þ
|
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended
December 31, 2013
|
Minnesota
(State or other jurisdiction of incorporation or organization)
|
41-0216800
(I.R.S. Employer Identification No.)
|
3680 Victoria St. N., Shoreview, Minnesota
(Address of principal executive offices)
|
55126-2966
(Zip Code)
|
Common Stock, par value $1.00 per share
(Title of each class)
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New York Stock Exchange
(Name of each exchange on which registered)
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Large accelerated filer
þ
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Item
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Page
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3
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12
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19
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19
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19
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19
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19
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21
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22
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43
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45
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100
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|||
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100
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|||
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100
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|||
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100
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|||
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101
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|||
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101
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101
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101
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102
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106
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|||
|
107
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|
|
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2013
|
|
2012
|
|
2011
|
|||
Checks, including contract settlements
|
|
55.8
|
%
|
|
58.7
|
%
|
|
61.5
|
%
|
Marketing solutions, including services
|
|
15.7
|
%
|
|
13.6
|
%
|
|
10.6
|
%
|
Forms
|
|
12.6
|
%
|
|
13.2
|
%
|
|
13.8
|
%
|
Accessories and other products
|
|
9.9
|
%
|
|
9.2
|
%
|
|
9.0
|
%
|
Other services
|
|
6.0
|
%
|
|
5.3
|
%
|
|
5.1
|
%
|
Total revenue
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
•
|
Effectively acquire and retain customers by optimizing each of our sales channels;
|
•
|
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.
|
•
|
Optimize core check revenue streams and acquire new clients;
|
•
|
Expand sales of higher growth marketing solutions and other services that differentiate us from the competition; and
|
•
|
Continue to optimize our cost and expense structure.
|
•
|
Marketing solutions – a variety of strategic marketing solutions which help financial institutions acquire new customers, deepen existing customer relationships and retain customers, including Cornerstone Solutions
SM
; the service offerings of Acton Marketing; Destination Rewards® proprietary customer loyalty, incentive and engagement solutions; analytics-driven direct marketing programs; and SwitchAgent
SM
, a proprietary service allowing consumers to easily switch from one financial institution to another.
|
•
|
Banker's Dashboard® – online financial management tools that provide financial institutions with a comprehensive daily view of their financial picture.
|
•
|
Deluxe Provent
SM
– a comprehensive suite of identity protection services.
|
•
|
Deluxe Detect® – an account applicant screening tool.
|
•
|
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.
|
Name
|
Age
|
Present Position
|
Executive Officer Since
|
Anthony Scarfone
|
52
|
Senior Vice President, General Counsel and Secretary
|
2000
|
Terry Peterson
|
49
|
Senior Vice President, Chief Financial Officer
|
2005
|
Lee Schram
|
52
|
Chief Executive Officer
|
2006
|
Pete Godich
|
49
|
Senior Vice President, Fulfillment
|
2008
|
Julie Loosbrock
|
54
|
Senior Vice President, Human Resources
|
2008
|
Malcolm McRoberts
|
49
|
Senior Vice President, Small Business Services
|
2008
|
John Filby
|
51
|
Senior Vice President, Financial Services
|
2012
|
Jeffrey Bata
|
48
|
Vice President, Controller and Chief Accounting Officer
|
2012
|
Tracey Engelhardt
|
49
|
Vice President, Direct-to-Consumer
|
2012
|
Michael Mathews
|
41
|
Vice-President, Chief Information Officer
|
2013
|
Amanda Brinkman
|
34
|
Vice-President, Chief Brand and Communications Officer
|
2014
|
•
|
the failure to anticipate and overcome obstacles to achieving our goals;
|
•
|
the decision to forgo intended investments because the investments are more costly than we anticipated or because we are unable to devote the necessary operational or financial resources;
|
•
|
the inability to promote, strengthen and protect our brand;
|
•
|
the failure to acquire new customers, retain our current customers and sell more products and services to current and new customers;
|
•
|
unanticipated changes in our business, markets, industry or the competitive landscape;
|
•
|
the failure to generate profitable revenue growth; and
|
•
|
challenging general economic conditions.
|
|
|
|
|
Stock price
|
||||||||||||
|
|
Dividend
|
|
High
|
|
Low
|
|
Close
|
||||||||
2013
|
|
|
|
|
|
|
|
|
||||||||
Quarter 4
|
|
$
|
0.25
|
|
|
$
|
52.69
|
|
|
$
|
41.61
|
|
|
$
|
52.19
|
|
Quarter 3
|
|
0.25
|
|
|
43.49
|
|
|
34.67
|
|
|
41.66
|
|
||||
Quarter 2
|
|
0.25
|
|
|
42.43
|
|
|
33.37
|
|
|
34.65
|
|
||||
Quarter 1
|
|
0.25
|
|
|
42.50
|
|
|
32.32
|
|
|
41.40
|
|
||||
2012
|
|
|
|
|
|
|
|
|
||||||||
Quarter 4
|
|
$
|
0.25
|
|
|
$
|
32.58
|
|
|
$
|
28.33
|
|
|
$
|
32.24
|
|
Quarter 3
|
|
0.25
|
|
|
32.39
|
|
|
25.02
|
|
|
30.56
|
|
||||
Quarter 2
|
|
0.25
|
|
|
25.25
|
|
|
21.40
|
|
|
24.94
|
|
||||
Quarter 1
|
|
0.25
|
|
|
26.90
|
|
|
22.53
|
|
|
23.42
|
|
Period
|
|
Total number of shares (or units) purchased
|
|
Average price paid per share (or unit)
|
|
Total number of shares (or units) purchased as part of publicly announced plans or programs
|
|
Maximum number (or approximate dollar value) of shares (or units) that may yet be purchased under the plans or programs
|
|||||
October 1, 2013 - October 31, 2013
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
3,396,828
|
|
November 1, 2013 - November 30, 2013
|
|
104,584
|
|
|
47.81
|
|
|
104,584
|
|
|
3,292,244
|
|
|
December 1, 2013 - December 31, 2013
|
|
196,782
|
|
|
50.82
|
|
|
196,782
|
|
|
3,095,462
|
|
|
Total
|
|
301,366
|
|
|
49.77
|
|
|
301,366
|
|
|
3,095,462
|
|
(dollars and orders in thousands, except per share and per order amounts)
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
Statement of Income Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue
|
|
$
|
1,584,824
|
|
|
$
|
1,514,917
|
|
|
$
|
1,417,596
|
|
|
$
|
1,402,237
|
|
|
$
|
1,344,195
|
|
As a percentage of total revenue:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross profit
|
|
64.6
|
%
|
|
65.4
|
%
|
|
65.2
|
%
|
|
65.2
|
%
|
|
62.4
|
%
|
|||||
Selling, general and administrative expense
|
|
43.6
|
%
|
|
44.9
|
%
|
|
45.2
|
%
|
|
44.5
|
%
|
|
45.9
|
%
|
|||||
Operating income
|
|
20.1
|
%
|
|
19.9
|
%
|
|
19.1
|
%
|
|
20.1
|
%
|
|
14.2
|
%
|
|||||
Operating income
|
|
$
|
317,914
|
|
|
$
|
302,028
|
|
|
$
|
271,058
|
|
|
$
|
281,544
|
|
|
$
|
190,589
|
|
Income from continuing operations:
|
|
186,652
|
|
|
170,492
|
|
|
144,595
|
|
|
153,395
|
|
|
99,365
|
|
|||||
Per share - basic
|
|
3.68
|
|
|
3.33
|
|
|
2.82
|
|
|
2.98
|
|
|
1.94
|
|
|||||
Per share - diluted
|
|
3.65
|
|
|
3.32
|
|
|
2.80
|
|
|
2.97
|
|
|
1.94
|
|
|||||
Cash dividends per share
|
|
1.00
|
|
|
1.00
|
|
|
1.00
|
|
|
1.00
|
|
|
1.00
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
121,089
|
|
|
$
|
45,435
|
|
|
$
|
28,687
|
|
|
$
|
17,383
|
|
|
$
|
12,789
|
|
Return on average assets
(1)
|
|
12.5
|
%
|
|
12.2
|
%
|
|
10.7
|
%
|
|
12.1
|
%
|
|
8.2
|
%
|
|||||
Total assets
|
|
$
|
1,569,529
|
|
|
$
|
1,412,440
|
|
|
$
|
1,388,809
|
|
|
$
|
1,308,691
|
|
|
$
|
1,211,210
|
|
Long-term obligations
(2)
|
|
640,704
|
|
|
652,581
|
|
|
741,706
|
|
|
748,122
|
|
|
742,753
|
|
|||||
Total debt
(3)
|
|
640,704
|
|
|
652,581
|
|
|
741,706
|
|
|
755,122
|
|
|
768,753
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Statement of Cash Flows Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities of continuing operations
|
|
$
|
261,502
|
|
|
$
|
244,077
|
|
|
$
|
235,367
|
|
|
$
|
212,615
|
|
|
$
|
206,438
|
|
Net cash used by investing activities of continuing operations
|
|
(101,050
|
)
|
|
(68,513
|
)
|
|
(131,785
|
)
|
|
(136,170
|
)
|
|
(81,788
|
)
|
|||||
Net cash used by financing activities of continuing operations
|
|
(82,297
|
)
|
|
(159,510
|
)
|
|
(91,702
|
)
|
|
(72,541
|
)
|
|
(128,545
|
)
|
|||||
Purchases of capital assets
|
|
(37,459
|
)
|
|
(35,193
|
)
|
|
(35,506
|
)
|
|
(43,932
|
)
|
|
(44,266
|
)
|
|||||
Payments for acquisitions, net of cash acquired
|
|
(69,709
|
)
|
|
(34,172
|
)
|
|
(85,641
|
)
|
|
(98,621
|
)
|
|
(30,825
|
)
|
|||||
Payments for common shares repurchased
|
|
(48,798
|
)
|
|
(27,155
|
)
|
|
(23,620
|
)
|
|
(2,999
|
)
|
|
(1,319
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Data (continuing operations):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Orders
(4)
|
|
52,584
|
|
|
53,216
|
|
|
54,348
|
|
|
56,736
|
|
|
59,174
|
|
|||||
Revenue per order
(4)
|
|
$
|
30.14
|
|
|
$
|
28.47
|
|
|
$
|
26.08
|
|
|
$
|
24.72
|
|
|
$
|
22.72
|
|
Number of employees
|
|
5,575
|
|
|
5,476
|
|
|
5,565
|
|
|
5,765
|
|
|
6,089
|
|
|||||
Number of printing/fulfillment facilities
|
|
14
|
|
|
14
|
|
|
16
|
|
|
15
|
|
|
14
|
|
|||||
Number of call center facilities
|
|
16
|
|
|
13
|
|
|
13
|
|
|
14
|
|
|
12
|
|
•
|
Effectively acquire and retain customers by optimizing each of our sales channels;
|
•
|
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.
|
•
|
Optimize core check revenue streams and acquire new clients;
|
•
|
Expand sales of higher growth marketing solutions and other services that differentiate us from the competition; and
|
•
|
Continue to optimize our cost and expense structure.
|
•
|
Marketing solutions – a variety of strategic marketing solutions which help financial institutions acquire new customers, deepen existing customer relationships and retain customers, including Cornerstone Solutions
SM
; the service offerings of Acton Marketing; Destination Rewards® proprietary customer loyalty, incentive and engagement solutions; analytics-driven direct marketing programs; and SwitchAgent
SM
, a proprietary service allowing consumers to easily switch from one financial institution to another.
|
•
|
Banker's Dashboard® – online financial management tools that provide financial institutions with a comprehensive daily view of their financial picture.
|
•
|
Deluxe Provent
SM
– a comprehensive suite of identity protection services.
|
•
|
Deluxe Detect® – an account applicant screening tool.
|
•
|
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.
|
|
|
|
|
|
|
|
|
Change
|
||||||||||
(in thousands, except per order amounts)
|
|
2013
|
|
2012
|
|
2011
|
|
2013 vs. 2012
|
|
2012 vs. 2011
|
||||||||
Total revenue
|
|
$
|
1,584,824
|
|
|
$
|
1,514,917
|
|
|
$
|
1,417,596
|
|
|
4.6
|
%
|
|
6.9
|
%
|
Orders
|
|
52,584
|
|
|
53,216
|
|
|
54,348
|
|
|
(1.2
|
%)
|
|
(2.1
|
%)
|
|||
Revenue per order
|
|
$
|
30.14
|
|
|
$
|
28.47
|
|
|
$
|
26.08
|
|
|
5.9
|
%
|
|
9.2
|
%
|
|
|
|
|
|
|
|
|
Change
|
|||||||
|
|
2013
|
|
2012
|
|
2011
|
|
2013 vs. 2012
|
|
2012 vs. 2011
|
|||||
Checks, including contract settlements
|
|
55.8
|
%
|
|
58.7
|
%
|
|
61.5
|
%
|
|
(2.9) pt.
|
|
|
(2.8) pt.
|
|
Marketing solutions, including services
|
|
15.7
|
%
|
|
13.6
|
%
|
|
10.6
|
%
|
|
2.1 pt.
|
|
|
3.0 pt.
|
|
Forms
|
|
12.6
|
%
|
|
13.2
|
%
|
|
13.8
|
%
|
|
(0.6) pt.
|
|
|
(0.6) pt.
|
|
Accessories and other products
|
|
9.9
|
%
|
|
9.2
|
%
|
|
9.0
|
%
|
|
0.7 pt.
|
|
|
0.2 pt.
|
|
Other services
|
|
6.0
|
%
|
|
5.3
|
%
|
|
5.1
|
%
|
|
0.7 pt.
|
|
|
0.2 pt.
|
|
Total revenue
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
—
|
|
|
—
|
|
|
|
|
|
Change
|
||||||||||||||
(in thousands)
|
|
2013
|
|
2012
|
|
2011
|
|
2013 vs. 2012
|
|
2012 vs. 2011
|
||||||||
Gross profit
|
|
$
|
1,023,708
|
|
|
$
|
990,542
|
|
|
$
|
924,194
|
|
|
3.3
|
%
|
|
7.2
|
%
|
Gross margin
|
|
64.6
|
%
|
|
65.4
|
%
|
|
65.2
|
%
|
|
(0.8) pt.
|
|
|
0.2 pt.
|
|
|
|
|
|
Change
|
||||||||||||||
(in thousands)
|
|
2013
|
|
2012
|
|
2011
|
|
2013 vs. 2012
|
|
2012 vs. 2011
|
||||||||
SG&A expense
|
|
$
|
691,359
|
|
|
$
|
680,460
|
|
|
$
|
640,307
|
|
|
1.6
|
%
|
|
6.3
|
%
|
SG&A expense as a percentage of total revenue
|
|
43.6
|
%
|
|
44.9
|
%
|
|
45.2
|
%
|
|
(1.3) pt.
|
|
|
(0.3) pt.
|
|
|
|
|
|
Change
|
||||||||||||||||
(in thousands)
|
|
2013
|
|
2012
|
|
2011
|
|
2013 vs. 2012
|
|
2012 vs. 2011
|
||||||||||
Net restructuring charges
|
|
$
|
9,435
|
|
|
$
|
7,926
|
|
|
$
|
11,743
|
|
|
$
|
1,509
|
|
|
$
|
(3,817
|
)
|
|
|
|
|
Change
|
||||||||||||||||
(in thousands)
|
|
2013
|
|
2012
|
|
2011
|
|
2013 vs. 2012
|
|
2012 vs. 2011
|
||||||||||
Asset impairment charge
|
|
$
|
5,000
|
|
|
$
|
—
|
|
|
$
|
1,196
|
|
|
$
|
5,000
|
|
|
$
|
(1,196
|
)
|
|
|
|
|
Change
|
||||||||||||||||
(in thousands)
|
|
2013
|
|
2012
|
|
2011
|
|
2013 vs. 2012
|
|
2012 vs. 2011
|
||||||||||
Loss on early debt extinguishment
|
|
$
|
—
|
|
|
$
|
5,258
|
|
|
$
|
6,995
|
|
|
$
|
(5,258
|
)
|
|
$
|
(1,737
|
)
|
|
|
|
|
Change
|
||||||||||||||
(in thousands)
|
|
2013
|
|
2012
|
|
2011
|
|
2013 vs. 2012
|
|
2012 vs. 2011
|
||||||||
Interest expense
|
|
$
|
38,301
|
|
|
$
|
46,847
|
|
|
$
|
47,797
|
|
|
(18.2
|
%)
|
|
(2.0
|
%)
|
Weighted-average debt outstanding
|
|
654,751
|
|
|
742,534
|
|
|
760,798
|
|
|
(11.8
|
%)
|
|
(2.4
|
%)
|
|||
Weighted-average interest rate
|
|
5.32
|
%
|
|
5.73
|
%
|
|
5.63
|
%
|
|
(0.41) pt.
|
|
|
0.10 pt.
|
|
|
|
|
|
Change
|
||||||||||||||
(in thousands)
|
|
2013
|
|
2012
|
|
2011
|
|
2013 vs. 2012
|
|
2012 vs. 2011
|
||||||||
Income tax provision
|
|
$
|
94,407
|
|
|
$
|
80,261
|
|
|
$
|
71,489
|
|
|
17.6
|
%
|
|
12.3
|
%
|
Effective tax rate
|
|
33.6
|
%
|
|
32.0
|
%
|
|
33.1
|
%
|
|
1.6 pt.
|
|
|
(1.1) pt.
|
|
(dollars in thousands)
|
|
2013
|
|
2012
|
|
2011
|
||||||
Severance accruals
|
|
$
|
7,495
|
|
|
$
|
7,619
|
|
|
$
|
8,826
|
|
Severance reversals
|
|
(805
|
)
|
|
(1,862
|
)
|
|
(1,737
|
)
|
|||
Operating lease obligations
|
|
216
|
|
|
396
|
|
|
52
|
|
|||
Operating lease obligations reversals
|
|
(157
|
)
|
|
—
|
|
|
(6
|
)
|
|||
Net restructuring accruals
|
|
6,749
|
|
|
6,153
|
|
|
7,135
|
|
|||
Other costs
|
|
4,157
|
|
|
4,581
|
|
|
6,586
|
|
|||
Net restructuring charges
|
|
$
|
10,906
|
|
|
$
|
10,734
|
|
|
$
|
13,721
|
|
|
|
|
|
|
|
|
||||||
Number of employees included in severance accruals
|
|
230
|
|
|
395
|
|
|
400
|
|
|
|
|
|
|
|
|
|
Change
|
||||||||||
(in thousands)
|
|
2013
|
|
2012
|
|
2011
|
|
2013 vs. 2012
|
|
2012 vs. 2011
|
||||||||
Total revenue
|
|
$
|
1,050,250
|
|
|
$
|
961,631
|
|
|
$
|
846,449
|
|
|
9.2
|
%
|
|
13.6
|
%
|
Operating income
|
|
175,888
|
|
|
160,363
|
|
|
145,219
|
|
|
9.7
|
%
|
|
10.4
|
%
|
|||
Operating margin
|
|
16.7
|
%
|
|
16.7
|
%
|
|
17.2
|
%
|
|
—
|
|
|
(0.5) pt.
|
|
|
|
|
|
|
|
|
|
Change
|
||||||||||
(in thousands)
|
|
2013
|
|
2012
|
|
2011
|
|
2013 vs. 2012
|
|
2012 vs. 2011
|
||||||||
Total revenue
|
|
$
|
343,160
|
|
|
$
|
341,135
|
|
|
$
|
342,382
|
|
|
0.6
|
%
|
|
(0.4
|
%)
|
Operating income
|
|
82,343
|
|
|
77,728
|
|
|
59,804
|
|
|
5.9
|
%
|
|
30.0
|
%
|
|||
Operating margin
|
|
24.0
|
%
|
|
22.8
|
%
|
|
17.5
|
%
|
|
1.2 pt.
