Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
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Income Statement [Abstract] | |||
Revenues | $ 20,156,447 | $ 15,794,341 | $ 11,692,713 |
Cost of revenues | 12,440,213 | 9,967,538 | 8,033,000 |
Marketing | 2,652,462 | 2,369,469 | 1,436,281 |
Technology and development | 1,545,149 | 1,221,814 | 953,710 |
General and administrative | 914,369 | 630,294 | 431,043 |
Operating income | 2,604,254 | 1,605,226 | 838,679 |
Other income (expense): | |||
Interest expense | (626,023) | (420,493) | (238,204) |
Interest and other income (expense) | 84,000 | 41,725 | (115,154) |
Income before income taxes | 2,062,231 | 1,226,458 | 485,321 |
Provision for (benefit from) income taxes | 195,315 | 15,216 | (73,608) |
Net income | $ 1,866,916 | $ 1,211,242 | $ 558,929 |
Earnings per share: | |||
Basic (in USD per share) | $ 4.26 | $ 2.78 | $ 1.29 |
Diluted (in USD per share) | $ 4.13 | $ 2.68 | $ 1.25 |
Weighted-average common shares outstanding: | |||
Basic (in shares) | 437,799 | 435,374 | 431,885 |
Diluted (in shares) | 451,765 | 451,244 | 446,814 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
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Statement of Comprehensive Income [Abstract] | |||
Net income | $ 1,866,916 | $ 1,211,242 | $ 558,929 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustments | (3,939) | 975 | 27,409 |
Change in unrealized gains (losses) on available-for-sale securities, net of tax of $0, $0, and $378, respectively | 0 | 0 | 599 |
Total other comprehensive income (loss) | (3,939) | 975 | 28,008 |
Comprehensive income | $ 1,862,977 | $ 1,212,217 | $ 586,937 |
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
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Statement of Comprehensive Income [Abstract] | |||
Change in unrealized gains (losses) on available for sale securities, tax | $ 0 | $ 0 | $ 378 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Dec. 31, 2019 |
Dec. 31, 2018 |
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Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 4,990,000,000 | 4,990,000,000 |
Common stock, shares issued | 438,806,649 | 436,598,597 |
Common stock, shares outstanding | 438,806,649 | 436,598,597 |
Organization and Summary of Significant Accounting Policies |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Summary of Significant Accounting Policies | Organization and Summary of Significant Accounting Policies Description of Business Netflix, Inc. (the “Company”) was incorporated on August 29, 1997 and began operations on April 14, 1998. The Company is the world’s leading subscription streaming entertainment service with over 167 million paid streaming memberships in over 190 countries enjoying TV series, documentaries and feature films across a wide variety of genres and languages. Members can watch as much as they want, anytime, anywhere, on any internet-connected screen. Members can play, pause and resume watching, all without commercials. Additionally, over two million members in the United States ("U.S.") subscribe to our legacy DVD-by-mail service. Basis of Presentation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated. Reclassification Certain prior period amounts in the Consolidated Statements of Cash Flows and the Consolidated Balance Sheets have been reclassified to conform to the current period presentation. In the Consolidated Statements of Cash Flows, the amortization of DVD content assets has been reclassified into "Other non-cash items" within "Cash flows from operating activities". In addition, cash flows from the acquisition of DVD content assets have been reclassified into "Change in other assets" within "Cash flows from investing activities". In the Consolidated Balance Sheets, DVD content assets have been reclassified from "Non-current content assets, net" to "Other non-current assets" and DVD content liabilities have been reclassified from "Current content liabilities" and "Non-current content liabilities" to "Accrued expenses and other liabilities" and "Other non-current liabilities", respectively. There is no change to consolidated operating income, net income or cash flows as a result of this change in classification. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include the streaming content asset amortization policy and the recognition and measurement of income tax assets and liabilities. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. On an ongoing basis, the Company evaluates these assumptions, judgments and estimates. Actual results may differ from these estimates. Recently adopted accounting pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-02, Leases (Topic 842) in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under prior GAAP. ASU 2016-02 requires that a lessee should recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. The Company adopted ASU 2016-02 in the first quarter of 2019 utilizing the modified retrospective transition method through a cumulative-effect adjustment at the beginning of the first quarter of 2019. The Company has elected the package of practical expedients, which allows the Company not to reassess (1) whether any expired or existing contracts as of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date and (3) initial direct costs for any existing leases as of the adoption date. The Company did not elect to apply the hindsight practical expedient when determining lease term and assessing impairment of right-of-use assets. The adoption of ASU 2016-02 on January 1, 2019 resulted in the recognition of right-of-use assets of approximately $743 million, lease liabilities for operating leases of approximately $813 million and a cumulative-effect adjustment on retained earnings of $2 million on its Consolidated Balance Sheets, with no material impact to its Consolidated Statements of Operations. See Note 3 for further information regarding the impact of the adoption of ASU 2016-02 on the Company's financial statements. In March 2019, the FASB issued ASU 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials, in order to align the accounting for production costs of an episodic television series with the accounting for production costs of films by removing the content distinction for capitalization. ASU 2019-02 also requires that an entity reassess estimates of the use of a film in a film group and account for any changes prospectively. In addition, ASU 2019-02 requires that an entity test films and license agreements for program material for impairment at a film group level when the film or license agreements are predominantly monetized with other films and license agreements. ASU 2019-02 is effective for fiscal years beginning after December 15, 2019 and early adoption is permitted. The Company early adopted ASU 2019-02 in the first quarter of 2019 and as such has included all content assets (licensed and produced) as "Non-current content assets, net" on its Consolidated Balance Sheets, beginning with the period of adoption. There was no material impact to its Consolidated Statements of Operations. See the Company's updated Streaming Content policy below for further details. Recently issued accounting pronouncements not yet adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326), in order to improve financial reporting of expected credit losses on financial instruments and other commitments to extend credit. ASU 2016-13 requires that an entity measure and recognize expected credit losses for financial assets held at amortized cost and replaces the incurred loss impairment methodology in current GAAP with a methodology that requires consideration of a broader range of information to estimate credit losses. While the Company is continuing to assess the potential impacts of ASU 2016-13, it does not expect ASU 2016-13 to have a material effect on its financial statements. Cash Equivalents The Company considers investments in instruments purchased with an original maturity of 90 days or less to be cash equivalents. The Company also classifies amounts in transit from payment processors for customer credit card and debit card transactions as cash equivalents. Streaming Content The Company acquires, licenses and produces content, including original programming, in order to offer members unlimited viewing of TV series and films. The content licenses are for a fixed fee and specific windows of availability. Payment terms for certain content licenses and the production of content require more upfront cash payments relative to the amortization expense. Payments for content, including additions to streaming assets and the changes in related liabilities, are classified within "Net cash used in operating activities" on the Consolidated Statements of Cash Flows. The Company recognizes content assets (licensed and produced) as “Non-current content assets, net” on the Consolidated Balance Sheets. For licenses, the Company capitalizes the fee per title and records a corresponding liability at the gross amount of the liability when the license period begins, the cost of the title is known and the title is accepted and available for streaming. For productions, the Company capitalizes costs associated with the production, including development costs, direct costs and production overhead. Participations and residuals are expensed in line with the amortization of production costs. Based on factors including historical and estimated viewing patterns, the Company amortizes the content assets (licensed and produced) in “Cost of revenues” on the Consolidated Statements of Operations over