10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

o Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2011

Commission file number: 1-7945

DELUXE CORPORATION

(Exact name of registrant as specified in its charter)

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

Registrant's telephone number, including area code:(651) 483-7111

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, par value $1.00 per share	New York Stock Exchange
(Title of each class)	(Name of each exchange on which registered)

Securities registered pursuant to Section 12(g) of the Act:  None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  þ Yes o No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  oYes þ  No

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 for such shorter period that the registrant was required to submit and post such files).  þYes o No

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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy orinformation statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   þ

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 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 Act).  o Yes þ No

The aggregate market value of the voting stock held by non-affiliates of the registrant is $1,247,906,150 based on the last sales price of the registrant’s common stock on the New York Stock Exchange on June 30, 2011. The number of outstanding shares of the registrant's common stock as of February 7, 2012, was 50,933,231.

Documents Incorporated by Reference:

1. Portions of our definitive proxy statement to be filed within 120 days after our fiscal year-end are incorporated by reference in Part III.

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DELUXE CORPORATION

FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2011

TABLE OF CONTENTS

Item	Description	Page
Item 1	Business	4
Item 1A	Risk Factors	12
Item 1B	Unresolved Staff Comments	18
Item 2	Properties	18
Item 3	Legal Proceedings	18
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	19
Item 6	Selected Financial Data	21
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	44
Item 8	Financial Statements and Supplementary Data	45
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	101
Item 9A	Controls and Procedures	101
Item 9B	Other Information	101
Item 10	Directors, Executive Officers and Corporate Governance	101
Item 11	Executive Compensation	102
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	102
Item 13	Certain Relationships and Related Transactions, and Director Independence	102
Item 14	Principal Accounting Fees and Services	102
Item 15	Exhibits, Financial Statement Schedules	103
	Signatures	108
	Index to Exhibits	109

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PART I

Item 1.  Business.

Deluxe Corporation was incorporated under the laws of the State of Minnesota in 1920. From 1920 until 1988 our company was named Deluxe Check Printers, Incorporated. Our principal corporate offices are located at 3680 Victoria Street North, Shoreview, Minnesota 55126-2966. Our main telephone number is (651) 483-7111.

COMPANY OVERVIEW

Our vision is to be the best at helping small businesses and financial institutions grow. Through our various businesses and brands, we help small businesses and financial institutions better grow, operate and protect their businesses. We employ a multi-channel strategy to provide a suite of life-cycle driven solutions to our customers. We use printed and electronic marketing, a direct sales force, financial institution and telecommunication client referrals, purchased search results from online search engines, and independent distributors and dealers to provide our customers a wide range of customized products and services. Over the past 24 months, our Small Business Services segment has provided products and services to over four million small business customers and our Direct Checks segment has provided products and services to more than eight million consumers. Through our Financial Services segment, we provide products and services to approximately 6,000 financial institution clients. Our product and service offerings are comprised of the following:

Checks – We remain one of the largest providers of checks in the United States, both in terms of revenue and the number of checks produced. Checks account for the majority of the revenue in our Financial Services and Direct Checks segments and represented 47.2%, 48.3% and 47.7% of our Small Business Services segment’s revenue in 2011, 2010 and 2009, respectively.

Forms – Our Small Business Services segment is a leading provider of printed forms to small businesses including, 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 produced by our Financial Services and Direct Checks segments include deposit tickets and check registers.

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

Marketing solutions – All three of our segments offer products and services that help small businesses and financial institutions promote their businesses and acquire customers. Our Small Business Services segment offers services such as web design, hosting and other web services, logo design, search engine marketing, and digital printing services designed to fulfill the sales and marketing needs of small businesses, as well as products such as business cards, greeting cards, brochures and apparel. Financial Services offers various customer acquisition programs and marketing communications services, while Direct Checks provides package insert programs under which companies’ marketing materials are included in our check packages.

Other services – All three of our segments provide fraud protection services. In addition, our Small Business Services segment offers payroll services, and Financial Services provides financial institution profitability, regulatory and compliance programs.

Revenue, by product and service category, as a percentage of consolidated revenue for the last three years was as follows:

	2011			2010			2009
Checks, including contract settlements		61.4	%		63.9	%		63.5	%
Forms		13.8	%		13.9	%		14.8	%
Accessories and other products		9.0	%		8.8	%		9.6	%
Marketing solutions, including services		10.6	%		9.0	%		8.4	%
Other services		5.2	%		4.4	%		3.7	%
Total revenue		100.0	%		100.0	%		100.0	%

During 2011, we modified the categories we use to report a portion of our products and services. We added the marketing solutions category to add more clarity to our products and services, as our marketing solutions and other services categories reflect a growing part of our business. Amounts for 2010 and 2009 have been reclassified to conform to the 2011 presentation. These changes had no impact on the amounts reported in previous years for checks.

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BUSINESS SEGMENTS

Our business segments are generally organized by type of customer and reflect the way we manage the company. Additional information concerning our segments appears under the caption “Note 16: Business segment information” of the Notes to Consolidated Financial Statements appearing in Item 8 of this report.

Small Business Services

Small Business Services operates under various brands including Deluxe®, NEBS®, Safeguard®, McBee®, PsPrint®, Stephen·Fossler, Hostopia®, Logo Mojo®, Aplus.netSM and MerchEngines.comSM. This is our largest segment in terms of revenue and operating income and we are concentrating on profitably growing this segment. Small Business Services strives to be a leading supplier to small businesses by providing personalized products and services that help them grow, operate and protect their businesses. This segment sells products and services to small businesses in the United States, Canada, and portions of Europe and South America.

The majority of Small Business Services products are distributed through more than one channel. Our primary channels are direct response advertising via mail and the internet, referrals from financial institutions and telecommunications clients, Safeguard distributors, a network of independent local dealers, and a direct sales force which focuses on major accounts. These efforts are supplemented by the account development efforts of an outbound telemarketing group. We continue to shift a portion of our advertising efforts to the internet as our customers are increasingly using the internet to procure products and services. Customer service for initial order support, product reorders and routine service is provided by a network of call center representatives located throughout the United States and Canada.

Our focus within Small Business Services is to grow revenue and increase operating margin by continuing to implement the following strategies:

● Acquire new customers by leveraging customer referrals that we receive from our Financial Services segment’s financial institution clients and our telecommunications clients, as well as from other marketing initiatives, including internet and direct mail solicitations;

● Expand sales of higher growth marketing solutions and other services;

● Increase our share of the amount small businesses spend on the types of products and services in our portfolio through increased brand awareness and improved customer segmentation and analytics; and

● Continue to optimize our cost and expense structure.

We continue to invest in several key enablers to achieve our strategies and reposition Small Business Services as not just a provider of business checks and printed forms, but also a provider of higher growth marketing solutions and other services. These key enablers include strengthening our portfolio of products and services, attracting new customers, improving our use of technology, growing our distributor network, and enhancing brand awareness and positioning. We continue to refresh portions of our existing product offerings and have improved some of our newer service offerings, which we believe creates a more valuable suite of products and services. We have also identified opportunities to expand sales to our existing customers and to acquire new customers. Continued investment in our e-commerce platforms increases our opportunities to market and sell on-line. Also important to our growth are the small business customer referrals we receive through our Deluxe Business Advantage® program, which provides a fast and simple way for financial institutions to offer expanded personalized service to small businesses. Our relationships with financial institutions are important in helping us more deeply serve unique customer segments such as contractors, retailers and professional services firms. During the past two years, we increased our investment in promoting and strengthening the Deluxe brand to increase brand awareness and loyalty.

In recent years, we have acquired companies which allow us to expand our marketing solutions and other services offerings, including web-to-print capabilities. We expect these higher growth products and services will represent an increasing portion of our revenue. Specifically, during July 2011, we acquired PsPrint, LLC a web-to-print solutions company that provides online print marketing and promotional services for small businesses. In 2009, we acquired Abacus America, Inc., a wholly-owned subsidiary of Aplus Holdings Inc., to expand our web services customer base. We also acquired MerchEngines.com during 2009 which added new search engine marketing capabilities.

As in our other two business segments, we continue our efforts within Small Business Services to simplify processes, eliminate complexity and lower costs. During 2010, we closed our Colorado Springs, Colorado customer call center. During 2009, we closed two customer call centers located in Thorofare, New Jersey and Santa Fe Springs, California.

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Financial Services

Financial Services’ products and services are sold through multiple channels, including a direct sales force, to financial institution clients nationwide, including banks, credit unions and financial services companies. Our check supply relationships with financial institutions are generally formalized through contracts which usually range in duration from three to six years. As part of our check programs, we provide enhanced services such as customized reporting, file management and expedited account conversion support. Consumers and small businesses typically submit their check order to their financial institution, which then forwards the order to us. We process the order and ship it directly to the consumer or small business. Financial Services produces a wide range of check designs, with many consumers preferring one of the dozens of licensed or cause-related designs we offer, including Disney®, Warner Brothers®, Garfield®, Harley-Davidson®, NASCAR®, PGA TOUR®, Thomas Kinkade®, Susan G. Komen for the Cure® and National Arbor Day Foundation®.

Our strategies within Financial Services are as follows:

· Optimize core check revenue streams and acquire new clients;

· Provide marketing solutions and other services that differentiate us from the competition; and

· Continue to optimize our cost and expense structure.

Our focus on acquiring new clients will continue during 2012. We are also advancing our marketing solutions and other services offerings. During April 2011, we acquired Banker’s Dashboard, LLC, which provides online financial management tools that provide banks with a comprehensive daily view of their financial picture. In March 2010, we purchased substantially all of the assets of Cornerstone Customer Solutions, LLC, a full-service, marketing solutions provider specializing in the development and execution of analytics-driven direct marketing programs. We also continue to leverage our Deluxe Business Advantage program which is designed to maximize financial institution business check programs. It offers the products and services of our Small Business Services segment to the small business customers of financial institutions through a number of service level options. The revenue from the products and services sold through this program is reflected in our Small Business Services segment.

In our efforts to expand beyond check-related products, we deliver several marketing solutions and other services offerings including:

· Marketing solutions – a variety of strategic and tactical marketing solutions which help financial institutions acquire new customers, deepen existing customer relationships and retain customers.

· Banker’s Dashboard® – Online financial management tools that provide financial institutions with a comprehensive daily view of their financial picture.

· Deluxe ProventSM – a comprehensive suite of identity protection services.

· Deluxe CallingSM – an outbound calling program aimed at helping financial institutions generate new organic revenue growth and reduce account holder attrition.

· REALCheckingTM program – a system of deposit products, including reward checking programs, that drives non-interest income, attracts new account holders and increases retention for community financial institutions. We offer this suite of products to our clients through a partnership with BancVue, Ltd.

· Regulatory compliance – services that assist financial institutions in complying with the current dynamic regulatory environment.

· SwitchAgentSM – a proprietary service allowing consumers to easily switch from one financial institution to another.

We expect providing products and services that differentiate us from the competition will help partially offset the impacts of the decline in check usage and the pricing pressures we are experiencing in our check programs.As such, we also continue to focus on accelerating the pace at which we introduce new products and services.

In addition to our various marketing solutions and other services offerings, we continue to offer our Knowledge ExchangeTM Series for financial institution clients through which we host knowledge exchange expos, conduct web seminars, host special industry conference calls and offer specialized publications. Our Collaborative initiative, a key component of the Knowledge Exchange Series, enlists a team of leading financial institution executives who meet with us over a one-year timeframe to develop and test specific and focused solutions on behalf of the financial services industry. These findings and new strategies or services are then disseminated for the benefit of all our clients. During 2011, the Collaborative focused on how banks and credit unions can thrive in the increasingly regulated banking environment. The focus of our 2012 Collaborative is on the consumer mindset and profitable solutions. It will explore what provides value to the consumer and profitability to the financial institution.

Financial Services, similar to our other two business segments, continues to simplify processes, eliminate complexity and lower costs. During 2011, we closed our Financial Services customer call center located in Phoenix, Arizona.

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Direct Checks

Direct Checks is the nation’s leading direct-to-consumer check supplier, selling under various brand names including Checks Unlimited®, Designer® Checks, Checks.com, Check Gallery®, The Styles Check Company®, and Artistic Checks®, among others. Through these brands, we sell our products and services directly to consumers using direct response marketing and the internet. We estimate the direct-to-consumer personal check printing portion of the payments industry accounts for approximately 12% of all personal checks sold in the United States.

We use a variety of direct marketing techniques to acquire new customers, including newspaper inserts, in-package advertising, statement stuffers and co-op advertising. We also use e-commerce strategies to direct traffic to our websites, which include: checksunlimited.com, designerchecks.com, checks.com, 4checks.com, checkgallery.com, styleschecks.com, and artisticchecks.com, among others.

Direct Checks competes primarily on price and design. Pricing in the direct-to-consumer channel is generally lower than retail prices charged to consumers in the financial institution channel. We also compete on design by seeking to offer the most attractive selection of images with high consumer appeal, many of which are licensed from well-known artists and organizations such as Disney, Warner Brothers, Harley Davidson and Thomas Kinkade.

Our strategies within Direct Checks are as follows:

· Maximize the lifetime value of customers by selling new features, accessories and products;

· Continue to optimize our cost and expense structure; and

· Optimize cash flow.

In April 2010, we acquired Custom Direct, Inc., a provider of direct-to-consumer checks. We have leveraged this acquisition to build a best-in-class, direct-to-consumer check experience. Additionally, we continue to identify opportunities to lower our cost and expense structure in all functional areas, particularly in the areas of marketing and fulfillment. We continue to actively market our products and services through targeted advertising, including a continued focus on the internet channel. We continue to explore avenues to increase sales to existing customers. For example, we have had success with the EZShieldTM offering, a check protection service that provides reimbursement to consumers for losses resulting from forged signatures or endorsements and altered checks.

MANUFACTURING AND FULFILLMENT

We continue to focus on improving the customer experience by providing excellent service and quality, reducing costs and increasing productivity. We accomplish this by embedding lean operating principles in all processes while emphasizing a culture of continuous improvement. Under this approach, employees work together to produce products, rather than working on individual tasks in a linear fashion. Because employees assume more ownership of the end product, the results are improved productivity and lower costs.

We have demonstrated our commitment to innovative technology solutions by implementing a fully automated flat check delivery package, for which we have a patent pending, to mitigate the effect of postal rate increases. We also continue to sponsor “sustainability” initiatives which encompass environmentally friendly practices. We have aligned with suppliers that promote sustainable business practices and we continually seek opportunities to eliminate wasted material, reduce cycle times and use more environmentally friendly materials. More than 90% of our check and form paper is purchased from Forest Stewardship Council certified supplier mills, our vinyl checkbook covers are produced utilizing a minimum of 85% post-industrial recycled material and we use environmentally friendly janitorial supplies. Our sustainability initiatives have also benefited our results of operations over the past several years as we focused on reducing our consumption of water, electricity and natural gas and improved our transportation efficiency. During 2011, we purchased renewable wind power electricity for several of our facilities and we were named number one on the Environmental Protection Agency’s (EPA) October 2011 list of top green power purchasers in the printing industry. The green power that we purchase amounts to more than 60% of our total U.S. annual electricity needs, and we produce nearly all of our checks for financial institution clients and direct-to-consumer customers using renewable energy.

The expertise we have developed in logistics, productivity and inventory management has allowed us to reduce the number of production facilities while still meeting client requirements. During 2011, we closed our Crystal Lakes, Illinois business products fulfillment center and moved its operations into another facility. In 2009, we closed seven manufacturing facilities, relocating the operations and assets of these facilities to other locations. Aside from our plant consolidations, we continue to seek other innovations to further increase efficiencies and reduce costs. During 2010, this included completing the expansion of our use of digital printing processes and during 2011, we acquired PsPrint, LLC, a web-to-print solutions company, to enhance our web-to-print capabilities.

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In manufacturing, we have a shared services approach which allows our three business segments to leverage shared manufacturing facilities to optimize capacity utilization, enhance operational excellence and foster a culture of continuous improvement. We continue to reduce costs by utilizing our assets and printing technologies more efficiently and by enabling employees to better leverage their capabilities and talents.

INDUSTRY OVERVIEW

Checks

According to a Federal Reserve study released in December 2010, the most recent information available, approximately 27.5 billion checks were written in 2009. According to this study, checks are no longer the largest single non-cash payment method in the United States, being surpassed by the debit card. Checks written account for approximately 25% of all non-cash payment transactions, which is a reduction from the Federal Reserve Study released in December 2007 when checks accounted for approximately 35% of all non-cash payment transactions. The Federal Reserve estimates that checks written declined approximately 6.1% percent per year between 2006 and 2009, and we expect this trend to continue. In addition, we believe that turmoil in the financial services industry over the past few years has had a negative impact on our check volumes, as some of our clients have experienced higher than normal customer attrition.

Small Business Customers

The Small Business Administration’s Office of Advocacy defines a small business as an independent business having fewer than 500 employees. In 2009, the most recent period for which information is available, it was estimated that there were approximately 27.5 million small businesses in the United States. This represented approximately 99.7% of all employer firms. According to the same survey, small businesses employ half of all private sector employees and generated 65% of net new jobs created over the past 17 years. According to the Small Business and Tourism Branch of Industry Canada, there are just over one million small businesses in Canada with employees, and 98% of businesses in Canada have fewer than 100 employees.

The small business market is impacted by general economic conditions and the rate of small business formations. The index of small business optimism published by the National Federation of Independent Business was 94.1 in January 2011 and ended the year at 93.8, after dipping as low as 88.1 in August. The year did end positively, with four consecutive monthly increases. However, the December 2011 outlook for expected business conditions in six months dropped 18 points from January 2011. According to estimates of the Small Business Administration’s Office of Advocacy, the last year in which the number of small businesses increased was 2006. The economy had a negative impact on our operating results over the past three years, and we expect the economic environment will continue to be challenging in 2012.

The business checks and forms portion of the markets serviced by Small Business Services has been declining, and we expect this trend to continue. In addition to the availability of alternative payment methods, continual technological improvements provide small business customers with alternative means to enact and record business transactions. For example, off-the-shelf business software applications, electronic transaction systems and mobile applications have been designed to replace pre-printed business forms products.

Financial Institution Clients

Checks are most commonly ordered through financial institutions. We estimate that approximately 88% of all consumer checks are ordered in this manner. Financial institutions include banks, credit unions and other financial services companies. Several developments related to financial institutions have affected the check printing portion of the payments industry:

· Financial institutions seek to maintain the profits they have historically generated from their check programs, despite the decline in check usage. This continues to put significant pricing pressure on check printers.

· When financial institutions consolidate through mergers and acquisitions, often the newly combined entity seeks to reduce costs by leveraging economies of scale in purchasing, including its check supply contracts. This results in check providers competing intensely on price in order to retain not only their previous business with one of the financial institutions, but also to gain the business of the other financial institution in the merger/acquisition.

· Financial institution mergers and acquisitions can also impact the duration of our contracts. Normally, the length of our supply contracts with financial institutions ranges from three to six years. However, contracts may be renegotiated or bought out mid-term due to a consolidation of financial institutions.

· Banks, especially larger ones, may request pre-paid product discounts in the form of cash incentives payable at the beginning of a contract. These contract acquisition payments negatively impact check producers’ cash flows at the beginning of these contracts.

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Turmoil in the financial services industry, which began in late 2008, led to increases in bank failures and consolidations. To the extent any financial institution failures and consolidations impact large portions of our customer base, this could have a significant impact on our financial institution check programs.

Consumer Direct Mail Response Rates

Direct Checks and portions of Small Business Services have, at times, been impacted by reduced consumer response rates to direct mail advertisements. Our own experience indicates that declines in our customer response rates may be attributable to the decline in check usage, the gradual obsolescence of standardized forms products and a general decline in direct marketing response rates due, in part, to increasing utilization of e-commerce by both consumers and small businesses. We continually evaluate our marketing techniques in order to utilize the most effective and affordable advertising media and we continue to shift a greater portion of our advertising investment to the internet.

Competition

The small business forms and supplies industry and the business services industry are all highly fragmented with many small local suppliers, large national retailers and internet-based providers. We believe we are well-positioned in this competitive landscape through our broad customer base, the breadth of our small business product and service offerings, multiple distribution channels, established relationships with our financial institution and telecommunications clients, competitive prices, high quality and dependable service.

In the small business forms and supplies industry, the competitive factors influencing a customer’s purchase decision are breadth of product line, speed of delivery, product quality, price, convenience and customer service. Our primary competitors are office product superstores, local printers, business forms dealers and internet-based suppliers. Local printers provide personalization and customization, but typically have a limited variety of products and services, as well as limited printing sophistication. Office superstores offer a variety of products at competitive prices, but provide limited personalization and customization. We are aware of numerous independent companies or divisions of companies offering printed products and business supplies to small businesses through the internet, direct mail, distributors or a direct sales force.

Many of our marketing solutions and other services offerings also face intense competition, including competition from internet-based service providers. With relatively low barriers to entry for the services we offer, we expect the intensity of competition to increase in the future from other established and emerging companies. The competitive factors affecting marketing solutions and other services offerings include the breadth, quality and ease of use of web and other services, price, and the responsiveness and quality of customer support.

In the check printing portion of the payments industry, we face considerable competition from other check printers, and we expect competition to remain intense as check usage continues to decline and financial institutions continue to consolidate. We also face competition from check printing software vendors and from internet-based sellers of checks and related products. Moreover, the check product must compete with alternative payment methods, including credit cards, debit cards, automated teller machines, direct deposit, and electronic and other bill paying services.

In the financial institution check printing business, there are two large primary providers, one of which is Deluxe. The principal factors on which we compete are product and service breadth, price, quality and check merchandising program management. We believe the key items which differentiate us from our competition include our automated flat check delivery package, online performance dashboard and portal analytics tools for financial institution branches, our personalized customer call center experience, and our Deluxe Business Advantage program, which provides a fast and simple way for financial institutions to offer expanded personalized service to small businesses.

At times, check suppliers have reduced the prices of their products during the supplier selection process in an attempt to gain greater volume. The corresponding pricing pressure has resulted in reduced profit margins. Pricing pressure will continue to impact our results of operations through lower pricing levels or client losses. Additionally, product discounts in the form of cash incentives payable to financial institutions upon contract execution have been a practice within the industry since the late 1990’s. Both the number of financial institution clients requesting these payments and the size of the payments has fluctuated significantly in recent years. These up-front payments negatively impact check printers’ cash flows in the short-term. We make an effort to reduce the use of up-front product discounts by structuring new contracts with incentives throughout the duration of the contract.

Seasonality

From time to time, the markets in which we sell our products and services experience weak economic conditions that negatively impact revenue. We experience seasonal trends in selling some of our products. For example, holiday card sales and stored value gift cards typically are stronger in the fourth quarter of the year due to the holidays, sales of tax forms are stronger in the first and fourth quarters of the year, and check sales for our Direct Checks segment have historically been stronger in the first quarter of the year.

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Raw Materials, Supplies and Service Providers

The principal raw materials used in producing our main products are paper, plastics, ink, cartons and printing plate material, which we purchase from various sources. We also purchase some stock business forms produced by third parties. We believe that we will be able to obtain an adequate supply of materials from current or alternative suppliers.

We have entered into agreements with third party providers for information technology services, including telecommunications and network server and transaction processing services. We believe we would be able to obtain an alternative source of supply if one or more of our service providers failed to perform.

Governmental Regulation

We are subject to regulations implementing the privacy and information security requirements of the federal financial modernization law known as the Gramm-Leach-Bliley Act, as well as other federal regulation and state law regarding the protection of consumer information. These laws and regulations require us to develop, implement and maintain policies and procedures to protect the security and confidentiality of consumers’ nonpublic personal information. We are also subject to additional requirements in certain of our contracts with financial institution clients, which are often more restrictive than the regulations. These regulations and agreements limit our ability to use or disclose nonpublic personal information for other than the purposes originally intended, which could limit business opportunities. The complexity of compliance with these regulations may also increase the cost of doing business.

We are unable to predict whether more restrictive legislation or regulation will be adopted in the future. Any future legislation or regulation, or the interpretation of existing legislation or regulation, could have a negative impact on our business, results of operations and prospects. Laws and regulations relating to consumer privacy may be adopted in the future with respect to the internet, e-commerce or marketing practices. Such laws or regulations may impede the growth of the internet and/or the use of other sales or marketing vehicles. For example, new privacy laws could decrease traffic to our websites, decrease telemarketing opportunities and increase the cost of obtaining new customers. At this time, we are not aware of any changes in these laws and regulations which will have a significant impact on our business in 2012.

Intellectual Property

We rely on a combination of trademark and copyright laws, trade secret and patent protection, and confidentiality and license agreements to protect our trademarks, software and other intellectual property. These protective measures afford only limited protection. Despite our efforts to protect our intellectual property, third parties may infringe or misappropriate our intellectual property or otherwise independently develop substantially equivalent products or services which do not infringe on our intellectual property rights. In addition, the company may be the target of aggressive and opportunistic enforcement of patents by third parties, including non-practicing entities. Check designs exclusively licensed from third parties account for a portion of our revenue. These license agreements generally average three years in duration. There can be no guarantee that such licenses will be available to us indefinitely or under terms that would allow us to continue to sell the licensed products profitably.

EMPLOYEES

As of December 31, 2011, we employed 5,020 employees in the United States and 545 employees in Canada. None of our employees are represented by labor unions, and we consider our employee relations to be good.

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AVAILABILITY OF COMMISSION FILINGS

We make available through the Investor Relations section of our website, deluxe.com, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports filed or furnished pursuant to section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after these items are electronically filed with or furnished to the Securities and Exchange Commission (SEC). These reports can also be accessed via the SEC website, sec.gov, or via the SEC’s Public Reference Room located at 100 F Street N.E., Washington, D.C. 20549. Information concerning the operation of the SEC’s Public Reference Room can be obtained by calling 1-800-SEC-0330.

A printed copy of this report may be obtained without charge by calling 651-787-1068, by sending a written request to the attention of Investor Relations, Deluxe Corporation, P.O. Box 64235, St. Paul, Minnesota 55164-0235, or by sending an email request to investorrelations@deluxe.com.

CODE OF ETHICS AND CORPORATE GOVERNANCE GUIDELINES

We have adopted a Code of Ethics and Business Conduct which applies to all of our employees and our board of directors. The Code of Ethics and Business Conduct is available in the News and Investor Relations section of our website, deluxe.com, and also can be obtained free of charge upon written request to the attention of Investor Relations, Deluxe Corporation, P.O. Box 64235, St. Paul, Minnesota 55164-0235. Any changes or waivers of the Code of Ethics and Business Conduct will be disclosed on our website. In addition, our Corporate Governance Guidelines and the charters of the Audit, Compensation, Corporate Governance and Finance Committees of our board of directors are available on our website or upon written request.

One of the policies supporting our Code of Ethics and Business Conduct addresses political contributions. It is not our practice to make political contributions. We permit political contributions only upon written approval by our most senior management in their capacity as the corporate Compliance Committee under our ethics and compliance program. The Compliance Committee has not approved any such contributions. We are a member of various trade groups that represent the interests of specified industries. However, as a part of those memberships, we have not provided funds designated for political contributions.

EXECUTIVE OFFICERS OF THE REGISTRANT

Our executive officers are elected by the board of directors each year. The following summarizes our executive officers and their positions.

Name	Age	Present Position	Executive Officer Since
Anthony Scarfone	50	Senior Vice President, General Counsel and Secretary	2000
Terry Peterson	47	Senior Vice President, Chief Financial Officer	2005
Lynn Koldenhoven	45	Senior Vice President, Sales and Marketing Direct-to-Consumer	2006
Lee Schram	50	Chief Executive Officer	2006
Pete Godich	47	Vice President, Fulfillment	2008
Julie Loosbrock	52	Senior Vice President, Human Resources	2008
Malcolm McRoberts	47	Senior Vice President, Small Business Services	2008
Laura Radewald	51	Vice President, Enterprise Brand, Customer Experience and Media Relations	2008
Robert Glaus	57	Vice President, Chief Information Officer	2011

Anthony Scarfone has served as senior vice president, general counsel and secretary since joining us in September 2000.

Terry Peterson was named senior vice president, chief financial officer in November 2009. Mr. Peterson served as chief accounting officer from March 2005 to October 2009. From October 2006 through October 2009, Mr. Peterson also served as vice president of investor relations.

Lynn Koldenhoven was named senior vice president in September 2010. From October 2006 to September 2010, Ms. Koldenhoven served as vice president, sales and marketing direct-to-consumer.

Lee Schram has served as chief executive officer since joining us in May 2006.

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Pete Godich was named vice president, fulfillment in May 2008. From December 2006 to May 2008, Mr. Godich was vice president of marketing and sales operations.

Julie Loosbrock was named senior vice president, human resources in September 2008. Prior to this, Ms. Loosbrock held several leadership positions within human resources, most recently serving as vice president, human resources – strategic business partners from September 2003 to September 2008.

Malcolm McRoberts was named senior vice president of small business services in February 2011. From September 2010 to February 2011, Mr. McRoberts served as senior vice president, chief information and technology officer. Mr. McRoberts joined us in May 2008 and served as senior vice president, chief information officer until September 2010. Prior to this, Mr. McRoberts held a variety of leadership positions at NCR, including vice president of operations for the retail, hospitality and self-service division from August 2004 to May 2008.

Laura Radewald was named vice president, enterprise brand, customer experience and media relations in September 2008. Ms. Radewald joined us in October 2007 and served as vice president, enterprise brand until September 2008. From November 2005 to September 2007, Ms. Radewald operated her own marketing consulting practice.

Robert Glaus was named vice president, chief information officer in February 2011. Mr. Glaus joined us in November 2010 and served as vice president, information technology until February 2011. From May 2010 to November 2010, Mr. Glaus served as client executive for HCL America, Inc., a provider of global consulting and information technology services. Prior to this, Mr. Glaus served as vice president, information technology for MoneyGram International, Inc. from August 2003 to June 2009.

Item 1A. Risk Factors.

Our business, consolidated results of operations, financial condition and cash flows could be adversely affected by various risks and uncertainties. These risks include, but are not limited to, the principal factors listed below and the other matters set forth in this Annual Report on Form 10-K. We have disclosed all known material risks. Additional risks not presently known to us, or that we currently believe are immaterial, may also adversely affect our business, results of operations, financial condition and cash flows. You should carefully consider all of these risks and uncertainties before investing in our common stock or other securities.

The following important factors could cause our actual results to differ materially from the statements we make from time to time regarding our expected future results, including, but not limited to, forecasts regarding estimated revenue, earnings per share or cash provided by operating activities. Any forecast regarding our future performance reflects various assumptions which are subject to significant uncertainties and, as a matter of course, may prove to be incorrect. Further, the achievement of any forecast depends on numerous factors which are beyond our control. Consequently, no forward-looking statement can be guaranteed and the variation of actual results or events from such statements may be material and adverse. You are cautioned not to base your entire analysis of our business and prospects upon isolated statements, and are encouraged to use the entire mix of historical and forward-looking information made available by us, and other information affecting us and our products and services, including the following factors.

Economic conditions could continue to have an adverse effect on our operating results.

Local, national and worldwide economic conditions have affected and, most likely, will continue to affect our results of operations and financial position. Current and future economic conditions that affect consumer and business spending, including unemployment levels, the availability of credit and consumer and business confidence, as well as the financial condition and growth prospects of our customers, may continue to adversely affect our business and results of operations.

A significant portion of our business relies on small business spending. As such, the level of small business confidence and the rate of small business formations impact our business. Continued below average small business optimism, as well as declines in small business formations, have negatively impacted our results of operations in Small Business Services. Small businesses typically have more limited budgets and are more likely to be significantly affected by economic downturns than larger, more established companies. During a sluggish economy, small businesses may choose to spend their limited funds on items other than our products and services. Within our personal check printing businesses, consumer spending and employment levels impact the number of checks consumers use. Modest consumer spending growth, along with only moderate private sector growth in employment during 2011, continued to impact our personal check businesses. We cannot predict whether these negative economic trends will improve or worsen in the near future.

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As a result of global economic conditions in recent years, a number of financial institutions sought additional capital, merged with other financial institutions and, in some cases, failed. This turmoil in the financial services industry affected and may continue to affect our results of operations in a number of ways. Our experience indicates that financial institution failures, as well as the consolidation of companies within the financial services industry, caused some larger financial institutions to lose customers. This reduces our order volume when those customers move their accounts to financial institutions that are not our clients or they reduce or delay their check purchases. The failure of one or more of our larger financial institution clients, or large portions of our customer base, could adversely affect our operating results. In addition to the possibility of losing a significant client, the inability to recover contract acquisition payments made to one or more of our larger financial institution clients, or the inability to collect accounts receivable or contractually required contract termination payments, could have a significant negative impact on our results of operations. Also, there may be an increase in financial institution mergers and acquisitions during periods of economic uncertainty. Such an increase could adversely affect our operating results. Often the newly combined entity seeks to reduce costs by leveraging economies of scale in purchasing, including its check supply contracts. This results in check providers competing intensely on price in order to retain not only their previous business with one of the financial institutions, but also to gain the business of the other party in the merger/acquisition. Although we devote considerable effort toward the development of a competitively-priced, high-quality suite of products and services for the financial services industry, there can be no assurance that significant financial institution clients will be retained or that the impact of the loss of a significant client can be offset through the addition of new clients or by expanded sales to our remaining clients.

The severity and length of the present sluggish global economy is unknown. A further deterioration in financial markets and in general business conditions in 2012 could negatively affect our operating results.

We may not be successful at implementing our growth strategies.

We continue to execute strategies intended to drive sustained revenue and earnings growth. We are continuing to invest in several key enablers to achieve our strategies, including strengthening our portfolio of products and services, attracting new customers, improving our use of technology, and enhancing brand awareness and positioning. Additionally, we expect to drive growth from our marketing solutions and other services offerings. The market for many of our services is relatively new and untested, and small businesses and financial institutions may be slow to adopt these services. If the market for our services fails to grow or grows more slowly than we currently anticipate, or if our services fail to achieve widespread customer acceptance, our operating results would be negatively affected.

All of our growth initiatives have required and will continue to require investment. Business, economic and competitive uncertainties, many of which are beyond our control, may impact the success of our growth strategies. We can provide no assurance that our growth strategies will be successful either in the short-term or in the long-term, that they will generate a positive return on our investment, or that they will not dilute our operating margins.

We face intense competition in all areas of our business.

Although we are one of the leading check printers in the United States, we face considerable competition. In addition to competition from alternative payment methods, we also face intense competition from another large check printer in our traditional financial institution sales channel, from direct mail sellers of personal checks, from sellers of business checks and forms, from check printing software vendors and from internet-based sellers of our products and services to individuals and small businesses. Additionally, low price, high volume office supply chain stores offer standardized business forms, checks and related products to small businesses. Our marketing solutions and other services offerings also face intense competition, and with relatively low barriers to entry for the types of services we offer, we expect the intensity of competition to increase in the future from both established and emerging companies.

We can provide no assurance that we will be able to compete effectively against current and future competitors. Continued competition could result in additional price reductions, reduced profit margins, loss of customers and an increase in up-front cash payments to financial institutions upon contract execution or renewal, all of which would have an adverse effect on our results of operations and cash flows.

The check printing portion of the payments industry is mature and, if check usage declines faster than expected, it could have an adverse impact on our operating results.

Check printing is, and is expected to continue to be, an essential part of our business. We sell checks for personal and small business use and believe that there will continue to be a substantial demand for these checks for the foreseeable future. However, the total number of checks written in the United States has been in decline since the mid-1990’s. According to a Federal Reserve study released in December 2010, the total number of checks written declined 6.1% each year between 2006 and 2009, and we expect this trend to continue. We believe that the number of checks written will continue to decline due to the increasing use of alternative payment methods, including credit cards, debit cards, automated teller machines, direct deposit, and electronic and other bill paying services. However, the rate and the extent to which alternative payment methods will achieve acceptance and replace checks, whether as a result of legislative developments, personal preference or otherwise, cannot be predicted with certainty. A surge in the popularity of any of these alternative payment methods, or our inability to successfully offset the decline in check usage with other sources of revenue, could have an adverse effect on our business and results of operations.

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Small Business Services’ standardized business forms and related products face technological obsolescence and changing customer preferences.

Continual technological improvements provide small business customers with alternative means to enact and record business transactions. For example, because of the lower price and higher performance capabilities of personal computers, printers and mobile devices, small businesses now have an alternate means to print many business forms. Additionally, electronic transaction systems, off-the-shelf business software applications and mobile applications have been designed to replace pre-printed business forms products. If small business preferences change rapidly and we are unable to develop new products and services with comparable profit margins, our results of operations could be adversely affected.

The failure to reduce costs could have an adverse impact on our operating results.

Intense competition compels us to continually improve our operating efficiency in order to maintain or improve profitability. We have significantly reduced costs over the past several years, primarily within sales, marketing and our shared services functions, including fulfillment, information technology, real estate, finance and human resources. We realized net cost reductions of $60 million in 2011, as compared to our 2010 results of operations, and we will continue to explore ways to simplify our business processes and reduce our cost and expense structure. We anticipate that we will realize additional cost reductions of approximately $50 million in 2012, as compared to our 2011 results of operations. Cost reduction initiatives have required and will continue to require up-front expenditures related to items such as redesigning and streamlining processes, consolidating information technology platforms, standardizing technology applications, improving real estate utilization and funding employee severance benefits. We can provide no assurance that we will achieve future cost reductions or that we will do so without incurring unexpected or greater than anticipated expenditures. Moreover, we may find that we are unable to achieve business simplification and/or cost reduction goals without disrupting our business and, as a result, may choose to delay or forego certain cost reductions as business conditions require. Failure to continue to improve our operating efficiency could adversely affect our business if we are unable to remain competitive.

If we are unable to attract customers in a cost effective manner, our business and results of operations could be adversely affected.

We rely on a variety of methods to promote our products and services, including direct mail advertising, purchased search results from online search engines and e-mail. The profitability of our Direct Checks segment depends in large part on our ability to secure adequate advertising media placements at acceptable rates. We can provide no assurance regarding the future cost, effectiveness and/or availability of suitable advertising media. In addition, future legislation could affect our ability to advertise via direct mail or e-mail. Congress has contemplated enacting “anti-spam” legislation in response to consumer complaints about unsolicited e-mail advertisements. If anti-spam legislation is enacted and/or if similar legislation is enacted for direct mail advertisers, we may be unable to sustain our current levels of profitability.

In addition to print and e-mail advertising, many customers access our websites through internet search engines. Search engines typically provide two types of search results, algorithmic and purchased listings. Algorithmic listings are not purchased, but are determined and displayed solely by a set of formulas designed by the search engine. Purchased listings can be bought to attract users to our websites. We rely on both algorithmic and purchased listings to attract customers to our websites. Search engines revise their algorithms from time to time in an attempt to optimize their search results listings and to maximize the advertising revenue generated by those listings. If search engines on which we rely for algorithmic listings modify their algorithms, this could result in fewer customers going to our websites. Additionally, one or more of the search engines on which we rely for purchased listings could modify or terminate their relationship with us. As we analyze our overall advertising strategy, we may have to resort to more costly resources to replace lost internet traffic, which would adversely affect our results of operations. In addition, the cost of purchased search engine listings could increase as demand for them continues to grow, and further cost increases could negatively affect our profitability.

We may not succeed in promoting and strengthening our brand, which could prevent us from acquiring customers and increasing revenue.

The success of Small Business Services depends, in part, on our ability to attract new and repeat customers. For this reason, a component of our business strategy is the promotion and strengthening of the Deluxe brand. We believe that the importance of brand recognition will increase relative to certain of our service offerings due to the low barriers to entry in the internet channel. Customer awareness of our brand, as well as the perceived value of our brand, will depend largely on the success of our marketing efforts and our ability to provide a consistent, high quality customer experience. To promote our brand, we have incurred and will continue to incur expense related to advertising and other marketing efforts. We can provide no assurance that we will realize a positive return on this investment.

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A component of our brand promotion strategy is establishing a relationship of trust with our customers, which we believe can be achieved by providing a high quality customer experience. We have invested, and will continue to invest, resources in website development, technology and customer service operations. Our ability to provide a high quality customer experience is also dependent on external factors including the reliability and performance of our suppliers and telecommunications providers. If we are unable to provide a high quality customer experience for any reason, our reputation would be harmed and our efforts to develop brand loyalty would be adversely impacted. The failure of our brand promotion activities could adversely affect our ability to attract new customers and maintain customer relationships, which would adversely harm our business and results of operations.

Weak direct mail response rates could have an adverse impact on our operating results.

Our Direct Checks segment and portions of our Small Business Services segment have, at times, experienced declines in response rates related to direct mail promotional materials. While we believe that media response rates have declined across a wide variety of products and services, we believe that the declines we have experienced are also attributable to the decline in check usage, the gradual obsolescence of standardized forms products and increasing utilization of e-commerce by both consumers and small businesses. In an attempt to offset these impacts, we continually modify our marketing and sales efforts and have shifted a greater portion of our advertising investment to the internet. Competitive pressure may inhibit our ability to reflect increased costs in the prices of our products and new marketing strategies may not be successful. We can provide no assurance that we will be able to offset a decline in response rates, even with additional marketing and sales efforts.

We face uncertainty regarding the success of recent and future acquisitions, which could have an adverse impact on our operating results.

During 2011, we acquired substantially all of the assets of PsPrint, LLC and Banker’s Dashboard, LLC. During 2010, we acquired Custom Direct, Inc. and substantially all of the assets of Cornerstone Customer Solutions, LLC, and during 2009, we acquired Abacus America, Inc., a wholly-owned subsidiary of Aplus Holdings, Inc., as well as substantially all of the assets of MerchEngines.com. We have invested in acquisitions that offer marketing solutions and other services, extend our direct-to-consumer offerings, improve our operating cash flow, and extend the range of products and services we offer to our customers. The integration of any acquisition involves numerous risks, including: difficulties in assimilating operations and products; failure to realize expected synergies; diversion of management’s attention from other business concerns; potential loss of key employees; potential exposure to unknown liabilities; and possible loss of our clients and customers or the clients and customers of the acquired businesses. One or more of these factors could impact our ability to successfully integrate an acquisition and could negatively affect our results of operations.

We may continue to invest in small to medium-sized acquisitions. We cannot predict whether suitable acquisition candidates can be acquired on acceptable terms or whether any acquired products, technologies or businesses will contribute to our revenue or earnings to any material extent. Significant acquisitions typically result in additional contingent liabilities or debt and/or additional amortization expense related to acquired intangible assets, and thus, could adversely affect our business, results of operations and financial condition.

Weak economic conditions could result in additional asset impairment charges.

Declines in our stock price, as well as the impact of the economic downturn on our expected operating results, led to asset impairment charges in 2009 related to goodwill and an indefinite-lived trade name in our Small Business Services segment. If our stock price declines in the future for a sustained period or if a further downturn in economic conditions negatively affects our actual and forecasted operating results, it may be indicative of a decline in our fair value and may require us to record an impairment charge for a portion of goodwill and/or our indefinite-lived trade name or other assets. Such a charge would have an adverse effect on our consolidated results of operations.

The cost and availability of materials, delivery services and energy could adversely affect our operating results.

We are subject to risks associated with the cost and availability of paper, plastics, ink, other raw materials, delivery services, and energy. There are relatively few paper suppliers. As such, when our suppliers increase paper prices, we may not be able to obtain better pricing from alternative suppliers. Postal rates have increased in recent years and the United States Postal Service (USPS) has incurred significant financial losses. This may result in significant changes to the breadth or frequency of USPS mail delivery services in the future. Also, fuel costs have fluctuated over the past several years. Competitive pressures and/or contractual arrangements may inhibit our ability to reflect increased costs in the price of our products.

Paper costs represent a significant portion of our materials cost. Historically, we have not been negatively impacted by paper shortages because of our relationships with paper suppliers. However, we can provide no assurance that we will be able to purchase sufficient quantities of paper if such a shortage were to occur. Additionally, we depend upon third party providers for delivery services. Events resulting in the inability of these service providers to perform their obligations, such as extended labor strikes, could adversely impact our results of operations by requiring us to secure alternate providers at higher costs.

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Security breaches involving customer data, or the perception that e-commerce is not secure, could adversely affect our reputation and business.

Online commerce and communications depend on the secure transmission of confidential information over public networks. For example, we utilize the internet to collect customer’s bank account information and bill our customer’s credit card accounts. We rely on various security procedures and systems to ensure the secure storage and transmission of data, including encryption and authentication technology licensed from third parties, to effect secure transmission of confidential information. Computer networks and the internet are, by nature, vulnerable to unauthorized access. An accidental or willful security breach could result in unauthorized access and/or use of customer data, including consumers’ nonpublic personal information. Our security measures could be breached by a third-party action, computer viruses, accidents, employee error or malfeasance, or design flaws in our systems could be exposed and exploited. Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until they are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. If a third party obtains unauthorized access to any of our customers’ data, our reputation could be damaged, clients and consumers could be deterred from ordering our products and services, and client contracts could be terminated, all of which would adversely affect our business and operating results. We could also be exposed to time-consuming and expensive litigation. If we are unsuccessful in defending a lawsuit regarding security breaches, we may be forced to pay damages which would have an adverse affect on our operating results.

In addition, some states have enacted laws requiring companies to notify individuals of data security breaches involving their personal data. These mandatory disclosures regarding a security breach often lead to widespread negative publicity. If we were required to make such a disclosure, it may cause our clients and customers to lose confidence in the effectiveness of our data security measures. Likewise, general publicity regarding security breaches at other companies could lead to the perception among the general public that e-commerce is not secure. This could decrease traffic to our websites and limit future business opportunities.

Interruptions to our website operations or information technology systems could damage our reputation and harm our business.

The satisfactory performance, reliability and availability of our information technology systems is critical to our reputation and our ability to attract and retain customers. We could experience temporary interruptions in our websites, transaction processing systems, network infrastructure, printing production facilities or customer service operations for a variety of reasons, including human error, software errors, power loss, telecommunications failures, fire, flood, extreme weather and other events beyond our control. In addition, our technology, infrastructure and processes may contain undetected errors or design faults which may cause our websites or operating systems to fail. The failure of our systems could result in the loss of customers, additional development costs, diversion of technical and other resources, negative publicity or exposure to liability claims.

Declines in the equity markets could affect the value of our postretirement benefit plan assets, which could adversely affect our operating results and cash flows.

The fair value of our postretirement benefit plan assets is subject to various risks, including credit, interest and overall market volatility risk. During 2008, the equity markets experienced a significant decline in value, resulting in a significant decrease in the fair value of our plan assets. This materially affected the funded status of the plan and resulted in higher postretirement benefit expense in 2009. The fair value of our plan assets did recover in subsequent years. Although our obligation is limited to funding benefits as they become payable, future declines in the fair value of our plan assets would result in increased expense, as well as the need to contribute increased amounts of cash to fund benefits payable under the plan.

We may be unable to maintain our licenses to use third party intellectual property on favorable terms, which would affect our ability to offer licensed products to our customers, and thus, adversely affect our operating results.

Check designs licensed from third parties account for a portion of our revenue. These license agreements generally average three years in duration. There can be no guarantee that such licenses will be available to us indefinitely or under terms that would allow us to continue to sell the licensed products profitably, which would adversely impact our results of operations.

If we are unable to attract and retain key personnel and other qualified employees, our business could suffer.

Our success at efforts to grow our business depends on the contributions and abilities of key employees, especially in the areas of sales, marketing and product management. If we are unable to retain our existing employees and attract qualified personnel, we may not be able to manage our business effectively. We can provide no assurance that we will be successful in attracting and retaining such personnel.

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We may be subject to sales and other taxes which could have an adverse effect on our business.

In accordance with existing state and local tax laws, we currently collect sales, use or other similar taxes in state and local jurisdictions where we have a physical presence. One or more state or local jurisdiction may seek to impose sales tax collection obligations on out-of-state companies which engage in remote or online commerce. Further, tax law and the interpretation of constitutional limitations thereon is subject to change. In addition, cross-marketing and other affiliate support activities between our direct-to-consumer businesses and any of our other entities which have a physical presence in numerous states, could subject shipments of goods by our direct-to-consumer businesses to sales tax collection under current and/or future state statutes. If one or more state or local jurisdiction successfully asserts that we should have collected sales or other taxes in the past but did not, or that we must collect sales or other taxes in the future beyond our current practices, either determination could have an adverse affect on our business.

We may be unable to protect our rights in intellectual property, which could harm our business and ability to compete.

We rely on a combination of trademark and copyright laws, trade secret and patent protection, and confidentiality and license agreements to protect our trademarks, software and other intellectual property. These protective measures afford only limited protection. Despite our efforts to protect our intellectual property, third parties may infringe or misappropriate our intellectual property or otherwise independently develop substantially equivalent products and services which do not infringe on our intellectual property rights. We may be required to spend significant resources to protect our trade secrets and to monitor and police our intellectual property rights. The loss of intellectual property protection or the inability to secure or enforce intellectual property protection could harm our business and ability to compete.

If third party providers of certain significant information technology needs are unable to provide services, our business could be disrupted and the cost of such services could increase.

We have entered into agreements with third party providers for information technology services, including telecommunications, network server and transaction processing services. In the event that one or more of these providers is unable to provide adequate or timely information technology services, we could be adversely affected. Although we believe that information technology services are available from numerous sources, a failure to perform by one or more of our service providers could cause a disruption in our business while we obtain an alternative source of supply. In addition, the use of substitute third party providers could result in increased expense.

Legislation relating to consumer privacy protection could limit or harm our business.

We are subject to regulations implementing the privacy and information security requirements of the federal financial modernization law known as the Gramm-Leach-Bliley Act, as well as and other federal regulation and state law regarding the protection of consumer information. These laws and regulations require us to develop, implement and maintain policies and procedures to protect the security and confidentiality of consumers’ nonpublic personal information. We are also subject to additional requirements in certain of our contracts with financial institution clients, which are often more restrictive than the regulations. These regulations and agreements limit our ability to use or disclose nonpublic personal information for other than the purposes originally intended, which could limit business opportunities. The complexity of compliance with these regulations may also increase the cost of doing business.

We are unable to predict whether more restrictive legislation or regulation will be adopted in the future. Any future legislation or regulation, or the interpretation of existing legislation or regulation, could have a negative impact on our business, results of operations and prospects. Laws and regulations relating to consumer privacy may be adopted in the future with respect to the internet, e-commerce or marketing practices. Such laws or regulations may impede the growth of the internet and/or the use of other sales or marketing vehicles. For example, new privacy laws could decrease traffic to our websites, decrease telemarketing opportunities and increase the cost of obtaining new customers.

A third party could assert that we are infringing its intellectual property, which could result in costly litigation or require us to obtain licenses.

The e-commerce channel is characterized by the existence of a large number of patents, trademarks and copyrights, and by increasing litigation based on allegations of infringement or other violations of intellectual property rights. Third parties may assert patent and other intellectual property infringement claims against us, which could include aggressive and opportunistic enforcement of patents by non-practicing entities. These claims, whether successful or not, could divert management’s attention, result in costly and time-consuming litigation, require us to enter into royalty or licensing agreements, or require us to redesign our software or services to avoid infringement. If we fail to obtain a required license or we are unable to design around a third party’s patent, we may be unable to effectively conduct certain business activities. Consequently, third party intellectual property claims could result in increased expense or could limit our ability to generate revenue.

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We are subject to environmental risks which, if realized, could have an adverse impact on our operating results.

Our printing facilities are subject to many federal and state regulations designed to protect the environment. We have sold former printing facilities to third parties and, in some instances, have agreed to indemnify the buyer of the facility for certain environmental liabilities. Unforeseen conditions at current or former facilities could result in additional liability and expense beyond our insurance coverage.

Item 1B. Unresolved Staff Comments.

None.

Item 2.  Properties.

Our principal executive office is an owned property located in Shoreview, Minnesota. We occupy 29 facilities throughout the United States and six facilities in Canada where we conduct printing and fulfillment, call center, data center and administrative functions. We also have one data center located in Ireland. 40% of our facilities are owned, while the remaining 60% are leased. These facilities have a combined floor space of approximately 2.7 million square feet. We believe that our properties are sufficiently maintained and are adequate and suitable for our business needs as presently conducted.

Item 3.  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, either individually or in the aggregate, will materially affect our financial position, results of operations or liquidity.

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PART II

Item 5.  Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common stock is traded on the New York Stock Exchange under the symbol DLX. Dividends are declared by our board of directors on a current basis and therefore, may be subject to change in the future, although we currently have no plans to change our $0.25 per share quarterly dividend amount. As of December 31, 2011, the number of shareholders of record was 7,316. The table below shows the per share closing price ranges of our common stock for the past two fiscal years as quoted on the New York Stock Exchange, as well as the quarterly dividend amount for each period.

			Stock price
	Dividend		High		Low		Close
2011
Quarter 4	$	0.25	$	24.83	$	17.65	$	22.76
Quarter 3		0.25		26.70		17.50		18.60
Quarter 2		0.25		29.30		22.11		24.71
Quarter 1		0.25		27.03		22.94		26.54
2010
Quarter 4	$	0.25	$	24.00	$	18.64	$	23.02
Quarter 3		0.25		22.67		16.57		19.13
Quarter 2		0.25		23.77		18.63		18.75
Quarter 1		0.25		20.37		14.96		19.42

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 5.3 million shares remain available for purchase under this authorization. We did not repurchase any shares during the fourth quarter of 2011.

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 exercise or vesting of such awards. During the fourth quarter of 2011, we withheld 2,554 shares in conjunction with the vesting and exercise of equity-based awards.

Absent certain defined events of default under our debt instruments, and as long as our ratio of earnings before interest, taxes, depreciation and amortization to interest expense, as defined, is in excess of two to one, our debt covenants do not restrict our ability to pay cash dividends at our current rate, although there is an aggregate annual limit on the amount of dividends and share repurchases under the terms of our credit facility.

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The table below compares the cumulative total shareholder return on our common stock for the last five fiscal years with the cumulative total return of the S&P 400 MidCap Index and the Dow Jones U.S. Support Services (DJUSIS) Index.

Comparison of 5 Year Cumulative Total Return

Assumes Initial Investment of $100*

December 2011

* The graph assumes that $100 was invested on December 31, 2006 in each of Deluxe common stock, the S&P 400 MidCap Index and the DJUSIS Index, and that all dividends were reinvested.

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Item 6.  Selected Financial Data.

The following table shows certain selected financial data for the five years ended December 31, 2011. This information should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations appearing in Item 7 of this report and our consolidated financial statements appearing in Item 8 of this report.

(dollars and orders in thousands, except per share and per order amounts)		2011				2010				2009				2008				2007
Statement of Income Data:
Revenue	$		1,417,596		$		1,402,237		$		1,344,195		$		1,468,662		$		1,588,885
As a percentage of revenue:
Gross profit			65.2%				65.2%				62.4%				61.4%				63.8%
Selling, general and administrative expense			45.2%				44.5%				45.9%				45.7%				46.8%
Operating income			19.1%				20.1%				14.2%				14.2%				17.0%
Operating income	$		271,058		$		281,544		$		190,589		$		209,234		$		269,904
Income from continuing operations			144,595				153,395				99,365				105,872				145,117
Per share – basic			2.82				2.98				1.94				2.06				2.79
Per share – diluted			2.80				2.97				1.94				2.05				2.78
Cash dividends per share			1.00				1.00				1.00				1.00				1.00
Balance Sheet Data:
Cash and cash equivalents	$		28,687		$		17,383		$		12,789		$		15,590		$		21,615
Return on average assets(1)			10.7%				12.1%				8.2%				8.4%				11.6%
Total assets	$		1,388,809		$		1,308,691		$		1,211,210		$		1,218,985		$		1,210,755
Long-term obligations(2)			741,706				748,122				742,753				775,336				776,840
Total debt			741,706				755,122				768,753				853,336				844,040
Statement of Cash Flows Data:
Net cash provided by operating activities of continuing operations	$		235,367		$		212,615		$		206,438		$		198,487		$		245,075
Net cash used by investing activities of continuing operations			(131,785	)			(136,170	)			(81,788	)			(135,773	)			(10,929	)
Net cash used by financing activities of continuing operations			(91,702	)			(72,541	)			(128,545	)			(67,681	)			(224,890	)
Purchases of capital assets			(35,506	)			(43,932	)			(44,266	)			(31,865	)			(32,286	)
Payments for acquisitions, net of cash acquired			(85,641	)			(98,621	)			(30,825	)			(104,879	)			(2,316	)
Payments for common shares repurchased			(23,620	)			(2,999	)			(1,319	)			(21,847	)			(11,288	)
Other Data (continuing operations):
Orders(3)			54,348				56,736				59,174				62,823				64,753
Revenue per order(3)	$		26.08		$		24.72		$		22.72		$		23.38		$		24.54
Number of employees			5,565				5,765				6,089				7,172				7,910
Number of printing/fulfillment facilities			16				15				14				21				22
Number of call center facilities			13				14				12				14				14

(1) Return on average assets is calculated as net income divided by average assets for the period.

(2) Long-term obligations include both the current and long-term portions of our long-term debt obligations, including capital leases.

(3) Orders is our company-wide measure of volume. When portions of a customer order are on back-order, one customer order may be fulfilled via multiple shipments. Generally, an order is counted when the last item ordered is shipped to the customer.

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Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations.

EXECUTIVE OVERVIEW

We employ a multi-channel strategy to provide a suite of life-cycle driven solutions to our customers. We use printed and electronic marketing, a direct sales force, financial institution and telecommunication client referrals, purchased search results from online search engines, and independent distributors and dealers to provide our customers a wide range of customized products and services. Over the past 24 months, our Small Business Services segment has provided products and services to over four million small business customers and our Direct Checks segment has provided products and services to more than eight million consumers. Through our Financial Services segment, we provide products and services to approximately 6,000 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, both in terms of revenue and the number of checks produced. Checks account for the majority of the revenue in our Financial Services and Direct Checks segments and represented 47.2%, 48.3% and 47.7% of our Small Business Services segment’s revenue in 2011, 2010 and 2009, respectively.

Forms – Our Small Business Services segment is a leading provider of printed forms to small businesses including, 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 produced by our Financial Services and Direct Checks segments include deposit tickets and check registers.

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

Marketing solutions – All three of our segments offer products and services that help small businesses and financial institutions promote their businesses and acquire customers. Our Small Business Services segment offers services such as web design, hosting and other web services, logo design, search engine marketing, and digital printing services designed to fulfill the sales and marketing needs of small businesses, as well as products such as business cards, greeting cards, brochures and apparel. Financial Services offers various customer acquisition programs and marketing communications services, while Direct Checks provides package insert programs under which companies’ marketing materials are included in our check packages.

Other services – All three of our segments provide fraud protection services. In addition, our Small Business Services segment offers payroll services, and Financial Services provides financial institution profitability, regulatory and compliance programs.

Throughout the downturn in the U.S. economy, which began in late 2008, we have focused on capitalizing on transformational opportunities available to us so that we are positioned to deliver increasing revenues and continued strong operating margins. These opportunities include new product offerings, brand awareness and positioning initiatives, investing in technology for new 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 offer marketing solutions and other services, extend our direct-to-consumer offerings, improve our operating cash flow, and extend the range of products and services we offer to our customers. During 2012, we will continue our focus in these areas, with an emphasis on profitable revenue growth, improving our marketing solutions and other services offerings for small businesses and financial institutions, and assessing small to medium-sized acquisitions that complement our large customer bases with a focus on marketing solutions and other services.

Earnings for 2011, as compared to 2010, benefited from continuing initiatives to reduce our cost structure, primarily within sales, marketing and manufacturing, as well as price increases and a lower effective income tax rate in 2011. These benefits were more than offset by volume reductions for our personal check businesses due primarily to the continuing decline in check usage, revenue of $24.6 million from a contract settlement executed during 2010, the recognition of deferred revenue in 2010 from a Financial Services contract settlement executed in the fourth quarter of 2009, and pre-tax losses in the first quarter of 2011 from the retirement of long-term notes.

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Our Strategies

Small Business Services – Our focus within Small Business Services is to grow revenue and increase operating margin by continuing to implement the following strategies:

· Acquire new customers by leveraging customer referrals that we receive from our Financial Services segment’s financial institution clients and our telecommunications clients, as well as from other marketing initiatives, including internet and direct mail solicitations;

· Expand sales of higher growth marketing solutions and other services;

· Increase our share of the amount small businesses spend on the types of products and services in our portfolio through increased brand awareness and improved customer segmentation and analytics; and

· Continue to optimize our cost and expense structure.

We continue to invest in several key enablers to achieve our strategies and reposition Small Business Services as not just a provider of business checks and printed forms, but also a provider of higher growth marketing solutions and other services. These key enablers include strengthening our portfolio of products and services, attracting new customers, improving our use of technology, growing our distributor network, and enhancing brand awareness and positioning. We continue to refresh portions of our existing product offerings and have improved some of our newer service offerings, which we believe creates a more valuable suite of products and services. We have also identified opportunities to expand sales to our existing customers and to acquire new customers. Continued investment in our e-commerce platforms increases our opportunities to market and sell on-line. Also important to our growth are the small business customer referrals we receive through our Deluxe Business Advantage® program, which provides a fast and simple way for financial institutions to offer expanded personalized service to small businesses. Our relationships with financial institutions are important in helping us more deeply serve unique customer segments such as contractors, retailers and professional services firms. During the past two years, we increased our investment in promoting and strengthening the Deluxe brand to increase brand awareness and loyalty.

In recent years, we have acquired companies which allow us to expand our marketing solutions and other services offerings, including web-to-print capabilities. We expect these higher growth products and services will represent an increasing portion of our revenue. Specifically, during July 2011, we acquired substantially all of the assets of PsPrint, LLC, for cash of $45.5 million, net of cash acquired. PsPrint is a web-to-print solutions company that provides online print marketing and promotional services for small businesses. In 2009, we purchased all of the common stock of Abacus America, Inc., a wholly-owned subsidiary of Aplus Holdings Inc., to expand our web services customer base. We also acquired substantially all of the assets of MerchEngines.com during 2009, which added new search engine marketing capabilities. The companies acquired during 2009 were purchased for an aggregate cash amount of $30.8 million, net of cash acquired.

Financial Services – Our strategies within Financial Services are as follows:

· Optimize core check revenue streams and acquire new clients;

· Provide marketing solutions and other services that differentiate us from the competition; and

· Continue to optimize our cost and expense structure.

            Our focus on acquiring new clients will continue during 2012. We are also advancing our marketing solutions and other services offerings, During April 2011, we acquired substantially all of the assets of Banker’s Dashboard, LLC, for $39.7 million, comprised of $35.0 million of cash and $4.7 million of shares of our common stock plus related dividend equivalent payments. Banker’s Dashboard provides online financial management tools that provide banks with a comprehensive daily view of their financial picture. In March 2010, we purchased substantially all of the assets of Cornerstone Customer Solutions, LLC (Cornerstone), for $0.7 million. Cornerstone is a full-service, marketing solutions provider specializing in the development and execution of analytics-driven direct marketing programs. We also continue to leverage our Deluxe Business Advantage program which is designed to maximize financial institution business check programs. It offers the products and services of our Small Business Services segment to the small business customers of financial institutions through a number of service level options. The revenue from the products and services sold through this program is reflected in our Small Business Services segment.

In our efforts to expand beyond check-related products, we deliver several marketing solutions and other services offerings including:

· Marketing solutions – a variety of strategic and tactical marketing solutions which help financial institutions acquire new customers, deepen existing customer relationships and retain customers.

· Banker’s Dashboard® – Online financial management tools that provide financial institutions with a comprehensive daily view of their financial picture.

· Deluxe ProventSM – a comprehensive suite of identity protection services.

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· Deluxe CallingSM – an outbound calling program aimed at helping financial institutions generate new organic revenue growth and reduce account holder attrition.

· REALCheckingTM program – a system of deposit products, including reward checking programs, that drives non-interest income, attracts new account holders and increases retention for community financial institutions. We offer this suite of products to our clients through a partnership with BancVue, Ltd.

· Regulatory compliance – services that assist financial institutions in complying with the current dynamic regulatory environment.

· SwitchAgentSM – a proprietary service allowing consumers to easily switch from one financial institution to another.

We expect providing products and services that differentiate us from the competition will help partially offset the impacts of the decline in check usage and the pricing pressures we are experiencing in our check programs. As such, we also continue to focus on accelerating the pace at which we introduce new products and services. In addition to our various marketing solutions and other service offerings, we continue to offer our Knowledge ExchangeTM Series, a suite of resources and events for our financial institution clients focused on topics that most impact financial institutions’ core strategies.

Direct Checks – Our strategies within Direct Checks are as follows:

· Maximize the lifetime value of customers by selling new features, accessories and products;

· Continue to optimize our cost and expense structure; and

· Optimize cash flow.

In April 2010, we acquired Custom Direct, Inc., a provider of direct-to-consumer checks, in a cash transaction for $97.9 million, net of cash acquired.We have leveraged this acquisition to build a best-in-class, direct-to-consumer check experience. Additionally, we continue to identify opportunities to lower our cost and expense structure in all functional areas, particularly in the areas of marketing and fulfillment. We continue to actively market our products and services through targeted advertising, including a continued focus on the internet channel. We continue to explore avenues to increase sales to existing customers. For example, we have had success with the EZShieldTM offering, a check protection service that provides reimbursement to consumers for losses resulting from forged signatures or endorsements and altered checks.

Cost Reduction Initiatives

For several years we have been pursuing cost reduction and business simplification initiatives, including: reducing shared services infrastructure costs; streamlining our call center and fulfillment activities; eliminating system and work stream redundancies; reducing advertising costs; and strengthening our ability to quickly develop new products and services and bring them to market. We have reduced stock-keeping units (SKUs), standardized products and services and improved the sourcing of third-party goods and services. As a result of all of these efforts, we realized net cost savings of approximately $60 million during 2011, as compared to our 2010 results of operations. Approximately one-third of these savings impacted cost of goods sold, while the remaining two-thirds impacted selling, general and administrative (SG&A) expense. We anticipate that we will realize additional net cost reductions of approximately $50 million in 2012, as compared to our 2011 results of operations, which will be generated primarily by our fulfillment, sales and marketing, and information technology organizations. Approximately 40% of these savings are expected to impact cost of goods sold, with the remaining 60% affecting SG&A expense.

Outlook for 2012

We anticipate that consolidated revenue will be between $1.42 billion and $1.46 billion for 2012, as compared to $1.42 billion for 2011. In Small Business Services, we expect the percentage increase in revenue to be in the middle to high single digits compared to 2011 revenue of $846.4 million, as declines in core business products are expected to be more than offset by the benefits of our e-commerce investments, price increases, and growth in our distributor and dealer channels and in our marketing solutions and other services offerings. In Financial Services, we expect the percentage decrease in revenue to be in the low to mid-single digits compared to 2011 revenue of $342.4 million, driven by continued check order declines of approximately seven to eight percent, partially offset by higher revenue per order, a new large customer which began contributing volume early in the first quarter of 2012, and continued contributions from marketing solutions and other services offerings. In Direct Checks, we expect the percentage decrease in revenue to be in the middle to high single digits compared to 2011 revenue of $228.8 million, driven by check usage declines.

We expect that 2012 diluted earnings per share will be between $3.10 and $3.30, compared to $2.80 for 2011, which included total estimated charges of $0.31 per share related to restructuring-related costs, losses on debt retirements, transaction costs related to acquisitions, and an asset impairment charge. We expect that the benefit of our cost reduction activities will be partially offset by continued investments in revenue growth opportunities and increases in material and delivery rates. We estimate that our annual effective tax rate for 2012 will be approximately 33%, the same as in 2011.

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We anticipate that net cash provided by operating activities will be between $225 million and $245 million in 2012, compared to $235 million in 2011, driven by higher earnings in the middle to upper end of our outlook range, partially offset by higher income tax payments. We estimate that capital spending will be approximately $35 million in 2012 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 our credit facility, will be sufficient to support our operations, including capital expenditures, small-to-medium-sized acquisitions, required debt service and dividend payments, for the next 12 months. This includes payments of $84.8 million which are due in December 2012 when a portion of our long-term notes matures. We are focused on 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. We also 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. To the extent we have cash flow in excess of these priorities, our focus during 2012 will be on further reducing our debt if we are able to purchase our long-term notes on the open market, or we may complete share repurchases to offset the dilution of shares issued under our employee stock incentive plan. During 2011, we retired $195.5 million of our long-term notes due in 2012 and $10.0 million of our long-term notes due in 2014. We also completed the issuance of $200.0 million of long-term notes due in 2019, collecting net proceeds of $196.5 million. Because we had no amounts drawn on our credit facility at the end of 2011, we may accumulate larger investment balances during 2012 as we prepare to pay the $84.8 million of long-term debt which is due in December 2012.

BUSINESS CHALLENGES/MARKET RISKS

Market for checks and business forms

The market for our two largest products, checks and business forms, is very competitive. These products are mature and their use has been declining. The total number of checks written in the United States has been in decline as a result of alternative payment methods, including credit cards, debit cards, automated teller machines, direct deposit, and electronic and other bill paying services. According to a Federal Reserve study released in December 2010, the most recent information available, approximately 27.5 billion checks were written in 2009. According to this study, checks are no longer the largest single non-cash payment method in the United States, being surpassed by the debit card. Checks written account for approximately 25% of all non-cash payment transactions, which is a reduction from the Federal Reserve study released in December 2007 when checks accounted for approximately 35% of all non-cash payment transactions. The Federal Reserve estimates that checks written declined approximately 6.1% per year between 2006 and 2009, and we expect this trend to continue. In addition to the decline in check usage, the use of business forms is also under pressure. Continual technological improvements provide small business customers with alternative means to enact and record business transactions. For example, off-the-shelf business software applications, electronic transaction systems and mobile applications have been designed to replace pre-printed business forms products.

Financial institution clients

Because check usage is declining, we have been encountering significant pricing pressure when negotiating contracts with our financial institution clients. Financial institutions seek to maintain the profits they have historically generated from their check programs, despite the decline in check usage. Our traditional financial institution relationships are typically formalized through check supply contracts averaging three to six years in duration. As we compete to retain and acquire new financial institution business, the resulting pricing pressure, combined with declining check usage in the marketplace, has reduced our revenue and profit margins. We expect these trends to continue.

Turmoil in the financial services industry, which began in late 2008, led to increased bank failures and consolidations. There could be a significant impact on our consolidated results of operations if we were to lose a significant amount of business and/or we were unable to recover the value of unamortized contract acquisition costs or accounts receivable. As of December 31, 2011, unamortized contract acquisition costs totaled $55.1 million, while liabilities for contract acquisition costs not paid as of December 31, 2011 were $20.5 million. The inability to recover amounts paid to one or more of our larger financial institution clients could have a significant negative impact on our consolidated results of operations.

The consolidation of financial institutions may also impact our results of operations. In the past we have occasionally acquired new clients as financial institutions that were not our clients consolidated with our clients. When two of our financial institution clients consolidate, the increase in general negotiating leverage possessed by the consolidated entity could result in a new contract which is not as favorable to us as those historically negotiated with the clients individually. However, we may also generate non-recurring conversion revenue when obsolete checks have to be replaced after one financial institution merges with or acquires another. Conversely, we have also lost financial institution clients when they consolidated with financial institutions which were not our clients. If we were to lose a significant amount of business in this manner, it could have a significant negative impact on our consolidated results of operations. In such situations, we have typically collected contract termination payments and we may be able to do so in similar circumstances in the future.

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Economic conditions

General economic conditions had a continued negative impact on our 2011 results of operations. Small business confidence and the rate of small business formations impact Small Business Services. The index of small business optimism published by the National Federation of Independent Business was 94.1 in January 2011 and ended the year at 93.8, after dipping as low as 88.1 in August. The year did end positively, with four consecutive monthly increases. However, the December 2011 outlook for expected business conditions in six months dropped 18 points from January 2011. According to estimates of the Small Business Administration’s Office of Advocacy, the last year in which the number of small businesses increased was 2006. Consumer spending and employment levels have some impact on our personal check businesses. Modest consumer spending growth, along with only moderate private sector growth in employment during 2011, continued to impact our personal check businesses. We expect that general economic conditions will continue to be challenging in 2012. A continued sluggish economy could result in additional declines in our revenue and profitability.

CONSOLIDATED RESULTS OF OPERATIONS

Consolidated Revenue

							Change
(in thousands, except per order amounts)	2011		2010		2009		2011 vs. 2010			2010 vs. 2009
Revenue	$	1,417,596	$	1,402,237	$	1,344,195		1.1	%		4.3	%
Orders		54,348		56,736		59,174		(4.2	%)		(4.1	%)
Revenue per order	$	26.08	$	24.72	$	22.72		5.5	%		8.8	%

The increase in revenue for 2011, as compared to 2010, was primarily due to price increases in all three segments, incremental revenue of $24.1 million from the acquisition of Custom Direct in April 2010, revenue generated by the businesses acquired during 2011, growth in the Small Business Services distributor channel, and a favorable currency exchange rate impact of $3.0 million. These revenue increases were partially offset by lower order volume for our personal check businesses, revenue of $24.6 million in 2010 from a contract settlement, continued pricing pressure within Financial Services, and the recognition of deferred revenue in 2010 from a contract settlement executed in the fourth quarter of 2009. The revenue of $24.6 million from the contract settlement recognized in 2010 accounted for a revenue decrease of 1.8 percentage points in 2011. It related to a settlement with a large financial institution that acquired one of our clients and chose to consolidate its check printing business with another provider. This business transitioned during the third quarter of 2010 and the contract termination payments were included in revenue in our Small Business Services and Financial Services segments. Revenue from a new contract acquisition which began generating revenue during the third quarter of 2010 offset the revenue lost from this contract termination. The recognition of Financial Services deferred revenue in 2010 related to a contract settlement executed in the fourth quarter of 2009 accounted for a revenue decrease of 1.0 percentage point in 2011.

The number of orders decreased for 2011, as compared to 2010, due primarily to the continuing decline in check and forms usage, partially offset by the addition of Custom Direct orders, which increased orders 1.1 percentage points as compared to 2010. Revenue per order increased for 2011, as compared to 2010, primarily due to the benefit of price increases, partially offset by revenue of $24.6 million in 2010 from a contract settlement, continued pricing pressure within Financial Services, and the recognition of deferred revenue in 2010 from a Financial Services contract settlement executed in the fourth quarter of 2009. The $24.6 million contract settlement in 2010 increased revenue per order by 1.9 percentage points in 2010.

The increase in revenue for 2010, as compared to 2009, was primarily due to a revenue contribution of $60.3 million from the acquisition of Custom Direct in April 2010 and revenue of $24.6 million from a contract settlement executed during 2010. In addition, revenue benefited from price increases in Financial Services and Small Business Services, growth in marketing solutions and other services, including revenue from businesses acquired in July 2009, the recognition of deferred revenue from a Financial Services contract settlement executed in the fourth quarter of 2009, and a favorable currency exchange rate impact of $6.9 million. Partially offsetting these revenue increases was lower order volume and continued pricing pressure within Financial Services.

The number of orders decreased for 2010, as compared to 2009, due primarily to the continuing decline in check and forms usage and the impact of general economic conditions, partially offset by Custom Direct orders, which increased orders 3.0 percentage points as compared to 2009. Revenue per order increased for 2010, as compared to 2009, due to the $24.6 million contract settlement executed during 2010, as well as the recognition of deferred revenue from a Financial Services contract settlement executed in the fourth quarter of 2009 and the benefit of price increases in Financial Services and Small Business Services. These increases in revenue per order were partially offset by continued pricing pressure within Financial Services.

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Supplemental information regarding revenue by product and service category is as follows:

							Change
(in thousands)	2011		2010		2009		2011 vs. 2010			2010 vs. 2009
Checks, including contract settlements	$	871,731	$	896,563	$	853,729		(2.8	%)		5.0	%
Forms		195,905		194,724		198,855		0.6	%		(2.1	%)
Accessories and other products		126,949		123,264		129,323		3.0	%		(4.7	%)
Marketing solutions, including services		150,973		126,211		112,848		19.6	%		11.8	%
Other services		72,038		61,475		49,440		17.2	%		24.3	%
Total revenue	$	1,417,596	$	1,402,237	$	1,344,195		1.1	%		4.3	%

During 2011, we modified the categories we use to report a portion of our products and services. We added the marketing solutions category to add more clarity to our products and services, as our marketing solutions and other services categories reflect a growing part of our business. Amounts for 2010 and 2009 have been reclassified to conform to the 2011 presentation. These changes had no impact on the amounts reported in previous years for checks.

The percentage of total revenue derived from the sale of checks was 61.4% in 2011, compared to 63.9% in 2010 and 63.5% in 2009. Check revenue decreased in 2011, as compared to 2010, due to the decline in check usage, revenue of $24.6 million in 2010 from a contract settlement, and the recognition in 2010 of deferred revenue from a Financial Services contract settlement executed in the fourth quarter of 2009. These decreases in check revenue were partially offset by incremental revenue from the acquisition of Custom Direct in April 2010 and price increases. Check revenue increased in 2010, as compared to 2009, as revenue from the acquisition of Custom Direct in April 2010, the 2010 contract settlement, the recognition of deferred revenue from a Financial Services contract settlement executed in the fourth quarter of 2009 and Financial Services price increases more than offset the impact of the decline in check usage. Small Business Services contributed non-check revenue of $446.8 million in 2011, $411.7 million in 2010 and $410.2 million in 2009.

Consolidated Gross Margin

							Change
(in thousands)	2011		2010		2009		2011 vs. 2010			2010 vs. 2009
Gross profit	$	924,194	$	913,818	$	839,413		1.1	%		8.9%
Gross margin		65.2%		65.2%		62.4%		—		2.8 pt.

We evaluate gross margin when analyzing our consolidated results of operations as we believe it provides important insight into significant profit drivers. As a significant portion of our revenue is generated from the sale of manufactured and purchased products, we believe the measure of gross margin best demonstrates our manufacturing and distribution performance, as well as the impact of pricing on our profitability. Gross margin is not a complete measure of profitability, as it omits SG&A expense. However, it is a financial measure which we believe is useful in evaluating our results of operations.

Gross margin for 2011 was the same as in 2010. Manufacturing and delivery efficiencies and other benefits resulting from our continued cost reduction initiatives, as well as the benefit of price increases, were offset by the $24.6 million contract settlement in 2010, higher material costs and delivery rates, and the recognition of deferred revenue in 2010 from a Financial Services contract settlement executed in the fourth quarter of 2009. The $24.6 million contract settlement in 2010 contributed 0.7 percentage points to gross margin in 2010.

Gross margin increased for 2010, as compared to 2009, due primarily to the higher revenue per order discussed earlier, including the $24.6 million contract settlement which contributed 0.7 percentage points of the increase in gross margin, as well as manufacturing and delivery efficiencies and other benefits resulting from our cost reduction initiatives. Also contributing to the higher gross margin was a $4.4 million decrease in restructuring charges and other costs related to our cost reduction initiatives. Further information regarding our restructuring costs can be found under Restructuring Costs. Partially offsetting these increases in gross margin were higher delivery rates and material costs.

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Consolidated Selling, General & Administrative Expense

							Change
(in thousands)	2011		2010		2009		2011 vs. 2010		2010 vs. 2009
SG&A expense	$	640,307	$	624,303	$	616,496		2.6%		1.3%
SG&A expense as a percentage of revenue		45.2%		44.5%		45.9%	0.7 pt.		(1.4) pt.

The increase in SG&A expense for 2011, as compared to 2010, was driven primarily by operating expenses of the businesses we acquired in 2011 and the acquisition of Custom Direct in April 2010, and increased Small Business Services commission expense driven by increased volume, as well as marketing investments in our brand positioning and business development initiatives. These increases were partially offset by various expense reduction initiatives within sales and marketing and our shared services organizations, as well as the discontinuation of contributions to our defined contribution pension plan in 2011, which reduced SG&A expense approximately $7 million for 2011, as compared to 2010, and lower acquisition-related amortization related to previous acquisitions.

The increase in SG&A expense for 2010, as compared to 2009, was driven primarily by expenses from the businesses we acquired in 2009 and 2010, as well as marketing investments in our brand awareness and positioning initiatives and direct marketing tests. These increases were partly offset by various cost reduction initiatives within our shared services organizations, primarily within sales and marketing and information technology, as well as lower acquisition-related amortization related to acquisitions completed prior to 2009, and lower performance-based compensation and retiree medical expense.

Net Restructuring Charges

							Change
(in thousands)	2011		2010		2009		2011 vs. 2010		2010 vs. 2009
Net restructuring charges	$	11,743	$	7,971	$	7,428	$	3,772	$	543

We recorded restructuring charges and reversals related to the cost reduction initiatives discussed under Executive Overview. The charges and reversals for each period relate to costs of our restructuring activities such as employee severance benefits, as well as other direct costs of our initiatives, including employee and equipment moves, training and travel. Additional restructuring charges of $ $2.0 million in 2011, $2.4 million in 2010 and $4.6 million in 2009 were included within cost of goods sold in our consolidated statements of income. Further information can be found under Restructuring Costs.

Asset Impairment Charges

							Change
(in thousands)	2011		2010		2009		2011 vs. 2010		2010 vs. 2009
Asset impairment charges	$	1,196	$	—	$	24,900	$	1,196	$	(24,900	)

During 2011, we recorded an asset impairment charge of $1.2 million related to our vacant facility located in Thorofare, New Jersey, which is currently held for sale. The amount of the impairment charge was based on current market conditions and ongoing negotiations for the sale of the facility, and we continue to actively market the property.

As of March 31, 2009, we completed impairment analyses of goodwill and an indefinite-lived trade name due to declines in our stock price during the first quarter of 2009 coupled with the continuing negative impact of the economic downturn on our expected operating results. We recorded non-cash asset impairment charges in our Small Business Services segment of $20.0 million related to goodwill and $4.9 million related to the indefinite-lived trade name.

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(Loss) Gain on Early Debt Extinguishment

								Change
(in thousands)	2011			2010		2009		2011 vs. 2010			2010 vs. 2009
(Loss) gain on early debt extinguishment	$	(6,995	)	$	—	$	9,834	$	(6,995	)	$	(9,834	)

During the first quarter of 2011, we retired $205.5 million of long-term notes, realizing a pre-tax loss of $7.0 million. During the first quarter of 2009, we retired $31.2 million of long-term notes, realizing a pre-tax gain of $9.8 million. We may retire additional debt, depending on prevailing market conditions, our liquidity requirements and other potential uses of cash, including acquisitions or share repurchases.

Interest Expense

							Change
(in thousands)	2011		2010		2009		2011 vs. 2010		2010 vs. 2009
Interest expense	$	47,797	$	44,165	$	46,280		8.2%		(4.6%)
Weighted-average debt outstanding		760,798		793,767		818,521		(4.2%)		(3.0%)
Weighted-average interest rate		5.63%		5.09%		5.14%	0.54 pt.		(0.05) pt.

The increase in interest expense for 2011, as compared to 2010, was due, in part, to our higher average interest rate in 2011. Also contributing to the increase in interest expense were charges of $1.3 million driven by the retirement of long-term notes during the first quarter of 2011. The debt retirements required that we accelerate the recognition of a portion of a derivative loss, and we recognized expense related to the settlement of a portion of our interest rate swap agreements. These increases in interest expense were partially offset by our lower average debt level in 2011.

The decrease in interest expense for 2010, as compared to 2009, was primarily due to a favorable impact of $2.7 million from interest rates swaps and our lower average debt level in 2010. During the third quarter of 2009, we entered into interest rate swaps with a notional amount of $210.0 million to hedge against changes in the fair value of a portion of our long-term debt. Additionally, due to the early retirement of long-term notes during the first quarter of 2009, we were required to accelerate the recognition of a portion of a previously deferred derivative loss. This accelerated recognition resulted in additional interest expense of $0.5 million in 2009.

Income Tax Provision

							Change
(in thousands)	2011		2010		2009		2011 vs. 2010		2010 vs. 2009
Income tax provision	$	71,489	$	82,554	$	55,656		(13.4%)		48.3%
Effective tax rate		33.1%		35.0%		35.9%	(1.9) pt.		(0.9) pt.

The decrease in our effective tax rate for 2011, as compared to 2010, was due, in part, to discrete income tax expense in 2010, which increased our effective tax rate by 0.5 points. The largest discrete item in 2010 was a $4.1 million charge resulting from the Health Care and Education Reconciliation Act of 2010, which was signed into law in March 2010, and requires that certain tax deductions after 2012 be reduced by the amount of Medicare Part D subsidy payments. Prior to this law change, the subsidy was to be disregarded in all future years when computing tax deductions. This resulted in a reduction in the deferred tax asset associated with our postretirement benefit plan. Our 2011 tax rate decreased 1.2 points due to actions taken to restore a portion of this deferred tax asset. In addition, our effective tax rate for 2011 included a number of discrete items, including adjustments to receivables for amendments to prior year tax returns, which collectively decreased our tax rate by 0.6 points. We expect that our annual effective tax rate for 2012 will be approximately 33%.

The decrease in our effective tax rate for 2010, as compared to 2009, was primarily due to the impact of the goodwill impairment charge in 2009, a portion of which was non-deductible, and which increased our 2009 effective tax rate 2.9 percentage points. In addition, our state effective tax rate decreased in 2010 and our qualified production activity deduction increased. Partially offsetting these decreases in our effective tax rate was the impact of other discrete items and lower tax credits in 2010 for research and development. Discrete items in 2009, excluding the impact of the goodwill impairment charge, lowered our effective tax rate 2.9 percentage points and related primarily to receivables for amendments to prior year tax returns of $3.5 million. Discrete income tax expense for 2010 increased our effective tax rate by 0.5 points. The discrete items in 2010 consisted primarily of a $4.1 million charge resulting from the Health Care and Education Reconciliation Act of 2010, which was signed into law in March 2010, and requires that certain tax deductions after 2012 be reduced by the amount of Medicare Part D subsidy payments. Prior to this law change, the subsidy was to be disregarded in all future years when computing tax deductions. This resulted in a reduction in the deferred tax asset associated with our postretirement benefit plan. Partially offsetting the impact of this unfavorable discrete item were discrete credits to income tax expense related to adjustments to accruals for uncertain tax positions.

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RESTRUCTURING COSTS

During 2011, we recorded net restructuring charges of $13.7 million. This amount included expenses related to our restructuring activities, including employee and equipment moves, training and travel, which were expensed as incurred, as well as net restructuring accruals of $7.1 million. The restructuring accruals included charges of $8.8 million related to severance for employee reductions across all functional areas as we continue to reduce costs. The restructuring accruals included severance benefits for approximately 400 employees. These charges were reduced by the reversal of $1.7 million of severance accruals, the majority of which were recorded in previous years, as fewer employees received severance benefits than originally estimated. The majority of the employee reductions included in our restructuring accruals are expected to be completed by the end of 2012, and we expect most of the related severance payments to be paid by mid-2013, utilizing cash from operations.

During 2010, we recorded net restructuring charges of $10.3 million. This amount included expenses related to our restructuring activities, including employee and equipment moves, training and travel, which were expensed as incurred, as well as net restructuring accruals of $7.5 million. The net restructuring accruals included charges of $9.3 million related to severance for employee reductions primarily resulting from reductions in various functional areas as we continued our cost reduction initiatives, as well as actions related to our integration of Custom Direct. The net restructuring accruals included severance benefits for approximately 470 employees. These charges were reduced by the reversal of $2.4 million of severance accruals recorded primarily in previous years, as fewer employees received severance benefits than originally estimated.

During 2009, we recorded net restructuring charges of $12.0 million. This amount included expenses related to our restructuring activities, including items such as equipment moves, training and travel which were expensed as incurred, as well as net restructuring accruals of $8.2 million. The net restructuring accruals included charges of $11.8 million related to severance for employee reductions in various functional areas, including the closing of one customer call center which was completed in the first quarter of 2010, and further consolidation in the sales, marketing and fulfillment organizations, as well as operating lease obligations on three manufacturing facilities closed during 2009. These actions were the result of our cost reduction initiatives. The net restructuring accruals included severance benefits for approximately 640 employees. These charges were reduced by the reversal of $3.6 million of restructuring accruals recorded primarily in previous years, as fewer employees received severance benefits than originally estimated.

During 2009, we closed seven manufacturing operations and two customer call centers which were located in five leased facilities and three owned facilities. The operations and related assets were relocated to other locations. We have remaining rent obligations for three of the five leased facilities, with the remaining rental payments to be paid through May 2013. In January 2011, we sold one of the owned facilities, realizing a pre-tax gain of $0.1 million, and we are actively marketing the remaining two owned facilities. Although we closed the manufacturing operations within our Colorado Springs, Colorado facility during 2009, this owned location also houses administrative functions and two customer call centers, one of which we closed during the first quarter of 2010. Once this facility is sold, we plan to relocate the remaining employees to another location in the same area unless we are able to lease back a portion of the existing facility. During the third quarter of 2011, we closed one leased facility which housed both manufacturing operations and a call center and one leased facility which housed a call center. We have remaining rent obligations on these facilities through January 2012.

As a result of our employee reductions and facility closings, we realized cost savings of approximately $5 million in cost of goods sold and $10 million in SG&A expense in 2011, in comparison to our 2010 results of operations, which represents a portion of the total net cost reductions we realized in 2011. In 2012, we expect to realize cost savings of approximately $4 million in cost of goods sold and $9 million in SG&A expense, in comparison to our 2011 results of operations, which represents a portion of the estimated $50 million of total net cost reductions we expect to realize in 2012. Expense reductions consist primarily of labor and facility costs.

Further information regarding our restructuring charges can be found under the caption “Note 8: Restructuring charges” of the Notes to Consolidated Financial Statements appearing in Item 8 of this report.

SEGMENT RESULTS

Additional financial information regarding our business segments appears under the caption “Note 16: Business segment information” of the Notes to Consolidated Financial Statements appearing in Item 8 of this report.

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Small Business Services

This segment’s products and services are promoted and distributed through direct response advertising via mail and the internet, referrals from financial institutions and telecommunications clients, Safeguard distributors, a network of local dealers, a direct sales force which focuses on major accounts, and an outbound telemarketing group. Results for this segment for the last three years were as follows:

							Change
(in thousands)	2011		2010		2009		2011 vs. 2010		2010 vs. 2009
Revenue	$	846,449	$	796,254	$	785,109		6.3%		1.4%
Operating income		145,219		137,534		60,804		5.6%		126.2%
Operating margin		17.2%		17.3%		7.7%	(0.1) pt.		9.6 pt.

The increase in revenue for 2011, as compared to 2010, was due primarily to price increases, revenue of $15.5 million from the acquisition of PsPrint, which was acquired in July 2011, and growth in our distributor channel and in marketing solutions and other services revenue, as well as a favorable currency exchange rate impact related to our Canadian operations of $3.0 million. Partially offsetting these increases was revenue of $12.1 million related to Small Business Services’ portion of the contract settlement executed during 2010, as well as the continuing decline in check and forms usage. The contract settlement revenue in 2010 resulted in a decrease in revenue of 1.6 points in 2011.

The increase in operating income for 2011, as compared to 2010, was due to price increases, the benefit of continued cost reduction initiatives, the discontinuation of contributions to our defined contribution pension plan in 2011, lower acquisition-related amortization related to acquisitions completed in previous years, and growth in marketing solutions and other services revenue. Partially offsetting these increases in operating income was the revenue of $12.1 million from the 2010 contract settlement, brand awareness and business development investments, and increases in material costs and delivery rates. In addition, restructuring and related costs increased $2.7 million for 2011, as compared to 2010, and we recorded an asset impairment charge of $1.2 million in 2011 related to a vacant facility. Further information regarding the restructuring costs can be found under Restructuring Costs. The contract settlement revenue in 2010 caused a decrease in operating margin of 1.3 points in 2011.

The increase in revenue for 2010, as compared to 2009, was due primarily to price increases and $12.1 million of revenue related to Small Business Services’ portion of the contract settlement executed during 2010, as well as revenue from businesses acquired in July 2009 and growth in services revenue. Additionally, revenue increased due to a favorable currency exchange rate impact related to our Canadian operations of $6.9 million for 2010. These increases in revenue were partly offset by the impact of the continuing decline in check and forms usage. We also believe that the negative impact of general economic conditions continued to affect our customer’s buying patterns.

The increases in operating income and operating margin for 2010, as compared to 2009, were primarily due to continued progress on our cost reduction initiatives, the asset impairment charges of $24.9 million in 2009 discussed earlier under Consolidated Results of Operations, price increases, revenue from the 2010 contract settlement, a $10.2 million decrease in restructuring and costs related to acquisitions, lower acquisition-related amortization related to acquisitions completed prior to 2009, and lower performance-based compensation and retiree medical expense. Further information regarding the restructuring costs can be found under Restructuring Costs. These increases in operating income were partially offset by the continuing decline in check and forms usage, the impact of negative economic conditions, marketing investments in our brand awareness and positioning initiatives and direct marketing tests, and increases in delivery rates and material costs.

Financial Services

Financial Services’ products and services are sold through multiple channels, including a direct sales force. Results for this segment for the last three years were as follows:

							Change
(in thousands)	2011		2010		2009		2011 vs. 2010			2010 vs. 2009
Revenue	$	342,382	$	390,331	$	396,353		(12.3	%)		(1.5	%)
Operating income		59,804		84,158		75,091		(28.9	%)		12.1	%
Operating margin		17.5%		21.6%		18.9%	(4.1.		) pt	2.7		pt.

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The decrease in revenue for 2011, as compared to 2010, was due to a decrease in order volume resulting primarily from the continued decline in check usage, the recognition of deferred revenue in 2010 from a contract settlement executed in the fourth quarter of 2009, revenue of $12.5 million related to Financial Services’ portion of the contract settlement executed during 2010, and continuing competitive pricing pressure. The recognition of deferred revenue in 2010 accounted for 3.4 percentage points of the 12.3% decrease in revenue for 2011, and the $12.5 million contract settlement revenue in 2010 accounted for 2.9 percentage points of the 12.3% decrease in revenue for 2011. Partially offsetting these revenue decreases was the benefit of price increases implemented in the first half of 2011 and revenue from the Banker’s Dashboard acquisition in April 2011.

Operating income and operating margin decreased for 2011, as compared to 2010, primarily due to the decrease in revenue discussed earlier, increased material costs and delivery rates, and business development investments. The recognition of the deferred revenue in 2010 accounted for 3.0 percentage points of the decrease in operating margin for 2011. The $12.5 million contract settlement revenue in 2010 accounted for 2.6 percentage points of the decrease in operating margin for 2011. In addition, restructuring and related costs increased $1.8 million for 2011, as compared to 2010. Further information regarding the restructuring charges and related costs can be found under Restructuring Costs. These decreases in operating income and operating margin were partially offset by the benefit of our various cost reduction initiatives and the discontinuation of contributions to our defined contribution pension plan in 2011.

