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Summary of Significant Accounting Policies (Policies) | 6 Months Ended
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Dec. 31, 2019
Accounting Policies [Abstract] |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and, accordingly, do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting primarily of normal recurring accruals, considered necessary for fair presentation of the results of operations for the interim periods reported and of our financial condition as of the date of the interim balance sheet have been included. Operating results for the three and six months ended December 31, 2019 are not necessarily indicative of the results that may be expected for the year ending June 30, 2020 or for any other period. The consolidated financial statements include the accounts of Cimpress plc, its wholly owned subsidiaries, entities in which we maintain a controlling financial interest, and those entities in which we have a variable interest and are the primary beneficiary. Intercompany balances and transactions have been eliminated. Investments in entities in which we cannot exercise significant influence, and the related equity securities do not have a readily determinable fair value, are accounted for using the cost method and are included in other assets on the consolidated balance sheets. Significant Accounting Policies Our significant accounting policies are described in Note 2 in our consolidated financial statements included in the Form 10-K for our year ended June 30, 2019. There have been no material changes to our significant accounting policies during three and six months ended December 31, 2019, except the adoption of the new lease accounting standard, as discussed below.
Share-Based Compensation | Share-based Compensation Total share-based compensation expense was $8,433 and $13,847 for the three and six months ended December 31, 2019, respectively. During the three months ended December 31, 2018, we recognized a net benefit in our consolidated statement of operations for share-based compensation costs of $2,720 and expense of $6,196 during the six months ended December 31, 2018. During the three months ended December 31, 2018, we concluded the performance condition tied to our supplemental performance share units was no longer probable and reversed $15,397 of share-based compensation expense, resulting in a net benefit to operating income. As of December 31, 2019, we continue to believe the awards are not probable of achievement and recognized no expense in the current periods.
Other Income (expense), net | Other (Expense) Income, Net The following table summarizes the components of other (expense) income, net:
| Three Months Ended December 31, |  | Six Months Ended December 31,
| 2019 |  | 2018 |  | 2019 |  | 2018
(Losses) gains on derivatives not designated as hedging instruments (1) | $ | (11,666 | ) |  | $ | 11,171 |  |  | $ | 7,691 |  |  | $ | 18,544 |
Currency-related gains (losses), net (2) | 2,645 |  |  | (1,023 | ) |  | (767 | ) |  | 1,074 |
Other (losses) gains | (19 | ) |  | (519 | ) |  | (290 | ) |  | 263 |
Total other (expense) income, net | $ | (9,040 | ) |  | $ | 9,629 |  |  | $ | 6,634 |  |  | $ | 19,881 |
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(1) | Primarily relates to both realized and unrealized gains (losses) on derivative currency forward and option contracts not designated as hedging instruments.
(2) | We have significant non-functional currency intercompany financing relationships that we may change at times and are subject to currency exchange rate volatility. The currency-related gains (losses), net for the three and six months ended December 31, 2019 and 2018 are primarily driven by this intercompany activity. In addition, we have certain cross-currency swaps designated as cash flow hedges, which hedge the remeasurement of certain intercompany loans, both presented in the same component above. Unrealized losses related to cross-currency swaps were $2,858 and unrealized gains were $1,820 for the three and six months ended December 31, 2019, respectively, as compared to unrealized gains of $2,080 and $1,243 for the three and six months ended December 31, 2018, respectively.
Net Income Per Share | Net Income Per Share Attributable to Cimpress plc Basic net income per share attributable to Cimpress plc is computed by dividing net income attributable to Cimpress plc by the weighted-average number of ordinary shares outstanding for the respective period. Diluted net income per share attributable to Cimpress plc gives effect to all potentially dilutive securities, including share options, restricted share units (“RSUs”), restricted share awards ("RSAs") and performance share units ("PSUs"), 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:
| Three Months Ended December 31, |  | Six Months Ended December 31,
| 2019 |  | 2018 |  | 2019 |  | 2018
Weighted average shares outstanding, basic | 27,036,675 |  |  | 30,863,339 |  |  | 28,391,855 |  |  | 30,873,478 |
Weighted average shares issuable upon exercise/vesting of outstanding share options/RSUs/RSAs | 880,084 |  |  | 957,158 |  |  | 831,261 |  |  | 1,040,032 |
Shares used in computing diluted net income per share attributable to Cimpress plc | 27,916,759 |  |  | 31,820,497 |  |  | 29,223,116 |  |  | 31,913,510 |
Lessee, Leases [Policy Text Block] | Lease Accounting Lease accounting - adoption of ASC 842 On July 1, 2019, we adopted ASC 842, Leases, using a modified retrospective transition approach. Under the modified retrospective approach, we recognized any cumulative impacts as of the adoption date within retained earnings on our consolidated balance sheet. We did not adjust the prior comparable period. Additionally, as part of our transition, we elected several practical expedients that streamlined the transition to the new guidance whereby we did not reassess the following:
• | whether a lease under the prior standard continues to meet the definition of a lease under the new standard;
• | whether the application of the new standard would have an impact on the classification of our existing leases, with the exception of our build-to-suit leases; and
• | the existence of any initial direct costs associated with our leases.
