Shutterfly 2014 Annual Report Download - page 70

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Contractual Obligations
The following are contractual obligations at December 31, 2014, associated with lease obligations and
other arrangements:
Less Than More Than
Total 1 Year 1-3 Years 3-5 Years 5 Years
(in thousands)
Contractual Obligations
Convertible Senior Notes, including
interest ................... $ 302,625 $ 750 $ 1,500 $ 300,375 $ —
Capital lease obligations ........ 44,149 10,026 19,445 14,076 602
Operating lease obligations(1) .... 44,095 14,585 20,223 6,722 2,565
Build-to-suit lease obligations(2) . . 63,108 4,798 12,312 12,871 33,127
Purchase obligations(3) ......... 99,189 18,383 38,078 31,394 11,334
Total contractual obligations ..... $ 553,166 $ 48,542 $ 91,558 $ 365,438 $ 47,628
(1) Includes office space in Redwood City and Santa Clara, California, and Tempe, Arizona and certain
production facilities under non-cancelable operating leases. We also have various non-cancelable
operating leases for certain production equipment.
(2) Includes the estimated timing and amount of payments for rent for our newly leased production
facility spaces in Fort Mill, South Carolina, Shakopee, Minnesota and Tempe, Arizona. See Part II,
Item 8 of this annual report on Form 10-K ‘‘Financial Statements and Supplementary Data — Notes
to Consolidated Financial Statements — Note 7 — Commitments and Contingencies’’ for further
discussion.
(3) Includes co-location agreements with third-party hosting facilities that expire in 2020 as well as
minimums under marketing agreements.
Other than the obligations, liabilities and commitments described above, we have no significant
unconditional purchase obligations or similar instruments. We are not a guarantor of any other entities’
debt or other financial obligations.
Off-Balance Sheet Arrangements
We do not have any relationships with unconsolidated entities or financial partnerships, such as
entities often referred to as structured finance or special purpose entities, which would have been
established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or
limited purposes. In addition, we do not have any undisclosed borrowings or debt and we have not entered
into any synthetic leases. We are, therefore, not materially exposed to any financing, liquidity, market or
credit risk that could arise if we had engaged in such relationships.
Recent Accounting Pronouncements
In May 2014, the FASB issued new accounting guidance related to revenue recognition. This new
standard will replace all current U.S. GAAP guidance on this topic and eliminate all industry-specific
guidance. The new revenue recognition standard provides a unified model to determine when and how
revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer
of promised goods or services to customers in an amount that reflects the consideration for which the
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