REBEKAH Group Project 1 - Exibit 1 Netflix Financial...

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Exibit 1 2004 2005 Delta 2006 Delta Netflix Financial Statements (Dollars in Thousands) Income Statement Sales Subscription 500,611 682,213 996,660 Cost of Revenues Subscription 273,401 393,788 532,621 Fulfillment 56,609 70,762 93,439 Total 330,010 464,550 626,060 Gross Profit 170,601 217,663 0.27 370,600 0.70 Operating Expenses Tech and Development 22,906 30,942 44,771 Marketing 98,027 141,997 223,386 G&A 16,287 29,395 30,130 Restructuring 0 0 0 Stock-based Comp 16,587 14,327 12,696 Gain on Disposal of DVD’s -2,560 -1,987 -4,797 Total Operating Expenses 151,247 214,674 0.42 306,186 0.43 Operating Income 19,354 2,989 64,414 Interest and other Income 2,592 5,753 15,904 Interest Expense -170 -407 0 Pre-tax Income 21,776 8,335 80,318 Taxes 181 -33,692 31,236 Net Income 21,595 42,027 0.95 49,082 0.17 Cash Flow Summary Cash flows for operations 145,269 157,507 247,862 Acquisition Costs of DVD Library -100,087 -111,446 -169,528 Purchase of property, plant and equipment -15,720 -27,653 -27,333 Proceeds from sales of DVDs 5,617 5,781 12,886 Free Cash Flow 35,079 24,189 -0.31 63,887 1.00 Exhibit 2
Netflix Inc. (NMS: NFLX) Annual Balance Sheet Report Date 12/31/2004 12/31/2005 12/31/2006 Cash & cash equivalents 174461 212256 400430 Short-term investments - - - Prepaid expenses 2741 7848 4742 Prepaid revenue sharing expenses 4695 5252 9456 Current content library, net - - - Prepaid content - - - Deferred tax assets - 13666 3155 Other current assets 5449 4669 10635 Total current assets 187346 243691 428418 Non-current content library, net 42158 57032 104908 Intangible assets, net 961 457 969 Information technology assets - - - Furniture & fixtures 1193 1240 4855 Building - - - Leasehold improvements 2482 2866 14389 DVD operations equipment - - - Computer equipment - 22549 28237 Other equipment - 19641 25000 Operations & other equipment - - - Software - - - Computer software, including internal-use software 10094 13061 16883 Capital work-in-progress 4498 13266 11482 Computer & other equipment 23938 - - Property & equipment, gross 42205 72623 100846 Less: accumulated depreciation 23477 32410 45343 Property & equipment, net 18728 40213 55503 Deferred tax assets - 21239 15600 Deposits 1600 1249 1316 Patents, net - - - Restricted cash - - - Debt issuance costs, net - - - Other assets - - - Total other assets - - - Other non-current assets 1000 800 2065 Total assets 251793 364681 608779 Current content accounts payable - - - Current content liabilities - - - Other accounts payable - - - Accounts payable 49775 63491 93864
Accrued state sales & use tax 4736 6656 9019 Accrued payroll & employee benefits - - 5080 Employee benefits 2709 3513 - Accrued interest on debt - - - Accrued content acquisition costs - - - Accrued legal settlement - 8589 6615 Current portion of lease financing obligations - - - Other accrued expenses 5686 6805 9191 Accrued expenses 13131 25563 29905 Current portion of lease financing obligations 68 - - Deferred revenue 31936 48533 69678 Notes payable - - - Total current liabilities 94910 137587 193447 Non-current content liabilities - - - Deferred rent 600 842 1121 Long-term debt - - - Long-term debt due to related party - - - Lease financing obligations, excluding current portion - - - Note payable - - - Subordinated notes payable - - - Other non-current liabilities - - - Total liabilities 95510 138429 194568 Redeemable convertible preferred stock - - - Convertible preferred stock - - - Common stock 53 55 69 Additional paid-in capital 292843 317194 454731 Treasury stock at cost - - - Foreign currency - - - Change in unrealized gains on available for sale securities - - - Accumulated other comprehensive income (loss) -222 - - Retained earnings (accumulated deficit) -131698 -89671 -40589 Deferred stock-based compensation 4693 1326 - Total stockholders' equity (deficiency) 156283 226252 414211 Analysis of Data
Netflix has seen steady growth within the most current three years of data 2004-2006.

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