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NETFLIX, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

Year ended December 31,

2016 2015 2014
Revenues $ 8,830,669 $ 6,779,511 $ 5,504,656
Cost of revenues 6,029,901 4,591,476 3,752,760
Marketing 991,078 824,092 607,186
Technology and development 852,098 650,788 472,321
General and administrative 577,799 407,329 269,741
Operating income 379,793 305,826 402,648
Other income (expense):
Interest expense (150,114) (132,716) (50,219)
Interest and other income (expense) 30,828 (31,225) (3,060)
Income before income taxes 260,507 141,885 349,369
Provision for income taxes 73,829 19,244 82,570
Net income $ 186,678 $ 122,641 $ 266,799
Earnings per share:
Basic $ 0.44 $ 0.29 $ 0.63
Diluted $ 0.43 $ 0.28 $ 0.62
Weighted-average common shares outstanding:
Basic 428,822 425,889 420,544
Diluted 438,652 436,456 431,894

See accompanying notes to consolidated financial statements.

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NETFLIX, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

Year ended December 31,

2016 2015 2014
Net income $ 186,678 $ 122,641 $ 266,799
Other comprehensive loss:
Foreign currency translation adjustments (5,464) (37,887) (7,768)
Change in unrealized gains (losses) on available-for-sale securities, net of tax of $126, $(598), and 207 (975) (253)
$(156), respectively
Total other comprehensive loss (5,257) (38,862) (8,021)
Comprehensive income $ 181,421 $ 83,779 $ 258,778

See accompanying notes to consolidated financial statements.

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NETFLIX, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

As of December 31,
2016 2015
Assets
Current assets:
Cash and cash equivalents $ 1,467,576 $ 1,809,330
Short-term investments 266,206 501,385
Current content assets, net 3,726,307 2,905,998
Other current assets 260,202 215,127
Total current assets 5,720,291 5,431,840
Non-current content assets, net 7,274,501 4,312,817
Property and equipment, net 250,395 173,412
Other non-current assets 341,423 284,802
Total assets $ 13,586,610 $ 10,202,871
Liabilities and Stockholders Equity
Current liabilities:
Current content liabilities $ 3,632,711 $ 2,789,023
Accounts payable 312,842 253,491
Accrued expenses 197,632 140,389
Deferred revenue 443,472 346,721
Total current liabilities 4,586,657 3,529,624
Non-current content liabilities 2,894,654 2,026,360
Long-term debt 3,364,311 2,371,362
Other non-current liabilities 61,188 52,099
Total liabilities 10,906,810 7,979,445
Commitments and contingencies (Note 5)
Stockholders equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized at December 31, 2016 and 2015; no shares
issued and outstanding at December 31, 2016 and 2015
Common stock, $0.001 par value; 4,990,000,000 shares authorized at December 31, 2016 and December 31,
2015, respectively; 430,054,212 and 427,940,440 issued and outstanding at December 31, 2016 and
December 31, 2015, respectively 1,599,762 1,324,809
Accumulated other comprehensive loss (48,565) (43,308)
Retained earnings 1,128,603 941,925
Total stockholders equity 2,679,800 2,223,426
Total liabilities and stockholders equity $ 13,586,610 $ 10,202,871

See accompanying notes to consolidated financial statements.

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