Vistaprint 2010 Annual Report Download - page 90

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(1) Excludes deferred tax assets of $7,277 and $7,035, respectively, and goodwill of $4,169 and $0,
respectively.
(2) The increase in long-lived assets in Australia is principally a result of the construction of a new
production facility to serve our customers in the Asia Pacific region, which commenced and was
completed during fiscal 2010.
12. Commitments and Contingencies
Operating Lease Commitments
The Company is committed under operating leases for facilities expiring on various dates
through 2018. Total lease expense for the years ended June 30, 2010, 2009 and 2008 were $7,395,
$6,331 and $5,347, respectively.
Future minimum rental payments required under operating leases for the next five fiscal years
and thereafter are as follows at June 30, 2010:
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,170
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,948
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,580
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,526
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,661
Thereafter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,270
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 46,155
In connection with Vistaprint USA, Incorporated’s lease for approximately 202,000 square feet
of office space in Lexington, Massachusetts, the lease requires a security deposit in the form of a
letter of credit in the amount of $728. The letter of credit is cash collateralized on a dollar-for-dollar
basis, which is classified as restricted cash and is included in other assets in the consolidated
balance sheet. In addition, the Company provided a customary indemnification to the lessor for
certain claims that may arise under the lease. A maximum obligation is not explicitly stated, thus the
potential amount of future maximum payments that might arise under this indemnification obligation
cannot be reasonably estimated. The Company has not experienced any prior claims against similar
lease indemnifications in the past and management has determined that the associated fair value of
the liability is not material. As such, the Company has not recorded any liability for this indemnity in
the accompanying consolidated financial statements. The Company carries specific and general
liability insurance policies, which the Company believes would provide, in most cases, some, if not
total, recourse to any claims arising from this lease indemnification provision.
Other Obligations
In June 2009, the Company entered into a $1,100 Standby Letter of Credit (the “Letter of
Credit”) with JPMorgan. The Letter of Credit was obtained in compliance with the Company’s
agreement with a vendor, the beneficiary of the Letter of Credit, which provides payment processing
services. The Letter of Credit expires on August 23, 2013.
The Company has also entered into arrangements with financial institutions and vendors to
provide guarantees for the obligations of the Company’s subsidiaries under banking arrangements
and purchase contracts. The guarantees vary in length of time but, in general, guarantee the financial
obligations of the subsidiaries under such arrangements. The financial obligations of the Company’s
subsidiaries under such arrangements are reflected in the Company’s consolidated financial
statements and these notes.
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