Vistaprint 2015 Annual Report Download - page 93

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No valuation allowance has been recorded against the $15,580 deferred tax asset associated with share-
based compensation charges at June 30, 2015. However, in the future, if the underlying awards expire, are
released or are exercised with an intrinsic value less than the fair value of the awards on the date of grant, some or
all of the benefit may not be realizable.
Based on the weight of available evidence at June 30, 2015, management believes that it is more likely
than not that all other net deferred tax assets will be realized in the foreseeable future. We will continue to assess
the realization of the deferred tax assets based on operating results.
A reconciliation of the beginning and ending amount of the valuation allowance for the year ended June 30,
2015 is as follows:
Balance at June 30, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,890
Charges to earnings (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,940
Charges to other accounts (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,782
Balance at June 30, 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 16,612
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(1) Amount is primarily related to non-U.S. net operating losses.
(2) Amount is primarily related to unrealized losses on cross-currency swap contracts included in other comprehensive income (loss) and non-
U.S. net operating losses recorded in purchase accounting, partially offset by a decrease in deferred tax assets on non-U.S. net operating
losses due to currency exchange rate changes.
The deferred tax liabilities increased by $28,010 in fiscal 2015 as a result of intangible and other assets
from our fiscal 2015 acquisitions.
As of June 30, 2015, we had gross U.S. federal and state net operating losses of approximately $1,850 that
expire on various dates from fiscal 2030 through fiscal 2034. We had gross non-U.S. net operating loss and other
carryforwards of $180,263, a significant amount of which expire in fiscal 2021, with the remaining amounts expiring
on various dates from fiscal 2019 through fiscal 2031. The benefits of these carryforwards are dependent upon the
generation of taxable income in the jurisdictions where they arose. During fiscal 2015, we recognized excess tax
deductions related to share-based compensation resulting in a net operating loss that can be carried back to
reclaim prior year taxes paid. Accordingly, we have recorded a receivable of $7,617 in prepaid expenses and other
current assets and recognized the benefit through shareholders’ equity. In addition, we have $28,777 of state net
operating losses and $1,031 of federal and state R&D credit carryforwards as a result of excess tax deductions
related to share-based compensation. We will realize the benefit of these excess tax deductions through increases
to shareholders’ equity in the periods in which these carryforward losses are utilized to reduce cash tax payments.
As of June 30, 2015, no tax provision has been made for $59,010 of undistributed earnings of certain of our
subsidiaries as these earnings are considered indefinitely reinvested. If, in the future, we decide to repatriate the
undistributed earnings from these subsidiaries in the form of dividends or otherwise, we could be subject to
withholding taxes payable in the range of $7,000 to $8,000 at that time. A deferred tax liability of $361 has been
recorded attributable to undistributed earnings of recently-acquired subsidiaries that we have deemed are not
indefinitely reinvested. The remaining undistributed earnings of our subsidiaries are not deemed to be indefinitely
reinvested and can be repatriated at no tax cost. Accordingly, there has been no provision for income or withholding
taxes on these earnings.
Form 10-K