the shorter of each title's contractual window of availability or estimated period of use or ten years, beginning with the month of first availability. The amortization is on an accelerated basis, as the Company typically expects more upfront viewing, for instance due to additional merchandising and marketing efforts and film amortization is more accelerated than TV series amortization. On average, over 90% of a licensed or produced streaming content asset is expected to be amortized within four years after its month of first availability. The Company reviews factors impacting the amortization of the content assets on an ongoing basis. The Company's estimates related to these factors require considerable management judgment. The Company's business model is subscription based as opposed to a model generating revenues at a specific title level. Content assets (licensed and produced) are predominantly monetized as a group and therefore are reviewed in aggregate at a group level when an event or change in circumstances indicates a change in the expected usefulness of the content or that the fair value may be less than unamortized cost. To date, the Company has not identified any such event or changes in circumstances. If such changes are identified in the future, these aggregated content assets will be stated at the lower of unamortized cost or fair value. In addition, unamortized costs for assets that have been, or are expected to be, abandoned are written off. Property and Equipment Property and equipment are carried at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the shorter of the estimated useful lives of the respective assets, generally up to 30 years, or the expected lease term for leasehold improvements, if applicable. Trade Receivables Trade receivables consist primarily of amounts related to members and payment partners that collect membership fees on the Company's behalf. The Company evaluates the need for an allowance for doubtful accounts based on historical collection trends, the financial condition of its payment partners, and external market factors. Revenue Recognition The Company's primary source of revenues is from monthly membership fees. Members are billed in advance of the start of their monthly membership and revenues are recognized ratably over each monthly membership period. Revenues are presented net of the taxes that are collected from members and remitted to governmental authorities. The Company is the principal in all its relationships where partners, including consumer electronics (“CE”) manufacturers, multichannel video programming distributors (“MVPDs”), mobile operators and internet service providers (“ISPs”), provide access to the service as the Company retains control over service delivery to its members. Typically, payments made to the partners, such as for marketing, are expensed, but in the case where the price that the member pays is established by the partners and there is no standalone price for the Netflix service (for instance, in a bundle), these payments are recognized as a reduction of revenues. The following tables summarize streaming revenue, paid net membership additions, and ending paid memberships by region for the years December 31, 2019, 2018 and 2017, respectively: United States and Canada (UCAN)
Europe, Middle East, and Africa (EMEA)
Latin America (LATAM)
Asia-Pacific (APAC)
Total U.S. revenues, inclusive of DVD revenues not reported in the tables above, were $9.5 billion, $8.0 billion and $6.6 billion for the years ended December 31, 2019, 2018 and 2017, respectively. DVD revenues were $0.3 billion, $0.4 billion, and $0.5 billion for the years ended December 31, 2019, 2018 and 2017, respectively. Deferred revenue consists of membership fees billed that have not been recognized, as well as gift and other prepaid memberships that have not been fully redeemed. As of December 31, 2019, total deferred revenue was $925 million, the vast majority of which was related to membership fees billed that are expected to be recognized as revenue within the next month. The remaining deferred revenue balance, which is related to gift cards and other prepaid memberships, will be recognized as revenue over the period of service after redemption, which is expected to occur over the next 12 months. The $164 million increase in deferred revenue as compared to the balance of $761 million for the year ended December 31, 2018, is a result of the increase in membership fees billed due to increased memberships and average monthly revenue per paying memberships. Marketing Marketing expenses consist primarily of advertising expenses and certain payments made to the Company’s partners, including CE manufacturers, MVPDs, mobile operators and ISPs. Advertising expenses include promotional activities such as digital and television advertising. Advertising costs are expensed as incurred. Advertising expenses were $1,879 million, $1,808 million and $1,091 million for the years ended December 31, 2019, 2018 and 2017, respectively. Marketing expenses also include payroll and related expenses for personnel that support the Company's marketing activities. Research and Development Research and development expenses consist of payroll and related costs incurred in making improvements to our service offerings. Research and development expenses were $1,673 million, $1,218 million and $981 million for the years ended December 31, 2019, 2018 and 2017, respectively. Income Taxes The Company records a provision for income taxes for the anticipated tax consequences of the reported results of operations using the asset and liability method. Deferred income taxes are recognized by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases as well as net operating loss and tax credit carryforwards. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefits for which future realization is uncertain. The Company did not recognize certain tax benefits from uncertain tax positions within the provision for income taxes. The Company may recognize a tax benefit only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. See Note 8 to the consolidated financial statements for further information regarding income taxes. Foreign Currency The functional currency for the Company's subsidiaries is determined based on the primary economic environment in which the subsidiary operates. The Company translates the assets and liabilities of its non-U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in effect at the end of each period. Revenues and expenses for these subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are recognized in cumulative translation adjustment included in "Accumulated other comprehensive loss" in Stockholders’ equity on the Consolidated Balance Sheets. The Company remeasures monetary assets and liabilities that are not denominated in the functional currency at exchange rates in effect at the end of each period. Gains and losses from these remeasurements are recognized in interest and other income (expense). Foreign currency transactions resulted in a gain of $7 million for the year ended December 31, 2019, and in a loss of $1 million and $128 million for the years ended December 31, 2018 and 2017, respectively. Earnings Per Share Basic earnings per share is computed using the weighted-average number of outstanding shares of common stock during the period. Diluted earnings per share is computed using the weighted-average number of outstanding shares of common stock and, when dilutive, potential common shares outstanding during the period. Potential common shares consist of incremental shares issuable upon the assumed exercise of stock options. The computation of earnings per share is as follows:
Employee stock options with exercise prices greater than the average market price of the common stock were excluded from the diluted calculation as their inclusion would have been anti-dilutive. The following table summarizes the potential common shares excluded from the diluted calculation:
Stock-Based Compensation The Company grants fully vested non-qualified stock options to its employees on a monthly basis. As a result of immediate vesting, stock-based compensation expense is fully recognized on the grant date, and no estimate is required for post-vesting option forfeitures. See Note 7 to the consolidated financial statements for further information regarding stock-based compensation.
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Cash, Cash Equivalents and Restricted Cash |
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Short-Term Investments And Fair Value Measurement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash The following tables summarize the Company's cash, cash equivalents and restricted cash as of December 31, 2019 and 2018:
Other current assets include restricted cash for self insurance. Non-current assets include restricted cash related to workers compensation deposits and letter of credit agreements. Balances as of December 31, 2019 are included in cash, cash equivalents, and restricted cash on the Consolidated Statements of Cash Flows. Foreign time deposits of $300 million, classified as Level 2 securities, were included in Cash and cash equivalents on the Company's Balance Sheet as of December 31, 2019. The fair value of cash equivalents included in the Level 2 category is based on observable inputs, such as quoted prices for similar assets at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly. See Note 4 to the consolidated financial statements for further information regarding the fair value of the Company’s senior notes.
