NetFlix 2009 Annual Report Download - page 78

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NETFLIX, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes stock-based compensation expense, net of tax, related to stock option plans
and employee stock purchases which was allocated as follows:
Year Ended December 31,
2009 2008 2007
(in thousands)
Fulfillment expenses ..................................... $ $380 $ 466 $ 427
Technology and development .............................. 4,453 3,890 3,695
Marketing .............................................. 1,786 1,886 2,160
General and administrative ................................ 5,999 6,022 5,694
Stock-based compensation expense before income taxes ......... 12,618 12,264 11,976
Income tax benefit ....................................... (5,017) (4,585) (4,760)
Total stock-based compensation after income taxes ............. $ 7,601 $ 7,679 $ 7,216
8. Income Taxes
The components of provision for income taxes for all periods presented were as follows:
Year Ended December 31,
2009 2008 2007
(in thousands)
Current tax provision:
Federal ............................................ $55,104 $41,883 $38,002
State .............................................. 14,900 12,063 7,208
Total current .................................... 70,004 53,946 45,210
Deferred tax provision:
Federal ............................................ 6,568 (3,680) (645)
State .............................................. (240) (1,792) (248)
Total deferred ................................... 6,328 (5,472) (893)
Provision for income taxes ................................. $76,332 $48,474 $44,317
A reconciliation of the provision for income taxes, with the amount computed by applying the statutory
federal income tax rate to income before provision for income taxes for the three years ended December 31, 2009
is as follows:
Year Ended December 31,
2009 2008 2007
(in thousands)
Expected tax expense at U.S. federal statutory rate of 35% ....... $67,267 $46,060 $39,025
State income taxes, net of Federal income tax effect ............. 10,350 5,155 5,818
Valuation allowance ...................................... — — (80)
R&D tax credit .......................................... (1,600) (3,321) —
Stock-based compensation ................................. (89) 108 (248)
Other .................................................. 404 472 (198)
Provision for income taxes ................................. $76,332 $48,474 $44,317
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