Netflix, Inc.

Consolidated Balance Sheets

(unaudited)
(in thousands)
March 31,
2011
Assets
Current assets:
Cash and cash equivalents
Short-term investments
Current content library, net
Other current assets
Total current assets
Non-current content library, net
Property and equipment, net
Other non-current assets
Total assets
Liabilities and Stockholders' Equity
Current liabilities:
Current content liabilities
Accounts payable
Accrued expenses
Deferred revenue
Total current liabilities
Non-current content liabilities
Long-term debt
Long-term debt due to related party
Other non-current liabilities
Total liabilities
Stockholders' equity:
Common stock
Additional paid-in capital
Accumulated other comprehensive income (loss)
Retained earnings
Total stockholders' equity
Total liabilities and stockholders' equity

June 30,
2011

As of
September 30,
2011

December 31,
2011

March 31,
2012

June 30,
2012

As of
September 30,
2012

December 31,
2012

March 31,
2013

June 30,
2013

As of
September 30,
2013

December 31,
2013

150,419 $ 175,207 $
192,302
201,200
265,933
499,434
108,798
90,098
717,452
965,939
197,554
425,246
134,800
136,948
40,382
42,560
1,090,188 $ 1,570,693 $

159,199 $
206,573
705,398
118,943
1,190,113
570,210
143,993
57,242
1,961,558 $

508,053 $
289,758
919,709
113,337
1,830,857
1,046,934
136,353
55,052
3,069,196 $

395,992 $ 402,251 $
408,534
411,092
1,155,443
1,223,638
98,772
100,804
2,058,741
2,137,785
1,226,274
1,147,805
128,197
124,644
67,247
68,056
3,480,459 $ 3,478,290 $

370,298 $
428,057
1,335,769
90,894
2,225,018
1,366,566
133,603
83,646
3,808,833 $

290,291 $
457,787
1,368,162
124,551
2,240,791
1,506,008
131,681
89,410
3,967,890 $

418,051 $ 370,678 $
607,821
709,432
1,391,505
1,363,609
139,723
126,603
2,557,100
2,570,322
1,576,674
1,682,202
129,319
127,931
100,196
100,296
4,363,289 $ 4,480,751 $

439,056 $
695,931
1,577,514
136,777
2,849,278
1,808,387
127,263
116,397
4,901,325 $

604,965
595,440
1,706,421
151,937
3,058,763
2,091,071
133,605
129,124
5,412,563

241,559 $ 478,417 $
67,829
65,583
37,885
35,772
143,045
146,937
490,318
726,709
67,119
251,302
200,000
200,000
57,029
58,648
814,466
1,236,659

684,905 $
73,759
48,373
160,929
967,966
348,182
200,000
57,058
1,573,206

935,036 $
86,992
54,231
148,796
1,225,055
739,628
200,000
200,000
61,703
2,426,386

1,163,839 $ 1,204,209 $
83,119
90,961
49,106
50,884
150,602
152,790
1,446,666
1,498,844
908,188
829,163
200,000
200,000
200,000
200,000
62,203
62,057
2,817,057
2,790,064

1,280,885 $
91,511
70,681
155,146
1,598,223
1,030,979
200,000
200,000
62,791
3,091,993

1,366,847 $
86,468
53,139
169,472
1,675,926
1,076,622
200,000
200,000
70,669
3,223,217

1,355,010 $ 1,321,217 $
102,822
103,441
52,004
59,035
178,878
186,571
1,688,714
1,670,264
1,083,427
1,124,249
500,000
500,000
200,000
78,229
80,616
3,550,370
3,375,129

1,591,981 $
100,899
46,433
195,823
1,935,136
1,179,055
500,000
82,764
3,696,955

1,775,983
108,435
54,018
215,767
2,154,203
1,345,590
500,000
79,209
4,079,002

52
53
590
884
275,080
333,097
275,722
334,034
1,090,188 $ 1,570,693 $

53
588
387,711
388,352
1,961,558 $

55
219,119
706
422,930
642,810
3,069,196 $

55
56
243,424
262,699
1,577
961
418,346
424,510
663,402
688,226
3,480,459 $ 3,478,290 $

56
281,593
3,006
432,185
716,840
3,808,833 $

56
301,616
2,919
440,082
744,673
3,967,890 $

56
59
369,801
634,985
291
(1,664)
442,771
472,242
812,919
1,105,622
4,363,289 $ 4,480,751 $

