Vistaprint 2011 Annual Report Download - page 53

(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 $2.5 million as of June 30, 2011 have been excluded from the contractual obligations table above. For further
information on unrecognized tax benefits, see Item 8 of Part II, “Financial Statements and Supplementary Data —
Note 10 — Income Taxes.”
Long-Term Debt. During fiscal 2011, we paid the remaining balance of our amended
Canadian credit agreement. There are no remaining long-term debt obligations outstanding as of
June 30, 2011.
Operating Leases. We rent office space under operating leases expiring on various dates
through 2018. Future rental payments required under our leases are an aggregate of approximately
$46.3 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 $2.0 million and $0.4 million, respectively. We have
entered into an operating lease for a new location for our headquarters office in Paris, France and
plan to exit our existing office space prior to the end of the calendar year. Both leases are included in
the calculation of future rental payments as of June 30, 2011. We may incur costs in the future to exit
the lease for the current location, although we do not have an ability to estimate the timing or amount
of such costs.
Purchase Obligations. At June 30, 2011, we had unrecorded commitments under contract of
$23.0 million, which were principally composed of site development and construction of our Jamaican
customer service, sales and design support centers of approximately $14.8 million, production and
computer equipment purchases of approximately $6.6 million, and other unrecorded purchase
commitments of $1.6 million.
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 marketable securities that at June 30, 2011 consisted of money market funds and an
investment in a municipal auction rate security. These cash equivalents and marketable securities are
held for working capital purposes and we do not enter into investments for trading or speculative
purposes. Due to the nature of our investments, we do not believe we have a material exposure to
interest rate risk.
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.
•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 expense, net on the
consolidated statements of income. 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%
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