|
|
|
5.3 pt.
|
|
|
|
|
|
|
|
|
|
Change
|
||||||||||
(in thousands)
|
|
2013
|
|
2012
|
|
2011
|
|
2013 vs. 2012
|
|
2012 vs. 2011
|
||||||||
Total revenue
|
|
$
|
191,414
|
|
|
$
|
212,151
|
|
|
$
|
228,765
|
|
|
(9.8
|
%)
|
|
(7.3
|
%)
|
Operating income
|
|
59,683
|
|
|
63,937
|
|
|
66,035
|
|
|
(6.7
|
%)
|
|
(3.2
|
%)
|
|||
Operating margin
|
|
31.2
|
%
|
|
30.1
|
%
|
|
28.9
|
%
|
|
1.1 pt.
|
|
|
1.2 pt.
|
|
|
|
|
|
|
|
|
|
Change
|
||||||||||||
(in thousands)
|
|
2013
|
|
2012
|
|
2011
|
|
2013 vs. 2012
|
|
2012 vs. 2011
|
||||||||||
Net cash provided by operating activities
|
|
$
|
261,502
|
|
|
$
|
244,077
|
|
|
$
|
235,367
|
|
|
$
|
17,425
|
|
|
$
|
8,710
|
|
Net cash used by investing activities
|
|
(101,050
|
)
|
|
(68,513
|
)
|
|
(131,785
|
)
|
|
(32,537
|
)
|
|
63,272
|
|
|||||
Net cash used by financing activities
|
|
(82,297
|
)
|
|
(159,510
|
)
|
|
(91,702
|
)
|
|
77,213
|
|
|
(67,808
|
)
|
|||||
Effect of exchange rate change on cash
|
|
(2,501
|
)
|
|
694
|
|
|
(576
|
)
|
|
(3,195
|
)
|
|
1,270
|
|
|||||
Net change in cash and cash equivalents
|
|
$
|
75,654
|
|
|
$
|
16,748
|
|
|
$
|
11,304
|
|
|
$
|
58,906
|
|
|
$
|
5,444
|
|
|
|
|
|
|
|
|
|
Change
|
||||||||||||
(in thousands)
|
|
2013
|
|
2012
|
|
2011
|
|
2013 vs. 2012
|
|
2012 vs. 2011
|
||||||||||
Income tax payments
|
|
$
|
90,322
|
|
|
$
|
83,875
|
|
|
$
|
60,861
|
|
|
$
|
6,447
|
|
|
$
|
23,014
|
|
Interest payments
|
|
38,676
|
|
|
46,514
|
|
|
42,542
|
|
|
(7,838
|
)
|
|
3,972
|
|
|||||
Employee profit sharing/cash bonus payments
(1)
|
|
30,346
|
|
|
18,805
|
|
|
27,165
|
|
|
11,541
|
|
|
(8,360
|
)
|
|||||
Funding of medical benefits
(2)
|
|
29,861
|
|
|
41,670
|
|
|
36,792
|
|
|
(11,809
|
)
|
|
4,878
|
|
|||||
Contract acquisition payments
|
|
12,133
|
|
|
16,952
|
|
|
12,190
|
|
|
(4,819
|
)
|
|
4,762
|
|
|||||
Severance payments
|
|
5,451
|
|
|
7,183
|
|
|
7,484
|
|
|
(1,732
|
)
|
|
(301
|
)
|
|
|
|
|
|
|
|
|
Change
|
||||||||||||
(in thousands)
|
|
2013
|
|
2012
|
|
2011
|
|
2013 vs. 2012
|
|
2012 vs. 2011
|
||||||||||
Proceeds from issuing long-term debt
|
|
$
|
—
|
|
|
$
|
200,000
|
|
|
$
|
200,000
|
|
|
$
|
(200,000
|
)
|
|
$
|
—
|
|
Proceeds from issuing shares under employee plans
|
|
15,948
|
|
|
12,320
|
|
|
7,671
|
|
|
3,628
|
|
|
4,649
|
|
|||||
Proceeds from company-owned life insurance policies
|
|
4,599
|
|
|
—
|
|
|
—
|
|
|
4,599
|
|
|
—
|
|
|
|
|
|
|
|
|
|
Change
|
||||||||||||
(in thousands)
|
|
2013
|
|
2012
|
|
2011
|
|
2013 vs. 2012
|
|
2012 vs. 2011
|
||||||||||
Payments for acquisitions, net of cash acquired
|
|
$
|
69,709
|
|
|
$
|
34,172
|
|
|
$
|
85,641
|
|
|
$
|
35,537
|
|
|
$
|
(51,469
|
)
|
Cash dividends paid to shareholders
|
|
50,711
|
|
|
50,918
|
|
|
51,126
|
|
|
(207
|
)
|
|
(208
|
)
|
|||||
Payments for common shares repurchased
|
|
48,798
|
|
|
27,155
|
|
|
23,620
|
|
|
21,643
|
|
|
3,535
|
|
|||||
Purchases of capital assets
|
|
37,459
|
|
|
35,193
|
|
|
35,506
|
|
|
2,266
|
|
|
(313
|
)
|
|||||
Payments on long-term debt, including costs of debt reacquisition
|
|
1,555
|
|
|
288,938
|
|
|
215,030
|
|
|
(287,383
|
)
|
|
73,908
|
|
|||||
Loans to distributors
|
|
778
|
|
|
3,287
|
|
|
5,175
|
|
|
(2,509
|
)
|
|
(1,888
|
)
|
|||||
Net payments on short-term debt
|
|
—
|
|
|
—
|
|
|
7,000
|
|
|
—
|
|
|
(7,000
|
)
|
|||||
Payments on company-owned life insurance policies
|
|
—
|
|
|
—
|
|
|
6,383
|
|
|
—
|
|
|
(6,383
|
)
|
|
|
December 31, 2013
|
|
December 31, 2012
|
|
|
||||||||||||
(in thousands)
|
|
Amount
|
|
Weighted-
average interest rate
|
|
Amount
|
|
Weighted-
average interest rate
|
|
Change
|
||||||||
Fixed interest rate
|
|
$
|
257,408
|
|
|
6.6
|
%
|
|
$
|
255,478
|
|
|
6.6
|
%
|
|
$
|
1,930
|
|
Floating interest rate
|
|
383,296
|
|
|
4.5
|
%
|
|
397,103
|
|
|
4.5
|
%
|
|
(13,807
|
)
|
|||
Total debt
|
|
640,704
|
|
|
5.3
|
%
|
|
652,581
|
|
|
5.3
|
%
|
|
(11,877
|
)
|
|||
Shareholders’ equity
|
|
550,457
|
|
|
|
|
|
432,935
|
|
|
|
|
|
117,522
|
|
|||
Total capital
|
|
$
|
1,191,161
|
|
|
|
|
|
$
|
1,085,516
|
|
|
|
|
|
$
|
105,645
|
|
(in thousands)
|
|
2011
|
||
Daily average amount outstanding
|
|
$
|
21,655
|
|
Weighted-average interest rate
|
|
3.03
|
%
|
(in thousands)
|
Total available
|
||
Credit facility commitment
|
$
|
200,000
|
|
Outstanding letters of credit
(1)
|
(8,415
|
)
|
|
Net available for borrowing as of December 31, 2013
|
$
|
191,585
|
|
(in thousands)
|
|
Total
|
|
2014
|
|
2015 and 2016
|
|
2017 and 2018
|
|
2019 and thereafter
|
||||||||||
Long-term debt and related interest
|
|
$
|
818,933
|
|
|
$
|
289,388
|
|
|
$
|
52,000
|
|
|
$
|
52,000
|
|
|
$
|
425,545
|
|
Lease obligations
|
|
21,293
|
|
|
8,839
|
|
|
12,083
|
|
|
371
|
|
|
—
|
|
|||||
Purchase obligations
|
|
29,023
|
|
|
17,835
|
|
|
11,114
|
|
|
74
|
|
|
—
|
|
|||||
Other non-current liabilities
|
|
21,792
|
|
|
7,667
|
|
|
8,857
|
|
|
1,615
|
|
|
3,653
|
|
|||||
Total contractual obligations
|
|
$
|
891,041
|
|
|
$
|
323,729
|
|
|
$
|
84,054
|
|
|
$
|
54,060
|
|
|
$
|
429,198
|
|
•
|
Profit sharing, cash bonus and long-term incentive payments – Amounts payable under our performance-based compensation arrangements are dependent on our future operating performance. As of
December 31, 2013
, accrued liabilities included
$29.5 million
and other non-current liabilities included
$6.1 million
for performance-based compensation accruals.
|
•
|
Fair value of interest rate swaps – As of
December 31, 2013
, other non-current liabilities included
$16.2 million
for the fair value of interest rate swaps related to our long-term debt due in 2020.
|
•
|
Deferred income taxes of businesses held for sale – As of
December 31, 2013
, other non-current liabilities included
$7.8 million
of deferred income taxes related to small business distributors held for sale. Further information regarding net assets held for sale can be found under the caption "Note 2: Supplemental balance sheet and cash flow information" of the Notes to Consolidated Financial Statements appearing in Item 8 of this report.
|
•
|
Payments for uncertain tax positions – Due to the nature of the underlying liabilities and the extended time frame 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
$7.0 million
as of
December 31, 2013
, excluding tax benefits of deductible interest and the federal benefit of deductible state income tax.
|
•
|
Insured environmental remediation costs – As of
December 31, 2013
,
$4.2 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
$4.1 million
as of
December 31, 2013
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,
$2.4 million
of our deferred compensation liability as of
December 31, 2013
is excluded from the obligations shown in the table above.
|
•
|
Benefit payments for our postretirement benefit plan – In the past, we have contributed funds to this plan for the purpose of funding our obligations. Thus, we have the option of paying benefits from the accumulated 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. We anticipate that we will utilize plan assets to pay a majority of our benefits during 2014. Our postretirement benefit plan was overfunded
$25.0 million
as of
December 31, 2013
.
|
•
|
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.
|
•
|
Income tax payments, which are dependent upon our earnings.
|
(in thousands)
|
|
One-percentage-point increase
|
|
One-percentage-point decrease
|
||||
Effect on total of service and interest cost
|
|
$
|
75
|
|
|
$
|
(71
|
)
|
Effect on benefit obligation
|
|
1,775
|
|
|
(1,664
|
)
|
(in thousands)
|
|
Carrying amount
|
|
Fair value
(1)
|
|
Weighted-average interest rate
|
|||||
Long-term notes maturing October 2014, including increase of $1,569 related to the cumulative change in fair value of hedged debt
|
|
$
|
255,026
|
|
|
$
|
259,559
|
|
|
4.3
|
%
|
Long-term notes maturing March 2019
|
|
200,000
|
|
|
216,574
|
|
|
7.0
|
%
|
||
Long-term notes maturing November 2020, including decrease of $16,239 related to the cumulative change in fair value of hedged debt
|
|
183,761
|
|
|
208,000
|
|
|
4.9
|
%
|
||
Capital lease obligations
|
|
1,917
|
|
|
1,917
|
|
|
2.0
|
%
|
||
Total debt
|
|
$
|
640,704
|
|
|
$
|
686,050
|
|
|
5.3
|
%
|
|
|
December 31,
2013 |
|
December 31,
2012 |
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
121,089
|
|
|
$
|
45,435
|
|
Trade accounts receivable, net of allowances for uncollectible accounts
|
|
88,049
|
|
|
70,387
|
|
||
Inventories and supplies
|
|
28,966
|
|
|
23,291
|
|
||
Deferred income taxes
|
|
6,946
|
|
|
7,687
|
|
||
Funds held for customers
|
|
42,425
|
|
|
43,140
|
|
||
Other current assets
|
|
31,838
|
|
|
29,803
|
|
||
Total current assets
|
|
319,313
|
|
|
219,743
|
|
||
Deferred income taxes
|
|
1,851
|
|
|
1,662
|
|
||
Long-term investments (including $2,407 and $2,196 of investments at fair value, respectively)
|
|
44,451
|
|
|
46,898
|
|
||
Property, plant and equipment, net of accumulated depreciation
|
|
101,343
|
|
|
104,189
|
|
||
Assets held for sale
|
|
25,451
|
|
|
970
|
|
||
Intangibles, net of accumulated amortization
|
|
153,576
|
|
|
150,717
|
|
||
Goodwill
|
|
822,777
|
|
|
789,636
|
|
||
Other non-current assets
|
|
100,767
|
|
|
98,625
|
|
||
Total assets
|
|
$
|
1,569,529
|
|
|
$
|
1,412,440
|
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
71,492
|
|
|
$
|
65,107
|
|
Accrued liabilities
|
|
162,990
|
|
|
155,003
|
|
||
Long-term debt due within one year
|
|
255,589
|
|
|
—
|
|
||
Total current liabilities
|
|
490,071
|
|
|
220,110
|
|
||
Long-term debt
|
|
385,115
|
|
|
652,581
|
|
||
Deferred income taxes
|
|
82,814
|
|
|
75,147
|
|
||
Other non-current liabilities
|
|
61,072
|
|
|
31,667
|
|
||
Commitments and contingencies (Notes 9, 13 and 14)
|
|
|
|
|
|
|
||
Shareholders’ equity:
|
|
|
|
|
|
|
||
Common shares $1 par value (authorized: 500,000 shares; outstanding: 2013 – 50,344; 2012 – 50,614)
|
|
50,344
|
|
|
50,614
|
|
||
Additional paid-in capital
|
|
22,596
|
|
|
47,968
|
|
||
Retained earnings
|
|
510,941
|
|
|
375,000
|
|
||
Accumulated other comprehensive loss
|
|
(33,424
|
)
|
|
(40,647
|
)
|
||
Total shareholders’ equity
|
|
550,457
|
|
|
432,935
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
1,569,529
|
|
|
$
|
1,412,440
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Product revenue
|
|
$
|
1,369,711
|
|
|
$
|
1,345,929
|
|
|
$
|
1,280,420
|
|
Service revenue
|
|
215,113
|
|
|
168,988
|
|
|
137,176
|
|
|||
Total revenue
|
|
1,584,824
|
|
|
1,514,917
|
|
|
1,417,596
|
|
|||
Cost of products sold
|
|
(463,487
|
)
|
|
(446,994
|
)
|
|
(435,563
|
)
|
|||
Cost of services
|
|
(97,629
|
)
|
|
(77,381
|
)
|
|
(57,839
|
)
|
|||
Total cost of revenue
|
|
(561,116
|
)
|
|
(524,375
|
)
|
|
(493,402
|
)
|
|||
Gross profit
|
|
1,023,708
|
|
|
990,542
|
|
|
924,194
|
|
|||
Selling, general and administrative expense
|
|
(691,359
|
)
|
|
(680,460
|
)
|
|
(640,307
|
)
|
|||
Net restructuring charges
|
|
(9,435
|
)
|
|
(7,926
|
)
|
|
(11,743
|
)
|
|||
Asset impairment charge
|
|
(5,000
|
)
|
|
—
|
|
|
(1,196
|
)
|
|||
Net (loss) gain on sale of facility
|
|
—
|
|
|
(128
|
)
|
|
110
|
|
|||
Operating income
|
|
317,914
|
|
|
302,028
|
|
|
271,058
|
|
|||
Loss on early debt extinguishment
|
|
—
|
|
|
(5,258
|
)
|
|
(6,995
|
)
|
|||
Interest expense
|
|
(38,301
|
)
|
|
(46,847
|
)
|
|
(47,797
|
)
|
|||
Other income (expense)
|
|
1,446
|
|
|
830
|
|
|
(182
|
)
|
|||
Income before income taxes
|
|
281,059
|
|
|
250,753
|
|
|
216,084
|
|
|||
Income tax provision
|
|
(94,407
|
)
|
|
(80,261
|
)
|
|
(71,489
|
)
|
|||
Net income
|
|
$
|
186,652
|
|
|
$
|
170,492
|
|
|
$
|
144,595
|
|
|
|
|
|
|
|
|
||||||
Basic earnings per share
|
|
$
|
3.68
|
|
|
$
|
3.33
|
|
|
$
|
2.82
|
|
Diluted earnings per share
|
|
3.65
|
|
|
3.32
|
|
|
2.80
|
|
|||
|
|
|
|
|
|
|
||||||
Cash dividends per share
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Net income
|
|
$
|
186,652
|
|
|
$
|
170,492
|
|
|
$
|
144,595
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
||||||
Reclassification of loss on derivative instruments from other comprehensive income to net income
|
|
1,040
|
|
|
1,110
|
|
|
1,591
|
|
|||
Postretirement benefit plans:
|
|
|
|
|
|
|
||||||
Net actuarial gain (loss) arising during the year
|
|
8,365
|
|
|
15,221
|
|
|
(10,627
|
)
|
|||
Less reclassification of amounts from other comprehensive income to net income:
|
|
|
|
|
|
|
||||||
Amortization of prior service credit
|
|
(864
|
)
|
|
(1,899
|
)
|
|
(2,330
|
)
|
|||
Amortization of net actuarial loss
|
|
2,928
|
|
|
3,653
|
|
|
3,371
|
|
|||
Postretirement benefit plans
|
|
10,429
|
|
|
16,975
|
|
|
(9,586
|
)
|
|||
Unrealized (losses) gains on securities:
|
|
|
|
|
|
|
||||||
Unrealized holding (losses) gains on securities arising during the year
|
|
(184
|
)
|
|
(29
|
)
|
|
165
|
|
|||
Less reclassification of realized gains from other comprehensive income to net income
|
|
—
|
|
|
(241
|
)
|
|
—
|
|
|||
Unrealized (losses) gains on securities
|
|
(184
|
)
|
|
(270
|
)
|
|
165
|
|
|||
Unrealized foreign currency translation adjustment
|
|
(4,062
|
)
|
|
939
|
|
|
(1,559
|
)
|
|||
Other comprehensive income (loss)
|
|
7,223
|
|
|
18,754
|
|
|
(9,389
|
)
|
|||
Comprehensive income
|
|
$
|
193,875
|
|
|
$
|
189,246
|
|
|
$
|
135,206
|
|
|
|
|
|
|
|
|
||||||
Income tax (expense) benefit of other comprehensive income (loss) included in above amounts:
|
|
|
|
|
|
|
||||||
Reclassification of loss on derivative instruments from other comprehensive income to net income
|
|
$
|
(671
|
)
|
|
$
|
(676
|
)
|
|
$
|
(951
|
)
|
Postretirement benefit plans:
|
|
|
|
|
|
|
||||||
Net actuarial gain (loss) arising during the year
|
|
(5,393
|
)
|
|
(15,589
|
)
|
|
6,442
|
|
|||
Less reclassification of amounts from other comprehensive income to net income:
|
|
|
|
|
|
|
||||||
Amortization of prior service credit
|
|
557
|
|
|
1,157
|
|
|
1,413
|
|
|||
Amortization of net actuarial loss
|
|
(1,511
|
)
|
|
(2,226
|
)
|
|
(2,044
|
)
|
|||
Postretirement benefit plans
|
|
(6,347
|
)
|
|
(16,658
|
)
|
|
5,811
|
|
|||
Unrealized (losses) gains on securities:
|
|
|
|
|
|
|
||||||
Unrealized holding (losses) gains on securities arising during the year
|
|
64
|
|
|
10
|
|
|
(65
|
)
|
|||
Less reclassification of realized gains from other comprehensive income to net income
|
|
—
|
|
|
86
|
|
|
—
|
|
|||
Unrealized (losses) gains on securities
|
|
64
|
|
|
96
|
|
|
(65
|
)
|
|||
Total net tax (expense) benefit included In other comprehensive income (loss)
|
|
$
|
(6,954
|
)
|
|
$
|
(17,238
|
)