The decrease in revenue for 2010, as compared to 2009, was due primarily to a decrease in order volume resulting from the continuing decline in check usage and the weak economy, as well as continuing competitive pricing pressure. These decreases in revenue were partially offset by the recognition of deferred revenue related to a contract settlement executed in the fourth quarter of 2009, Financial Services’ portion of the revenue from a contract settlement executed during 2010 of $12.5 million, price increases implemented in the second quarter of 2010 and the third quarter of 2009, and increased services revenue.

Operating income and operating margin increased for 2010, as compared to 2009, primarily due to the recognition of deferred revenue related to a contract settlement executed in the fourth quarter of 2009 and the 2010 contract settlement, as well as the benefit of our various cost reduction initiatives and lower performance-based compensation and retiree medical expense. These increases in operating income and operating margin were partially offset by the effect of the decrease in order volume, increased marketing investment, delivery and material rate increases and a $2.2 million increase in restructuring-related costs in 2010. Further information regarding the restructuring charges and related costs can be found under Restructuring Costs.

Direct Checks

Direct Checks sells products and services directly to consumers using direct response marketing and the internet. We use a variety of direct marketing techniques to acquire new customers in the direct-to-consumer channel, including newspaper inserts, in-package advertising, statement stuffers and co-op advertising. We also use e-commerce strategies to direct traffic to our websites. 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 for the last three years were as follows:

							Change
(in thousands)	2011		2010		2009		2011 vs. 2010			2010 vs. 2009
Revenue	$	228,765	$	215,652	$	162,733		6.1	%		32.5	%
Operating income		66,035		59,852		54,694		10.3	%		9.4	%
Operating margin		28.9%		27.8%		33.6%	1.1		pt.	(5.8		) pt.

The increase in revenue for 2011, as compared to 2010, was due to incremental revenue of $24.1 million from the acquisition of Custom Direct in April 2010, as well as higher revenue per order in all order channels, partly due to price increases. Partially offsetting these increases in revenue was a reduction in orders stemming from the decline in check usage.

The increase in operating income and operating margin for 2011, as compared to 2010, was due primarily to benefits of our cost reduction initiatives and lower acquisition-related amortization related to the Custom Direct acquisition, as well as the contribution of Custom Direct’s operations. In addition, restructuring and related costs decreased $1.6 million for 2011, as compared to 2010. Further information regarding the restructuring charges and related costs can be found under Restructuring Costs. These increases in operating income were partially offset by lower order volume and increased material costs and delivery rates.

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The increase in revenue for 2010, as compared to 2009, was due to the revenue contribution from the acquisition of Custom Direct in April 2010, which contributed revenue of $60.3 million for 2010. Partially offsetting the impact of the acquisition was a reduction in orders stemming from the decline in check usage, as well as the weak economy.

The increase in operating income for 2010, as compared to 2009, was due primarily to the benefit of our cost reduction initiatives, the contribution of Custom Direct’s operations and lower performance-based compensation and retiree medical expense. These increases in operating income were partially offset by the lower order volume, an increase of $2.4 million in restructuring-related costs related primarily to employee reductions at Custom Direct, and increased delivery rates and material costs. The decrease in operating margin for 2010, as compared to 2009, reflects the impact of Custom Direct’s operations.

CASH FLOWS AND LIQUIDITY

As of December 31, 2011, we held cash and cash equivalents of $28.7 million. The following table shows our cash flow activity for the last three years and should be read in conjunction with the consolidated statements of cash flows appearing in Item 8 of this report.

										Change
(in thousands)	2011			2010			2009			2011 vs. 2010			2010 vs. 2009
Continuing operations:
Net cash provided by operating activities	$	235,367		$	212,615		$	206,438		$	22,752		$	6,177
Net cash used by investing activities		(131,785	)		(136,170	)		(81,788	)		4,385			(54,382	)
Net cash used by financing activities		(91,702	)		(72,541	)		(128,545	)		(19,161	)		56,004
Effect of exchange rate change on cash		(576	)		690			1,594			(1,266	)		(904	)
Net cash provided (used) by continuing operations		11,304			4,594			(2,301	)		6,710			6,895
Net cash used by operating activities of discontinued operations		—			—			(470	)		—			470
Net cash used by financing activities of discontinued operations		—			—			(30	)		—			30
Net change in cash and cash equivalents	$	11,304		$	4,594		$	(2,801	)	$	6,710		$	7,395

The $22.8 million increase in cash provided by operating activities for 2011, as compared to 2010, was due primarily to benefits from our cost reduction initiatives and price increases, as well as decreases of $9.9 million in contract acquisition payments, $9.4 million in income tax payments and $4.1 million in severance payments. These increases in cash provided by operating activities were partially offset by the $24.6 million contract settlement received in 2010 and the reduction in order volume for our personal check businesses.

The $6.2 million increase in cash provided by operating activities for 2010, as compared to 2009, was due primarily to the higher earnings discussed earlier under Consolidated Results of Operations, including the $24.6 million contract settlement, as well as decreases of $7.2 million in contract acquisition payments and $5.0 million in severance payments in 2010 as compared to 2009. These increases in cash provided by operating activities were partially offset by an $18.4 million increase in 2010 in pension contributions and employee profit sharing/cash bonus payments related to our 2009 performance, as well as higher income tax payments and a contract termination payment received in the fourth quarter of 2009.

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Included in cash provided by operating activities of continuing operations were the following operating cash outflows:

							Change
(in thousands)	2011		2010		2009		2011 vs. 2010			2010 vs. 2009
Income tax payments	$	60,861	$	70,246	$	56,060	$	(9,385	)	$	14,186
Interest payments		42,542		44,054		43,513		(1,512	)		541
Voluntary employee beneficiary association (VEBA) trust contributions to fund medical benefits		36,792		39,400		40,300		(2,608	)		(900	)
Pension contributions and employee profit sharing/cash bonus payments		27,165		29,790		11,430		(2,625	)		18,360
Contract acquisition payments		12,190		22,087		29,250		(9,897	)		(7,163	)
Severance payments		7,484		11,558		16,558		(4,074	)		(5,000	)

Net cash used by investing activities for 2011 was $4.4 million lower than 2010 due primarily to a $13.0 million decrease in payments for acquisitions and an $8.4 million reduction in purchases of capital assets. We paid $98.6 million to acquire Custom Direct and Cornerstone Customer Solutions in 2010 and $85.6 million to acquire Banker’s Dashboard, PsPrint and small business distributors in 2011. Partially offsetting these decreases in the use of cash were payments of $6.4 million in 2011 on company-owned life insurance policies, proceeds from life insurance policies in 2010, and loans made to distributors in 2011.

Net cash used by investing activities in 2010 was $54.4 million higher than 2009 primarily due to the acquisition of Custom Direct in April 2010, partly offset by proceeds from life insurance policies in 2010 and purchases of marketable securities in 2009.

Net cash used by financing activities for 2011 was $19.2 million higher than 2010 due primarily to payments of $215.0 million to retire long-term debt in 2011 and an increase of $20.6 million in payments to repurchase common shares to offset dilution from shares to be issued for the Banker’s Dashboard acquisition and under our share-based compensation plans. Partially offsetting these increases in the use of cash were proceeds of $200.0 million from the issuance of long-term debt in 2011, lower payments in 2011 on our credit facility as we repaid all amounts borrowed, and a $4.4 million increase in proceeds from issuing shares under employee plans.

Net cash used by financing activities in 2010 was $56.0 million lower than 2009. This was due primarily to borrowings under our credit facility in 2010 to complete the acquisition of Custom Direct, as well as payments in 2009 of $21.2 million to retire long-term notes.

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

							Change
(in thousands)	2011		2010		2009		2011 vs. 2010			2010 vs. 2009
Proceeds from issuing long-term debt	$	200,000	$	—	$	—	$	200,000		$	—
Proceeds from issuing shares under employee plans		7,671		3,267		1,972		4,404			1,295
Proceeds from company-owned life insurance policies		—		6,143		—		(6,143	)		6,143
Proceeds from sales of marketable securities		—		1,970		914		(1,970	)		1,056

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

							Change
(in thousands)	2011		2010		2009		2011 vs. 2010			2010 vs. 2009
Payments on long-term debt, including costs of debt reacquisition	$	215,030	$	—	$	22,627	$	215,030		$	(22,627	)
Payments for acquisitions, net of cash acquired		85,641		98,621		30,825		(12,980	)		67,796
Cash dividends paid to shareholders		51,126		51,435		51,279		(309	)		156
Purchases of capital assets		35,506		43,932		44,266		(8,426	)		(334	)
Payments for common shares repurchased		23,620		2,999		1,319		20,621			1,680
Payments on company-owned life insurance policies		6,383		—		—		6,383			—
Loans to distributors		5,175		—		—		5,175			—
Net payments on short-term debt		7,000		19,000		52,000		(12,000	)		(33,000	)
Payments for debt issue costs		3,513		2,361		—		1,152			2,361
Purchases of marketable securities		18		14		4,581		4			(4,567	)

We anticipate that net cash provided by operating activities will be between $225 million and $245 million in 2012, compared to $235 million in 2011, driven by higher earnings in the middle to upper end of our outlook range, partially offset by higher income tax payments. We anticipate that cash generated by operating activities in 2012 will be utilized for payments of $84.8 million which are due in December 2012 when a portion of our long-term notes matures, dividend payments of approximately $50 million, capital expenditures of approximately $35 million, additional debt reduction if we are able to purchase our long-term notes on the open market, share repurchases, and possibly additional 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. We had $191.4 million available for borrowing under our credit facility as of December 31, 2011. We believe that cash generated by operating activities, along with our credit facility, will be sufficient to support our operations in 2012, including capital expenditures, possible small-to-medium-sized acquisitions, required debt service and dividend payments.

CAPITAL RESOURCES

Our total debt was $741.7 million as of December 31, 2011, a decrease of $13.4 million from December 31, 2010. We have entered into interest rate swaps to hedge against changes in the fair value of our long-term debt due in 2012 and in 2014. As of December 31, 2011, interest rate swaps with a notional amount of $282.8 million were designated as fair value hedges. The carrying amount of long-term debt as of December 31, 2011 included a $3.6 million increase related to adjusting the hedged debt for changes in its fair value. As of December 31, 2010, this fair value adjustment was an increase of $4.9 million. Further information concerning the interest rate swaps and our outstanding debt can be found under the captions “Note 6: Derivative financial instruments” and “Note 13: Debt and leases” of the Notes to Consolidated Financial Statements appearing in Item 8 of this report. Information regarding our debt service obligations can be found under Off-Balance Sheet Arrangements, Guarantees and Contractual Obligations.

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Our capital structure for each period was as follows:

	December 31,
	2011					2010
(in thousands)	Amount		Weighted- average interest  rate			Amount		Weighted- average interest rate			Change
Fixed interest rate	$	455,466		6.9	%	$	533,502		6.0	%	$	(78,036	)
Floating interest rate		286,240		3.9	%		221,620		3.4	%		64,620
Total debt		741,706		5.8	%		755,122		5.2	%		(13,416	)
Shareholders’ equity		302,689					226,198					76,491
Total capital	$	1,044,395				$	981,320				$	63,075

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 5.3 million shares remained available for purchase under this authorization as of December 31, 2011. We repurchased 0.9 million shares during 2011 for $23.6 million, we repurchased 0.2 million shares during 2010 for $3.0 million, and we repurchased 0.1 million shares during 2009 for $1.3 million. Further information regarding changes in shareholders’ equity can be found in the consolidated statements of shareholders’ equity appearing in Item 8 of this report.

We may, from time to time, consider retiring outstanding debt through open market purchases, privately negotiated transactions or by 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.

As of December 31, 2011, we had a $200.0 million credit facility, which was due to expire in March 2013. Borrowings under the credit facility are collateralized by substantially all personal property. Our commitment fee ranges from 0.40% to 0.50% based on our leverage ratio. 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, and certain asset sales outside the ordinary course of business, as well as required repayments in the event of a 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 December 31, 2011 and we expect to remain in compliance with all debt covenants throughout the next 12 months.

In February 2012, we modified the terms of our credit facility. We extended the term of the agreement to February 2017 and lowered the commitment fee to a range of 0.20% to 0.45%, based on our leverage ratio. No changes were made to the financial covenants included in the credit agreement.

Amounts outstanding under our credit facility for the years ended December 31 were as follows:

(in thousands)	2011		2010		2009
Daily average amount outstanding	$	21,655	$	49,957	$	69,267
Weighted-average interest rate		3.03%		3.20%		0.76%

As of December 31, 2011, no amounts were outstanding under our credit facility. As of December 31, 2010, $7,000 was outstanding at a weighted-average interest rate of 5.25%.

As of December 31, 2011, amounts were available for borrowing under our credit facility as follows:

(in thousands)	Total available
Credit facility commitment	$	200,000
Outstanding letters of credit		(8,551	)
Net available for borrowing as of December 31, 2011	$	191,449

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OTHER FINANCIAL POSITION INFORMATION

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. Cash payments made for contract acquisition costs were $12.2 million for 2011, $22.1 million for 2010 and $29.3 million for 2009. We anticipate cash payments of approximately $15 million in 2012. Changes in contract acquisition costs during the last three years were as follows:

(in thousands)	2011			2010			2009
Balance, beginning of year	$	57,476		$	45,701		$	37,706
Additions		14,624			31,520			32,545
Amortization		(16,659	)		(19,745	)		(24,550	)
Other		(365	)		—			—
Balance, end of year	$	55,076		$	57,476		$	45,701

The number of checks being written has been in decline since the mid-1990s, 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 significantly 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. When the overall discount level provided for in a contract is unchanged, contract acquisition costs do not result in lower net revenue. These payments impact the timing of cash flows. An up-front cash payment is made rather than providing higher product 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 $13.1 million as of December 31, 2011 and $8.6 million as of December 31, 2010. Accruals for contract acquisition payments included in other non-current liabilities in our consolidated balance sheets were $7.5 million as of December 31, 2011 and $9.9 million as of December 31, 2010.

Funds held for customers – Our Canadian payroll services business collects funds from clients to pay their payroll and related taxes. We hold these funds temporarily until payments are remitted to the clients’ employees and the appropriate taxing authorities. Funds held for customers of $44.4 million as of December 31, 2011 increased $8.7 million from December 31, 2010. The increase in funds held for customers, and the corresponding accrued liability, was due primarily to an increase in the number of payroll services customers.

Foreign cash and investments – As of December 31, 2011, our subsidiaries located in Canada held cash and marketable securities of $25.2 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 the cash and marketable securities into the U.S., we would incur a U.S. tax liability of approximately $3 million.

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 such items as product or service defects, including 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. However, we have no reason to believe that any likely liability under these indemnities would have a material adverse effect on our financial position, annual results of operations or annual cash flows. We have recorded liabilities for known indemnifications related to environmental matters. Further information can be found under the caption “Note 14: Other commitments and contingencies” of the Notes to Consolidated Financial Statements appearing in Item 8 of this report.

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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.

As of December 31, 2011, our contractual obligations were as follows:

(in thousands)	Total		2012		2013 and 2014		2015 and 2016		2017 and thereafter
Long-term debt and related interest	$	929,640	$	130,654	$	333,880	$	234,228	$	230,878
Operating lease obligations		21,630		10,249		9,649		1,692		40
Purchase obligations		40,590		20,915		19,600		60		15
Other long-term liabilities		37,432		19,013		10,786		4,185		3,448
Total	$	1,029,292	$	180,831	$	373,915	$	240,165	$	234,381

Purchase obligations include amounts due under contracts with third-party service providers. These contracts are primarily for information technology services. Additionally, purchase obligations include amounts due under Direct Checks direct mail advertising agreements and Direct Checks and Financial Services royalty agreements. We routinely issue purchase orders to numerous vendors for the purchase of inventory and other supplies. These purchase orders are not included in the purchase obligations presented here, as our business partners typically allow us to cancel these purchase orders as necessary to accommodate business needs. Of the purchase obligations included in the table above, $29.7 million allow for early termination upon the payment of early termination fees. If we were to terminate these agreements, we would have incurred early termination fees of $37.6 million as of December 31, 2011.

Other long-term liabilities presented in our consolidated balance sheets consist primarily of amounts due for our postretirement benefit plan and liabilities for uncertain tax positions, deferred compensation and workers’ compensation. Of the $79.8 million reported as other long-term liabilities in our consolidated balance sheet as of December 31, 2011, $61.4 million is excluded from the obligations shown in the table above. The excluded amounts, including the current portion of each liability, are comprised primarily of the following:

· Benefit payments for our postretirement benefit plan – We have contributed funds to this plan for the purpose of funding our obligations. Thus, we have the option of paying benefits from the assets of the plan or from the general funds of the company. Additionally, we expect the plan assets to earn income over time. As such, we cannot predict when or if payments from our general funds will be required. As of December 31, 2011, our postretirement benefit plan was underfunded $45.5 million.

· Payments for uncertain tax positions – Due to the nature of the underlying liabilities and the extended timeframe often needed to resolve income tax uncertainties, we cannot make reliable estimates of the amount or timing of cash payments that may be required to settle these liabilities. Our liability for uncertain tax positions, including accrued interest and penalties, was $7.7 million as of December 31, 2011, excluding tax benefits of deductible interest and the federal benefit of deductible state income tax.

· Insured environmental remediation costs – As of December 31, 2011, $6.4 million of the costs included in our environmental accruals are covered by an environmental insurance policy which we purchased in 2002. The related receivables from the insurance company are reflected in other current assets and other non-current assets in our consolidated balance sheets based on the amounts of our environmental accruals for insured sites. Uninsured environmental accruals of $2.3 million as of December 31, 2011 are included in the table above.

· A portion of the amount due under our deferred compensation plan – Under this plan, some employees may begin receiving payments upon the termination of employment or disability, and we cannot predict when these events will occur. As such, $1.3 million of our deferred compensation liability as of December 31, 2011 is excluded from the obligations shown in the table above.

Total contractual obligations do not include the following:

· Payments to our 401(k) plan – Payments to our 401(k) plan throughout the year are dependent on the number of employees participating in the plan, the level of employee contributions and employee wage rates.

· Profit sharing and cash bonus payments – Amounts payable under our profit sharing and cash bonus plans are dependent on our operating performance.

· Income tax payments, which are dependent upon our earnings.

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RELATED PARTY TRANSACTIONS

We have not entered into any material related party transactions during the past three years.

CRITICAL ACCOUNTING POLICIES

Management’s discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles (GAAP) in the United States of America. Our accounting policies are discussed under the caption: “Note 1: Significant accounting policies” of the Notes to Consolidated Financial Statements appearing in Item 8 of this report. We review the accounting policies used in reporting our financial results on a regular basis. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosure of contingent assets and liabilities. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the result of which forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Results may differ from these estimates due to actual outcomes being different from those on which we based our assumptions. The estimates and judgments utilized are reviewed by management on an ongoing basis and by the audit committee of our board of directors at the end of each quarter prior to the public release of our financial results.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

We consider theestimates discussed below to be critical to an understanding of our financial statements because they place the most significant demands on management’s judgment about the effect of matters that are inherently uncertain, and the impact of different estimates or assumptions could be material to our financial condition or results of operations.

Goodwill and Indefinite-Lived Intangibles

As ofDecember 31, 2011, goodwill was comprised of the following:

(in thousands)
Acquisition of New England Business Service (NEBS) in June 2004	$	472,082
Acquisition of Designer Checks in February 2000		77,970
Acquisition of Hostopia.com Inc. in August 2008		68,555
Acquisition of Custom Direct, Inc. in April 2010		66,269
Acquisition of Banker’s Dashboard in April 2011		26,281
Acquisition of PsPrint in July 2011		24,826
Acquisition of Abacus America, Inc. in July 2009		24,225
Acquisition of the Johnson Group in October 2006		7,320
Acquisition of Direct Checks in December 1987		4,267
Acquisition of Logo Design Mojo in April 2008		1,359
Acquisition of MerchEngines.com in July 2009		1,140
Acquisition of Dots and Pixels, Inc. in July 2005		1,021
Acquisition of Cornerstone Customer Solutions in March 2010		897
Acquisition of All Trade Computer Forms, Inc. in February 2007		786
Goodwill	$	776,998

Further information regarding acquisitions which occurred during the past three years can be found under the caption “Note 4: Acquisitions” of the Notes to Consolidated Financial Statements appearing in Item 8 of this report.

Goodwill and our indefinite-lived trade name are tested for impairment on an annual basis as of July 31, or more frequently if events or circumstances occur which could indicate impairment. We completed events-driven impairment analyses of goodwill and our indefinite-lived trade name during the first quarter of 2009 due to declines in our stock price coupled with the continuing negative impact of the economic downturn on our expected operating results. In addition to the required impairment analyses, we regularly evaluate the remaining useful life of our indefinite-lived trade name to determine whether events and circumstances continue to support an indefinite useful life. If we would determine that this asset has a finite useful life, we would test the asset for impairment and then amortize the asset’s remaining carrying value over its estimated remaining useful life.

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The estimate of fair value for the indefinite-lived trade name is based on a relief from royalty method, which calculates the cost savings associated with owning rather than licensing the trade name. An assumed royalty rate is applied to forecasted revenue and the resulting cash flows are discounted. If the estimated fair value is less than the carrying value of the asset, an impairment loss is recognized. The annual impairment analysis completed during the third quarter of 2011 indicated that the estimated fair value of our indefinite-lived trade name exceeded its carrying value of $19.1 million by approximately $12.0 million. In this analysis, we assumed a discount rate of 13.1% and a royalty rate of 2.0%. A one-half percentage point increase in the discount rate would reduce the indicated fair value of the asset by $1.5 million and a one-half percentage point decrease in the royalty rate would reduce the indicated fair value of the asset by approximately $8.0 million. During the first quarter of 2009, we recorded an impairment charge of $4.9 million in our Small Business Services segment related to the indefinite-lived trade name.

During the quarter ended September 30, 2011, we adopted Accounting Standards Update (ASU) No. 2011-08, Testing Goodwill for Impairment. This new standard gives us the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less that its carrying amount. If, after this qualitative assessment, we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step quantitative impairment test is unnecessary. In completing our 2011 annual impairment analysis, we elected to perform this qualitative assessment for all of our reporting units to which goodwill is assigned. As such, we completed a qualitative analysis of goodwill, evaluating factors including, but not limited to, economic, market and industry conditions, cost factors and the overall financial performance of the reporting units. We also considered the quantitative analysis we completed as of July 31, 2010 in which the estimated fair values of our reporting units exceeded their carrying values by amounts between $43.0 million and $546.0 million, or by amounts between 55% and 442% above the carrying values of their net assets. In our qualitative analysis, we noted no changes in events or circumstances which would have required us to complete the two-step quantitative goodwill impairment analysis for any of our reporting units. As such, no impairment charges were recorded as a result of our 2011 annual impairment analysis.

In previous years, a two-step, quantitative approach was required in evaluating goodwill for impairment. First, we would calculate the estimated fair value of each reporting unit to which goodwill was assigned and compare this estimated fair value to the carrying amount of its net assets. In calculating the estimated fair value, we utilized the income approach. The income approach is a valuation technique under which we estimated future cash flows using the reporting unit’s financial forecast from the perspective of an unrelated market participant. Using historical trending and internal forecasting techniques, we projected revenue for the next five years. We applied our fixed and variable cost experience rates to the projected revenue to arrive at the future cash flows. A terminal value was then applied to the projected cash flow stream. Future estimated cash flows were discounted to their present value to calculate the estimated fair value. The discount rate used was the value-weighted average of our estimated cost of capital derived using both known and estimated customary market metrics. In determining the estimated fair values of our reporting units, we were required to estimate a number of factors, including projected future operating results, terminal growth rates, economic conditions, anticipated future cash flows, the discount rate and the allocation of shared or corporate items. For reasonableness, the summation of our reporting units’ fair values was compared to our consolidated fair value as indicated by our market capitalization plus an appropriate control premium. If the carrying amount of a reporting unit’s net assets exceeded its estimated fair value, the second step of the goodwill impairment analysis required us to measure the amount of the impairment loss. An impairment loss is calculated by comparing the implied fair value of the goodwill to its carrying amount. To calculate the implied fair value of goodwill, the fair value of the reporting unit’s assets and liabilities, excluding goodwill, is estimated. The excess of the fair value of the reporting unit over the amount assigned to its assets and liabilities, excluding goodwill, is the implied fair value of the reporting unit’s goodwill.

Based on the events-driven impairment analysis completed during the first quarter of 2009, we recorded a goodwill impairment charge of $20.0 million in our Small Business Services segment related to one of our reporting units. If our stock price declines in the future for a sustained period or if we are required to significantly reduce our forecasted operating results because of a continuing downturn in economic conditions or due to changes in other circumstances, it may be indicative of a decline in our fair value and could require us to record an impairment charge for a portion of goodwill and/or our indefinite-lived trade name.

The evaluation of asset impairment requires us to make assumptions about future events, market conditions, and financial performance over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from our assumptions. If these estimates and assumptions change, we may be required to recognize impairment losses in the future.

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 Income Taxes

When preparing our consolidated financial statements, we are required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual current tax obligations based on expected taxable income, statutory tax rates and tax credits allowed in the various jurisdictions in which we operate. In interim reporting periods, we use an estimate of our annual effective tax rate based on the facts available at the time. Changes in the mix or estimated amount of annual pre-tax income could impact our estimated effective tax rate in interim periods. In the event there is a significant unusual or one-time item recognized in our results of operations, the tax attributable to that item is separately calculated and recorded in the interim period during which the unusual or one-time item occurred. The actual effective tax rate is calculated at year-end.

Tax laws require certain items to be included in our tax return at different times than the items are reflected in our results of operations. As a result, the annual effective tax rate reflected in our results of operations is different than that reported on our tax return (i.e., our cash tax rate). Some of these differences are permanent, such as expenses that are not deductible in our tax return, and some are temporary differences that will reverse over time, such as depreciation expense on capital assets. These temporary differences result in deferred tax assets and liabilities, which are included within our consolidated balance sheets. Deferred tax assets generally represent items that can be used as a tax deduction or credit in our tax return in future years for which we have already recorded the expense, net of the expected tax benefit, in our statements of income. We must assess the likelihood that our deferred tax assets will be realized through future taxable income, and to the extent we believe that realization is not likely, we must establish a valuation allowance against those deferred tax assets. Deferred tax liabilities generally represent items for which we have already taken a deduction in our tax return, but we have not yet recognized the items as expense in our results of operations. Significant judgment is required in evaluating our tax positions, and in determining our provision for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets. We had net deferred tax liabilities of $42.6 million as of December 31, 2011, including valuation allowances of $0.6 million. As of December 31, 2010, we had net deferred tax liabilities of $37.4 million, including valuation allowances of $1.1 million. The valuation allowances as of December 31, 2011 related primarily to operating loss carryforwards in Ireland which we do not expect to realize. As of December 31, 2010, the valuation allowances related primarily to operating loss carryforwards in Canada which we reversed during 2011, as we now expect to realize the loss carryforwards in 2012 and/or in future years.

We are subject to tax audits in numerous domestic and foreign tax jurisdictions. Tax audits are often complex and can require several years to complete. In the normal course of business, we are subject to challenges from the Internal Revenue Service (IRS) and other tax authorities regarding the amount of taxes due. These challenges may alter the timing or amount of taxable income or deductions, or the allocation of income among tax jurisdictions. We recognize the benefits of tax return positions in the financial statements when they are “more-likely-than-not” to be sustained by the taxing authorities based solely on the technical merits of the position. If the recognition threshold is met, the tax benefit is measured and recognized as the largest amount of tax benefit that, in our judgment, is greater than 50% likely to be realized. The total amount of unrecognized tax benefits as of December 31, 2011 was $6.2 million, excluding accrued interest and penalties and the federal benefit of deductible state income tax. If the unrecognized tax benefits were recognized in our consolidated financial statements, $5.2 million would positively affect income tax expense and our related effective tax rate. Interest and penalties recorded for uncertain tax positions are included in our income tax provision. As of December 31, 2011, we had accrued $1.5 million of interest and penalties, excluding the tax benefit of deductible interest. The statute of limitations for federal tax assessments for 2006 and prior years has closed. Our federal income tax returns through 2007 have been audited by the IRS, our 2008 and 2009 returns are currently being audited, and our returns for 2010 and 2011 remain subject to IRS examination. In general, income tax returns for the years 2007 through 2011 remain subject to examination by foreign, state and city tax jurisdictions. In the event that we have determined not to file tax returns with a particular state or city, all years remain subject to examination by the tax jurisdiction. The ultimate outcome of tax matters may differ from our estimates and assumptions. Unfavorable settlement of any particular issue would require the use of cash and could result in increased income tax expense. Favorable resolution would result in reduced income tax expense.

Changes in unrecognized tax benefits during the last three years can be found under the caption: “Note 9: Income tax provision” of the Notes to Consolidated Financial Statements appearing in Item 8 of this report. Within the next 12 months, it is reasonably possible that our unrecognized tax benefits will change in the range of a decrease of $4.5 million to an increase of $0.7 million as we attempt to settle certain federal and state matters or as federal and state statutes of limitations expire. We are not able to predict what, if any, impact these changes may have on our effective tax rate or cash flows.

During 2010, we recorded income tax expense of $4.1 million to reduce our deferred tax asset related to our postretirement benefit plan. This expense resulted from the Health Care and Education Reconciliation Act of 2010, which was signed into law in March 2010, and requires that certain tax deductions after 2012 be reduced by the amount of Medicare Part D subsidy payments. Prior to this law change, the subsidy was to be disregarded in all future years when computing tax deductions. During 2011, we took actions to restore approximately $2.5 million of this deferred tax asset, and we expect to restore additional amounts in 2012 as we fund our postretirement benefit plan.

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During 2009, we reduced our income tax provision $3.5 million for amendments to prior year tax returns claiming refunds primarily associated with federal and state tax credits and the funding of medical costs through our VEBA trust, as well as the related interest.

Postretirement Benefit Plan

Detailed information regarding our postretirement benefit plan, including a description of the plan, its related future cash flows, plan assets and the actuarial assumptions used in accounting for the plan, can be found under the caption: “Note 12: Pension and other postretirement benefits” of the Notes to Consolidated Financial Statements appearing in Item 8 of this report.

Our net postretirement benefit expense was $0.5 million for 2011, $1.7 million for 2010 and $7.2 million for 2009. Our business segments record postretirement benefit expense in cost of goods sold and SG&A expense, based on the composition of their workforces. Our postretirement benefit expense and liability are calculated utilizing various actuarial assumptions and methodologies. These assumptions include, but are not limited to, the discount rate, the expected long-term rate of return on plan assets, the expected health care cost trend rate and the average remaining life expectancy of plan participants. We analyze the assumptions used each year when we complete our actuarial valuation of the plan. The effects of changes to our assumptions are recognized immediately on the consolidated balance sheet, but are generally amortized into earnings over future periods, with the deferred amount recorded in accumulated other comprehensive loss. If the assumptions utilized in determining our postretirement benefit expense and liability differ from actual events, our results of operations for future periods are impacted.

Discount rate – The discount rate is used to reflect the time value of money. It is the assumed rate at which future postretirement benefits could be effectively settled. The discount rate assumption is based on the rates of return on high-quality, fixed-income instruments currently available whose cash flows match the timing and amount of expected benefit payments. In determining the discount rate, we utilize the Aon Hewitt AA Above Median Curve and the Citigroup Pension Discount yield curves to discount each cash flow stream at an interest rate specifically applicable to the timing of each respective cash flow. The present value of each cash flow stream is aggregated and used to impute a weighted-average discount rate. The discount rate established at year-end for purposes of calculating our benefit obligation is also used in the calculation of the interest component of benefit expense for the following year. In measuring the accumulated postretirement benefit obligation as of December 31, 2011, we assumed a discount rate of 4.2%. A 0.25 point change in the discount rate would increase or decrease our annual postretirement benefit expense by approximately $0.1 million, and would increase or decrease our postretirement benefit obligation by approximately $3.1 million.

Expected long-term rate of return on plan assets – The long-term rate of return on plan assets reflects the average rate of earnings expected on the funds invested or to be invested to provide for expected benefit payments. In determining this rate, we utilize our historical returns and then adjust these returns for estimated inflation. Our inflation assumption is primarily based on historical inflation data. In measuring net postretirement benefit expense for 2011, we assumed an expected long-term rate of return on plan assets of 7.75%. A 0.25 point change in this assumption would increase or decrease our annual postretirement benefit expense by approximately $0.3 million.

Expected health care cost trend rate – The health care cost trend rate represents the expected annual rate of change in the cost of health care benefits currently provided due to factors other than changes in the demographics of plan participants. In measuring the accumulated postretirement benefit obligation as of December 31, 2011, our initial health care inflation rate for 2012 was assumed to be 7.5%. Our ultimate health care inflation rate was assumed to be 5.0% in 2017 and beyond. A one percentage point change in the health care inflation rate for each year would have the following effects:

(in thousands)	One- percentage- point increase		One- percentage- point decrease
Effect on total of service and interest cost	$	92	$	(87	)
Effect on benefit obligation		2,185		(2,069	)

Average remaining life expectancy of plan participants – In determining the average remaining life expectancy of plan participants, our actuaries use a mortality table which includes estimated death rates for each age. We use the RP-2000 Combined Healthy Participant Table with fully generational mortality improvements projected using Scale AA.

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When actual events differ from our assumptions or when we change the assumptions used, an unrecognized actuarial gain or loss results. The gain or loss is recognized immediately in the consolidated balance sheet within accumulated comprehensive loss and is amortized into postretirement benefit expense. Effective April 30, 2009, we amended our postretirement benefit plan to decrease the minimum age for eligibility to receive the maximum available benefits from age 58 to age 51 and to decrease the service requirement for maximum retiree cost sharing from 30 years to 25 years. Prior to the April 30, 2009 plan amendment and re-measurement, unrecognized actuarial gains and losses were being amortized over the average remaining service period of plan participants, which was 8.2 years as of December 31, 2008. Because the plan amendment increased the number of participants currently eligible to receive the maximum available benefits, almost all of the plan participants were classified as inactive subsequent to the plan amendment. As such, actuarial gains and losses are required to be amortized over the average remaining life expectancy of inactive plan participants, which was 18.8 years as of April 30, 2009. This change resulted in a $5.2 million decrease in postretirement benefit expense for 2009, as compared to the expense we had expected for 2009 prior to the plan amendments.

The fair value of our postretirement benefit plan assets is subject to various risks, including credit, interest and overall market volatility risks. During 2008, the equity markets experienced a significant decline in value, resulting in a significant decrease in the fair value of our plan assets. This materially affected the funded status of the plan and resulted in higher postretirement benefit expense in subsequent years. If the equity and bond markets decline in future periods, the funded status of our plan could again be materially affected. This could result in higher postretirement benefit expense in the future, as well as the need to contribute increased amounts of cash to fund the benefits payable under the plan, although our obligation is limited to funding benefits as they become payable. We did not use plan assets to make benefit payments during 2011 or 2010. Rather, we used cash provided by operating activities to make these payments.

Restructuring Accruals

Over the past several years, we have recorded restructuring accruals as a result of facility closings and other cost management efforts. Cost management is one of our strategic objectives and we are continually seeking ways to lower our cost structure. These accruals primarily consist of employee termination benefits payable under our ongoing severance benefit plan. We record accruals for employee termination benefits when it is probable that a liability has been incurred and the amount of the liability is reasonably estimable. As such, judgment is involved in determining when it is appropriate to record restructuring accruals. Additionally, we are required to make estimates and assumptions in calculating the restructuring accruals, as on some occasions, employees choose to voluntarily leave the company prior to their termination date or they secure another position within the company. In these situations, the employees do not receive termination benefits. To the extent our assumptions and estimates differ from our actual costs, subsequent adjustments to restructuring accruals have been and will be required. We reversed previously recorded restructuring accruals of $1.7 million in 2011, $2.8 million in 2010 and $3.6 million in 2009, primarily as a result of fewer employees receiving severance benefits than originally estimated. Further information regarding our restructuring accruals can be found under the caption “Note 8: Restructuring charges” of the Notes to Consolidated Financial Statements appearing in Item 8 of this report.

NEW ACCOUNTING PRONOUNCEMENTS

Information regarding the accounting pronouncements adopted during 2011 can be found under the caption: “Note 1: Significant accounting policies” of the Notes to Consolidated Financial Statements appearing in Item 8 of this report.

In May 2011, the Financial Accounting Standards Board (FASB) issued ASU No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The new guidance changes some fair value measurement principles and disclosure requirements. The changes in fair value measurement principles relate primarily to financial assets and do not impact our fair value measurements at this time. Effective January 1, 2012, we will adopt the new disclosure requirements.

In June 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income. This standard eliminates the current option to report other comprehensive income and its components in the statement of shareholders’ equity. The standard also requires that the components of other comprehensive income be presented in interim financial statements. Currently, only the total of comprehensive income is required to be presented in interim reports. In December 2011, the FASB issued ASU No. 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. This standard temporarily defers a provision included in ASU No. 2011-05 which requires that reclassification adjustments from other comprehensive income to net income be presented by income statement line item. Both new standards are effective for us on January 1, 2012.

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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” or similar expressions in this Annual Report on Form 10-K, 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 this report and are incorporated into this Item 7 of the report 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.

Item 7A.  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 December 31, 2011, our total debt was comprised of the following:

(in thousands)	Carrying amount		Fair value			Weighted- average interest rate
Long-term notes maturing December 2012, including increase of $780 related to the cumulative change in fair value of hedged debt	$	85,575	$	84,846	(1)		3.36	%
Long-term notes maturing October 2014, including increase of $2,788 related to the cumulative change in fair value of hedged debt		256,131		255,561	(1)		4.39	%
Long-term notes maturing June 2015		200,000		204,250	(1)		7.38	%
Long-term notes maturing March 2019		200,000		193,500	(2)		7.00	%
Total debt	$	741,706	$	738,157			5.79	%

(1) Fair value is based on quoted market prices as of December 31, 2011 for identical liabilities when traded as assets.

(2) As these notes were not publicly traded as of December 31, 2011, fair value was determined by means of a pricing model utilizing readily observable market interest rates and data from trades executed by institutional investors.

We may, from time to time, retire outstanding debt through open market purchases, privately negotiated transactions or by 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 our long-term debt due in 2012 and in 2014. As of December 31, 2011, interest rate swaps with a notional amount of $282.8 million were designated as fair value hedges. The carrying amount of long-term debt as of December 31, 2011 included a $3.6 million increase related to adjusting the hedged debt for changes in its fair value. Changes in the fair value of the interest rate swaps and the related long-term debt are included in interest expense in the consolidated statements of income. When the change in the fair value of the interest rate swaps and the hedged debt are not equal (i.e., hedge ineffectiveness), the difference in the changes in fair value affects the reported amount of interest expense in our consolidated statements of income. Information regarding hedge ineffectiveness can be found under the caption “Note 7: Fair value measurements” of the Notes to Consolidated Financial Statements appearing in Item 8 of this report.

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Based on the outstanding variable rate debt in our portfolio, a one percentage point change in interest rates would have resulted in a $3.0 million change in interest expense for 2011, excluding any hedge ineffectiveness related to our interest rate swaps.

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 results of operations and cash flows, as our foreign operations represent a relatively small portion of our business.

See Business Challenges/Market Risks for further discussion of market risks.

Item 8.  Financial Statements and Supplementary Data.

Report of Independent Registered Accounting Firm

To the Shareholders and Board of Directors of Deluxe Corporation:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows present fairly, in all material respects, the financial position of Deluxe Corporation and its subsidiaries at December 31, 2011 and December 31, 2010, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2011 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on these financial statements and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP

Minneapolis, Minnesota

February 24, 2012

45

DELUXE CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except share par value)

	December 31,
	2011			2010
ASSETS
Current Assets:
Cash and cash equivalents	$	28,687		$	17,383
Trade accounts receivable-net of allowances for uncollectible accounts		69,023			66,471
Inventories and supplies		22,043			21,660
Deferred income taxes		7,216			9,390
Funds held for customers		44,394			35,720
Other current assets		21,212			20,613
Total current assets		192,575			171,237
Long-Term Investments (including $2,165 and $2,283 of investments at fair value, respectively)		45,147			37,410
Property, Plant, and Equipment-net of accumulated depreciation		113,411			120,221
Assets Held for Sale		2,741			4,527
Intangibles-net of accumulated amortization		157,339			155,112
Goodwill		776,998			725,937
Other Non-Current Assets		100,598			94,247
Total assets	$	1,388,809		$	1,308,691
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	64,694		$	60,478
Accrued liabilities		150,098			144,034
Short-term debt		—			7,000
Long-term debt due within one year		85,575			—
Total current liabilities		300,367			211,512
Long-Term Debt		656,131			748,122
Deferred Income Taxes		49,807			46,752
Other Non-Current Liabilities		79,815			76,107
Commitments and Contingencies (Notes 9, 13 and 14)
Shareholders’ Equity:
Common shares $1 par value (authorized: 500,000 shares; outstanding: 2011 – 50,826; 2010 – 51,338)		50,826			51,338
Additional paid-in capital		55,838			62,915
Retained earnings		255,426			161,957
Accumulated other comprehensive loss		(59,401	)		(50,012	)
Total shareholders’ equity		302,689			226,198
Total liabilities and shareholders’ equity	$	1,388,809		$	1,308,691

See Notes to Consolidated Financial Statements

46

DELUXE CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

	Year Ended December 31,
	2011			2010			2009
Revenue	$	1,417,596		$	1,402,237		$	1,344,195
Cost of goods sold, including net restructuring charges		493,402			488,419			504,782
Gross Profit		924,194			913,818			839,413
Selling, general and administrative expense		640,307			624,303			616,496
Net restructuring charges		11,743			7,971			7,428
Asset impairment charges		1,196			—			24,900
Net gain on sale of facility		(110	)		—			—
Operating Income		271,058			281,544			190,589
(Loss) gain on early debt extinguishment		(6,995	)		—			9,834
Interest expense		(47,797	)		(44,165	)		(46,280	)
Other (expense) income		(182	)		(1,430	)		878
Income Before Income Taxes		216,084			235,949			155,021
Income tax provision		71,489			82,554			55,656
Income From Continuing Operations		144,595			153,395			99,365
Net Loss From Discontinued Operations		—			(771	)		—
Net Income	$	144,595		$	152,624		$	99,365
Basic Earnings (Loss) Per Share:
Income from continuing operations	$	2.82		$	2.98		$	1.94
Net loss from discontinued operations		—			(0.02	)		—
Basic earnings per share		2.82			2.97			1.94
Diluted Earnings (Loss) Per Share:
Income from continuing operations	$	2.80		$	2.97		$	1.94
Net loss from discontinued operations		—			(0.01	)		—
Diluted earnings per share		2.80			2.96			1.94
Cash Dividends Per Share	$	1.00		$	1.00		$	1.00

See Notes to Consolidated Financial Statements

47

DELUXE CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

	Year Ended December 31,
	2011			2010			2009
Net Income	$	144,595		$	152,624		$	99,365
Other Comprehensive Income:
Reclassification of loss on derivative instruments from other comprehensive income to net income, net of tax		1,591			1,319			1,657
Pension and postretirement benefit plans, net of tax:
Net actuarial (loss) gain arising during the year		(10,627	)		(1,376	)		2,190
Less reclassification of amounts from other comprehensive income to net income:
Amortization of prior service credit		(2,330	)		(2,327	)		(2,368	)
Amortization of net actuarial loss		3,371			3,361			5,989
Pension and postretirement benefit plans, net of tax		(9,586	)		(342	)		5,811
Unrealized holding gains on securities arising during the year, net of tax		165			13			—
Unrealized foreign currency translation adjustment		(1,559	)		1,816			4,668
Other Comprehensive (Loss) Income, Net Of Tax		(9,389	)		2,806			12,136
Comprehensive Income	$	135,206		$	155,430		$	111,501
Related Tax Benefit (Expense) of Other Comprehensive (Loss) Income Included in Above Amounts:
Reclassification of loss on derivative instruments from other comprehensive income to net income	$	(951	)	$	(770	)	$	(967	)
Pension and postretirement benefit plans:
Net actuarial (loss) gain arising during the year		6,442			837			(1,348	)
Less reclassification of amounts from other comprehensive income to net income:
Amortization of prior service credit		1,413			1,416			1,447
Amortization of net actuarial loss		(2,044	)		(2,045	)		(3,584	)
Pension and postretirement benefit plans		5,811			208			(3,485	)
Unrealized holding gains on securities arising during the year		(65	)		(6	)		—
Total Net Tax Benefit (Expense) Included In Other Comprehensive (Loss) Income	$	4,795		$	(568	)	$	(4,452	)

See Notes to Consolidated Financial Statements

48

DELUXE CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in thousands)

	Common shares par value(1)			Additional paid-in capital			Retained earnings			Accumulated other  comprehensive loss			Total
Balance at December 31, 2008	$	51,131		$	54,207		$	12,682		$	(64,954	)	$	53,066
Net income		—			—			99,365			—			99,365
Cash dividends		—			—			(51,279	)		—			(51,279	)
Common shares issued		237			1,735			—			—			1,972
Tax impact of share-based awards		—			(2,591	)		—			—			(2,591	)
Common shares repurchased		(120	)		(1,199	)		—			—			(1,319	)
Other common shares retired		(59	)		(608	)		—			—			(667	)
Fair value of share-based compensation		—			6,527			—			—			6,527
Amounts related to postretirement benefit plans, net of tax (Note 12)		—			—			—			5,811			5,811
Amortization of loss on derivatives, net of tax		—			—			—			1,657			1,657
Currency translation adjustment		—			—			—			4,668			4,668
Balance at December 31, 2009		51,189			58,071			60,768			(52,818	)		117,210
Net income		—			—			152,624			—			152,624
Cash dividends		—			—			(51,435	)		—			(51,435	)
Common shares issued		410			4,187			—			—			4,597
Tax impact of share-based awards		—			(677	)		—			—			(677	)
Common shares repurchased		(167	)		(2,832	)		—			—			(2,999	)
Other common shares retired		(94	)		(1,716	)		—			—			(1,810	)
Fair value of share-based compensation		—			5,882			—			—			5,882
Amounts related to postretirement benefit plans, net of tax (Note 12)		—			—			—			(342	)		(342	)
Amortization of loss on derivatives, net of tax		—			—			—			1,319			1,319
Marketable securities net unrealized gain, net of tax		—			—			—			13			13
Currency translation adjustment		—			—			—			1,816			1,816
Balance at December 31, 2010		51,338			62,915			161,957			(50,012	)		226,198
Net income		—			—			144,595			—			144,595
Cash dividends		—			—			(51,126	)		—			(51,126	)
Common shares issued		499			7,584			—			—			8,083
Common shares to be issued for Banker’s Dashboard acquisition (see Note 4)		—			4,300			—			—			4,300
Tax impact of share-based awards		—			112			—			—			112
Common shares repurchased		(940	)		(22,680	)		—			—			(23,620	)
Other common shares retired		(71	)		(1,758	)		—			—			(1,829	)
Fair value of share-based compensation		—			5,365			—			—			5,365
Amounts related to postretirement benefit plans, net of tax (Note 12)		—			—			—			(9,586	)		(9,586	)
Amortization of loss on derivatives, net of tax		—			—			—			1,591			1,591
Marketable securities net unrealized gain, net of tax		—			—			—			165			165
Currency translation adjustment		—			—			—			(1,559	)		(1,559	)
Balance at December 31, 2011	$	50,826		$	55,838		$	255,426		$	(59,401	)	$	302,689

(1) As the par value of our common shares is $1.00 per share, the number of shares associated with the transactions presented here is equivalent to the related par value. See Note 15 for share information.

See Notes to Consolidated Financial Statements

49

DELUXE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Year Ended December 31,
	2011			2010			2009
Cash Flows From Operating Activities:
Net income	$	144,595		$	152,624		$	99,365
Adjustments to reconcile net income to net cash provided by operating activities of continuing operations:
Net loss from discontinued operations		—			771			—
Depreciation		21,547			20,946			22,463
Amortization of intangibles		51,796			52,969			45,302
Asset impairment charges		1,196			—			24,900
Amortization of contract acquisition costs		16,659			19,745			24,550
Deferred income taxes		9,350			20,362			12,039
Employee share-based compensation expense		5,733			6,150			6,663
Loss (gain) on early debt extinguishment		6,995			—			(9,834	)
Other non-cash items, net		10,612			12,802			15,111
Changes in assets and liabilities, net of effects of acquisitions and discontinued operations:
Trade accounts receivable		(6,648	)		(3,962	)		(1,481	)
Inventories and supplies		(398	)		(470	)		2,793
Other current assets		(1,538	)		1,864			(2,109	)
Non-current assets		2,261			928			5,403
Accounts payable		3,460			(5,193	)		1,868
Contract acquisition payments		(12,190	)		(22,087	)		(29,250	)
Other accrued and non-current liabilities		(18,063	)		(44,834	)		(11,345	)
Net cash provided by operating activities of continuing operations		235,367			212,615			206,438
Cash Flows From Investing Activities:
Purchases of capital assets		(35,506	)		(43,932	)		(44,266	)
Payments for acquisitions, net of cash acquired		(85,641	)		(98,621	)		(30,825	)
Payments on company-owned life insurance policies		(6,383	)		—			—
Loans to distributors		(5,175	)		—			—
Purchases of customer lists		—			(265	)		(1,639	)
Purchases of marketable securities		(18	)		(14	)		(4,581	)
Proceeds from sales of marketable securities		—			1,970			914
Proceeds from company-owned life insurance policies		—			6,143			—
Other		938			(1,451	)		(1,391	)
Net cash used by investing activities of continuing operations		(131,785	)		(136,170	)		(81,788	)
Cash Flows From Financing Activities:
Net payments on short-term debt		(7,000	)		(19,000	)		(52,000	)
Payments on long-term debt, including costs of debt reacquisition		(215,030	)		—			(22,627	)
Proceeds from issuing long-term debt		200,000			—			—
Payments for debt issue costs		(3,513	)		(2,361	)		—
Change in book overdrafts		(136	)		(693	)		(3,360	)
Proceeds from issuing shares under employee plans		7,671			3,267			1,972
Excess tax benefit from share-based employee awards		1,052			680			68
Payments for common shares repurchased		(23,620	)		(2,999	)		(1,319	)
Cash dividends paid to shareholders		(51,126	)		(51,435	)		(51,279	)
Net cash used by financing activities of continuing operations		(91,702	)		(72,541	)		(128,545	)
Effect Of Exchange Rate Change On Cash		(576	)		690			1,594
Cash Used By Operating Activities Of Discontinued Operations		—			—			(470	)
Cash Used By Investing Activities Of Discontinued Operations		—			—			(30	)
Net Change In Cash And Cash Equivalents		11,304			4,594			(2,801	)
Cash And Cash Equivalents:                 Beginning Of Year		17,383			12,789			15,590
End Of Year	$	28,687		$	17,383		$	12,789

See Notes to Consolidated Financial Statements

50

DELUXE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Note 1: Significant accounting policies

Consolidation – The consolidated financial statements include the accounts of Deluxe Corporation and its wholly-owned subsidiaries. All intercompany accounts, transactions and profits have been eliminated.

Use of estimates – We have prepared the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. In this process, it is necessary for us to make certain assumptions and estimates affecting the amounts reported in the consolidated financial statements and related notes. These estimates and assumptions are developed based upon all available information. However, actual results can differ from assumed and estimated amounts.

Foreign currency translation – The financial statements of our foreign subsidiaries are measured in the respective subsidiaries’ functional currencies, primarily Canadian dollars, and are translated into U.S. dollars. Assets and liabilities are translated using the exchange rates in effect at the balance sheet date. Revenue and expenses are translated at the average exchange rates during the year. The resulting translation gains and losses are reflected in accumulated other comprehensive loss in the shareholders’ equity section of our consolidated balance sheets. Foreign currency transaction gains and losses are recorded in other (expense) income in our consolidated statements of income.

Cash and cash equivalents – We consider all cash on hand and other highly liquid investments with original maturities of three months or less to be cash and cash equivalents. As a result of our cash management system, checks issued by us but not presented to the banks for payment may create negative book cash balances. These book overdrafts are included in accounts payable and totaled $2,871 as of December 31, 2011 and $3,007 as of December 31, 2010.

Marketable securities – Marketable securities consist of investments in mutual funds. They are classified as available for sale and are carried at fair value on the consolidated balance sheets. Because of the short-term nature of the underlying investments, the cost of these securities approximates their fair value. The cost of securities sold is determined using the average cost method.

Trade accounts receivable – Trade accounts receivable are initially recorded at fair value upon the sale of goods or services to customers. They are stated net of allowances for uncollectible accounts, which represent estimated losses resulting from the inability of customers to make the required payments. When determining the allowances for uncollectible accounts, we take several factors into consideration including the overall composition of accounts receivable aging, our prior history of accounts receivable write-offs, the type of customer and our day-to-day knowledge of specific customers. Changes in the allowances for uncollectible accounts are included in selling, general and administrative (SG&A) expense in our consolidated statements of income. The point at which uncollected accounts are written off varies by type of customer, but generally does not exceed one year from the due date of the receivable.

Inventories and supplies – Inventories and supplies are stated at the lower of average cost or market. Average cost approximates cost calculated on a first-in, first-out basis. Supplies consist of items not used directly in the production of goods, such as maintenance and janitorial supplies utilized in the production area.

Funds held for customers – Our Canadian payroll services business collects funds from clients to pay their payroll and related taxes. We hold these funds temporarily until payments are remitted to the clients’ employees and the appropriate taxing authorities. These funds, consisting of cash and mutual fund investments, are reported as funds held for customers in our consolidated balance sheets. The corresponding liability for these obligations is included in accrued liabilities in our consolidated balance sheets. The mutual fund investments are carried at fair value, with unrealized gains and losses included in accumulated other comprehensive loss in our consolidated balance sheets. Realized gains and losses are included in revenue in our consolidated statements of income and were not significant for 2011, 2010 or 2009.

Long-term investments – Long-term investments consist primarily of cash surrender values of life insurance contracts. Additionally, long-term investments include an investment in domestic mutual funds with a fair value of $2,165 as of December 31, 2011 and $2,283 as of December 31, 2010. We have elected to account for this investment 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. Realized and unrealized gains and losses, as well as dividends earned by the mutual fund investment, are included in SG&A expense in the consolidated statements of income. This investment corresponds to a liability under an officers’ deferred compensation plan which 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 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 income. The cost of securities sold is determined using the average cost method.

51

Property, plant and equipment – Property, plant and equipment, including leasehold and other improvements that extend an asset’s useful life or productive capabilities, are stated at historical cost. Buildings have been assigned 40-year lives and machinery and equipment are generally assigned lives ranging from one to 11 years, with a weighted-average life of 7.7 years as of December 31, 2011. Buildings, machinery and equipment are generally depreciated using accelerated methods. Leasehold and building improvements are depreciated on the straight-line basis over the estimated useful life of the property or the life of the lease, whichever is shorter. Maintenance and repairs are expensed as incurred. Gains or losses resulting from the disposition of property, plant and equipment are included in SG&A expense in the consolidated statements of income, with the exception of building sales. Such gains and losses are reported separately in the consolidated statements of income.

Intangibles – Intangible assets are stated at historical cost. Amortization expense is generally determined on the straight-line basis over periods ranging from one to 20 years, with a weighted-average life of 6.2 years as of December 31, 2011. Customer lists and distributor contracts are generally amortized using accelerated methods. Each reporting period, we evaluate the remaining useful lives of our amortizable intangibles to determine whether events and circumstances warrant a revision to the remaining period of amortization. If our estimate of an asset’s remaining useful life is revised, the remaining carrying amount of the asset is amortized prospectively over the revised remaining useful life. As of December 31, 2011, we held a trade name asset which has been assigned an indefinite life. As such, this asset is not amortized, but is subject to impairment testing on at least an annual basis. Gains or losses resulting from the disposition of intangibles are included in SG&A expense in the consolidated statements of income.

We capitalize costs of software developed or obtained for internal use, including website development costs, once the preliminary project stage has been completed, management commits to funding the project and it is probable that the project will be completed and the software will be used to perform the function intended. Capitalized costs include only (1) external direct costs of materials and services consumed in developing or obtaining internal-use software, (2) payroll and payroll-related costs for employees who are directly associated with and who devote time to the internal-use software project, and (3) interest costs incurred, when significant, while developing internal-use software. Costs incurred in populating websites with information about the company or products are expensed as incurred. Capitalization of costs ceases when the project is substantially complete and ready for its intended use. The carrying value of internal-use software is reviewed in accordance with our policy on impairment of long-lived assets and amortizable intangibles.

Impairment of long-lived assets and amortizable intangibles – We evaluate the recoverability of property, plant, equipment and amortizable intangibles not held for sale whenever events or changes in circumstances indicate that an asset’s carrying amount may not be recoverable. Such circumstances could include, but are not limited to, (1) a significant decrease in the market value of an asset, (2) a significant adverse change in the extent or manner in which an asset is used or in its physical condition, or (3) an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of an asset. We measure the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. If the sum of the expected future net cash flows is less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeds the fair value of the asset. As quoted market prices are not available for the majority of our assets, the estimate of fair value is based on various valuation techniques, including the discounted value of estimated future cash flows.

We evaluate the recoverability of property, plant, equipment and intangibles held for sale by comparing the asset’s carrying amount with its fair value less costs to sell. Should the fair value less costs to sell be less than the carrying value of the long-lived asset, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeds the fair value of the asset less costs to sell.

The evaluation of asset impairment requires us to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts.

Impairment of indefinite-lived intangibles and goodwill – We evaluate the carrying value of indefinite-lived intangibles and goodwill on July 31st of each year and between annual evaluations if events occur or circumstances change that would indicate a possible impairment. Such circumstances could include, but are not limited to, (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, (3) an adverse action or assessment by a regulator, or (4) an adverse change in market conditions which are indicative of a decline in the fair value of the assets.

When evaluating whether our indefinite-lived trade name is impaired, we compare the carrying amount of the asset to its estimated fair value. The estimate of fair value is based on a relief from royalty method which calculates the cost savings associated with owning rather than licensing the trade name. An assumed royalty rate is applied to forecasted revenue and the resulting cash flows are discounted. Should the estimated fair value be less than the carrying value of the asset, an impairment loss would be recognized. The impairment loss is calculated as the amount by which the carrying value of the asset exceeds the fair value of the asset. The impairment analysis completed during 2009 indicated impairment of the indefinite-lived trade name. See Note 7 for further information regarding the impairment charge. The impairment analyses completed during 2011 and 2010 indicated no impairment. In addition to the required impairment analyses, we regularly evaluate the remaining useful life of this asset to determine whether events and circumstances continue to support an indefinite useful life. If we were to determine that the asset has a finite useful life, we would test it for impairment and then amortize its remaining carrying value over its estimated remaining useful life.

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In 2009 and 2010, a two-step, quantitative approach was used in evaluating goodwill for impairment. First, we calculated the estimated fair value of each reporting unit to which goodwill was assigned and compared this estimated fair value to the carrying amount of its net assets. In calculating fair value, we used the income approach. The income approach is a valuation technique under which we estimated future cash flows using the reporting unit’s financial forecast from the perspective of an unrelated market participant. Using historical trending and internal forecasting techniques, we projected revenue for the next five years. We applied our fixed and variable cost experience rates to the projected revenue to arrive at the future cash flows. A terminal value was then applied to the projected cash flow stream. Future estimated cash flows were discounted to their present value to calculate fair value. The discount rate was the value-weighted average of our estimated cost of capital derived using both known and estimated customary market metrics. In determining the fair value of our reporting units we were required to estimate a number of factors, including projected future operating results, terminal growth rates, economic conditions, anticipated future cash flows, the discount rate and the allocation of shared or corporate items. For reasonableness, the summation of our reporting units’ fair values was compared to our consolidated fair value as indicated by our market capitalization plus an appropriate control premium. If the carrying amount of a reporting unit’s net assets exceeded its estimated fair value, the second step of the goodwill impairment analysis required us to measure the amount of the impairment loss. An impairment loss is calculated by comparing the implied fair value of the goodwill to its carrying amount. In calculating the implied fair value of the goodwill, we measure the fair value of the reporting unit’s assets and liabilities, excluding goodwill. The excess of the fair value of the reporting unit over the amount assigned to its assets and liabilities, excluding goodwill, is the implied fair value of the reporting unit’s goodwill. We recorded a goodwill impairment charge during the first quarter of 2009. See Note 7 for further information. No goodwill impairment charges were recorded during 2010.

We adopted Accounting Standards Update (ASU) No. 2011-08 during the quarter ended September 30, 2011. This new standard gives us the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after this qualitative assessment, we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step, quantitative impairment test described earlier is unnecessary. In completing our qualitative analysis during the third quarter of 2011, we noted no changes in events or circumstances which would require us to complete the two-step quantitative goodwill impairment analysis for any of our reporting units. See Note 7 for further information regarding this qualitative analysis. As such, no impairment charges were recorded as a result of our 2011 annual impairment analysis.

Contract acquisition costs – We record contract acquisition costs when we sign or renew certain contracts with our financial institution clients. These costs, which are essentially pre-paid product discounts, consist of cash payments or accruals related to amounts owed to financial institution clients by our Financial Services segment. Contract acquisition costs are generally amortized as reductions of revenue on the straight-line basis over the related contract term. Currently, these amounts are being amortized over periods ranging from one to 10 years, with a weighted-average life of 6.1 years as of December 31, 2011. Whenever events or changes occur that impact the related contract, including significant declines in the anticipated profitability, we evaluate the carrying value of the contract acquisition costs to determine if impairment has occurred. Should a financial institution cancel a contract prior to the agreement's termination date, or should the volume of orders realized through a financial institution fall below contractually-specified minimums, we generally have a contractual right to a refund of the remaining unamortized contract acquisition costs. These costs are included in other non-current assets in the consolidated balance sheets.

Advertising costs – Deferred advertising costs include materials, printing, labor and postage costs related to direct response advertising programs of our Direct Checks and Small Business Services segments. These costs are amortized as SG&A expense over periods (not exceeding 18 months) that correspond to the estimated revenue streams of the individual advertisements. The actual revenue streams are analyzed at least annually to monitor the propriety of the amortization periods. Judgment is required in estimating the future revenue streams, especially with regard to check re-orders which can span an extended period of time. Significant changes in the actual revenue streams would require the amortization periods to be modified, thus impacting our results of operations during the period in which the change occurred and in subsequent periods. Within our Direct Checks segment, approximately 84% of the costs of individual advertisements is expensed within six months of the advertisement. The majority of the deferred advertising costs of our Small Business Services segment are fully amortized within six months of the advertisement. Deferred advertising costs are included in other non-current assets in the consolidated balance sheets, as portions are amortized over periods in excess of one year.

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Non-direct response advertising projects are expensed the first time the advertising takes place. Catalogs provided to financial institution clients of our Financial Services segment are accounted for as prepaid assets until they are shipped to financial institutions. The total amount of advertising expense for continuing operations was $103,009 in 2011, $93,527 in 2010 and $83,099 in 2009.

Loans to distributors – Beginning in 2011, we made loans to certain of our Safeguard® distributorsto allow them to purchase the operations of other small business distributors. These loans are included in other current assets and other non-current assets in the consolidated balance sheet. Interest is accrued at market interest rates. As of December 31, 2011, we had no allowances for credit losses related to these receivables, and no amounts were past due.

Restructuring charges – Over the past several years, we have recorded restructuring accruals as a result of facility closings and other cost management efforts. These accruals primarily consist of employee termination benefits payable under our ongoing severance benefit plan. We record accruals for employee termination benefits when it is probable that a liability has been incurred and the amount of the liability is reasonably estimable. As such, judgment is involved in determining when it is appropriate to record restructuring accruals. Additionally, we are required to make estimates and assumptions in calculating the restructuring accruals, as on some occasions employees choose to voluntarily leave the company prior to their termination date or they secure another position within the company. In these situations, the employees do not receive termination benefits. To the extent our assumptions and estimates differ from our actual costs, subsequent adjustments to restructuring accruals have been and will be required. Restructuring accruals are included in accrued liabilities and other non-current liabilities in our consolidated balance sheets. In addition to severance benefits, we also typically incur other costs related to restructuring activities including, but not limited to, employee and equipment moves, training and travel. These costs are expensed as incurred.

Litigation – We are party to legal actions and claims arising in the ordinary course of business. We record accruals for legal matters when the expected outcome of these matters is either known or considered probable and can be reasonably estimated. Our accruals do not include related legal and other costs expected to be incurred in defense of legal actions. Based upon information presently available, we believe that it is unlikely that any identified matters, either individually or in the aggregate, will have a material adverse effect on our annual results of operations, financial position or liquidity.

Income taxes – Deferred income taxes result from temporary differences between the financial reporting basis of assets and liabilities and their respective tax reporting bases. Current deferred tax assets and liabilities are netted in the consolidated balance sheets, as are long-term deferred tax assets and liabilities. Net deferred tax assets are recognized to the extent that realization of such benefits is more likely than not.

We are subject to tax audits in numerous domestic and foreign tax jurisdictions. Tax audits are often complex and can require several years to complete. In the normal course of business, we are subject to challenges from the Internal Revenue Service and other tax authorities regarding the amount of taxes due. These challenges may alter the timing or amount of taxable income or deductions, or the allocation of income among tax jurisdictions. We recognize the benefits of tax return positions in the financial statements when they are “more-likely-than-not” to be sustained by the taxing authorities based solely on the technical merits of the position. If the recognition threshold is met, the tax benefit is measured and recognized as the largest amount of tax benefit that, in our judgment, is greater than 50% likely to be realized. Accrued interest and penalties related to unrecognized tax positions is included in our provision for income taxes in the consolidated statements of income.

Derivative financial instruments – Information regarding our derivative financial instruments is included in Note 6. We do not use derivative financial instruments for speculative or trading purposes. All derivative transactions must be linked to an existing balance sheet item or firm commitment, and the notional amount cannot exceed the value of the exposure being hedged.

We recognize all derivative financial instruments in the consolidated financial statements at fair value regardless of the purpose or intent for holding the instrument. Changes in the fair value of derivative financial instruments are recognized periodically either in income or in shareholders’ equity as a component of accumulated other comprehensive loss, depending on whether the derivative financial instrument qualifies for hedge accounting, and if so, whether it qualifies as a fair value hedge or a cash flow hedge and whether the hedge is effective. Generally, changes in fair values of derivatives accounted for as fair value hedges are recorded in income along with the portion of the change in the fair value of the hedged items that relate to the hedged risk. Changes in fair values of derivatives accounted for as cash flow hedges, to the extent they are effective as hedges, are recorded in accumulated other comprehensive loss, net of tax. We classify the cash flows from derivative instruments that have been designated as fair value or cash flow hedges in the same category as the cash flows from the items being hedged. Changes in fair values of derivatives not qualifying as hedges and the ineffective portion of hedges are reported in income.

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Revenue recognition – We recognize revenue when (1) persuasive evidence of an arrangement exists, (2) delivery has occurred or services have been rendered, (3) the sales price is fixed or determinable, and (4) collectibility is reasonably assured. The majority of our revenues are generated from the sale of products for which revenue is recognized upon shipment or customer receipt, based upon the transfer of title. Our services, which account for the remainder of our revenue, consist primarily of web hosting and applications services, fraud prevention, financial institution customer acquisition programs, and payroll services. We recognize these service revenues as the services are provided. In some situations, our web hosting and applications services are billed on a quarterly, semi-annual or annual basis. When a customer pays in advance for services, we defer the revenue and recognize it as the services are performed. Up-front set-up fees related to our web hosting and applications services are deferred and recognized as revenue on the straight-line basis over the term of the customer relationship. Deferred revenue is included in accrued liabilities in our consolidated balance sheets.

Revenue includes amounts billed to customers for shipping and handling and pass-through costs, such as marketing materials for which our financial institution clients reimburse us. Costs incurred for shipping and handling and pass-through costs are reflected in cost of goods sold. For sales with a right of return, we record a reserve for estimated sales returns based on significant historical experience.

At times, a financial institution client may terminate its contract with us prior to the end of the contract term. In many of these cases, the financial institution is contractually required to remit a contract termination payment. Such payments are recorded as revenue when the termination agreement is executed, provided that we have no further service or contractual obligations, and collection of the funds is assured. If we have a continuing service obligation following the execution of a contract termination agreement, we record the related revenue over the remaining service period.

Revenue is presented in the consolidated statements of income net of rebates, discounts, amortization of contract acquisition costs and sales tax. We enter into contractual agreements with financial institution clients for rebates on certain products we sell. We record these amounts as reductions of revenue in the consolidated statements of income and as accrued liabilities in the consolidated balance sheets when the related revenue is recorded. At times we may also sell products at discounted prices or provide free products to customers when they purchase a specified product. Discounts are recorded as reductions of revenue when the related revenue is recorded. The cost of free products is recorded as cost of goods sold when the revenue for the related order is recorded. Reported revenue for our Financial Services segment does not reflect the full retail price paid by end-consumers to their financial institutions. Revenue reflects the amounts paid to us by our financial institution clients.

Employee share-based compensation – Our share-based compensation consists of non-qualified stock options, restricted stock units, restricted stock and an employee stock purchase plan. The fair value of stock options is measured on the grant date using the Black-Scholes option pricing model. The related compensation expense is recognized on the straight-line basis, net of estimated forfeitures, over the option’s vesting period. The fair value of restricted stock and a portion of our restricted stock unit awards is measured on the grant date based on the market value of our common stock. The related compensation expense, net of estimated forfeitures, is recognized over the applicable service period. Certain of our restricted stock unit awards may be settled in cash if an employee voluntarily chooses to leave the company. These awards are included in accrued liabilities in the consolidated balance sheets and are re-measured at fair value as of each balance sheet date. Compensation expense resulting from the 15% discount provided under our employee stock purchase plan is recognized over the six-month purchase period. Employee share-based compensation expense is included in cost of goods sold and in SG&A expense in our consolidated statements of income, based on the functional areas of the employees receiving the awards.

Earnings per share – Basic earnings per share is based on the weighted-average number of common shares outstanding during the year. Diluted earnings per share is based on the weighted-average number of common shares outstanding during the year, adjusted to give effect to potential common shares such as stock options and shares to be issued under our employee stock purchase plan. When determining the denominator for the diluted earnings per share calculation under the treasury stock method, we exclude from assumed proceeds the impact of pro forma deferred tax assets. We calculate earnings per share using the two-class method as we have unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalent payments. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings.

Comprehensive income – Comprehensive income includes charges and credits to shareholders’ equity that are not the result of transactions with shareholders. Our total comprehensive income consists of net income, gains and losses on derivative instruments, changes in the funded status and amortization of amounts related to our pension and postretirement benefit plans, unrealized gains and losses on available-for-sale marketable securities, and foreign currency translation adjustments. The items of comprehensive income, with the exception of net income, are included in accumulated other comprehensive loss in our consolidated balance sheets and statements of shareholders’ equity.

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Recently adopted accounting pronouncements – In September 2011, the Financial Accounting Standards Board (FASB) issued ASU No. 2011-08, Testing Goodwill for Impairment. Under the new guidance, companies have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less that its carrying amount. If, after this qualitative assessment, a company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step quantitative impairment test is unnecessary. We elected to adopt this new standard during the quarter ended September 30, 2011. As such, when performing our annual goodwill impairment analysis as of July 31, 2011, we performed a qualitative assessment of events and circumstances affecting the fair value of all of our reporting units. See Note 7 for further information regarding this qualitative analysis.

Accounting pronouncements not yet adopted – In May 2011, the FASB issued ASU No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The new guidance changes some fair value measurement principles and disclosure requirements. The changes in fair value measurement principles relate primarily to financial assets and do not impact our fair value measurements at this time. Effective January 1, 2012, we will adopt the new disclosure requirements.

In June 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income. This standard eliminates the current option to report other comprehensive income and its components in the statement of shareholders’ equity. The standard also requires that the components of other comprehensive income be presented in interim financial statements. Currently, only the total of comprehensive income is required to be presented in interim reports. In December 2011, the FASB issued ASU No. 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. This standard temporarily defers a provision included in ASU No. 2011-05 which requires that reclassification adjustments from other comprehensive income to net income be presented by income statement line item. Both new standards are effective for us on January 1, 2012.

Note 2: Supplemental balance sheet and cash flow information

Trade accounts receivable – Net trade accounts receivable was comprised of the following at December 31:

	2011			2010
Trade accounts receivable – gross	$	73,030		$	70,601
Allowances for uncollectible accounts		(4,007	)		(4,130	)
Trade accounts receivable – net	$	69,023		$	66,471

Changes in the allowances for uncollectible accounts were as follows:

	2011			2010			2009
Balance, beginning of year	$	4,130		$	4,991		$	5,930
Bad debt expense		4,033			4,686			5,842
Write-offs, net of recoveries		(4,156	)		(5,547	)		(6,781	)
Balance, end of year	$	4,007		$	4,130		$	4,991

Inventories and supplies – Inventories and supplies were comprised of the following at December 31:

	2011		2010
Raw materials	$	5,566	$	4,879
Semi-finished goods		8,273		8,393
Finished goods		5,301		5,083
Supplies, primarily production		2,903		3,305
Inventories and supplies	$	22,043	$	21,660

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

	December 31, 2011
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Corporate investments:
Money market securities	$	2,001	$	—	$	—	$	2,001
Funds held for customers:(1)
Money market securities		3		—		—		3
Canadian and provincial government securities		5,172		243		—		5,415
Marketable securities – funds held for customers		5,175		243		—		5,418
Total marketable securities	$	7,176	$	243	$	—	$	7,419

(1) Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2011, also included cash and cash equivalents of $38,976.

	December 31, 2010
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Corporate investments:
Money market securities	$	2,029	$	—	$	—	$	2,029
Funds held for customers:(1)
Money market securities		5,078		—		—		5,078
Canadian and provincial government securities		5,148		23		—		5,171
Marketable securities – funds held for customers		10,226		23		—		10,249
Total marketable securities	$	12,255	$	23	$	—	$	12,278

(1) Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2010, also included cash and cash equivalents of $25,471.

Expected maturities of available-for-sale securities as of December 31, 2011 were as follows:

	Fair value
Due in one year or less	$	2,108
Due in three to five years		1,353
Due after five years		3,958
Total marketable securities	$	7,419

Further information regarding the fair value of marketable securities can be found in Note 7: Fair value measurements.

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Property, plant and equipment – Property, plant and equipment was comprised of the following at December 31:

	2011							2010
	Gross carrying amount		Accumulated depreciation			Net carrying amount		Gross carrying amount		Accumulated depreciation			Net carrying amount
Land and improvements	$	33,970	$	(8,848	)	$	25,122	$	33,981	$	(8,517	)	$	25,464
Buildings and improvements		122,262		(69,619	)		52,643		120,672		(65,359	)		55,313
Machinery and equipment		310,021		(274,375	)		35,646		303,987		(264,543	)		39,444
Property, plant and equipment – net	$	466,253	$	(352,842	)	$	113,411	$	458,640	$	(338,419	)	$	120,221

Intangibles – Intangibles were comprised of the following at December 31:

	2011							2010
	Gross carrying amount		Accumulated amortization			Net carrying amount		Gross carrying amount		Accumulated amortization			Net carrying amount
Indefinite-lived:
Trade name	$	19,100	$	—		$	19,100	$	19,100	$	—		$	19,100
Amortizable intangibles:
Internal-use software		410,905		(345,145	)		65,760		378,269		(314,267	)		64,002
Customer lists/relationships		52,542		(26,059	)		26,483		72,292		(43,660	)		28,632
Distributor contracts		30,900		(28,198	)		2,702		30,900		(26,396	)		4,504
Trade names		67,661		(25,958	)		41,703		59,361		(22,009	)		37,352
Other		9,566		(7,975	)		1,591		8,602		(7,080	)		1,522
Amortizable intangibles		571,574		(433,335	)		138,239		549,424		(413,412	)		136,012
Intangibles	$	590,674	$	(433,335	)	$	157,339	$	568,524	$	(413,412	)	$	155,112

As of December 31, 2011, we held a distributor contract asset which was recorded in conjunction with the acquisition of New England Business Service, Inc. (NEBS) in June 2004. This asset is being amortized over nine years and had a carrying value of $2,702 as of December 31, 2011 and $4,504 as of December 31, 2010. In general, the distributor contracts have an initial five-year term and may be renewed for successive five-year periods upon mutual agreement of both parties. At the time the fair value of the contracts was determined, an annual 90% contract retention rate was assumed based on historical experience. As of December 31, 2011, the average period remaining to the next contract renewal for our recognized distributor contracts was 2.3 years. Costs related to renewing or extending these contracts are not material and are expensed as incurred. We had no other intangible assets as of December 31, 2011 or 2010 which have legal, regulatory or contractual provisions that potentially limit our use of the asset.

Total amortization of intangibles was $51,796 in 2011, $52,969 in 2010 and $45,302 in 2009. Of these amounts, amortization of internal-use software was $31,562 in 2011, $29,121 in 2010 and $25,152 in 2009. Based on the intangibles in service as of December 31, 2011, estimated amortization expense for each of the next five years ending December 31 is as follows:

	Estimated amortization  expense
2012	$	37,121
2013		26,700
2014		15,027
2015		8,043
2016		5,713

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We acquire internal-use software in the normal course of business. In conjunction with acquisitions (see Note 4), we also acquired certain other amortizable intangible assets. The following intangible assets were acquired during the years indicated:

	2011			2010			2009
	Amount		Weighted- average amortization  period	Amount		Weighted- average amortization period	Amount		Weighted- average amortization period
Internal-use software	$	33,169	4 years	$	36,442	4 years	$	24,911	3 years
Customer lists/relationships		12,600	8 years		16,690	1 year		13,943	7 years
Trade names		8,300	9 years		9,100	10 years		900	10 years
Other		1,000	4 years		—	—		—	—
Acquired intangibles	$	55,069	6 years	$	62,232	4 years	$	39,754	5 years

Intangible assets acquired via the acquisition of small business distributors, as described in Note 4, are not included in the table above as the assets are typically sold shortly after their purchase to Safeguard distributors and thus, are not held long enough to amortize.

Goodwill – Information regarding the acquisitions completed during the past three years can be found in Note 4. As ofDecember 31, 2011, goodwill was comprised of the following:

	Goodwill
Acquisition of NEBS in June 2004	$	472,082
Acquisition of Designer Checks in February 2000(1)		77,970
Acquisition of Hostopia.com Inc. in August 2008		68,555
Acquisition of Custom Direct, Inc. in April 2010		66,269
Acquisition of Banker’s Dashboard in April 2011(1)		26,281
Acquisition of PsPrint in July 2011(1)		24,826
Acquisition of Abacus America, Inc. in July 2009		24,225
Acquisition of the Johnson Group in October 2006(1)		7,320
Acquisition of Direct Checks in December 1987		4,267
Acquisition of Logo Design Mojo in April 2008(1)		1,359
Acquisition of MerchEngines.com in July 2009(1)		1,140
Acquisition of Dots and Pixels, Inc. in July 2005		1,021
Acquisition of Cornerstone Customer Solutions in March 2010(1)		897
Acquisition of All Trade Computer Forms, Inc. in February 2007		786
Goodwill	$	776,998

(1) This goodwill is deductible for income tax purposes.

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Changes in goodwill by reportable segment and in total were as follows:

	Small Business Services			Financial Services		Direct Checks		Total
Balance, December 31, 2009:
Goodwill, gross	$	596,429		$	—	$	82,237	$	678,666
Accumulated impairment charges		(20,000	)		—		—		(20,000	)
Goodwill, net of accumulated impairment charges		576,429			—		82,237		658,666
Acquisition of Custom Direct, Inc. (see Note 4)		—			—		66,269		66,269
Acquisition of Cornerstone Customer Solutions (see Note 4)		—			897		—		897
Currency translation adjustment		105			—		—		105
Balance, December 31, 2010:
Goodwill, gross		596,534			897		148,506		745,937
Accumulated impairment charges		(20,000	)		—		—		(20,000	)
Goodwill, net of accumulated impairment charges		576,534			897		148,506		725,937
Acquisition of Banker’s Dashboard (see Note 4)		—			26,281		—		26,281
Acquisition of PsPrint (see Note 4)		24,826			—		—		24,826
Currency translation adjustment		(46	)		—		—		(46	)
Balance, December 31, 2011:
Goodwill, gross		621,314			27,178		148,506		796,998
Accumulated impairment charges		(20,000	)		—		—		(20,000	)
Goodwill, net of accumulated impairment charges	$	601,314		$	27,178	$	148,506	$	776,998

Other non-current assets – Other non-current assets as of December 31 were comprised of the following:

	2011		2010
Contract acquisition costs	$	55,076	$	57,476
Deferred advertising costs		15,599		15,832
Other		29,923		20,939
Other non-current assets	$	100,598	$	94,247

Changes in contract acquisition costs were as follows:

	2011			2010			2009
Balance, beginning of year	$	57,476		$	45,701		$	37,706
Additions(1)		14,624			31,520			32,545
Amortization		(16,659	)		(19,745	)		(24,550	)
Other		(365	)		—			—
Balance, end of year	$	55,076		$	57,476		$	45,701

(1) Contract acquisition costs are accrued upon contract execution. Cash payments made for contract acquisition costs were $12,190 in 2011, $22,087 in 2010 and $29,250 in 2009.

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Accrued liabilities – Accrued liabilities as of December 31 were comprised of the following:

	2011		2010
Funds held for customers	$	43,829	$	35,475
Employee profit sharing/cash bonus and pension		23,783		34,109
Customer rebates		20,969		19,201
Contract acquisition costs due within one year		13,070		8,550
Interest		8,760		5,227
Restructuring due within one year (see Note 8)		5,946		6,435
Wages, including vacation		4,995		5,898
Other		28,746		29,139
Accrued liabilities	$	150,098	$	144,034

Supplemental cash flow disclosures – Cash payments for interest and income taxes were as follows for the years ended December 31:

	2011		2010		2009
Interest paid	$	42,542	$	44,054	$	43,513
Income taxes paid		60,861		70,246		56,060

Note 3: Earnings per share

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

	2011			2010			2009
Earnings per share – basic:
Income from continuing operations	$	144,595		$	153,395		$	99,365
Income allocated to participating securities		(823	)		(804	)		(751	)
Income available to common shareholders	$	143,772		$	152,591		$	98,614
Weighted-average shares outstanding		51,036			51,123			50,837
Earnings per share – basic	$	2.82		$	2.98		$	1.94
Earnings per share – diluted:
Income from continuing operations	$	144,595		$	153,395		$	99,365
Income allocated to participating securities		(586	)		(802	)		(751	)
Re-measurement of share-based awards classified as liabilities		(20	)		79			(18	)
Income available to common shareholders	$	143,989		$	152,672		$	98,596
Weighted-average shares outstanding		51,036			51,123			50,837
Dilutive impact of potential common shares		379			202			88
Weighted-average shares and potential common shares outstanding		51,415			51,325			50,925
Earnings per share – diluted	$	2.80		$	2.97		$	1.94
Antidilutive options excluded from calculation		1,835			2,324			2,128

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Earnings per share amounts for continuing operations, discontinued operations and net income, as presented on the consolidated statements of income, are calculated individually and may not sum due to rounding differences.

Note 4: Acquisitions

2011 acquisitions –During April 2011, we acquired substantially all of the assets of Banker’s Dashboard, LLC, for $39,700, comprised of $35,000 of cash and $4,700 of shares of our common stock plus related dividend equivalent payments. We funded the cash portion of the purchase price with cash on hand and a draw on our credit facility. The common stock amount represents the fair value of 193 shares that we will issue to the previous owners of Banker’s Dashboard at a future date, and which has been recorded as a component of additional paid-in capital in the consolidated balance sheet. The shares will be issued four years after the closing of the acquisition. The shares could potentially be issued two years after the closing of the transaction, depending on the retention of certain Banker’s Dashboard employees. Banker’s Dashboard provides online financial management tools that provide banks with a comprehensive daily view of their financial picture. The allocation of the purchase price based upon the estimated fair value of the assets acquired and liabilities assumed resulted in goodwill of $26,281, which is tax deductible. This acquisition resulted in goodwill as it extends the range of products and services we offer to our financial institution clients. Transaction costs related to this acquisition were expensed as incurred and were not significant to our 2011 consolidated statement of income. The results of operations of this business from its acquisition date are included in our Financial Services segment.

Intangible assets acquired in the Banker’s Dashboard acquisition consisted primarily of a customer list valued at $9,300 with a useful life of nine years and a trade name valued at $2,200 with a useful life of eight years. The customer list is being amortized using an accelerated method and the trade name is being amortized using the straight-line method. Further information regarding the calculation of the estimated fair values of these assets can be found in Note 7.

During July 2011, we acquired substantially all of the assets of PsPrint, LLC for cash of $45,486, net of cash acquired, which we funded with a draw on our credit facility. PsPrint is a web-to-print solutions company that provides online print marketing and promotional services for small businesses. The allocation of the purchase price based upon the estimated fair value of the assets acquired and liabilities assumed resulted in goodwill of $24,826, which is tax deductible. This acquisition resulted in goodwill as it is expected to accelerate one of our key platforms for growth by combining PsPrint’s capabilities and technology with our market presence. Transaction costs related to this acquisition were expensed as incurred and were not significant to our 2011 consolidated statement of income. The results of operations of this business from its acquisition date are included in our Small Business Services segment.

Intangible assets acquired in the PsPrint acquisition included internal-use software valued at $9,050 with a useful life of five years, a trade name valued at $6,100 with a useful life of 10 years, and a customer list valued at $3,300 with a useful life of six years. The customer list is being amortized using an accelerated method and the software and trade name are being amortized using the straight-line method. Further information regarding the calculation of the estimated fair values of these assets can be found in Note 7.

During 2011, we acquired the operations of several small business distributors for aggregate cash payments of $5,155. The assets acquired consisted primarily of customer lists, which we then sold to our Safeguard distributors, realizing insignificant net gains and losses on the sales. In most cases, we entered into a note receivable upon the sale of the assets to the distributors. Proceeds collected from these notes receivable are included in other investing activities in our consolidated statements of cash flows.

 2010 acquisitions – During April 2010, we acquired all of the outstanding stock of Custom Direct, Inc. (Custom Direct), a provider of direct-to-consumer checks, in a cash transaction for $97,921, net of cash acquired. We funded the acquisition with our credit facility. The allocation of the purchase price based upon the estimated fair values of the assets acquired and liabilities assumed resulted in goodwill of $66,269. This acquisition resulted in the recognition of goodwill as we expected Custom Direct to contribute to our strategy of optimizing cash flows in our Direct Checks segment. Transaction costs related to this acquisition were expensed as incurred and were not significant to our 2010 consolidated statement of income. The results of operations of this business from its acquisition date are included in our Direct Checks segment.

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The following illustrates our allocation of the Custom Direct purchase price to the assets acquired and liabilities assumed:

	Allocation of purchase  price
Cash and cash equivalents	$	24
Other current assets		11,249
Intangibles		36,487
Goodwill		66,269
Other non-current assets		5,082
Current liabilities		(8,686	)
Non-current liabilities		(12,480	)
Total purchase price		97,945
Less: cash acquired		(24	)
Purchase price, net of cash acquired	$	97,921

Intangible assets acquired in the Custom Direct acquisition included a customer list valued at $15,000 with a useful life of 1.3 years, internal-use software valued at $12,587 with a weighted-average useful life of 4.7 years, and trade names valued at $8,900 with a useful life of 10 years. The customer list is being amortized using an accelerated method and the software and trade name are being amortized using the straight-line method. Further information regarding the calculation of the estimated fair values of these assets can be found in Note 7.

During March 2010, we purchased substantially all of the assets of Cornerstone Customer Solutions, LLC (Cornerstone) in a cash transaction for $700. Cornerstone is a full-service, marketing solutions provider specializing in the development and execution of analytics-driven direct marketing programs. The allocation of the purchase price based upon the estimated fair values of the assets acquired and liabilities assumed resulted in goodwill of $897, which is tax deductible. This acquisition resulted in the recognition of goodwill as we are offering these strategic and tactical marketing solutions to our financial institution clients. Transaction costs related to this acquisition were expensed as incurred and were not significant to our 2010 consolidated statement of income. The results of operations of this business from its acquisition date are included in our Financial Services segment.

2009 acquisitions – During July 2009, we purchased all of the common stock of Abacus America, Inc., a wholly-owned subsidiary of Aplus Holdings Inc. and a web hosting and internet services provider, in a cash transaction for $27,577, net of cash acquired. We acquired this company for its large number of small business subscribers of shared web hosting, hosted e-commerce stores, managed e-mail services, domain name registration and a variety of website management applications. We funded the acquisition with our existing credit facility. The allocation of the purchase price based upon the estimated fair values of the assets acquired and liabilities assumed resulted in goodwill of $24,225. This acquisition resulted in the recognition of goodwill as we expanded our customer base and expected to provide the acquired customers upgraded offerings and enhanced web services. The net assets acquired consisted principally of customer relationships with an estimated fair value of $11,900 and a liability for deferred revenue of $7,300. The customer relationship asset is being amortized over seven years using an accelerated method. Further information regarding the calculation of the estimated fair values of the customer relationship asset and the liability for deferred revenue can be found in Note 7. The results of this business from its acquisition date are included in our Small Business Services segment.

Also during July 2009, we purchased substantially all of the assets of MerchEngines.com, a search engine marketing firm, in a cash transaction for $3,248, net of cash acquired. MerchEngines.com provides ad agencies, traditional media companies, online publishers and local aggregators a hosted and fully managed search engine marketing solution. The allocation of the purchase price based upon the fair values of the assets acquired and liabilities assumed resulted in goodwill of $1,140, which is tax deductible. This acquisition resulted in the recognition of goodwill as it increased the product offerings we provide to our small business customers. The results of this business from its acquisition date are included in our Small Business Services segment.

As our acquisitions were immaterial to our operating results both individually and in the aggregate in the year of the transactions, pro forma results of operations are not provided.

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Note 5: Assets held for sale and discontinued operations

Assets held for sale– Assets held for sale as of December 31, 2011 consisted of our facility located in Thorofare, New Jersey, which was closed in April 2009. Assets held for sale as of December 31, 2010 also included our facility located in Greensboro, North Carolina, which was closed in July 2009. Both facilities previously housed manufacturing operations, while the Thorofare location also housed a customer call center. The Greensboro facility was sold in January 2011 for net cash proceeds of $699, realizing a pre-tax gain of $110. During 2011, we recorded an asset impairment charge of $1,196 related to the Thorofare location, based on current market conditions and ongoing negotiations for the sale of the facility, and we continue to actively market the property.

Discontinued operations – Discontinued operations consisted of our retail packaging and signage business, which we sold on January 31, 2009 for gross cash proceeds of $250 plus a note receivable. The loss on disposal recorded in 2010 related to the finalization of purchase consideration. There were no discontinued operations in 2011.

Revenue and net loss from discontinued operations were as follows:

	2010			2009
Revenue	$	—		$	816
Loss from operations	$	—		$	(155	)
(Loss) gain on disposal		(1,244	)		155
Income tax benefit		473			—
Net loss from discontinued operations	$	(771	)	$	—

Note 6: Derivative financial instruments

Fair value hedges – We have entered into interest rate swaps to hedge against changes in the fair value of a portion of our long-term debt. We entered into these swaps, which we designated as fair value hedges, to achieve a targeted 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). Changes in the fair value of the interest rate swaps and the related long-term debt are included in interest expense in the consolidated statements of income. When the change in the fair value of the interest rate swaps and the hedged debt are not equal (i.e., hedge ineffectiveness), the difference in the changes in fair value affects the reported amount of interest expense in our consolidated statements of income. Information regarding hedge ineffectiveness in each period is provided in Note 7. The fair value of the interest rate swaps related to our debt due in 2012 is included in other current assets on the consolidated balance sheet as of December 31, 2011 and in other non-current assets on the consolidated balance sheet as of December 31, 2010. The fair value of the interest rate swaps related to our debt due in 2014 is included in other non-current assets on the consolidated balance sheets.

Information regarding interest swaps as of December 31, 2011 was as follows:

	Notional amount		Fair value of interest rate swaps		Increase in debt due to fair value adjustment
Fair value hedge related to long-term debt due in 2012	$	84,847	$	1,309	$	780
Fair value hedge related to long-term debt due in 2014		198,000		3,230		2,788
Total fair value hedges	$	282,847	$	4,539	$	3,568

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Information regarding interest rate swaps as of December 31, 2010 was as follows:

	Notional amount		Fair value of interest rate swaps		Increase in debt due to fair value adjustment
Fair value hedge related to long-term debt due in 2012	$	210,000	$	5,456	$	4,879

During the first quarter of 2011, we retired $195,463 of our ten-year bonds due in 2012 (see Note 13). In conjunction with this debt retirement, we settled a portion of the interest rate swaps and received cash payments of $2,548. Interest rate swaps remaining after the settlement were redesignated as fair value hedges during March 2011. In conjunction with the debt retirement, we recognized $3,094 of the fair value adjustment to the hedged debt, decreasing the loss on early debt extinguishment. The $1,355 remaining fair value adjustment to the hedged debt as of the date hedge accounting was discontinued is being recorded as a decrease to interest expense over the term of the remaining debt.

Cash flow hedges – During 2004, we entered into $225,000 of forward starting interest rate swaps to hedge, or lock-in, the interest rate on a portion of the debt we issued in October 2004 (see Note 13). The termination of the lock agreements in 2004 yielded a deferred pre-tax loss of $17,877. During 2002, we entered into forward interest rate lock agreements to effectively hedge the annual interest rate on a portion of the notes issued in December 2002 (see Note 13). The termination of the lock agreements in December 2002 yielded a deferred pre-tax loss of $4,026. These losses are reflected, net of tax, in accumulated other comprehensive loss in our consolidated balance sheets and are being reclassified ratably to our statements of income as increases to interest expense over the term of the related debt. We expect to recognize $1,757 of the deferred pre-tax losses in interest expense during 2012.

Note 7: Fair value measurements

2011 asset impairment analyses – We evaluate the carrying value of our indefinite-lived trade name and goodwill as of July 31st of each year and between annual evaluations if events occur or circumstances change that would indicate a possible impairment. Our policy on impairment of non-amortizable intangibles and goodwill in Note 1 explains our methodology for assessing impairment of these assets.

