NetFlix 2003 Annual Report Download - page 64

NETFLIX, INC.
STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended December 31,
2001 2002 2003
Cash flows from operating activities:
Net income (loss) ................................................... $(39,182) $ (20,948) $ 6,512
Adjustments to reconcile net income (loss) to net cash provided by operating
activities:
Depreciation of property and equipment ............................... 5,507 5,919 4,720
AmortizationofDVDlibrary ........................................ 22,127 17,417 43,125
Amortization of intangible assets ..................................... 2,163 3,141 3,146
Non-cash charges for equity instruments granted to non-employees .......... 28 40 —
Stock-based compensation expense ................................... 6,250 8,832 10,719
Gain on disposal of DVDs .......................................... — (1,674) (1,604)
Non-cash interest expense .......................................... 1,017 11,384 103
Changes in operating assets and liabilities:
Prepaid expenses and other current assets ............................ (15) (44) (290)
Accounts payable ............................................... 6,025 6,635 12,304
Accrued expenses ............................................... (1,375) 4,558 2,523
Deferred revenue ............................................... 2,164 4,806 8,581
Deferredrent................................................... 138 48 (47)
Net cash provided by operating activities........................... 4,847 40,114 89,792
Cash flows from investing activities:
Purchases of short-term investments .................................... — (43,022) (1,679)
Purchases of property and equipment .................................... (3,233) (2,751) (8,872)
Acquisitions of DVD library .......................................... (8,851) (24,070) (55,620)
Proceeds from sale of DVDs .......................................... — 1,988 1,833
Deposits and other assets ............................................. (586) 554 (339)
Net cash used in investing activities ............................... (12,670) (67,301) (64,677)
Cash flows from financing activities:
Proceeds from issuance of common stock ................................ 125 88,020 6,299
Net proceeds from issuance of subordinated notes payable and detachable
warrants ........................................................ 12,831 — —
Repurchases of common stock ......................................... (12) (6) —
Principal payments on notes payable and capital lease obligations ............. (3,885) (17,144) (1,334)
Net cash provided by financing activities........................... 9,059 70,870 4,965
Net increase in cash and cash equivalents .................................. 1,236 43,683 30,080
Cash and cash equivalents, beginning of period .............................. 14,895 16,131 59,814
Cash and cash equivalents, end of period ................................... $16,131 $ 59,814 $89,894
Supplemental disclosure:
Cashpaidforinterest ................................................ $ 860 $ 592 $ 312
Non-cash investing and financing activities:
Purchase of assets under capital lease obligations ........................ 520 583 —
Exchange of Series F non-voting convertible preferred stock for intangible
asset ......................................................... 4,498 1,318 —
Conversion of redeemable convertible preferred stock to common stock ...... — 101,830 —
See accompanying notes to financial statements.
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