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Balance Sheet Components |
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Balance Sheet Components Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Components | Balance Sheet Components Content Assets Content assets consisted of the following:
As of December 31, 2019, approximately $5,793 million, $3,733 million, and $2,518 million of the $14,703 million unamortized cost of the licensed content is expected to be amortized in each of the next three years. As of December 31, 2019, approximately $1,552 million, $1,187 million, and $882 million of the $4,383 million unamortized cost of the produced content that has been released is expected to be amortized in each of the next three years. As of December 31, 2019, the amount of accrued participations and residuals was not material. The following table represents the amortization of streaming content assets:
Property and Equipment, Net Property and equipment and accumulated depreciation consisted of the following:
Leases The Company has entered into operating leases primarily for real estate. These leases generally have terms which range from 1 year to 15 years, and often include one or more options to renew. These renewal terms can extend the lease term from 1 year to 15 years, and are included in the lease term when it is reasonably certain that the Company will exercise the option. These operating leases are included in "Other non-current assets" on the Company's December 31, 2019 Consolidated Balance Sheets, and represent the Company’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in "Accrued expenses and other liabilities" and "Other non-current liabilities" on the Company's December 31, 2019 Consolidated Balance Sheets. Based on the present value of the lease payments for the remaining lease term of the Company's existing leases, the Company recognized right-of-use assets of approximately $743 million and lease liabilities for operating leases of approximately $813 million on January 1, 2019. Operating lease right-of-use assets and liabilities commencing after January 1, 2019 are recognized at commencement date based on the present value of lease payments over the lease term. As of December 31, 2019, total right-of-use assets and operating lease liabilities were approximately $1,532 million and $1,613 million, respectively. The Company has entered into various short-term operating leases, primarily for marketing billboards, with an initial term of twelve months or less. These leases are not recorded on the Company's Consolidated Balance Sheets. All operating lease expense is recognized on a straight-line basis over the lease term. For the year ended December 31, 2019, the Company recognized approximately $448 million in total lease costs, which was comprised of $218 million in operating lease costs for right-of-use assets and $230 million in short-term lease costs related to short-term operating leases. Prior to the adoption of ASU 2016-02 in the first quarter of 2019, the Company recognized minimum rental expense on a straight-line basis over the lease term. The Company used the date of initial possession to begin amortization, which is generally when the Company entered the space and began to make improvements in preparation for intended use. For scheduled rent escalation clauses during the lease terms or for rental payments commencing at a date other than the date of initial occupancy, the Company recorded minimum rental expenses on a straight-line basis over the terms of the leases in the Consolidated Statements of Operations. Rent expense associated with operating leases was $107 million and $75 million for the years ended December 31, 2018 and December 31, 2017, respectively. Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments. The Company has certain contracts for real estate and marketing which may contain lease and non-lease components which it has elected to treat as a single lease component. Information related to the Company's right-of-use assets and related lease liabilities were as follows:
(1) Balance includes $743 million for operating leases existing on January 1, 2019.
Maturities of lease liabilities as of December 31, 2019 were as follows (in thousands):
The Company has additional operating leases for real estate of $699 million which have not commenced as of December 31, 2019, and as such, have not been recognized on the Company's Consolidated Balance Sheets. These operating leases are expected to commence in 2020 with lease terms between 1 year and 15 years. Other Current Assets Other current assets consisted of the following:
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Long-term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt | Long-term Debt As of December 31, 2019, the Company had aggregate outstanding long-term notes of $14,759 million, net of $114 million of issuance costs, with varying maturities (the "Notes"). Each of the Notes were issued at par and are senior unsecured obligations of the Company. Interest is payable semi-annually at fixed rates. A portion of the outstanding long-term notes is denominated in foreign currency (comprised of €4,700 million) and is remeasured into U.S. dollars at each balance sheet date (with remeasurement gain totaling $46 million for the year ended December 31, 2019). The following table provides a summary of the Company's outstanding long-term debt and the fair values based on quoted market prices in less active markets as of December 31, 2019 and December 31, 2018:
(1) Debt is denominated in euro with a €1,300 million principal amount. Total proceeds were $1,421 million. (2) Debt is denominated in euro with a €1,100 million principal amount. Total proceeds were $1,262 million. (3) Debt is denominated in euro with a €1,200 million principal amount. Total proceeds were $1,343 million. (4) Debt is denominated in euro with a €1,100 million principal amount. Total proceeds were $1,226 million. The expected timing of principal and interest payments for these Notes are as follows:
Each of the Notes are repayable in whole or in part upon the occurrence of a change of control, at the option of the holders, at a purchase price in cash equal to 101% of the principal plus accrued interest. The Company may redeem the Notes prior to maturity in whole or in part at an amount equal to the principal amount thereof plus accrued and unpaid interest and an applicable premium. The Notes include, among other terms and conditions, limitations on the Company's ability to create, incur or allow certain liens; enter into sale and lease-back transactions; create, assume, incur or guarantee additional indebtedness of certain of the Company's subsidiaries; and consolidate or merge with, or convey, transfer or lease all or substantially all of the Company's and its subsidiaries assets, to another person. As of December 31, 2019 and December 31, 2018, the Company was in compliance with all related covenants. Revolving Credit Facility In July 2017, the Company entered into a $500 million unsecured revolving credit facility (“Revolving Credit Agreement”), with an uncommitted incremental facility to increase the amount of the revolving credit facility by up to an additional $250 million, subject to certain terms and conditions. On March 29, 2019, the agreement was amended to extend the maturity date from July 27, 2022 to March 29, 2024 and to increase the size of the credit facility to $750 million, without impacting the existing uncommitted incremental facility. Revolving loans may be borrowed, repaid and reborrowed until March 29, 2024, at which time all amounts borrowed must be repaid. The Company may use the proceeds of future borrowings under the Revolving Credit Agreement for working capital and general corporate purposes. As of December 31, 2019, no amounts have been borrowed under the Revolving Credit Agreement. The borrowings under the Revolving Credit Agreement bear interest, at the Company’s option, of either (i) a floating rate equal to a base rate (the “Alternate Base Rate”) or (ii) a rate equal to an adjusted London interbank offered rate (the “Adjusted LIBO Rate”), plus a margin of 0.75%. The Alternate Base Rate is defined as the greatest of (A) the rate of interest published by the Wall Street Journal, from time to time, as the prime rate, (B) the federal funds rate, plus 0.500% and (C) the Adjusted LIBO Rate for a one-month interest period, plus 1.00%. The Adjusted LIBO Rate is defined as the London interbank offered rate for deposits in U.S. dollars, for the relevant interest period, adjusted for statutory reserve requirements, but in no event shall the Adjusted LIBO Rate be less than 0.00% per annum. Regulatory authorities that oversee financial markets have announced that after the end of 2021, they would no longer compel banks currently reporting information used to set the LIBO Rate to continue to make rate submissions. As a result, it is possible that beginning in 2022, the LIBO Rate will no longer be available as a reference rate. Under the terms of the Company's Revolving Credit Agreement, in the event of the discontinuance of the LIBO Rate, a mutually agreed-upon alternate benchmark rate will be established to replace the LIBO Rate. The Company and Lenders shall in good faith establish an alternate benchmark rate which places the Lenders and the Company in the same economic position that existed immediately prior to the discontinuation of the LIBO Rate. The Company does not anticipate that the discontinuance of the LIBO Rate will materially impact its liquidity or financial position. The Company is also obligated to pay a commitment fee on the undrawn amounts of the Revolving Credit Agreement at an annual rate of 0.10%. The Revolving Credit Agreement requires the Company to comply with certain covenants, including covenants that limit or restrict the ability of the Company’s subsidiaries to incur debt and limit or restrict the ability of the Company and its subsidiaries to grant liens and enter into sale and leaseback transactions; and, in the case of the Company or a guarantor, merge, consolidate, liquidate, dissolve or sell, transfer, lease or otherwise dispose of all or substantially all of the assets of the Company and its subsidiaries, taken as a whole. As of December 31, 2019, the Company was in compliance with all related covenants.
