Vistaprint 2012 Annual Report Download - page 50

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46
June 30, 2011, we employed 267 employees in these organizations compared to 199 employees at June 30, 2010.
These increases were offset by decreased third-party professional fees of $0.8 million during fiscal 2011 as
compared to fiscal 2010 due primarily to the completion of our change of domicile to the Netherlands and
decreased costs of ongoing litigation and other general and administrative activities.
Share-based compensation
As a result of the RSAs granted as part of the Webs transaction and certain other equity awards, including a
share option grant to our CEO that includes a market condition and will therefore be expensed using an accelerated
method, we expect share-based compensation costs in fiscal 2013 to increase relative to historical trends across
technology and development, marketing and selling, and general and administrative expenses.
Interest income
Interest income, which consists of interest earned on cash, cash equivalents and marketable securities,
was $0.2 million, $0.4 million and $0.4 million during fiscal 2012, 2011 and 2010, respectively. The decrease in
interest income in fiscal 2012 as compared to fiscal 2011 is primarily due to lower levels of interest bearing assets.
The decrease in interest income in fiscal 2011 as compared to fiscal 2010 is attributable to the decline in interest
rates on a year-over-year basis, partially offset by higher levels of interest bearing assets.
Other income (expense), net
Other income (expense), net, which primarily consists of gains and losses from currency transactions or
revaluation and realized gains and losses related to our marketable securities, was $2.4 million, ($2.2) million, and
($1.5) million for fiscal 2012, 2011 and 2010, respectively. The variations in other income (expense), net are
primarily due to currency exchange rate fluctuations on transactions or balances denominated in currencies other
than the functional currency of our subsidiaries. Other income for fiscal 2012 includes a gain of $1.7 million from
Euro currency transactions relating to the funding of our acquisition of Albumprinter.
Interest expense
Interest expense, which consists of interest paid to financial institutions on outstanding balances on our
credit facilities, was $1.9 million, $0.2 million, and $0.8 million in fiscal 2012, 2011, and 2010, respectively. The
increase in interest expense in fiscal 2012 as compared to fiscal 2011 is a result of our new revolving credit facility
executed during the year ended June 30, 2012. The decrease in interest expense in fiscal 2011 as compared to
fiscal 2010 was due to the decrease in the outstanding principal on our bank loans as we paid the remaining
obligations associated with our amended Canadian credit agreement and Euro revolving credit agreement in fiscal
2011 and fiscal 2010, respectively.
Income tax provision
Year Ended June 30,
2012 2011 2010
Income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,851 $ 9,013 $ 7,273
Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.2% 9.9% 9.7%
Income tax expense increased to $11.9 million for fiscal 2012, as compared to $9.0 million, and $7.3 million
for fiscal 2011 and 2010, respectively as a result of increased operating expenses and the transfer pricing
agreements between our subsidiaries. Our tax expense for the year ended June 30, 2012 increased primarily due to
growth in our organic business’ operating expenses, which form the basis upon which our transfer pricing
agreements determine pre-tax profits and related income tax expense for most of our subsidiaries. The
intercompany services and related agreements among Vistaprint N.V. and its subsidiaries ensure that most of our
subsidiaries realize profits based on their operating expenses, which results in taxable profits regardless of the level
of consolidated pre-tax income or loss. During the year we also recorded tax expense associated with the
operational alignment of the recently acquired Webs business and related intellectual property.