NetFlix 2010 Annual Report Download - page 59

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Restricted cash of $4.6 million and $2.8 million, as of December 31, 2010 and 2009, respectively, related to
workers’ compensation insurance deposits.
Accrued Expenses
Accrued expenses consisted of the following:
As of December 31,
2010 2009
(in thousands)
Accrued state sales and use tax ............................... $14,983 $11,625
Accrued payroll and employee benefits ........................ 8,520 6,427
Accrued interest on debt .................................... 2,125 2,597
Accrued content acquisition costs ............................. 6,950 5,810
Other ................................................... 3,911 6,928
Accrued expenses ......................................... $36,489 $33,387
Other Non-Current Liabilities
Other non-current liabilities consisted of the following:
As of December 31,
2010 2009
(in thousands)
Accrued content acquisition costs ............................. $48,179 $ 2,227
Other ................................................... 21,022 14,356
Other non-current liabilities ................................. $69,201 $16,583
4. Long-term Debt
Senior Notes
In November 2009, the Company issued $200.0 million aggregate principal amount of 8.50% senior notes
due November 15, 2017 (the “8.50% Notes”). The net proceeds to the Company from the 8.50% Notes were
approximately $193.9 million. Debt issuance costs of $6.1 million are recorded in other non-current assets on the
consolidated balance sheet and are amortized over the term of the notes as interest expense. The notes were
issued at par and are senior unsecured obligations of the Company. Interest is payable semi-annually at a rate of
8.50% per annum on May 15 and November 15 of each year, commencing on May 15, 2010. The 8.50% Notes
are repayable in whole or in part upon the occurrence of a change of control, at the option of the holders, at a
purchase price in cash equal to 101% of the principal plus accrued interest. Prior to November 15, 2012, in the
event of a qualified equity offering, the Company may redeem up to 35% of the 8.50% Notes at a redemption
price of 108.50% of the principal plus accrued interest. Additionally, the Company may redeem the 8.50% Notes
prior to November 15, 2013 in whole or in part at a redemption price of 100% of the principal plus accrued
interest, plus a “make-whole” premium. On or after November 15, 2013, the Company may redeem the
8.50% Notes in whole or in part at specified prices ranging from 104.25% to 100% of the principal plus accrued
interest.
The 8.50% Notes include, among other terms and conditions, limitations on the Company’s ability to create,
incur, assume or be liable for indebtedness (other than specified types of permitted indebtedness); dispose of
assets outside the ordinary course (subject to specified exceptions); acquire, merge or consolidate with or into
F-15