NetFlix 2007 Annual Report Download - page 57

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NETFLIX, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended December 31,
2007 2006 2005
Cash flows from operating activities:
Netincome ................................................... $ 66,952 $ 49,082 $ 42,027
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation of property and equipment . . . . . . . . . . . . . . . . . . . . . . . . 21,394 15,903 9,134
Amortization of content library . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203,415 141,160 96,883
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 73 985
Amortization of discounts and premiums on investments . . . . . . . . . . . 24 — —
Stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,976 12,696 14,327
Excess tax benefits from stock-based compensation . . . . . . . . . . . . . . . (26,248) (13,217) —
Loss (gain) on disposal of property and equipment . . . . . . . . . . . . . . . . 142 (23) —
Gain on sale of short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . (687) — —
Gain on disposal of DVDs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14,637) (9,089) (3,588)
Non-cashinterestexpense ................................... — — 11
Deferredtaxes ............................................ (661) 16,150 (34,905)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . (4,303) (7,064) (4,884)
Accountspayable ...................................... (1,217) 3,208 8,246
Accruedexpenses...................................... 32,809 17,559 12,432
Deferredrevenue ...................................... 1,987 21,145 16,597
Otherliabilities........................................ 724 279 242
Net cash provided by operating activities . . . . . . . . . . . . . . . 291,823 247,862 157,507
Cash flows from investing activities:
Purchases of short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (405,340) — —
Proceeds from sale of short-term investments . . . . . . . . . . . . . . . . . . . . . . . . 200,832 — —
Purchases of property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (44,256) (27,333) (27,653)
Acquisition of intangible asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (550) (585) (481)
Acquisitions of content library . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (223,436) (169,528) (111,446)
Proceeds from sale of DVDs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,640 12,886 5,781
Proceeds from disposal of property and equipment . . . . . . . . . . . . . . . . . . . . 15 23 —
Otherassets .................................................. 282 (1,332) 551
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . (450,813) (185,869) (133,248)
Cash flows from financing activities:
Proceeds from issuance of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,611 112,964 13,393
Excess tax benefits from stock-based compensation . . . . . . . . . . . . . . . . . . . 26,248 13,217 —
Repurchases of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (99,860) — —
Principal payments on notes payable and capital lease obligations . . . . . . . . — — (79)
Net cash (used in) provided by financing activities . . . . . . . . (64,001) 126,181 13,314
Effect of exchange rate changes on cash and cash equivalents . . . . . . . . . . . — — 222
Net (decrease) increase in cash and cash equivalents . . . . . . . . . . . . . . . . . . (222,991) 188,174 37,795
Cash and cash equivalents, beginning of year . . . . . . . . . . . . . . . . . . . . . . . . 400,430 212,256 174,461
Cash and cash equivalents, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 177,439 $ 400,430 $ 212,256
Supplemental disclosure:
Cashpaidforinterest ........................................... — — 170
Incometaxespaid.............................................. (15,775) (2,324) (977)
See accompanying notes to consolidated financial statements.
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