Shutterfly 2011 Annual Report Download - page 58

Download and view the complete annual report

Please find page 58 of the 2011 Shutterfly annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 123

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123

The Company’
s policy is to recognize interest and /or penalties related to all tax positions in income tax expense. To the extent that accrued
interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected as a reduction of the overall income tax
provision in the period that such determination is made. No interest and penalties were accrued as of December 31, 2009 and 2010.
The Company is subject to taxation in the United States, California and fourteen other jurisdictions in the United States.
Net Income Per Share
Basic net income per share attributed to common shares is computed by dividing the net income attributable to common shares for the
period by the weighted average number of common shares outstanding during the period as reduced by the weighted average unvested common
shares subject to repurchase by the Company.
Diluted net income per share attributed to common shares is computed by dividing the net income attributable to common shares for the
period by the weighted average number of common and potential common shares outstanding during the period, if the effect of each class of
potential common shares is dilutive. Potential common shares include restricted common stock units, common stock subject to repurchase rights,
and incremental shares of common stock issuable upon the exercise of stock options.
The following weighted-average outstanding stock options, restricted stock units, and shares subject to repurchase were excluded from the
computation of diluted net loss per common share for the periods presented because including them would have had an anti-dilutive effect (in
thousands):
Comprehensive Income
Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and
circumstances from non-
owner sources. Comprehensive income is composed of net income and unrealized gains and losses on marketable
securities, which are disclosed in the accompanying consolidated statements of comprehensive income. Unrealized gain on investments for the
years ended December 31, 2010, 2009 and 2008 are net of tax benefit of $0, $0 and $3,148,000 respectively.
Segment Reporting
The Company operates in one industry segment —
digital photofinishing services. The Company operates in one geographic area, the
United States of America. The Company reports as a single operating segment with the Chief Executive Officer (“CEO”) being the Company’
s
chief operating decision maker. The Company’
s CEO reviews financial information presented on a consolidated basis for purposes of allocating
resources and evaluating financial performance. Accordingly, the Company has one business activity and there are no segment managers who
are held accountable for operations, operating results or components below the consolidated unit level.
Table of Contents
Year Ended December 31,
2010
2009
2008
Net income per share:
In thousands, except per share amounts
Numerator
Net income
$
17,127
$
5,853
$
3,660
Denominator
Weighted
-
average common shares outstanding
27,025
25,420
25,038
Less: Weighted
-
average unvested common shares subject to repurchase
-
-
(2
)
Denominator for basic net income per share
27,025
25,420
25,036
Dilutive effect of stock options, restricted awards and shares subject to repurchase
2,224
1,390
751
Denominator for diluted net income per share
29,249
26,810
25,787
Net income per share
Basic
$
0.63
$
0.23
$
0.15
Diluted
$
0.59
$
0.22
$
0.14
Year Ended December 31,
2010
2009
2008
Stock options, restricted stock units, and shares subject to repurchase
830
2,559
4,230
49