NetFlix 2003 Annual Report Download - page 60

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INDEPENDENT AUDITORS’ REPORT
The Stockholders and Board of Directors
Netflix, Inc.:
We have audited the accompanying balance sheets of Netflix, Inc. (formerly known as NetFlix.com, Inc.) as
of December 31, 2002 and 2003, and the related statements of operations, stockholders’ (deficit) equity and
comprehensive income (loss), and cash flows for each of the years in the three-year period ended December 31,
2003. These financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of
America. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of Netflix, Inc. as of December 31, 2002 and 2003, and the results of its operations and its cash flows for
each of the years in the three-year period ended December 31, 2003, in conformity with accounting principles
generally accepted in the United States of America.
As discussed in note 8, the Company changed its method of accounting for stock based compensation by
adopting the fair value method with retroactive restatement of all prior periods.
/s/ KPMG LLP
Mountain View, California
January 19, 2004
F-2