NetFlix 2005 Annual Report Download - page 53

$45.0 million from the sale of our short-term investments. Excluding the impact of the net proceeds from the sale
of our short-term investments, cash used in investing activities increased by $25.3 million, primarily due to
increased purchases of titles for our DVD library to support our larger subscriber base and increased purchases of
property and equipment to support our growing operations in 2005 as compared to 2004.
Net cash used in investing activities increased slightly in 2004 as compared to 2003. The increase was
primarily attributable to increased purchases of titles for our DVD library to support our larger subscriber base
and increased purchases of property and equipment to support our growing operations in 2004 as compared to
2003. However, the increase was partially offset by net proceeds of $45.0 million from the sale of our short-term
investments.
Financing activities: Net cash provided by financing activities increased by $7.7 million in 2005 as
compared to 2004 primarily due to an increase in proceeds from issuance of common stock under our employee
stock plans.
Net cash provided by financing activities increased slightly in 2004 as compared to 2003. The increase was
primarily attributable to a decrease in the repayment of debt and other obligations offset partially by lower
proceeds from issuance of common stock under our employee stock plans.
Contractual Obligations
The following table summarizes our contractual obligations at December 31, 2005 (in thousands):
Payments due by period
Contractual Obligations (in thousands): Total
Less than
1 year 1-3 years 3-5 years
More than
5 years
Operating lease obligations ............. $32,682 $ 9,555 $11,578 $6,476 $5,073
Capital purchase obligations (1) ......... 254 254 — — —
Other purchase obligations (2) .......... 15,552 15,552 — — —
Total ........................... $48,488 $25,361 $11,578 $6,476 $5,073
(1) Capital purchase obligations include commitments for purchase of equipment. They were not recorded as
liabilities on our balance sheet as of December 31, 2005, as we had not yet received the related goods.
(2) Other purchase obligations relate primarily to acquisitions for our DVD library. Our purchase orders are
based on our current needs and are generally fulfilled by our vendors within short time horizons.
For the purposes of this table, contractual obligations for purchase of goods or services are defined as
agreements that are enforceable and legally binding and that specify all significant terms, including: fixed or
minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of
the transaction. The expected timing of payment of the obligations discussed above is estimated based on
information available to us as of December 31, 2005. Timing of payments and actual amounts paid may be
different depending on the time of receipt of goods or services or changes to agreed-upon amounts for some
obligations.
Off-Balance Sheet Arrangements
We do not engage in transactions that generate relationships with unconsolidated entities or financial
partnerships, such as entities often referred to as structured finance or special purpose entities. Accordingly, our
operating results, financial condition and cash flows are not subject to off-balance sheet risks.
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