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Streaming Content At December 31, 2019, the Company had $19.5 billion of obligations comprised of $4.4 billion included in "Current content liabilities" and $3.3 billion of "Non-current content liabilities" on the Consolidated Balance Sheets and $11.8 billion of obligations that are not reflected on the Consolidated Balance Sheets as they did not yet meet the criteria for asset recognition. At December 31, 2018, the Company had $19.3 billion of obligations comprised of $4.7 billion included in "Current content liabilities" and $3.8 billion of "Non-current content liabilities" on the Consolidated Balance Sheets and $10.8 billion of obligations that are not reflected on the Consolidated Balance Sheets as they did not yet meet the criteria for asset recognition. The expected timing of payments for these streaming content obligations is as follows:
Content obligations include amounts related to the acquisition, licensing and production of streaming content. Obligations that are in non-U.S. dollar currencies are translated to the U.S. dollar at period end rates. An obligation for the production of content includes non-cancelable commitments under creative talent and employment agreements as well as other production related commitments. An obligation for the acquisition and licensing of content is incurred at the time the Company enters into an agreement to obtain future titles. Once a title becomes available, a content liability is recorded on the Consolidated Balance Sheets. Certain agreements include the obligation to license rights for unknown future titles, the ultimate quantity and/or fees for which are not yet determinable as of the reporting date. Traditional film output deals, or certain TV series license agreements where the number of seasons to be aired is unknown, are examples of such license agreements. The Company does not include any estimated obligation for these future titles beyond the known minimum amount. However, the unknown obligations are expected to be significant. Legal Proceedings From time to time, in the normal course of its operations, the Company is subject to litigation matters and claims, including claims relating to employee relations, business practices and patent infringement. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict and the Company's view of these matters may change in the future as the litigation and events related thereto unfold. The Company expenses legal fees as incurred. The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Company's operations or its financial position, liquidity or results of operations. The Company is involved in litigation matters not listed herein but does not consider the matters to be material either individually or in the aggregate at this time. The Company's view of the matters not listed may change in the future as the litigation and events related thereto unfold.
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Guarantees—Indemnification Obligations |
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Guarantees [Abstract] | |
Guarantees—Indemnification Obligations | Guarantees—Indemnification Obligations In the ordinary course of business, the Company has entered into contractual arrangements under which it has agreed to provide indemnification of varying scope and terms to business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements and out of intellectual property infringement claims made by third parties. In these circumstances, payment may be conditional on the other party making a claim pursuant to the procedures specified in the particular contract. The Company’s obligations under these agreements may be limited in terms of time or amount, and in some instances, the Company may have recourse against third parties for certain payments. In addition, the Company has entered into indemnification agreements with its directors and certain of its officers that will require it, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The terms of such obligations vary. It is not possible to make a reasonable estimate of the maximum potential amount of future payments under these or similar agreements due to the conditional nature of the Company’s obligations and the unique facts and circumstances involved in each particular agreement. No amount has been accrued in the accompanying consolidated financial statements with respect to these indemnification guarantees.
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Stockholders' Equity |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders’ Equity Voting Rights The holders of each share of common stock shall be entitled to one vote per share on all matters to be voted upon by the Company’s stockholders. Stock Option Plans In June 2011, the Company adopted the 2011 Stock Plan. The 2011 Stock Plan provides for the grant of incentive stock options to employees and for the grant of non-statutory stock options, stock appreciation rights, restricted stock and restricted stock units to employees, directors and consultants. A summary of the activities related to the Company’s stock option plans is as follows:
The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the Company’s closing stock price on the last trading day of 2019 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on the last trading day of 2019. This amount changes based on the fair market value of the Company’s common stock. Total intrinsic value of options exercised for the years ended December 31, 2019, 2018 and 2017 was $666 million, $863 million and $464 million, respectively. Cash received from option exercises for the years ended December 31, 2019, 2018 and 2017 was $72 million, $125 million and $88 million, respectively. Stock-Based Compensation Stock options granted are exercisable for the full ten year contractual term regardless of employment status. The following table summarizes the assumptions used to value option grants using the lattice-binomial model and the valuation data:
The Company considers several factors in determining the suboptimal exercise factor, including the historical and estimated option exercise behavior. The Company calculates expected volatility based solely on implied volatility. The Company believes that implied volatility of publicly traded options in its common stock is more reflective of market conditions, and given consistently high trade volumes of the options, can reasonably be expected to be a better indicator of expected volatility than historical volatility of its common stock. In valuing shares issued under the Company’s employee stock option plans, the Company bases the risk-free interest rate on U.S. Treasury zero-coupon issues with terms similar to the contractual term of the options. The Company does not anticipate paying any cash dividends in the foreseeable future and therefore uses an expected dividend yield of zero in the option valuation model. The Company does not use a post-vesting termination rate as options are fully vested upon grant date. Accumulated Other Comprehensive Loss The following table summarizes the changes in accumulated balances of other comprehensive loss, net of tax:
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Income before provision for income taxes was as follows:
The components of provision for (benefit from) income taxes for all periods presented were as follows:
In connection with the Tax Cuts and Jobs Act of 2017 the Company simplified its global corporate structure, effective April 1, 2019. The tax impacts of such simplifications were not material to the financial statements as a whole. During the fourth quarter of 2019, the United States Treasury issued final regulations with respect to certain aspects related to the Tax Cuts and Jobs Act of 2017. Additional guidance provided in these regulations resulted in a tax adjustment in the fourth quarter of 2019. We paid U.S. Federal taxes for the full year inclusive of this fourth quarter adjustment. A reconciliation of the provision for income taxes, with the amount computed by applying the statutory Federal income tax rate to income before income taxes is as follows:
The components of deferred tax assets and liabilities were as follows:
All deferred tax assets are classified as “Other non-current assets” on the Consolidated Balance Sheets as of December 31, 2019 and December 31, 2018. In evaluating its ability to realize the net deferred tax assets, the Company considered all available positive and negative evidence, including its past operating results and the forecast of future market growth, forecasted earnings, future taxable income, and prudent and feasible tax planning strategies. As of December 31, 2019, the valuation allowance of $135 million was primarily related to certain foreign tax credits that are not likely to be realized. As of December 31, 2019, the Company's Federal R&D tax credit and state tax credit carryforwards for tax return purposes were $251 million, and $256 million, respectively. The Federal R&D tax credit carryforwards expire through 2039. State tax credit carryforwards can be carried forward indefinitely. As of December 31, 2019, the Company's foreign tax credit carryforwards for U.S. and non-U.S. tax return purposes were $138 million of which a $135 million valuation allowance is placed against non-U.S. foreign tax credits and a $3 million carryforward on the U.S. tax return. The Federal foreign tax credit carryovers expire through 2029. The unrecognized tax benefits that are not expected to result in payment or receipt of cash within one year are classified as “Other non-current liabilities” and a reduction of deferred tax assets which is classified as "Other non-current assets" in the Consolidated Balance Sheets. As of December 31, 2019, the total amount of gross unrecognized tax benefits was $67 million, of which $57 million, if recognized, would favorably impact the Company’s effective tax rate. As of December 31, 2018, the total amount of gross unrecognized tax benefits was $48 million, of which $44 million, if recognized, would favorably impact the Company’s effective tax rate. The aggregate changes in the Company’s total gross amount of unrecognized tax benefits are summarized as follows (in thousands):
The Company includes interest and penalties related to unrecognized tax benefits within the provision for income taxes and in “Other non-current liabilities” in the Consolidated Balance Sheets. Interest and penalties included in the Company's provision for income taxes were not material in all the periods presented. The Company files U.S. Federal, state and foreign tax returns. The Company is currently under examination by the IRS for 2016, 2017, and 2018. The 2009 through 2018 state tax returns are subject to examination by state tax authorities. The Company is also currently under examination in the UK for 2018. The company has no other significant foreign jurisdiction audits underway. The years 2014 through 2018 remain subject to examination by foreign tax authorities. Given the potential outcome of the current examinations as well as the impact of the current examinations on the potential expiration of the statute of limitations, it is reasonably possible that the balance of unrecognized tax benefits could significantly change within the next twelve months. However, an estimate of the range of reasonably possible adjustments cannot be made at this time.
