Finance 9
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NetFlix-ASSIGNMENT.xlsxConsolidated Balance Sheets
| Consolidated Balance Sheets - USD ($) $ in Thousands | Vertical Analysis | Horizontal Analysis | Absolute Change | |||||||||||
| Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ 2,822,795 | $ 1,467,576 | $ 1,809,330 | $ 1,113,608 | 14.8% | 10.8% | 17.7% | 15.8% | 92.3% | -18.9% | 62.5% | $ 1,355,219 | $ (341,754) | $ 695,722 |
| Short-term investments | 0 | 266,206 | 501,385 | 494,888 | 0.0% | 2.0% | 4.9% | 7.0% | -100.0% | -46.9% | 1.3% | $ (266,206) | $ (235,179) | $ 6,497 |
| Current content assets, net | 4,310,934 | 3,726,307 | 2,905,998 | 2,166,134 | 22.7% | 27.4% | 28.5% | 30.8% | 15.7% | 28.2% | 34.2% | $ 584,627 | $ 820,309 | $ 739,864 |
| Other current assets | 536,245 | 260,202 | 215,127 | 152,423 | 2.8% | 1.9% | 2.1% | 2.2% | 106.1% | 21.0% | 41.1% | $ 276,043 | $ 45,075 | $ 62,704 |
| Total current assets | 7,669,974 | 5,720,291 | 5,431,840 | 3,927,053 | 40.3% | 42.1% | 53.2% | 55.8% | 34.1% | 5.3% | 38.3% | $ 1,949,683 | $ 288,451 | $ 1,504,787 |
| Non-current content assets, net | 10,371,055 | 7,274,501 | 4,312,817 | 2,773,326 | 54.5% | 53.5% | 42.3% | 39.4% | 42.6% | 68.7% | 55.5% | $ 3,096,554 | $ 2,961,684 | $ 1,539,491 |
| Property and equipment, net | 319,404 | 250,395 | 173,412 | 149,875 | 1.7% | 1.8% | 1.7% | 2.1% | 27.6% | 44.4% | 15.7% | $ 69,009 | $ 76,983 | $ 23,537 |
| Other non-current assets | 652,309 | 341,423 | 284,802 | 192,246 | 3.4% | 2.5% | 2.8% | 2.7% | 91.1% | 19.9% | 48.1% | $ 310,886 | $ 56,621 | $ 92,556 |
| Total assets | 19,012,742 | 13,586,610 | 10,202,871 | 7,042,500 | 100.0% | 100.0% | 100.0% | 100.0% | 39.9% | 33.2% | 44.9% | $ 5,426,132 | $ 3,383,739 | $ 3,160,371 |
| Current liabilities: | ||||||||||||||
| Current content liabilities | 4,173,041 | 3,632,711 | 2,789,023 | 2,117,241 | 21.9% | 26.7% | 27.3% | 30.1% | 14.9% | 30.3% | 31.7% | $ 540,330 | $ 843,688 | $ 671,782 |
| Accounts payable | 359,555 | 312,842 | 253,491 | 201,581 | 1.9% | 2.3% | 2.5% | 2.9% | 14.9% | 23.4% | 25.8% | $ 46,713 | $ 59,351 | $ 51,910 |
| Accrued expenses | 315,094 | 197,632 | 140,389 | 69,746 | 1.7% | 1.5% | 1.4% | 1.0% | 59.4% | 40.8% | 101.3% | $ 117,462 | $ 57,243 | $ 70,643 |
| Deferred revenue | 618,622 | 443,472 | 346,721 | 274,586 | 3.3% | 3.3% | 3.4% | 3.9% | 39.5% | 27.9% | 26.3% | $ 175,150 | $ 96,751 | $ 72,135 |
| Total current liabilities | 5,466,312 | 4,586,657 | 3,529,624 | 2,663,154 | 28.8% | 33.8% | 34.6% | 37.8% | 19.2% | 29.9% | 32.5% | $ 879,655 | $ 1,057,033 | $ 866,470 |
| Non-current content liabilities | 3,329,796 | 2,894,654 | 2,026,360 | 1,575,832 | 17.5% | 21.3% | 19.9% | 22.4% | 15.0% | 42.8% | 28.6% | $ 435,142 | $ 868,294 | $ 450,528 |
