NetFlix 2013 Annual Report Download - page 63

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Future minimum payments under lease financing obligations and non-cancelable operating leases as of
December 31, 2013 are as follows:
Year Ending December 31,
Future
Minimum
Payments
(in thousands)
2014 .......................................................... $ 25,101
2015 .......................................................... 26,637
2016 .......................................................... 26,073
2017 .......................................................... 21,846
2018 .......................................................... 15,586
Thereafter ...................................................... 86,179
Total minimum payments ......................................... $201,422
Rent expense associated with the operating leases was $27.9 million, $29.7 million and $16.9 million for the
years ended December 31, 2013, 2012 and 2011, respectively.
Legal Proceedings
From time to time, in the normal course of its operations, the Company is a party to litigation matters and
claims, including claims relating to employee relations, business practices and patent infringement. Litigation can
be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings
are difficult to predict and the Company’s view of these matters may change in the future as the litigation and
events related thereto unfold. The Company expenses legal fees as incurred. The Company records a provision
for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be
reasonably estimated. An unfavorable outcome to any legal matter, if material, could have an adverse effect on
the Company’s operations or its financial position, liquidity or results of operations.
On January 13, 2012, the first of three purported shareholder class action lawsuits was filed in the United
States District Court for the Northern District of California against the Company and certain of its officers and
directors. Two additional purported shareholder class action lawsuits were filed in the same court on January 27,
2012 and February 29, 2012 alleging substantially similar claims. These lawsuits were consolidated into In re
Netflix, Inc., Securities Litigation, Case No. 3:12-cv-00225-SC, and the Court selected lead plaintiffs. On
June 26, 2012, lead plaintiffs filed a consolidated complaint which alleged violations of the federal securities
laws. The Court dismissed the consolidated complaint with leave to amend on February 13, 2013. Lead plaintiffs
filed a first amended consolidated complaint on March 22, 2013. The Court dismissed the first amended
consolidated complaint with prejudice on August 20, 2013, and judgment was entered on September 27, 2013.
Lead plaintiffs filed a motion to alter or amend the judgment and requested leave to file a second amended
complaint on October 25, 2013. On January 17, 2014, the Court denied that motion.
On November 23, 2011, the first of six purported shareholder derivative suits was filed in the Superior Court
of California, Santa Clara County, against the Company and certain of its officers and directors. Five additional
purported shareholder derivative suits were subsequently filed: two in the Superior Court of California, Santa
Clara County on February 9, 2012 and May 2, 2012; and three in the United States District Court for the
Northern District of California on February 13, 2012, February 24, 2012 and April 2, 2012. The purported
shareholder derivative suits filed in the Northern District of California have been voluntarily dismissed. On
July 5, 2012, the purported shareholder derivative suits filed in Santa Clara County were consolidated into In re
Netflix, Inc. Shareholder Derivative Litigation, Case No. 1-12-cv-218399, and lead counsel was appointed. A
consolidated complaint was filed on December 4, 2012, with plaintiffs seeking compensatory damages and other
relief. The consolidated complaint alleges, among other things, that certain of the Company’s current and former
officers and directors breached their fiduciary duties, issued false and misleading statements primarily regarding
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