Vistaprint 2014 Annual Report Download - page 64

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Foreign Currency Translation
Our non-U.S. dollar functional currency subsidiaries translate their assets and liabilities denominated in
their functional currency to U.S. dollars at current rates of exchange in effect at the balance sheet date, and
revenues and expenses are translated at average rates prevailing throughout the period. The resulting gains and
losses from translation are included as a component of accumulated other comprehensive income (loss).
Transaction gains and losses and remeasurement of assets and liabilities denominated in currencies other than an
entity’s functional currency are included in other income (expense), net in our statement of operations. The
following table summarizes the components of other income (expense), net:
Year Ended June 30,
2014 2013 2012
(Losses) gains on derivative instruments . . . . . . . . . . . . . . . . . . . . $ (7,473) $ 29 $ —
Currency related (losses) and gains, net . . . . . . . . . . . . . . . . . . . . (1,476) (92) 2,350
Loss on disposal of Namex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,681) — —
Total other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . $ (21,630) $ (63) $ 2,350
Net Income Per Share Attributable to Vistaprint N.V.
Basic net income per share attributable to Vistaprint N.V. is computed by dividing net income attributable to
Vistaprint N.V. by the weighted-average number of ordinary shares outstanding for the respective period. Diluted
net income per share attributable to Vistaprint N.V. gives effect to all potentially dilutive securities, including share
options, restricted share units (“RSUs”) and restricted share awards ("RSAs"), if the effect of the securities is
dilutive using the treasury stock method. Awards with performance or market conditions are included using the
treasury stock method only if the conditions would have been met as of the end of the reporting period and their
effect is dilutive.
The following table sets forth the reconciliation of the weighted-average number of ordinary shares:
Year Ended June 30,
2014 2013 2012
Weighted average shares outstanding, basic . . . . . . . . . . . . . . . . . 32,873,234 33,209,172 37,813,504
Weighted average shares issuable upon exercise/vesting of
outstanding share options/RSUs/RSAs . . . . . . . . . . . . . . . . . . . . . 1,366,675 1,262,832 1,139,675
Shares used in computing diluted net income per share
attributable to Vistaprint N.V. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,239,909 34,472,004 38,953,179
Weighted average anti-dilutive shares excluded from diluted net
income per share attributable to Vistaprint N.V. . . . . . . . . . . . . . . . 953,100 1,740,542 1,495,858
Compensation Expense
Share-Based Compensation
Compensation expense for all share-based awards expected to vest is measured at fair value on the date
of grant and recognized over the requisite service period. The fair value of share options is determined using the
Black-Scholes valuation model, or lattice model for share options with a market condition or subsidiary share
options, and the fair value of RSUs and RSAs is determined based on the number of shares granted and the
quoted price of our ordinary shares on the date of the grant. Such value is recognized ratably as expense over the
requisite service period, or on an accelerated method for awards with a performance or market condition, net of
estimated forfeitures. For awards that are ultimately settable in cash, we treat as liability awards and mark the
award to market each reporting period recognizing any gain or loss in our statement of operations. The estimation
of share awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates
differ from our current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates
are revised. We consider many factors when estimating expected forfeitures, including types of awards, employee
class, and historical experience. For awards with a performance condition vesting feature, compensation cost is
recorded if it is probable that the performance condition will be achieved.