59
698,677
1,570
504,064
1,204,370
4,901,325 $

60
777,441
3,575
552,485
1,333,561
5,412,563

Netflix, Inc.
Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data)
March 31,
2011
Revenues
Cost of revenues
Marketing*
Technology and development
General and administrative*
VPPA Settlement
Operating income (loss)
Other income (expense):
Interest expense
Interest and other income (expense)
Loss on extinguishment of debt
Income (loss) before income taxes
Provision (benefit) for income taxes
Net income (loss)
Earnings per share:
Basic
Diluted
Weighted-average common shares outstanding:
Basic
Diluted

Three Months Ended

Twelve Months Ended
June 30, September 30, December 31,
December 31,
2011
2011
2011
2011

March 31,
2012

Three Months Ended

Twelve Months Ended
June 30,
September 30, December 31,
December 31,
2012
2012
2012
2012

March 31,
2013

Three Months Ended

June 30,
September 30,
2013
2013

December 31,
2013

Twelve Months Ended

December 31,
2013

$ 718,553 $ 788,610 $
438,151
489,978
99,595
90,606
50,905
57,865
27,662
35,047
102,240
115,114

821,839 $
536,617
83,421
69,480
35,479
96,842

875,575 $
575,155
107,647
80,783
41,118
9,000
61,872

3,204,577 $
2,039,901
381,269
259,033
139,306
9,000
376,068

869,791 $
623,933
129,928
82,801
35,064
(1,935)

889,163 $
643,428
113,964
81,547
34,070
16,154

905,089 $
662,638
108,448
82,521
35,347
16,135

945,239 $
695,867
113,060
82,139
34,535
19,638

3,609,282 $
2,625,866
465,400
329,008
139,016
49,992

1,023,961 $
726,863
129,175
91,975
44,126
31,822

1,069,372 $
753,525
121,760
93,126
43,844
57,117

1,105,999 $
791,019
116,109
95,540
46,211
57,120

1,175,230 $
811,849
136,845
98,128
46,120
82,288

4,374,562
3,083,256
503,889
378,769
180,301
228,347

(4,865)
(5,303)
865
1,013
98,240
110,824
38,007
42,610
$ 60,233 $ 68,214 $

(4,915)
1,696
93,623
31,163
62,460 $

(4,942)
(95)
56,835
21,616
35,219 $

(20,025)
3,479
359,522
133,396
226,126 $

(4,974)
(116)
(7,025)
(2,441)
(4,584) $

(5,006)
(493)
10,655
4,491
6,164 $

(4,990)
801
11,946
4,271
7,675 $

(5,016)
282
14,904
7,007
7,897 $

(19,986)
474
30,480
13,328
17,152 $

(6,740)
977
(25,129)
930
(1,759)
2,689 $

(7,528)
(2,940)
46,649
17,178
29,471 $

(7,436)
(193)
49,491
17,669
31,822 $

(7,438)
(846)
74,004
25,583
48,421 $

(29,142)
(3,002)
(25,129)
171,074
58,671
112,403

1.19 $
1.16 $

.66 $
.64 $

4.28 $
4.16 $

(.08) $
(.08) $

.11 $
.11 $

.14 $
.13 $

.14 $
.13 $

.31 $
.29 $

.05 $
.05 $

.51 $
.49 $

.54 $
.52 $

.81 $
.79 $

1.93
1.85

$
$

1.14 $
1.11 $
52,759
54,246

1.30 $
1.26 $
52,470
53,909

52,569
53,870

53,582
55,439

52,847
54,369

55,456
55,456

* Certain prior period amounts have been reclassified from Marketing to General and Administrative to conform to current period presentation

55,526
58,809

55,541
58,729

55,562
59,129

55,521
58,904

55,972
60,146

58,192
60,590

59,108
60,990

59,470
61,304

58,198
60,761

Netflix, Inc.
Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
March 31,
2011
Cash flows from operating activities:
Net income (loss)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Additions to streaming content library
Change in streaming content liabilities
Amortization of streaming content library
Amortization of DVD content library
Depreciation and amortization of property, equipment and intangibles
Stock-based compensation expense
Excess tax benefits from stock-based compensation
Other non-cash items
Loss on extinguishment of debt
Deferred taxes
Changes in operating assets and liabilities:
Other current assets
Accounts payable
Accrued expenses
Deferred revenue
Other non-current assets and liabilities
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Acquisitions of DVD content library
Purchases of property and equipment
Other assets
Purchases of short-term investments
Proceeds from sale of short-term investments
Proceeds from maturities of short-term investments
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from issuance of common stock
Proceeds from public offering of common stock, net of issuance costs
Proceeds from issuance of debt, net of issuance costs
Redemption of debt
Repurchases of common stock
Excess tax benefits from stock-based compensation
Principal payments of lease financing obligations
Net cash provided by (used in) financing activities

