NetFlix 2013 Annual Report Download - page 29

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Interest Expense
Interest expense consists primarily of the interest associated with outstanding long-term debt obligations,
including the amortization of debt issuance costs, as well as interest on our lease financing obligations.
Year Ended December 31, Change
2013 2012 2013 vs. 2012
(in thousands, except percentages)
Interest expense ..................................... $(29,142) $(19,986) 46%
As a percentage of revenues ........................... 1% 1%
Interest expense for the year ended December 31, 2013 consists primarily of $26.1 million of interest on our
notes. The increase in interest expense for the year ended December 31, 2013 as compared the year ended
December 31, 2012 is due to the higher aggregate principal of interest bearing notes outstanding, partially offset
by the lower interest rate.
Year Ended December 31, Change
2012 2011 2012 vs. 2011
(in thousands, except percentages)
Interest expense ..................................... $(19,986) $(20,025) —%
As a percentage of revenues ........................... 1% 1%
Interest expense was relatively flat as compared to the prior year. Interest expense in 2012 consists primarily
of $17.0 million of interest due on our 8.50% Notes.
Interest and Other Income (Expense)
Interest and other income (expense) consists primarily of interest earned on cash, cash equivalents and
short-term investments and foreign exchange gains and losses on foreign currency denominated balances.
Year Ended December 31, Change
2013 2012 2013 vs. 2012
(in thousands, except percentages)
Interest and other income (expense) ..................... $(3,002) $ 474 (733)%
As a percentage of revenues ........................... NM NM
Interest and other income (expense) decreased due to increased foreign exchange losses on foreign currency
denominated balances. The foreign exchange losses were $8.4 million and $4.0 million for the years ended
December 31, 2013 and 2012, respectively.
Year Ended December 31, Change
2012 2011 2012 vs. 2011
(in thousands, except percentages)
Interest and other income (expense) ..................... $474 $3,479 (86)%
As a percentage of revenues ........................... NM NM
Interest and other income (expense) decreased due to increased foreign exchange losses on foreign currency
denominated balances. The foreign exchange loss was $4.0 million for the year ended December 31, 2012 and
were immaterial for the year ended December 31, 2011.
Extinguishment of Debt
In connection with the redemption of the outstanding $200.0 million aggregate principal amount of the
8.50% Notes, we recognized a loss on extinguishment of debt of $25.1 million in the year ended December 31,
2013, which consisted of expenses associated with the redemption, including a $19.4 million premium payment
pursuant to the make-whole provision in the indenture governing the 8.50% Notes.
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