NFLX » Topics » Liquidity and Capital Resources

This excerpt taken from the NFLX 10-Q filed May 8, 2009.

Liquidity and Capital Resources

We have generated net cash from operations during each quarter since the second quarter of 2001. Many factors will impact our ability to continue to generate and grow cash from our operations including, but not limited to, the number of subscribers who sign up for our service and the growth or reduction in our subscriber base. In addition, we may have or otherwise choose to lower our prices and increase our marketing expenses in order to grow faster or respond to competition. Although we currently anticipate that cash flows from operations, together with our available funds, will be sufficient to meet our cash needs for the foreseeable future, we may require or choose to obtain additional financing. Our ability to obtain financing will depend on, among other things, our development efforts, business plans, operating performance and the condition of the capital markets at the time we seek financing.

Our primary source of liquidity has been cash from operations, which consists mainly of net income adjusted for non-cash items such as amortization of our content library, depreciation of property and equipment and stock-based compensation related to the issuance of common stock. Our primary uses of cash include our stock repurchase programs, postage and packaging expenses, the acquisition of content, capital expenditures related to information technology and automation equipment for operations, marketing and fulfillment expenses.

In 2009, operating cash flows is expected to be a significant source of liquidity, while postage and packaging expenses, acquisition of content, marketing and fulfillment expenses are expected to continue to be significant uses of cash. In addition, on January 26, 2009, we announced that our Board of Directors authorized a stock repurchase program allowing us to repurchase our common stock through the end of 2009. Under this program, the Company anticipates repurchasing up to $132 million during the second through fourth quarters of 2009. The timing and actual number of shares repurchased will depend on various factors, including price, corporate and regulatory requirements, alternative investment opportunities and other market conditions. The following table highlights selected measures of our liquidity and capital resources as of March 31, 2009 and 2008:

 

     Three Months Ended  
     March 31,
2009
    March 31,
2008
 

Net cash provided by operating activities

   $ 65,633     $ 64,062  

Net cash (used in) provided by investing activities

     (64,668 )     18,133  

Net cash used in financing activities

     (25,715 )     (90,645 )
These excerpts taken from the NFLX 10-K filed Feb 25, 2009.

Liquidity and Capital Resources

We have generated net cash from operations during each quarter since the second quarter of 2001. Many factors will impact our ability to continue to generate and grow cash from our operations including, but not limited to, the number of subscribers who sign up for our service and the growth or reduction in our subscriber base. In addition, we may have to or otherwise choose to lower our prices and increase our marketing expenses in order to grow faster or respond to competition. Although we currently anticipate that cash flows from operations, together with our available funds, will be sufficient to meet our cash needs for the foreseeable future, we may require or choose to obtain additional financing. Our ability to obtain financing will depend on, among other things, our development efforts, business plans, operating performance and the condition of the capital markets at the time we seek financing.

Our primary source of liquidity has been cash from operations, which consists primarily of net income adjusted for non-cash items such as amortization of our content library, depreciation of property and equipment and stock-based compensation related to the issuance of common stock. Our primary uses of cash include our stock repurchase programs, shipping and packaging expenses, the acquisition of content, capital expenditures related to IT and automation equipment for operations, marketing and fulfillment expenses.

In 2009, operating cash flows will be a significant source of liquidity, while the shipping and packaging expenses, acquisition of content, marketing and fulfillment expenses will continue to be significant uses of cash. In addition, on January 26, 2009, we announced that our Board of Directors authorized a stock repurchase program allowing us to repurchase our common stock through the end of 2009. Based on the Board’s authorization, the Company anticipates a repurchase program of up to $175 million in 2009. The timing and actual number of shares repurchased will depend on various factors including price, corporate and regulatory requirements, alternative investment opportunities and other market conditions. The following table highlights selected measures of our liquidity and capital resources as of December 31, 2008, 2007 and 2006:

 

     Year Ended December 31,  
     2008     2007     2006  
     (in thousands)  

Cash and cash equivalents

   $ 139,881     $ 177,439     $ 400,430  

Short-term investments

     157,390       207,703       —    
                        
   $ 297,271     $ 385,142     $ 400,430  
                        

Net cash provided by operating activities

   $ 284,037     $ 277,424     $ 248,190  

Net cash used in investing activities

   $ (144,960 )   $ (436,024 )   $ (185,869 )