The impairment analysis completed during the quarter ended September 30, 2011, indicated that the calculated fair value of the indefinite-lived trade name exceeded its carrying value of $19,100 by approximately $12,000. As discussed in Note 1, we adopted ASU No. 2011-08 during the third quarter of 2011. In completing our 2011 annual impairment analysis, we elected to perform a qualitative assessment for all of our reporting units to which goodwill is assigned. This qualitative analysis evaluated factors including, but not limited to, economic, market and industry conditions, cost factors and the overall financial performance of the reporting units. We also considered the quantitative analysis we completed as of July 31, 2010 in which the estimated fair values of our reporting units exceeded their carrying values by amounts between $43,000 and $546,000, or by amounts between 55% and 442% above the carrying values of their net assets. In completing our qualitative analysis, we noted no changes in events or circumstances which would require us to complete the two-step quantitative goodwill impairment analysis for any of our reporting units. As such, no impairment charges were recorded as a result of our 2011 annual impairment analyses.

In the fourth quarter of 2011, we recorded an asset impairment charge of $1,196 related to our Thorofare, New Jersey facility, which is classified as assets held for sale in our consolidated balance sheets. The impairment charge was determined based on current market conditions and ongoing negotiations for the sale of this facility, and we continue to actively market the property.

Information regarding this nonrecurring fair value measurement completed during 2011 was as follows:

			Fair value measurements using
	Fair value as of measurement date		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Impairment charge
Assets held for sale	$	2,741	$	—	$	2,741	$	—	$	1,196

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2009 asset impairment analyses – During the quarter ended March 31, 2009, we experienced continued declines in our stock price, as well as a continuing negative impact of the economic downturn on our expected operating results. Based on these indicators of potential impairment, we completed impairment analyses of our indefinite-lived trade name and goodwill as of March 31, 2009. We recorded non-cash asset impairment charges in our Small Business Services segment of $4,900 related to our indefinite-lived trade name and $20,000 related to goodwill during the quarter ended March 31, 2009. Significant intangible assets of the reporting unit identified for purposes of this impairment analysis included the indefinite-lived trade name and a distributor contract intangible asset. Our methodology for estimating the fair value of the indefinite-lived trade name is outlined in Note 1. The fair value of the distributor contract was measured using the income approach, including adjustments for an estimated distributor retention rate based on historical experience.

Information regarding these nonrecurring fair value measurements completed during 2009 was as follows:

			Fair value measurements using
	Fair value as of measurement date		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Impairment charge
Goodwill(1)	$	20,245	$	—	$	—	$	20,245	$	20,000
Indefinite-lived trade name(2)		19,100		—		—		19,100		4,900
Total impairment charges									$	24,900

(1) Represents the implied fair value of the goodwill assigned to the reporting unit for which we were required to calculate this amount.

(2) Represents the fair value determined from the event-driven impairment analysis completed during the quarter ended March 31, 2009.

2011 acquisitions – For all business combinations 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. The identifiable net assets acquired during 2011 (see Note 4) were comprised primarily of customer lists, internal-use software and trade names. The fair value of the customer lists was estimated using valuation techniques including the multi-period excess earnings method. Assumptions used in these calculations included same-customer revenue growth rates and estimated annual customer retention rates. Customer retention rates were based on the acquirees’ historical information, as well as management’s estimates of the costs to obtain and retain customers. The aggregate calculated fair value of the customer lists acquired in the Banker's Dashboard and PsPrint acquisitions was $12,600, which is being amortized over a weighted-average period of 8.2 years using an accelerated method. Customer lists acquired via our purchases of small business distributors are typically sold shortly after their purchase and thus, are not held long enough to amortize. The fair value of the internal-use software was estimated, in part, using a cost of reproduction method. The primary components of the software were identified and the estimated cost to reproduce the software was calculated based on estimated time and labor rates derived from our historical data from previous upgrades of similar size and nature. In addition, the fair value of a portion of the internal-use software was estimated using the actual cost of the software adjusted for obsolescence. The calculated fair value of the internal-use software was $9,050, which is being amortized on the straight-line basis over five years. The fair value of the trade names was estimated using a relief from royalty method, which calculates the cost savings associated with owning rather than licensing the trade names. An assumed royalty rate was applied to forecasted revenue and the resulting cash flows were discounted. The assumed royalty rate was based on market data and an analysis of the expected margins for the acquired operations. The aggregate calculated fair value of the trade names was $8,300, which is being amortized on the straight-line basis over a weighted-average period of 9.5 years.

In conjunction with the acquisition of Banker’s Dashboard in April 2011, we will be issuing 193 shares of our common stock at a later date. The fair value of this consideration was determined as the fair value of our common stock on the date of the acquisition, discounted to reflect the restrictions which prohibit the trade or transfer of the stock until the date of issuance. The estimated fair value of the stock consideration was $4,300, which is reflected in additional paid-in capital on the consolidated balance sheet as of December 31, 2011.

2010 acquisitions – During 2010, we completed two business combinations (see Note 4). The identifiable net assets acquired were comprised primarily of a customer list, internal-use software and trade names related to the acquisition of Custom Direct. The fair value of the customer list was estimated using the multi-period excess earnings method. Assumptions used in this calculation included a same-customer revenue growth rate and an estimated annual customer retention rate. The customer retention rate was based on estimated re-order rates, as well as management’s estimates of the costs to obtain and retain customers. The calculated fair value of the customer list was $15,000, which is being amortized over 1.3 years using an accelerated method. The fair value of the internal-use software was estimated using a cost of reproduction method. The primary components of the software were identified and the estimated cost to reproduce the software was calculated based on estimated time and labor rates derived from our historical data from previous upgrades of similar size and nature. The calculated fair value of the internal-use software was $12,587, which is being amortized on the straight-line basis over a weighted average useful life of 4.7 years. The fair value of the trade names was estimated using a relief from royalty method, which calculates the cost savings associated with owning rather than licensing the trade names. An assumed royalty rate was applied to forecasted revenue and the resulting cash flows were discounted. The assumed royalty rate was based on market data and an analysis of the expected margins for Custom Direct’s operations. The calculated fair value of the trade names was $8,900, which is being amortized on the straight-line basis over 10 years.

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2009 acquisitions – During 2009, we completed two business combinations (see Note 4). The identifiable net assets acquired were comprised primarily of customer relationships and deferred revenue related to the acquisition of Abacus America, Inc. The fair value of the customer relationships was estimated using the multi-period excess earnings method. Assumptions used in this calculation included a same-customer revenue growth rate and an estimated annual customer retention rate. The same-customer growth rate was based on expected pricing and the customer retention rate was based on the business’ historical attrition, as well as management’s estimate of customer retention, the effort required to obtain a customer, customer costs to change suppliers and the effort required to renew contracts. The calculated fair value of the customer relationships was $11,900, which is being amortized over seven years using an accelerated method. The calculated fair value of deferred revenue was $7,300, based on the direct and incremental costs to provide the services required plus an estimated market-based profit margin.

Recurring fair value measurements – We held an investment in a Canadian money market fund of $2,001 as of December 31, 2011 and $2,029 as of December 31, 2010. This investment is included in other current assets on the consolidated balance sheets. The money market 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. Because of the short-term nature of the underlying investments, the cost of these securities approximates their fair value. The cost of securities sold is determined using the average cost method. No gains or losses on sales of these marketable securities were realized during 2011, 2010 or 2009.

Funds held for customers included available-for-sale marketable securities of $5,418 as of December 31, 2011 and $10,249 as of December 31, 2010. As of December 31, 2011, these securities consisted primarily of a mutual fund investment which invests in Canadian and provincial government securities. As of December 31, 2010, these securities also included an investment in a Canadian money market fund. These funds are not traded in active markets and their fair values are determined by obtaining quoted prices in active markets for the underlying securities held by the funds.Unrealized gains and losses on these investments, net of tax, are included in other comprehensive loss on the consolidated balance sheets. Realized gains and losses are included in revenue on the consolidated statements of income and were not significant for 2011, 2010 or 2009. The cost of securities sold is determined using the average cost method.

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. Information regarding the accounting for this investment is provided in our long-term investments policy in Note 1. We recognized net unrealized gains on the investment in mutual funds of $196 during 2010 and $420 during 2009. Net unrealized gains recognized during 2011 and net realized gains recognized during 2011, 2010 and 2009 were not significant.

The fair value of interest rate swaps (see Note 6) 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. Changes in the fair value of interest rate swaps, as well as changes in the fair value of the hedged debt, are included in interest expense in the consolidated statements of income and were as follows:

	2011			2010			2009
Gain (loss) from derivatives	$	2,220		$	5,608		$	(152	)
(Loss) gain from change in fair value of hedged debt		(2,395	)		(5,133	)		254
Net (increase) decrease in interest expense	$	(175	)	$	475		$	102

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

			Fair value measurements using
	Fair value as of December 31, 2011		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Marketable securities – funds held for customers	$	5,418	$	—	$	5,418	$	—
Marketable securities – corporate investments		2,001		—		2,001		—
Long-term investment in mutual funds		2,165		2,165		—		—
Derivative assets		4,539		—		4,539		—

			Fair value measurements using
	Fair value as of December 31, 2010		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Marketable securities – funds held for customers	$	10,249	$	—	$	10,249	$	—
Marketable securities – corporate investments		2,029		—		2,029		—
Long-term investment in mutual funds		2,283		2,283		—		—
Derivative assets		5,456		—		5,456		—

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

Long-term debt – The fair value of long-term debt is based on quoted prices for identical liabilities when traded as assets in an active market (Level 1 fair value measurement), with the exception of the debt issued in March 2011 which was not traded in an active market as of December 31, 2011. The fair value of this debt is determined at each reporting date by means of a pricing model utilizing readily observable market interest rates and data from trades executed by institutional investors (Level 2 fair value measurement). The fair value of long-term debt included in the table below does not reflect the impact of hedging activity. The carrying amount of long-term debt includes the change in fair value of hedged long-term debt.

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The estimated fair values of these financial instruments were as follows at December 31:

	2011				2010
	Carrying amount		Fair value		Carrying amount		Fair value
Cash and cash equivalents	$	28,687	$	28,687	$	17,383	$	17,383
Cash and cash equivalents - funds held for customers		38,976		38,976		25,471		25,471
Short-term debt		—		—		7,000		7,000
Long-term debt, including portion due within one year		741,706		738,157		748,122		751,978

Note 8: Restructuring charges

Net restructuring charges for the years ended December 31 consisted of the following components:

	2011			2010			2009
Severance accruals	$	8,826		$	9,331		$	10,625
Severance reversals		(1,737	)		(2,398	)		(3,523	)
Operating lease obligations		52			933			1,177
Operating lease obligation reversals		(6	)		(380	)		(32	)
Net restructuring accruals		7,135			7,486			8,247
Other costs		6,586			2,841			3,739
Net restructuring charges	$	13,721		$	10,327		$	11,986

The net restructuring charges are reflected in the consolidated statements of income for the years ended December 31 as follows:

	2011		2010		2009
Cost of goods sold	$	1,978	$	2,356	$	4,558
Operating expenses		11,743		7,971		7,428
Net restructuring charges	$	13,721	$	10,327	$	11,986

2011 restructuring charges – During 2011, the net restructuring accruals included severance charges related to employee reductions across functional areas as we continue to reduce costs. The restructuring accruals included severance benefits for approximately 400 employees. These charges were reduced by the reversal of restructuring accruals, the majority of which were recorded in prior years, as fewer employees received severance benefits than originally estimated. The majority of the employee reductions are expected to be completed by the end of 2012, and we expect most of the related severance payments to be paid by mid-2013, utilizing cash from operations. The remaining payments due under operating lease obligations will be paid through May 2013. Other restructuring costs, which were expensed as incurred, included items such as employee and equipment moves, training and travel related to our restructuring activities.

2010 restructuring charges – During 2010, the net restructuring accruals included severance charges related to employee reductions in various functional areas, primarily fulfillment, sales and marketing, as we continue our cost reduction initiatives, as well as actions related to our integration of Custom Direct (see Note 4). Net restructuring accruals also included operating lease obligations on facilities vacated during 2010. The restructuring accruals included severance benefits for approximately 470 employees. These charges were reduced by the reversal of restructuring accruals, primarily those recorded in prior years, as fewer employees received severance benefits than originally estimated. Other restructuring costs, which were expensed as incurred, included items such as employee and equipment moves, training and travel related to our restructuring activities.

2009 restructuring charges – During 2009, the net restructuring accruals included severance charges related to employee reductions in various functional areas as we continued our cost reduction initiatives, including the closing of a Small Business Services customer call center located in Colorado Springs, Colorado in the first quarter of 2010, and further consolidation in the sales, marketing and fulfillment organizations. Net restructuring accruals also included operating lease obligations on manufacturing facilities closed during 2009. The restructuring accruals included severance benefits for approximately 640 employees. These charges were reduced by the reversal of previously recorded restructuring accruals as fewer employees received severance benefits than originally estimated. Other restructuring costs, which were expensed as incurred, included items such as equipment moves, training and travel related to our restructuring activities.

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Restructuring accruals of $6,032 as of December 31, 2011 are reflected in the consolidated balance sheet as accrued liabilities of $5,946 and other non-current liabilities of $86. Restructuring accruals of $6,798 as of December 31, 2010 are reflected in the consolidated balance sheet as accrued liabilities of $6,435 and other non-current liabilities of $363. As of December 31, 2011, approximately 260 employees had not yet started to receive severance benefits.

By company initiative, our restructuring accruals were as follows:

	NEBS acquisition related and 2006 initiatives			2007 initiatives			2008 initiatives			2009 initiatives			2010 initiatives			2011 initiatives			Total
Balance, December 31, 2008	$	214		$	335		$	19,830		$	—		$	—		$	—		$	20,379
Restructuring charges		—			—			886			10,916			—			—			11,802
Restructuring reversals		(19	)		(34	)		(3,354	)		(148	)		—			—			(3,555	)
Payments		(195	)		(237	)		(15,187	)		(1,515	)		—			—			(17,134	)
Balance, December 31, 2009		—			64			2,175			9,253			—			—			11,492
Restructuring charges		—			—			525			99			9,640			—			10,264
Restructuring reversals		—			(64	)		(985	)		(1,465	)		(264	)		—			(2,778	)
Payments		—			—			(1,598	)		(7,235	)		(3,347	)		—			(12,180	)
Balance, December 31, 2010		—			—			117			652			6,029			—			6,798
Restructuring charges		—			—			—			9			75			8,794			8,878
Restructuring reversals		—			—			(17	)		(57	)		(1,058	)		(611	)		(1,743	)
Payments		—			—			(100	)		(420	)		(4,265	)		(3,116	)		(7,901	)
Balance, December 31, 2011	$	—		$	—		$	—		$	184		$	781		$	5,067		$	6,032
Cumulative amounts:
Restructuring charges	$	41,107		$	7,181		$	27,545		$	11,024		$	9,715		$	8,794		$	105,366
Restructuring reversals		(2,530	)		(1,503	)		(5,887	)		(1,670	)		(1,322	)		(611	)		(13,523	)
Payments		(38,577	)		(5,678	)		(21,658	)		(9,170	)		(7,612	)		(3,116	)		(85,811	)
Balance, December 31, 2011	$	—		$	—		$	—		$	184		$	781		$	5,067		$	6,032

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

				Employee severance benefits									Operating lease obligations
	Small Business Services			Financial Services			Direct Checks			Corporate(1)			Small Business Services			Direct Checks			Total
Balance, December 31, 2008	$	3,974		$	3,617		$	151		$	12,409		$	228		$	—		$	20,379
Restructuring charges		5,310			1,063			134			4,118			1,177			—			11,802
Restructuring reversals		(672	)		(674	)		(7	)		(2,170	)		(32	)		—			(3,555	)
Inter-segment transfer		1,174			—			—			(1,174	)		—			—			—
Payments		(5,041	)		(2,953	)		(162	)		(8,402	)		(576	)		—			(17,134	)
Balance, December 31, 2009		4,745			1,053			116			4,781			797			—			11,492
Restructuring charges		1,807			2,134			2,344			3,046			424			509			10,264
Restructuring reversals		(875	)		(206	)		(116	)		(1,201	)		(380	)		—			(2,778	)
Payments		(4,429	)		(1,027	)		(2,092	)		(4,010	)		(605	)		(17	)		(12,180	)
Balance, December 31, 2010		1,248			1,954			252			2,616			236			492			6,798
Restructuring charges		1,897			2,640			823			3,466			52			—			8,878
Restructuring reversals		(767	)		(517	)		(76	)		(377	)		(6	)		—			(1,743	)
Inter-segment transfer		125			234			2			(361	)		—			—			—
Payments		(1,616	)		(2,914	)		(257	)		(2,697	)		(213	)		(204	)		(7,901	)
Balance, December 31, 2011	$	887		$	1,397		$	744		$	2,647		$	69		$	288		$	6,032
Cumulative amounts:
Restructuring charges	$	48,403		$	13,726		$	3,770		$	34,178		$	4,780		$	509		$	105,366
Restructuring reversals		(3,371	)		(2,438	)		(343	)		(6,401	)		(970	)		—			(13,523	)
Inter-segment transfer		2,310			1,351			95			(3,756	)		—			—			—
Payments		(46,455	)		(11,242	)		(2,778	)		(21,374	)		(3,741	)		(221	)		(85,811	)
Balance, December 31, 2011	$	887		$	1,397		$	744		$	2,647		$	69		$	288		$	6,032

(1) As discussed in Note 16: Business segment information, corporate costs are allocated to our business segments. As such, the net corporate restructuring charges are reflected in the business segment operating income presented in Note 16 in accordance with our allocation methodology.

Note 9: Income tax provision

The components of the income tax provision for continuing operations were as follows:

	2011		2010		2009
Current tax provision:
Federal	$	49,702	$	49,909	$	37,945
State		9,168		8,424		4,323
Foreign		3,269		3,859		1,349
Total		62,139		62,192		43,617
Deferred tax provision		9,350		20,362		12,039
Provision for income taxes	$	71,489	$	82,554	$	55,656

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The effective tax rate on pre-tax income from continuing operations reconciles to the U.S. federal statutory tax rate of 35% as follows:

	2011		2010		2009
Income tax at federal statutory rate		35.0%		35.0%		35.0%
State income tax expense, net of federal income tax benefit		2.8%		2.8%		3.5%
Change in unrecognized tax benefits, including interest and penalties		0.5%		(1.3% )		0.1%
Non-deductible portion of goodwill impairment charge (see Note 7)		—		—		2.9%
Qualified production activity deduction		(2.4% )		(2.4%)		(1.8%)
Impact of health care legislation on deferred income taxes		(1.2% )		1.7%		—
Receivables for prior year tax returns(1)		(0.8% )		—		(2.2%)
Other		(0.8% )		(0.8%)		(1.6%)
Income tax provision		33.1%		35.0%		35.9%

(1) Relates to amendments to prior year income tax returns claiming refunds primarily associated with foreign tax returns for 2011 and federal and state income tax credits for 2009.

Our income tax provision for 2010 included a $4,063 charge resulting from the Health Care and Education Reconciliation Act of 2010, which was signed into law in March 2010 and requires that certain tax deductions after 2012 be reduced by the amount of Medicare Part D subsidy payments. Prior to this law change, the subsidy was to be disregarded in all future years when computing tax deductions. This resulted in a reduction in the deferred tax asset associated with our postretirement benefit plan. During 2011, our income tax provision was reduced $2,539 by actions taken to restore a portion of the deferred tax asset attributable to the receipt of Medicare Part D subsidy payments.

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A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding accrued interest and penalties, is as follows:

	Unrecognized tax benefits
Balance, December 31, 2008	$	11,457
Additions for tax positions of current year		606
Additions for tax positions of prior years		2,316
Reductions for tax positions of prior years		(2,152	)
Settlements		(3,186	)
Lapse of statutes of limitations		(1,063	)
Balance, December 31, 2009		7,978
Additions for tax positions of current year		641
Additions for tax positions of prior years		1,406
Fair value of acquired tax positions (see Note 4)		1,069
Reductions for tax positions of prior years		(2,634	)
Settlements		(640	)
Lapse of statutes of limitations		(1,282	)
Balance, December 31, 2010		6,538
Additions for tax positions of current year		510
Additions for tax positions of prior years		1,646
Reductions for tax positions of prior years		(219	)
Settlements		(1,507	)
Lapse of statutes of limitations		(732	)
Balance, December 31, 2011	$	6,236

If the unrecognized tax benefits as of December 31, 2011 were recognized in our consolidated financial statements, $5,152 would positively affect income tax expense and our related effective tax rate. Accruals for interest and penalties, excluding the tax benefits of deductible interest, were $1,497 as of December 31, 2011 and $1,382 as of December 31, 2010. Our income tax provision included expense for interest and penalties of $639 in 2011, and credits to our income tax provision for interest and penalties of $837 in 2010 and $446 in 2009. Within the next 12 months, it is reasonably possible that our unrecognized tax benefits will change in the range of a decrease of $4,500 to an increase of $700 as we attempt to settle certain federal and state tax matters or as federal and state statutes of limitations expire.

The statute of limitations for federal tax assessments for 2006 and prior years has closed. Our federal income tax returns through 2007 have been audited by the IRS, our 2008 and 2009 returns are currently being audited, and our returns for 2010 and 2011 remain subject to IRS examination. In general, income tax returns for the years 2007 through 2011 remain subject to examination by foreign, state and city tax jurisdictions.In the event that we have determined not to file income tax returns with a particular state or city, all years remain subject to examination by the tax jurisdiction.

The ultimate outcome of tax matters may differ from our estimates and assumptions. Unfavorable settlement of any particular issue would require the use of cash and could result in increased income tax expense. Favorable resolution would result in reduced income tax expense.

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Tax-effected temporary differences which gave rise to deferred tax assets and liabilities as of December 31 were as follows:

	2011					2010
	Deferred tax assets			Deferred tax liabilities		Deferred tax assets			Deferred tax liabilities
Goodwill	$	—		$	40,761	$	—		$	34,818
Intangible assets		—			28,831		—			33,774
Property, plant and equipment		—			6,080		—			4,201
Deferred advertising costs		—			5,769		—			5,964
Early extinguishment of debt (see Note 13)		—			3,775		—			3,784
Employee benefit plans		29,776			—		29,593			—
Reserves and accruals		6,574			—		5,457			—
Net operating loss and tax credit carryforwards		3,366			—		5,760			—
Inventories		2,800			—		2,771			—
Federal benefit of state uncertain tax positions		1,776			—		1,719			—
Interest rate lock agreements (see Note 6)		1,751			—		2,709			—
All other		1,748			4,558		1,370			3,061
Total deferred taxes		47,791			89,774		49,379			85,602
Valuation allowances		(608	)		—		(1,139	)		—
Net deferred taxes	$	47,183		$	89,774	$	48,240		$	85,602

Deferred U.S. and state 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.

The valuation allowances as of December 31, 2011 related primarily to the portion of our operating loss carryforwards in Ireland which we do not expect to fully realize. As of December 31, 2010, the valuation allowances related primarily to operating loss carryforwards in Canada which we reversed during 2011, as we now expect to realize the loss carryforwards in 2012 and/or in future years.

As of December 31, 2011, we had operating loss carryforwards of $4,088 in Ireland which do not expire, and we had operating loss carryforwards of $3,689 in Canada, which expire at various dates between 2013 and 2031. We also had state net operating loss carryforwards of $19,026 which expire at various dates up to 2030 and federal alternative minimum tax credit carryforwards of $586 which have no expiration date.

Note 10: Share-based compensation plans

Our employee share-based compensation plans consist of our employee stock purchase plan and our stock incentive plan. Effective April 30, 2008, our shareholders approved a new stock incentive plan, simultaneously terminating our previous plan. Under this plan, 4,000 shares of common stock are reserved for issuance, with 1,476 shares remaining available for issuance as of December 31, 2011. Full value awards such as restricted stock, restricted stock units and share-based performance awards reduce the number of shares available for issuance by a factor of 2.29, or if such an award were forfeited or terminated without delivery of the shares, the number of shares that again become eligible for issuance would be multiplied by a factor of 2.29. We currently have non-qualified stock options, restricted stock units and restricted share awards outstanding under our current and previous plans. See the employee share-based compensation policy in Note 1 for our policies regarding the recognition of compensation expense for employee share-based awards.

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The following amounts were recognized in our consolidated statements of income for share-based compensation awards:

	2011			2010			2009
Stock options	$	3,633		$	2,967		$	3,213
Restricted shares and restricted stock units		1,799			2,866			3,135
Employee stock purchase plan		301			317			315
Total share-based compensation expense	$	5,733		$	6,150		$	6,663
Income tax benefit	$	(1,930	)	$	(2,123	)	$	(2,375	)

As of December 31, 2011, the total compensation expense for unvested awards not yet recognized in our consolidated statements of income was $5,383, net of the effect of estimated forfeitures. This amount is expected to be recognized over a weighted-average period of 1.7 years.

Non-qualified stock options – All options allow for the purchase of shares of common stock at prices equal to the stock’s market value at the date of grant. Options become exercisable beginning one year after the grant date, with one-third vesting each year over three years. Options may be exercised up to seven years following the date of grant. In the case of qualified retirement, death, disability or involuntary termination without cause, options vest immediately and the period over which the options can be exercised is shortened. Employees forfeit unvested options when they voluntarily terminate their employment with the company, and they have up to three months to exercise vested options before they are cancelled. In the case of involuntary termination with cause, the entire unexercised portion of the award is cancelled. All options may vest immediately upon a change of control, as defined in the award agreement. The following weighted-average assumptions were used in the Black-Scholes option pricing model in determining the fair value of stock options granted:

	2011		2010		2009
Risk-free interest rate (%)		2.0		2.2		1.6
Dividend yield (%)		3.9		3.2		3.4
Expected volatility (%)		58.6		54.0		44.2
Weighted-average option life (years)		4.3		4.8		4.6

The risk-free interest rate for periods within the expected option life is based on the U.S. Treasury yield curve in effect at the grant date. Expected volatility is based on the historical volatility of our stock.

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Each option is convertible into one share of common stock upon exercise. Information regarding options issued under the current and all previous plans was as follows:

(options in thousands)	Number of  options			Weighted- average exercise price per option		Aggregate intrinsic  value		Weighted- average remaining contractual term (in years)
Outstanding at December 31, 2008		3,105		$	33.50
Granted		790			9.75
Exercised		(3	)		9.73
Forfeited or expired		(1,051	)		39.68
Outstanding at December 31, 2009		2,841			24.64
Granted		695			18.37
Exercised		(185	)		11.08
Forfeited or expired		(438	)		33.94
Outstanding at December 31, 2010		2,913			22.60
Granted		598			25.56
Exercised		(383	)		16.56
Forfeited or expired		(362	)		28.87
Outstanding at December 31, 2011		2,766			23.26	$	7,519		3.7
Exercisable at December 31, 2009		1,643		$	30.60
Exercisable at December 31, 2010		1,675			27.66
Exercisable at December 31, 2011		1,685			25.18	$	3,378		2.6

The weighted-average grant-date fair value of options granted was $9.37 per option for 2011, $6.86 per option for 2010 and $2.82 per option for 2009. The intrinsic value of a stock award is the amount by which the fair value of the underlying stock exceeds the exercise price of the award. The total intrinsic value of options exercised was $3,452 for 2011, $1,834 for 2010 and $16 for 2009.

Restricted stock units – Certain management employees have the option to receive a portion of their bonus payment in the form of restricted stock units. When employees elect this payment method, we provide an additional matching amount of restricted stock units equal to one-half of the restricted stock units earned under the bonus plan. These awards vest two years from the date of grant. In the case of approved retirement, death, disability or change of control, the units vest immediately. In the case of involuntary termination without cause or voluntary termination, employees receive a cash payment for the units earned under the bonus plan, but forfeit the company-provided matching amount.

In addition to awards granted to employees, non-employee members of our board of directors can elect to receive all or a portion of their fees in the form of restricted stock units. Directors are issued shares in exchange for the units upon the earlier of the tenth anniversary of February 1st of the year following the year in which the non-employee director ceases to serve on the board or such other objectively determinable date pre-elected by the director.

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Each restricted stock unit is convertible into one share of common stock upon completion of the vesting period. Information regarding our restricted stock units was as follows:

(units in thousands)	Number of  units			Weighted- average grant date fair value per unit		Aggregate  intrinsic value		Weighted- average remaining contractual term (in years)
Outstanding at December 31, 2008		145		$	26.65
Granted		17			12.27
Vested		(40	)		24.04
Forfeited		(2	)		25.57
Outstanding at December 31, 2009		120			25.48
Granted		34			19.85
Vested		(68	)		25.57
Outstanding at December 31, 2010		86			23.58
Granted		26			24.70
Vested		(5	)		16.84
Forfeited		(6	)		20.61
Outstanding at December 31, 2011		101			24.26	$	2,305		4.4

Of the awards outstanding as of December 31, 2011, 15 restricted stock units with a value of $338 were liability awards. As of December 31, 2011, these units had a fair value of $22.76 per unit and a weighted-average remaining contractual term of 0.6 year.

The total fair value of restricted stock units that vested was $132 for 2011, $1,090 for 2010 and $589 for 2009. We did not settle any share-based liabilities in cash in 2011, 2010 or 2009.

Restricted shares – Our restricted share awards have a set vesting period at which time the restrictions on the shares lapse. The vesting period on these awards currently ranges from one to three years. The restrictions lapse immediately in the case of qualified retirement, death or disability. In the case of involuntary termination without cause or a change of control, restrictions on a pro-rata portion of the shares lapse based on how much of the vesting period has passed. In the case of voluntary termination of employment or termination with cause, the unvested restricted shares are forfeited.

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Information regarding unvested restricted shares was as follows:

	Number of shares			Weighted- average grant date fair value per share
Unvested at December 31, 2008		453		$	25.53
Granted		44			14.81
Vested		(206	)		25.19
Forfeited		(23	)		25.82
Unvested at December 31, 2009		268			24.00
Granted		52			20.00
Vested		(131	)		26.01
Forfeited		(7	)		21.83
Unvested at December 31, 2010		182			21.48
Granted		25			26.58
Vested		(166	)		21.72
Forfeited		(1	)		18.14
Unvested at December 31, 2011		40			23.71

The total fair value of restricted shares that vested was $4,305 for 2011, $2,557 for 2010 and $2,484 for 2009.

Employee stock purchase plan – During 2011, 85 shares were issued under this plan at prices of $20.78 and $20.01. During 2010, 109 shares were issued under this plan at prices of $15.82 and $17.49. During 2009, 174 shares were issued under this plan at prices of $9.80 and $13.30.

Note 11: Employee benefit plans

Profit sharing, 401(k) and defined contribution plans – We maintain a profit sharing plan and a plan established under section 401(k) of the Internal Revenue Code to provide retirement benefits for certain employees. The plans cover a significant majority of our full-time employees, as well as some part-time employees. Employees are eligible to participate in the plans on the first day of the quarter following their first full year of service. We also provide cash bonus programs under which employees may receive cash bonus payments based on our operating performance. Previously, we maintained a defined contribution pension plan which was discontinued effective with the 2011 plan year. The contribution made to this plan in early 2011 for the 2010 plan year was the last contribution to this plan.

Contributions to the profit sharing plan, as well as the terminated defined contribution plan, are made solely by Deluxe and are remitted to the plans’ respective trustees. Benefits provided by the plans are paid from accumulated funds of the trusts. In 2010 and 2009, contributions to the defined contribution pension plan equaled 4% of eligible compensation. Contributions to the profit sharing plan vary based on the company’s performance. Under the 401(k) plan, employees under the age of 50 could contribute up to the lesser of $17 or 50% of eligible wages during 2011. Employees 50 years of age or older could make contributions of up to $22 during 2011. Beginning on the first day of the quarter following an employee’s first full year of service, we match 100% of the first 1% of wages contributed by employees and 50% of the next 5% of wages contributed. All employee and employer contributions are remitted to the plans’ respective trustees and benefits provided by the plans are paid from accumulated funds of the trusts. Payments made under the cash bonus programs vary based on the company’s performance and are paid in cash directly to employees.

Employees are provided a broad range of investment options to choose from when investing their profit sharing, defined contribution and 401(k) plan funds. Investing in our common stock is not one of these options, although funds selected by employees may at times hold our common stock.

78

Expense recognized in the consolidated statements of income for these plans was as follows:

	2011		2010		2009
Profit sharing/cash bonus plans	$	16,361	$	18,500	$	22,751
Defined contribution pension plan		—		8,664		9,953
401(k) plan		6,226		5,636		6,312

Deferred compensation plan – We have a non-qualified deferred compensation plan that allows eligible employees to defer a portion of their compensation. Participants can elect to defer up to 100 percent of their base salary plus up to 50 percent of their bonus for the year. The compensation deferred under this plan is credited with earnings or losses measured by the mirrored rate of return on phantom investments elected by plan participants, which are similar to the investments available in our terminated defined contribution pension plan. Each participant is fully vested in all deferred compensation and earnings. A participant may elect to receive deferred amounts in a lump-sum payment or in monthly installments upon termination of employment or disability. Our total liability under this plan was $2,391 as of December 31, 2011 and $2,920 as of December 31, 2010. These amounts are reflected in accrued liabilities and other non-current liabilities in the consolidated balance sheets. We fund this liability through investments in company-owned life insurance policies. These investments are included in long-term investments in the consolidated balance sheets and totaled $13,489 as of December 31, 2011 and $12,872 as of December 31, 2010.

Voluntary employee beneficiary association (VEBA) trust – We have formed a VEBA trust to fund employee and retiree medical costs and severance benefits. Contributions to the VEBA trust are tax deductible, subject to annual limitations contained in the Internal Revenue Code. VEBA assets primarily consist of fixed income investments. We made contributions to the VEBA trust of $36,792 in 2011, $39,400 in 2010 and $40,300 in 2009. The prepaid balance in the VEBA trust exceeded our liability for incurred but not reported medical claims by $361 as of December 31, 2011 and $959 as of December 31, 2010. These amounts are reflected in other current assets in our consolidated balance sheets.

Note 12: Pension and other postretirement benefits

We have historically provided certain health care benefits for a large number of retired U.S. employees. Employees hired prior to January 1, 2002 become eligible for benefits if they attain the appropriate years of service and age prior to retirement. Employees hired on January 1, 2002 or later are not eligible to participate in our retiree health care plan. In addition to our retiree health care plan, we also have a supplemental executive retirement plan (SERP) in the United States. Additionally, we had a pension plan that covered certain Canadian employees which was settled during 2009.

Effective April 30, 2009, we amended our postretirement benefit plan to decrease the minimum age for eligibility to receive the maximum available benefits from age 58 to age 51 and to decrease the service requirement for maximum retiree cost sharing from 30 years to 25 years. As a result of this amendment, the plan assets and liabilities were re-measured as of April 30, 2009, reducing the underfunded amount of the plan from $60,437 as of December 31, 2008 to $55,928 as of April 30, 2009. The reduction in the underfunded amount was primarily due to a change in the discount rate assumption from 6.6% as of December 31, 2008 to 7.25% as of April 30, 2009. The other actuarial assumptions were consistent with those utilized in our determination of the benefit obligation and funded status as of December 31, 2008. Prior to the April 30, 2009 plan amendment and re-measurement, unrecognized actuarial gains and losses were being amortized over the average remaining service period of plan participants, which was 8.2 years as of December 31, 2008. Because the plan amendment increased the number of participants currently eligible to receive the maximum available benefits, almost all of the plan participants were classified as inactive subsequent to the plan amendment. As such, actuarial gains and losses are required to be amortized over the average remaining life expectancy of inactive plan participants, which was 18.8 years as of April 30, 2009. This change resulted in a $5,208 decrease in postretirement benefit expense for 2009, as compared to the expense we had expected for 2009 prior to the plan amendments.

79

Obligations and funded status – The following tables summarize the change in benefit obligation, plan assets and funded status during 2011 and 2010:

	Postretirement benefit plan			Pension plan
Change in benefit obligation:
Benefit obligation, December 31, 2009	$	138,915		$	3,455
Interest cost		7,282			179
Actuarial loss – net		5,781			198
Benefits paid from the VEBA trust (see Note 11) and company funds		(11,363	)		(324	)
Medicare Part D reimbursements		726			—
Benefit obligation, December 31, 2010		141,341			3,508
Interest cost		6,669			164
Actuarial loss – net		8,199			332
Benefits paid from the VEBA trust (see Note 11) and company funds		(10,940	)		(324	)
Medicare Part D reimbursements		856			—
Benefit obligation, December 31, 2011	$	146,125		$	3,680
Change in plan assets:
Fair value of plan assets, December 31, 2009	$	90,320		$	—
Actual gain on plan assets		10,990			—
Fair value of plan assets, December 31, 2010		101,310			—
Actual loss on plan assets		(688	)		—
Fair value of plan assets, December 31, 2011	$	100,622		$	—
Funded status, December 31, 2010	$	(40,031	)	$	(3,508	)
Funded status, December 31, 2011	$	(45,503	)	$	(3,680	)

 

As of December 31, 2011 and 2010, the accumulated benefit obligation equaled the projected benefit obligation for the United States SERP plan.

Plan assets of our postretirement medical plan do not include the assets of the VEBA trust discussed in Note 11. Plan assets consist only of those assets invested in a trust established under section 401(h) of the Internal Revenue Code. These assets can be used only to pay retiree medical benefits for employees who retired after 1986, which represents 80% of the total number of retirees receiving medical benefits as of December 31, 2011. The assets of the VEBA trust may be used to pay medical and severance benefits for both active and retired employees.

Amounts recognized in the consolidated balance sheets as of December 31 were as follows:

	Postretirement benefit plan				Pension plan
	2011		2010		2011		2010
Accrued liabilities	$	—	$	—	$	324	$	324
Other non-current liabilities		45,503		40,031		3,356		3,184

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Amounts included in accumulated other comprehensive loss that have not been recognized as components of postretirement benefit expense were as follows:

	Postretirement benefit plan						Pension plan
	2011			2010			2011			2010
Unrecognized prior service credit	$	(20,697	)	$	(24,440	)	$	—		$	—
Unrecognized net actuarial loss		119,681			108,358			493			161
Tax effect		(37,021	)		(31,334	)		(178	)		(53	)
Amount recognized in accumulated other comprehensive loss, net of tax	$	61,963		$	52,584		$	315		$	108

The unrecognized prior service credit for our postretirement benefit plan resulted from a 2003 curtailment and other plan amendments. These changes resulted in a reduction of the accumulated postretirement benefit obligation. This reduction was first used to reduce any existing unrecognized prior service cost, then to reduce any remaining unrecognized transition obligation. The excess is the unrecognized prior service credit. The prior service credit is being amortized on the straight-line basis over a weighted-average period of 16 years. Unrecognized actuarial gains and losses are being amortized over the average remaining life expectancy of inactive plan participants, which is currently 17.9 years. The unrecognized net actuarial loss for our postretirement benefit plan resulted from experience different from that assumed and from changes in assumptions.

Amounts included in accumulated other comprehensive loss as of December 31, 2011 which we expect to recognize in postretirement benefit expense during 2012 are as follows:

	Postretirement benefit plan			Pension plan
Prior service credit	$	(3,055	)	$	—
Net actuarial loss		5,870			9
Total	$	2,815		$	9

Net pension and postretirement benefit expense – Net pension and postretirement benefit expense for the years ended December 31 consisted of the following components:

	Postretirement benefit plan									Pension plans
	2011			2010			2009			2011		2010		2009
Interest cost	$	6,669		$	7,282		$	8,560		$	164	$	179	$	262
Expected return on plan assets		(7,851	)		(7,226	)		(5,919	)		—		—		(57	)
Amortization of prior service credit		(3,743	)		(3,742	)		(3,815	)		—		—		—
Amortization of net actuarial loss		5,415			5,406			8,383			—		—		9
Total periodic benefit expense		490			1,720			7,209			164		179		214
Settlement loss		—			—			—			—		—		402
Net periodic benefit expense	$	490		$	1,720		$	7,209		$	164	$	179	$	616

Actuarial assumptions – In measuring benefit obligations as of December 31, the following discount rate assumptions were used:

	Postretirement benefit plan						Pension plan
	2011			2010			2011			2010
Discount rate		4.2	%		4.9	%		4.2	%		4.9	%

The discount rate assumption is based on the rates of return on high-quality, fixed-income instruments currently available whose cash flows match the timing and amount of expected benefit payments. In determining the discount rate, we utilize the Aon Hewitt AA Above Median Curve and the Citigroup Pension Discount yield curves to discount each cash flow stream at an interest rate specifically applicable to the timing of each respective cash flow. The present value of each cash flow stream is aggregated and used to impute a weighted-average discount rate.

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In measuring net periodic benefit expense for the years ended December 31, the following assumptions were used:

	Postretirement benefit plan									Pension plans
	2011			2010			2009			2011			2010			2009
Discount rate(1)		4.90	%		5.45	%		7.25	%		4.90	%		5.45	%		4.06% - 6.60	%
Expected return on plan assets		7.75	%		8.00	%		8.50	%		—			—			4.50	%

(1) For 2009, the rate presented for our postretirement benefit plan was used from April 30, 2009 through December 31, 2009, the period subsequent to the 2009 plan amendments. A discount rate of 6.60% was used for the period from January 1, 2009 through April 30, 2009.

In determining the expected long-term rate of return on plan assets, we utilize our historical returns and then adjust these returns for estimated inflation. Our inflation assumption is primarily based on analysis of historical inflation data.

In measuring the benefit obligation for our postretirement benefit plan, the following assumptions for health care cost trend rates were used:

	2011	2010	2009
Health care cost trend rate assumed for next year	7.50%	7.75%	8.00%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	5.00%	5.00%	5.00%
Year that the rate reaches the ultimate trend rate	2017	2017	2017

Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects:

	One- percentage- point increase		One- percentage- point decrease
Effect on total of service and interest cost	$	92	$	(87	)
Effect on benefit obligation		2,185		(2,069	)

Plan assets – The allocation of plan assets by asset category as of December 31 was as follows:

	Postretirement benefit  plan
	2011		2010
U.S. large capitalization equity securities		33%		34%
U.S. corporate debt securities		19%		10%
International equity securities		16%		18%
Government debt securities		14%		13%
Mortgage-backed securities		10%		14%
U.S. small and mid-capitalization equity securities		8%		8%
Other debt securities		—		3%
Total		100%		100%

Our postretirement benefit plan has assets that are intended to meet long-term obligations. In order to meet these obligations, we employ a total return investment approach which considers cash flow needs and balances long-term projected returns against expected asset risk, as measured using projected standard deviations. Risk tolerance is established through consideration of projected plan liabilities, the plan’s funded status, projected liquidity needs and current corporate financial condition.

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The target asset allocation percentages for our postretirement benefit plan are based on our liability and asset projections. The targeted allocation of plan assets is 33% large capitalization equity securities, 42% fixed income securities, 18% international equity securities and 7% small and mid-capitalization equity securities.

There were no significant transfers of plan assets between fair value measurement levels during 2011. Information regarding fair value measurements of plan assets as of December 31, 2011 was as follows:

			Fair value measurements using
	Fair value as of December 31, 2011		Quoted prices in active markets for identical assets (Level 1)			Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
U.S. large capitalization equity securities	$	33,613	$	—		$	33,613	$	—
U.S. corporate debt securities		19,319		5,655			13,664		—
International equity securities		16,023		15,615			408		—
Government debt securities		14,151		12,006			2,145		—
Mortgage-backed securities		9,698		2,193			7,505		—
U.S. small and mid-capitalization equity securities		7,803		7,606			197		—
Other debt securities		15		(95	)		110		—
Total	$	100,622	$	42,980		$	57,642	$	—

Information regarding fair value measurements of plan assets as of December 31, 2010 was as follows:

			Fair value measurements using
	Fair value as of December 31, 2010		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
U.S. large capitalization equity securities	$	34,332	$	16,554	$	17,778	$	—
International equity securities		18,357		18,027		330		—
Mortgage-backed securities		14,113		—		14,113		—
Government debt securities		13,531		7,544		5,987		—
U.S. corporate debt securities		9,725		8,611		1,114		—
U.S. small and mid-capitalization equity securities		8,153		8,064		89		—
Other debt securities		3,099		2,825		274		—
Total	$	101,310	$	61,625	$	39,685	$	—

The information as of December 31, 2010 shown in the table above contains corrections to the classifications within the fair value hierarchy reported in the prior year.

The fair value of mortgage-backed securities is estimated using pricing models with inputs derived principally from observable market data. The fair value of our other Level 2 debt securities is typically estimated using pricing models, quoted prices of securities with similar characteristics or discounted cash flow calculations that maximize observable inputs, such as current yields for similar instruments adjusted for trades and other pertinent market information.

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Cash flows – While we are not contractually obligated to make contributions to the assets of our postretirement benefit plan, we made contributions of $7,000 to the plan in January 2012. We may make additional contributions to plan assets during 2012, although the amount and timing of any such contributions has not yet been determined.

We have fully funded the United States SERP obligation with investments in company-owned life insurance policies. The cash surrender value of these policies is included in long-term investments in the consolidated balance sheets and totaled $6,619 as of December 31, 2011 and $6,291 as of December 31, 2010.

The following benefit payments are expected to be paid during the years indicated:

	Postretirement benefit plan						Pension plan
	Gross benefit payments		Expected Medicare subsidy		Net benefit payments		Gross benefit payments
2012	$	12,000	$	1,200	$	10,800	$	320
2013		12,600		1,200		11,400		310
2014		13,100		1,300		11,800		300
2015		13,400		1,400		12,000		300
2016		13,300		1,500		11,800		290
2017 – 2021		61,600		7,500		54,100		1,330

Note 13: Debt and leases

Debt outstanding as of December 31 was as follows:

	2011		2010
5.0% senior, unsecured notes due December 15, 2012, net of discount, including cumulative change in fair value of hedged debt: 2010 - $4,879 increase	$	—	$	284,843
5.125% senior, unsecured notes due October 1, 2014, net of discount, including cumulative change in fair value of hedged debt: 2011 - $2,788 increase		256,131		263,279
7.375% senior notes due June 1, 2015		200,000		200,000
7.0% senior notes due March 15, 2019		200,000		—
Long-term portion of debt		656,131		748,122
5.0% senior, unsecured notes due December 15, 2012, net of discount, including cumulative change in fair value of hedged debt: 2011 - $780 increase		85,575		—
Amounts drawn on credit facility		—		7,000
Total debt	$	741,706	$	755,122

Discounts from par value are being amortized ratably as increases to interest expense over the term of the related debt.

All of our notes include covenants that place restrictions on the issuance of additional debt and limitations on certain liens. The notes due in 2019 and 2015 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.

In March 2011, we issued $200,000 of 7.0% senior notes maturing 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 Securities and Exchange Commission (SEC) via a registration statement which became effective on January 10, 2012. Interest payments are due each March and September. 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 17. At any time prior to March 15, 2014, we may on any one or more occasions redeem up to 35% of the original principal amount of the notes with the proceeds of one or more equity offerings at a redemption price of 107% of the principal amount of the notes, together with accrued and unpaid interest. At any time prior to March 15, 2015, we may also 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 March 15, 2015, we may redeem some or all of the notes at prices ranging from 100% to 103.5% 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 the notes at 101% of the principal amount. Proceeds from the offering, net of offering costs, were $196,487. These proceeds were used to retire a portion of our senior, unsecured notes due in 2012. The fair value of the notes issued in March 2011 was $193,500 as of December 31, 2011, based on a pricing model utilizing readily observable market interest rates and data from trades executed by institutional investors.

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In May 2007, we issued $200,000 of 7.375% senior notes maturing on June 1, 2015. 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 which became effective on June 29, 2007. Interest payments are due each June and December. The notes are guaranteed by the same subsidiaries which guarantee our notes due in 2019 and place a limitation on restricted payments, including share repurchases and increases in dividend levels. This limitation 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 17. Principal redemptions may be made at our election at any time at redemption prices ranging from 100% to 103.688% of the principal amount. If we sell certain of our assets or experience specific types of changes in control, we must offer to purchase the notes at 101% of the principal amount. Proceeds from the offering, net of offering costs, were $196,329. These proceeds were used as part of our repayment of unsecured notes which matured on October 1, 2007. The fair value of the notes issued in May 2007 was $204,250 as of December 31, 2011, based on quoted prices for identical liabilities when traded as assets.

In October 2004, we issued $275,000 of 5.125% senior, unsecured notes maturing on October 1, 2014. 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 which became effective on November 23, 2004. Interest payments are due each April and October. Proceeds from the offering, net of offering costs, were $272,276. These proceeds were used to repay commercial paper borrowings used for the acquisition of New England Business Service, Inc. in 2004. During the quarter ended March 31, 2011, we retired $10,000 of these notes, realizing a pre-tax loss of $185. During the quarter ended March 31, 2009, we retired $11,500 of these notes, realizing a pre-tax gain of $4,077. As of December 31, 2011, the fair value of the $253,500 remaining notes outstanding was $255,561, based on quoted prices for identical liabilities when traded as assets. As discussed in Note 6, we have entered into interest rate swaps to hedge a portion of these notes. The fair value of long-term debt disclosed here does not reflect the impact of these fair value hedges.

In December 2002, we issued $300,000 of 5.0% senior, unsecured notes maturing on December 15, 2012. These notes were issued under our shelf registration statement covering up to $300,000 in medium-term notes, thereby exhausting that registration statement. Interest payments are due each June and December. Principal redemptions may be made at our election prior to the stated maturity. Proceeds from the offering, net of offering costs, were $295,722. These proceeds were used for general corporate purposes, including funding share repurchases, capital asset purchases and working capital. During the quarter ended March 31, 2011, we retired $195,463 of these notes, realizing a pre-tax loss of $6,810. During the quarter ended March 31, 2009, we retired $19,690 of these notes, realizing a pre-tax gain of $5,757. As of December 31, 2011, the fair value of the $84,847 remaining notes outstanding was $84,846, based on quoted prices for identical liabilities when traded as assets. As discussed in Note 6, we have entered into interest rate swaps to hedge these notes. The fair value of long-term debt disclosed here does not reflect the impact of these fair value hedges.

As of December 31, 2011, we had a $200,000 credit facility, which was due to expire in March 2013. Borrowings under the credit facility are collateralized by substantially all personal property. Our commitment fee ranges from 0.40% to 0.50% based on our leverage ratio. 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, and certain asset sales outside the ordinary course of business, as well as required repayments in the event of a change in control as defined in the agreement. The agreement also contains financial covenants regarding our leverage ratio, interest coverage and liquidity.

Amounts outstanding under our credit facility for the years ended December 31 were as follows:

	2011		2010		2009
Daily average amount outstanding	$	21,655	$	49,957	$	69,267
Weighted-average interest rate		3.03%		3.20%		0.76%

As of December 31, 2011, no amounts were outstanding under our credit facility. As of December 31, 2010, $7,000 was outstanding at a weighted-average interest rate of 5.25%.

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Amounts available for borrowing under our credit facility as of December 31, 2011 were as follows:

	Total available
Credit facility commitment	$	200,000
Outstanding letters of credit		(8,551	)
Net available for borrowing as of December 31, 2011	$	191,449

Absent certain defined events of default under our debt instruments, and as long as our ratio of earnings before interest, taxes, depreciation and amortization (EBITDA) to interest expense, as defined, is in excess of two to one, our debt covenants do not restrict our ability to pay cash dividends at our current rate, although there is an aggregate annual limit on the amount of dividends and share repurchases under the terms of our credit facility. If our ratio of EBITDA to interest expense falls below two to one, there would also be limitations on our ability to issue additional debt.

We have operating leases on certain facilities and equipment. As of December 31, 2011, future minimum lease payments under noncancelable operating leases with an initial term in excess of one year were as follows:

	Operating leases
2012	$	10,249
2013		7,117
2014		2,532
2015		920
2016		772
2017		40
Total minimum lease payments	$	21,630

The composition of rent expense for the years ended December 31 was as follows:

	2011			2010			2009
Minimum rentals	$	10,068		$	10,313		$	8,180
Sublease rentals		(144	)		(190	)		(1,677	)
Net rental expense	$	9,924		$	10,123		$	6,503

Note 14: Other commitments and contingencies

Indemnifications – In the normal course of business, we periodically enter into agreements that incorporate general indemnification language. These indemnifications encompass such items as product or service defects, including 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. However, we have no reason to believe that any possible liability under these indemnities would have a material adverse effect on our financial position, annual results of operations or annual cash flows. 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 which 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.

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Accruals for environmental matters were $8,730 as of December 31, 2011 and $9,293 as of December 31, 2010, primarily related to facilities which have been sold. These accruals are included in accrued liabilities and other long-term liabilities in the consolidated balance sheets. Accrued costs consist of direct costs of the remediation activities, primarily fees which 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. Expense reflected in our consolidated statements of income for environmental remediation costs was $353 in 2011, $868 in 2010 and $1,327 in 2009.

 As of December 31, 2011, $6,440 of the costs included in our environmental accruals were covered by an environmental insurance policy which we purchased during 2002. The insurance policy covers up to $12,911 of remediation costs, of which $6,471 had been paid through December 31, 2011. This insurance policy does not cover properties acquired subsequent to 2002. However, costs included in our environmental accruals for such properties were not material as of December 31, 2011. We do not anticipate significant net cash outlays for environmental matters in 2011. The insurance policy also covers up to $10,000 of third-party claims through 2032 at certain owned, leased and divested sites, as well as any new conditions discovered at certain owned or leased sites through 2012. We consider the realization of recovery under the insurance policy to be probable based on the insurance contract in place with a reputable and financially-sound insurance company. As our environmental accruals include our best estimates of these costs, we have recorded receivables from the insurance company within other current assets and other non-current assets based on the amounts of our environmental accruals for insured sites.

We also have an additional environmental site liability insurance policy providing coverage on facilities which we acquired subsequent to 2002. 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. The policy provides coverage of up to $15,000 through April 2019. No accruals have been recorded in our consolidated financial statements for any of the events contemplated in this insurance policy.

Self-insurance – We are self-insured for certain costs, primarily workers’ compensation claims and medical and dental benefits. The liabilities associated with these items represent our best estimate of the ultimate obligations for reported claims plus those incurred, but not reported. The liability for workers’ compensation, which totaled $5,141 as of December 31, 2011 and $4,716 as of December 31, 2010, is accounted for on a present value basis. The difference between the discounted and undiscounted workers’ compensation liability was $20 as of December 31, 2011 and $29 as of December 31, 2010. We record liabilities for medical and dental benefits for active employees and those employees on long-term disability. Our liability for active employees is not accounted for on a present value basis as we expect the benefits to be paid in a relatively short period of time. Our liability for those employees on long-term disability is accounted for on a present value basis. Our total liability for these medical and dental benefits totaled $3,848 as of December 31, 2011 and $4,167 as of December 31, 2010. The difference between the discounted and undiscounted medical and dental liability was $296 as of December 31, 2011 and $419 as of December 31, 2010.

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.

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Note 15: Shareholders’ equity

Shares outstanding – Changes in common shares outstanding during the years ended December 31 were as follows:

	2011			2010			2009
Balance, beginning of year		51,338			51,189			51,131
Issued		499			410			237
Repurchased		(940	)		(167	)		(120	)
Retired		(71	)		(94	)		(59	)
Balance, end of year		50,826			51,338			51,189

Share repurchases – 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 5,257 shares remained available for purchase under this authorization as of December 31, 2011. During 2011, we repurchased 940 shares for $23,620, during 2010 we repurchased 167 shares for $2,999 and during 2009 we repurchased 120 shares for $1,319.

Common stock purchase rights – In February 1988, we adopted a shareholder rights plan under which common stock purchase rights automatically attach to each share of common stock we issue. The rights plan is governed by a rights agreement between us and Wells Fargo Bank, National Association, as rights agent. This agreement most recently was amended and restated as of December 20, 2006 (Restated Agreement).

Pursuant to the Restated Agreement, upon the occurrence of certain events, each right will entitle the holder to purchase one share of common stock at an exercise price of $100 per share. The exercise price may be adjusted from time to time upon the occurrence of certain events outlined in the Restated Agreement. In certain circumstances described in the Restated Agreement, if (i) any person becomes the beneficial owner of 20% or more of the company’s common stock, (ii) the company is acquired in a merger or other business combination or (iii) upon the occurrence of other events, each right will entitle its holder to purchase a number of shares of common stock of the company, or the acquirer or the surviving entity if the company is not the surviving corporation in such a transaction. The number of shares purchasable at the then-current exercise price will be equal to the exercise price of the right divided by 50% of the then-current market price of one share of common stock of the company, or other surviving entity, subject to adjustments provided in the Restated Agreement. The rights expire December 31, 2016, and may be redeemed by the company at a price of $.01 per right at any time prior to the occurrence of the circumstances described above. The Restated Agreement requires an independent director review of the plan at least once every three years. The most recent review was completed in December 2009.

Accumulated other comprehensive loss – The components of accumulated other comprehensive loss as of December 31 were as follows:

	2011			2010			2009
Postretirement and defined benefit pension plans:
Unrealized prior service credit	$	13,321		$	15,651		$	17,978
Unrealized net actuarial losses		(75,599	)		(68,343	)		(70,328	)
Postretirement and defined benefit pension plans, net of tax		(62,278	)		(52,692	)		(52,350	)
Loss on derivatives, net of tax(1)		(2,931	)		(4,522	)		(5,841	)
Net unrealized gain on marketable securities, net of tax		178			13			—
Currency translation adjustment		5,630			7,189			5,373
Accumulated other comprehensive loss	$	(59,401	)	$	(50,012	)	$	(52,818	)

(1) Relates to interest rate locks executed in 2004 and 2002. See Note 6 for further information regarding these financial instruments.

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Note 16: 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 and reflect the way we manage the company. Small Business Services provides products and services to small businesses via mail and the internet, referrals from financial institutions and telecommunications clients, a network of distributors and dealers, and a direct sales force which focuses on major accounts. These efforts are supplemented by the account development efforts of an outbound telemarketing group. Financial Services’ products and services are sold through multiple channels, including a direct sales force, to financial institution clients nationwide, including banks, credit unions and financial services companies. Direct Checks sells products and services directly to consumers using direct response marketing and the internet. All three segments operate primarily in the United States. Small Business Services also has operations in Canada and portions of Europe. No single customer accounted for more than 10% of revenue in 2011, 2010 or 2009. Our product and service offerings are comprised of the following:

Checks – We remain one of the largest providers of checks in the United States, both in terms of revenue and the number of checks produced. Checks account for the majority of the revenue in our Financial Services and Direct Checks segments and represented 47.2%, 48.3% and 47.7% of our Small Business Services segment’s revenue in 2011, 2010 and 2009, respectively.

Forms – Our Small Business Services segment provides printed forms to small businesses including, 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 produced by our Financial Services and Direct Checks segments include deposit tickets and check registers.

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

Marketing solutions – All three of our segments offer products and services that help small businesses and financial institutions promote their businesses and acquire customers. Our Small Business Services segment offers services such as web design, hosting and other web services, logo design, search engine marketing, and digital printing services designed to fulfill the sales and marketing needs of small businesses, as well as products such as business cards, greeting cards, brochures and apparel. Financial Services offers various customer acquisition programs and marketing communications services, while Direct Checks provides package insert programs under which companies’ marketing materials are included in our check packages.

Other services – All three of our segments provide fraud protection services. In addition, our Small Business Services segment offers payroll services, and Financial Services provides financial institution profitability, regulatory and compliance programs.

The accounting policies of the segments are the same as those described in Note 1. 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 and finance, 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, inventories and supplies related to our corporate shared services functions of manufacturing, information technology and real estate, as well as long-term investments. Depreciation and amortization expense related to corporate assets which was allocated to the segments was $42,211 in 2011, $38,808 in 2010 and $37,056 in 2009.

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.

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The following is our segment information as of and for the years ended December 31:

		Reportable business segments
		Small Business Services		Financial Services		Direct Checks		Corporate		Consolidated
Revenue from external customers:	2011	$	846,449	$	342,382	$	228,765	$	—	$	1,417,596
	2010		796,254		390,331		215,652		—		1,402,237
	2009		785,109		396,353		162,733		—		1,344,195
Operating income:	2011		145,219		59,804		66,035		—		271,058
	2010		137,534		84,158		59,852		—		281,544
	2009		60,804		75,091		54,694		—		190,589
Depreciation and amortization expense:	2011		44,706		13,009		15,628		—		73,343
	2010		45,163		11,788		16,964		—		73,915
	2009		52,507		10,946		4,312		—		67,765
Asset impairment charges:	2011		1,196		—		—		—		1,196
	2010		—		—		—		—		—
	2009		24,900		—		—		—		24,900
Total assets:	2011		836,918		99,803		173,435		278,653		1,388,809
	2010		772,799		66,065		178,880		290,947		1,308,691
	2009		778,191		57,716		96,288		279,015		1,211,210
Capital asset purchases:	2011		—		—		—		35,506		35,506
	2010		—		—		—		43,932		43,932
	2009		—		—		—		44,266		44,266

Revenue by product and service category for each year was as follows:

	2011		2010		2009
Checks, including contract settlements	$	871,731	$	896,563	$	853,729
Forms		195,905		194,724		198,855
Accessories and other products		126,949		123,264		129,323
Marketing solutions, including services		150,973		126,211		112,848
Other services		72,038		61,475		49,440
Total revenue	$	1,417,596	$	1,402,237	$	1,344,195

During 2011, we modified the manner in which we determine revenue by product and service. We added the marketing solutions category to add more clarity to our products and services, as our marketing solutions and other services categories reflect a growing part of our business. Amounts for 2010 and 2009 have been reclassified to conform to the 2011 presentation. These changes had no impact on the amounts reported in previous years for checks.

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The following information is based on the geographic locations of our subsidiaries:

	2011		2010		2009
Revenue from external customers:
United States	$	1,334,540	$	1,325,163	$	1,275,885
Foreign, primarily Canada		83,056		77,074		68,310
Total revenue	$	1,417,596	$	1,402,237	$	1,344,195
Long-lived assets:
United States	$	1,139,678	$	1,086,685	$	996,505
Foreign, primarily Canada		11,409		13,359		16,006
Total long-lived assets	$	1,151,087	$	1,100,044	$	1,012,511

Note 17: Supplemental guarantor financial information

In March 2011, we issued $200,000 of long-term notes due in March 2019. The notes were issued under a private placement under Rule 144A of the Securities Act of 1933. These notes were subsequently registered with the SEC via a registration statement which became effective on January 10, 2012. These notes are jointly and severally guaranteed on a full and unconditional basis, subject to the release provisions described herein, by certain 100%-owned subsidiaries that guarantee any of our other indebtedness. These subsidiaries also guarantee our obligations under our credit facility and our long-term notes due in 2015. The subsidiary guarantees with respect to the notes due in March 2019 are subject to release upon the sale of all or substantially all of a subsidiary’s assets, when the requirements for legal defeasance of the guaranteed securities have been satisfied, when the subsidiary is declared an unrestricted subsidiary, or upon satisfaction and discharge of the indenture.

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

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

91

Deluxe Corporation

Condensed Consolidating Balance Sheet

	December 31, 2011
	Deluxe Corporation			Guarantor subsidiaries		Non- guarantor subsidiaries			Eliminations			Total
ASSETS
Current Assets:
Cash and cash equivalents	$	3,047		$	1,522	$	24,118		$	—		$	28,687
Trade accounts receivable, net		—			57,463		11,560			—			69,023
Inventories and supplies		—			19,941		2,102			—			22,043
Deferred income taxes		1,035			5,430		751			—			7,216
Funds held for customers		—			—		44,394			—			44,394
Other current assets		5,851			10,469		4,892			—			21,212
Total current assets		9,933			94,825		87,817			—			192,575
Long-term Investments		36,338			8,809		—			—			45,147
Property, Plant and Equipment, net		—			96,345		17,066			—			113,411
Assets Held for Sale		—			2,741		—			—			2,741
Intangibles, net		—			155,452		1,887			—			157,339
Goodwill		—			775,044		1,954			—			776,998
Investments In Consolidated Subsidiaries		1,307,149			15,478		—			(1,322,627	)		—
Intercompany (Payable) Receivable		(316,876	)		360,789		(43,913	)		—			—
Other Non-Current Assets		11,758			72,944		15,896			—			100,598
Total assets	$	1,048,302		$	1,582,427	$	80,707		$	(1,322,627	)	$	1,388,809
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	13,401		$	44,908	$	6,385		$	—		$	64,694
Accrued liabilities		12,272			86,001		51,825			—			150,098
Long-term debt due within one year		85,575			—		—			—			85,575
Total current liabilities		111,248			130,909		58,210			—			300,367
Long-Term Debt		656,131			—		—			—			656,131
Deferred Income Taxes		(27,471	)		74,133		3,145			—			49,807
Other Non-Current Liabilities		5,705			70,236		3,874			—			79,815
Total Shareholders’ Equity		302,689			1,307,149		15,478			(1,322,627	)		302,689
Total liabilities and shareholders’ equity	$	1,048,302		$	1,582,427	$	80,707		$	(1,322,627	)	$	1,388,809

92

Deluxe Corporation

Condensed Consolidating Balance Sheet

	December 31, 2010
	Deluxe Corporation			Guarantor subsidiaries		Non-guarantor subsidiaries			Eliminations			Total
ASSETS
Current Assets:
Cash and cash equivalents	$	3,197		$	683	$	13,503		$	—		$	17,383
Trade accounts receivable, net		—			53,679		12,792			—			66,471
Inventories and supplies		—			19,350		2,310			—			21,660
Deferred income taxes		2,854			6,303		233			—			9,390
Funds held for customers		—			—		35,720			—			35,720
Other current assets		9,463			8,047		3,103			—			20,613
Total current assets		15,514			88,062		67,661			—			171,237
Long-term Investments		34,905			2,427		78						37,410
Property, Plant and Equipment, net		—			102,427		17,794			—			120,221
Assets Held for Sale		—			4,527		—			—			4,527
Intangibles, net		—			151,512		3,600			—			155,112
Goodwill		—			723,938		1,999			—			725,937
Investments In Consolidated Subsidiaries		986,484			615		—			(987,099	)		—
Intercompany (Payable) Receivable		(68,348	)		114,299		(45,951	)		—			—
Other Non-Current Assets		12,337			71,032		10,878			—			94,247
Total assets	$	980,892		$	1,258,839	$	56,059		$	(987,099	)	$	1,308,691
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	11,697		$	42,798	$	5,983		$	—		$	60,478
Accrued liabilities		9,440			92,038		42,556			—			144,034
Short-term debt		7,000			—		—			—			7,000
Total current liabilities		28,137			134,836		48,539			—			211,512
Long-Term Debt		748,122			—		—			—			748,122
Deferred Income Taxes		(25,898	)		68,794		3,856			—			46,752
Other Non-Current Liabilities		4,333			68,725		3,049			—			76,107
Total Shareholders’ Equity		226,198			986,484		615			(987,099	)		226,198
Total liabilities and shareholders’ equity	$	980,892		$	1,258,839	$	56,059		$	(987,099	)	$	1,308,691

93

Deluxe Corporation

Condensed Consolidating Statement of Income

	Year Ended December 31, 2011
	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Revenue	$	9,409		$	1,276,898		$	272,994		$	(141,705	)	$	1,417,596
Total cost of goods sold		—			459,119			159,589			(125,306	)		493,402
Gross Profit		9,409			817,779			113,405			(16,399	)		924,194
Selling, general and administrative expense, including net restructuring charges		9,323			569,957			89,169			(16,399	)		652,050
Asset impairment charges		—			1,196			—			—			1,196
Net gain on assets held for sale		—			(110	)		—			—			(110	)
Operating Income		86			246,736			24,236			—			271,058
Loss on early debt extinguishment		(6,995	)		—			—			—			(6,995	)
Interest expense		(47,629	)		(8,561	)		(1,190	)		9,583			(47,797	)
Other income (expense)		8,534			907			(40	)		(9,583	)		(182	)
(Loss) Income Before Income Taxes		(46,004	)		239,082			23,006			—			216,084
Income tax (benefit) provision		(22,143	)		86,489			7,143			—			71,489
(Loss) Income From Continuing Operations Before Equity In Earnings Of Consolidated Subsidiaries		(23,861	)		152,593			15,863			—			144,595
Equity In Earnings Of Consolidated Subsidiaries		168,456			15,863			—			(184,319	)		—
Income From Continuing Operations		144,595			168,456			15,863			(184,319	)		144,595
Net Loss From Discontinued Operations		—			—			—			—			—
Net Income	$	144,595		$	168,456		$	15,863		$	(184,319	)	$	144,595

94

Deluxe Corporation

Condensed Consolidating Statement of Income

	Year Ended December 31, 2010
	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Revenue	$	9,145		$	1,270,480		$	270,279		$	(147,667	)	$	1,402,237
Total cost of goods sold		—			454,374			162,473			(128,428	)		488,419
Gross Profit		9,145			816,106			107,806			(19,239	)		913,818
Selling, general and administrative expense, including net restructuring charges		5,663			551,519			94,331			(19,239	)		632,274
Operating Income		3,482			264,587			13,475			—			281,544
Interest expense		(44,061	)		(6,365	)		(930	)		7,191			(44,165	)
Other income (expense)		4,992			(58	)		827			(7,191	)		(1,430	)
(Loss) Income Before Income Taxes		(35,587	)		258,164			13,372			—			235,949
Income tax (benefit) provision		(16,952	)		92,691			6,815			—			82,554
(Loss) Income From Continuing Operations Before Equity In Earnings Of Consolidated Subsidiaries		(18,635	)		165,473			6,557			—			153,395
Equity In Earnings Of Consolidated Subsidiaries		171,259			6,557			—			(177,816	)		—
Income From Continuing Operations		152,624			172,030			6,557			(177,816	)		153,395
Net Loss From Discontinued Operations		—			(771	)		—			—			(771	)
Net Income	$	152,624		$	171,259		$	6,557		$	(177,816	)	$	152,624

95

Deluxe Corporation

Condensed Consolidating Statement of Income

	Year Ended December 31, 2009
	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Revenue	$	24,184		$	1,209,475		$	271,367		$	(160,831	)	$	1,344,195
Total cost of goods sold		—			470,835			167,635			(133,688	)		504,782
Gross Profit		24,184			738,640			103,732			(27,143	)		839,413
Selling, general and administrative expense, including net restructuring charges		8,816			541,135			101,116			(27,143	)		623,924
Asset impairment charges		—			24,900			—			—			24,900
Operating Income		15,368			172,605			2,616			—			190,589
Gain on early debt extinguishment		9,834			—			—			—			9,834
Interest expense		(46,166	)		(4,091	)		(768	)		4,745			(46,280	)
Other income		3,398			885			1,340			(4,745	)		878
(Loss) Income Before Income Taxes		(17,566	)		169,399			3,188			—			155,021
Income tax (benefit) provision		(13,685	)		68,203			1,138			—			55,656
(Loss) Income From Continuing Operations Before Equity In Earnings Of Consolidated Subsidiaries		(3,881	)		101,196			2,050			—			99,365
Equity In Earnings Of Consolidated Subsidiaries		103,246			2,050			—			(105,296	)		—
Income From Continuing Operations		99,365			103,246			2,050			(105,296	)		99,365
Net Loss From Discontinued Operations		—			—			—			—			—
Net Income	$	99,365		$	103,246		$	2,050		$	(105,296	)	$	99,365

96

Deluxe Corporation

Condensed Consolidating Statement of Cash Flows

	Year Ended December 31, 2011
	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Total
Net Cash Provided By Operating Activities of Continuing Operations	$	2,567		$	213,999		$	18,801		$	235,367
Cash Flows From Investing Activities:
Purchases of capital assets		—			(33,731	)		(1,775	)		(35,506	)
Payments for acquisitions, net of cash acquired		—			(80,486	)		(5,155	)		(85,641	)
Payments on company-owned life insurance policies		—			(6,383	)		—			(6,383	)
Loans to distributors		—			(4,879	)		(296	)		(5,175	)
Purchases of marketable securities		—			—			(18	)		(18	)
Other		(342	)		850			430			938
Net cash used by investing activities of continuing operations		(342	)		(124,629	)		(6,814	)		(131,785	)
Cash Flows From Financing Activities:
Net payments on short-term debt		(7,000	)		—			—			(7,000	)
Payments on long-term debt, including costs of debt reacquisition		(215,030	)		—			—			(215,030	)
Proceeds from issuing long-term debt		200,000			—			—			200,000
Payments for debt issue costs		(3,513	)		—			—			(3,513	)
Change in book overdrafts		742			(878	)		—			(136	)
Proceeds from issuing shares under employee plans		7,671			—			—			7,671
Excess tax benefit from share-based employee awards		1,052			—			—			1,052
Payments for common shares repurchased		(23,620	)		—			—			(23,620	)
Cash dividends paid to shareholders		(51,126	)		—			—			(51,126	)
Advances from (to) consolidated subsidiaries		88,449			(87,653	)		(796	)		—
Net cash used by financing activities of continuing operations		(2,375	)		(88,531	)		(796	)		(91,702	)
Effect Of Exchange Rate Change on Cash		—			—			(576	)		(576	)
Net Change In Cash And Cash Equivalents		(150	)		839			10,615			11,304
Cash And Cash Equivalents: Beginning Of Year		3,197			683			13,503			17,383
Cash And Cash Equivalents: End Of Year	$	3,047		$	1,522		$	24,118		$	28,687

97

Deluxe Corporation

Condensed Consolidating Statement of Cash Flows

	Year Ended December 31, 2010
	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Total
Net Cash (Used) Provided By Operating Activities of Continuing Operations	$	(16,786	)	$	224,279		$	5,122		$	212,615
Cash Flows From Investing Activities:
Purchases of capital assets		—			(43,005	)		(927	)		(43,932	)
Payments for acquisitions, net of cash acquired		—			(98,621	)		—			(98,621	)
Purchases of customer lists		—			(70	)		(195	)		(265	)
Purchases of marketable securities		—			—			(14	)		(14	)
Proceeds from sales of marketable securities		—			—			1,970			1,970
Proceeds from company-owned life insurance policies		5,782			361			—			6,143
Other		(1,410	)		(41	)		—			(1,451	)
Net cash provided (used) by investing activities of continuing operations		4,372			(141,376	)		834			(136,170	)
Cash Flows From Financing Activities:
Net payments on short-term debt		(19,000	)		—			—			(19,000	)
Payments for debt issue costs		(2,361	)		—			—			(2,361	)
Change in book overdrafts		(1,090	)		397			—			(693	)
Proceeds from issuing shares under employee plans		3,267			—			—			3,267
Excess tax benefit from share-based employee awards		680			—			—			680
Payments for common shares repurchased		(2,999	)		—			—			(2,999	)
Cash dividends paid to shareholders		(51,435	)		—			—			(51,435	)
Advances from (to) consolidated subsidiaries		85,824			(83,114	)		(2,710	)		—
Net cash provided (used) by financing activities of continuing operations		12,886			(82,717	)		(2,710	)		(72,541	)
Effect Of Exchange Rate Change on Cash		—			—			690			690
Net Change In Cash And Cash Equivalents		472			186			3,936			4,594
Cash And Cash Equivalents: Beginning Of Year		2,725			497			9,567			12,789
Cash And Cash Equivalents: End Of Year	$	3,197		$	683		$	13,503		$	17,383

98

Deluxe Corporation

Condensed Consolidating Statement of Cash Flows

	Year Ended December 31, 2009
	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Total
Net Cash (Used) Provided By Operating Activities of Continuing Operations	$	(9,287	)	$	217,167		$	(1,442	)	$	206,438
Cash Flows From Investing Activities:
Purchases of capital assets		—			(41,777	)		(2,489	)		(44,266	)
Payments for acquisitions, net of cash acquired		—			(30,825	)		—			(30,825	)
Purchases of customer lists		—			(1,639	)		—			(1,639	)
Purchases of marketable securities		—			—			(4,581	)		(4,581	)
Proceeds from sales of marketable securities		—			—			914			914
Other		(1,234	)		(157	)		—			(1,391	)
Net cash used by investing activities of continuing operations		(1,234	)		(74,398	)		(6,156	)		(81,788	)
Cash Flows From Financing Activities:
Net payments on short-term debt		(52,000	)		—			—			(52,000	)
Payments on long-term debt, including costs of debt reacquisition		(21,187	)		(1,440	)		—			(22,627	)
Change in book overdrafts		(3,457	)		97			—			(3,360	)
Proceeds from issuing shares under employee plans		1,972			—			—			1,972
Excess tax benefit from share-based employee awards		68			—			—			68
Payments for common shares repurchased		(1,319	)		—			—			(1,319	)
Cash dividends paid to shareholders		(51,279	)		—			—			(51,279	)
Advances from (to) consolidated subsidiaries		136,956			(140,965	)		4,009			—
Net cash provided (used) by financing activities of continuing operations		9,754			(142,308	)		4,009			(128,545	)
Effect Of Exchange Rate Change on Cash		—			—			1,594			1,594
Cash Used By Operating Activities Of Discontinued Operations		—			(470	)		—			(470	)
Cash Used By Investing Activities Of Discontinued Operations		—			(30	)		—			(30	)
Net Change In Cash And Cash Equivalents		(767	)		(39	)		(1,995	)		(2,801	)
Cash And Cash Equivalents: Beginning Of Year		3,492			536			11,562			15,590
Cash And Cash Equivalents: End Of Year	$	2,725		$	497		$	9,567		$	12,789

Note 18: Subsequent event

In February 2012, we modified the terms of our $200,000 credit facility (see Note 13). We extended the term of the agreement to February 2017 and lowered the commitment fee to a range of 0.20% to 0.45%, based on our leverage ratio. No changes were made to the financial covenants included in the credit agreement.

99

 DELUXE CORPORATION

SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED)

(in thousands, except per share amounts)

	2011 Quarter Ended
	March 31(1)		June 30(2)		September 30(3)		December 31(4)
Revenue	$	349,752	$	346,274	$	355,144	$	366,426
Gross profit		229,589		225,587		232,506		236,512
Net income		32,556		35,473		36,735		39,831
Earnings per share:
Basic		0.63		0.69		0.72		0.78
Diluted		0.63		0.68		0.71		0.78
Cash dividends per share		0.25		0.25		0.25		0.25

	2010 Quarter Ended
	March 31(5)		June 30(6)		September 30(7)		December 31(8)
Revenue	$	335,120	$	347,996	$	367,633	$	351,488
Gross profit		216,757		226,056		246,200		224,805
Net income		33,384		33,614		50,800		34,826
Earnings per share:
Basic		0.65		0.65		0.99		0.68
Diluted		0.65		0.65		0.98		0.68
Cash dividends per share		0.25		0.25		0.25		0.25

(1) 2011 first quarter results included net pre-tax restructuring charges of $1,474 related to our cost reduction initiatives.

(2) 2011 second quarter results included net pre-tax restructuring charges of $4,604 related to our cost reduction initiatives.

(3)  2011 third quarter results included net pre-tax restructuring charges of $4,598 related to our cost reduction initiatives.

(4) 2011 fourth quarter results included net pre-tax restructuring charges of $3,045 related to our cost reduction initiatives and an asset impairment charge of $1,196 related to a vacant facility which is held for sale.

(5) 2010 first quarter results included tax expense of $3,662 for discrete items, primarily the impact of recent health care legislation on deferred income taxes.

(6) 2010 second quarter results included net pre-tax restructuring charges of $2,093 related to our cost reduction initiatives. Results also included a $1,384 reduction in income tax expense for discrete items, primarily reductions in accruals for uncertain tax positions.

(7) 2010 third quarter results included a $1,482 reduction in income tax expense for discrete items, primarily adjustments to accruals for uncertain tax positions.

(8) 2010 fourth quarter results included net pre-tax restructuring charges of $7,754 related to our cost reduction initiatives.

100

Item 9.  Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A.  Controls and Procedures.

Disclosure Controls and Procedures – As of the end of the period covered by this report (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.

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 December 31, 2011 which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting – Management of Deluxe Corporation is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed 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 in the United States of America.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2011. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework. Based on this assessment we have concluded that, as of December 31, 2011, our internal control over financial reporting was effective based on those criteria. The attestation report on our internal control over financial reporting issued by PricewaterhouseCoopers LLP appears in Item 8 of this report.

Item 9B.  Other Information.

None.

PART III

Except where otherwise noted, the information required by Items 10 through 14 is incorporated by reference from our definitive proxy statement, to be filed with the Securities and Exchange Commission within 120 days of our fiscal year-end, with the exception of the executive officers section of Item 10, which is included in Part I, Item 1 of this report.

Item 10.  Directors, Executive Officers and Corporate Governance.

See Part I, Item 1 of this report “Executive Officers of the Registrant.” The sections of the proxy statement entitled “Item 1: Election of Directors,” “Board Structure and Governance—Audit Committee Expertise; Complaint-Handling Procedures,” “Board Structure and Governance—Meetings and Committees of the Board of Directors—Audit Committee,” “Stock Ownership and Reporting—Section 16(a) Beneficial Ownership Reporting Compliance” and “Board Structure and Governance—Code of Ethics and Business Conduct” are incorporated by reference into this report.

The full text of our Code of Ethics and Business Conduct (Code of Ethics) is posted on the News and Investor Relations page of our website at deluxe.com under the “Corporate Governance” caption. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of the Code of Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions by posting such information on our website at the address and location specified above.

101

Item 11.  Executive Compensation.

The sections of the proxy statement entitled “Executive Compensation—Compensation Committee Report,” “Executive Compensation,” “Board Structure and Governance—Non-Employee Director Compensation” and “Board Structure and Governance—Compensation Committee Interlocks and Insider Participation” are incorporated by reference into this report.

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The section of the proxy statement entitled “Stock Ownership and Reporting—Security Ownership of Certain Beneficial Owners and Management” is incorporated by reference into this report.

The following table provides information concerning all of our equity compensation plans as of December 31, 2011:

Equity Compensation Plan Information

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights			Weighted-average exercise price of outstanding options, warrants and rights			Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column)
Equity compensation plans approved by shareholders		2,867,608	(1)	$	22.44	(1)		5,308,448	(2)
Equity compensation plans not approved by shareholders	None			None			None
Total		2,867,608		$	22.44			5,308,448

(1) Includes awards granted under our 2008 Stock Incentive Plan and our previous stock incentive plan adopted in 2000, as amended. The number of securities to be issued upon exercise of outstanding options, warrants and rights includes outstanding stock options of 2,766,320 and restricted stock unit awards of 101,288. The restricted stock unit awards require no consideration upon vesting. Therefore, restricted stock units outstanding reduce the total weighted-average exercise price of outstanding options, warrants and rights presented in the table. The weighted-average exercise price excluding restricted stock units is $23.26.

(2) Includes 3,832,889 shares reserved for issuance under our Amended and Restated 2000 Employee Stock Purchase Plan. Of the total available for future issuance, 1,475,559 shares remain available for issuance under our 2008 Stock Incentive Plan. Under this plan, full value awards such as restricted stock, restricted stock units and share-based performance awards reduce the number of shares available for issuance by a factor of 2.29, or if such an award were forfeited or terminated without delivery of the shares, the number of shares that again become eligible for issuance would be multiplied by a factor of 2.29.

Item 13.  Certain Relationships and Related Transactions, and Director Independence.

None of our directors or officers, nor any known person who beneficially owns, directly or indirectly, five percent of our common stock, nor any member of the immediate family of any of the foregoing persons has any material interest, direct or indirect, in any transaction since January 1, 2011 or in any presently proposed transaction which, in either case, has affected or will materially affect us. None of our directors or officers is indebted to us.

The sections of the proxy entitled “Board Structure and Governance—Board Oversight and Director Independence” and “Board Structure and Governance—Related Party Transaction Policy and Procedures” are incorporated by reference into this report.

Item 14.  Principal Accounting Fees and Services.

The sections of the proxy statement entitled “Fiscal Year 2011 Audit and Independent Registered Public Accounting Firm—Fees Paid to Independent Registered Public Accounting Firm” and “Fiscal Year 2011 Audit and Independent Registered Public Accounting Firm—Policy on Audit Committee Pre-Approval of Accounting Firm Fees and Services” are incorporated by reference into this report.

102

PART IV

Item 15.  Exhibits, Financial Statement Schedules.

(a) Financial Statements and Schedules

The financial statements are set forth under Item 8 of this Annual Report on Form 10-K. Financial statement schedules have been omitted since they are either not required or are not applicable, or the required information is shown in the consolidated financial statements or notes.

(b) Exhibit Listing

The following exhibits are filed as part of or are incorporated in this report by reference:

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	First Supplemental Indenture, dated as of December 4, 2002, by and between us and Wells Fargo Bank Minnesota, N.A. (formerly, Norwest Bank Minnesota, National Association), as trustee (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Commission on December 5, 2002)	*
4.3	Second Supplemental Indenture, dated as of March 11, 2011, by and between us and Wells Fargo Bank Minnesota, N.A. (formerly, Norwest Bank Minnesota, National Association), as trustee (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed with the Commission on March 15, 2011)	*
4.4	Indenture, dated as of April 30, 2003, by and between us and Wells Fargo Bank Minnesota, N.A. (formerly Norwest Bank Minnesota, National Association), 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)	*
4.5	Form of Officer’s Certificate and Company Order authorizing the 2014 Notes, series B (incorporated by reference to Exhibit 4.9 to the Registration Statement on Form S-4 (Registration No. 333-120381) filed with the Commission on November 12, 2004)	*

103

4.6	Specimen of 5 1/8% notes due 2014, series B (incorporated by reference to Exhibit 4.10 to the Registration Statement on Form S-4 (Registration No. 333-120381) filed with the Commission on November 12, 2004)	*
4.7	Indenture, dated as of May 14, 2007, by and between us and The Bank of New York Trust Company, N.A., as trustee (including form of 7.375% Senior Notes due 2015) (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Commission on May 15, 2007)	*
4.8	Supplemental Indenture, dated as of March 12, 2010, among us, the guarantors listed on the signature pages thereto and The Bank of New York Mellon Trust Company, N.A. (formerly The Bank of New York Trust Company, N.A.), as trustee (incorporated by reference to Exhibit 4.9 to the Annual Report on Form 10-K for the year ended December 31, 2010)	*
4.9	Supplemental Indenture, dated as of September 9, 2010, among us, the guarantors listed on the signature pages thereto and The Bank of New York Mellon Trust Company, N.A. (formerly The Bank of New York Trust Company, N.A.), as trustee (incorporated by reference to Exhibit 4.10 to the Annual Report on Form 10-K for the year ended December 31, 2010)	*
4.10	Indenture, dated as of March 12, 2011, among us, the guarantors listed on the signature pages thereto and U.S. Bank National Association, as trustee (including form of 7.00% Senior Notes due 2019) (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Commission on March 15, 2011)	*
4.11	Registration Rights Agreement, dated as of March 15, 2011, among us, the guarantors listed on the signature pages thereto and J.P. Morgan Securities LLC, as representative of the several initial purchasers listed in Schedule I to the Purchase Agreement (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the Commission on March 15, 2011)	*
10.1	Deluxe Corporation 2008 Annual Incentive Plan (incorporated by reference to Appendix A of our definitive proxy statement filed with the Commission on March 13, 2008)**	*
10.2	First Amendment to the Deluxe Corporation 2008 Annual Incentive Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Commission on December 14, 2009)**	*
10.3	Deluxe Corporation 2008 Stock Incentive Plan, including as Annex I the Deluxe Corporation Non-employee Director Stock and Deferral Plan (incorporated by reference to Appendix B of our definitive proxy statement filed with the Commission on March 13, 2008)**	*
10.4	First Amendment to the Deluxe Corporation 2008 Stock Incentive Plan (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Commission on December 14, 2009)**	*
10.5	First Amendment to Deluxe Corporation Non-employee Director Stock and Deferral Plan (incorporated by reference to Exhibit 10.3 to the Annual Report on Form 10-K for the year ended December 31, 2008)**	*

104

10.6	Amended and Restated 2000 Employee Stock Purchase Plan (incorporated by reference to Exhibit 10.18 to the Annual Report on Form 10-K for the year ended December 31, 2001)**	*
10.7	Deluxe Corporation Deferred Compensation Plan (2011 Restatement) (incorporated by reference to Exhibit 10.7 to the Annual Report on Form 10-K for the year ended December 31, 2010)**	*
10.8	Deluxe Corporation Deferred Compensation Plan Trust (incorporated by reference to Exhibit 4.3 to the Form S-8 filed with the Commission on January 7, 2002)**	*
10.9	Deluxe Corporation Executive Deferred Compensation Plan for Employee Retention and Other Eligible Arrangements (incorporated by reference to Exhibit 10.24 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2000)**	*
10.10	Description of modification to the Deluxe Corporation Non-Employee Director Retirement and Deferred Compensation Plan (incorporated by reference to Exhibit 10.10 to the Annual Report on Form 10-K for the year ended December 31, 1997)**	*
10.11	Description of Non-Employee Director Compensation Arrangements, updated April 30, 2008 (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2008)**	*
10.12	Form of Severance Agreement entered into between us and the following executive officers: Anthony Scarfone, Terry Peterson, Lynn Koldenhoven, Pete Godich, Julie Loosbrock, Malcolm McRoberts, Laura Radewald and Robert Glaus (incorporated by reference to Exhibit 10.17 to the Annual Report on Form 10-K for the year ended December 31, 2000)**	*
10.13	Employment Agreement dated as of April 10, 2006, between us and Lee Schram (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed with the Commission on April 17, 2006)**	*
10.14	Form of Executive Retention Agreement entered into between us and Lee Schram (incorporated by reference to Exhibit 99.1 to the Current Report on Form 8-K filed with the Commission on August 10, 2007)**	*
10.15	Form of Executive Retention Agreement entered into between us and Senior Vice Presidents appointed prior to 2010 (incorporated by reference to Exhibit 99.2 to the Current Report on Form 8-K filed with the Commission on August 10, 2007)**	*
10.16	Form of Executive Retention Agreement entered into between us and each Vice President designated as an executive officer prior to 2010 (incorporated by reference to Exhibit 99.3 to the Current Report on Form 8-K filed with the Commission on August 10, 2007)**	*

105

10.17	Form of Addendum to Executive Retention and Severance Agreements Relating to Section 409A of the Internal Revenue Code (incorporated by reference to Exhibit 10.18 to the Annual Report on Form 10-K for the year ended December 31, 2008)**	*
10.18	Form of Agreement for Awards Payable in Restricted Stock Units (rev. 12/08) (incorporated by reference to Exhibit 10.20 to the Annual Report on Form 10-K for the year ended December 31, 2008)**	*
10.19	Form of Non-Employee Director Non-qualified Stock Option Agreement (incorporated by reference to Exhibit 10.19 to the Annual Report on Form 10-K for the year ended December 31, 2004)**	*
10.20	Form of Non-Employee Director Restricted Stock Award Agreement (ver. 4/07) (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2007)**	*
10.21	Form of Non-Qualified Stock Option Agreement (incorporated by reference to Exhibit 10.21 to the Annual Report on Form 10-K for the year ended December 31, 2004)**	*
10.22	Form of Non-Qualified Stock Option Agreement (as amended February 2006) (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Commission on February 21, 2006)**	*
10.23	Form of Non-Qualified Stock Option Agreement (version 2/07) (incorporatedby reference to exhibit 10.28 to the Annual Report on Form 10-K for the year ended December 31, 2006)**	*
10.24	Form of Non-Qualified Stock Option Agreement (version 2/09) (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2009)**	*
10.25	Form of Cash Performance Award Agreement (version 2/09) (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2009)**	*
10.26	Form of Cash Performance Award Agreement (version 2/10) (incorporated by reference to Exhibit 10.30 to the Annual Report on Form 10-K for the year ended December 31, 2009)**	*
10.27	Amendment No. 1, dated as of February 8, 2012, to revolving credit agreement dated as of March 12, 2010, among us, JPMorgan Chase Bank, N.A. as administrative agent, Fifth Third Bank as Syndication Agent, U.S. Bank National Association and The Bank of Tokyo-Mitsubishi UFJ, Ltd. as co-documentation agents, and the other financial institutions party thereto, related to a $200,000,000 revolving credit agreement	Filed herewith

106

12.1	Statement re: Computation of Ratios	Filed herewith
21.1	Subsidiaries of the Registrant	Filed herewith
23.1	Consent of Independent Registered Public Accounting Firm	Filed herewith
24.1	Power of Attorney	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 December 31, 2011 and 2010, (ii) Consolidated Statements of Income for the years ended December 31, 2011, 2010 and 2009, (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2011, 2010 and 2009, (iv) Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2011, 2010 and 2009, (v) Consolidated Statements of Cash Flows for the years ended December 31, 2011, 2010 and 2009 and (vi) Notes to Consolidated Financial Statements***	Furnished herewith

*Incorporated by reference

**Denotes compensatory plan or management contract

*** Submitted electronically with this report

Note to recipients of Form 10-K: Copies of exhibits will be furnished upon written request and payment of reasonable expenses in furnishing such copies.

107

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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
Date: February 24, 2012	By:	/s/ Lee Schram
		Lee Schram
		Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on February 24, 2012.

Signature		Title
By	/s/ Lee Schram	Chief Executive Officer
	Lee Schram	(Principal Executive Officer)
By	/s/ Terry D. Peterson	Senior Vice President, Chief Financial Officer
	Terry D. Peterson	(Principal Financial Officer and Principal Accounting Officer)
*
Ronald C. Baldwin		Director
*
Charles A. Haggerty		Director
*
Don J. McGrath		Director
*
Cheryl Mayberry McKissack		Director
*
Neil J. Metviner		Director
*
Stephen P. Nachtsheim		Director
*
Mary Ann O’Dwyer		Director
*
Martyn R. Redgrave		Director
*By:	/s/ Lee Schram
	Lee Schram
	Attorney-in-Fact

108

EXHIBIT INDEX

Exhibit No.	Description
10.27	Amendment No. 1, dated as of February 8, 2012, to revolving credit agreement dated as of March 12, 2010, among us, JPMorgan Chase Bank, N.A. as administrative agent, Fifth Third Bank as Syndication Agent, U.S. Bank National Association and The Bank of Tokyo-Mitsubishi UFJ, Ltd. as co-documentation agents, and the other financial institutions party thereto, related to a $200,000,000 revolving credit agreement
12.1	Statement re: Computation of Ratios
21.1	Subsidiaries of the Registrant
23.1	Consent of Independent Registered Public Accounting Firm
24.1	Power of Attorney
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 December 31, 2011 and 2010, (ii) Consolidated Statements of Income for the years ended December 31, 2011, 2010 and 2009, (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2011, 2010 and 2009, (iv) Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2011, 2010 and 2009, (v) Consolidated Statements of Cash Flows for the years ended December 31, 2011, 2010 and 2009 and (vi) Notes to Consolidated Financial Statements

109

EX-10.27

Exhibit 10.27

EXECUTION COPY

AMENDMENT NO. 1

to

CREDIT AGREEMENT

THIS AMENDMENT NO. 1 TO CREDIT AGREEMENT (the “Amendment”) is made as of February 8, 2012 by and among DELUXE CORPORATION (the “Borrower”), the institutions from time to time parties thereto as Lenders (the “Lenders”), JPMORGAN CHASE BANK, N.A., in its capacity as Administrative Agent for itself and the other Lenders (the “Agent”) under that certain Credit Agreement dated as of March 12, 2010 by and among the Borrower, the financial institutions party thereto, and the Agent (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”).  Defined terms used herein and not otherwise defined herein shall have the meaning given to them in the Credit Agreement.

