Segment Information

During the first quarter of fiscal 2016, we revised our internal organizational and reporting structure resulting in changes to our reportable segments. Our operating segments are based upon the manner in which our operations are managed and the availability of separate financial information reported internally to the Chief Executive Officer, who is our Chief Operating Decision Maker (“CODM”) for purposes of making decisions about how to allocate resources and assess performance. We have several operating segments under our management reporting structure which are reported in the following three reportable segments:


•	Vistaprint Business Unit - Includes the operations of our Vistaprint-branded websites focused on the North America, Europe, Australia and New Zealand markets, and our Webs-branded business, which is managed with the Vistaprint-branded digital business in the previously listed geographies.


•	Upload and Print Business Units - Aggregates the operations of our druck.at, Exagroup, Easyflyer, Printdeal, Pixartprinting, and Tradeprint branded businesses. These operating segments have been aggregated into one reportable segment based on the similarity of their products, markets and economic characteristics.

•

All Other Business Units - Includes the operations of our Albumprinter and Most of World business units and newly formed Corporate Solutions business unit. Our Most of World business unit is focused on our emerging market portfolio, including operations in Brazil, China, India and Japan. The results of the newly formed Corporate Solutions business unit were previously part of the Vistaprint Business Unit, and the Corporate Solutions business unit will focus on delivering volume and revenue via partnerships. These business units have been combined into one reportable segment based on materiality.

Consistent with our historical reporting, the cost of our global legal, human resource, finance, facilities management, software and manufacturing engineering, the global component of our IT operations functions, and certain start-up costs related to new product introductions and manufacturing technologies are generally not allocated to the reporting segments and are instead reported and disclosed under the caption "Corporate and global functions." Corporate and global functions is a cost center and does not meet the definition of an operating segment. We have revised our presentation of all prior periods presented to reflect our revised segment reporting.

During the second quarter of fiscal 2016, we revised our segment revenue and profit allocation for the Vistaprint Business Unit and Corporate Solutions business unit, resulting in a shift of previously reported segment results for the Vistaprint Business Unit and All Other Business Units segments. The refined methodology represents a change from identifying segment revenue based on customer orientation (all repeat revenue attributed to the source of the customer's first order) to identifying segment revenue on a merchant basis (all new and repeat revenue attributed to the channel ordered through, regardless of the customer's first order). We have revised our presentation of all prior periods presented to reflect our revised segment reporting.

In addition, during the first quarter of fiscal 2016 we introduced adjusted net operating profit as the primary metric by which our CODM measures segment financial performance. Certain items are excluded from segment adjusted net operating profit, such as acquisition-related amortization and depreciation, expense recognized for earn-out related charges, including the changes in fair value of contingent consideration and compensation expense related to cash-based earn-out mechanisms dependent upon continued employment, share-based compensation related to investment consideration, certain asset impairment expense and restructuring charges. A portion of the interest expense associated with our Waltham lease is included as expense in adjusted net operating profit and allocated based on headcount to the appropriate business unit or corporate and global function. The interest expense represents a portion of the cash rent payment and is considered an operating expense for purposes of measuring our segment performance. There are no internal revenue transactions between our operating segments, and we do not allocate non-operating income to our segment results. All intersegment transfers are recorded at cost for presentation to the CODM, for example, we allocate costs related to products manufactured by our global network of production facilities to the applicable operating segment. There is no intercompany profit or loss recognized on these transactions.

The following factors, among others, may limit the comparability of adjusted net operating profit by segment:


•	We do not allocate global support costs across operating segments or corporate and global functions.


•	Some of our acquired operations in our Upload and Print Business Units and All Other Business Units segments are burdened by the costs of their local finance, HR, and other administrative support functions, whereas other business units leverage our global functions and do not receive an allocation for these services.


•	Our All Other Business Units reporting segment includes our Most of World business unit, which has operating losses as it is in its early stage of investment relative to the scale of the underlying business.

Our balance sheet information is not presented to the CODM on an allocated basis, and therefore we do not present asset information by segment.

