401(k) savings plan. deferred salary Internal Revenue Code internationally. employees contribute 90% compensation limitations. January 2022 50% contributions 6% $3,000) compensation one year service. December 2023 2022 recognized $99 million $91 million expenses contributions.


November 2023 Financial Accounting Standards Board issued ASU. 2023-07 Improvements Reportable Segment Disclosures 280. updates disclosure requirements expenses Chief Operating Decision Maker. requires title position CODM explanation performance resources. effective December 15 2023 interim after December 15 2024. Adoption retrospectively periods financial statements. Early adoption permitted. additional disclosures. evaluating provisions adopt December 31, 2024.


December 2023 FASB issued ASU. 2023-08 Accounting Disclosure Crypto Assets 350-60). requires crypto assets fair value balance sheet income statement. name cost basis fair value number units crypto holding. effective after December 15 2024 interim periods. Adoption requires adjustment opening balance earnings. Early adoption permitted. must adopt fiscal year. gains losses consolidated financial statements disclosures. evaluating adoption carrying value crypto assets gains losses.


December 2023 FASB issued ASU. 2023-09 Improvements Income Tax Disclosures 740). requires tax rate reconciliation taxes. effective December 15 2024. Early statements. disclosures consolidated financial statements.


October 2021 FASB issued ASU. 2021-08 Accounting Contract Assets Liabilities 805). requires acquirer recognize assets liabilities contracts Topic 606. applies revenue model contracts. effective December 15 2022 interim. adopted January 1, 2023. financial statements.


2022 FASB issued ASU 2022-02 Troubled Debt Restructurings Disclosures. eliminates debt restructurings 2016-13 January 1 2020. enhances disclosure loan refinancing restructurings difficulty. amends write-offs year origination financing receivables investments ASC 326-20. effective December 15 2022. adopted January 1, 2023. financial statements.


August 2020 FASB issued ASU 2020-06 Accounting Convertible Instruments Contracts Equity. simplifies accounting instruments separation models ASC 470-20. updates guidance embedded conversion features Topic 815 contract. convertible debt instruments accounted single liability amortized cost. interest expense closer coupon interest rate Topic 835. EPS guidance Topic 260 instruments if-converted method diluted EPS calculation net share settlement method. Topic 815-40 contract scope exception derivative accounting. amendments change scope contracts assets liabilities.


January 1, 2021 adopted ASU retrospective method. $211 million deficit. recombination equity conversion debt capital reduced $474 million senior notes reduced $51 million. removal debt net debt $269 million reduced property plant equipment $45 million. prior statements adjusted accounting standards.


2023 2022 purchased received digital assets. 2023 recorded losses. 2022 $204 million losses gains $64 million converting fiat currency. gains net losses consolidated statements. December 2023 2022 value impairment $204 million.


Goodwill increased $59 million automotive $194 million 2022 $253 million combination divestiture. no losses.


intangible $215 million 2022 $178 million 2023 amortization.


ASC 820 Fair Value Measurements states value exit price amount received sell asset transfer liability transaction between market participants. fair value market-based measurement determined assumptions pricing liability. three-tiered fair value hierarchy prioritizes inputs I observable inputs prices II III unobservable inputs little no market data. hierarchy requires observable market data. assets liabilities measured at fair value 31, 31, 2022 Value Money market funds.government securities,136 Corporate debt securities Certificates deposit deposits,253 Commercial paper Total#13,191,082,220,188#6,032


money market funds Level I prices. government securities certificates deposit commercial paper deposits corporate debt Level II market approach.


cash equivalents investments December 31, 2023 2022 31, Cost Unrealized Gains Value Equivalents-Term Investments,903 Money market funds U. S. government securities Corporate debt securities Certificates deposit deposits Commercial paper Total cash equivalents short investments,098 31, Cost Unrealized Gains Value Equivalents-Term Investments,965 Money market funds.securities Corporate debt securities Certificates deposit deposits,252 cash equivalents short investments,209,185,253


record gains losses credit losses income statements. years December 31, 2023 2022 gains losses credit losses. balances credit losses immaterial. unrealized losses investments temporary.


table summarizes investments maturities December 31, 2023 Due 1 year,374 5 10 years,696


instruments-measured digital assets accrued liabilities deposits debt. values approximate values. Convertible Senior Notes 2024 digital assets.


estimate 2024 Notes valuation methodologies risk measurements credit risk II. estimate values digital assets prices markets I. table estimated values carrying values 31, 2023 31, 2022 2024 Notes Digital assets


inventory 2023 2022 Raw materials,390,137,385 Finished goods,049 Service parts,171 Total,626


goods inventory includes transit new used energy products.


write excess obsolete net value less carrying. 2023 2022 2021 write-downs $233 million $144 million $106 million.


solar energy systems 31, 2023 31, 2022 service Initial costs lease acquisition accumulated depreciation amortization(1,643)(1,418),216,471 construction interconnection net,229,489


expense 2023 2022 2021 $235 $236 million.


2023 2022 $740 $802 million solar depreciation $157 $148 million.


property equipment 2023 2022 Machinery equipment vehicles office furniture,372,558 Tooling,147 Leasehold improvements,366 Land buildings Computer Construction,263,589 depreciation,725,548


Construction expansion equipment tooling manufacturing. Completed assets transferred classes depreciation begins ready use.


Depreciation 2021 $3. $2. 42. 91.


Panasonic Gigafactory Nevada production equipment battery cells. purchase full output negotiated prices. account production equipment leased production. non components. cost equipment consolidated balance sheets liability debt finance leases. Depreciation Panasonic equipment computed units-of-production method capitalized costs amortized productive life. December 31, 2023 2022 capitalized gross costs $2. 02 billion $2. 01 billion balance sheets Panasonic arrangement.


accrued liabilities 31, 2023 2022 purchases,721,747 warranty reserve Payroll costs,325 Taxes Customer deposits lease liabilities Sales return reserve liabilities,080,205


purchases receipts goods services invoiced. invoiced balance accounts payable increase.


value income sales property use tax.


long-term liabilities 31, 2023 2022 lease,671,164 warranty reserve,606,480 non-current liabilities,330


summary debt leases December 31, 2023 Carrying Value Principal Balance Committed Amount Interest Rates Recourse debt 2024 Notes. RCF Credit Agreement Solar Bonds. 75% recourse debt,028 Non-recourse debt Automotive Asset Notes. Solar Asset-backed Notes. Cash Equity Debt. non-recourse debt Finance leases


debt leases December 31, 2022 Carrying Value Principal Balance Committed Amount Interest Rates Recourse debt 2024 Notes. Agreement Solar Bonds. 75% debt,266 Non-recourse debt Automotive Asset-backed Notes. Solar Asset-backed Notes. Cash Equity Debt. Automotive Lease-backed Credit Facilities non debt Finance leases


no restrictions draw-down funds RCF Credit Agreement except conditions. section terms facility.


no restrictions draw-down corporate funds credit facilities except conditions pledging receivables inventories leased vehicles interests assets.


Recourse. Non-recourse subsidiaries. differences unpaid principal balances net carrying values discounts deferred costs. December 2023 debt covenants.


closing price common stock 130% conversion 2024 Notes 20 30 days 2023. December 31, 2023-converted value exceeds principal $406 million. Notes settled cash shares common stock election.


June 2015, senior credit agreement banks. Borrowed funds interest 1% LIBOR federal funds rate. 50% lenders’ 1% LIBOR. fee undrawn amounts. 25% annum. secured accounts inventory equipment. Availability value reduced reserves.


January 2023 entered 5-year unsecured revolving credit facility banks replace Agreement terminated. two one-year extensions commitment $5. billion $7. billion. underlying borrowings corporate purposes. Borrowed funds accrue interest variable rate dollar-denominated loans 0. 10% alternate base rate pounds sterling euros adjusted EURIBOR margin. based rating indebtedness. fee undrawn amounts variable Rating 0. 125% per annum.


transfer receivables interests vehicles special purpose entities issue Automotive Asset-backed Notes investors. SPEs consolidated financial statements. cash flows principal interest payments expenses remaining cash distributed to owners. recognize revenue lease financing contracts policy. assets cash flows not available creditors no recourse.


2023 interests vehicles SPEs issued $3. 93 billion Automotive Asset-backed Notes. proceeds $3. 92 billion.


cash equity financing 2016, subsidiaries issued $502 million rates. secured interests funds non-recourse.


2023 terminated Automotive Lease Credit funds borrowings.


December 2022 pledged $4. 64 billion $2. billion receivables cash equity interests debt.


future maturities debt December 31, 2023-recourse debt 2024 2025 2026 2027 2028####221 Total#4,639


entered lease agreements offices manufacturing retail locations data centers equipment vehicles solar systems worldwide. determine record leases statements lease commencement asset available.


lease agreements non-lease components practical expedient single lease exception direct sales leases production equipment supply agreements. timing pattern transfer same non-lease lease component lease separately operating lease.


elected not present short-term leases consolidated balance 12 months purchase options renewal terms. lease assets liabilities recognized present value lease payments. leases implicit return used incremental borrowing rate determining present value.


leases include options extend term 10 years. Some terminate end term. calculating lease liabilities terms include options extend terminate certain exercise.


Lease expense recognized cost revenues expenses asset. leases increases index rate. calculate future lease payments new leases. Differences calculated expensed as incurred. Amortization lease assets recognized cost revenues expenses. Interest expense on finance lease liabilities recognized statements operations.


balances operating finance leases millions balance sheets 31, 2023 2022 Operating leases right-of-use assets,180 Accrued liabilities-term liabilities,164 liabilities,343 Finance leases Solar energy systems Property plant equipment finance lease assets,119 debt leases finance lease liabilities


components lease expense consolidated statements Ended December lease expense#1,153#798#627 Amortization leased assets#506#493 Interest lease liabilities finance lease#551#504#1,704,363,131


short variable costs.


