Vistaprint 2008 Annual Report Download - page 70

VISTAPRINT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Years Ended June 30, 2008, 2007 and 2006
(in thousands, except share and per share data)
and accretion of discounts to maturity. Such amortization and accretion are included in interest income
in the accompanying consolidated statements of income. There were no realized gains and losses or
declines in value judged to be other-than-temporary on available-for-sale securities and other
investments that are included in interest income for the years ended June 30, 2008, 2007 and 2006 in
the accompanying consolidated statements of income. The cost of securities sold is based on the
specific identification method. Interest and dividends on securities classified as available-for-sale are
included in interest income in the accompanying consolidated statements of income.
As of June 30, 2008, approximately $2.5 million of the Company’s short term investments were
invested in auction rate securities as compared to $16.9 million at June 30, 2007. These auction rate
securities are collateralized by portfolios of AAA and Aaa American municipal and federally insured
obligations. During fiscal year 2008, certain auctions relating to the Company’s holdings failed resulting
in the Company continuing to hold these securities and the issuers paying the maximum rate which
has been reset due to the failure of the auction. The high reset rates have caused a portion of the
Company’s holdings to be called by issuers during the year. The Company believes the reset rates
have provided sufficient incentive to security issuers to address this lack of liquidity in the near term.
The Company has the intent and the ability to hold these investments until the anticipated recovery
period which it believes will be less than twelve months. The Company will continue to monitor and
evaluate these investments on a quarterly basis for impairment or the need to reclassify as long-term
investments. Subsequent to June 30, 2008 the Company sold $1.8 million of its auction rate securities
in the Company’s marketable securities portfolio at par.
Cash, cash equivalents and marketable securities consist of the following (in thousands):
June 30,
2008 2007
Cash and cash equivalents........................................ $103,145 $ 69,464
Marketable securities:
Asset-backed securities ...................................... — 603
Commercial paper ........................................... 1,497 —
Corporate bonds ............................................. 11,917 12,429
Certificates of deposit ........................................ 893 3,700
U.S. government agency issues ............................... 9,756 4,946
Municipal auction rate securities ............................... 2,535 16,900
Total marketable securities ............................... 26,598 38,578
Total cash, cash equivalents and marketable securities .............. $129,743 $108,042
We have not experienced any realized gains or losses on our investments in the periods
presented. Net unrealized losses at June 30, 2008 and 2007 were $52 and $13, respectively. As of
June 30, 2008, the contractual maturities for all of the Company’s available-for-sale securities, with the
exception of auction rate securities, are one year or less.
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