Vistaprint 2008 Annual Report Download - page 87

VISTAPRINT LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Years Ended June 30, 2008, 2007 and 2006
(in thousands, except share and per share data)
will not be realized. Based on the weight of available evidence at June 30, 2008, management believes
that it is more likely than not that all of its net deferred tax assets will be realized. The Company will
continue to assess the realization of the deferred tax assets based on operating results.
At June 30, 2008, the Company had U.S. federal net operating loss carryforwards of
approximately $1,240 that expire on dates up to and through the year 2021. The utilization of these net
operating losses is subject to annual limitation under the change in share ownership rules of the
Internal Revenue Code. The Company had foreign net operating loss carryforwards of approximately
$435 that expire on dates up to and through 2027.
The Company has corporate minimum tax credit carryforwards in Canada of approximately $210
that expire on dates up to 2019.
The Company adopted the provisions of FIN 48 effective July 1, 2007. FIN 48 clarifies the
accounting for income taxes by prescribing the minimum recognition threshold a tax position is
required to meet before being recognized in the financial statements. FIN 48 provides guidance on
derecognition, classification, interest and penalties, accounting in interim periods, disclosure and
transition. The Company did not recognize any cumulative effect of a change in accounting principle
from the adoption of FIN 48. A reconciliation of the beginning and ending amount of unrecognized tax
benefits, including interest, is as follows:
(in thousands)
Balance at July 1, 2007 ........................................................... $390
Additions based on tax positions related to the current year........................... 460
Reductions for tax positions of prior years........................................... 0
Balance at June 30, 2008 ......................................................... $850
The amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is
$877 as of June 30, 2008. The Company recognizes interest and, if applicable, penalties related to
unrecognized tax benefits in income tax expense. The accrued interest and penalties included in
income tax expense for the year ended June 30, 2008 and 2007 were $27 and $6 respectively.
The Company does not anticipate the amount of unrecognized tax benefits to change materially
over the next 12 months.
The Company files income tax returns in the US federal and Massachusetts tax jurisdiction, and
various foreign jurisdictions. The statute of limitations for federal and state tax authorities is closed for
years prior to June 30, 2004 although carryforward attributes that were generated prior to fiscal 2004
may still be subject to examination if they either have been or will be utilized to offset taxable income in
tax years 2004 and forward. The statute of limitations are not closed for foreign tax jurisdictions.
11. Segment Information
SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information,
establishes standards for reporting information regarding operating segments in annual financial
statements and requires selected information of those segments to be presented in interim financial
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Form 10-K