Shutterfly 2014 Annual Report Download - page 96

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At December 31, 2014, the total future minimum payments under non-cancelable operating and
capital leases are as follows (in thousands):
Operating Capital
Leases Leases
Year Ending:
2015 .................................................... $ 14,585 $ 10,026
2016 .................................................... 11,557 9,856
2017 .................................................... 8,666 9,589
2018 .................................................... 4,681 8,754
2019 .................................................... 2,041 5,322
Thereafter ................................................ 2,565 602
Total minimum lease payments ................................. $ 44,095 44,149
Less: amount representing interest ............................... (2,947)
Present value of future minimum lease payments .................... 41,202
Less: current portion ........................................ (8,905)
Non-current portion of capital lease obligations ..................... $ 32,297
Purchase obligations consist of non-cancelable marketing and service agreements and co-location
services that expire at various dates through the year 2020. As of December 31, 2014, the Company’s
purchase obligations totaled $99.2 million. At December 31, 2014, the total future minimum payments
under these purchase obligations are as follows (in thousands):
Year Ending:
2015 .............................................................. $ 18,383
2016 .............................................................. 19,238
2017 .............................................................. 18,840
2018 .............................................................. 16,082
2019 .............................................................. 15,312
Thereafter .......................................................... 11,334
Total minimum purchase obligations ....................................... $ 99,189
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 replaced
the Company’s current east coast production facility in Charlotte, North Carolina. In order for the facility
to meet the Company’s operating specifications, both the landlord and the Company made structural
changes as part of the uplift of the building, and as a result, the Company has concluded that it was the
‘‘deemed owner’’ of the building (for accounting purposes only) during the construction period.
Accordingly, at lease inception, the Company recorded an asset of $4.9 million, representing its estimate of
the fair market value of the building, and a corresponding construction financing obligation, recorded as a
component of other non-current liabilities. The Company increased the asset and financing obligations by
$3.1 million and $ 1.5 million for building uplift costs incurred by the landlord during 2013 and 2012,
respectively.
During the year ended December 31, 2013, the Company executed a lease for a new 217,000 square
foot production facility in Shakopee, Minnesota. This facility provides additional production capacity. Both
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