60,233 $

Three Months Ended

June 30, September 30,
2011
2011
68,214 $

December 31,
2011

62,460 $

Twelve Months Ended

December 31,
2011

35,219 $

226,126 $

(192,307)
84,048
85,937
26,990
9,826
12,264
(15,654)
(925)
(4,982)

(612,595)
422,080
144,466
24,000
10,182
15,536
(17,868)
(802)
(3,927)

(539,285)
313,781
187,446
23,000
11,913
15,705
(11,761)
(1,745)
(5,281)

(976,545)
644,046
281,279
22,754
11,826
18,077
(501)
(578)
(4,407)

(2,320,732)
1,463,955
699,128
96,744
43,747
61,582
(45,784)
(4,050)
(18,597)

(2,882)
15,232
20,293
15,862
2,388
116,323

18,802
(4,231)
15,459
3,892
3,184
86,392

(25,913)
(7,052)
23,489
13,992
(11,218)
49,531

11,429
20,019
6,319
(12,133)
8,662
65,466

1,436
23,968
65,560
21,613
3,016
317,712

(22,119)
(16,320)
1,419
(52,266)
14,961
650
(73,675)

(19,065)
(8,626)
844
(40,597)
16,510
15,985
(34,949)

(20,826)
(14,080)
(844)
(7,673)
37
1,805
(41,581)

(23,144)
(10,656)
2,255
(123,214)
19,485
19,665
(115,609)

6,762
(108,643)
15,654
(501)
(86,728)

7,418
(51,421)
17,868
(520)
(26,655)

4,409
(39,602)
11,761
(526)
(23,958)

1,025
199,947
198,060
501
(536)
398,997

March 31,
2012
(4,584) $

Three Months Ended

June 30,
September 30,
2012
2012
6,164 $

December 31,
2012

7,675 $

Twelve Months Ended

December 31,
2012

7,897 $

17,152 $

March 31,
2013
2,689 $

Three Months Ended

June 30,
September 30,
2013
2013
29,471 $

31,822 $

December 31,
2013

Twelve Months Ended

December 31,
2013

48,421 $

112,403

(764,893)
397,553
339,736
20,046
11,331
19,332
(3,755)
(1,519)
(10,843)

(374,252)
(39,947)
375,997
16,304
11,047
18,450
(307)
(1,579)
-

(744,714)
274,196
410,947
13,132
11,128
18,472
(111)
(2,078)
(15,606)

(631,647)
130,287
464,538
15,914
11,963
17,694
(370)
(3,216)
(3,622)

(2,515,506)
762,089
1,591,218
65,396
45,469
73,948
(4,543)
(8,392)
(30,071)

(591,941)
9,700
485,740
18,237
12,051
17,746
(11,615)
1,750
25,129
(6,748)

(593,454)
7,284
510,250
17,709
12,026
17,955
(20,368)
1,188
(2,040)

(878,314)
310,191
553,394
17,546
11,452
18,477
(20,492)
1,994
(2,424)

(986,049)
346,610
572,597
17,833
12,845
18,922
(29,188)
400
(10,832)

(3,049,758)
673,785
2,121,981
71,325
48,374
73,100
(81,663)
5,332
25,129
(22,044)

14,735
(1,756)
1,783
1,806
137
19,109

(3,574)
316
6,854
2,188
1,746
19,407

11,882
(9,727)
15,294
2,356
4,229
(2,925)

(28,475)
6,224
(14,125)
14,326
(1,393)
(14,005)

(5,432)
(4,943)
9,806
20,676
4,719
21,586

(5,727)
17,019
(4,132)
9,406
8,446
(12,250)

33,762
(5,138)
10,494
7,693
7,111
33,943

9,920
(5,877)
(11,451)
9,252
(10,797)
34,693

24,279
12,370
7,030
19,944
(13,737)
41,445

62,234
18,374
1,941
46,295
(8,977)
97,831

(85,154)
(49,682)
3,674
(223,750)
50,993
38,105
(265,814)

(13,528)
(4,766)
1,334
(299,467)
172,335
8,275
(135,817)

(8,012)
(3,359)
3,132
(63,303)
48,173
12,715
(10,654)

(8,586)
(10,808)
1,857
(67,779)
52,172
2,695
(30,449)

(18,149)
(21,345)
2,493
(46,772)
10,273
5,680
(67,820)

(48,275)
(40,278)
8,816
(477,321)
282,953
29,365
(244,740)

