Shutterfly 2012 Annual Report Download

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Table of contents

  • Page 1

  • Page 2
    ... their photos and videos, as we evolve from a product-based company to a solutions and services ecosystem. In closing, I want to personally thank our customers for their loyalty and our employees and partners for their tremendous dedication throughout the year, and on behalf of the Shutterfly team...

  • Page 3
    ... business day of our most recently completed second fiscal quarter, the aggregate market value of our Common Stock held by non-affiliates based on the closing price or our Common Stock on June 29, 2012 as reported on the NASDAQ Global Select Market was $1,103,549,240. Indicate the number of shares...

  • Page 4
    ... ...Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ...Controls and Procedures ...Other Information ...PART III Directors, Executive Officers and Corporate Governance ...Executive Compensation ...Security Ownership of Certain Beneficial Owners and Management and...

  • Page 5
    ... and send unique greeting cards. Our Treat launch signifies our focused expansion into the one-to-one U.S. greeting card market, to complement our existing one-to-many card business. And in May 2012, we acquired the customer accounts and images of Kodak Gallery's online photo service through...

  • Page 6
    ... products and services that our brands offer. On September 14, 2012, we acquired Penguin Digital, Inc., a mobile application development company that has an iPhone application that allows users to access their photos from iPhones or their Facebook or Instagram accounts and create customized products...

  • Page 7
    ... purchases for different holidays and life events and increasing our cross-selling and up-selling activities. In 2012, we added more styles and introduced premium content across our brands. We also introduced new products in 2012, such as a 6x8 sized flat stationery card and iPhone cases, which add...

  • Page 8
    ... - marketing, business development, multi-brand site experiences and customer service. During 2012, we partnered with various companies to offer our products through multiple nationwide flash promotions to those companies' members, and partnered with retailers, like Best Buy, to promote Shutterfly...

  • Page 9
    ... to increase average order sizes by expanding customer awareness, providing targeted, segmented offers to customers, and encouraging cross- and up-selling. The system uses a variety of data, including website usage patterns, order size, order frequency, products purchased, seasonality factors, image...

  • Page 10
    ... strategies, offer their customers heavily discounted in-store products and services that compete directly with our offerings; Drug stores such as Walgreens, CVS/pharmacy, and others that offer in-store pick-up from their photo website internet orders; Mobile digital photography services companies...

  • Page 11
    ... products and services to their large user bases; Home printing service providers such as Hewlett-Packard, Epson, Canon, and Kodak that are seeking to expand their printer and ink businesses by gaining market share in the digital photography marketplace; Social media companies that host images...

  • Page 12
    ... may be issued to us in the future. Our primary brands are ''Shutterfly,'' ''Tiny Prints,'' ''Wedding Paper Divas,'' and ''Treat.'' We hold applications and/or registrations for the Shutterfly, Tiny Prints, Wedding Paper Divas and Treat trademarks in our major markets of the United States and Canada...

  • Page 13
    ... be disclosed to direct marketers. The federal Credit Card Accountability Responsibility and Disclosure Act of 2009 (the ''CARD Act''), which was signed into law May 22, 2009, includes new provisions governing the use of gift cards, including specific disclosure requirements and a prohibition or...

  • Page 14
    ... good. Available Information Our Internet website is located at http://www.shutterfly.com. The information on our website is not a part of this annual report on Form 10-K. We make available free of charge on our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports...

  • Page 15
    ... the operations of either our Charlotte, North Carolina or Phoenix, Arizona production facilities, could delay production or shipment of our products. Our inability to meet our production requirements could lead to customer dissatisfaction and damage our reputation and brands, which would result in...

  • Page 16
    ... of 2011, many of these competitors discounted those products at an unprecedented level. As a result, we also changed our discounting strategy, which impacted our acquisition of new customers, average order value, net revenues, gross margin, and our adjusted EBITDA and net income profitability...

  • Page 17
    ... strategies, offer their customers heavily discounted in-store products and services that compete directly with our offerings; Drug stores such as Walgreens, CVS/pharmacy, and others that offer in-store pick-up from their photo website internet orders; Mobile digital photography services companies...

  • Page 18
    ... picture taking; the timing of holidays; volatility in our stock price, which may lead to higher stock-based compensation expense; consumer preferences for digital photography services; improvements to the quality, cost and convenience of desktop printing of digital pictures and products; and global...

