Shutterfly 2010 Annual Report Download - page 50

Investing Activities.
For 2009, net cash used in investing activities was $14.1 million, which included $13.8 million for capital
expenditures for computer and network hardware for our website infrastructure and information technology systems, capital expenditures for
production equipment for our manufacturing and production operations, and $3.9 million of capitalized software and website development. We
also paid $0.8 million in cash to acquire TinyPictures, Inc. The use of cash was offset by cash provided from the liquidation of $4.3 million (at
par value) of our ARS investments that were called by various issuers at par.
For 2008, net cash used in investing activities was $82.1 million, which included $18.2 million for capital expenditures for computer and
network hardware for our website infrastructure and information technology systems, capital expenditures for production equipment for our
manufacturing and production operations at our California and North Carolina facilities, and $4.5 million of capitalized software and website
development. An additional $52.3 million was used to purchase auction rate securities, offset by $3.0 million in proceeds from the sale of the
short term investments. We also paid $10.1 million in cash consideration to acquire Nexo.
For 2007, net cash used in investing activities included $31.9 million for capital expenditures for computer and network hardware for our
website infrastructure and information technology systems, capital expenditures for production equipment for our manufacturing and production
operations at our California and North Carolina facilities, and $3.1 million of capitalized website development costs. Additional cash of $3.0
million was used for purchases of short-term investments and $2.9 million was used for the acquisition of “Make-it-About-Me,”
and a customer
list.
Financing Activities.
For 2009, net cash provided by financing activities was $4.9 million, primarily from $3.3 million excess tax benefit
from stock-
options and $2.7 million of proceeds from issuance of common stock from exercise of stock options, offset by $91,000 principal
payments of capital lease obligations and $1.0 million in cash used to pay employee withholding tax liabilities for restricted shares vested during
2009.
Our financing activities for 2008 provided cash of $0.6 million, primarily from $1.2 million of proceeds from issuance of common stock
from exercise of stock options and $0.5 million excess tax benefit from stock options, offset by $0.8 million principal payments of capital lease
obligations and shares withheld to pay for employee’s withholding tax liability for restricted awards vested of $0.3 million.
Our financing activities for 2007 provided cash of $2.2 million, primarily from $5.0 million of proceeds from issuance of common stock,
offset by $2.8 million of capitalized lease obligations.
Contractual Obligations
We lease office space in Redwood City, California and a production facility in Charlotte, North Carolina under non-
cancelable operating
leases that expire in 2010 and 2014, respectively. In 2008, we terminated the lease at our Hayward, California facility effective June 2009,
which was originally scheduled to expire in September 2009. In 2008, we entered into a non-
cancelable operating lease for our new Phoenix,
Arizona facility that commenced in February 2009 and will expire in 2016. We lease information
technology equipment under various capital
leases that expire through 2011. We also have co-location agreements with third-
party hosting facilities that expire in 2013. As a result of our
growth strategies, we believe that our liquidity and capital resources requirements will grow in absolute dollars but will be generally consistent
with historical periods on an annual basis as a percentage of net revenues. We anticipate leasing additional office space, production facilities and
hosting facilities in future periods as the need arises, consistent with our historical business model.
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