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Company Name Deluxe Corp. cell F3 is named "

Sub-header Dollars in Millions, except per share cell F5 is named "s

Last Fiscal Year End 12/31/2002 cell is named "FYE"

Days Assumption 365 cell is named "days"

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Projected Income Statement for Deluxe Corp.Dollars in Millions, except per share

Historical Year Ending Dec. 31, Projected Year2000 2001 2002 2003 2004

Sales $1,262.7 $1,278.4 $1,284.0 $1,289.1 $1,294.3 $1,2Cost of Sales (excluding Depreciation) (4) 419.6 422.0 411.2 412.5 403.8 3

Gross Profit 843.1 856.4 872.7 876.6 890.5 9

SG&A Expense (excluding Amortization) (1)(4) 490.7 474.2 467.8 464.2 459.6 4

EBITDA 352.4 382.2 404.9 412.4 430.9 4

Depreciation 33.4 30.6 24.0 23.0 23.6Amortization (2) 30.0 37.2 34.3 34.6 30.9

EBIT 289.0 314.4 346.7 354.8 376.4 3

Other Expense / (Income) (3) (3.6) 1.2 (0.2) 0.0 0.0Interest Expense 11.4 5.6 5.1 16.0 16.0Interest (Income) (4.8) (2.4) (0.7) (2.1) (3.8)

Pretax Income 285.9 310.0 342.5 340.9 364.3 3

Income Taxes 108.4 116.0 127.1 127.8 136.6 1

Net Income $177.5 $193.9 $215.4 $213.0 $227.7 $2

Diluted Weighted Average Shares in Millions 72.420 69.115 63.747 62.370 62.620 63

Earnings Per Share $2.45 $2.81 $3.38 $3.42 $3.64 $3.45

MarginsGross Margin 66.8% 67.0% 68.0% 68.0% 68.8% 69

SG&A Expense as % of Sales 38.9% 37.1% 36.4% 36.0% 35.5% 35Other Expense / (Income) as % of Sales (0.3%) 0.1% (0.0%) 0.0% 0.0% 0EBITDA Margin 27.9% 29.9% 31.5% 32.0% 33.3% 34EBIT Margin 22.9% 24.6% 27.0% 27.5% 29.1% 30Net Income Margin 14.1% 15.2% 16.8% 16.5% 17.6% 18

Growth Rate AnalysisSales Growth Rate 1.2% 0.4% 0.4% 0.4% 0EBITDA Growth Rate 8.4% 6.0% 1.8% 4.5% 4EBIT Growth Rate 8.8% 10.3% 2.3% 6.1% 5

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Projected Balance Sheet for Deluxe Corp.Dollars in Millions, except per share

Historical Year Ending Dec. 31, Projected Year Ending Dec. 31,2000 2001 2002 2003 2004 2005 2006 2007

Cash $99.2 $9.6 $124.9 $288.4 $480.4 $706.7 $968.4 $1,266.2

Accounts Receivable, net 46.0 37.7 32.9 33.6 33.7 33.8 34.0 34.1

Inventories 23.1 22.3 20.3 20.3 19.9 19.5 19.0 18.6

Other Current Assets 19.4 14.4 21.6 21.9 22.0 22.1 22.2 22.3

Total Current Assets: 187.8 84.0 199.6 364.2 556.0 782.1 1,043.6 1,341.1

PP&E, net 174.0 151.1 140.0 142.0 143.5 144.3 144.7 144.5

Intangibles, net 134.4 114.9 106.0 91.4 80.6 72.4 69.0 71.6Goodwill 88.4 82.2 82.2 82.2 82.2 82.2 82.2 82.2

Long-Term Investment 35.6 37.7 40.2 40.2 40.2 40.2 40.2 40.2

Other Non-Current Assets 36.2 67.9 100.9 100.9 100.9 100.9 100.9 100.9

Total Assets: $656.3 $537.7 $669.0 $821.0 $1,003.3 $1,222.2 $1,480.5 $1,780.5

Accounts Payable $44.7 $52.8 $57.9 $57.6 $56.4 $55.2 $54.0 $52.7

Accrued Liabilities 148.5 162.9 155.3 155.9 152.6 149.3 146.0 142.6Other Current Liabilities 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Total Current Liabilities: 193.2 215.7 213.2 213.6 209.1 204.5 199.9 195.3

Revolving Credit Facility 0.0 150.0 0.0 0.0 0.0 0.0 0.0 0.0Long-Term Debt (Including Capital Leases) 110.9 11.5 308.2 308.2 308.2 308.2 308.2 308.2

Deferred Income Taxes 51.1 44.9 54.5 54.5 54.5 54.5 54.5 54.5

Other Long-Term Liabilities 38.3 37.0 28.8 28.8 28.8 28.8 28.8 28.8

Total Liabilities: 393.5 459.1 604.7 605.1 600.6 596.0 591.4 586.8

Total Equity: 262.8 78.6 64.3 215.9 402.8 626.2 889.1 1,193.7

Total Liabilities and Equity: $656.3 $537.7 $669.0 $821.0 $1,003.3 $1,222.2 $1,480.5 $1,780.5