  • Page 19
    ... do the following maintain and increase the size of our customer base; maintain and enhance our brands; enhance and expand our products and services; maintain and grow our websites and customer operations; successfully execute our business and marketing strategy; continue to develop and upgrade our...

  • Page 20
    ... website operations, offices and customer support centers in Redwood City, California, Sunnyvale, California, and Tempe, Arizona and production facilities in Charlotte, North Carolina and Phoenix, Arizona and a new facility in Fort Mill, South Carolina that will replace our Charlotte, North Carolina...

  • Page 21
    ... the customer experience on our websites through internal development. However, from time to time, we may selectively pursue acquisitions of complementary businesses, such as our 2012 acquisitions of ThisLife, Inc., Penguin Digital, Inc. and Photoccino, Ltd., our 2011 acquisition of Tiny Prints, Inc...

  • Page 22
    ... and new Chief Marketing Officer. In addition, inducement equity awards outside of our 2006 Plan were issued to the new employees that we acquired as part of our purchase of Photoccino, Ltd., Penguin Digital, Inc., and ThisLife, Inc. The issuance of additional shares of common or preferred stock may...

  • Page 23
    ... who drive new customers to our websites, purchasing search results from online search engines, e-mail and direct mail. We pay providers of online services, search engines, directories and other websites and e-commerce businesses to provide content, advertising banners and other links that direct...

  • Page 24
    ... us from acquiring new customers and increasing revenues. A component of our business strategy is the continued promotion and strengthening of the Shutterfly, Tiny Prints, Wedding Paper Divas and Treat brands. Due to the competitive nature of the digital photography products and services markets, if...

  • Page 25
    ... our websites, in order to offer customers enhanced and new products, services, capacity, features and functionality. The expansion of our systems and infrastructure may require us to commit substantial financial, operational and technical resources before the volume of our business increases, with...

  • Page 26
    ... with us. In addition, we purchase or rent a substantial portion of the machines used to produce certain of our photo-based products from Hewlett-Packard, which is one of our primary competitors in the area of online digital photography services. This competition may influence their willingness to...

  • Page 27
    ... our ability to build brand identity and possibly leading to customer confusion. In addition, we have been and may continue to be subject to potential trade name or trademark infringement claims brought by owners of marks that are similar to Shutterfly, Tiny Prints, Wedding Paper Divas, Treat or one...

  • Page 28
    ...'' presence (essentially marketing activities) which is a broader definition than is used for sales and use tax. We collect sales and use taxes in jurisdictions where we have employees and/or property and in other states where we have implemented joint sales efforts with Target Corporation. 26

  • Page 29
    .... Future tax audits by taxing agencies for the open tax years could lead to fluctuations in our effective tax rate because the taxing authority may disagree with certain assumptions we have made regarding appropriate credits and deductions in filing our tax returns. Under current stock option tax...

  • Page 30
    ... credit card billing practices and adds new regulations on the use of gift cards, limiting our ability to expire them. In addition, several states are also attempting to pass new laws regulating the use of gift cards and amending state escheatment laws to try and obtain unused gift card balances...

  • Page 31
    ... damage our reputation and brands and substantially harm our business and results of operations. For example, a majority of our sales are billed to our customers' credit card accounts directly, orders are shipped to a customer's address, and customers log on using their e-mail address. We rely on...

  • Page 32
    ... products using self-service alternatives, such as printing at home. Furthermore, we may have to incur significantly higher and more sustained advertising and promotional expenditures or reduce the prices of our products and services in order to attract additional online consumers to our websites...

  • Page 33
    ...such delays or restatements could cause investors to lose confidence in our reported financial information and lead to a decline in our stock price. Maintaining and improving our financial controls and the requirements of being a public company may strain our resources, divert management's attention...

  • Page 34
    ... of our stock; ratings downgrades by any securities analysts who follow our company; the public's response to our press releases or other public announcements, including our filings with the SEC; announcements by us or our competitors of significant technical innovations, acquisitions, strategic...

  • Page 35
    • • lawsuits threatened or filed against us; future sales of our common stock by our executive officers, directors and significant stockholders; and other events or factors, including those resulting from war, incidents of terrorism or responses to these events. • Some provisions in ...

  • Page 36
    ... in certain adjacent buildings. We terminated this lease early and expect to move to our newly leased South Carolina production facility during 2013. In 2012, we executed a lease for a new 300,000 square foot east coast production and customer service facility in Fort Mill, South Carolina with the...