WITNESSETH

WHEREAS, the Borrower, the Lenders, and the Agent are parties to the Credit Agreement; and

WHEREAS, the Borrower has requested that the Agent and the Lenders amend the Credit Agreement on the terms and conditions set forth herein; and

WHEREAS, the Borrower, the Lenders and the Agent have agreed to amend the Credit Agreement on the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto have agreed to the following amendments to the Credit Agreement:

1.           Amendments to the Credit Agreement.  Effective as of February 8, 2012, subject to the satisfaction of the conditions precedent set forth in Section 2 below, the Credit Agreement is hereby amended to incorporate and give effect to the changes highlighted in the copy of the Credit Agreement attached as Exhibit A hereto. Upon giving effect to this Amendment, the document attached as Exhibit A hereto shall constitute a conformed copy of the Credit Agreement.

2.           Conditions of Effectiveness.  The effectiveness of this Amendment is subject to the conditions precedent that the Agent shall have received the following:

(A)        duly executed originals of this Amendment from the Borrower, the Lenders and the Agent;

(B)         a copy of the Omnibus Reaffirmation Agreement duly executed by each of the Loan Parties in the form attached hereto as Exhibit B;

(C)           a written opinion (addressed to the Agent and the Lenders and dated the date hereof) of Dorsey & Whitney LLP, counsel to the Borrower, with respect to noncontravention of laws and material indebtedness, enforceability of the Loan Documents, and such other matters relating to the Borrower, this Amendment or the Loan Documents as the Administrative Agent shall reasonably request;

(D)           a written opinion (addressed to the Agent and the Lenders and dated the date hereof) of in-house counsel to the Borrower, with respect to general corporate matters, noncontravention of laws and material indebtedness, and such other matters relating to the Borrower, this Amendment or the Loan Documents as the Administrative Agent shall reasonably request;

(E)           a certificate of the secretary or assistant secretary of the Borrower certifying resolutions of the Board of Directors of the Borrower authorizing the execution, delivery and performance of this Amendment and each document executed in connection herewith;

(F)           an executed copy of that certain Assignment and Asssumption Agreement dated as of the date hereof, between The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Assignor and Union Bank, N.A., as Assignee;

(G)           executed copies of each of the confirmatory grants of security interests in intellectual property set forth on Exhibit C attached hereto.

(H)           all fees and expenses due and payable on or prior to the date hereof in connection with this Amendment; and

(I)           such other documents, instruments and agreements as the Agent may reasonably request.

3.           Representations and Warranties of the Borrower.

(A)           The Borrower hereby represents and warrants that (i) this Amendment and the Credit Agreement, as previously executed and as amended hereby, constitute legal, valid and binding obligations of the Borrower and are enforceable against the Borrower in accordance with their terms (except as enforceability may be limited by bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights generally) and (ii) no Default or Event of Default has occurred and is continuing.

(B)           Upon the effectiveness of this Amendment and after giving effect hereto, the Borrower hereby reaffirms all covenants, representations and warranties made in the Credit Agreement as amended hereby, and agrees that all such covenants, representations and warranties shall be true and correct as of the effective date of this Amendment (unless such representation and warranty is made as of a specific date, in which case such representation and warranty shall be true and correct as of such date).

2

4.           Appointment of Co-Documentation Agent.  Upon the effectiveness of this Amendment, Union Bank, N.A. is hereby appointed as successor Co-Documentation Agent to The Bank of Tokyo-Mitsubishi UFJ, Ltd., subject to the provisions of Article VIII of the Credit Agreement.

5.           References to the Credit Agreement.

(A)        Upon the effectiveness of Section 1 hereof, on and after the date hereof, each reference in the Credit Agreement (including any reference therein to “this Credit Agreement,” “hereunder,” “hereof,” “herein” or words of like import referring thereto) or in any other Loan Document shall mean and be a reference to the Credit Agreement as amended hereby.

(B)         Except as specifically amended above, the Credit Agreement and all other documents, instruments and agreements executed and/or delivered in connection therewith, shall remain in full force and effect, and are hereby ratified and confirmed.

(C)         The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the administrative agent or the Lenders, nor constitute a waiver of any provision of the Credit Agreement or any other documents, instruments and agreements executed and/or delivered in connection therewith.

6.           GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.

7.           Headings.  Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

8.           Counterparts.  This Amendment may be executed by one or more of the parties to this Amendment on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

[REMAINDER OF PAGE INTENTIONALLY BLANK]

3

IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first above written.

DELUXE CORPORATION, as the Borrower
By	/s/ Terry D. Peterson
	Name: Terry D. Peterson
	Title: Sr VP & Chief Financial Officer
By	/s/ Jeff Johnson
	Name:
	Title:

Signature Page to Amendment No. 1 to Credit Agreement

JPMORGAN CHASE BANK, N.A., individually as a Lender, as the Swingline Lender, as the Issuing Bank and as Administrative Agent
By	/s/ Suzanne Ergastolo
	Name: Suzanne Ergastolo
	Title: Vice President

Signature Page to Amendment No. 1 to Credit Agreement

FIFTH THIRD BANK, as a Lender
By	/s/ Gary S. Losey
Name: Gary S. Losey
Title: VP – Corporate Banking

Signature Page to Amendment No. 1 to Credit Agreement

U.S. BANK NATIONAL ASSOCIATION, as a Lender
By	/s/ Andrew C. Beckman
Name: Andrew C. Beckman
Title: Assistant Vice President

Signature Page to Amendment No. 1 to Credit Agreement

UNION BANK, N.A., as a Lender
By	/s/ Dana Philbin
Name: Dana Philbin
Title: Vice President

Signature Page to Amendment No. 1 to Credit Agreement

PNC BANK, NATIONAL ASSOCIATION, as a Lender
By	/s/ Michael Leong
Name: Michael Leong
Title: Senior Vice President

Signature Page to Amendment No. 1 to Credit Agreement

WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender
By	/s/ Brian Buck
Name: Brian Buck
Title: Director

Signature Page to Amendment No. 1 to Credit Agreement

CREDIT SUISSE AG, Cayman Islands Branch as a Lender
By	/s/ Ari Bruger
Name: Ari Bruger
Title: Vice President
By	/s/ Alex Verdone
Name: Alex Verdone
Title: Associate

Signature Page to Amendment No. 1 to Credit Agreement

EXECUTION COPY

CONFORMED COPY TO INCLUDE:

AMENDMENT NO. 1 DATED AS OF FEBRUARY 8, 2012

EXHIBIT A TO AMENDMENT NO. 1

TO CREDIT AGREEMENT

CREDIT AGREEMENT

dated as of

March 12, 2010

among

DELUXE CORPORATION,

as Borrower

The Lenders Party Hereto

JPMORGAN CHASE BANK, N.A.

as Administrative Agent

and

FIFTH THIRD BANK

as Syndication Agent

and

U.S. BANK NATIONAL ASSOCIATION and UNION BANK, N.A.,

as Co-Documentation Agents

J.P. MORGAN SECURITIES INC. and

FIFTH THIRD BANK,

as Joint Bookrunners and Joint Lead Arrangers

ARTICLE I Definitions
SECTION 1.01.	Defined Terms	1
SECTION 1.02.	Classification of Loans and Borrowings	22
SECTION 1.03.	Terms Generally	22
SECTION 1.04.	Accounting Terms; GAAP	23
SECTION 1.05.	Status of Obligations	23
ARTICLE II The Credits
SECTION 2.01.	Commitments	24
SECTION 2.02.	Loans and Borrowings	24
SECTION 2.03.	Requests for Revolving Borrowings	24
SECTION 2.04.	Intentionally Omitted	25
SECTION 2.05.	Swingline Loans	25
SECTION 2.06.	Letters of Credit	26
SECTION 2.07.	Funding of Borrowings	29
SECTION 2.08.	Interest Elections	30
SECTION 2.09.	Termination and Reduction of Commitments	31
SECTION 2.10.	Repayment of Loans; Evidence of Debt	32
SECTION 2.11.	Prepayment of Loans	32
SECTION 2.12.	Fees	33
SECTION 2.13.	Interest	34
SECTION 2.14.	Alternate Rate of Interest	34
SECTION 2.15.	Increased Costs	35
SECTION 2.16.	Break Funding Payments	36
SECTION 2.17.	Taxes	36
SECTION 2.18.	Payments Generally; Allocations of Proceeds; Pro Rata Treatment; Sharing of Set-offs	39
SECTION 2.19.	Mitigation Obligations; Replacement of Lenders	41
SECTION 2.20.	Expansion Option	42
SECTION 2.21.	Defaulting Lenders	43
ARTICLE III Representation and Warranties
SECTION 3.01.	Organization; Powers; Subsidiaries	44
SECTION 3.02.	Authorization; Enforceability	45
SECTION 3.03.	Governmental Approvals; No Conflicts	45
SECTION 3.04.	Financial Condition; No Material Adverse Change	45
SECTION 3.05.	Properties	45
SECTION 3.06.	Litigation, Environmental and Labor Matters	46
SECTION 3.07.	Compliance with Laws and Agreements	46
SECTION 3.08.	Investment Company Status	46
SECTION 3.09.	Taxes	46
SECTION 3.10.	ERISA	46
SECTION 3.11.	Disclosure	47
SECTION 3.12.	Federal Reserve Regulations	47

SECTION 3.13.	Liens	47
SECTION 3.14.	No Default	47
SECTION 3.15.	No Burdensome Restrictions	47
SECTION 3.16.	Solvency	47
SECTION 3.17.	Insurance	47
SECTION 3.18.	Security Interest in Collateral	47
ARTICLE IV Conditions
SECTION 4.01.	Effective Date	48
SECTION 4.02.	Each Credit Event	49
ARTICLE V Affirmative Covenants
SECTION 5.01.	Financial Statements and Other Information	50
SECTION 5.02.	Notices of Material Events	51
SECTION 5.03.	Existence; Conduct of Business	52
SECTION 5.04.	Payment of Obligations	52
SECTION 5.05.	Maintenance of Properties; Insurance	52
SECTION 5.06.	Books and Records; Inspection Rights	53
SECTION 5.07.	Compliance with Laws and Material Contractual Obligations	53
SECTION 5.08.	Use of Proceeds	53
SECTION 5.09.	Subsidiary Guarantors; Pledges; Additional Collateral; Further Assurances	53
ARTICLE VI Negative Covenants
SECTION 6.01.	Indebtedness	54
SECTION 6.02.	Liens	56
SECTION 6.03.	Fundamental Changes and Asset Sales	57
SECTION 6.04.	Investments, Loans, Advances, Guarantees and Acquisitions	58
SECTION 6.05.	Swap Agreements	60
SECTION 6.06.	Transactions with Affiliates	60
SECTION 6.07.	Restricted Payments	60
SECTION 6.08.	Restrictive Agreements	61
SECTION 6.09.	Subordinated Indebtedness and Amendments to Subordinated Indebtedness Documents	61
SECTION 6.10.	Sale and Leaseback Transactions	62
SECTION 6.11.	Capital Expenditures	62
SECTION 6.12.	Financial Covenants	62
ARTICLE VII Events of Default
ARTICLE VIII The Administrative Agent

ARTICLE IX Miscellaneous
SECTION 9.01.	Notices.	68
SECTION 9.02.	Waivers; Amendments	69
SECTION 9.03.	Expenses; Indemnity; Damage Waiver	71
SECTION 9.04.	Successors and Assigns	72
SECTION 9.05.	Survival	75
SECTION 9.06.	Counterparts; Integration; Effectiveness	75
SECTION 9.07.	Severability	75
SECTION 9.08.	Right of Setoff	75
SECTION 9.09.	Governing Law; Jurisdiction; Consent to Service of Process	76
SECTION 9.10.	WAIVER OF JURY TRIAL	76
SECTION 9.11.	Headings	76
SECTION 9.12.	Confidentiality	77
SECTION 9.13.	USA PATRIOT Act	77
SECTION 9.14.	Appointment for Perfection	77

SCHEDULES:

Schedule 2.01 – Commitments

Schedule 2.06 – Existing Letters of Credit

Schedule 3.01 – Subsidiaries

Schedule 6.01 – Existing Indebtedness

Schedule 6.02 – Existing Liens

Schedule 6.04 – Existing Investments

Schedule 6.10 – Sale and Leaseback Transactions

EXHIBITS:

Exhibit A – Form of Assignment and Assumption

Exhibit B – Form of Opinion of Loan Parties’ Counsel

Exhibit C – Form of Increasing Lender Supplement

Exhibit D – Form of Augmenting Lender Supplement

Exhibit E – List of Closing Documents

Exhibit F – Form of Compliance Certificate

CREDIT AGREEMENT (this “Agreement”) dated as of March 12, 2010 among DELUXE CORPORATION, as Borrower, the LENDERS from time to time party hereto, JPMORGAN CHASE BANK, N.A., as Administrative Agent and FIFTH THIRD BANK, as Syndication Agent and U.S. BANK NATIONAL ASSOCIATION and UNION BANK, N.A., as Co-Documentation Agents.

The parties hereto agree as follows:

ARTICLE I

Definitions

SECTION 1.01.  Defined Terms.  As used in this Agreement, the following terms have the meanings specified below:

“1995 Indenture” means that certain Indenture, dated October 27, 1995, between the Borrower and Norwest Bank Minnesota, National Association, as trustee, as amended, restated, supplemented or otherwise modified from time to time.

“2003 Indenture” means that certain Indenture, dated April 30, 2003, between the Borrower and Wells Fargo Bank Minnesota, N.A. (formerly, Norwest Bank Minnesota National Association), as trustee, as amended, restated, supplemented or otherwise modified from time to time.

“2007 Indenture” means that certain Indenture, dated as of May 14, 2007, between the Borrower and The Bank of New York Trust Company, N.A., as trustee, as amended, restated, supplemented or otherwise modified from time to time.

“2014 Bonds” means the series of interest-bearing notes due in 2014 created pursuant to an Officers’ Certificate and Company Order dated October 1, 2004 under the 2003 Indenture (as amended, restated, supplemented or modified from time to time), and issued pursuant to the 2003 Indenture.

“2015 Bonds” means the series of interest-bearing notes due in 2015 created and issued under the 2007 Indenture (as amended, restated, supplemented or modified from time to time).

“ABR”, when used in reference to any Loan or Borrowing, refers to a Loan, or the Loans comprising such Borrowing, bearing interest at a rate determined by reference to the Alternate Base Rate.

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum  equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Lenders hereunder.

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“Affected Foreign Subsidiary” means any Foreign Subsidiary to the extent such Foreign Subsidiary acting as a Subsidiary Guarantor would cause a Deemed Dividend Problem.

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“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“Aggregate Commitment” means the aggregate of the Commitments of all of the Lenders, as reduced or increased from time to time pursuant to the terms and conditions hereof.  As of the Effective Date, the Aggregate Commitment is $200,000,000.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus ½ of 1% and (c) the Adjusted LIBO Rate for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%, provided that, for the avoidance of doubt, the Adjusted LIBO Rate for any day shall be based on the rate appearing on Reuters Screen LIBOR01 Page (or on any successor or substitute page of such page) at approximately 11:00 a.m. London time on such day.  Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.

“Amendment No. 1 Effective Date” means February 8, 2012.

“Applicable Percentage” means, with respect to any Lender, the percentage of the Aggregate Commitment represented by such Lender’s Commitment; provided that, in the case of Section 2.21 when a Defaulting Lender shall exist, “Applicable Percentage” shall mean the percentage of the Aggregate Commitment (disregarding any Defaulting Lender’s Commitment) represented by such Lender's Commitment.  If the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments and to any Lender’s status as a Defaulting Lender at the time of determination.

“Applicable Pledge Percentage” means 100%, but 65% in the case of a pledge by the Borrower or any Domestic Subsidiary of its Equity Interests in a Foreign Subsidiary that is an Affected Foreign Subsidiary due to a Deemed Dividend Problem.

“Applicable Rate” means, for any day, with respect to any Eurodollar Revolving Loan or any ABR Revolving Loan (including any Swingline Loan) or with respect to the commitment fees payable hereunder, as the case may be, the applicable rate per annum set forth below based upon the Leverage Ratio applicable on such date:

Pricing Level	Leverage Ratio	Commitment Fee Rate	Applicable Rate for Eurodollar Revolving Loans	Applicable Rate for ABR Revolving Loans
Level I	< 1.50 to 1.00	0.20%	1.50%	0.50%
Level II	> 1.50 to 1.00 but < 2.00 to 1.00	0.25%	1.75%	0.75%
Level III	> 2.00 to 1.00 but < 2.50 to 1.00	0.30%	2.00%	1.00%
Level IV	> 2.50 to 1.00 but < 3.00 to 1.00	0.35%	2.25%	1.25%
Level V	> 3.00 to 1.00	0.45%	2.50%	1.50%

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For purposes of the foregoing,

(a)           if at any time the Borrower fails to deliver the Financials on or before the date such Financials are due pursuant to Section 5.01, Pricing Level V shall be deemed applicable for the period commencing three (3) Business Days after such required date of delivery and ending on the date which is three (3) Business Days after such Financials are actually delivered, after which the Pricing Level shall be determined in accordance with the table above as applicable;

(b)           except as otherwise provided in the paragraph below, adjustments, if any, to the Pricing Level then in effect shall be effective three (3) Business Days after the Administrative Agent has received the applicable Financials (it being understood and agreed that each change in Pricing Level shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change); and

(c)           notwithstanding the foregoing, Pricing Level III shall be deemed to be applicable until the Administrative Agent’s receipt of the applicable Financials for the Borrower’s first full fiscal quarter ending after the Amendment No. 1 Effective Date (unless such Financials demonstrate that Pricing Level IV or Pricing Level V should have been applicable during such period, in which case such other Pricing Level shall be deemed to be applicable during such period) and adjustments to the Pricing Level then in effect shall thereafter be effected in accordance with the preceding paragraphs.

“Approved Fund” has the meaning assigned to such term in Section 9.04.

“Assignment and Assumption” means an assignment and assumption agreement entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.

“Augmenting Lender” has the meaning assigned to such term in Section 2.20.

“Availability Period” means the period from and including the Effective Date to but excluding the earlier of the Maturity Date and the date of termination of the Commitments.

“Banking Services” means each and any of the following bank services provided to the Borrower or any Subsidiary by any Lender or any of its Affiliates: (a) credit cards for commercial customers (including, without limitation, commercial credit cards and purchasing cards), (b) stored value cards and (c) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services).

“Banking Services Agreement” means any agreement entered into by the Borrower or any Subsidiary in connection with Banking Services.

“Banking Services Obligations” means any and all obligations of the Borrower or any Subsidiary, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services.

“Bankruptcy Event” means, with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, provided, further, that such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

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“Board” means the Board of Governors of the Federal Reserve System of the United States of America.

“Borrower” means Deluxe Corporation, a Minnesota corporation.

“Borrowing” means (a) Revolving Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect or (b) a Swingline Loan.

“Borrowing Request” means a request by the Borrower for a Revolving Borrowing in accordance with Section 2.03.

“Burdensome Restrictions” means any consensual encumbrance or restriction of the type described in clause (a) or (b) of Section 6.08.

“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in Chicago, Illinois and New York City are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in Dollars in the London interbank market.

 “Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

“Change in Control” means:

 (a)           the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof), of Equity Interests representing more than 25% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Borrower;

(b)           occupation of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by Persons who were (i) not nominated by, or whose nomination for election was not approved or ratified by a majority of the directors of, the board of directors of the Borrower, or (iii) not appointed by Persons described in the foregoing clause (i); or

(c)           the occurrence of a change in control, or other similar provision, as defined in any agreement or instrument evidencing any Material Indebtedness.

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“Change in Law” means, with respect to any Lender, (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender or by such Lender’s or the Issuing Bank’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided however, that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements and directives thereunder, issued in connection therewith or in implementation thereof, and (ii) all requests, rules, guidelines, requirements and directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law” regardless of the date enacted, adopted, issued or implemented.

“Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline Loans.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 “Co-Documentation Agent” means each of U.S. BANK NATIONAL ASSOCIATION and UNION BANK, N.A. in its capacity as co-documentation agent for the credit facility evidenced by this Agreement.

“Collateral” means any and all personal property owned, leased or operated by a Person covered by the Collateral Documents and any and all other personal property of any Loan Party, now existing or hereafter acquired, that may at any time be or become subject to a security interest or Lien in favor of Administrative Agent, on behalf of itself and the Secured Parties, to secure the Secured Obligations.

“Collateral Documents” means, collectively, the Security Agreement, and all other agreements, instruments and documents executed in connection with this Agreement that are intended to create, perfect or evidence, or establish enforcement rights or priority of claims in respect of, Liens to secure the Secured Obligations whether heretofore, now, or hereafter executed by the Borrower or any of its Subsidiaries and delivered to the Administrative Agent.

“Commitment” means, with respect to each Lender, the commitment of such Lender to make Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, expressed as an amount representing the maximum aggregate amount of such Lender’s Revolving Credit Exposure hereunder, as such commitment may be (a) reduced or terminated from time to time pursuant to Section 2.09, (b) increased from time to time pursuant to Section 2.20 and (c) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04.  The initial amount of each Lender’s Commitment is set forth on Schedule 2.01, or in the Assignment and Assumption or other documentation contemplated hereby pursuant to which such Lender shall have assumed its Commitment, as applicable.

“Consolidated Capital Expenditures” means, without duplication, any expenditures for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a consolidated balance sheet of the Borrower and its Subsidiaries prepared in accordance with GAAP.

5

“Consolidated EBIT” means Consolidated Net Income plus, (a) to the extent deducted from revenues in determining Consolidated Net Income and without duplication, (i) Consolidated Interest Expense, (ii) expense for taxes paid or accrued, (iii) extraordinary or non-recurring non-cash expenses or losses incurred other than in the ordinary course of business, (iv) non-cash expenses related to stock based compensation, and (v) non-recurring non-cash charges and expenses related to write-downs of goodwill or asset impairment minus, (b) to the extent included in Consolidated Net Income, (i) interest income, (ii) income tax credits and refunds (to the extent not netted from tax expense), (iii) any cash payments made during such period in respect of items described in clauses (a)(iii), (a)(iv) or (a)(v) above subsequent to the fiscal quarter in which the relevant non-cash expenses or losses were incurred and (iv) extraordinary, unusual or non-recurring income or gains realized other than in the ordinary course of business, all calculated for the Borrower and its Subsidiaries in accordance with GAAP on a consolidated basis.

“Consolidated EBITDA” means Consolidated EBIT plus, to the extent deducted from revenues in determining Consolidated Net Income, (i) depreciation and (ii) amortization.  For the purposes of calculating Consolidated EBITDA for any period of four consecutive fiscal quarters (each, a “Reference Period”), (i) if at any time during such Reference Period the Borrower or any Subsidiary shall have made any Material Disposition, the Consolidated EBITDA for such Reference Period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) attributable to the property that is the subject of such Material Disposition for such Reference Period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable thereto for such Reference Period, and (ii) if during such Reference Period the Borrower or any Subsidiary shall have made a Material Acquisition, Consolidated EBITDA for such Reference Period shall be calculated after giving effect thereto on a Pro Forma Basis as if such Material Acquisition occurred on the first day of such Reference Period.  As used in this definition, “Material Acquisition” means any acquisition of property or series of related acquisitions of property that (a) constitutes (i) assets comprising all or substantially all or any significant portion of a business or operating unit of a business, or (ii) all or substantially all of the common stock or other Equity Interests of a Person, and (b) involves the payment of consideration by the Borrower and its Subsidiaries in excess of $10,000,000; and “Material Disposition” means any sale, transfer or disposition of property or series of related sales, transfers, or dispositions of property that yields gross proceeds to the Borrower or any of its Subsidiaries in excess of $10,000,000.

“Consolidated Interest Expense” means, with reference to any period, the interest expense (including, without limitation, interest expense under Capital Lease Obligations that is treated as interest in accordance with GAAP) of the Borrower and its Subsidiaries calculated on a consolidated basis for such period with respect to all outstanding Indebtedness of the Borrower and its Subsidiaries allocable to such period in accordance with GAAP (including, without limitation, all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers acceptance financing and net costs under interest rate Swap Agreements to the extent such net costs are allocable to such period in accordance with GAAP).

“Consolidated Net Income” means, with reference to any period, the net income (or loss) of the Borrower and its Subsidiaries calculated in accordance with GAAP on a consolidated basis (without duplication) for such period; provided that there shall be excluded any income (or loss) of any Person other than the Borrower or a Subsidiary, but any such income so excluded may be included in such period or any later period to the extent of any cash dividends or distributions actually paid in the relevant period to the Borrower or any wholly-owned Subsidiary of the Borrower.

“Consolidated Total Assets” means, as of the date of any determination thereof, total assets of the Borrower and its Subsidiaries calculated in accordance with GAAP on a consolidated basis as of such date.

6

“Consolidated Total Indebtedness” means at any time the sum, without duplication, of (a) the aggregate Indebtedness of the Borrower and its Subsidiaries calculated on a consolidated basis as of such time in accordance with GAAP, (b) the aggregate amount of Indebtedness of the Borrower and its Subsidiaries relating to the maximum amount available to be drawn under all outstanding letters of credit and bankers acceptances and (c) Indebtedness of the type referred to in clauses (a) or (b) hereof of another Person guaranteed by the Borrower or any of its Subsidiaries in an amount calculated on a consolidated basis as of such time in accordance with GAAP.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

“Credit Event” means a Borrowing, the issuance of a Letter of Credit or an LC Disbursement.

“Credit Party” means the Administrative Agent, the Issuing Bank, the Swingline Lender or any other Lender.

“Deemed Dividend Problem” means, with respect to any Foreign Subsidiary, such Foreign Subsidiary’s accumulated and undistributed earnings and profits being deemed to be repatriated to the Borrower or the applicable parent Domestic Subsidiary under Section 956 of the Code and the effect of such repatriation causing materially adverse tax consequences to the Borrower or such parent Domestic Subsidiary, in each case as determined by the Borrower in its commercially reasonable judgment acting in good faith and in consultation with its legal and tax advisors.

“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

“Defaulting Lender” means any Lender that (a) has failed, within two (2) Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Letters of Credit or Swingline Loans or (iii) pay over to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Borrower or any Credit Party in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three (3) Business Days after request by a Credit Party, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans and participations in then outstanding Letters of Credit and Swingline Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Credit Party’s receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become the subject of a Bankruptcy Event.

“Dollars” or “$” refers to lawful money of the United States of America.

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“Domestic Subsidiary” means a Subsidiary organized under the laws of a jurisdiction located in the United States of America.

“Effective Date” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).

“Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters.

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any of the foregoing.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal of the Borrower or any of its ERISA Affiliates from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition upon the Borrower or any of its ERISA Affiliates of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.

8

“Eurodollar”, when used in reference to any Loan or Borrowing, means that such Loan, or the Loans comprising such Borrowing, bears interest at a rate determined by reference to the Adjusted LIBO Rate.

“Event of Default” has the meaning assigned to such term in Article VII.

“Excluded Restricted Subsidiary Equity Interests” means Equity Interests of any Subsidiary to the extent constituting (a) shares of stock of any “Restricted Subsidiary” (as defined in each of the 1995 Indenture and the 2003 Indenture) held or owned by the Borrower or (b) shares of capital stock of any “Restricted Subsidiary” (as defined in the 2007 Indenture).

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income  by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which the Borrower is located and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 2.19(b)), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Foreign Lender’s failure to comply with Section 2.17(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.17(a).

“Existing Letters of Credit” has the meaning given to such term in Section 2.06(k).

 “Fair Market Value” means, with respect to any asset or liability, the fair market value of such asset or liability as determined by the Borrower in good faith; provided that if the fair market value is equal to or exceeds $5,000,000, such determination shall be approved by the board of directors of the Borrower.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement, and any regulations or official interpretations thereof.

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

“Financial Officer” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower.

“Financials” means the annual or quarterly financial statements, and accompanying certificates and other documents, of the Borrower and its Subsidiaries required to be delivered pursuant to Section 5.01(a) or 5.01(b).

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“First Tier Foreign Subsidiary” means each Foreign Subsidiary with respect to which any one or more of the Borrower and its Domestic Subsidiaries directly owns more than 50% of such Foreign Subsidiary’s issued and outstanding Equity Interests.

“Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is located.  For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

“Foreign Subsidiary” means any Subsidiary which is not a Domestic Subsidiary.

“GAAP” means generally accepted accounting principles in the United States of America.

“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank) and any group or body charged with setting financial accounting or regulatory capital rules or standards (including, without limitation, the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing).

“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants regulated pursuant to any Environmental Law, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

“Hostile Acquisition” means (a) the acquisition of the Equity Interests of a Person through a tender offer or similar solicitation of the owners of such Equity Interests which has not been approved (prior to such acquisition) by the board of directors (or any other applicable governing body) of such Person or by similar action if such Person is not a corporation and (b) any such acquisition as to which such approval has been withdrawn.

“Increasing Lender” has the meaning assigned to such term in Section 2.20.

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“Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, provided that the amount of such Indebtedness which has not been assumed by such Person shall be the lesser of (i) the amount of such Indebtedness and (ii) the Fair Market Value of such property, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, and (k) all obligations of such Person under Sale and Leaseback Transactions.  The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

“Indemnified Taxes” means Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by any Loan Party under any Loan Document.

“Information Memorandum” means the Confidential Information Memorandum dated February 2010 relating to the Borrower and the Transactions.

“Interest Coverage Ratio” has the meaning assigned to such term in Section 6.12(b).

“Interest Election Request” means a request by the Borrower to convert or continue a Revolving Borrowing in accordance with Section 2.08.

“Interest Payment Date” means (a) with respect to any ABR Loan (other than a Swingline Loan), the last day of each March, June, September and December and the Maturity Date, (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period and the Maturity Date and (c) with respect to any Swingline Loan, the day that such Loan is required to be repaid in accordance with Section 2.10 and the Maturity Date.

“Interest Period” means with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is seven days or one, two, three or six months thereafter, as the Borrower may elect; provided, that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case of a Eurodollar Borrowing only, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period pertaining to a Eurodollar Borrowing that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period.  For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made, in the case of a Revolving Borrowing, and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

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“Issuing Bank” means JPMorgan Chase Bank, N.A., in its capacity as the issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.06(i).  The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.

“LC Collateral Account” has the meaning assigned to such term in Section 2.06(j).

“LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter of Credit.

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time.  The LC Exposure of any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.

“Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall have become a Lender hereunder pursuant to Section 2.20 or pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.  Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender.

“Letter of Credit” means any letter of credit issued pursuant to this Agreement and any Existing Letter of Credit.

“Leverage Ratio” has the meaning assigned to such term in Section 6.12(a).

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on Reuters Screen LIBOR01 Page (or on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to deposits in Dollars in the London interbank market) at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period, as the rate for deposits in Dollars with a maturity comparable to such Interest Period.  In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest Period shall be the rate at which deposits in Dollars in an amount equal to $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities, other than (i) any purchase option, call or other similar right in respect of the Equity Interests of the Borrower created in connection with an employee stock option or stock incentive plan existing as of the Effective Date, as amended, renewed, re-adopted, modified, extended or administered from time to time in the ordinary course of business in accordance with past practices and (ii) any Equity Interest granted in respect of the Borrower’s Equity Interests certified by the Borrower to the Administrative Agent in writing as having a bona fide purpose directly related to effecting any disposition otherwise permitted under Section 6.03 or a Permitted Acquisition (as determined by the Administrative Agent in its reasonable discretion).

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“Limited Equity Acquisition” means any acquisition (whether by purchase, merger, consolidation or otherwise) or series of related acquisitions by the Borrower or any Subsidiary of 50% or less of the Equity Interests in a Person, if, at the time of and immediately after giving effect thereto, (a) no Default has occurred and is continuing or would arise after giving effect thereto, (b) such Person is engaged in the same or a similar line of business as the Borrower and the Subsidiaries or business reasonably related thereto.

“Liquidity” means, with respect to the Borrower, at any time, the sum of (a) Unrestricted Cash, plus (b) the unused portion of the Aggregate Commitment hereunder at such time, minus (c) (i) for purposes of Section 6.12(c)(i), the aggregate outstanding principal amount due under the 2014 Bonds (and any Restricted Refinancing thereof) at such time and (ii) for purposes of Section 6.12(c)(ii), the aggregate outstanding principal amount due under the 2015 Bonds (and any Restricted Refinancing thereof) at such time.

“Loan Documents” means this Agreement, any promissory notes issued pursuant to Section 2.10(e) of this Agreement, any Letter of Credit applications, the Collateral Documents, the Post-Closing Matters Side Letter, the Subsidiary Guaranty, and all other agreements, instruments, documents and certificates identified in Section 4.01 executed and delivered to, or in favor of, the Administrative Agent or any Lenders and including all other pledges, powers of attorney, consents, assignments, contracts, notices, letter of credit agreements and all other written matter whether heretofore, now or hereafter executed by or on behalf of any Loan Party, or any employee of any Loan Party, and delivered to the Administrative Agent or any Lender in connection with this Agreement or the transactions contemplated thereby.  Any reference in this Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to this Agreement or such Loan Document as the same may be in effect at any and all times such reference is operative.

“Loan Parties” means, collectively, the Borrower and the Subsidiary Guarantors.

“Loans” means the loans made by the Lenders to the Borrower pursuant to this Agreement.

“Material Adverse Effect” means a material adverse effect on (a) the business, assets, operations, or financial condition of the Borrower and the Subsidiaries taken as a whole, (b) the validity or enforceability of (i) this Agreement, the Security Agreement, the Subsidiary Guaranty, any Letter of Credit application or any fee letter constituting a Loan Document or (ii) taken as a whole, any of the other material Loan Documents, (c) the ability of the Borrower or any Subsidiary Guarantor to perform any of its payment or other material obligations under this Agreement, the Security Agreement, the Subsidiary Guaranty, any Letter of Credit application, any fee letter constituting a Loan Document or any other material Loan Document, (d) all or any portion of the Collateral with a Fair Market Value in excess of $15,000,000 or any of the Administrative Agent’s liens (on behalf of itself and the other Secured Parties) on all or any portion of the Collateral with a Fair Market Value in excess of $15,000,000 or, giving effect to any Lien permitted under Section 6.02, the priority of such Liens, or (e) the rights or remedies of the Administrative Agent and the Lenders under this Agreement or under any other Loan Document.

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“Material Indebtedness” means Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Swap Agreements, of any one or more of the Borrower and its Subsidiaries in an aggregate principal amount exceeding $25,000,000.  For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Borrower or any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such Swap Agreement were terminated at such time.

“Material Subsidiary” means each Subsidiary (i) which, as of the most recent fiscal quarter of the Borrower, for the period of four consecutive fiscal quarters then ended, for which Financials have been delivered pursuant to Section 5.01, contributed greater than ten percent (10%) of the Borrower’s Consolidated EBITDA for such period, (ii) which contributed greater than ten percent (10%) of the Borrower’s Consolidated Total Assets as of such date or (iii) which owns, directly or indirectly, any Equity Interests of any Subsidiary that satisfies the criteria set forth in either clause (i) or clause (ii) above; provided that, if at any time the aggregate amount of the EBITDA or consolidated total assets of all Subsidiaries that are not Material Subsidiaries exceeds ten percent (10%) of the Borrower’s Consolidated EBITDA for any such period or ten percent (10%) of the Borrower’s Consolidated Total Assets as of the end of any such fiscal quarter, the Borrower (or, in the event the Borrower has failed to do so within ten (10) days after delivery of Financials for such fiscal quarter pursuant to Sections 5.01(a) or 5.01(b), the Administrative Agent) shall within ten (10) days after delivery of Financials for such fiscal quarter pursuant to Sections 5.01(a) or 5.01(b) designate sufficient Subsidiaries as “Material Subsidiaries” to eliminate such excess, and such designated Subsidiaries shall for all purposes of this Agreement constitute Material Subsidiaries.

“Maturity Date” means February 8, 2017.

“Minimum Liquidity End Date” means (i) for purposes of Section 6.12(c)(i), the date on which the Borrower has delivered a notice to the Administrative Agent certifying that all Indebtedness due under the 2014 Bonds has been paid in full or Refinanced in whole (other than pursuant to a Restricted Refinancing) and (ii) for purposes of Section 6.12(c)(ii), the date on which the Borrower has delivered a notice to the Administrative Agent certifying that all Indebtedness due under the 2015 Bonds has been paid in full or Refinanced in whole (other than pursuant to a Restricted Refinancing).

“Moody’s” means Moody’s Investors Service, Inc.

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“Net Cash Proceeds” means, with respect to any event:

(a)            the cash proceeds received in respect of such event including:

(i)            any cash received in respect of any non-cash proceeds (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but excluding any interest payments), but only as and when received;

(ii)           in the case of a casualty, insurance proceeds; and

(iii)          in the case of a condemnation or similar event, condemnation awards and similar payments;

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net of

(b)            the sum of:

(i)            all reasonable fees and out-of-pocket expenses paid to third parties in connection with such event;

(ii)           in the case of a sale, transfer or other disposition of an asset, the amount of all payments required to be made as a result of such event to repay Indebtedness (other than Loans) secured by such asset or otherwise subject to mandatory prepayment as a result of such event; and

(iii)          the amount of all taxes paid (or reasonably estimated to be payable) and the amount of any reserves established to fund contingent liabilities reasonably estimated to be payable, in each case during the year that such event occurred or the next succeeding year and that are directly attributable to such event (as determined reasonably and in good faith by a Financial Officer).

“Obligations” means all unpaid principal of and accrued and unpaid interest on the Loans, all LC Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations and indebtedness (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), obligations and liabilities of any of the Borrower and its Subsidiaries to any of the Lenders, the Administrative Agent, the Issuing Bank or any indemnified party, individually or collectively, existing on the Effective Date or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under this Credit Agreement or any of the other Loan Documents or in respect of any of the Loans made or reimbursement or other obligations incurred or any of the Letters of Credit or other instruments at any time evidencing any thereof.

“Other Taxes” means any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

“Parent” means, with respect to any Lender, any Person as to which such Lender is, directly or indirectly, a subsidiary.

“Participant” has the meaning set forth in Section 9.04.

“Participant Register” has the meaning assigned to such term in Section 9.04(c).

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

“Permitted Acquisition” means any acquisition (whether by purchase, merger, consolidation or otherwise, but excluding in any event a Hostile Acquisition) or series of related acquisitions by the Borrower or any Subsidiary of (i) all or substantially all the assets of or (ii) all or substantially all the Equity Interests in, a Person or division or line of business of a Person, if, at the time of and immediately after giving effect thereto, (a) no Default has occurred and is continuing or would arise after giving effect thereto, (b) such Person or division or line of business is engaged in the same or a similar line of business as the Borrower and the Subsidiaries or business reasonably related thereto, (c) all actions required to be taken with respect to such acquired or newly formed Subsidiary under Section 5.09 shall have been taken, (d) the Borrower and the Subsidiaries are (i) in compliance with the covenant contained in Section 6.12(b) as of the last day of the most recently completed fiscal quarter, and (ii) in compliance with the covenants contained in Section 6.12(a) and (c) on a pro forma basis reasonably acceptable to the Administrative Agent after giving effect to such acquisition (but without giving effect to any synergies or cost savings), with such covenants under this clause (ii) recomputed as of the last day of the most recently ended fiscal quarter of the Borrower for which Financials are available, as if such acquisition (and any related incurrence or repayment of Indebtedness, with any new Indebtedness being deemed to be amortized over the applicable testing period in accordance with its terms) had occurred on the first day of each relevant period for testing such compliance and, if the aggregate consideration paid in respect of such acquisition exceeds $25,000,000, the Borrower shall have delivered to the Administrative Agent a certificate of a Financial Officer of the Borrower to such effect, together with all relevant financial information, statements and projections reasonably requested by the Administrative Agent  and (e) in the case of an acquisition or merger involving the Borrower or a Subsidiary, the Borrower or such Subsidiary is the surviving entity of such merger and/or consolidation.

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“Permitted Encumbrances” means:

(a) Liens imposed by law for taxes, assessments or government charges or claims that are not yet due or are being contested in compliance with Section 5.04;

(b) landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law or customary reservations or restrictions of title, in each case, arising in the ordinary course of business and securing obligations that are not overdue by more than thirty (30) days or are being contested in compliance with Section 5.04;

(c) Liens or deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;

(d) Liens or deposits to secure the performance of bids, trade contracts, leases, statutory or regulatory obligations, surety and appeal bonds, performance bonds, bids, leases, government contracts, trade contracts and other obligations of a like nature, in each case in the ordinary course of business;

(e) judgment Liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII;

(f) non-exclusive licenses (with respect to intellectual property and other property), leases or subleases granted to third parties in the ordinary course of business which do not interfere in any material respect with the ordinary conduct of the business of the Borrower or any of its Subsidiaries;

(g) exclusive licenses (with respect to intellectual property and other property) granted to third parties in the ordinary course of business of the Borrower or any of its Subsidiaries consistent with past practice that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower or any Subsidiary;

(h)easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower or any Subsidiary;

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(i) any interest or title of a lessor or sublessor or lessee or sublessee under any lease entered into by the Borrower or any of its Subsidiaries in the ordinary course of business;

(j) Liens arising from precautionary filings of UCC financing statements relating solely to leases and other transactions entered into in the ordinary course of business;

(k) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation or exportation of goods in the ordinary course of business;

(l) Liens arising with respect to repurchase agreements and reverse repurchase agreements permitted under Section 6.04, provided that such Liens do not extend to any assets other than those that are the subject of such repurchase agreement or reverse repurchase agreement;

(m) Liens in favor of a collection bank on items in the course of collection (and the documents related thereto) arising in the ordinary course of business of the Borrower and the Subsidiaries under Article IV of the UCC; and

(n) any zoning or similar law or right reserved to or vested in any Government Authority to control or regulate the use of any real property;

provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.

“Permitted Investments” means:

(a)  direct obligations of, or obligations, the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;

(b)  investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s;

(c)  investments in certificates of deposit, banker’s acceptances, time deposits and overnight bank deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000;

(d)  fully collateralized repurchase agreements with a term of not more than thirty (30) days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above;

(e)  money market funds that (i) comply with the criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000;

 (f)  securities, with average maturities of 12 months or less from the date of acquisition, issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory that are rated AA by S&P and Aa by Moody’s; and

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(g)  instruments equivalent to those referred to in clauses (a) through (f) above denominated in Canadian dollars comparable in credit quality and tenor to those referred to above and customarily used by corporation for cash purposes in Canada to the extent reasonably required in connection with any business conducted by any Subsidiary organized in such jurisdiction.

“Permitted Safeguard Distributor Transaction” means (i) the acquisition (whether by purchase, merger, consolidation or otherwise) or series of related acquisitions by the Borrower or any of its Subsidiaries of (a) all or substantially all of the assets of or (b) all or substantially all of the Equity Interests in, a Person or division or line of business of a Person engaged in the sale or distribution of the Safeguard services and product line of the Borrower and its Subsidiaries (or any competitor services or product lines thereto), if, at the time of and immediately after giving effect thereto, (w) no Default has occurred and is continuing or would arise after giving effect thereto, (x) in the case of any such acquisition or merger involving the Borrower or a Subsidiary, the Borrower or such Subsidiary is the surviving entity of such merger and/or consolidation, (y) the aggregate consideration paid in respect of such acquisition, when taken together with the aggregate consideration paid in respect of all other Permitted Safeguard Acquisition Transactions does not exceed $20,000,000 in any fiscal year of the Borrower and (z) all of the assets (other than de minimis immaterial assets and any assets related to customer lists) acquired pursuant to any such acquisition or all of the equity of an entity holding such assets shall have been sold, transferred, leased or otherwise disposed of pursuant to clause (ii) below on or prior to the 12-month anniversary of such acquisition (each a “Permitted Safeguard Acquisition Transaction”), and (ii) the sale, transfer, lease or other disposition (in one transaction or in any series of related transactions) for Fair Market Value of any assets acquired pursuant to a Permitted Safeguard Acquisition Transaction or the equity of an entity holding such assets, the consideration for which may be cash, installment payments settled through future commissions or otherwise as determined by the Borrower in its commercially reasonable judgment acting in good faith (“Permitted Safeguard Sale Consideration”).

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Pledge Subsidiary” means (i) each Domestic Subsidiary which is a Material Subsidiary and (ii) each First Tier Foreign Subsidiary which is a Material Subsidiary.

“Post-Closing Matters Side Letter” means that certain Post Closing Matters Side Letter, dated as of the date hereof between the Borrower and the Administrative Agent, as the same may be amended, restated or otherwise modified from time to time.

“Prime Rate” means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal office in New York City; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

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“Pro Forma Basis” means, with respect to any event, that the Borrower is in compliance on a pro forma basis with the applicable covenant, calculation or requirement herein recomputed as if the event with respect to which compliance on a Pro Forma Basis is being tested had occurred on the first day of the four fiscal quarter period most recently ended on or prior to such date for which Financials have been delivered pursuant to Section 5.01.

“Refinance” means in respect of any security or Indebtedness, to refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue a security or Indebtedness in exchange or replacement for, such security or Indebtedness in whole or in part. “Refinanced” and “Refinancing” shall have correlative meanings.

“Register” has the meaning set forth in Section 9.04.

“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.

“Required Lenders” means, at any time, Lenders having Revolving Credit Exposures and unused Commitments representing more than 50% of the sum of the total Revolving Credit Exposures and unused Commitments at such time.

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in the Borrower or any Subsidiary or any option, warrant or other right to acquire any such Equity Interests in the Borrower or any Subsidiary; provided that no such dividend, distribution or payment certified by the Borrower to the Administrative Agent in writing as having a bona fide purpose directly related to effecting any disposition permitted under Section 6.03 or any Permitted Acquisition (as determined by the Administrative Agent in its reasonable discretion) shall constitute a Restricted Payment.

“Restricted Refinancing” means, with respect to the 2014 Bonds and the 2015 Bonds, and any Refinancing thereof, as applicable, any Refinancing (other than pursuant to the incurrence of Loans hereunder) by the Borrower or any of its Subsidiaries of all or any portion of the Indebtedness evidenced pursuant to the 2014 Bonds or 2015 Bonds, as applicable, in each case that creates Indebtedness with (A) a Weighted Average Life to Maturity that is less than the Weighted Average Life to Maturity of the Indebtedness being Refinanced (assuming such Indebtedness being Refinanced shall have a final maturity date on the date that is ninety-one (91) days after the Maturity Date)  or (B) matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is ninety-one (91) days after the Maturity Date.

“Revolving Credit Exposure” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Revolving Loans and its LC Exposure and Swingline Exposure at such time.

“Revolving Loan” means a Loan made pursuant to Section 2.01.

“S&P” means Standard & Poor’s.

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“Sale and Leaseback Transaction” means any sale or other transfer of any property or asset by any Person with the intent to lease such property or asset as lessee.

“SEC” means the United States Securities and Exchange Commission.

“Secured Obligations” means all Obligations, together with all Swap Obligations and Banking Services Obligations owing to one or more Lenders or their respective Affiliates.

“Secured Parties” means the holders of the Secured Obligations from time to time and shall include (i) each Lender and the Issuing Bank in respect of its Loans and LC Exposure respectively, (ii) the Administrative Agent, the Issuing Bank and the Lenders in respect of all other present and future obligations and liabilities of the Borrower and each Subsidiary of every type and description arising under or in connection with this Agreement or any other Loan Document, (iii) each Lender and affiliate of such Lender in respect of Swap Agreements and Banking Services Agreements entered into with such Person by the Borrower or any Subsidiary, (iv) each indemnified party under Section 9.03 in respect of the obligations and liabilities of the Borrower to such Person hereunder and under the other Loan Documents, and (v) their respective successors and (in the case of a Lender, permitted) transferees and assigns.

“Security Agreement” means that certain Pledge and Security Agreement (including any and all supplements thereto), dated as of the date hereof, between the Loan Parties and the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, and any other pledge or security agreement entered into, after the date of this Agreement by any other Loan Party (as required by this Agreement or any other Loan Document), or any other Person, as the same may be amended, restated or otherwise modified from time to time.

“Solvent” means, in reference to the Borrower, (i) the fair value of the assets of the Borrower as a going concern, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise; (ii) the present fair saleable value of the property of the Borrower as a going concern will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) the Borrower will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) the Borrower will not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted after the Effective Date.

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board).  Such reserve percentages shall include those imposed pursuant to such Regulation D of the Board.  Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D of the Board or any comparable regulation.  The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

“Subordinated Indebtedness” means any Indebtedness of the Borrower or any Subsidiary the payment of which is subordinated pursuant to Subordinated Indebtedness Documents to payment of the obligations under the Loan Documents.

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“Subordinated Indebtedness Documents” means any document, agreement or instrument evidencing any Subordinated Indebtedness or entered into in connection with any Subordinated Indebtedness.

“subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned or held.

“Subsidiary” means any subsidiary of the Borrower.

“Subsidiary Guarantor” means each Material Subsidiary (other than Affected Foreign Subsidiaries) that is party to the Subsidiary Guaranty.  The Subsidiary Guarantors on the Effective Date are identified as such in Schedule 3.01 hereto.

“Subsidiary Guaranty” means that certain Guaranty dated as of the Effective Date (including any and all supplements thereto) and executed by each Subsidiary Guarantor party thereto, and, in the case of any guaranty by a Foreign Subsidiary, any other guaranty agreements as are reasonably requested by the Administrative Agent and its counsel which would not cause the occurrence of a Deemed Dividend Problem, in each case as amended, restated, supplemented or otherwise modified from time to time.

“Swap Agreement” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.

“Swap Obligations” means any and all obligations of the Borrower or any Subsidiary, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any and all Swap Agreements permitted hereunder with a Lender or an Affiliate of a Lender, and (b) any and all cancellations, buy backs, reversals, terminations or assignments of any such Swap Agreement transaction.

“Swingline Exposure” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time.  The Swingline Exposure of any Lender at any time shall be its Applicable Percentage of the total Swingline Exposure at such time.

“Swingline Lender” means JPMorgan Chase Bank, N.A., in its capacity as lender of Swingline Loans hereunder.

“Swingline Loan” means a Loan made pursuant to Section 2.05.

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“Syndication Agent” means Fifth Third Bank in its capacity as syndication agent for the credit facility evidenced by this Agreement.

“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.

“Transactions” means the execution, delivery and performance by the Loan Parties of this Agreement and the other Loan Documents, the borrowing of Loans and other credit extensions, the use of the proceeds thereof and the issuance of Letters of Credit hereunder.

“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York or any other state the laws of which are required to be applied in connection with the issue of perfection of security interests.

“Unliquidated Obligations” means, at any time, any Secured Obligations (or portion thereof) that are contingent in nature or unliquidated at such time, including any Secured Obligation that is: (i) an obligation to reimburse a bank for drawings not yet made under a letter of credit issued by it; (ii) any other obligation (including any guarantee) that is contingent in nature at such time; or (iii) an obligation to provide collateral to secure any of the foregoing types of obligations.

“Unrestricted Cash” means the aggregate unrestricted cash and Permitted Investments of the Borrower and the Subsidiary Guarantors (but excluding any cash pledged to third parties) in respect of which the Administrative Agent shall have a first priority (subject solely to Permitted Encumbrances in favor of depository banks and to the Administrative Agent’s Lien created pursuant to any Loan Document) perfected security interest.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing (a) the then outstanding aggregate principal amount of such Indebtedness into (b) the sum of the total of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal, including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) which will elapse between such date the making of such payment.

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

SECTION 1.02.  Classification of Loans and Borrowings.  For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a “Eurodollar Revolving Loan”).  Borrowings also may be classified and referred to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurodollar Borrowing”) or by Class and Type (e.g., a “Eurodollar Revolving Borrowing”).

SECTION 1.03.  Terms Generally.  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  The word “law” shall be construed as referring to all statutes, rules, regulations, codes and other laws (including official rulings and interpretations thereunder having the force of law or with which affected Persons customarily comply), and all judgments, orders and decrees, of all Governmental Authorities.  Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth herein), (b) any definition of or reference to any statute, rule or regulation shall be construed as referring thereto as from time to time amended, supplemented or otherwise modified (including by succession of comparable successor laws), (c) any reference herein to any Person shall be construed to include such Person’s successors and assigns (subject to any restrictions on assignment set forth herein) and, in the case of any Governmental Authority, any other Governmental Authority that shall have succeeded to any or all functions thereof, (d) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (e) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (f) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

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SECTION 1.04.  Accounting Terms; GAAP.  Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision  amended in accordance herewith.  Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to any election under Accounting Standards Codification 825-10-25 (previously referred to as Statement of Financial Accounting Standards 159) (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any Subsidiary at “fair value”, as defined therein.

SECTION 1.05.  Status of Obligations.  In the event that the Borrower or any other Loan Party shall at any time issue or have outstanding any other Subordinated Indebtedness, the Borrower shall take or cause such other Loan Party to take all such actions as shall be necessary to cause the Secured Obligations to constitute senior indebtedness (however denominated) in respect of such Subordinated Indebtedness and to enable the Administrative Agent and the Lenders to have and exercise any payment blockage or other remedies available or potentially available to holders of senior indebtedness under the terms of such Subordinated Indebtedness.  Without limiting the foregoing, the Obligations are hereby designated as “senior indebtedness” and as “designated senior indebtedness” and words of similar import under and in respect of any indenture or other agreement or instrument under which such other Subordinated Indebtedness is outstanding and are further given all such other designations as shall be required under the terms of any such Subordinated Indebtedness in order that the Lenders may have and exercise any payment blockage or other remedies available or potentially available to holders of senior indebtedness under the terms of such Subordinated Indebtedness.

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ARTICLE II

The Credits

SECTION 2.01.  Commitments.  Subject to the terms and conditions set forth herein, each Lender agrees to make Revolving Loans to the Borrower in Dollars from time to time during the Availability Period in an aggregate principal amount that will not result in (a) such Lender’s Revolving Credit Exposure exceeding such Lender’s Commitment or (b) the sum of the total Revolving Credit Exposures exceeding the Aggregate Commitment.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans.

SECTION 2.02.  Loans and Borrowings.  (a)  Each Revolving Loan (other than a Swingline Loan) shall be made as part of a Borrowing consisting of Revolving Loans made by the Lenders ratably in accordance with their respective Commitments.  The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.  Any Swingline Loan shall be made in accordance with the procedures set forth in Section 2.05.

(b) Subject to Section 2.14, each Revolving Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request in accordance herewith.  Each Swingline Loan shall be an ABR Loan.  Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan (and in the case of an Affiliate, the provisions of Sections 2.14, 2.15, 2.16 and 2.17 shall apply to such Affiliate to the same extent as to such Lender); provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.

(c) At the commencement of each Interest Period for any Eurodollar Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $500,000 and not less than $500,000.  At the time that each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $500,000  and not less than $500,000; provided that an ABR Revolving Borrowing may be in an aggregate amount that is equal to the entire unused balance of the Aggregate Commitment or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.06(e).  Each Swingline Loan shall be in an amount that is an integral multiple of $100,000 and not less than $500,000.  Borrowings of more than one Type and Class may be outstanding at the same time; provided that there shall not at any time be more than a total of eight (8) Eurodollar Revolving Borrowings outstanding.

(d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.

SECTION 2.03.  Requests for Revolving Borrowings.  To request a Revolving Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 10:00 a.m., Chicago time, three (3) Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 10:00 a.m., Chicago time, on the date of the proposed Borrowing; provided that any such notice of an ABR Revolving Borrowing to finance the reimbursement of an LC Disbursement as contemplated by Section 2.06(e) may be given not later than 9:00 a.m., Chicago time, on the date of the proposed Borrowing.  Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent and signed by the Borrower.  Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02:

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(i)           the aggregate amount of the requested Borrowing;

(ii)          the date of such Borrowing, which shall be a Business Day;

(iii)         whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;

(iv)         in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”; and

(v)          the location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.07.

If no election as to the Type of Revolving Borrowing is specified, then the requested Revolving Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with respect to any requested Eurodollar Revolving Borrowing, then the Borrower shall be deemed to have selected an Interest Period of seven days’ duration.  Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

SECTION 2.04.  Intentionally Omitted.

SECTION 2.05.  Swingline Loans.  (a)  Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans in Dollars to the Borrower from time to time during the Availability Period, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding $15,000,000 or (ii) the sum of the total Revolving Credit Exposures exceeding the Aggregate Commitment; provided that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.

(b)To request a Swingline Loan, the Borrower shall notify the Administrative Agent of such request by telephone (confirmed by telecopy), not later than 11:00 a.m., Chicago time, on the day of a proposed Swingline Loan.  Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan.  The Administrative Agent will promptly advise the Swingline Lender of any such notice received from the Borrower.  The Swingline Lender shall make each Swingline Loan available to the Borrower by means of a credit to an account designated by the Borrower (or, in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.06(e), by remittance to the Issuing Bank) by 2:00 p.m., Chicago time, on the requested date of such Swingline Loan.

(c)The Swingline Lender may by written notice given to the Administrative Agent not later than 9:00 a.m., Chicago time, on any Business Day require the Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding.  Such notice shall specify the aggregate amount of Swingline Loans in which Lenders will participate.  Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each  Lender, specifying in such notice such Lender’s Applicable Percentage of such Swingline Loan or Loans.  Each Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Swingline Lender, such Lender’s Applicable Percentage of such Swingline Loan or Loans.  Each Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.  Each Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Lenders.  The Administrative Agent shall notify the Borrower of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender.  Any amounts received by the Swingline Lender from the Borrower (or other party on behalf of the Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear; provided that any such payment so remitted shall be repaid to the Swingline Lender or to the Administrative Agent, as applicable, if and to the extent such payment is required to be refunded to the Borrower for any reason.  The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrower of any default in the payment thereof.

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SECTION 2.06.  Letters of Credit.  (a) General.  Subject to the terms and conditions set forth herein, the Borrower may request the issuance of Letters of Credit denominated in Dollars for its own account, in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from time to time during the Availability Period.  In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.  To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with clause (c) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit.  If requested by the Issuing Bank, the Borrower also shall submit a letter of credit application on the Issuing Bank’s standard form in connection with any request for a Letter of Credit.  A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the amount of the LC Exposure shall not exceed $20,000,000 and (ii) the sum of the total Revolving Credit Exposures shall not exceed the Aggregate Commitment.

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(c) Expiration Date.  Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (ii) the date that is five (5) Business Days prior to the Maturity Date; provided that any Letter of Credit may expire on the date that is one year after the Maturity Date if the Borrower has deposited into the LC Collateral Account (as defined in clause (j) of this Section) cash collateral in an amount equal to 105% of the LC Exposure plus any accrued and unpaid interest and fees thereon as of the Maturity Date, in accordance with the terms set forth in clause (j) of this Section.

(d) Participations.  By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit.  In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the date due as provided in clause (e) of this Section, or of any reimbursement payment required to be refunded to the Borrower for any reason.  Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.

(e) Reimbursement.  If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent in Dollars the amount equal to such LC Disbursement, calculated as of the date the Issuing Bank made such LC Disbursement not later than 11:00 a.m., Chicago time, on the date that such LC Disbursement is made, if the Borrower shall have received notice of such LC Disbursement prior to 9:00 a.m., Chicago time, on such date, or, if such notice has not been received by the Borrower prior to such time on such date, then not later than 11:00 a.m., Chicago time, on the Business Day immediately following the day that the Borrower receives such notice, provided that, if such LC Disbursement is not less than $1,000,000, the Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 or 2.05 that such payment be financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount of such LC Disbursement and, to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline Loan.  If the Borrower fails to make such payment when due, the Administrative Agent shall notify each Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such Lender’s Applicable Percentage thereof.  Promptly following receipt of such notice, each Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the Borrower, in the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from the Lenders.  Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that Lenders have made payments pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their interests may appear.  Any payment made by a Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC Disbursement.

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(f) Obligations Absolute.  The Borrower’s obligation to reimburse LC Disbursements as provided in clause (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder.  Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof.  The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination.  In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

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(g) Disbursement Procedures.  The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit.  The Issuing Bank shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed by telecopy) of such demand for payment and whether the Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to any such LC Disbursement.

(h) Interim Interest.  If the Issuing Bank shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to ABR Revolving Loans; provided that, if the Borrower fails to reimburse such LC Disbursement when due pursuant to clause (e) of this Section, then Section 2.13(c) shall apply.  Interest accrued pursuant to this paragraph shall be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to clause (e) of this Section to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment.

(i) Replacement of Issuing Bank.  The Issuing Bank may be replaced at any time by written agreement among the Borrower, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank.  The Administrative Agent shall notify the Lenders of any such replacement of the Issuing Bank.  At the time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.12(b).  From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require.  After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit then outstanding and issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.

(j) Cash Collateralization.  If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Lenders with LC Exposure representing greater than 50% of the total LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Lenders (the “LC Collateral Account”), an amount in cash equal to 105% of the amount of the LC Exposure as of such date plus any accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in clause (h) or (i) of Article VII.  Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the Secured Obligations.  The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account and the Borrower hereby grants the Administrative Agent a security interest in the LC Collateral Account.  Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest.  Interest or profits, if any, on such investments shall accumulate in such account.  Moneys in such account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Lenders with LC Exposure  representing greater than 50% of the total LC Exposure), be applied to satisfy other Secured Obligations.  If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived.

(k)  Existing Letters of Credit.  Certain letters of credit issued for the account of the Borrower by JPMorgan Chase Bank, N.A., and outstanding on the Effective Date are identified on Schedule 2.06 (the “Existing Letters of Credit”).  As of the Effective Date, (i) the Existing Letters of Credit shall be deemed to be Letters of Credit issued pursuant to and in compliance with this Section 2.06, (ii) the undrawn amount of the Existing Letters of Credit and the unreimbursed amount of LC Disbursements with respect to the Existing Letters of Credit shall be included in the calculation of LC Exposure and (iii) the provisions of this Section 2.06 and Section 2.12(b) shall apply to the Existing Letters of Credit, and the Borrower and the Lenders hereby expressly acknowledge their respective obligations hereunder with respect to the Existing Letters of Credit.

SECTION 2.07.  Funding of Borrowings.  (a)  Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 11:00 a.m., Chicago time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders in an amount equal to such Lender’s Applicable Percentage of the requested Borrowing; provided that Swingline Loans shall be made as provided in Section 2.05.  The Administrative Agent

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will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an account of the Borrower designated by the Borrower in the applicable Borrowing Request; provided that ABR Revolving Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.06(e) shall be remitted by the Administrative Agent to the Issuing Bank.

(b) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with clause (a) of this Section and may, in reliance upon such assumption, make available to the Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrower, the interest rate applicable to ABR Loans; provided, that, to the extent the Borrower pays such interest, the Borrower shall not be required to pay any additional interest thereon it would otherwise be required to pay pursuant to Section 2.13.  If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.

SECTION 2.08.  Interest Elections.  (a)  Each Revolving Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Revolving Borrowing, shall have an initial Interest Period as specified in such Borrowing Request.  Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Revolving Borrowing, may elect Interest Periods therefor, all as provided in this Section.  The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.  This Section shall not apply to Swingline Borrowings, which may not be converted or continued.

(b) To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Revolving Borrowing of the Type resulting from such election to be made on the effective date of such election.  Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent and signed by the Borrower.  Notwithstanding any contrary provision herein, this Section shall not be construed to permit the Borrower to elect an Interest Period for Eurodollar Loans that does not comply with Section 2.02(d).

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(c) Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:

(i)           the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

(ii)          the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

(iii)         whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and

(iv)         if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which Interest Period shall be a period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of seven days’ duration.

(d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

(e) If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Revolving Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing.  Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (i) no outstanding Revolving Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Revolving Borrowing shall be converted to a Eurodollar Borrowing having an interest period of seven days’ duration at the end of the Interest Period applicable thereto.

SECTION 2.09.  Termination and Reduction of Commitments.  (a)  Unless previously terminated, the Commitments shall terminate on the Maturity Date.

(b) The Borrower may at any time terminate, or from time to time reduce, the Commitments; provided that (i) each reduction of the Commitments shall be in an amount that is an integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 2.11, the sum of the Revolving Credit Exposures would exceed the Aggregate Commitment.

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(c) The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Commitments under clause (b) of this Section at least three (3) Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof.  Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof.  Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that a notice of termination of the Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied.  Any termination or reduction of the Commitments shall be permanent.  Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their respective Commitments.

SECTION 2.10.  Repayment of Loans; Evidence of Debt.  (a)The Borrower hereby unconditionally promises to pay (i) to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Revolving Loan on the Maturity Date and (ii) to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the earlier of the Maturity Date and the first date after such Swingline Loan is made that is the 15th or last day of a calendar month and is at least two (2) Business Days after such Swingline Loan is made; provided that on each date that a Revolving Borrowing is made, the Borrower shall repay all Swingline Loans then outstanding.

(b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

(c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

(d) The entries made in the accounts maintained pursuant to clause (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.

(e) Any Lender may request that Loans made by it be evidenced by a promissory note.  In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent.  Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).

SECTION 2.11.  Prepayment of Loans.  (a) Optional Prepayments.  The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in accordance with the provisions of this Section 2.11.  The Borrower shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Revolving Borrowing, not later than 11:00 a.m., Chicago time, three (3) Business Days before the date of prepayment, (ii) in the case of prepayment of an ABR Revolving Borrowing, not later than 11:00 a.m., Chicago time, one (1) Business Day before the date of prepayment or (iii) in the case of prepayment of a Swingline Loan, not later than 11:00 a.m., Chicago time, on the date of prepayment.  Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; provided that, if a notice of

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prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.09, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.09.  Promptly following receipt of any such notice relating to a Revolving Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof.  Each partial prepayment of any Revolving Borrowing shall be in an amount that would be permitted in the case of an advance of a Revolving Borrowing of the same Type as provided in Section 2.02.  Each prepayment of a Revolving Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing.  Prepayments shall be accompanied by (i) accrued interest to the extent required by Section 2.13 and (ii) break funding payments pursuant to Section 2.16.

(b)  Mandatory Prepayment.  If at any time and for any reason the Revolving Credit Exposure exceeds the Aggregate Commitment at such time, then the Borrower shall immediately prepay Borrowings in an amount equal to such excess.

SECTION 2.12.  Fees.  (a)The Borrower agrees to pay to the Administrative Agent for the account of each Lender a commitment fee, which shall accrue at the Applicable Rate on the daily unused amount of the Commitment of such Lender during the period from and including the Effective Date to but excluding the date on which such Commitment terminates; provided, that for the purpose of calculating the commitment fee payable hereunder by the Borrower, such Lender’s Applicable Percentage of the total Swingline Exposure at such time shall not be considered as part of the used portion of its Commitment.  Accrued commitment fees shall be payable quarterly in arrears on the last day of March, June, September and December of each year and on the date on which the Commitments terminate, commencing on the first such date to occur after the date hereof.  All commitment fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(b)The Borrower agrees to pay (i) to the Administrative Agent for the account of each Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at the same Applicable Rate used to determine the interest rate applicable to Eurodollar Revolving Loans on the average daily amount of such Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date on which such Lender’s Commitment terminates and the date on which such Lender ceases to have any LC Exposure and (ii) to the Issuing Bank for its own account a fronting fee, which shall accrue at the rate of 0.125% per annum on the average daily amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) attributable to Letters of Credit issued by the Issuing Bank during the period from and including the Effective Date to but excluding the later of the date of termination of the Commitments and the date on which there ceases to be any LC Exposure, as well as the Issuing Bank’s standard fees and commissions with respect to the issuance, amendment, cancellation, negotiation, transfer, presentment, renewal or extension of any Letter of Credit or processing of drawings thereunder.  Unless otherwise specified above, accrued participation fees and fronting fees shall be payable quarterly in arrears on the last day of March, June, September and December (commencing on the first such date to occur after the Effective Date); provided that all such fees shall be payable on the date on which the Commitments terminate and any such fees accruing after the date on which the Commitments terminate shall be payable on demand.  Any other fees payable to the Issuing Bank pursuant to this paragraph shall be payable within ten (10) days after demand.  All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(c)The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrower and the Administrative Agent.

(d)All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for distribution, in the case of commitment fees and participation fees, to the Lenders.  Fees paid shall not be refundable under any circumstances.

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SECTION 2.13.  Interest.  (a)  The Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear interest at the Alternate Base Rate plus the Applicable Rate.

(b) The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.

(c) Notwithstanding the foregoing, during the occurrence and continuance of an Event of Default, the Administrative Agent or the Required Lenders may, at their option, by notice to the Borrower (which notice may be revoked at the option of the Required Lenders notwithstanding any provision of Section 9.02 requiring the consent of “each Lender directly affected thereby” for reductions in interest rates), declare that (i) all Loans shall bear interest at 2% plus the rate otherwise applicable to such Loans as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount outstanding hereunder, such amount shall accrue at 2% plus the rate applicable to such fee or other obligation as provided hereunder.

(d) Accrued interest on each Revolving Loan shall be payable in arrears on each Interest Payment Date for such Revolving Loan and upon termination of the Commitments; provided that (i) interest accrued pursuant to clause (c) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Revolving Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.

(e) All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day).  The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

SECTION 2.14.  Alternate Rate of Interest.  If prior to the commencement of any Interest Period for a Eurodollar Borrowing:

(a) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period; or

(b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Revolving Borrowing to, or continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be ineffective and any such Eurodollar Borrowing shall be repaid on the last day of the then current Interest Period applicable thereto and (ii) if any Borrowing Request requests a Eurodollar Revolving Borrowing, such Borrowing shall be made as an ABR Borrowing.

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SECTION 2.15.  Increased Costs.  (a)  If any Change in Law shall:

(i)           impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank;

(ii)          impose on any Lender or the Issuing Bank or the London interbank market any other condition, cost or expense affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit or participation therein; or

(iii)         subject the Administrative Agent, any Lender, the Issuing Bank or any other recipient of any payment hereunder to any Taxes (other than (A) Indemnified Taxes, (B) Excluded Taxes and (C) Other Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;

and the result of any of the foregoing shall be to increase the cost to such Person of making or maintaining any Loan or of maintaining its obligation to make any such Loan or to increase the cost to such Person of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Person hereunder, whether of principal, interest or otherwise, then the Borrower will pay to such Person, such additional amount or amounts as will compensate such Person for such additional costs incurred or reduction suffered.

(b) If any Lender or the Issuing Bank determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such reduction suffered.

(c) A certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified in clause (a) or (b) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof.

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(d) Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 180 days prior to the date that such Lender or the Issuing Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the Issuing Bank’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

SECTION 2.16.  Break Funding Payments.  In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default or as a result of any prepayment pursuant to Section 2.11), (b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.11 and is revoked in accordance therewith) or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.19, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event.  Such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for deposits in Dollars of a comparable amount and period from other banks in the eurodollar market.  A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.

SECTION 2.17.  Taxes.  (a)  Any and all payments by or on account of any obligation of the Borrower hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

(b) In addition, the Borrower shall pay any Other Taxes imposed on or incurred by the Administrative Agent, a Lender or the Issuing Bank to the relevant Governmental Authority in accordance with applicable law.

(c) The Borrower shall indemnify the Administrative Agent, each Lender and the Issuing Bank, within ten (10) days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or the Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive absent manifest error.

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(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(e) Unless not legally entitled to do so:

(i) any Lender, if requested by the Borrower or the Administrative Agent, shall deliver such forms or other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements;

(ii) any Foreign Lender that is entitled to an exemption from or reduction of any Tax with respect to payments hereunder or under any other Loan Document shall deliver to the Borrower and the Administrative Agent, on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter, as may be necessary in the determination of the Borrower or the Administrative Agent, each in the reasonable exercise of its discretion), such properly completed and duly executed forms or other documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate of withholding;

(iii) without limiting the generality of the foregoing, in the event that the Borrower is resident for tax purposes in the United States, any Foreign Lender shall deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter, as may be necessary in the determination of the Borrower or the Administrative Agent, each in the reasonable exercise of its discretion), whichever of the following is applicable:

(A) properly completed and duly executed copies of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States is a party, or

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(B) properly completed and duly executed copies of Internal Revenue Service Form W-8ECI, or

(C) in the case of a Foreign Lender claiming the benefits of the exemption for “portfolio interest” under Section 881(c) of the Code, (A) a duly executed certificate to the effect that such Foreign Lender is not (i) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (ii) a ten-percent shareholder (within the meaning of Section 881(c)(3)(B) of the Code) of the Borrower or (iii) a controlled foreign corporation described in Section 881(c)(3)(C) of the Code and (B) properly completed and duly executed copies of Internal Revenue Service Form W-8BEN,

(D) properly completed and duly executed copies of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in any Tax,in each case together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower and the Administrative Agent to determine the withholding or deduction required to be made, if any;

(iv) without limiting the generality of the foregoing, in the event that the Borrower is resident for tax purposes in the United States, any Foreign Lender that does not act or ceases to act for its own account with respect to any portion of any sums paid or payable to such Lender under any of the Loan Documents (for example, in the case of a typical participation by such Lender) shall deliver to the Administrative Agent and the Borrower (in such number of copies as shall be requested by the recipient), on or prior to the date such Foreign Lender becomes a Lender, or on such later date when such Foreign Lender ceases to act for its own account with respect to any portion of any such sums paid or payable, and from time to time thereafter, as may be necessary in the determination of the Borrower or the Administrative Agent (each in the reasonable exercise of its discretion):

(A) duly executed and properly completed copies of the forms and statements required to be provided by such Foreign Lender under clause (iii), above, to establish the portion of any such sums paid or payable with respect to which such Lender acts for its own account and may be entitled to an exemption from or a reduction of the applicable Tax, and

(B) duly executed and properly completed copies of Internal Revenue Service Form W-8IMY (or any successor forms) properly completed and duly executed by such Foreign Lender, together with any information, if any, such Foreign Lender chooses to transmit with such form, and any other certificate or statement of exemption required under the Internal Revenue Code or the regulations thereunder, to establish that such Foreign Lender is not acting for its own account with respect to a portion of any such sums payable to such Foreign Lender;

(v) without limiting the generality of the foregoing, in the event that the Borrower is resident for tax purposes in the United States, any Lender that is not a Foreign Lender and is not an exempt recipient (as defined in section 6049(b)(4) of the Code and the United States Treasury Regulations thereunder) shall deliver to the Borrower and the Administrative Agent (in such numbers of copies as shall be requested by the recipient) on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter as prescribed by applicable law or upon the reasonable request of the Borrower or the Administrative Agent), duly executed and properly completed copies of Internal Revenue Service Form W-9; and

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(vi) without limiting the generality of the foregoing, each Lender hereby agrees, from time to time after the initial delivery by such Lender of such forms, whenever a lapse in time or change in circumstances renders such forms, certificates or other evidence so delivered obsolete or inaccurate in any material respect, that such Lender shall promptly (1) deliver to the Administrative Agent and the Borrower two original copies of renewals, amendments or additional or successor forms, properly completed and duly executed by such Lender, together with any other certificate or statement of exemption required in order to confirm or establish that such Lender is entitled to an exemption from or reduction of any Tax with respect to payments to such Lender under the Loan Documents and, if applicable, that such Lender does not act for its own account with respect to any portion of such payment, or (2) notify the Administrative Agent and the Borrower of its inability to deliver any such forms, certificates or other evidence.

(f) If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent, at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent, such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this Section 2.17(f), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

(g) Each Lender shall severally indemnify the Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes or Other Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so), (ii) any Taxes attributable to such Lender's failure to comply with the provisions of Section 9.04(c) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this Section 2.17(g).

(h) If the Administrative Agent or a Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 2.17, it shall pay over such refund to the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 2.17 with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This Section shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its Taxes which it deems confidential) to the Borrower or any other Person.

SECTION 2.18.  Payments Generally; Allocations of Proceeds; Pro Rata Treatment; Sharing of Set-offs.

(a) The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to 11:00 a.m., Chicago time on the date when due, in immediately available funds, without set-off or

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counterclaim.  Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon.  All such payments shall be made to the Administrative Agent at its offices at 10 South Dearborn Street, 7th Floor, Chicago, Illinois 60603, except payments to be made directly to the Issuing Bank or Swingline Lender as expressly provided herein and except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto.  The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof.  If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension.  All payments hereunder shall be made in Dollars.

(b) Any proceeds of Collateral received by the Administrative Agent (i) not constituting a specific payment of principal, interest, fees or other sum payable under the Loan Documents (which shall be applied as specified by the Borrower) or (ii) after an Event of Default has occurred and is continuing and the Administrative Agent so elects or the Required Lenders so direct, such funds shall be applied ratably first, to pay any fees, indemnities, or expense reimbursements including amounts then due to the Administrative Agent and the Issuing Bank from the Borrower, second, to pay any fees or expense reimbursements then due to the Lenders from the Borrower, third, to pay interest then due and payable on the Loans ratably, fourth, to prepay principal on the Loans and unreimbursed LC Disbursements and any other amounts owing with respect to Banking Services Obligations and Swap Obligations ratably, fifth, to pay an amount to the Administrative Agent equal to one hundred five percent (105%) of the aggregate undrawn face amount of all outstanding Letters of Credit and the aggregate amount of any unpaid LC Disbursements, to be held as cash collateral for such Obligations, and sixth, to the payment of any other Secured Obligation due to the Administrative Agent or any Lender by the Borrower.  Notwithstanding anything to the contrary contained in this Agreement, unless so directed by the Borrower, or unless a Default is in existence, none of the Administrative Agent or any Lender shall apply any payment which it receives to any Eurodollar Loan of a Class, except (a) on the expiration date of the Interest Period applicable to any such Eurodollar Loan or (b) in the event, and only to the extent, that there are no outstanding ABR Loans of the same Class and, in any event, the Borrower shall pay the break funding payment required in accordance with Section 2.16.  The Administrative Agent and the Lenders shall have the continuing and exclusive right to apply and reverse and reapply any and all such proceeds and payments to any portion of the Secured Obligations.

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(c) At the election of the Administrative Agent, all payments of principal, interest, LC Disbursements, fees, premiums, reimbursable expenses (including, without limitation, all reimbursement for fees and expenses pursuant to Section 9.03), and other sums payable under the Loan Documents, may be paid from the proceeds of Borrowings made hereunder whether made following a request by the Borrower pursuant to Section 2.03 or a deemed request as provided in this Section or may be deducted from any deposit account of the Borrower maintained with the Administrative Agent.  The Borrower hereby irrevocably authorizes (i) the Administrative Agent to make a Borrowing for the purpose of paying each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the Loan Documents and agrees that all such amounts charged shall constitute Loans (including Swingline Loans) and that all such Borrowings shall be deemed to have been requested pursuant to Section 2.03, 2.04 or 2.05, as applicable and (ii) the Administrative Agent to charge any deposit account of the Borrower maintained with the Administrative Agent for each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the Loan Documents.

(d) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Revolving Loans or participations in LC Disbursements or Swingline Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Revolving Loans and participations in LC Disbursements and Swingline Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Revolving Loans and participations in LC Disbursements and Swingline Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Revolving Loans and participations in LC Disbursements and Swingline Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered,  such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements and Swingline Loans to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply).  The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

(e) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due.  In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

(f) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.05(c), 2.06(d) or (e), 2.07(b), 2.18(e) or 9.03(c), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), (i) apply any amounts thereafter received by the Administrative Agent for the account of such Lender and for the benefit of the Administrative Agent, the Swingline Lender or the Issuing Bank to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid and/or (ii) hold any such amounts in a segregated account as cash collateral for, and application to, any future funding obligations of such Lender under such Sections; in the case of each of (i) and (ii) above, in any order as determined by the Administrative Agent in its discretion.

SECTION 2.19.  Mitigation Obligations; Replacement of Lenders.  (a)  If (i) any Lender requests compensation under Section 2.15, or (ii) the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, or (iii) any Lender becomes a Defaulting Lender, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

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(b)If any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, or if any Lender becomes a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights and obligations under the Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent (and if a Commitment is being assigned, the Issuing Bank), which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17, such assignment will result in a reduction in such compensation or payments.  A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such  assignment and delegation cease to apply.

SECTION 2.20.  Expansion Option.  The Borrower may from time to time elect to increase the Commitments in minimum increments of $15,000,000 so long as after giving effect thereto, the aggregate amount of such increases does not exceed $75,000,000.  The Borrower may arrange for any such increase to be provided by one or more Lenders (each Lender so agreeing to an increase in its Commitment, an “Increasing Lender”), or by one or more new banks, financial institutions or other entities (each such new bank, financial institution or other entity, an “Augmenting Lender”), to increase their existing Commitments, or extend Commitments, as the case may be; provided that (i) each Augmenting Lender and Increasing Lender, shall be subject to the approval of the Borrower, the Administrative Agent and the Issuing Bank and (ii) (x) in the case of an Increasing Lender, the Borrower and such Increasing Lender execute an agreement substantially in the form of Exhibit C hereto, and (y) in the case of an Augmenting Lender, the Borrower and such Augmenting Lender execute an agreement substantially in the form of Exhibit D hereto.  No Lender shall have any obligation to provide any such increase and each Lender may refuse to provide such increase in its absolute and sole discretion. No consent of any Lender (other than the Lenders participating in the increase) shall be required for any increase in Commitments pursuant to this Section 2.20.  Increases and new Commitments created pursuant to this Section 2.20 shall become effective on the date agreed by the Borrower, the Administrative Agent and the relevant Increasing Lenders or Augmenting Lenders, and the Administrative Agent shall notify each Lender thereof.  Notwithstanding the foregoing, no increase in the Commitments (or in the Commitment of any Lender) shall become effective under this paragraph unless, (i) on the proposed date of the effectiveness of such increase, (A) the conditions set forth in clauses (a) and (b) of Section 4.02 shall be satisfied or waived by the Required Lenders and the Administrative Agent shall have received a certificate to that effect dated such date and executed by a Financial Officer of the Borrower and (B) the Borrower shall be in compliance (on a Pro Forma Basis reasonably acceptable to the Administrative Agent) with the covenants contained in Section 6.12 and (ii) the Administrative Agent shall have received documents consistent with those delivered on the Effective Date as to the corporate power and authority of the Borrower to borrow hereunder after giving effect to such increase.  On the effective date of any increase in the Commitments being made, (i) each relevant

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Increasing Lender and Augmenting Lender shall make available to the Administrative Agent such amounts in immediately available funds as the Administrative Agent shall determine, for the benefit of the other Lenders, as being required in order to cause, after giving effect to such increase and the use of such amounts to make payments to such other Lenders, each Lender’s portion of the outstanding Revolving Loans of all the Lenders to equal its Applicable Percentage of such outstanding Revolving Loans, and (ii) the Borrower shall be deemed to have repaid and reborrowed all outstanding Revolving Loans as of the date of any increase in the Commitments (with such reborrowing to consist of the Types of Revolving Loans, with related Interest Periods if applicable, specified in a notice delivered by the Borrower, in accordance with the requirements of Section 2.03).  The deemed payments made pursuant to clause (ii) of the immediately preceding sentence shall be accompanied by payment of all accrued interest on the amount prepaid and, in respect of each Eurodollar Loan, shall be subject to indemnification by the Borrower pursuant to the provisions of Section 2.16 if the deemed payment occurs other than on the last day of the related Interest Periods.

SECTION 2.21.  Defaulting Lenders.  Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

(a) fees shall cease to accrue on the unfunded portion of the Commitment of such Defaulting Lender pursuant to Section 2.12(a);

(b) the Commitment and Revolving Credit Exposure of such Defaulting Lender shall not be included in determining whether all Lenders or the Required Lenders have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to Section 9.02); provided that any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender which affects such Defaulting Lender differently than other affected Lenders shall require the consent of such Defaulting Lender;

(c) if any Swingline Exposure or LC Exposure exists at the time a Lender becomes a Defaulting Lender then:

(i)           all or any part of such Swingline Exposure and LC Exposure of such Defaulting Lender shall be reallocated among the non-Defaulting Lenders in accordance with their respective Applicable Percentages  but only to the extent (x) the sum of all non-Defaulting Lenders’ Revolving Credit Exposures plus such Defaulting Lender’s Swingline Exposure and LC Exposure does not exceed the total of all non-Defaulting Lenders’ Commitments and (y) the conditions set forth in Section 4.02 are satisfied at such time;

(ii)          if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall within one (1) Business Day following notice by the Administrative Agent (x) first, prepay such Swingline Exposure and (y) second, cash collateralize for the benefit of the Issuing Bank only the Borrower’s obligations corresponding to such Defaulting Lender’s LC Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 2.06(j) for so long as such LC Exposure is outstanding;

(iii)         if the Borrower cash collateralizes any portion of such Defaulting Lender’s LC Exposure pursuant to Section 2.21(c), the Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is cash collateralized;

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(iv)           if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to Section 2.21(c), then the fees payable to the Lenders pursuant to Sections 2.12(a) and 2.12(b) shall be adjusted in accordance with such non-Defaulting Lenders’ Applicable Percentages; or

(v)           if any Defaulting Lender’s LC Exposure is neither cash collateralized nor reallocated pursuant to Section 2.21(c), then, without prejudice to any rights or remedies of the Issuing Bank or any Lender hereunder, all letter of credit fees payable under Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank until such LC Exposure is cash collateralized and/or reallocated; and

(d) so long as any Lender is a Defaulting Lender, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit, unless it is satisfied that the related exposure and the Defaulting Lender’s then outstanding LC Exposure will be 100% covered by the Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrower in accordance with Section 2.21(c), and participating interests in any such newly issued or increased Letter of Credit or newly made Swingline Loan shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.21(c)(i) (and Defaulting Lenders shall not participate therein).

If (i) a Bankruptcy Event with respect to a Parent of any Lender shall occur following the date hereof and for so long as such event shall continue or (ii) the Swingline Lender or the Issuing Bank has a good faith belief that any Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit, unless the Swingline Lender or the Issuing Bank, as the case may be, shall have entered into arrangements with the Borrower or such Lender, satisfactory to the Swingline Lender or the Issuing Bank, as the case may be, to defease any risk to it in respect of such Lender hereunder.

In the event that the Administrative Agent, the Borrower, the Issuing Bank and the Swingline Lender each agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and LC Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Commitment and on such date such Lender shall purchase at par such of the Loans of the other Lenders (other than Swingline Loans) as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Applicable Percentage.

ARTICLE III

Representations and Warranties

The Borrower represents and warrants to the Lenders that:

SECTION 3.01.  Organization; Powers; Subsidiaries.  Each of the Borrower and its Subsidiaries is duly organized, validly existing and, except as set forth on Schedule 3.01 solely for the period commencing on the Effective Date to and including June 30, 2010 (or such later date as the Administrative Agent may determine in its reasonable discretion), in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.  Schedule 3.01 hereto (as supplemented from time to time) identifies each Subsidiary as of the Effective Date, noting whether such Subsidiary is a Material Subsidiary, the jurisdiction of its incorporation or organization, as the case may be, the percentage of issued and outstanding shares of each class of its Equity Interests owned

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by the Borrower and the other Subsidiaries and, if such percentage is not 100% (excluding directors’ qualifying shares as required by law), a description of each class issued and outstanding.  All of the outstanding shares of capital stock and other equity interests of each Subsidiary are validly issued and outstanding and fully paid and nonassessable and all such shares and other equity interests indicated on Schedule 3.01 as owned by the Borrower or another Subsidiary as of the Effective Date are owned, beneficially and of record, by the Borrower or any Subsidiary free and clear of all Liens, other than Liens created under the Loan Documents.  As of the Effective Date, except as set forth on Schedule 3.01, there are no outstanding commitments or other obligations of the Borrower or any Subsidiary to issue, and no options, warrants or other rights of any Person to acquire, any Equity Interests of the Borrower or any Subsidiary.  As of any date after the Effective Date, except as set forth on Schedule 3.01, there are no outstanding commitments or other obligations of any Subsidiary of the Borrower to issue, and no options, warrants or other rights of any Person to acquire, any Equity Interests of any Subsidiary of the Borrower.

SECTION 3.02.  Authorization; Enforceability.  The Transactions are within each Loan Party’s organizational powers and have been duly authorized by all necessary organizational actions and, if required, actions by equity holders.  The Loan Documents to which each Loan Party is a party have been duly executed and delivered by such Loan Party and constitute a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 3.03.  Governmental Approvals; No Conflicts.  The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect and except for filings necessary to perfect Liens created pursuant to the Loan Documents, (b) will not violate any applicable law or regulation or the charter, by-laws or other organizational documents of the Borrower or any of its Subsidiaries or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon the Borrower or any of its Subsidiaries or its assets, or give rise to a right thereunder to require any payment to be made by the Borrower or any of its Subsidiaries, and (d) will not result in the creation or imposition of any Lien on any asset of the Borrower or any of its Subsidiaries, other than Liens created under the Loan Documents.

SECTION 3.04.  Financial Condition; No Material Adverse Change.  (a)  The Borrower has heretofore furnished to the Lenders its consolidated balance sheet and statements of income, stockholders equity and cash flows as of and for the fiscal year ended December 31, 2009 reported on by PricewaterhouseCoopers LLP, independent public accountants.  Such Financials present fairly, in all material respects, the financial position and results of operations and cash flows of the Borrower and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP.

(b) Since December 31, 2009, there has been no material adverse change in the business, assets, operations or financial condition of the Borrower and its Subsidiaries, taken as a whole.

SECTION 3.05.  Properties.  (a)  Each of the Borrower and its Subsidiaries has marketable title to, or valid leasehold interests in, all its real and personal property material to its business, except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes.

(b) Each of the Borrower and its Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to its business, and the use thereof by the Borrower and its Subsidiaries does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

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SECTION 3.06.  Litigation, Environmental and Labor Matters.  (a) There are no actions, suits, proceedings or investigations by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of its Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) that involve this Agreement or the Transactions.

(b) Except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, neither the Borrower nor any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.

(c) There are no strikes, lockouts or slowdowns against the Borrower or any of its Subsidiaries pending or, to their knowledge, threatened.  The hours worked by and payments made to employees of the Borrower and its Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Federal, state, local or foreign law relating to such matters where such violation could reasonably be expected to result in a Material Adverse Effect.  All material payments due from the Borrower or any of its Subsidiaries, or for which any claim may be made against the Borrower or any of its Subsidiaries, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as liabilities on the books of the Borrower or such Subsidiary, except to the extent such payments or claims could not reasonably be expected to result in a Material Adverse Effect.  The consummation of the Transactions will not give rise to any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement under which the Borrower or any of its Subsidiaries is bound.

SECTION 3.07.  Compliance with Laws and Agreements.  Each of the Borrower and its Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.08.  Investment Company Status.  Neither the Borrower nor any of its Subsidiaries is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

SECTION 3.09.  Taxes.  Each of the Borrower and its Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which the Borrower or such Subsidiary, as applicable, has set aside on its books adequate reserves or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.10.  ERISA.  No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect.

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SECTION 3.11.  Disclosure.  The Borrower has disclosed to the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject as of the Effective Date, and all other matters known to it as of the Effective Date, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.  Neither the Information Memorandum nor any of the other reports, Financials, certificates or other information furnished by or on behalf of the Borrower or any Subsidiary to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished), and taken as a whole, contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.

SECTION 3.12.  Federal Reserve Regulations.  No part of the proceeds of any Loan have been used or will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X.

SECTION 3.13.  Liens.  There are no Liens on any of the real or personal properties of the Borrower or any Subsidiary except for Liens permitted by Section 6.02.

SECTION 3.14.  No Default.  No Default or Event of Default has occurred and is continuing.

SECTION 3.15.  No Burdensome Restrictions.  The Borrower is not subject to any Burdensome Restrictions except Burdensome Restrictions permitted under Section 6.08.

SECTION 3.16.  Solvency.

(a) Immediately after the consummation of the Transactions to occur on the Effective Date, the Borrower and its Subsidiaries, taken as a whole, are and will be Solvent.

(b) The Borrower does not intend to, nor does it intend to permit any of its Subsidiaries to, and the Borrower does not believe that it or any of its Subsidiaries will, incur debts beyond its ability to pay such debts as they mature, taking into account the timing of and amounts of cash to be received by it or any such Subsidiary and the timing of the amounts of cash to be payable on or in respect of its Indebtedness or the Indebtedness of any such Subsidiary.

SECTION 3.17.  Insurance.  The Borrower maintains, and has caused each Subsidiary to maintain, with financially sound and reputable insurance companies, insurance on all their real and personal property in such amounts, subject to such deductibles and self-insurance retentions and covering such properties and risks as are adequate and customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations.

SECTION 3.18.  Security Interest in Collateral.  The provisions of the Security Agreement, taken together with the provisions of the other Loan Documents, creates legal and valid Liens on all the Collateral in favor of the Administrative Agent, for the benefit of the Secured Parties, and such Liens, upon the filing of applicable financing statements and applicable intellectual property security agreements and the execution of applicable control agreements, will constitute perfected and continuing Liens on the Collateral, securing the Secured Obligations, enforceable against the applicable Loan Party and all third parties, and having priority over all other Liens on the Collateral except in the case of (a) Liens permitted under clauses (b), (c), (d), (e), (f) and (h)(solely to the extent the collateral in respect of such Lien is cash or Permitted Investments) of Section 6.02, to the extent any such Permitted Encumbrances would have priority over the Liens in favor of the Administrative Agent pursuant to any applicable law and (b) Liens perfected only by possession (including possession of any certificate of title) or control to the extent the Administrative Agent has not obtained or does not maintain possession or control of such Collateral.

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ARTICLE IV

Conditions

SECTION 4.01.  Effective Date.  The obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02):

(a) The Administrative Agent (or its counsel) shall have received from (i) each party hereto either (A) a counterpart of this Agreement signed on behalf of such party or (B) written evidence satisfactory to the Administrative Agent (which may include telecopy or electronic transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement and (ii) duly executed copies of the Loan Documents and such other legal opinions, certificates, documents, instruments and agreements as the Administrative Agent shall reasonably request in connection with the Transactions, all in form and substance satisfactory to the Administrative Agent and its counsel and as further described in the list of closing documents attached as Exhibit E.

