NetFlix 2010 Annual Report Download - page 50

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NETFLIX, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Year Ended December 31,
2010 2009 2008
Cash flows from operating activities:
Net income ............................................................ $160,853 $ 115,860 $ 83,026
Adjustments to reconcile net income to net cash provided by operating activities:
Acquisition of streaming content library .................................. (406,210) (64,217) (48,290)
Amortization of content library ......................................... 300,596 219,490 209,757
Depreciation and amortization of property, equipment and intangibles .......... 38,099 38,044 32,454
Amortization of discounts and premiums on investments .................... 859 607 625
Amortization of debt issuance costs ..................................... 514 1,124 —
Stock-based compensation expense ..................................... 27,996 12,618 12,264
Excess tax benefits from stock-based compensation ........................ (62,214) (12,683) (5,220)
Loss on disposal of property and equipment ............................... 394 254 101
Gain on sale of short-term investments ................................... (1,033) (1,509) (3,130)
Gain on disposal of DVDs ............................................ (9,862) (7,637) (13,350)
Gain on sale of business .............................................. — (1,783) —
Deferred taxes ...................................................... (962) 6,328 (5,905)
Changes in operating assets and liabilities:
Prepaid content ................................................. (35,476) (5,643) (13,458)
Other current assets .............................................. (21,763) (5,358) 9,277
Accounts payable ............................................... 139,983 (1,189) 7,111
Accrued expenses ............................................... 67,209 13,169 (1,824)
Deferred revenue ................................................ 27,086 16,970 11,462
Other assets and liabilities ......................................... 50,332 618 9,137
Net cash provided by operating activities ......................... 276,401 325,063 284,037
Cash flows from investing activities:
Acquisition of DVD content library ......................................... (123,901) (193,044) (162,849)
Purchases of short-term investments ......................................... (107,362) (228,000) (256,959)
Proceeds from sale of short-term investments ................................. 120,857 166,706 304,163
Proceeds from maturities of short-term investments ............................. 15,818 35,673 3,170
Purchases of property and equipment ........................................ (33,837) (45,932) (43,790)
Proceeds from sale of DVDs ............................................... 12,919 11,164 18,368
Acquisitions of intangible assets ............................................ (505) (200) (1,062)
Investment in business ................................................... — — (6,000)
Proceeds from sale of business ............................................. — 7,483 —
Other assets ............................................................ (70) 71 (1)
Net cash used in investing activities ............................. (116,081) (246,079) (144,960)
Cash flows from financing activities:
Principal payments of lease financing obligations .............................. (1,776) (1,158) (823)
Proceeds from issuance of common stock .................................... 49,776 35,274 18,872
Excess tax benefits from stock-based compensation ............................ 62,214 12,683 5,220
Borrowings on line of credit, net of issuance costs .............................. — 18,978 —
Payments on line of credit ................................................. — (20,000) —
Proceeds from issuance of debt, net of issuance costs ........................... — 193,917 —
Repurchases of common stock ............................................. (210,259) (324,335) (199,904)
Net cash used in financing activities ............................. (100,045) (84,641) (176,635)
Net increase (decrease) in cash and cash equivalents ............................ 60,275 (5,657) (37,558)
Cash and cash equivalents, beginning of year .................................. 134,224 139,881 177,439
Cash and cash equivalents, end of year ....................................... $194,499 $ 134,224 $ 139,881
Supplemental disclosure:
Income taxes paid ....................................................... $ 56,218 $ 58,770 $ 40,494
Interest paid ............................................................ 20,101 3,878 2,458
See accompanying notes to consolidated financial statements.
F-6