Balance Sheet Components

12 Months Ended

Dec. 31, 2020

Balance Sheet Components Disclosure [Abstract]

Content Assets, Net

Content assets consisted of the following:


	As of December 31,
	2020		2019
	(in thousands)

Licensed content, net	$	13,747,607	$	14,703,352
Produced content, net
Released, less amortization	5,809,681		4,382,685
In production	4,827,455		4,750,664
In development and pre-production	999,207		667,866
	11,636,343		9,801,215

Content assets, net	$	25,383,950	$	24,504,567

As of December 31, 2020, approximately $5,637 million, $3,494 million, and $2,134 million of the $13,748 million unamortized cost of the licensed content is expected to be amortized in each of the next three years. As of December 31, 2020, approximately $2,183 million, $1,629 million, and $1,092 million of the $5,810 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, 2020, the amount of accrued participations and residuals was not material.

The following table represents the amortization of content assets:


	Year ended December 31,
	2020		2019		2018
	(in thousands)
Licensed content	$	7,544,631	$	7,242,799	$	6,511,689
Produced content	3,262,281		1,973,448		1,020,399
Total	$	10,806,912	$	9,216,247	$	7,532,088

Property and Equipment, Net

Property and equipment and accumulated depreciation consisted of the following:


	As of December 31,				Estimated Useful Lives (in Years)
	2020		2019
	(in thousands)
Land	$	50,700	$	6,125
Buildings	42,717		33,141		30 years
Leasehold improvements	524,537		354,999		Over life of lease
Furniture and fixtures	110,185		87,465		3-15 years
Information technology	283,014		243,565		3 years
Corporate aircraft	110,629		108,995		8 years
Machinery and equipment	34,633		46,415		3-5 years
Capital work-in-progress	298,558		100,521
Property and equipment, gross	1,454,973		981,226
Less: Accumulated depreciation	(494,790)		(416,005)
Property and equipment, net	$	960,183	$	565,221

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 20 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 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 Consolidated Balance Sheets. Operating lease right-of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. 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, 2020, the Company recognized approximately $441 million in total lease costs, which was comprised of $324 million in operating lease costs for right-of-use assets and $117 million in short-term lease costs related to short-term operating leases. 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 for the year ended December 31, 2018.

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 operating right-of-use assets and related operating lease liabilities were as follows:


	Year ended December 31,
	2020		2019
	(in thousands)
Cash paid for operating lease liabilities	$	259,559	$	192,084
Right-of-use assets obtained in exchange for new operating lease obligations (1)	729,942		1,672,462

(1) Balance as of December 31, 2019 includes $743 million for operating leases existing on January 1, 2019.


	As of December 31,
	2020			2019
	(in thousands, except lease term and discount rate)
Operating lease right-of-use assets, net	$	2,037,726		$	1,532,285

Current operating lease liabilities	$	256,222		$	190,622
Non-current operating lease liabilities	1,945,631			1,422,612
Total operating lease liabilities	$	2,201,853		$	1,613,234

Weighted-average remaining lease term	8.9 years			8.8 years
Weighted-average discount rate	3.6		%	5.0		%

Maturities of operating lease liabilities as of December 31, 2020 were as follows (in thousands):


Due in 12 month period ended December 31,
2021	$	320,245
2022	312,154
2023	300,014
2024	279,037
2025	258,348
Thereafter	1,100,115
	2,569,913
Less imputed interest	(368,060)
Total operating lease liabilities	2,201,853

Current operating lease liabilities	256,222
Non-current operating lease liabilities	1,945,631
Total operating lease liabilities	$	2,201,853

The Company has additional operating leases for real estate of $256 million which have not commenced as of December 31, 2020, and as such, have not been recognized on the Company's Consolidated Balance Sheets. These operating leases are expected to commence in 2021 with lease terms between 1 year and 15 years.

Other Current Assets

Other current assets consisted of the following:


	As of
	December 31, 2020		December 31, 2019
	(in thousands)
Trade receivables	$	610,819	$	454,399
Prepaid expenses	203,042		180,999
Other	742,169		524,669
Total other current assets	$	1,556,030	$	1,160,067