  • Page 37
    ...5, 2013, Kodak filed a stipulation and order lifting the stay and dismissing the case with prejudice. On January 31, 2011, we filed a complaint for patent infringement against Eastman Kodak Company and Kodak Imaging Network, Inc. in Shutterfly, Inc. v. Eastman Kodak Company and Kodak Imaging Network...

  • Page 38
    ... Equity Securities The following table provides information about our repurchase of shares of our common stock during the fourth quarter of the fiscal year ended December 31, 2012: Total Number of Shares Purchased Under Publicly Announced Plans or Programs(2) Approximate Dollar Value of Shares that...

  • Page 39
    ... in this annual report on Form 10-K. 2012 Year Ended December 31, 2011 2010 2009 (In thousands, except per share amounts) 2008 Consolidated Income Statement Data: Net revenues ...Cost of net revenues ...Gross profit ...Operating expenses: Technology and development . Sales and marketing ...General...

  • Page 40
    ...limited to, the seasonality of our business, whether we are able to expand our customer base and increase our product and service offering, competition in our marketplace and the other risks set forth below under ''Risk Factors'' in Part I, Item 1A of this report. Given these risks and uncertainties...

  • Page 41
    ... products and services that our brands offer. On September 14, 2012, we acquired Penguin Digital, Inc., a mobile application development company that has an iPhone application that allows users to access their photos from iPhones or their Facebook or Instagram accounts and create customized products...

  • Page 42
    ..., mouse pads, desktop plaques and puzzles. Photo prints consist of wallet, 4x6, 5x7, 8x10, and large format sizes. Revenue from advertising displayed on our websites is also included in Consumer revenues. Enterprise. Our Enterprise revenues are primarily from variable, four-color direct marketing...

  • Page 43
    ... services (such as Shutterfly Share Sites), and by conducting integrated marketing and advertising programs. Total customers have increased on an annual basis for each year since inception and we expect this trend to continue. Total Number of Orders. We closely monitor total number of orders...

  • Page 44
    ... development, and public relations activities. Our marketing efforts consist of various online and offline media programs, such as e-mail and direct mail promotions, the purchase of keyword search terms and various strategic alliances. We depend on these efforts to attract customers to our service...

  • Page 45
    ...place Consumer product orders through our websites and pay primarily using credit cards. Enterprise customers are invoiced upon fulfillment. Shipping charged to customers is recognized as revenue at the time of shipment. For gift card sales and flash deal promotions through group buying websites, we...

  • Page 46
    ... the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in a business combination. Intangible assets resulting from the acquisition of entities accounted for using the purchase method of accounting are estimated by management based on the fair value of...

  • Page 47
    ... model requires us to make estimates and assumptions including, among other things, estimates regarding the length of time an employee will retain vested stock options before exercising them, the estimated volatility of our common stock price using historical and implied volatility and the number...

  • Page 48
    ...in 2012 compared to 3% in 2011. The increase is a combination of new Enterprise customers as well as increased sales to existing customers. Consumer net revenue increases were also the result of year-over-year increases in total transacting customers and orders as outlined below. Average order value...

  • Page 49
    ...reflecting additional hires during 2012, as well as the inclusion of the Tiny Prints development team for the entire year 2012. There was also an increase of $5.6 million related to incremental costs associated with our acquisition of Photoccino and Kodak Gallery's accounts. The overall increase was...

  • Page 50
    ...million for 2011. Our effective tax rate was 43% in 2012 and 9% in 2011. This increase in our effective tax rate was primarily the result of fewer disqualifying dispositions of incentive stock option awards in the current year, a delay in the extension of the federal research credit, and a valuation...

  • Page 51
    ...acquired in the WMSG acquisition. For the Shutterfly brand, Consumer net revenue increases were also the result of year-over-year increases in customers and orders. Average order value was down 1% year-over-year reflecting a discount intensive environment in 2011, primarily during the fourth quarter...

  • Page 52
    ... in 2012, further increasing capitalized website and software development costs as a percentage of our total capital expenditures. Our sales and marketing expense increased $54.7 million, or 92%, in 2011 compared to 2010, primarily as a result of our acquisition of Tiny Prints in April 2011. As...

  • Page 53
    ... to assumed Tiny Prints options and from Research and Development tax credits. At December 31, 2011, we had approximately $41.1 million, $55.1 million, and $20.3 million of federal, California, and other state jurisdictions net operating loss carryforwards, respectively, to reduce future taxable...