31, 2023 2022 lease term Operating leases. 4. 4 Finance leases. 3. 1 discount rate Operating leases. Finance.


cash flow leases Ended December Cash paid lease liabilities cash outflows leases#1,084#754#616 finance leases payments#75#89 Leased assets finance lease liabilities#486 operating lease liabilities,170#1,059#818


December 31, 2023 maturities operating lease liabilities 2024 2025 2026 2027 2028 lease payments,360 Interest lease obligations,343 Current portion Long-term,671


2023 excluded leases rent $1. 53 billion. commence 2024 2025 2 20 years.


lessor vehicle solar energy Note 2 Accounting Policies. December 31, 2023 sales receivables five years Leases 2024 2025 2026 2027 2028 lease receivables#4,742


table include vehicle sales leasing resale value guarantee cash payments received upfront. solar PPA arrangements charged power predefined rate kilowatt-hour. future payments not power.


investment leases present future payments Prepaid expenses current assets non-current assets long-term. Lease receivables 31, 2023 31, 2022 lease receivables#780#837 Unearned interest income credit losses investment#696##738 Prepaid expenses current assets#189$#164 non-current assets####574#696#738


December 31, 2023 five transactions fund arrangements. subsidiaries finance solar energy systems master leases 10 25 years. systems lease term 25 years.


lease pass-through fund investor large upfront payment lessor payments. December 31, 2023 future minimum lease payments five years 2024 2025 2026 Total#468


June 2019 adopted 2019 Equity Incentive Plan. stock options restricted stock RSUs appreciation rights performance units shares employees directors consultants. nonstatutory. Incentive. Nonstatutory. options RSUs vest four years 10 years. Vesting terminates employment.


December 2023. million 2019 Plan.


table summarizes stock RSU activity December 2023 Options Options Exercise Price Contractual Life Intrinsic Value billions RSUs Grant Date.,333. Granted.,743. Exercised released. 47 Cancelled. 23. 22 period,021.,088. Vested expected vest December 31, 2023,884.,446. 76 Exercisable vested December 31, 2023,124.


-average grant 2022 2021 $228. $239. $261. release $2. 50 billion $4. 32 billion $5. 70 billion.


2023 2022 $1. 33 billion. 90. 88 billion. 2021 CEO exercised options 2012 Award $23. 45 billion.


employees purchase common stock deductions 15% compensation limitations. purchase price 85% fair market first last six-month period. 2023 2022 2021 issued. 5 million shares. 2023 97. 8 million shares.


fair value method stock compensation expense. estimate stock option award performance conditions ESPP grant Black-Scholes option pricing model. weighted-average assumptions Ended December Risk-free interest rate. Expected term years. volatility Dividend yield. Grant date fair value per share.


fair value RSUs conditions measured grant date closing market value common stock. risk-free interest rate. Treasury yield zero-coupon. life. historical data term grants. volatility implied options historical volatility.


March 2018 stockholders approved 304. million stock option awards 2020 2022 Stock Split CEO CEO Performance. 12 vesting tranches operational milestones market conditions continued employment CEO Executive Chairman Chief Product Officer. 12 tranches vested certification market capitalization milestone $100. 0 billion $50. 0 billion achieved eight operational milestones revenue Adjusted EBITDA achieved four consecutive fiscal quarters reported financial statements 10-Q 10-K. Adjusted EBITDA net income before interest expense income taxes depreciation amortization stock-based compensation. vesting exercise price $23. 34 per share 2020 2022 CEO hold shares five years post-exercise exercise price tax withholding.


achievement status operational milestones December 31, 2023 provided. Annualized Revenue Adjusted EBITDA billions) Status#20.#1.#35.#3.#55.#4.#75.#6.#100.#8.#125.#10.#150.#12.#175.#14.


Stock-based compensation 2018 CEO Performance Award non-cash recorded Selling administrative operating expense in consolidated statements. each quarter recognized expense pro-rated for tranches 12 operational milestones achieved principles.


grant date Monte Carlo simulation each tranche fixed expense future time market capitalization milestone milestone achievement time. subjective assessment future financial performance quarter determined probable achieve operational milestone not achieved future time achievement time.


December 31, 2022 expense 2018 Award recognized. 2021 $66 million $910 million 2018 Award.


Compensation Committee performance RSUs stock options.


December 31, 2023 unrecognized stock $655 million grants 5. 3 million shares stock. $110 million 4. years.


2023 2022 $57 $159 million stock compensation forfeitures.


table stock compensation expense line item Ended December Cost revenues#741#421 Research development Selling general administrative Total,121


income tax benefits stock compensation valuation. deferred tax 2022 2021. valuation allowance 2023 benefits $326 million 2023. 2022 2021 expense $199 million $245 million $182 million. December 31, 2023 $4. 82 billion unrecognized expense non recognized 2. 8 years.


income before taxes December 2023 2022 2021 Ended December Domestic#3,196#5,524 Noncontrolling Foreign,800,348 before taxes#9,973,719,343


income taxes $(5. billion $1. 13 billion $699 million recognized years December 31, 2023 2022 2021. components Ended December Current Federal State Foreign Total current,348,328 Deferred Federal,246) State Foreign(450 Total deferred,349) taxes(5,001),132#699


reconciliation federal 2023 2022 2021 Tax federal rate,332 State tax federal benefit Nondeductible executive compensation Excess tax benefits stock compensation Nontaxable manufacturing credit Foreign income rate differential. tax credits GILTI inclusion,279 Unrecognized tax benefits valuation allowance income taxes


monitor realizability deferred tax assets factors reporting period. December 31, 2023 evidence taxable income future earnings U. S. federal state deferred tax assets realizable. released $6. 54 billion valuation allowance. exception California deferred assets. maintain full valuation allowance California assets December 31, 2023 California tax assets exceed ability.


Deferred tax 2023 2022 loss Research development credits tax credits Deferred revenue Inventory warranty reserves Stock compensation lease-use liabilities research development costs,344 Deferred GILTI tax assets Accruals deferred tax assets,774 Valuation allowance,349,184 Depreciation amortization financing funds Operating lease-use assets Total deferred tax liabilities,230


December 31, 2023 maintained valuation allowances $892 million deferred tax assets California foreign operating losses. allowance decreased $6. 46 billion $1. 73 billion 2023 2022 increased $6. 14 billion 2021. decrease 2023 due release. federal state deferred tax assets. changes 2022 2021 due changes. deferred tax assets liabilities. recorded valuation allowance foreign operating losses not. remainder assets likely.


December 31, 2023 $10. 31 billion federal $10. 36 billion state operating loss carry-forwards future income 2024. laws restrictions carry-forwards change Section 382 Internal Revenue Code. no limitation-forwards ownership changes expirations.


December 31, 2023 federal $1. 10 billion renewable energy $605 million state $923 million. California. expire 2036. California credits carried forward indefinitely.


Shanghai granted tax 15% enterprises 25%. Gigafactory Shanghai subsidiary granted 15% 2019 2023. Starting 2024 subject 25%.


December 31, 2023 reinvest foreign earnings cash unless no minimal tax costs. recorded taxes. no deferred tax liabilities. estimated unrecognized withholding tax liability $245 million.


changes unrecognized tax benefits December 31, 2020 Increases Decreases(90) Increases December 31, 2021 Increases Decreases) Increases Decreases expiration statute limitations December 31, 2022 Increases Decreases settlement tax authorities Increases current year positions Decreases expiration statute limitations December 31, 2023,174


interest penalties tax benefits income tax. recognized interest penalties $17 million $27 million $4 million 2023 2022 2021. accrued $47 million $31 million benefits. $901 million affect tax rate.


file income tax returns U. S. foreign jurisdictions. examination Internal Revenue Service 2015 2018. Additional 2004 2014 2019 2022. operating losses tax credits adjustment. tax returns 2004 years.


uncertainty timing tax examinations estimate change tax benefits twelve months.


operating lease SUNY Foundation Gigafactory New York. lease research facility.


agreement obligated meet employment targets minimum numbers personnel New York Buffalo spend $5. 00 billion capital operational expenses costs 10-year period April 30, 2018. fail investment job creation requirements pay $41 million SUNY Foundation each year. arrangement terminated breach additional amounts payable.


2021 amendment agreement spend $5. billion capital expenses New York through December 31, 2029. February 1, 2022 reported met exceeded requirements jobs investment Buffalo New York. December 31, 2023 expect requirements. expectations incorrect incur expenses payments SUNY Foundation.


lease 50 years Shanghai constructing Gigafactory Shanghai. spend RMB 14. 08 billion capital 2023 generate RMB 2. 23 billion annual tax revenues. December 31, 2023 tax revenue requirements.


June 4 2018 Tesla stockholder filed action Delaware Elon Musk waste unjust enrichment compensation. Trial November 14-18 2022. Post-trial briefing argument complete.


June Tesla stockholder filed action Delaware Court directors compensation 2017 2020. breach fiduciary duty unjust enrichment seeks relief damages. Defendants September 17, 2020.


July 14, 2023 parties filed Stipulation Agreement Compromise Settlement wrongdoing. approved settled dismissed prejudice. Tesla notice settlement stockholders. Court hearing October 13, 2023 settlement fee request advisement. settlement cash flows financial position.


August September 6 nine stockholder class actions filed Tesla Elon Musk. Tesla. January 16, 2019 Plaintiffs consolidated complaint Northern District California board. securities laws damages. certification stockholders granted November 25, 2020. Trial January 17, 2023 February 3, 2023 jury. judgment new trial denied judgement July 11, 2023. July 14, 2023 appeal.


October 17, 2018 March 8, 2021 seven lawsuits filed Delaware Court Chancery Tesla against. Musk board directors private transaction Twitter posts. Musk. Five actions consolidated seven stayed pending. two lawsuits filed October 25, 2018 February 11, 2019 U. S. District Court Delaware Tesla against. Musk board. consolidated stayed pending.


October lawsuit filed Delaware shareholder Tesla board members breached duties oversight 2018 settlement SEC. seeks reforms governance damages attorneys’ fees. March 5 2024.


November 15, 2021 JPMorgan Chase Bank filed lawsuit Tesla Southern New York breach stock warrant agreement 2014. 2018 JP Morgan informed Tesla adjusted strike price. Musk’s August 7 2018 Tesla. disputed adjustment. 2021 delivered shares JP Morgan. JP Morgan owed $162 million additional shares adjustment. January 24, 2022 Tesla filed counterclaims JP Morgan terminated stock warrant agreement 2018. Tesla adjustments. JP Morgan filed motion judgment Tesla opposed Court.


October 4 2021 Diaz. Tesla California former worker race discrimination Fremont Factory. retrial March 27, 2023 $3,175,000. damages $136. million $15 million 13, $3. 175 million, 2023. November 2, 2023 plaintiff November 16, Tesla cross appeal.


February 9 2022 Diaz verdict California Civil Rights Department Tesla Alameda race discrimination hostile work environment pay equity. damages injunctive relief. September 22, 2022 Tesla complaint Administrative Procedures Act demurrer refiled. discovery.