(b) The Administrative Agent shall have received favorable written opinions (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of (i) Anthony C. Scarfone, General Counsel, Secretary and Senior Vice President of the Borrower and (ii) Dorsey & Whitney LLP, counsel for the Borrower, in each case addressing the matters set forth on Exhibit B, and covering such other matters relating to the Loan Parties (other than, with respect to Safeguard Holdings, Inc., matters under Texas law as set forth in the Post Closing Matters Side Letter), the Loan Documents or the Transactions as the Administrative Agent shall reasonably request.  The Borrower hereby requests such counsel to deliver such opinion.

(c) The Lenders shall have received (i) satisfactory audited consolidated Financials of the Borrower for the two most recent fiscal years ended prior to the Effective Date as to which such Financials are available, (ii) satisfactory unaudited interim consolidated Financials of the Borrower for each quarterly period ended subsequent to the date of the latest Financials delivered pursuant to clause (i) of this paragraph as to which such Financials are publicly available and (iii) satisfactory financial statement projections through and including the Borrower’s 2012 fiscal year, together with such information as the Administrative Agent and the Lenders shall reasonably request (including, without limitation, a detailed description of the assumptions used in preparing such projections).

(d) The Administrative Agent shall have received (i) such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of the initial Loan Parties, the authorization of the Transactions and any other legal matters relating to such Loan Parties, the Loan Documents or the Transactions, all in form and substance satisfactory to the Administrative Agent and its counsel and as further described in the list of closing documents attached as Exhibit E and (ii) to the extent reasonably requested by any of the Lenders, all documentation and other information required by bank regulatory authorities under applicable “know-your-customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act.

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(e) The Administrative Agent shall have received a certificate, dated the Effective Date and signed by the President, a Vice President or a Financial Officer of the Borrower, confirming compliance with the conditions set forth in clauses (a) and (b) of Section 4.02.

(f) The Administrative Agent shall have received evidence satisfactory to it that any revolving loan credit facility currently in effect for the Borrower shall have been terminated and cancelled and all indebtedness thereunder shall have been fully repaid (except to the extent being so repaid with the initial Revolving Loans and the Existing Letters of Credit issued thereunder shall remain outstanding as Letters of Credit under this Agreement) and any and all Liens thereunder shall have been terminated and released.

(g) The Administrative Agent shall have received evidence reasonably satisfactory to it that all governmental and third party approvals necessary or, in the discretion of the Administrative Agent, advisable in connection with the Transactions and the continuing operations of the Borrower and its Subsidiaries have been obtained and are in full force and effect.

(h) The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder.

(i)  To the extent not previously delivered, the Administrative Agent shall have received (i) the certificates or other instruments representing the Applicable Pledge Percentage of the issued and outstanding Equity Interests of each Pledge Subsidiary (other than Excluded Restricted Subsidiary Equity Interests) directly owned by the Borrower or any other Loan Party pledged pursuant to the Security Agreement, together with stock powers or other instruments of transfer with respect thereto endorsed in blank and (ii) each promissory note pledged and required to be delivered to the Administrative Agent pursuant to the Security Agreement, together with note powers or other instruments of transfer with respect thereto endorsed in blank.

(j)  All documents and instruments, including Uniform Commercial Code financing statements, required by law or reasonably requested by the Administrative Agent to be filed, registered or recorded to create the Liens intended to be created by the Collateral Documents and to perfect such Liens to the extent required by, and with the priority required by, the Collateral Documents, shall have been executed or authorized, as applicable, and be in proper form for filing, subject only to exceptions satisfactory to the Administrative Agent.

The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding.

SECTION 4.02.  Each Credit Event.  The obligation of each Lender to make a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction of the following conditions:

(a) The representations and warranties of the Borrower set forth in this Agreement shall be true and correct in all respects with respect to representations and warranties containing qualifications as to materiality, and true and correct in all material respects with respect to representations and warranties without qualifications as to materiality, on and as of the date of such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable, except to the extent such

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representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date.

(b) At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default or Event of Default shall have occurred and be continuing.

(c) All conditions under the 2007 Indenture required thereunder for the extension of such Borrowing to the Borrower have been satisfied in full.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in clauses (a) through (c) of this Section.

ARTICLE V

Affirmative Covenants

Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that:

SECTION 5.01.  Financial Statements and Other Information.  The Borrower will furnish to the Administrative Agent and each Lender:

(a) within ninety (90) days after the end of each fiscal year of the Borrower (or, if earlier, by the date that the Annual Report on Form 10-K of the Borrower for such fiscal year would be required to be filed under the rules and regulations of the SEC, giving effect to any automatic extension available thereunder for the filing of such form), its audited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by PricewaterhouseCoopers LLP or other independent public accountants of recognized national standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated Financials present fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied;

(b) within forty-five (45) days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower (or, if earlier, by the date that the Quarterly Report on Form 10-Q of the Borrower for such fiscal quarter would be required to be filed under the rules and regulations of the SEC, giving effect to any automatic extension available thereunder for the filing of such form), its consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial

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condition and results of operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;

(c) concurrently with any delivery of Financials under clause (a) or (b) above, a compliance certificate in the form of Exhibit F of a Financial Officer of the Borrower (i) certifying as to whether a Default or Event of Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating compliance with Section 6.12 and (iii) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited Financials referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the Financials accompanying such certificate;

(d) concurrently with any delivery of Financials under clause (a) above, a certificate of the accounting firm that reported on such Financials stating whether they obtained knowledge during the course of their examination of such Financials of any Default (which certificate may be limited to the extent required by accounting rules or guidelines);

(e) as soon as available, but in any event not later than forty-five (45) days after the beginning of each fiscal year of the Borrower, a copy of the plan and forecast (including a projected consolidated balance sheet, income statement and funds flow statement) of the Borrower for each quarter of such fiscal year in form reasonably satisfactory to the Administrative Agent;

(f) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Borrower or any Subsidiary with the SEC, or any Governmental Authority succeeding to any or all of the functions of said Commission, or with any national securities exchange, or distributed by the Borrower to its shareholders generally, as the case may be; and

(g) promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any Subsidiary, or compliance with the terms of this Agreement, as the Administrative Agent or any Lender may reasonably request.

Documents required to be delivered pursuant to clauses (a) and (b) of this Section 5.01 may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which such documents are filed for public availability on the SEC’s Electronic Data Gathering and Retrieval System; provided that the Borrower shall, if requested by the Administrative Agent, notify (which may be by facsimile or electronic mail) the Administrative Agent of the filing of any such documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents.  Notwithstanding anything contained herein, in every instance the Borrower shall be required to provide copies of the compliance certificates (by facsimile or electronic email)required by clause (c) of this Section 5.01 to the Administrative Agent.

SECTION 5.02.  Notices of Material Events.  The Borrower will furnish to the Administrative Agent and each Lender prompt written notice of the following:

(a) the occurrence of any Default or Event of Default;

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(b) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Borrower or any Subsidiary that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect;

(c) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect;

(d) any casualty or other insured damage to any material portion of the Collateral or the commencement of any action or proceeding for the taking of any material portion of the Collateral or interest therein under power of eminent domain or by condemnation or similar proceeding; and

(e) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

SECTION 5.03.  Existence; Conduct of Business.  The Borrower will, and will cause each of its Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, qualifications, licenses, permits, privileges, franchises, governmental authorizations and intellectual property rights material to the conduct of its business, and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03.

SECTION 5.04.  Payment of Obligations.  The Borrower will, and will cause each of its Subsidiaries to, pay its obligations, including Tax liabilities, that, if not paid, could result in a Material Adverse Effect before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.05.  Maintenance of Properties; Insurance.  The Borrower will, and will cause each of its Subsidiaries to, (a) keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, and (b) maintain with financially sound and reputable carriers (i) insurance in such amounts and against such risks (including all-risk, property damage, crime/fidelity, business interruption and commercial general liability) and such other hazards, as is customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations and (ii) all insurance required pursuant to the Collateral Documents.  The Borrower will furnish to the Lenders, upon request of the Administrative Agent, certificates of insurance providing proof of the insurance so maintained.  The Borrower shall deliver to the Administrative Agent endorsements which provide that (x) the Administrative Agent is lender loss payee on all “All Risk” property damage insurance policies, and (y) the Administrative Agent is an additional insured on all commercial general liability policies as required by contract.  So long as no Event of Default has occurred and is continuing, the Borrower and its Subsidiaries shall be entitled to receive payment of all insurance proceeds.  In the event the Borrower or any of its Subsidiaries at any time or times hereafter shall fail to obtain or maintain any of the policies or insurance required herein or to pay any premium in whole or in part relating thereto, then the Administrative Agent, without waiving or releasing any obligations or resulting Default hereunder, may at any time or times thereafter (but shall be under no obligation to do so) obtain and maintain such policies of insurance and pay such premiums and take any other action with respect thereto which the Administrative Agent deems advisable.  All sums so disbursed by the Administrative Agent shall constitute part of the Obligations, payable as provided in this Agreement.

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SECTION 5.06.  Books and Records; Inspection Rights.  The Borrower will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries in all material respects are made of all material transactions in relation to its business and activities.  The Borrower will, and will cause each of its Subsidiaries to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, including environmental assessment reports and Phase I or Phase II studies, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested.  The Borrower acknowledges that the Administrative Agent, after exercising its rights of inspection, may prepare and distribute to the Lenders certain reports pertaining to the Borrower and its Subsidiaries’ assets for internal use by the Administrative Agent and the Lenders.

SECTION 5.07.  Compliance with Laws and Material Contractual Obligations.  The Borrower will, and will cause each of its Subsidiaries to, (i) comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property (including without limitation Environmental Laws) and (ii) perform in all material respects its obligations under material agreements to which it is a party, in each case except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.08.  Use of Proceeds.  The proceeds of the Loans will be used only (i) to finance the working capital needs, and for general corporate purposes, of the Borrower and its Subsidiaries in the ordinary course of business (ii) to finance Permitted Acquisitions and Limited Equity Acquisitions and Permitted Safeguard Distributor Transactions and (iii) to refinance the 2014 Bonds and/or the 2015 Bonds.  No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X.

SECTION 5.09.  Subsidiary Guarantors; Pledges; Additional Collateral; Further Assurances.

(a) As promptly as possible but in any event within thirty (30) days (or such later date as may be agreed upon by the Administrative Agent) after any Person qualifies as, or is designated by the Borrower or the Administrative Agent as, a Subsidiary Guarantor pursuant to the definition of “Material Subsidiary”, the Borrower shall provide the Administrative Agent with written notice thereof setting forth information in reasonable detail describing the material assets of such Person and shall cause each such Person which qualifies as a Material Subsidiary to deliver to the Administrative Agent a joinder to the Subsidiary Guaranty and the Security Agreement (in each case in the form contemplated thereby) pursuant to which such Person agrees to be bound by the terms and provisions thereof, such Subsidiary Guaranty and the Security Agreement to be accompanied by appropriate corporate resolutions, other corporate documentation and legal opinions in form and substance reasonably satisfactory to the Administrative Agent and its counsel.

(b) The Borrower will cause, and will cause each other Loan Party to cause, its owned personal property (whether tangible, intangible, or mixed) to be subject at all times to first priority, perfected Liens in favor of the Administrative Agent for the benefit of the Secured Parties to secure the Secured Obligations in accordance with the terms and conditions of the Collateral Documents, subject to exclusions for certain personal property as set forth in the Collateral Documents and to Liens permitted by Section 6.02.  Without limiting the generality of the foregoing, (i) the Borrower will cause the Applicable Pledge Percentage of the issued and outstanding Equity Interests of each Pledge Subsidiary (other than Excluded Restricted Subsidiary Equity Interests) directly owned by the Borrower or any other Loan Party to be subject at all times to a first priority, perfected Lien in favor of the Administrative Agent to secure the Secured Obligations in accordance with the terms and conditions of the Collateral Documents or such other pledge and security documents as the Administrative Agent shall reasonably request, and (ii) no such pledge agreement in respect of the Equity Interests of a Foreign Subsidiary shall be required hereunder (A) until June 30, 2010 or such later date as the Administrative Agent may agree in the exercise of its reasonable discretion with respect thereto, and (B) to the extent the Administrative Agent or its counsel determines that such pledge would not provide material credit support for the benefit of the Secured Parties pursuant to legally valid, binding and enforceable pledge agreements.

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(c) Without limiting the foregoing, the Borrower will, and will cause each Subsidiary to, execute and deliver, or cause to be executed and delivered, to the Administrative Agent such documents, agreements and instruments, and will take or cause to be taken such further actions (including the filing and recording of financing statements, fixture filings, and other documents and such other actions or deliveries of the type required by Section 4.01, as applicable), which may be required by law or which the Administrative Agent may, from time to time, reasonably request to carry out the terms and conditions of this Agreement and the other Loan Documents and to ensure perfection and priority of the Liens created or intended to be created by the Collateral Documents, all at the expense of the Borrower.

(d) If any assets are acquired by a Loan Party after the Effective Date (other than assets constituting Collateral under the Security Agreement that become subject to the Lien under the Security Agreement upon acquisition thereof), the Borrower will notify the Administrative Agent thereof, and, if requested by the Administrative Agent, the Borrower will cause such assets to be subjected to a Lien securing the Secured Obligations and will take, and cause the other Loan Parties to take, such actions as shall be necessary or reasonably requested by the Administrative Agent to grant and perfect such Liens, including actions described in clause (c) of this Section, all at the expense of the Borrower.

(e)  At any time the Borrower determines that a Subsidiary Guarantor is not required to be a Subsidiary Guarantor under the definition of “Material Subsidiary”, including upon the addition of another Subsidiary as a Subsidiary Guarantor, the Borrower shall provide the Administrative Agent with written notice thereof setting forth information in reasonable detail describing why such Subsidiary is no longer required to be a Subsidiary Guarantor. Upon the Administrative Agent’s reasonable determination that such Subsidiary is no longer required to be a Subsidiary Guarantor, the Administrative Agent shall, at the Borrower’s expense, release such Subsidiary from the Subsidiary Guaranty and the Collateral Documents pursuant to such documentation as the Borrower shall reasonably request.

ARTICLE VI

Negative Covenants

Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees  payable hereunder have been paid in full and all Letters of Credit have expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower covenants and agrees with the Lenders that:

SECTION 6.01.  Indebtedness.  The Borrower will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Indebtedness, except:

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(a) the Secured Obligations;

(b) Indebtedness existing on the Amendment No. 1 Effective Date and set forth in Schedule 6.01 and extensions, renewals and replacements of any such Indebtedness with Indebtedness of a similar type that does not increase the outstanding principal amount thereof (except to the extent any increase thereof shall otherwise be permitted under Section 6.01(e) or Section 6.01(m));

(c) Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary; provided that Indebtedness owed to a Loan Party by any Subsidiary that is not a Loan Party shall be (i) in connection with cash management of the Borrower and its Subsidiaries in the ordinary course of business consistent with past practice or (ii) otherwise subject to the limitations set forth in Section 6.04(d);

(d) Guarantees (i) by the Borrower of Indebtedness of any Subsidiary and by any Subsidiary of Indebtedness of the Borrower or any other Subsidiary and (ii) in respect of customary indemnification and purchase price adjustment obligations, including, without limitation, earnout payment obligations, incurred in connection with dispositions of properties or assets or with purchases of properties or assets;

(e) Indebtedness of the Borrower or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof; provided that (i) such Indebtedness is incurred prior to or within ninety (90) days after such acquisition or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this clause (e) shall not exceed $50,000,000 at any time outstanding;

(f) Indebtedness of the Borrower or any Subsidiary as an account party in respect of trade letters of credit;

(g) Indebtedness (i) of a Person existing at the time such Person became a Subsidiary in connection with an investment permitted pursuant to Section 6.04, or (ii) secured by a Lien existing on any property or asset prior to the acquisition thereof by the Borrower or any Subsidiary to the extent such Lien is permitted under Section 6.02(d), and in the case of each of clause (i) and (ii), solely to the extent that such Indebtedness was not incurred in contemplation of, such Person becoming a Subsidiary or the acquisition of such assets, respectively;

(h) obligations in respect of Swap Contracts to the extent such agreements are permitted pursuant to Section 6.05;

(i) Indebtedness arising from the honoring of a bank or other financial institution of a check, draft or other similar instrument drawn against insufficient funds in the ordinary course of business and unpaid for not more than two (2) Business Days;

(j) obligations in respect of performance bonds and completion, guarantee, surety and similar bonds, in each case obtained in the ordinary course of business to support statutory and contractual obligations (other than Indebtedness) arising in the ordinary course of business;

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(k) obligations owed to customers of the Borrower or any Subsidiary arising from the receipt of advance payments from a customer in the ordinary course of business and consistent with past practices;

(l) additional Indebtedness not otherwise permitted under this Section 6.01 in an aggregate outstanding principal amount not to exceed $25,000,000 at any time; provided that to the extent any Indebtedness permitted under this clause (l) shall be secured, such Lien shall not apply to any property or asset of the Borrower or any Subsidiary other than cash or Permitted Investments; and

(m) unsecured Indebtedness of the Borrower or any Subsidiary, including, without limitation, Subordinated Indebtedness; provided that (i) prior to and after giving effect to the incurrence of any such Indebtedness, no Default or Event of Default has occurred and is continuing or would arise therefrom, (ii) the Borrower is in compliance, on a pro forma basis reasonably acceptable to the Administrative Agent after giving effect to the incurrence of any such Indebtedness, with the covenants contained in Section 6.12 recomputed as of the last day of the most recently ended fiscal quarter of the Borrower for which Financials are available, as if such Indebtedness (and any related repayment of Indebtedness, and with any such new Indebtedness being deemed to be amortized over the applicable testing period in accordance with its terms) had occurred on the first day of each relevant period for testing such compliance and (iii) the aggregate principal amount of Indebtedness of the Borrower’s Subsidiaries permitted by this clause (m) shall not exceed $75,000,000 at any time outstanding.

SECTION 6.02.  Liens.  The Borrower will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except:

(a) Liens created pursuant to any Loan Document;

(b) Permitted Encumbrances;

(c) any Lien on any property or asset of the Borrower or any Subsidiary existing on the Amendment No. 1 Effective Date and set forth in Schedule 6.02; provided that (i) such Lien shall not apply to any other property or asset of the Borrower or any Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

(d) any Lien existing on any property or asset prior to the acquisition thereof by the Borrower or any Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after the date hereof prior to the time such Person becomes a Subsidiary; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other property or assets of the Borrower or any Subsidiary and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be, and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

(e) Liens on fixed or capital assets acquired, constructed or improved by the Borrower or any Subsidiary; provided that (i) such security interests secure Indebtedness permitted by clause (e) of Section 6.01, (ii) such security interests and the Indebtedness secured thereby are incurred prior to or within ninety (90) days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed the cost of acquiring, constructing or improving such fixed or capital assets and (iv) such security interests shall not apply to any other property or assets of the Borrower or any Subsidiary;

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(f) bankers’ Liens and rights of setoff created or incurred on deposits or with respect to deposit accounts that are within the general parameters customary in the banking industry and arising in the ordinary course of business;

(g) customary restrictions on transfers of assets contained in agreements related to the sale by the Borrower or the Subsidiaries of such assets pending their sale; provided that such restrictions apply only to the assets to be sold and such sale is permitted under this Agreement; and

(h) Liens on assets of the Borrower and its Subsidiaries not otherwise permitted above so long as the aggregate principal amount of the Indebtedness and other obligations secured by such Liens does not at any time exceed $25,000,000.

SECTION 6.03.  Fundamental Changes and Asset Sales.  (a) The Borrower will not, and will not permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) any of its assets (including pursuant to a Sale and Leaseback Transaction), or any of the Equity Interests of any of its Subsidiaries (in each case, whether now owned or hereafter acquired), or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing:

(i)           any Person may merge into the Borrower in a transaction in which the Borrower is the surviving corporation;

(ii)          (A) any Subsidiary may merge into a Loan Party in a transaction in which the surviving entity is such Loan Party (provided that any such merger involving the Borrower must result in the Borrower as the surviving entity), (B) any wholly-owned Subsidiary of the Borrower that is not a Loan Party may merge into another wholly-owned Subsidiary of the Borrower that is not a Loan Party (provided that the survivor thereof shall be a wholly-owned Subsidiary of the Borrower) and (C) any non-wholly-owned Subsidiary of the Borrower that is not a Loan Party may merge into another Subsidiary of the Borrower that is not a Loan Party to the extent permitted under clause (iv) below;

(iii)          any Subsidiary may sell, transfer, lease or otherwise dispose of its assets to a Loan Party;

(iv)          the Borrower and its Subsidiaries may (A) sell inventory in the ordinary course of business, (B) effect sales, trade-ins or dispositions of used equipment for value in the ordinary course of business consistent with past practice, (C) enter into licenses of technology in the ordinary course of business, and (D) make any other sales, transfers, leases or dispositions that, together with the Fair Market Value of all other property of the Borrower and its Subsidiaries previously leased, sold or disposed of as permitted by this clause (D) during any fiscal year of the Borrower, does not exceed $25,000,000;

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(v)           the Borrower and its Subsidiaries may make dispositions of, or discount without recourse, accounts receivable in connection with the compromise or collection thereof in the ordinary course of business (and not as part of any financing transaction);

(vi)          the Borrower and its Subsidiaries may make dispositions of cash and Permitted Investments in the ordinary course of business;

(vii)         the Borrower and its Subsidiaries may make dispositions of obsolete, used, worn out or surplus equipment, raw materials and supplies in the ordinary course of business;

(viii)        the Borrower and its Subsidiaries may make sales or dispositions of shares of Equity Interests of any of Subsidiary in order to qualify members of the governing body of such Subsidiary if required by applicable law;

(ix)          the Borrower and its Subsidiaries may enter into sale and leaseback transactions permitted under Section 6.10;

(x)           the Borrower and its Subsidiaries may make charitable donations in the ordinary course of business and consistent with past practices;

(xi)           the Borrower and its Subsidiaries may grant Liens to the extent such Liens are permitted under Section 6.02;

(xii)          the Borrower and its Subsidiaries may enter into Permitted Safeguard Distributor Transactions; and

(xiii)         any Subsidiary that is not a Loan Party may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders.

(b) The Borrower will not, and will not permit any of its Subsidiaries to, engage to any material extent in any business other than businesses of the type conducted by the Borrower and its Subsidiaries on the Effective Date and businesses reasonably related thereto.

(c) The Borrower will not, nor will it permit any of its Subsidiaries to, change its fiscal year from the basis in effect on the Effective Date.

SECTION 6.04.  Investments, Loans, Advances, Guarantees and Acquisitions.  The Borrower will not, and will not permit any of its Subsidiaries to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly-owned Subsidiary prior to such merger) any capital stock, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any Person or any assets of any other Person constituting a business unit, except:

(a) cash and Permitted Investments;

(b) Permitted Acquisitions and Limited Equity Acquisitions; provided, that (i) the aggregate consideration paid in respect of such Permitted Acquisition or Limited Equity Acquisition, when taken together with the aggregate consideration paid in respect of all other Permitted Acquisitions and paid or contributed in respect of all other Limited Equity Acquisitions, does not exceed $275,000,000 during any twelve-month period, (ii) the aggregate consideration paid in respect of any Permitted Acquisition does not exceed

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$150,000,000, (iii) the aggregate consideration paid in respect of all Limited Equity Acquisitions does not exceed $50,000,000 during any twelve-month period, and (iv) the Leverage Ratio, calculated on a Pro Forma Basis after giving effect to such acquisition, does not exceed 3.00 to 1.00;

(c) investments by the Borrower and its Subsidiaries existing on the date hereof in the capital stock of its Subsidiaries;

(d) investments, loans or advances made by the Borrower in or to any Subsidiary and made by any Subsidiary in or to the Borrower or any other Subsidiary (provided that not more than an aggregate amount of $25,000,000 in investments, loans or advances or capital contributions may be made and remain outstanding, at any time, by Loan Parties to Subsidiaries which are not Loan Parties);

(e) Guarantees constituting Indebtedness permitted by Section 6.01;

(f) extended payment terms to customers of the Borrower and any Subsidiary in the ordinary course of business and consistent with past practices;

(g) investments in the form of promissory notes and other non-cash consideration received by the Borrower or any Subsidiary in connection with any disposition or discount of accounts receivable to the extent permitted under Section 6.03(a)(v);

(h) loans and advances to (i) distributors of the Safeguard services and product lines of the Borrower and its Subsidiaries (other than with respect to a Permitted Safeguard Distributor Transaction) and (ii) officers and employees of the Borrower or its Subsidiaries in accordance with prior practices, so long as (x) the aggregate amount of all loans and advances made pursuant to clause (h)(i) above does not exceed $1,000,000 at any time and (y) the aggregate amount of all loans and advances made pursuant to this Section 6.04(h) does not exceed $5,000,000 at any time;

(i) investments consisting of the purchase, repurchase, redemption or acquisition of Equity Interests of the Borrower or any Subsidiary permitted under Section 6.07, provided that such Equity Interests so purchased, repurchased, redeemed or acquired are promptly retired and cancelled, other than Equity Interests of the Borrower consisting of capital stock which may be held by the Borrower as treasury stock;

(j) any purchase, repurchase or acquisition by the Borrower or any other Subsidiary of outstanding loans or advances owed by the Borrower to any Subsidiary or owed by any Subsidiary to the Borrower or any other Subsidiary, provided that any such purchase, repurchase or acquisition by a Loan Party from a Subsidiary that is not a Subsidiary Guarantor shall comply with Section 6.06 (without giving effect to the exception under Section 6.06(b));

(k) investments in Swap Agreements permitted under Section 6.05;

(l) investments of advance payments received from customers to the extent such advance payments shall be permitted under Section 6.01(k);

(m) investments existing on the Amendment No. 1 Effective Date and set forth on Schedule 6.04;

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(n)  investments, advances or loans having a bona fide purpose directly related to effecting any Permitted Safeguard Distributor Transaction (as determined by the Borrower in its commercially reasonable judgment acting in good faith), including, without limitation, any Permitted Safeguard Sale Consideration; and

(o) any other investment, loan or advance (other than acquisitions) so long as the aggregate amount of all such investments, loans and advances does not exceed $60,000,000 during the term of this Agreement.

For purposes of determining the amount of any investment outstanding for purposes of this Section 6.04, such amount shall be deemed to be the amount of such investment when made, purchased or acquired without adjustment for subsequent increases or decreases in the value of such investment.

SECTION 6.05.  Swap Agreements.  The Borrower will not, and will not permit any of its Subsidiaries to, enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge or mitigate risks to which the Borrower or any Subsidiary has actual exposure (other than those in respect of Equity Interests of the Borrower or any of its Subsidiaries), and (b) Swap Agreements entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Borrower or any Subsidiary.

SECTION 6.06.  Transactions with Affiliates.  The Borrower will not, and will not permit any of its Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) in the ordinary course of business at prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among the Borrower and any wholly-owned Subsidiaries not involving any other Affiliate, (c) any transaction permitted by Section 6.01, 6.03, 6.04 or 6.07, (d) payment of customary fees and expenses to members of the board of directors of the Borrower and its Subsidiaries in the ordinary course of business; and (e) payment of employee compensation in the ordinary course of business to any Affiliate who is an individual in such Person’s capacity as an officer, employee or consultant of the Borrower or any of its Subsidiaries.

SECTION 6.07.  Restricted Payments.  The Borrower will not, and will not permit any of its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except (a) the Borrower may declare and pay dividends with respect to its Equity Interests payable solely in additional shares of its common stock, (b) Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests, (c) the Borrower may make Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans for management or employees of the Borrower and its Subsidiaries, (d) the Borrower and the Subsidiaries may make Restricted Payments (i) to effect any merger or consolidation of any Subsidiary of the Borrower permitted under Section 6.03 and (ii) certified by the Borrower to the Administrative Agent in writing as having a bona fide purpose directly related to effecting the capitalization of a Subsidiary to the extent such investment shall otherwise be permitted under Section 6.04 (as determined by the Administrative Agent in its reasonable discretion), and (e) the Borrower and its Subsidiaries may make any other Restricted Payment so long as no Default or Event of Default has occurred and is continuing prior to making such Restricted Payment or would arise after giving effect (including giving effect on a Pro Forma Basis) thereto and the aggregate amount of all such Restricted Payments (i) from and after the Amendment No. 1 Effective Date does not exceed $400,000,000 and (ii) during any twelve-month period does not exceed $100,000,000.

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SECTION 6.08.  Restrictive Agreements.  The Borrower will not, and will not permit any of its Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any enforceable agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to holders of its Equity Interests or to make or repay loans or advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law, by any Loan Document or by the 1995 Indenture, the 2003 Indenture or the 2007 Indenture and extensions, renewals or replacements of any such Indebtedness of a similar type that does not increase the outstanding principal amount thereof or is otherwise permitted under Section 6.01, (ii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale or other disposition of assets or Equity Interests pending such sale or disposition, provided such restrictions and conditions apply only to the assets or Equity Interests is to be sold and such sale or disposition is permitted hereunder, (iii) the foregoing shall not apply customary provisions in agreements relating to Limited Equity Acquisitions solely to the respective Limited Equity Acquisition or the Equity Interest therein, (iv) the foregoing shall not apply to restrictions and conditions imposed by any Governmental Authority, (v) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness, (vi) clause (a) of the foregoing shall not apply to customary provisions in leases, licenses and other contracts restricting the assignment thereof or, to the extent such restrictions shall exist as of the Effective Date or are otherwise entered into consistent with past practice, such customary provisions restricting the assignment of or Liens upon property subject thereto, (vii) clause (a) of the foregoing shall not apply to limitations or restrictions consisting of customary net worth, leverage or other financial covenants in each case contained in, or required by, any contractual obligation governing Indebtedness permitted under Section 6.01 and (viii) clause (b) of the foregoing shall not applyto customary restrictions and conditions that waive or prohibit  the subrogation of claims and/or prohibit parties to from collecting intercompany obligations customarily included in indemnity agreements or Guarantees.

SECTION 6.09.  Subordinated Indebtedness and Amendments to Subordinated Indebtedness Documents.  The Borrower will not, and will not permit any Subsidiary to, directly or indirectly voluntarily prepay, defease or in substance defease, purchase, redeem, retire or otherwise acquire, any Subordinated Indebtedness or any Indebtedness from time to time outstanding under the Subordinated Indebtedness Documents.  Furthermore, the Borrower will not, and will not permit any Subsidiary to, amend the Subordinated Indebtedness Documents or any document, agreement or instrument evidencing any Indebtedness incurred pursuant to the Subordinated Indebtedness Documents (or any replacements, substitutions, extensions or renewals thereof) or pursuant to which such Indebtedness is issued where such amendment, modification or supplement provides for the following or which has any of the following effects:

(a)           increases the overall principal amount of any such Indebtedness or increases the amount of any single scheduled installment of principal or interest;

(b)           shortens or accelerates the date upon which any installment of principal or interest becomes due or adds any additional mandatory redemption provisions;

(c)           shortens the final maturity date of such Indebtedness or otherwise accelerates the amortization schedule with respect to such Indebtedness;

(d)           increases the rate of interest accruing on such Indebtedness;

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(e)           provides for the payment of additional fees or increases existing fees;

(f)           amends or modifies any financial or negative covenant (or covenant which prohibits or restricts the Borrower or any Subsidiary from taking certain actions) in a manner which is more onerous or more restrictive in any material respect to the Borrower or such Subsidiary or which is otherwise materially adverse to the Borrower, any Subsidiary and/or the Lenders or, in the case of any such covenant, which places material additional restrictions on the Borrower or such Subsidiary or which requires the Borrower or such Subsidiary to comply with more restrictive financial ratios or which requires the Borrower to better its financial performance, in each case from that set forth in the existing applicable covenants in the Subordinated Indebtedness Documents or the applicable covenants in this Agreement; or

(g)           amends, modifies or adds any affirmative covenant in a manner which (i) when taken as a whole, is materially adverse to the Borrower, any Subsidiary and/or the Lenders or (ii) is more onerous than the existing applicable covenant in the Subordinated Indebtedness Documents or the applicable covenant in this Agreement.

SECTION 6.10.  Sale and Leaseback Transactions.  Except as set forth on Schedule 6.10, the Borrower shall not, nor shall it permit any Subsidiary to, enter into any Sale and Leaseback Transaction, other than Sale and Leaseback Transactions in respect of which the Net Cash Proceeds received in connection therewith does not exceed $10,000,000  in the aggregate during any fiscal year of the Borrower, determined on a consolidated basis for the Borrower and its Subsidiaries.

SECTION 6.11.  [Reserved]

SECTION 6.12.  Financial Covenants.

(a) Maximum Leverage Ratio.   The Borrower will not permit the ratio (the “Leverage Ratio”) as of the last day of any fiscal quarter of (i) the sum of (x) Consolidated Total Indebtedness at such time minus (y) the amount of Unrestricted Cash in excess of $15,000,000 at such time to (ii) Consolidated EBITDA for the period of four consecutive fiscal quarters of the Borrower then ending, all calculated for the Borrower and its Subsidiaries on a consolidated basis, to be greater than 3.25 to 1.00; provided that if the Leverage Ratio, calculated on a Pro Forma Basis, exceeds 2.75 to 1.00 after giving effect to a Permitted Acquisition, the aggregate consideration of which is equal to or greater than $25,000,000, the Borrower will not permit the Leverage Ratio for the twelve-month period following such Permitted Acquisition to be greater than 3.50 to 1.00.

(b) Minimum Interest Coverage Ratio.  The Borrower will not permit the ratio (the “Interest Coverage Ratio”) as of the last day of any fiscal quarter of (i) Consolidated EBIT for the period of four consecutive fiscal quarters of the Borrower then ending to (ii) Consolidated Interest Expense for the period of four consecutive fiscal quarters of the Borrower then ending, all calculated for the Borrower and its Subsidiaries on a consolidated basis, to be less than 3.25 to 1.00.

(c)Minimum Liquidity.  At all times (i) from April 1, 2014 to the Minimum Liquidity End Date, the Borrower shall maintain Liquidity equal to or greater than $50,000,000 and (ii) from January 1, 2015 to the Minimum Liquidity End Date, the Borrower shall maintain Liquidity equal to or greater than $50,000,000.

SECTION 6.13.  Guarantors.  The Borrower shall not permit any Domestic Subsidiary to guaranty any other Indebtedness of the Borrower or any of its Subsidiaries in an aggregate amount in excess of $5,000,000 unless and until such Domestic Subsidiary shall have become a Subsidiary Guarantor pursuant to Section 5.09(a) and, if applicable, complied with all other applicable terms of Section 5.09.

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ARTICLE VII

Events of Default

If any of the following events (“Events of Default”) shall occur:

(a) the Borrower shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

(b) the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three (3) Business Days;

(c) any representation or warranty made or deemed made by or on behalf of the Borrower or any Subsidiary in or in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, or in any report, certificate, Financials or other document furnished pursuant to or in connection with this Agreement or any other Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect  when made or deemed made;

(d) the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02, 5.03 (with respect to the Borrower’s existence), 5.08 or 5.09 or in Article VI;

(e) the Borrower or any Subsidiary Guarantor, as applicable, shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in clause (a), (b) or (d) of this Article) or any other Loan Document, and such failure shall continue unremedied for a period of thirty (30) days after notice thereof from the Administrative Agent to the Borrower (which notice will be given at the request of any Lender);

(f) the Borrower or any Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable;

(g) any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;

(h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any Subsidiary or its debts, or of a substantial part of its assets, under any  Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered;

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(i) the Borrower or any Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

(j) the Borrower or any Subsidiary shall become unable, admit in writing its inability or fail generally to pay its debts as they become due;

(k) one or more judgments for the payment of money in an aggregate amount in excess of $15,000,000 shall be rendered against the Borrower, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of thirty (30) consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower or any Subsidiary to enforce any such judgment;

(l) an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect;

(m) a Change in Control shall occur;

(n) the occurrence of any “default”, as defined in any Loan Document (other than this Agreement) or the breach of any of the terms or provisions of any Loan Document (other than this Agreement), which default or breach continues beyond any period of grace therein provided;

(o) any material provision of any Loan Document for any reason ceases to be valid, binding and enforceable in accordance with its terms (or the Borrower or any Subsidiary shall challenge the enforceability of any Loan Document or shall assert in writing, or engage in any action or inaction based on any such assertion, that any provision of any of the Loan Documents has ceased to be or otherwise is not valid, binding and enforceable in accordance with its terms); or

(p) any Collateral Document shall for any reason fail to create a valid and perfected first priority security interest in any portion of the Collateral with a Fair Market Value in excess of $15,000,000 purported to be covered thereby, except as permitted by the terms of any Loan Document;

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then, and in every such event (other than an event with respect to the Borrower described in clause (h), (i) or (j) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times:  (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other Secured Obligations of the Borrower accrued hereunder and under the other Loan Documents, shall become  due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other Secured Obligations accrued hereunder and under the other Loan Documents, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.  Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent may, and at the request of the Required Lenders shall, exercise any rights and remedies provided to the Administrative Agent under the Loan Documents or at law or equity, including all remedies provided under the UCC.

ARTICLE VIII

The Administrative Agent

Each of the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf, including  execution of the other Loan Documents, and to exercise such powers as are delegated to the Administrative Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto.

The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.

The Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents.  Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02), and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity.  The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02) or in the absence of its own gross negligence or willful misconduct.  The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or in connection with any Loan Document, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, (v) the creation, perfection or priority of Liens on the Collateral or the existence of the Collateral or (vi) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

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The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person.  The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon.  The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties.  The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, the Issuing Bank and the Borrower.  Upon any such resignation, the Required Lenders shall have the right, with the consent of the Borrower, such consent not to be unreasonably withheld or delayed, to appoint a successor; provided that no such consent of the Borrower shall be required at any time an Event of Default has occurred and is continuing.  If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent which shall be a bank with an office in New York, New York, or an Affiliate of any such bank.  Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder.  The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor.  After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 9.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent.

Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

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None of the Lenders, if any, identified in this Agreement as a Syndication Agent or Co-Documentation Agent shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such.  Without limiting the foregoing, none of such Lenders shall have or be deemed to have a fiduciary relationship with any Lender.  Each Lender hereby makes the same acknowledgments with respect to the relevant Lenders in their respective capacities as Syndication Agent or Co-Documentation Agents, as applicable, as it makes with respect to the Administrative Agent in the preceding paragraph.

Except with respect to the exercise of setoff rights of any Lender, in accordance with Section 9.08, the proceeds of which are applied in accordance with this Agreement, each Lender agrees that it will not take any action, nor institute any actions or proceedings, against the Borrower or with respect to any Loan Document, without the prior written consent of the Required Lenders or, as may be provided in this Agreement or the other Loan Documents, with the consent of the Administrative Agent.

The Lenders are not partners or co-venturers, and no Lender shall be liable for the acts or omissions of, or (except as otherwise set forth herein in case of the Administrative Agent) authorized to act for, any other Lender.  The Administrative Agent shall have the exclusive right on behalf of the Lenders to enforce the payment of the principal of and interest on any Loan after the date such principal or interest has become due and payable pursuant to the terms of this Agreement.

In its capacity, the Administrative Agent is a “representative” of the Secured Parties within the meaning of the term “secured party” as defined in the New York Uniform Commercial Code.  Each Lender authorizes the Administrative Agent to enter into each of the Collateral Documents to which it is a party and to take all action contemplated by such documents.  Each Lender agrees that no Secured Party (other than the Administrative Agent) shall have the right individually to seek to realize upon the security granted by any Collateral Document, it being understood and agreed that such rights and remedies may be exercised solely by the Administrative Agent for the benefit of the Secured Parties upon the terms of the Collateral Documents.  In the event that any Collateral is hereafter pledged by any Person as collateral security for the Secured Obligations, the Administrative Agent is hereby authorized, and hereby granted a power of attorney, to execute and deliver on behalf of the Secured Parties any Loan Documents necessary or appropriate to grant and perfect a Lien on such Collateral in favor of the Administrative Agent on behalf of the Secured Parties.  The Lenders hereby authorize the Administrative Agent, at its option and in its discretion, to release any Lien granted to or held by the Administrative Agent upon any Collateral (i) as described in Section 9.02(d); (ii) as permitted by, but only in accordance with, the terms of the applicable Loan Document; or (iii) if approved, authorized or ratified in writing by the Required Lenders, unless such release is required to be approved by all of the Lenders hereunder.  Upon request by the Administrative Agent at any time, the Lenders will confirm in writing the Administrative Agent’s authority to release particular types or items of Collateral pursuant hereto.  Upon any sale lease, transfer or other disposition of assets constituting Collateral which is permitted pursuant to the terms of any Loan Document, or consented to in writing by the Required Lenders or all of the Lenders, as applicable, and upon at least five (5) Business Days’ prior written request by the Borrower to the Administrative Agent, the Administrative Agent shall (and is hereby irrevocably authorized by the Lenders to) execute such documents as may be necessary to evidence the release of the Liens granted to the Administrative Agent for the benefit of the Secured Parties herein or pursuant hereto upon the Collateral that was sold or transferred; provided, however, that (i) the Administrative Agent shall not be required to execute any such document on terms which, in the Administrative Agent’s opinion, would expose the Administrative Agent to liability or create any obligation or entail any consequence other than the release of such Liens without recourse or warranty, and (ii) such release shall not in any manner discharge, affect or impair the Secured Obligations or any Liens upon (or obligations of the Borrower or any Subsidiary in respect of) all interests retained by the Borrower or any Subsidiary, including (without limitation) the proceeds of the sale, all of which shall continue to constitute part of the Collateral.

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The Borrower, on its behalf and on behalf of its Subsidiaries, and each Lender, on its behalf and on the behalf of its affiliated Secured Parties, hereby irrevocably constitute the Administrative Agent as the holder of an irrevocable power of attorney (fondé de pouvoir within the meaning of Article 2692 of the Civil Code of Québec) in order to hold hypothecs and security granted by the Borrower or any Subsidiary on property pursuant to the laws of the Province of Quebec to secure obligations of the Borrower or any Subsidiary under any bond, debenture or similar title of indebtedness issued by the Borrower or any Subsidiary in connection with this Agreement, and agree that the Administrative Agent may act as the bondholder and mandatory with respect to any bond, debenture or similar title of indebtedness that may be issued by the Borrower or any Subsidiary and pledged in favor of the Secured Parties in connection with this Agreement.  Notwithstanding the provisions of Section 32 of the An Act respecting the special powers of legal persons (Quebec), JPMorgan Chase Bank, N.A. as Administrative Agent may acquire and be the holder of any bond issued by the Borrower or any Subsidiary in connection with this Agreement (i.e., the fondé de pouvoir may acquire and hold the first bond issued under any deed of hypothec by the Borrower or any Subsidiary).

ARTICLE IX

Miscellaneous

SECTION 9.01.  Notices.  (a) Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to clause (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:

(i)           if to the Borrower, to it at 3680 Victoria Street North, Shoreview, MN  55126, Attention of Jeff L. Johnson (Telecopy No. (651) 787-1068; Telephone No. (651) 787-1441);

(ii)         if to the Administrative Agent, to JPMorgan Chase Bank, N.A., 10 South Dearborn Street, 7th Floor, Chicago, Illinois 60603, Attention of April Yebd (Telecopy No. (312) 385-7096),with a copy to JPMorgan Chase Bank, N.A., 10 South Dearborn Street, 9th Floor, Chicago, Illinois 60603, Attention of Suzanne Ergastolo (Telecopy No. (312) 794-7682);

(iii)         if to the Issuing Bank, to it at JPMorgan Chase Bank, N.A., 10 South Dearborn Street, 7th Floor, Chicago, Illinois 60603, Attention of Debra Williams (Telecopy No. (312) 256-2608; Telephone No. (312) 732-2590);

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(iv)          if to the Swingline Lender, to it at JPMorgan Chase Bank, N.A., 10 South Dearborn Street, 7th Floor, Chicago, Illinois 60603, Attention of April Yebd (Telecopy No. (312) 385-7096); and

(v)           if to any other Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire.

(b) Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the Administrative Agent and the applicable Lender.  The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

(c) Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto.  All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

SECTION 9.02.  Waivers; Amendments.  (a)  No failure or delay by the Administrative Agent, the Issuing Bank or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the Administrative Agent, the Issuing Bank and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of any Loan Document or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by clause (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default or Event of Default, regardless of whether the Administrative Agent, any Lender or the Issuing Bank may have had notice or knowledge of such Default or Event of Default at the time.

(b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or by the Borrower and the Administrative Agent with the consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender directly affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender directly affected thereby, (iv) change Section 2.18(b) or (d) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (v) change any of the provisions of this Section or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender, (vi) release all or substantially all of the Subsidiary Guarantors from their obligations under the Subsidiary Guaranty without the written consent of each Lender, or (viii) except as provided in clause (d) of this Section or in any Collateral Document, release all or substantially all of the Collateral, without the written consent of each Lender; provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Issuing Bank or the Swingline Lender hereunder without the prior written consent of the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be.

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(c) Notwithstanding the foregoing, this Agreement and any other Loan Document may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent and the Borrower to each relevant Loan Document (x) to add one or more credit facilities to this Agreement and to permit extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other Loan Documents with the Revolving Loans and the accrued interest and fees in respect thereof and (y) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders and Lenders.

(d) The Lenders hereby irrevocably authorize the Administrative Agent, at its option and in its sole discretion, to release any Liens granted to the Administrative Agent by the Loan Parties on any Collateral (i) upon the termination of all the Commitments, payment and satisfaction in full in cash of all Secured Obligations (other than Unliquidated Obligations), and the cash collateralization of all Unliquidated Obligations in a manner satisfactory to the Administrative Agent, (ii) constituting property being sold, leased, transferred or disposed of if the Borrower certifies to the Administrative Agent that the sale, lease, transfer or disposition is made in compliance with the terms of this Agreement (and the Administrative Agent may rely conclusively on any such certificate, without further inquiry), (iii) constituting property leased to the Borrower or any Subsidiary under a lease which has expired or been terminated in a transaction permitted under this Agreement, (iv) constituting property of a Subsidiary that is no longer required to be a Subsidiary Guarantor pursuant to Section 5.09(e)  or (v) as required to effect any sale or other disposition of such Collateral in connection with any exercise of remedies of the Administrative Agent and the Lenders pursuant to Article VII.  Any such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of the Loan Parties in respect of) all interests retained by the Loan Parties, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral.

(e) Notwithstanding anything to the contrary contained herein or in any other Loan Document, the Administrative Agent is hereby irrevocably authorized by each Lender (without requirement of notice to or consent of any Lender) to take any action requested by the Borrower having the effect of releasing the Subsidiary Guaranty (i) to the extent necessary to permit consummation of any proposed sale, lease, transfer or other disposition of assets not prohibited by any Loan Document or that has been consented to in accordance with Section 9.02(b), (ii) with respect to a Subsidiary that is no longer required to be a Subsidiary Guarantor pursuant to Section 5.09(e) or (iii) at such time as the Loans, the Letters of Credit and the other Obligations under the Loan Documents  shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding.  Following such termination, the Administrative Agent shall execute (at the Borrower’s expense) any documents or instruments reasonably requested and prepared by the Borrower to evidence such termination.

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(f)  If, in connection with any proposed amendment, waiver or consent  requiring the consent of “each Lender” or “each Lender directly affected thereby,” the consent of the Required Lenders is obtained, but the consent of other necessary Lenders is not obtained (any such Lender whose consent is necessary but not obtained being referred to herein as a “Non-Consenting Lender”), then the Borrower may elect to replace a Non-Consenting Lender as a Lender party to this Agreement, provided that, concurrently with such replacement, (i) another bank or other entity which is reasonably satisfactory to the Borrower and the Administrative Agent shall agree, as of such date, to purchase for cash the Loans and other Obligations due to the Non-Consenting Lender pursuant to an Assignment and Assumption and to become a Lender for all purposes under this Agreement and to assume all obligations of the Non-Consenting Lender to be terminated as of such date and to comply with the requirements of clause (b) of Section 9.04, and (ii) the Borrower shall pay to such Non-Consenting Lender in same day funds on the day of such replacement (1) all interest, fees and other amounts then accrued but unpaid to such Non-Consenting Lender by the Borrower hereunder to and including the date of termination, including without limitation payments due to such Non-Consenting Lender under Sections 2.15 and 2.17, and (2) an amount, if any, equal to the payment which would have been due to such Lender on the day of such replacement under Section 2.16 had the Loans of such Non-Consenting Lender been prepaid on such date rather than sold to the replacement Lender.

(g) Notwithstanding anything to the contrary herein the Administrative Agent may, with the consent of the Borrower only, amend, modify or supplement this Agreement or any of the other Loan Documents to cure any ambiguity, omission, mistake, defect or inconsistency.

SECTION 9.03.  Expenses; Indemnity; Damage Waiver.  (a)  The Borrower shall pay (i) following receipt of written invoices and statements of account, all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, in connection with the syndication and distribution (including, without limitation, via the internet or through a service such as Intralinks) of the credit facilities provided for herein, the preparation and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or any Lender, including the fees, charges and disbursements of any counsel for the Administrative Agent, the Issuing Bank or any Lender, in connection with the enforcement or protection of its rights in connection with this Agreement and any other Loan Document, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during  any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.

(b) The Borrower shall indemnify the Administrative Agent, the Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of any Loan Document or any agreement or instrument contemplated thereby, the performance by the parties hereto of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any of its Subsidiaries, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or the breach in bad faith, by such indemnified person of its express obligations hereunder or under any other Loan Document pursuant to a claim initiated by the Borrower.  To the extent permitted by applicable law, any Person seeking to be indemnified under this Section 9.03(b) shall, upon obtaining knowledge thereof, use commercially reasonable efforts to give prompt written notice to the Borrower of the commencement of any action or proceeding giving rise to such indemnification claim, provided that the failure to give such notice shall not relieve the Borrower of any indemnification obligations hereunder.

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(c) To the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent, the Issuing Bank or the Swingline Lender under clause (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount (it being understood that the Borrower’s failure to pay any such amount shall not relieve the Borrower of any default in the payment thereof); provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent, the Issuing Bank or the Swingline Lender in its capacity as such.

(d) Subject to the obligations of the Administrative Agent and the Lenders under Section 9.12 which are not hereby waived, to the extent permitted by applicable law, the Borrower shall not assert, and hereby waives, any claim against any Indemnitee (i) for any damages arising from the use by others of information or other materials obtained through telecommunications, electronic or other information transmission systems (including the Internet), or (ii) on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.

(e) All amounts due under this Section shall be payable not later than fifteen (15) days after written demand therefor.

SECTION 9.04.  Successors and Assigns.  (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section.  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit),  Participants (to the extent provided in clause (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)(1)  Subject to the conditions set forth in clause (b)(ii) below, any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of:

(A) the Borrower; provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof; provided, further, that no consent of the Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee;

(B) the Administrative Agent; and

(C)  the Issuing Bank.

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(ii)           Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans of any Class, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower and the Administrative Agent otherwise consent, provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing;

(B) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement, provided that this clause shall not be construed to prohibit the assignment of a proportionate part of all the assigning Lender’s rights and obligations in respect of one Class of Commitments or Loans;

(C) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500, such fee to be paid by either the assigning Lender or the assignee Lender or shared between such Lenders; and

(D) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire in which the assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower and its affiliates and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with the assignee’s compliance procedures and applicable laws, including Federal and state securities laws.

For the purposes of this Section 9.04(b), the term “Approved Fund” has the following meaning:

“Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

(iii)           Subject to acceptance and recording thereof pursuant to clause (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03).  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with clause (c) of this Section.

(iv)           The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent, the Issuing Bank and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrower, the Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

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(v)           Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in clause (b) of this Section and any written consent to such assignment required by clause (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.05(c), 2.06(d) or (e), 2.07(b), 2.18(e) or 9.03(c), the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon.  No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(c)           (i)  Any Lender may, without the consent of the Borrower, the Administrative Agent, the Issuing Bank or the Swingline Lender, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (A) such Lender’s obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that affects such Participant.  Subject to clause (c)(ii) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to clause (b) of this Section.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.18(d) as though it were a Lender.

(ii)           A Participant shall not be entitled to receive any greater payment under Section 2.15 or 2.17 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent.  A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.17 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 2.17(e) as though it were a Lender.  Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans, Letters of Credit or its other obligations under this Agreement) except to the extent that such disclosure is necessary to establish that such Commitment, Loan, Letter of Credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.

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(d)           Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

SECTION 9.05.  Survival.  All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement or any other Loan Document is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated.  The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any other Loan Document or any provision hereof or thereof.

SECTION 9.06.  Counterparts; Integration; Effectiveness.  This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.  Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic imaging shall be effective as delivery of a manually executed counterpart of this Agreement.

SECTION 9.07.  Severability.  Any provision of any Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 9.08.  Right of Setoff.  If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final and in whatever currency denominated) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower or any Subsidiary Guarantor against any of and all of the Secured Obligations held by such Lender, irrespective of whether or not such Lender shall have made any demand under the Loan Documents and although such obligations may be unmatured.  The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.

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SECTION 9.09.  Governing Law; Jurisdiction; Consent to Service of Process.  (a)  This Agreement shall be construed in accordance with and governed by the law of the State of New York.

(b)The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to any Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Loan Party or its properties in the courts of any jurisdiction.

(c)The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in clause (b) of this Section.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d)Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01.  Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

SECTION 9.10.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 9.11.  Headings.  Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

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SECTION 9.12.  Confidentiality.  Each of the Administrative Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential; provided that each of the Administrative Agent, the Issuing Bank and the Lenders shall use commercially reasonable efforts to ensure that such Information shall not be disclosed to those employees of the Administrative Agent, the Issuing Bank or such Lender or its Affiliates having direct responsibility for engaging in direct commercial transactions (excluding debt financing, equity capital or other financial advisory services) with the Borrower or its Subsidiaries, (b) to the extent requested by any regulatory authority (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies under this Agreement or any other Loan Document or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to a written agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii)  any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the Borrower or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis from a source other than the Borrower.  For the purposes of this Section, “Information” means all information received from the Borrower by virtue of the Transactions contemplated by this Agreement relating to the Borrower or its business, other than any such information that is available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by the Borrower; provided that, in the case of information received from the Borrower after the date hereof, such information is clearly identified at the time of delivery as confidential.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

SECTION 9.13.  USA PATRIOT Act.  Each Lender that is subject to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”) hereby notifies each Loan Party that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies such Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender to identify such Loan Party in accordance with the Act.

SECTION 9.14.  Appointment for Perfection.  Each Lender hereby appoints each other Lender as its agent for the purpose of perfecting Liens, for the benefit of the Administrative Agent and the Secured Parties, in assets which, in accordance with Article 9 of the UCC or any other applicable law can be perfected only by possession.  Should any Lender (other than the Administrative Agent) obtain possession of any such Collateral, such Lender shall notify the Administrative Agent thereof, and, promptly upon the Administrative Agent’s request therefor shall deliver such Collateral to the Administrative Agent or otherwise deal with such Collateral in accordance with the Administrative Agent’s instructions.

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SECTION 9.15.  No Advisory or Fiduciary Responsibility.  In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees that: (i) (A) the arranging and other services regarding this Agreement provided by the Lenders are arm’s-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Lenders and their Affiliates, on the other hand, (B) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) each of the Lenders and their Affiliates is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person and (B) no Lender or any of its Affiliates has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except, in the case of a Lender, those obligations expressly set forth herein and in the other Loan Documents; and (iii) each of the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and no Lender or any of its Affiliates has any obligation to disclose any of such interests to the Borrower or its Affiliates.  To the fullest extent permitted by law, the Borrower hereby waives and releases any claims that it may have against each of the Lenders and their Affiliates with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

[Signature Pages Follow]

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EX-12.1

Exhibit 12.1

Deluxe Corporation

Computation of Ratio of Earnings to Fixed Charges

	Year Ended December 31,
	2011		2010		2009		2008		2007		2006
Earnings:
Income from continuing operations before income taxes	$	216,084	$	235,949	$	155,021	$	160,176	$	220,015	$	142,788
Interest expense (excluding capitalized interest)(1)		47,797		44,165		46,280		50,421		55,294		56,661
Portion of rent expense under long-term operating leases representative of an interest factor		3,215		3,438		2,716		3,147		2,900		3,526
Total earnings	$	267,096	$	283,552	$	204,017	$	213,744	$	278,209	$	202,975
Fixed charges:
Interest expense (including capitalized interest)(1)	$	47,797	$	44,165	$	46,280	$	50,421	$	55,294	$	57,051
Portion of rent expense under long-term operating leases representative of an interest factor		3,215		3,438		2,716		3,147		2,900		3,526
Total fixed charges	$	51,012	$	47,603	$	48,996	$	53,568	$	58,194	$	60,577
Ratio of earnings to fixed charges		5.2		6.0		4.2		4.0		4.8		3.4

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

EX-21.1

Exhibit 21.1

DELUXE CORPORATION SUBSIDIARIES

ChecksByDeluxe.com, LLC (Minnesota)

Custom Direct, Inc. (Delaware)

Custom Direct LLC (Delaware)

Direct Checks Unlimited, LLC (Colorado)

Direct Checks Unlimited Sales, Inc. (Colorado)

Deluxe Business Operations, Inc. (Delaware)

Deluxe Enterprise Operations, Inc. (Minnesota)

Deluxe Financial Services, Inc. (Minnesota)

Deluxe Manufacturing Operations, Inc. (Minnesota)

Deluxe Small Business Sales, Inc. (Minnesota)

Hostopia.com Inc. (Delaware)

Hostopia Canada, Corp. (Canada)

Hostopia Ireland Limited (Ireland)

Internet Names for Business Inc. (Canada)

NEBS Business Products Limited (Canada)

NEBS Payroll Service Limited (Canada)

Safeguard Acquisitions, Inc. (Texas)

Safeguard Business Systems, Inc. (Delaware)

Safeguard Business Systems Limited (Canada)

Safeguard Franchise Systems, Inc. (Texas)

Safeguard Holdings, Inc. (Texas)

SyncSuite, LLC (Minnesota)

EX-23.1

 Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 33-53585, 333-03265, 333-95739, 333-52452, 333-52454, 333-89532 and 333-150674) of Deluxe Corporation of our report dated February 24, 2012 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

PricewaterhouseCoopers LLP

Minneapolis, Minnesota

February 24, 2012

EX-24.1

Exhibit 24.1

POWER OF ATTORNEY

Each of the undersigned directors and officers of DELUXE CORPORATION, a Minnesota corporation, hereby constitutes and appoints Lee Schram and Terry D. Peterson their true and lawful attorneys-in-fact, and each of them, with full power to act without the other, to sign the Company's annual report on Form 10-K for the year ended December 31, 2011, and any and all amendments to such report, and to file the same and any such amendment, with any exhibits, and any other documents required in connection with such filing, with the Securities and Exchange Commission under the provisions of the Securities Exchange Act of 1934.

	Date
/s/ Lee Schram	2/15/2012
Lee Schram, Director and
Principal Executive Officer
/s/ Terry D. Peterson	2/15/2012
Terry D. Peterson, Principal Financial
Officer and Principal Accounting Officer
/s/ Ronald C. Baldwin	2/15/2012
Ronald C. Baldwin, Director
/s/ Charles A. Haggerty	2/15/2012
Charles A. Haggerty, Director
/s/ Don J. McGrath	2/15/2012
Don J. McGrath, Director
/s/ Cheryl Mayberry McKissack	2/15/2012
Cheryl Mayberry McKissack, Director
/s/ Neil J. Metviner	2/15/2012
Neil J. Metviner, Director
/s/ Stephen P. Nachtsheim	2/15/2012
Stephen P. Nachtsheim, Director
/s/ Mary Ann O’Dwyer	2/15/2012
Mary Ann O’Dwyer, Director
/s/ Martyn R. Redgrave	2/15/2012
Martyn R. Redgrave, Director

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 annual report on Form 10-K 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:       February 24, 2012	/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 annual report on Form 10-K 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:       February 24, 2012	/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 Annual Report on Form 10-K of the Company for the year ended December 31, 2011 (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:  February 24, 2012	/s/ Lee Schram
	Lee Schram
	Chief Executive Officer

/s/ Terry D. Peterson

Terry D. Peterson

Chief Financial Officer

XML

Pension and other postretirement benefits (Tables)

12 Months Ended

Dec. 31, 2011

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

Change in benefit obligation, plan assets and funded status

Obligations and funded status – The following tables summarize the change in benefit obligation, plan assets and funded status during 2011 and 2010:

	Postretirement benefit plan			Pension plan
Change in benefit obligation:
Benefit obligation, December 31, 2009	$	138,915		$	3,455
Interest cost		7,282			179
Actuarial loss – net		5,781			198
Benefits paid from the VEBA trust (see Note 11) and company funds		(11,363	)		(324	)
Medicare Part D reimbursements		726			-
Benefit obligation, December 31, 2010		141,341			3,508
Interest cost		6,669			164
Actuarial loss – net		8,199			332
Benefits paid from the VEBA trust (see Note 11) and company funds		(10,940	)		(324	)
Medicare Part D reimbursements		856			-
Benefit obligation, December 31, 2011	$	146,125		$	3,680
Change in plan assets:
Fair value of plan assets, December 31, 2009	$	90,320		$	-
Actual gain on plan assets		10,990			-
Fair value of plan assets, December 31, 2010		101,310			-
Actual loss on plan assets		(688	)		-
Fair value of plan assets, December 31, 2011	$	100,622		$	-
Funded status, December 31, 2010	$	(40,031	)	$	(3,508	)
Funded status, December 31, 2011	$	(45,503	)	$	(3,680	)

Amounts recognized in the consolidated balance sheets

Amounts recognized in the consolidated balance sheets as of December 31 were as follows:

	Postretirement benefit plan				Pension plan
	2011		2010		2011		2010
Accrued liabilities	$	-	$	-	$	324	$	324
Other non-current liabilities		45,503		40,031		3,356		3,184

Amounts included in accumulated other comprehensive loss that have not been recognized as components of postretirement benefit expense

Amounts included in accumulated other comprehensive loss that have not been recognized as components of postretirement benefit expense were as follows:

	Postretirement benefit plan						Pension plan
	2011			2010			2011			2010
Unrecognized prior service credit	$	(20,697	)	$	(24,440	)	$	-		$	-
Unrecognized net actuarial loss		119,681			108,358			493			161
Tax effect		(37,021	)		(31,334	)		(178	)		(53	)
Amount recognized in accumulated other comprehensive loss, net of tax	$	61,963		$	52,584		$	315		$	108

Amounts included in accumulated other comprehensive loss expected to be recognized in the next 12 months

Amounts included in accumulated other comprehensive loss as of December 31, 2011 which we expect to recognize in postretirement benefit expense during 2012 are as follows:

	Postretirement benefit plan			Pension plan
Prior service credit	$	(3,055	)	$	-
Net actuarial loss		5,870			9
Total	$	2,815		$	9

Components of net periodic benefit expense

Net pension and postretirement benefit expense – Net pension and postretirement benefit expense for the years ended December 31 consisted of the following components:

	Postretirement benefit plan									Pension plans
	2011			2010			2009			2011		2010		2009
Interest cost	$	6,669		$	7,282		$	8,560		$	164	$	179	$	262
Expected return on plan assets		(7,851	)		(7,226	)		(5,919	)		-		-		(57	)
Amortization of prior service credit		(3,743	)		(3,742	)		(3,815	)		-		-		-
Amortization of net actuarial loss		5,415			5,406			8,383			-		-		9
Total periodic benefit expense		490			1,720			7,209			164		179		214
Settlement loss		-			-			-			-		-		402
Net periodic benefit expense	$	490		$	1,720		$	7,209		$	164	$	179	$	616

Actuarial assumptions used in measuring benefit obligations and net periodic benefit expense

Actuarial assumptions – In measuring benefit obligations as of December 31, the following discount rate assumptions were used:

	Postretirement benefit plan						Pension plan
	2011			2010			2011			2010
Discount rate		4.2	%		4.9	%		4.2	%		4.9	%

In measuring net periodic benefit expense for the years ended December 31, the following assumptions were used:

	Postretirement benefit plan									Pension plans
	2011			2010			2009			2011			2010			2009
Discount rate(1)		4.90	%		5.45	%		7.25	%		4.90	%		5.45	%		4.06% - 6.60	%
Expected return on plan assets		7.75	%		8.00	%		8.50	%		-			-			4.50	%

(1) For 2009, the rate presented for our postretirement benefit plan was used from April 30, 2009 through December 31, 2009, the period subsequent to the 2009 plan amendments. A discount rate of 6.60% was used for the period from January 1, 2009 through April 30, 2009.

Assumptions used for health care cost trend rates

In measuring the benefit obligation for our postretirement benefit plan, the following assumptions for health care cost trend rates were used:

	2011	2010	2009
Health care cost trend rate assumed for next year	7.50%	7.75%	8.00%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	5.00%	5.00%	5.00%
Year that the rate reaches the ultimate trend rate	2017	2017	2017

Effect of one-percentage-point change in assumed health care cost trend rates

A one-percentage-point change in assumed health care cost trend rates would have the following effects:

	One- percentage- point increase		One- percentage- point decrease
Effect on total of service and interest cost	$	92	$	(87	)
Effect on benefit obligation		2,185		(2,069	)

Allocation of plan assets by asset category

Plan assets – The allocation of plan assets by asset category as of December 31 was as follows:

	Postretirement benefit  plan
	2011		2010
U.S. large capitalization equity securities		33%		34%
U.S. corporate debt securities		19%		10%
International equity securities		16%		18%
Government debt securities		14%		13%
Mortgage-backed securities		10%		14%
U.S. small and mid-capitalization equity securities		8%		8%
Other debt securities		-		3%
Total		100%		100%

Fair value measurements of plan assets

Information regarding fair value measurements of plan assets as of December 31, 2011 was as follows:

			Fair value measurements using
	Fair value as of December 31, 2011		Quoted prices in active markets for identical assets (Level 1)			Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
U.S. large capitalization equity securities	$	33,613	$	-		$	33,613	$	-
U.S. corporate debt securities		19,319		5,655			13,664		-
International equity securities		16,023		15,615			408		-
Government debt securities		14,151		12,006			2,145		-
Mortgage-backed securities		9,698		2,193			7,505		-
U.S. small and mid-capitalization equity securities		7,803		7,606			197		-
Other debt securities		15		(95	)		110		-
Total	$	100,622	$	42,980		$	57,642	$	-

Information regarding fair value measurements of plan assets as of December 31, 2010 was as follows:

			Fair value measurements using
	Fair value as of December 31, 2010		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
U.S. large capitalization equity securities	$	34,332	$	16,554	$	17,778	$	-
International equity securities		18,357		18,027		330		-
Mortgage-backed securities		14,113		-		14,113		-
Government debt securities		13,531		7,544		5,987		-
U.S. corporate debt securities		9,725		8,611		1,114		-
U.S. small and mid-capitalization equity securities		8,153		8,064		89		-
Other debt securities		3,099		2,825		274		-
Total	$	101,310	$	61,625	$	39,685	$	-

Estimated future benefit payments

The following benefit payments are expected to be paid during the years indicated:

	Postretirement benefit plan						Pension plan
	Gross benefit payments		Expected Medicare subsidy		Net benefit payments		Gross benefit payments
2012	$	12,000	$	1,200	$	10,800	$	320
2013		12,600		1,200		11,400		310
2014		13,100		1,300		11,800		300
2015		13,400		1,400		12,000		300
2016		13,300		1,500		11,800		290
2017 – 2021		61,600		7,500		54,100		1,330

XML

Assets held for sale and discontinued operations (Details) (USD $) In Thousands, unless otherwise specified	1 Months Ended	3 Months Ended	12 Months Ended
	Jan. 31, 2009	Dec. 31, 2011	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Assets held for sale and discontinued operations [Abstract]
Gross cash proceeds from sale of business	$ 250
Revenue				0	816
Loss from operations				0	(155)
(Loss) gain on disposal				(1,244)	155
Income tax benefit				473	0
Net loss from discontinued operations			0	(771)	0
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Asset impairment charges		1,196	1,196	0	24,900
Greensboro facility [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net cash proceeds from sale of facility			699
Pre-tax gain from sale of facility			110
Thorofare facility [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Asset impairment charges			$ 1,196

XML

Supplemental balance sheet and cash flow information (property, plant and equipment) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Property, plant and equipment [Abstract]
Property, plant and equipment - gross	$ 466,253	$ 458,640
Accumulated depreciation	(352,842)	(338,419)
Property, plant and equipment - net	113,411	120,221
Trade name [Member]
Indefinite-lived [Abstract]
Gross carrying amount	19,100	19,100
Net carrying amount	19,100	19,100
Land and Improvements [Member]
Property, plant and equipment [Abstract]
Property, plant and equipment - gross	33,970	33,981
Accumulated depreciation	(8,848)	(8,517)
Property, plant and equipment - net	25,122	25,464
Building and Improvements [Member]
Property, plant and equipment [Abstract]
Property, plant and equipment - gross	122,262	120,672
Accumulated depreciation	(69,619)	(65,359)
Property, plant and equipment - net	52,643	55,313
Machinery and Equipment [Member]
Property, plant and equipment [Abstract]
Property, plant and equipment - gross	310,021	303,987
Accumulated depreciation	(274,375)	(264,543)
Property, plant and equipment - net	$ 35,646	$ 39,444

XML

Pension and other postretirement benefits (net pension and postretirement benefit expense) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Postretirement Benefit Plan [Member]
Net pension and postretirement benefit expense [Abstract]
Interest cost	$ 6,669	$ 7,282	$ 8,560
Expected return on plan assets	(7,851)	(7,226)	(5,919)
Amortization of prior service credit	(3,743)	(3,742)	(3,815)
Amortization of net actuarial loss	5,415	5,406	8,383
Total periodic benefit expense	490	1,720	7,209
Settlement loss	0	0	0
Net periodic benefit expense	490	1,720	7,209
Pension Plans [Member]
Net pension and postretirement benefit expense [Abstract]
Interest cost	164	179	262
Expected return on plan assets	0	0	(57)
Amortization of prior service credit	0	0	0
Amortization of net actuarial loss	0	0	9
Total periodic benefit expense	164	179	214
Settlement loss	0	0	402
Net periodic benefit expense	$ 164	$ 179	$ 616

XML

Derivative financial instruments (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
Derivative [Line Items]
Notional amount	$ 282,847
Fair value of interest rate swaps	4,539
Increase in debt due to fair value adjustment	3,568
Deferred pre-tax losses on cash flow hedges to be recognized in interest expense during the next 12 months	1,757
Fair value hedge related to long-term debt due in 2012 [Member]
Derivative [Line Items]
Notional amount	84,847	210,000
Fair value of interest rate swaps	1,309	5,456
Increase in debt due to fair value adjustment	780	4,879
Amount of bonds retired	195,463
Term of bonds (in years)	10Y
Cash received on interest rate swaps	2,548
Fair value adjustment to hedged debt recognized in earnings at hedge termination	3,094
Accumulated fair value adjustment to hedged debt deferred at hedge termination	1,355
Fair value hedge related to long-term debt due in 2014 [Member]
Derivative [Line Items]
Notional amount	198,000
Fair value of interest rate swaps	3,230
Increase in debt due to fair value adjustment	2,788
Cash flow hedge, interest rate swaps 2004 [Member]
Derivative [Line Items]
Notional amount	225,000
Deferred pre-tax loss	17,877
Cash flow hedge, interest rate swaps 2002 [Member]
Derivative [Line Items]
Deferred pre-tax loss	$ 4,026

XML

Shareholders' equity (accumulated other comprehensive loss) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Postretirement and defined benefit pension plans:
Unrealized prior service credit	$ 13,321	$ 15,651	$ 17,978
Unrealized net actuarial losses	(75,599)	(68,343)	(70,328)
Postretirement and defined benefit pension plans, net of tax	(62,278)	(52,692)	(52,350)
Loss on derivatives, net of tax	(2,931)	(4,522)	(5,841)	[1]
Net unrealized gain on marketable securities, net of tax	178	13	0
Currency translation adjustment	5,630	7,189	5,373
Accumulated other comprehensive loss	$ (59,401)	$ (50,012)	$ (52,818)

[1] Relates to interest rate locks executed in 2004 and 2002. see Note 6 for further information regarding these financial instruments

XML

Supplemental balance sheet and cash flow information (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Trade accounts receivable [Abstract]
Trade accounts receivable - gross	$ 73,030	$ 70,601
Allowances for uncollectible accounts	(4,007)	(4,130)	(4,991)
Trade accounts receivable - net	69,023	66,471
Allowances for uncollectible accounts [Abstract]
Balance, beginning of year	4,130	4,991	5,930
Bad debt expense	4,033	4,686	5,842
Write-offs, net of recoveries	(4,156)	(5,547)	(6,781)
Balance, end of year	4,007	4,130	4,991
Inventories and supplies [Abstract]
Raw materials	5,566	4,879
Semi-finished goods	8,273	8,393
Finished goods	5,301	5,083
Supplies, primarily production	2,903	3,305
Inventories and supplies	$ 22,043	$ 21,660

XML

Derivative financial instruments (Tables)

12 Months Ended

Dec. 31, 2011

Derivative financial instruments [Abstract]

Interest rate swaps

Information regarding interest swaps as of December 31, 2011 was as follows:

	Notional amount		Fair value of interest rate swaps		Increase in debt due to fair value adjustment
Fair value hedge related to long-term debt due in 2012	$	84,847	$	1,309	$	780
Fair value hedge related to long-term debt due in 2014		198,000		3,230		2,788
Total fair value hedges	$	282,847	$	4,539	$	3,568

Information regarding interest rate swaps as of December 31, 2010 was as follows:

	Notional amount		Fair value of interest rate swaps		Increase in debt due to fair value adjustment
Fair value hedge related to long-term debt due in 2012	$	210,000	$	5,456	$	4,879

XML

Business segment information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Sep. 30, 2010	Jun. 30, 2010	Mar. 31, 2010	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Business segment information [Abstract]
Number of reportable business segments	3				3				3	3	3
Percentage of consolidated revenue which must be exceeded to qualify as a major customer									10.00%	10.00%	10.00%
Depreciation and amortization expense related to corporate assets which was allocated to the segments									$ 42,211	$ 38,808	$ 37,056
Segment Reporting Information [Line Items]
Revenue from external customers	366,426	355,144	346,274	349,752	351,488	367,633	347,996	335,120	1,417,596	1,402,237	1,344,195
Operating income									271,058	281,544	190,589
Depreciation and amortization expense									73,343	73,915	67,765
Asset impairment charges	1,196								1,196	0	24,900
Total assets	1,388,809				1,308,691				1,388,809	1,308,691	1,211,210
Capital asset purchases									35,506	43,932	44,266
Revenue from External Customer [Line Items]
Revenue	366,426	355,144	346,274	349,752	351,488	367,633	347,996	335,120	1,417,596	1,402,237	1,344,195
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue from external customers	366,426	355,144	346,274	349,752	351,488	367,633	347,996	335,120	1,417,596	1,402,237	1,344,195
Long-lived assets	1,139,678				1,086,685				1,139,678	1,086,685	996,505
Foreign, primarily Canada [Member]
Segment Reporting Information [Line Items]
Revenue from external customers									83,056	77,074	68,310
Revenue from External Customer [Line Items]
Revenue									83,056	77,074	68,310
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue from external customers									83,056	77,074	68,310
Long-lived assets	11,409				13,359				11,409	13,359	16,006
Checks, including contract settlements [Member]
Segment Reporting Information [Line Items]
Revenue from external customers									871,731	896,563	853,729
Revenue from External Customer [Line Items]
Revenue									871,731	896,563	853,729
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue from external customers									871,731	896,563	853,729
Forms [Member]
Segment Reporting Information [Line Items]
Revenue from external customers									195,905	194,724	198,855
Revenue from External Customer [Line Items]
Revenue									195,905	194,724	198,855
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue from external customers									195,905	194,724	198,855
Accessories and other products [Member]
Segment Reporting Information [Line Items]
Revenue from external customers									126,949	123,264	129,323
Revenue from External Customer [Line Items]
Revenue									126,949	123,264	129,323
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue from external customers									126,949	123,264	129,323
Marketing solutions, including services [Member]
Segment Reporting Information [Line Items]
Revenue from external customers									150,973	126,211	112,848
Revenue from External Customer [Line Items]
Revenue									150,973	126,211	112,848
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue from external customers									150,973	126,211	112,848
Other serices [Member]
Segment Reporting Information [Line Items]
Revenue from external customers									72,038	61,475	49,440
Revenue from External Customer [Line Items]
Revenue									72,038	61,475	49,440
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue from external customers									72,038	61,475	49,440
Small Business Services [Member]
Segment Reporting Information [Line Items]
Percentage of check revenue (in hundredths)	47.20%				48.30%				47.20%	48.30%	47.70%
Revenue from external customers									846,449	796,254	785,109
Operating income									145,219	137,534	60,804
Depreciation and amortization expense									44,706	45,163	52,507
Asset impairment charges									1,196	0	24,900
Total assets	836,918				772,799				836,918	772,799	778,191
Capital asset purchases									0	0	0
Revenue from External Customer [Line Items]
Revenue									846,449	796,254	785,109
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue from external customers									846,449	796,254	785,109
Financial Services [Member]
Segment Reporting Information [Line Items]
Revenue from external customers									342,382	390,331	396,353
Operating income									59,804	84,158	75,091
Depreciation and amortization expense									13,009	11,788	10,946
Asset impairment charges									0	0	0
Total assets	99,803				66,065				99,803	66,065	57,716
Capital asset purchases									0	0	0
Revenue from External Customer [Line Items]
Revenue									342,382	390,331	396,353
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue from external customers									342,382	390,331	396,353
Direct Checks [Member]
Segment Reporting Information [Line Items]
Revenue from external customers									228,765	215,652	162,733
Operating income									66,035	59,852	54,694
Depreciation and amortization expense									15,628	16,964	4,312
Asset impairment charges									0	0	0
Total assets	173,435				178,880				173,435	178,880	96,288
Capital asset purchases									0	0	0
Revenue from External Customer [Line Items]
Revenue									228,765	215,652	162,733
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue from external customers									228,765	215,652	162,733
Corporate [Member]
Segment Reporting Information [Line Items]
Revenue from external customers									0	0	0
Operating income									0	0	0
Depreciation and amortization expense									0	0	0
Asset impairment charges									0	0	0
Total assets	278,653				290,947				278,653	290,947	279,015
Capital asset purchases									35,506	43,932	44,266
Revenue from External Customer [Line Items]
Revenue									0	0	0
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenue from external customers									$ 0	$ 0	$ 0

XML

Debt and leases (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Debt Instrument [Line Items]
Cumulative increase in fair value of hedged debt	$ 3,568
Long-term portion of debt	656,131	748,122
Long-term debt due within one year	85,575	0
Total debt	741,706	755,122
Pre-tax gain (loss) from extinguishment of debt	(6,995)	0	9,834
Senior, unsecured notes due 2012 [Member]
Debt Instrument [Line Items]
Stated interest rate (in hundredths)	5.00%
Debt maturity date	Dec. 15, 2012
Cumulative increase in fair value of hedged debt	780	4,879
Long-term portion of debt		284,843
Long-term debt due within one year	85,575
Debt, issuance date	December 2002
Principal amount issued	300,000	300,000
Proceeds from offering, net of offering costs	295,722
Principal amount retired	195,463		19,690
Fair value of notes	84,846
Pre-tax gain (loss) from extinguishment of debt	(6,810)		5,757
Remaining principal amount outstanding	84,847
Principal amount authorized under shelf registration	300,000
Senior, unsecured notes due 2014 [Member]
Debt Instrument [Line Items]
Stated interest rate (in hundredths)	5.125%
Debt maturity date	Oct. 01, 2014
Cumulative increase in fair value of hedged debt	2,788
Long-term portion of debt	256,131	263,279
Debt, issuance date	October 2004
Principal amount issued	275,000	275,000
Proceeds from offering, net of offering costs	272,276
Principal amount retired	10,000		11,500
Fair value of notes	255,561
Pre-tax gain (loss) from extinguishment of debt	(185)		4,077
Remaining principal amount outstanding	253,500
Senior notes due 2015 [Member]
Debt Instrument [Line Items]
Stated interest rate (in hundredths)	7.375%
Debt maturity date	Jun. 01, 2015
Long-term portion of debt	200,000	200,000
Debt, issuance date	May 2007
Principal amount issued	200,000	200,000
Redemption price, mandatory redemption (in hundredths)	101.00%
Proceeds from offering, net of offering costs	196,329
Fair value of notes	204,250
Senior notes due 2015 [Member] | First Optional Redemption Period [Member]
Debt Instrument [Line Items]
Redemption price, optional redemption minimum (in hundredths)		100.00%
Redemption price, optional redemption maximum (in hundredths)		103.688%
Senior notes due 2019 [Member]
Debt Instrument [Line Items]
Stated interest rate (in hundredths)	7.00%
Debt maturity date	Mar. 15, 2019
Long-term portion of debt	200,000
Debt, issuance date	March 2011
Principal amount issued	200,000
Redemption price, mandatory redemption (in hundredths)	101.00%
Proceeds from offering, net of offering costs	196,487
Fair value of notes	$ 193,500
Senior notes due 2019 [Member] | First Optional Redemption Period [Member]
Debt Instrument [Line Items]
Optional redemption period	prior to March 15, 2014
Notes redeemable maximum (in hundredths)	35.00%
Redemption price, optional redemption maximum (in hundredths)	107.00%
Senior notes due 2019 [Member] | Third Optional Redemption Period [Member]
Debt Instrument [Line Items]
Optional redemption period	on or after March 15, 2015
Redemption price, optional redemption minimum (in hundredths)	100.00%
Redemption price, optional redemption maximum (in hundredths)	103.50%
Senior notes due 2019 [Member] | Second Optional Redemption Period [Member]
Debt Instrument [Line Items]
Optional redemption period	prior to March 15, 2015
Redemption price, optional redemption (in hundredths)	100.00%

XML

Fair value measurements (recurring and nonrecurring fair value measurements) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Fair value disclosure, hedge ineffectiveness [Abstract]
(Loss) gain from derivatives		$ 2,220	$ 5,608	$ (152)
Loss from change in fair value of hedged debt		(2,395)	(5,133)	254
Net decrease (increase) in interest expense		(175)	475	102
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total impairment charges	1,196	1,196	0	24,900
Long-term investment in mutual funds	2,165	2,165	2,283
Net unrealized gain on investment in mutual funds			196	420
Fair Value, Measurements, Nonrecurring [Member] | Impairment of Intangible Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Goodwill				20,000	[1]
Assets held for sale	1,196	1,196
Indefinite-lived trade name				4,900	[2]
Total impairment charges		1,196		24,900
Fair Value, Measurements, Nonrecurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Goodwill				20,245	[1]
Assets held for sale	2,741	2,741
Indefinite-lived trade name				19,100	[2]
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Goodwill				0	[1]
Indefinite-lived trade name				0	[2]
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Goodwill				0	[1]
Assets held for sale	2,741	2,741
Indefinite-lived trade name				0	[2]
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Goodwill				20,245	[1]
Assets held for sale	0	0
Indefinite-lived trade name				19,100	[2]
Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities - funds held for customers	5,418	5,418	10,249
Marketable securities - corporate investments	2,001	2,001	2,029
Long-term investment in mutual funds	2,165	2,165	2,283
Derivative assets	4,539	4,539	5,456
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities - funds held for customers	0	0	0
Marketable securities - corporate investments	0	0	0
Long-term investment in mutual funds	2,165	2,165	2,283
Derivative assets	0	0	0
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities - funds held for customers	5,418	5,418	10,249
Marketable securities - corporate investments	2,001	2,001	2,029
Long-term investment in mutual funds	0	0	0
Derivative assets	4,539	4,539	5,456
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities - funds held for customers	0	0	0
Marketable securities - corporate investments	0	0	0
Long-term investment in mutual funds	0	0	0
Derivative assets	$ 0	$ 0	$ 0

[1] Represents the implied fair value of the goodwill assigned to the reporting unit for which we were required to calculate this amount.

[2] Represents the fair value determined from the event-driven impairment analysis completed during the quarter ended March 31, 2009.

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Other commitments and contingencies (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Environmental matters [Abstract]
Accruals for environmental matters	$ 8,730	$ 9,293
Environmental remediation costs	353	868	1,327
Portion of accruals covered by environmental insurance policy	6,440
Maximum losses covered for remediation costs under 2002 environmental insurance policy	12,911
Cumulative losses for which payment has been received under 2002 environmental insurance policy	6,471
Maximum losses covered for third-party claims under 2002 environmental insurance policy	10,000
Maximum losses covered for remediation costs related to facilities acquired after 2002	15,000
Self-insurance [Abstract]
Workers' compensation liability	5,141	4,716
Difference between discounted and undiscounted amount of workers' compensation liability	20	29
Liability for medical and dental benefits for active and disabled employees	3,848	4,167
Difference between discounted and undiscounted amount of liability for medical and dental benefits for active and disabled employees	$ 296	$ 419

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Supplemental guarantor financial information (Condensed consolidating balance sheets) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Current Assets:
Cash and cash equivalents	$ 28,687	$ 17,383	$ 12,789	$ 15,590
Trade accounts receivable, net	69,023	66,471
Inventories and supplies	22,043	21,660
Deferred income taxes	7,216	9,390
Funds held for customers	44,394	35,720
Other current assets	21,212	20,613
Total current assets	192,575	171,237
Long-term Investments	45,147	37,410
Property, Plant and Equipment, net	113,411	120,221
Assets Held for Sale	2,741	4,527
Intangibles, net	157,339	155,112
Goodwill	776,998	725,937	658,666
Investments in Consolidated Subsidiaries	0	0
Intercompany (Payable) Receivable	0	0
Other Non-Current Assets	100,598	94,247
Total assets	1,388,809	1,308,691	1,211,210
Current Liabilities:
Accounts payable	64,694	60,478
Accrued liabilities	150,098	144,034
Short-term debt	0	7,000
Long-term debt due within one year	85,575
Total current liabilities	300,367	211,512
Long-Term Debt	656,131	748,122
Deferred Income Taxes	49,807	46,752
Other Non-Current Liabilities	79,815	76,107
Total shareholders' equity	302,689	226,198	117,210	53,066
Total liabilities and shareholders' equity	1,388,809	1,308,691
Deluxe Corporation [Member]
Current Assets:
Cash and cash equivalents	3,047	3,197	2,725	3,492
Trade accounts receivable, net	0	0
Inventories and supplies	0	0
Deferred income taxes	1,035	2,854
Funds held for customers	0	0
Other current assets	5,851	9,463
Total current assets	9,933	15,514
Long-term Investments	36,338	34,905
Property, Plant and Equipment, net	0	0
Assets Held for Sale	0	0
Intangibles, net	0	0
Goodwill	0	0
Investments in Consolidated Subsidiaries	1,307,149	986,484
Intercompany (Payable) Receivable	(316,876)	(68,348)
Other Non-Current Assets	11,758	12,337
Total assets	1,048,302	980,892
Current Liabilities:
Accounts payable	13,401	11,697
Accrued liabilities	12,272	9,440
Short-term debt		7,000
Long-term debt due within one year	85,575
Total current liabilities	111,248	28,137
Long-Term Debt	656,131	748,122
Deferred Income Taxes	(27,471)	(25,898)
Other Non-Current Liabilities	5,705	4,333
Total shareholders' equity	302,689	226,198
Total liabilities and shareholders' equity	1,048,302	980,892
Guarantor Subsidiaries [Member]
Current Assets:
Cash and cash equivalents	1,522	683	497	536
Trade accounts receivable, net	57,463	53,679
Inventories and supplies	19,941	19,350
Deferred income taxes	5,430	6,303
Funds held for customers	0	0
Other current assets	10,469	8,047
Total current assets	94,825	88,062
Long-term Investments	8,809	2,427
Property, Plant and Equipment, net	96,345	102,427
Assets Held for Sale	2,741	4,527
Intangibles, net	155,452	151,512
Goodwill	775,044	723,938
Investments in Consolidated Subsidiaries	15,478	615
Intercompany (Payable) Receivable	360,789	114,299
Other Non-Current Assets	72,944	71,032
Total assets	1,582,427	1,258,839
Current Liabilities:
Accounts payable	44,908	42,798
Accrued liabilities	86,001	92,038
Short-term debt	0	0
Total current liabilities	130,909	134,836
Long-Term Debt	0	0
Deferred Income Taxes	74,133	68,794
Other Non-Current Liabilities	70,236	68,725
Total shareholders' equity	1,307,149	986,484
Total liabilities and shareholders' equity	1,582,427	1,258,839
Non-Guarantor Subsidiaries [Member]
Current Assets:
Cash and cash equivalents	24,118	13,503	9,567	11,562
Trade accounts receivable, net	11,560	12,792
Inventories and supplies	2,102	2,310
Deferred income taxes	751	233
Funds held for customers	44,394	35,720
Other current assets	4,892	3,103
Total current assets	87,817	67,661
Long-term Investments		78
Property, Plant and Equipment, net	17,066	17,794
Assets Held for Sale	0	0
Intangibles, net	1,887	3,600
Goodwill	1,954	1,999
Investments in Consolidated Subsidiaries	0	0
Intercompany (Payable) Receivable	(43,913)	(45,951)
Other Non-Current Assets	15,896	10,878
Total assets	80,707	56,059
Current Liabilities:
Accounts payable	6,385	5,983
Accrued liabilities	51,825	42,556
Short-term debt	0	0
Total current liabilities	58,210	48,539
Long-Term Debt	0	0
Deferred Income Taxes	3,145	3,856
Other Non-Current Liabilities	3,874	3,049
Total shareholders' equity	15,478	615
Total liabilities and shareholders' equity	80,707	56,059
Eliminations [Member]
Current Assets:
Cash and cash equivalents	0	0
Trade accounts receivable, net	0	0
Inventories and supplies	0	0
Deferred income taxes	0	0
Funds held for customers	0	0
Other current assets	0	0
Total current assets	0	0
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	(1,322,627)	(987,099)
Intercompany (Payable) Receivable	0	0
Other Non-Current Assets	0	0
Total assets	(1,322,627)	(987,099)
Current Liabilities:
Accounts payable	0	0
Accrued liabilities	0	0
Short-term debt	0	0
Total current liabilities	0	0
Long-Term Debt	0	0
Deferred Income Taxes	0	0
Other Non-Current Liabilities	0	0
Total shareholders' equity	(1,322,627)	(987,099)
Total liabilities and shareholders' equity	$ (1,322,627)	$ (987,099)

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Shareholders' equity (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Shares outstanding [Abstract]
Common stock shares outstanding, beginning of year (in shares)	51,338,000
Balance, end of year (in shares)	50,826,000	51,338,000
Share repurchases [Abstract]
Payments for common shares repurchased	$ 23,620	$ 2,999	$ 1,319
Common Stock [Member]
Shares outstanding [Abstract]
Common stock shares outstanding, beginning of year (in shares)	51,338,000	51,189,000	51,131,000
Issued (in shares)	499,000	410,000	237,000
Repurchased (in shares)	(940,000)	(167,000)	(120,000)
Retired (in shares)	(71,000)	(94,000)	(59,000)
Balance, end of year (in shares)	50,826,000	51,338,000	51,189,000
Share repurchases [Abstract]
Common shares authorized for repurchase (in shares)	10,000,000
Common shares that remain available for repurchase (in shares)	5,257,000
Common shares repurchased during the period (in shares)	940,000	167,000	120,000
Payments for common shares repurchased	$ 23,620	$ 2,999	$ 1,319
Common stock purchase rights [Abstract]
Number of common shares each right entitles holder to purchase (in shares)	1
Exercise price of common stock purchase rights (in dollars per share)	$ 100
Beneficial ownership that could trigger the exercise of stock purchase rights (in hundredths)	20.00%
Percentage of market price of one share of common stock used to determine number of shares purchasable (in hundredths)	50.00%
Expiration date of common stock purchase rights	December 31, 2016
Redemption price of common stock purchase rights (in dollars per right)	$ 0.01
Maximum allowable period between independent director reviews of the plan (in years)	3Y

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Pension and other postretirement benefits (actuarial assumptions) (Details) (USD $) In Thousands, unless otherwise specified	4 Months Ended	8 Months Ended		12 Months Ended
	Apr. 29, 2009	Dec. 31, 2009		Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Postretirement Benefit Plan [Member]
Assumptions used in calculating benefit obligation [Abstract]
Discount rate (in hundredths)	7.25%			4.20%	4.90%		6.60%
Assumptions used in calculating net periodic benefit expense [Abstract]
Discount rate (in hundredths)	6.60%	7.25%	[1]	4.90%	5.45%
Expected return on plan assets (in hundredths)				7.75%	8.00%	8.50%
Assumed health care cost trend rates [Abstract]
Health care cost trend rate assumed for next year (in hundredths)				7.50%	7.75%	8.00%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) (in hundredths)				5.00%	5.00%	5.00%
Year that the rate reaches the ultimate trend rate		2017		2017	2017	2017
Effect of one-percentage-point change in assumed health care cost trend rate [Abstract]
Effect of one-percentage-point increase on total of service and interest cost				$ 92
Effect of one-percentage-point decrease on total of service and interest cost				(87)
Effect of one-percentage-point increase on benefit obligation				2,185
Effect of one-percentage-point decrease on benefit obligation				$ (2,069)
Pension Plans [Member]
Assumptions used in calculating benefit obligation [Abstract]
Discount rate (in hundredths)				4.20%	4.90%
Assumptions used in calculating net periodic benefit expense [Abstract]
Discount rate (in hundredths)				4.90%	5.45%
Discount rate, range minimum (in hundredths)						4.06%
Discount rate, range maximum (in hundredths)						6.60%
Expected return on plan assets (in hundredths)				0.00%	0.00%	4.50%

[1] For 2009, the rate presented for our postretirement benefit plan was used from April 30, 2009 through December 31, 2009, the period subsequent to the 2009 plan amendments. A discount rate of 6.60% was used for the period from January 1, 2009 through April 30, 2009.

