Vistaprint 2013 Annual Report Download - page 50

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Currency Exchange Rate Risk. We conduct business in multiple currencies through our worldwide
operations but report our financial results in U.S. dollars. Therefore, we are affected by fluctuations in exchange
rates of such currencies versus the U.S. dollar as follows:
• Translation of our non-U.S. dollar revenues and expenses: Revenue and related expenses generated in
currencies other than the U.S. dollar could result in higher or lower net income when, upon consolidation,
those transactions are translated to U.S. dollars. When the value or timing of revenue and expenses in a
given currency are materially different, we may be exposed to significant impacts on our net income.
In order to mitigate a portion of the exposure related to currency exchange rate volatility on our net income,
we execute currency forward contracts. Our current contracts mature at various dates through September
30, 2013.
• Translation of our non-U.S. dollar assets and liabilities: Each of our subsidiaries translates its assets and
liabilities to U.S. dollars at current rates of exchange in effect at the balance sheet date. The resulting gains
and losses from translation are included as a component of accumulated other comprehensive loss on the
consolidated balance sheet. Fluctuations in exchange rates can materially impact the carrying value of our
assets and liabilities.
• Remeasurement of monetary assets and liabilities: Transaction gains and losses generated from
remeasurement of monetary assets and liabilities denominated in currencies other than the functional
currency of a subsidiary are included in other income (expense), net on the consolidated statements of
operations. Our subsidiaries have intercompany accounts that are eliminated in consolidation and cash and
cash equivalents denominated in various currencies that expose us to fluctuations in currency exchange
rates. A hypothetical 10% change in currency exchange rates was applied to total net monetary assets
denominated in currencies other than the functional currencies at the balance sheet dates to compute the
impact these changes would have had on our income before taxes in the near term. A hypothetical
decrease in exchange rates of 10% against the functional currency of our subsidiaries would have resulted
in an increase of $2.5 million, $2.1 million and $0.8 million on our income before taxes for the fiscal years
2013, 2012 and 2011, respectively. Additionally, some of our subsidiaries prepare tax returns in currencies
other than their functional currency.
Foreign currency transaction losses included in other income (expense), net for the year ended June 30,
2013 and 2011 were $0.1 million and $2.2 million, respectively, while fiscal 2012 resulted in foreign currency
transaction gains of $2.4 million.
Form 10-K