| Long-term debt | 6,499,432 | 3,364,311 | 2,371,362 | 885,849 | 34.2% | 24.8% | 23.2% | 12.6% | 93.2% | 41.9% | 167.7% | $ 3,135,121 | $ 992,949 | $ 1,485,513 |
| Other non-current liabilities | 135,246 | 61,188 | 52,099 | 59,957 | 0.7% | 0.5% | 0.5% | 0.9% | 121.0% | 17.4% | -13.1% | $ 74,058 | $ 9,089 | $ (7,858) |
| Total liabilities | 15,430,786 | 10,906,810 | 7,979,445 | 5,184,792 | 81.2% | 80.3% | 78.2% | 73.6% | 41.5% | 36.7% | 53.9% | $ 4,523,976 | $ 2,927,365 | $ 2,794,653 |
| Stockholders’ equity: | ||||||||||||||
| Preferred stock, $0.001 par value; 10,000,000 shares authorized at December 31, 2017 and 2016; no shares issued and outstanding at December 31, 2017 and 2016 | 0 | 0 | 0 | 0 | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | $ 0 | $ 0 | $ 0 |
| Common stock, $0.001 par value; 4,990,000,000 shares authorized at December 31, 2017 and December 31, 2016, respectively; 433,392,686 and 430,054,212 issued and outstanding at December 31, 2017 and December 31, 2016, respectively | 1,871,396 | 1,599,762 | 1,324,809 | 1,042,870 | 9.8% | 11.8% | 13.0% | 14.8% | 17.0% | 20.8% | 27.0% | $ 271,634 | $ 274,953 | $ 281,939 |
| Accumulated other comprehensive loss | (20,557) | (48,565) | (43,308) | (4,446) | -0.1% | -0.4% | -0.4% | -0.1% | -57.7% | 12.1% | 874.1% | $ 28,008 | $ (5,257) | $ (38,862) |
| Retained earnings | 1,731,117 | 1,128,603 | 941,925 | 819,284 | 9.1% | 8.3% | 9.2% | 11.6% | 53.4% | 19.8% | 15.0% | $ 602,514 | $ 186,678 | $ 122,641 |
| Total stockholders’ equity | 3,581,956 | 2,679,800 | 2,223,426 | 1,857,708 | 18.8% | 19.7% | 21.8% | 26.4% | 33.7% | 20.5% | 19.7% | $ 902,156 | $ 456,374 | $ 365,718 |
| Total liabilities and stockholders’ equity | $ 19,012,742 | $ 13,586,610 | $ 10,202,871 | $ 7,042,500 | 100.0% | 100.0% | 100.0% | 100.0% | 39.9% | 33.2% | 44.9% | $ 5,426,132 | $ 3,383,739 | $ 3,160,371 |
Consolidated Statements of Oper
| Consolidated Statements of Operations - USD ($) shares in Thousands | Vertical Analysis | Horizontal Analysis | Absolute change | |||||||||||
| Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
| Income Statement [Abstract] | ||||||||||||||
| Revenues | $ 11,692,713 | $ 8,830,669 | $ 6,779,511 | $ 5,504,656 | 100.0% | 100.0% | 100.0% | 100.0% | 32.4% | 30.3% | 23.2% | $ 2,862,044 | $ 2,051,158 | $ 2,051,158 |
| Cost of revenues | 7,659,666 | 6,029,901 | 4,591,476 | 3,752,760 | 65.5% | 68.3% | 67.7% | 68.2% | 27.0% | 31.3% | 22.3% | $ 1,629,765 | $ 1,438,425 | $ 1,438,425 |
| Marketing | 1,278,022 | 991,078 | 824,092 | 607,186 | 10.9% | 11.2% | 12.2% | 11.0% | 29.0% | 20.3% | 35.7% | $ 286,944 | $ 166,986 | $ 166,986 |
| Technology and development | 1,052,778 | 852,098 | 650,788 | 472,321 | 9.0% | 9.6% | 9.6% | 8.6% | 23.6% | 30.9% | 37.8% | $ 200,680 | $ 201,310 | $ 201,310 |