Net cash (used in) provided by financing activities

   $ (176,635 )   $ (64,391 )   $ 125,853  

 

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Table of Contents

Liquidity and Capital Resources

We have generated net cash from operations during each quarter since the second quarter of 2001. Many factors will impact our ability to continue to generate and grow cash from our operations including, but not limited to, the number of subscribers who sign up for our service and the growth or reduction in our subscriber base. In addition, we may have to or otherwise choose to lower our prices and increase our marketing expenses in order to grow faster or respond to competition. Although we currently anticipate that cash flows from operations, together with our available funds, will be sufficient to meet our cash needs for the foreseeable future, we may require or choose to obtain additional financing. Our ability to obtain financing will depend on, among other things, our development efforts, business plans, operating performance and the condition of the capital markets at the time we seek financing.

Our primary source of liquidity has been cash from operations, which consists primarily of net income adjusted for non-cash items such as amortization of our content library, depreciation of property and equipment and stock-based compensation related to the issuance of common stock. Our primary uses of cash include our stock repurchase programs, shipping and packaging expenses, the acquisition of content, capital expenditures related to IT and automation equipment for operations, marketing and fulfillment expenses.

In 2009, operating cash flows will be a significant source of liquidity, while the shipping and packaging expenses, acquisition of content, marketing and fulfillment expenses will continue to be significant uses of cash. In addition, on January 26, 2009, we announced that our Board of Directors authorized a stock repurchase program allowing us to repurchase our common stock through the end of 2009. Based on the Board’s authorization, the Company anticipates a repurchase program of up to $175 million in 2009. The timing and actual number of shares repurchased will depend on various factors including price, corporate and regulatory requirements, alternative investment opportunities and other market conditions. The following table highlights selected measures of our liquidity and capital resources as of December 31, 2008, 2007 and 2006:

 

     Year Ended December 31,  
     2008     2007     2006  
     (in thousands)  

Cash and cash equivalents

   $ 139,881     $ 177,439     $ 400,430  

Short-term investments

     157,390       207,703       —    
                        
   $ 297,271     $ 385,142     $ 400,430  
                        

Net cash provided by operating activities

   $ 284,037     $ 277,424     $ 248,190  

Net cash used in investing activities

   $ (144,960 )   $ (436,024 )   $ (185,869 )

Net cash (used in) provided by financing activities

   $ (176,635 )   $ (64,391 )   $ 125,853  

 

36


Table of Contents

Liquidity and Capital Resources

SIZE="2">We have generated net cash from operations during each quarter since the second quarter of 2001. Many factors will impact our ability to continue to generate and grow cash from our operations including, but not limited to, the number of
subscribers who sign up for our service and the growth or reduction in our subscriber base. In addition, we may have to or otherwise choose to lower our prices and increase our marketing expenses in order to grow faster or respond to competition.
Although we currently anticipate that cash flows from operations, together with our available funds, will be sufficient to meet our cash needs for the foreseeable future, we may require or choose to obtain additional financing. Our ability to obtain
financing will depend on, among other things, our development efforts, business plans, operating performance and the condition of the capital markets at the time we seek financing.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">Our primary source of liquidity has been cash from operations, which consists primarily of net income adjusted for non-cash items such as amortization of
our content library, depreciation of property and equipment and stock-based compensation related to the issuance of common stock. Our primary uses of cash include our stock repurchase programs, shipping and packaging expenses, the acquisition of
content, capital expenditures related to IT and automation equipment for operations, marketing and fulfillment expenses.

In 2009,
operating cash flows will be a significant source of liquidity, while the shipping and packaging expenses, acquisition of content, marketing and fulfillment expenses will continue to be significant uses of cash. In addition, on January 26,
2009, we announced that our Board of Directors authorized a stock repurchase program allowing us to repurchase our common stock through the end of 2009. Based on the Board’s authorization, the Company anticipates a repurchase program of up to
$175 million in 2009. The timing and actual number of shares repurchased will depend on various factors including price, corporate and regulatory requirements, alternative investment opportunities and other market conditions. The following table
highlights selected measures of our liquidity and capital resources as of December 31, 2008, 2007 and 2006:

 























































































































