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Supplemental guarantor financial information

12 Months Ended

Dec. 31, 2011

Supplemental guarantor financial information [Abstract]

Supplemental guarantor financial information

Note 17: Supplemental guarantor financial information

In March 2011, we issued $200,000 of long-term notes due in March 2019. The notes were issued under a private placement under Rule 144A of the Securities Act of 1933. These notes were subsequently registered with the SEC via a registration statement which became effective on January 10, 2012. These notes are jointly and severally guaranteed on a full and unconditional basis, subject to the release provisions described herein, by certain 100%-owned subsidiaries that guarantee any of our other indebtedness. These subsidiaries also guarantee our obligations under our credit facility and our long-term notes due in 2015. The subsidiary guarantees with respect to the notes due in March 2019 are subject to release upon the sale of all or substantially all of a subsidiary's assets, when the requirements for legal defeasance of the guaranteed securities have been satisfied, when the subsidiary is declared an unrestricted subsidiary, or upon satisfaction and discharge of the indenture.

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

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

Deluxe Corporation

Condensed Consolidating Balance Sheet

	December 31, 2011
	Deluxe Corporation			Guarantor subsidiaries		Non- guarantor subsidiaries			Eliminations			Total
ASSETS
Current Assets:
Cash and cash equivalents	$	3,047		$	1,522	$	24,118		$	-		$	28,687
Trade accounts receivable, net		-			57,463		11,560			-			69,023
Inventories and supplies		-			19,941		2,102			-			22,043
Deferred income taxes		1,035			5,430		751			-			7,216
Funds held for customers		-			-		44,394			-			44,394
Other current assets		5,851			10,469		4,892			-			21,212
Total current assets		9,933			94,825		87,817			-			192,575
Long-term Investments		36,338			8,809		-			-			45,147
Property, Plant and Equipment, net		-			96,345		17,066			-			113,411
Assets Held for Sale		-			2,741		-			-			2,741
Intangibles, net		-			155,452		1,887			-			157,339
Goodwill		-			775,044		1,954			-			776,998
Investments In Consolidated Subsidiaries		1,307,149			15,478		-			(1,322,627	)		-
Intercompany (Payable) Receivable		(316,876	)		360,789		(43,913	)		-			-
Other Non-Current Assets		11,758			72,944		15,896			-			100,598
Total assets	$	1,048,302		$	1,582,427	$	80,707		$	(1,322,627	)	$	1,388,809
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	13,401		$	44,908	$	6,385		$	-		$	64,694
Accrued liabilities		12,272			86,001		51,825			-			150,098
Long-term debt due within one year		85,575			-		-			-			85,575
Total current liabilities		111,248			130,909		58,210			-			300,367
Long-Term Debt		656,131			-		-			-			656,131
Deferred Income Taxes		(27,471	)		74,133		3,145			-			49,807
Other Non-Current Liabilities		5,705			70,236		3,874			-			79,815
Total Shareholders' Equity		302,689			1,307,149		15,478			(1,322,627	)		302,689
Total liabilities and shareholders' equity	$	1,048,302		$	1,582,427	$	80,707		$	(1,322,627	)	$	1,388,809

Deluxe Corporation

Condensed Consolidating Balance Sheet

	December 31, 2010
	Deluxe Corporation			Guarantor subsidiaries		Non-guarantor subsidiaries			Eliminations			Total
ASSETS
Current Assets:
Cash and cash equivalents	$	3,197		$	683	$	13,503		$	-		$	17,383
Trade accounts receivable, net		-			53,679		12,792			-			66,471
Inventories and supplies		-			19,350		2,310			-			21,660
Deferred income taxes		2,854			6,303		233			-			9,390
Funds held for customers		-			-		35,720			-			35,720
Other current assets		9,463			8,047		3,103			-			20,613
Total current assets		15,514			88,062		67,661			-			171,237
Long-term Investments		34,905			2,427		78						37,410
Property, Plant and Equipment, net		-			102,427		17,794			-			120,221
Assets Held for Sale		-			4,527		-			-			4,527
Intangibles, net		-			151,512		3,600			-			155,112
Goodwill		-			723,938		1,999			-			725,937
Investments In Consolidated Subsidiaries		986,484			615		-			(987,099	)		-
Intercompany (Payable) Receivable		(68,348	)		114,299		(45,951	)		-			-
Other Non-Current Assets		12,337			71,032		10,878			-			94,247
Total assets	$	980,892		$	1,258,839	$	56,059		$	(987,099	)	$	1,308,691
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	11,697		$	42,798	$	5,983		$	-		$	60,478
Accrued liabilities		9,440			92,038		42,556			-			144,034
Short-term debt		7,000			-		-			-			7,000
Total current liabilities		28,137			134,836		48,539			-			211,512
Long-Term Debt		748,122			-		-			-			748,122
Deferred Income Taxes		(25,898	)		68,794		3,856			-			46,752
Other Non-Current Liabilities		4,333			68,725		3,049			-			76,107
Total Shareholders' Equity		226,198			986,484		615			(987,099	)		226,198
Total liabilities and shareholders' equity	$	980,892		$	1,258,839	$	56,059		$	(987,099	)	$	1,308,691

Deluxe Corporation

Condensed Consolidating Statement of Income

	Year Ended December 31, 2011
	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Revenue	$	9,409		$	1,276,898		$	272,994		$	(141,705	)	$	1,417,596
Total cost of goods sold		-			459,119			159,589			(125,306	)		493,402
Gross Profit		9,409			817,779			113,405			(16,399	)		924,194
Selling, general and administrative expense, including net restructuring charges		9,323			569,957			89,169			(16,399	)		652,050
Asset impairment charges		-			1,196			-			-			1,196
Net gain on assets held for sale		-			(110	)		-			-			(110	)
Operating Income		86			246,736			24,236			-			271,058
Loss on early debt extinguishment		(6,995	)		-			-			-			(6,995	)
Interest expense		(47,629	)		(8,561	)		(1,190	)		9,583			(47,797	)
Other income (expense)		8,534			907			(40	)		(9,583	)		(182	)
(Loss) Income Before Income Taxes		(46,004	)		239,082			23,006			-			216,084
Income tax (benefit) provision		(22,143	)		86,489			7,143			-			71,489
(Loss) Income From Continuing Operations Before Equity In Earnings Of Consolidated Subsidiaries		(23,861	)		152,593			15,863			-			144,595
Equity In Earnings Of Consolidated Subsidiaries		168,456			15,863			-			(184,319	)		-
Income From Continuing Operations		144,595			168,456			15,863			(184,319	)		144,595
Net Loss From Discontinued Operations		-			-			-			-			-
Net Income	$	144,595		$	168,456		$	15,863		$	(184,319	)	$	144,595

Deluxe Corporation

Condensed Consolidating Statement of Income

	Year Ended December 31, 2010
	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Revenue	$	9,145		$	1,270,480		$	270,279		$	(147,667	)	$	1,402,237
Total cost of goods sold		-			454,374			162,473			(128,428	)		488,419
Gross Profit		9,145			816,106			107,806			(19,239	)		913,818
Selling, general and administrative expense, including net restructuring charges		5,663			551,519			94,331			(19,239	)		632,274
Operating Income		3,482			264,587			13,475			-			281,544
Interest expense		(44,061	)		(6,365	)		(930	)		7,191			(44,165	)
Other income (expense)		4,992			(58	)		827			(7,191	)		(1,430	)
(Loss) Income Before Income Taxes		(35,587	)		258,164			13,372			-			235,949
Income tax (benefit) provision		(16,952	)		92,691			6,815			-			82,554
(Loss) Income From Continuing Operations Before Equity In Earnings Of Consolidated Subsidiaries		(18,635	)		165,473			6,557			-			153,395
Equity In Earnings Of Consolidated Subsidiaries		171,259			6,557			-			(177,816	)		-
Income From Continuing Operations		152,624			172,030			6,557			(177,816	)		153,395
Net Loss From Discontinued Operations		-			(771	)		-			-			(771	)
Net Income	$	152,624		$	171,259		$	6,557		$	(177,816	)	$	152,624

Deluxe Corporation

Condensed Consolidating Statement of Income

	Year Ended December 31, 2009
	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Revenue	$	24,184		$	1,209,475		$	271,367		$	(160,831	)	$	1,344,195
Total cost of goods sold		-			470,835			167,635			(133,688	)		504,782
Gross Profit		24,184			738,640			103,732			(27,143	)		839,413
Selling, general and administrative expense, including net restructuring charges		8,816			541,135			101,116			(27,143	)		623,924
Asset impairment charges		-			24,900			-			-			24,900
Operating Income		15,368			172,605			2,616			-			190,589
Gain on early debt extinguishment		9,834			-			-			-			9,834
Interest expense		(46,166	)		(4,091	)		(768	)		4,745			(46,280	)
Other income		3,398			885			1,340			(4,745	)		878
(Loss) Income Before Income Taxes		(17,566	)		169,399			3,188			-			155,021
Income tax (benefit) provision		(13,685	)		68,203			1,138			-			55,656
(Loss) Income From Continuing Operations Before Equity In Earnings Of Consolidated Subsidiaries		(3,881	)		101,196			2,050			-			99,365
Equity In Earnings Of Consolidated Subsidiaries		103,246			2,050			-			(105,296	)		-
Income From Continuing Operations		99,365			103,246			2,050			(105,296	)		99,365
Net Loss From Discontinued Operations		-			-			-			-			-
Net Income	$	99,365		$	103,246		$	2,050		$	(105,296	)	$	99,365

Deluxe Corporation

Condensed Consolidating Statement of Cash Flows

	Year Ended December 31, 2011
	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Total
Net Cash Provided By Operating Activities of Continuing Operations	$	2,567		$	213,999		$	18,801		$	235,367
Cash Flows From Investing Activities:
Purchases of capital assets		-			(33,731	)		(1,775	)		(35,506	)
Payments for acquisitions, net of cash acquired		-			(80,486	)		(5,155	)		(85,641	)
Payments on company-owned life insurance policies		-			(6,383	)		-			(6,383	)
Loans to distributors		-			(4,879	)		(296	)		(5,175	)
Purchases of marketable securities		-			-			(18	)		(18	)
Other		(342	)		850			430			938
Net cash used by investing activities of continuing operations		(342	)		(124,629	)		(6,814	)		(131,785	)
Cash Flows From Financing Activities:
Net payments on short-term debt		(7,000	)		-			-			(7,000	)
Payments on long-term debt, including costs of debt reacquisition		(215,030	)		-			-			(215,030	)
Proceeds from issuing long-term debt		200,000			-			-			200,000
Payments for debt issue costs		(3,513	)		-			-			(3,513	)
Change in book overdrafts		742			(878	)		-			(136	)
Proceeds from issuing shares under employee plans		7,671			-			-			7,671
Excess tax benefit from share-based employee awards		1,052			-			-			1,052
Payments for common shares repurchased		(23,620	)		-			-			(23,620	)
Cash dividends paid to shareholders		(51,126	)		-			-			(51,126	)
Advances from (to) consolidated subsidiaries		88,449			(87,653	)		(796	)		-
Net cash used by financing activities of continuing operations		(2,375	)		(88,531	)		(796	)		(91,702	)
Effect Of Exchange Rate Change on Cash		-			-			(576	)		(576	)
Net Change In Cash And Cash Equivalents		(150	)		839			10,615			11,304
Cash And Cash Equivalents: Beginning Of Year		3,197			683			13,503			17,383
Cash And Cash Equivalents: End Of Year	$	3,047		$	1,522		$	24,118		$	28,687

Deluxe Corporation

Condensed Consolidating Statement of Cash Flows

	Year Ended December 31, 2010
	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Total
Net Cash (Used) Provided By Operating Activities of Continuing Operations	$	(16,786	)	$	224,279		$	5,122		$	212,615
Cash Flows From Investing Activities:
Purchases of capital assets		-			(43,005	)		(927	)		(43,932	)
Payments for acquisitions, net of cash acquired		-			(98,621	)		-			(98,621	)
Purchases of customer lists		-			(70	)		(195	)		(265	)
Purchases of marketable securities		-			-			(14	)		(14	)
Proceeds from sales of marketable securities		-			-			1,970			1,970
Proceeds from company-owned life insurance policies		5,782			361			-			6,143
Other		(1,410	)		(41	)		-			(1,451	)
Net cash provided (used) by investing activities of continuing operations		4,372			(141,376	)		834			(136,170	)
Cash Flows From Financing Activities:
Net payments on short-term debt		(19,000	)		-			-			(19,000	)
Payments for debt issue costs		(2,361	)		-			-			(2,361	)
Change in book overdrafts		(1,090	)		397			-			(693	)
Proceeds from issuing shares under employee plans		3,267			-			-			3,267
Excess tax benefit from share-based employee awards		680			-			-			680
Payments for common shares repurchased		(2,999	)		-			-			(2,999	)
Cash dividends paid to shareholders		(51,435	)		-			-			(51,435	)
Advances from (to) consolidated subsidiaries		85,824			(83,114	)		(2,710	)		-
Net cash provided (used) by financing activities of continuing operations		12,886			(82,717	)		(2,710	)		(72,541	)
Effect Of Exchange Rate Change on Cash		-			-			690			690
Net Change In Cash And Cash Equivalents		472			186			3,936			4,594
Cash And Cash Equivalents: Beginning Of Year		2,725			497			9,567			12,789
Cash And Cash Equivalents: End Of Year	$	3,197		$	683		$	13,503		$	17,383

Deluxe Corporation

Condensed Consolidating Statement of Cash Flows

	Year Ended December 31, 2009
	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Total
Net Cash (Used) Provided By Operating Activities of Continuing Operations	$	(9,287	)	$	217,167		$	(1,442	)	$	206,438
Cash Flows From Investing Activities:
Purchases of capital assets		-			(41,777	)		(2,489	)		(44,266	)
Payments for acquisitions, net of cash acquired		-			(30,825	)		-			(30,825	)
Purchases of customer lists		-			(1,639	)		-			(1,639	)
Purchases of marketable securities		-			-			(4,581	)		(4,581	)
Proceeds from sales of marketable securities		-			-			914			914
Other		(1,234	)		(157	)		-			(1,391	)
Net cash used by investing activities of continuing operations		(1,234	)		(74,398	)		(6,156	)		(81,788	)
Cash Flows From Financing Activities:
Net payments on short-term debt		(52,000	)		-			-			(52,000	)
Payments on long-term debt, including costs of debt reacquisition		(21,187	)		(1,440	)		-			(22,627	)
Change in book overdrafts		(3,457	)		97			-			(3,360	)
Proceeds from issuing shares under employee plans		1,972			-			-			1,972
Excess tax benefit from share-based employee awards		68			-			-			68
Payments for common shares repurchased		(1,319	)		-			-			(1,319	)
Cash dividends paid to shareholders		(51,279	)		-			-			(51,279	)
Advances from (to) consolidated subsidiaries		136,956			(140,965	)		4,009			-
Net cash provided (used) by financing activities of continuing operations		9,754			(142,308	)		4,009			(128,545	)
Effect Of Exchange Rate Change on Cash		-			-			1,594			1,594
Cash Used By Operating Activities Of Discontinued Operations		-			(470	)		-			(470	)
Cash Used By Investing Activities Of Discontinued Operations		-			(30	)		-			(30	)
Net Change In Cash And Cash Equivalents		(767	)		(39	)		(1,995	)		(2,801	)
Cash And Cash Equivalents: Beginning Of Year		3,492			536			11,562			15,590
Cash And Cash Equivalents: End Of Year	$	2,725		$	497		$	9,567		$	12,789

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Supplemental balance sheet and cash flow information (goodwill) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010
Goodwill [Line Items]
Goodwill	$ 776,998		$ 725,937
Goodwill [Roll Forward]
Goodwill, gross, beginning of period	745,937		678,666
Accumulated impairment charges	(20,000)		(20,000)
Goodwill, net of accumulated impairment charges, beginning balance	725,937		658,666
Currency translation adjustment	(46)		105
Goodwill, gross, end of period	796,998		745,937
Accumulated impairment charges	(20,000)		(20,000)
Goodwill, net, end of period	776,998		725,937
New England Business Service Inc. (NEBS) [Member]
Goodwill [Line Items]
Goodwill	472,082
Goodwill [Roll Forward]
Goodwill, net, end of period	472,082
Designer Checks [Member]
Goodwill [Line Items]
Goodwill	77,970	[1]
Goodwill [Roll Forward]
Goodwill, net, end of period	77,970	[1]
Hostopia.com Inc. [Member]
Goodwill [Line Items]
Goodwill	68,555
Goodwill [Roll Forward]
Goodwill, net, end of period	68,555
Custom Direct [Member]
Goodwill [Line Items]
Goodwill	66,269
Goodwill [Roll Forward]
Acquisitions			66,269
Goodwill, net, end of period	66,269
Banker's Dashboard [Member]
Goodwill [Line Items]
Goodwill	26,281	[1]
Goodwill [Roll Forward]
Acquisitions	26,281	[1]
Goodwill, net, end of period	26,281	[1]
Abacus America Inc. [Member]
Goodwill [Line Items]
Goodwill	24,225
Goodwill [Roll Forward]
Goodwill, net, end of period	24,225
Johnson Group [Member]
Goodwill [Line Items]
Goodwill	7,320	[1]
Goodwill [Roll Forward]
Goodwill, net, end of period	7,320	[1]
Direct Checks Acquisition [Member]
Goodwill [Line Items]
Goodwill	4,267
Goodwill [Roll Forward]
Goodwill, net, end of period	4,267
Logo Design Mojo [Member]
Goodwill [Line Items]
Goodwill	1,359	[1]
Goodwill [Roll Forward]
Goodwill, net, end of period	1,359	[1]
MerchEngines.com [Member]
Goodwill [Line Items]
Goodwill	1,140	[1]
Goodwill [Roll Forward]
Goodwill, net, end of period	1,140	[1]
Dots and Pixels Inc. [Member]
Goodwill [Line Items]
Goodwill	1,021
Goodwill [Roll Forward]
Goodwill, net, end of period	1,021
Cornerstone Customer Solutions [Member]
Goodwill [Line Items]
Goodwill	897	[1]
Goodwill [Roll Forward]
Acquisitions			897
Goodwill, net, end of period	897	[1]
All Trade Computer Forms, Inc. [Member]
Goodwill [Line Items]
Goodwill	786
Goodwill [Roll Forward]
Goodwill, net, end of period	786
PsPrint, LLC [Member]
Goodwill [Line Items]
Goodwill	24,826	[1]
Goodwill [Roll Forward]
Acquisitions	24,826	[1]
Goodwill, net, end of period	24,826	[1]
Small Business Services [Member]
Goodwill [Line Items]
Goodwill	601,314		576,534
Goodwill [Roll Forward]
Goodwill, gross, beginning of period	596,534		596,429
Accumulated impairment charges	(20,000)		(20,000)
Goodwill, net of accumulated impairment charges, beginning balance	576,534		576,534
Currency translation adjustment	(46)		105
Goodwill, gross, end of period	621,314		596,534
Accumulated impairment charges	(20,000)		(20,000)
Goodwill, net, end of period	601,314		576,534
Small Business Services [Member] | PsPrint, LLC [Member]
Goodwill [Roll Forward]
Acquisitions	24,826	[1]
Financial Services [Member]
Goodwill [Line Items]
Goodwill	27,178		897
Goodwill [Roll Forward]
Goodwill, gross, beginning of period	897		0
Accumulated impairment charges	0
Goodwill, net of accumulated impairment charges, beginning balance	897		0
Acquisitions	0
Currency translation adjustment	0		0
Goodwill, gross, end of period	27,178		897
Accumulated impairment charges	0		0
Goodwill, net, end of period	27,178		897
Financial Services [Member] | Banker's Dashboard [Member]
Goodwill [Roll Forward]
Acquisitions	26,281	[1]
Financial Services [Member] | Cornerstone Customer Solutions [Member]
Goodwill [Roll Forward]
Acquisitions			897	[1]
Direct Checks [Member]
Goodwill [Line Items]
Goodwill	148,506		148,506
Goodwill [Roll Forward]
Goodwill, gross, beginning of period	148,506		82,237
Accumulated impairment charges	0
Goodwill, net of accumulated impairment charges, beginning balance	148,506		82,237
Acquisitions	0
Currency translation adjustment	0		0
Goodwill, gross, end of period	148,506		148,506
Accumulated impairment charges	0		0
Goodwill, net, end of period	148,506		148,506
Direct Checks [Member] | Custom Direct [Member]
Goodwill [Roll Forward]
Acquisitions			$ 66,269

[1] This goodwill is deductible for income tax purposes.

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Business segment information (Tables)

12 Months Ended

Dec. 31, 2011

Business segment information [Abstract]

Business segment information

The following is our segment information as of and for the years ended December 31:

		Reportable business segments
		Small Business Services		Financial Services		Direct Checks		Corporate		Consolidated
Revenue from external customers:	2011	$	846,449	$	342,382	$	228,765	$	-	$	1,417,596
	2010		796,254		390,331		215,652		-		1,402,237
	2009		785,109		396,353		162,733		-		1,344,195
Operating income:	2011		145,219		59,804		66,035		-		271,058
	2010		137,534		84,158		59,852		-		281,544
	2009		60,804		75,091		54,694		-		190,589
Depreciation and amortization expense:	2011		44,706		13,009		15,628		-		73,343
	2010		45,163		11,788		16,964		-		73,915
	2009		52,507		10,946		4,312		-		67,765
Asset impairment charges:	2011		1,196		-		-		-		1,196
	2010		-		-		-		-		-
	2009		24,900		-		-		-		24,900
Total assets:	2011		836,918		99,803		173,435		278,653		1,388,809
	2010		772,799		66,065		178,880		290,947		1,308,691
	2009		778,191		57,716		96,288		279,015		1,211,210
Capital asset purchases:	2011		-		-		-		35,506		35,506
	2010		-		-		-		43,932		43,932
	2009		-		-		-		44,266		44,266

Revenue by product and service category

Revenue by product and service category for each year was as follows:

	2011		2010		2009
Checks, including contract settlements	$	871,731	$	896,563	$	853,729
Forms		195,905		194,724		198,855
Accessories and other products		126,949		123,264		129,323
Marketing solutions, including services		150,973		126,211		112,848
Other services		72,038		61,475		49,440
Total revenue	$	1,417,596	$	1,402,237	$	1,344,195

Geographical information

The following information is based on the geographic locations of our subsidiaries:

	2011		2010		2009
Revenue from external customers:
United States	$	1,334,540	$	1,325,163	$	1,275,885
Foreign, primarily Canada		83,056		77,074		68,310
Total revenue	$	1,417,596	$	1,402,237	$	1,344,195
Long-lived assets:
United States	$	1,139,678	$	1,086,685	$	996,505
Foreign, primarily Canada		11,409		13,359		16,006
Total long-lived assets	$	1,151,087	$	1,100,044	$	1,012,511

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Debt and leases (leases) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Future minimum lease payments under noncancelable operating leases [Abstract]
2012	$ 10,249
2013	7,117
2014	2,532
2015	920
2016	772
2017	40
Total minimum lease payments	21,630
Composition of rent expense [Abstract]
Minimum rentals	10,068	10,313	8,180
Sublease rentals	(144)	(190)	(1,677)
Net rental expense	$ 9,924	$ 10,123	$ 6,503

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Share-based compensation plans (Tables)

12 Months Ended

Dec. 31, 2011

Share-based compensation plans [Abstract]

Expense for share-based compensation awards

The following amounts were recognized in our consolidated statements of income for share-based compensation awards:

	2011			2010			2009
Stock options	$	3,633		$	2,967		$	3,213
Restricted shares and restricted stock units		1,799			2,866			3,135
Employee stock purchase plan		301			317			315
Total share-based compensation expense	$	5,733		$	6,150		$	6,663
Income tax benefit	$	(1,930	)	$	(2,123	)	$	(2,375	)

Weighted-average assumptions used in the Black-Scholes option pricing model

The following weighted-average assumptions were used in the Black-Scholes option pricing model in determining the fair value of stock options granted:

	2011		2010		2009
Risk-free interest rate (%)		2.0		2.2		1.6
Dividend yield (%)		3.9		3.2		3.4
Expected volatility (%)		58.6		54.0		44.2
Weighted-average option life (years)		4.3		4.8		4.6

Stock options rollforward

Information regarding options issued under the current and all previous plans was as follows:

(options in thousands)	Number of  options			Weighted- average exercise price per option		Aggregate intrinsic  value		Weighted- average remaining contractual term (in years)
Outstanding at December 31, 2008		3,105		$	33.50
Granted		790			9.75
Exercised		(3	)		9.73
Forfeited or expired		(1,051	)		39.68
Outstanding at December 31, 2009		2,841			24.64
Granted		695			18.37
Exercised		(185	)		11.08
Forfeited or expired		(438	)		33.94
Outstanding at December 31, 2010		2,913			22.60
Granted		598			25.56
Exercised		(383	)		16.56
Forfeited or expired		(362	)		28.87
Outstanding at December 31, 2011		2,766			23.26	$	7,519		3.7
Exercisable at December 31, 2009		1,643		$	30.60
Exercisable at December 31, 2010		1,675			27.66
Exercisable at December 31, 2011		1,685			25.18	$	3,378		2.6

Restricted stock units rollforward

Each restricted stock unit is convertible into one share of common stock upon completion of the vesting period. Information regarding our restricted stock units was as follows:

(units in thousands)	Number of  units			Weighted- average grant date fair value per unit		Aggregate  intrinsic value		Weighted- average remaining contractual term (in years)
Outstanding at December 31, 2008		145		$	26.65
Granted		17			12.27
Vested		(40	)		24.04
Forfeited		(2	)		25.57
Outstanding at December 31, 2009		120			25.48
Granted		34			19.85
Vested		(68	)		25.57
Outstanding at December 31, 2010		86			23.58
Granted		26			24.70
Vested		(5	)		16.84
Forfeited		(6	)		20.61
Outstanding at December 31, 2011		101			24.26	$	2,305		4.4

Unvested restricted shares rollforward

Information regarding unvested restricted shares was as follows:

	Number of shares			Weighted- average grant date fair value per share
Unvested at December 31, 2008		453		$	25.53
Granted		44			14.81
Vested		(206	)		25.19
Forfeited		(23	)		25.82
Unvested at December 31, 2009		268			24.00
Granted		52			20.00
Vested		(131	)		26.01
Forfeited		(7	)		21.83
Unvested at December 31, 2010		182			21.48
Granted		25			26.58
Vested		(166	)		21.72
Forfeited		(1	)		18.14
Unvested at December 31, 2011		40			23.71

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Earnings per share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Earnings per share - basic: [Abstract]
Income from continuing operations	$ 144,595	$ 153,395	$ 99,365
Income allocated to participating securities	(823)	(804)	(751)
Income available to common shareholders	143,772	152,591	98,614
Weighted-average shares outstanding (in shares)	51,036	51,123	50,837
Earnings per share - basic (in dollars per share)	$ 2.82	$ 2.98	$ 1.94
Income from continuing operations	144,595	153,395	99,365
Income allocated to participating securities	(586)	(802)	(751)
Re-measurement of share-based awards classified as liabilities	(20)	79	(18)
Income available to common shareholders	$ 143,989	$ 152,672	$ 98,596
Weighted-average shares outstanding (in shares)	51,036	51,123	50,837
Dilutive impact of potential common shares (in shares)	379	202	88
Weighted-average shares and potential common shares outstanding (in shares)	51,415	51,325	50,925
Earnings per share - diluted (in dollars per share)	$ 2.80	$ 2.97	$ 1.94
Antidilutive options excluded from calculation (in shares)	1,835	2,324	2,128

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Employee benefit plans (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Profit sharing, defined contribution and 401(k) plans [Abstract]
Percentage of eligible compensation contributed to defined contribution pension plan (in hundredths)		4.00%	4.00%
Maximum allowable employee contributions, employees under age 50	$ 17
Maximum allowable employee contributions as a percentage of eligible wages, employees under age 50 (in hundredths)	50.00%
Maximum allowable employee contributions, employees 50 years of age and older	22
Employer 401(k) plan matching contribution description	100% of the first 1% of wages contributed by employees and 50% of the next 5% of wages contributed
Profit sharing/cash bonus plans expense	16,361	18,500	22,751
Defined contribution pension plan expense	0	8,664	9,953
401(k) plan expense	6,226	5,636	6,312
Deferred compensation plan [Abstract]
Maximum percentage of base salary employees can defer (in hundredths)		100.00%
Maximum percentage of bonus employees can defer (in hundredths)		50.00%
Deferred compensation plan liability	2,391	2,920
Investments in company-owned life insurance policies that fund the deferred compensation plan	13,489	12,872
Voluntary employee beneficiary association (VEBA) trust [Abstract]
Contributions to VEBA trust	36,792	39,400	40,300
Amount by which prepaid balance in VEBA trust exceeds the liability for IBNR medical claims	$ 361	$ 959

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Income tax provision (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Current tax provision [Abstract]
Federal	$ 49,702		$ 49,909		$ 37,945
State	9,168		8,424		4,323
Foreign	3,269		3,859		1,349
Total	62,139		62,192		43,617
Deferred tax provision	9,350		20,362		12,039
Provision for income taxes	71,489		82,554		55,656
Effective tax rate reconciliation [Abstract]
Income tax at federal statutory rate (in hundredths)	35.00%		35.00%		35.00%
State income tax expense, net of federal income tax benefit (in hundredths)	2.80%		2.80%		3.50%
Change in unrecognized tax benefits, including interest and penalties (in hundredths)	0.50%		(1.30%)		0.10%
Non-deductible portion of goodwill impairment charge (in hundredths) (see Note 7)	0.00%		0.00%		2.90%
Qualified production activity deduction (in hundredths)	(2.40%)		(2.40%)		(1.80%)
Impact of health care legislation on deferred income taxes (in hundredths)	(1.20%)		1.70%		0.00%
Receivables for prior year tax returns (in hundredths)	(0.80%)	[1]	0.00%	[1]	(2.20%)	[1]
Other (in hundredths)	(0.80%)		(0.80%)		(1.60%)
Income tax provision (in hundredths)	33.10%		35.00%		35.90%
Charge resulting from the Health Care and Education Reconciliation Act of 2010			4,063
Credit resulting from actions to restore a portion of the deferred tax asset attributable to the receipt of Medicare Part D subsidy payments	(2,539)
Unrecognized tax benefits [Roll forward]
Balance, beginning of period	6,538		7,978		11,457
Additions for tax positions of current year	510		641		606
Additions for tax positions of prior years	1,646		1,406		2,316
Fair value of acquired tax positions (see Note 4)			1,069
Reductions for tax positions of prior years	(219)		(2,634)		(2,152)
Settlements	(1,507)		(640)		(3,186)
Lapse of statutes of limitations	(732)		(1,282)		(1,063)
Balance, end of period	6,236		6,538		7,978
Unrecognized tax benefits [Abstract]
Amount of unrecognized tax benefits as of the balance sheet date that would positively affect income tax expense and the related effective tax rate if recognized	5,152
Accruals for interest and penalties	1,497		1,382
Expense (credit) for interest and penalties	639		(837)		(446)
Amount by which it is reasonably possible that unrecognized tax benefits will decrease within the next 12 months	4,500
Amount by which it is reasonably possible that unrecognized tax benefits will increase within the next 12 months	700
Deferred tax liabilities [Abstract]
Goodwill	40,761		34,818
Intangible assets	28,831		33,774
Property, plant and equipment	6,080		4,201
Deferred advertising costs	5,769		5,964
Early extinguishment of debt (see Note 13)	3,775		3,784
All other deferred tax liabilities	4,558		3,061
Total deferred tax liabilities	89,774		85,602
Deferred tax assets [Abstract]
Employee benefit plans	29,776		29,593
Reserves and accruals	6,574		5,457
Net operating loss and tax credit carryforwards	3,366		5,760
Inventories	2,800		2,771
Federal benefit of state uncertain tax positions	1,776		1,719
Interest rate lock agreements (see Note 6)	1,751		2,709
All other deferred tax assets	1,748		1,370
Total deferred tax assets	47,791		49,379
Valuation allowance	(608)		(1,139)
Net deferred tax assets	47,183		48,240
Tax credit carryforwards	586
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	4,088
Canada [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	3,689
State [Member]
Operating Loss Carryforwards [Line Items]
Operating loss carryforwards	$ 19,026

[1] Relates to amendments to prior year income tax returns claiming refunds primarily associated with foreign tax returns for 2011 and federal and state income tax credits for 2009.

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Supplemental balance sheet and cash flow information (marketable securities) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011		Dec. 31, 2010
Corporate Investments [Abstract]
Cost	$ 7,176		$ 12,255
Gross unrealized gains	243		23
Gross unrealized losses	0		0
Total marketable securities	7,419		12,278
Funds Held For Customers [Abstract]
Funds held for customers, cash and cash equivalents	38,976		25,471
Expected maturities of available-for-sale securities [Abstract]
Due in one year or less	2,108
Due in three to five years	1,353
Due after five years	3,958
Total marketable securities	7,419		12,278
Funds Held for Customers [Member]
Corporate Investments [Abstract]
Cost	5,175	[1]	10,226	[2]
Gross unrealized gains	243	[1]	23	[2]
Gross unrealized losses	0	[1]	0	[2]
Total marketable securities	5,418	[1]	10,249	[2]
Expected maturities of available-for-sale securities [Abstract]
Total marketable securities	5,418	[1]	10,249	[2]
Money Market Securities [Member] | Corporate Investments [Member]
Corporate Investments [Abstract]
Cost	2,001		2,029
Gross unrealized gains	0		0
Gross unrealized losses	0		0
Total marketable securities	2,001		2,029
Expected maturities of available-for-sale securities [Abstract]
Total marketable securities	2,001		2,029
Money Market Securities [Member] | Funds Held for Customers [Member]
Corporate Investments [Abstract]
Cost	3	[1]	5,078	[2]
Gross unrealized gains	0	[1]	0	[2]
Gross unrealized losses	0	[1]	0	[2]
Total marketable securities	3	[1]	5,078	[2]
Expected maturities of available-for-sale securities [Abstract]
Total marketable securities	3	[1]	5,078	[2]
Canadian and Provincial Government Securities [Member] | Funds Held for Customers [Member]
Corporate Investments [Abstract]
Cost	5,172	[1]	5,148	[2]
Gross unrealized gains	243	[1]	23	[2]
Gross unrealized losses	0	[1]	0	[2]
Total marketable securities	5,415	[1]	5,171	[2]
Expected maturities of available-for-sale securities [Abstract]
Total marketable securities	$ 5,415	[1]	$ 5,171	[2]

[1] Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2011, also included cash and cash equivalents of $38,976.

[2] Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2010 also included cash and cash equivalents of $25,471.

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Significant accounting policies

12 Months Ended

Dec. 31, 2011

Significant accounting policies [Abstract]

Significant accounting policies

Note 1: Significant accounting policies

Consolidation – The consolidated financial statements include the accounts of Deluxe Corporation and its wholly-owned subsidiaries. All intercompany accounts, transactions and profits have been eliminated.

Use of estimates – We have prepared the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. In this process, it is necessary for us to make certain assumptions and estimates affecting the amounts reported in the consolidated financial statements and related notes. These estimates and assumptions are developed based upon all available information. However, actual results can differ from assumed and estimated amounts.

Foreign currency translation – The financial statements of our foreign subsidiaries are measured in the respective subsidiaries' functional currencies, primarily Canadian dollars, and are translated into U.S. dollars. Assets and liabilities are translated using the exchange rates in effect at the balance sheet date. Revenue and expenses are translated at the average exchange rates during the year. The resulting translation gains and losses are reflected in accumulated other comprehensive loss in the shareholders' equity section of our consolidated balance sheets. Foreign currency transaction gains and losses are recorded in other (expense) income in our consolidated statements of income.

Cash and cash equivalents – We consider all cash on hand and other highly liquid investments with original maturities of three months or less to be cash and cash equivalents. As a result of our cash management system, checks issued by us but not presented to the banks for payment may create negative book cash balances. These book overdrafts are included in accounts payable and totaled $2,871 as of December 31, 2011 and $3,007 as of December 31, 2010.

Marketable securities – Marketable securities consist of investments in mutual funds. They are classified as available for sale and are carried at fair value on the consolidated balance sheets. Because of the short-term nature of the underlying investments, the cost of these securities approximates their fair value. The cost of securities sold is determined using the average cost method.

Trade accounts receivable – Trade accounts receivable are initially recorded at fair value upon the sale of goods or services to customers. They are stated net of allowances for uncollectible accounts, which represent estimated losses resulting from the inability of customers to make the required payments. When determining the allowances for uncollectible accounts, we take several factors into consideration including the overall composition of accounts receivable aging, our prior history of accounts receivable write-offs, the type of customer and our day-to-day knowledge of specific customers. Changes in the allowances for uncollectible accounts are included in selling, general and administrative (SG&A) expense in our consolidated statements of income. The point at which uncollected accounts are written off varies by type of customer, but generally does not exceed one year from the due date of the receivable.

Inventories and supplies – Inventories and supplies are stated at the lower of average cost or market. Average cost approximates cost calculated on a first-in, first-out basis. Supplies consist of items not used directly in the production of goods, such as maintenance and janitorial supplies utilized in the production area.

Funds held for customers – Our Canadian payroll services business collects funds from clients to pay their payroll and related taxes. We hold these funds temporarily until payments are remitted to the clients' employees and the appropriate taxing authorities. These funds, consisting of cash and mutual fund investments, are reported as funds held for customers in our consolidated balance sheets. The corresponding liability for these obligations is included in accrued liabilities in our consolidated balance sheets. The mutual fund investments are carried at fair value, with unrealized gains and losses included in accumulated other comprehensive loss in our consolidated balance sheets. Realized gains and losses are included in revenue in our consolidated statements of income and were not significant for 2011, 2010 or 2009.

Long-term investments – Long-term investments consist primarily of cash surrender values of life insurance contracts. Additionally, long-term investments include an investment in domestic mutual funds with a fair value of $2,165 as of December 31, 2011 and $2,283 as of December 31, 2010. We have elected to account for this investment 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. Realized and unrealized gains and losses, as well as dividends earned by the mutual fund investment, are included in SG&A expense in the consolidated statements of income. This investment corresponds to a liability under an officers' deferred compensation plan which 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 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 income. The cost of securities sold is determined using the average cost method.

Property, plant and equipment – Property, plant and equipment, including leasehold and other improvements that extend an asset's useful life or productive capabilities, are stated at historical cost. Buildings have been assigned 40-year lives and machinery and equipment are generally assigned lives ranging from one to 11 years, with a weighted-average life of 7.7 years as of December 31, 2011. Buildings, machinery and equipment are generally depreciated using accelerated methods. Leasehold and building improvements are depreciated on the straight-line basis over the estimated useful life of the property or the life of the lease, whichever is shorter. Maintenance and repairs are expensed as incurred. Gains or losses resulting from the disposition of property, plant and equipment are included in SG&A expense in the consolidated statements of income, with the exception of building sales. Such gains and losses are reported separately in the consolidated statements of income.

Intangibles – Intangible assets are stated at historical cost. Amortization expense is generally determined on the straight-line basis over periods ranging from one to 20 years, with a weighted-average life of 6.2 years as of December 31, 2011. Customer lists and distributor contracts are generally amortized using accelerated methods. Each reporting period, we evaluate the remaining useful lives of our amortizable intangibles to determine whether events and circumstances warrant a revision to the remaining period of amortization. If our estimate of an asset's remaining useful life is revised, the remaining carrying amount of the asset is amortized prospectively over the revised remaining useful life. As of December 31, 2011, we held a trade name asset which has been assigned an indefinite life. As such, this asset is not amortized, but is subject to impairment testing on at least an annual basis. Gains or losses resulting from the disposition of intangibles are included in SG&A expense in the consolidated statements of income.

We capitalize costs of software developed or obtained for internal use, including website development costs, once the preliminary project stage has been completed, management commits to funding the project and it is probable that the project will be completed and the software will be used to perform the function intended. Capitalized costs include only (1) external direct costs of materials and services consumed in developing or obtaining internal-use software, (2) payroll and payroll-related costs for employees who are directly associated with and who devote time to the internal-use software project, and (3) interest costs incurred, when significant, while developing internal-use software. Costs incurred in populating websites with information about the company or products are expensed as incurred. Capitalization of costs ceases when the project is substantially complete and ready for its intended use. The carrying value of internal-use software is reviewed in accordance with our policy on impairment of long-lived assets and amortizable intangibles.

Impairment of long-lived assets and amortizable intangibles – We evaluate the recoverability of property, plant, equipment and amortizable intangibles not held for sale whenever events or changes in circumstances indicate that an asset's carrying amount may not be recoverable. Such circumstances could include, but are not limited to, (1) a significant decrease in the market value of an asset, (2) a significant adverse change in the extent or manner in which an asset is used or in its physical condition, or (3) an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of an asset. We measure the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. If the sum of the expected future net cash flows is less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeds the fair value of the asset. As quoted market prices are not available for the majority of our assets, the estimate of fair value is based on various valuation techniques, including the discounted value of estimated future cash flows.

We evaluate the recoverability of property, plant, equipment and intangibles held for sale by comparing the asset's carrying amount with its fair value less costs to sell. Should the fair value less costs to sell be less than the carrying value of the long-lived asset, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeds the fair value of the asset less costs to sell.

The evaluation of asset impairment requires us to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts.

Impairment of indefinite-lived intangibles and goodwill – We evaluate the carrying value of indefinite-lived intangibles and goodwill on July 31st of each year and between annual evaluations if events occur or circumstances change that would indicate a possible impairment. Such circumstances could include, but are not limited to, (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, (3) an adverse action or assessment by a regulator, or (4) an adverse change in market conditions which are indicative of a decline in the fair value of the assets.

When evaluating whether our indefinite-lived trade name is impaired, we compare the carrying amount of the asset to its estimated fair value. The estimate of fair value is based on a relief from royalty method which calculates the cost savings associated with owning rather than licensing the trade name. An assumed royalty rate is applied to forecasted revenue and the resulting cash flows are discounted. Should the estimated fair value be less than the carrying value of the asset, an impairment loss would be recognized. The impairment loss is calculated as the amount by which the carrying value of the asset exceeds the fair value of the asset. The impairment analysis completed during 2009 indicated impairment of the indefinite-lived trade name. See Note 7 for further information regarding the impairment charge. The impairment analyses completed during 2011 and 2010 indicated no impairment. In addition to the required impairment analyses, we regularly evaluate the remaining useful life of this asset to determine whether events and circumstances continue to support an indefinite useful life. If we were to determine that the asset has a finite useful life, we would test it for impairment and then amortize its remaining carrying value over its estimated remaining useful life.

In 2009 and 2010, a two-step, quantitative approach was used in evaluating goodwill for impairment. First, we calculated the estimated fair value of each reporting unit to which goodwill was assigned and compared this estimated fair value to the carrying amount of its net assets. In calculating fair value, we used the income approach. The income approach is a valuation technique under which we estimated future cash flows using the reporting unit's financial forecast from the perspective of an unrelated market participant. Using historical trending and internal forecasting techniques, we projected revenue for the next five years. We applied our fixed and variable cost experience rates to the projected revenue to arrive at the future cash flows. A terminal value was then applied to the projected cash flow stream. Future estimated cash flows were discounted to their present value to calculate fair value. The discount rate was the value-weighted average of our estimated cost of capital derived using both known and estimated customary market metrics. In determining the fair value of our reporting units we were required to estimate a number of factors, including projected future operating results, terminal growth rates, economic conditions, anticipated future cash flows, the discount rate and the allocation of shared or corporate items. For reasonableness, the summation of our reporting units' fair values was compared to our consolidated fair value as indicated by our market capitalization plus an appropriate control premium. If the carrying amount of a reporting unit's net assets exceeded its estimated fair value, the second step of the goodwill impairment analysis required us to measure the amount of the impairment loss. An impairment loss is calculated by comparing the implied fair value of the goodwill to its carrying amount. In calculating the implied fair value of the goodwill, we measure the fair value of the reporting unit's assets and liabilities, excluding goodwill. The excess of the fair value of the reporting unit over the amount assigned to its assets and liabilities, excluding goodwill, is the implied fair value of the reporting unit's goodwill. We recorded a goodwill impairment charge during the first quarter of 2009. See Note 7 for further information. No goodwill impairment charges were recorded during 2010.

We adopted Accounting Standards Update (ASU) No. 2011-08 during the quarter ended September 30, 2011. This new standard gives us the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after this qualitative assessment, we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step, quantitative impairment test described earlier is unnecessary. In completing our qualitative analysis during the third quarter of 2011, we noted no changes in events or circumstances which would require us to complete the two-step quantitative goodwill impairment analysis for any of our reporting units. See Note 7 for further information regarding this qualitative analysis. As such, no impairment charges were recorded as a result of our 2011 annual impairment analysis.

Contract acquisition costs – We record contract acquisition costs when we sign or renew certain contracts with our financial institution clients. These costs, which are essentially pre-paid product discounts, consist of cash payments or accruals related to amounts owed to financial institution clients by our Financial Services segment. Contract acquisition costs are generally amortized as reductions of revenue on the straight-line basis over the related contract term. Currently, these amounts are being amortized over periods ranging from one to 10 years, with a weighted-average life of 6.1 years as of December 31, 2011. Whenever events or changes occur that impact the related contract, including significant declines in the anticipated profitability, we evaluate the carrying value of the contract acquisition costs to determine if impairment has occurred. Should a financial institution cancel a contract prior to the agreement's termination date, or should the volume of orders realized through a financial institution fall below contractually-specified minimums, we generally have a contractual right to a refund of the remaining unamortized contract acquisition costs. These costs are included in other non-current assets in the consolidated balance sheets.

Advertising costs – Deferred advertising costs include materials, printing, labor and postage costs related to direct response advertising programs of our Direct Checks and Small Business Services segments. These costs are amortized as SG&A expense over periods (not exceeding 18 months) that correspond to the estimated revenue streams of the individual advertisements. The actual revenue streams are analyzed at least annually to monitor the propriety of the amortization periods. Judgment is required in estimating the future revenue streams, especially with regard to check re-orders which can span an extended period of time. Significant changes in the actual revenue streams would require the amortization periods to be modified, thus impacting our results of operations during the period in which the change occurred and in subsequent periods. Within our Direct Checks segment, approximately 84% of the costs of individual advertisements is expensed within six months of the advertisement. The majority of the deferred advertising costs of our Small Business Services segment are fully amortized within six months of the advertisement. Deferred advertising costs are included in other non-current assets in the consolidated balance sheets, as portions are amortized over periods in excess of one year.

Non-direct response advertising projects are expensed the first time the advertising takes place. Catalogs provided to financial institution clients of our Financial Services segment are accounted for as prepaid assets until they are shipped to financial institutions. The total amount of advertising expense for continuing operations was $103,009 in 2011, $93,527 in 2010 and $83,099 in 2009.

Loans to distributors – Beginning in 2011, we made loans to certain of our Safeguard® distributorsto allow them to purchase the operations of other small business distributors. These loans are included in other current assets and other non-current assets in the consolidated balance sheet. Interest is accrued at market interest rates. As of December 31, 2011, we had no allowances for credit losses related to these receivables, and no amounts were past due.

Restructuring charges – Over the past several years, we have recorded restructuring accruals as a result of facility closings and other cost management efforts. These accruals primarily consist of employee termination benefits payable under our ongoing severance benefit plan. We record accruals for employee termination benefits when it is probable that a liability has been incurred and the amount of the liability is reasonably estimable. As such, judgment is involved in determining when it is appropriate to record restructuring accruals. Additionally, we are required to make estimates and assumptions in calculating the restructuring accruals, as on some occasions employees choose to voluntarily leave the company prior to their termination date or they secure another position within the company. In these situations, the employees do not receive termination benefits. To the extent our assumptions and estimates differ from our actual costs, subsequent adjustments to restructuring accruals have been and will be required. Restructuring accruals are included in accrued liabilities and other non-current liabilities in our consolidated balance sheets. In addition to severance benefits, we also typically incur other costs related to restructuring activities including, but not limited to, employee and equipment moves, training and travel. These costs are expensed as incurred.

Litigation – We are party to legal actions and claims arising in the ordinary course of business. We record accruals for legal matters when the expected outcome of these matters is either known or considered probable and can be reasonably estimated. Our accruals do not include related legal and other costs expected to be incurred in defense of legal actions. Based upon information presently available, we believe that it is unlikely that any identified matters, either individually or in the aggregate, will have a material adverse effect on our annual results of operations, financial position or liquidity.

Income taxes – Deferred income taxes result from temporary differences between the financial reporting basis of assets and liabilities and their respective tax reporting bases. Current deferred tax assets and liabilities are netted in the consolidated balance sheets, as are long-term deferred tax assets and liabilities. Net deferred tax assets are recognized to the extent that realization of such benefits is more likely than not.

We are subject to tax audits in numerous domestic and foreign tax jurisdictions. Tax audits are often complex and can require several years to complete. In the normal course of business, we are subject to challenges from the Internal Revenue Service and other tax authorities regarding the amount of taxes due. These challenges may alter the timing or amount of taxable income or deductions, or the allocation of income among tax jurisdictions. We recognize the benefits of tax return positions in the financial statements when they are “more-likely-than-not” to be sustained by the taxing authorities based solely on the technical merits of the position. If the recognition threshold is met, the tax benefit is measured and recognized as the largest amount of tax benefit that, in our judgment, is greater than 50% likely to be realized. Accrued interest and penalties related to unrecognized tax positions is included in our provision for income taxes in the consolidated statements of income.

Derivative financial instruments – Information regarding our derivative financial instruments is included in Note 6. We do not use derivative financial instruments for speculative or trading purposes. All derivative transactions must be linked to an existing balance sheet item or firm commitment, and the notional amount cannot exceed the value of the exposure being hedged.

We recognize all derivative financial instruments in the consolidated financial statements at fair value regardless of the purpose or intent for holding the instrument. Changes in the fair value of derivative financial instruments are recognized periodically either in income or in shareholders' equity as a component of accumulated other comprehensive loss, depending on whether the derivative financial instrument qualifies for hedge accounting, and if so, whether it qualifies as a fair value hedge or a cash flow hedge and whether the hedge is effective. Generally, changes in fair values of derivatives accounted for as fair value hedges are recorded in income along with the portion of the change in the fair value of the hedged items that relate to the hedged risk. Changes in fair values of derivatives accounted for as cash flow hedges, to the extent they are effective as hedges, are recorded in accumulated other comprehensive loss, net of tax. We classify the cash flows from derivative instruments that have been designated as fair value or cash flow hedges in the same category as the cash flows from the items being hedged. Changes in fair values of derivatives not qualifying as hedges and the ineffective portion of hedges are reported in income.

Revenue recognition – We recognize revenue when (1) persuasive evidence of an arrangement exists, (2) delivery has occurred or services have been rendered, (3) the sales price is fixed or determinable, and (4) collectibility is reasonably assured. The majority of our revenues are generated from the sale of products for which revenue is recognized upon shipment or customer receipt, based upon the transfer of title. Our services, which account for the remainder of our revenue, consist primarily of web hosting and applications services, fraud prevention, financial institution customer acquisition programs, and payroll services. We recognize these service revenues as the services are provided. In some situations, our web hosting and applications services are billed on a quarterly, semi-annual or annual basis. When a customer pays in advance for services, we defer the revenue and recognize it as the services are performed. Up-front set-up fees related to our web hosting and applications services are deferred and recognized as revenue on the straight-line basis over the term of the customer relationship. Deferred revenue is included in accrued liabilities in our consolidated balance sheets.

Revenue includes amounts billed to customers for shipping and handling and pass-through costs, such as marketing materials for which our financial institution clients reimburse us. Costs incurred for shipping and handling and pass-through costs are reflected in cost of goods sold. For sales with a right of return, we record a reserve for estimated sales returns based on significant historical experience.

At times, a financial institution client may terminate its contract with us prior to the end of the contract term. In many of these cases, the financial institution is contractually required to remit a contract termination payment. Such payments are recorded as revenue when the termination agreement is executed, provided that we have no further service or contractual obligations, and collection of the funds is assured. If we have a continuing service obligation following the execution of a contract termination agreement, we record the related revenue over the remaining service period.

Revenue is presented in the consolidated statements of income net of rebates, discounts, amortization of contract acquisition costs and sales tax. We enter into contractual agreements with financial institution clients for rebates on certain products we sell. We record these amounts as reductions of revenue in the consolidated statements of income and as accrued liabilities in the consolidated balance sheets when the related revenue is recorded. At times we may also sell products at discounted prices or provide free products to customers when they purchase a specified product. Discounts are recorded as reductions of revenue when the related revenue is recorded. The cost of free products is recorded as cost of goods sold when the revenue for the related order is recorded. Reported revenue for our Financial Services segment does not reflect the full retail price paid by end-consumers to their financial institutions. Revenue reflects the amounts paid to us by our financial institution clients.

Employee share-based compensation – Our share-based compensation consists of non-qualified stock options, restricted stock units, restricted stock and an employee stock purchase plan. The fair value of stock options is measured on the grant date using the Black-Scholes option pricing model. The related compensation expense is recognized on the straight-line basis, net of estimated forfeitures, over the option's vesting period. The fair value of restricted stock and a portion of our restricted stock unit awards is measured on the grant date based on the market value of our common stock. The related compensation expense, net of estimated forfeitures, is recognized over the applicable service period. Certain of our restricted stock unit awards may be settled in cash if an employee voluntarily chooses to leave the company. These awards are included in accrued liabilities in the consolidated balance sheets and are re-measured at fair value as of each balance sheet date. Compensation expense resulting from the 15% discount provided under our employee stock purchase plan is recognized over the six-month purchase period. Employee share-based compensation expense is included in cost of goods sold and in SG&A expense in our consolidated statements of income, based on the functional areas of the employees receiving the awards.

Earnings per share – Basic earnings per share is based on the weighted-average number of common shares outstanding during the year. Diluted earnings per share is based on the weighted-average number of common shares outstanding during the year, adjusted to give effect to potential common shares such as stock options and shares to be issued under our employee stock purchase plan. When determining the denominator for the diluted earnings per share calculation under the treasury stock method, we exclude from assumed proceeds the impact of pro forma deferred tax assets. We calculate earnings per share using the two-class method as we have unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalent payments. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings.

Comprehensive income – Comprehensive income includes charges and credits to shareholders' equity that are not the result of transactions with shareholders. Our total comprehensive income consists of net income, gains and losses on derivative instruments, changes in the funded status and amortization of amounts related to our pension and postretirement benefit plans, unrealized gains and losses on available-for-sale marketable securities, and foreign currency translation adjustments. The items of comprehensive income, with the exception of net income, are included in accumulated other comprehensive loss in our consolidated balance sheets and statements of shareholders' equity.

Recently adopted accounting pronouncements – In September 2011, the Financial Accounting Standards Board (FASB) issued ASU No. 2011-08, Testing Goodwill for Impairment. Under the new guidance, companies have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less that its carrying amount. If, after this qualitative assessment, a company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step quantitative impairment test is unnecessary. We elected to adopt this new standard during the quarter ended September 30, 2011. As such, when performing our annual goodwill impairment analysis as of July 31, 2011, we performed a qualitative assessment of events and circumstances affecting the fair value of all of our reporting units. See Note 7 for further information regarding this qualitative analysis.

Accounting pronouncements not yet adopted – In May 2011, the FASB issued ASU No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The new guidance changes some fair value measurement principles and disclosure requirements. The changes in fair value measurement principles relate primarily to financial assets and do not impact our fair value measurements at this time. Effective January 1, 2012, we will adopt the new disclosure requirements.

In June 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income. This standard eliminates the current option to report other comprehensive income and its components in the statement of shareholders' equity. The standard also requires that the components of other comprehensive income be presented in interim financial statements. Currently, only the total of comprehensive income is required to be presented in interim reports. In December 2011, the FASB issued ASU No. 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. This standard temporarily defers a provision included in ASU No. 2011-05 which requires that reclassification adjustments from other comprehensive income to net income be presented by income statement line item. Both new standards are effective for us on January 1, 2012.

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Share-based compensation plans (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 5,733	$ 6,150	$ 6,663
Income tax benefit	(1,930)	(2,123)	(2,375)
Stock incentive plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance under stock incentive plan (in shares)	4,000	4,000	4,000
Common stock available for issuance under stock incentive plan (in shares)	1,476
Stock incentive plan, full value awards factor	2.29	2.29	2.29
Compensation expense for unvested awards not yet recognized	5,383
Weighted-average period over which expense for unvested awards will be recognized (in years)	1.7
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	3,633	2,967	3,213
Restricted shares and restricted stock units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	1,799	2,866	3,135
Employee stock purchase plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 301	$ 317	$ 315

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Supplemental guarantor financial information (Tables)

12 Months Ended

Dec. 31, 2011

Supplemental guarantor financial information [Abstract]

Condensed Consolidating Balance Sheet

Deluxe Corporation

Condensed Consolidating Balance Sheet

	December 31, 2011
	Deluxe Corporation			Guarantor subsidiaries		Non- guarantor subsidiaries			Eliminations			Total
ASSETS
Current Assets:
Cash and cash equivalents	$	3,047		$	1,522	$	24,118		$	-		$	28,687
Trade accounts receivable, net		-			57,463		11,560			-			69,023
Inventories and supplies		-			19,941		2,102			-			22,043
Deferred income taxes		1,035			5,430		751			-			7,216
Funds held for customers		-			-		44,394			-			44,394
Other current assets		5,851			10,469		4,892			-			21,212
Total current assets		9,933			94,825		87,817			-			192,575
Long-term Investments		36,338			8,809		-			-			45,147
Property, Plant and Equipment, net		-			96,345		17,066			-			113,411
Assets Held for Sale		-			2,741		-			-			2,741
Intangibles, net		-			155,452		1,887			-			157,339
Goodwill		-			775,044		1,954			-			776,998
Investments In Consolidated Subsidiaries		1,307,149			15,478		-			(1,322,627	)		-
Intercompany (Payable) Receivable		(316,876	)		360,789		(43,913	)		-			-
Other Non-Current Assets		11,758			72,944		15,896			-			100,598
Total assets	$	1,048,302		$	1,582,427	$	80,707		$	(1,322,627	)	$	1,388,809
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	13,401		$	44,908	$	6,385		$	-		$	64,694
Accrued liabilities		12,272			86,001		51,825			-			150,098
Long-term debt due within one year		85,575			-		-			-			85,575
Total current liabilities		111,248			130,909		58,210			-			300,367
Long-Term Debt		656,131			-		-			-			656,131
Deferred Income Taxes		(27,471	)		74,133		3,145			-			49,807
Other Non-Current Liabilities		5,705			70,236		3,874			-			79,815
Total Shareholders' Equity		302,689			1,307,149		15,478			(1,322,627	)		302,689
Total liabilities and shareholders' equity	$	1,048,302		$	1,582,427	$	80,707		$	(1,322,627	)	$	1,388,809

Deluxe Corporation

Condensed Consolidating Balance Sheet

	December 31, 2010
	Deluxe Corporation			Guarantor subsidiaries		Non-guarantor subsidiaries			Eliminations			Total
ASSETS
Current Assets:
Cash and cash equivalents	$	3,197		$	683	$	13,503		$	-		$	17,383
Trade accounts receivable, net		-			53,679		12,792			-			66,471
Inventories and supplies		-			19,350		2,310			-			21,660
Deferred income taxes		2,854			6,303		233			-			9,390
Funds held for customers		-			-		35,720			-			35,720
Other current assets		9,463			8,047		3,103			-			20,613
Total current assets		15,514			88,062		67,661			-			171,237
Long-term Investments		34,905			2,427		78						37,410
Property, Plant and Equipment, net		-			102,427		17,794			-			120,221
Assets Held for Sale		-			4,527		-			-			4,527
Intangibles, net		-			151,512		3,600			-			155,112
Goodwill		-			723,938		1,999			-			725,937
Investments In Consolidated Subsidiaries		986,484			615		-			(987,099	)		-
Intercompany (Payable) Receivable		(68,348	)		114,299		(45,951	)		-			-
Other Non-Current Assets		12,337			71,032		10,878			-			94,247
Total assets	$	980,892		$	1,258,839	$	56,059		$	(987,099	)	$	1,308,691
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	11,697		$	42,798	$	5,983		$	-		$	60,478
Accrued liabilities		9,440			92,038		42,556			-			144,034
Short-term debt		7,000			-		-			-			7,000
Total current liabilities		28,137			134,836		48,539			-			211,512
Long-Term Debt		748,122			-		-			-			748,122
Deferred Income Taxes		(25,898	)		68,794		3,856			-			46,752
Other Non-Current Liabilities		4,333			68,725		3,049			-			76,107
Total Shareholders' Equity		226,198			986,484		615			(987,099	)		226,198
Total liabilities and shareholders' equity	$	980,892		$	1,258,839	$	56,059		$	(987,099	)	$	1,308,691

Condensed Consolidating Statement of Income

Deluxe Corporation

Condensed Consolidating Statement of Income

	Year Ended December 31, 2011
	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Revenue	$	9,409		$	1,276,898		$	272,994		$	(141,705	)	$	1,417,596
Total cost of goods sold		-			459,119			159,589			(125,306	)		493,402
Gross Profit		9,409			817,779			113,405			(16,399	)		924,194
Selling, general and administrative expense, including net restructuring charges		9,323			569,957			89,169			(16,399	)		652,050
Asset impairment charges		-			1,196			-			-			1,196
Net gain on assets held for sale		-			(110	)		-			-			(110	)
Operating Income		86			246,736			24,236			-			271,058
Loss on early debt extinguishment		(6,995	)		-			-			-			(6,995	)
Interest expense		(47,629	)		(8,561	)		(1,190	)		9,583			(47,797	)
Other income (expense)		8,534			907			(40	)		(9,583	)		(182	)
(Loss) Income Before Income Taxes		(46,004	)		239,082			23,006			-			216,084
Income tax (benefit) provision		(22,143	)		86,489			7,143			-			71,489
(Loss) Income From Continuing Operations Before Equity In Earnings Of Consolidated Subsidiaries		(23,861	)		152,593			15,863			-			144,595
Equity In Earnings Of Consolidated Subsidiaries		168,456			15,863			-			(184,319	)		-
Income From Continuing Operations		144,595			168,456			15,863			(184,319	)		144,595
Net Loss From Discontinued Operations		-			-			-			-			-
Net Income	$	144,595		$	168,456		$	15,863		$	(184,319	)	$	144,595

Deluxe Corporation

Condensed Consolidating Statement of Income

	Year Ended December 31, 2010
	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Revenue	$	9,145		$	1,270,480		$	270,279		$	(147,667	)	$	1,402,237
Total cost of goods sold		-			454,374			162,473			(128,428	)		488,419
Gross Profit		9,145			816,106			107,806			(19,239	)		913,818
Selling, general and administrative expense, including net restructuring charges		5,663			551,519			94,331			(19,239	)		632,274
Operating Income		3,482			264,587			13,475			-			281,544
Interest expense		(44,061	)		(6,365	)		(930	)		7,191			(44,165	)
Other income (expense)		4,992			(58	)		827			(7,191	)		(1,430	)
(Loss) Income Before Income Taxes		(35,587	)		258,164			13,372			-			235,949
Income tax (benefit) provision		(16,952	)		92,691			6,815			-			82,554
(Loss) Income From Continuing Operations Before Equity In Earnings Of Consolidated Subsidiaries		(18,635	)		165,473			6,557			-			153,395
Equity In Earnings Of Consolidated Subsidiaries		171,259			6,557			-			(177,816	)		-
Income From Continuing Operations		152,624			172,030			6,557			(177,816	)		153,395
Net Loss From Discontinued Operations		-			(771	)		-			-			(771	)
Net Income	$	152,624		$	171,259		$	6,557		$	(177,816	)	$	152,624

Deluxe Corporation

Condensed Consolidating Statement of Income

	Year Ended December 31, 2009
	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Eliminations			Total
Revenue	$	24,184		$	1,209,475		$	271,367		$	(160,831	)	$	1,344,195
Total cost of goods sold		-			470,835			167,635			(133,688	)		504,782
Gross Profit		24,184			738,640			103,732			(27,143	)		839,413
Selling, general and administrative expense, including net restructuring charges		8,816			541,135			101,116			(27,143	)		623,924
Asset impairment charges		-			24,900			-			-			24,900
Operating Income		15,368			172,605			2,616			-			190,589
Gain on early debt extinguishment		9,834			-			-			-			9,834
Interest expense		(46,166	)		(4,091	)		(768	)		4,745			(46,280	)
Other income		3,398			885			1,340			(4,745	)		878
(Loss) Income Before Income Taxes		(17,566	)		169,399			3,188			-			155,021
Income tax (benefit) provision		(13,685	)		68,203			1,138			-			55,656
(Loss) Income From Continuing Operations Before Equity In Earnings Of Consolidated Subsidiaries		(3,881	)		101,196			2,050			-			99,365
Equity In Earnings Of Consolidated Subsidiaries		103,246			2,050			-			(105,296	)		-
Income From Continuing Operations		99,365			103,246			2,050			(105,296	)		99,365
Net Loss From Discontinued Operations		-			-			-			-			-
Net Income	$	99,365		$	103,246		$	2,050		$	(105,296	)	$	99,365

Condensed Consolidating Statement of Cash Flows

Deluxe Corporation

Condensed Consolidating Statement of Cash Flows

	Year Ended December 31, 2011
	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Total
Net Cash Provided By Operating Activities of Continuing Operations	$	2,567		$	213,999		$	18,801		$	235,367
Cash Flows From Investing Activities:
Purchases of capital assets		-			(33,731	)		(1,775	)		(35,506	)
Payments for acquisitions, net of cash acquired		-			(80,486	)		(5,155	)		(85,641	)
Payments on company-owned life insurance policies		-			(6,383	)		-			(6,383	)
Loans to distributors		-			(4,879	)		(296	)		(5,175	)
Purchases of marketable securities		-			-			(18	)		(18	)
Other		(342	)		850			430			938
Net cash used by investing activities of continuing operations		(342	)		(124,629	)		(6,814	)		(131,785	)
Cash Flows From Financing Activities:
Net payments on short-term debt		(7,000	)		-			-			(7,000	)
Payments on long-term debt, including costs of debt reacquisition		(215,030	)		-			-			(215,030	)
Proceeds from issuing long-term debt		200,000			-			-			200,000
Payments for debt issue costs		(3,513	)		-			-			(3,513	)
Change in book overdrafts		742			(878	)		-			(136	)
Proceeds from issuing shares under employee plans		7,671			-			-			7,671
Excess tax benefit from share-based employee awards		1,052			-			-			1,052
Payments for common shares repurchased		(23,620	)		-			-			(23,620	)
Cash dividends paid to shareholders		(51,126	)		-			-			(51,126	)
Advances from (to) consolidated subsidiaries		88,449			(87,653	)		(796	)		-
Net cash used by financing activities of continuing operations		(2,375	)		(88,531	)		(796	)		(91,702	)
Effect Of Exchange Rate Change on Cash		-			-			(576	)		(576	)
Net Change In Cash And Cash Equivalents		(150	)		839			10,615			11,304
Cash And Cash Equivalents: Beginning Of Year		3,197			683			13,503			17,383
Cash And Cash Equivalents: End Of Year	$	3,047		$	1,522		$	24,118		$	28,687

Deluxe Corporation

Condensed Consolidating Statement of Cash Flows

	Year Ended December 31, 2010
	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Total
Net Cash (Used) Provided By Operating Activities of Continuing Operations	$	(16,786	)	$	224,279		$	5,122		$	212,615
Cash Flows From Investing Activities:
Purchases of capital assets		-			(43,005	)		(927	)		(43,932	)
Payments for acquisitions, net of cash acquired		-			(98,621	)		-			(98,621	)
Purchases of customer lists		-			(70	)		(195	)		(265	)
Purchases of marketable securities		-			-			(14	)		(14	)
Proceeds from sales of marketable securities		-			-			1,970			1,970
Proceeds from company-owned life insurance policies		5,782			361			-			6,143
Other		(1,410	)		(41	)		-			(1,451	)
Net cash provided (used) by investing activities of continuing operations		4,372			(141,376	)		834			(136,170	)
Cash Flows From Financing Activities:
Net payments on short-term debt		(19,000	)		-			-			(19,000	)
Payments for debt issue costs		(2,361	)		-			-			(2,361	)
Change in book overdrafts		(1,090	)		397			-			(693	)
Proceeds from issuing shares under employee plans		3,267			-			-			3,267
Excess tax benefit from share-based employee awards		680			-			-			680
Payments for common shares repurchased		(2,999	)		-			-			(2,999	)
Cash dividends paid to shareholders		(51,435	)		-			-			(51,435	)
Advances from (to) consolidated subsidiaries		85,824			(83,114	)		(2,710	)		-
Net cash provided (used) by financing activities of continuing operations		12,886			(82,717	)		(2,710	)		(72,541	)
Effect Of Exchange Rate Change on Cash		-			-			690			690
Net Change In Cash And Cash Equivalents		472			186			3,936			4,594
Cash And Cash Equivalents: Beginning Of Year		2,725			497			9,567			12,789
Cash And Cash Equivalents: End Of Year	$	3,197		$	683		$	13,503		$	17,383

Deluxe Corporation

Condensed Consolidating Statement of Cash Flows

	Year Ended December 31, 2009
	Deluxe Corporation			Guarantor subsidiaries			Non-guarantor subsidiaries			Total
Net Cash (Used) Provided By Operating Activities of Continuing Operations	$	(9,287	)	$	217,167		$	(1,442	)	$	206,438
Cash Flows From Investing Activities:
Purchases of capital assets		-			(41,777	)		(2,489	)		(44,266	)
Payments for acquisitions, net of cash acquired		-			(30,825	)		-			(30,825	)
Purchases of customer lists		-			(1,639	)		-			(1,639	)
Purchases of marketable securities		-			-			(4,581	)		(4,581	)
Proceeds from sales of marketable securities		-			-			914			914
Other		(1,234	)		(157	)		-			(1,391	)
Net cash used by investing activities of continuing operations		(1,234	)		(74,398	)		(6,156	)		(81,788	)
Cash Flows From Financing Activities:
Net payments on short-term debt		(52,000	)		-			-			(52,000	)
Payments on long-term debt, including costs of debt reacquisition		(21,187	)		(1,440	)		-			(22,627	)
Change in book overdrafts		(3,457	)		97			-			(3,360	)
Proceeds from issuing shares under employee plans		1,972			-			-			1,972
Excess tax benefit from share-based employee awards		68			-			-			68
Payments for common shares repurchased		(1,319	)		-			-			(1,319	)
Cash dividends paid to shareholders		(51,279	)		-			-			(51,279	)
Advances from (to) consolidated subsidiaries		136,956			(140,965	)		4,009			-
Net cash provided (used) by financing activities of continuing operations		9,754			(142,308	)		4,009			(128,545	)
Effect Of Exchange Rate Change on Cash		-			-			1,594			1,594
Cash Used By Operating Activities Of Discontinued Operations		-			(470	)		-			(470	)
Cash Used By Investing Activities Of Discontinued Operations		-			(30	)		-			(30	)
Net Change In Cash And Cash Equivalents		(767	)		(39	)		(1,995	)		(2,801	)
Cash And Cash Equivalents: Beginning Of Year		3,492			536			11,562			15,590
Cash And Cash Equivalents: End Of Year	$	2,725		$	497		$	9,567		$	12,789

XML

Supplemental balance sheet and cash flow information (Tables)

12 Months Ended

Dec. 31, 2011

Supplemental balance sheet and cash flow information [Abstract]

Trade accounts receivable

Trade accounts receivable – Net trade accounts receivable was comprised of the following at December 31:

	2011			2010
Trade accounts receivable – gross	$	73,030		$	70,601
Allowances for uncollectible accounts		(4,007	)		(4,130	)
Trade accounts receivable – net	$	69,023		$	66,471

Changes in allowances for uncollectible accounts

Changes in the allowances for uncollectible accounts were as follows:

	2011			2010			2009
Balance, beginning of year	$	4,130		$	4,991		$	5,930
Bad debt expense		4,033			4,686			5,842
Write-offs, net of recoveries		(4,156	)		(5,547	)		(6,781	)
Balance, end of year	$	4,007		$	4,130		$	4,991

Inventories and supplies

Inventories and supplies – Inventories and supplies were comprised of the following at December 31:

	2011		2010
Raw materials	$	5,566	$	4,879
Semi-finished goods		8,273		8,393
Finished goods		5,301		5,083
Supplies, primarily production		2,903		3,305
Inventories and supplies	$	22,043	$	21,660

Marketable securities

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

	December 31, 2011
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Corporate investments:
Money market securities	$	2,001	$	-	$	-	$	2,001
Funds held for customers:(1)
Money market securities		3		-		-		3
Canadian and provincial government securities		5,172		243		-		5,415
Marketable securities – funds held for customers		5,175		243		-		5,418
Total marketable securities	$	7,176	$	243	$	-	$	7,419

(1) Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2011, also included cash and cash equivalents of $38,976.

	December 31, 2010
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Corporate investments:
Money market securities	$	2,029	$	-	$	-	$	2,029
Funds held for customers:(1)
Money market securities		5,078		-		-		5,078
Canadian and provincial government securities		5,148		23		-		5,171
Marketable securities – funds held for customers		10,226		23		-		10,249
Total marketable securities	$	12,255	$	23	$	-	$	12,278

(1) Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2010, also included cash and cash equivalents of $25,471.

Expected maturities of available-for-sale securities

Expected maturities of available-for-sale securities as of December 31, 2011 were as follows:

	Fair value
Due in one year or less	$	2,108
Due in three to five years		1,353
Due after five years		3,958
Total marketable securities	$	7,419

Property, plant and equipment

Property, plant and equipment – Property, plant and equipment was comprised of the following at December 31:

	2011							2010
	Gross carrying amount		Accumulated depreciation			Net carrying amount		Gross carrying amount		Accumulated depreciation			Net carrying amount
Land and improvements	$	33,970	$	(8,848	)	$	25,122	$	33,981	$	(8,517	)	$	25,464
Buildings and improvements		122,262		(69,619	)		52,643		120,672		(65,359	)		55,313
Machinery and equipment		310,021		(274,375	)		35,646		303,987		(264,543	)		39,444
Property, plant and equipment – net	$	466,253	$	(352,842	)	$	113,411	$	458,640	$	(338,419	)	$	120,221

Intangibles

Intangibles – Intangibles were comprised of the following at December 31:

	2011							2010
	Gross carrying amount		Accumulated amortization			Net carrying amount		Gross carrying amount		Accumulated amortization			Net carrying amount
Indefinite-lived:
Trade name	$	19,100	$	-		$	19,100	$	19,100	$	-		$	19,100
Amortizable intangibles:
Internal-use software		410,905		(345,145	)		65,760		378,269		(314,267	)		64,002
Customer lists/relationships		52,542		(26,059	)		26,483		72,292		(43,660	)		28,632
Distributor contracts		30,900		(28,198	)		2,702		30,900		(26,396	)		4,504
Trade names		67,661		(25,958	)		41,703		59,361		(22,009	)		37,352
Other		9,566		(7,975	)		1,591		8,602		(7,080	)		1,522
Amortizable intangibles		571,574		(433,335	)		138,239		549,424		(413,412	)		136,012
Intangibles	$	590,674	$	(433,335	)	$	157,339	$	568,524	$	(413,412	)	$	155,112

Estimated future amortization of intangibles

Based on the intangibles in service as of December 31, 2011, estimated amortization expense for each of the next five years ending December 31 is as follows:

	Estimated amortization  expense
2012	$	37,121
2013		26,700
2014		15,027
2015		8,043
2016		5,713

Acquired intangibles

We acquire internal-use software in the normal course of business. In conjunction with acquisitions (see Note 4), we also acquired certain other amortizable intangible assets. The following intangible assets were acquired during the years indicated:

	2011			2010			2009
	Amount		Weighted- average amortization  period	Amount		Weighted- average amortization period	Amount		Weighted- average amortization period
Internal-use software	$	33,169	4 years	$	36,442	4 years	$	24,911	3 years
Customer lists/relationships		12,600	8 years		16,690	1 year		13,943	7 years
Trade names		8,300	9 years		9,100	10 years		900	10 years
Other		1,000	4 years		-	-		-	-
Acquired intangibles	$	55,069	6 years	$	62,232	4 years	$	39,754	5 years

Summary of goodwill

Goodwill – Information regarding the acquisitions completed during the past three years can be found in Note 4. As ofDecember 31, 2011, goodwill was comprised of the following:

	Goodwill
Acquisition of NEBS in June 2004	$	472,082
Acquisition of Designer Checks in February 2000(1)		77,970
Acquisition of Hostopia.com Inc. in August 2008		68,555
Acquisition of Custom Direct, Inc. in April 2010		66,269
Acquisition of Banker's Dashboard in April 2011(1)		26,281
Acquisition of PsPrint in July 2011(1)		24,826
Acquisition of Abacus America, Inc. in July 2009		24,225
Acquisition of the Johnson Group in October 2006(1)		7,320
Acquisition of Direct Checks in December 1987		4,267
Acquisition of Logo Design Mojo in April 2008(1)		1,359
Acquisition of MerchEngines.com in July 2009(1)		1,140
Acquisition of Dots and Pixels, Inc. in July 2005		1,021
Acquisition of Cornerstone Customer Solutions in March 2010(1)		897
Acquisition of All Trade Computer Forms, Inc. in February 2007		786
Goodwill	$	776,998

(1) This goodwill is deductible for income tax purposes.

Goodwill

Changes in goodwill by reportable segment and in total were as follows:

	Small Business Services			Financial Services		Direct Checks		Total
Balance, December 31, 2009:
Goodwill, gross	$	596,429		$	-	$	82,237	$	678,666
Accumulated impairment charges		(20,000	)		-		-		(20,000	)
Goodwill, net of accumulated impairment charges		576,429			-		82,237		658,666
Acquisition of Custom Direct, Inc. (see Note 4)		-			-		66,269		66,269
Acquisition of Cornerstone Customer Solutions (see Note 4)		-			897		-		897
Currency translation adjustment		105			-		-		105
Balance, December 31, 2010:
Goodwill, gross		596,534			897		148,506		745,937
Accumulated impairment charges		(20,000	)		-		-		(20,000	)
Goodwill, net of accumulated impairment charges		576,534			897		148,506		725,937
Acquisition of Banker's Dashboard (see Note 4)		-			26,281		-		26,281
Acquisition of PsPrint (see Note 4)		24,826			-		-		24,826
Currency translation adjustment		(46	)		-		-		(46	)
Balance, December 31, 2011:
Goodwill, gross		621,314			27,178		148,506		796,998
Accumulated impairment charges		(20,000	)		-		-		(20,000	)
Goodwill, net of accumulated impairment charges	$	601,314		$	27,178	$	148,506	$	776,998

Other non-current assets

Other non-current assets – Other non-current assets as of December 31 were comprised of the following:

	2011		2010
Contract acquisition costs	$	55,076	$	57,476
Deferred advertising costs		15,599		15,832
Other		29,923		20,939
Other non-current assets	$	100,598	$	94,247

Changes in contract acquisition costs

Changes in contract acquisition costs were as follows:

	2011			2010			2009
Balance, beginning of year	$	57,476		$	45,701		$	37,706
Additions(1)		14,624			31,520			32,545
Amortization		(16,659	)		(19,745	)		(24,550	)
Other		(365	)		-			-
Balance, end of year	$	55,076		$	57,476		$	45,701

(1) Contract acquisition costs are accrued upon contract execution. Cash payments made for contract acquisition costs were $12,190 in 2011, $22,087 in 2010 and $29,250 in 2009.

Accrued liabilities

Accrued liabilities – Accrued liabilities as of December 31 were comprised of the following:

	2011		2010
Funds held for customers	$	43,829	$	35,475
Employee profit sharing/cash bonus and pension		23,783		34,109
Customer rebates		20,969		19,201
Contract acquisition costs due within one year		13,070		8,550
Interest		8,760		5,227
Restructuring due within one year (see Note 8)		5,946		6,435
Wages, including vacation		4,995		5,898
Other		28,746		29,139
Accrued liabilities	$	150,098	$	144,034

Supplemental cash flow disclosures

Supplemental cash flow disclosures – Cash payments for interest and income taxes were as follows for the years ended December 31:

	2011		2010		2009
Interest paid	$	42,542	$	44,054	$	43,513
Income taxes paid		60,861		70,246		56,060

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Significant accounting policies (Policies)

12 Months Ended

Dec. 31, 2011

Significant accounting policies [Abstract]

Consolidation

Consolidation – The consolidated financial statements include the accounts of Deluxe Corporation and its wholly-owned subsidiaries. All intercompany accounts, transactions and profits have been eliminated.

Use of estimates

Use of estimates – We have prepared the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. In this process, it is necessary for us to make certain assumptions and estimates affecting the amounts reported in the consolidated financial statements and related notes. These estimates and assumptions are developed based upon all available information. However, actual results can differ from assumed and estimated amounts.

Foreign currency translation

Foreign currency translation – The financial statements of our foreign subsidiaries are measured in the respective subsidiaries' functional currencies, primarily Canadian dollars, and are translated into U.S. dollars. Assets and liabilities are translated using the exchange rates in effect at the balance sheet date. Revenue and expenses are translated at the average exchange rates during the year. The resulting translation gains and losses are reflected in accumulated other comprehensive loss in the shareholders' equity section of our consolidated balance sheets. Foreign currency transaction gains and losses are recorded in other (expense) income in our consolidated statements of income.

Cash and cash equivalents

Cash and cash equivalents – We consider all cash on hand and other highly liquid investments with original maturities of three months or less to be cash and cash equivalents. As a result of our cash management system, checks issued by us but not presented to the banks for payment may create negative book cash balances. These book overdrafts are included in accounts payable and totaled $2,871 as of December 31, 2011 and $3,007 as of December 31, 2010

Marketable securities

Marketable securities – Marketable securities consist of investments in mutual funds. They are classified as available for sale and are carried at fair value on the consolidated balance sheets. Because of the short-term nature of the underlying investments, the cost of these securities approximates their fair value. The cost of securities sold is determined using the average cost method.

Trade accounts receivable

Trade accounts receivable – Trade accounts receivable are initially recorded at fair value upon the sale of goods or services to customers. They are stated net of allowances for uncollectible accounts, which represent estimated losses resulting from the inability of customers to make the required payments. When determining the allowances for uncollectible accounts, we take several factors into consideration including the overall composition of accounts receivable aging, our prior history of accounts receivable write-offs, the type of customer and our day-to-day knowledge of specific customers. Changes in the allowances for uncollectible accounts are included in selling, general and administrative (SG&A) expense in our consolidated statements of income. The point at which uncollected accounts are written off varies by type of customer, but generally does not exceed one year from the due date of the receivable.

Inventories and supplies

Inventories and supplies – Inventories and supplies are stated at the lower of average cost or market. Average cost approximates cost calculated on a first-in, first-out basis. Supplies consist of items not used directly in the production of goods, such as maintenance and janitorial supplies utilized in the production area.

Funds held for customers

Funds held for customers – Our Canadian payroll services business collects funds from clients to pay their payroll and related taxes. We hold these funds temporarily until payments are remitted to the clients' employees and the appropriate taxing authorities. These funds, consisting of cash and mutual fund investments, are reported as funds held for customers in our consolidated balance sheets. The corresponding liability for these obligations is included in accrued liabilities in our consolidated balance sheets. The mutual fund investments are carried at fair value, with unrealized gains and losses included in accumulated other comprehensive loss in our consolidated balance sheets. Realized gains and losses are included in revenue in our consolidated statements of income and were not significant for 2011, 2010 or 2009.

Long-term investments

Long-term investments – Long-term investments consist primarily of cash surrender values of life insurance contracts. Additionally, long-term investments include an investment in domestic mutual funds with a fair value of $2,165 as of December 31, 2011 and $2,283 as of December 31, 2010. We have elected to account for this investment 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. Realized and unrealized gains and losses, as well as dividends earned by the mutual fund investment, are included in SG&A expense in the consolidated statements of income. This investment corresponds to a liability under an officers' deferred compensation plan which 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 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 income. The cost of securities sold is determined using the average cost method.

Property, plant and equipment

Property, plant and equipment – Property, plant and equipment, including leasehold and other improvements that extend an asset's useful life or productive capabilities, are stated at historical cost. Buildings have been assigned 40-year lives and machinery and equipment are generally assigned lives ranging from one to 11 years, with a weighted-average life of 7.7 years as of December 31, 2011. Buildings, machinery and equipment are generally depreciated using accelerated methods. Leasehold and building improvements are depreciated on the straight-line basis over the estimated useful life of the property or the life of the lease, whichever is shorter. Maintenance and repairs are expensed as incurred. Gains or losses resulting from the disposition of property, plant and equipment are included in SG&A expense in the consolidated statements of income, with the exception of building sales. Such gains and losses are reported separately in the consolidated statements of income.

Intangibles

Intangibles – Intangible assets are stated at historical cost. Amortization expense is generally determined on the straight-line basis over periods ranging from one to 20 years, with a weighted-average life of 6.2 years as of December 31, 2011. Customer lists and distributor contracts are generally amortized using accelerated methods. Each reporting period, we evaluate the remaining useful lives of our amortizable intangibles to determine whether events and circumstances warrant a revision to the remaining period of amortization. If our estimate of an asset's remaining useful life is revised, the remaining carrying amount of the asset is amortized prospectively over the revised remaining useful life. As of December 31, 2011, we held a trade name asset which has been assigned an indefinite life. As such, this asset is not amortized, but is subject to impairment testing on at least an annual basis. Gains or losses resulting from the disposition of intangibles are included in SG&A expense in the consolidated statements of income.

We capitalize costs of software developed or obtained for internal use, including website development costs, once the preliminary project stage has been completed, management commits to funding the project and it is probable that the project will be completed and the software will be used to perform the function intended. Capitalized costs include only (1) external direct costs of materials and services consumed in developing or obtaining internal-use software, (2) payroll and payroll-related costs for employees who are directly associated with and who devote time to the internal-use software project, and (3) interest costs incurred, when significant, while developing internal-use software. Costs incurred in populating websites with information about the company or products are expensed as incurred. Capitalization of costs ceases when the project is substantially complete and ready for its intended use. The carrying value of internal-use software is reviewed in accordance with our policy on impairment of long-lived assets and amortizable intangibles.

Impairment of long-lived assets and amortizable intangibles

Impairment of long-lived assets and amortizable intangibles – We evaluate the recoverability of property, plant, equipment and amortizable intangibles not held for sale whenever events or changes in circumstances indicate that an asset's carrying amount may not be recoverable. Such circumstances could include, but are not limited to, (1) a significant decrease in the market value of an asset, (2) a significant adverse change in the extent or manner in which an asset is used or in its physical condition, or (3) an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of an asset. We measure the carrying amount of the asset against the estimated undiscounted future cash flows associated with it. If the sum of the expected future net cash flows is less than the carrying value of the asset being evaluated, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeds the fair value of the asset. As quoted market prices are not available for the majority of our assets, the estimate of fair value is based on various valuation techniques, including the discounted value of estimated future cash flows.

We evaluate the recoverability of property, plant, equipment and intangibles held for sale by comparing the asset's carrying amount with its fair value less costs to sell. Should the fair value less costs to sell be less than the carrying value of the long-lived asset, an impairment loss would be recognized. The impairment loss would be calculated as the amount by which the carrying value of the asset exceeds the fair value of the asset less costs to sell.

The evaluation of asset impairment requires us to make assumptions about future cash flows over the life of the asset being evaluated. These assumptions require significant judgment and actual results may differ from assumed and estimated amounts.

Impairment of indefinite-lived intangibles and goodwill

Impairment of indefinite-lived intangibles and goodwill – We evaluate the carrying value of indefinite-lived intangibles and goodwill on July 31st of each year and between annual evaluations if events occur or circumstances change that would indicate a possible impairment. Such circumstances could include, but are not limited to, (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, (3) an adverse action or assessment by a regulator, or (4) an adverse change in market conditions which are indicative of a decline in the fair value of the assets.

When evaluating whether our indefinite-lived trade name is impaired, we compare the carrying amount of the asset to its estimated fair value. The estimate of fair value is based on a relief from royalty method which calculates the cost savings associated with owning rather than licensing the trade name. An assumed royalty rate is applied to forecasted revenue and the resulting cash flows are discounted. Should the estimated fair value be less than the carrying value of the asset, an impairment loss would be recognized. The impairment loss is calculated as the amount by which the carrying value of the asset exceeds the fair value of the asset. The impairment analysis completed during 2009 indicated impairment of the indefinite-lived trade name. See Note 7 for further information regarding the impairment charge. The impairment analyses completed during 2011 and 2010 indicated no impairment. In addition to the required impairment analyses, we regularly evaluate the remaining useful life of this asset to determine whether events and circumstances continue to support an indefinite useful life. If we were to determine that the asset has a finite useful life, we would test it for impairment and then amortize its remaining carrying value over its estimated remaining useful life.

In 2009 and 2010, a two-step, quantitative approach was used in evaluating goodwill for impairment. First, we calculated the estimated fair value of each reporting unit to which goodwill was assigned and compared this estimated fair value to the carrying amount of its net assets. In calculating fair value, we used the income approach. The income approach is a valuation technique under which we estimated future cash flows using the reporting unit's financial forecast from the perspective of an unrelated market participant. Using historical trending and internal forecasting techniques, we projected revenue for the next five years. We applied our fixed and variable cost experience rates to the projected revenue to arrive at the future cash flows. A terminal value was then applied to the projected cash flow stream. Future estimated cash flows were discounted to their present value to calculate fair value. The discount rate was the value-weighted average of our estimated cost of capital derived using both known and estimated customary market metrics. In determining the fair value of our reporting units we were required to estimate a number of factors, including projected future operating results, terminal growth rates, economic conditions, anticipated future cash flows, the discount rate and the allocation of shared or corporate items. For reasonableness, the summation of our reporting units' fair values was compared to our consolidated fair value as indicated by our market capitalization plus an appropriate control premium. If the carrying amount of a reporting unit's net assets exceeded its estimated fair value, the second step of the goodwill impairment analysis required us to measure the amount of the impairment loss. An impairment loss is calculated by comparing the implied fair value of the goodwill to its carrying amount. In calculating the implied fair value of the goodwill, we measure the fair value of the reporting unit's assets and liabilities, excluding goodwill. The excess of the fair value of the reporting unit over the amount assigned to its assets and liabilities, excluding goodwill, is the implied fair value of the reporting unit's goodwill. We recorded a goodwill impairment charge during the first quarter of 2009. See Note 7 for further information. No goodwill impairment charges were recorded during 2010.

We adopted Accounting Standards Update (ASU) No. 2011-08 during the quarter ended September 30, 2011. This new standard gives us the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after this qualitative assessment, we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step, quantitative impairment test described earlier is unnecessary. In completing our qualitative analysis during the third quarter of 2011, we noted no changes in events or circumstances which would require us to complete the two-step quantitative goodwill impairment analysis for any of our reporting units. See Note 7 for further information regarding this qualitative analysis. As such, no impairment charges were recorded as a result of our 2011 annual impairment analysis.

Contract acquisition costs

Contract acquisition costs – We record contract acquisition costs when we sign or renew certain contracts with our financial institution clients. These costs, which are essentially pre-paid product discounts, consist of cash payments or accruals related to amounts owed to financial institution clients by our Financial Services segment. Contract acquisition costs are generally amortized as reductions of revenue on the straight-line basis over the related contract term. Currently, these amounts are being amortized over periods ranging from one to 10 years, with a weighted-average life of 6.1 years as of December 31, 2011. Whenever events or changes occur that impact the related contract, including significant declines in the anticipated profitability, we evaluate the carrying value of the contract acquisition costs to determine if impairment has occurred. Should a financial institution cancel a contract prior to the agreement's termination date, or should the volume of orders realized through a financial institution fall below contractually-specified minimums, we generally have a contractual right to a refund of the remaining unamortized contract acquisition costs. These costs are included in other non-current assets in the consolidated balance sheets.

Advertising costs

Advertising costs – Deferred advertising costs include materials, printing, labor and postage costs related to direct response advertising programs of our Direct Checks and Small Business Services segments. These costs are amortized as SG&A expense over periods (not exceeding 18 months) that correspond to the estimated revenue streams of the individual advertisements. The actual revenue streams are analyzed at least annually to monitor the propriety of the amortization periods. Judgment is required in estimating the future revenue streams, especially with regard to check re-orders which can span an extended period of time. Significant changes in the actual revenue streams would require the amortization periods to be modified, thus impacting our results of operations during the period in which the change occurred and in subsequent periods. Within our Direct Checks segment, approximately 84% of the costs of individual advertisements is expensed within six months of the advertisement. The majority of the deferred advertising costs of our Small Business Services segment are fully amortized within six months of the advertisement. Deferred advertising costs are included in other non-current assets in the consolidated balance sheets, as portions are amortized over periods in excess of one year.

Non-direct response advertising projects are expensed the first time the advertising takes place. Catalogs provided to financial institution clients of our Financial Services segment are accounted for as prepaid assets until they are shipped to financial institutions. The total amount of advertising expense for continuing operations was $103,009 in 2011, $93,527 in 2010 and $83,099 in 2009.

Loans to distributors

Loans to distributors – Beginning in 2011, we made loans to certain of our Safeguard® distributorsto allow them to purchase the operations of other small business distributors. These loans are included in other current assets and other non-current assets in the consolidated balance sheet. Interest is accrued at market interest rates. As of December 31, 2011, we had no allowances for credit losses related to these receivables, and no amounts were past due.

Restructuring charges

Restructuring charges – Over the past several years, we have recorded restructuring accruals as a result of facility closings and other cost management efforts. These accruals primarily consist of employee termination benefits payable under our ongoing severance benefit plan. We record accruals for employee termination benefits when it is probable that a liability has been incurred and the amount of the liability is reasonably estimable. As such, judgment is involved in determining when it is appropriate to record restructuring accruals. Additionally, we are required to make estimates and assumptions in calculating the restructuring accruals, as on some occasions employees choose to voluntarily leave the company prior to their termination date or they secure another position within the company. In these situations, the employees do not receive termination benefits. To the extent our assumptions and estimates differ from our actual costs, subsequent adjustments to restructuring accruals have been and will be required. Restructuring accruals are included in accrued liabilities and other non-current liabilities in our consolidated balance sheets. In addition to severance benefits, we also typically incur other costs related to restructuring activities including, but not limited to, employee and equipment moves, training and travel. These costs are expensed as incurred.

Litigation

Litigation – We are party to legal actions and claims arising in the ordinary course of business. We record accruals for legal matters when the expected outcome of these matters is either known or considered probable and can be reasonably estimated. Our accruals do not include related legal and other costs expected to be incurred in defense of legal actions. Based upon information presently available, we believe that it is unlikely that any identified matters, either individually or in the aggregate, will have a material adverse effect on our annual results of operations, financial position or liquidity.