| General and administrative | 863,568 | 577,799 | 407,329 | 269,741 | 7.4% | 6.5% | 6.0% | 4.9% | 49.5% | 41.9% | 51.0% | $ 285,769 | $ 170,470 | $ 170,470 |
| Operating income | 838,679 | 379,793 | 305,826 | 402,648 | 7.2% | 4.3% | 4.5% | 7.3% | 120.8% | 24.2% | -24.0% | $ 458,886 | $ 73,967 | $ 73,967 |
| Other income (expense): | ||||||||||||||
| Interest expense | (238,204) | (150,114) | (132,716) | (50,219) | -2.0% | -1.7% | -2.0% | -0.9% | 58.7% | 13.1% | 164.3% | $ (88,090) | $ (17,398) | $ (17,398) |
| Interest and other income (expense) | (115,154) | 30,828 | (31,225) | (3,060) | -1.0% | 0.3% | -0.5% | -0.1% | -473.5% | -198.7% | 920.4% | $ (145,982) | $ 62,053 | $ 62,053 |
| Income before income taxes | 485,321 | 260,507 | 141,885 | 349,369 | 4.2% | 3.0% | 2.1% | 6.3% | 86.3% | 83.6% | -59.4% | $ 224,814 | $ 118,622 | $ 118,622 |
| Provision for (benefit from) income taxes | (73,608) | 73,829 | 19,244 | 82,570 | -0.6% | 0.8% | 0.3% | 1.5% | -199.7% | 283.6% | -76.7% | $ (147,437) | $ 54,585 | $ 54,585 |
| Net income | $ 558,929 | $ 186,678 | $ 122,641 | $ 266,799 | 4.8% | 2.1% | 1.8% | 4.8% | 199.4% | 52.2% | -54.0% | $ 372,251 | $ 64,037 | $ 64,037 |
| Earnings per share: | ||||||||||||||
| Basic (in USD per share) | $ 1.29 | $ 0.44 | $ 0.29 | $ 0.63 | 0.0% | 0.0% | 0.0% | 0.0% | 197.3% | 51.2% | -54.6% | $ 1 | $ 0 | $ 0 |
| Diluted (in USD per share) | $ 1.25 | $ 0.43 | $ 0.28 | $ 0.62 | 0.0% | 0.0% | 0.0% | 0.0% | 193.9% | 51.5% | -54.5% | $ 1 | $ 0 | $ 0 |
| Weighted-average common shares outstanding: | ||||||||||||||
| Basic (in shares) | 431,885 | 428,822 | 425,889 | 420,544 | 3.7% | 4.9% | 6.3% | 7.6% | 0.7% | 0.7% | 1.3% | $ 3,063 | $ 2,933 | $ 2,933 |
| Diluted (in shares) | 446,814 | 438,652 | 436,456 | 431,894 | 3.8% | 5.0% | 6.4% | 7.8% | 1.9% | 0.5% | 1.1% | $ 8,162 | $ 2,196 | $ 2,196 |
Consolidated Statements of Cash
| Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||||||
| Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | ||||
| Cash flows from operating activities: | |||||||
| Net income | $ 558,929 | $ 186,678 | $ 122,641 | $ 266,799 | |||
| Adjustments to reconcile net income to net cash used in operating activities: | |||||||
| Additions to streaming content assets | (9,805,763) | (8,653,286) | (5,771,652) | (3,773,019) | |||
| Change in streaming content liabilities | 900,006 | 1,772,650 | 1,162,413 | 593,125 | |||
| Amortization of streaming content assets | 6,197,817 | 4,788,498 | 3,405,382 | 2,656,279 | |||
| Amortization of DVD content assets | 60,657 | 78,952 | 79,380 | 71,491 | |||
| Depreciation and amortization of property, equipment and intangibles | 71,911 | 57,528 | 62,283 | 54,028 | |||
