Shutterfly 2013 Annual Report Download - page 67

Download and view the complete annual report

Please find page 67 of the 2013 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.

Page out of 124

  • 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

Contractual Obligations
The following are contractual obligations at December 31, 2013, 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 ................... $ 303,375 $ 750 $ 1,500 $ 301,125 $ —
Capital lease obligations ........ 6,554 1,731 2,994 1,829 —
Operating lease obligations(1) .... 62,859 17,863 29,950 11,571 3,475
Build-to-suit lease obligations(2) . . 62,484 2,066 10,502 12,083 37,833
Purchase obligations(3) ......... 100,587 16,325 26,207 31,609 26,446
Total contractual obligations ..... $ 535,859 $ 38,735 $ 71,153 $ 358,217 $ 67,754
(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. Specifically, in 2013, 2012, and 2011, we entered
into multiple non-cancelable operating leases for new digital presses and finishing equipment with
terms that expire in up to five years.
(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 ‘‘Notes to
Consolidated Financial Statements — Note 5 — 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 2013, the FASB issued a new accounting standard that will require the presentation of certain
unrecognized tax benefits as reductions to deferred tax assets rather than as liabilities in the Consolidated
Balance Sheets when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward
exists. The new standard requires adoption on a prospective basis in the first quarter of 2015; however,
65