Check 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

Total Debt $110.9 $161.5 $308.2 $308.2 $308.2 $308.2 $308.2 $308.2

Total Book Capitalization 373.7 240.1 372.5 524.1 711.0 934.4 1,197.3 1,501.9

Total Debt / Total Book Capitalization 29.7% 67.3% 82.7% 58.8% 43.3% 33.0% 25.7% 20.5%

EBITDA $352.4 $382.2 $404.9 $412.4 $430.9 $449.5 $468.2 $487.1

Total Debt / EBITDA 0.3x 0.4x 0.8x 0.7x 0.7x 0.7x 0.7x 0.6x

Interest Expense $11.4 $5.6 $5.1 $16.0 $16.0 $16.0 $16.0 $16.0EBITDA Coverage 30.8x 68.5x 79.7x 25.7x 26.9x 28.0x 29.2x 30.4x

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Projected Cash Flow Statement for Deluxe Corp.Dollars in Millions, except per share

Projected Year Ending Dec. 31,2003 2004 2005 2006 2007

Operating Activities

Net Income $213.0 $227.7 $241.9 $257.8 $274.8

Depreciation 23.0 23.6 24.1 24.7 25.2

Amortization 34.6 30.9 28.2 23.4 17.3

Change in Working Capital (0.6) (4.3) (4.3) (4.4) (4.4)

Change in Other Long-Term Assets & Liabilities 0.0 0.0 0.0 0.0 0.0

Cash Flow from Operating Activities: 270.0 277.8 289.9 301.5 313.0

Investing Activities

Capital Expenditures (25.0) (25.0) (25.0) (25.0) (25.0)

Additions to Intangibles (20.0) (20.0) (20.0) (20.0) (20.0)

Cash Flow from Investing Activities: (45.0) (45.0) (45.0) (45.0) (45.0)

CASH FLOW AVAILABLE FOR FINANCING ACTIVITIES 225.0 232.8 244.9 256.5 268.0

Financing Activities

Proceeds from / (Repayment of) Revolver 0.0 0.0 0.0 0.0 0.0

Proceeds from Issuance of Long-Term Debt 0.0 0.0 0.0 0.0 0.0

(Repayment of) Long-Term Debt 0.0 0.0 0.0 0.0 0.0

Proceeds from / (Repurchase of) Equity 0.0 20.9 43.9 68.8 95.2Dividends (61.4) (61.7) (62.4) (63.7) (65.4)

Option Proceeds 0.0 0.0 0.0 0.0 0.0

Cash Flow from Financing Activities: (61.4) (40.8) (18.5) 5.1 29.8

Effects of Exchange Rates on Cash 0.0 0.0 0.0 0.0 0.0

Net Change in Cash 163.5 192.0 226.4 261.7 297.8

Beginning Cash Balance 124.9 288.4 480.4 706.7 968.4

Ending Cash Balance $288.4 $480.4 $706.7 $968.4 $1,266.2

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Projected Working Capital Schedule for Deluxe Corp.Dollars in Millions, except per share

Historical Year Ending Dec. 31, Projected Year Ending Dec. 31,2000 2001 2002 2003 2004 2005 2006 2007

Sales $1,262.7 $1,278.4 $1,284.0 $1,289.1 $1,294.3 $1,299.5 $1,304.7 $1,309.9Cost of Sales (excluding Depreciation) 419.6 422.0 411.2 412.5 403.8 395.0 386.2 377.2

Working Capital Balances

Accounts Receivable, net $46.0 $37.7 $32.9 $33.6 $33.7 $33.8 $34.0 $34.1

Inventories 23.1 22.3 20.3 20.3 19.9 19.5 19.0 18.6

Other Current Assets 19.4 14.4 21.6 21.9 22.0 22.1 22.2 22.3

Total Non-Cash Current Assets: $88.6 $74.4 $74.8 $75.8 $75.6 $75.4 $75.2 $75.0

Accounts Payable $44.7 $52.8 $57.9 $57.6 $56.4 $55.2 $54.0 $52.7

Accrued Liabilities 148.5 162.9 155.3 155.9 152.6 149.3 146.0 142.6

Other Current Liabilities 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Total Non-Debt Current Liabilities: $193.2 $215.7 $213.2 $213.6 $209.1 $204.5 $199.9 $195.3

NET WORKING CAPITAL / (DEFICIT) ($104.6) ($141.3) ($138.4) ($137.8) ($133.5) ($129.1) ($124.8) ($120.3)

(Increase)/Decrease in Working Capital $36.7 ($3.0) ($0.6) ($4.3) ($4.3) ($4.4) ($4.4)

Ratios and AssumptionsAccounts Receivable, net (Collection period in days) 13.3 10.8 9.4 9.5 9.5 9.5 9.5 9.5Inventories (Days outstanding) 20.1 19.3 18.0 18.0 18.0 18.0 18.0 18.0