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Employee Benefit Plan |
12 Months Ended |
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Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | Employee Benefit Plan The Company maintains a 401(k) savings plan covering substantially all of its employees. Eligible employees may contribute up to 80% of their annual salary through payroll deductions, but not more than the statutory limits set by the Internal Revenue Service. The Company matches employee contributions at the discretion of the Board. During 2019, 2018 and 2017, the Company’s matching contributions totaled $47 million, $27 million and $20 million, respectively.
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Segment and Geographic Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment and Geographic Information | Segment and Geographic Information Effective in the fourth quarter of 2019, the Company operates as one operating segment. The Company's chief operating decision maker ("CODM") is its chief executive officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance and allocating resources. Historically, the Company reported contribution profit (loss) for three segments: Domestic streaming, International streaming and Domestic DVD, which was reflective of how the Company’s CODM reviewed financial information for purposes of making operating decisions, assessing financial performance and allocating resources. Because the Company increasingly obtains multi-territory or global rights for streaming content, contribution profit (loss) on a regional basis is no longer a meaningful metric reviewed by the CODM or used in the allocation of resources. Instead, the CODM now focuses on the Company's global operating margin as the primary measure of profitability and basis for allocation of resources. Total U.S. revenues were $9.5 billion, $8.0 billion and $6.6 billion for the years ended December 31, 2019, 2018 and 2017, respectively. See Note 1 Revenue Recognition for additional information about streaming revenue by region. The Company's long-lived tangible assets were located as follows:
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Selected Quarterly Financial Data (Unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Quarterly Financial Data (Unaudited) | Selected Quarterly Financial Data (Unaudited)
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Organization and Summary of Significant Accounting Policies (Policy) |
12 Months Ended |
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Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include the streaming content asset amortization policy and the recognition and measurement of income tax assets and liabilities. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. On an ongoing basis, the Company evaluates these assumptions, judgments and estimates. Actual results may differ from these estimates.
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Recent accounting pronouncements | Recently adopted accounting pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-02, Leases (Topic 842) in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under prior GAAP. ASU 2016-02 requires that a lessee should recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. The Company adopted ASU 2016-02 in the first quarter of 2019 utilizing the modified retrospective transition method through a cumulative-effect adjustment at the beginning of the first quarter of 2019. The Company has elected the package of practical expedients, which allows the Company not to reassess (1) whether any expired or existing contracts as of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date and (3) initial direct costs for any existing leases as of the adoption date. The Company did not elect to apply the hindsight practical expedient when determining lease term and assessing impairment of right-of-use assets. The adoption of ASU 2016-02 on January 1, 2019 resulted in the recognition of right-of-use assets of approximately $743 million, lease liabilities for operating leases of approximately $813 million and a cumulative-effect adjustment on retained earnings of $2 million on its Consolidated Balance Sheets, with no material impact to its Consolidated Statements of Operations. See Note 3 for further information regarding the impact of the adoption of ASU 2016-02 on the Company's financial statements. In March 2019, the FASB issued ASU 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials, in order to align the accounting for production costs of an episodic television series with the accounting for production costs of films by removing the content distinction for capitalization. ASU 2019-02 also requires that an entity reassess estimates of the use of a film in a film group and account for any changes prospectively. In addition, ASU 2019-02 requires that an entity test films and license agreements for program material for impairment at a film group level when the film or license agreements are predominantly monetized with other films and license agreements. ASU 2019-02 is effective for fiscal years beginning after December 15, 2019 and early adoption is permitted. The Company early adopted ASU 2019-02 in the first quarter of 2019 and as such has included all content assets (licensed and produced) as "Non-current content assets, net" on its Consolidated Balance Sheets, beginning with the period of adoption. There was no material impact to its Consolidated Statements of Operations. See the Company's updated Streaming Content policy below for further details. Recently issued accounting pronouncements not yet adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326), in order to improve financial reporting of expected credit losses on financial instruments and other commitments to extend credit. ASU 2016-13 requires that an entity measure and recognize expected credit losses for financial assets held at amortized cost and replaces the incurred loss impairment methodology in current GAAP with a methodology that requires consideration of a broader range of information to estimate credit losses. While the Company is continuing to assess the potential impacts of ASU 2016-13, it does not expect ASU 2016-13 to have a material effect on its financial statements.
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Cash Equivalents | Cash Equivalents The Company considers investments in instruments purchased with an original maturity of 90 days or less to be cash equivalents. The Company also classifies amounts in transit from payment processors for customer credit card and debit card transactions as cash equivalents.
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Streaming Content | Streaming Content The Company acquires, licenses and produces content, including original programming, in order to offer members unlimited viewing of TV series and films. The content licenses are for a fixed fee and specific windows of availability. Payment terms for certain content licenses and the production of content require more upfront cash payments relative to the amortization expense. Payments for content, including additions to streaming assets and the changes in related liabilities, are classified within "Net cash used in operating activities" on the Consolidated Statements of Cash Flows. The Company recognizes content assets (licensed and produced) as “Non-current content assets, net” on the Consolidated Balance Sheets. For licenses, the Company capitalizes the fee per title and records a corresponding liability at the gross amount of the liability when the license period begins, the cost of the title is known and the title is accepted and available for streaming. For productions, the Company capitalizes costs associated with the production, including development costs, direct costs and production overhead. Participations and residuals are expensed in line with the amortization of production costs. Based on factors including historical and estimated viewing patterns, the Company amortizes the content assets (licensed and produced) in “Cost of revenues” on the Consolidated Statements of Operations over the shorter of each title's contractual window of availability or estimated period of use or ten years, beginning with the month of first availability. The amortization is on an accelerated basis, as the Company typically expects more upfront viewing, for instance due to additional merchandising and marketing efforts and film amortization is more accelerated than TV series amortization. On average, over 90% of a licensed or produced streaming content asset is expected to be amortized within four years after its month of first availability. The Company reviews factors impacting the amortization of the content assets on an ongoing basis. The Company's estimates related to these factors require considerable management judgment. The Company's business model is subscription based as opposed to a model generating revenues at a specific title level. Content assets (licensed and produced) are predominantly monetized as a group and therefore are reviewed in aggregate at a group level when an event or change in circumstances indicates a change in the expected usefulness of the content or that the fair value may be less than unamortized cost. To date, the Company has not identified any such event or changes in circumstances. If such changes are identified in the future, these aggregated content assets will be stated at the lower of unamortized cost or fair value. In addition, unamortized costs for assets that have been, or are expected to be, abandoned are written off.
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Property and Equipment | Property and Equipment Property and equipment are carried at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the shorter of the estimated useful lives of the respective assets, generally up to 30 years, or the expected lease term for leasehold improvements, if applicable. |
Trade Receivables | Trade Receivables Trade receivables consist primarily of amounts related to members and payment partners that collect membership fees on the Company's behalf. The Company evaluates the need for an allowance for doubtful accounts based on historical collection trends, the financial condition of its payment partners, and external market factors.
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Revenue Recognition | Revenue Recognition The Company's primary source of revenues is from monthly membership fees. Members are billed in advance of the start of their monthly membership and revenues are recognized ratably over each monthly membership period. Revenues are presented net of the taxes that are collected from members and remitted to governmental authorities. The Company is the principal in all its relationships where partners, including consumer electronics (“CE”) manufacturers, multichannel video programming distributors (“MVPDs”), mobile operators and internet service providers (“ISPs”), provide access to the service as the Company retains control over service delivery to its members. Typically, payments made to the partners, such as for marketing, are expensed, but in the case where the price that the member pays is established by the partners and there is no standalone price for the Netflix service (for instance, in a bundle), these payments are recognized as a reduction of revenues.