June 1 2022 Equal Employment Tesla allegations. September 28, 2023 complaint Tesla California race harassment retaliation monetary injunctive relief. December 18 Tesla stay. December 26, dismiss.


June 16 2022 Tesla stockholders actions. Western Texas directors. breach fiduciary duty unjust enrichment securities laws race discrimination sexual harassment. relief damages fees. July 22, consolidated cases September 6 complaint. November 7, dismiss September 15 2023 dismissed amended complaint. November 2, 2023 amended complaint Elon Musk. December 19, dismiss.


subject to lawsuits relief. class actions consumer claims defects misrepresentations products. September 14, 2022 class action filed against Tesla. Northern District California driver assistance. consolidated Consolidated Amended Complaint filed October 28, 2022 damages relief Tesla January 1 2016. October 5, 2022 class. Eastern District New York claims. September 30, 2023 Court dismissed amend. November 20, 2023 plaintiff Tesla opposed. March 22, 2023 plaintiffs Northern Tesla cease Self-Driving cease sale deactivate provide notices. Tesla opposed. September 30, 2023 Court denied compelled four plaintiffs arbitration dismissed amend. October 31, 2023 remaining plaintiff amended complaint Tesla. October 2, 2023 class action San Diego County Superior Court California.San Diego federal January 8 2024 granted. District Northern District California.


February 27, 2023 class action filed. Northern California Tesla. Elon Musk executives. misrepresentations Autopilot FSD seeks damages Tesla. amended complaint September 5, 2023 Tesla. Elon Musk. November 6, 2023 Tesla.


March 14 2023 class action filed Tesla. Northern District California. similar complaints consolidated. Tesla violates antitrust warranty laws damages 2019 2023. July 17, 2023 plaintiffs filed consolidated complaint. September 27, arbitration November 17, dismiss. Second Complaint December 12, 2023 Tesla dismiss. appealed arbitration order. Trial July 7, 2025.


Company intends defend predict outcome impact. unable estimate loss claims unless noted.


receive requests from National Highway Traffic Safety Administration National Transportation Safety Board Securities and Exchange Commission Department of Justice local international agencies. requests include operations technology. compliance finance data privacy Tesla’s business personnel. cooperate with requests. no agency wrongdoing. predict outcome impact. enforcement impact business results prospects cash flows financial position brand.


subject to legal proceedings risks claims business activities. second quarter 2023 foreign news outlet obtained misappropriated data non-public Tesla business personal information. Tesla authorities working with law enforcement. August 5, 2023 class action filed Northern District California. individuals impacted additional lawsuits damages. unfavorable ruling impact business prospects cash flows financial position brand.


$525 million unused letters.


entered arrangements with investors funding solar energy systems vehicles. subsidiaries investors contributed cash assets financing funds agreements. determined funds are VIEs primary beneficiary ASC 810. considered provisions agreements power manage decisions operation solar energy systems customer contracts redeploying receivables. rights investors protective.


primary beneficiary VIEs consolidate financial position results cash flows intercompany balances transactions eliminated. Cash distributions receipts tax benefits tax credits allocated fund investor subsidiary agreements.


subsidiary option acquire investor’s interest market value formula agreements.


sale liquidation fund distributions agreements.


contracted funds operations maintenance accounting lease servicing performance reporting. guaranteed payments investors. creditors no recourse credit other. assets pledged collateral obligations.


assets liabilities intercompany transactions consolidated sheets 31, 2023 2022 Assets Cash equivalents Accounts receivable Prepaid expenses current assets Solar energy systems,278,060 non-current assets,087 Liabilities Accrued Deferred revenue debt finance leases liabilities Deferred revenue Debt finance leases long liabilities Total,777,215


stock options sale stock 2012 Tesla withheld taxes. indemnification agreement November 2021 additional taxes.


Tesla business CEO directors SpaceX X Corp. Related Person Transactions Policy. transactions material impact financial statements.


two segments automotive energy generation storage. automotive design manufacturing sales leasing electric vehicles regulatory credits. used vehicles body shop parts Supercharging insurance retail merchandise. energy generation storage design manufacture sales leasing solar solar incentives. CODM evaluate liability. revenues gross profit segment Automotive Revenues,738,553 Gross profit,565,735 Energy generation storage Revenues,789 Gross profit,141


table presents revenues sales December United States,235,553,973 China,745,145,844 international,793,764,006 Total,462,823


table long-lived assets 2023 2022 United States,667 Germany,258 China,978 international Total,037


table inventory segment 2023 2022 Automotive,139,996 Energy storage,487,626


2022 2021 recorded $204 $101 million losses digital assets. gains $64 million $128 million converting fiat currency. expenses $36 million quarter employee terminations.


DISAGREEMENTS DISCLOSURE


management Chief Executive Officer Chief Financial Officer evaluated disclosure controls procedures Rule 13a-15 Securities Exchange Act 1934. controls management recognizes reasonable assurance achieving desired control objectives. design reflect resource constraints management judgment evaluating benefits costs.


evaluation Chief Executive Financial Officer concluded December 31, 2023 disclosure controls procedures designed reasonable assurance information Exchange Act recorded processed summarized reported SEC rules information accumulated communicated management timely decisions disclosures.


management responsible internal control over financial reporting. designed Chief Executive Officer Chief Financial Officer assurance reliability financial reporting preparation financial statements accounting principles includes policies procedures maintenance records transactions dispositions assets transactions recorded preparation financial statements receipts expenditures authorizations management directors prevention unauthorized acquisition use disposition assets financial statements.


supervision management evaluation internal control financial reporting Internal Control – Integrated Framework (2013) Sponsoring Organizations Commission. concluded effective December 31, 2023.


PricewaterhouseCoopers LLP audited control financial reporting December 31, 2023.


limitations internal control financial reporting prevent misstatements projections future risk controls conditions compliance policies deteriorate.


no change in control over financial reporting quarter ended December 31, 2023.


directors officers adopted modified terminated Rule 10b5-1 quarter December 31, 2023 408 Regulation S-K


Robyn Denholm adopted Rule 10b5-1 sale 281,116 shares stock. 2024. expiration August 16 2024.


Andrew Baglino Vice President Powertrain adopted Rule 10b5-1 115,500 shares. December 2024.


information Item 10 Form 10-K 2024 Proxy Statement filed Securities Exchange Commission 2024 Annual Meeting Stockholders incorporated. filed 120 days fiscal year.


11 10-K 2024 Proxy Statement incorporated.


SECURITY OWNERSHIP STOCKHOLDER


12 10-K 2024 Proxy Statement incorporated.


13 10-K 2024 Proxy Statement incorporated.


14 10-K 2024 Proxy Statement incorporated.


. Consolidated Statements Part II 8


. financial statement schedules omitted required information not applicable included consolidated financial statements notes