Other Current Assets as % of Sales 1.5% 1.1% 1.7% 1.7% 1.7% 1.7% 1.7% 1.7%

Accounts Payable (Days outstanding) 38.9 45.7 51.4 51.0 51.0 51.0 51.0 51.0

Accrued Liabilities as % of Cost of Sales 35.4% 38.6% 37.8% 37.8% 37.8% 37.8% 37.8% 37.8%Other Current Liabilities as % of Cost of Sales 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Cash Flows by Individual Accounts

Accounts Receivable, net $8.3 $4.8 ($0.6) ($0.1) ($0.1) ($0.1) ($0.1)

Inventories 0.9 2.0 (0.1) 0.4 0.4 0.4 0.4

Other Current Assets 5.0 (7.1) (0.3) (0.1) (0.1) (0.1) (0.1)

Accounts Payable 8.1 5.0 (0.2) (1.2) (1.2) (1.2) (1.2)Accrued Liabilities 14.4 (7.6) 0.6 (3.3) (3.3) (3.3) (3.4)

Other Current Liabilities 0.0 0.0 0.0 0.0 0.0 0.0 0.0

(Increase)/Decrease in Working Capital $36.7 ($3.0) ($0.6) ($4.3) ($4.3) ($4.4) ($4.4)

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Projected Depreciation Schedule for Deluxe Corp.Dollars in Millions, except per share

Historical Year Ending Dec. 31, Projected Year Ending Dec. 31,2000 2001 2002 2003 2004 2005 2006 2007

Sales $1,262.7 $1,278.4 $1,284.0 $1,289.1 $1,294.3 $1,299.5 $1,304.7 $1,309.9

Capital Expenditures 9.8 10.7 14.2 25.0 25.0 25.0 25.0 25.0

Capital Expenditures as % of Sales 0.8% 0.8% 1.1% 1.9% 1.9% 1.9% 1.9% 1.9%

Beginning Net PP&E $140.0 $142.0 $143.5 $144.3 $144.7

Capital Expenditures Historicals not needed 25.0 25.0 25.0 25.0 25.0

(Depreciation Expense) (23.0) (23.6) (24.1) (24.7) (25.2)

(Asset Sales and Write-Offs) 0.0 0.0 0.0 0.0 0.0

Ending Net PP&E $174.0 $151.1 $140.0 $142.0 $143.5 $144.3 $144.7 $144.5

Existing PP&E, net $140.0 Depreciation Expense Projections

Land (32.3) Useful Life

Depreciable PP&E, net $107.8 9.0 years From Exiting PP&E: $21.6 $19.2 $16.8 $14.4 $12.0

CapEx Useful Life

2003 $25.0 8.5 years From CapEx: $1.5 $2.9 $2.9 $2.9 $2.9

2004 25.0 8.5 1.5 2.9 2.9 2.9

2005 25.0 8.5 1.5 2.9 2.92006 25.0 8.5 1.5 2.9

2007 25.0 8.5 1.5

Total Depreciation Expense $33.4 $30.6 $24.0 $23.0 $23.6 $24.1 $24.7 $25.2

Depreciation as % of PP&E, net 19.2% 20.3% 17.1% 16.2% 16.4% 16.7% 17.0% 17.4%

Depreciation as % of CapEx 341.3% 285.1% 169.2% 92.1% 94.3% 96.5% 98.6% 100.8%

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Projected Amortization of Intangibles Schedule for Deluxe Corp.Dollars in Millions, except per share

Historical Year Ending Dec. 31, Projected Year Ending Dec. 31,2000 2001 2002 2003 2004 2005 2006 2007

Sales $1,262.7 $1,278.4 $1,284.0 $1,289.1 $1,294.3 $1,299.5 $1,304.7 $1,309.9

Additions to Intangibles 38.7 18.0 26.6 20.0 20.0 20.0 20.0 20.0Additions as % of Sales 3.1% 1.4% 2.1% 1.6% 1.5% 1.5% 1.5% 1.5%

Beginning Intangibles $106.0 $91.4 $80.6 $72.4 $69.0

Additions to Intangibles Historicals not needed 20.0 20.0 20.0 20.0 20.0(Amortization Expense) (34.6) (30.9) (28.2) (23.4) (17.3)

(Write-Offs) 0.0 0.0 0.0 0.0 0.0

Ending Intangibles $134.4 $114.9 $106.0 $91.4 $80.6 $72.4 $69.0 $71.6

Amortization Expense Projections

Useful Life

Existing Intangibles, net $106.0 6.0 years From Existing: $32.9 $25.9 $19.8 $11.8 $2.3

Additions Useful Life

2003 $20.0 6.0 years From Additions: $1.7 $3.3 $3.3 $3.3 $3.3

2004 20.0 6.0 1.7 3.3 3.3 3.32005 20.0 6.0 1.7 3.3 3.3

2006 20.0 6.0 1.7 3.32007 20.0 6.0 1.7

Total Amortization Expense $30.0 $37.2 $34.3 $34.6 $30.9 $28.2 $23.4 $17.3

Amortization as % of Intangibles, net 22.3% 32.4% 32.3% 37.8% 38.3% 38.9% 34.0% 24.2%

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Projected Other Long-Term Items Schedule for Deluxe Corp.Dollars in Millions, except per share

