Balance Sheet Components

12 Months Ended

Dec. 31, 2019

Balance Sheet Components Disclosure [Abstract]

Content Assets

Content assets consisted of the following:



	As of December 31,
	2019		2018
	(in thousands)

Licensed content, net	$	14,703,352	$	14,081,463
Produced content, net
Released, less amortization	4,382,685		2,403,896
In production	4,750,664		3,305,126
In development and pre-production	667,866		311,842
	9,801,215		6,020,864

Total	$	24,504,567	$	20,102,327

Current content assets, net	$	—	$	5,151,186
Non-current content assets, net	$	24,504,567	$	14,951,141

As of December 31, 2019, approximately $5,793 million, $3,733 million, and $2,518 million of the $14,703 million unamortized cost of the licensed content is expected to be amortized in each of the next three years. As of December 31, 2019, approximately $1,552 million, $1,187 million, and $882 million of the $4,383 million unamortized cost of the produced content that has been released is expected to be amortized in each of the next three years.

As of December 31, 2019, the amount of accrued participations and residuals was not material.

The following table represents the amortization of streaming content assets:



	Year ended December 31,
	2019		2018		2017
	(in thousands)
Licensed content	$	7,242,799	$	6,511,689	$	5,680,373
Produced content	1,973,448		1,020,399		517,444
Total streaming content	$	9,216,247	$	7,532,088	$	6,197,817

Property and Equipment, Net

Property and equipment and accumulated depreciation consisted of the following:



	As of December 31,						Estimated Useful Lives (in Years)
	2019			2018			Estimated Useful Lives (in Years)
	(in thousands)
Land	$	6,125		$	6,125
Buildings	33,141			73,468			30 years
Leasehold improvements	354,999			282,028			Over life of lease
Furniture and fixtures	87,465			63,667			3-15 years
Information technology	243,565			224,296			3 years
Corporate aircraft	108,995			62,560			8 years
Machinery and equipment	46,415			55,108			3-5 years
Capital work-in-progress	100,521			19,548
Property and equipment, gross	981,226			786,800
Less: Accumulated depreciation	(416,005		)	(368,519		)
Property and equipment, net	$	565,221		$	418,281

Leases

The Company has entered into operating leases primarily for real estate. These leases generally have terms which range from 1 year to 15 years, and often include one or more options to renew. These renewal terms can extend the lease term from 1 year to 15 years, and are included in the lease term when it is reasonably certain that the Company will exercise the option. These operating leases are included in "Other non-current assets" on the Company's December 31, 2019 Consolidated Balance Sheets, and represent the Company’s right to use the underlying asset for the lease term. The Company’s obligations to make lease payments are included in "Accrued expenses and other liabilities" and "Other non-current liabilities" on the Company's December 31, 2019 Consolidated Balance Sheets. Based on the present value of the lease payments for the remaining lease term of the Company's existing leases, the Company recognized right-of-use assets of approximately $743 million and lease liabilities for operating leases of approximately $813 million on January 1, 2019. Operating lease right-of-use assets and liabilities commencing after January 1, 2019 are recognized at commencement date based on the present value of lease payments over the lease term. As of December 31, 2019, total right-of-use assets and operating lease liabilities were approximately $1,532 million and $1,613 million, respectively. The Company has entered into various short-term operating leases, primarily for marketing billboards, with an initial term of twelve months or less. These leases are not recorded on the Company's Consolidated Balance Sheets. All operating lease expense is recognized on a straight-line basis over the lease term. For the year ended December 31, 2019, the Company recognized approximately $448 million in total lease costs, which was comprised of $218 million in operating lease costs for right-of-use assets and $230 million in short-term lease costs related to short-term operating leases.

Prior to the adoption of ASU 2016-02 in the first quarter of 2019, the Company recognized minimum rental expense on a straight-line basis over the lease term. The Company used the date of initial possession to begin amortization, which is generally when the Company entered the space and began to make improvements in preparation for intended use. For scheduled rent escalation clauses during the lease terms or for rental payments commencing at a date other than the date of initial occupancy, the Company recorded minimum rental expenses on a straight-line basis over the terms of the leases in the Consolidated Statements of Operations. Rent expense associated with operating leases was $107 million and $75 million for the years ended December 31, 2018 and December 31, 2017, respectively.

Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate to determine the present value of the lease payments. The Company has certain contracts for real estate and marketing which may contain lease and non-lease components which it has elected to treat as a single lease component.

Information related to the Company's right-of-use assets and related lease liabilities were as follows:



	Year ended December 31,
	2019
	(in thousands)
Cash paid for operating lease liabilities	$	192,084
Right-of-use assets obtained in exchange for new operating lease obligations (1)	1,672,462

(1) Balance includes $743 million for operating leases existing on January 1, 2019.



	As of
	December 31, 2019

Weighted-average remaining lease term	8.8 years
Weighted-average discount rate	5.0	%

Maturities of lease liabilities as of December 31, 2019 were as follows (in thousands):



Due in 12 month period ended December 31,
2020	$	248,636
2021	246,148
2022	226,020
2023	211,387
2024	194,506
Thereafter	912,457
	2,039,154
Less imputed interest	(425,920		)
Total lease liabilities	1,613,234

Current operating lease liabilities	190,622
Non-current operating lease liabilities	1,422,612
Total lease liabilities	$	1,613,234

The Company has additional operating leases for real estate of $699 million which have not commenced as of December 31, 2019, and as such, have not been recognized on the Company's Consolidated Balance Sheets. These operating leases are expected to commence in 2020 with lease terms between 1 year and 15 years.

Other Current Assets

Other current assets consisted of the following:



	As of
	December 31, 2019		December 31, 2018
	(in thousands)
Trade receivables	$	454,399	$	362,712
Prepaid expenses	180,999		178,833
Other receivables	524,669		206,921
Total other current assets	$	1,160,067	$	748,466