Shutterfly 2014 Annual Report Download - page 91
Download and view the complete annual report
Please find page 91 of the 2014 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.-
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
-
124
-
125
-
126
-
127
-
128
-
129
-
130
 |
 |
The following table summarizes, by major security type, the Company’s cash equivalents and
investments that are measured at fair value on a recurring basis and are categorized using the fair value
hierarchy (in thousands):
Total Estimated Fair Value as of
December 31, December 31,
2014 2013
Level 1 Securities:
Money market funds ...................................... $ 34,480 $ —
Level 2 Securities:
Agency securities ........................................ 13,645 —
Corporate debt securities .................................. 79,348 —
US Government securities .................................. 1,801 —
Total cash equivalents and investments .......................... $ 129,274 $ —
Convertible Senior Notes
As of December 31, 2014, the fair value of the convertible senior notes, which was determined based
on inputs that are observable in the market or that could be derived from, or corroborated with, observable
market data, including our stock price, interest rates and credit spread (Level 2) were as follows (in
thousands):
Total Estimated Fair Value as of
December 31, December 31,
2014 2013
Convertible senior notes ..................................... $ 251,973 $ 237,066
Note 6 — Acquisitions
Business Combinations
Dot Copy, Inc. (‘‘Groovebook’’)
On October 31, 2014, the Company acquired certain assets of Dot Copy, Inc. (‘‘Groovebook’’) for a
total aggregate purchase price of $13.7 million, consisting of an upfront cash purchase amount and a future
performance-based earn-out subject to achieving certain financial metrics. Groovebook is a mobile photo
book app subscription service that sends customers a keepsake book of their mobile photos each month.
The acquisition was accounted for as a purchase transaction and, accordingly, the purchase price has been
allocated to the acquired tangible assets, liabilities assumed, and identifiable intangible assets acquired
based on their estimated fair values on the acquisition date. The excess of the purchase price over the
aggregate fair values was recorded as goodwill.
Of the total purchase price, $0.6 million was allocated to the customer base, which will be amortized
over an estimated useful life of two years, $0.5 million was allocated to the Groovebook tradename, which
will be amortized over an estimated useful life of three years, $0.4 million was allocated to Groovebook
patents, which will be amortized over an estimated useful life of two years and $0.2 million was allocated to
developed technologies, which will be amortized over an estimated useful life of one year. The remaining
excess purchase price of approximately $12.0 million was allocated to goodwill primarily representing
manufacturing and production synergies and synergies from Groovebooks’ market position. The results of
operations for the acquired business have been included in the consolidated statement of operations for
90