Historical Year Ending Dec. 31, Projected Year Ending Dec. 31,2000 2001 2002 2003 2004 2005 2006 2007

Assets

Long-Term Investment $35.6 $37.7 $40.2 $40.2 $40.2 $40.2 $40.2 $40.2

Other Non-Current Assets 36.2 67.9 100.9 100.9 100.9 100.9 100.9 100.9

Total Other Long-Term Assets: 71.8 105.6 141.1 141.1 141.1 141.1 141.1 141.1

(Increase)/Decrease in Other Assets: (33.8) (35.5) 0.0 0.0 0.0 0.0 0.0

Liabilities

Deferred Income Taxes $51.1 $44.9 $54.5 $54.5 $54.5 $54.5 $54.5 $54.5

Other Long-Term Liabilities 38.3 37.0 28.8 28.8 28.8 28.8 28.8 28.8Total Other Long-Term Liabilities: 89.4 81.9 83.3 83.3 83.3 83.3 83.3 83.3

Increase/(Decrease) in Other Liabilities: (7.5) 1.4 0.0 0.0 0.0 0.0 0.0

Change in Other Long-Term Assets and Liabilities ($41.3) ($34.1) $0.0 $0.0 $0.0 $0.0 $0.0

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Projected Shareholders' Equity Schedule for Deluxe Corp.Dollars in Millions, except per share

Historical Year Ending Dec. 31, Projected Year Ending Dec. 31,2000 2001 2002 2003 2004 2005 2006 2007

Beginning Equity Balance $64.3 $215.9 $402.8 $626.2 $889.1

Net Income 213.0 227.7 241.9 257.8 274.8

Issuance / (Repurchase of) Equity Historicals not needed 0.0 20.9 43.9 68.8 95.2

Dividends Paid (61.4) (61.7) (62.4) (63.7) (65.4)

Option Proceeds 0.0 0.0 0.0 0.0 0.0

Effects of Exchange Rates on Cash 0.0 0.0 0.0 0.0 0.0Ending Equity Balance $262.8 $78.6 $64.3 $215.9 $402.8 $626.2 $889.1 $1,193.7

Share Repurchase AssumptionsCurrent Year EPS $3.42 $3.64 $3.82 $3.99 $4.14

Assumed Current Year EPS Multiple 11.5x 11.5x 11.5x 11.5x 11.5x

Projected Share Price $39.28 $41.81 $43.90 $45.88 $47.62Shares Repurchased - millions 0.000 11.332 3.898 0.000 (0.500) (1.000) (1.500) (2.000)

$ Amount Repurchased $0.0 $345.4 $172.8 $0.0 ($20.9) ($43.9) ($68.8) ($95.2)

New Shares from Exercised Options

New Shares Issued from Options - millions 0.000 2.679 1.151 0.000 0.000 0.000 0.000 0.000

Average Strike Price $24.17 $24.17 $24.17 $24.17 $24.17

$ Received - millions $8.1 $68.7 $30.9 $0.0 $0.0 $0.0 $0.0 $0.0

Dividend Assumptions

Total Dividends Paid $107.2 $101.8 $92.9 $61.4 $61.7 $62.4 $63.7 $65.4

Net Income $177.5 $193.9 $215.4 $213.0 $227.7 $241.9 $257.8 $274.8

Dividend Payout Ratio 60.4% 52.5% 43.1% 28.8% 27.1% 25.8% 24.7% 23.8%Average Basic Shares 61.446 61.696 62.446 63.696 65.446

Dividend Per Share (Average Basic) $1.48 $1.48 $1.48 $1.00 $1.00 $1.00 $1.00 $1.00

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Shares Outstanding Table for Deluxe Corp.Dollars in Millions, except per share

Historical Year Ending Dec. 31, Projected Year Ending Dec. 31,2000 2001 2002 2003 2004 2005 2006 2007

Beginning Balance - Basic (actual) 61.446 61.446 61.946 62.946 64.446Shares Issued Historicals not needed 0.000 0.000 0.000 0.000 0.000Shares Repurchased 0.000 0.500 1.000 1.500 2.000

Ending Balance - Basic (actual) 72.555 64.102 61.446 61.446 61.946 62.946 64.446 66.446

Average Basic Shares 72.324 68.441 62.823 61.446 61.696 62.446 63.696 65.446Effects of Options 0.096 0.674 0.924 0.924 0.924 0.924 0.924 0.924

Average Diluted Shares 72.420 69.115 63.747 62.370 62.620 63.370 64.620 66.370

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Projected Debt and Interest Schedule for Deluxe Corp.Dollars in Millions, except per share

Historical Year Ending Dec. 31, Projected Year Ending Dec. 31,2000 2001 2002 2003 2004 2005 2006 2007

Cash Flow Available for Financing Activities $225.0 $232.8 $244.9 $256.5 $268.0

Proceeds from / (Repurchase of) Equity 0.0 20.9 43.9 68.8 95.2

Dividends (61.4) (61.7) (62.4) (63.7) (65.4)