Income taxes

Income taxes – Deferred income taxes result from temporary differences between the financial reporting basis of assets and liabilities and their respective tax reporting bases. Current deferred tax assets and liabilities are netted in the consolidated balance sheets, as are long-term deferred tax assets and liabilities. Net deferred tax assets are recognized to the extent that realization of such benefits is more likely than not.

We are subject to tax audits in numerous domestic and foreign tax jurisdictions. Tax audits are often complex and can require several years to complete. In the normal course of business, we are subject to challenges from the Internal Revenue Service and other tax authorities regarding the amount of taxes due. These challenges may alter the timing or amount of taxable income or deductions, or the allocation of income among tax jurisdictions. We recognize the benefits of tax return positions in the financial statements when they are “more-likely-than-not” to be sustained by the taxing authorities based solely on the technical merits of the position. If the recognition threshold is met, the tax benefit is measured and recognized as the largest amount of tax benefit that, in our judgment, is greater than 50% likely to be realized. Accrued interest and penalties related to unrecognized tax positions is included in our provision for income taxes in the consolidated statements of income.

Derivative financial instruments

Derivative financial instruments – Information regarding our derivative financial instruments is included in Note 6. We do not use derivative financial instruments for speculative or trading purposes. All derivative transactions must be linked to an existing balance sheet item or firm commitment, and the notional amount cannot exceed the value of the exposure being hedged.

We recognize all derivative financial instruments in the consolidated financial statements at fair value regardless of the purpose or intent for holding the instrument. Changes in the fair value of derivative financial instruments are recognized periodically either in income or in shareholders' equity as a component of accumulated other comprehensive loss, depending on whether the derivative financial instrument qualifies for hedge accounting, and if so, whether it qualifies as a fair value hedge or a cash flow hedge and whether the hedge is effective. Generally, changes in fair values of derivatives accounted for as fair value hedges are recorded in income along with the portion of the change in the fair value of the hedged items that relate to the hedged risk. Changes in fair values of derivatives accounted for as cash flow hedges, to the extent they are effective as hedges, are recorded in accumulated other comprehensive loss, net of tax. We classify the cash flows from derivative instruments that have been designated as fair value or cash flow hedges in the same category as the cash flows from the items being hedged. Changes in fair values of derivatives not qualifying as hedges and the ineffective portion of hedges are reported in income.

Revenue recognition

Revenue recognition – We recognize revenue when (1) persuasive evidence of an arrangement exists, (2) delivery has occurred or services have been rendered, (3) the sales price is fixed or determinable, and (4) collectibility is reasonably assured. The majority of our revenues are generated from the sale of products for which revenue is recognized upon shipment or customer receipt, based upon the transfer of title. Our services, which account for the remainder of our revenue, consist primarily of web hosting and applications services, fraud prevention, financial institution customer acquisition programs, and payroll services. We recognize these service revenues as the services are provided. In some situations, our web hosting and applications services are billed on a quarterly, semi-annual or annual basis. When a customer pays in advance for services, we defer the revenue and recognize it as the services are performed. Up-front set-up fees related to our web hosting and applications services are deferred and recognized as revenue on the straight-line basis over the term of the customer relationship. Deferred revenue is included in accrued liabilities in our consolidated balance sheets.

Revenue includes amounts billed to customers for shipping and handling and pass-through costs, such as marketing materials for which our financial institution clients reimburse us. Costs incurred for shipping and handling and pass-through costs are reflected in cost of goods sold. For sales with a right of return, we record a reserve for estimated sales returns based on significant historical experience.

At times, a financial institution client may terminate its contract with us prior to the end of the contract term. In many of these cases, the financial institution is contractually required to remit a contract termination payment. Such payments are recorded as revenue when the termination agreement is executed, provided that we have no further service or contractual obligations, and collection of the funds is assured. If we have a continuing service obligation following the execution of a contract termination agreement, we record the related revenue over the remaining service period.

Revenue is presented in the consolidated statements of income net of rebates, discounts, amortization of contract acquisition costs and sales tax. We enter into contractual agreements with financial institution clients for rebates on certain products we sell. We record these amounts as reductions of revenue in the consolidated statements of income and as accrued liabilities in the consolidated balance sheets when the related revenue is recorded. At times we may also sell products at discounted prices or provide free products to customers when they purchase a specified product. Discounts are recorded as reductions of revenue when the related revenue is recorded. The cost of free products is recorded as cost of goods sold when the revenue for the related order is recorded. Reported revenue for our Financial Services segment does not reflect the full retail price paid by end-consumers to their financial institutions. Revenue reflects the amounts paid to us by our financial institution clients.

Employee share-based compensation

Employee share-based compensation – Our share-based compensation consists of non-qualified stock options, restricted stock units, restricted stock and an employee stock purchase plan. The fair value of stock options is measured on the grant date using the Black-Scholes option pricing model. The related compensation expense is recognized on the straight-line basis, net of estimated forfeitures, over the option's vesting period. The fair value of restricted stock and a portion of our restricted stock unit awards is measured on the grant date based on the market value of our common stock. The related compensation expense, net of estimated forfeitures, is recognized over the applicable service period. Certain of our restricted stock unit awards may be settled in cash if an employee voluntarily chooses to leave the company. These awards are included in accrued liabilities in the consolidated balance sheets and are re-measured at fair value as of each balance sheet date. Compensation expense resulting from the 15% discount provided under our employee stock purchase plan is recognized over the six-month purchase period. Employee share-based compensation expense is included in cost of goods sold and in SG&A expense in our consolidated statements of income, based on the functional areas of the employees receiving the awards.

Earnings per share

Earnings per share – Basic earnings per share is based on the weighted-average number of common shares outstanding during the year. Diluted earnings per share is based on the weighted-average number of common shares outstanding during the year, adjusted to give effect to potential common shares such as stock options and shares to be issued under our employee stock purchase plan. When determining the denominator for the diluted earnings per share calculation under the treasury stock method, we exclude from assumed proceeds the impact of pro forma deferred tax assets. We calculate earnings per share using the two-class method as we have unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalent payments. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings.

Comprehensive income

Comprehensive income – Comprehensive income includes charges and credits to shareholders' equity that are not the result of transactions with shareholders. Our total comprehensive income consists of net income, gains and losses on derivative instruments, changes in the funded status and amortization of amounts related to our pension and postretirement benefit plans, unrealized gains and losses on available-for-sale marketable securities, and foreign currency translation adjustments. The items of comprehensive income, with the exception of net income, are included in accumulated other comprehensive loss in our consolidated balance sheets and statements of shareholders' equity.

Recently adopted accounting pronouncements

Recently adopted accounting pronouncements – In September 2011, the Financial Accounting Standards Board (FASB) issued ASU No. 2011-08, Testing Goodwill for Impairment. Under the new guidance, companies have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less that its carrying amount. If, after this qualitative assessment, a company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step quantitative impairment test is unnecessary. We elected to adopt this new standard during the quarter ended September 30, 2011. As such, when performing our annual goodwill impairment analysis as of July 31, 2011, we performed a qualitative assessment of events and circumstances affecting the fair value of all of our reporting units. See Note 7 for further information regarding this qualitative analysis.

Accounting pronouncements not yet adopted

Accounting pronouncements not yet adopted – In May 2011, the FASB issued ASU No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The new guidance changes some fair value measurement principles and disclosure requirements. The changes in fair value measurement principles relate primarily to financial assets and do not impact our fair value measurements at this time. Effective January 1, 2012, we will adopt the new disclosure requirements.

In June 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income. This standard eliminates the current option to report other comprehensive income and its components in the statement of shareholders' equity. The standard also requires that the components of other comprehensive income be presented in interim financial statements. Currently, only the total of comprehensive income is required to be presented in interim reports. In December 2011, the FASB issued ASU No. 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05. This standard temporarily defers a provision included in ASU No. 2011-05 which requires that reclassification adjustments from other comprehensive income to net income be presented by income statement line item. Both new standards are effective for us on January 1, 2012.

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Fair value measurements (impairment analyses and acquisitions) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Asset impairment analyses [Abstract]
Carrying value of indefinite-lived trade name	$ 19,100
Excess of fair value over carrying value of indefinite-live trade name	12,000
Excess of fair value over carrying value of reporting unit's net assets, minimum	43,000
Excess of fair value over carrying value of reporting unit's net assets, maximum	546,000
Excess of fair values over carrying values of reporting units net assets, minimum (in hundredths)	55.00%
Excess of fair value over carrying value of reporting unit's net assets, maximum (in hundredths)	442.00%
Acquisition [Abstract]
Number of business combinations completed		2	2
Shares of common stock to be issued for acquisition (in shares)	193
Shares of common stock to be issued for acquisition, fair value	4,300
Fair value of intangible assets acquired	55,069	62,232	39,754
Useful life (in years)	6	4	5
Fair value of deferred revenue acquired			7,300
Internal use software [Member]
Acquisition [Abstract]
Fair value of intangible assets acquired	33,169	36,442	24,911
Useful life (in years)	4	4	3
Internal use software [Member] | Custom Direct [Member]
Acquisition [Abstract]
Fair value of intangible assets acquired		12,587
Useful life (in years)		4.7
Internal use software [Member] | PsPrint, LLC [Member]
Acquisition [Abstract]
Fair value of intangible assets acquired	9,050
Useful life (in years)	5
Customer lists/relationships [Member]
Acquisition [Abstract]
Fair value of intangible assets acquired	12,600	16,690	13,943
Useful life (in years)	8.2	1.0	7
Customer lists/relationships [Member] | Custom Direct [Member]
Acquisition [Abstract]
Fair value of intangible assets acquired		15,000
Useful life (in years)		1.3
Customer lists/relationships [Member] | Abacus America Inc. [Member]
Acquisition [Abstract]
Fair value of intangible assets acquired			11,900
Useful life (in years)			7
Trade names [Member]
Acquisition [Abstract]
Fair value of intangible assets acquired	8,300	9,100	900
Useful life (in years)	9.5	10	10
Trade names [Member] | Custom Direct [Member]
Acquisition [Abstract]
Fair value of intangible assets acquired		$ 8,900

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SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables)

12 Months Ended

Dec. 31, 2011

SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED) [Abstract]

Summarized Quarterly Financial Data (Unaudited)

SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED)

(in thousands, except per share amounts)

	2011 Quarter Ended
	March 31(1)		June 30(2)		September 30(3)		December 31(4)
Revenue	$	349,752	$	346,274	$	355,144	$	366,426
Gross profit		229,589		225,587		232,506		236,512
Net income		32,556		35,473		36,735		39,831
Earnings per share:
Basic		0.63		0.69		0.72		0.78
Diluted		0.63		0.68		0.71		0.78
Cash dividends per share		0.25		0.25		0.25		0.25

	2010 Quarter Ended
	March 31(5)		June 30(6)		September 30(7)		December 31(8)
Revenue	$	335,120	$	347,996	$	367,633	$	351,488
Gross profit		216,757		226,056		246,200		224,805
Net income		33,384		33,614		50,800		34,826
Earnings per share:
Basic		0.65		0.65		0.99		0.68
Diluted		0.65		0.65		0.98		0.68
Cash dividends per share		0.25		0.25		0.25		0.25

(1) 2011 first quarter results included net pre-tax restructuring charges of $1,474 related to our cost reduction initiatives.

(2) 2011 second quarter results included net pre-tax restructuring charges of $4,604 related to our cost reduction initiatives.

(3)  2011 third quarter results included net pre-tax restructuring charges of $4,598 related to our cost reduction initiatives.

(4) 2011 fourth quarter results included net pre-tax restructuring charges of $3,045 related to our cost reduction initiatives and an asset impairment charge of $1,196 related to a vacant facility which is held for sale.

(5) 2010 first quarter results included tax expense of $3,662 for discrete items, primarily the impact of recent health care legislation on deferred income taxes.

(6) 2010 second quarter results included net pre-tax restructuring charges of $2,093 related to our cost reduction initiatives. Results also included a $1,384 reduction in income tax expense for discrete items, primarily reductions in accruals for uncertain tax positions.

(7) 2010 third quarter results included a $1,482 reduction in income tax expense for discrete items, primarily adjustments to accruals for uncertain tax positions.

(8) 2010 fourth quarter results included net pre-tax restructuring charges of $7,754 related to our cost reduction initiatives.

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Earnings per share (Tables)

12 Months Ended

Dec. 31, 2011

Earnings per share:

Earnings per share

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

	2011			2010			2009
Earnings per share – basic:
Income from continuing operations	$	144,595		$	153,395		$	99,365
Income allocated to participating securities		(823	)		(804	)		(751	)
Income available to common shareholders	$	143,772		$	152,591		$	98,614
Weighted-average shares outstanding		51,036			51,123			50,837
Earnings per share – basic	$	2.82		$	2.98		$	1.94
Earnings per share – diluted:
Income from continuing operations	$	144,595		$	153,395		$	99,365
Income allocated to participating securities		(586	)		(802	)		(751	)
Re-measurement of share-based awards classified as liabilities		(20	)		79			(18	)
Income available to common shareholders	$	143,989		$	152,672		$	98,596
Weighted-average shares outstanding		51,036			51,123			50,837
Dilutive impact of potential common shares		379			202			88
Weighted-average shares and potential common shares outstanding		51,415			51,325			50,925
Earnings per share – diluted	$	2.80		$	2.97		$	1.94
Antidilutive options excluded from calculation		1,835			2,324			2,128

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Acquisitions (Tables)

12 Months Ended

Dec. 31, 2011

Acquisition [Abstract]

Allocation of purchase price to the assets acquired and liabilities assumed

The following illustrates our allocation of the Custom Direct purchase price to the assets acquired and liabilities assumed:

	Allocation of purchase  price
Cash and cash equivalents	$	24
Other current assets		11,249
Intangibles		36,487
Goodwill		66,269
Other non-current assets		5,082
Current liabilities		(8,686	)
Non-current liabilities		(12,480	)
Total purchase price		97,945
Less: cash acquired		(24	)
Purchase price, net of cash acquired	$	97,921

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Cash Flows From Operating Activities:
Net income	$ 144,595	$ 152,624	$ 99,365
Adjustments to reconcile net income to net cash provided by operating activities of continuing operations:
Net loss from discontinued operations	0	771	0
Depreciation	21,547	20,946	22,463
Amortization of intangibles	51,796	52,969	45,302
Asset impairment charges	1,196	0	24,900
Amortization of contract acquisition costs	16,659	19,745	24,550
Deferred income taxes	9,350	20,362	12,039
Employee share-based compensation expense	5,733	6,150	6,663
Loss (gain) on early debt extinguishment	6,995	0	(9,834)
Other non-cash items, net	10,612	12,802	15,111
Changes in assets and liabilities, net of effects of acquisitions and discontinued operations:
Trade accounts receivable	(6,648)	(3,962)	(1,481)
Inventories and supplies	(398)	(470)	2,793
Other current assets	(1,538)	1,864	(2,109)
Non-current assets	2,261	928	5,403
Accounts payable	3,460	(5,193)	1,868
Contract acquisition payments	(12,190)	(22,087)	(29,250)
Other accrued and non-current liabilities	(18,063)	(44,834)	(11,345)
Net cash provided by operating activities of continuing operations	235,367	212,615	206,438
Cash Flows From Investing Activities:
Purchases of capital assets	(35,506)	(43,932)	(44,266)
Payments for acquisitions, net of cash acquired	(85,641)	(98,621)	(30,825)
Payments on company-owned life insurance policies	(6,383)	0	0
Loans to distributors	(5,175)	0	0
Purchases of customer lists	0	(265)	(1,639)
Purchases of marketable securities	(18)	(14)	(4,581)
Proceeds from sales of marketable securities	0	1,970	914
Proceeds from company-owned life insurance policies	0	6,143	0
Other	938	(1,451)	(1,391)
Net cash used by investing activities of continuing operations	(131,785)	(136,170)	(81,788)
Cash Flows From Financing Activities:
Net payments on short-term debt	(7,000)	(19,000)	(52,000)
Payments on long-term debt, including costs of debt reacquisition	(215,030)	0	(22,627)
Proceeds from issuing long-term debt	200,000	0	0
Payments for debt issue costs	(3,513)	(2,361)	0
Change in book overdrafts	(136)	(693)	(3,360)
Proceeds from issuing shares under employee plans	7,671	3,267	1,972
Excess tax benefit from share-based employee awards	1,052	680	68
Payments for common shares repurchased	(23,620)	(2,999)	(1,319)
Cash dividends paid to shareholders	(51,126)	(51,435)	(51,279)
Net cash used by financing activities of continuing operations	(91,702)	(72,541)	(128,545)
Effect Of Exchange Rate Change On Cash	(576)	690	1,594
Cash Used By Operating Activities Of Discontinued Operations	0	0	(470)
Cash Used By Investing Activities Of Discontinued Operations	0	0	(30)
Net Change In Cash And Cash Equivalents	11,304	4,594	(2,801)
Cash And Cash Equivalents: Beginning Of Year	17,383	12,789	15,590
Cash And Cash Equivalents: End Of Year	$ 28,687	$ 17,383	$ 12,789

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Assets held for sale and discontinued operations (Tables)

12 Months Ended

Dec. 31, 2011

Assets held for sale and discontinued operations [Abstract]

Revenue and income from discontinued operations

Revenue and net loss from discontinued operations were as follows:

	2010			2009
Revenue	$	-		$	816
Loss from operations	$	-		$	(155	)
(Loss) gain on disposal		(1,244	)		155
Income tax benefit		473			-
Net loss from discontinued operations	$	(771	)	$	-

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Supplemental guarantor financial information (Condensed consolidating statements of cash flows) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Condensed Consolidating Statement of Cash Flows [Abstract]
Net Cash (Used) Provided By Operating Activities of Continuing Operations	$ 235,367	$ 212,615	$ 206,438
Cash Flows From Investing Activities:
Purchases of capital assets	(35,506)	(43,932)	(44,266)
Payments for acquisitions, net of cash acquired	(85,641)	(98,621)	(30,825)
Payments on company-owned life insurance policies	(6,383)	0	0
Loans to distributors	(5,175)	0	0
Purchases of marketable securities	(18)	(14)	(4,581)
Purchases of customer lists	0	(265)	(1,639)
Proceeds from sales of marketable securities	0	1,970	914
Proceeds from company-owned life insurance policies	0	6,143	0
Other	938	(1,451)	(1,391)
Net cash used by investing activities of continuing operations	(131,785)	(136,170)	(81,788)
Cash Flows From Financing Activities:
Net payments on short-term debt	(7,000)	(19,000)	(52,000)
Payments on long-term debt, including costs of debt reacquisition	(215,030)	0	(22,627)
Proceeds from issuing long-term debt	200,000	0	0
Payments for debt issue costs	(3,513)	(2,361)	0
Change in book overdrafts	(136)	(693)	(3,360)
Proceeds from issuing shares under employee plans	7,671	3,267	1,972
Excess tax benefit from share-based employee awards	1,052	680	68
Payments for common shares repurchased	(23,620)	(2,999)	(1,319)
Cash dividends paid to shareholders	(51,126)	(51,435)	(51,279)
Advances from (to) consolidated subsidiaries	0	0	0
Net cash used by financing activities of continuing operations	(91,702)	(72,541)	(128,545)
Effect Of Exchange Rate Change on Cash	(576)	690	1,594
Cash Used By Operating Activities Of Discontinued Operations	0	0	(470)
Cash Used By Investing Activities Of Discontinued Operations	0	0	(30)
Net Change In Cash And Cash Equivalents	11,304	4,594	(2,801)
Cash And Cash Equivalents: Beginning Of Year	17,383	12,789	15,590
Cash And Cash Equivalents: End Of Year	28,687	17,383	12,789
Senior notes due 2019 [Member]
Debt Instrument [Line Items]
Parent company's ownership interest in guarantor subsidiaries (in hundredths)	100.00%
Deluxe Corporation [Member]
Condensed Consolidating Statement of Cash Flows [Abstract]
Net Cash (Used) Provided By Operating Activities of Continuing Operations	2,567	(16,786)	(9,287)
Cash Flows From Investing Activities:
Purchases of capital assets	0	0	0
Payments for acquisitions, net of cash acquired	0	0	0
Payments on company-owned life insurance policies	0
Loans to distributors	0
Purchases of marketable securities	0		0
Purchases of customer lists			0
Proceeds from sales of marketable securities			0
Proceeds from company-owned life insurance policies		5,782
Other	(342)	(1,410)	(1,234)
Net cash used by investing activities of continuing operations	(342)	4,372	(1,234)
Cash Flows From Financing Activities:
Net payments on short-term debt	(7,000)	(19,000)	(52,000)
Payments on long-term debt, including costs of debt reacquisition	(215,030)		(21,187)
Proceeds from issuing long-term debt	200,000
Payments for debt issue costs	(3,513)	(2,361)
Change in book overdrafts	742	(1,090)	(3,457)
Proceeds from issuing shares under employee plans	7,671	3,267	1,972
Excess tax benefit from share-based employee awards	1,052	680	68
Payments for common shares repurchased	(23,620)	(2,999)	(1,319)
Cash dividends paid to shareholders	(51,126)	(51,435)	(51,279)
Advances from (to) consolidated subsidiaries	88,449	85,824	136,956
Net cash used by financing activities of continuing operations	(2,375)	12,886	9,754
Effect Of Exchange Rate Change on Cash	0	0	0
Cash Used By Operating Activities Of Discontinued Operations			0
Cash Used By Investing Activities Of Discontinued Operations			0
Net Change In Cash And Cash Equivalents	(150)	472	(767)
Cash And Cash Equivalents: Beginning Of Year	3,197	2,725	3,492
Cash And Cash Equivalents: End Of Year	3,047	3,197	2,725
Guarantor Subsidiaries [Member]
Condensed Consolidating Statement of Cash Flows [Abstract]
Net Cash (Used) Provided By Operating Activities of Continuing Operations	213,999	224,279	217,167
Cash Flows From Investing Activities:
Purchases of capital assets	(33,731)	(43,005)	(41,777)
Payments for acquisitions, net of cash acquired	(80,486)	(98,621)	(30,825)
Payments on company-owned life insurance policies	(6,383)
Loans to distributors	(4,879)
Purchases of marketable securities	0		0
Purchases of customer lists		(70)	(1,639)
Proceeds from sales of marketable securities			0
Proceeds from company-owned life insurance policies		361
Other	850	(41)	(157)
Net cash used by investing activities of continuing operations	(124,629)	(141,376)	(74,398)
Cash Flows From Financing Activities:
Net payments on short-term debt	0	0	0
Payments on long-term debt, including costs of debt reacquisition	0		(1,440)
Proceeds from issuing long-term debt	0
Payments for debt issue costs	0	0
Change in book overdrafts	(878)	397	97
Proceeds from issuing shares under employee plans	0	0	0
Excess tax benefit from share-based employee awards	0	0	0
Payments for common shares repurchased	0	0	0
Cash dividends paid to shareholders	0	0	0
Advances from (to) consolidated subsidiaries	(87,653)	(83,114)	(140,965)
Net cash used by financing activities of continuing operations	(88,531)	(82,717)	(142,308)
Effect Of Exchange Rate Change on Cash	0	0	0
Cash Used By Operating Activities Of Discontinued Operations			(470)
Cash Used By Investing Activities Of Discontinued Operations			(30)
Net Change In Cash And Cash Equivalents	839	186	(39)
Cash And Cash Equivalents: Beginning Of Year	683	497	536
Cash And Cash Equivalents: End Of Year	1,522	683	497
Non-Guarantor Subsidiaries [Member]
Condensed Consolidating Statement of Cash Flows [Abstract]
Net Cash (Used) Provided By Operating Activities of Continuing Operations	18,801	5,122	(1,442)
Cash Flows From Investing Activities:
Purchases of capital assets	(1,775)	(927)	(2,489)
Payments for acquisitions, net of cash acquired	(5,155)	0	0
Payments on company-owned life insurance policies	0
Loans to distributors	(296)
Purchases of marketable securities	(18)	(14)	(4,581)
Purchases of customer lists		(195)	0
Proceeds from sales of marketable securities		1,970	914
Other	430		0
Net cash used by investing activities of continuing operations	(6,814)	834	(6,156)
Cash Flows From Financing Activities:
Net payments on short-term debt	0	0	0
Payments on long-term debt, including costs of debt reacquisition	0		0
Proceeds from issuing long-term debt	0
Payments for debt issue costs	0	0
Change in book overdrafts	0	0	0
Proceeds from issuing shares under employee plans	0	0	0
Excess tax benefit from share-based employee awards	0	0	0
Payments for common shares repurchased	0	0	0
Cash dividends paid to shareholders	0	0	0
Advances from (to) consolidated subsidiaries	(796)	(2,710)	4,009
Net cash used by financing activities of continuing operations	(796)	(2,710)	4,009
Effect Of Exchange Rate Change on Cash	(576)	690	1,594
Cash Used By Operating Activities Of Discontinued Operations			0
Cash Used By Investing Activities Of Discontinued Operations			0
Net Change In Cash And Cash Equivalents	10,615	3,936	(1,995)
Cash And Cash Equivalents: Beginning Of Year	13,503	9,567	11,562
Cash And Cash Equivalents: End Of Year	$ 24,118	$ 13,503	$ 9,567

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Debt and leases (Tables)

12 Months Ended

Dec. 31, 2011

Debt and leases [Abstract]

Debt

Debt outstanding as of December 31 was as follows:

	2011		2010
5.0% senior, unsecured notes due December 15, 2012, net of discount, including cumulative change in fair value of hedged debt: 2010 - $4,879 increase	$	-	$	284,843
5.125% senior, unsecured notes due October 1, 2014, net of discount, including cumulative change in fair value of hedged debt: 2011 - $2,788 increase		256,131		263,279
7.375% senior notes due June 1, 2015		200,000		200,000
7.0% senior notes due March 15, 2019		200,000		-
Long-term portion of debt		656,131		748,122
5.0% senior, unsecured notes due December 15, 2012, net of discount, including cumulative change in fair value of hedged debt: 2011 - $780 increase		85,575		-
Amounts drawn on credit facility		-		7,000
Total debt	$	741,706	$	755,122

Credit facility, amounts outstanding

Amounts outstanding under our credit facility for the years ended December 31 were as follows:

	2011		2010		2009
Daily average amount outstanding	$	21,655	$	49,957	$	69,267
Weighted-average interest rate		3.03%		3.20%		0.76%

Credit facility, amount available for borrowing

Amounts available for borrowing under our credit facility as of December 31, 2011 were as follows:

	Total available
Credit facility commitment	$	200,000
Outstanding letters of credit		(8,551	)
Net available for borrowing as of December 31, 2011	$	191,449

Future minimum lease payments under noncancelable operating leases

As of December 31, 2011, future minimum lease payments under noncancelable operating leases with an initial term in excess of one year were as follows:

	Operating leases
2012	$	10,249
2013		7,117
2014		2,532
2015		920
2016		772
2017		40
Total minimum lease payments	$	21,630

Composition of rent expense

The composition of rent expense for the years ended December 31 was as follows:

	2011			2010			2009
Minimum rentals	$	10,068		$	10,313		$	8,180
Sublease rentals		(144	)		(190	)		(1,677	)
Net rental expense	$	9,924		$	10,123		$	6,503

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Acquisitions (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended																				12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2011 Trade names [Member]	Dec. 31, 2010 Trade names [Member]	Dec. 31, 2009 Trade names [Member]	Dec. 31, 2011 Customer lists/relationships [Member]	Dec. 31, 2010 Customer lists/relationships [Member]	Dec. 31, 2009 Customer lists/relationships [Member]	Dec. 31, 2011 Banker's Dashboard [Member]	Dec. 31, 2011 Banker's Dashboard [Member] Trade names [Member]	Dec. 31, 2011 Banker's Dashboard [Member] Customer lists/relationships [Member]	Dec. 31, 2010 Custom Direct, Inc [Member]	Dec. 31, 2010 Custom Direct, Inc [Member] Internal use software [Member]	Dec. 31, 2010 Custom Direct, Inc [Member] Trade names [Member]	Dec. 31, 2010 Custom Direct, Inc [Member] Customer lists/relationships [Member]	Dec. 31, 2009 Abacus America Inc [Member]	Dec. 31, 2009 Abacus America Inc [Member] Customer relationships [Member]	Dec. 31, 2011 Acquisition of the operations of several small business distributors [Member]	Dec. 31, 2010 Cornerstone Customer Solutions, LLC [Member]	Dec. 31, 2009 MerchEngines.com [Member]	Dec. 31, 2008 PsPrint, LLC [Member]	Dec. 31, 2011 PsPrint, LLC [Member] Internal use software [Member]	Dec. 31, 2011 PsPrint, LLC [Member] Trade names [Member]	Dec. 31, 2011 PsPrint, LLC [Member] Customer lists/relationships [Member]
Business Acquisition [Line Items]
Cash paid for acquistion																			$ 5,155
Value of common shares plus related dividend equivalent payments										4,700
Shares of common stock to be issued for acquisition (in shares)	193									193
Number of years before shares will be issued after the closing of the acquisition (maximum) (in years)										4Y
Number of years before shares will be issued after the closing of the acquisition (minimum) (in years)										2Y
Purchase Price Allocation [Abstract]
Cash and cash equivalents													24
Other current assets													11,249
Intangibles													36,487
Goodwill													66,269				24,225			897	1,140	24,826
Other non-current assets													5,082
Current liabilities													(8,686)
Non-current liabilities													(12,480)
Total purchase price													97,945							700
Less: cash acquired													(24)
Purchase price, net of cash acquired	85,641	98,621	30,825										97,921				27,577				3,248	45,486
Fair value of deferred revenue acquired			7,300														7,300
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired intangible assets	$ 55,069	$ 62,232	$ 39,754	$ 8,300	$ 9,100	$ 900	$ 12,600	$ 16,690	$ 13,943		$ 2,200	$ 9,300		$ 12,587	$ 8,900	$ 15,000		$ 11,900					$ 9,050	$ 6,100	$ 3,300
Weighted average useful life (in years)	6	4	5	9.5	10	10	8.2	1.0	7		8	9		4.7	10	1.3		7					5	10	6

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Pension and other postretirement benefits (plan assets and cash flows) (Details) (USD $) In Thousands, unless otherwise specified																																																															1 Months Ended							12 Months Ended		12 Months Ended				12 Months Ended					12 Months Ended
	Dec. 31, 2011 Fair value measurements using quoted prices in active markets for identical assets (Level 1) [Member]	Dec. 31, 2010 Fair value measurements using quoted prices in active markets for identical assets (Level 1) [Member]	Dec. 31, 2011 Fair value measurements using significant other observable inputs (Level 2) [Member]	Dec. 31, 2010 Fair value measurements using significant other observable inputs (Level 2) [Member]	Dec. 31, 2011 Fair value measurements using significant unobservable inputs (Level 3) [Member]	Dec. 31, 2010 Fair value measurements using significant unobservable inputs (Level 3) [Member]	Dec. 31, 2011 US Large Capitalization Equity Securities [Member]	Dec. 31, 2010 US Large Capitalization Equity Securities [Member]	Dec. 31, 2011 US Large Capitalization Equity Securities [Member] Fair value measurements using quoted prices in active markets for identical assets (Level 1) [Member]	Dec. 31, 2010 US Large Capitalization Equity Securities [Member] Fair value measurements using quoted prices in active markets for identical assets (Level 1) [Member]	Dec. 31, 2011 US Large Capitalization Equity Securities [Member] Fair value measurements using significant other observable inputs (Level 2) [Member]	Dec. 31, 2010 US Large Capitalization Equity Securities [Member] Fair value measurements using significant other observable inputs (Level 2) [Member]	Dec. 31, 2011 US Large Capitalization Equity Securities [Member] Fair value measurements using significant unobservable inputs (Level 3) [Member]	Dec. 31, 2010 US Large Capitalization Equity Securities [Member] Fair value measurements using significant unobservable inputs (Level 3) [Member]	Dec. 31, 2011 International Equity Securities [Member]	Dec. 31, 2010 International Equity Securities [Member]	Dec. 31, 2011 International Equity Securities [Member] Fair value measurements using quoted prices in active markets for identical assets (Level 1) [Member]	Dec. 31, 2010 International Equity Securities [Member] Fair value measurements using quoted prices in active markets for identical assets (Level 1) [Member]	Dec. 31, 2011 International Equity Securities [Member] Fair value measurements using significant other observable inputs (Level 2) [Member]	Dec. 31, 2010 International Equity Securities [Member] Fair value measurements using significant other observable inputs (Level 2) [Member]	Dec. 31, 2011 International Equity Securities [Member] Fair value measurements using significant unobservable inputs (Level 3) [Member]	Dec. 31, 2010 International Equity Securities [Member] Fair value measurements using significant unobservable inputs (Level 3) [Member]	Dec. 31, 2011 Mortgage Backed Securities [Member]	Dec. 31, 2010 Mortgage Backed Securities [Member]	Dec. 31, 2011 Mortgage Backed Securities [Member] Fair value measurements using quoted prices in active markets for identical assets (Level 1) [Member]	Dec. 31, 2010 Mortgage Backed Securities [Member] Fair value measurements using quoted prices in active markets for identical assets (Level 1) [Member]	Dec. 31, 2011 Mortgage Backed Securities [Member] Fair value measurements using significant other observable inputs (Level 2) [Member]	Dec. 31, 2010 Mortgage Backed Securities [Member] Fair value measurements using significant other observable inputs (Level 2) [Member]	Dec. 31, 2011 Mortgage Backed Securities [Member] Fair value measurements using significant unobservable inputs (Level 3) [Member]	Dec. 31, 2010 Mortgage Backed Securities [Member] Fair value measurements using significant unobservable inputs (Level 3) [Member]	Dec. 31, 2011 Government Debt Securities [Member]	Dec. 31, 2010 Government Debt Securities [Member]	Dec. 31, 2011 Government Debt Securities [Member] Fair value measurements using quoted prices in active markets for identical assets (Level 1) [Member]	Dec. 31, 2010 Government Debt Securities [Member] Fair value measurements using quoted prices in active markets for identical assets (Level 1) [Member]	Dec. 31, 2011 Government Debt Securities [Member] Fair value measurements using significant other observable inputs (Level 2) [Member]	Dec. 31, 2010 Government Debt Securities [Member] Fair value measurements using significant other observable inputs (Level 2) [Member]	Dec. 31, 2011 Government Debt Securities [Member] Fair value measurements using significant unobservable inputs (Level 3) [Member]	Dec. 31, 2010 Government Debt Securities [Member] Fair value measurements using significant unobservable inputs (Level 3) [Member]	Dec. 31, 2011 US Corporate Debt Securities [Member]	Dec. 31, 2010 US Corporate Debt Securities [Member]	Dec. 31, 2011 US Corporate Debt Securities [Member] Fair value measurements using quoted prices in active markets for identical assets (Level 1) [Member]	Dec. 31, 2010 US Corporate Debt Securities [Member] Fair value measurements using quoted prices in active markets for identical assets (Level 1) [Member]	Dec. 31, 2011 US Corporate Debt Securities [Member] Fair value measurements using significant other observable inputs (Level 2) [Member]	Dec. 31, 2010 US Corporate Debt Securities [Member] Fair value measurements using significant other observable inputs (Level 2) [Member]	Dec. 31, 2011 US Corporate Debt Securities [Member] Fair value measurements using significant unobservable inputs (Level 3) [Member]	Dec. 31, 2010 US Corporate Debt Securities [Member] Fair value measurements using significant unobservable inputs (Level 3) [Member]	Dec. 31, 2011 US Small and Mid Capitalization Equity Securities [Member]	Dec. 31, 2010 US Small and Mid Capitalization Equity Securities [Member]	Dec. 31, 2011 US Small and Mid Capitalization Equity Securities [Member] Fair value measurements using quoted prices in active markets for identical assets (Level 1) [Member]	Dec. 31, 2010 US Small and Mid Capitalization Equity Securities [Member] Fair value measurements using quoted prices in active markets for identical assets (Level 1) [Member]	Dec. 31, 2011 US Small and Mid Capitalization Equity Securities [Member] Fair value measurements using significant other observable inputs (Level 2) [Member]	Dec. 31, 2010 US Small and Mid Capitalization Equity Securities [Member] Fair value measurements using significant other observable inputs (Level 2) [Member]	Dec. 31, 2011 US Small and Mid Capitalization Equity Securities [Member] Fair value measurements using significant unobservable inputs (Level 3) [Member]	Dec. 31, 2010 US Small and Mid Capitalization Equity Securities [Member] Fair value measurements using significant unobservable inputs (Level 3) [Member]	Dec. 31, 2011 Other Debt Securities [Member]	Dec. 31, 2010 Other Debt Securities [Member]	Dec. 31, 2011 Other Debt Securities [Member] Fair value measurements using quoted prices in active markets for identical assets (Level 1) [Member]	Dec. 31, 2010 Other Debt Securities [Member] Fair value measurements using quoted prices in active markets for identical assets (Level 1) [Member]	Dec. 31, 2011 Other Debt Securities [Member] Fair value measurements using significant other observable inputs (Level 2) [Member]	Dec. 31, 2010 Other Debt Securities [Member] Fair value measurements using significant other observable inputs (Level 2) [Member]	Dec. 31, 2011 Other Debt Securities [Member] Fair value measurements using significant unobservable inputs (Level 3) [Member]	Dec. 31, 2010 Other Debt Securities [Member] Fair value measurements using significant unobservable inputs (Level 3) [Member]	Jan. 31, 2012 Postretirement Benefit Plan [Member]	Dec. 31, 2011 Postretirement Benefit Plan [Member]	Dec. 31, 2010 Postretirement Benefit Plan [Member]	Dec. 31, 2009 Postretirement Benefit Plan [Member]	Dec. 31, 2011 Postretirement Benefit Plan [Member] Gross Benefit Payments [Member]	Dec. 31, 2011 Postretirement Benefit Plan [Member] Expected Medicare Subsidy [Member]	Dec. 31, 2011 Postretirement Benefit Plan [Member] Net Benefit Payments [Member]	Dec. 31, 2011 Postretirement Benefit Plan [Member] US Large Capitalization Equity Securities [Member]	Dec. 31, 2010 Postretirement Benefit Plan [Member] US Large Capitalization Equity Securities [Member]	Dec. 31, 2011 Postretirement Benefit Plan [Member] International Equity Securities [Member]	Dec. 31, 2010 Postretirement Benefit Plan [Member] International Equity Securities [Member]	Dec. 31, 2011 Postretirement Benefit Plan [Member] Mortgage Backed Securities [Member]	Dec. 31, 2010 Postretirement Benefit Plan [Member] Mortgage Backed Securities [Member]	Dec. 31, 2011 Postretirement Benefit Plan [Member] Fixed Income Securities [Member]	Dec. 31, 2011 Postretirement Benefit Plan [Member] Government Debt Securities [Member]	Dec. 31, 2010 Postretirement Benefit Plan [Member] Government Debt Securities [Member]	Dec. 31, 2011 Postretirement Benefit Plan [Member] US Corporate Debt Securities [Member]	Dec. 31, 2010 Postretirement Benefit Plan [Member] US Corporate Debt Securities [Member]	Dec. 31, 2011 Postretirement Benefit Plan [Member] US Small and Mid Capitalization Equity Securities [Member]	Dec. 31, 2010 Postretirement Benefit Plan [Member] US Small and Mid Capitalization Equity Securities [Member]	Dec. 31, 2011 Postretirement Benefit Plan [Member] Other Debt Securities [Member]	Dec. 31, 2010 Postretirement Benefit Plan [Member] Other Debt Securities [Member]	Dec. 31, 2011 Pension Plans [Member]	Dec. 31, 2010 Pension Plans [Member]	Dec. 31, 2009 Pension Plans [Member]	Dec. 31, 2011 Pension Plans [Member] Gross Benefit Payments [Member]
Allocation of plan assets by asset category [Abstract]
Allocation of plan assets, equity securities (in hundredths)																																																																						33.00%	34.00%	16.00%	18.00%								8.00%	8.00%
Allocation of plan assets, debt securities (in hundredths)																																																																										10.00%	14.00%		14.00%	13.00%	19.00%	10.00%			0.00%	3.00%
Allocation of plan assets, total (in hundredths)																																																																100.00%	100.00%
Target allocation of plan assets by asset category [Abstract]
Target allocation of plan assets, equity securities (in hundredths)																																																																						33.00%		18.00%									7.00%
Target allocation of plan assets, debt securities (in hundredths)																																																																												42.00%
Fair value of plan assets [Abstract]
Fair value of plan assets	$ 42,980	$ 61,625	$ 57,642	$ 39,685	$ 0	$ 0	$ 33,613	$ 34,332	$ 0	$ 16,554	$ 33,613	$ 17,778	$ 0	$ 0	$ 16,023	$ 18,357	$ 15,615	$ 18,027	$ 408	$ 330	$ 0	$ 0	$ 9,698	$ 14,113	$ 2,193	$ 0	$ 7,505	$ 14,113	$ 0	$ 0	$ 14,151	$ 13,531	$ 12,006	$ 7,544	$ 2,145	$ 5,987	$ 0	$ 0	$ 19,319	$ 9,725	$ 5,655	$ 8,611	$ 13,664	$ 1,114	$ 0	$ 0	$ 7,803	$ 8,153	$ 7,606	$ 8,064	$ 197	$ 89	$ 0	$ 0	$ 15	$ 3,099	$ (95)	$ 2,825	$ 110	$ 274	$ 0	$ 0		$ 100,622	$ 101,310	$ 90,320																			$ 0	$ 0	$ 0
Cash surrender value of life insurance policies																																																																																					6,619	6,291
Estimated future benefit payments [Abstract]
2012																																																																			12,000	1,200	10,800																			320
2013																																																																			12,600	1,200	11,400																			310
2014																																																																			13,100	1,300	11,800																			300
2015																																																																			13,400	1,400	12,000																			300
2016																																																																			13,300	1,500	11,800																			290
2017 - 2021																																																																			61,600	7,500	54,100																			1,330
Employer contributions																																																															$ 7,000

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Current Assets:
Cash and cash equivalents	$ 28,687	$ 17,383
Trade accounts receivable-net of allowances for uncollectible accounts	69,023	66,471
Inventories and supplies	22,043	21,660
Deferred income taxes	7,216	9,390
Funds held for customers	44,394	35,720
Other current assets	21,212	20,613
Total current assets	192,575	171,237
Long-Term Investments (including $2,165 and $2,283 of investments at fair value, respectively)	45,147	37,410
Property, Plant, and Equipment-net of accumulated depreciation	113,411	120,221
Assets Held for Sale	2,741	4,527
Intangibles-net of accumulated amortization	157,339	155,112
Goodwill	776,998	725,937
Other Non-Current Assets	100,598	94,247
Total assets	1,388,809	1,308,691
Current Liabilities:
Accounts payable	64,694	60,478
Accrued liabilities	150,098	144,034
Short-term debt	0	7,000
Long-term debt due within one year	85,575	0
Total current liabilities	300,367	211,512
Long-Term Debt	656,131	748,122
Deferred Income Taxes	49,807	46,752
Other Non-Current Liabilities	79,815	76,107
Commitments and Contingencies (Notes 9, 13 and 14)
Shareholders' Equity:
Common shares $1 par value (authorized: 500,000 shares; outstanding: 2011 - 50,826; 2010 - 51,338)	50,826	51,338
Additional paid-in capital	55,838	62,915
Retained earnings	255,426	161,957
Accumulated other comprehensive loss	(59,401)	(50,012)
Total shareholders' equity	302,689	226,198
Total liabilities and shareholders' equity	$ 1,388,809	$ 1,308,691

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Significant accounting policies (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Cash and cash equivalents [Abstract]
Book overdrafts included in accounts payable	$ 2,871	$ 3,007
Long-term investments [Abstract]
Investment in domestic mutual funds	2,165	2,283
Intangible assets [Abstract]
Intangibles useful life, minimum (in years)	1
Intangibles useful life, maximum (in years)	20
Intangibles useful life, weighted-average (in years)	6.2
Impairment of indefinite-lived intangibles and goodwill [Abstract]
Revenue projection for goodwill impairment analysis (in years)	5Y
Contract acquisition costs [Abstract]
Contract acquisition costs amortization period, minimum (in years)	1
Contract acquisition costs amortization period, maximum (in years)	10
Contract acquisition costs amortization period, weighted average (in years)	6.1
Advertising costs [Abstract]
Deferred advertising costs amortization period, maximum (in months)	18
Advertising expense for continuing operations	103,009	93,527	83,099
Income taxes (Abstract]
Measurement of tax benefit, minimum percentage tax benefit must be likely to be realized (in hundredths)	50.00%
Employee share based compensation [Abstract]
Employee stock purchase plan, discount (in hundredths)	15.00%
Employee stock purchase plan, purchase period (in months)	6M
Direct Checks [Member]
Advertising costs [Abstract]
Percentage of deferred advertising costs expensed within six months (in hundredths)	84.00%
Small Business Services [Member]
Advertising costs [Abstract]
Period over which majority of deferred advertising costs are expensed (in months)	within six months
Building [Member]
Property, plant and equipment [Abstract]
Useful life, maximum (in years)	40
Machinery and Equipment [Member]
Property, plant and equipment [Abstract]
Useful life, minimum (in years)	1
Useful life, maximum (in years)	11
Useful life, weighted average (in years)	7.7
Domestic mutual fund [Member]
Long-term investments [Abstract]
Investment in domestic mutual funds	$ 2,165	$ 2,283

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $) In Thousands	Common Shares Par Value [Member]		Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Loss [Member]	Total
Balance at Dec. 31, 2008	$ 51,131	[1]	$ 54,207	$ 12,682	$ (64,954)	$ 53,066
Net income	0	[1]	0	99,365	0	99,365
Cash dividends	0	[1]	0	(51,279)	0	(51,279)
Common shares issued	237	[1]	1,735	0	0	1,972
Tax impact of share-based awards	0	[1]	(2,591)	0	0	(2,591)
Common shares repurchased	(120)	[1]	(1,199)	0	0	(1,319)
Other common shares retired	(59)	[1]	(608)	0	0	(667)
Fair value of share-based compensation	0	[1]	6,527	0	0	6,527
Amounts related to postretirement benefit plans, net of tax (Note 12)	0	[1]	0	0	5,811	5,811
Amortization of loss on derivatives, net of tax	0	[1]	0	0	1,657	1,657
Marketable securities net unrealized gain, net of tax	0	[1]	0	0	0	0
Currency translation adjustment	0	[1]	0	0	4,668	4,668
Balance at Dec. 31, 2009	51,189	[1]	58,071	60,768	(52,818)	117,210
Net income	0	[1]	0	152,624	0	152,624
Cash dividends	0	[1]	0	(51,435)	0	(51,435)
Common shares issued	410	[1]	4,187	0	0	4,597
Tax impact of share-based awards	0	[1]	(677)	0	0	(677)
Common shares repurchased	(167)	[1]	(2,832)	0	0	(2,999)
Other common shares retired	(94)	[1]	(1,716)	0	0	(1,810)
Fair value of share-based compensation	0	[1]	5,882	0	0	5,882
Amounts related to postretirement benefit plans, net of tax (Note 12)	0	[1]	0	0	(342)	(342)
Amortization of loss on derivatives, net of tax	0	[1]	0	0	1,319	1,319
Marketable securities net unrealized gain, net of tax	0	[1]	0	0	13	13
Currency translation adjustment	0	[1]	0	0	1,816	1,816
Balance at Dec. 31, 2010	51,338	[1]	62,915	161,957	(50,012)	226,198
Net income	0	[1]	0	144,595	0	144,595
Cash dividends	0	[1]	0	(51,126)	0	(51,126)
Common shares issued	499	[1]	7,584	0	0	8,083
Common shares to be issued for Banker's Dashboard acquisition (see Note 4)	0		4,300	0	0	4,300
Tax impact of share-based awards	0	[1]	112	0	0	112
Common shares repurchased	(940)	[1]	(22,680)	0	0	(23,620)
Other common shares retired	(71)	[1]	(1,758)	0	0	(1,829)
Fair value of share-based compensation	0	[1]	5,365	0	0	5,365
Amounts related to postretirement benefit plans, net of tax (Note 12)	0	[1]	0	0	(9,586)	(9,586)
Amortization of loss on derivatives, net of tax	0	[1]	0	0	1,591	1,591
Marketable securities net unrealized gain, net of tax	0	[1]	0	0	165	165
Currency translation adjustment	0	[1]	0	0	(1,559)	(1,559)
Balance at Dec. 31, 2011	$ 50,826	[1]	$ 55,838	$ 255,426	$ (59,401)	$ 302,689

[1] As the par value of our common shares is $1.00 per share, the number of shares associated with the transactions presented here is equivalent to the related par value. See Note 15 for share information.

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Restructuring charges (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended						12 Months Ended
	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2010	Jun. 30, 2010	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
Restructuring charges [Abstract]
Severance accruals							$ 8,826	$ 9,331	$ 10,625
Severance reversals							(1,737)	(2,398)	(3,523)
Operating lease obligations							52	933	1,177
Operating lease obligation reversals							(6)	(380)	(32)
Net restructuring accruals							7,135	7,486	8,247
Other costs							6,586	2,841	3,739
Net restructuring charges	3,045	4,598	4,604	1,474	7,754	2,093	13,721	10,327	11,986
Net restructuring charges, cost of goods sold							1,978	2,356	4,558
Net restructuring charges, operating expenses							11,743	7,971	7,428
Number of employees included in severance accrual							400	470	640
Restructuring accruals	6,032				6,798		6,032	6,798	11,492	20,379
Restructuring accruals, accrued liabilities	5,946				6,435		5,946	6,435
Restructuring accruals, non-current liabilities	$ 86				$ 363		$ 86	$ 363
Number of employees that have not started receiving severance benefits	260						260

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Restructuring charges (Tables)

12 Months Ended

Dec. 31, 2011

Restructuring charges [Abstract]

Components of net restructuring charges

Net restructuring charges for the years ended December 31 consisted of the following components:

	2011			2010			2009
Severance accruals	$	8,826		$	9,331		$	10,625
Severance reversals		(1,737	)		(2,398	)		(3,523	)
Operating lease obligations		52			933			1,177
Operating lease obligation reversals		(6	)		(380	)		(32	)
Net restructuring accruals		7,135			7,486			8,247
Other costs		6,586			2,841			3,739
Net restructuring charges	$	13,721		$	10,327		$	11,986

The net restructuring charges are reflected in the consolidated statements of income for the years ended December 31 as follows:

	2011		2010		2009
Cost of goods sold	$	1,978	$	2,356	$	4,558
Operating expenses		11,743		7,971		7,428
Net restructuring charges	$	13,721	$	10,327	$	11,986

Restructuring accruals, by company initiative

By company initiative, our restructuring accruals were as follows:

	NEBS acquisition related and 2006 initiatives			2007 initiatives			2008 initiatives			2009 initiatives			2010 initiatives			2011 initiatives			Total
Balance, December 31, 2008	$	214		$	335		$	19,830		$	-		$	-		$	-		$	20,379
Restructuring charges		-			-			886			10,916			-			-			11,802
Restructuring reversals		(19	)		(34	)		(3,354	)		(148	)		-			-			(3,555	)
Payments		(195	)		(237	)		(15,187	)		(1,515	)		-			-			(17,134	)
Balance, December 31, 2009		-			64			2,175			9,253			-			-			11,492
Restructuring charges		-			-			525			99			9,640			-			10,264
Restructuring reversals		-			(64	)		(985	)		(1,465	)		(264	)		-			(2,778	)
Payments		-			-			(1,598	)		(7,235	)		(3,347	)		-			(12,180	)
Balance, December 31, 2010		-			-			117			652			6,029			-			6,798
Restructuring charges		-			-			-			9			75			8,794			8,878
Restructuring reversals		-			-			(17	)		(57	)		(1,058	)		(611	)		(1,743	)
Payments		-			-			(100	)		(420	)		(4,265	)		(3,116	)		(7,901	)
Balance, December 31, 2011	$	-		$	-		$	-		$	184		$	781		$	5,067		$	6,032
Cumulative amounts:
Restructuring charges	$	41,107		$	7,181		$	27,545		$	11,024		$	9,715		$	8,794		$	105,366
Restructuring reversals		(2,530	)		(1,503	)		(5,887	)		(1,670	)		(1,322	)		(611	)		(13,523	)
Payments		(38,577	)		(5,678	)		(21,658	)		(9,170	)		(7,612	)		(3,116	)		(85,811	)
Balance, December 31, 2011	$	-		$	-		$	-		$	184		$	781		$	5,067		$	6,032

Restructuring accruals, by segment

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

				Employee severance benefits									Operating lease obligations
	Small Business Services			Financial Services			Direct Checks			Corporate(1)			Small Business Services			Direct Checks			Total
Balance, December 31, 2008	$	3,974		$	3,617		$	151		$	12,409		$	228		$	-		$	20,379
Restructuring charges		5,310			1,063			134			4,118			1,177			-			11,802
Restructuring reversals		(672	)		(674	)		(7	)		(2,170	)		(32	)		-			(3,555	)
Inter-segment transfer		1,174			-			-			(1,174	)		-			-			-
Payments		(5,041	)		(2,953	)		(162	)		(8,402	)		(576	)		-			(17,134	)
Balance, December 31, 2009		4,745			1,053			116			4,781			797			-			11,492
Restructuring charges		1,807			2,134			2,344			3,046			424			509			10,264
Restructuring reversals		(875	)		(206	)		(116	)		(1,201	)		(380	)		-			(2,778	)
Payments		(4,429	)		(1,027	)		(2,092	)		(4,010	)		(605	)		(17	)		(12,180	)
Balance, December 31, 2010		1,248			1,954			252			2,616			236			492			6,798
Restructuring charges		1,897			2,640			823			3,466			52			-			8,878
Restructuring reversals		(767	)		(517	)		(76	)		(377	)		(6	)		-			(1,743	)
Inter-segment transfer		125			234			2			(361	)		-			-			-
Payments		(1,616	)		(2,914	)		(257	)		(2,697	)		(213	)		(204	)		(7,901	)
Balance, December 31, 2011	$	887		$	1,397		$	744		$	2,647		$	69		$	288		$	6,032
Cumulative amounts:
Restructuring charges	$	48,403		$	13,726		$	3,770		$	34,178		$	4,780		$	509		$	105,366
Restructuring reversals		(3,371	)		(2,438	)		(343	)		(6,401	)		(970	)		-			(13,523	)
Inter-segment transfer		2,310			1,351			95			(3,756	)		-			-			-
Payments		(46,455	)		(11,242	)		(2,778	)		(21,374	)		(3,741	)		(221	)		(85,811	)
Balance, December 31, 2011	$	887		$	1,397		$	744		$	2,647		$	69		$	288		$	6,032

(1) As discussed in Note 16: Business segment information, corporate costs are allocated to our business segments. As such, the net corporate restructuring charges are reflected in the business segment operating income presented in Note 16 in accordance with our allocation methodology.

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Share-based compensation plans (restricted shares) (Details) (Restricted shares [Member], USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Restricted shares [Member]
Unvested restricted shares [Roll Forward]
Outstanding, beginning of year (in shares/units)	182	268	453
Granted (in shares/units)	25	52	44
Vested (in shares/units)	(166)	(131)	(206)
Forfeited (in shares/units)	(1)	(7)	(23)
Outstanding, end of year (in shares/units)	40	182	268
Weighted-average grant date fair value [Abstract]
Outstanding, beginning of year (in dollars per share/unit)	$ 21.48	$ 24.00	$ 25.53
Granted (in dollars per share/unit)	$ 26.58	$ 20.00	$ 14.81
Vested (in dollars per share/unit)	$ 21.72	$ 26.01	$ 25.19
Forfeited (in dollars per share/unit)	$ 18.14	$ 21.83	$ 25.82
Outstanding, end of year (in dollars per share/unit)	$ 23.71	$ 21.48	$ 24.00
Fair value, awards vested	$ 4,305	$ 2,557	$ 2,484
Vesting period, minimum (in years)	1
Vesting period, maximum (in years)	3

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Other commitments and contingencies

12 Months Ended

Dec. 31, 2011

Other commitments and contingencies [Abstract]

Other commitments and contingencies

Note 14: Other commitments and contingencies

Indemnifications – In the normal course of business, we periodically enter into agreements that incorporate general indemnification language. These indemnifications encompass such items as product or service defects, including 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. However, we have no reason to believe that any possible liability under these indemnities would have a material adverse effect on our financial position, annual results of operations or annual cash flows. 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 which 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 $8,730 as of December 31, 2011 and $9,293 as of December 31, 2010, primarily related to facilities which have been sold. These accruals are included in accrued liabilities and other long-term liabilities in the consolidated balance sheets. Accrued costs consist of direct costs of the remediation activities, primarily fees which 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. Expense reflected in our consolidated statements of income for environmental remediation costs was $353 in 2011, $868 in 2010 and $1,327 in 2009.

 As of December 31, 2011, $6,440 of the costs included in our environmental accruals were covered by an environmental insurance policy which we purchased during 2002. The insurance policy covers up to $12,911 of remediation costs, of which $6,471 had been paid through December 31, 2011. This insurance policy does not cover properties acquired subsequent to 2002. However, costs included in our environmental accruals for such properties were not material as of December 31, 2011. We do not anticipate significant net cash outlays for environmental matters in 2011. The insurance policy also covers up to $10,000 of third-party claims through 2032 at certain owned, leased and divested sites, as well as any new conditions discovered at certain owned or leased sites through 2012. We consider the realization of recovery under the insurance policy to be probable based on the insurance contract in place with a reputable and financially-sound insurance company. As our environmental accruals include our best estimates of these costs, we have recorded receivables from the insurance company within other current assets and other non-current assets based on the amounts of our environmental accruals for insured sites.

We also have an additional environmental site liability insurance policy providing coverage on facilities which we acquired subsequent to 2002. 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. The policy provides coverage of up to $15,000 through April 2019. No accruals have been recorded in our consolidated financial statements for any of the events contemplated in this insurance policy.

Self-insurance – We are self-insured for certain costs, primarily workers' compensation claims and medical and dental benefits. The liabilities associated with these items represent our best estimate of the ultimate obligations for reported claims plus those incurred, but not reported. The liability for workers' compensation, which totaled $5,141 as of December 31, 2011 and $4,716 as of December 31, 2010, is accounted for on a present value basis. The difference between the discounted and undiscounted workers' compensation liability was $20 as of December 31, 2011 and $29 as of December 31, 2010. We record liabilities for medical and dental benefits for active employees and those employees on long-term disability. Our liability for active employees is not accounted for on a present value basis as we expect the benefits to be paid in a relatively short period of time. Our liability for those employees on long-term disability is accounted for on a present value basis. Our total liability for these medical and dental benefits totaled $3,848 as of December 31, 2011 and $4,167 as of December 31, 2010. The difference between the discounted and undiscounted medical and dental liability was $296 as of December 31, 2011 and $419 as of December 31, 2010.

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.

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Income tax provision (Tables)

12 Months Ended

Dec. 31, 2011

Income tax provision [Abstract]

Components of the income tax provision for continuing operations

The components of the income tax provision for continuing operations were as follows:

	2011		2010		2009
Current tax provision:
Federal	$	49,702	$	49,909	$	37,945
State		9,168		8,424		4,323
Foreign		3,269		3,859		1,349
Total		62,139		62,192		43,617
Deferred tax provision		9,350		20,362		12,039
Provision for income taxes	$	71,489	$	82,554	$	55,656

Reconciliation of effective income tax rate

The effective tax rate on pre-tax income from continuing operations reconciles to the U.S. federal statutory tax rate of 35% as follows:

	2011		2010		2009
Income tax at federal statutory rate		35.0%		35.0%		35.0%
State income tax expense, net of federal income tax benefit		2.8%		2.8%		3.5%
Change in unrecognized tax benefits, including interest and penalties		0.5%		(1.3% )		0.1%
Non-deductible portion of goodwill impairment charge (see Note 7)		-		-		2.9%
Qualified production activity deduction		(2.4% )		(2.4%)		(1.8%)
Impact of health care legislation on deferred income taxes		(1.2% )		1.7%		-
Receivables for prior year tax returns(1)		(0.8% )		-		(2.2%)
Other		(0.8% )		(0.8%)		(1.6%)
Income tax provision		33.1%		35.0%		35.9%

(1) Relates to amendments to prior year income tax returns claiming refunds primarily associated with foreign tax returns for 2011 and federal and state income tax credits for 2009.

Rollforward of unrecognized tax benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding accrued interest and penalties, is as follows:

	Unrecognized tax benefits
Balance, December 31, 2008	$	11,457
Additions for tax positions of current year		606
Additions for tax positions of prior years		2,316
Reductions for tax positions of prior years		(2,152	)
Settlements		(3,186	)
Lapse of statutes of limitations		(1,063	)
Balance, December 31, 2009		7,978
Additions for tax positions of current year		641
Additions for tax positions of prior years		1,406
Fair value of acquired tax positions (see Note 4)		1,069
Reductions for tax positions of prior years		(2,634	)
Settlements		(640	)
Lapse of statutes of limitations		(1,282	)
Balance, December 31, 2010		6,538
Additions for tax positions of current year		510
Additions for tax positions of prior years		1,646
Reductions for tax positions of prior years		(219	)
Settlements		(1,507	)
Lapse of statutes of limitations		(732	)
Balance, December 31, 2011	$	6,236

Schedule of deferred tax assets and liabilities

Tax-effected temporary differences which gave rise to deferred tax assets and liabilities as of December 31 were as follows:

	2011					2010
	Deferred tax assets			Deferred tax liabilities		Deferred tax assets			Deferred tax liabilities
Goodwill	$	-		$	40,761	$	-		$	34,818
Intangible assets		-			28,831		-			33,774
Property, plant and equipment		-			6,080		-			4,201
Deferred advertising costs		-			5,769		-			5,964
Early extinguishment of debt (see Note 13)		-			3,775		-			3,784
Employee benefit plans		29,776			-		29,593			-
Reserves and accruals		6,574			-		5,457			-
Net operating loss and tax credit carryforwards		3,366			-		5,760			-
Inventories		2,800			-		2,771			-
Federal benefit of state uncertain tax positions		1,776			-		1,719			-
Interest rate lock agreements (see Note 6)		1,751			-		2,709			-
All other		1,748			4,558		1,370			3,061
Total deferred taxes		47,791			89,774		49,379			85,602
Valuation allowances		(608	)		-		(1,139	)		-
Net deferred taxes	$	47,183		$	89,774	$	48,240		$	85,602

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Business segment information

12 Months Ended

Dec. 31, 2011

Business segment information [Abstract]

Business segment information

Note 16: 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 and reflect the way we manage the company. Small Business Services provides products and services to small businesses via mail and the internet, referrals from financial institutions and telecommunications clients, a network of distributors and dealers, and a direct sales force which focuses on major accounts. These efforts are supplemented by the account development efforts of an outbound telemarketing group. Financial Services' products and services are sold through multiple channels, including a direct sales force, to financial institution clients nationwide, including banks, credit unions and financial services companies. Direct Checks sells products and services directly to consumers using direct response marketing and the internet. All three segments operate primarily in the United States. Small Business Services also has operations in Canada and portions of Europe. No single customer accounted for more than 10% of revenue in 2011, 2010 or 2009. Our product and service offerings are comprised of the following:

Checks – We remain one of the largest providers of checks in the United States, both in terms of revenue and the number of checks produced. Checks account for the majority of the revenue in our Financial Services and Direct Checks segments and represented 47.2%, 48.3% and 47.7% of our Small Business Services segment's revenue in 2011, 2010 and 2009, respectively.

Forms – Our Small Business Services segment provides printed forms to small businesses including, 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 produced by our Financial Services and Direct Checks segments include deposit tickets and check registers.

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

Marketing solutions – All three of our segments offer products and services that help small businesses and financial institutions promote their businesses and acquire customers. Our Small Business Services segment offers services such as web design, hosting and other web services, logo design, search engine marketing, and digital printing services designed to fulfill the sales and marketing needs of small businesses, as well as products such as business cards, greeting cards, brochures and apparel. Financial Services offers various customer acquisition programs and marketing communications services, while Direct Checks provides package insert programs under which companies' marketing materials are included in our check packages.

Other services – All three of our segments provide fraud protection services. In addition, our Small Business Services segment offers payroll services, and Financial Services provides financial institution profitability, regulatory and compliance programs.

The accounting policies of the segments are the same as those described in Note 1. 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 and finance, 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, inventories and supplies related to our corporate shared services functions of manufacturing, information technology and real estate, as well as long-term investments. Depreciation and amortization expense related to corporate assets which was allocated to the segments was $42,211 in 2011, $38,808 in 2010 and $37,056 in 2009.

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 years ended December 31:

		Reportable business segments
		Small Business Services		Financial Services		Direct Checks		Corporate		Consolidated
Revenue from external customers:	2011	$	846,449	$	342,382	$	228,765	$	-	$	1,417,596
	2010		796,254		390,331		215,652		-		1,402,237
	2009		785,109		396,353		162,733		-		1,344,195
Operating income:	2011		145,219		59,804		66,035		-		271,058
	2010		137,534		84,158		59,852		-		281,544
	2009		60,804		75,091		54,694		-		190,589
Depreciation and amortization expense:	2011		44,706		13,009		15,628		-		73,343
	2010		45,163		11,788		16,964		-		73,915
	2009		52,507		10,946		4,312		-		67,765
Asset impairment charges:	2011		1,196		-		-		-		1,196
	2010		-		-		-		-		-
	2009		24,900		-		-		-		24,900
Total assets:	2011		836,918		99,803		173,435		278,653		1,388,809
	2010		772,799		66,065		178,880		290,947		1,308,691
	2009		778,191		57,716		96,288		279,015		1,211,210
Capital asset purchases:	2011		-		-		-		35,506		35,506
	2010		-		-		-		43,932		43,932
	2009		-		-		-		44,266		44,266

Revenue by product and service category for each year was as follows:

	2011		2010		2009
Checks, including contract settlements	$	871,731	$	896,563	$	853,729
Forms		195,905		194,724		198,855
Accessories and other products		126,949		123,264		129,323
Marketing solutions, including services		150,973		126,211		112,848
Other services		72,038		61,475		49,440
Total revenue	$	1,417,596	$	1,402,237	$	1,344,195

During 2011, we modified the manner in which we determine revenue by product and service. We added the marketing solutions category to add more clarity to our products and services, as our marketing solutions and other services categories reflect a growing part of our business. Amounts for 2010 and 2009 have been reclassified to conform to the 2011 presentation. These changes had no impact on the amounts reported in previous years for checks.

The following information is based on the geographic locations of our subsidiaries:

	2011		2010		2009
Revenue from external customers:
United States	$	1,334,540	$	1,325,163	$	1,275,885
Foreign, primarily Canada		83,056		77,074		68,310
Total revenue	$	1,417,596	$	1,402,237	$	1,344,195
Long-lived assets:
United States	$	1,139,678	$	1,086,685	$	996,505
Foreign, primarily Canada		11,409		13,359		16,006
Total long-lived assets	$	1,151,087	$	1,100,044	$	1,012,511

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Pension and other postretirement benefits (Details) (Postretirement Benefit Plan [Member], USD $) In Thousands, unless otherwise specified	Dec. 31, 2009	Apr. 30, 2009	Dec. 31, 2008
Postretirement Benefit Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Minimum age for eligibility to receive the maximum available benefits, prior to amendment (in years)		58
Minimum age for eligibility to receive the maximum available benefits, amended (in years)		51
Service requirement for maximum retiree cost sharing, prior to amendment (in years)		30
Service requirement for maximum retiree cost sharing, amended (in years)		25
Average remaining service period of plan participants (in years)			8.2
Decrease in postretirement benefit expense as a result of change in amortization period	$ 5,208

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) (USD $)	Dec. 31, 2011	Dec. 31, 2010
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY [Abstract]
Par value of common shares	$ 1	$ 1

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
ASSETS
Investments at fair value	$ 2,165	$ 2,283
Shareholders' Equity:
Common shares, par value (In dollars per share)	$ 1	$ 1
Common shares, authorized (in shares)	500,000	500,000
Common shares, outstanding (in shares)	50,826	51,338

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Income tax provision

12 Months Ended

Dec. 31, 2011

Income tax provision [Abstract]

Income tax provision

Note 9: Income tax provision

The components of the income tax provision for continuing operations were as follows:

	2011		2010		2009
Current tax provision:
Federal	$	49,702	$	49,909	$	37,945
State		9,168		8,424		4,323
Foreign		3,269		3,859		1,349
Total		62,139		62,192		43,617
Deferred tax provision		9,350		20,362		12,039
Provision for income taxes	$	71,489	$	82,554	$	55,656

The effective tax rate on pre-tax income from continuing operations reconciles to the U.S. federal statutory tax rate of 35% as follows:

	2011		2010		2009
Income tax at federal statutory rate		35.0%		35.0%		35.0%
State income tax expense, net of federal income tax benefit		2.8%		2.8%		3.5%
Change in unrecognized tax benefits, including interest and penalties		0.5%		(1.3% )		0.1%
Non-deductible portion of goodwill impairment charge (see Note 7)		-		-		2.9%
Qualified production activity deduction		(2.4% )		(2.4%)		(1.8%)
Impact of health care legislation on deferred income taxes		(1.2% )		1.7%		-
Receivables for prior year tax returns(1)		(0.8% )		-		(2.2%)
Other		(0.8% )		(0.8%)		(1.6%)
Income tax provision		33.1%		35.0%		35.9%

(1) Relates to amendments to prior year income tax returns claiming refunds primarily associated with foreign tax returns for 2011 and federal and state income tax credits for 2009.

Our income tax provision for 2010 included a $4,063 charge resulting from the Health Care and Education Reconciliation Act of 2010, which was signed into law in March 2010 and requires that certain tax deductions after 2012 be reduced by the amount of Medicare Part D subsidy payments. Prior to this law change, the subsidy was to be disregarded in all future years when computing tax deductions. This resulted in a reduction in the deferred tax asset associated with our postretirement benefit plan. During 2011, our income tax provision was reduced $2,539 by actions taken to restore a portion of the deferred tax asset attributable to the receipt of Medicare Part D subsidy payments.

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding accrued interest and penalties, is as follows:

	Unrecognized tax benefits
Balance, December 31, 2008	$	11,457
Additions for tax positions of current year		606
Additions for tax positions of prior years		2,316
Reductions for tax positions of prior years		(2,152	)
Settlements		(3,186	)
Lapse of statutes of limitations		(1,063	)
Balance, December 31, 2009		7,978
Additions for tax positions of current year		641
Additions for tax positions of prior years		1,406
Fair value of acquired tax positions (see Note 4)		1,069
Reductions for tax positions of prior years		(2,634	)
Settlements		(640	)
Lapse of statutes of limitations		(1,282	)
Balance, December 31, 2010		6,538
Additions for tax positions of current year		510
Additions for tax positions of prior years		1,646
Reductions for tax positions of prior years		(219	)
Settlements		(1,507	)
Lapse of statutes of limitations		(732	)
Balance, December 31, 2011	$	6,236

If the unrecognized tax benefits as of December 31, 2011 were recognized in our consolidated financial statements, $5,152 would positively affect income tax expense and our related effective tax rate. Accruals for interest and penalties, excluding the tax benefits of deductible interest, were $1,497 as of December 31, 2011 and $1,382 as of December 31, 2010. Our income tax provision included expense for interest and penalties of $639 in 2011, and credits to our income tax provision for interest and penalties of $837 in 2010 and $446 in 2009. Within the next 12 months, it is reasonably possible that our unrecognized tax benefits will change in the range of a decrease of $4,500 to an increase of $700 as we attempt to settle certain federal and state tax matters or as federal and state statutes of limitations expire.

The statute of limitations for federal tax assessments for 2006 and prior years has closed. Our federal income tax returns through 2007 have been audited by the IRS, our 2008 and 2009 returns are currently being audited, and our returns for 2010 and 2011 remain subject to IRS examination. In general, income tax returns for the years 2007 through 2011 remain subject to examination by foreign, state and city tax jurisdictions.In the event that we have determined not to file income tax returns with a particular state or city, all years remain subject to examination by the tax jurisdiction.

The ultimate outcome of tax matters may differ from our estimates and assumptions. Unfavorable settlement of any particular issue would require the use of cash and could result in increased income tax expense. Favorable resolution would result in reduced income tax expense.

Tax-effected temporary differences which gave rise to deferred tax assets and liabilities as of December 31 were as follows:

	2011					2010
	Deferred tax assets			Deferred tax liabilities		Deferred tax assets			Deferred tax liabilities
Goodwill	$	-		$	40,761	$	-		$	34,818
Intangible assets		-			28,831		-			33,774
Property, plant and equipment		-			6,080		-			4,201
Deferred advertising costs		-			5,769		-			5,964
Early extinguishment of debt (see Note 13)		-			3,775		-			3,784
Employee benefit plans		29,776			-		29,593			-
Reserves and accruals		6,574			-		5,457			-
Net operating loss and tax credit carryforwards		3,366			-		5,760			-
Inventories		2,800			-		2,771			-
Federal benefit of state uncertain tax positions		1,776			-		1,719			-
Interest rate lock agreements (see Note 6)		1,751			-		2,709			-
All other		1,748			4,558		1,370			3,061
Total deferred taxes		47,791			89,774		49,379			85,602
Valuation allowances		(608	)		-		(1,139	)		-
Net deferred taxes	$	47,183		$	89,774	$	48,240		$	85,602

Deferred U.S. and state 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.

The valuation allowances as of December 31, 2011 related primarily to the portion of our operating loss carryforwards in Ireland which we do not expect to fully realize. As of December 31, 2010, the valuation allowances related primarily to operating loss carryforwards in Canada which we reversed during 2011, as we now expect to realize the loss carryforwards in 2012 and/or in future years.

As of December 31, 2011, we had operating loss carryforwards of $4,088 in Ireland which do not expire, and we had operating loss carryforwards of $3,689 in Canada, which expire at various dates between 2013 and 2031. We also had state net operating loss carryforwards of $19,026 which expire at various dates up to 2030 and federal alternative minimum tax credit carryforwards of $586 which have no expiration date.

XML

Document And Entity Information (USD $)	12 Months Ended
	Dec. 31, 2011	Feb. 07, 2012	Jun. 30, 2011
Entity Registrant Name	DELUXE CORP
Entity Central Index Key	0000027996
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 1,247,906,150
Entity Common Stock, Shares Outstanding		50,933,231
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2011

XML

Share-based compensation plans

12 Months Ended

Dec. 31, 2011

Share-based compensation plans [Abstract]

Share-based compensation plans

Note 10: Share-based compensation plans

Our employee share-based compensation plans consist of our employee stock purchase plan and our stock incentive plan. Effective April 30, 2008, our shareholders approved a new stock incentive plan, simultaneously terminating our previous plan. Under this plan, 4,000 shares of common stock are reserved for issuance, with 1,476 shares remaining available for issuance as of December 31, 2011. Full value awards such as restricted stock, restricted stock units and share-based performance awards reduce the number of shares available for issuance by a factor of 2.29, or if such an award were forfeited or terminated without delivery of the shares, the number of shares that again become eligible for issuance would be multiplied by a factor of 2.29. We currently have non-qualified stock options, restricted stock units and restricted share awards outstanding under our current and previous plans. See the employee share-based compensation policy in Note 1 for our policies regarding the recognition of compensation expense for employee share-based awards.

The following amounts were recognized in our consolidated statements of income for share-based compensation awards:

	2011			2010			2009
Stock options	$	3,633		$	2,967		$	3,213
Restricted shares and restricted stock units		1,799			2,866			3,135
Employee stock purchase plan		301			317			315
Total share-based compensation expense	$	5,733		$	6,150		$	6,663
Income tax benefit	$	(1,930	)	$	(2,123	)	$	(2,375	)

As of December 31, 2011, the total compensation expense for unvested awards not yet recognized in our consolidated statements of income was $5,383, net of the effect of estimated forfeitures. This amount is expected to be recognized over a weighted-average period of 1.7 years.

Non-qualified stock options – All options allow for the purchase of shares of common stock at prices equal to the stock's market value at the date of grant. Options become exercisable beginning one year after the grant date, with one-third vesting each year over three years. Options may be exercised up to seven years following the date of grant. In the case of qualified retirement, death, disability or involuntary termination without cause, options vest immediately and the period over which the options can be exercised is shortened. Employees forfeit unvested options when they voluntarily terminate their employment with the company, and they have up to three months to exercise vested options before they are cancelled. In the case of involuntary termination with cause, the entire unexercised portion of the award is cancelled. All options may vest immediately upon a change of control, as defined in the award agreement. The following weighted-average assumptions were used in the Black-Scholes option pricing model in determining the fair value of stock options granted:

	2011		2010		2009
Risk-free interest rate (%)		2.0		2.2		1.6
Dividend yield (%)		3.9		3.2		3.4
Expected volatility (%)		58.6		54.0		44.2
Weighted-average option life (years)		4.3		4.8		4.6

The risk-free interest rate for periods within the expected option life is based on the U.S. Treasury yield curve in effect at the grant date. Expected volatility is based on the historical volatility of our stock.

Each option is convertible into one share of common stock upon exercise. Information regarding options issued under the current and all previous plans was as follows:

(options in thousands)	Number of  options			Weighted- average exercise price per option		Aggregate intrinsic  value		Weighted- average remaining contractual term (in years)
Outstanding at December 31, 2008		3,105		$	33.50
Granted		790			9.75
Exercised		(3	)		9.73
Forfeited or expired		(1,051	)		39.68
Outstanding at December 31, 2009		2,841			24.64
Granted		695			18.37
Exercised		(185	)		11.08
Forfeited or expired		(438	)		33.94
Outstanding at December 31, 2010		2,913			22.60
Granted		598			25.56
Exercised		(383	)		16.56
Forfeited or expired		(362	)		28.87
Outstanding at December 31, 2011		2,766			23.26	$	7,519		3.7
Exercisable at December 31, 2009		1,643		$	30.60
Exercisable at December 31, 2010		1,675			27.66
Exercisable at December 31, 2011		1,685			25.18	$	3,378		2.6

The weighted-average grant-date fair value of options granted was $9.37 per option for 2011, $6.86 per option for 2010 and $2.82 per option for 2009. The intrinsic value of a stock award is the amount by which the fair value of the underlying stock exceeds the exercise price of the award. The total intrinsic value of options exercised was $3,452 for 2011, $1,834 for 2010 and $16 for 2009.

Restricted stock units – Certain management employees have the option to receive a portion of their bonus payment in the form of restricted stock units. When employees elect this payment method, we provide an additional matching amount of restricted stock units equal to one-half of the restricted stock units earned under the bonus plan. These awards vest two years from the date of grant. In the case of approved retirement, death, disability or change of control, the units vest immediately. In the case of involuntary termination without cause or voluntary termination, employees receive a cash payment for the units earned under the bonus plan, but forfeit the company-provided matching amount.

In addition to awards granted to employees, non-employee members of our board of directors can elect to receive all or a portion of their fees in the form of restricted stock units. Directors are issued shares in exchange for the units upon the earlier of the tenth anniversary of February 1st of the year following the year in which the non-employee director ceases to serve on the board or such other objectively determinable date pre-elected by the director.

Each restricted stock unit is convertible into one share of common stock upon completion of the vesting period. Information regarding our restricted stock units was as follows:

(units in thousands)	Number of  units			Weighted- average grant date fair value per unit		Aggregate  intrinsic value		Weighted- average remaining contractual term (in years)
Outstanding at December 31, 2008		145		$	26.65
Granted		17			12.27
Vested		(40	)		24.04
Forfeited		(2	)		25.57
Outstanding at December 31, 2009		120			25.48
Granted		34			19.85
Vested		(68	)		25.57
Outstanding at December 31, 2010		86			23.58
Granted		26			24.70
Vested		(5	)		16.84
Forfeited		(6	)		20.61
Outstanding at December 31, 2011		101			24.26	$	2,305		4.4

Of the awards outstanding as of December 31, 2011, 15 restricted stock units with a value of $338 were liability awards. As of December 31, 2011, these units had a fair value of $22.76 per unit and a weighted-average remaining contractual term of 0.6 year.

The total fair value of restricted stock units that vested was $132 for 2011, $1,090 for 2010 and $589 for 2009. We did not settle any share-based liabilities in cash in 2011, 2010 or 2009.

Restricted shares – Our restricted share awards have a set vesting period at which time the restrictions on the shares lapse. The vesting period on these awards currently ranges from one to three years. The restrictions lapse immediately in the case of qualified retirement, death or disability. In the case of involuntary termination without cause or a change of control, restrictions on a pro-rata portion of the shares lapse based on how much of the vesting period has passed. In the case of voluntary termination of employment or termination with cause, the unvested restricted shares are forfeited.

Information regarding unvested restricted shares was as follows:

	Number of shares			Weighted- average grant date fair value per share
Unvested at December 31, 2008		453		$	25.53
Granted		44			14.81
Vested		(206	)		25.19
Forfeited		(23	)		25.82
Unvested at December 31, 2009		268			24.00
Granted		52			20.00
Vested		(131	)		26.01
Forfeited		(7	)		21.83
Unvested at December 31, 2010		182			21.48
Granted		25			26.58
Vested		(166	)		21.72
Forfeited		(1	)		18.14
Unvested at December 31, 2011		40			23.71

The total fair value of restricted shares that vested was $4,305 for 2011, $2,557 for 2010 and $2,484 for 2009.

Employee stock purchase plan – During 2011, 85 shares were issued under this plan at prices of $20.78 and $20.01. During 2010, 109 shares were issued under this plan at prices of $15.82 and $17.49. During 2009, 174 shares were issued under this plan at prices of $9.80 and $13.30.

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Supplemental guarantor financial information (Details) (Senior notes due 2019 [Member], USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011
Senior notes due 2019 [Member]
Debt Instrument [Line Items]
Debt issuance date	March 2011
Principal amount issued	$ 200,000
Debt maturity date	Mar. 15, 2019

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CONSOLIDATED STATEMENTS OF INCOME (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Condensed Consolidating Statement of Income [Abstract]
Revenue	$ 1,417,596	$ 1,402,237	$ 1,344,195
Cost of goods sold, including net restructuring charges	493,402	488,419	504,782
Gross Profit	924,194	913,818	839,413
Selling, general and administrative expense	640,307	624,303	616,496
Net restructuring charges	11,743	7,971	7,428
Asset impairment charges	1,196	0	24,900
Net gain on sale of facility	(110)	0	0
Operating Income	271,058	281,544	190,589
(Loss) gain on early debt extinguishment	(6,995)	0	9,834
Interest expense	(47,797)	(44,165)	(46,280)
Other (expense) income	(182)	(1,430)	878
Income Before Income Taxes	216,084	235,949	155,021
Income tax provision	71,489	82,554	55,656
Income From Continuing Operations	144,595	153,395	99,365
Net Loss From Discontinued Operations	0	(771)	0
Net Income	$ 144,595	$ 152,624	$ 99,365
Basic Earnings (Loss) Per Share:
Income from continuing operations (in dollars per share)	$ 2.82	$ 2.98	$ 1.94
Net loss from discontinued operations (in dollars per share)	$ 0	$ (0.02)	$ 0
Basic earnings per share (in dollars per share)	$ 2.82	$ 2.97	$ 1.94
Diluted Earnings (Loss) Per Share:
Income from continuing operations (in dollars per share)	$ 2.80	$ 2.97	$ 1.94
Net loss from discontinued operations (in dollars per share)	$ 0	$ (0.01)	$ 0
Diluted earnings per share (in dollars per share)	$ 2.80	$ 2.96	$ 1.94
Cash Dividends Per Share (in dollars per share)	$ 1.00	$ 1.00	$ 1.00

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Acquisitions

12 Months Ended

Dec. 31, 2011

Acquisition [Abstract]

Acquisitions

Note 4: Acquisitions

2011 acquisitions –During April 2011, we acquired substantially all of the assets of Banker's Dashboard, LLC, for $39,700, comprised of $35,000 of cash and $4,700 of shares of our common stock plus related dividend equivalent payments. We funded the cash portion of the purchase price with cash on hand and a draw on our credit facility. The common stock amount represents the fair value of 193 shares that we will issue to the previous owners of Banker's Dashboard at a future date, and which has been recorded as a component of additional paid-in capital in the consolidated balance sheet. The shares will be issued four years after the closing of the acquisition. The shares could potentially be issued two years after the closing of the transaction, depending on the retention of certain Banker's Dashboard employees. Banker's Dashboard provides online financial management tools that provide banks with a comprehensive daily view of their financial picture. The allocation of the purchase price based upon the estimated fair value of the assets acquired and liabilities assumed resulted in goodwill of $26,281, which is tax deductible. This acquisition resulted in goodwill as it extends the range of products and services we offer to our financial institution clients. Transaction costs related to this acquisition were expensed as incurred and were not significant to our 2011 consolidated statement of income. The results of operations of this business from its acquisition date are included in our Financial Services segment.

Intangible assets acquired in the Banker's Dashboard acquisition consisted primarily of a customer list valued at $9,300 with a useful life of nine years and a trade name valued at $2,200 with a useful life of eight years. The customer list is being amortized using an accelerated method and the trade name is being amortized using the straight-line method. Further information regarding the calculation of the estimated fair values of these assets can be found in Note 7.

During July 2011, we acquired substantially all of the assets of PsPrint, LLC for cash of $45,486, net of cash acquired, which we funded with a draw on our credit facility. PsPrint is a web-to-print solutions company that provides online print marketing and promotional services for small businesses. The allocation of the purchase price based upon the estimated fair value of the assets acquired and liabilities assumed resulted in goodwill of $24,826, which is tax deductible. This acquisition resulted in goodwill as it is expected to accelerate one of our key platforms for growth by combining PsPrint's capabilities and technology with our market presence. Transaction costs related to this acquisition were expensed as incurred and were not significant to our 2011 consolidated statement of income. The results of operations of this business from its acquisition date are included in our Small Business Services segment.

Intangible assets acquired in the PsPrint acquisition included internal-use software valued at $9,050 with a useful life of five years, a trade name valued at $6,100 with a useful life of 10 years, and a customer list valued at $3,300 with a useful life of six years. The customer list is being amortized using an accelerated method and the software and trade name are being amortized using the straight-line method. Further information regarding the calculation of the estimated fair values of these assets can be found in Note 7.

During 2011, we acquired the operations of several small business distributors for aggregate cash payments of $5,155. The assets acquired consisted primarily of customer lists, which we then sold to our Safeguard distributors, realizing insignificant net gains and losses on the sales. In most cases, we entered into a note receivable upon the sale of the assets to the distributors. Proceeds collected from these notes receivable are included in other investing activities in our consolidated statements of cash flows.

 2010 acquisitions – During April 2010, we acquired all of the outstanding stock of Custom Direct, Inc. (Custom Direct), a provider of direct-to-consumer checks, in a cash transaction for $97,921, net of cash acquired. We funded the acquisition with our credit facility. The allocation of the purchase price based upon the estimated fair values of the assets acquired and liabilities assumed resulted in goodwill of $66,269. This acquisition resulted in the recognition of goodwill as we expected Custom Direct to contribute to our strategy of optimizing cash flows in our Direct Checks segment. Transaction costs related to this acquisition were expensed as incurred and were not significant to our 2010 consolidated statement of income. The results of operations of this business from its acquisition date are included in our Direct Checks segment.

The following illustrates our allocation of the Custom Direct purchase price to the assets acquired and liabilities assumed:

	Allocation of purchase  price
Cash and cash equivalents	$	24
Other current assets		11,249
Intangibles		36,487
Goodwill		66,269
Other non-current assets		5,082
Current liabilities		(8,686	)
Non-current liabilities		(12,480	)
Total purchase price		97,945
Less: cash acquired		(24	)
Purchase price, net of cash acquired	$	97,921

Intangible assets acquired in the Custom Direct acquisition included a customer list valued at $15,000 with a useful life of 1.3 years, internal-use software valued at $12,587 with a weighted-average useful life of 4.7 years, and trade names valued at $8,900 with a useful life of 10 years. The customer list is being amortized using an accelerated method and the software and trade name are being amortized using the straight-line method. Further information regarding the calculation of the estimated fair values of these assets can be found in Note 7.

During March 2010, we purchased substantially all of the assets of Cornerstone Customer Solutions, LLC (Cornerstone) in a cash transaction for $700. Cornerstone is a full-service, marketing solutions provider specializing in the development and execution of analytics-driven direct marketing programs. The allocation of the purchase price based upon the estimated fair values of the assets acquired and liabilities assumed resulted in goodwill of $897, which is tax deductible. This acquisition resulted in the recognition of goodwill as we are offering these strategic and tactical marketing solutions to our financial institution clients. Transaction costs related to this acquisition were expensed as incurred and were not significant to our 2010 consolidated statement of income. The results of operations of this business from its acquisition date are included in our Financial Services segment.

2009 acquisitions – During July 2009, we purchased all of the common stock of Abacus America, Inc., a wholly-owned subsidiary of Aplus Holdings Inc. and a web hosting and internet services provider, in a cash transaction for $27,577, net of cash acquired. We acquired this company for its large number of small business subscribers of shared web hosting, hosted e-commerce stores, managed e-mail services, domain name registration and a variety of website management applications. We funded the acquisition with our existing credit facility. The allocation of the purchase price based upon the estimated fair values of the assets acquired and liabilities assumed resulted in goodwill of $24,225. This acquisition resulted in the recognition of goodwill as we expanded our customer base and expected to provide the acquired customers upgraded offerings and enhanced web services. The net assets acquired consisted principally of customer relationships with an estimated fair value of $11,900 and a liability for deferred revenue of $7,300. The customer relationship asset is being amortized over seven years using an accelerated method. Further information regarding the calculation of the estimated fair values of the customer relationship asset and the liability for deferred revenue can be found in Note 7. The results of this business from its acquisition date are included in our Small Business Services segment.

Also during July 2009, we purchased substantially all of the assets of MerchEngines.com, a search engine marketing firm, in a cash transaction for $3,248, net of cash acquired. MerchEngines.com provides ad agencies, traditional media companies, online publishers and local aggregators a hosted and fully managed search engine marketing solution. The allocation of the purchase price based upon the fair values of the assets acquired and liabilities assumed resulted in goodwill of $1,140, which is tax deductible. This acquisition resulted in the recognition of goodwill as it increased the product offerings we provide to our small business customers. The results of this business from its acquisition date are included in our Small Business Services segment.

As our acquisitions were immaterial to our operating results both individually and in the aggregate in the year of the transactions, pro forma results of operations are not provided.

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Earnings per share

12 Months Ended

Dec. 31, 2011

Earnings per share:

Earnings per share

Note 3: Earnings per share

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

	2011			2010			2009
Earnings per share – basic:
Income from continuing operations	$	144,595		$	153,395		$	99,365
Income allocated to participating securities		(823	)		(804	)		(751	)
Income available to common shareholders	$	143,772		$	152,591		$	98,614
Weighted-average shares outstanding		51,036			51,123			50,837
Earnings per share – basic	$	2.82		$	2.98		$	1.94
Earnings per share – diluted:
Income from continuing operations	$	144,595		$	153,395		$	99,365
Income allocated to participating securities		(586	)		(802	)		(751	)
Re-measurement of share-based awards classified as liabilities		(20	)		79			(18	)
Income available to common shareholders	$	143,989		$	152,672		$	98,596
Weighted-average shares outstanding		51,036			51,123			50,837
Dilutive impact of potential common shares		379			202			88
Weighted-average shares and potential common shares outstanding		51,415			51,325			50,925
Earnings per share – diluted	$	2.80		$	2.97		$	1.94
Antidilutive options excluded from calculation		1,835			2,324			2,128

Earnings per share amounts for continuing operations, discontinued operations and net income, as presented on the consolidated statements of income, are calculated individually and may not sum due to rounding differences.

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Shareholders' equity

12 Months Ended

Dec. 31, 2011

Shareholders' equity [Abstract]

Shareholders' equity

Note 15: Shareholders' equity

Shares outstanding – Changes in common shares outstanding during the years ended December 31 were as follows:

	2011			2010			2009
Balance, beginning of year		51,338			51,189			51,131
Issued		499			410			237
Repurchased		(940	)		(167	)		(120	)
Retired		(71	)		(94	)		(59	)
Balance, end of year		50,826			51,338			51,189

Share repurchases – 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 5,257 shares remained available for purchase under this authorization as of December 31, 2011. During 2011, we repurchased 940 shares for $23,620, during 2010 we repurchased 167 shares for $2,999 and during 2009 we repurchased 120 shares for $1,319.

Common stock purchase rights – In February 1988, we adopted a shareholder rights plan under which common stock purchase rights automatically attach to each share of common stock we issue. The rights plan is governed by a rights agreement between us and Wells Fargo Bank, National Association, as rights agent. This agreement most recently was amended and restated as of December 20, 2006 (Restated Agreement).

Pursuant to the Restated Agreement, upon the occurrence of certain events, each right will entitle the holder to purchase one share of common stock at an exercise price of $100 per share. The exercise price may be adjusted from time to time upon the occurrence of certain events outlined in the Restated Agreement. In certain circumstances described in the Restated Agreement, if (i) any person becomes the beneficial owner of 20% or more of the company's common stock, (ii) the company is acquired in a merger or other business combination or (iii) upon the occurrence of other events, each right will entitle its holder to purchase a number of shares of common stock of the company, or the acquirer or the surviving entity if the company is not the surviving corporation in such a transaction. The number of shares purchasable at the then-current exercise price will be equal to the exercise price of the right divided by 50% of the then-current market price of one share of common stock of the company, or other surviving entity, subject to adjustments provided in the Restated Agreement. The rights expire December 31, 2016, and may be redeemed by the company at a price of $.01 per right at any time prior to the occurrence of the circumstances described above. The Restated Agreement requires an independent director review of the plan at least once every three years. The most recent review was completed in December 2009.

Accumulated other comprehensive loss – The components of accumulated other comprehensive loss as of December 31 were as follows:

	2011			2010			2009
Postretirement and defined benefit pension plans:
Unrealized prior service credit	$	13,321		$	15,651		$	17,978
Unrealized net actuarial losses		(75,599	)		(68,343	)		(70,328	)
Postretirement and defined benefit pension plans, net of tax		(62,278	)		(52,692	)		(52,350	)
Loss on derivatives, net of tax(1)		(2,931	)		(4,522	)		(5,841	)
Net unrealized gain on marketable securities, net of tax		178			13			-
Currency translation adjustment		5,630			7,189			5,373
Accumulated other comprehensive loss	$	(59,401	)	$	(50,012	)	$	(52,818	)

(1) Relates to interest rate locks executed in 2004 and 2002. See Note 6 for further information regarding these financial instruments.