|
|
$
|
4,795
|
|
|
|
Common shares
|
|
Common shares
par value
|
|
Additional paid-in capital
|
|
Retained earnings
|
|
Accumulated other comprehensive loss
|
|
Total
|
|||||||||||
Balance, December 31, 2010
|
|
51,338
|
|
|
$
|
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
|
|
|
499
|
|
|
7,584
|
|
|
—
|
|
|
—
|
|
|
8,083
|
|
|||||
Common shares to be issued for Banker's Dashboard acquisition (Note 5)
|
|
—
|
|
|
—
|
|
|
4,300
|
|
|
—
|
|
|
—
|
|
|
4,300
|
|
|||||
Tax impact of share-based awards
|
|
—
|
|
|
—
|
|
|
112
|
|
|
—
|
|
|
—
|
|
|
112
|
|
|||||
Common shares repurchased
|
|
(940
|
)
|
|
(940
|
)
|
|
(22,680
|
)
|
|
—
|
|
|
—
|
|
|
(23,620
|
)
|
|||||
Other common shares retired
|
|
(71
|
)
|
|
(71
|
)
|
|
(1,758
|
)
|
|
—
|
|
|
—
|
|
|
(1,829
|
)
|
|||||
Fair value of share-based compensation
|
|
—
|
|
|
—
|
|
|
5,365
|
|
|
—
|
|
|
—
|
|
|
5,365
|
|
|||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,389
|
)
|
|
(9,389
|
)
|
|||||
Balance, December 31, 2011
|
|
50,826
|
|
|
50,826
|
|
|
55,838
|
|
|
255,426
|
|
|
(59,401
|
)
|
|
302,689
|
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
170,492
|
|
|
—
|
|
|
170,492
|
|
|||||
Cash dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50,918
|
)
|
|
—
|
|
|
(50,918
|
)
|
|||||
Common shares issued
|
|
1,113
|
|
|
1,113
|
|
|
19,161
|
|
|
—
|
|
|
—
|
|
|
20,274
|
|
|||||
Tax impact of share-based awards
|
|
—
|
|
|
—
|
|
|
1,491
|
|
|
—
|
|
|
—
|
|
|
1,491
|
|
|||||
Common shares repurchased
|
|
(999
|
)
|
|
(999
|
)
|
|
(26,156
|
)
|
|
—
|
|
|
—
|
|
|
(27,155
|
)
|
|||||
Other common shares retired
|
|
(326
|
)
|
|
(326
|
)
|
|
(8,944
|
)
|
|
—
|
|
|
—
|
|
|
(9,270
|
)
|
|||||
Fair value of share-based compensation
|
|
—
|
|
|
—
|
|
|
6,578
|
|
|
—
|
|
|
—
|
|
|
6,578
|
|
|||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,754
|
|
|
18,754
|
|
|||||
Balance, December 31, 2012
|
|
50,614
|
|
|
50,614
|
|
|
47,968
|
|
|
375,000
|
|
|
(40,647
|
)
|
|
432,935
|
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
186,652
|
|
|
—
|
|
|
186,652
|
|
|||||
Cash dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50,711
|
)
|
|
—
|
|
|
(50,711
|
)
|
|||||
Common shares issued
|
|
1,182
|
|
|
1,182
|
|
|
25,473
|
|
|
—
|
|
|
—
|
|
|
26,655
|
|
|||||
Tax impact of share-based awards
|
|
—
|
|
|
—
|
|
|
2,310
|
|
|
—
|
|
|
—
|
|
|
2,310
|
|
|||||
Common shares repurchased
|
|
(1,162
|
)
|
|
(1,162
|
)
|
|
(47,636
|
)
|
|
—
|
|
|
—
|
|
|
(48,798
|
)
|
|||||
Other common shares retired
|
|
(290
|
)
|
|
(290
|
)
|
|
(12,470
|
)
|
|
—
|
|
|
—
|
|
|
(12,760
|
)
|
|||||
Fair value of share-based compensation
|
|
—
|
|
|
—
|
|
|
6,951
|
|
|
—
|
|
|
—
|
|
|
6,951
|
|
|||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,223
|
|
|
7,223
|
|
|||||
Balance, December 31, 2013
|
|
50,344
|
|
|
$
|
50,344
|
|
|
$
|
22,596
|
|
|
$
|
510,941
|
|
|
$
|
(33,424
|
)
|
|
$
|
550,457
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
186,652
|
|
|
$
|
170,492
|
|
|
$
|
144,595
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
||||
Depreciation
|
|
17,822
|
|
|
19,922
|
|
|
21,547
|
|
|||
Amortization of intangibles
|
|
46,651
|
|
|
45,730
|
|
|
51,796
|
|
|||
Asset impairment charge
|
|
5,000
|
|
|
—
|
|
|
1,196
|
|
|||
Amortization of contract acquisition costs
|
|
17,197
|
|
|
17,110
|
|
|
16,659
|
|
|||
Deferred income taxes
|
|
(2,243
|
)
|
|
6,270
|
|
|
9,350
|
|
|||
Employee share-based compensation expense
|
|
7,562
|
|
|
7,292
|
|
|
5,733
|
|
|||
Loss on early debt extinguishment
|
|
—
|
|
|
5,258
|
|
|
6,995
|
|
|||
Other non-cash items, net
|
|
10,741
|
|
|
9,371
|
|
|
10,612
|
|
|||
Changes in assets and liabilities, net of effect of acquisitions:
|
|
|
|
|
|
|
|
|
||||
Trade accounts receivable
|
|
(14,754
|
)
|
|
(2,915
|
)
|
|
(6,648
|
)
|
|||
Inventories and supplies
|
|
(1,594
|
)
|
|
(1,629
|
)
|
|
(398
|
)
|
|||
Other current assets
|
|
7,032
|
|
|
(1,982
|
)
|
|
(1,538
|
)
|
|||
Non-current assets
|
|
(5,976
|
)
|
|
424
|
|
|
2,261
|
|
|||
Accounts payable
|
|
886
|
|
|
228
|
|
|
3,460
|
|
|||
Contract acquisition payments
|
|
(12,133
|
)
|
|
(16,952
|
)
|
|
(12,190
|
)
|
|||
Other accrued and non-current liabilities
|
|
(1,341
|
)
|
|
(14,542
|
)
|
|
(18,063
|
)
|
|||
Net cash provided by operating activities
|
|
261,502
|
|
|
244,077
|
|
|
235,367
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
||||
Purchases of capital assets
|
|
(37,459
|
)
|
|
(35,193
|
)
|
|
(35,506
|
)
|
|||
Payments for acquisitions, net of cash acquired
|
|
(69,709
|
)
|
|
(34,172
|
)
|
|
(85,641
|
)
|
|||
Payments on company-owned life insurance policies
|
|
—
|
|
|
—
|
|
|
(6,383
|
)
|
|||
Loans to distributors
|
|
(778
|
)
|
|
(3,287
|
)
|
|
(5,175
|
)
|
|||
Proceeds from company-owned life insurance policies
|
|
4,599
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from sale of facility
|
|
—
|
|
|
2,613
|
|
|
699
|
|
|||
Other
|
|
2,297
|
|
|
1,526
|
|
|
221
|
|
|||
Net cash used by investing activities
|
|
(101,050
|
)
|
|
(68,513
|
)
|
|
(131,785
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
||||
Net payments on short-term debt
|
|
—
|
|
|
—
|
|
|
(7,000
|
)
|
|||
Payments on long-term debt, including costs of debt reacquisition
|
|
(1,555
|
)
|
|
(288,938
|
)
|
|
(215,030
|
)
|
|||
Proceeds from issuing long-term debt
|
|
—
|
|
|
200,000
|
|
|
200,000
|
|
|||
Payments for debt issue costs
|
|
(236
|
)
|
|
(4,504
|
)
|
|
(3,513
|
)
|
|||
Change in book overdrafts
|
|
—
|
|
|
(2,600
|
)
|
|
(136
|
)
|
|||
Proceeds from issuing shares under employee plans
|
|
15,948
|
|
|
12,320
|
|
|
7,671
|
|
|||
Excess tax benefit from share-based employee awards
|
|
3,055
|
|
|
2,285
|
|
|
1,052
|
|
|||
Payments for common shares repurchased
|
|
(48,798
|
)
|
|
(27,155
|
)
|
|
(23,620
|
)
|
|||
Cash dividends paid to shareholders
|
|
(50,711
|
)
|
|
(50,918
|
)
|
|
(51,126
|
)
|
|||
Net cash used by financing activities
|
|
(82,297
|
)
|
|
(159,510
|
)
|
|
(91,702
|
)
|
|||
|
|
|
|
|
|
|
||||||
Effect of exchange rate change on cash
|
|
(2,501
|
)
|
|
694
|
|
|
(576
|
)
|
|||
|
|
|
|
|
|
|
||||||
Net change in cash and cash equivalents
|
|
75,654
|
|
|
16,748
|
|
|
11,304
|
|
|||
Cash and cash equivalents, beginning of year
|
|
45,435
|
|
|
28,687
|
|
|
17,383
|
|
|||
Cash and cash equivalents, end of year
|
|
$
|
121,089
|
|
|
$
|
45,435
|
|
|
$
|
28,687
|
|
|
|
2013
|
|
2012
|
||||
Trade accounts receivable – gross
|
|
$
|
91,910
|
|
|
$
|
74,299
|
|
Allowances for uncollectible accounts
|
|
(3,861
|
)
|
|
(3,912
|
)
|
||
Trade accounts receivable – net
|
|
$
|
88,049
|
|
|
$
|
70,387
|
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Balance, beginning of year
|
|
$
|
3,912
|
|
|
$
|
4,007
|
|
|
$
|
4,130
|
|
Bad debt expense
|
|
3,722
|
|
|
3,749
|
|
|
4,033
|
|
|||
Write-offs, net of recoveries
|
|
(3,773
|
)
|
|
(3,844
|
)
|
|
(4,156
|
)
|
|||
Balance, end of year
|
|
$
|
3,861
|
|
|
$
|
3,912
|
|
|
$
|
4,007
|
|
|
|
2013
|
|
2012
|
||||
Raw materials
|
|
$
|
5,426
|
|
|
$
|
4,818
|
|
Semi-finished goods
|
|
8,361
|
|
|
8,390
|
|
||
Finished goods
|
|
11,948
|
|
|
7,005
|
|
||
Supplies
|
|
3,231
|
|
|
3,078
|
|
||
Inventories and supplies
|
|
$
|
28,966
|
|
|
$
|
23,291
|
|
|
|
December 31, 2013
|
||||||||||||||
|
|
Cost
|
|
Gross unrealized gains
|
|
Gross unrealized losses
|
|
Fair value
|
||||||||
Canadian and provincial government securities
|
|
$
|
9,901
|
|
|
$
|
—
|
|
|
$
|
(343
|
)
|
|
$
|
9,558
|
|
Canadian guaranteed investment certificate
|
|
5,178
|
|
|
—
|
|
|
—
|
|
|
5,178
|
|
||||
Available-for-sale securities (funds held for customers)
(1)
|
|
15,079
|
|
|
—
|
|
|
(343
|
)
|
|
14,736
|
|
||||
Money market securities (cash equivalents)
|
|
70,001
|
|
|
—
|
|
|
—
|
|
|
70,001
|
|
||||
Canadian money market fund (other current assets)
|
|
2,045
|
|
|
—
|
|
|
—
|
|
|
2,045
|
|
||||
Total available-for-sale securities
|
|
$
|
87,125
|
|
|
$
|
—
|
|
|
$
|
(343
|
)
|
|
$
|
86,782
|
|
|
|
December 31, 2012
|
||||||||||||||
|
|
Cost
|
|
Gross unrealized gains
|
|
Gross unrealized losses
|
|
Fair value
|
||||||||
Canadian and provincial government securities
|
|
$
|
10,371
|
|
|
$
|
—
|
|
|
$
|
(115
|
)
|
|
$
|
10,256
|
|
Canadian guaranteed investment certificate
|
|
5,544
|
|
|
—
|
|
|
—
|
|
|
5,544
|
|
||||
Available-for-sale securities (funds held for customers)
(1)
|
|
15,915
|
|
|
—
|
|
|
(115
|
)
|
|
15,800
|
|
||||
Money market securities (cash equivalents)
|
|
9,350
|
|
|
—
|
|
|
—
|
|
|
9,350
|
|
||||
Canadian money market fund (other current assets)
|
|
2,162
|
|
|
—
|
|
|
—
|
|
|
2,162
|
|
||||
Total available-for-sale securities
|
|
$
|
27,427
|
|
|
$
|
—
|
|
|
$
|
(115
|
)
|
|
$
|
27,312
|
|
|
|
Fair value
|
||
Due in one year or less
|
|
$
|
77,386
|
|
Due in two to five years
|
|
5,936
|
|
|
Due in six to ten years
|
|
3,460
|
|
|
Total available-for-sale securities
|
|
$
|
86,782
|
|
|
|
2013
|
|
2012
|
||||||||||||||||||||
|
|
Gross carrying amount
|
|
Accumulated depreciation
|
|
Net carrying amount
|
|
Gross carrying amount
|
|
Accumulated depreciation
|
|
Net carrying amount
|
||||||||||||
Land and improvements
|
|
$
|
33,951
|
|
|
$
|
(9,445
|
)
|
|
$
|
24,506
|
|
|
$
|
33,984
|
|
|
$
|
(9,166
|
)
|
|
$
|
24,818
|
|
Buildings and improvements
|
|
125,655
|
|
|
(76,995
|
)
|
|
48,660
|
|
|
123,265
|
|
|
(73,403
|
)
|
|
49,862
|
|
||||||
Machinery and equipment
|
|
302,663
|
|
|
(274,486
|
)
|
|
28,177
|
|
|
305,520
|
|
|
(276,011
|
)
|
|
29,509
|
|
||||||
Property, plant and equipment
|
|
$
|
462,269
|
|
|
$
|
(360,926
|
)
|
|
$
|
101,343
|
|
|
$
|
462,769
|
|
|
$
|
(358,580
|
)
|
|
$
|
104,189
|
|
|
|
December 31,
|
|
|
||||||
|
|
2013
|
|
2012
|
|
Balance sheet caption
|
||||
Current assets
|
|
$
|
727
|
|
|
$
|
—
|
|
|
Other current assets
|
Intangibles
|
|
24,603
|
|
|
970
|
|
|
Assets held for sale
|
||
Other non-current assets
|
|
848
|
|
|
—
|
|
|
Assets held for sale
|
||
Accrued liabilities
|
|
(733
|
)
|
|
—
|
|
|
Accrued liabilities
|
||
Non-current deferred income tax liabilities
|
|
(7,821
|
)
|
|
—
|
|
|
Other non-current liabilities
|
||
Other non-current liabilities
|
|
(32
|
)
|
|
—
|
|
|
Other non-current liabilities
|
||
Net assets held for sale
|
|
$
|
17,592
|
|
|
$
|
970
|
|
|
|
|
|
2013
|
|
2012
|
||||||||||||||||||||
|
|
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
|
|
339,995
|
|
|
(275,159
|
)
|
|
64,836
|
|
|
438,988
|
|
|
(376,111
|
)
|
|
62,877
|
|
||||||
Trade names
|
|
67,961
|
|
|
(33,642
|
)
|
|
34,319
|
|
|
68,561
|
|
|
(30,151
|
)
|
|
38,410
|
|
||||||
Customer lists/relationships
|
|
63,282
|
|
|
(31,606
|
)
|
|
31,676
|
|
|
58,735
|
|
|
(30,287
|
)
|
|
28,448
|
|
||||||
Distributor contracts
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,900
|
|
|
(29,999
|
)
|
|
901
|
|
||||||
Other
|
|
9,324
|
|
|
(5,679
|
)
|
|
3,645
|
|
|
6,511
|
|
|
(5,530
|
)
|
|
981
|
|
||||||
Amortizable intangibles
|
|
480,562
|
|
|
(346,086
|
)
|
|
134,476
|
|
|
603,695
|
|
|
(472,078
|
)
|
|
131,617
|
|
||||||
Intangibles
|
|
$
|
499,662
|
|
|
$
|
(346,086
|
)
|
|
$
|
153,576
|
|
|
$
|
622,795
|
|
|
$
|
(472,078
|
)
|
|
$
|
150,717
|
|
|
|
Estimated
amortization
expense
|
||
2014
|
|
$
|
39,232
|
|
2015
|
|
27,732
|
|
|
2016
|
|
16,616
|
|
|
2017
|
|
8,637
|
|
|
2018
|
|
6,594
|
|
|
|
2013
|
|
2012
|
|
2011
|
||||||||||||
|
|
Amount
|
|
Weighted-average amortization period
(in years)
|
|
Amount
|
|
Weighted-average amortization period
(in years)
|
|
Amount
|
|
Weighted-average amortization period
(in years)
|
||||||
Internal-use software
|
|
$
|
34,455
|
|
|
3
|
|
$
|
28,097
|
|
|
4
|
|
$
|
33,169
|
|
|
4
|
Customer lists/relationships
|
|
16,610
|
|
|
8
|
|
10,200
|
|
|
9
|
|
12,600
|
|
|
8
|
|||
Trade names
|
|
200
|
|
|
2
|
|
900
|
|
|
5
|
|
8,300
|
|
|
9
|
|||
Other
|
|
3,310
|
|
|
4
|
|
—
|
|
|
—
|
|
1,000
|
|
|
4
|
|||
Acquired intangibles
|
|
$
|
54,575
|
|
|
5
|
|
$
|
39,197
|
|
|
5
|
|
$
|
55,069
|
|
|
6
|
|
|
Small
Business
Services
|
|
Financial
Services
|
|
Direct
Checks
|
|
Total
|
||||||||
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
|
|
||||
Acquisition of OrangeSoda, Inc. (Note 5)
|
|
12,580
|
|
|
—
|
|
|
—
|
|
|
12,580
|
|
||||
Currency translation adjustment
|
|
58
|
|
|
—
|
|
|
—
|
|
|
58
|
|
||||
Balance, December 31, 2012:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Goodwill, gross
|
|
633,952
|
|
|
27,178
|
|
|
148,506
|
|
|
809,636
|
|
||||
Accumulated impairment charges
|
|
(20,000
|
)
|
|
—
|
|
|
—
|
|
|
(20,000
|
)
|
||||
Goodwill, net of accumulated impairment charges
|
|
613,952
|
|
|
27,178
|
|
|
148,506
|
|
|
789,636
|
|
||||
Acquisition of VerticalResponse, Inc. (Note 5)
|
|
18,735
|
|
|
—
|
|
|
—
|
|
|
18,735
|
|
||||
Acquisition of Acton Marketing, LLC (Note 5)
|
|
—
|
|
|
1,459
|
|
|
—
|
|
|
1,459
|
|
||||
Acquisition of Destination Rewards, Inc. (Note 5)
|
|
—
|
|
|
13,080
|
|
|
—
|
|
|
13,080
|
|
||||
Currency translation adjustment
|
|
(133
|
)
|
|
—
|
|
|
—
|
|
|
(133
|
)
|
||||
Balance, December 31, 2013:
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Goodwill, gross
|
|
652,554
|
|
|
41,717
|
|
|
148,506
|
|
|
842,777
|
|
||||
Accumulated impairment charges
|
|
(20,000
|
)
|
|
—
|
|
|
—
|
|
|
(20,000
|
)
|
||||
Goodwill, net of accumulated impairment charges
|
|
$
|
632,554
|
|
|
$
|
41,717
|
|
|
$
|
148,506
|
|
|
$
|
822,777
|
|
|
|
2013
|
|
2012
|
||||
Contract acquisition costs
|
|
$
|
35,421
|
|
|
$
|
43,036
|
|
Postretirement benefit plan asset (Note 12)
|
|
24,981
|
|
|
4,993
|
|
||
Loans and notes receivable from distributors
|
|
16,162
|
|
|
18,162
|
|
||
Deferred advertising costs
|
|
10,447
|
|
|
13,783
|
|
||
Other
|
|
13,756
|
|
|
18,651
|
|
||
Other non-current assets
|
|
$
|
100,767
|
|
|
$
|
98,625
|
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Balance, beginning of year
|
|
$
|
43,036
|
|
|
$
|
55,076
|
|
|
$
|
57,476
|
|
Additions
(1)
|
|
10,072
|
|
|
5,543
|
|
|
14,624
|
|
|||
Amortization
|
|
(17,197
|
)
|
|
(17,110
|
)
|
|
(16,659
|
)
|
|||
Other
|
|
(490
|
)
|
|
(473
|
)
|
|
(365
|
)
|
|||
Balance, end of year
|
|
$
|
35,421
|
|
|
$
|
43,036
|
|
|
$
|
55,076
|
|
|
|
2013
|
|
2012
|
||||
Funds held for customers
|
|
$
|
41,810
|
|
|
$
|
42,460
|
|
Employee profit sharing/cash bonus
|
|
29,544
|
|
|
40,670
|
|
||
Customer rebates
|
|
21,623
|
|
|
22,164
|
|
||
Deferred revenue
|
|
16,897
|
|
|
7,825
|
|
||
Interest
|
|
8,869
|
|
|
8,465
|
|
||
Restructuring due within one year (Note 8)
|
|
5,609
|
|
|
4,507
|
|
||
Contract acquisition costs due within one year
