Shutterfly 2007 Annual Report Download - page 52

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Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders
Shutterfly, Inc.
In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of
operations, of redeemable convertible preferred stock and stockholders’ equity (deficit) and of cash flows present
fairly, in all material respects, the financial position of Shutterfly, Inc. and its subsidiary (the “Company”) at
December 31, 2006 and 2005, and the results of their operations and their cash flows for each of the three years in the
period ended December 31, 2006 in conformity with accounting principles generally accepted in the United States of
America. These financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on these financial statements based on our audits. We conducted our audits of these statements in
accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
As discussed in Note 2 to the consolidated financial statements, effective January 1, 2006, the Company
changed its method of accounting for stock-based compensation.
/s/ PricewaterhouseCoopers LLP
San Jose, California
March 16, 2007
47