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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                  to                 
Commission File Number: 001-35727
Netflix, Inc.
(Exact name of Registrant as specified in its charter)
Delaware77-0467272
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
100 Winchester Circle,Los Gatos,California95032
(Address of principal executive offices)(Zip Code)
(408) 540-3700
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.001 per shareNFLXNASDAQ Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No     
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerAccelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).    Yes      No  
As of March 31, 2022, there were 444,273,850 shares of the registrant’s common stock, par value $0.001, outstanding.



Table of Contents
 
Page
Part I. Financial Information
Item 1.
Item 2.
Item 3.
Item 4.
Part II. Other Information
Item 1.
Item 1A.
Item 2.
Item 6.

2

Table of Contents

NETFLIX, INC.
Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data)

Three Months Ended
March 31,
2022
March 31,
2021
Revenues
$7,867,767 $7,163,282 
Cost of revenues
4,284,705 3,868,511 
Marketing
555,978 512,512 
Technology and development
657,530 525,207 
General and administrative
397,928 297,196 
Operating income
1,971,626 1,959,856 
Other income (expense):
Interest expense
(187,579)(194,440)
Interest and other income
195,645 269,086 
Income before income taxes
1,979,692 2,034,502 
Provision for income taxes(382,245)(327,787)
Net income
$1,597,447 $1,706,715 
Earnings per share:
Basic
$3.60 $3.85 
Diluted
$3.53 $3.75 
Weighted-average shares of common stock outstanding:
Basic
444,146 443,224 
Diluted
452,984 455,641 










See accompanying notes to the consolidated financial statements.
3

Table of Contents
NETFLIX, INC.
Consolidated Statements of Comprehensive Income
(unaudited)
(in thousands)
Three Months Ended
March 31,
2022
March 31,
2021
Net income$1,597,447 $1,706,715 
Other comprehensive loss:
Foreign currency translation adjustments
(33,675)(40,261)
Comprehensive income$1,563,772 $1,666,454 
























See accompanying notes to the consolidated financial statements.
4

Table of Contents
NETFLIX, INC.

Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
   
Three Months Ended
   
March 31,
2022
March 31,
2021
Cash flows from operating activities:
Net income$1,597,447 $1,706,715 
Adjustments to reconcile net income to net cash provided by operating activities:
Additions to content assets(3,584,164)(3,284,576)
Change in content liabilities(347,149)(266,040)
Amortization of content assets3,166,365 2,719,196 
Depreciation and amortization of property, equipment and intangibles74,602 35,741 
Stock-based compensation expense119,209 107,230 
Foreign currency remeasurement gain on debt(161,821)(253,330)
Other non-cash items101,968 72,657 
Deferred income taxes(68,906)159,733 
Changes in operating assets and liabilities:
Other current assets41,157 (221,555)
Accounts payable(215,444)(137,313)
Accrued expenses and other liabilities350,763 177,897 
Deferred revenue16,743 22,279 
Other non-current assets and liabilities(167,931)(61,368)
Net cash provided by operating activities922,839 777,266 
Cash flows from investing activities:
Purchases of property and equipment(121,158)(81,001)
Change in other assets (4,615)
Acquisitions(124,521) 
Net cash used in investing activities(245,679)(85,616)
Cash flows from financing activities:
Repayments of debt(700,000)(500,000)
Proceeds from issuance of common stock13,678 48,071 
Net cash used in financing activities(686,322)(451,929)
Effect of exchange rate changes on cash, cash equivalents and restricted cash (11,448)(42,138)
Net increase (decrease) in cash, cash equivalents and restricted cash(20,610)197,583 
Cash, cash equivalents and restricted cash at beginning of period 6,055,111 8,238,870 
Cash, cash equivalents and restricted cash at end of period $6,034,501 $8,436,453 
See accompanying notes to the consolidated financial statements.
5

Table of Contents
NETFLIX, INC.
Consolidated Balance Sheets
(in thousands, except share and par value data)

