Vistaprint 2013 Annual Report Download - page 49

46
Contractual Obligations
Contractual obligations at June 30, 2013 are as follows:
In thousands
Payments Due by Period
Total
Less
than 1
year 1-3 years 3-5 years
More
than 5
years
Operating leases. . . . . . . . . . . . . . . . . . . . $ 53,002 $ 12,708 $ 21,823 $ 11,253 $ 7,218
Purchase commitments . . . . . . . . . . . . . . 39,569 39,569 ———
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263,975 14,279 32,243 217,453 —
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,750 8,194 6,501 6,657 3,398
Total (1). . . . . . . . . . . . . . . . . . . . . . . . . . . $ 381,296 $ 74,750 $ 60,567 $ 235,363 $ 10,616
___________________
(1) We may be required to make cash outlays related to our unrecognized tax benefits. However, due to the uncertainty of the timing of future
cash flows associated with our unrecognized tax benefits, we are unable to make reasonably reliable estimates of the period of cash
settlement, if any, with the respective taxing authorities. Accordingly, unrecognized tax benefits of $5.5 million as of June 30, 2013 have been
excluded from the contractual obligations table above. For further information on unrecognized tax benefits, see Note 13 to the
accompanying consolidated financial statements.
Operating Leases. We rent office space under operating leases expiring on various dates through 2024.
Future rental payments required under our leases are an aggregate of approximately $53.0 million. The terms of
certain lease agreements require security deposits in the form of bank guarantees and a letter of credit in the
amount of $1.8 million and $2.1 million, respectively. In July 2013, we executed a lease for an eleven year term to
move our Lexington, Massachusetts operations to a new facility in Waltham, Massachusetts, commencing in the
second half of calendar 2015. The table above includes the lease payments associated with our current least but no
future lease payments associated with the new facility as the lease was not effective as of June 30, 2013.
Purchase Obligations. At June 30, 2013, we had unrecorded commitments under contract of $39.6 million,
which were principally composed of inventory purchase commitments of approximately $13.3 million, production
and computer equipment purchases of approximately $11.2 million, various facility expansion and improvement
projects of $5.1 million, and other unrecorded purchase commitments of $10.0 million.
Debt. The term loan outstanding under our amended and restated credit agreement has repayments due
on various dates through February 8, 2018, with the revolving loans due on February 8, 2018. Interest payable
included in this table is based on the interest rate as of June 30, 2013 and assumes all revolving loan amounts
outstanding will not be paid until maturity, but that the term loan amortization payments will be made according to
our defined schedule.
Other Obligations. Includes an installment obligation of $19.8 million related to the fiscal 2012 intra-entity
transfer of Webs' Intellectual Property, which results in tax being paid over a 7.5 year term and has been classified
as a deferred tax liability in our consolidated balance sheet as of June 30, 2013. Also included is a $5.0 million
additional funding obligation due to our investment in Namex which is payable on or before October 1, 2013.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk. Our exposure to interest rate risk relates primarily to our cash, cash equivalents and
long-term debt. As of June 30, 2013, our cash and cash equivalents consisted of standard depository accounts
which are held for working capital purposes. Due to the nature of our cash and cash equivalents, we do not believe
we have a material exposure to interest rate fluctuations.
As of June 30, 2013, we have $238.8 million of total U.S. dollar denominated variable rate debt and $19.8
million of variable rate installment obligation related to the fiscal 2012 intra-entity transfer of Webs' Intellectual
Property. As a result, we have exposure to market risk for changes in interest rates related to these obligations. In
order to mitigate our exposure to interest rate changes related to our variable rate debt, we execute interest rate
swap contracts to fix the interest rate on a portion of our outstanding long-term debt with varying maturities. As of
June 30, 2013, a hypothetical 100 basis point increase in rates, inclusive of our outstanding interest rate swaps,
would result in an increase of interest expense of approximately $1.3 million over the next 12 months.