Option Proceeds 0.0 0.0 0.0 0.0 0.0

Effects of Exchange Rates on Cash 0.0 0.0 0.0 0.0 0.0

Plus: Beginning Cash Balance 124.9 288.4 480.4 706.7 968.4

Less: Minimum Cash Balance (125.0) (125.0) (125.0) (125.0) (125.0)

Cash Available for Debt Repayment $163.4 $355.4 $581.7 $843.4 $1,141.2

Long-Term Debt Issuance 0.0 0.0 0.0 0.0 0.0

Long-Term Debt (Repayments) 0.0 0.0 0.0 0.0 0.0

Cash Available for Revolving Credit Facility $163.4 $355.4 $581.7 $843.4 $1,141.2

Revolving Credit Facility

Beginning Balance $0.0 $0.0 $0.0 $0.0 $0.0

Discretionary (Paydown) / Borrowings 0.0 0.0 0.0 0.0 0.0

Ending Balance $0.0 $150.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0

Long-Term Debt (Including Capital Leases)

Beginning Balance $308.2 $308.2 $308.2 $308.2 $308.2Issuance 0.0 0.0 0.0 0.0 0.0

(Repayment / Amortization) 0.0 0.0 0.0 0.0 0.0

Ending Balance $110.9 $11.5 $308.2 $308.2 $308.2 $308.2 $308.2 $308.2

Revolving Credit Facility Average Balances $0.0 $0.0 $0.0 $0.0 $0.0

Interest Rate 4.5% 4.5% 4.5% 4.5% 4.5%

Interest Expense $0.0 $0.0 $0.0 $0.0 $0.0

Long-Term Debt (Including Capital Leases) Average Balances $308.2 $308.2 $308.2 $308.2 $308.2

Interest Rate 5.2% 5.2% 5.2% 5.2% 5.2%

Interest Expense $16.0 $16.0 $16.0 $16.0 $16.0

Total Interest Expense $16.0 $16.0 $16.0 $16.0 $16.0

Cash Balances: Average Balances $206.6 $384.4 $593.6 $837.6 $1,117.3Interest Rate 1.0% 1.0% 1.0% 1.0% 1.0%

Interest (Income) ($2.1) ($3.8) ($5.9) ($8.4) ($11.2)

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Deluxe Corp. Checking

Reconciliations for FYE 2003

Select the first year out of parity Balance Sheet Cash Flow "Use" + Net PP&E - "Source"x 2003 You are in parity 2002 2003 Difference 2003 Beginning Bal. 140.04

+ CapEx 25.00 23.02 - DepreciationCash 124.855 288.400 163.545 163.545 0.00 - Sale/write-off

Accounts Receivable, net 32.925 33.552 (0.627) (0.627)Inventories 20.287 20.343 (0.056) (0.056) Calculated Bal. 142.02

x Other Current Assets 21.579 21.915 (0.336) (0.336) Actual Balance 142.02

Difference 0.00

PP&E, net 140.042 142.021 (1.979) (1.979)

Intangibles, net 105.976 91.422 14.554 14.554 "Use" + Intangibles - "Source"Goodwill 82.237 82.237 0.000 0.000 Beginning Bal. 105.98

Long-Term Investment 40.205 40.205 0.000 0.000 + Purchases 20.00 34.55 - Amortization

x Other Non-Current Assets 100.867 100.867 0.000 0.000 0.00 - Sale/write-off

Calculated Bal. 91.42

Accounts Payable 57.857 57.640 (0.217) (0.217) Actual Balance 91.42Accrued Liabilities 155.312 155.932 0.620 0.620 Difference 0.00

x Other Current Liabilities 0.000 0.000 0.000 0.000

EquityRevolving Credit Facility 0.000 0.000 0.000 0.000 Beginning Bal. 64.32

Long-Term Debt (Including Capital Leases) 308.199 308.199 0.000 0.000 +/(-) Net Income 213.03Deferred Income Taxes 54.453 54.453 0.000 0.000 - Cash Dividend (61.45)

x Other Long-Term Liabilities 28.836 28.836 0.000 0.000 + Equity Issued 0.00

- Stock Buyback 0.00

+ Option Proceeds 0.00x Total Equity: 64.316 215.904 151.588 151.588 +/(-) FX Adjustment 0.00

Parity Check 0.000 0.000 327.091 327.091 Calculated Bal. 215.90

Actual Balance 215.90

x Difference 0.00

x

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Deluxe Corp. Growth Rates and Margins (1)Dollars in Millions, except per share

Historical Year Ending Dec. 31, Projected Year Ending Dec. 31,

2000 2001 2002 2003 2004 2005 2006 2

Sales $1,262.7 $1,278.4 $1,284.0 $1,289.1 $1,294.3 $1,299.5 $1,304.7 $1,30% growth -- 1.2% 0.4% 0.4% 0.4% 0.4% 0.4% 0.

Gross Profit (before D&A) $843.1 $856.4 $872.7 $876.6 $890.5 $904.4 $918.5 $93% margin 66.8% 67.0% 68.0% 68.0% 68.8% 69.6% 70.4% 71.