Revenue by segment is based on the business unit-specific websites through which the customer’s order was transacted. The following tables set forth revenue, adjusted net operating profit by reportable segment and total income from operations.



	Three Months Ended December 31,				Six Months Ended December 31,
	2015		2014		2015		2014
Revenue:
Vistaprint Business Unit	$	354,783	$	345,451	$	622,252	$	606,694
Upload and Print Business Units	93,277		43,979		169,815		82,708
All Other Business Units	48,214		50,475		79,955		84,435
Total revenue	$	496,274	$	439,905	$	872,022	$	773,837



	Three Months Ended December 31,						Six Months Ended December 31,
	2015			2014			2015			2014
Adjusted net operating profit by segment:
Vistaprint Business Unit	$	117,825		$	108,958		$	184,183		$	179,794
Upload and Print Business Units	15,237			5,617			26,124			10,137
All Other Business Units	6,881			8,435			5,796			9,868
Total adjusted net operating profit by segment	139,943			123,010			216,103			199,799
Corporate and global functions	(56,400		)	(52,699		)	(109,681		)	(101,547		)
Acquisition-related amortization and depreciation	(9,655		)	(5,468		)	(19,437		)	(12,376		)
Earn-out related charges (1)	(3,413		)	(3,701		)	(3,702		)	(7,378		)
Share-based compensation related to investment consideration	(1,735		)	(1,100		)	(2,537		)	(1,597		)
Certain impairments (2)	(3,022		)	—			(3,022		)	—
Restructuring charges	(110		)	(154		)	(381		)	(154		)
Interest expense for Waltham lease	2,001			—			2,351			—
Total income from operations	$	67,609		$	59,888		$	79,694		$	76,747

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(1) Includes expense recognized for the change in fair value of contingent consideration and compensation expense related to cash-based earn-out mechanisms dependent upon continued employment.

(2) Includes the impact of impairments or abandonments of goodwill and other long-lived assets as defined by ASC 350 - "Intangibles - Goodwill and Other" or ASC 360 - "Property, plant, and equipment."



	Three Months Ended December 31,				Six Months Ended December 31,
	2015		2014		2015		2014
Depreciation and amortization:
Vistaprint Business Unit	$	10,195	$	9,786	$	20,057	$	20,025
Upload and Print Business Units	10,519		5,160		20,549		10,984
All Other Business Units	4,921		3,584		9,970		7,857
Corporate and global functions	6,170		4,365		11,487		8,488
Total depreciation and amortization	$	31,805	$	22,895	$	62,063	$	47,354

Enterprise Wide Disclosures:

The following tables set forth revenues by geographic area and groups of similar products and services:



	Three Months Ended December 31,				Six Months Ended December 31,
	2015		2014		2015		2014

United States	$	207,663	$	189,657	$	387,076	$	354,975
Non-United States (3)	288,611		250,248		484,946		418,862
Total revenue	$	496,274	$	439,905	$	872,022	$	773,837



	Three Months Ended December 31,				Six Months Ended December 31,
	2015		2014		2015		2014

Physical printed products and other (4)	$	480,217	$	422,120	$	839,245	$	737,241
Digital products/services	16,057		17,785		32,777		36,596
Total revenue	$	496,274	$	439,905	$	872,022	$	773,837

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(3) Our non-United States revenue includes the Netherlands, our country of domicile.

(4) Other revenue includes miscellaneous items which account for less than 1% of revenue.

The following tables set forth long-lived assets by geographic area:



	December 31, 2015		June 30, 2015
Long-lived assets (5):
Canada	$	95,145	$	99,474
Netherlands	90,625		98,288
Switzerland	38,845		41,357
Italy	33,692		28,548
United States	31,879		31,417
Australia	24,930		26,908
France	24,936		21,449
Jamaica	23,113		23,814
Japan	19,798		16,219
Other	37,838		29,946
Total	$	420,801	$	417,420

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(5) Excludes goodwill of $399,102 and $400,629, intangible assets, net of $141,589 and $151,063, the Waltham lease asset of $122,218 and $104,315, and deferred tax assets of $20,772 and $17,172 as of December 31, 2015 and June 30, 2015, respectively.