Restructuring

2017 Restructuring Plan

During the first quarter of 2017, the Board of Directors approved, committed to and initiated a plan to significantly simplify the Consumer business during 2017 ("2017 Restructuring Plan"). As part of the plan, the following actions were taken:


•	During the second quarter of 2017, the Company shut down the legacy Tiny Prints website and reinvested in Tiny Prints as its premium cards & stationery brand, creating a Tiny Prints boutique on a dedicated tab on Shutterfly.com;


•	During the second quarter, the MyPublisher brand was retired in favor of the industry-leading Shutterfly Photo Books category; and


•	During the third quarter of 2017, the Company launched the new Shutterfly Wedding Shop and shut down the Wedding Paper Divas legacy website

As of December 31, 2017, the Company has substantially completed all actions under the 2017 Restructuring Plan. The Tiny Prints, MyPublisher and Wedding Paper Divas legacy websites were shut down during the first nine months of fiscal 2017. The Company seeks to retain as many customers and as much revenue as possible while migrating customers from the legacy websites to Shutterfly.com. Further, as part of the plan, the Company announced that it would undertake a strategic review of BorrowLenses for possible sale. The Company completed the strategic review process in the third quarter of 2017 and decided to retain and operate the business. Total restructuring costs associated with the 2017 Restructuring Plan were $16.8 million and impacted the restructuring expense line items within cost of net revenues and operating expenses in the consolidated statement of operations during the year ended December 31, 2017.

2015 Restructuring Plan

During 2015, the Company decided to discontinue the Treat brand as well as close the manufacturing operations in Elmsford, New York as part of the Company's strategic initiatives ("2015 Restructuring Plan"). Actions pursuant to the 2015 Restructuring Plan were substantially complete as of the first quarter of 2016. Total restructuring costs associated with the 2015 Restructuring Plan were $0.3 million and $3.5 million during the year ended December 31, 2016 and December 31, 2015, respectively. The restructuring expenses incurred during the year ended December 31, 2015 were recorded within the cost of net revenues line item in the amount of $2.7 million and technology and development line item in the amount of $0.8 million in the consolidated statement of operations.

Restructuring Activity

The following table summarizes the restructuring costs recognized during the years ended December 31, 2017, 2016, and 2015 (in thousands):



	2017 Restructuring													2015 Restructuring
	Property and equipment			Employee costs			Inventory				Other costs			Employee Costs			Other costs			Total
Balance as of January 1, 2015	$	—		$	—		$	—			$	—		$	—		$	—		$	—
Restructuring and other charges	—			—			—				—			1,043			2,494			3,537
Cash payments	—			—			—				—			(577		)	—			(577		)
Non-cash adjustments ^[2]	—			—			—				—			—			(435		)	(435		)
Balances as of December 31, 2015^[1]	—			—			—				—			466			2,059			2,525
Restructuring and other charges	—			—			—			—	—			61			229			290
Cash payments	—			—			—				—			(527		)	(686		)	(1,213		)
Balance as of December 31, 2016^[1]	—			—			—				—			—			1,602			1,602
Restructuring and other charges	8,233			5,851			1,475				1,226			—			181			16,966
Cash payments	(250		)	(4,658		)	—				(786		)	—			(390		)	(6,084		)
Non-cash adjustments ^[2]	(6,933		)	(814		)	(1,475		)		(23		)	—			—			(9,245		)
Balance as of December 31, 2017^[1]	$	1,050		$	379		$	—			$	417		$	—		$	1,393		$	3,239

^[1]The balances as of December 31, 2017, 2016, and 2015 are recorded in accrued liabilities and other non-current liabilities.
^[2] Non-cash adjustments include depreciation and amortization of property and equipment (primarily capitalized software development costs and manufacturing equipment) and intangible assets, inventory markdowns, stock-based compensation, and other non-cash costs incurred as part of the restructuring.