Vistaprint 2015 Annual Report Download - page 78

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70
The following table presents the adjustment to fair value recorded within the consolidated statements of
operations for derivative instruments for which we did not elect hedge accounting, as well as the effect of our de-
designated derivative financial instruments that no longer qualify as hedging instruments in the period:
Derivatives not classified as hedging instruments Amount of Gain (Loss) Recognized in Income
Location of Gain (Loss) Recognized in
Income (Ineffective Portion)
Year Ended June 30,
In thousands 2015 2014 2013
Currency contracts. . . . . . . . . . . . . . . . . . . . . . . . $9,370 $ (7,473) $ 29 Other income (expense), net
Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . (53)— —
Other income (expense), net
$9,317 $ (7,473) $ 29
5. Accumulated Other Comprehensive (Loss) Income
The following table presents a roll forward of amounts recognized in accumulated other comprehensive
(loss) income by component, net of tax of $195 and $218, for the years ended June 30, 2015 and June 30, 2014,
respectively:
Gains (losses)
on cash flow
hedges
Gains (losses)
on available for
sale securities
Losses on
pension benefit
obligation
Translation
adjustments, net
of hedges (1) Total
Balance as of June 30, 2013 . . . . . . . . . . . . . . . . $ 86 $ — $ — $ (11,642) $ (11,556)
Other comprehensive (loss) income before
reclassifications . . . . . . . . . . . . . . . . . . . . . . . . . (1,285) 9,246 (2,724) 8,036 13,273
Amounts reclassified from accumulated other
comprehensive (loss) income to net income . . . 396 — — — 396
Net current period other comprehensive (loss)
income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (889) 9,246 (2,724) 8,036 13,669
Balance as of June 30, 2014 . . . . . . . . . . . . . . . . (803) 9,246 (2,724) (3,606) 2,113
Other comprehensive (loss) income before
reclassifications . . . . . . . . . . . . . . . . . . . . . . . . . (1,417) (6,275) (388) (93,757) (101,837)
Amounts reclassified from accumulated other
comprehensive (loss) income to net income . . . 815 — — — 815
Net current period other comprehensive (loss)
income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (602) (6,275) (388) (93,757) (101,022)
Balance as of June 30, 2015 . . . . . . . . . . . . . . . . $ (1,405) $ 2,971 $ (3,112) $ (97,363) $ (98,909)
________________________
(1) Translation adjustment is inclusive of the effects of our net investment hedges, of which, unrealized losses, net of tax of $7,779 have been
included in other comprehensive (loss) income for the year ended June 30, 2015. There was no effect for the year ended June 30, 2014.
6. Waltham and Lexington Lease Arrangements
In July 2013, we executed a lease agreement to move our Lexington, Massachusetts, USA operations to a
yet to be constructed facility in Waltham, Massachusetts, USA. 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. We expect to pay approximately $131,769 in cash ratably over the initial 11-year term of the lease, 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. 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, 2015 and 2014 we have recorded $104,315 and $18,117 of construction
project costs incurred by the landlord as an asset with a corresponding financing obligation, respectively. The asset
is included as construction in progress in property, plant and equipment, net in the consolidated balance sheet. We