Vistaprint 2014 Annual Report Download - page 71

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5. Accumulated Other Comprehensive Income (Loss)
The following table presents a roll forward of amounts recognized in accumulated other comprehensive
income (loss) by component, net of tax of $218, for the years ended June 30, 2014 and June 30, 2013:
Gains (Losses)
on Cash Flow
Hedges
Gains (losses)
on available for
sale securities
Losses on
pension benefit
obligation
Currency
translation
adjustments Total
Balance as of June 30, 2012 . . . . . . . . . . . . . . . . $—$—$—$(10,732)$(10,732)
Other comprehensive income (loss) before
reclassifications . . . . . . . . . . . . . . . . . . . . . . . . . 483 — — (910) (427)
Amounts reclassified from accumulated other
comprehensive income (loss) to net income . . . (397) — — — (397)
Net current period other comprehensive income
(loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 — — (910) (824)
Balance as of June 30, 2013 . . . . . . . . . . . . . . . . 86 — — (11,642) (11,556)
Other comprehensive income (loss) before
reclassifications . . . . . . . . . . . . . . . . . . . . . . . . . (1,285) 9,246 (2,724) 8,036 13,273
Amounts reclassified from accumulated other
comprehensive income (loss) to net income . . . 396 — — — 396
Net current period other comprehensive income
(loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (889) 9,246 (2,724) 8,036 13,669
Balance as of June 30, 2014 . . . . . . . . . . . . . . . . $ (803) $ 9,246 $ (2,724) $ (3,606) $ 2,113
6. Waltham and Lexington Lease Arrangements
In July 2013, we executed a lease agreement to move our Lexington, Massachusetts operations to a yet to
be constructed facility in Waltham, Massachusetts. The Waltham lease will commence upon completion of the
building, scheduled for the first quarter of fiscal 2016, and will extend eleven years from the commencement date.
The cash expected to be paid ratably over the initial eleven-year term of the lease is approximately $119,593
starting in September 2015.
Concurrent with the Waltham lease negotiations, we amended our current Lexington lease, as both leases
are held with the same landlord. The amendment to the Lexington lease contained a contingent feature to shorten
the current term of the lease to coincide with the rent commencement date of the Waltham lease, and a second
contingent feature to adjust the remaining annual rental amounts. Both of the arrangements were contingent upon
the lessor obtaining certain building permits for the Waltham lease. If the lessor did not fulfill this obligation, we had
the option to cancel the Waltham lease, without penalty, and return to the terms of our original Lexington lease.
During the quarter ended March 31, 2014, the lessor obtained all of the requisite building permits for the Waltham
building construction.
For accounting purposes, we are deemed to be the owner of the Waltham building during the construction
period and, accordingly, as of June 30, 2014 we have recorded $18,117 of construction project costs incurred by
the landlord as an asset with a corresponding financing obligation. The asset is included as construction in progress
in property, plant and equipment, net. Once the construction is completed, we will evaluate the Waltham lease in
order to determine whether or not the lease meets the criteria for "sale-leaseback" treatment.
Although we will not begin making cash lease payments until the lease commencement date, a portion of the
lease obligation attributable to the land is treated for accounting purposes as an operating lease that commenced
during the second quarter of fiscal 2014. We bifurcate our future lease payments pursuant to the lease into (i) a
portion that is allocated to the building and (ii) a portion that is allocated to the land on which the building is being
constructed, which will be recorded as rental expense during the construction period. We recognized non-cash rent
expense of $875 in our consolidated statement of operations for the land operating lease during the year ended
June 30, 2014.
Form 10-K