Shutterfly 2014 Annual Report Download - page 85

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Diluted net income/(loss) 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 stock units and incremental shares of
common stock issuable upon the exercise of stock options, conversion of warrants, and the impact of
convertible debt.
Year ended December 31,
2014 2013 2012
(in thousands, except per share amounts)
Net income/(loss) per share:
Numerator
Net income/(loss) ................................. $ (7,860) $ 9,285 $ 22,998
Denominator
Denominator for basic net income/(loss) per share
Weighted-average common shares outstanding .......... 38,452 37,680 35,826
Dilutive effect of stock options and restricted awards ...... — 1,813 1,606
Denominator for diluted net income per share .......... 38,452 39,493 37,432
Net income/(loss) per share
Basic ........................................ $ (0.20) $ 0.25 $ 0.64
Diluted ....................................... $ (0.20) $ 0.24 $ 0.61
The following weighted-average outstanding stock options and restricted stock units were excluded
from the computation of diluted net income/(loss) per common share for the periods presented because
including them would have had an anti-dilutive effect (in thousands):
Year ended December 31,
2014 2013 2012
Stock options and restricted stock units ................. 4,205 24 748
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/(loss) and other comprehensive income/(loss). The Company’s other
comprehensive income/(loss) consists of unrealized gains and losses on marketable securities classified as
available-for-sale.
Segment Reporting
The Company reports as two operating segments with the Chief Executive Officer (‘‘CEO’’) acting as
the Company’s chief operating decision maker. The Company defined two reportable segments based on
factors such as how management manages the operations and how its chief operating decision maker views
results.
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
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