EBITDA $289.0 $314.4 $346.7 $354.8 $376.4 $397.2 $420.2 $44% margin 27.9% 29.9% 31.5% 32.0% 33.3% 34.6% 35.9% 37.% growth -- 8.8% 10.3% 2.3% 6.1% 5.5% 5.8% 5.

EBIT $352.4 $382.2 $404.9 $412.4 $430.9 $449.5 $468.2 $48% margin 27.9% 29.9% 31.5% 32.0% 33.3% 34.6% 35.9% 37.% growth -- 8.4% 6.0% 1.8% 4.5% 4.3% 4.2% 4.

Net Income $177.5 $193.9 $215.4 $213.0 $227.7 $241.9 $257.8 $27% margin 14.1% 15.2% 16.8% 16.5% 17.6% 18.6% 19.8% 21.% growth -- 9.2% 11.1% (1.1%) 6.9% 6.3% 6.6% 6.

Earnings Per Share $2.45 $2.81 $3.38 $3.42 $3.64 $3.82 $3.99 $4% growth -- 14.5% 20.4% 1.1% 6.4% 5.0% 4.5% 3.

Dividend Per Share (calculated using avg. basic) $1.48 $1.49 $1.48 $1.00 $1.00 $1.00 $1.00 $1% growth -- 0.3% (0.5%) (32.4%) 0.0% 0.0% 0.0% 0.Payout Ratio 60.4% 52.5% 43.1% 28.8% 27.1% 25.8% 24.7% 23.

Return on Sales 14.1% 15.2% 16.8% 16.5% 17.6% 18.6% 19.8% 21.

Return on Assets (avg) -- 32.5% 35.7% 28.6% 25.0% 21.7% 19.1% 16.Return on Equity (avg) -- 113.6% 301.5% 152.0% 73.6% 47.0% 34.0% 26.Return on Invested Capital (avg) -- 63.2% 70.3% 47.5% 36.9% 29.4% 24.2% 20.

(1) 2000 results exclude the $2.4 million reversal of the restructuring charge associated with the scaling back and repositioning the PlaidMoon.com project.

(2) Historicals exclude amortization of goodwill and indefinite life intangibles, as per SFAS 142.

(3) Includes the realized gains and losses and permanent declines in value of marketable securities.

2000, 2001 and 2002 results exclude asset impairment losses of $9.7, $2.062 and $0.297 million, respectively.

(4) 2001 results exclude restructuring charges of $1.2 million in COGS and $3.0 million in SG&A.

2002 l l d i h f $0 6 illi i COGS d $0 9 illi i SG&A

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Deluxe Corp. Ratio Summary (1)

Historical Year Ending Dec. 31, Projected Year Ending Dec. 31,

2000 2001 2002 2003 2004 2005 2006 2

Interest CoverageTotal Interest Expense $11.4 $5.6 $5.1 $16.0 $16.0 $16.0 $16.0 $1Net Interest Expense 6.7 3.2 4.4 14.0 12.2 10.1 7.7

EBITvs. Total Interest Expense 30.82x 68.45x 79.73x 25.73x 26.88x 28.05x 29.22x 30vs. Net Interest Expense 52.73x 118.84x 91.95x 29.54x 35.37x 44.54x 61.20x 100

EBITDAvs. Total Interest Expense 25.27x 56.31x 68.27x 22.14x 23.49x 24.78x 26.22x 27vs. Net Interest Expense 43.25x 97.76x 78.73x 25.42x 30.90x 39.36x 54.92x 91

EBITDA - Capital Expendituresvs. Total Interest Expense 24.42x 54.39x 65.48x 20.58x 21.93x 23.22x 24.66x 26vs. Net Interest Expense 43.25x 97.75x 78.73x 25.41x 30.90x 39.36x 54.92x 91

EBITDA - CapEx - Taxesvs. (Interest+Debt Amort+Dividends) 2.61x 2.76x 2.89x 3.02x 3vs. (Net Interest+Debt Amort+Dividends) 1.88x 2.01x 2.14x 2.28x 2

Cash Flow Available for Debt Repayment -- -- -- $163.4 $355.4 $581.7 $843.4 $1,14Cumulative Cash Available for Debt Repayment -- -- -- 163.4 518.8 1,100.5 1,943.9 3,08

LeverageTotal Debt / Total Capitalization 29.7% 67.3% 82.7% 58.8% 43.3% 33.0% 25.7% 20Net Debt / Total Capitalization 3.1% 63.3% 49.2% 3.8% (24.2%) (42.7%) (55.1%) (63

Total Debt / EBITDA 0.38x 0.51x 0.89x 0.87x 0.82x 0.78x 0.73x 0Net Debt / EBITDA 0.04x 0.48x 0.53x 0.06x -0.46x -1.00x -1.57x -2

(1) 2000 results exclude the $2.4 million reversal of the restructuring charge associated with the scaling back and repositioning the PlaidMoon.com project.

(2) Historicals exclude amortization of goodwill and indefinite life intangibles, as per SFAS 142.

(3) Includes the realized gains and losses and permanent declines in value of marketable securities.