| Stock-based compensation expense | 182,209 | 173,675 | 124,725 | 115,239 | |||
| Excess tax benefits from stock-based compensation | 0 | (65,121) | (80,471) | (89,341) | |||
| Other non-cash items | 57,207 | 40,909 | 31,628 | 15,282 | |||
| Foreign currency remeasurement loss on long-term debt | 140,790 | 0 | 0 | 0 | |||
| Deferred taxes | (208,688) | (46,847) | (58,655) | (30,063) | |||
| Changes in operating assets and liabilities: | |||||||
| Other current assets | (234,090) | 46,970 | 18,693 | (9,198) | |||
| Accounts payable | 74,559 | 32,247 | 51,615 | 83,812 | |||
| Accrued expenses | 114,337 | 68,706 | 48,810 | 55,636 | |||
| Deferred revenue | 177,974 | 96,751 | 72,135 | 58,819 | |||
| Other non-current assets and liabilities | (73,803) | (52,294) | (18,366) | (52,406) | |||
| Net cash used in operating activities | (1,785,948) | (1,473,984) | (749,439) | 16,483 | |||
| Cash flows from investing activities: | |||||||
| Acquisitions of DVD content assets | (53,720) | (77,177) | (77,958) | (74,790) | |||
| Purchases of property and equipment | (173,302) | (107,653) | (91,248) | (69,726) | |||
| Other assets | (6,689) | (941) | (1,912) | 1,334 | |||
| Purchases of short-term investments | (74,819) | (187,193) | (371,915) | (426,934) | |||
| Proceeds from sale of short-term investments | 320,154 | 282,484 | 259,079 | 385,300 | |||
| Proceeds from maturities of short-term investments | 22,705 | 140,245 | 104,762 | 141,950 | |||
| Net cash provided by (used in) investing activities | 34,329 | 49,765 | (179,192) | (42,866) | |||
| Cash flows from financing activities: | |||||||
| Proceeds from issuance of debt | 3,020,510 | 1,000,000 | 1,500,000 | 400,000 | |||
| Issuance costs | (32,153) | (10,700) | (17,629) | (7,080) | |||
| Proceeds from issuance of common stock | 88,378 | 36,979 | 77,980 | 60,544 | |||
| Excess tax benefits from stock-based compensation | 0 | 65,121 | 80,471 | 89,341 | |||
| Other financing activities | 255 | 230 | (545) | (1,093) | |||
| Net cash provided by financing activities | 3,076,990 | 1,091,630 | 1,640,277 | 541,712 | |||
| Effect of exchange rate changes on cash and cash equivalents | 29,848 | (9,165) | (15,924) | (6,686) | |||
| Net increase (decrease) in cash and cash equivalents | 1,355,219 | (341,754) | 695,722 | 508,643 | |||
| Cash and cash equivalents, beginning of year | 1,467,576 | 1,809,330 | 1,113,608 | 604,965 | |||
| Cash and cash equivalents, end of year | 2,822,795 | 1,467,576 | 1,809,330 | 1,113,608 | |||
| Supplemental disclosure: | |||||||
| Income taxes paid | 113,591 | 26,806 | 27,658 | 50,573 | |||
| Interest paid | 213,313 | 138,566 | 111,761 | 41,085 | |||
| Increase (decrease) in investing activities included in liabilities | $ (32,643) | $ 27,504 | $ (4,978) | $ 12,295 | 18,824 | 23,802 |
