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Netflix Inc (NFLX) SEC Filing 10-K Annual report for the fiscal year ending Thursday, December 31, 2015

Netflix Inc

CIK: 1065280 Ticker: NFLX


Exhibit 99.1
January 19, 2016

Fellow shareholders,

On January 1st, just a few hours after the quarter closed, we crossed 75 million members. Our quarter-end 74.76 million members put us at over 17 million net additions for the year, showing how much the world is embracing Internet TV. We think we’ll grow by over 6 million members in Q1 given our expansion of Netflix to virtually everywhere but China. We bring great stories from all over the world to people all over the world. Our summary results and Q1 forecast are below.
 (in millions except per share data and Streaming Content Obligations)
Q4 '14
Q1 '15
Q2 '15
Q3 '15
Q4 '15
Q1 '16 Forecast
Total Streaming:
 
 
 
 
 
 
Revenue
$
1,305

$
1,400

$
1,481

$
1,581

$
1,672

$
1,813

Contribution Profit
$
178

$
247

$
248

$
277

$
270

$
302

Contribution Margin
13.6
 %
17.7
 %
16.7
 %
17.5
 %
16.2
 %
16.7
 %
Paid Memberships
54.48

59.62

62.71

66.02

70.84

77.19

Total Memberships
57.39

62.27

65.55

69.17

74.76

80.86

Net Additions
4.33

4.88

3.28

3.62

5.59

6.10

 
 
 
 
 
 
 
US Streaming:
 
 
 
 
 
 
Revenue
$
917

$
985

$
1,026

$
1,064

$
1,106

$
1,160

Contribution Profit
$
257

$
312

$
340

$
344

$
379

$
416

Contribution Margin
28.0
 %
31.7
 %
33.1
 %
32.4
 %
34.3
 %
35.9
 %
Paid Memberships
37.70

40.32

41.06

42.07

43.40

45.40

Total Memberships
39.11

41.40

42.30

43.18

44.74

46.49

Net Additions
1.90

2.28

0.90

0.88

1.56

1.75

 
 
 
 
 
 
 
International Streaming:
 
 
 
 
 
 
Revenue
$
388

$
415

$
455

$
517

$
566

$
653

Contribution Profit (Loss)
$
(79
)
$
(65
)
$
(92
)
$
(68
)
$
(109
)
$
(114
)
Contribution Margin
-20.3
 %
-15.6
 %
-20.2
 %
-13.1
 %
-19.2
 %
-17.5
 %
Paid Memberships
16.78

19.30

21.65

23.95

27.44

31.79

Total Memberships
18.28

20.88

23.25

25.99

30.02

34.37

Net Additions
2.43

2.60

2.37

2.74

4.04

4.35

 
 
 
 
 
 
 
Total (including DVD):
 
 
 
 
 
 
Operating Income
$
65

$
97

$
75

$
74

$
60

$
50

Net Income*
$
83

$
24

$
26

$
29

$
43

$
11

EPS*
$
0.19

$
0.05

$
0.06

$
0.07

$
0.10

$
0.03

 
 
 
 
 
 
 
Free Cash Flow
$
(78
)
$
(163
)
$
(229
)
$
(252
)
$
(276
)
 
EBITDA
$
110

$
140

$
119

$
123

$
111

 
Shares (FD)*
432.5

433.8

436.1

437.6

438.3

 
Streaming Content Obligations** ($B)
9.5

9.8

10.1

10.4

10.9

 
*EPS and shares adjusted for 7-for-1 stock split. Q4'14 Net Income/EPS includes a $39m / $0.10 benefit from a tax accrual release related to resolution of tax audit. Q4'15 Net Income/EPS includes a $13m / $0.03 benefit from a tax accrual release related to resolution of tax audits.
**Corresponds to our total known streaming content obligations as defined in our financial statements and related notes in our most recently filed SEC Form 10-K

                                                                                                                                                    1

The following information was filed by Netflix Inc (NFLX) on Tuesday, January 19, 2016 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Financial Statements, Disclosures and Schedules