   Year Ended December 31, 
   2008  2007  2006 
   (in thousands) 

Cash and cash equivalents

  $139,881  $177,439  $400,430 

Short-term investments

   157,390   207,703   —   
             
  $297,271  $385,142  $400,430 
             

Net cash provided by operating activities

  $284,037  $277,424  $248,190 

Net cash used in investing activities

  $(144,960) $(436,024) $(185,869)

Net cash (used in) provided by financing activities

  $(176,635) $(64,391) $125,853 

 


36







Table of Contents


Liquidity and Capital Resources

SIZE="2">We have generated net cash from operations during each quarter since the second quarter of 2001. Many factors will impact our ability to continue to generate and grow cash from our operations including, but not limited to, the number of
subscribers who sign up for our service and the growth or reduction in our subscriber base. In addition, we may have to or otherwise choose to lower our prices and increase our marketing expenses in order to grow faster or respond to competition.
Although we currently anticipate that cash flows from operations, together with our available funds, will be sufficient to meet our cash needs for the foreseeable future, we may require or choose to obtain additional financing. Our ability to obtain
financing will depend on, among other things, our development efforts, business plans, operating performance and the condition of the capital markets at the time we seek financing.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">Our primary source of liquidity has been cash from operations, which consists primarily of net income adjusted for non-cash items such as amortization of
our content library, depreciation of property and equipment and stock-based compensation related to the issuance of common stock. Our primary uses of cash include our stock repurchase programs, shipping and packaging expenses, the acquisition of
content, capital expenditures related to IT and automation equipment for operations, marketing and fulfillment expenses.

In 2009,
operating cash flows will be a significant source of liquidity, while the shipping and packaging expenses, acquisition of content, marketing and fulfillment expenses will continue to be significant uses of cash. In addition, on January 26,
2009, we announced that our Board of Directors authorized a stock repurchase program allowing us to repurchase our common stock through the end of 2009. Based on the Board’s authorization, the Company anticipates a repurchase program of up to
$175 million in 2009. The timing and actual number of shares repurchased will depend on various factors including price, corporate and regulatory requirements, alternative investment opportunities and other market conditions. The following table
highlights selected measures of our liquidity and capital resources as of December 31, 2008, 2007 and 2006:

 























































































































































   Year Ended December 31, 
   2008  2007  2006 
   (in thousands) 

Cash and cash equivalents

  $139,881  $177,439  $400,430 

Short-term investments

   157,390   207,703   —   
             
  $297,271  $385,142  $400,430 
             

Net cash provided by operating activities

  $284,037  $277,424  $248,190 

Net cash used in investing activities

  $(144,960) $(436,024) $(185,869)

Net cash (used in) provided by financing activities

  $(176,635) $(64,391) $125,853 

 


36







Table of Contents


Liquidity and Capital Resources

SIZE="2">We have generated net cash from operations during each quarter since the second quarter of 2001. Many factors will impact our ability to continue to generate and grow cash from our operations including, but not limited to, the number of
subscribers who sign up for our service and the growth or reduction in our subscriber base. In addition, we may have to or otherwise choose to lower our prices and increase our marketing expenses in order to grow faster or respond to competition.
Although we currently anticipate that cash flows from operations, together with our available funds, will be sufficient to meet our cash needs for the foreseeable future, we may require or choose to obtain additional financing. Our ability to obtain
financing will depend on, among other things, our development efforts, business plans, operating performance and the condition of the capital markets at the time we seek financing.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">Our primary source of liquidity has been cash from operations, which consists primarily of net income adjusted for non-cash items such as amortization of
our content library, depreciation of property and equipment and stock-based compensation related to the issuance of common stock. Our primary uses of cash include our stock repurchase programs, shipping and packaging expenses, the acquisition of
content, capital expenditures related to IT and automation equipment for operations, marketing and fulfillment expenses.

