NetFlix 2005 Annual Report Download - page 89

Download and view the complete annual report

Please find page 89 of the 2005 NetFlix annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 96

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96

NETFLIX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(in thousands, except share and per share data and percentages)
10. Employee Benefit Plan
The Company maintains a 401(k) savings plan covering substantially all of its employees. Eligible
employees may contribute up to 15 percent of their annual salary through payroll deductions, but not more than
the statutory limits set by the Internal Revenue Service. The Company matches employee contributions at the
discretion of the Board of Directors. During 2003, 2004 and 2005, the Company’s matching contributions totaled
$0, $379 and $905, respectively.
11. Selected Quarterly Financial Data (Unaudited)
Quarter Ended
March 31 (1) June 30 (1) September 30 (1) December 31 (2)
2004
Total revenues ................................ $ 99,823 $119,710 $140,414 $140,664
Gross profit .................................. $ 32,589 $ 35,733 $ 54,271 $ 48,008
Net income (loss) ............................. $ (5,790) $ 2,891 $ 18,925 $ 5,569
Net income (loss) per share:
Basic ..................................... $ (0.11) $ 0.06 $ 0.36 $ 0.11
Diluted ................................... $ (0.11) $ 0.04 $ 0.29 $ 0.09
Subscribers at end of period ..................... 1,932 2,093 2,229 2,610
2005
Total revenues ................................ $152,446 $164,027 $172,740 $193,000
Gross profit .................................. $ 41,766 $ 46,510 $ 57,318 $ 72,069
Net income (loss) ............................. $ (8,814) $ 5,684 $ 6,946 $ 38,211
Net income (loss) per share:
Basic ..................................... $ (0.17) $ 0.11 $ 0.13 $ 0.70
Diluted ................................... $ (0.17) $ 0.09 $ 0.11 $ 0.57
Subscribers at end of period ..................... 3,018 3,196 3,592 4,179
(1) Previously reported quarterly results have been adjusted to reflect the impact of the reclassifications
described in Note 1.
(2) Net income for the fourth quarter includes a benefit of realized deferred tax assets of $34,905, or
approximately $0.52 per diluted share, related to the recognition of the Company’s deferred tax assets (See
Note 9).
F-29