Inside this 10-K Annual Report

Document And Entity Information
Consolidated Balance Sheets
Consolidated Balance Sheets (parenthetical)
Consolidated Statements Of Cash Flows
Consolidated Statements Of Comprehensive Income
Consolidated Statements Of Comprehensive Income (parenthetical)
Consolidated Statements Of Operations
Consolidated Statements Of Stockholders' Equity
Accumulated Other Comprehensive (loss) Income
Accumulated Other Comprehensive (loss) Income (details)
Accumulated Other Comprehensive (loss) Income (tables)
Balance Sheet Components
Balance Sheet Components (components Of Content Library) (details)
Balance Sheet Components (property And Equipment And Accumulated Depreciation) (details)
Balance Sheet Components (tables)
Commitments And Contingencies
Commitments And Contingencies (expected Timing Of Payments For Commitments) (details)
Commitments And Contingencies (future Minimum Payments Under Lease Financing Obligations And Non-cancelable Operating Leases) (details)
Commitments And Contingencies (lease Obligations) (narrative) (details)
Commitments And Contingencies (legal Proceedings) (details)
Commitments And Contingencies (streaming Content) (narrative) (details)
Commitments And Contingencies (tables)
Employee Benefit Plan
Employee Benefit Plan (details)
Guarantees???indemnification Obligations
Income Taxes
Income Taxes (components Of Provision For Income Taxes) (details)
Income Taxes (deferred Tax Assets And Liabilities) (details)
Income Taxes (narrative) (details)
Income Taxes (reconciliation Of Provision For Income Taxes) (details)
Income Taxes (schedule Of Income Before Income Taxes) (details)
Income Taxes (summary Of Changes In Unrecognized Tax Benefits) (details)
Income Taxes (tables)
Long-term Debt
Long-term Debt (8.50% Senior Notes) (narrative) (details)
Long-term Debt (narrative) (details)
Long-term Debt (senior Convertible Notes) (narrative) (details)
Long-term Debt (summary Of Long-term Debt) (details)
Long-term Debt (tables)
Organization And Summary Of Significant Accounting Policies
Organization And Summary Of Significant Accounting Policies (computation Of Net Income Per Share) (details)
Organization And Summary Of Significant Accounting Policies (narrative) (details)
Organization And Summary Of Significant Accounting Policies (policy)
Organization And Summary Of Significant Accounting Policies (summary Of Potential Common Shares Excluded From Diluted Calculation) (details)
Organization And Summary Of Significant Accounting Policies (tables)
Reclassifications
Reclassifications (narrative) (details)
Segment Information
Segment Information (information On Reportable Segments And Reconciliation To Consolidated Net Income) (details)
Segment Information (long-lived Assets By Geographic Areas) (details)
Segment Information (narrative) (details)
Segment Information (tables)
Selected Quarterly Financial Data (details)
Selected Quarterly Financial Data (tables)
Selected Quarterly Financial Data (unaudited)
Short-term Investments
Short-term Investments (available-for-sale Securities Reported At Fair Value) (details)
Short-term Investments (estimated Fair Value Of Short-term Investments By Contractual Maturity) (details)
Short-term Investments (tables)
Stockholders' Equity
Stockholders' Equity (narrative) (details)
Stockholders' Equity (preferred Stock And Voting Rights) (narrative) (details)
Stockholders' Equity (stock Option Plans) (narrative) (details)
Stockholders' Equity (stock-based Compensation) (narrative) (details)
Stockholders' Equity (summary Of Activity Related To Stock Option Plans) (details)
Stockholders' Equity (summary Of Assumptions Used To Value Stock Option Grants) (details)
Stockholders' Equity (tables)
Stockholders' Equity Stockholders' Equity (stock Split) (narrative) (details)
Ticker: NFLX
CIK: 1065280
Form Type: 10-K Annual Report
Accession Number: 0001065280-16-000047
Submitted to the SEC: Thu Jan 28 2016 2:55:13 PM EST
Accepted by the SEC: Thu Jan 28 2016
Period: Thursday, December 31, 2015
Industry: Video Tape Rental

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