In 2009,
operating cash flows will be a significant source of liquidity, while the shipping and packaging expenses, acquisition of content, marketing and fulfillment expenses will continue to be significant uses of cash. In addition, on January 26,
2009, we announced that our Board of Directors authorized a stock repurchase program allowing us to repurchase our common stock through the end of 2009. Based on the Board’s authorization, the Company anticipates a repurchase program of up to
$175 million in 2009. The timing and actual number of shares repurchased will depend on various factors including price, corporate and regulatory requirements, alternative investment opportunities and other market conditions. The following table
highlights selected measures of our liquidity and capital resources as of December 31, 2008, 2007 and 2006:

 























































































































































   Year Ended December 31, 
   2008  2007  2006 
   (in thousands) 

Cash and cash equivalents

  $139,881  $177,439  $400,430 

Short-term investments

   157,390   207,703   —   
             
  $297,271  $385,142  $400,430 
             

Net cash provided by operating activities

  $284,037  $277,424  $248,190 

Net cash used in investing activities

  $(144,960) $(436,024) $(185,869)

Net cash (used in) provided by financing activities

  $(176,635) $(64,391) $125,853 

 


36







Table of Contents


This excerpt taken from the NFLX 10-Q filed Nov 3, 2008.

Liquidity and Capital Resources

As of September 30, 2008, we had cash and cash equivalents of $111.5 million and short-term investments of $139.3 million, for a combined total of $250.8 million. Short-term investments are comprised of corporate debt securities, government and agency securities and asset and mortgage-backed securities. Substantially all of the residential and commercial mortgage-backed securities are “AAA” rated. The mortgage bonds owned represent the senior tranches of the capital structure and provide credit enhancement through over-collateralization and their subordinated characteristics.

We have generated net cash from operations during each quarter since the second quarter of 2001. Many factors will impact our ability to continue to generate and grow cash from our operations including, but not limited to, the number of subscribers who sign up for our service and the growth or reduction in our subscriber base. In addition, we may have or otherwise choose to lower our prices and increase our marketing expenses in order to grow faster or respond to competition. Although we currently anticipate that cash flows from operations, together with our available funds, will be sufficient to meet our cash needs for the foreseeable future, we may require or choose to obtain additional financing. Our ability to obtain financing will depend on, among other things, our development efforts, business plans, operating performance and the condition of the capital markets at the time we seek financing.

Our primary source of liquidity has been cash from operations, which consists mainly of net income adjusted for non-cash items such as amortization of our content library, the depreciation of property and equipment, and stock-based compensation related to the

 

30


Table of Contents

issuance of common stock. Our primary uses of cash include our stock repurchase programs, the acquisition of content, marketing expenses and fulfillment expenses. The following table highlights selected measures of our liquidity and capital resources for the three and nine months ended September 30, 2008 and 2007:

 

     Three Months Ended     Nine Months Ended  
     September 30,
2008
    September 30,
2007
    September 30,
2008
    September 30,
2007
 
     (in thousands)  

Net cash provided by operating activities

   $ 73,231     $ 77,663     $ 229,245     $ 206,021  

Net cash used in investing activities

     (19,403 )     (52,197 )     (124,770 )     (385,937 )

Net cash used in financing activities

     (86,593 )     (29,844 )     (170,390 )     (40,710 )
This excerpt taken from the NFLX 10-Q filed Aug 11, 2008.

Liquidity and Capital Resources

We have generated net cash from operations during each quarter since the second quarter of 2001. Many factors will impact our ability to continue to generate and grow cash from our operations including, but not limited to, the number of subscribers who sign up for our service, the growth or reduction in our subscriber base and our ability to develop new revenue sources. In addition, we may have or otherwise choose to lower our prices and increase our marketing expenses in order to grow faster or respond to competition. Although we currently anticipate that cash flows from operations, together with our available funds, will be sufficient to meet our cash needs for the foreseeable future, we may require or choose to obtain additional financing. Our ability to obtain financing will depend on, among other things, our development efforts, business plans, operating performance and the condition of the capital markets at the time we seek financing.

 

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Table of Contents

Our primary source of liquidity has been cash from operations, which consists mainly of net income adjusted for non-cash items such as amortization of our content library and the depreciation of property and equipment, and stock-based compensation related to the issuance of common stock. Our primary uses of cash include our stock repurchase programs, the acquisition of content and marketing and fulfillment expenses.

