Vistaprint 2010 Annual Report Download - page 77

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Form 10-K
Foreign Currency Translation
The Company’s Dutch, Spanish, French, German and Tunisian subsidiaries have the euro as
their functional currency, the Swiss subsidiary has the Swiss franc as its functional currency, the
Australia subsidiary has the Australian dollar as its functional currency and Vistaprint N.V. and all
other consolidated entities have the U.S. dollar as their functional currency. Non-U.S. dollar functional
currency subsidiaries translate their assets and liabilities denominated in their functional currency at
current rates of exchange in effect at the balance sheet date, and revenues and expenses are
translated at rates prevailing on the day of the transaction. The resulting gains and losses from
translation are included as a component of other comprehensive income. Transaction gains and
losses and re-measurement of assets and liabilities denominated in currencies other than an entities
functional currency are included in other (expense) income, net. Foreign currency transaction (losses)
gains included in other (expense) income, net for the years ended June 30, 2010, 2009 and 2008
were $(1,491), $(803) and $427, respectively.
Treasury Shares
Treasury shares are accounted for under the cost method and included as a component of
shareholders’ equity. Treasury shares are used to fulfill certain share option exercises and restricted
share unit vesting, and may in the future be used for acquisitions.
Net Income Per Share
Basic net income per share is computed by dividing net income by the weighted-average
number of ordinary shares outstanding for the fiscal period. Diluted net income per share gives effect
to all potentially dilutive securities, including share options and restricted share units (“RSUs”) using
the treasury stock method. Ordinary share equivalents of 259,398, 2,096,825 and 864,968 were
excluded from the determination of potentially dilutive shares for the years ended June 30, 2010,
2009 and 2008, respectively, due to their anti-dilutive effect.
The following table sets forth the reconciliation of the weighted-average number of ordinary
shares:
2010 2009 2008
Year Ended June 30,
Weighted average shares outstanding, basic . . . . . . 43,365,872 43,330,166 43,913,119
Weighted average shares issuable upon
exercise/vesting of outstanding share
options/RSUs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,970,689 1,304,025 2,103,245
Shares used in computing diluted net income per
share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,336,561 44,634,191 46,016,364
Share-Based Compensation
At June 30, 2010, the Company had three share-based compensation plans (see Part II,
Item 8, “Financial Statements and Supplementary Data – Note 8 – Shareholders’ Equity”). The
Company grants share options for a fixed number of shares to employees and certain other
individuals with exercise prices as determined by the Supervisory Board or Management Board on the
date of grant. For all share option grants in fiscal years 2010 and prior, the exercise price has been
equal to the closing price on the date of grant. For all restricted share unit grants in fiscal years 2010
and prior, the grant date fair value has been equal to the closing price on the date of grant.
The Company recorded share-based compensation costs of $22,380, $19,473 and $14,747 for
the years ended June 30, 2010, 2009 and 2008, respectively. Share-based compensation costs
73