NetFlix 2011 Annual Report Download - page 67

It is not possible to make a reasonable estimate of the maximum potential amount of future payments under
these or similar agreements due to the conditional nature of the Company’s obligations and the unique facts and
circumstances involved in each particular agreement. No amount has been accrued in the accompanying financial
statements with respect to these indemnification guarantees.
7. Stockholders’ Equity
On November 28, 2011, the Company issued 2.9 million shares of common stock upon the closing of a
public offering for $200 million net of issuance costs of $0.5 million, the majority of which were unpaid as of
December 31, 2011.
Stock Repurchase Program
The following table presents a summary of the Company’s stock repurchases:
Year ended December 31,
2011 2010 2009
(in thousands, except per share data)
Total number of shares repurchased .... 900 2,606 7,371
Dollar amount of shares repurchased . . . $ 199,666 210,259 324,335
Average price paid per share .......... $ 221.88 $ 80.67 $ 44.00
Range of price paid per share ......... $160.11 – 248.78 $60.23 – $126.01 $34.70 – $60.00
Under the current stock repurchase plan, announced on June 11, 2010, the Company is authorized to
repurchase up to $300 million of its common stock through the end of 2012. As of December 31, 2011, $41.0
million of this authorization is remaining. The timing and actual number of shares repurchased is at
management’s discretion and will depend on various factors including price, corporate and regulatory
requirements, debt covenant requirements, alternative investment opportunities and other market conditions.
Shares repurchased by the Company are accounted for when the transaction is settled. There were no
unsettled share repurchases at December 31, 2011. Shares repurchased and retired are deducted from common
stock for par value and from additional paid-in capital for the excess over par value. If additional paid-in capital
has been exhausted, the excess over par value is deducted from retained earnings. Direct costs incurred to acquire
the shares are included in the total cost of the shares. During the year ended December 31, 2011, $40.9 million
was deducted from retained earnings related to share repurchases.
In the fourth quarter of 2009, the Company determined that all shares held in treasury stock would be
retired. Accordingly, these constructively retired shares were deducted from common stock for par value and
from additional paid in capital for the excess over par value, until additional paid in capital was exhausted and
then from retained earnings.
Preferred Stock
The Company has authorized 10,000,000 shares of undesignated preferred stock with par value of $0.001
per share. None of the preferred shares were issued and outstanding at December 31, 2011 and 2010.
Voting Rights
The holders of each share of common stock shall be entitled to one vote per share on all matters to be voted
upon by the Company’s stockholders.
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