|
|
3,880
|
|
|
3,820
|
|
||
Other
|
|
34,758
|
|
|
25,092
|
|
||
Accrued liabilities
|
|
$
|
162,990
|
|
|
$
|
155,003
|
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Income taxes paid
|
|
$
|
90,322
|
|
|
$
|
83,875
|
|
|
$
|
60,861
|
|
Interest paid
|
|
38,676
|
|
|
46,514
|
|
|
42,542
|
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Earnings per share – basic:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
186,652
|
|
|
$
|
170,492
|
|
|
$
|
144,595
|
|
Income allocated to participating securities
|
|
(846
|
)
|
|
(1,161
|
)
|
|
(823
|
)
|
|||
Income available to common shareholders
|
|
$
|
185,806
|
|
|
$
|
169,331
|
|
|
$
|
143,772
|
|
Weighted-average shares outstanding
|
|
50,550
|
|
|
50,775
|
|
|
51,036
|
|
|||
Earnings per share – basic
|
|
$
|
3.68
|
|
|
$
|
3.33
|
|
|
$
|
2.82
|
|
|
|
|
|
|
|
|
||||||
Earnings per share – diluted:
|
|
|
|
|
|
|
|
|
||||
Net income
|
|
$
|
186,652
|
|
|
$
|
170,492
|
|
|
$
|
144,595
|
|
Income allocated to participating securities
|
|
(840
|
)
|
|
(1,156
|
)
|
|
(586
|
)
|
|||
Re-measurement of share-based awards classified as liabilities
|
|
314
|
|
|
123
|
|
|
(20
|
)
|
|||
Income available to common shareholders
|
|
$
|
186,126
|
|
|
$
|
169,459
|
|
|
$
|
143,989
|
|
Weighted-average shares outstanding
|
|
50,550
|
|
|
50,775
|
|
|
51,036
|
|
|||
Dilutive impact of potential common shares
|
|
460
|
|
|
301
|
|
|
379
|
|
|||
Weighted-average shares and potential common shares outstanding
|
|
51,010
|
|
|
51,076
|
|
|
51,415
|
|
|||
Earnings per share – diluted
|
|
$
|
3.65
|
|
|
$
|
3.32
|
|
|
$
|
2.80
|
|
|
|
|
|
|
|
|
||||||
Antidilutive options excluded from calculation
|
|
12
|
|
|
470
|
|
|
1,835
|
|
Accumulated other comprehensive loss component
|
|
Amounts reclassified from accumulated other comprehensive loss
|
|
Affected line item in consolidated statements of income
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
|
|
||||||
Amortization of loss on interest rate locks
(1)
|
|
$
|
(1,711
|
)
|
|
$
|
(1,786
|
)
|
|
$
|
(2,542
|
)
|
|
Interest expense
|
Tax benefit
|
|
671
|
|
|
676
|
|
|
951
|
|
|
Income tax provision
|
|||
Amortization of loss on interest rate locks, net of tax
|
|
(1,040
|
)
|
|
(1,110
|
)
|
|
(1,591
|
)
|
|
Net income
|
|||
Amortization of postretirement benefit plan items:
|
|
|
|
|
|
|
|
|
||||||
Prior service credit
|
|
1,421
|
|
|
3,056
|
|
|
3,743
|
|
|
(2)
|
|||
Net actuarial loss
|
|
(4,439
|
)
|
|
(5,879
|
)
|
|
(5,415
|
)
|
|
(2)
|
|||
Total amortization
|
|
(3,018
|
)
|
|
(2,823
|
)
|
|
(1,672
|
)
|
|
(2)
|
|||
Tax benefit
|
|
954
|
|
|
1,069
|
|
|
631
|
|
|
(2)
|
|||
Amortization of postretirement benefit plan items, net of tax
|
|
(2,064
|
)
|
|
(1,754
|
)
|
|
(1,041
|
)
|
|
(2)
|
|||
Realized gains on available-for-sale securities
|
|
—
|
|
|
327
|
|
|
—
|
|
|
Other income (expense)
|
|||
Tax expense
|
|
—
|
|
|
(86
|
)
|
|
—
|
|
|
Income tax provision
|
|||
Realized gains on available-for-sale securities, net of tax
|
|
—
|
|
|
241
|
|
|
—
|
|
|
Net income
|
|||
Total reclassifications, net of tax
|
|
$
|
(3,104
|
)
|
|
$
|
(2,623
|
)
|
|
$
|
(2,632
|
)
|
|
|
|
|
Postretirement benefit plans, net of tax
|
|
Loss on derivatives, net of tax
(1)
|
|
Net unrealized gain (loss) on marketable securities, net of tax
|
|
Currency translation adjustment
|
|
Accumulated other comprehensive loss
|
||||||||||
Balance, December 31, 2010
|
|
$
|
(52,692
|
)
|
|
$
|
(4,522
|
)
|
|
$
|
13
|
|
|
$
|
7,189
|
|
|
$
|
(50,012
|
)
|
Other comprehensive (loss) income before reclassifications
|
|
(10,627
|
)
|
|
—
|
|
|
165
|
|
|
(1,559
|
)
|
|
(12,021
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
|
1,041
|
|
|
1,591
|
|
|
—
|
|
|
—
|
|
|
2,632
|
|
|||||
Net current-period other comprehensive (loss) income
|
|
(9,586
|
)
|
|
1,591
|
|
|
165
|
|
|
(1,559
|
)
|
|
(9,389
|
)
|
|||||
Balance, December 31, 2011
|
|
(62,278
|
)
|
|
(2,931
|
)
|
|
178
|
|
|
5,630
|
|
|
(59,401
|
)
|
|||||
Other comprehensive income (loss) before reclassifications
|
|
15,221
|
|
|
—
|
|
|
(29
|
)
|
|
939
|
|
|
16,131
|
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
|
1,754
|
|
|
1,110
|
|
|
(241
|
)
|
|
—
|
|
|
2,623
|
|
|||||
Net current-period other comprehensive income (loss)
|
|
16,975
|
|
|
1,110
|
|
|
(270
|
)
|
|
939
|
|
|
18,754
|
|
|||||
Balance, December 31, 2012
|
|
(45,303
|
)
|
|
(1,821
|
)
|
|
(92
|
)
|
|
6,569
|
|
|
(40,647
|
)
|
|||||
Other comprehensive income (loss) before reclassifications
|
|
8,365
|
|
|
—
|
|
|
(184
|
)
|
|
(4,062
|
)
|
|
4,119
|
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
|
2,064
|
|
|
1,040
|
|
|
—
|
|
|
—
|
|
|
3,104
|
|
|||||
Net current-period other comprehensive income (loss)
|
|
10,429
|
|
|
1,040
|
|
|
(184
|
)
|
|
(4,062
|
)
|
|
7,223
|
|
|||||
Balance, December 31, 2013
|
|
$
|
(34,874
|
)
|
|
$
|
(781
|
)
|
|
$
|
(276
|
)
|
|
$
|
2,507
|
|
|
$
|
(33,424
|
)
|
|
|
Notional amount
|
|
Fair value of interest rate swaps
|
|
Increase (decrease) in debt due to fair value adjustment
|
|
Balance sheet caption including interest rate swaps
|
||||||
Fair value hedge related to long-term debt due in 2014
|
|
$
|
198,000
|
|
|
$
|
2,158
|
|
|
$
|
1,569
|
|
|
Other current assets
|
Fair value hedge related to long-term debt due in 2020
|
|
200,000
|
|
|
(16,239
|
)
|
|
(16,239
|
)
|
|
Other non-current liabilities
|
|||
Total fair value hedges
|
|
$
|
398,000
|
|
|
$
|
(14,081
|
)
|
|
$
|
(14,670
|
)
|
|
|
|
|
Notional amount
|
|
Fair value of interest rate swaps
|
|
Increase (decrease) in debt due to fair value adjustment
|
|
Balance sheet caption including interest rate swaps
|
||||||
Fair value hedge related to long-term debt due in 2014
|
|
$
|
198,000
|
|
|
$
|
3,858
|
|
|
$
|
3,370
|
|
|
Other non-current assets
|
Fair value hedge related to long-term debt due in 2020
|
|
200,000
|
|
|
(4,189
|
)
|
|
(4,189
|
)
|
|
Other non-current liabilities
|
|||
Total fair value hedges
|
|
$
|
398,000
|
|
|
$
|
(331
|
)
|
|
$
|
(819
|
)
|
|
|
|
|
|
|
Fair value measurements using
|
|
|
||||||||||||||
|
|
Fair value as of
December 31, 2013
|
|
Quoted prices in active markets for identical assets
|
|
Significant other observable inputs
|
|
Significant unobservable inputs
|
|
Impairment charge
|
||||||||||
|
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
||||||||||||
2013:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Customer relationships
|
|
$
|
2,120
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,120
|
|
|
$
|
5,000
|
|
2011:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets held for sale
|
|
2,741
|
|
|
—
|
|
|
2,741
|
|
|
—
|
|
|
1,196
|
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
(Loss) gain from derivatives
|
|
$
|
(13,750
|
)
|
|
$
|
(4,871
|
)
|
|
$
|
2,220
|
|
Gain (loss) from change in fair value of hedged debt
|
|
13,851
|
|
|
3,645
|
|
|
(2,395
|
)
|
|||
Net decrease (increase) in interest expense
|
|
$
|
101
|
|
|
$
|
(1,226
|
)
|
|
$
|
(175
|
)
|
|
|
|
|
Fair value measurements using
|
||||||||||||
|
|
Fair value as of
December 31, 2013
|
|
Quoted prices in active markets for identical assets
|
|
Significant other observable inputs
|
|
Significant unobservable inputs
|
||||||||
|
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|||||||||
Available-for-sale marketable securities (cash equivalents)
|
|
$
|
70,001
|
|
|
$
|
70,001
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Available-for-sale marketable securities (funds held for customers)
|
|
14,736
|
|
|
—
|
|
|
14,736
|
|
|
—
|
|
||||
Available-for-sale marketable securities (other current assets)
|
|
2,045
|
|
|
—
|
|
|
2,045
|
|
|
—
|
|
||||
Long-term investment in mutual funds
|
|
2,407
|
|
|
2,407
|
|
|
—
|
|
|
—
|
|
||||
Derivative assets
|
|
2,158
|
|
|
—
|
|
|
2,158
|
|
|
—
|
|
||||
Derivative liabilities
|
|
(16,239
|
)
|
|
—
|
|
|
(16,239
|
)
|
|
—
|
|
|
|
|
|
Fair value measurements using
|
||||||||||||
|
|
Fair value as of
December 31, 2012
|
|
Quoted prices in active markets for identical assets
|
|
Significant other
observable
inputs
|
|
Significant unobservable inputs
|
||||||||
|
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|||||||||
Available-for-sale marketable securities (cash equivalents)
|
|
$
|
9,350
|
|
|
$
|
9,350
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Available-for-sale marketable securities (funds held for customers)
|
|
15,800
|
|
|
—
|
|
|
15,800
|
|
|
—
|
|
||||
Available-for-sale marketable securities (other current assets)
|
|
2,162
|
|
|
—
|
|
|
2,162
|
|
|
—
|
|
||||
Long-term investment in mutual funds
|
|
2,196
|
|
|
2,196
|
|
|
—
|
|
|
—
|
|
||||
Derivative assets
|
|
3,858
|
|
|
—
|
|
|
3,858
|
|
|
—
|
|
||||
Derivative liabilities
|
|
(4,189
|
)
|
|
—
|
|
|
(4,189
|
)
|
|
—
|
|
|
|
|
|
Fair value measurements using
|
||||||||||||||||
|
|
December 31, 2013
|
|
Quoted prices in active markets for identical assets
|
|
Significant other observable inputs
|
|
Significant unobservable inputs
|
||||||||||||
|
|
Carrying value
|
|
Fair value
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||||
Cash (excluding cash equivalents)
|
|
$
|
51,088
|
|
|
$
|
51,088
|
|
|
$
|
51,088
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash (funds held for customers)
|
|
27,689
|
|
|
27,689
|
|
|
27,689
|
|
|
—
|
|
|
—
|
|
|||||
Loans and notes receivable from distributors
|
|
18,047
|
|
|
17,051
|
|
|
—
|
|
|
—
|
|
|
17,051
|
|
|||||
Long-term debt, including portion due within one year
(1)
|
|
638,787
|
|
|
684,133
|
|
|
684,133
|
|
|
—
|
|
|
—
|
|
|
|
|
|
Fair value measurements using
|
||||||||||||||||
|
|
December 31, 2012
|
|
Quoted prices in active markets for identical assets
|
|
Significant other observable inputs
|
|
Significant unobservable inputs
|
||||||||||||
|
|
Carrying value
|
|
Fair value
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
||||||||||
Cash (excluding cash equivalents)
|
|
$
|
36,085
|
|
|
$
|
36,085
|
|
|
$
|
36,085
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cash (funds held for customers)
|
|
27,340
|
|
|
27,340
|
|
|
27,340
|
|
|
—
|
|
|
—
|
|
|||||
Loans and notes receivable from distributors
|
|
19,843
|
|
|
19,170
|
|
|
—
|
|
|
—
|
|
|
19,170
|
|
|||||
Long-term debt
|
|
652,581
|
|
|
676,859
|
|
|
481,048
|
|
|
195,811
|
|
|
—
|
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Severance accruals
|
|
$
|
7,495
|
|
|
$
|
7,619
|
|
|
$
|
8,826
|
|
Severance reversals
|
|
(805
|
)
|
|
(1,862
|
)
|
|
(1,737
|
)
|
|||
Operating lease obligations
|
|
216
|
|
|
396
|
|
|
52
|
|
|||
Operating lease obligations reversals
|
|
(157
|
)
|
|
—
|
|
|
(6
|
)
|
|||
Net restructuring accruals
|
|
6,749
|
|
|
6,153
|
|
|
7,135
|
|
|||
Other costs
|
|
4,157
|
|
|
4,581
|
|
|
6,586
|
|
|||
Net restructuring charges
|
|
$
|
10,906
|
|
|
$
|
10,734
|
|
|
$
|
13,721
|
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Total cost of revenue
|
|
$
|
1,471
|
|
|
$
|
2,808
|
|
|
$
|
1,978
|
|
Operating expenses
|
|
9,435
|
|
|
7,926
|
|
|
11,743
|
|
|||
Net restructuring charges
|
|
$
|
10,906
|
|
|
$
|
10,734
|
|
|
$
|
13,721
|
|
|
|
2008/2009
initiatives
|
|
2010
initiatives
|
|
2011
initiatives
|
|
2012
initiatives
|
|
2013
initiatives
|
|
Total
|
||||||||||||
Balance, December 31, 2010
|
|
$
|
769
|
|
|
$
|
6,029
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,798
|
|
Restructuring charges
|
|
9
|
|
|
75
|
|
|
8,794
|
|
|
—
|
|
|
—
|
|
|
8,878
|
|
||||||
Restructuring reversals
|
|
(74
|
)
|
|
(1,058
|
)
|
|
(611
|
)
|
|
—
|
|
|
—
|
|
|
(1,743
|
)
|
||||||
Payments
|
|
(520
|
)
|
|
(4,265
|
)
|
|
(3,116
|
)
|
|
—
|
|
|
—
|
|
|
(7,901
|
)
|
||||||
Balance, December 31, 2011
|
|
184
|
|
|
781
|
|
|
5,067
|
|
|
—
|
|
|
—
|
|
|
6,032
|
|
||||||
Restructuring charges
|
|
11
|
|
|
15
|
|
|
281
|
|
|
7,708
|
|
|
—
|
|
|
8,015
|
|
||||||
Restructuring reversals
|
|
(2
|
)
|
|
(226
|
)
|
|
(1,105
|
)
|
|
(529
|
)
|
|
—
|
|
|
(1,862
|
)
|
||||||
Payments
|
|
(193
|
)
|
|
(485
|
)
|
|
(4,222
|
)
|
|
(2,635
|
)
|
|
—
|
|
|
(7,535
|
)
|
||||||
Balance, December 31, 2012
|
|
—
|
|
|
85
|
|
|
21
|
|
|
4,544
|
|
|
—
|
|
|
4,650
|
|
||||||
Restructuring charges
|
|
—
|
|
|
—
|
|
|
49
|
|
|
283
|
|
|
7,379
|
|
|
7,711
|
|
||||||
Restructuring reversals
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(822
|
)
|
|
(137
|
)
|
|
(962
|
)
|
||||||
Payments
|
|
—
|
|
|
(85
|
)
|
|
(67
|
)
|
|
(3,596
|
)
|
|
(2,013
|
)
|
|
(5,761
|
)
|
||||||
Balance, December 31, 2013
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
409
|
|
|
$
|
5,229
|
|
|
$
|
5,638
|
|
Cumulative amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Restructuring charges
|
|
$
|
38,580
|
|
|
$
|
9,730
|
|
|
$
|
9,124
|
|
|
$
|
7,991
|
|
|
$
|
7,379
|
|
|
$
|
72,804
|
|
Restructuring reversals
|
|
(7,559
|
)
|
|
(1,548
|
)
|
|
(1,719
|
)
|
|
(1,351
|
)
|
|
(137
|
)
|
|
(12,314
|
)
|
||||||
Payments
|
|
(31,021
|
)
|
|
(8,182
|
)
|
|
(7,405
|
)
|
|
(6,231
|
)
|
|
(2,013
|
)
|
|
(54,852
|
)
|
||||||
Balance, December 31, 2013
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
409
|
|
|
$
|
5,229
|
|
|
$
|
5,638
|
|
|
|
Employee severance benefits
|
|
Operating lease obligations
|
|
|
||||||||||||||||||||||
|
|
Small Business Services
|
|
Financial Services
|
|
Direct Checks
|
|
Corporate
(1)
|
|
Small Business Services
|
|
Direct Checks
|
|
Total
|
||||||||||||||
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
|
|
|||||||
Restructuring charges
|
|
2,485
|
|
|
1,331
|
|
|
166
|
|
|
3,637
|
|
|
278
|
|
|
118
|
|
|
8,015
|
|
|||||||
Restructuring reversals
|
|
(422
|
)
|
|
(227
|
)
|
|
(136
|
)
|
|
(1,077
|
)
|
|
—
|
|
|
—
|
|
|
(1,862
|
)
|
|||||||
Inter-segment transfer
|
|
184
|
|
|
(184
|
)
|
|
(40
|
)
|
|
40
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Payments
|
|
(2,491
|
)
|
|
(1,227
|
)
|
|
(690
|
)
|
|
(2,775
|
)
|
|
(96
|
)
|
|
(256
|
)
|
|
(7,535
|
)
|
|||||||
Balance, December 31, 2012
|
|
643
|
|
|
1,090
|
|
|
44
|
|
|
2,472
|
|
|
251
|
|
|
150
|
|
|
4,650
|
|
|||||||
Restructuring charges
|
|
2,459
|
|
|
2,619
|
|
|
407
|
|
|
2,010
|
|
|
164
|
|
|
52
|
|
|
7,711
|
|
|||||||
Restructuring reversals
|
|
(129
|
)
|
|
(249
|
)
|
|
(4
|
)
|
|
(423
|
)
|
|
(157
|
)
|
|
—
|
|
|
(962
|
)
|
|||||||
Payments
|
|
(1,349
|
)
|
|
(1,469
|
)
|
|
(82
|
)
|
|
(2,551
|
)
|
|
(108
|
)
|
|
(202
|
)
|
|
(5,761
|
)
|
|||||||
Balance, December 31, 2013
|
|
$
|
1,624
|
|
|
$
|
1,991
|
|
|
$
|
365
|
|
|
$
|
1,508
|
|
|
$
|
150
|
|
|
$
|
—
|
|
|
$
|
5,638
|
|
Cumulative amounts