2000, 2001 and 2002 results exclude asset impairment losses of $9.7, $2.062 and $0.297 million, respectively.

(4) 2001 results exclude restructuring charges of $1.2 million in COGS and $3.0 million in SG&A.

2002 results exclude restructuring charges of $0.6 million in COGS and $0.9 million in SG&A.

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Deluxe Corp. Ratio Summary (1) cont.

Historical Year Ending Dec. 31, Projected Year Ending Dec. 31,

2000 2001 2002 2003 2004 2005 2006 2007

CapitalizationCash $99.2 $9.6 $124.9 $288.4 $480.4 $706.7 $968.4 $1,266.2Total Debt 110.9 161.5 308.2 308.2 308.2 308.2 308.2 308.2Minority Interest 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Preferred Stock 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Net Debt 11.7 151.9 183.3 19.8 (172.2) (398.5) (660.2) (958.0)

Common Equity $262.8 $78.6 $64.3 $215.9 $402.8 $626.2 $889.1 $1,193.7Total Capitalization 373.7 240.1 372.5 524.1 711.0 934.4 1,197.3 1,501.9

Capital InvestmentsDepreciation / Net PP&E 19.2% 20.3% 17.1% 16.2% 16.4% 16.7% 17.0% 17.4%Depreciation / CapEx 341.3% 285.1% 169.2% 92.1% 94.3% 96.5% 98.6% 100.8%CapEx / Revenues 0.8% 0.8% 1.1% 1.9% 1.9% 1.9% 1.9% 1.9%

LiquidityWorking Capital (2) ($104.6) ($141.3) ($138.4) ($137.8) ($133.5) ($129.1) ($124.8) ($120.3)

(Increase)/Decrease in Working Capital -- 36.7 (3.0) (0.6) (4.3) (4.3) (4.4) (4.4)Current Ratio (2) 0.46x 0.34x 0.35x 0.35x 0.36x 0.37x 0.38x 0.38xQuick Ratio (3) 0.75x 0.22x 0.74x 1.51x 2.46x 3.62x 5.01x 6.66xInventory Reliance (4) 207.5% 756.7% 273.0% (532.8%) (1531.7%) (2751.6%) (4213.5%) (5939.4%)

ActivityA/R Days on Hand 13.3 10.8 9.4 9.5 9.5 9.5 9.5 9.5Inventory Days on Hand 20.1 19.3 18.0 18.0 18.0 18.0 18.0 18.0A/P Days on Hand 38.9 45.7 51.4 51.0 51.0 51.0 51.0 51.0Asset Turnover (5) 1.92x 2.38x 1.92x 1.57x 1.29x 1.06x 0.88x 0.74x

(1) Historicals exclude amortization of goodwill and indefinite life intangibles, as per SFAS 142.

(2) Excluding Cash and Current Portion of Long Term Debt

(3) Quick Ratio = (Cash + Accounts Rec.) / Current Liabilities

(4) Inventory Reliance = (Current Liabilities - (Cash + Accounts Rec.)) / Inventory

(5) Asset Turnover = Net Sales / Total Assets

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Discounted Cash Flow Analysis for Deluxe Corp.Dollars in Millions, except per share

Historical Year Ending Dec. 31, Projected Year

2000 2001 2002 2003 2004

Sales $1,262.7 $1,278.4 $1,284.0 $1,289.1 $1,294.3 $

EBITDA 352.4 382.2 404.9 412.4 430.9

Less: Depreciation (33.4) (30.6) (24.0) (23.0) (23.6)

Less: Amortization of Intangibles (30.0) (37.2) (34.3) (34.6) (30.9)

EBIT 289.0 314.4 346.7 354.8 376.4Less: Taxes @ 35.0% (101.2) (110.0) (121.4) (124.2) (131.8)

Tax-effected EBIT 187.9 204.4 225.4 230.6 244.7

Plus: Depreciation 23.0 23.6

Plus: Amortization of Intangibles 34.6 30.9

Plus: Changes in Deferred Taxes 0.0 0.0

Less: Capital Expenditures (25.0) (25.0)

Less: Additions to Intangibles (20.0) (20.0)

Less: Changes in Working Capital (0.6) (4.3)

Less: Changes in Other Assets and Liabilities 0.0 0.0

Unlevered Free Cash Flow $242.6 $249.8

Unlevered Free Cash Flow Growth Rate 3.0%

A + B

Discounted (b) PV of Terminal Value as a

Cash Flows Perpetual Growth Rate of (c)

Discount Rate (2003 - 2007) 1.5% 2.0% 2.5%

11.00% $958.7 $1,788.8 $1,897.5 $2,019.0

11.50% 946.4 1,661.6 1,757.7 1,864.4

12.00% 934.4 1,547.5 1,632.8 1,727.2

12.50% 922.7 1,444.6 1,520.8 1,604.7

13.00% 911.1 1,351.5 1,419.9 1,494.8

- D = E

Net Debt Total Equity Value

Di t R t 9/30/2003 1 5% 2 0% 2 5%

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Discounted Cash Flow Analysis for Deluxe Corp.Dollars in Millions, except per share

