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What does the data in case Exhibits 1, 2, 5, 6 and 7 reveal about NETFLIX financial and operating performance?

EXHIBIT 1 Netflix's Consolidated Statements of Operations, 2005-2018 (in millions of $, except per share data) 2018 2016 2010 2005 Revenues 2017 $11,692.7 8,033.0 $8,830.7 $2,162.6 $15,794.3 9,967.5 $682.2 6,257.5 1,357.4 465.8 5,836.8 3,659.7 2,800.8 805.3 216.4 Cost of revenues (almost all of which relates to amortization of content assets) Gross profit Operating expenses Technology and development Marketing General and administrative 953.7 780.2 163.3 35.4 1,221.8 2,369.5 630.3 1,436.3 293.8 144.6 1,097.5 315.7 431.1 64.5 35.5 Other | (2.0) 213.4 3,194.4 2,421.0 379.8 521.6 283.6 838.7 3.0 4,221.6 1,605.2 41,725 1,226.5 (115.2) Total operating expenses Operating income Interest and other income (expense) Income before income taxes Provision for (benefit from) income taxes 5.3 30.8 260.5 (15.9) 267.7 485.3 8.3 73.8 106.8 (33.7) 15.2 $ 1,211.2 (73.6) 558.9 $ $ 186.7 $ 160.8 $ 42.0 Net income $2.78 $1.29 $0.44 $0.44 $0.11 $2.68 $1.25 $0.43 $0.40 $0.09 Net income per share: Basic Diluted Weighted average common shares outstanding (in millions) Basic Diluted 435.4 431.9 428.8 365.5 374.5 458.5 451.2 446.8 438.7 380.1 CamScanner EXHIBIT 2 Selected Balance Sheet and Cash Flow Data for Netflix, 20052018 (in millions of $) 2016 2010 2005 2018 2017 Selected Balance Sheet Data $ 1,773.8 $350.4 $2,822.8 $212.3 $3,794.5 Cash, cash equivalents, and short-term investments 637.2 5,720.3 9,694.1 7,670.0 243.7 Current assets 362.0 57.0 Total content assets 20.112.1 14,682.0 25,974.4 19,012.7 982.1 364.7 Total assets 11,008.8 13,586.6 4,586.7 3,364.3 2,679.8 6,487.3 137.6 388.6 Current liabilities 5,466.3 6,499.4 200.0 10,360.1 5,238.8 3,582.0 290.2 226.3 $(2,680.5) $(1,785.9) $(1,474.0) $276.4 $157.5 Long-term debt* Stockholders' equity Cash Flow Data Net cash (used in) provided by operating activities Net cash provided by (used in) investing activities Net cash provided by (used in) financing activities (339.1) 34.3 49.8 (116.1) (133.2) 4,048.5 3,077.0 1,091.3 (100.0) 13.3 CamScanner EXHIBIT 5 Netflix's Performance by Business Segment, 20152018 (in millions, except for average monthly revenues per paying member and percentages) 2017 2016 2015 2018 47.9 58.5 52.8 43.4 1.5 2.1 2.0 1.3 44.7 54.8 49.4 60.6 4.7 5.6 5.8 5.55 $10.18 $9.21 $11.40 $5,077.3 $8.50 $4,180.3 2,487.2 2,855.8 $7,646.6 4,038.4 1,025.4 $2,582.9 $6,153.0 3,319.2 603.7 $2,078.5 412.9 $1,712.4 313.6 $1,375.5 33% 34% 34% 34% Domestic Streaming Segment Memberships Paid memberships at year-end Trial memberships at year-end Total Net membership additions Average monthly revenue per paying membership Revenues Cost of Revenues (Note 1) Marketing costs Contribution profit (Note 2) Contribution margin International Streaming Segment Memberships Paid memberships at year-end Trial memberships at year-end Total Net membership additions Average monthly revenue per paying membership Revenues Cost of Revenues (Note 1) Marketing costs Contribution profit (Note 2) Contribution margin 80.8 57.8 41.2 27.4 5.0 