As of
   
March 31,
2022
December 31,
2021
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$6,008,946 $6,027,804 
Other current assets
2,089,069 2,042,021 
Total current assets
8,098,015 8,069,825 
Content assets, net
31,191,920 30,919,539 
Property and equipment, net
1,383,763 1,323,453 
Other non-current assets
4,657,206 4,271,846 
Total assets
$45,330,904 $44,584,663 
Liabilities and Stockholders’ Equity
Current liabilities:
Current content liabilities
$4,066,289 $4,292,967 
Accounts payable
617,202 837,483 
Accrued expenses and other liabilities
1,817,117 1,449,351 
Deferred revenue
1,239,048 1,209,342 
Short-term debt
 699,823 
Total current liabilities
7,739,656 8,488,966 
Non-current content liabilities
2,945,221 3,094,213 
Long-term debt
14,534,561 14,693,072 
Other non-current liabilities
2,567,427 2,459,164 
Total liabilities
27,786,865 28,735,415 
Commitments and contingencies (Note 7)
Stockholders’ equity:
Common stock, $0.001 par value; 4,990,000,000 shares authorized at March 31, 2022 and December 31, 2021; 444,273,850 and 443,963,107 issued and outstanding at March 31, 2022 and December 31, 2021, respectively
4,155,580 4,024,561 
Treasury stock at cost (1,564,478 shares at March 31, 2022)
(824,190)(824,190)
Accumulated other comprehensive loss(74,170)(40,495)
Retained earnings
14,286,819 12,689,372 
Total stockholders’ equity
17,544,039 15,849,248 
Total liabilities and stockholders’ equity
$45,330,904 $44,584,663 




See accompanying notes to the consolidated financial statements.
6

Table of Contents
NETFLIX, INC.
Consolidated Statements of Stockholders’ Equity
(unaudited)
(in thousands)
Three Months Ended
 March 31,
2022
March 31,
2021
Total stockholders' equity, beginning balances$15,849,248 $11,065,240 
Common stock and additional paid-in capital:
Beginning balances
$4,024,561 $3,447,698 
Issuance of common stock upon exercise of options
11,810 45,156 
Stock-based compensation expense119,209 107,230 
Ending balances$4,155,580 $3,600,084 
Treasury stock:
Beginning balances
$(824,190)$ 
Repurchases of common stock to be held as treasury stock— — 
Ending balances$(824,190)$ 
Accumulated other comprehensive loss
Beginning balances
$(40,495)$44,398 
Other comprehensive loss(33,675)(40,261)
Ending balances$(74,170)$4,137 
Retained earnings:
Beginning balances$12,689,372 $7,573,144 
Net income
1,597,447 1,706,715 
Ending balances$14,286,819 $9,279,859 
Total stockholders' equity, ending balances
$17,544,039 $12,884,080 





















See accompanying notes to the consolidated financial statements.
7

Table of Contents
NETFLIX, INC.
Notes to Consolidated Financial Statements
(unaudited)

1. Basis of Presentation and Summary of Significant Accounting Policies
The accompanying interim consolidated financial statements of Netflix, Inc. and its wholly owned subsidiaries (the “Company”) have been prepared in conformity with accounting principles generally accepted in the United States (“U.S.”) and are consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (the “SEC”) on January 27, 2022. The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant items subject to such estimates and assumptions include the content asset amortization policy and the recognition and measurement of income tax assets and liabilities. The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. On a regular basis, the Company evaluates the assumptions, judgments and estimates. Actual results may differ from these estimates.
The interim financial information is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. The interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Interim results are not necessarily indicative of the results for a full year.
There have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

Recently adopted accounting pronouncements
In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers. The Company adopted ASU 2021-08 in the first quarter of 2022 and the adoption had no material impact to the Company’s consolidated financial statements.


2. Revenue Recognition
The Company's primary source of revenues is from monthly membership fees. Members are billed in advance of the start of their monthly membership and revenues are recognized ratably over each monthly membership period. Revenues are presented net of the taxes that are collected from members and remitted to governmental authorities. The Company is the principal in all its relationships where partners, including consumer electronics (“CE”) manufacturers, multichannel video programming distributors (“MVPDs”), mobile operators and internet service providers (“ISPs”), provide access to the service as the Company retains control over service delivery to its members. Typically, payments made to the partners, such as for marketing, are expensed. However, if there is no distinct service provided in exchange for the payments made to the partners or if the price that the member pays is established by the partners and there is no standalone price for the Netflix service (for instance, in a bundle), these payments are recognized as a reduction of revenues.
The following tables summarize streaming revenue, paid net membership additions, and paid memberships at end of period by region for the three months ended March 31, 2022 and 2021, respectively:

United States and Canada (UCAN)
As of/ Three Months Ended
 March 31,
2022
March 31,
2021
 (in thousands)
Revenues$3,350,424 $3,170,972 
Paid net membership additions (losses)(636)448 
Paid memberships at end of period (1)74,579 74,384 


8

Table of Contents
Europe, Middle East, and Africa (EMEA)
As of/ Three Months Ended
 March 31,
2022
March 31,
2021
 (in thousands)
Revenues$2,561,831 $2,343,674 
Paid net membership additions (losses)(303)1,810 
Paid memberships at end of period (1)73,733 68,508 

Latin America (LATAM)
As of/ Three Months Ended
 March 31,
2022
March 31,
2021
 (in thousands)
Revenues$998,948 $836,647 
Paid net membership additions (losses)(351)357 
Paid memberships at end of period (1)39,610 37,894 

Asia-Pacific (APAC)
As of/ Three Months Ended
 March 31,
2022
March 31,
2021
 (in thousands)
Revenues$916,754 $762,414 
Paid net membership additions1,087 1,361 
Paid memberships at end of period (1)33,719 26,853 
(1) A paid membership (also referred to as a paid subscription) is defined as a membership that has the right to receive Netflix service following sign-up and a method of payment being provided, and that is not part of a free trial or certain other promotions that may be offered by the Company to new or rejoining members. A membership is canceled and ceases to be reflected in the above metrics as of the effective cancellation date. Voluntary cancellations generally become effective at the end of the prepaid membership period. Involuntary cancellations, as a result of a failed method of payment, become effective immediately. Memberships are assigned to territories based on the geographic location used at time of sign-up as determined by the Company’s internal systems, which utilize industry standard geo-location technology.
Total U.S. revenues, inclusive of DVD revenues not reported in the tables above, were $3.1 billion and $3.0 billion for the three months ended March 31, 2022 and 2021, respectively. DVD revenues were $40 million and $50 million for the three months ended March 31, 2022 and 2021, respectively.
Deferred revenue consists of membership fees billed that have not been recognized, as well as gift cards and other prepaid memberships that have not been fully redeemed. As of March 31, 2022, total deferred revenue was $1,239 million, the vast majority of which was related to membership fees billed that are expected to be recognized as revenue within the next month. The remaining deferred revenue balance, which is related to gift cards and other prepaid memberships, will be recognized as revenue over the period of service after redemption, which is expected to occur over the next 12 months. The $30 million increase in deferred revenue as compared to the balance of $1,209 million as of December 31, 2021 is a result of the increase in average monthly revenue per paying member and acquisition-related deferred revenue.

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3. Earnings Per Share

Basic earnings per share is computed using the weighted-average number of outstanding shares of common stock during the period. Diluted earnings per share is computed using the weighted-average number of outstanding shares of common stock and, when dilutive, potential outstanding shares of common stock during the period. Potential shares of common stock consist of incremental shares issuable upon the assumed exercise of stock options. The computation of earnings per share is as follows:
Three Months Ended
March 31,
2022
March 31,
2021
(in thousands, except per share data)
Basic earnings per share:
Net income
$1,597,447 $1,706,715 
Shares used in computation:
Weighted-average shares of common stock outstanding444,146 443,224 
Basic earnings per share$3.60 $3.85 
Diluted earnings per share:
Net income
$1,597,447 $1,706,715 
Shares used in computation:
Weighted-average shares of common stock outstanding444,146 443,224 
Employee stock options8,838 12,417 
Weighted-average number of shares
452,984 455,641 
Diluted earnings per share$3.53 $3.75 

Employee stock options with exercise prices greater than the average market price of the common stock were excluded from the diluted calculation as their inclusion would have been anti-dilutive. The following table summarizes the potential shares of common stock excluded from the diluted calculation:
Three Months Ended
March 31,
2022
March 31,
2021
(in thousands)
Employee stock options2,749 257 
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4. Cash, Cash Equivalents and Restricted Cash