We also elected the practical expedient to account for our lease components as a single lease component rather than separating them into lease and nonlease components, which would have resulted in recognizing only the lease components in the measurement of our lease assets and liabilities. This expedient was applied to all underlying classes of assets we lease. We elected the short-term lease exception policy, permitting us to not apply the recognition requirements of ASC 842 to short-term leases, which are defined as leases with a term of twelve months or less. Short-term leases are not recorded on our consolidated balance sheet and are expensed on a straight-line basis over the lease term in our consolidated statement of operations. We determine the lease term by including the exercise of renewal options that are considered reasonably certain at lease inception. The following table summarizes the cumulative effect of adopting the new lease standard as of the adoption date of July 1, 2019:
Consolidated Balance Sheet | As reported at June 30, 2019 |  | ASC 842 adjustments |  | Adjusted balance at July 1, 2019
Assets |  |  |  |  |
Prepaid expenses and other current assets | $ | 78,065 |  |  | $ | (59 | ) |  | $ | 78,006 |
Property, plant and equipment, net | 490,755 |  |  | (121,254 | ) |  | 369,501 |
Operating lease assets, net | — |  |  | 169,668 |  |  | 169,668 |
Deferred tax assets | 59,906 |  |  | (817 | ) |  | 59,089 |
Liabilities and shareholders' equity |  |  |  |  |
Operating lease liabilities, current | $ | — |  |  | $ | 37,342 |  |  | $ | 37,342 |
Other current liabilities | 27,881 |  |  | (12,569 | ) |  | 15,312 |
Lease financing obligation | 112,096 |  |  | (112,096 | ) |  | — |
Operating lease liabilities, non-current | — |  |  | 139,041 |  |  | 139,041 |
Other liabilities | 53,716 |  |  | (7,169 | ) |  | 46,547 |
Retained earnings | 537,422 |  |  | 2,989 |  |  | 540,411 |
The new standard impacted the classification of our build-to-suit leases for our Waltham, Massachusetts and Dallas, Texas building leases, which resulted in a change of their classification to operating leases. On July 1, 2019, we de-recognized the existing lease assets included within property, plant and equipment, net of $121,254, the related lease financing obligations of $124,665, and associated deferred rent of $418. This change resulted in an $817 decrease to deferred tax assets and a net increase to retained earnings of $2,989. In addition, on July 1, 2019, we recognized operating lease assets of $169,668 and operating lease liabilities of $176,383, inclusive of our Waltham, Massachusetts lease which commenced prior to the transition date. The difference between the operating lease assets and liabilities resulted from the reclassification of deferred rent and tenant allowance balances presented in other financial statement lines of the consolidated balance sheet, which are now included in the operating lease assets. For the three and six months ended December 31, 2019, the change in lease classification for our build-to-suit leases resulted in a reduction to operating income within our consolidated statement of operations of $1,860 and $3,720, respectively, with a corresponding decrease to interest expense, net. In our consolidated statement of cash flows, the change in classification resulted in a decrease to cash from operating activities and increase to cash from financing activities of $1,955 during the six months ended December 31, 2019. Other than the impact from our build-to-suit leases, the new standard did not have a material impact on our consolidated statement of operations and consolidated statement of cash flows. Refer to Note 13 for additional lease disclosure. Lease accounting policy We determine if an arrangement contains a lease at contract inception. We consider an arrangement to be a lease if it conveys the right to control an identifiable asset for a period of time. Lease right-of-use ("ROU") assets and liabilities for operating and finance leases are recognized based on the present value of the future lease payments over the lease term at lease commencement date. As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at the lease commencement date. Our incremental borrowing rate approximates the interest rate on a collateralized basis for the economic environments where our leased assets are located, and is established by considering the credit spread associated with our existing debt arrangements, as well as observed market rates for instruments with a similar term to that of the lease payments. ROU assets also include any lease payments made at or before the lease commencement, as well as any initial direct costs incurred. Lease incentives received from the lessor are recognized as a reduction to the ROU asset. Variable lease payments are excluded from the operating lease assets and liabilities and are recognized as expense in the period in which the obligation is