3.2 2.6 7.1 87.9 62.8 44.4 30.0 25.1 18.5 14.3 11.7 $9.43 $8.66 $7.81 $3,211.1 3,042.7 $7,782.1 5,776.0 1,334.1 $ 672.0 $5,089.2 4,359.6 832.5 $ (102.9) $7.48 $1,953.4 1,780.4 506.4 $ (333.4) (17)% 684.6 $ (516.2) (16)% 9% (2)% CamScanner 2015 2018 2017 2016 4.0 4.8 2.7 3.3 .1 .1 .0 .1 4.1 4.9 3.4 2.7 .7 .8 .9 $10.22 $10.19 $10.17 450.5 $10.30 $ 645.7 $ 365.6 $ $ 542.3 262.7 323.9 153.1 202.5 Domestic Streaming Segment Domestic DVD Segment Memberships Paid memberships at year-end Trial memberships at year-end Total Net membership losses Average monthly revenue per paying membership Revenues Cost of Revenues (Note 1) Marketing costs Contribution profit (Note 2) Contribution margin Global Totals Global streaming memberships at year end, including free trials Global streaming average monthly revenue per paying membership Revenues Operating income Operating margin Net income $ 321.8 $ 212.5 $ 248.0 55% $ 279.5 52% 50% 58% 93.8 74.8 148.5 117.6 $10.31 $9.43 $8.61 $8.15 $15,794.3 1,605.2 10% $ 1,221.2 $11,692.7 838.7 7% $ 558.9 $8,830.7 379.8 4% $ 186.7 $6,779.5 305.8 5% $ 122.6 CamScanner EXHIBIT 6 The Growing Financial Strain of Netflix's Strategic Emphasis on Producing Original Content In-House, 2014-2018 (in millions of dollars) 2018 2014 2017 2016 2015 $9,451.1 $19,285.9 $17,694.6 $10,902.2 5,771.6 3,773.0 9,805.8 13,043.4 38.6 $14,479.5 8,653.3 77.2 4,788.5 78.0 74.8 53.7 7,532.1 6,197.8 3,405.4 79.4 2,656.3 71.9 Streaming content obligations at year-end Additions to streaming content assets Additions to DVD content assets Amortization of streaming content assets Amortization of DVD content assets Net cash used in operating activities Proceeds from issuance of debt Proceeds from issuance of common stock Outstanding senior notes 60.7 79.0 (749.4) 16.4 41.2 (2,680.5) 3,921.8 (1,785.9) 3,020.5 (1,474.0) 1,000.0 37.0 1,500.0 400.0 78.0 60.5 88.4 124.5 10,360.0 3,364.3 885.8 6,499.4 2,371.4 -... Malliy in 2010 2016 and 2014 Annual Rennrt accessed August 5. 2019. CamScanner EXHIBIT 7 Netflix's Outstanding Long-Term Debt as of May 2019 Debt Issues Principal Amount at Par Issue Date Interest Due Dates Maturity Date 5.375% Senior Notes $1.34 billion November 2029 April 2019 April 2019 $900 million 3.875% Senior Notes November 2029 6.375% Senior Notes $800 million October 2018 4.625% Senior Notes $1,260 million October 2018 5.875% Senior Notes $1.9 billion April 2018 4.875% Senior Notes $1.6 billion October 2017 3.625% Senior Notes May 15 and November 15 May 15 and November 15 May 15 and November 15 May 15 and November 15 April 15 and November 15 April 15 and October 15 May 15 and November 15 May 15 and November 15 April 15 and October 15 April 15 and October 15 March 1 and September 1 April 1 and October 1 February 1 and August 1 $1.561 billion $1.0 billion May 2029 May 2029 November 2028 April 2028 May 2027 November 2026 February 2022 February 2025 March 2024 February 2022 February 2021 4.375% Senior Notes 5.50% Senior Notes $700 million May 2017 October 2016 February 2015 February 2015 February 2014 February 2015 February 2013 5.875% Senior Notes $800 million 5.750% Senior Notes $400 million $700 million 5.50% Senior