. exhibits Index filed incorporated report


Exhibit Number Description No. Date. Restated Certificate Incorporation.#001-34756. 1 2017. Amendment.#001-34756. 1 2017. Restated Bylaws.#001-34756. 5, 2023. common stock certificate.#001-34756. 1 2017. Amended Restated Investors’ Rights Agreement August 31, 2009, Registrant holders capital stock.#333-164593. 29, 2010. Agreement May 20 2010, Registrant holders capital stock. 27, 2010. Agreement Registrant Toyota Motor Corporation holders capital stock. 2010. June 14 2010, Registrant holders. 2010.Fifth Investor’s Rights Agreement November 2, 2010, Registrant holders capital stock.#001-34756. 2010 Exhibit Number Reference Description No. Date. Agreement May 22, 2011, Registrant holders capital stock.#333-174466. 2, 2011. May 30, 2011, Registrant holders capital stock.#001-34756. 1, 2011. Amendment May 15, 2013 Registrant Elon Musk Revocable Trust holders capital stock.#001-34756. 2013. May 14, 2013, Registrant holders capital stock.#001-34756. 20 2013. August 13, 2015, Registrant holders stock.#001-34756. 19, 2015.Fifth Investors’ Rights Agreement May 18 2016, Registrant holders capital stock.#001-34756. March 15 2017 Registrant holders capital stock.#001-34756. May 1 2019 Registrant holders capital stock.#001-34756. May 22, 2013, Registrant U. S. Bank National Association.#001-34756. 2013. Supplemental Indenture May 7, 2019 Registrant U. S. Bank National Association 2.% Convertible Senior Notes May 15, 2024.#001-34756. Convertible Senior Notes 2024 Exhibit. October 15, 2014, SolarCity U. S. Bank National Association.-199321. 15 2014.March 9 2015, SolarCity Trustee 5. Solar Bonds 2015/6-10.-35758. Indenture SolarCity 5. 75% Solar Bonds 2015/7-15.-35758. Indenture March 19, SolarCity. 70% Solar Bonds 2015/C4-10.-35758. Indenture SolarCity 5. 45% Solar Bonds 2015/C5-15.-35758. Supplemental Indenture March 26, 4. 70% Solar Bonds 2015/C9-10.-First Supplemental Indenture March 26, SolarCity 5. 45% Solar Bonds 2015/C10-15.-35758.-Sixth Supplemental Indenture April 2, SolarCity 4. 70% Solar Bonds 2015/C14-10.-35758. 2 2015. Supplemental Indenture 9 SolarCity Trustee. 70% Solar Bonds 2015/C19-10.-35758. 9 2015 Reference. Date.-First Supplemental Indenture April 9 SolarCity. 45% Solar Bonds 2015/C20-15.-35758.-Fifth Supplemental Indenture. 70% Solar Bonds 2015/C24-10.-35758.-Sixth Supplemental Indenture SolarCity. 45% Solar Bonds 2015/C25-15.-35758.-Eighth Supplemental Indenture April 21, SolarCity. 70% Solar Bonds 2015/C27-10.-35758.-Ninth Supplemental Indenture SolarCity. 45% Solar Bonds 2015/C28-15.-35758. 21, 2015.-Third Supplemental Indenture SolarCity Trustee. 70% Solar Bonds 2015/C32-10.-35758. 27, 2015.-Fourth Indenture SolarCity. 45% Solar Bonds 2015/C33-15.-35758.-Eighth Supplemental Indenture May SolarCity. Solar Bonds 2015/12-10.-35758. 1 2015.-Ninth Supplemental Indenture SolarCity. 75% Solar Bonds 2015/13-15.-35758. Supplemental Indenture May 11 SolarCity. 70% Solar Bonds 2015/C36-10.-35758. 11.-Third Supplemental Indenture May 11 SolarCity. 45% Solar Bonds 2015/C37-15.-35758.11 2015.-Seventh Supplemental Indenture May 18 SolarCity Trustee. 70% Solar Bonds 2015/C40-10.-35758. 18 2015.-Eighth Indenture SolarCity. 45% Solar Bonds 2015/C41-15.-35758.-First Supplemental Indenture May 26, SolarCity. 70% Solar Bonds 2015/C44-10.-Second Supplemental Indenture May. 45% Solar Bonds 2015/C45-15.-35758. 2015. Supplemental Indenture June 16 SolarCity. 70% Solar Bonds 2015/C52-10.-35758.-First Supplemental Indenture. 45% Solar Bonds 2015/C53-15.-35758.-Fourth Supplemental Indenture June 22, SolarCity.70% Solar Bonds 2015/C56-10.-35758. 23, 2015.-Fifth Supplemental Indenture June 22, SolarCity. 45% Solar Bonds 2015/C57-15.-35758. Supplemental Indenture June 29, SolarCity. 70% Solar Bonds 2015/C61-10.-35758.-First Supplemental Indenture June 29,. 45% Solar Bonds 2015/C62-15.-35758. Supplemental Indenture July 20 SolarCity. 70% Solar Bonds 2015/C71-10.-35758. 21,.-First Supplemental Indenture July. 45% Solar Bonds 2015/C72-15.-35758.-Fifth Supplemental Indenture July 31, SolarCity. Solar Bonds.-35758. 31, 2015.-Sixth Supplemental Indenture SolarCity Trustee 5. 75% Solar Bonds 2015/21-15.-35758.-Fifth Indenture August 10 SolarCity. 70% Solar Bonds 2015/C81-10.-35758.-Eleventh Indenture August 17, SolarCity. 45% Solar Bonds 2015/C87-15.-35758.-Sixteenth Indenture August 24 SolarCity. 45% Solar Bonds 2015/C92-15.-35758.-First Indenture August 31, SolarCity. 45% Solar Bonds 2015/C97-15.-35758.-Eighth Supplemental Indenture September 14, SolarCity 4. 70% Solar Bonds 2015/C101-10.-35758.15 2015 Exhibit Reference Description. Date. Supplemental Indenture September 14 SolarCity Trustee 5. 45% Solar Bonds 2015/C102-15.-35758. 15 2015. Indenture September 28, SolarCity. 70% Solar Bonds 2015/C106-10. 29, 2015. Indenture SolarCity. 45% Solar Bonds 2015/C107-15.-35758. 29, 2015.-Eighth Indenture October 13, SolarCity. 70% Solar Bonds 2015/C111-10. Supplemental Indenture October 30 SolarCity 5. Solar Bonds Series 2015/25-10.-35758.62-Fourth Supplemental Indenture October 30, 2015, SolarCity Trustee 5. 75% Solar Bonds 2015/26-15.-35758. 63-Eighth November 4 SolarCity 4. 70% Solar Bonds 2015/C116-10.-35758. 64-Third Indenture November 16 SolarCity. 70% Solar Bonds 2015/C121-10.-35758. 65-Fourth Indenture November 16 SolarCity 5. 45% Solar Bonds 2015/C122-15.-35758. 17, 2015. 66-Eighth Indenture November 30, SolarCity 4. 70% Solar Bonds 2015/C126-10.-35758. 67-Ninth Indenture November 30 SolarCity.Solar Bonds 2015/C127-15.-35758. 30, 2015.-Third Supplemental Indenture December 14 SolarCity Trustee. 70% Solar Bonds 2015/C131-10.-35758. 14.-Fourth Indenture SolarCity. 45% Solar Bonds 2015/C132-15.-35758.-Eighth Indenture SolarCity. 70% Solar Bonds 2015/C136-10.-35758. 28,.-Ninth Indenture December SolarCity. 45% Solar Bonds 2015/C137-15.-35758.-Third Indenture January 29, 2016, SolarCity. Solar Bonds Series 2016/4-10.-35758.-Fourth Supplemental Indenture SolarCity 5. 75% Solar Bonds Series 2016/5-15.-35758. 29, 2016. Registrant’s Securities. 13, 2020. Indemnification Agreement Registrant directors officers. 15 2010. Equity Incentive Plan. 27, 2010. Stock Option Agreement 2003 Equity Incentive Plan. 29, 2010. Incentive Plan. 23, 2018. Stock Option Agreement Incentive. 1 2017. Restricted Stock Unit Award Agreement. Employee Stock Purchase Plan February 1 2017. 1 2017. Equity Incentive Plan. 12 2019. Stock Option Agreement. Restricted Stock Unit Award Agreement.. 12 2019. Stock Purchase Plan. SolarCity Stock Plan. 5 2012. SolarCity Equity Incentive Plan. Zep Solar. Equity Incentive Plan. 20 2013. Letter Registrant Elon Musk October 13, 2008.#333-164593. 29, 2010. Stock Option Agreement Elon Musk January 21, 2018.#001-34756 8 2018. 2005 Omnibus Equity Incentive Plan 6. Technologies. Omnibus Equity Incentive Plan 2 2017. Agreement June 23, 2020 Registrant Elon. Musk. 28, 2020. Agreement February 27, 2014, Registrant.Morgan Securities. 5 2014. Call Option Confirmation. 25% Convertible Senior Notes March 1 2021. Warrant Confirmation. 25% Convertible Senior Notes 2021. Option Confirmation 2. Convertible Senior Notes May 15 2024. Warrant Confirmation. Convertible Senior Notes 2024. Agreement Panasonic Corporation Registrant October 5 2011. 2012. Supply Agreement 2013. 2014 Panasonic July 31, 2014. 7 2014. Terms Conditions Panasonic October 1 2014. Agreement February 24 2015, co General Terms Conditions Production Pricing Agreement Investment Letter Agreement. 24 2016.Gigafactory Terms March 1 2016, Panasonic Panasonic Energy Corporation North America. 11 2016. Restated Terms Conditions Gigafactory June 10 2020 Tesla Motors Netherlands. Panasonic North America. Pricing Agreement Panasonic October 1 2014. Letter Agreement Panasonic October 1 2014. Gigafactory Documents April 5 2016, Panasonic North America Energy. 2016. Pricing Agreement Cells 2011 Supply Agreement September 20 2019 Tesla Motors Netherlands. Panasonic SANYO Electric. 29,. Pricing Agreement 2170 June 9, 2020 Tesla Motors Netherlands. Panasonic North America. 28, 2020.Pricing Agreement Cells 2011 Supply Agreement December 29, 2020 Registrant Tesla Motors Netherlands. Panasonic North America SANYO Electric. 8 2021. Restated Factory Lease March 26, 2019 Registrant Panasonic Energy North America. 29, 2019. Amendment September 20 2019 Panasonic. 29, 2019. Lease Amendment June 9, 2020 Registrant Panasonic Energy North Amended Restated Factory Lease January 1 2017. 28, 2020. Restatement ABL Credit Agreement March 6, 2019 Tesla Motors Netherlands. subsidiaries Wells Fargo Bank Association JPMorgan Chase. Goldman Sachs Morgan Stanley Funding. Bank America.lenders Deutsche Bank New York Branch collateral.-229749. 3, 2019. Amendment ABL Credit Agreement December 23, 2020 March 6, 2019 Tesla Motors Netherlands. subsidiaries Wells Fargo Bank JPMorgan Chase Bank. Goldman Sachs Bank Morgan Stanley Senior Funding. Bank of America. Deutsche Bank. 8 2021. Tax Abatement Incentives May 7 2015, Tesla Motors. State Nevada Governor’s Office. 2015. Agreement August 11, 2017 Registrant SolarCity Goldman Sachs. Morgan Stanley. 23, 2017. Restated Agreement Research Development Alliance Triex Module Technology September 2, 2014, Research Foundation State University New York Silevo.-35758.6 2014 Exhibit Number Reference Description No. Date 10. 46 Amendment Agreement Alliance Triex Module Technology October 31, 2014, Research Foundation State University New York Nanoscale Science Silevo Inc.-35758. 16a 24, 2015. 47 Amendment December 15, 2014, Research Foundation Silevo.-35758. 16b 24, 2015. 48 Amendment Triex Module Technology February 12, 2015, Research Foundation University Silevo Inc.-35758. 16c 6, 2015. 49 Amendment Agreement Triex Module Technology March 30, 2015, Research Foundation State University Silevo.-Q(1)-35758. 16d 6, 2015 10.Amendment Agreement Alliance Triex Module Technology June 30 2015, Research Foundation State University New York College Nanoscale Science Silevo LLC.-Q(1)-35758. 30, 2015. 51 Amendment Agreement Triex Module September 1 2015, Research Foundation Silevo LLC.-Q(1)#001-35758. 30, 2015 Exhibit Number Reference Description. Date. 52 Amendment Agreement Triex Module Technology October 9 2015, Research Foundation Silevo LLC.-Q(1)#001-35758. 30, 2015. Amendment Agreement Triex Module Technology October 26, 2015, Research Foundation Silevo LLC.-Q(1)#001-35758. 30, 2015.Amendment Agreement Triex Module Technology December 9 2015, Research Foundation State University New York College Nanoscale Science Silevo LLC.-35758. 10 2016. 55 Amendment March 31, 2017 Research Foundation Silevo.#001-34756. 10, 2017. Amendment Agreement July 22, 2020 Foundation Silevo Tesla Energy Operations.#001-34756. 28, 2020. Amendment Triex Module Technology May 1, 2021 Research Foundation Silevo Tesla Operations.#001-34756. 25, 2021 Reference. Date. Contract State-Owned Construction Land Use Right October 17, 2018 Shanghai Planning Land Resource Administration Bureau Tesla (Shanghai. grantee translation.#001-34756. 29, 2019.Agreement January 20 2023 Tesla Inc. Lenders Issuing Banks Citibank. Administrative Agent Deutsche Bank Securities. Syndication Agent#001-34756. 31, 2023. Subsidiaries Registrant. LLP Accounting Firm. 13a-14 15 Certification Principal Executive Officer. 13a-14 Principal Financial Officer. 1350 Certifications Inc. Clawback Policy. XBRL Document. XBRL Taxonomy Extension Schema. Taxonomy Extension. Extension. Taxonomy Extension Presentation Interactive Data File taxonomy extension information Exhibits 101


exhibit Regulation S 601.


Maxwell Technologies.