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Employee benefit plans

12 Months Ended

Dec. 31, 2011

Employee benefit plans [Abstract]

Employee benefit plans

Note 11: Employee benefit plans

Profit sharing, 401(k) and defined contribution plans – We maintain a profit sharing plan and a plan established under section 401(k) of the Internal Revenue Code to provide retirement benefits for certain employees. The plans cover a significant majority of our full-time employees, as well as some part-time employees. Employees are eligible to participate in the plans on the first day of the quarter following their first full year of service. We also provide cash bonus programs under which employees may receive cash bonus payments based on our operating performance. Previously, we maintained a defined contribution pension plan which was discontinued effective with the 2011 plan year. The contribution made to this plan in early 2011 for the 2010 plan year was the last contribution to this plan.

Contributions to the profit sharing plan, as well as the terminated defined contribution plan, are made solely by Deluxe and are remitted to the plans' respective trustees. Benefits provided by the plans are paid from accumulated funds of the trusts. In 2010 and 2009, contributions to the defined contribution pension plan equaled 4% of eligible compensation. Contributions to the profit sharing plan vary based on the company's performance. Under the 401(k) plan, employees under the age of 50 could contribute up to the lesser of $17 or 50% of eligible wages during 2011. Employees 50 years of age or older could make contributions of up to $22 during 2011. Beginning on the first day of the quarter following an employee's first full year of service, we match 100% of the first 1% of wages contributed by employees and 50% of the next 5% of wages contributed. All employee and employer contributions are remitted to the plans' respective trustees and benefits provided by the plans are paid from accumulated funds of the trusts. Payments made under the cash bonus programs vary based on the company's performance and are paid in cash directly to employees.

Employees are provided a broad range of investment options to choose from when investing their profit sharing, defined contribution and 401(k) plan funds. Investing in our common stock is not one of these options, although funds selected by employees may at times hold our common stock.

Expense recognized in the consolidated statements of income for these plans was as follows:

	2011		2010		2009
Profit sharing/cash bonus plans	$	16,361	$	18,500	$	22,751
Defined contribution pension plan		-		8,664		9,953
401(k) plan		6,226		5,636		6,312

Deferred compensation plan – We have a non-qualified deferred compensation plan that allows eligible employees to defer a portion of their compensation. Participants can elect to defer up to 100 percent of their base salary plus up to 50 percent of their bonus for the year. The compensation deferred under this plan is credited with earnings or losses measured by the mirrored rate of return on phantom investments elected by plan participants, which are similar to the investments available in our terminated defined contribution pension plan. Each participant is fully vested in all deferred compensation and earnings. A participant may elect to receive deferred amounts in a lump-sum payment or in monthly installments upon termination of employment or disability. Our total liability under this plan was $2,391 as of December 31, 2011 and $2,920 as of December 31, 2010. These amounts are reflected in accrued liabilities and other non-current liabilities in the consolidated balance sheets. We fund this liability through investments in company-owned life insurance policies. These investments are included in long-term investments in the consolidated balance sheets and totaled $13,489 as of December 31, 2011 and $12,872 as of December 31, 2010.

Voluntary employee beneficiary association (VEBA) trust – We have formed a VEBA trust to fund employee and retiree medical costs and severance benefits. Contributions to the VEBA trust are tax deductible, subject to annual limitations contained in the Internal Revenue Code. VEBA assets primarily consist of fixed income investments. We made contributions to the VEBA trust of $36,792 in 2011, $39,400 in 2010 and $40,300 in 2009. The prepaid balance in the VEBA trust exceeded our liability for incurred but not reported medical claims by $361 as of December 31, 2011 and $959 as of December 31, 2010. These amounts are reflected in other current assets in our consolidated balance sheets.

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Subsequent event (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended	1 Months Ended
	Dec. 31, 2011	Feb. 29, 2012 Modification of Credit Facility [Member]
Subsequent Event [Line Items]
Credit facility commitment	$ 200,000	$ 200,000
Credit facility, date of expiration	March 2013	February 2017
Commitment fees, minimum (in hundredths)	0.40%	0.20%
Commitment fees, maximum (in hundredths)	0.50%	0.45%

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Fair value measurements

12 Months Ended

Dec. 31, 2011

Fair value measurements [Abstract]

Fair value measurements

Note 7: Fair value measurements

2011 asset impairment analyses – We evaluate the carrying value of our indefinite-lived trade name and goodwill as of July 31st of each year and between annual evaluations if events occur or circumstances change that would indicate a possible impairment. Our policy on impairment of non-amortizable intangibles and goodwill in Note 1 explains our methodology for assessing impairment of these assets.

The impairment analysis completed during the quarter ended September 30, 2011, indicated that the calculated fair value of the indefinite-lived trade name exceeded its carrying value of $19,100 by approximately $12,000. As discussed in Note 1, we adopted ASU No. 2011-08 during the third quarter of 2011. In completing our 2011 annual impairment analysis, we elected to perform a qualitative assessment for all of our reporting units to which goodwill is assigned. This qualitative analysis evaluated factors including, but not limited to, economic, market and industry conditions, cost factors and the overall financial performance of the reporting units. We also considered the quantitative analysis we completed as of July 31, 2010 in which the estimated fair values of our reporting units exceeded their carrying values by amounts between $43,000 and $546,000, or by amounts between 55% and 442% above the carrying values of their net assets. In completing our qualitative analysis, we noted no changes in events or circumstances which would require us to complete the two-step quantitative goodwill impairment analysis for any of our reporting units. As such, no impairment charges were recorded as a result of our 2011 annual impairment analyses.

In the fourth quarter of 2011, we recorded an asset impairment charge of $1,196 related to our Thorofare, New Jersey facility, which is classified as assets held for sale in our consolidated balance sheets. The impairment charge was determined based on current market conditions and ongoing negotiations for the sale of this facility, and we continue to actively market the property.

Information regarding this nonrecurring fair value measurement completed during 2011 was as follows:

			Fair value measurements using
	Fair value as of measurement date		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Impairment charge
Assets held for sale	$	2,741	$	-	$	2,741	$	-	$	1,196

2009 asset impairment analyses – During the quarter ended March 31, 2009, we experienced continued declines in our stock price, as well as a continuing negative impact of the economic downturn on our expected operating results. Based on these indicators of potential impairment, we completed impairment analyses of our indefinite-lived trade name and goodwill as of March 31, 2009. We recorded non-cash asset impairment charges in our Small Business Services segment of $4,900 related to our indefinite-lived trade name and $20,000 related to goodwill during the quarter ended March 31, 2009. Significant intangible assets of the reporting unit identified for purposes of this impairment analysis included the indefinite-lived trade name and a distributor contract intangible asset. Our methodology for estimating the fair value of the indefinite-lived trade name is outlined in Note 1. The fair value of the distributor contract was measured using the income approach, including adjustments for an estimated distributor retention rate based on historical experience.

Information regarding these nonrecurring fair value measurements completed during 2009 was as follows:

			Fair value measurements using
	Fair value as of measurement date		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Impairment charge
Goodwill(1)	$	20,245	$	-	$	-	$	20,245	$	20,000
Indefinite-lived trade name(2)		19,100		-		-		19,100		4,900
Total impairment charges									$	24,900

(1) Represents the implied fair value of the goodwill assigned to the reporting unit for which we were required to calculate this amount.

(2) Represents the fair value determined from the event-driven impairment analysis completed during the quarter ended March 31, 2009.

2011 acquisitions – For all business combinations 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. The identifiable net assets acquired during 2011 (see Note 4) were comprised primarily of customer lists, internal-use software and trade names. The fair value of the customer lists was estimated using valuation techniques including the multi-period excess earnings method. Assumptions used in these calculations included same-customer revenue growth rates and estimated annual customer retention rates. Customer retention rates were based on the acquirees' historical information, as well as management's estimates of the costs to obtain and retain customers. The aggregate calculated fair value of the customer lists acquired in the Banker's Dashboard and PsPrint acquisitions was $12,600, which is being amortized over a weighted-average period of 8.2 years using an accelerated method. Customer lists acquired via our purchases of small business distributors are typically sold shortly after their purchase and thus, are not held long enough to amortize. The fair value of the internal-use software was estimated, in part, using a cost of reproduction method. The primary components of the software were identified and the estimated cost to reproduce the software was calculated based on estimated time and labor rates derived from our historical data from previous upgrades of similar size and nature. In addition, the fair value of a portion of the internal-use software was estimated using the actual cost of the software adjusted for obsolescence. The calculated fair value of the internal-use software was $9,050, which is being amortized on the straight-line basis over five years. The fair value of the trade names was estimated using a relief from royalty method, which calculates the cost savings associated with owning rather than licensing the trade names. An assumed royalty rate was applied to forecasted revenue and the resulting cash flows were discounted. The assumed royalty rate was based on market data and an analysis of the expected margins for the acquired operations. The aggregate calculated fair value of the trade names was $8,300, which is being amortized on the straight-line basis over a weighted-average period of 9.5 years.

In conjunction with the acquisition of Banker's Dashboard in April 2011, we will be issuing 193 shares of our common stock at a later date. The fair value of this consideration was determined as the fair value of our common stock on the date of the acquisition, discounted to reflect the restrictions which prohibit the trade or transfer of the stock until the date of issuance. The estimated fair value of the stock consideration was $4,300, which is reflected in additional paid-in capital on the consolidated balance sheet as of December 31, 2011.

2010 acquisitions – During 2010, we completed two business combinations (see Note 4). The identifiable net assets acquired were comprised primarily of a customer list, internal-use software and trade names related to the acquisition of Custom Direct. The fair value of the customer list was estimated using the multi-period excess earnings method. Assumptions used in this calculation included a same-customer revenue growth rate and an estimated annual customer retention rate. The customer retention rate was based on estimated re-order rates, as well as management's estimates of the costs to obtain and retain customers. The calculated fair value of the customer list was $15,000, which is being amortized over 1.3 years using an accelerated method. The fair value of the internal-use software was estimated using a cost of reproduction method. The primary components of the software were identified and the estimated cost to reproduce the software was calculated based on estimated time and labor rates derived from our historical data from previous upgrades of similar size and nature. The calculated fair value of the internal-use software was $12,587, which is being amortized on the straight-line basis over a weighted average useful life of 4.7 years. The fair value of the trade names was estimated using a relief from royalty method, which calculates the cost savings associated with owning rather than licensing the trade names. An assumed royalty rate was applied to forecasted revenue and the resulting cash flows were discounted. The assumed royalty rate was based on market data and an analysis of the expected margins for Custom Direct's operations. The calculated fair value of the trade names was $8,900, which is being amortized on the straight-line basis over 10 years.

2009 acquisitions – During 2009, we completed two business combinations (see Note 4). The identifiable net assets acquired were comprised primarily of customer relationships and deferred revenue related to the acquisition of Abacus America, Inc. The fair value of the customer relationships was estimated using the multi-period excess earnings method. Assumptions used in this calculation included a same-customer revenue growth rate and an estimated annual customer retention rate. The same-customer growth rate was based on expected pricing and the customer retention rate was based on the business' historical attrition, as well as management's estimate of customer retention, the effort required to obtain a customer, customer costs to change suppliers and the effort required to renew contracts. The calculated fair value of the customer relationships was $11,900, which is being amortized over seven years using an accelerated method. The calculated fair value of deferred revenue was $7,300, based on the direct and incremental costs to provide the services required plus an estimated market-based profit margin.

Recurring fair value measurements – We held an investment in a Canadian money market fund of $2,001 as of December 31, 2011 and $2,029 as of December 31, 2010. This investment is included in other current assets on the consolidated balance sheets. The money market 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. Because of the short-term nature of the underlying investments, the cost of these securities approximates their fair value. The cost of securities sold is determined using the average cost method. No gains or losses on sales of these marketable securities were realized during 2011, 2010 or 2009.

Funds held for customers included available-for-sale marketable securities of $5,418 as of December 31, 2011 and $10,249 as of December 31, 2010. As of December 31, 2011, these securities consisted primarily of a mutual fund investment which invests in Canadian and provincial government securities. As of December 31, 2010, these securities also included an investment in a Canadian money market fund. These funds are not traded in active markets and their fair values are determined by obtaining quoted prices in active markets for the underlying securities held by the funds.Unrealized gains and losses on these investments, net of tax, are included in other comprehensive loss on the consolidated balance sheets. Realized gains and losses are included in revenue on the consolidated statements of income and were not significant for 2011, 2010 or 2009. The cost of securities sold is determined using the average cost method.

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. Information regarding the accounting for this investment is provided in our long-term investments policy in Note 1. We recognized net unrealized gains on the investment in mutual funds of $196 during 2010 and $420 during 2009. Net unrealized gains recognized during 2011 and net realized gains recognized during 2011, 2010 and 2009 were not significant.

The fair value of interest rate swaps (see Note 6) 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. Changes in the fair value of interest rate swaps, as well as changes in the fair value of the hedged debt, are included in interest expense in the consolidated statements of income and were as follows:

	2011			2010			2009
Gain (loss) from derivatives	$	2,220		$	5,608		$	(152	)
(Loss) gain from change in fair value of hedged debt		(2,395	)		(5,133	)		254
Net (increase) decrease in interest expense	$	(175	)	$	475		$	102

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

			Fair value measurements using
	Fair value as of December 31, 2011		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Marketable securities – funds held for customers	$	5,418	$	-	$	5,418	$	-
Marketable securities – corporate investments		2,001		-		2,001		-
Long-term investment in mutual funds		2,165		2,165		-		-
Derivative assets		4,539		-		4,539		-

			Fair value measurements using
	Fair value as of December 31, 2010		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Marketable securities – funds held for customers	$	10,249	$	-	$	10,249	$	-
Marketable securities – corporate investments		2,029		-		2,029		-
Long-term investment in mutual funds		2,283		2,283		-		-
Derivative assets		5,456		-		5,456		-

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

Long-term debt – The fair value of long-term debt is based on quoted prices for identical liabilities when traded as assets in an active market (Level 1 fair value measurement), with the exception of the debt issued in March 2011 which was not traded in an active market as of December 31, 2011. The fair value of this debt is determined at each reporting date by means of a pricing model utilizing readily observable market interest rates and data from trades executed by institutional investors (Level 2 fair value measurement). The fair value of long-term debt included in the table below does not reflect the impact of hedging activity. The carrying amount of long-term debt includes the change in fair value of hedged long-term debt.

The estimated fair values of these financial instruments were as follows at December 31:

	2011				2010
	Carrying amount		Fair value		Carrying amount		Fair value
Cash and cash equivalents	$	28,687	$	28,687	$	17,383	$	17,383
Cash and cash equivalents - funds held for customers		38,976		38,976		25,471		25,471
Short-term debt		-		-		7,000		7,000
Long-term debt, including portion due within one year		741,706		738,157		748,122		751,978

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Restructuring charges (restructuring accruals by company initiative and segment) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Restructuring accrual [Roll Forward]
Balance, beginning	$ 6,798		$ 11,492		$ 20,379
Restructuring charges	8,878		10,264		11,802
Restructuring reversals	(1,743)		(2,778)		(3,555)
Inter-segment transfer	0				0
Payments	(7,901)		(12,180)		(17,134)
Balance, ending	6,032		6,798		11,492
Components of restructuring accrual, cumulative amounts [Abstract]
Restructuring charges, cumulative amount	105,366
Restructuring reversals, cumulative amount	(13,523)
Payments, cumulative amount	(85,811)
Balance, ending	6,032		6,798		11,492
Small Business Services [Member] | Employee Severance Benefits [Member]
Restructuring accrual [Roll Forward]
Balance, beginning	1,248		4,745		3,974
Restructuring charges	1,897		1,807		5,310
Restructuring reversals	(767)		(875)		(672)
Inter-segment transfer	125				1,174
Payments	(1,616)		(4,429)		(5,041)
Balance, ending	887		1,248		4,745
Components of restructuring accrual, cumulative amounts [Abstract]
Restructuring charges, cumulative amount	48,403
Restructuring reversals, cumulative amount	(3,371)
Inter-segment transfer, cumulative amount	2,310
Payments, cumulative amount	(46,455)
Balance, ending	887		1,248		4,745
Small Business Services [Member] | Operating Lease Obligations [Member]
Restructuring accrual [Roll Forward]
Balance, beginning	236		797		228
Restructuring charges	52		424		1,177
Restructuring reversals	(6)		(380)		(32)
Inter-segment transfer	0				0
Payments	(213)		(605)		(576)
Balance, ending	69		236		797
Components of restructuring accrual, cumulative amounts [Abstract]
Restructuring charges, cumulative amount	4,780
Restructuring reversals, cumulative amount	(970)
Inter-segment transfer, cumulative amount	0
Payments, cumulative amount	(3,741)
Balance, ending	69		236		797
Financial Services [Member] | Employee Severance Benefits [Member]
Restructuring accrual [Roll Forward]
Balance, beginning	1,954		1,053		3,617
Restructuring charges	2,640		2,134		1,063
Restructuring reversals	(517)		(206)		(674)
Inter-segment transfer	234				0
Payments	(2,914)		(1,027)		(2,953)
Balance, ending	1,397		1,954		1,053
Components of restructuring accrual, cumulative amounts [Abstract]
Restructuring charges, cumulative amount	13,726
Restructuring reversals, cumulative amount	(2,438)
Inter-segment transfer, cumulative amount	1,351
Payments, cumulative amount	(11,242)
Balance, ending	1,397		1,954		1,053
Direct Checks [Member] | Employee Severance Benefits [Member]
Restructuring accrual [Roll Forward]
Balance, beginning	252		116		151
Restructuring charges	823		2,344		134
Restructuring reversals	(76)		(116)		(7)
Inter-segment transfer	2				0
Payments	(257)		(2,092)		(162)
Balance, ending	744		252		116
Components of restructuring accrual, cumulative amounts [Abstract]
Restructuring charges, cumulative amount	3,770
Restructuring reversals, cumulative amount	(343)
Inter-segment transfer, cumulative amount	95
Payments, cumulative amount	(2,778)
Balance, ending	744		252		116
Direct Checks [Member] | Operating Lease Obligations [Member]
Restructuring accrual [Roll Forward]
Balance, beginning	492		0		0
Restructuring charges	0		509		0
Restructuring reversals	0		0		0
Inter-segment transfer	0				0
Payments	(204)		(17)		0
Balance, ending	288		492		0
Components of restructuring accrual, cumulative amounts [Abstract]
Restructuring charges, cumulative amount	509
Restructuring reversals, cumulative amount	0
Inter-segment transfer, cumulative amount	0
Payments, cumulative amount	(221)
Balance, ending	288		492		0
Corporate [Member] | Employee Severance Benefits [Member]
Restructuring accrual [Roll Forward]
Balance, beginning	2,616	[1]	4,781	[1]	12,409	[1]
Restructuring charges	3,466	[1]	3,046	[1]	4,118	[1]
Restructuring reversals	(377)	[1]	(1,201)	[1]	(2,170)	[1]
Inter-segment transfer	(361)	[1]			(1,174)	[1]
Payments	(2,697)	[1]	(4,010)	[1]	(8,402)	[1]
Balance, ending	2,647	[1]	2,616	[1]	4,781	[1]
Components of restructuring accrual, cumulative amounts [Abstract]
Restructuring charges, cumulative amount	34,178	[1]
Restructuring reversals, cumulative amount	(6,401)	[1]
Inter-segment transfer, cumulative amount	(3,756)	[1]
Payments, cumulative amount	(21,374)	[1]
Balance, ending	2,647	[1]	2,616	[1]	4,781	[1]
NEBS acquisition related and Fiscal 2006 Initiatives [Member]
Restructuring accrual [Roll Forward]
Balance, beginning	0		0		214
Restructuring charges	0		0		0
Restructuring reversals	0		0		(19)
Payments	0		0		(195)
Balance, ending	0		0		0
Components of restructuring accrual, cumulative amounts [Abstract]
Restructuring charges, cumulative amount	41,107
Restructuring reversals, cumulative amount	(2,530)
Balance, ending	0		0		0
2007 Initiatives [Member]
Restructuring accrual [Roll Forward]
Balance, beginning	0		64		335
Restructuring charges	0		0		0
Restructuring reversals	0		(64)		(34)
Payments	0		0		(237)
Balance, ending	0		0		64
Components of restructuring accrual, cumulative amounts [Abstract]
Restructuring charges, cumulative amount	7,181
Restructuring reversals, cumulative amount	(1,503)
Balance, ending	0		0		64
2008 Initiatives [Member]
Restructuring accrual [Roll Forward]
Balance, beginning	117		2,175		19,830
Restructuring charges	0		525		886
Restructuring reversals	(17)		(985)		(3,354)
Payments	(100)		(1,598)		(15,187)
Balance, ending	0		117		2,175
Components of restructuring accrual, cumulative amounts [Abstract]
Restructuring charges, cumulative amount	27,545
Restructuring reversals, cumulative amount	(5,887)
Balance, ending	0		117		2,175
2009 Initiatives [Member]
Restructuring accrual [Roll Forward]
Balance, beginning	652		9,253		0
Restructuring charges	9		99		10,916
Restructuring reversals	(57)		(1,465)		(148)
Payments	(420)		(7,235)		(1,515)
Balance, ending	184		652		9,253
Components of restructuring accrual, cumulative amounts [Abstract]
Restructuring charges, cumulative amount	11,024
Restructuring reversals, cumulative amount	(1,670)
Balance, ending	184		652		9,253
2010 Initiatives [Member]
Restructuring accrual [Roll Forward]
Balance, beginning	6,029		0		0
Restructuring charges	75		9,640		0
Restructuring reversals	(1,058)		(264)		0
Payments	(4,265)		(3,347)		0
Balance, ending	781		6,029		0
Components of restructuring accrual, cumulative amounts [Abstract]
Restructuring charges, cumulative amount	9,715
Restructuring reversals, cumulative amount	(1,322)
Balance, ending	781		6,029		0
2011 Initiatives [Member]
Restructuring accrual [Roll Forward]
Balance, beginning	0		0		0
Restructuring charges	8,794		0		0
Restructuring reversals	(611)		0		0
Payments	(3,116)		0		0
Balance, ending	5,067		0		0
Components of restructuring accrual, cumulative amounts [Abstract]
Restructuring charges, cumulative amount	8,794
Restructuring reversals, cumulative amount	(611)
Balance, ending	$ 5,067		$ 0		$ 0

[1] As discussed in Note 16: Business segment information, corporate costs are allocated to our business segments. As such, the net corporate restructuring charges are reflected in the business segment operating income presented in Note 16 in accordance with our allocation methodology.

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Assets held for sale and discontinued operations

12 Months Ended

Dec. 31, 2011

Assets held for sale and discontinued operations [Abstract]

Assets held for sale and discontinued operations

Note 5: Assets held for sale and discontinued operations

Assets held for sale– Assets held for sale as of December 31, 2011 consisted of our facility located in Thorofare, New Jersey, which was closed in April 2009. Assets held for sale as of December 31, 2010 also included our facility located in Greensboro, North Carolina, which was closed in July 2009. Both facilities previously housed manufacturing operations, while the Thorofare location also housed a customer call center. The Greensboro facility was sold in January 2011 for net cash proceeds of $699, realizing a pre-tax gain of $110. During 2011, we recorded an asset impairment charge of $1,196 related to the Thorofare location, based on current market conditions and ongoing negotiations for the sale of the facility, and we continue to actively market the property.

Discontinued operations – Discontinued operations consisted of our retail packaging and signage business, which we sold on January 31, 2009 for gross cash proceeds of $250 plus a note receivable. The loss on disposal recorded in 2010 related to the finalization of purchase consideration. There were no discontinued operations in 2011.

Revenue and net loss from discontinued operations were as follows:

	2010			2009
Revenue	$	-		$	816
Loss from operations	$	-		$	(155	)
(Loss) gain on disposal		(1,244	)		155
Income tax benefit		473			-
Net loss from discontinued operations	$	(771	)	$	-

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Derivative financial instruments

12 Months Ended

Dec. 31, 2011

Derivative financial instruments [Abstract]

Derivative financial instruments

Note 6: Derivative financial instruments

Fair value hedges – We have entered into interest rate swaps to hedge against changes in the fair value of a portion of our long-term debt. We entered into these swaps, which we designated as fair value hedges, to achieve a targeted 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). Changes in the fair value of the interest rate swaps and the related long-term debt are included in interest expense in the consolidated statements of income. When the change in the fair value of the interest rate swaps and the hedged debt are not equal (i.e., hedge ineffectiveness), the difference in the changes in fair value affects the reported amount of interest expense in our consolidated statements of income. Information regarding hedge ineffectiveness in each period is provided in Note 7. The fair value of the interest rate swaps related to our debt due in 2012 is included in other current assets on the consolidated balance sheet as of December 31, 2011 and in other non-current assets on the consolidated balance sheet as of December 31, 2010. The fair value of the interest rate swaps related to our debt due in 2014 is included in other non-current assets on the consolidated balance sheets.

Information regarding interest swaps as of December 31, 2011 was as follows:

	Notional amount		Fair value of interest rate swaps		Increase in debt due to fair value adjustment
Fair value hedge related to long-term debt due in 2012	$	84,847	$	1,309	$	780
Fair value hedge related to long-term debt due in 2014		198,000		3,230		2,788
Total fair value hedges	$	282,847	$	4,539	$	3,568

Information regarding interest rate swaps as of December 31, 2010 was as follows:

	Notional amount		Fair value of interest rate swaps		Increase in debt due to fair value adjustment
Fair value hedge related to long-term debt due in 2012	$	210,000	$	5,456	$	4,879

During the first quarter of 2011, we retired $195,463 of our ten-year bonds due in 2012 (see Note 13). In conjunction with this debt retirement, we settled a portion of the interest rate swaps and received cash payments of $2,548. Interest rate swaps remaining after the settlement were redesignated as fair value hedges during March 2011. In conjunction with the debt retirement, we recognized $3,094 of the fair value adjustment to the hedged debt, decreasing the loss on early debt extinguishment. The $1,355 remaining fair value adjustment to the hedged debt as of the date hedge accounting was discontinued is being recorded as a decrease to interest expense over the term of the remaining debt.

Cash flow hedges – During 2004, we entered into $225,000 of forward starting interest rate swaps to hedge, or lock-in, the interest rate on a portion of the debt we issued in October 2004 (see Note 13). The termination of the lock agreements in 2004 yielded a deferred pre-tax loss of $17,877. During 2002, we entered into forward interest rate lock agreements to effectively hedge the annual interest rate on a portion of the notes issued in December 2002 (see Note 13). The termination of the lock agreements in December 2002 yielded a deferred pre-tax loss of $4,026. These losses are reflected, net of tax, in accumulated other comprehensive loss in our consolidated balance sheets and are being reclassified ratably to our statements of income as increases to interest expense over the term of the related debt. We expect to recognize $1,757 of the deferred pre-tax losses in interest expense during 2012.

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Restructuring charges

12 Months Ended

Dec. 31, 2011

Restructuring charges [Abstract]

Restructuring charges

Note 8: Restructuring charges

Net restructuring charges for the years ended December 31 consisted of the following components:

	2011			2010			2009
Severance accruals	$	8,826		$	9,331		$	10,625
Severance reversals		(1,737	)		(2,398	)		(3,523	)
Operating lease obligations		52			933			1,177
Operating lease obligation reversals		(6	)		(380	)		(32	)
Net restructuring accruals		7,135			7,486			8,247
Other costs		6,586			2,841			3,739
Net restructuring charges	$	13,721		$	10,327		$	11,986

The net restructuring charges are reflected in the consolidated statements of income for the years ended December 31 as follows:

	2011		2010		2009
Cost of goods sold	$	1,978	$	2,356	$	4,558
Operating expenses		11,743		7,971		7,428
Net restructuring charges	$	13,721	$	10,327	$	11,986

2011 restructuring charges – During 2011, the net restructuring accruals included severance charges related to employee reductions across functional areas as we continue to reduce costs. The restructuring accruals included severance benefits for approximately 400 employees. These charges were reduced by the reversal of restructuring accruals, the majority of which were recorded in prior years, as fewer employees received severance benefits than originally estimated. The majority of the employee reductions are expected to be completed by the end of 2012, and we expect most of the related severance payments to be paid by mid-2013, utilizing cash from operations. The remaining payments due under operating lease obligations will be paid through May 2013. Other restructuring costs, which were expensed as incurred, included items such as employee and equipment moves, training and travel related to our restructuring activities.

2010 restructuring charges – During 2010, the net restructuring accruals included severance charges related to employee reductions in various functional areas, primarily fulfillment, sales and marketing, as we continue our cost reduction initiatives, as well as actions related to our integration of Custom Direct (see Note 4). Net restructuring accruals also included operating lease obligations on facilities vacated during 2010. The restructuring accruals included severance benefits for approximately 470 employees. These charges were reduced by the reversal of restructuring accruals, primarily those recorded in prior years, as fewer employees received severance benefits than originally estimated. Other restructuring costs, which were expensed as incurred, included items such as employee and equipment moves, training and travel related to our restructuring activities.

2009 restructuring charges – During 2009, the net restructuring accruals included severance charges related to employee reductions in various functional areas as we continued our cost reduction initiatives, including the closing of a Small Business Services customer call center located in Colorado Springs, Colorado in the first quarter of 2010, and further consolidation in the sales, marketing and fulfillment organizations. Net restructuring accruals also included operating lease obligations on manufacturing facilities closed during 2009. The restructuring accruals included severance benefits for approximately 640 employees. These charges were reduced by the reversal of previously recorded restructuring accruals as fewer employees received severance benefits than originally estimated. Other restructuring costs, which were expensed as incurred, included items such as equipment moves, training and travel related to our restructuring activities.

Restructuring accruals of $6,032 as of December 31, 2011 are reflected in the consolidated balance sheet as accrued liabilities of $5,946 and other non-current liabilities of $86. Restructuring accruals of $6,798 as of December 31, 2010 are reflected in the consolidated balance sheet as accrued liabilities of $6,435 and other non-current liabilities of $363. As of December 31, 2011, approximately 260 employees had not yet started to receive severance benefits.

By company initiative, our restructuring accruals were as follows:

	NEBS acquisition related and 2006 initiatives			2007 initiatives			2008 initiatives			2009 initiatives			2010 initiatives			2011 initiatives			Total
Balance, December 31, 2008	$	214		$	335		$	19,830		$	-		$	-		$	-		$	20,379
Restructuring charges		-			-			886			10,916			-			-			11,802
Restructuring reversals		(19	)		(34	)		(3,354	)		(148	)		-			-			(3,555	)
Payments		(195	)		(237	)		(15,187	)		(1,515	)		-			-			(17,134	)
Balance, December 31, 2009		-			64			2,175			9,253			-			-			11,492
Restructuring charges		-			-			525			99			9,640			-			10,264
Restructuring reversals		-			(64	)		(985	)		(1,465	)		(264	)		-			(2,778	)
Payments		-			-			(1,598	)		(7,235	)		(3,347	)		-			(12,180	)
Balance, December 31, 2010		-			-			117			652			6,029			-			6,798
Restructuring charges		-			-			-			9			75			8,794			8,878
Restructuring reversals		-			-			(17	)		(57	)		(1,058	)		(611	)		(1,743	)
Payments		-			-			(100	)		(420	)		(4,265	)		(3,116	)		(7,901	)
Balance, December 31, 2011	$	-		$	-		$	-		$	184		$	781		$	5,067		$	6,032
Cumulative amounts:
Restructuring charges	$	41,107		$	7,181		$	27,545		$	11,024		$	9,715		$	8,794		$	105,366
Restructuring reversals		(2,530	)		(1,503	)		(5,887	)		(1,670	)		(1,322	)		(611	)		(13,523	)
Payments		(38,577	)		(5,678	)		(21,658	)		(9,170	)		(7,612	)		(3,116	)		(85,811	)
Balance, December 31, 2011	$	-		$	-		$	-		$	184		$	781		$	5,067		$	6,032

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

				Employee severance benefits									Operating lease obligations
	Small Business Services			Financial Services			Direct Checks			Corporate(1)			Small Business Services			Direct Checks			Total
Balance, December 31, 2008	$	3,974		$	3,617		$	151		$	12,409		$	228		$	-		$	20,379
Restructuring charges		5,310			1,063			134			4,118			1,177			-			11,802
Restructuring reversals		(672	)		(674	)		(7	)		(2,170	)		(32	)		-			(3,555	)
Inter-segment transfer		1,174			-			-			(1,174	)		-			-			-
Payments		(5,041	)		(2,953	)		(162	)		(8,402	)		(576	)		-			(17,134	)
Balance, December 31, 2009		4,745			1,053			116			4,781			797			-			11,492
Restructuring charges		1,807			2,134			2,344			3,046			424			509			10,264
Restructuring reversals		(875	)		(206	)		(116	)		(1,201	)		(380	)		-			(2,778	)
Payments		(4,429	)		(1,027	)		(2,092	)		(4,010	)		(605	)		(17	)		(12,180	)
Balance, December 31, 2010		1,248			1,954			252			2,616			236			492			6,798
Restructuring charges		1,897			2,640			823			3,466			52			-			8,878
Restructuring reversals		(767	)		(517	)		(76	)		(377	)		(6	)		-			(1,743	)
Inter-segment transfer		125			234			2			(361	)		-			-			-
Payments		(1,616	)		(2,914	)		(257	)		(2,697	)		(213	)		(204	)		(7,901	)
Balance, December 31, 2011	$	887		$	1,397		$	744		$	2,647		$	69		$	288		$	6,032
Cumulative amounts:
Restructuring charges	$	48,403		$	13,726		$	3,770		$	34,178		$	4,780		$	509		$	105,366
Restructuring reversals		(3,371	)		(2,438	)		(343	)		(6,401	)		(970	)		-			(13,523	)
Inter-segment transfer		2,310			1,351			95			(3,756	)		-			-			-
Payments		(46,455	)		(11,242	)		(2,778	)		(21,374	)		(3,741	)		(221	)		(85,811	)
Balance, December 31, 2011	$	887		$	1,397		$	744		$	2,647		$	69		$	288		$	6,032

(1) As discussed in Note 16: Business segment information, corporate costs are allocated to our business segments. As such, the net corporate restructuring charges are reflected in the business segment operating income presented in Note 16 in accordance with our allocation methodology.

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Share-based compensation plans (restricted stock units) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Company match, restricted stock units	one-half of the restricted stock units earned under the bonus plan
Vesting period (in years)	2Y
Shares of common stock into which each restricted stock unit is convertible (in shares)	1
Unvested restricted shares [Roll Forward]
Outstanding, beginning of year (in shares/units)	86,000	120,000	145,000
Granted (in shares/units)	26,000	34,000	17,000
Vested (in shares/units)	(5,000)	(68,000)	(40,000)
Forfeited or expired (in shares/units)	(6,000)		(2,000)
Outstanding, end of year (in shares/units)	101,000	86,000	120,000
Weighted-average grant date fair value [Abstract]
Outstanding, beginning of year (in dollars per share/unit)	$ 23.58	$ 25.48	$ 26.65
Granted (in dollars per share/unit)	$ 24.70	$ 19.85	$ 12.27
Vested (in dollars per share/unit)	$ 16.84	$ 25.57	$ 24.04
Forfeited (in dollars per share/unit)	$ 20.61		$ 25.57
Outstanding, end of year (in dollars per share/unit)	$ 24.26	$ 23.58	$ 25.48
Aggregate intrinsic value [Abstract]
Aggregate intrinsic value, outstanding	$ 2,305
Weighted-average remaining contractual term [Abstract]
Weighted-average remaining contractual term, outstanding (in years)	4.4
Fair value, awards vested	132	1,090	589
Restricted stock units classified as liabilities [Member]
Unvested restricted shares [Roll Forward]
Outstanding, end of year (in shares/units)	15,000
Weighted-average grant date fair value [Abstract]
Outstanding, end of year (in dollars per share/unit)	$ 22.76
Aggregate intrinsic value [Abstract]
Aggregate intrinsic value, outstanding	$ 338
Weighted-average remaining contractual term [Abstract]
Weighted-average remaining contractual term, outstanding (in years)	0.6

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SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended																12 Months Ended
	Dec. 31, 2011		Sep. 30, 2011		Jun. 30, 2011		Mar. 31, 2011		Dec. 31, 2010		Sep. 30, 2010		Jun. 30, 2010		Mar. 31, 2010		Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED) [Abstract]
Revenue	$ 366,426		$ 355,144		$ 346,274		$ 349,752		$ 351,488		$ 367,633		$ 347,996		$ 335,120		$ 1,417,596	$ 1,402,237	$ 1,344,195
Gross profit	236,512	[1]	232,506	[2]	225,587	[3]	229,589	[4]	224,805	[5]	246,200	[6]	226,056	[7]	216,757	[8]	924,194	913,818	839,413
Net income	39,831	[1]	36,735	[2]	35,473	[3]	32,556	[4]	34,826	[5]	50,800	[6]	33,614	[7]	33,384	[8]	144,595	152,624	99,365
Basic (in dollars per share)	$ 0.78	[1]	$ 0.72	[2]	$ 0.69	[3]	$ 0.63	[4]	$ 0.68	[5]	$ 0.99	[6]	$ 0.65	[7]	$ 0.65	[8]	$ 2.82	$ 2.97	$ 1.94
Diluted (in dollars per share)	$ 0.78	[1]	$ 0.71	[2]	$ 0.68	[3]	$ 0.63	[4]	$ 0.68	[5]	$ 0.98	[6]	$ 0.65	[7]	$ 0.65	[8]	$ 2.80	$ 2.96	$ 1.94
Cash dividends per share (in dollars per share)	$ 0.25		$ 0.25		$ 0.25		$ 0.25		$ 0.25		$ 0.25		$ 0.25		$ 0.25		$ 1.00	$ 1.00	$ 1.00
Net pre-tax restructuring charges	3,045		4,598		4,604		1,474		7,754				2,093				13,721	10,327	11,986
Asset impairment charges	1,196																1,196	0	24,900
Tax expense (credit) for discrete items											$ (1,482)		$ (1,384)		$ 3,662

[1] 2011 fourth quarter results included net pre-tax restructuring charges of $3,045 related to our cost reduction initiatives and an asset impairment charge of $1,196 related to a vacant facility which is held for sale.

[2] 2011 third quarter results included net pre-tax restructuring charges of $4,598 related to our cost reduction initiatives.

[3] 2011 second quarter results include net pre-tax restructuring charges of $4,604 related to our cost reduction initiatives.

[4] 2011 first quarter results include net pre-tax restructuring charges of $1,474 related to our cost reduction initiatives.

[5] 2010 fourth quarter results include net pre-tax restructuring charges of $7,754 related to our cost reduction initiatives.

[6] 2010 third quarter results include a $1,482 reduction in income tax expense for discrete items, primarily adjustments to accruals for uncertain tax positions.

[7] 2010 second quarter results include net pre-tax restructuring charges of $2,093 related to our cost reduction initiatives. Results also include a $1,384 reduction in income tax expense for discrete items, primarily reductions in accruals for uncertain tax positions.

[8] 2010 first quarter results include tax expense of $3,662 for discrete items, primarily the impact of recent health care legislation on deferred income taxes.

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Share-based compensation plans (employee stock purchase plan) (Details) (Employee stock purchase plan [Member], USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Employee stock purchase plan [Member]
Employee stock purchase plan [Abstract]
Shares issued under plan (in shares)	85	109	174
Issue price for shares issued under plan, lower value (in dollars per share)	$ 20.78	$ 15.82	$ 9.80
Issue price for shares issued under plan, higher value (in dollars per share)	$ 20.01	$ 17.49	$ 13.30

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Share-based compensation plans (stock options) (Details) (Stock Options [Member], USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period, minimum (in years)	1
Vesting period, maximum (in years)	3
Term of award from grant date to expiration date (in years)	7
Exercise period before cancellation of award following voluntary termination of employment (in months)	3M
Black-Scholes option pricing model assumptions [Abstract]
Risk-free interest rate (in hundredths)	2.00%	2.20%	1.60%
Dividend yield (in hundredths)	3.90%	3.20%	3.40%
Expected volatility (in hundredths)	58.60%	54.00%	44.20%
Weighted-average option life (in years)	4.3	4.8	4.6
Shares of common stock into which each option is convertible (in shares)	1
Options outstanding [rollforward]
Outstanding, beginning of year (in options)	2,913,000	2,841,000	3,105,000
Granted (in options)	598,000	695,000	790,000
Exercised (in options)	(383,000)	(185,000)	(3,000)
Forfeited or expired (in options)	(362,000)	(438,000)	(1,051,000)
Outstanding, end of year (in options)	2,766,000	2,913,000	2,841,000
Exercisable, end of year (in options)	1,685,000	1,675,000	1,643,000
Weighted-average exercise price [Abstract]
Outstanding at beginning of year (in dollars per option)	$ 22.60	$ 24.64	$ 33.50
Granted (in dollars per option)	$ 25.56	$ 18.37	$ 9.75
Exercised (in dollars per option)	$ 16.56	$ 11.08	$ 9.73
Forfeited or expired (in dollars per option)	$ 28.87	$ 33.94	$ 39.68
Outstanding at end of period (in dollars per option)	$ 23.26	$ 22.60	$ 24.64
Exercisable at end of period (in dollars per option)	$ 25.18	$ 27.66	$ 30.60
Aggregate intrinsic value [Abstract]
Aggregate intrinsic value, options outstanding, end of year	$ 7,519
Exercisable at end of period	3,378
Weighted-average remaining contractual term [Abstract]
Weighted-average remaining contractual term, options outstanding, end of year (in years)	3.7
Weighted-average remaining contractual term, options exercisable, end of year (in years)	2.6
Weighted-average grant-date fair value, options granted (in dollars per option)	$ 9.37	$ 6.86	$ 2.82
Intrinsic value, options exercised	$ 3,452	$ 1,834	$ 16

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Fair value measurements (Tables)

12 Months Ended

Dec. 31, 2011

Fair value measurements [Abstract]

Nonrecurring fair value measurements

Information regarding this nonrecurring fair value measurement completed during 2011 was as follows:

			Fair value measurements using
	Fair value as of measurement date		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Impairment charge
Assets held for sale	$	2,741	$	-	$	2,741	$	-	$	1,196

Information regarding these nonrecurring fair value measurements completed during 2009 was as follows:

			Fair value measurements using
	Fair value as of measurement date		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Impairment charge
Goodwill(1)	$	20,245	$	-	$	-	$	20,245	$	20,000
Indefinite-lived trade name(2)		19,100		-		-		19,100		4,900
Total impairment charges									$	24,900

(1) Represents the implied fair value of the goodwill assigned to the reporting unit for which we were required to calculate this amount.

(2) Represents the fair value determined from the event-driven impairment analysis completed during the quarter ended March 31, 2009.

Gain (loss) from derivative instruments

Changes in the fair value of interest rate swaps, as well as changes in the fair value of the hedged debt, are included in interest expense in the consolidated statements of income and were as follows:

	2011			2010			2009
Gain (loss) from derivatives	$	2,220		$	5,608		$	(152	)
(Loss) gain from change in fair value of hedged debt		(2,395	)		(5,133	)		254
Net (increase) decrease in interest expense	$	(175	)	$	475		$	102

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 December 31, 2011		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Marketable securities – funds held for customers	$	5,418	$	-	$	5,418	$	-
Marketable securities – corporate investments		2,001		-		2,001		-
Long-term investment in mutual funds		2,165		2,165		-		-
Derivative assets		4,539		-		4,539		-

			Fair value measurements using
	Fair value as of December 31, 2010		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Marketable securities – funds held for customers	$	10,249	$	-	$	10,249	$	-
Marketable securities – corporate investments		2,029		-		2,029		-
Long-term investment in mutual funds		2,283		2,283		-		-
Derivative assets		5,456		-		5,456		-

Estimated fair value of other financial instruments

The estimated fair values of these financial instruments were as follows at December 31:

	2011				2010
	Carrying amount		Fair value		Carrying amount		Fair value
Cash and cash equivalents	$	28,687	$	28,687	$	17,383	$	17,383
Cash and cash equivalents - funds held for customers		38,976		38,976		25,471		25,471
Short-term debt		-		-		7,000		7,000
Long-term debt, including portion due within one year		741,706		738,157		748,122		751,978

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Supplemental balance sheet and cash flow information (other) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011		Dec. 31, 2010		Dec. 31, 2009
Other non-current assets [Abstract]
Contract acquisition costs	$ 55,076		$ 57,476		$ 45,701
Deferred advertising costs	15,599		15,832
Other	29,923		20,939
Other non-current assets	100,598		94,247
Contract acquisition costs [Roll Forward]
Balance, beginning of year	57,476		45,701		37,706
Additions	14,624	[1]	31,520	[1]	32,545	[1]
Amortization	(16,659)		(19,745)		(24,550)
Other	(365)
Balance, end of year	55,076		57,476		45,701
Cash payments made for contract acquisition	12,190		22,087		29,250
Accrued liabilities [Abstract]
Funds held for customers	43,829		35,475
Employee profit sharing/cash bonus and pension	23,783		34,109
Customer rebates	20,969		19,201
Contract acquisition costs due within one year	13,070		8,550
Interest	8,760		5,227
Restructuring due within one year (see Note 8)	5,946		6,435
Wages, including vacation	4,995		5,898
Other	28,746		29,139
Accrued liabilities	150,098		144,034
Supplemental cash flow disclosures [Abstract]
Interest paid	42,542		44,054		43,513
Income taxes paid	$ 60,861		$ 70,246		$ 56,060

[1] Contract acquisition costs are accrued upon contract execution. Cash payments made for contract acquisition costs were $12,190 in 2011 $22,087 in 2010 and $29,250 in 2009.

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Debt and leases

12 Months Ended

Dec. 31, 2011

Debt and leases [Abstract]

Debt and leases

Note 13: Debt and leases

Debt outstanding as of December 31 was as follows:

	2011		2010
5.0% senior, unsecured notes due December 15, 2012, net of discount, including cumulative change in fair value of hedged debt: 2010 - $4,879 increase	$	-	$	284,843
5.125% senior, unsecured notes due October 1, 2014, net of discount, including cumulative change in fair value of hedged debt: 2011 - $2,788 increase		256,131		263,279
7.375% senior notes due June 1, 2015		200,000		200,000
7.0% senior notes due March 15, 2019		200,000		-
Long-term portion of debt		656,131		748,122
5.0% senior, unsecured notes due December 15, 2012, net of discount, including cumulative change in fair value of hedged debt: 2011 - $780 increase		85,575		-
Amounts drawn on credit facility		-		7,000
Total debt	$	741,706	$	755,122

Discounts from par value are being amortized ratably as increases to interest expense over the term of the related debt.

All of our notes include covenants that place restrictions on the issuance of additional debt and limitations on certain liens. The notes due in 2019 and 2015 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.

In March 2011, we issued $200,000 of 7.0% senior notes maturing 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 Securities and Exchange Commission (SEC) via a registration statement which became effective on January 10, 2012. Interest payments are due each March and September. 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 17. At any time prior to March 15, 2014, we may on any one or more occasions redeem up to 35% of the original principal amount of the notes with the proceeds of one or more equity offerings at a redemption price of 107% of the principal amount of the notes, together with accrued and unpaid interest. At any time prior to March 15, 2015, we may also 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 March 15, 2015, we may redeem some or all of the notes at prices ranging from 100% to 103.5% 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 the notes at 101% of the principal amount. Proceeds from the offering, net of offering costs, were $196,487. These proceeds were used to retire a portion of our senior, unsecured notes due in 2012. The fair value of the notes issued in March 2011 was $193,500 as of December 31, 2011, based on a pricing model utilizing readily observable market interest rates and data from trades executed by institutional investors.

In May 2007, we issued $200,000 of 7.375% senior notes maturing on June 1, 2015. 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 which became effective on June 29, 2007. Interest payments are due each June and December. The notes are guaranteed by the same subsidiaries which guarantee our notes due in 2019 and place a limitation on restricted payments, including share repurchases and increases in dividend levels. This limitation 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 17. Principal redemptions may be made at our election at any time at redemption prices ranging from 100% to 103.688% of the principal amount. If we sell certain of our assets or experience specific types of changes in control, we must offer to purchase the notes at 101% of the principal amount. Proceeds from the offering, net of offering costs, were $196,329. These proceeds were used as part of our repayment of unsecured notes which matured on October 1, 2007. The fair value of the notes issued in May 2007 was $204,250 as of December 31, 2011, based on quoted prices for identical liabilities when traded as assets.

In October 2004, we issued $275,000 of 5.125% senior, unsecured notes maturing on October 1, 2014. 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 which became effective on November 23, 2004. Interest payments are due each April and October. Proceeds from the offering, net of offering costs, were $272,276. These proceeds were used to repay commercial paper borrowings used for the acquisition of New England Business Service, Inc. in 2004. During the quarter ended March 31, 2011, we retired $10,000 of these notes, realizing a pre-tax loss of $185. During the quarter ended March 31, 2009, we retired $11,500 of these notes, realizing a pre-tax gain of $4,077. As of December 31, 2011, the fair value of the $253,500 remaining notes outstanding was $255,561, based on quoted prices for identical liabilities when traded as assets. As discussed in Note 6, we have entered into interest rate swaps to hedge a portion of these notes. The fair value of long-term debt disclosed here does not reflect the impact of these fair value hedges.

In December 2002, we issued $300,000 of 5.0% senior, unsecured notes maturing on December 15, 2012. These notes were issued under our shelf registration statement covering up to $300,000 in medium-term notes, thereby exhausting that registration statement. Interest payments are due each June and December. Principal redemptions may be made at our election prior to the stated maturity. Proceeds from the offering, net of offering costs, were $295,722. These proceeds were used for general corporate purposes, including funding share repurchases, capital asset purchases and working capital. During the quarter ended March 31, 2011, we retired $195,463 of these notes, realizing a pre-tax loss of $6,810. During the quarter ended March 31, 2009, we retired $19,690 of these notes, realizing a pre-tax gain of $5,757. As of December 31, 2011, the fair value of the $84,847 remaining notes outstanding was $84,846, based on quoted prices for identical liabilities when traded as assets. As discussed in Note 6, we have entered into interest rate swaps to hedge these notes. The fair value of long-term debt disclosed here does not reflect the impact of these fair value hedges.

As of December 31, 2011, we had a $200,000 credit facility, which was due to expire in March 2013. Borrowings under the credit facility are collateralized by substantially all personal property. Our commitment fee ranges from 0.40% to 0.50% based on our leverage ratio. 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, and certain asset sales outside the ordinary course of business, as well as required repayments in the event of a change in control as defined in the agreement. The agreement also contains financial covenants regarding our leverage ratio, interest coverage and liquidity.

Amounts outstanding under our credit facility for the years ended December 31 were as follows:

	2011		2010		2009
Daily average amount outstanding	$	21,655	$	49,957	$	69,267
Weighted-average interest rate		3.03%		3.20%		0.76%

As of December 31, 2011, no amounts were outstanding under our credit facility. As of December 31, 2010, $7,000 was outstanding at a weighted-average interest rate of 5.25%.

Amounts available for borrowing under our credit facility as of December 31, 2011 were as follows:

	Total available
Credit facility commitment	$	200,000
Outstanding letters of credit		(8,551	)
Net available for borrowing as of December 31, 2011	$	191,449

Absent certain defined events of default under our debt instruments, and as long as our ratio of earnings before interest, taxes, depreciation and amortization (EBITDA) to interest expense, as defined, is in excess of two to one, our debt covenants do not restrict our ability to pay cash dividends at our current rate, although there is an aggregate annual limit on the amount of dividends and share repurchases under the terms of our credit facility. If our ratio of EBITDA to interest expense falls below two to one, there would also be limitations on our ability to issue additional debt.

We have operating leases on certain facilities and equipment. As of December 31, 2011, future minimum lease payments under noncancelable operating leases with an initial term in excess of one year were as follows:

	Operating leases
2012	$	10,249
2013		7,117
2014		2,532
2015		920
2016		772
2017		40
Total minimum lease payments	$	21,630

The composition of rent expense for the years ended December 31 was as follows:

	2011			2010			2009
Minimum rentals	$	10,068		$	10,313		$	8,180
Sublease rentals		(144	)		(190	)		(1,677	)
Net rental expense	$	9,924		$	10,123		$	6,503

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Subsequent event

12 Months Ended

Dec. 31, 2011

Subsequent event [Abstract]

Subsequent event

Note 18: Subsequent event

In February 2012, we modified the terms of our $200,000 credit facility (see Note 13). We extended the term of the agreement to February 2017 and lowered the commitment fee to a range of 0.20% to 0.45%, based on our leverage ratio. No changes were made to the financial covenants included in the credit agreement.

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Supplemental balance sheet and cash flow information (intangibles) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Amortizable intangibles [Abstract]
Gross carrying amount	$ 571,574	$ 549,424
Accumulated amortization	(433,335)	(413,412)
Net carrying amount	138,239	136,012
Total intangibles, gross carrying amount	590,674	568,524
Total intangibles, accumulated amortization	(433,335)	(413,412)
Total intangibles, net carrying amount	157,339	155,112
Total amortization of intangibles	51,796	52,969	45,302
Acquired Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	55,069	62,232	39,754
Weighted-average amortization period (in years)	6	4	5
Estimated future amortization expense [Abstract]
2012	37,121
2013	26,700
2014	15,027
2015	8,043
2016	5,713
Internal use software [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	33,169	36,442	24,911
Weighted-average amortization period (in years)	4	4	3
Customer lists/relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	12,600	16,690	13,943
Weighted-average amortization period (in years)	8.2	1.0	7
Distributor contracts [Member] | New England Business Service Inc. (NEBS) [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life (in years)	9
Initial contract term (in years)	5Y
Length of contractual renewal periods (in years)	5Y
Assumed contract retention rate (in hundredths)	90.00%
Average period remaining to next contract renewal (in years)	2.3
Trade names [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	8,300	9,100	900
Weighted-average amortization period (in years)	9.5	10	10
Other [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	1,000	0	0
Weighted-average amortization period (in years)	4	0	0
Internal use software [Member]
Amortizable intangibles [Abstract]
Gross carrying amount	410,905	378,269
Accumulated amortization	(345,145)	(314,267)
Net carrying amount	65,760	64,002
Total intangibles, accumulated amortization	(345,145)	(314,267)
Total amortization of intangibles	31,562	29,121	25,152
Customer lists/relationships [Member]
Amortizable intangibles [Abstract]
Gross carrying amount	52,542	72,292
Accumulated amortization	(26,059)	(43,660)
Net carrying amount	26,483	28,632
Total intangibles, accumulated amortization	(26,059)	(43,660)
Distributor contracts [Member]
Amortizable intangibles [Abstract]
Gross carrying amount	30,900	30,900
Accumulated amortization	(28,198)	(26,396)
Net carrying amount	2,702	4,504
Total intangibles, accumulated amortization	(28,198)	(26,396)
Trade names [Member]
Amortizable intangibles [Abstract]
Gross carrying amount	67,661	59,361
Accumulated amortization	(25,958)	(22,009)
Net carrying amount	41,703	37,352
Total intangibles, accumulated amortization	(25,958)	(22,009)
Other [Member]
Amortizable intangibles [Abstract]
Gross carrying amount	9,566	8,602
Accumulated amortization	(7,975)	(7,080)
Net carrying amount	1,591	1,522
Total intangibles, accumulated amortization	$ (7,975)	$ (7,080)

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Shareholders' equity (Tables)

12 Months Ended

Dec. 31, 2011

Shareholders' equity [Abstract]

Shares oustanding

Shares outstanding – Changes in common shares outstanding during the years ended December 31 were as follows:

	2011			2010			2009
Balance, beginning of year		51,338			51,189			51,131
Issued		499			410			237
Repurchased		(940	)		(167	)		(120	)
Retired		(71	)		(94	)		(59	)
Balance, end of year		50,826			51,338			51,189

Accumulated other comprehensive loss

Accumulated other comprehensive loss – The components of accumulated other comprehensive loss as of December 31 were as follows:

	2011			2010			2009
Postretirement and defined benefit pension plans:
Unrealized prior service credit	$	13,321		$	15,651		$	17,978
Unrealized net actuarial losses		(75,599	)		(68,343	)		(70,328	)
Postretirement and defined benefit pension plans, net of tax		(62,278	)		(52,692	)		(52,350	)
Loss on derivatives, net of tax(1)		(2,931	)		(4,522	)		(5,841	)
Net unrealized gain on marketable securities, net of tax		178			13			-
Currency translation adjustment		5,630			7,189			5,373
Accumulated other comprehensive loss	$	(59,401	)	$	(50,012	)	$	(52,818	)

(1) Relates to interest rate locks executed in 2004 and 2002. See Note 6 for further information regarding these financial instruments.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract]
Net Income	$ 144,595	$ 152,624	$ 99,365
Other Comprehensive Income:
Reclassification of loss on derivative instruments from other comprehensive income to net income, net of tax	1,591	1,319	1,657
Pension and postretirement benefit plans, net of tax:
Net actuarial (loss) gain arising during the year	(10,627)	(1,376)	2,190
Less reclassification of amounts from other comprehensive income to net income:
Amortization of prior service credit	(2,330)	(2,327)	(2,368)
Amortization of net actuarial loss	3,371	3,361	5,989
Pension and postretirement benefit plans, net of tax	(9,586)	(342)	5,811
Unrealized holding gains on securities arising during the year, net of tax	165	13	0
Unrealized foreign currency translation adjustment	(1,559)	1,816	4,668
Other Comprehensive (Loss) Income, Net Of Tax	(9,389)	2,806	12,136
Comprehensive Income	135,206	155,430	111,501
Related Tax Benefit (Expense) of Other Comprehensive (Loss) Income Included in Above Amounts:
Reclassification of loss on derivative instruments from other comprehensive income to net income	(951)	(770)	(967)
Pension and postretirement benefit plans:
Net actuarial (loss) gain arising during the year	6,442	837	(1,348)
Less reclassification of amounts from other comprehensive income to net income:
Amortization of prior service credit	1,413	1,416	1,447
Amortization of net actuarial loss	(2,044)	(2,045)	(3,584)
Pension and postretirement benefit plans	5,811	208	(3,485)
Unrealized holding gains on securities arising during the year	(65)	(6)	0
Total Net Tax Benefit (Expense) Included In Other Comprehensive (Loss) Income	$ 4,795	$ (568)	$ (4,452)

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Supplemental balance sheet and cash flow information

12 Months Ended

Dec. 31, 2011

Supplemental balance sheet and cash flow information [Abstract]

Supplemental balance sheet and cash flow information

Note 2: Supplemental balance sheet and cash flow information

Trade accounts receivable – Net trade accounts receivable was comprised of the following at December 31:

	2011			2010
Trade accounts receivable – gross	$	73,030		$	70,601
Allowances for uncollectible accounts		(4,007	)		(4,130	)
Trade accounts receivable – net	$	69,023		$	66,471

Changes in the allowances for uncollectible accounts were as follows:

	2011			2010			2009
Balance, beginning of year	$	4,130		$	4,991		$	5,930
Bad debt expense		4,033			4,686			5,842
Write-offs, net of recoveries		(4,156	)		(5,547	)		(6,781	)
Balance, end of year	$	4,007		$	4,130		$	4,991

Inventories and supplies – Inventories and supplies were comprised of the following at December 31:

	2011		2010
Raw materials	$	5,566	$	4,879
Semi-finished goods		8,273		8,393
Finished goods		5,301		5,083
Supplies, primarily production		2,903		3,305
Inventories and supplies	$	22,043	$	21,660

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

	December 31, 2011
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Corporate investments:
Money market securities	$	2,001	$	-	$	-	$	2,001
Funds held for customers:(1)
Money market securities		3		-		-		3
Canadian and provincial government securities		5,172		243		-		5,415
Marketable securities – funds held for customers		5,175		243		-		5,418
Total marketable securities	$	7,176	$	243	$	-	$	7,419

(1) Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2011, also included cash and cash equivalents of $38,976.

	December 31, 2010
	Cost		Gross unrealized gains		Gross unrealized losses		Fair value
Corporate investments:
Money market securities	$	2,029	$	-	$	-	$	2,029
Funds held for customers:(1)
Money market securities		5,078		-		-		5,078
Canadian and provincial government securities		5,148		23		-		5,171
Marketable securities – funds held for customers		10,226		23		-		10,249
Total marketable securities	$	12,255	$	23	$	-	$	12,278

(1) Funds held for customers, as reported on the consolidated balance sheet as of December 31, 2010, also included cash and cash equivalents of $25,471.

Expected maturities of available-for-sale securities as of December 31, 2011 were as follows:

	Fair value
Due in one year or less	$	2,108
Due in three to five years		1,353
Due after five years		3,958
Total marketable securities	$	7,419

Further information regarding the fair value of marketable securities can be found in Note 7: Fair value measurements.

Property, plant and equipment – Property, plant and equipment was comprised of the following at December 31:

	2011							2010
	Gross carrying amount		Accumulated depreciation			Net carrying amount		Gross carrying amount		Accumulated depreciation			Net carrying amount
Land and improvements	$	33,970	$	(8,848	)	$	25,122	$	33,981	$	(8,517	)	$	25,464
Buildings and improvements		122,262		(69,619	)		52,643		120,672		(65,359	)		55,313
Machinery and equipment		310,021		(274,375	)		35,646		303,987		(264,543	)		39,444
Property, plant and equipment – net	$	466,253	$	(352,842	)	$	113,411	$	458,640	$	(338,419	)	$	120,221

Intangibles – Intangibles were comprised of the following at December 31:

	2011							2010
	Gross carrying amount		Accumulated amortization			Net carrying amount		Gross carrying amount		Accumulated amortization			Net carrying amount
Indefinite-lived:
Trade name	$	19,100	$	-		$	19,100	$	19,100	$	-		$	19,100
Amortizable intangibles:
Internal-use software		410,905		(345,145	)		65,760		378,269		(314,267	)		64,002
Customer lists/relationships		52,542		(26,059	)		26,483		72,292		(43,660	)		28,632
Distributor contracts		30,900		(28,198	)		2,702		30,900		(26,396	)		4,504
Trade names		67,661		(25,958	)		41,703		59,361		(22,009	)		37,352
Other		9,566		(7,975	)		1,591		8,602		(7,080	)		1,522
Amortizable intangibles		571,574		(433,335	)		138,239		549,424		(413,412	)		136,012
Intangibles	$	590,674	$	(433,335	)	$	157,339	$	568,524	$	(413,412	)	$	155,112

As of December 31, 2011, we held a distributor contract asset which was recorded in conjunction with the acquisition of New England Business Service, Inc. (NEBS) in June 2004. This asset is being amortized over nine years and had a carrying value of $2,702 as of December 31, 2011 and $4,504 as of December 31, 2010. In general, the distributor contracts have an initial five-year term and may be renewed for successive five-year periods upon mutual agreement of both parties. At the time the fair value of the contracts was determined, an annual 90% contract retention rate was assumed based on historical experience. As of December 31, 2011, the average period remaining to the next contract renewal for our recognized distributor contracts was 2.3 years. Costs related to renewing or extending these contracts are not material and are expensed as incurred. We had no other intangible assets as of December 31, 2011 or 2010 which have legal, regulatory or contractual provisions that potentially limit our use of the asset.

Total amortization of intangibles was $51,796 in 2011, $52,969 in 2010 and $45,302 in 2009. Of these amounts, amortization of internal-use software was $31,562 in 2011, $29,121 in 2010 and $25,152 in 2009. Based on the intangibles in service as of December 31, 2011, estimated amortization expense for each of the next five years ending December 31 is as follows:

	Estimated amortization  expense
2012	$	37,121
2013		26,700
2014		15,027
2015		8,043
2016		5,713

We acquire internal-use software in the normal course of business. In conjunction with acquisitions (see Note 4), we also acquired certain other amortizable intangible assets. The following intangible assets were acquired during the years indicated:

	2011			2010			2009
	Amount		Weighted- average amortization  period	Amount		Weighted- average amortization period	Amount		Weighted- average amortization period
Internal-use software	$	33,169	4 years	$	36,442	4 years	$	24,911	3 years
Customer lists/relationships		12,600	8 years		16,690	1 year		13,943	7 years
Trade names		8,300	9 years		9,100	10 years		900	10 years
Other		1,000	4 years		-	-		-	-
Acquired intangibles	$	55,069	6 years	$	62,232	4 years	$	39,754	5 years

Intangible assets acquired via the acquisition of small business distributors, as described in Note 4, are not included in the table above as the assets are typically sold shortly after their purchase to Safeguard distributors and thus, are not held long enough to amortize.

Goodwill – Information regarding the acquisitions completed during the past three years can be found in Note 4. As ofDecember 31, 2011, goodwill was comprised of the following:

	Goodwill
Acquisition of NEBS in June 2004	$	472,082
Acquisition of Designer Checks in February 2000(1)		77,970
Acquisition of Hostopia.com Inc. in August 2008		68,555
Acquisition of Custom Direct, Inc. in April 2010		66,269
Acquisition of Banker's Dashboard in April 2011(1)		26,281
Acquisition of PsPrint in July 2011(1)		24,826
Acquisition of Abacus America, Inc. in July 2009		24,225
Acquisition of the Johnson Group in October 2006(1)		7,320
Acquisition of Direct Checks in December 1987		4,267
Acquisition of Logo Design Mojo in April 2008(1)		1,359
Acquisition of MerchEngines.com in July 2009(1)		1,140
Acquisition of Dots and Pixels, Inc. in July 2005		1,021
Acquisition of Cornerstone Customer Solutions in March 2010(1)		897
Acquisition of All Trade Computer Forms, Inc. in February 2007		786
Goodwill	$	776,998

(1) This goodwill is deductible for income tax purposes.

Changes in goodwill by reportable segment and in total were as follows:

	Small Business Services			Financial Services		Direct Checks		Total
Balance, December 31, 2009:
Goodwill, gross	$	596,429		$	-	$	82,237	$	678,666
Accumulated impairment charges		(20,000	)		-		-		(20,000	)
Goodwill, net of accumulated impairment charges		576,429			-		82,237		658,666
Acquisition of Custom Direct, Inc. (see Note 4)		-			-		66,269		66,269
Acquisition of Cornerstone Customer Solutions (see Note 4)		-			897		-		897
Currency translation adjustment		105			-		-		105
Balance, December 31, 2010:
Goodwill, gross		596,534			897		148,506		745,937
Accumulated impairment charges		(20,000	)		-		-		(20,000	)
Goodwill, net of accumulated impairment charges		576,534			897		148,506		725,937
Acquisition of Banker's Dashboard (see Note 4)		-			26,281		-		26,281
Acquisition of PsPrint (see Note 4)		24,826			-		-		24,826
Currency translation adjustment		(46	)		-		-		(46	)
Balance, December 31, 2011:
Goodwill, gross		621,314			27,178		148,506		796,998
Accumulated impairment charges		(20,000	)		-		-		(20,000	)
Goodwill, net of accumulated impairment charges	$	601,314		$	27,178	$	148,506	$	776,998

Other non-current assets – Other non-current assets as of December 31 were comprised of the following:

	2011		2010
Contract acquisition costs	$	55,076	$	57,476
Deferred advertising costs		15,599		15,832
Other		29,923		20,939
Other non-current assets	$	100,598	$	94,247

Changes in contract acquisition costs were as follows:

	2011			2010			2009
Balance, beginning of year	$	57,476		$	45,701		$	37,706
Additions(1)		14,624			31,520			32,545
Amortization		(16,659	)		(19,745	)		(24,550	)
Other		(365	)		-			-
Balance, end of year	$	55,076		$	57,476		$	45,701

(1) Contract acquisition costs are accrued upon contract execution. Cash payments made for contract acquisition costs were $12,190 in 2011, $22,087 in 2010 and $29,250 in 2009.

Accrued liabilities – Accrued liabilities as of December 31 were comprised of the following:

	2011		2010
Funds held for customers	$	43,829	$	35,475
Employee profit sharing/cash bonus and pension		23,783		34,109
Customer rebates		20,969		19,201
Contract acquisition costs due within one year		13,070		8,550
Interest		8,760		5,227
Restructuring due within one year (see Note 8)		5,946		6,435
Wages, including vacation		4,995		5,898
Other		28,746		29,139
Accrued liabilities	$	150,098	$	144,034

Supplemental cash flow disclosures – Cash payments for interest and income taxes were as follows for the years ended December 31:

	2011		2010		2009
Interest paid	$	42,542	$	44,054	$	43,513
Income taxes paid		60,861		70,246		56,060

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Fair value measurements (other financial instruments) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents - funds held for customers	$ 38,976	$ 25,471
Carrying (Reported) Amount, Fair Value Disclosure [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	28,687	17,383
Cash and cash equivalents - funds held for customers	38,976	25,471
Short-term debt	0	7,000
Long term debt, including portion due within one year	741,706	748,122
Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	28,687	17,383
Cash and cash equivalents - funds held for customers	38,976	25,471
Short-term debt	0	7,000
Long term debt, including portion due within one year	$ 738,157	$ 751,978

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Supplemental guarantor financial information (Condensed consolidating statements of income) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended																12 Months Ended
	Dec. 31, 2011		Sep. 30, 2011		Jun. 30, 2011		Mar. 31, 2011		Dec. 31, 2010		Sep. 30, 2010		Jun. 30, 2010		Mar. 31, 2010		Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Condensed Consolidating Statement of Income [Abstract]
Revenue	$ 366,426		$ 355,144		$ 346,274		$ 349,752		$ 351,488		$ 367,633		$ 347,996		$ 335,120		$ 1,417,596	$ 1,402,237	$ 1,344,195
Total cost of goods sold																	493,402	488,419	504,782
Gross Profit	236,512	[1]	232,506	[2]	225,587	[3]	229,589	[4]	224,805	[5]	246,200	[6]	226,056	[7]	216,757	[8]	924,194	913,818	839,413
Selling, general and administrative expense, including net restructuring charges																	652,050	632,274	623,924
Asset impairment charges	1,196																1,196	0	24,900
Net gain on sale of facility																	(110)	0	0
Operating Income																	271,058	281,544	190,589
(Loss) gain on early extinguishment of debt																	(6,995)	0	9,834
Interest expense																	(47,797)	(44,165)	(46,280)
Other (expense) income																	(182)	(1,430)	878
Income Before Income Taxes																	216,084	235,949	155,021
Income tax (benefit) provision																	71,489	82,554	55,656
(Loss) Income From Continuing Operations Before Equity In Earnings Of Consolidated Subsidiaries																	144,595	153,395	99,365
Equity In Earnings Of Consolidated Subsidiaries																	0	0	0
Income From Continuing Operations																	144,595	153,395	99,365
Net Loss From Discontinued Operations																	0	(771)	0
Net Income	39,831	[1]	36,735	[2]	35,473	[3]	32,556	[4]	34,826	[5]	50,800	[6]	33,614	[7]	33,384	[8]	144,595	152,624	99,365
Deluxe Corporation [Member]
Condensed Consolidating Statement of Income [Abstract]
Revenue																	9,409	9,145	24,184
Total cost of goods sold																	0	0	0
Gross Profit																	9,409	9,145	24,184
Selling, general and administrative expense, including net restructuring charges																	9,323	5,663	8,816
Asset impairment charges																			0
Operating Income																	86	3,482	15,368
(Loss) gain on early extinguishment of debt																	(6,995)		9,834
Interest expense																	(47,629)	(44,061)	(46,166)
Other (expense) income																	8,534	4,992	3,398
Income Before Income Taxes																	(46,004)	(35,587)	(17,566)
Income tax (benefit) provision																	(22,143)	(16,952)	(13,685)
(Loss) Income From Continuing Operations Before Equity In Earnings Of Consolidated Subsidiaries																	(23,861)	(18,635)	(3,881)
Equity In Earnings Of Consolidated Subsidiaries																	168,456	171,259	103,246
Income From Continuing Operations																	144,595	152,624	99,365
Net Loss From Discontinued Operations																	0	0	0
Net Income																	144,595	152,624	99,365
Guarantor Subsidiaries [Member]
Condensed Consolidating Statement of Income [Abstract]
Revenue																	1,276,898	1,270,480	1,209,475
Total cost of goods sold																	459,119	454,374	470,835
Gross Profit																	817,779	816,106	738,640
Selling, general and administrative expense, including net restructuring charges																	569,957	551,519	541,135
Asset impairment charges																			24,900
Operating Income																	246,736	264,587	172,605
(Loss) gain on early extinguishment of debt																			0
Interest expense																	(8,561)	(6,365)	(4,091)
Other (expense) income																	907	(58)	885
Income Before Income Taxes																	239,082	258,164	169,399
Income tax (benefit) provision																	86,489	92,691	68,203
(Loss) Income From Continuing Operations Before Equity In Earnings Of Consolidated Subsidiaries																	152,593	165,473	101,196
Equity In Earnings Of Consolidated Subsidiaries																	15,863	6,557	2,050
Income From Continuing Operations																	168,456	172,030	103,246
Net Loss From Discontinued Operations																	0	(771)	0
Net Income																	168,456	171,259	103,246
Non-Guarantor Subsidiaries [Member]
Condensed Consolidating Statement of Income [Abstract]
Revenue																	272,994	270,279	271,367
Total cost of goods sold																	159,589	162,473	167,635
Gross Profit																	113,405	107,806	103,732
Selling, general and administrative expense, including net restructuring charges																	89,169	94,331	101,116
Asset impairment charges																			0
Operating Income																	24,236	13,475	2,616
(Loss) gain on early extinguishment of debt																			0
Interest expense																	(1,190)	(930)	(768)
Other (expense) income																	(40)	827	1,340
Income Before Income Taxes																	23,006	13,372	3,188
Income tax (benefit) provision																	7,143	6,815	1,138
(Loss) Income From Continuing Operations Before Equity In Earnings Of Consolidated Subsidiaries																	15,863	6,557	2,050
Equity In Earnings Of Consolidated Subsidiaries																	0	0	0
Income From Continuing Operations																	15,863	6,557	2,050
Net Loss From Discontinued Operations																	0	0	0
Net Income																	15,863	6,557	2,050
Eliminations [Member]
Condensed Consolidating Statement of Income [Abstract]
Revenue																	(141,705)	(147,667)	(160,831)
Total cost of goods sold																	(125,306)	(128,428)	(133,688)
Gross Profit																	(16,399)	(19,239)	(27,143)
Selling, general and administrative expense, including net restructuring charges																	(16,399)	(19,239)	(27,143)
Asset impairment charges																			0
Operating Income																	0	0	0
(Loss) gain on early extinguishment of debt																			0
Interest expense																	9,583	7,191	4,745
Other (expense) income																	(9,583)	(7,191)	(4,745)
Income Before Income Taxes																	0	0	0
Income tax (benefit) provision																	0	0	0
(Loss) Income From Continuing Operations Before Equity In Earnings Of Consolidated Subsidiaries																	0	0	0
Equity In Earnings Of Consolidated Subsidiaries																	(184,319)	(177,816)	(105,296)
Income From Continuing Operations																	(184,319)	(177,816)	(105,296)
Net Loss From Discontinued Operations																	0	0	0
Net Income																	$ (184,319)	$ (177,816)	$ (105,296)

[1] 2011 fourth quarter results included net pre-tax restructuring charges of $3,045 related to our cost reduction initiatives and an asset impairment charge of $1,196 related to a vacant facility which is held for sale.

[2] 2011 third quarter results included net pre-tax restructuring charges of $4,598 related to our cost reduction initiatives.

[3] 2011 second quarter results include net pre-tax restructuring charges of $4,604 related to our cost reduction initiatives.

[4] 2011 first quarter results include net pre-tax restructuring charges of $1,474 related to our cost reduction initiatives.

[5] 2010 fourth quarter results include net pre-tax restructuring charges of $7,754 related to our cost reduction initiatives.

[6] 2010 third quarter results include a $1,482 reduction in income tax expense for discrete items, primarily adjustments to accruals for uncertain tax positions.

[7] 2010 second quarter results include net pre-tax restructuring charges of $2,093 related to our cost reduction initiatives. Results also include a $1,384 reduction in income tax expense for discrete items, primarily reductions in accruals for uncertain tax positions.

[8] 2010 first quarter results include tax expense of $3,662 for discrete items, primarily the impact of recent health care legislation on deferred income taxes.

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Pension and other postretirement benefits (obligations and funded status) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Apr. 30, 2009	Dec. 31, 2008
Amounts recognized in accumulated other comprehensive income (loss) [Abstract]
Amount recognized in accumulated other comprehensive loss, net of tax	$ (62,278)	$ (52,692)	$ (52,350)
Postretirement Benefit Plan [Member]
Change in benefit obligation [Roll Forward]
Benefit obligation, beginning of period	141,341	138,915
Interest cost	6,669	7,282	8,560
Actuarial loss - net	8,199	5,781
Benefits paid from the VEBA trust (see Note 11) and company funds	(10,940)	(11,363)
Medicare Part D reimbursements	856	726
Benefit obligation, end of period	146,125	141,341	138,915
Change in plan assets [Roll Forward]
Fair value of plan assets, beginning of period	101,310	90,320
Actual (loss) gain on plan assets	(688)	10,990
Fair value of plan assets, end of period	100,622	101,310	90,320
Funded status	(45,503)	(40,031)		(55,928)	(60,437)
Employees who retired after 1986 that are receiving medical benefits as a percentage of total retirees receiving medical benefits (in hundredths)	80.00%
Amounts recognized in Balance Sheet [Abstract]
Accrued liabilities	0	0
Other non-current liabilities	45,503	40,031
Amounts recognized in accumulated other comprehensive income (loss) [Abstract]
Unrecognized prior service credit	(20,697)	(24,440)
Unrecognized net actuarial loss	119,681	108,358
Tax effect	(37,021)	(31,334)
Amount recognized in accumulated other comprehensive loss, net of tax	61,963	52,584
Weighted-average amortization period, prior service credit (in years)	16
Average remaining life expectancy of inactive plan participants (in years)	17.9			18.8
Amounts recognized in accumulated comprehensive loss which are expected to be recognized in postretirement benefit expense in the next 12 months [Abstract]
Prior service credit	(3,055)
Net actuarial loss	5,870
Total	2,815
Pension Plans [Member]
Change in benefit obligation [Roll Forward]
Benefit obligation, beginning of period	3,508	3,455
Interest cost	164	179	262
Actuarial loss - net	332	198
Benefits paid from the VEBA trust (see Note 11) and company funds	(324)	(324)
Medicare Part D reimbursements	0	0
Benefit obligation, end of period	3,680	3,508	3,455
Change in plan assets [Roll Forward]
Fair value of plan assets, beginning of period	0	0
Actual (loss) gain on plan assets	0	0
Fair value of plan assets, end of period	0	0	0
Funded status	(3,680)	(3,508)
Amounts recognized in Balance Sheet [Abstract]
Accrued liabilities	324	324
Other non-current liabilities	3,356	3,184
Amounts recognized in accumulated other comprehensive income (loss) [Abstract]
Unrecognized prior service credit	0	0
Unrecognized net actuarial loss	493	161
Tax effect	(178)	(53)
Amount recognized in accumulated other comprehensive loss, net of tax	315	108
Amounts recognized in accumulated comprehensive loss which are expected to be recognized in postretirement benefit expense in the next 12 months [Abstract]
Prior service credit	0
Net actuarial loss	9
Total	$ 9

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SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED)

12 Months Ended

Dec. 31, 2011

SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED) [Abstract]

SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED)

 DELUXE CORPORATION

SUMMARIZED QUARTERLY FINANCIAL DATA (UNAUDITED)

(in thousands, except per share amounts)

	2011 Quarter Ended
	March 31(1)		June 30(2)		September 30(3)		December 31(4)
Revenue	$	349,752	$	346,274	$	355,144	$	366,426
Gross profit		229,589		225,587		232,506		236,512
Net income		32,556		35,473		36,735		39,831
Earnings per share:
Basic		0.63		0.69		0.72		0.78
Diluted		0.63		0.68		0.71		0.78
Cash dividends per share		0.25		0.25		0.25		0.25

	2010 Quarter Ended
	March 31(5)		June 30(6)		September 30(7)		December 31(8)
Revenue	$	335,120	$	347,996	$	367,633	$	351,488
Gross profit		216,757		226,056		246,200		224,805
Net income		33,384		33,614		50,800		34,826
Earnings per share:
Basic		0.65		0.65		0.99		0.68
Diluted		0.65		0.65		0.98		0.68
Cash dividends per share		0.25		0.25		0.25		0.25

(1) 2011 first quarter results included net pre-tax restructuring charges of $1,474 related to our cost reduction initiatives.

(2) 2011 second quarter results included net pre-tax restructuring charges of $4,604 related to our cost reduction initiatives.

(3)  2011 third quarter results included net pre-tax restructuring charges of $4,598 related to our cost reduction initiatives.

(4) 2011 fourth quarter results included net pre-tax restructuring charges of $3,045 related to our cost reduction initiatives and an asset impairment charge of $1,196 related to a vacant facility which is held for sale.

(5) 2010 first quarter results included tax expense of $3,662 for discrete items, primarily the impact of recent health care legislation on deferred income taxes.

(6) 2010 second quarter results included net pre-tax restructuring charges of $2,093 related to our cost reduction initiatives. Results also included a $1,384 reduction in income tax expense for discrete items, primarily reductions in accruals for uncertain tax positions.

(7) 2010 third quarter results included a $1,482 reduction in income tax expense for discrete items, primarily adjustments to accruals for uncertain tax positions.

(8) 2010 fourth quarter results included net pre-tax restructuring charges of $7,754 related to our cost reduction initiatives.

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Debt and leases (credit facility) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Debt and leases [Abstract]
Amounts drawn on credit facility	$ 0	$ 7,000
Credit facility, expiration date	March 2013
Commitment fees, minimum (in hundredths)	0.40%
Commitment fees, maximum (in hundredths)	0.50%
Weighted-average interest rate on amount outstanding (in hundredths)		5.25%
Ratio of EBITDA to interest expense	2 to 1
Credit facility availability [Abstract]
Credit facility commitment	200,000
Credit facility outstanding [Abstract]
Daily average amount outstanding	21,655	49,957	69,267
Weighted-average interest rate (in hundredths)	3.03%	3.20%	0.76%
Credit Facility [Member]
Credit facility availability [Abstract]
Credit facility commitment	200,000
Outstanding letters of credit	(8,551)
Net available for borrowing	$ 191,449

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Employee benefit plans (Tables)

12 Months Ended

Dec. 31, 2011

Employee benefit plans [Abstract]

Expense recognized for profit sharing, 401(k) and defined contribution plans

Expense recognized in the consolidated statements of income for these plans was as follows:

	2011		2010		2009
Profit sharing/cash bonus plans	$	16,361	$	18,500	$	22,751
Defined contribution pension plan		-		8,664		9,953
401(k) plan		6,226		5,636		6,312

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Pension and other postretirement benefits

12 Months Ended

Dec. 31, 2011

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

Pension and other postretirement benefits

Note 12: Pension and other postretirement benefits

We have historically provided certain health care benefits for a large number of retired U.S. employees. Employees hired prior to January 1, 2002 become eligible for benefits if they attain the appropriate years of service and age prior to retirement. Employees hired on January 1, 2002 or later are not eligible to participate in our retiree health care plan. In addition to our retiree health care plan, we also have a supplemental executive retirement plan (SERP) in the United States. Additionally, we had a pension plan that covered certain Canadian employees which was settled during 2009.

Effective April 30, 2009, we amended our postretirement benefit plan to decrease the minimum age for eligibility to receive the maximum available benefits from age 58 to age 51 and to decrease the service requirement for maximum retiree cost sharing from 30 years to 25 years. As a result of this amendment, the plan assets and liabilities were re-measured as of April 30, 2009, reducing the underfunded amount of the plan from $60,437 as of December 31, 2008 to $55,928 as of April 30, 2009. The reduction in the underfunded amount was primarily due to a change in the discount rate assumption from 6.6% as of December 31, 2008 to 7.25% as of April 30, 2009. The other actuarial assumptions were consistent with those utilized in our determination of the benefit obligation and funded status as of December 31, 2008. Prior to the April 30, 2009 plan amendment and re-measurement, unrecognized actuarial gains and losses were being amortized over the average remaining service period of plan participants, which was 8.2 years as of December 31, 2008. Because the plan amendment increased the number of participants currently eligible to receive the maximum available benefits, almost all of the plan participants were classified as inactive subsequent to the plan amendment. As such, actuarial gains and losses are required to be amortized over the average remaining life expectancy of inactive plan participants, which was 18.8 years as of April 30, 2009. This change resulted in a $5,208 decrease in postretirement benefit expense for 2009, as compared to the expense we had expected for 2009 prior to the plan amendments.

Obligations and funded status – The following tables summarize the change in benefit obligation, plan assets and funded status during 2011 and 2010:

	Postretirement benefit plan			Pension plan
Change in benefit obligation:
Benefit obligation, December 31, 2009	$	138,915		$	3,455
Interest cost		7,282			179
Actuarial loss – net		5,781			198
Benefits paid from the VEBA trust (see Note 11) and company funds		(11,363	)		(324	)
Medicare Part D reimbursements		726			-
Benefit obligation, December 31, 2010		141,341			3,508
Interest cost		6,669			164
Actuarial loss – net		8,199			332
Benefits paid from the VEBA trust (see Note 11) and company funds		(10,940	)		(324	)
Medicare Part D reimbursements		856			-
Benefit obligation, December 31, 2011	$	146,125		$	3,680
Change in plan assets:
Fair value of plan assets, December 31, 2009	$	90,320		$	-
Actual gain on plan assets		10,990			-
Fair value of plan assets, December 31, 2010		101,310			-
Actual loss on plan assets		(688	)		-
Fair value of plan assets, December 31, 2011	$	100,622		$	-
Funded status, December 31, 2010	$	(40,031	)	$	(3,508	)
Funded status, December 31, 2011	$	(45,503	)	$	(3,680	)

 

As of December 31, 2011 and 2010, the accumulated benefit obligation equaled the projected benefit obligation for the United States SERP plan.

Plan assets of our postretirement medical plan do not include the assets of the VEBA trust discussed in Note 11. Plan assets consist only of those assets invested in a trust established under section 401(h) of the Internal Revenue Code. These assets can be used only to pay retiree medical benefits for employees who retired after 1986, which represents 80% of the total number of retirees receiving medical benefits as of December 31, 2011. The assets of the VEBA trust may be used to pay medical and severance benefits for both active and retired employees.

Amounts recognized in the consolidated balance sheets as of December 31 were as follows:

	Postretirement benefit plan				Pension plan
	2011		2010		2011		2010
Accrued liabilities	$	-	$	-	$	324	$	324
Other non-current liabilities		45,503		40,031		3,356		3,184

Amounts included in accumulated other comprehensive loss that have not been recognized as components of postretirement benefit expense were as follows:

	Postretirement benefit plan						Pension plan
	2011			2010			2011			2010
Unrecognized prior service credit	$	(20,697	)	$	(24,440	)	$	-		$	-
Unrecognized net actuarial loss		119,681			108,358			493			161
Tax effect		(37,021	)		(31,334	)		(178	)		(53	)
Amount recognized in accumulated other comprehensive loss, net of tax	$	61,963		$	52,584		$	315		$	108

The unrecognized prior service credit for our postretirement benefit plan resulted from a 2003 curtailment and other plan amendments. These changes resulted in a reduction of the accumulated postretirement benefit obligation. This reduction was first used to reduce any existing unrecognized prior service cost, then to reduce any remaining unrecognized transition obligation. The excess is the unrecognized prior service credit. The prior service credit is being amortized on the straight-line basis over a weighted-average period of 16 years. Unrecognized actuarial gains and losses are being amortized over the average remaining life expectancy of inactive plan participants, which is currently 17.9 years. The unrecognized net actuarial loss for our postretirement benefit plan resulted from experience different from that assumed and from changes in assumptions.

Amounts included in accumulated other comprehensive loss as of December 31, 2011 which we expect to recognize in postretirement benefit expense during 2012 are as follows:

	Postretirement benefit plan			Pension plan
Prior service credit	$	(3,055	)	$	-
Net actuarial loss		5,870			9
Total	$	2,815		$	9

Net pension and postretirement benefit expense – Net pension and postretirement benefit expense for the years ended December 31 consisted of the following components:

	Postretirement benefit plan									Pension plans
	2011			2010			2009			2011		2010		2009
Interest cost	$	6,669		$	7,282		$	8,560		$	164	$	179	$	262
Expected return on plan assets		(7,851	)		(7,226	)		(5,919	)		-		-		(57	)
Amortization of prior service credit		(3,743	)		(3,742	)		(3,815	)		-		-		-
Amortization of net actuarial loss		5,415			5,406			8,383			-		-		9
Total periodic benefit expense		490			1,720			7,209			164		179		214
Settlement loss		-			-			-			-		-		402
Net periodic benefit expense	$	490		$	1,720		$	7,209		$	164	$	179	$	616

Actuarial assumptions – In measuring benefit obligations as of December 31, the following discount rate assumptions were used:

	Postretirement benefit plan						Pension plan
	2011			2010			2011			2010
Discount rate		4.2	%		4.9	%		4.2	%		4.9	%

The discount rate assumption is based on the rates of return on high-quality, fixed-income instruments currently available whose cash flows match the timing and amount of expected benefit payments. In determining the discount rate, we utilize the Aon Hewitt AA Above Median Curve and the Citigroup Pension Discount yield curves to discount each cash flow stream at an interest rate specifically applicable to the timing of each respective cash flow. The present value of each cash flow stream is aggregated and used to impute a weighted-average discount rate.

In measuring net periodic benefit expense for the years ended December 31, the following assumptions were used:

	Postretirement benefit plan									Pension plans
	2011			2010			2009			2011			2010			2009
Discount rate(1)		4.90	%		5.45	%		7.25	%		4.90	%		5.45	%		4.06% - 6.60	%
Expected return on plan assets		7.75	%		8.00	%		8.50	%		-			-			4.50	%

(1) For 2009, the rate presented for our postretirement benefit plan was used from April 30, 2009 through December 31, 2009, the period subsequent to the 2009 plan amendments. A discount rate of 6.60% was used for the period from January 1, 2009 through April 30, 2009.

In determining the expected long-term rate of return on plan assets, we utilize our historical returns and then adjust these returns for estimated inflation. Our inflation assumption is primarily based on analysis of historical inflation data.

In measuring the benefit obligation for our postretirement benefit plan, the following assumptions for health care cost trend rates were used:

	2011	2010	2009
Health care cost trend rate assumed for next year	7.50%	7.75%	8.00%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	5.00%	5.00%	5.00%
Year that the rate reaches the ultimate trend rate	2017	2017	2017

Assumed health care cost trend rates have a significant effect on the amounts reported for health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects:

	One- percentage- point increase		One- percentage- point decrease
Effect on total of service and interest cost	$	92	$	(87	)
Effect on benefit obligation		2,185		(2,069	)

Plan assets – The allocation of plan assets by asset category as of December 31 was as follows:

	Postretirement benefit  plan
	2011		2010
U.S. large capitalization equity securities		33%		34%
U.S. corporate debt securities		19%		10%
International equity securities		16%		18%
Government debt securities		14%		13%
Mortgage-backed securities		10%		14%
U.S. small and mid-capitalization equity securities		8%		8%
Other debt securities		-		3%
Total		100%		100%

Our postretirement benefit plan has assets that are intended to meet long-term obligations. In order to meet these obligations, we employ a total return investment approach which considers cash flow needs and balances long-term projected returns against expected asset risk, as measured using projected standard deviations. Risk tolerance is established through consideration of projected plan liabilities, the plan's funded status, projected liquidity needs and current corporate financial condition.

The target asset allocation percentages for our postretirement benefit plan are based on our liability and asset projections. The targeted allocation of plan assets is 33% large capitalization equity securities, 42% fixed income securities, 18% international equity securities and 7% small and mid-capitalization equity securities.

There were no significant transfers of plan assets between fair value measurement levels during 2011. Information regarding fair value measurements of plan assets as of December 31, 2011 was as follows:

			Fair value measurements using
	Fair value as of December 31, 2011		Quoted prices in active markets for identical assets (Level 1)			Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
U.S. large capitalization equity securities	$	33,613	$	-		$	33,613	$	-
U.S. corporate debt securities		19,319		5,655			13,664		-
International equity securities		16,023		15,615			408		-
Government debt securities		14,151		12,006			2,145		-
Mortgage-backed securities		9,698		2,193			7,505		-
U.S. small and mid-capitalization equity securities		7,803		7,606			197		-
Other debt securities		15		(95	)		110		-
Total	$	100,622	$	42,980		$	57,642	$	-

Information regarding fair value measurements of plan assets as of December 31, 2010 was as follows:

			Fair value measurements using
	Fair value as of December 31, 2010		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
U.S. large capitalization equity securities	$	34,332	$	16,554	$	17,778	$	-
International equity securities		18,357		18,027		330		-
Mortgage-backed securities		14,113		-		14,113		-
Government debt securities		13,531		7,544		5,987		-
U.S. corporate debt securities		9,725		8,611		1,114		-
U.S. small and mid-capitalization equity securities		8,153		8,064		89		-
Other debt securities		3,099		2,825		274		-
Total	$	101,310	$	61,625	$	39,685	$	-

The information as of December 31, 2010 shown in the table above contains corrections to the classifications within the fair value hierarchy reported in the prior year.

The fair value of mortgage-backed securities is estimated using pricing models with inputs derived principally from observable market data. The fair value of our other Level 2 debt securities is typically estimated using pricing models, quoted prices of securities with similar characteristics or discounted cash flow calculations that maximize observable inputs, such as current yields for similar instruments adjusted for trades and other pertinent market information.

Cash flows – While we are not contractually obligated to make contributions to the assets of our postretirement benefit plan, we made contributions of $7,000 to the plan in January 2012. We may make additional contributions to plan assets during 2012, although the amount and timing of any such contributions has not yet been determined.

We have fully funded the United States SERP obligation with investments in company-owned life insurance policies. The cash surrender value of these policies is included in long-term investments in the consolidated balance sheets and totaled $6,619 as of December 31, 2011 and $6,291 as of December 31, 2010.

The following benefit payments are expected to be paid during the years indicated:

	Postretirement benefit plan						Pension plan
	Gross benefit payments		Expected Medicare subsidy		Net benefit payments		Gross benefit payments
2012	$	12,000	$	1,200	$	10,800	$	320
2013		12,600		1,200		11,400		310
2014		13,100		1,300		11,800		300
2015		13,400		1,400		12,000		300
2016		13,300		1,500		11,800		290
2017 – 2021		61,600		7,500		54,100		1,330