NetFlix 2008 Annual Report Download - page 45

equivalents were generally invested in money market funds, which are not subject to market risk because the
interest paid on such funds fluctuates with the prevailing interest rate. Our short-term investments were
comprised of corporate debt securities, government and agency securities and asset and mortgage-backed
securities. Approximately 60% of the portfolio is invested in government and agency issued securities.
At December 31, 2008, we had securities classified as short-term investments of $157.4 million. Changes in
interest rates could adversely affect the market value of these investments. The table below separates these
investments, based on stated maturities, to show the approximate exposure to interest rates.
Due within one year ................................................ $ 32,689
Due within five years ............................................... 118,127
Due within ten years ................................................ —
Due after ten years ................................................. 6,574
Total ............................................................ $157,390
A sensitivity analysis was performed on our investment portfolio as of December 31, 2008. The analysis is
based on an estimate of the hypothetical changes in market value of the portfolio that would result from an
immediate parallel shift in the yield curve of various magnitudes. This methodology assumes a more immediate
change in interest rates to reflect the current economic environment.
The following tables present the hypothetical fair values (in $ thousands) of our debt securities classified as
short term investments assuming immediate parallel shifts in the yield curve of 50 basis points (“BPS”), 100 BPS
and 150 BPS. The analysis is shown as of December 31, 2008:
Fair Value December 31, 2008
-150 BPS -100 BPS -50 BPS +50 BPS +100 BPS +150 BPS
160,283 159,319 158,354 156,426 155,462 154,497
Item 8. Financial Statements and Supplementary Data
See “Financial Statements” beginning on page F-1 which are incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
(a) Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer,
evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this
Annual Report on Form 10-K. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer
concluded that our disclosure controls and procedures as of the end of the period covered by this Annual Report
on Form 10-K were effective in providing reasonable assurance that information required to be disclosed by us in
reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed,
summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules
and forms, and that such information is accumulated and communicated to our management, including our Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required
disclosures.
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