(2)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Restructuring charges
|
|
$
|
20,851
|
|
|
$
|
13,291
|
|
|
$
|
4,215
|
|
|
$
|
31,464
|
|
|
$
|
2,304
|
|
|
$
|
679
|
|
|
$
|
72,804
|
|
Restructuring reversals
|
|
(3,085
|
)
|
|
(1,827
|
)
|
|
(341
|
)
|
|
(6,505
|
)
|
|
(556
|
)
|
|
—
|
|
|
(12,314
|
)
|
|||||||
Inter-segment transfer
|
|
1,098
|
|
|
435
|
|
|
23
|
|
|
(1,556
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Payments
|
|
(17,240
|
)
|
|
(9,908
|
)
|
|
(3,532
|
)
|
|
(21,895
|
)
|
|
(1,598
|
)
|
|
(679
|
)
|
|
(54,852
|
)
|
|||||||
Balance, December 31, 2013
|
|
$
|
1,624
|
|
|
$
|
1,991
|
|
|
$
|
365
|
|
|
$
|
1,508
|
|
|
$
|
150
|
|
|
$
|
—
|
|
|
$
|
5,638
|
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
United States
|
|
$
|
263,427
|
|
|
$
|
237,450
|
|
|
$
|
199,429
|
|
Foreign
|
|
17,632
|
|
|
13,303
|
|
|
16,655
|
|
|||
Income before income taxes
|
|
$
|
281,059
|
|
|
$
|
250,753
|
|
|
$
|
216,084
|
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Current tax provision:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
80,262
|
|
|
$
|
66,178
|
|
|
$
|
49,702
|
|
State
|
|
11,599
|
|
|
6,276
|
|
|
9,168
|
|
|||
Foreign
|
|
4,789
|
|
|
1,537
|
|
|
3,269
|
|
|||
Total current tax provision
|
|
96,650
|
|
|
73,991
|
|
|
62,139
|
|
|||
Deferred tax provision:
|
|
|
|
|
|
|
||||||
Federal
|
|
(1,403
|
)
|
|
6,799
|
|
|
9,158
|
|
|||
State
|
|
(618
|
)
|
|
735
|
|
|
1,094
|
|
|||
Foreign
|
|
(222
|
)
|
|
(1,264
|
)
|
|
(902
|
)
|
|||
Total deferred tax provision
|
|
(2,243
|
)
|
|
6,270
|
|
|
9,350
|
|
|||
Income tax provision
|
|
$
|
94,407
|
|
|
$
|
80,261
|
|
|
$
|
71,489
|
|
|
|
2013
|
|
2012
|
|
2011
|
|||
Income tax at federal statutory rate
|
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State income tax expense, net of federal income tax benefit
|
|
2.8
|
%
|
|
2.5
|
%
|
|
2.8
|
%
|
Change in unrecognized tax benefits, including interest and penalties
|
|
—
|
|
|
—
|
|
|
0.5
|
%
|
Qualified production activities deduction
|
|
(2.8
|
%)
|
|
(2.6
|
%)
|
|
(2.4
|
%)
|
Receivables for prior year tax returns
(1)
|
|
(0.1
|
%)
|
|
(0.7
|
%)
|
|
(0.8
|
%)
|
Impact of health care legislation on deferred income taxes
(2)
|
|
—
|
|
|
(0.4
|
%)
|
|
(1.2
|
%)
|
Other
|
|
(1.3
|
%)
|
|
(1.8
|
%)
|
|
(0.8
|
%)
|
Income tax provision
|
|
33.6
|
%
|
|
32.0
|
%
|
|
33.1
|
%
|
|
|
Unrecognized tax benefits
|
||
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
|
|
|
Additions for tax positions of current year
|
|
364
|
|
|
Additions for tax positions of prior years
|
|
2,793
|
|
|
Reductions for tax positions of prior years
|
|
(2,976
|
)
|
|
Settlements
|
|
(416
|
)
|
|
Lapse of statutes of limitations
|
|
(382
|
)
|
|
Balance, December 31, 2012
|
|
5,619
|
|
|
Additions for tax positions of current year
|
|
617
|
|
|
Additions for tax positions of prior years
|
|
834
|
|
|
Fair value of acquired tax positions
|
|
316
|
|
|
Reductions for tax positions of prior years
|
|
(1,178
|
)
|
|
Lapse of statutes of limitations
|
|
(203
|
)
|
|
Balance, December 31, 2013
|
|
$
|
6,005
|
|
|
|
2013
|
|
2012
|
||||||||||||
|
|
Deferred tax assets
|
|
Deferred tax liabilities
|
|
Deferred tax assets
|
|
Deferred tax liabilities
|
||||||||
Goodwill
|
|
$
|
—
|
|
|
$
|
51,962
|
|
|
$
|
—
|
|
|
$
|
46,991
|
|
Intangible assets
|
|
—
|
|
|
28,370
|
|
|
—
|
|
|
30,376
|
|
||||
Deferred advertising costs
|
|
—
|
|
|
4,814
|
|
|
—
|
|
|
5,080
|
|
||||
Early extinguishment of debt (Note 13)
|
|
—
|
|
|
3,921
|
|
|
—
|
|
|
3,788
|
|
||||
Property, plant and equipment
|
|
—
|
|
|
1,606
|
|
|
—
|
|
|
3,183
|
|
||||
Employee benefit plans
|
|
3,319
|
|
|
—
|
|
|
10,170
|
|
|
—
|
|
||||
Net operating loss and capital loss carryforwards
|
|
9,129
|
|
|
—
|
|
|
7,609
|
|
|
—
|
|
||||
Reserves and accruals
|
|
7,206
|
|
|
—
|
|
|
5,992
|
|
|
—
|
|
||||
Inventories
|
|
2,768
|
|
|
—
|
|
|
2,967
|
|
|
—
|
|
||||
Federal benefit of state uncertain tax positions
|
|
2,259
|
|
|
—
|
|
|
2,311
|
|
|
—
|
|
||||
All other
|
|
2,449
|
|
|
7,271
|
|
|
2,810
|
|
|
5,664
|
|
||||
Total deferred taxes
|
|
27,130
|
|
|
97,944
|
|
|
31,859
|
|
|
95,082
|
|
||||
Valuation allowances
|
|
(3,203
|
)
|
|
—
|
|
|
(2,575
|
)
|
|
—
|
|
||||
Net deferred taxes
|
|
$
|
23,927
|
|
|
$
|
97,944
|
|
|
$
|
29,284
|
|
|
$
|
95,082
|
|
•
|
State net operating loss carryforwards of
$40,445
which expire at
various dates up to 2033
;
|
•
|
Federal net operating loss carryforwards of
$10,349
which expire at various dates
between 2025 and 2033
;
|
•
|
Capital loss carryforwards of
$6,057
in Canada which
do not expire
; and
|
•
|
Net operating loss carryforwards of
$5,883
in Ireland which
do not expire
.
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Stock options
|
|
$
|
4,705
|
|
|
$
|
4,681
|
|
|
$
|
3,633
|
|
Restricted shares and restricted stock units
|
|
2,556
|
|
|
2,323
|
|
|
1,799
|
|
|||
Employee stock purchase plan
|
|
301
|
|
|
288
|
|
|
301
|
|
|||
Total share-based compensation expense
|
|
$
|
7,562
|
|
|
$
|
7,292
|
|
|
$
|
5,733
|
|
Income tax benefit
|
|
$
|
(2,595
|
)
|
|
$
|
(2,439
|
)
|
|
$
|
(1,930
|
)
|
|
|
2013
|
|
2012
|
|
2011
|
|||
Risk-free interest rate
|
|
0.7
|
%
|
|
0.7
|
%
|
|
2.0
|
%
|
Dividend yield
|
|
2.6
|
%
|
|
4.0
|
%
|
|
3.9
|
%
|
Expected volatility
|
|
50.5
|
%
|
|
59.6
|
%
|
|
58.6
|
%
|
Weighted-average option life (in years)
|
|
4.3
|
|
|
4.3
|
|
|
4.3
|
|
|
|
Number of options
(in thousands)
|
|
Weighted-average exercise price per option
|
|
Aggregate intrinsic value
|
|
Weighted-average remaining contractual term
(in years)
|
|||||
Outstanding, December 31, 2010
|
|
2,913
|
|
|
$
|
22.60
|
|
|
|
|
|
||
Granted
|
|
598
|
|
|
25.56
|
|
|
|
|
|
|||
Exercised
|
|
(383
|
)
|
|
16.56
|
|
|
|
|
|
|||
Forfeited or expired
|
|
(362
|
)
|
|
28.87
|
|
|
|
|
|
|||
Outstanding, December 31, 2011
|
|
2,766
|
|
|
23.26
|
|
|
|
|
|
|||
Granted
|
|
671
|
|
|
25.16
|
|
|
|
|
|
|||
Exercised
|
|
(989
|
)
|
|
18.70
|
|
|
|
|
|
|||
Forfeited or expired
|
|
(226
|
)
|
|
32.13
|
|
|
|
|
|
|||
Outstanding, December 31, 2012
|
|
2,222
|
|
|
24.96
|
|
|
|
|
|
|||
Granted
|
|
465
|
|
|
38.74
|
|
|
|
|
|
|||
Exercised
|
|
(912
|
)
|
|
27.19
|
|
|
|
|
|
|||
Forfeited or expired
|
|
(135
|
)
|
|
30.03
|
|
|
|
|
|
|||
Outstanding, December 31, 2013
|
|
1,640
|
|
|
27.22
|
|
|
$
|
40,944
|
|
|
4.4
|
|
|
|
|
|
|
|
|
|
|
|||||
Exercisable at December 31, 2011
|
|
1,685
|
|
|
$
|
25.18
|
|
|
|
|
|
||
Exercisable at December 31, 2012
|
|
1,134
|
|
|
25.68
|
|
|
|
|
|
|||
Exercisable at December 31, 2013
|
|
759
|
|
|
22.09
|
|
|
$
|
22,842
|
|
|
3.2
|
|
|
Number of units
(in thousands)
|
|
Weighted-average grant date fair value per unit
|
|
Aggregate intrinsic value
|
|
Weighted-average remaining contractual term
(in years)
|
|||||
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
|
|
|
|
|
|
|||
Granted
|
|
43
|
|
|
24.26
|
|
|
|
|
|
|||
Vested
|
|
(16
|
)
|
|
20.63
|
|
|
|
|
|
|||
Forfeited
|
|
(5
|
)
|
|
23.42
|
|
|
|
|
|
|||
Outstanding at December 31, 2012
|
|
123
|
|
|
24.56
|
|
|
|
|
|
|||
Granted
|
|
45
|
|
|
36.74
|
|
|
|
|
|
|||
Vested
|
|
(11
|
)
|
|
24.33
|
|
|
|
|
|
|||
Forfeited
|
|
(7
|
)
|
|
26.78
|
|
|
|
|
|
|||
Outstanding at December 31, 2013
|
|
150
|
|
|
27.11
|
|
|
$
|
7,851
|
|
|
3.8
|
|
|
Number of shares
|
|
Weighted-average grant date fair value per share
|
|||
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
|
|
|
Granted
|
|
37
|
|
|
23.63
|
|
|
Vested
|
|
(34
|
)
|
|
23.44
|
|
|
Forfeited
|
|
(3
|
)
|
|
25.37
|
|
|
Unvested at December 31, 2012
|
|
40
|
|
|
23.73
|
|
|
Granted
|
|
17
|
|
|
37.50
|
|
|
Vested
|
|
(33
|
)
|
|
23.68
|
|
|
Forfeited
|
|
(3
|
)
|
|
23.45
|
|
|
Unvested at December 31, 2013
|
|
21
|
|
|
35.24
|
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Profit sharing/cash bonus plans
|
|
$
|
25,561
|
|
|
$
|
33,007
|
|
|
$
|
16,361
|
|
401(k) plan
|
|
7,004
|
|
|
6,680
|
|
|
6,226
|
|
|
|
Postretirement benefit plan
|
|
Pension plan
|
||||
Change in benefit obligation:
|
|
|
|
|
||||
Benefit obligation, December 31, 2011
|
|
$
|
146,125
|
|
|
$
|
3,680
|
|
Interest cost
|
|
5,913
|
|
|
148
|
|
||
Net actuarial (gain) loss
|
|
(19,917
|
)
|
|
368
|
|
||
Benefits paid from company funds
|
|
(10,679
|
)
|
|
(324
|
)
|
||
Plan amendment
|
|
(5,063
|
)
|
|
—
|
|
||
Medicare Part D reimbursements
|
|
851
|
|
|
—
|
|
||
Benefit obligation, December 31, 2012
|
|
117,230
|
|
|
3,872
|
|
||
Interest cost
|
|
3,535
|
|
|
117
|
|
||
Net actuarial gain
|
|
(2,666
|
)
|
|
(237
|
)
|
||
Benefits paid from plan assets and company funds
|
|
(10,386
|
)
|
|
(324
|
)
|
||
Medicare Part D reimbursements
|
|
854
|
|
|
—
|
|
||
Benefit obligation, December 31, 2013
|
|
$
|
108,567
|
|
|
$
|
3,428
|
|
|
|
|
|
|
||||
Change in plan assets:
|
|
|
|
|
||||
Fair value of plan assets, December 31, 2011
|
|
$
|
100,622
|
|
|
$
|
—
|
|
Actual gain on plan assets
|
|
14,001
|
|
|
—
|
|
||
Company contributions
|
|
7,600
|
|
|
—
|
|
||
Fair value of plan assets, December 31, 2012
|
|
122,223
|
|
|
—
|
|
||
Actual gain on plan assets
|
|
18,886
|
|
|
—
|
|
||
Benefits paid
|
|
(7,561
|
)
|
|
—
|
|
||
Fair value of plan assets, December 31, 2013
|
|
$
|
133,548
|
|
|
$
|
—
|
|
|
|
|
|
|
||||
Funded status, December 31, 2012
|
|
$
|
4,993
|
|
|
$
|
(3,872
|
)
|
Funded status, December 31, 2013
|
|
$
|
24,981
|
|
|
$
|
(3,428
|
)
|
|
|
2013
|
|
2012
|
||||
Retiree medical benefits for post-1986 retirees
|
|
$
|
124,730
|
|
|
$
|
114,037
|
|
Post-2012 prescription drug benefits for pre-1986 retirees
|
|
8,818
|
|
|
8,186
|
|
||
Fair value of plan assets
|
|
$
|
133,548
|
|
|
$
|
122,223
|
|
|
|
Postretirement benefit plan
|
|
Pension plan
|
||||||||||||
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Other non-current assets
|
|
$
|
24,981
|
|
|
$
|
4,993
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Accrued liabilities
|
|
—
|
|
|
—
|
|
|
324
|
|
|
324
|
|
||||
Other non-current liabilities
|
|
—
|
|
|
—
|
|
|
3,104
|
|
|
3,548
|
|
|
|
2013
|
|
2012
|
||||
Unrecognized prior service credit
|
|
$
|
21,284
|
|
|
$
|
22,705
|
|
Unrecognized net actuarial loss
|
|
(70,350
|
)
|
|
(88,548
|
)
|
||
Tax effect
|
|
14,192
|
|
|
20,540
|
|
||
Amount recognized in accumulated other comprehensive loss, net of tax
|
|
$
|
(34,874
|
)
|
|
$
|
(45,303
|
)
|
|
|
Amounts expected to be expensed
|
||
Prior service credit
|
|
$
|
(1,421
|
)
|
Net actuarial loss
|
|
3,418
|
|
|
Total
|
|
$
|
1,997
|
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Interest cost
|
|
$
|
3,652
|
|
|
$
|
6,061
|
|
|
$
|
6,833
|
|
Expected return on plan assets
|
|
(8,030
|
)
|
|
(7,803
|
)
|
|
(7,851
|
)
|
|||
Amortization of prior service credit
|
|
(1,421
|
)
|
|
(3,055
|
)
|
|
(3,743
|
)
|
|||
Amortization of net actuarial losses
|
|
4,439
|
|
|
5,879
|
|
|
5,415
|
|
|||
Net periodic benefit (income) expense
|
|
$
|
(1,360
|
)
|
|
$
|
1,082
|
|
|
$
|
654
|
|
|
|
2013
|
|
2012
|
||
Discount rate
|
|
4.25
|
%
|
|
3.15
|
%
|
|
|
2013
|
|
2012
|
|
2011
|
|||
Discount rate
|
|
3.15
|
%
|
|
4.20
|
%
|
|
4.90
|
%
|
Expected return on plan assets
|
|
6.75
|
%
|
|
7.25
|
%
|
|
7.75
|
%
|
|
|
2013
|
|
2012
|
|
2011
|
|||||||||
|
|
Participants under age 65
|
|
Participants age 65 and older
|
|
Participants under age 65
|
|
Participants age 65 and older
|
|
All participants
|
|||||
Health care cost trend rate assumed for next year
|
|
7.75
|
%
|
|
7.25
|
%
|
|
8.00
|
%
|
|
7.50
|
%
|
|
7.50
|
%
|
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
|
|
5.00
|
%
|
|
5.00
|
%
|
|
5.00
|
%
|
|
5.00
|
%
|
|
5.00
|
%
|
Year that the rate reaches the ultimate trend rate
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
|
2017
|
|
|
|
One percentage point increase
|
|
One percentage point decrease
|
||||
Effect on total of service and interest cost
|
|
$
|
75
|
|
|
$
|
(71
|
)
|
Effect on benefit obligation
|
|
1,775
|
|
|
(1,664
|
)
|
|
|
Postretirement benefit plan
|
||||
|
|
2013
|
|
2012
|
||
U.S. large capitalization equity securities
|
|
35
|
%
|
|
34
|
%
|
International equity securities
|
|
18
|
%
|
|
19
|
%
|
Mortgage-backed securities
|
|
12
|
%
|
|
15
|
%
|
Government debt securities
|
|
11
|
%
|
|
14
|
%
|
U.S. corporate debt securities
|
|
10
|
%
|
|
11
|
%
|
U.S. small and mid-capitalization equity securities
|
|
7
|
%
|
|
7
|
%
|
Other debt securities
|
|
7
|
%
|
|
—
|
%
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
Fair value measurements using
|
||||||||||||
|
|
Fair value as of
December 31,
2013
|
|
Quoted prices in active markets for identical assets
|
|
Significant other observable inputs
|
|
Significant unobservable inputs
|
||||||||
|
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|||||||||
U.S. large capitalization equity securities
|
|
$
|
45,876
|
|
|
$
|
3,033
|
|
|
$
|
42,843
|
|
|
$
|
—
|
|
International equity securities
|
|
24,269
|
|
|
23,397
|
|
|
872
|
|
|
—
|
|
||||
Mortgage-backed securities
|
|
16,060
|
|
|
3,481
|
|
|
12,579
|
|
|
—
|
|
||||
Government debt securities
|
|
14,946
|
|
|
12,916
|
|
|
2,030
|
|
|
—
|
|
||||
U.S. corporate debt securities
|
|
13,287
|
|
|
5,210
|
|
|
8,077
|
|
|
—
|
|
||||
U.S. small and mid-capitalization equity securities
|
|
9,646
|
|
|
9,470
|
|
|
176
|
|
|
—
|
|
||||
Other debt securities
|
|
9,464
|
|
|
7,512
|
|
|
1,952
|
|
|
—
|
|
||||
Total
|
|
$
|
133,548
|
|
|
$
|
65,019
|
|
|
$
|
68,529
|
|
|
$
|
—
|
|
|
|
|
|
Fair value measurements using
|
||||||||||||
|
|
Fair value as of
December 31,
2012
|
|
Quoted prices in active markets for identical assets
|
|
Significant other observable inputs
|
|
Significant unobservable inputs
|
||||||||
|
|
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|||||||||
U.S. large capitalization equity securities
|
|
$
|
40,805
|
|
|
$
|
3,234
|
|
|
$
|
37,571
|
|
|
$
|
—
|
|
International equity securities
|
|
23,491
|
|
|
22,929
|
|
|
562
|
|
|
—
|
|
||||
Mortgage-backed securities
|
|
17,871
|
|
|
5,322
|
|
|
12,549
|
|
|
—
|
|
||||
Government debt securities
|
|
17,365
|
|
|
11,476
|
|
|
5,889
|
|
|
—
|
|
||||
U.S. corporate debt securities
|
|
13,559
|
|
|
6,782
|
|
|
6,777
|
|
|
—
|
|
||||
U.S. small and mid-capitalization equity securities
|
|
8,591
|
|
|
8,392
|
|
|
199
|
|
|
—
|
|
||||
Other debt securities
|
|
541
|
|
|
158
|
|
|
383
|
|
|
—
|
|
||||
Total
|
|
$
|
122,223
|
|
|
$
|
58,293
|
|
|
$
|
63,930
|
|
|
$
|
—
|
|
|
|
Postretirement benefit plan
|
Pension plan
|
|||||
2014
|
|
$
|
9,500
|
|
|
$
|
320
|
|
2015
|
|
9,600
|
|
|
310
|
|
||
2016
|
|
9,500
|
