NetFlix 2008 Annual Report Download - page 30

Item 6. Selected Financial Data
The following selected financial data is not necessarily indicative of results of future operations and should
be read in conjunction with “Item 7, Management’s Discussion and Analysis of Financial Condition and Results
of Operations” and “Item 8, Financial Statements and Supplementary Data.”
Year ended December 31,
2008 2007 (1)(2) 2006 (1) 2005 (1)(3) 2004 (1)
(in thousands, except per share data)
Revenues ................................ $1,364,661 $1,205,340 $996,660 $682,213 $500,611
Total cost of revenues ...................... 910,234 786,168 626,985 465,775 331,712
Operating income .......................... 121,506 91,773 65,218 2,622 19,142
Net income ............................... 83,026 66,608 48,839 41,889 21,383
Net income per share:
Basic ................................ $ 1.36 $ 0.99 $ 0.78 $ 0.78 $ 0.41
Diluted .............................. $ 1.32 $ 0.97 $ 0.71 $ 0.64 $ 0.33
Weighted-average shares outstanding:
Basic ................................ 60,961 67,076 62,577 53,528 51,988
Diluted .............................. 62,836 68,902 69,075 65,518 64,713
Notes:
(1) Certain amounts in prior periods have been revised to conform to current period presentation (see Note 1 to
Notes to Consolidated Financial Statements).
(2) Operating expenses for the year includes a one-time payment received in the amount of $7.0 million as a
result of resolving a patent litigation with Blockbuster, Inc.
(3) Net income for the year includes a benefit of realized deferred tax assets of $34.9 million or approximately
$0.53 per diluted share, related to the recognition of the Company’s deferred tax assets. In addition, general
and administrative expenses includes an accrual of $8.1 million (net of expected insurance proceeds for
reimbursement of legal defense costs of $0.9 million) related to the settlement costs of the Chavez vs.
Netflix, Inc. lawsuit.
As of December 31,
2008 2007 (1) 2006 (1) 2005 (1) 2004 (1)
(in thousands)
Balance Sheet Data:
Cash and cash equivalents ......... $139,881 $177,439 $400,430 $212,256 $174,461
Short-term investments (4) ......... 157,390 207,703 — — —
Working capital ................. 145,430 223,518 234,582 105,776 92,436
Total assets ..................... 617,946 678,998 633,013 385,114 255,057
Lease financing obligations,
excluding current portion ........ 37,988 35,652 23,798 19,876 3,264
Other liabilities .................. 16,786 4,629 1,761 1,421 812
Stockholders’ equity .............. 347,155 429,812 413,618 225,902 156,071
As of/Year Ended December 31,
2008 2007 2006 2005 2004
(in thousands, except subscriber acquisition cost)
Other Data:
Total subscribers at end of period . . . 9,390 7,479 6,316 4,179 2,610
Gross subscriber additions during
period ....................... 6,859 5,340 5,250 3,729 2,716
Subscriber acquisition cost (5) ...... $ 29.12 $ 40.86 $ 42.94 $ 38.78 $ 37.02
(4) Short-term investments are comprised of corporate debt securities, government and agency securities and
asset and mortgage-backed securities.
(5) Subscriber acquisition cost is defined as total marketing expenses divided by total gross subscriber additions
during the period.
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