Vistaprint 2009 Annual Report Download - page 93

VISTAPRINT LIMITED
(predecessor to Vistaprint N.V.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Years Ended June 30, 2009, 2008 and 2007
(in thousands, except share and per share data)
Significant components of the Company’s deferred tax assets and liabilities, which are primarily
related to its United States subsidiary, for income taxes consist of the following at June 30, 2009 and
2008:
Year Ended
June 30,
2009 2008
Deferred tax assets:
Net operating loss carryforwards .......................................... $ 887 $ 595
Depreciation and amortization ............................................ 316 —
Accrued expenses ....................................................... 624 608
Shared-based compensation ............................................. 6,259 2,641
Corporate minimum tax .................................................. 378 210
R&D credit carryforwards ................................................. 657 150
Total deferred tax assets ............................................. 9,121 4,204
Deferred tax liabilities:
Depreciation ............................................................ (3,099) (2,827)
Net deferred taxes ........................................................... $ 6,022 $ 1,377
The current portion of the net deferred taxes at June 30, 2009 and 2008 was an asset of $624
and $1,076, respectively, which is included in prepaid and other current assets in the accompanying
consolidated balance sheets.
In assessing the realizability of deferred tax assets in accordance with SFAS No. 109, the
Company considers whether it is more likely than not that some portion or all of the deferred tax assets
will not be realized. Under the guidance of SFAS No. 123(R), no valuation allowance has been
recorded against the $6.3 million deferred tax asset associated with share-based compensation
charges at June 30, 2009. However, in the future, if the underlying awards expire with an intrinsic value
less than the fair value of the awards on the date of grant, some or all of the benefit may not be
realizable. Based on the weight of available evidence at June 30, 2009, 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, 2009, the Company had U.S. federal net operating loss carryforwards of
approximately $868 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
$1,895 that expire on dates up to and through 2027. In addition, the Company has approximately $747
of excess tax deductions related to stock-based compensation. The Company will realize the benefit of
these excess tax deductions through increases to shareholders’ equity in the periods in which the
losses are utilized to reduce tax payments.
At June 30, 2009, the Company had state research and development tax credits of $251 that
expire at various dates through 2024.
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Form 10-K