Section 13 Securities Exchange Act 1934 registrant report signed. January 26, 2024 Elon Musk Executive Officer


Securities Exchange Act 1934 report signed registrant capacities dates. Signature Elon Musk Executive Officer 26, 2024 Vaibhav Taneja Financial Officer 26, Robyn Denholm 26, 2024 Ira Ehrenpreis Joseph Gebbia James Murdoch Kimbal Musk 26, 2024 JB Straubel Kathleen Wilson-Thompson 26, 2024


Annual Report Form 10-K statements federal securities laws. include strategy content service future financial performance net income expenses profitability liquidity net cash financing free cash flows capital allocation strategies stock repurchases seasonality stock price volatility foreign exchange rate interest rate facilities regulatory changes intellectual property price changes accounting treatment acquisitions competitors membership growth partnerships advertising multi-household usage member viewing patterns dividends obligations global content marketing investments work stoppages content amortization tax examinations tax expense unrecognized tax benefits deferred tax assets change growth company culture employees. statements subject risks uncertainties. Item 1A "Risk Factors" section Report.forward-looking statements based on date no obligation revise release except required by law.


Netflix, Inc. leading entertainment 260 million memberships 190 countries TV series films games genres languages. Members play pause resume change plans.


strategy grow business globally operating margin target. improve members' experience compelling content. drive conversation enhance joy enhancing user interface choose content.


operate segment. revenues membership fees streaming. Note 12 Segment Geographic Information financial statements.


market entertainment video competitive rapid change. compete with activities leisure time linear TV streaming pirated video gaming against entertainment social media free time. compete against obtaining content licensed original.


consumers relationships entertainment sources we strive choose us free time. referred "winning moments truth. improve service technology content offerings.


membership growth seasonal pattern internet screens viewing. fourth quarter greatest growth. impacted content schedule pricing plans.


trademarks service marks copyrights patents domain names trade dress secrets technologies intellectual property important success. use patent trademark copyright secret laws confidentiality agreements protect intellectual property. rights extend technology business processes content. use intellectual property third parties creating content merchandising marketing. content depends studios content providers rights distribution. license periods terms conditions vary. risks disputes. disputes.


media landscape internet delivery growing regulatory action. Historically media regulated countries. regulatory frameworks services. countries update legislation Netflix. content quotas levies investment obligations. Some restrict ownership rights service content. regulators reviews adjustments content. regulations impact services make operating expensive restrictive.


employees culture key success. December 31, 2023 13,000 full-time employees. 9,000 (69% United States Canada 2,000 (15%) Europe Middle East Africa 500 (4% Latin America 1,500 (12%) Asia-Pacific. employees content production part-time temporary numbers fluctuate. critical success company culture. Memo website unique environment. aim attract retain people diverse perspectives skills team. empower employees decision-making freedom power decisions. accountable decisions. flexible fun stimulating creative collaborative successful organization.


expanded offices globally culture important. mindful of cultural differences. Fostering work environment culturally diverse inclusive equitable focus. build diversity inclusion equity operations critical lens Netflix. cultures on screen employee base diverse communities. increase representation recruiters leaders diversify networks. support employee resource groups underrepresented marginalized communities. publish annually update inclusion initiatives EEO-1 reports website.


believe fostering leaders. offer programs seminars lectures leaders VPs managers business teams goals. built portfolio programs pillars company leaders human beings future success. offer programs workshops skills coaching leading inspiring


. focus helps employees grow positions Netflix global business content.


aim pay employees top personal market choose compensation between cash stock. permits compensation personalized needs preferences. conduct pay equity analyses annually adopted practices ensure underrepresented groups gender race. rectify pay gaps.


care employees benefit programs. employees receive annual cash health benefit medical dental vision premiums. benefits mental health childcare family planning company match charitable donations.


approach human capital instrumental growth Netflix desirable.


maintain website. netflix. com. contents not Annual Report Form 10-K. free access Annual Report Quarterly Reports 10-Q Current Reports 8-K amendments filed Section 13(a) 15(d Securities Exchange Act 1934 Securities Exchange Commission.


Investors announce financial information relations website. SEC filings press releases conference calls webcasts. social media blogs communicate company services issues. information social media blogs material information. encourage investors media review social media blogs website.


risks occur business financial results. trading price common stock decline lose investment.


efforts attract retain business affected.


add new members replace canceled memberships grow business beyond current base. penetration growth rates vary across jurisdictions. countries years membership growth slower newer less penetrated countries. attract retain members on compelling content choices conversation quality experience TV series films games. service levels content offerings pricing features competitors may impact attract retain members. Competitors include entertainment video gaming user-generated content sources of entertainment.


Members cancel service perception expenses dissatisfaction content competitive services customer service issues. Membership growth impacted by seasonality fourth quarter greatest growth timing content release schedules. Adverse macroeconomic conditions inflation impact attract retain members. grow content costs fixed adjust expenditures increase revenues pricing lowered growth rate margins liquidity results. unable compete competitors content business affected.


provide value members improvements service revenue results operations business adversely affected.


consumers perceive service value introduce adjust features pricing change content attract retain members revenue per membership results operations affected. expanded entertainment video games. efforts games not valued current future members attract retain members. seek extend business new products services. expanding consumer products live experiences. find develop new products services future results impacted.


adjust membership pricing plans model. introduced new lower-priced ad-supported subscription plan. increased enforcement limit multi-household usage shared viewing outside household. adjustments impact attract members revenues results operations. members rejoin originate from word-of-mouth advertising. If members adjustments successful may attract retain maintain grow business affected.


offerings impact business.


market entertainment competitive change. channels consumers. economic models subscription transactional ad-supported piracy. potential capture


entertainment video market. Traditional providers internet e-commerce increasing streaming video offerings. competitors have long histories large customer bases brand recognition exclusive rights libraries financial marketing resources. may offer compelling content terms aggressive pricing resources product development technology infrastructure content acquisitions marketing. New entrants adjust services unique. technological developments generative artificial evolving. competitors results. Companies may enter business combinations alliances competitive positions. Piracy business proposition content free. piracy services rapid growth efforts may insufficient. business increase market share revenues profitability.


face risks unforeseen costs liability license.


producer distributor content face potential liability for negligence copyright trademark infringement claims materials. liability for content promoting service marketing materials. devote resources development production marketing distribution original programming TV series documentaries feature films games. original exclusive programming service brand retain members. programming expectations viewing popularity business brand results may. responsible for production costs expenses guild payments risks talent. entertainment industry impact timing costs. contract with third parties development production distribution programming. face liability suffer losses violate law fraudulent behavior. create sell digital merchandise license rights to product liability intellectual property claims. may remove content discontinue alter production if prohibited damaging to brand business.


anticipate costs mitigate risks content service liable for content distribute business may suffer. Litigation costly expenses damages liability risks harm operations. not indemnified against claims costs insurance coverage.


manage change growth business affected.


expanding operations internationally scaling streaming service growth introducing games advertising live programming expanding consumer products experiences. scaling studio operations original content acquisitions Scanline Animal Logic. managing business content consumer customs practices e-commerce streaming video legal regulatory environments. ad-supported subscription plan developing technology utilizing third-party computing services. content production games live programming consumer products building expertise creative marketing legal finance licensing merchandising management attention. may expand content. face integration operational challenges liabilities reputational concerns partners companies.


manage complexity business improving corporate culture systems practices streaming original content.


positive reputation attract retain members face regulatory scrutiny operating results affected.


believe positive reputation important attracting retaining members. content original programming low quality offensive not compelling reputation. content controversial offensive regulators face retaliatory action remove content heightened regulatory scrutiny. face boycotts affect business. response government action marketing customer service public relations effective negative reputation. increasing focus regulators investors members on environmental social governance matters new disclosure regulatory frameworks. content creates ESG concerns reputation harmed.


business impacted acquisitions investments.


acquire invest businesses technologies. risks include integrating solutions operations personnel inheriting liabilities litigation failure benefits synergies diversion time attention.


risks acquisitions impact business. complete acquisition integrate business realize benefits. Acquisitions investments contribute fluctuations quarterly financial results. fluctuations costs eliminating redundant expenses write-offs impaired assets impact financial results.


rely partners service devices.


offer members streaming content internet-connected devices TVs digital video players set-top boxes mobile devices. agreements with cable satellite telecommunications operators set-top boxes some compete or. agreements include partner bills Netflix service offers services. If partners content service may. intend broaden relationships increase capability stream TV series films offer games platforms. If relationships technological content licensing regulatory business impediments content retain members grow business could.


agreements with partners one three years business if partners provide access or unwilling on terms accessibility prominence. devices manufactured sold by other Netflix responsible for performance connection in consumer dissatisfaction claims impact business. technology changes require partners update or supporting on legacy devices. If partners update discontinue support service members' use enjoyment negatively impacted.


subject payment.


members pay service payment methods credit cards gift cards prepaid cards direct debit online wallets carrier partner billing. rely on internal systems third parties. Acceptance processing subject to rules regulations industry standards data storage authentication interchange fees. increases processing fees changes payment ecosystem re-issuances delays changes rules loss payment partners disruptions failures processing payment products revenue operating expenses results could. leverage third parties bill. transition subscribers alternative member acquisition retention. encounter fraudulent use methods impact results negative consumer perceptions. fraud chargeback rate fines card approval rate additional card authentication requirements. termination process payments business.


government regulations internet business change alter business incur greater.


adoption of laws internet business could business. our service international markets governments regulations broadcast media tax. European law levies financial obligations on media operators outside jurisdiction. jurisdictions may impose financial regulatory obligations on us. growth online commerce may stringent consumer protection laws burdens. If with new expenses alter business model.


Changes laws growth internet impacting net neutrality fees decrease demand increase cost. laws operators legal traffic implemented countries European Union. laws nascent. favorable laws change United States net neutrality repealed. uncertainty interpretations repeal political power local operators discriminatory practices impede growth expense affect business.


engaged legal proceedings expenses occupy management's time.


subject to litigation business operations financial position. rise litigation matters. copyright patent infringement tax employment consumer securities class actions expensive defend. Litigation disputes expenses content unavailability service disruptions occupy management time attention business position. receive inquiries subpoenas information requests from government authorities subject to related claims actions. outcome difficult predict expensive time-consuming distracting adverse resolutions modification business practices reputational harm costs payments.


advertising new risks affect business.


limited experience history advertising revenue may not grow. revenue risks factors attract retain advertisers •fluctuations memberships engagement quantity quality ads compete advertising spend impact seasonal cyclical shifts macroeconomic conditions availability accuracy security measurement solutions •changes advertising devices TVs computers legal developments third-party policies impact •regulatory legislative industry developments collection use information privacy ad targeting measurement tools liability reputational harm from advertisements relationship with third-party service providers technology develop advertising sales team technology infrastructure impact content reputation on advertisers’ willingness spend member dissatisfaction advertisements.


studios providers rights holders refuse license streaming business.


provide members content depends on obtaining rights from third parties including distribution rights related elements public performance music. license periods terms conditions vary. content providers develop streaming services provide access content including popular series movies. If studios rights holders license content stream costs increase. licenses studios withdraw content quickly. content can withdrawn short notice. competition increases cost programming. service securing exclusive rights including original content. programming mix content. selective about titles add renew. If compelling mix member acquisition retention affected.