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Marketing | Marketing Marketing expenses consist primarily of advertising expenses and certain payments made to the Company’s partners, including CE manufacturers, MVPDs, mobile operators and ISPs. Advertising expenses include promotional activities such as digital and television advertising. Advertising costs are expensed as incurred.
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Research and Development | Research and Development Research and development expenses consist of payroll and related costs incurred in making improvements to our service offerings.
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Income Taxes | Income Taxes The Company records a provision for income taxes for the anticipated tax consequences of the reported results of operations using the asset and liability method. Deferred income taxes are recognized by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases as well as net operating loss and tax credit carryforwards. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefits for which future realization is uncertain. The Company did not recognize certain tax benefits from uncertain tax positions within the provision for income taxes. The Company may recognize a tax benefit only if it is more likely than not the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense.
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Foreign Currency | Foreign Currency The functional currency for the Company's subsidiaries is determined based on the primary economic environment in which the subsidiary operates. The Company translates the assets and liabilities of its non-U.S. dollar functional currency subsidiaries into U.S. dollars using exchange rates in effect at the end of each period. Revenues and expenses for these subsidiaries are translated using rates that approximate those in effect during the period. Gains and losses from these translations are recognized in cumulative translation adjustment included in "Accumulated other comprehensive loss" in Stockholders’ equity on the Consolidated Balance Sheets. The Company remeasures monetary assets and liabilities that are not denominated in the functional currency at exchange rates in effect at the end of each period. Gains and losses from these remeasurements are recognized in interest and other income (expense).
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Earnings Per Share | Earnings Per Share Basic earnings per share is computed using the weighted-average number of outstanding shares of common stock during the period. Diluted earnings per share is computed using the weighted-average number of outstanding shares of common stock and, when dilutive, potential common shares outstanding during the period. Potential common shares consist of incremental shares issuable upon the assumed exercise of stock options.
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Stock-Based Compensation | Stock-Based Compensation The Company grants fully vested non-qualified stock options to its employees on a monthly basis. As a result of immediate vesting, stock-based compensation expense is fully recognized on the grant date, and no estimate is required for post-vesting option forfeitures.
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Organization and Summary of Significant Accounting Policies (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Streaming Revenue, Paid net Membership Additions, and Ending Paid Memberships by Region | The following tables summarize streaming revenue, paid net membership additions, and ending paid memberships by region for the years December 31, 2019, 2018 and 2017, respectively: United States and Canada (UCAN)
Europe, Middle East, and Africa (EMEA)
Latin America (LATAM)
Asia-Pacific (APAC)
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Computation of Earnings Per Share | The computation of earnings per share is as follows:
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Summary of Potential Common Shares Excluded from Diluted Calculation | The following table summarizes the potential common shares excluded from the diluted calculation:
|
Cash, Cash Equivalents and Restricted Cash (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-Term Investments And Fair Value Measurement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash and Cash Equivalents | The following tables summarize the Company's cash, cash equivalents and restricted cash as of December 31, 2019 and 2018:
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Balance Sheet Components (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Components Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Content Assets | Content assets consisted of the following:
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Schedule of Amortization of Streaming Content Assets | The following table represents the amortization of streaming content assets:
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Property and Equipment, Net | Property and equipment and accumulated depreciation consisted of the following:
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Information on Right-of-Use Assets and Lease Liabilities | Information related to the Company's right-of-use assets and related lease liabilities were as follows:
(1) Balance includes $743 million for operating leases existing on January 1, 2019.
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Maturities of Lease Liabilities | Maturities of lease liabilities as of December 31, 2019 were as follows (in thousands):
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Other Current Assets | Other current assets consisted of the following:
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Long-term Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments | The following table provides a summary of the Company's outstanding long-term debt and the fair values based on quoted market prices in less active markets as of December 31, 2019 and December 31, 2018:
(1) Debt is denominated in euro with a €1,300 million principal amount. Total proceeds were $1,421 million. (2) Debt is denominated in euro with a €1,100 million principal amount. Total proceeds were $1,262 million. (3) Debt is denominated in euro with a €1,200 million principal amount. Total proceeds were $1,343 million. (4) Debt is denominated in euro with a €1,100 million principal amount. Total proceeds were $1,226 million.
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Schedule of Expected Timing of Principal and Interest Payments for the Notes | The expected timing of principal and interest payments for these Notes are as follows:
|
Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expected Timing of Payments for Streaming Content Obligations | The expected timing of payments for these streaming content obligations is as follows:
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Stockholders' Equity (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Activity Related to Stock Option Plans | A summary of the activities related to the Company’s stock option plans is as follows:
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Summary of Assumptions Used to Value Stock Option Grants Using Lattice-Binomial Model | The following table summarizes the assumptions used to value option grants using the lattice-binomial model and the valuation data:
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Schedule of Changes in Accumulated Other Comprehensive Loss | The following table summarizes the changes in accumulated balances of other comprehensive loss, net of tax:
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Income before Income Taxes | Income before provision for income taxes was as follows:
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Components of Provision for Income Taxes | The components of provision for (benefit from) income taxes for all periods presented were as follows:
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Reconciliation of Provision for Income Taxes | A reconciliation of the provision for income taxes, with the amount computed by applying the statutory Federal income tax rate to income before income taxes is as follows:
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Deferred Tax Assets and Liabilities | The components of deferred tax assets and liabilities were as follows:
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Summary of Changes in Unrecognized Tax Benefits | The aggregate changes in the Company’s total gross amount of unrecognized tax benefits are summarized as follows (in thousands):
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Segment Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-lived Assets by Geographic Areas | The Company's long-lived tangible assets were located as follows:
|
Selected Quarterly Financial Data (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Quarterly Financial Data |
|
Organization and Summary of Significant Accounting Policies Organization and Summary of Significant Accounting Policies (Revenue and Membership Information) (Details) membership in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019
USD ($)
membership
|
Sep. 30, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
|
Mar. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
membership
|
Sep. 30, 2018
USD ($)
|
Jun. 30, 2018
USD ($)
|
Mar. 31, 2018
USD ($)
|
Dec. 31, 2019
USD ($)
membership
|
Dec. 31, 2018
USD ($)
membership
|
Dec. 31, 2017
USD ($)
membership
|
|
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ | $ 5,467,434 | $ 5,244,905 | $ 4,923,116 | $ 4,520,992 | $ 4,186,841 | $ 3,999,374 | $ 3,907,270 | $ 3,700,856 | $ 20,156,447 | $ 15,794,341 | $ 11,692,713 |
United States and Canada | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Paid net membership additions (in memberships) | 2,905 | 6,335 | 5,512 | ||||||||
Paid memberships at end of period (in memberships) | 67,662 | 64,757 | 67,662 | 64,757 | 58,422 | ||||||
Europe, Middle East, and Africa | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Paid net membership additions (in memberships) | 13,960 | 11,814 | 8,173 | ||||||||
Paid memberships at end of period (in memberships) | 51,778 | 37,818 | 51,778 | 37,818 | 26,004 | ||||||
Latin America | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Paid net membership additions (in memberships) | 5,340 | 6,360 | 5,509 | ||||||||
Paid memberships at end of period (in memberships) | 31,417 | 26,077 | 31,417 | 26,077 | 19,717 | ||||||
Asia-Pacific | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Paid net membership additions (in memberships) | 5,626 | 4,106 | 2,360 | ||||||||
Paid memberships at end of period (in memberships) | 16,233 | 10,607 | 16,233 | 10,607 | 6,501 | ||||||
Streaming | United States and Canada | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ | $ 10,051,208 | $ 8,281,532 | $ 6,660,859 | ||||||||
Streaming | Europe, Middle East, and Africa | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ | 5,543,067 | 3,963,707 | 2,362,813 | ||||||||
Streaming | Latin America | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ | 2,795,434 | 2,237,697 | 1,642,616 | ||||||||
Streaming | Asia-Pacific | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ | $ 1,469,521 | $ 945,816 | $ 575,928 |
Organization and Summary of Significant Accounting Policies (Computation of Net Income Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Basic earnings per share: | |||||||||||
Net income | $ 586,970 | $ 665,244 | $ 270,650 | $ 344,052 | $ 133,934 | $ 402,835 | $ 384,349 | $ 290,124 | $ 1,866,916 | $ 1,211,242 | $ 558,929 |
Weighted-average common shares outstanding (in shares) | 437,799 | 435,374 | 431,885 | ||||||||
Basic earnings per share (in USD per share) | $ 1.34 | $ 1.52 | $ 0.62 | $ 0.79 | $ 0.31 | $ 0.92 | $ 0.88 | $ 0.67 | $ 4.26 | $ 2.78 | $ 1.29 |
Diluted earnings per share: | |||||||||||
Net income | $ 586,970 | $ 665,244 | $ 270,650 | $ 344,052 | $ 133,934 | $ 402,835 | $ 384,349 | $ 290,124 | $ 1,866,916 | $ 1,211,242 | $ 558,929 |
Shares used in computation: | |||||||||||
Weighted-average common shares outstanding (in shares) | 437,799 | 435,374 | 431,885 | ||||||||
Employee stock options (in shares) | 13,966 | 15,870 | 14,929 | ||||||||
Weighted-average number of shares (in shares) | 451,765 | 451,244 | 446,814 | ||||||||
Diluted earnings per share (in USD per share) | $ 1.30 | $ 1.47 | $ 0.60 | $ 0.76 | $ 0.30 | $ 0.89 | $ 0.85 | $ 0.64 | $ 4.13 | $ 2.68 | $ 1.25 |
Organization and Summary of Significant Accounting Policies (Summary of Potential Common Shares Excluded From Diluted Calculation) (Details) - shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Employee stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Employee stock options | 1,588 | 330 | 189 |
Balance Sheet Components - Lease Maturities (Details) $ in Thousands |
Dec. 31, 2019
USD ($)
|
---|---|
Leases [Abstract] | |
2020 | $ 248,636 |
2021 | 246,148 |
2022 | 226,020 |
2023 | 211,387 |
2024 | 194,506 |
Thereafter | 912,457 |
Total lease liabilities | 2,039,154 |
Less imputed interest | (425,920) |
Total lease liabilities | 1,613,234 |
Current operating lease liabilities | 190,622 |
Non-current operating lease liabilities | $ 1,422,612 |
Balance Sheet Components - Other Current Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Balance Sheet Components Disclosure [Abstract] | ||
Trade receivables | $ 454,399 | $ 362,712 |
Prepaid expenses | 180,999 | 178,833 |
Other receivables | 524,669 | 206,921 |
Total other current assets | $ 1,160,067 | $ 748,466 |
Long-term Debt (Narrative) (Details) |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2019
EUR (€)
|
Dec. 31, 2019
USD ($)
|
|
Debt Instrument [Line Items] | |||||
Aggregate outstanding principal | $ 10,360,058,000 | $ 14,759,260,000 | |||
Debt issuance cost | 114,000,000 | ||||
Foreign currency remeasurement gain on long-term debt | $ 45,576,000 | $ 73,953,000 | $ (140,790,000) | ||
Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Long-term notes denominated in foreign currency | € 4,700,000,000 | $ 14,873,000,000 | |||
Foreign currency remeasurement gain on long-term debt | $ 46,000,000 | ||||
Redemption price, percent of outstanding principal | 101.00% |
Long-term Debt (Maturities) (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Debt Disclosure [Abstract] | ||
Less than one year | $ 736,969 | $ 538,384 |
Due after one year and through three years | 2,581,471 | 1,550,581 |
Due after three years and through five years | 1,705,201 | 1,646,101 |
Due after five years | 15,699,800 | 11,138,129 |
Total debt obligations | $ 20,723,441 | $ 14,873,195 |
Long-term Debt (Revolving Credit Facility) (Details) - Revolving Credit Facility - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Mar. 29, 2019 |
Jul. 31, 2017 |
|
Line of Credit Facility [Line Items] | |||
Line of credit facility, maximum borrowing capacity | $ 750,000,000 | $ 500,000,000 | |
Line of credit facility, additional maximum borrowing capacity | $ 250,000,000 | ||
Commitment fee percentage | 0.10% | ||
London Interbank Offered Rate (LIBOR) | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 0.75% | ||
Federal Funds Rate | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 0.50% | ||
One-Month LIBOR Rate | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.00% | ||
One-Month LIBOR Rate | Minimum | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 0.00% |
Commitments and Contingencies (Streaming Content) (Narrative) (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Contractual Obligation [Line Items] | ||
Total streaming content obligations | $ 19,490,082 | $ 19,285,875 |
Current content liabilities | 4,413,561 | 4,681,562 |
Non-current content liabilities | 3,334,323 | 3,759,026 |
Unrecorded streaming obligations | 11,800,000 | 10,800,000 |
Current Content Liabilities | ||
Contractual Obligation [Line Items] | ||
Current content liabilities | 4,400,000 | 4,700,000 |
Non-current Content Liabilities | ||
Contractual Obligation [Line Items] | ||
Non-current content liabilities | $ 3,300,000 | $ 3,800,000 |
Commitments and Contingencies (Expected Timing of Payments for Commitments) (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Less than one year | $ 8,477,367 | $ 8,611,398 |
