NetFlix 2015 Annual Report Download - page 31

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Year ended December 31, 2014 as compared to the year ended December 31, 2013
The increase in technology and development expenses was primarily due to an $87.4 million increase in
personnel-related costs, including stock-based compensation expense, resulting from an increase in compensation
for existing employees and a 12% growth in average headcount supporting continued improvements in our
streaming service and our international expansion.
General and Administrative
General and administrative expenses consist of payroll and related expenses for corporate personnel, as well
as professional fees and other general corporate expenses.
Year Ended December 31, Change
2015 2014 2013 2015 vs. 2014 2014 vs. 2013
(in thousands, except percentages)
General and administrative ............. $407,329 $269,741 $180,301 $137,588 51% $89,440 50%
As a percentage of revenues ............. 6% 5% 4%
Year ended December 31, 2015 as compared to the year ended December 31, 2014
General and administrative expenses increased primarily due to a $120.1 million increase in personnel-
related costs, including stock-based compensation expense, resulting from a 51% increase in average headcount
primarily to support our international expansion and increased production of original content, and an increase in
compensation for existing employees.
Year ended December 31, 2014 as compared to the year ended December 31, 2013
General and administrative expenses increased primarily due to a $70.6 million increase in personnel-related
costs, including stock-based compensation expense, resulting from a 37% increase in average headcount
primarily to support our international expansion, and an increase in compensation for existing employees. In
addition, there was an $11.6 million increase in legal costs for the year ended December 31, 2014 as compared to
the year ended December 31, 2013.
Interest Expense
Interest expense consists primarily of the interest associated with our 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
2015 2014 2013 2015 vs. 2014 2014 vs. 2013
(in thousands, except percentages)
Interest expense ...................... $(132,716) $(50,219) $(29,142) $82,497 164% $21,077 72%
As a percentage of revenues ............. 2% 1% 1%
Year ended December 31, 2015 as compared to the year ended December 31, 2014
Interest expense for the year ended December 31, 2015 consists primarily of $127.1 million of interest on
our notes. The increase in interest expense for the year ended December 31, 2015 as compared to the year ended
December 31, 2014 is due to the higher aggregate principal of interest bearing notes outstanding.
Year ended December 31, 2014 as compared to the year ended December 31, 2013
Interest expense for the year ended December 31, 2014 consists primarily of $46.8 million of interest on our
notes. The increase in interest expense for the year ended December 31, 2014 as compared to the year ended
December 31, 2013 is due to the higher aggregate principal of interest bearing notes outstanding.
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