NetFlix 2014 Annual Report Download - page 13

Table of Contents
We intend to raise at least $1 billion, pending market conditions, of additional long-
term debt in the first quarter of 2015 and it is possible
that we may incur additional indebtedness in the future in the ordinary course of business. If new debt is added to current debt levels, the risks
described above could intensify.
We may lose key employees or may be unable to hire qualified employees.
We rely on the continued service of our senior management, including our Chief Executive Officer and co-founder Reed Hastings,
members of our executive team and other key employees and the hiring of new qualified employees. In our industry, there is substantial and
continuous competition for highly-
skilled business, product development, technical and other personnel. We may not be successful in recruiting
new personnel and in retaining and motivating existing personnel, which may be disruptive to our operations.
If memberships to our Domestic DVD segment decline faster than anticipated, our business could be adversely affected.
The number of memberships to our DVD-by-mail offering is declining, and we anticipate that this decline will continue. We believe,
however, that the domestic DVD business will continue to generate significant contribution profit for our business. The contribution profit
generated by our domestic DVD business will help provide capital resources to fund our growth internationally. To the extent that the rate of
decline in our DVD-by-mail business is greater than we anticipate, our business could be adversely affected. We do not anticipate increasing
resources to our DVD operations and the technology used in its operations will not be meaningfully improved. To the extent that we experience
service interruptions or other degradations in our DVD-by-mail service, members' satisfaction could be negatively impacted and we could
experience an increase in DVD-by-mail member cancellations, which could adversely impact our business.
Changes in U.S. Postal rates or operations could adversely impact our operating results and member satisfaction.
We rely exclusively on the U.S. Postal Service to deliver DVDs from our shipping centers and to return DVDs to us from our members.
Increases in postage delivery rates, including those resulting from changes to policies on the requirements of first class mail such as size,
weight or machinability, could adversely affect our Domestic DVD segment's contribution profit. If the U.S. Postal Service were to implement
other changes to improve its financial position, such as closing mail processing facilities or service reductions, such changes could lead to a
decrease in customer satisfaction and our Domestic DVD segment's contribution profit could be adversely affected.
Risks Related to Our Stock Ownership
Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable.
Our charter documents may discourage, delay or prevent a merger or acquisition that a stockholder may consider favorable because they:
As a Delaware corporation, we are also subject to certain Delaware anti-takeover provisions. Under Delaware law, a corporation may not
engage in a business combination with any holder of 15% or more of its capital stock unless the holder has
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requiring us to dedicate a portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability
of cash flow to fund working capital, capital expenditures, acquisitions and investments and other general corporate purposes;
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limiting our flexibility in planning for, or reacting to, changes in our business and the markets in which we operate; and
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limiting our ability to borrow additional funds or to borrow funds at rates or on other terms we find acceptable.
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authorize our board of directors, without stockholder approval, to issue up to 10,000,000 shares of undesignated preferred stock;
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provide for a classified board of directors;
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prohibit our stockholders from acting by written consent;
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establish advance notice requirements for proposing matters to be approved by stockholders at stockholder meetings; and
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prohibit stockholders from calling a special meeting of stockholders.