|
|
300
|
|
||
2017
|
|
9,800
|
|
|
290
|
|
||
2018
|
|
9,600
|
|
|
280
|
|
||
2019 - 2023
|
|
40,900
|
|
|
1,240
|
|
|
|
2013
|
|
2012
|
||||
5.125% senior, unsecured notes due October 1, 2014, net of discount
(1)
|
|
$
|
—
|
|
|
$
|
256,770
|
|
7.0% senior notes due March 15, 2019
|
|
200,000
|
|
|
200,000
|
|
||
6.0% senior notes due November 15, 2020
(2)
|
|
183,761
|
|
|
195,811
|
|
||
Long-term portion of capital lease obligations
|
|
1,354
|
|
|
—
|
|
||
Long-term portion of debt
|
|
385,115
|
|
|
652,581
|
|
||
5.125% senior, unsecured notes due October 1, 2014, net of discount
(3)
|
|
255,026
|
|
|
—
|
|
||
Capital lease obligations due within one year
|
|
563
|
|
|
—
|
|
||
Total debt
|
|
$
|
640,704
|
|
|
$
|
652,581
|
|
|
|
2011
|
||
Daily average amount outstanding
|
|
$
|
21,655
|
|
Weighted-average interest rate
|
|
3.03
|
%
|
|
|
Total available
|
||
Credit facility commitment
|
|
$
|
200,000
|
|
Outstanding letters of credit
(1)
|
|
(8,415
|
)
|
|
Net available for borrowing as of December 31, 2013
|
|
$
|
191,585
|
|
|
|
Capital lease obligations
|
|
Operating lease obligations
|
||||
2014
|
|
$
|
663
|
|
|
$
|
8,176
|
|
2015
|
|
596
|
|
|
7,012
|
|
||
2016
|
|
547
|
|
|
3,928
|
|
||
2017
|
|
178
|
|
|
182
|
|
||
2018
|
|
—
|
|
|
11
|
|
||
Total minimum lease payments
|
|
1,984
|
|
|
$
|
19,309
|
|
|
Less portion representing interest
|
|
(67
|
)
|
|
|
|||
Present value of minimum lease payments
|
|
$
|
1,917
|
|
|
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Minimum rentals
|
|
$
|
11,855
|
|
|
$
|
13,408
|
|
|
$
|
10,068
|
|
Sublease rentals
|
|
—
|
|
|
(18
|
)
|
|
(144
|
)
|
|||
Net rental expense
|
|
$
|
11,855
|
|
|
$
|
13,390
|
|
|
$
|
9,924
|
|
|
|
|
|
Reportable Business Segments
|
|
|
|
|
||||||||||||||
|
|
|
|
Small Business Services
|
|
Financial Services
|
|
Direct Checks
|
|
Corporate
|
|
Consolidated
|
||||||||||
Total revenue from external
|
|
2013
|
|
$
|
1,050,250
|
|
|
$
|
343,160
|
|
|
$
|
191,414
|
|
|
$
|
—
|
|
|
$
|
1,584,824
|
|
customers:
|
|
2012
|
|
961,631
|
|
|
341,135
|
|
|
212,151
|
|
|
—
|
|
|
1,514,917
|
|
|||||
|
|
2011
|
|
846,449
|
|
|
342,382
|
|
|
228,765
|
|
|
—
|
|
|
1,417,596
|
|
|||||
Operating income:
|
|
2013
|
|
175,888
|
|
|
82,343
|
|
|
59,683
|
|
|
—
|
|
|
317,914
|
|
|||||
|
|
2012
|
|
160,363
|
|
|
77,728
|
|
|
63,937
|
|
|
—
|
|
|
302,028
|
|
|||||
|
|
2011
|
|
145,219
|
|
|
59,804
|
|
|
66,035
|
|
|
—
|
|
|
271,058
|
|
|||||
Depreciation and amortization
|
|
2013
|
|
45,329
|
|
|
11,231
|
|
|
7,913
|
|
|
—
|
|
|
64,473
|
|
|||||
expense:
|
|
2012
|
|
44,408
|
|
|
12,059
|
|
|
9,185
|
|
|
—
|
|
|
65,652
|
|
|||||
|
|
2011
|
|
44,706
|
|
|
13,009
|
|
|
15,628
|
|
|
—
|
|
|
73,343
|
|
|||||
Total assets:
|
|
2013
|
|
943,868
|
|
|
109,612
|
|
|
167,283
|
|
|
348,766
|
|
|
1,569,529
|
|
|||||
|
|
2012
|
|
877,840
|
|
|
82,150
|
|
|
169,936
|
|
|
282,514
|
|
|
1,412,440
|
|
|||||
|
|
2011
|
|
836,918
|
|
|
99,803
|
|
|
173,435
|
|
|
278,653
|
|
|
1,388,809
|
|
|||||
Capital asset purchases:
|
|
2013
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,459
|
|
|
37,459
|
|
|||||
|
|
2012
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35,193
|
|
|
35,193
|
|
|||||
|
|
2011
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35,506
|
|
|
35,506
|
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Checks, including contract settlements
|
|
$
|
884,605
|
|
|
$
|
890,018
|
|
|
$
|
871,731
|
|
Marketing solutions, including services
(1)
|
|
248,401
|
|
|
205,683
|
|
|
150,973
|
|
|||
Forms
|
|
200,560
|
|
|
200,379
|
|
|
195,905
|
|
|||
Accessories and other products
|
|
156,653
|
|
|
139,000
|
|
|
126,949
|
|
|||
Other services
|
|
94,605
|
|
|
79,837
|
|
|
72,038
|
|
|||
Total revenue
|
|
$
|
1,584,824
|
|
|
$
|
1,514,917
|
|
|
$
|
1,417,596
|
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Total revenue from external customers:
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
1,501,176
|
|
|
$
|
1,427,593
|
|
|
$
|
1,334,540
|
|
Foreign, primarily Canada
|
|
83,648
|
|
|
87,324
|
|
|
83,056
|
|
|||
Total revenue
|
|
$
|
1,584,824
|
|
|
$
|
1,514,917
|
|
|
$
|
1,417,596
|
|
|
|
|
|
|
|
|
||||||
Long-lived assets
(1)
:
|
|
|
|
|
|
|
||||||
United States
|
|
$
|
1,191,084
|
|
|
$
|
1,131,525
|
|
|
$
|
1,139,678
|
|
Foreign, primarily Canada
|
|
14,681
|
|
|
14,274
|
|
|
11,409
|
|
|||
Total long-lived assets
|
|
$
|
1,205,765
|
|
|
$
|
1,145,799
|
|
|
$
|
1,151,087
|
|
|
|
Year Ended December 31, 2013
|
||||||||||||||||||
|
|
Deluxe Corporation
|
|
Guarantor subsidiaries
|
|
Non-guarantor subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||
Product revenue
|
|
$
|
—
|
|
|
$
|
1,293,257
|
|
|
$
|
76,454
|
|
|
$
|
—
|
|
|
$
|
1,369,711
|
|
Service revenue
|
|
9,042
|
|
|
188,767
|
|
|
34,962
|
|
|
(17,658
|
)
|
|
215,113
|
|
|||||
Total revenue
|
|
9,042
|
|
|
1,482,024
|
|
|
111,416
|
|
|
(17,658
|
)
|
|
1,584,824
|
|
|||||
Cost of products sold
|
|
—
|
|
|
(429,432
|
)
|
|
(34,055
|
)
|
|
—
|
|
|
(463,487
|
)
|
|||||
Cost of services
|
|
(7,597
|
)
|
|
(85,693
|
)
|
|
(12,532
|
)
|
|
8,193
|
|
|
(97,629
|
)
|
|||||
Total cost of revenue
|
|
(7,597
|
)
|
|
(515,125
|
)
|
|
(46,587
|
)
|
|
8,193
|
|
|
(561,116
|
)
|
|||||
Gross profit
|
|
1,445
|
|
|
966,899
|
|
|
64,829
|
|
|
(9,465
|
)
|
|
1,023,708
|
|
|||||
Operating expenses
|
|
—
|
|
|
(669,218
|
)
|
|
(46,041
|
)
|
|
9,465
|
|
|
(705,794
|
)
|
|||||
Operating income
|
|
1,445
|
|
|
297,681
|
|
|
18,788
|
|
|
—
|
|
|
317,914
|
|
|||||
Interest expense
|
|
(38,236
|
)
|
|
(8,442
|
)
|
|
(3
|
)
|
|
8,380
|
|
|
(38,301
|
)
|
|||||
Other income
|
|
7,283
|
|
|
2,027
|
|
|
516
|
|
|
(8,380
|
)
|
|
1,446
|
|
|||||
(Loss) income before income taxes
|
|
(29,508
|
)
|
|
291,266
|
|
|
19,301
|
|
|
—
|
|
|
281,059
|
|
|||||
Income tax benefit (provision)
|
|
16,597
|
|
|
(105,812
|
)
|
|
(5,192
|
)
|
|
—
|
|
|
(94,407
|
)
|
|||||
(Loss) income before equity in earnings of consolidated subsidiaries
|
|
(12,911
|
)
|
|
185,454
|
|
|
14,109
|
|
|
—
|
|
|
186,652
|
|
|||||
Equity in earnings of consolidated subsidiaries
|
|
199,563
|
|
|
14,109
|
|
|
—
|
|
|
(213,672
|
)
|
|
—
|
|
|||||
Net income
|
|
$
|
186,652
|
|
|
$
|
199,563
|
|
|
$
|
14,109
|
|
|
$
|
(213,672
|
)
|
|
$
|
186,652
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income
|
|
$
|
193,875
|
|
|
$
|
205,595
|
|
|
$
|
9,862
|
|
|
$
|
(215,457
|
)
|
|
$
|
193,875
|
|
|
|
Year Ended December 31, 2012
|
||||||||||||||||||
|
|
Deluxe Corporation
|
|
Guarantor subsidiaries
|
|
Non-guarantor subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||
Product revenue
|
|
$
|
—
|
|
|
$
|
1,283,471
|
|
|
$
|
62,458
|
|
|
$
|
—
|
|
|
$
|
1,345,929
|
|
Service revenue
|
|
8,902
|
|
|
150,758
|
|
|
26,625
|
|
|
(17,297
|
)
|
|
168,988
|
|
|||||
Total revenue
|
|
8,902
|
|
|
1,434,229
|
|
|
89,083
|
|
|
(17,297
|
)
|
|
1,514,917
|
|
|||||
Cost of products sold
|
|
—
|
|
|
(422,836
|
)
|
|
(24,158
|
)
|
|
—
|
|
|
(446,994
|
)
|
|||||
Cost of services
|
|
(5,637
|
)
|
|
(68,339
|
)
|
|
(9,042
|
)
|
|
5,637
|
|
|
(77,381
|
)
|
|||||
Total cost of revenue
|
|
(5,637
|
)
|
|
(491,175
|
)
|
|
(33,200
|
)
|
|
5,637
|
|
|
(524,375
|
)
|
|||||
Gross profit
|
|
3,265
|
|
|
943,054
|
|
|
55,883
|
|
|
(11,660
|
)
|
|
990,542
|
|
|||||
Operating expenses
|
|
—
|
|
|
(654,414
|
)
|
|
(45,760
|
)
|
|
11,660
|
|
|
(688,514
|
)
|
|||||
Operating income
|
|
3,265
|
|
|
288,640
|
|
|
10,123
|
|
|
—
|
|
|
302,028
|
|
|||||
Loss on early debt extinguishment
|
|
(5,258
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,258
|
)
|
|||||
Interest expense
|
|
(46,767
|
)
|
|
(12,819
|
)
|
|
(7
|
)
|
|
12,746
|
|
|
(46,847
|
)
|
|||||
Other income
|
|
11,721
|
|
|
(1,341
|
)
|
|
3,196
|
|
|
(12,746
|
)
|
|
830
|
|
|||||
(Loss) income before income taxes
|
|
(37,039
|
)
|
|
274,480
|
|
|
13,312
|
|
|
—
|
|
|
250,753
|
|
|||||
Income tax benefit (provision)
|
|
19,690
|
|
|
(99,674
|
)
|
|
(277
|
)
|
|
—
|
|
|
(80,261
|
)
|
|||||
(Loss) income before equity in earnings of consolidated subsidiaries
|
|
(17,349
|
)
|
|
174,806
|
|
|
13,035
|
|
|
—
|
|
|
170,492
|
|
|||||
Equity in earnings of consolidated subsidiaries
|
|
187,841
|
|
|
13,035
|
|
|
—
|
|
|
(200,876
|
)
|
|
—
|
|
|||||
Net income
|
|
$
|
170,492
|
|
|
$
|
187,841
|
|
|
$
|
13,035
|
|
|
$
|
(200,876
|
)
|
|
$
|
170,492
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income
|
|
$
|
189,246
|
|
|
$
|
205,245
|
|
|
$
|
13,704
|
|
|
$
|
(218,949
|
)
|
|
$
|
189,246
|
|
|
|
Year Ended December 31, 2011
|
||||||||||||||||||
|
|
Deluxe Corporation
|
|
Guarantor subsidiaries
|
|
Non-guarantor subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||
Product revenue
|
|
$
|
—
|
|
|
$
|
1,219,745
|
|
|
$
|
60,675
|
|
|
$
|
—
|
|
|
$
|
1,280,420
|
|
Service revenue
|
|
9,409
|
|
|
112,364
|
|
|
31,495
|
|
|
(16,092
|
)
|
|
137,176
|
|
|||||
Total revenue
|
|
9,409
|
|
|
1,332,109
|
|
|
92,170
|
|
|
(16,092
|
)
|
|
1,417,596
|
|
|||||
Cost of products sold
|
|
—
|
|
|
(412,558
|
)
|
|
(23,005
|
)
|
|
—
|
|
|
(435,563
|
)
|
|||||
Cost of services
|
|
(9,323
|
)
|
|
(49,424
|
)
|
|
(9,031
|
)
|
|
9,939
|
|
|
(57,839
|
)
|
|||||
Total cost of revenue
|
|
(9,323
|
)
|
|
(461,982
|
)
|
|
(32,036
|
)
|
|
9,939
|
|
|
(493,402
|
)
|
|||||
Gross profit
|
|
86
|
|
|
870,127
|
|
|
60,134
|
|
|
(6,153
|
)
|
|
924,194
|
|
|||||
Operating expenses
|
|
—
|
|
|
(616,044
|
)
|
|
(43,245
|
)
|
|
6,153
|
|
|
(653,136
|
)
|
|||||
Operating income
|
|
86
|
|
|
254,083
|
|
|
16,889
|
|
|
—
|
|
|
271,058
|
|
|||||
Loss on early debt extinguishment
|
|
(6,995
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,995
|
)
|
|||||
Interest expense
|
|
(47,629
|
)
|
|
(9,749
|
)
|
|
(2
|
)
|
|
9,583
|
|
|
(47,797
|
)
|
|||||
Other income (expense)
|
|
8,534
|
|
|
1,086
|
|
|
(219
|
)
|
|
(9,583
|
)
|
|
(182
|
)
|
|||||
(Loss) income before income taxes
|
|
(46,004
|
)
|
|
245,420
|
|
|
16,668
|
|
|
—
|
|
|
216,084
|
|
|||||
Income tax benefit (provision)
|
|
22,143
|
|
|
(88,811
|
)
|
|
(4,821
|
)
|
|
—
|
|
|
(71,489
|
)
|
|||||
(Loss) income before equity in earnings of consolidated subsidiaries
|
|
(23,861
|
)
|
|
156,609
|
|
|
11,847
|
|
|
—
|
|
|
144,595
|
|
|||||
Equity in earnings of consolidated subsidiaries
|
|
168,456
|
|
|
11,847
|
|
|
—
|
|
|
(180,303
|
)
|
|
—
|
|
|||||
Net income
|
|
$
|
144,595
|
|
|
$
|
168,456
|
|
|
$
|
11,847
|
|
|
$
|
(180,303
|
)
|
|
$
|
144,595
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Comprehensive income
|
|
$
|
135,206
|
|
|
$
|
157,596
|
|
|
$
|
10,453
|
|
|
$
|
(168,049
|
)
|
|
$
|
135,206
|
|
|
|
Year Ended December 31, 2013
|
||||||||||||||||||
|
|
Deluxe Corporation
|
|
Guarantor subsidiaries
|
|
Non-guarantor subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||
Net cash (used) provided by operating activities
|
|
$
|
(7,462
|
)
|
|
$
|
243,906
|
|
|
$
|
24,160
|
|
|
$
|
898
|
|
|
$
|
261,502
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of capital assets
|
|
—
|
|
|
(32,659
|
)
|
|
(4,800
|
)
|
|
—
|
|
|
(37,459
|
)
|
|||||
Payments for acquisitions, net of cash acquired
|
|
—
|
|
|
(69,709
|
)
|
|
—
|
|
|
—
|
|
|
(69,709
|
)
|
|||||
Loans to distributors
|
|
—
|
|
|
(778
|
)
|
|
—
|
|
|
—
|
|
|
(778
|
)
|
|||||
Proceeds from company-owned life insurance policies
|
|
3,641
|
|
|
958
|
|
|
—
|
|
|
—
|
|
|
4,599
|
|
|||||
Other
|
|
1,181
|
|
|
1,104
|
|
|
12
|
|
|
—
|
|
|
2,297
|
|
|||||
Net cash provided (used) by investing activities
|
|
4,822
|
|
|
(101,084
|
)
|
|
(4,788
|
)
|
|
—
|
|
|
(101,050
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Payments on long-term debt, including costs of debt reacquisition
|
|
(224
|
)
|
|
—
|
|
|
(1,331
|
)
|
|
—
|
|
|
(1,555
|
)
|
|||||
Payments for debt issue costs
|
|
(236
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(236
|
)
|
|||||
Proceeds from issuing shares under employee plans
|
|
15,948
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,948
|
|
|||||
Excess tax benefit from share-based employee awards
|
|
3,055
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,055
|
|
|||||
Payments for common shares repurchased
|
|
(48,798
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(48,798
|
)
|
|||||
Cash dividends paid to shareholders
|
|
(50,711
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50,711
|
)
|
|||||
Advances from (to) consolidated subsidiaries
|
|
140,716
|
|
|
(139,059
|
)
|
|
(1,657
|
)
|
|
—
|
|
|
—
|
|
|||||
Net cash provided (used) by financing activities
|
|
59,750
|
|
|
(139,059
|
)
|
|
(2,988
|
)
|
|
—
|
|
|
(82,297
|
)
|
|||||
Effect of exchange rate change on cash
|
|
—
|
|
|
—
|
|
|
(2,501
|
)
|
|
—
|
|
|
(2,501
|
)
|
|||||
Net change in cash and cash equivalents
|
|
57,110
|
|
|
3,763
|
|
|
13,883
|
|
|
898
|
|
|
75,654
|
|
|||||
Cash and cash equivalents, beginning of year
|
|
14,862
|
|
|
3,228
|
|
|
31,346
|
|
|
(4,001
|
)
|
|
45,435
|
|
|||||
Cash and cash equivalents, end of year
|
|
$
|
71,972
|
|
|
$
|
6,991
|
|
|
$
|
45,229
|
|
|
$
|
(3,103
|
)
|
|
$
|
121,089
|
|
|
|
Year Ended December 31, 2012
|
||||||||||||||||||
|
|
Deluxe Corporation
|
|
Guarantor subsidiaries
|
|
Non-guarantor subsidiaries
|
|
Eliminations
|
|
Total
|
||||||||||
Net cash (used) provided by operating activities
|
|
$
|
(10,325
|
)
|
|
$
|
244,091
|
|
|
$
|
10,311
|
|
|
$
|
—
|
|
|
$
|
244,077
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of capital assets
|
|
—
|
|
|
(31,561
|
)
|
|
(3,632
|
)
|
|
—
|
|
|
(35,193
|
)
|
|||||
Payments for acquisitions, net of cash acquired
|
|
—
|
|
|
(34,172
|
)
|
|
—
|
|
|
—
|
|
|
(34,172
|
)
|
|||||
Loans to distributors
|
|
—
|
|
|
(3,227
|
)
|
|
(60
|
)
|
|
—
|
|
|
(3,287
|
)
|
|||||
Proceeds from sale of facility
|
|
—
|
|
|
2,613
|
|
|
—
|
|
|
—
|
|
|
2,613
|
|
|||||
Other
|
|
379
|
|
|
1,162
|
|
|
(15
|
)
|
|
—
|
|
|
1,526
|
|
|||||
Net cash provided (used) by investing activities
|
|
379
|
|
|
(65,185
|
)
|
|
(3,707
|
)
|
|
—
|
|
|
(68,513
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Payments on long-term debt, including costs of debt reacquisition
|
|
(288,938
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(288,938
|
)
|
|||||
Proceeds from issuing long-term debt
|
|
200,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
200,000
|
|
|||||
Payments for debt issue costs
|
|
(4,504
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,504
|
)
|
|||||
Change in book overdrafts
|
|
(2,426
|
)
|
|
3,827
|
|
|
—
|
|
|
(4,001
|
)
|
|
(2,600
|
)
|
|||||
Proceeds from issuing shares under employee plans