incurred. Variable lease payments primarily include index-based rent escalation associated with some of our real estate leases, as well as property taxes and common area maintenance payments for most real estate leases, which are determined based on the costs incurred by the lessor. We also make variable lease payments for certain print equipment leases that are determined based on production volumes. Our initial determination of the lease term is based on the facts and circumstances that exist at lease commencement. The lease term may include the effect of options to extend or terminate the lease when it is reasonably certain that those options will be exercised. We consider these options reasonably certain to be exercised based on our assessment of economic incentives, including the fair market rent for equivalent properties under similar terms and conditions, costs of relocating, availability of comparable replacement assets, and any related disruption to operations that would be experienced by not renewing the lease. Operating leases are included in operating lease assets and current and non-current operating lease liabilities in the consolidated balance sheets. Finance lease assets are included in property, plant, and equipment, net, and the related liabilities are included in other current liabilities and other liabilities in the consolidated balance sheets. We have subleased a small amount of our equipment and real estate lease portfolio to third parties, making us the lessor. Most of these subleases meet the criteria for operating lease classification and the related sublease income is recognized on a straight-line basis over the lease term within the consolidated statement of operations. To a lesser extent, we have leases in which we are the lessees, classify the leases as finance leases and have subleased the asset under similar terms, resulting in their classification as direct financing leases. For direct financing leases, we recognize a sublease receivable within prepaid expenses and other current assets and other assets in the consolidated balance sheets.
Recently Issued or Adopted Accounting Pronouncements | Recently Issued or Adopted Accounting Pronouncements New Accounting Standards Adopted In August 2018, the FASB issued Accounting Standards Update No. 2018-15 "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40)" (ASU 2018-15), which requires a customer in a cloud computing arrangement that is a service contract to follow the internal use software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets or expense as incurred. The standard would be effective on July 1, 2020 and we early adopted the new standard on July 1, 2019. The standard did not have a material impact on our consolidated financial statements. In August 2017, the FASB issued Accounting Standards Update No. 2017-12, "Derivatives and Hedging: Targeted Improvements to Accounting for Hedging Activities (Topic 815)," (ASU 2017-12), which better aligns a company’s financial reporting for hedging activities with the economic objectives of those activities. We adopted the amendment on its effective date of July 1, 2019. The standard requires a modified retrospective transition approach, and we recognized the cumulative effect of the change within shareholders' equity as of the date of adoption. Upon transitioning to the new standard on July 1, 2019, we reversed the cumulative effect of expense previously recognized in earnings for the ineffective portion of our interest rate swap contracts, which resulted in an adjustment to retained earnings and accumulated other comprehensive loss within our consolidated balance sheet of $153, net of tax. We will prospectively recognize any ineffectiveness associated with our effective and designated cash flow hedges within accumulated other comprehensive loss, rather than in earnings. These changes did not have a material impact on our consolidated financial statements. In March 2016, the FASB issued Accounting Standards Update No. 2016-02, "Leases (Topic 842)" (ASU 2016-02), which requires the recognition of lease assets and lease liabilities by lessees for those leases currently classified as operating leases. The standard also retains a distinction between finance leases and operating leases. We adopted the standard on its effective date of July 1, 2019. Refer to the information above for additional details of the adoption. Issued Accounting Standards to be Adopted In June 2016, the FASB issued Accounting Standards Update No. 2016-13 "Financial Instruments—Credit Losses (Topic 326)" (ASU 2016-13), which introduces a new accounting model for recognizing credit losses on certain financial instruments based on an estimate of current expected credit losses. The standard is effective for us on July 1, 2020. We do not expect the effect of ASU 2016-13 to have a material impact on our consolidated financial statements.

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