Notes 5.375% Senior Notes $500 million CamScanner EXHIBIT 1 Netflix's Consolidated Statements of Operations, 2005-2018 (in millions of $, except per share data) 2018 2016 2010 2005 Revenues 2017 $11,692.7 8,033.0 $8,830.7 $2,162.6 $15,794.3 9,967.5 $682.2 6,257.5 1,357.4 465.8 5,836.8 3,659.7 2,800.8 805.3 216.4 Cost of revenues (almost all of which relates to amortization of content assets) Gross profit Operating expenses Technology and development Marketing General and administrative 953.7 780.2 163.3 35.4 1,221.8 2,369.5 630.3 1,436.3 293.8 144.6 1,097.5 315.7 431.1 64.5 35.5 Other | (2.0) 213.4 3,194.4 2,421.0 379.8 521.6 283.6 838.7 3.0 4,221.6 1,605.2 41,725 1,226.5 (115.2) Total operating expenses Operating income Interest and other income (expense) Income before income taxes Provision for (benefit from) income taxes 5.3 30.8 260.5 (15.9) 267.7 485.3 8.3 73.8 106.8 (33.7) 15.2 $ 1,211.2 (73.6) 558.9 $ $ 186.7 $ 160.8 $ 42.0 Net income $2.78 $1.29 $0.44 $0.44 $0.11 $2.68 $1.25 $0.43 $0.40 $0.09 Net income per share: Basic Diluted Weighted average common shares outstanding (in millions) Basic Diluted 435.4 431.9 428.8 365.5 374.5 458.5 451.2 446.8 438.7 380.1 CamScanner EXHIBIT 2 Selected Balance Sheet and Cash Flow Data for Netflix, 20052018 (in millions of $) 2016 2010 2005 2018 2017 Selected Balance Sheet Data $ 1,773.8 $350.4 $2,822.8 $212.3 $3,794.5 Cash, cash equivalents, and short-term investments 637.2 5,720.3 9,694.1 7,670.0 243.7 Current assets 362.0 57.0 Total content assets 20.112.1 14,682.0 25,974.4 19,012.7 982.1 364.7 Total assets 11,008.8 13,586.6 4,586.7 3,364.3 2,679.8 6,487.3 137.6 388.6 Current liabilities 5,466.3 6,499.4 200.0 10,360.1 5,238.8 3,582.0 290.2 226.3 $(2,680.5) $(1,785.9) $(1,474.0) $276.4 $157.5 Long-term debt* Stockholders' equity Cash Flow Data Net cash (used in) provided by operating activities Net cash provided by (used in) investing activities Net cash provided by (used in) financing activities (339.1) 34.3 49.8 (116.1) (133.2) 4,048.5 3,077.0 1,091.3 (100.0) 13.3 CamScanner EXHIBIT 5 Netflix's Performance by Business Segment, 20152018 (in millions, except for average monthly revenues per paying member and percentages) 2017 2016 2015 2018 47.9 58.5 52.8 43.4 1.5 2.1 2.0 1.3 44.7 54.8 49.4 60.6 4.7 5.6 5.8 5.55 $10.18 $9.21 $11.40 $5,077.3 $8.50 $4,180.3 2,487.2 2,855.8 $7,646.6 4,038.4 1,025.4 $2,582.9 $6,153.0 3,319.2 603.7 $2,078.5 412.9 $1,712.4 313.6 $1,375.5 33% 34% 34% 34% Domestic Streaming Segment Memberships Paid memberships at year-end Trial memberships at year-end Total Net membership additions Average monthly revenue per paying membership Revenues Cost of Revenues (Note 1) Marketing costs Contribution profit (Note 2) Contribution margin International Streaming Segment Memberships Paid memberships at year-end Trial memberships at year-end Total Net membership additions Average monthly revenue per paying membership Revenues Cost of Revenues (Note 1) Marketing costs Contribution profit (Note 2) Contribution margin 80.8 57.8 41.2 27.4 5.0 3.2 2.6 7.1 87.9 62.8 44.4 30.0 25.1 18.5 14.3 11.7 $9.43 $8.66 $7.81 $3,211.1 3,042.7 $7,782.1 5,776.0 1,334.1 $ 672.0 $5,089.2 4,359.6 832.5 $ (102.9) $7.48 $1,953.4 1,780.4 506.4 $ (333.4) (17)% 684.6 $ (516.2) (16)% 9% (2)% CamScanner 2015 2018 2017 2016 4.0 4.8 2.7 3.3 .1 .1 .0 .1 4.1 4.9 3.4 2.7 .7 .8 .9 $10.22 $10.19 $10.17 450.5 $10.30 $ 645.7 $ 365.6 $ $ 542.3 262.7 323.9 153.1 202.5 Domestic Streaming Segment Domestic DVD Segment Memberships Paid memberships at year-end Trial memberships at year-end Total Net membership losses Average monthly revenue per paying membership Revenues Cost of Revenues (Note 1) Marketing costs Contribution profit (Note 2) Contribution margin Global Totals Global streaming memberships at year end, including free trials Global streaming average monthly revenue per paying membership Revenues Operating income Operating margin Net income $ 321.8 $ 212.5 $ 248.0 55% $ 279.5 52% 50% 58% 93.8 74.8 148.5 117.6 $10.31 $9.43 $8.61 $8.15 $15,794.3 1,605.2 10% $ 1,221.2 $11,692.7 838.7 7% $ 558.9 $8,830.7 379.8 4% $ 186.7 $6,779.5 305.8 5% $ 122.6 CamScanner EXHIBIT 6 The Growing Financial Strain of Netflix's Strategic Emphasis on Producing Original Content In-House, 2014-2018 (in millions of dollars) 2018 2014 2017 2016 2015 $9,451.1 $19,285.9 $17,694.6 $10,902.2 5,771.6 3,773.0 9,805.8 13,043.4 38.6 $14,479.5 8,653.3 77.2 4,788.5 78.0 74.8 53.7 7,532.1 6,197.8 3,405.4 79.4 2,656.3 71.9 Streaming content obligations at year-end Additions to streaming content assets Additions to DVD content assets Amortization of streaming content assets Amortization of DVD content assets Net cash used in operating activities Proceeds from issuance of debt Proceeds from issuance of common stock Outstanding senior notes 60.7 79.0 (749.4) 16.4 41.2 (2,680.5) 3,921.8 (1,785.9) 3,020.5 (1,474.0) 1,000.0 37.0 1,500.0 400.0 78.0 60.5 88.4 124.5 10,360.0 3,364.3 885.8 6,499.4 2,371.4 -... Malliy in 2010 2016 and 2014 Annual Rennrt accessed August 5. 2019. CamScanner EXHIBIT 7 Netflix's Outstanding Long-Term Debt as of May 2019 Debt Issues Principal Amount at Par Issue Date Interest Due Dates Maturity Date 5.375% Senior Notes $1.34 billion November 2029 April 2019 April 2019 $900 million 3.875% Senior Notes November 2029 6.375% Senior Notes $800 million October 2018 4.625% Senior Notes $1,260 million October 2018 5.875% Senior Notes $1.9 billion April 2018 4.875% Senior Notes $1.6 billion October 2017 3.625% Senior Notes May 15 and November 15 May 15 and November 15 May 15 and November 15 May 15 and November 15 April 15 and November 15 April 15 and October 15 May 15 and November 15 May 15 and November 15 April 15 and October 15 April 15 and October 15 March 1 and September 1 April 1 and October 1 February 1 and August 1 $1.561 billion $1.0 billion May 2029 May 2029 November 2028 April 2028 May 2027 November 2026 February 2022 February 2025 March 2024 February 2022 February 2021 4.375% Senior Notes 5.50% Senior Notes $700 million May 2017 October 2016 February 2015 February 2015 February 2014 February 2015 February 2013 5.875% Senior Notes $800 million 5.750% Senior Notes $400 million $700 million 5.50% Senior Notes 5.375% Senior Notes $500 million CamScanner

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