|
|
12,320
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,320
|
|
|||||
Excess tax benefit from share-based employee awards
|
|
2,285
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,285
|
|
|||||
Payments for common shares repurchased
|
|
(27,155
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27,155
|
)
|
|||||
Cash dividends paid to shareholders
|
|
(50,918
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50,918
|
)
|
|||||
Advances from (to) consolidated subsidiaries
|
|
181,097
|
|
|
(181,166
|
)
|
|
69
|
|
|
—
|
|
|
—
|
|
|||||
Net cash provided (used) by financing activities
|
|
21,761
|
|
|
(177,339
|
)
|
|
69
|
|
|
(4,001
|
)
|
|
(159,510
|
)
|
|||||
Effect of exchange rate change on cash
|
|
—
|
|
|
—
|
|
|
694
|
|
|
—
|
|
|
694
|
|
|||||
Net change in cash and cash equivalents
|
|
11,815
|
|
|
1,567
|
|
|
7,367
|
|
|
(4,001
|
)
|
|
16,748
|
|
|||||
Cash and cash equivalents, beginning of year
|
|
3,047
|
|
|
1,661
|
|
|
23,979
|
|
|
—
|
|
|
28,687
|
|
|||||
Cash and cash equivalents, end of year
|
|
$
|
14,862
|
|
|
$
|
3,228
|
|
|
$
|
31,346
|
|
|
$
|
(4,001
|
)
|
|
$
|
45,435
|
|
|
|
Year Ended December 31, 2011
|
||||||||||||||
|
|
Deluxe Corporation
|
|
Guarantor subsidiaries
|
|
Non-guarantor subsidiaries
|
|
Total
|
||||||||
Net cash provided by operating activities
|
|
$
|
2,567
|
|
|
$
|
219,066
|
|
|
$
|
13,734
|
|
|
$
|
235,367
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
||||||||
Purchases of capital assets
|
|
—
|
|
|
(33,748
|
)
|
|
(1,758
|
)
|
|
(35,506
|
)
|
||||
Payments for acquisitions, net of cash acquired
|
|
—
|
|
|
(85,641
|
)
|
|
—
|
|
|
(85,641
|
)
|
||||
Payments on company-owned life insurance policies
|
|
—
|
|
|
(6,383
|
)
|
|
—
|
|
|
(6,383
|
)
|
||||
Loans to distributors
|
|
—
|
|
|
(5,029
|
)
|
|
(146
|
)
|
|
(5,175
|
)
|
||||
Proceeds from sale of facility
|
|
—
|
|
|
699
|
|
|
—
|
|
|
699
|
|
||||
Other
|
|
(342
|
)
|
|
567
|
|
|
(4
|
)
|
|
221
|
|
||||
Net cash used by investing activities
|
|
(342
|
)
|
|
(129,535
|
)
|
|
(1,908
|
)
|
|
(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
|
|
|
(87,801
|
)
|
|
(648
|
)
|
|
—
|
|
||||
Net cash used by financing activities
|
|
(2,375
|
)
|
|
(88,679
|
)
|
|
(648
|
)
|
|
(91,702
|
)
|
||||
Effect of exchange rate change on cash
|
|
—
|
|
|
—
|
|
|
(576
|
)
|
|
(576
|
)
|
||||
Net change in cash and cash equivalents
|
|
(150
|
)
|
|
852
|
|
|
10,602
|
|
|
11,304
|
|
||||
Cash and cash equivalents, beginning of year
|
|
3,197
|
|
|
809
|
|
|
13,377
|
|
|
17,383
|
|
||||
Cash and cash equivalents, end of year
|
|
$
|
3,047
|
|
|
$
|
1,661
|
|
|
$
|
23,979
|
|
|
$
|
28,687
|
|
|
|
2013 Quarter Ended
|
||||||||||||||
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Total revenue
|
|
$
|
387,553
|
|
|
$
|
381,433
|
|
|
$
|
398,080
|
|
|
$
|
417,758
|
|
Gross profit
|
|
254,256
|
|
|
247,886
|
|
|
255,857
|
|
|
265,709
|
|
||||
Net income
|
|
45,875
|
|
|
48,152
|
|
|
46,903
|
|
|
45,722
|
|
||||
Earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
0.90
|
|
|
0.95
|
|
|
0.93
|
|
|
0.90
|
|
||||
Diluted
|
|
0.89
|
|
|
0.94
|
|
|
0.92
|
|
|
0.90
|
|
||||
Cash dividends per share
|
|
0.25
|
|
|
0.25
|
|
|
0.25
|
|
|
0.25
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
2012 Quarter Ended
|
||||||||||||||
|
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Total revenue
|
|
$
|
377,981
|
|
|
$
|
371,014
|
|
|
$
|
378,338
|
|
|
$
|
387,584
|
|
Gross profit
|
|
250,494
|
|
|
243,420
|
|
|
246,648
|
|
|
249,980
|
|
||||
Net income
|
|
44,079
|
|
|
42,262
|
|
|
41,503
|
|
|
42,648
|
|
||||
Earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
0.86
|
|
|
0.83
|
|
|
0.81
|
|
|
0.83
|
|
||||
Diluted
|
|
0.86
|
|
|
0.82
|
|
|
0.81
|
|
|
0.83
|
|
||||
Cash dividends per share
|
|
0.25
|
|
|
0.25
|
|
|
0.25
|
|
|
0.25
|
|
•
|
First quarter 2013
–
net pre-tax restructuring charges of
$1,449
related to our cost reduction initiatives.
|
•
|
Second quarter 2013
–
net pre-tax restructuring charges of
$1,051
related to our cost reduction initiatives.
|
•
|
Third quarter 2013
–
net pre-tax restructuring charges of
$3,079
related to our cost reduction initiatives.
|
•
|
Fourth quarter 2013
–
net pre-tax restructuring charges of
$5,327
related to our cost reduction initiatives and a
$5,000
pre-tax asset impairment charge related to a Small Business Services customer relationship intangible asset.
|
•
|
First quarter 2012 –
net pre-tax restructuring charges of
$1,877
related to our cost reduction initiatives.
|
•
|
Second quarter 2012
–
net pre-tax restructuring charges of
$1,921
related to our cost reduction initiatives.
|
•
|
Third quarter 2012
–
net pre-tax restructuring charges of
$2,934
related to our cost reduction initiatives and a
$1,097
reduction in income tax expense for discrete items, primarily adjustments to prior year state income tax returns.
|
•
|
Fourth quarter 2012
–
pre-tax losses on early debt extinguishment of
$5,258
, net pre-tax restructuring charges of
$4,002
related to our cost reduction initiatives, and a
$1,731
reduction in income tax expense for discrete items, primarily adjustments to foreign deferred income taxes.
|
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
|
|
1,790,016
|
|
(1)
|
$
|
24.93
|
|
(1)
|
8,192,537
|
|
(2)
|
Equity compensation plans not approved by shareholders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Total
|
|
1,790,016
|
|
|
$
|
24.93
|
|
|
8,192,537
|
|
|
Exhibit Number
|
|
Description
|
|
Method of Filing
|
3.1
|
|
Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2010)
|
|
*
|
3.2
|
|
Bylaws (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed with the Commission on October 23, 2008)
|
|
*
|
4.1
|
|
Amended and Restated Rights Agreement, dated as of December 20, 2006, by and between us and Wells Fargo Bank, National Association, as Rights Agent, which includes as Exhibit A thereto, the Form of Rights Certificate (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Commission on December 21, 2006)
|
|
*
|
4.2
|
|
Indenture, dated as of April 30, 2003, by and between us and Wells Fargo Bank Minnesota, N.A., as trustee (incorporated by reference to Exhibit 4.8 to the Registration Statement on Form S-3 (Registration No. 333-104858) filed with the Commission on April 30, 2003)
|
|
*
|
4.3
|
|
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)
|
|
*
|
4.4
|
|
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)
|
|
*
|
4.5
|
|
Indenture, dated as of March 15, 2011, by and 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)
|
|
*
|
4.6
|
|
Supplemental Indenture, dated as of July 30, 2012, among us, OrangeSoda, Inc., the guarantors listed on the signature pages thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.11 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2012)
|
|
*
|
4.7
|
|
Indenture, dated as of November 27, 2012, by and among us, the guarantors listed on the signature pages thereto and U.S. Bank National Association, as trustee (including form of 6.000% Senior Notes due 2020) (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Commission on November 27, 2012)
|
|
*
|
4.8
|
|
Second Supplemental Indenture, dated as of June 28, 2013, among us, VerticalResponse, Inc., the guarantors listed on the signature pages thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.13 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2013)
|
|
*
|
4.9
|
|
Supplemental Indenture, dated as of June 28, 2013, among us, VerticalResponse, Inc., the guarantors listed on the signature pages thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.14 to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2013)
|
|
*
|
Exhibit Number
|
|
Description
|
|
Method of Filing
|
4.10
|
|
Second Supplemental Indenture, dated as of September 25, 2013, among us, ChecksByDeluxe.com, LLC, Direct Checks Unlimited, LLC, Direct Checks Unlimited Sales, Inc., Safeguard Acquisitions, Inc., Safeguard Franchise Systems, Inc., the guarantors listed on the signature pages thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.15 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2013)
|
|
*
|
4.11
|
|
Third Supplemental Indenture, dated as of September 25, 2013, among us, ChecksByDeluxe.com, LLC, Direct Checks Unlimited, LLC, Direct Checks Unlimited Sales, Inc., Safeguard Acquisitions, Inc., Safeguard Franchise Systems, Inc., the guarantors listed on the signature pages thereto and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.16 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2013)
|
|
*
|
10.1
|
|
Deluxe Corporation 2012 Annual Incentive Plan (incorporated by reference to Appendix A of our definitive proxy statement filed with the Commission on March 12, 2012)**
|
|
*
|
10.2
|
|
Deluxe Corporation 2012 Long-Term Incentive Plan (incorporated by reference to Appendix B of our definitive proxy statement filed with the Commission on March 12, 2012)**
|
|
*
|
10.3
|
|
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)**
|
|
*
|
10.4
|
|
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)**
|
|
*
|
10.5
|
|
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)**
|
|
*
|
10.6
|
|
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)**
|
|
*
|
10.7
|
|
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)**
|
|
*
|
10.8
|
|
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)**
|
|
*
|
10.9
|
|
Form of Severance Agreement entered into between us and the following executive officers: Anthony Scarfone, Terry Peterson, Pete Godich, Julie Loosbrock, Malcolm McRoberts, John Filby, Tracey Engelhardt, Michael Mathews and Amanda Brinkman (incorporated by reference to Exhibit 10.17 to the Annual Report on Form 10-K for the year ended December 31, 2000)**
|
|
*
|
10.10
|
|
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)**
|
|
*
|
10.11
|
|
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)**
|
|
*
|
10.12
|
|
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)**
|
|
*
|
Exhibit Number
|
|
Description
|
|
Method of Filing
|
10.13
|
|
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)**
|
|
*
|
10.14
|
|
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)**
|
|
*
|
10.15
|
|
Form of Agreement for Awards Payable in Restricted Stock Units (revised 12/08) (incorporated by reference to Exhibit 10.20 to the Annual Report on Form 10-K for the year ended December 31, 2008)**
|
|
*
|
10.16
|
|
Form of Agreement for Awards Payable in Restricted Stock Units (revised 10/12) (incorporated by reference to Exhibit 10.16 to the Annual Report on Form 10-K for the year ended December 31, 2012)**
|
|
*
|
10.17
|
|
Form of Non-Employee Director Restricted Stock Award Agreement (version 4/07) (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2007)**
|
|
*
|
10.18
|
|
Form of Non-Qualified Stock Option Agreement (version 2/07) (incorporated by reference to exhibit 10.28 to the Annual Report on Form 10-K for the year ended December 31, 2006)**
|
|
*
|
10.19
|
|
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)**
|
|
*
|
10.20
|
|
Form of Non-Qualified Stock Option Agreement (version 10/12) (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2013)**
|
|
*
|
10.21
|
|
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)**
|
|
*
|
10.22
|
|
Omnibus Amendment No. 2 to Credit Agreement, Amendment No. 1 to Subsidiary Guaranty and Amendment No. 1 to Pledge and Security Agreement, dated as of February 21, 2014, by and among us, the institutions from time to time parties thereto as lenders, and JPMorgan Chase Bank, N.A. in its capacity as Administrative Agent for itself and the other lenders (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Commission on February 25, 2014)
|
|
*
|
10.23
|
|
Form of Performance Share Award Agreement (version 2/14)**
|
|
Filed
herewith
|
10.24
|
|
Form of Employee Restricted Stock Award Agreement (version 2/14)**
|
|
Filed
herewith
|
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
|
Exhibit Number
|
|
Description
|
|
Method of Filing
|
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, 2013 and December 31, 2012, (ii) Consolidated Statements of Income for the years ended December 31, 2013, 2012 and 2011, (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2013, 2012 and 2011, (iv) Consolidated Statements of Shareholders' Equity for the years ended December 31, 2013, 2012 and 2011 (v) Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2012 and 2011, and (vi) Notes to Consolidated Financial Statements***
|
|
Filed
herewith
|
|
DELUXE CORPORATION
|
Date: February 28, 2014
|
By: /s/ Lee Schram
|
|
Lee Schram, Chief Executive Officer
|
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)
|
|
|
By: /s/ Jeffrey J. Bata
|
Vice President, Controller and Chief Accounting Officer
|
Jeffrey J. Bata
|
(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
|
|
|
*
|
|
Thomas J. Reddin, Director
|
Director
|
|
|
*
|
|
Martyn R. Redgrave
|
Director
|
|
|
|
|
* By: /s/ Lee Schram
|
|
Lee Schram, Attorney-in-Fact
|
|
Exhibit No.
|
|
Description
|
10.23
|
|
Form of Performance Share Award Agreement (version 2/14)**
|
10.24
|
|
Form of Employee Restricted Stock Award Agreement (version 2/14)**
|
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, 2013 and December 31, 2012, (ii) Consolidated Statements of Income for the years ended December 31, 2013, 2012 and 2011, (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2013, 2012 and 2011, (iv) Consolidated Statements of Shareholders' Equity for the years ended December 31, 2013, 2012 and 2011 (v) Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2012 and 2011, and (vi) Notes to Consolidated Financial Statements
|
AWARDED TO
|
AWARD DATE
|
TARGET NUMBER OF SHARES
|
|
|
|
1.
|
The Award
. Deluxe Corporation, a Minnesota corporation (“Deluxe“), hereby grants to you as of the above Award Date the right to receive shares of Deluxe common stock, par value $1.00 per share (the “Shares”) at the targeted level set forth above (the “Target Award”) on the terms and conditions contained in this Performance Share Award Agreement (this “Agreement”) and the Deluxe Corporation 2012 Long Term Incentive Plan (the “Plan”).
|
2.
|
Performance Period
. The performance period for purposes of determining whether a Performance Award (as defined below) will occur shall be the three-year period commencing on January 1 of the year in which this Award was granted (the “Performance Period”).
|
3.
|
Performance Goals.