(21,193)
(12,118)
4,050
(235,623)
81,228
4,420
(179,236)

(14,023)
(8,088)
1,087
(146,050)
33,979
5,410
(127,685)

(15,471)
(10,828)
(1,329)
(116,116)
81,185
48,890
(13,669)

(15,240)
(23,109)
2,131
(52,475)
151,110
2,205
64,622

(65,927)
(54,143)
5,939
(550,264)
347,502
60,925
(255,968)

19,614
199,947
198,060
(199,666)
45,784
(2,083)
261,656

1,224
(224)
(164)
3,755
(559)
4,032

524
(240)
(131)
307
(577)
(117)

318
111
(587)
(158)

2,058
370
(596)
1,832

4,124
(464)
(295)
4,543
(2,319)
5,589

39,146
490,586
(219,362)
11,615
(403)
321,582

28,846
20,368
(255)
48,959

25,561
20,492
(258)
45,795

31,004
29,188
(264)
59,928

124,557
490,586
(219,362)
81,663
(1,180)
476,264

Effect of exchange rate changes on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period

(44,080)
24,788
194,499
150,419
$ 150,419 $ 175,207 $

(16,008)
175,207
159,199 $

348,854
159,199
508,053 $

313,554
194,499
508,053 $

615
(112,061)
508,053
395,992 $

(2,377)
6,259
395,992
402,251 $

1,579
(31,953)
402,251
370,298 $

(14)
(80,007)
370,298
290,291 $

(197)
(217,762)
508,053
290,291 $

(2,336)
127,760
290,291
418,051 $

(2,590)
(47,373)
418,051
370,678 $

1,559
68,378
370,678
439,056 $

(86)
165,909
439,056
604,965 $

(3,453)
314,674
290,291
604,965

Non-GAAP free cash flow reconciliation:

Net cash provided by (used in) operating activities
Acquisitions of DVD content library
Purchases of property and equipment
Other assets
Non-GAAP free cash flow

$ 116,323 $
(22,119)
(16,320)
1,419
$ 79,303 $

49,531 $
(20,826)
(14,080)
(844)
13,781 $

65,466 $
(23,144)
(10,656)
2,255
33,921 $

317,712 $
(85,154)
(49,682)
3,674
186,550 $

19,109 $
(13,528)
(4,766)
1,334
2,149 $

19,407 $
(8,012)
(3,359)
3,132
11,168 $

(2,925) $
(8,586)
(10,808)
1,857
(20,462) $

(14,005) $
(18,149)
(21,345)
2,493
(51,006) $

21,586 $
(48,275)
(40,278)
8,816
(58,151) $

(12,250) $
(21,193)
(12,118)
4,050
(41,511) $

33,943 $
(14,023)
(8,088)
1,087
12,919 $

34,693 $
(15,471)
(10,828)
(1,329)
7,065 $

41,445 $
(15,240)
(23,109)
2,131
5,227 $

97,831
(65,927)
(54,143)
5,939
(16,300)

86,392 $
(19,065)
(8,626)
844
59,545 $

Netflix, Inc.
Segment Information
(unaudited)
(in thousands)

March 31,
2011
Domestic Streaming
Total members at end of period
Paid members at end of period
Revenues
Cost of revenues
Marketing*
Contribution profit

International Streaming
Total members at end of period
Paid members at end of period
Revenues
Cost of revenues
Marketing*
Contribution profit (loss)

Consolidated
Revenues
Cost of revenues
Marketing*
Contribution profit
Other operating expenses*
Operating income (loss)
Other income (expense)
Provision (benefit) for income taxes
Net Income (loss)

21,448
20,511
$

967
857

$ 718,553
438,151
99,595
$ 180,807
78,567
102,240

$ 788,610
489,978
90,606
$ 208,026
92,912
115,114

(4,000)
(4,290)
38,007
42,610
$ 60,233 $ 68,214 $

476,334
345,026
73,335
57,973

22,687 $
28,792
17,213
(23,318)

28,988 $
55,909
32,822
(59,743)

22,928
21,500

23,529
21,600

821,839
536,617
83,421
201,801
104,959
96,842

March 31,
2012

1,858
1,447

13,928
13,813
$

Twelve Months
Ended
December 31,
2011

21,671
20,153

1,480
989

$ 12,279 $ 18,896 $
9,328
13,453
13,693
14,789
(10,742)
(9,346)

Domestic DVD
Total members at end of period
Paid members at end of period
Revenues
Cost of revenues
Marketing*
Contribution profit

