Vistaprint 2015 Annual Report Download - page 74

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valuation of our derivatives. As a result, we have determined that our derivative valuations in their entirety are
classified in Level 2 in the fair value hierarchy.
During the fiscal year ended June 30, 2015, we amended the terms of our contingent consideration
arrangement related to our fiscal 2014 acquisition of Printdeal (formerly known as People & Print Group). The
original terms provided for contingent consideration payable based upon the achievement of an initial calendar year
2014 earnings before interest, taxes, depreciation and amortization (EBITDA) margin threshold but ultimately
payable based on revenue and EBITDA performance for calendar year 2015. We amended the terms to pay a fixed
amount of €15,000, of which €8,000 was paid in March 2015 ($8,270 based on the exchange rate as of the date of
payment) and the remaining €7,000 ($7,833 based on the exchange rate as of June 30, 2015) is payable during the
fourth quarter of fiscal 2016.
Our fiscal 2014 acquisition of Pixartprinting provided for contingent consideration payable based on the
achievement of revenue and EBITDA performance metrics for calendar year 2014. Based on Pixartprinting's 2014
results, we paid the maximum amount achievable of €9,600 ($10,890 based on the exchange rate as of the date of
payment) during the fourth quarter of fiscal 2015.
The contingent consideration obligations are measured at fair value and are based on significant inputs not
observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The valuation of
contingent consideration uses assumptions and estimates to forecast a range of outcomes and probabilities for the
contingent consideration. We assess these assumptions and estimates on a quarterly basis as additional data
impacting the assumptions is obtained. Any changes in the fair value of contingent consideration related to updated
assumptions and estimates will be recognized within general and administrative expenses in the consolidated
statements of operations during the period in which the change occurs. As the Printdeal contingent liability is no
longer variable, we do not expect any additional adjustments to fair value prior to payment.
The following table represents the changes in fair value of Level 3 contingent consideration:
Total contingent
consideration
Balance at June 30, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $—
Fair value at acquisition date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,006
Fair value adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,192
Foreign currency impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (126)
Balance at June 30, 2014 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 16,072
Fair value adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,890
Cash payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19,160)
Foreign currency impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,969)
Balance at June 30, 2015 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $7,833
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(1) Of the total contingent consideration outstanding as of June 30, 2015 and 2014, $7,833 and $6,276 was classified as a current liability,
respectively. As of June 30, 2014, $9,796 was classified as a long-term liability.
As of June 30, 2015 and 2014, the carrying amounts of our cash and cash equivalents, accounts
receivables, accounts payable, and other current liabilities approximated their estimated fair values. As of June 30,
2015 and 2014 the carrying value of our debt was $522,543 and $448,059, respectively, and the fair value was
$539,752 and $460,098, respectively. Our debt at June 30, 2015 includes a variable rate debt instrument indexed to
LIBOR that resets periodically and a fixed rate debt instruments. The estimated fair value of our debt was
determined using available market information based on recent trades or activity of debt instruments with
substantially similar risks, terms and maturities, which fall within Level 2 under the fair value hierarchy. The
estimated fair value of assets and liabilities disclosed above may not be representative of actual values that could
have been or will be realized in the future.