  • Page 54
    ... Ended December 31, 2011 2010 (in thousands) Consolidated Statements of Cash Flows Data: Purchases of property and equipment ...Capitalization of software and website development costs Depreciation and amortization ...Acquisition of business and intangible assets, net of cash acquired ...Cash flows...

  • Page 55
    ... in the acquisition of Kodak Gallery's customer accounts and images and 32.8 million in the acquisitions of Photoccino Ltd, Penguin Digital, Inc., and ThisLife, Inc., net of cash acquired. We used $40.5 million for capital expenditures for computer and network hardware and production equipment for...

  • Page 56
    ... 18% 50,102 $ 11% $ We carefully manage our operating costs and capital expenditures, in order to make the strategic investments necessary to grow and strengthen our business, while at the same time increasing our adjusted EBITDA profitability and improving our free cash flows. Over the last three...

  • Page 57
    ... to Non-GAAP Adjusted EBITDA and Free Cash Flow $ 128,144 $ 83,713 $ 67,113 2012 Year Ended December 31, 2011 2010 Net cash provided by operating activities . . Add back: Interest expense ...Interest and other income, net ...Tax provision ...Changes in operating assets and liabilities Other...

  • Page 58
    ... 2012, 2011, and 2010, we entered into multiple non-cancelable operating leases for new digital presses and finishing equipment with terms that expire in up to five years. Includes the estimated timing and amount of payments for rent for our newly leased production facility space in Fort Mill, South...

  • Page 59
    ... effect on our current business, financial condition or results of operations. If our costs were to become subject to significant inflationary pressures, for example, if the cost of our materials or the cost of shipping our products to customers were to incur substantial increases as a result of...

  • Page 60
    ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA SHUTTERFLY, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets ...Consolidated Statements of Income ...Consolidated Statements of Stockholders' Equity ...Consolidated ...

  • Page 61
    ... of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was...

  • Page 62
    SHUTTERFLY, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except par value amounts) December 31, 2012 2011 ASSETS Current assets: Cash and cash equivalents ...Accounts receivable, net ...Inventories ...Deferred tax asset, current portion ...Prepaid expenses and other current assets . Total ...

  • Page 63
    ... STATEMENTS OF INCOME (In thousands, except per share amounts) Year Ended December 31, 2011 2012 2010 Net revenues ...Cost of net revenues ...Gross profit ...Operating expenses: Technology and development ...Sales and marketing ...General and administrative ...Total operating expenses ...Income...

  • Page 64
    SHUTTERFLY, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (In thousands) Year Ended December 31, 2011 2010 2012 Common stock (par value) Balance, beginning of year ...Issuance of common stock in connection with acquisition and upon exercise of options and vesting of restricted stock units ...

  • Page 65
    ... activities: Acquisition of business and intangibles, net of cash acquired . Purchases of property and equipment ...Capitalization of software and website development costs ...Proceeds from sale of equipment ...Proceeds from the sale of auction rate securities ...Net cash provided by (used in...

  • Page 66
    ... of products and services to organize and archive digital images; share pictures; order prints and create an assortment of personalized items such as photo books, greeting cards and stationery and calendars. The Company also provides enterprise services; printing and shipping of direct marketing and...

  • Page 67
    ...'s accounts receivable are derived primarily from sales to customers located in the United States who make payments through credit cards, sales of the Company's products in retail stores, sales of enterprise services, and revenue generated from online advertisements posted on the Company's websites...

  • Page 68
    ... sales, net of applicable sales tax, upon shipment of fulfilled orders, when persuasive evidence of an arrangement exists, the selling price is fixed or determinable and collection of resulting receivables is reasonably assured. Customers place Consumer product orders through the Company's websites...

  • Page 69
    ... takes place. The Company did not have any capitalized direct mail costs at December 31, 2012 and December 31, 2011. Total advertising costs are a component of sales and marketing expenses and include print advertising, internet advertising, such as display ads and keyword search terms and TV and...

  • Page 70
    ... model. This model requires the Company to make estimates and assumptions including, among other things, estimates regarding the length of time an employee will retain vested stock options before exercising them, the estimated volatility of the Company's common stock price and the number of options...

  • Page 71
    ... had an anti-dilutive effect (in thousands): 2012 Year ended December 31, 2011 2010 Stock options and restricted stock units ...Comprehensive Income 748 278 830 Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events...

  • Page 72
    Recent Accounting Pronouncements In September 2011, the Financial Accounting Standards Board issued new accounting... Expenses and Other Current Assets December 31, 2012 2011 (in thousands) Prepaid service contracts - current portion . Deferred costs ...Prepaid income taxes ...Other prepaid expenses...

