NetFlix 2004 Annual Report Download - page 67

NETFLIX, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended December 31,
2002 2003 2004
Cash flows from operating activities:
Netincome(loss).............................................. $(20,948) $ 6,512 $ 21,595
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation of property and equipment .......................... 5,919 4,720 5,871
Amortization of DVD library .................................. 17,417 43,125 80,346
Amortization of intangible assets ............................... 3,141 3,146 1,987
Non-cash charges for equity instruments granted to non-employees .... 40 — —
Stock-based compensation expense ............................. 8,832 10,719 16,587
Stock option income tax benefits ............................... — — 176
Loss on disposal of property and equipment ....................... — — 135
Loss on disposal of short-term investments ....................... — — 274
Gain on disposal of DVDs ..................................... (1,674) (1,604) (2,912)
Non-cash interest expense ..................................... 11,384 103 44
Changes in operating assets and liabilities:
Prepaid expenses and other current assets ....................... (44) (290) (9,130)
Accounts payable .......................................... 6,635 12,304 17,121
Accrued expenses ......................................... 4,558 2,523 1,506
Deferred revenue .......................................... 4,806 8,581 13,612
Deferred rent ............................................. 48 (47) 359
Net cash provided by operating activities ..................... 40,114 89,792 147,571
Cash flows from investing activities:
Purchases of short-term investments ............................... (43,022) (1,679) (586)
Proceeds from sale of short-term investments ........................ — — 45,013
Purchases of property and equipment .............................. (2,751) (8,872) (14,962)
Acquisitions of DVD library ..................................... (24,070) (55,620) (102,971)
Proceeds from sale of DVDs ..................................... 1,988 1,833 5,617
Deposits and other assets ........................................ 554 (339) (492)
Net cash used in investing activities ......................... (67,301) (64,677) (68,381)
Cash flows from financing activities:
Proceeds from issuance of common stock ........................... 88,020 6,299 6,035
Repurchases of common stock ................................... (6) — —
Principal payments on notes payable and capital lease obligations ....... (17,144) (1,334) (436)
Net cash provided by financing activities ..................... 70,870 4,965 5,599
Effect of exchange rate changes on cash and cash equivalents ............. — — (222)
Net increase in cash and cash equivalents ............................. 43,683 30,080 84,567
Cash and cash equivalents, beginning of period ........................ 16,131 59,814 89,894
Cash and cash equivalents, end of period ............................. $ 59,814 $89,894 $174,461
Supplemental disclosure:
Cash paid for interest $ 592 $ 312 $ 109
Non-cash investing and financing activities:
Purchase of assets under capital lease obligations .................. 583 — —
Exchange of Series F non-voting convertible preferred stock for
intangible asset ........................................... 1,318 — —
Conversion of redeemable convertible preferred stock to common
stock.................................................... 101,830 — —
Net unrealized gain (loss) on short term investments ................ 774 (178) (870)
See accompanying notes to consolidated financial statements.
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