The performance goals for purposes of determining whether a Performance Award will occur are set forth in the attached Performance Goals Schedule.
|
4.
|
Vesting
. Vesting of awards shall occur if and to the extent that performance goals are achieved, as set forth in the attached Performance Goals Schedule and as determined and certified by the Compensation Committee of the Board of Directors (the “Committee”) in accordance with the Plan after the end of the Performance Period. Any amount that may vest may be adjusted by the Committee to the extent permitted by this Agreement and the Plan. The final vested award amount certified by the Committee is referred to as the “Performance Award.”
|
5.
|
Distribution
. Any Shares to be distributed under this Agreement shall be distributed as soon as administratively practicable after attainment of the Performance Goals in payment of a Performance Award and to the extent a Performance Award has been certified by the Compensation Committee, but no later than two and one-half months following the end of the Performance Period for which such certification occurred. The Committee may, in its sole discretion, elect to pay you the value of all or any portion of the Performance Award in cash, based upon the closing price of a Share on the business day immediately prior to the date of vesting.
|
6.
|
Restrictions
. Your rights in any Shares covered by this Agreement shall be subject to the following restrictions during and after the Performance Period:
|
(a)
|
The Shares shall be subject to forfeiture to Deluxe as provided in this Agreement and the Plan.
|
(b)
|
Until any Shares are distributed to you under this Agreement, neither you nor anyone claiming through you shall have any rights as a shareholder under this Agreement, including the right to vote or to receive dividends, stock dividends or other non-cash distributions.
|
(c)
|
You may not transfer the right to receive the Shares, other than by will or the laws of descent and distribution, or as otherwise permitted by the Committee pursuant to the Plan, and any such attempted transfer shall be void.
|
7.
|
Termination of Employment.
Except as described in this Section or in Section 8, in the event your employment is terminated prior to the payment of the Performance Award, this Agreement and your rights to receive the Performance Award shall be immediately and irrevocably forfeited, unless your termination occurs on or after the one-year anniversary of commencement of the Performance Period and is by reason of (a) involuntary termination without Cause, (b) resignation for Good Reason, (c) death, (d) Disability, or (e) Qualified Retirement (as those capitalized terms are defined in the Addendum to this Agreement).
|
8.
|
Change of Control
. If, in connection with or following a Change of Control (as defined in the Addendum to this Agreement) in which either Shares of Deluxe continue to be outstanding and listed on a national securities exchange, or a successor to Deluxe assumes this Agreement as provided in the following paragraph, your employment is terminated for any of the reasons (a) through (e) in the first paragraph of Section 7 on or after the one-year anniversary of commencement of the Performance Period and prior to the end of the Performance Period, you or your estate shall be entitled to receive, on or before forty-five days after your employment termination, a distribution of Shares at the Target Award. If, in connection with or following such a Change of Control, your employment is terminated for any of the reasons (a) through (e) in the first paragraph of this Section after the end of the Performance Period, the second paragraph of Section 7 shall apply.
|
9.
|
Rights
. Upon the distribution of any Shares as provided in this Agreement, you shall, subject to the restrictions of this Agreement and the Plan, have all of the rights of a shareholder with respect to the Shares that are distributed, including the right to vote the Shares and receive any cash dividends and any other distributions thereon.
|
10.
|
Income Taxes
. You are liable for any federal and state income or other taxes applicable upon the distribution to you of any Shares or other payments under this Agreement, and you acknowledge that you should consult with your own tax advisor regarding the applicable tax consequences. Upon the distribution of Shares, you shall promptly pay to Deluxe in cash, or in previously acquired shares of Deluxe common stock having a fair market value equal to the amount of all applicable taxes required by Deluxe to be withheld or collected upon the distribution of the Shares. In the alternative, prior to the end of the Performance Period, you may direct Deluxe to withhold from Shares otherwise to be distributed the number of Shares having a fair market value equal to the amount of all applicable taxes required by Deluxe to be withheld upon the distribution of the Shares (based upon the minimum statutory withholding rate as defined by FASB Accounting Standards Codification Paragraph 718-10-25-19). You acknowledge that no Shares will be distributed to you, notwithstanding any Performance Award, unless and until you have satisfied any obligation for withholding taxes as provided in this Agreement. Any Performance Award made under this Agreement and the Plan is intended to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code.
|
12.
|
Terms and Conditions
. This Agreement does not guarantee your continued employment or alter the right of Deluxe or its Affiliates to terminate your employment at any time. This Award is granted pursuant to the Plan and is subject to its terms. In the event of any conflict between the provisions of this Agreement and the Plan, the provisions of the Plan shall govern
.
|
(I)
|
The date on which any one person, or more than one person acting as a group, acquires ownership of stock of Deluxe that, together with stock held by such Person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of Deluxe. If any one Person, or more than one Person acting as a group, is already considered to own more than 50% of the total fair market value or total voting power of the stock of the Deluxe, the acquisition of additional stock by the same Person or Persons is not considered to cause a Change of Control under this paragraph or paragraph (II). An increase in the percentage of stock owned by any one Person, or Persons acting as a group, as a result of a transaction in which Deluxe acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this paragraph. This paragraph applies only when there is a transfer or issuance of stock of Deluxe and stock in Deluxe remains outstanding after the transaction.
|
(II)
|
The date any one Person, or more than one Person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Persons) ownership of stock of Deluxe possessing 30% or more of the total voting power of the stock of such corporation. If any one Person, or more than one Person acting as a group, is already considered to own more than 30% of the total voting power of the stock of the Deluxe, the acquisition of additional stock by the same Person or Persons is not considered to cause a Change of Control under this paragraph.
|
(III)
|
The date a majority of members of Deluxe’s board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the board of directors before the date of the appointment or election.
|
(IV)
|
The date that any one Person, or more than one Person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Persons) assets from Deluxe that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of Deluxe immediately before such acquisition or acquisitions; provided that a Change of Control shall not result from a transfer of assets by Deluxe to (a) a shareholder of Deluxe (immediately prior to the transfer) in exchange for or with respect to Deluxe’s stock, (b) an entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by Deluxe immediately following the transfer, (c) a Person, or more than one Person acting as a group, that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding stock of Deluxe immediately following the transfer, or (d) an entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a Person or group of Persons described in clause (c) For this purpose, gross fair market value means the value of the assets of Deluxe, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.
|
AWARDED TO
|
AWARD DATE
|
NUMBER OF SHARES OF RESTRICTED STOCK
|
|
|
|
1.
|
The Award
. Deluxe Corporation, a Minnesota corporation (“Deluxe“), hereby grants to you as of the above Award Date the above number of restricted shares of Deluxe common stock, par value $1.00 per share (the “Shares”) on the terms and conditions contained in this Restricted Stock Award Agreement (this “Agreement”) and the Deluxe Corporation 2012 Long Term Incentive Plan (the “Plan”).
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2.
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Restricted Period
. The Shares are subject to the restrictions contained in this Agreement and the Plan for a period (the “Restricted Period”) commencing on the Award Date and ending on the third anniversary of the Award Date, subject to the provisions of Section 4 below.
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3.
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Restrictions
. The Shares shall be subject to the following restrictions during the Restricted Period:
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(a)
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The Shares shall be subject to forfeiture to Deluxe as provided in this Agreement and the Plan.
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(b)
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The Shares may not be sold, assigned, transferred or pledged during the Restricted Period. You may not transfer the right to receive the Shares, other than by will or the laws of descent and distribution, and any such attempted transfer shall be void.
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(c)
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The Shares will be issued in your name, either by book-entry registration or issuance of a stock certificate, which certificate will be held by Deluxe. If any certificate is issued, the certificate will bear an appropriate legend referring to the restrictions applicable to the Shares.
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(d)
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Any non-cash dividends or distributions paid or declared with respect to the Shares during the Restricted Period shall be held by Deluxe until the end of the Restricted Period, at which time Deluxe will pay you all such dividends and other distributions, less any applicable tax withholding amounts. If the Shares are forfeited as described in Section 5 of this Agreement, then all rights to such payments shall also be forfeited.
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4.
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Acceleration of Vesting
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(a)
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In the event your employment with the Company is terminated by reason of death, Disability or Qualified Retirement during the
Restricted Period, all of the Shares will vest (i.e., the restrictions on the Shares shall lapse) and the Shares shall become non-forfeitable and transferable as of the date of such termination.
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(b)
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Subject to subparagraph 4(c), in the event your employment is terminated during the Restricted Period by reason of involuntary termination without Cause, a pro-rata portion of the Shares (based on the number of completed days elapsed since the Award Date) then subject to restrictions shall vest and become non-forfeitable and transferable as of the date of such termination.
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(c)
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Notwithstanding any provision contained in this Agreement that would result in Shares vesting in full or in part at a later date, if, in connection with any Change of Control, the acquiring Person, surviving or acquiring corporation or entity, or an Affiliate of such corporation or entity, elects to assume the obligations of Deluxe under this Agreement and to replace the Shares issuable under it with other equity securities that are listed on a national securities exchange (including by use of American Depository Receipts or any similar method) and are freely transferable under all applicable federal and state securities laws and regulations, the Shares then subject to restriction shall vest in full if, within twelve months of the date of the Change of Control,
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(d)
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If the Change of Control does not meet the continuation or replacement criteria specified in subparagraph 4(c) above, all Shares then subject to restriction shall vest in full immediately upon the Change of Control.
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(a)
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Subject to the provisions of Section 4, in the event your employment is terminated during the Restricted Period, or you engage in a Forfeiture Activity (as defined below) during the Restricted Period, your rights to all of the Shares then subject to restrictions shall be immediately and irrevocably forfeited.
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(b)
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If, at any time within 12 months after the date any portion of this Award has vested, you engage in any Forfeiture Activity (as defined below), then the value of the Shares received by you pursuant to such vesting must be paid to Deluxe within 30 days of demand by Deluxe. For purposes hereof, the value received by you shall be determined by multiplying the number of Shares that vested times the closing price on the New York Stock Exchange of a share of Deluxe’s common stock on the vesting date (without regard to any subsequent increase or decrease in the fair market value of such shares).
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(c)
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As used herein, you shall be deemed to have engaged in a Forfeiture Activity if you (i) directly or indirectly, engage in any business activity on your own behalf or as a partner, stockholder, director, trustee, principal, agent, employee, consultant or otherwise of any person or entity which is in any respect in competition with or competitive with the Company or you solicit, entice or induce any employee or representative of the Company to engage in any such activity, (ii) directly or indirectly solicit, entice or induce (or assist any other person or entity in soliciting, enticing or inducing) any customer or potential customer (or agent, employee or consultant of any customer or potential customer) with whom you had contact in the course of your employment with the Company to deal with a competitor of the Company, (iii) fail to hold in a fiduciary capacity for the benefit of the Company all confidential information, knowledge and data, including customer lists and information, business plans and business strategy (“Confidential Data”) relating in any way to the business of the Company for so long as such Confidential Data remains confidential, or (iv) are terminated by the Company for Cause.
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(d)
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If any court of competent jurisdiction shall determine that the foregoing forfeiture provisions are invalid in any respect, the court so holding may limit such provisions in any manner which the court determines such that the provision shall be enforceable against you.
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(e)
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By accepting this Agreement, you consent to a deduction from any amounts the Company owes you from time to time (including amounts owed to you as wages or other compensation, fringe benefits, or vacation pay, as well as any other amounts owed to you by the Company), to the extent of the amount you owe the Company under the foregoing provisions. Whether or not the Company elects to make any set-off in whole or in part, if the Company does not recover by means of set-off the full amount you owe, calculated as set forth above, you agree to pay immediately the unpaid balance to the Company.
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(f)
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You will be released from the forfeiture provisions of subparagraph (c)(i) in the event your employment with the Company has been involuntarily terminated without Cause due to a job elimination or other reduction in force. Otherwise, you may be released from the foregoing forfeiture provisions only if the Compensation Committee of the Deluxe Board (or is duly appointed agent) determines in its sole discretion that such action is in the best interests of the Company.
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6.
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Rights
. Upon issuance of the Shares, you shall, subject to the restrictions of this Agreement and the Plan, have all of the rights of a shareholder with respect to the Shares, including the right to vote the Shares and receive any dividends and other distributions thereon (subject to the provisions of Section 3(d), unless and until the Shares are forfeited. Cash dividends will be paid to you at the time such dividends are paid on shares of Deluxe common stock, less any applicable tax withholding amounts, and may, at Deluxe’s discretion, be paid through its normal payroll process.
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7.
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Income Taxes
. You are liable for any federal and state income or other taxes applicable upon the grant of the Restricted Stock if you make an election under Section 83(b) of the Internal Revenue Code of 1986, as amended, within 30 days of the date of grant, or upon the lapse of the restrictions on the Shares, and the subsequent disposition of the Shares, and you acknowledge that you should consult with your own tax advisor regarding the applicable tax consequences. Upon the lapse of the restrictions on the Shares, you shall promptly pay to Deluxe in cash, or in previously acquired shares of Deluxe common stock having a fair market value equal to the amount of, all applicable taxes required by Deluxe to be withheld or collected upon the lapse of the restrictions on the Shares. In the alternative, prior to the end of the Restricted Period, you may direct Deluxe to withhold from the Shares the number of Shares having a fair market value equal to the amount of all applicable taxes required by Deluxe to be withheld upon the lapse of the restrictions on the Shares.
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8.
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Terms and Conditions.
This Agreement does not guarantee your continued employment or alter the right of Deluxe or its affiliates to terminate your employment at any time. This Award is granted pursuant to the Plan and is subject to its terms. In the event of any conflict between the provisions of this Agreement and the Plan, the provisions of the Plan shall govern
.
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(I)
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The date on which any one person, or more than one person acting as a group, acquires ownership of stock of Deluxe that, together with stock held by such Person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of Deluxe. If any one Person, or more than one Person acting as a group, is already considered to own more than 50% of the total fair market value or total voting power of the stock of the Deluxe, the acquisition of additional stock by the same Person or Persons is not considered to cause a Change of Control under this paragraph or paragraph (II). An increase in the percentage of stock owned by any one Person, or Persons acting as a group, as a result of a transaction in which Deluxe acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this paragraph. This paragraph applies only when there is a transfer or issuance of stock of Deluxe and stock in Deluxe remains outstanding after the transaction.
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(II)
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The date any one Person, or more than one Person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Persons) ownership of stock of Deluxe possessing 30% or more of the total voting power of the stock of such corporation. If any one Person, or more than one Person acting as a group, is already considered to own more than 30% of the total voting power of the stock of the Deluxe, the acquisition of additional stock by the same Person or Persons is not considered to cause a Change of Control under this paragraph.
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(III)
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The date a majority of members of Deluxe’s board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the board of directors before the date of the appointment or election.
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(IV)
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The date that any one Person, or more than one Person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such Person or Persons) assets from Deluxe that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of Deluxe immediately before such acquisition or acquisitions; provided that a Change of Control shall not result from a transfer of assets by Deluxe to (a) a shareholder of Deluxe (immediately prior to the transfer) in exchange for or with respect to Deluxe’s stock, (b) an entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by Deluxe immediately following the transfer, (c) a Person, or more than one Person acting as a group, that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding stock of Deluxe immediately following the transfer, or (d) an entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a Person or group of Persons described in clause (c) For this purpose, gross fair market value means the value of the assets of Deluxe, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.
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Year Ended December 31,
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2013
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2012
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2011
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2010
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2009
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2008
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Earnings:
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Income from continuing operations before income taxes
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$
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281,059
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$
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250,753
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$
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216,084
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$
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235,949
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$
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155,021
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$
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160,176
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Interest expense (excluding capitalized interest)
(1)
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38,301
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46,847
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47,797
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44,165
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46,280
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50,421
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Portion of rent expense under long-term operating leases representative of an interest factor
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3,952
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4,463
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3,215
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3,438
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2,716
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3,147
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Total earnings
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$
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323,312
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$
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302,063
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$
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267,096
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$
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283,552
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$
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204,017
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$
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213,744
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Fixed charges:
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Interest expense (including capitalized interest)
(1)
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$
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38,301
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$
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46,847
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$
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47,797
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$
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44,165
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$
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46,280
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$
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50,421
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Portion of rent expense under long-term operating leases representative of an interest factor
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3,952
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4,463
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3,215
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3,438
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2,716
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3,147
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Total fixed charges
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$
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42,253
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$
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51,310
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$
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51,012
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$
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47,603
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$
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48,996
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$
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53,568
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Ratio of earnings to fixed charges
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7.7
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5.9
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5.2
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6.0
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4.2
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4.0
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Date
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/s/ Lee Schram
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2/26/2014
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Lee Schram, Chief Executive Officer and
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Director (principal executive officer)
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/s/ Terry D. Peterson
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2/26/2014
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Terry D. Peterson, Senior Vice President, Chief
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Financial Officer (principal financial officer)
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/s/ Jeffrey J. Bata
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2/26/2014
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Jeffrey J. Bata, Vice President, Controller and
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Chief Accounting Officer (principal accounting officer)
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/s/ Ronald C. Baldwin
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2/26/2014
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Ronald C. Baldwin, Director
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/s/ Charles A. Haggerty
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2/26/2014
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Charles A. Haggerty, Director
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/s/ Don. J. McGrath
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2/26/2014
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Don J. McGrath, Director
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/s/ Cheryl Mayberry McKissack
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2/26/2014
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Cheryl Mayberry McKissack, Director
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/s/ Neil J. Metviner
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2/26/2014
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Neil J. Metviner, Director
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/s/ Stephen P. Nachtsheim
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2/26/2014
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Stephen P. Nachtsheim, Director
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/s/ Mary Ann O'Dwyer
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2/26/2014
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Mary Ann O'Dwyer, Director
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/s/ Thomas J. Reddin
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2/26/2014
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Thomas J. Reddin, Director
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/s/ Martyn R. Redgrave
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2/26/2014
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Martyn R. Redgrave, Director
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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(a)
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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
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(b)
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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.
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Date: February 28, 2014
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/s/ Lee Schram
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Lee Schram
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Chief Executive Officer
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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(a)
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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
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(b)
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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.
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Date: February 28, 2014
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/s/ Terry D. Peterson
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Terry D. Peterson
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Chief Financial Officer
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(1)
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the Annual Report on Form 10-K of the Company for the year ended December 31, 2013 (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
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(2)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: February 28, 2014
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/s/ Lee Schram
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Lee Schram
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Chief Executive Officer
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/s/ Terry D. Peterson
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Terry D. Peterson
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Chief Financial Officer
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