Due after one year and through 3 years | 8,352,731 | 8,841,561 |
Due after 3 years and through 5 years | 2,041,340 | 1,684,582 |
Due after 5 years | 618,644 | 148,334 |
Total streaming content obligations | $ 19,490,082 | $ 19,285,875 |
Stockholders' Equity (Voting Rights) (Narrative) (Details) |
12 Months Ended |
---|---|
Dec. 31, 2019
vote
| |
Stockholders' Equity Note [Abstract] | |
Number of voting rights per share | 1 |
Stockholders' Equity (Stock Option Plans) (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Stockholders' Equity Note [Abstract] | |||
Total intrinsic value of options exercised | $ 666 | $ 863 | $ 464 |
Cash received from option exercised | $ 72 | $ 125 | $ 88 |
Expiration period | 10 years |
Stockholders' Equity (Summary of Assumptions Used to Value Stock Option Grants) (Details) $ / shares in Units, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019
USD ($)
$ / shares
|
Dec. 31, 2018
USD ($)
$ / shares
|
Dec. 31, 2017
USD ($)
$ / shares
|
|
Stockholders' Equity Note [Abstract] | |||
Dividend yield | 0.00% | 0.00% | 0.00% |
Expected volatility, minimum | 37.00% | 40.00% | 34.00% |
Expected volatility, maximum | 41.00% | 42.00% | 37.00% |
Risk-free interest rate, minimum | 1.74% | 2.61% | 2.24% |
Risk-free interest rate, maximum | 2.74% | 3.09% | 2.45% |
Suboptimal exercise factor, minimum | 3.07 | 2.80 | 2.48 |
Suboptimal exercise factor, maximum | 3.23 | 3.01 | 2.63 |
Valuation data: | |||
Weighted-average fair value (in USD per share) | $ / shares | $ 156.60 | $ 157.19 | $ 71.45 |
Total stock-based compensation expense | $ 405,376 | $ 320,657 | $ 182,209 |
Total income tax impact on provision | $ 90,856 | $ 67,575 | $ 61,842 |
Stockholders' Equity Stockholders' Equity (Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
|
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | $ 5,238,765 | $ 3,581,956 |
Ending Balance | 7,582,157 | 5,238,765 |
Foreign Currency | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning Balance | (19,582) | (20,557) |
Other comprehensive income (loss) before reclassifications | (3,939) | 975 |
Net decrease (increase) in accumulated other comprehensive loss | (3,939) | 975 |
Ending Balance | $ (23,521) | $ (19,582) |
Income Taxes (Schedule of Income before Income Taxes) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Income Tax Disclosure [Abstract] | |||
United States | $ 1,719,326 | $ 845,402 | $ 144,100 |
Foreign | 342,905 | 381,056 | 341,221 |
Income before income taxes | $ 2,062,231 | $ 1,226,458 | $ 485,321 |
Income Taxes (Components of Provision for Income Taxes) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Current tax provision: | |||
Federal | $ 21,498 | $ (22,176) | $ 54,245 |
State | 45,228 | (10,234) | (7,601) |
Foreign | 223,328 | 133,146 | 88,436 |
Total current | 290,054 | 100,736 | 135,080 |
Deferred tax provision: | |||
Federal | (28,003) | (37,396) | (153,963) |
State | (54,507) | (52,391) | (52,695) |
Foreign | (12,229) | 4,267 | (2,030) |
Total deferred | (94,739) | (85,520) | (208,688) |
Provision for (benefit from) income taxes | $ 195,315 | $ 15,216 | $ (73,608) |
Income Taxes (Reconciliation of Provision for Income Taxes) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Income Tax Disclosure [Abstract] | |||
Expected tax expense at U.S. Federal statutory rates | $ 433,059 | $ 257,556 | $ 169,860 |
State income taxes, net of Federal income tax effect | 47,909 | 33,611 | 6,404 |
Foreign earnings at other than U.S. rates | 56,969 | 63,519 | (87,514) |
Federal and California R&D tax credits | (134,523) | (140,749) | (79,868) |
Excess tax benefits on stock-based compensation | (148,693) | (191,323) | (157,888) |
Impact of the Tax Cuts and Jobs Act of 2017 | |||
Rate Change / Transition Tax | 0 | (71,516) | 79,077 |
Tax effects of the Tax Cuts and Jobs Act | (127,534) | 43,099 | 0 |
Global corporate structure simplification | 35,939 | 0 | 0 |
Nondeductible Officers Compensation | 24,111 | 14,377 | 28 |
Other | 8,078 | 6,642 | (3,707) |
Provision for (benefit from) income taxes | $ 195,315 | $ 15,216 | $ (73,608) |
Effective Tax Rate | 9.00% | 1.00% | (15.00%) |
Income Taxes (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Deferred tax assets (liabilities): | ||
Stock-based compensation | $ 258,376 | $ 190,451 |
Federal and California tax R&D credits | 408,715 | 369,023 |
Foreign tax credits | 137,818 | 218,026 |
Accruals and reserves | 42,450 | 36,396 |
Operating leases | 349,208 | 0 |
Other | 6,510 | 27,203 |
Gross deferred tax assets | 1,203,077 | 841,099 |
Depreciation & amortization | (80,921) | (151,678) |
Operating leases | (329,168) | 0 |
Gross deferred tax liabilities | 410,089 | 151,678 |
Valuation allowance | (134,782) | (124,996) |
Net deferred tax assets | $ 658,206 | $ 564,425 |
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Operating Loss Carryforwards [Line Items] | |||
Valuation allowance | $ 134,782 | $ 124,996 | |
Foreign tax credits | 137,818 | 218,026 | |
Valuation allowance | 135,000 | ||
Unrecognized tax benefits | 66,768 | 47,534 | $ 42,902 |
Reduction in provision for income taxes due to impact of effective tax rate | 57,000 | $ 44,000 | |
Federal tax authority | |||
Operating Loss Carryforwards [Line Items] | |||
Tax credit carryforward, amount | 251,000 | ||
Foreign tax credits | 3,000 | ||
State tax authority | |||
Operating Loss Carryforwards [Line Items] | |||
Tax credit carryforward, amount | $ 256,000 |
Income Taxes (Summary of Changes in Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning Balance | $ 47,534 | $ 42,902 |
Increases related to tax positions taken during prior periods | 925 | 4,486 |
Decreases related to tax positions taken during prior periods | (417) | (17,922) |
Increases related to tax positions taken during the current period | 18,826 | 18,068 |
Decreases related to expiration of statute of limitations | (100) | |
Ending Balance | $ 66,768 | $ 47,534 |
Employee Benefit Plan (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Retirement Benefits [Abstract] | |||
Eligible employees maximum contribution percentage | 80.00% | ||
Contributions by employer | $ 47 | $ 27 | $ 20 |
Segment Information (Narrative) (Details) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019
USD ($)
|
Sep. 30, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
|
Mar. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
Sep. 30, 2018
USD ($)
|
Jun. 30, 2018
USD ($)
|
Mar. 31, 2018
USD ($)
|
Dec. 31, 2019
USD ($)
segment
|
Dec. 31, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
|
Segment Reporting [Abstract] | |||||||||||
Number of reportable segments | segment | 3 | ||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | $ 5,467,434 | $ 5,244,905 | $ 4,923,116 | $ 4,520,992 | $ 4,186,841 | $ 3,999,374 | $ 3,907,270 | $ 3,700,856 | $ 20,156,447 | $ 15,794,341 | $ 11,692,713 |
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | $ 9,500,000 | $ 8,000,000 | $ 6,600,000 |
Segment Information (Long-lived Assets by Geographic Areas) (Details) - USD ($) $ in Thousands |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 1,503,459 | $ 381,947 |
International | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 594,047 | $ 36,334 |
Selected Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 |
Sep. 30, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Jun. 30, 2018 |
Mar. 31, 2018 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenues | $ 5,467,434 | $ 5,244,905 | $ 4,923,116 | $ 4,520,992 | $ 4,186,841 | $ 3,999,374 | $ 3,907,270 | $ 3,700,856 | $ 20,156,447 | $ 15,794,341 | $ 11,692,713 |
Gross profit | 2,001,411 | 2,146,986 | 1,917,459 | 1,650,378 | 1,453,441 | 1,468,246 | 1,504,839 | 1,400,277 | |||
Net income | $ 586,970 | $ 665,244 | $ 270,650 | $ 344,052 | $ 133,934 | $ 402,835 | $ 384,349 | $ 290,124 | $ 1,866,916 | $ 1,211,242 | $ 558,929 |
Earnings (loss) per share: | |||||||||||
Basic (in USD per share) | $ 1.34 | $ 1.52 | $ 0.62 | $ 0.79 | $ 0.31 | $ 0.92 | $ 0.88 | $ 0.67 | $ 4.26 | $ 2.78 | $ 1.29 |
Diluted (in USD per share) | $ 1.30 | $ 1.47 | $ 0.60 | $ 0.76 | $ 0.30 | $ 0.89 | $ 0.85 | $ 0.64 | $ 4.13 | $ 2.68 | $ 1.25 |