NetFlix 2011 Annual Report Download - page 64

Consolidated Balance Sheet. The remaining future minimum payments under the lease financing obligation are
$19.3 million. The lease financing obligation balance at the end of the extended lease term will be approximately
$25.8 million which approximates the net book value of the buildings to be relinquished to the lessor.
Future minimum payments under lease financing obligations and non-cancelable operating leases as of
December 31, 2011 are as follows:
Year Ending December 31,
Future
Minimum
Payments
(in thousands)
2012 .......................................................... $21,773
2013 .......................................................... 18,310
2014 .......................................................... 14,195
2015 .......................................................... 11,008
2016 .......................................................... 8,580
Thereafter ...................................................... 5,326
Total minimum payments ......................................... $79,192
Rent expense associated with the operating leases was $16.9 million, $14.9 million and $14.5 million for the
years ended December 31, 2011, 2010 and 2009, respectively.
Streaming Content
The Company had $3.91 billion and $1.12 billion of obligations at December 31, 2011 and December 31,
2010, respectively, including agreements to acquire and license streaming content that represent long-term
liabilities or that are not reflected on the Consolidated Balance Sheets because they do not meet content library
asset recognition criteria. The license agreements do not meet content library asset recognition criteria because
either the fee is not known or reasonably determinable for a specific title or it is known but the title is not yet
available for streaming to subscribers. For those agreements with variable terms, the Company does not estimate
what the total obligation may be beyond any minimum quantities and/or pricing as of the reporting date. For
those agreements that include renewal provisions that are solely at the option of the content provider, the
Company includes the commitments associated with the renewal period to the extent such commitments are fixed
or a minimum amount is specified.
The expected timing of payments as of December 31, 2011 for these commitments is as follows:
(in thousands)
Less than one year ............................................... $ 797,649
Due after one year and through 3 years ............................... 2,384,373
Due after 3 years and through 5 years ................................ 650,480
Due after 5 years ................................................ 74,696
Total streaming content obligations .................................. $3,907,198
The Company has entered into certain license agreements that include an unspecified or a maximum number
of titles that the Company may or may not receive in the future and /or that include pricing contingent upon
certain variables, such as theatrical exhibition receipts for the title. As of the reporting date, it is unknown
whether the Company will receive access to these titles or what the ultimate price per title will be. Accordingly,
such amounts are not reflected in the commitments described above. However such amounts are expected to be
significant and the expected timing of payments could range from less than one year to more than five years.
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