In 2008, operating cash flows is expected to be a significant source of liquidity, while the acquisition of content and marketing and fulfillment expenses are expected to continue to be significant uses of cash. Other significant uses of cash in 2008 may include stock repurchases. The following table highlights selected measures of our liquidity and capital resources for the three and six months ended June 30, 2008 and 2007:

 

     Three Months Ended     Six Months Ended  
     June 30,
2008
    June 30,
2007
    June 30,
2008
    June 30,
2007
 
     (in thousands)  

Net cash provided by operating activities

   $ 78,145     $ 65,234     $ 156,014     $ 128,358  

Net cash used in investing activities

     (109,693 )     (83,897 )     (105,367 )     (333,740 )

Net cash provided by (used in) financing activities

     6,848       (15,613 )     (83,797 )     (10,866 )
This excerpt taken from the NFLX 10-Q filed May 6, 2008.

Liquidity and Capital Resources

We have generated net cash from operations during each quarter since the second quarter of 2001. Many factors will impact our ability to continue to generate and grow cash from our operations including, but not limited to, the number of subscribers who sign up for our service, the growth or reduction in our subscriber base and our ability to develop new revenue sources. In addition, we may have or otherwise choose to lower our prices and increase our marketing expenses in order to grow faster or respond to competition. Although we currently anticipate that cash flows from operations, together with our available funds, will be sufficient to meet our cash needs for the foreseeable future, we may require or choose to obtain additional financing. Our ability to obtain financing will depend on, among other things, our development efforts, business plans, operating performance and the condition of the capital markets at the time we seek financing.

Our primary source of liquidity has been cash from operations, which consists mainly of net income adjusted for non-cash items such as amortization of our content library and the depreciation of property and equipment. Our primary uses of cash include our stock repurchase programs, the acquisition of content and marketing and fulfillment expenses.

In 2008, operating cash flows is expected to be a significant source of liquidity, while the acquisition of content and marketing and fulfillment expenses are expected to continue to be significant uses of cash. Other significant uses of cash in 2008 may include stock repurchases. The following table highlights selected measures of our liquidity and capital resources as of March 31, 2008 and 2007:

 

    Three Months Ended  
    March 31,
2008
    March 31,
2007
 
    (in thousands)  

Net cash provided by operating activities

  $ 77,747     $ 63,029  

Net cash provided by (used in) investing activities

    4,326       (249,843 )

Net cash (used in) provided by financing activities

    (90,523 )     4,842  
This excerpt taken from the NFLX 10-K filed Feb 28, 2008.

Liquidity and Capital Resources

We have generated net cash from operations during each quarter since the second quarter of 2001. Many factors will impact our ability to continue to generate and grow cash from our operations including, but not limited to, the number of subscribers who sign up for our service, the growth or reduction in our subscriber base and our ability to develop new revenue sources. In addition, we may have to or otherwise choose to lower our prices and increase our marketing expenses in order to grow faster or respond to competition. Although we currently anticipate that cash flows from operations, together with our available funds, will be sufficient to meet our cash needs for the foreseeable future, we may require or choose to obtain additional financing. Our ability to obtain financing will depend on, among other things, our development efforts, business plans, operating performance and the condition of the capital markets at the time we seek financing.

Our primary source of liquidity has been cash from operations, which consists primarily of net income adjusted for non-cash items such as amortization of our content library and the depreciation of property and equipment. Our primary uses of cash include the acquisition of content, marketing and fulfillment expenses.

In 2008, operating cash flows will be a significant source of liquidity, while the acquisition of content, marketing and fulfillment expenses will continue to be significant uses of cash. In addition, on January 31, 2008, our Board of Directors authorized a stock repurchase program allowing us to repurchase up to $100.0 million of

 

38


Table of Contents

our common stock through the end of 2008. We completed this stock repurchase program in February 2008. The following table highlights selected measures of our liquidity and capital resources as of December 31, 2007, 2006 and 2005:

 

     Year Ended December 31,  
     2007     2006     2005  
     (in thousands)  

Cash and cash equivalents

   $ 177,439     $ 400,430     $ 212,256  

Short-term investments

     207,703       —         —    
                        
   $ 385,142     $ 400,430     $ 212,256  
                        

Net cash provided by operating activities

   $ 291,823     $ 247,862     $ 157,507  

Net cash used in investing activities

   $ (450,813 )   $ (185,869 )   $ (133,248 )

Net cash (used in) provided by financing activities

   $ (64,001 )   $ 126,181     $ 13,314  
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