  • Page 73
    ... at December 31: Weighted Average Useful Life December 31, 2012 2011 (in thousands) Purchased technology ...Less: accumulated amortization ... 10 years $ 99,003 $ (23,153) 75,850 76,843 (12,771) 64,072 35,235 (4,742) 30,493 871 (420) 451 Customer relationships ...Less: accumulated amortization...

  • Page 74
    ... a result of the acquisition of Tiny Prints in April 2011. Accrued Liabilities December 31, 2012 2011 (in thousands) Accrued Accrued Accrued Accrued Accrued Accrued Accrued Accrued production costs ...marketing expenses . income and sales tax compensation ...consulting ...purchases ...fixed assets...

  • Page 75
    .... ThisLife provides cloud-based services for protecting, organizing, storing and sharing photos and videos which will strengthen the Company's photo storage and sharing capabilities as well as enable the creation of products across the web and mobile efficiently. The acquisition was accounted for...

  • Page 76
    company that has an iPhone application that allows users to access their photos from iPhones or their Facebook or Instagram accounts and create customized products and gifts from their mobile devices. The acquisition was accounted for as a non-taxable purchase transaction and, accordingly, the ...

  • Page 77
    ....com which offer cards, invitations, and personalized stationery. With the acquisition and combined resources, the Company expects to incur significant revenue and cost synergies through the Tiny Prints brands, customer base and workforce. Estimated Fair Value of Stock Awards Assumed...

  • Page 78
    ... upon their estimated fair values as of the April 25, 2011 closing date of the acquisition. The excess purchase price over the value of the net assets acquired is recorded as goodwill. The purchase price of Tiny Prints is allocated as follows (in thousands): Estimated Useful Life (in years) Amount...

  • Page 79
    ... purchase price of $6.0 million. This acquisition enabled the Company to provide a complete solution for variable digital print marketers and other print-on-demand opportunities. WMSG was a privately-held, digital direct marketing specialist with strong data management and marketing analytics...

  • Page 80
    ...'s purchase obligations totaled $22,806,000. Build-to-suit Lease During the year ended December 31, 2012, the Company executed a lease for a new 300,000 square foot east coast production and customer service facility in Fort Mill, South Carolina. This facility will replace the Company's current east...

  • Page 81
    ...$200.0 million. From inception through December 31, 2012, the Company has not drawn on the credit facility. At the Company's option, loans under the Facility will bear stated interest based on the Base Rate or Adjusted LIBO Rate, in each case plus the Applicable Rate (respectively, as defined in the...

  • Page 82
    ... matures on the fifth anniversary of its closing and is payable in full upon maturity. The Company intends to use the new Facility from time to time for general corporate purposes, working capital and potential acquisitions. The Credit Agreement contains customary representations and warranties...

  • Page 83
    ... Company employees, which includes officers and directors of the Company. Non-qualified stock options (''NSO'') and stock purchase rights were able to be granted to employees and consultants. Options under the Plan were to be granted at prices not less than 85% of the deemed fair value of the shares...

  • Page 84
    .... Stock Option Activity A summary of the Company's stock option activity at December 31, 2012 and changes during the period are presented in the table below (share numbers and aggregate intrinsic values in thousands): Number of Options Outstanding Weighted Average Exercise Price Weighted Average...

  • Page 85
    ... Incentive Plan and Inducement awards to new employees upon hire in accordance with NASDAQ Listing Rule 5635(c)(4). The cost of RSUs is determined using the fair value of the Company's common stock on the date of grant. RSUs typically vest and are settled annually, based on a three or four year...

  • Page 86
    ... are issued to newly hired officers and to new employees from acquired companies. These awards typically vest annually over a three year period based on continued employment. The above includes 366,000 RSUs to certain employees of Photoccino, Penguin Digital, and ThisLife. Includes PBRSUs issued to...

  • Page 87
    ... 1,314 $ 8,088 The Company's actual tax expense differed from the statutory federal income tax rate, as follows: 2012 December 31, 2011 2010 Income tax expense at statutory rate State income taxes ...Stock-based compensation ...R&D tax credit ...Acquisition costs ...Valuation allowance ...Other...

  • Page 88
    ... 15 years for Arizona purposes. The research and development tax credit will expire starting in 2027 for federal and 2025 for Arizona. On January 2, 2013, President Barack Obama signed into law The American Taxpayer Relief Act of 2012, which reinstated the research tax credit retroactive to January...