803
674

Total Streaming
Total members at end of period
Paid members at end of period
Revenue
Cost of revenues
Marketing*
Contribution profit (loss)

As of / Three Months Ended

June 30, September 30, December 31,
2011
2011
2011

875,575
575,155
107,647
192,773
130,901
61,872

(3,219)
31,163
62,460 $

23,938
22,686

506,665
360,776
73,405
72,484

$ 532,705
378,574
66,732
87,399

3,065
2,409

3,624
3,024

26,475
24,431
$

11,165
11,039
370,253
174,220
1,490
194,543

23,410
22,022

(5,037)
21,616
35,219 $

25,101
23,801
$

82,850 $
43,425 $ 64,973 $
107,482
91,411
108,542
78,517
54,697
45,858
(103,149)
(102,683)
(89,427)

505,322
400,935
106,157
(1,770)

As of / Three Months Ended

June 30,
September 30, December 31,
2012
2012
2012

3,204,577
2,039,901
381,269
783,407
407,339
376,068

27,562
25,710

556,027
399,124
61,197
95,706

589,471
420,390
55,661
113,420

6,121
4,892

77,744 $
124,379
45,742
(92,377)

101,400 $
151,238
54,818
(104,656)

2,184,868
1,558,864
256,995
369,009

287,542 $
475,570
201,115
(389,143)

33,267
30,363
$

638,649
436,506
70,793
131,350

2,472,410 $
2,034,434
458,110
(20,134)

221,418
218,855
59,845
(57,282)

780,668
601,530
124,708
54,430

271,318
139,135
1,509
130,674

254,368
124,239
2,581
127,548

1,136,872
591,432
7,290
538,150

243,293
125,333
4,467
113,493

869,791 $ 889,163
623,933
643,428
129,928
113,964
115,930 $ 131,771
117,865
115,617
(1,935)
16,154

905,089
662,638
108,448
134,003
117,868
16,135

945,239
695,867
113,060
136,312
116,674
19,638

3,609,282
2,625,866
465,400
518,016
468,024
49,992

1,023,961
726,863
129,175
167,923
136,101
31,822

* Certain prior period amounts have been reclassified from Marketing to General and Administrative to conform to current period presentation

(5,499)
4,491
6,164 $

(4,189)
4,271
7,675 $

(4,734)
7,007
7,897 $

(19,512)
13,328
17,152 $

740,554
492,544
74,388
173,622

183,051 $
207,989
49,359
(74,297)

$ 291,485
156,312
1,374
133,799

(5,090)
(2,441)
(4,584) $

165,902 $
182,885
48,850
(65,833)

319,701
171,746
1,826
146,129

(16,546)
133,396
226,126 $

701,083
470,631
63,971
166,481

142,019 $
165,024
53,915
(76,920)

10,930
9,722

37,554
35,638
$

7,983
7,827

671,089
449,473
70,302
151,314

33,420
31,712

9,188
8,084

36,316
34,244

8,224
8,049

31,092
29,925

7,747
7,014

9,240
9,145

29,807
28,624

7,142
6,331

10,089
9,958

8,606
8,465

690,871
571,628
110,479
8,764

As of / Three Months Ended

June 30,
September 30, December 31,
2013
2013
2013

29,174
27,913

4,311
3,689

633,771
523,503
106,939
3,329

March 31,
2013

27,146
25,471

29,412
27,490

550,090 $ 597,678 $
452,187
487,116
128,102
112,590
(30,199)
(2,028)

Twelve Months
Ended
December 31,
2012

836,991
632,358
119,152
85,481

40,280
38,009
$

7,508
7,369
$

884,134
678,620
113,330
92,184

44,350
41,434
$

7,148
7,014

961,972
711,399
134,233
116,340

6,930
6,765

232,381
121,167
2,608
108,606

221,865
112,399
2,779
106,687

213,258
100,450
2,612
110,196

$ 1,069,372
753,525
121,760
$ 194,087
136,970
57,117

1,105,999
791,019
116,109
198,871
141,751
57,120

1,175,230
811,849
136,845
226,536
144,248
82,288

(30,892)
(1,759)
2,689 $

(10,468)
17,178
29,471 $

(7,629)
17,669
31,822 $

(8,284)
25,583
48,421

Twelve Months
Ended
December 31,
2013

2,751,375
1,849,154
279,454
622,767

712,390
774,753
211,969
(274,332)

3,463,765
2,623,907
491,423
348,435

910,797
459,349
12,466
438,982

4,374,562
3,083,256
503,889
787,417
559,070
228,347

(57,273)
58,671
112,403