NetFlix 2012 Annual Report Download - page 65

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reliability of the inputs used in the valuation of such instrument at the measurement date. The fair value of
available-for-sale securities and cash equivalents included in the Level 1 category is based on quoted prices that
are readily and regularly available in an active market. The fair value of available-for-sale securities included in
the Level 2 category is based on observable inputs, such as quoted prices for similar assets at the measurement
date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly.
These values were obtained from an independent pricing service and were evaluated using pricing models that
vary by asset class and may incorporate available trade, bid and other market information and price quotes from
well-established independent pricing vendors and broker-dealers. The Company’s procedures include controls to
ensure that appropriate fair values are recorded, such as comparing prices obtained from multiple independent
sources. See Note 4 to the consolidated financial statements for further information regarding the fair value of the
Company’s senior convertible notes and senior notes.
Because the Company does not intend to sell the investments that are in an unrealized loss position and it is
not likely that the Company will be required to sell any investments before recovery of their amortized cost basis,
the Company does not consider those investments with an unrealized loss to be other-than-temporarily impaired
at December 31, 2012. There were no material other-than-temporary impairments or credit losses related to
available-for-sale securities in 2012, 2011 or 2010.
There were no material gross realized gains or losses from the sale of available-for-sale investments for the
years ended December 31, 2012, 2011 and 2010. Realized gains and losses and interest income are included in
interest and other income.
The estimated fair value of short-term investments by contractual maturity as of December 31, 2012 is as follows:
(in thousands)
Due within one year .............................................. $ 94,739
Due after one year and through 5 years ............................... 312,096
Due after 5 years and through 10 years ............................... 6,679
Due after 10 years ............................................... 44,273
Total short-term investments ....................................... $457,787
3. Balance Sheet Components
Content Library
Content library consisted of the following:
As of December 31,
2012 2011
(in thousands)
Total content library, gross .................................... $5,001,524 $ 3,151,439
Accumulated amortization .................................... (2,127,354) (1,184,796)
Total content library, net ..................................... 2,874,170 1,966,643
Current content library, net .................................... 1,368,162 919,709
Non-current content library, net ............................ $1,506,008 $ 1,046,934
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