  • Page 89
    ... program for up to $60.0 million of the Company's common stock. The share repurchase authorization, which is effective immediately, permits the Company to effect repurchases for cash from time to time through open market, privately negotiated or other transactions, including pursuant to trading...

  • Page 90
    All repurchased shares of common stock have been retired. Between October 29, 2012 and December 31, 2012, the Company repurchased 137,262 shares of its outstanding common stock at an average of $27.34 per share pursuant to the share repurchase program. Note 10 - Quarterly Financial Data (Unaudited) ...

  • Page 91
    ... at Beginning of Period Deductions Balance at End of Period Allowance for Receivable Year ended Year ended Year ended Tax Valuation Year ended Year ended Year ended Doubtful Accounts December 31, 2010 ...$ December 31, 2011 ...$ December 31, 2012 ...$ Allowance December 31, 2010 ...$ December...

  • Page 92
    ..., our Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2012, our disclosure controls and procedures were effective at the reasonable assurance level. Management's Report on Internal Control over Financial Reporting Management of the Company is responsible...

  • Page 93
    ... the degree of compliance with the policies or procedures may change over time. Our management, under the supervision of our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in...

  • Page 94
    ... officer, controller and other employees of the finance department designated by the Company's Chief Financial Officer. This code of ethics, titled the ''Code of Conduct and Ethics for Chief Executive Officer and Senior Financial Department Personnel,'' can be found on our website at www.shutterfly...

  • Page 95
    ... by reference to information set forth in the Proxy Statement in the section entitled ''Independence of Board of Directors and its Committees.'' ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES. The information concerning principal accounting fees and services required by this Item is incorporated...

  • Page 96
    ...-K. 2. Financial Statement Schedule. The Valuation and Qualifying Accounts schedule is incorporated by reference to Part II, Item 8 of this annual report. 3. Exhibits. We have filed, or incorporated into this report by reference, the exhibits listed on the accompanying Index to Exhibits immediately...

  • Page 97
    ... has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SHUTTERFLY, INC. (Registrant) Dated: February 13, 2013 By: /s/ Brian M. Regan Brian M. Regan Senior Vice President and Chief Financial Officer (Principal Financial Officer) POWER OF ATTORNEY...

  • Page 98
    ... Stock Unit Award Agreement.* Shutterfly, Inc. 2012 Quarterly Bonus Plan.* Shutterfly, Inc. Executive Stock Ownership Guidelines Offer letter dated January 5, 2005 for Jeffrey T. Housenbold.* Amendment to Employment Agreement dated December 8, 2008 for Jeffrey T. Housenbold.* Amendment Number...

  • Page 99
    ... August 23, 2012 by and between Shutterfly, Inc. and FUJIFILM North America Corporation.** Credit Agreement, dated as of November 22, 2011, by and among the Shutterfly, Inc., the Lenders (as defined therein) and JPMorgan Chase Bank, N.A. Consent of Independent Registered Public Accounting Firm. 10...

  • Page 100
    ... Section 1350 and Securities Exchange Act Rule 13a-14(b).*** The following financial statements from the Shutterfly Inc.'s Annual Report on Form 10-K for the year ended December 31, 2012, formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated...

  • Page 101
    ...or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: February 13, 2013 By: /s/ Jeffrey T. Housenbold Jeffrey T. Housenbold President and Chief Executive Officer (Principal Executive and Financial...

  • Page 102
    ... on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is...

  • Page 103
    ..., the President and Chief Executive Officer of Shutterfly, Inc. (the ''Company''), pursuant to 18 U.S.C. §1350, hereby certifies that: (i) the Annual Report on Form 10-K for the period ended December 31, 2012 of the Company (the ''Report'') fully complies with the requirements of Section 13...

  • Page 104
    ..., Senior Vice President and Chief Financial Officer of Shutterfly, Inc. (the ''Company''), pursuant to 18 U.S.C. §1350, hereby certifies that: (i) the Annual Report on Form 10-K for the period ended December 31, 2012 of the Company (the ''Report'') fully complies with the requirements of Section 13...

  • Page 105
    ... Shut terf ly, Inc. 2800 Bridge Parkway Redwood City, California 94065 SFLY COMP RUT 50% 0% 2007 2008 2009 2010 2011 2012 Email: IRinquiries@shut terf ly.com Trading Information The common stock of Shutterfly, Inc. is traded on the Nasdaq Stock Market (symbol: SFLY). If you wish to become...

  • Page 106