Music authors’ performances require licenses. engage negotiations with collection management organizations entities rights music intellectual property. streaming content territories. If reach acceptable terms could litigation enjoined from distributing content impact business. pending negotiations between CMOs third parties impact publishers withdrawing rights licensing agreements. Failure liability copyright infringement increase costs. digital distribution grows broader role CMOs remuneration authors performers greater distribution expenses.


trademarks proprietary rights protected third parties value brand intangible assets business affected.


rely on confidentiality license agreements with employees consultants third parties trademark copyright patent secret protection laws protect proprietary rights. enforce rights through court proceedings legal actions. filed expect trademark copyright patent applications. applications approved third parties challenge copyrights patents trademarks infringe rights prevent infringement misappropriation without expense. protection inadequate value brand intangible assets competitors mimic service perception members affected.


hold domain names brand including Netflix. com. Failure protect affect reputation brand difficult find website service. unable prevent decrease value trademarks proprietary rights.


property claims costly rights website streaming recommendation merchandising title content marketing.


Trademark copyright patent intellectual property rights important to us. extend to technology business processes content consumer products experiences marketing assets. use intellectual property third parties content merchandising service. third parties allege. obtain rights defend develop non technology alter business practices business position. technologies exposure to claims protection for AI-generated material uncertain. companies patents affect business. patents claim business internet. not searched patents technology. Defending against claims results costly litigation diversion personnel. inability use website streaming technology recommendation merchandising technology market products. remove content consumer products marketing materials. develop non-infringing technology royalty licensing agreements adjust content merchandising marketing activities resolve. actions costly unavailable.


disruption unauthorized access computer third parties cybersecurity cyber-attacks loss degradation service disclosure destruction data theft intellectual property digital impact business.


reputation members performance security computer systems third parties. damage earthquakes adverse weather disasters health terrorist attacks rogue employees power loss telecommunications failures cybersecurity risks interruptions beyond control. Interruptions make service unavailable. interruptions errors software unavailability data diminish attractiveness members.


computer systems third parties subject to evolving cybersecurity threats viruses malware ransomware denial of service break-ins insider threats misconfigurations networks software hardware disruptions errors. experience attacks interruptions delays loss misuse theft of personal information confidential information intellectual property. rely on open source software libraries increase exposure vulnerabilities. outside parties induce disclose sensitive information access. hackers obtain data intellectual property disrupt service harm business damage reputation. implemented systems processes thwart hackers protect data systems. techniques unauthorized access evolving unable anticipate detect prevent address all cybersecurity incidents. prominence attractive target for attacks unauthorized release digital content. service systems business. no. carry insurance expenses disruptions unauthorized access.prevent hackers service systems expensive develop maintain. require monitoring updating technologies change security limit functionality impact service systems. disruption loss members affect business results. penetration third-party’s misappropriation personal information business regulatory reputation risk business financial condition results operations.


utilize communications computer hardware systems facilities third-party provider. third-party services business operations.-party content networks stream TV documentaries films offer games Netflix members. Problems disruptions cybersecurity threats regulatory interference impact experience.


rely Amazon Web Services service disruption impact operations business adversely impacted.


Amazon Web Services provides distributed computing infrastructure business "cloud". architected software systems utilize data processing storage services AWS. run majority computing on AWS. switch AWS to cloud disruption operations business. retail Amazon competes believe Amazon use AWS competitive advantage could harm business.


technology business fails unavailable expectations business results impacted.


utilize proprietary third-party technology business. includes technology recommend merchandise content fast delivery content members consumer devices. built deployed content-delivery network (“CDN”). Internet Service Providers interconnect CDN charge difficulties deliver streaming content business results. if recommendation technology predict titles members attract retain members. utilize third-party technology market service process payments manage daily operations. If technology fails operates improperly


errors in development software ability operate service retain add impaired. harm to devices software business results financial condition.


network operators charge access data impact business.


rely consumers access service internet. network operators block restrict impair access business. operators implement usage based pricing bandwidth caps monetize access incur operating expenses member acquisition retention. operators create tiers charge prohibit business.


network operators provide consumers internet multichannel video programming. use infrastructure growth. consumer demand regulatory oversight competition check incentives preferential treatment discriminatory practices business. incentives behavior differs across markets.


Privacy collect leverage information disclosure impact business reputation.


content acquisition merchandising ad-supported subscription plan collect utilize information personal. subject laws U. S. other countries privacy security information Regulation 2016/679 Data Protection Regulation California Privacy Rights Act. failure GDPR California Consumer Privacy Act privacy laws obligations rights violation investigations claims proceedings damages costs penalties liabilities harm reputation market position.


businesses criticized by privacy groups bodies for personal identities to data internet browsing. Increased regulation data self-regulation laws information business. personal information objectionable business reputation legal claims operating results. Internationally to stringent legal obligations personal information laws data localization restrictions on data export. Failure to to liability business model incur additional expenses.


reputation relationships billing data accessed unauthorized.


maintain personal information members names age gender billing information. systems third parties. billing information numbers rely on encryption authentication technology. measures protect against unauthorized intrusion. could experience intrusion. breach potential members may unwilling provide information. notify regulators data breach state Attorneys General EU data protection authorities individuals affected within time periods. face legal claims regulatory fines penalties. costs breach material carry insurance risk


breach. maintain personal information employees others productions. unauthorized intrusion business affected reputation data protection negatively impacted.


long-term fixed cost limit flexibility liquidity results.


streaming content enter multi-year commitments with studios content providers. content non-cancelable commitments talent agreements. payment terms not tied to member usage membership base determined by costs production titles licensed theatrical exhibition receipts. commitments included in Contractual Obligations Part II, Item 7 Financial Condition Note 8 Commitments Contingencies consolidated financial statements Part II Item 8 Annual Report Form 10-K. multiple-year duration fixed cost content commitments business performance margins. cash flows streaming content obligations. content commitments require more up cash payments. membership revenue growth liquidity results content commitments accelerated payment requirements. long-term fixed cost commitments limit flexibility changes business market.license produce content not favorably received unable acquisition retention long-term fixed cost content commitments adjust content offerings quickly results.


seek capital dilution rights common stockholders.


seek additional capital equity-linked debt securities. 2020 cash flows negative need additional capital. business plans performance capital markets. Rising interest rates disruption difficult raise capital refinance indebtedness. funds equity debt securities rights privileges common stock stockholders experience dilution. large equity-linked offering impact stock price.


substantial indebtedness obligations streaming content affect financial position generate cash debt.


substantial indebtedness obligations streaming content. incur additional indebtedness. payments financial operating performance economic conditions factors beyond control. service debt cash need refinance restructure prior maturity. financial markets difficult rising interest rates foreign currency economic capital refinancing restructuring higher interest rates onerous covenants restrict business operations. December 31, 2023 $14. 6 billion senior notes outstanding denominated currencies other. dollar. revolving credit agreement $1 billion unsecured revolving credit facility.


borrowed under revolving credit facility. December 31, 2023 approximately $7. 0 billion content liabilities consolidated balance sheet denominated currencies other U. S. dollar. streaming content commitments liability recognition significant. information streaming content obligations see Note 8, Commitments Contingencies consolidated financial statements Part II Item 8 Annual Report Form 10-K. substantial indebtedness obligations obligations difficult financial obligations borrow cost borrowing cash flow financing cash flow debt service payments obligations flexibility business competitive disadvantage vulnerability adverse economic industry conditions interest rates foreign exchange rates.


regulatory risks international operations.


international markets requires resources management attention economic political regulatory risks different U. S. risks.international operations involve risks business content user interfaces for cultural language differences costs staffing managing foreign operations unrest hostilities economic instability with Foreign Corrupt Practices Act UK Bribery Act anti-corruption laws export controls economic sanctions local laws corrupt payments •difficulties local laws regulations customs ownership requirements streaming action against service disruption service increased operating costs intellectual property laws EU copyright impact economics content anti-piracy efforts intellectual property rights tax consequences tax laws rates deferred assets •fluctuations currency exchange rates impact revenues expenses foreign risk derivative instruments hedge counterparty risk inflation repatriation currency control regulations restrictions on transfer funds payment processing systems electronic payment methods competition •censorship requirements content disappointment brand tarnishmentdissatisfaction service usage internet devices user data privacy laws localization export local ownership broadband wide networks laws piracy impacts trade disputes regulations local production culture content quotas investment obligations levies film funds. European Union revised Audio Media Services Directive 2018 European works (30%) catalogs prominence.


factors business plans expanding ceasing operations strategies. failure risks harm international operations business results.


taxation jurisdictions.


U. S. multinational company. jurisdictions. judgment global provision income deferred taxes liabilities receivables evaluating tax positions. subject tax returns IRS state local tax authorities challenging tax positions. assess adverse outcomes provision. consider factors tax positions benefits require adjustments forecast tax audit outcomes. tax liabilities differ business financial condition impacted.


Tax laws re-examined globally. New laws financial statement purposes. Tax authorities tax positions tax audits jurisdictions. U. S. governments European Union Organization for Economic Cooperation Development considering changes tax laws increase tax obligations. tax authorities change laws challenge profits taxes increase business financial condition.


lose employees hire qualified failure company culture affect business.


rely senior management Co-Chief Executive Officers Ted Sarandos Greg Peters Executive Chairman Reed Hastings executive team key employees. competition for-skilled business technical creative personnel. high executive turnover business practices succession plans transition recruiting retaining motivating culture operations affect results.


disputes adverse.


partners suppliers vendors engage directors actors talent employees collective bargaining agreements motion picture industry. Expiring agreements renewed unfavorable. unions strikes work stoppages. Writers Guild Screen Actors Guild


agreements expired 2023 WGA SAG-AFTRA May July 2023. bargaining agreements I. T. S. contracts Teamster unions expire mid-2024. WGA SAG-AFTRA strikes resurgence organized labor lead workers strike. work stoppages halted productions delays new content. higher costs complexities delays costs profit margins new content.