Historical Year Ending Dec. 31, Projected Year

2000 2001 2002 2003 2004

Sales $1,262.7 $1,278.4 $1,284.0 $1,289.1 $1,294.3 $

EBITDA 352.4 382.2 404.9 412.4 430.9

Less: Depreciation (33.4) (30.6) (24.0) (23.0) (23.6)

Less: Amortization of Intangibles (30.0) (37.2) (34.3) (34.6) (30.9)

EBIT 289.0 314.4 346.7 354.8 376.4Less: Taxes @ 35.0% (101.2) (110.0) (121.4) (124.2) (131.8)

Tax-effected EBIT 187.9 204.4 225.4 230.6 244.7

Plus: Depreciation 23.0 23.6

Plus: Amortization of Intangibles 34.6 30.9

Plus: Changes in Deferred Taxes 0.0 0.0

Less: Capital Expenditures (25.0) (25.0)

Less: Additions to Intangibles (20.0) (20.0)

Less: Changes in Working Capital (0.6) (4.3)

Less: Changes in Other Assets and Liabilities 0.0 0.0

Unlevered Free Cash Flow $242.6 $249.8

Unlevered Free Cash Flow Growth Rate 3.0%

A + B

Discounted (b) PV of Terminal Value as a

Cash Flows Multiple of 2007 EBITDA (c)

Discount Rate (2003 - 2007) 5.5x 6.0x 6.5x

11.00% $958.7 $1,590.0 $1,734.6 $1,879.1

11.50% $946.4 1,554.7 1,696.0 1,837.4

12.00% $934.4 1,520.3 1,658.5 1,796.7

12.50% $922.7 1,486.8 1,622.0 1,757.1

13.00% $911.1 1,454.2 1,586.4 1,718.6

- D = E

Net Debt Total Equity Value

Di t R t 9/30/2003 5 5 6 0 6 5

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Deluxe Corp.'s Debt and Capital Lease Detail

Treated as a capital lease if meets any of the below criteria at inception: Cost of Debt Estimate

Transfer of title 5.50% Range from Annual Report Bargain purchase option at the end of the lease 10.40% Lease term is more than 75% of useful life of the asset 7.95% Average rate on Capital Leases PV of the lease payments is more than 90% of the fair value of the asset

Balance Sheet Reconginition Amount Rate % of t Fixed asset and debt Revlover $0.0 4.50% 0

Income Statement Reconginition Long-Term Debt 298.1 5.08% 96 Interest and depreciation expense Calital Leases 10.1 7.95% 3

Cash Flow Reconginition Total $308.2 100 Principal payment and depreciation

Capital Lease Sample 2003 Debits and Credits10.0% Total annual

Total Interest Principal Lease Depr. Cap. Lease +(A) Fixed Asset $10,000.0Date Payment Expense Payment Balance of Asset Expense +(L) Capital Lease $10,000

$10,000.02003 $2,638.0 $1,000.0 $1,638.0 8,362.0 2,000.0 3,000.0 -(L) Capital Lease $1,638.02004 2,638.0 836.2 1,801.8 6,560.3 2,000.0 2,836.2 -(E) Interest Expense $1,000.02005 2,638.0 656.0 1,981.9 4,578.3 2,000.0 2,656.0 -(A) Cash $2,638.2006 2,638.0 457.8 2,180.1 2,398.2 2,000.0 2,457.82007 2,638.0 239.8 2,398.2 0.0 2,000.0 2,239.8 -(E) Depreciation Expense $2,000.0

$13,189.9 $3,189.9 $10,000.0 10,000.0 13,189.9 -(A) Accumulated Depreciation $2,000.

PV factor 3.7907868 PMT function $2,638.0 5 YearsJUST LIKE MORTAGE

Total payment can solved using the PMT function or by dividing thebeginning balance of the lease by the PV factor.

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Assumptions

Present value - discount $298.107 99.369% of parFace value $300.000

Annual coupon 5.00%Number of semi-annual periods 20

Effective interest rate (a) 2.54% Semi-annual

Semi-annual coupon 1 2 3 4 17 18 19 20Beginning balance $298.107 $298.181 $298.256 $298.334 $299.542 $299.652 $299.765 $299.881

+ Accretion 0.074 0.076 0.078 0.080 0.110 0.113 0.116 0.119= Ending balance $298.181 $298.256 $298.334 $298.414 $299.652 $299.765 $299.881 $300.000

Interest expense (semi-annual effective int. rate) $7.574 $7.576 $7.578 $7.580 $7.610 $7.613 $7.616 $7.619- Interest coupon (semi-annual coupon) 7.500 7.500 7.500 7.500 7.500 7.500 7.500 7.500= Accretion $0.074 $0.076 $0.078 $0.080 $0.110 $0.113 $0.116 $0.119

(a) Effective interest rate is calculate using the RATE function in Excel with the following assumptions:N = 20

PMT = $7.500 (based on $300.000 FV and a 2.5% semi-annual coupon)

PV = -$298.107

FV = $300.000

For training purposes onlyCOPYRIGHT 2004 by Training The Street, Inc.