NetFlix 2006 Annual Report Download - page 78

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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 60 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 2004, 2005 and 2006, the Company’s matching contributions totaled
$379, $905 and $1,401, respectively.
11. Selected Quarterly Financial Data (Unaudited)
Quarter Ended
March 31 (1) June 30 (1) September 30 (1) December 31 (2)
2005
Total revenues ................................ $152,446 $164,027 $172,740 $193,000
Gross profit .................................. $ 41,325 $ 46,178 $ 57,091 $ 71,844
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
2006
Total revenues ................................ $224,126 $239,351 $255,950 $277,233
Gross profit .................................. $ 75,861 $ 88,772 $ 97,157 $107,885
Net income .................................. $ 4,404 $ 17,037 $ 12,781 $ 14,860
Net income per share:
Basic ..................................... $ 0.08 $ 0.29 $ 0.19 $ 0.22
Diluted ................................... $ 0.07 $ 0.25 $ 0.18 $ 0.21
Subscribers at end of period ..................... 4,866 5,169 5,662 6,316
(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 of 2005 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-25