Provisions charter Delaware law discourage takeover plans modify.


charter documents discourage merger acquisition •authorize board issue 10,000,000 shares preferred stock classified board until annual meeting 2025 •prohibit stockholders acting written consent advance notice.


Delaware corporation subject to anti-takeover provisions. law engage holder 15% capital stock unless three years or board. rely Delaware law prevent acquisition.


merger acquisition retention payments employees Severance Retention Incentive Plan cost.


stock.


price common stock fluctuated. due to factors beyond control •variations operating results membership acquisition retention revenues income net income cash free cash flow results expectations analysts investors financial community business expansion plans •competition pricing strategies volatility demand stock short interest impact current repurchase program future results competitors risks uncertainties.


investors common stock resell shares original purchase price.


volatility subject litigation. experience litigation future volatility. litigation substantial costs diversion attention resources.


financial results judgments differ results.


dynamic business limitations predicting future forecasts revenues margins net income financial data may differ from results. predicting consumer pricing strategies multi-household usage new revenue streams difficult operating history results may differ from expectations management securities analysts investors. discrepancies could cause decline trading price common stock. consolidated financial statements requires estimates assumptions assets liabilities revenues expenses. base estimates on historical experience assumptions results may differ. estimate content amortization pattern television series film viewing patterns. viewing patterns differ affect amortization. estimates in-period expenses earnings guidance impact results stock price. events outside control may cause results differ from.


enterprise-wide information security program detect cybersecurity risks threats. use security tools prevent identify escalate investigate resolve recover vulnerabilities incidents. include internal reporting monitoring detection tools bug bounty program vulnerabilities before. maintain third party security program mitigate remediate risks rely on third parties ensure.


assess risks cybersecurity monitor systems vulnerabilities. use risk quantification model develop security controls safeguards. conduct reviews tests leverage tabletop exercises penetration testing red team exercises simulations improve. engage external auditor annual payment card review third penetration testing. results reported Audit Committee.


systems experience attacks interruptions delays service loss misuse theft of personal information data confidential information intellectual property unauthorized release digital content. incidents material impact service systems business. significant disruption could loss members business results. penetration misappropriation misuse personal information business regulatory reputation risk business financial condition results. Factors disruption unauthorized access cybersecurity loss degradation service unauthorized access disclosure destruction data theft intellectual property digital content business.


Vice President Security Privacy leads organization Netflix program. 30 years industry experience cybersecurity companies. Team members educational industry experience


holding positions companies. reports senior management cybersecurity threats.


Board annual enterprise risk assessment security cybersecurity. Audit Committee cybersecurity reports VP Security Privacy mitigation strategies emerging risks incidents industry trends.


leased properties Los Gatos Los Angeles. lease office production space world.


believe existing facilities adequate requirements additional space available expansion additional offices.


Note 8 Commitments Contingencies financial statements Part II Item 8 Statements Data Annual Report Form 10-K Proceedings.


Equity Stockholder Purchases Securities


common stock traded NASDAQ.


December 31, 2023 2,728 stockholders larger beneficial owners.


never declared paid cash dividends capital stock anticipate.


Stock repurchases December 31, 2023 Shares Purchased Price Paid Share Programs Value Shares October 1 - 31, 2023. November 1 - 30 2023,708,477. December 1 - 31, 2023,771.,354,857,477


March 2021 authorized repurchase $5 billion expiration September 2023 increased repurchase $10 billion expiration. Note 9 Stockholders’ Equity Annual Report.


price share repurchases.


statement contrary previous filings Securities Exchange Commission information price performance common stock not Exchange Act not incorporated filings.


graph compares five year period 2023 stockholder return common stock NASDAQ S&P 500 RDG Internet Composite Index. points last trading day years 2021 2022 2023. return assumes $100 invested common stock Composite S&P 500 RDG Internet Composite Index reinvestment dividends. stock price performance future performance.


Form 10-K discusses 2023 2022.'s Discussion Analysis Financial Condition Results Operations Part II Item 7 Company Annual Report 10-K year December 31, 2022.


consolidated performance Ended December. revenue membership percentages Financial Results Streaming revenues,640,458,496 DVD revenues,698 Total revenues,723,297,697,844 Operating income,003,194,509 Operating margin Global Streaming Memberships Paid membership additions,181 Paid memberships end period Average memberships,924,784 monthly revenue membership.


April 2023 discontinue DVD-mail ceased September 29, 2023. discontinuance operations financial results.


revenues December 2023 increased 7% 2022. Operating margin increased three points due revenues faster decreased technology development expenses offset higher general administrative expenses.


derive revenues membership fees streaming content. offer membership plans price varies by country features. December 31, 2023 paid plans. $1 to $28 extra sub accounts. $2 to $8. prices change test variations.


earn revenue advertisements streaming service consumer products sources. Revenues membership material 2023 2022 2021. Ended. Streaming revenues,640,458,469,852,496,170,606


Streaming revenues December 2023 increased 7% 2022 due 8% growth memberships offset 1% decrease monthly revenue. due changes plan mix higher membership growth lower price increases. revenues impacted foreign exchange rates.


tables revenue membership region 2023 2022 2021.


Ended December 31,. thousands revenue membership percentages Revenues,783,084,643,972,100,140 membership additions,279 Paid memberships end period,128,296,215 Average memberships,126,001,234,125 monthly revenue membership. currency change


Ended December 31,. thousands revenue membership percentages Revenues,556,487,745,015,819,472 membership additions,084,338,391 memberships end period,813,036,084 Average memberships,928,024 monthly revenue membership. Constant currency change


Ended December 31,. 2022 thousands revenue membership percentages Revenues,461,069,973 membership additions,298,424 Paid memberships end period,997,298 Average memberships,802,573 monthly revenue membership. Constant currency change


Ended December 31,. thousands revenue membership percentages Revenues,763,727,221,266,601 membership additions,315,391,140 memberships end period,338,632,315 Average memberships,019,461 monthly revenue membership. Constant currency change


paid membership Netflix service payment not part of free trial promotions. members add extra accounts. not included in paid memberships. membership canceled ceases metrics cancellation date. Voluntary cancellations effective end prepaid membership period. Involuntary cancellations failed payment effective immediately. Memberships assigned territories geographic location geo-location technology.


believe non-GAAP measure constant currency revenue analyzing monthly revenue absent foreign currency fluctuations. superior measures GAAP. exclude effect foreign currency rate fluctuations revenue estimate revenue assuming foreign rates constant. December 31, 2023 revenues $597 million higher rates constant 2022.


Amortization content assets majority revenues. Expenses licensing production content payroll stock compensation facilities personnel rights music deals talent production costs streaming delivery operations costs remainder. built global content delivery network volume content. Delivery expenses include equipment payroll personnel third-party costs cloud computing. operations costs customer service payment processing fees costs content. Ended December 31,. thousands Cost revenues,715,368,168,285,332,683,083 percentage revenues


increase cost revenues 2023 2022 due $171 million increase content amortization $376 million increase revenues expenses acquisition licensing production content.


Marketing expenses advertising payments partners manufacturers video distributors mobile operators ISPs. digital television advertising. payroll stock compensation facilities sales marketing. Ended December 31,. 2022 thousands Marketing#2,657,883,502,146,381 percentage revenues


marketing expenses 2023 2022 due $146 million advertising $21 million personnel offset $39 million marketing partners.


Technology development expenses payroll stock compensation facilities technology personnel testing user interface recommendations merchandising infrastructure. computer hardware software. Ended December 31,. 2022 thousands Technology development,711,041,273,885,283) percentage revenues


Technology expenses December 31, 2023 2022 flat.


administrative expenses payroll stock compensation facilities personnel. professional fees expenses. Ended December 31,. 2022 thousands percentages administrative,285,351,621,394 percentage revenues


increase expenses 2023 2022 $82 million third-party expenses $78 million personnel costs.


Interest expense debt obligations amortization issuance costs. Note 6 Debt debt obligations. Ended December 31,. 2022 thousands Interest expense#699,826,212,386 percentage revenues


Interest expense year December 31, 2023 $698 million Notes. 2023 2022 flat.


Interest income foreign exchange gains losses balances interest cash equivalents short-term investments. Ended December 31,. 2022 thousands Interest income,772,310 percentage revenues


Interest income decreased foreign exchange losses $293 million 2023 $282 million 2022. foreign exchange loss non-cash loss $176 million Senior Notes euros cash liability. foreign exchange gain 2022 non-cash $353 million gain Senior Notes euros offset cash liability. foreign currency gains losses offset $221 million increase interest income higher interest rates investment balances 2023.


Ended December. 2022 thousands percentages Provision income taxes,005,875,410 tax rate


decrease effective tax rate 31, 2023 2022 due foreign taxes. Note 10 Income Taxes.


December. thousands Cash equivalents restricted short-term investments,139,488,858,057,630 long debt,543,185


equivalents investments increased $1,058 million 2023 repurchase stock.


increased $190 million euro notes. principal interest twelve months $1,077 million. $16,662 million. December 2023 no borrowed $1 billion Revolving Credit Agreement.


anticipate future capital needs debt market limited. additional financing acquisitions development efforts business plans operating performance capital markets. obtain financing terms. raise additional funds equity debt securities rights privileges senior common stock stockholders experience dilution.


March 2021 Board authorized repurchase $5 billion stock no expiration September 2023 increased repurchase $10 billion expiration. repurchases market Rule 10b-18 trading plans privately-negotiated transactions accelerated block purchases. obligated stock price economic business conditions investment opportunities. discontinue repurchases notice. December 31, 2023 repurchased 14,513,790 shares $6,045 million. December 31, 2023 $8. 4 billion repurchases.


uses cash include acquisition licensing production marketing streaming delivery personnel costs strategic acquisitions investments. Cash payment non-original content amortization. Investments original content require more cash. production costs paid. global content original liquidity. cash flows funds financing revolving credit facility needs next twelve months.


cash requirements content debt lease. December 31, 2023 Contractual obligations 12 Content obligations,349,328,923,384,426 Debt,739,159,261,661,898 lease,899,393,541,407,919,690,621,717


December 31, 2023 obligations $4. 5 billion $2. 6 billion-current Consolidated Balance Sheets $14. 6 billion.


obligations include acquisition licensing production. includes non-cancelable commitments creative talent employment. acquisition licensing incurred titles. available liability recorded Balance Sheets. agreements include license unknown future titles quantity fees. film deals TV series license agreements. obligations table estimated obligation unknown future titles to years. obligations $1 billion to $4 billion next three years payments after twelve months. range based management judgments amounts may differ. title license fees include in obligations table.


obligations principal interest payments. Note 6 financial statements.


lease obligations expenses non-current liabilities Consolidated Balance Sheets imputed interest. additional not. December 31, 2023 Company additional leases real estate $343 million. See Note 5 Balance Sheet Components financial statements details.


December 31, 2023 unrecognized tax benefits $327 million $221 million non-current liabilities Balance Sheets. adjustments.


define free cash flow operating activities less purchases property other assets. important liquidity metric measures cash repay debt acquisitions investments stock repurchases. non-GAAP financial measure not net income operating cash financial performance liquidity GAAP.


liquidity compare cash flow net income differences timing payments amortization non-cash stock compensation expense gain/loss euro-denominated debt excess property equipment purchases working capital differences. include deferred revenue taxes interest debt. receivables settle quickly. Net cash operating activities,274,301,257,248,044 investing activities,392,143 financing,950,803),149,776,286,549 Non-GAAP reconciliation cash,274,301,257,044 Purchases property equipment,552 Change assets cash flow,749,307,221


cash increased $5,248 million 2022 $7,274 million 2023. $916 million 20% income working capital. payments decreased $3,519 million $16,660 $13,140 million.


Net cash investing activities increased $2,618 million 2022 to $542 million 2023. increase due short-term investments purchases no acquisitions 2023 compared $757 million 2022.


cash financing increased $5,287 million 2022 to $5,951 million 2023. due repurchases stock $6,045 million 2023 no repurchases 2022 debt maturities repayment maturity $700 million 5. 500% Senior Notes 2022.


cash $1,518 million $1,057 million amortization $339 million-cash compensation $176 million loss $47 million differences $101 million property purchases depreciation.


Note 8 Commitments Contingencies statements Part II Item 8 Annual Report 10-K incorporated.


preparation consolidated financial statements accounting principles requires estimates assumptions assets liabilities contingent assets liabilities revenues expenses. Securities and Exchange Commission critical accounting policies important financial condition results difficult subjective judgments. identified policies judgments. base estimates on historical experience assumptions. results may differ.


acquire license produce content original unlimited video entertainment. licenses fixed fee specific windows availability. require upfront. Payments additions changes liabilities cash Consolidated Statements Cash Flows.


recognize content assets Consolidated Balance Sheets. licensed capitalize fee title record liability period cost accepted available streaming. produced capitalize costs. Participations residuals expensed amortization production costs.


historical viewing patterns amortize content assets Consolidated Statements Operations title availability ten years first availability. amortization accelerated upfront viewing film TV series. 90% licensed content amortized within four years


availability. review factors amortization assets. estimates require management.


third-party qualify for tax incentives spend. accounting incentives type incentive nature location. tax incentives as cash receipts received after title launches. launch amounts eligible recognized in current or non-current Consolidated Balance Sheets receivables. Tax incentives accounted cost content assets reduce amortization Consolidated Statements Operations.


business model subscription based specific title level. Content assets monetized group reviewed when expected usefulness fair value less than unamortized cost. If content assets stated lower unamortized cost fair value. unamortized costs assets abandoned written off.


record provision taxes asset liability method. Deferred taxes tax rates differences financial assets liabilities tax bases loss tax credit carryforwards. effect deferred tax assets change tax rates recognized income enactment date. measurement reduced valuation allowance.


believe assumptions judgments estimates changes tax laws impact taxes financial statements.


evaluating deferred tax assets consider evidence past results future earnings taxable income tax planning strategies. assumptions income require judgment plans estimates business. results differ assumptions.


recognize tax benefits uncertain tax positions. recognize benefit if likely position sustained technical merits. tax benefits measured largest benefit 50% likelihood settlement. uncertainties tax audit estimates settlement unrecognized change tax benefits differ.


Note 10 Income Taxes statements.


Note 1 consolidated financial statements Presentation Accounting incorporated.


exposed market risks interest rate debt foreign currency.


December 31, 2023 cash investments funds time deposits. Interest.


December 2023 $14. billion debt unsecured fourteen tranches 2024 2030. Note 6.


debt fluctuate with interest rates increasing declining increasing. fair value foreign currency rates.


transact currencies. 57% revenue 28% expenses 2023. foreign risk exposures euro British pound Brazilian real Canadian dollar Mexican peso.


volatility exchange rates weakening foreign currencies. affect revenue income. 2023 revenues $597 million higher rates constant. Part II Item 7 Discussion Analysis Financial Condition Results non-GAAP constant currency.


December 2023 entered foreign exchange contracts mitigate. dollar revenues January 2024 rates. contracts reduce eliminate fluctuations hedge exposures. contracts cash flow hedges record gains losses income reclassify Consolidated Statements Operations earnings. dollar weakened 10% December 31, 2023 AOCI $958 million lower. adverse change AOCI offset favorable foreign currency change revenues earnings.


year December 31, 2023 entered foreign exchange contracts mitigate fluctuations. dollar transactions licensing production January 2024 rates. contracts reduce eliminate fluctuations not hedge exposures. contracts cash flow hedges record gains losses AOCI reclassify offset exposures earnings assets. dollar strengthened 10% December 2023 AOCI $71 million lower. adverse change AOCI favorable foreign currency change earnings.


experienced fluctuations net income settlement remeasurement assets liabilities functional. December 2023 recognized $293 million foreign exchange loss due non-cash remeasurement Senior Notes euros cash liabilities.


exchange rate cash restricted Consolidated Statements Flows December 2023 $83 million.


consolidated statements notes Part IV 15 Annual Report 10-K incorporated.


management co-Chief Chief Financial Officer evaluated disclosure controls procedures Rules 13a-15(e) 15d-15(e) Exchange Act end Annual Report Form 10-K. concluded disclosure controls procedures effective information reports Exchange Act recorded processed summarized reported within time periods Securities and Exchange rules forms information accumulated communicated management timely decisions.


management co-Chief Chief Financial Officer expect disclosure internal controls prevent error fraud. control system reasonable not absolute assurance objectives met. design reflect resource constraints benefits relative to costs. limitations no evaluation absolute issues fraud Netflix detected.


management responsible establishing internal control over financial reporting Rule 13a-15(f) Exchange Act. assessed December 31, 2023. used criteria Committee Sponsoring Organizations Treadway Commission Internal Control—Integrated Framework (2013. concluded control effective December 31, 2023. audited by Ernst & Young LLP.


no change in control over financial reporting quarter ended December 31, 2023.


Stockholders Board Netflix.


audited Netflix. control financial reporting December 31, 2023 Control-Integrated Framework Sponsoring Organizations Treadway Commission. Netflix. maintained control reporting 2023.


audited Public Company Accounting balance sheets December 2023 2022 statements income stockholders’ equity cash flows three years 2023 notes report January unqualified opinion.


management responsible internal control financial reporting assessment Annual Report. responsibility opinion control based audit. public accounting firm registered PCAOB independent U. federal securities laws rules Securities and Exchange Commission PCAOB.


conducted audit PCAOB. standards require plan assurance internal control financial reporting.


audit included understanding internal control financial reporting risk material weakness testing effectiveness procedures necessary. audit provides basis opinion.


internal control over financial reporting assurance reliability financial reporting preparation financial statements for accounting principles. includes policies procedures maintenance records transactions dispositions assets assurance transactions recorded necessary preparation financial statements receipts expenditures with authorizations management directors assurance prevention of unauthorized acquisition use disposition assets financial statements.


limitations internal control financial reporting prevent misstatements. projections effectiveness future risk controls compliance policies deteriorate.


adoption termination contracts purchase sale securities Section 16 officers directors three months December 31, 2023 Rule 10b5-1 Exchange Act Name Securities Purchased Ted Sarandos-CEO Director


Ted Sarandos co-CEO stock trading plan Rule November 10 2023. vested options sale 68,957 shares Netflix stock. expires February 7 2025 transactions.


directors officers-Rule 10b5-1 arrangement 408 Regulation.


directors officers incorporated One Election Directors Proxy Statement Annual Meeting Stockholders.


incorporated “Compensation Discussion Named Executive Officers Proxy Statement Annual Meeting Stockholders.


Ownership Owners Stockholder


incorporated “Security Ownership Owners Compensation Plan Proxy Statement Annual Meeting Stockholders.


incorporated Relationships Related “Director Proxy Statement Annual Meeting Stockholders.


accounting firm fees services incorporated Two Ratification Proxy Statement Annual Meeting Stockholders.


documents Annual Report Form 10-K


Statements


financial statements Annual Report Form 10-K. Data.


Statement


financial statement schedules omitted applicable 8. Financial Statements Supplementary Data.


Exhibit Annual Report 10-K.


Report Accounting Firm ID 42 Operations Income Cash Flows Balance Sheets Equity


Stockholders Board Netflix.


audited consolidated balance sheets Netflix, Inc. December 31, 2023 2022 statements operations income stockholders’ equity cash flows three years notes. statements present financial position December 31, 2023 2022 results operations cash flows U. accounting principles.


audited Public Company Accounting Oversight Board control financial reporting December 31, 2023 Internal Control Framework report January 2024 unqualified opinion.


financial statements responsibility management. opinion audits. public accounting firm registered PCAOB independent U. federal securities laws Securities Exchange Commission PCAOB.


conducted audits standards PCAOB. standards require plan audit assurance financial statements free misstatement. audits included risks misstatement. procedures included examining evidence amounts disclosures statements. accounting principles estimates management overall presentation. audits provide reasonable basis for opinion.


critical audit matter is from current period audit of financial statements communicated to audit committee relates to accounts disclosures material challenging complex judgments. alter our opinion on consolidated financial statements not separate opinion on.


disclosed Note 1 financial statements Company acquires licenses produces content original programming. amortizes Content historical estimated viewing patterns. Auditing amortization complex subjective judgmental amortization based future viewing patterns. differ amortization content amortization.


Addressed Audit obtained understanding evaluated design tested controls content amortization process. tested controls review method assumptions viewing consumption patterns. data. audit procedures method assumptions completeness accuracy data. assessed assumptions viewing trends operating information previous estimates results. performed analyses changes assumptions. Ernst & Young LLP Company's auditor since 2012. San Jose California January 26, 2024