The following tables summarize the Company's cash, cash equivalents, and restricted cash as of March 31, 2022 and December 31, 2021:

 As of March 31, 2022
 Cash and cash equivalentsOther Current AssetsNon-current AssetsTotal
 (in thousands)
Cash$4,568,719 $955 $24,454 $4,594,128 
Level 1 securities:
Money market funds1,440,227  146 1,440,373 
$6,008,946 $955 $24,600 $6,034,501 

 As of December 31, 2021
 Cash and cash equivalentsOther Current AssetsNon-current AssetsTotal
 (in thousands)
Cash$4,103,613 $3,189 $23,972 $4,130,774 
Level 1 securities:
Money market funds1,924,191  146 1,924,337 
$6,027,804 $3,189 $24,118 $6,055,111 
Other current assets include restricted cash for deposits related to self insurance. Non-current assets include restricted cash related to letter of credit agreements.
There were no material gross realized gains or losses in the three months ended March 31, 2022 or 2021.

5. Balance Sheet Components

Content Assets, Net
Content assets consisted of the following:
As of
March 31,
2022
December 31,
2021
(in thousands)
Licensed content, net
$12,923,692 $13,799,221 
Produced content, net
Released, less amortization
7,111,245 6,877,743 
In production
10,175,960 9,235,975 
In development and pre-production
981,023 1,006,600 
18,268,228 17,120,318 

Content assets, net
$31,191,920 $30,919,539 

As of March 31, 2022, approximately $5,606 million, $2,963 million, and $1,815 million of the $12,924 million unamortized cost of the licensed content is expected to be amortized in each of the next three years.  As of March 31, 2022, approximately $2,807 million, $1,933 million, and $1,182 million of the $7,111 million unamortized cost of the produced content that has been released is expected to be amortized in each of the next three years.
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As of March 31, 2022, the amount of accrued participations and residuals was not material.
The following tables represent the amortization of content assets:
Three Months Ended
 March 31,
2022
March 31,
2021
(in thousands)
Licensed content$1,884,438 $1,829,246 
Produced content1,281,927 889,950 
Total$3,166,365 $2,719,196 

Property and Equipment, Net
Property and equipment and accumulated depreciation consisted of the following:
As of
March 31,
2022
December 31,
2021
Estimated Useful Lives
(in thousands)
Land
$82,381 $82,381 
Buildings
48,625 48,123 30 years
Leasehold improvements
983,209 863,342 Over life of lease
Furniture and fixtures
147,059 139,809 
3 years
Information technology
448,608 380,452 3 years
Corporate aircraft
110,978 110,978 8 years
Machinery and equipment
32,613 32,426 
3-5 years
Capital work-in-progress
220,422 282,248 
Property and equipment, gross
2,073,895 1,939,759 
Less: Accumulated depreciation
(690,132)(616,306)
Property and equipment, net
$1,383,763 $1,323,453 


Leases
The Company has entered into operating leases primarily for real estate. 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. 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. 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.
Information related to the Company's operating right-of-use assets and related operating lease liabilities were as follows:
Three Months Ended
March 31,
2022
March 31,
2021
(in thousands)
Cash paid for operating lease liabilities$103,141 $82,439 
Right-of-use assets obtained in exchange for new operating lease obligations141,298 49,445 

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As of
March 31,
2022
December 31,
2021
(in thousands)
Operating lease right-of-use assets, net$2,483,778 $2,446,573 
Current operating lease liabilities330,936 315,189 
Non-current operating lease liabilities2,434,078 2,408,486 
Total operating lease liabilities$2,765,014 $2,723,675 
Other Current Assets
Other current assets consisted of the following:
As of
March 31,
2022
December 31,
2021
(in thousands)
Trade receivables
$824,650 $804,320 
Prepaid expenses
419,134 323,818 
Other
845,285 913,883 
Total other current assets
$2,089,069 $2,042,021 

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6. Debt
As of March 31, 2022, the Company had aggregate outstanding notes of $14,535 million, net of $88 million of issuance costs, with varying maturities (the "Notes"). As of December 31, 2021, the Company had aggregate outstanding notes of $15,393 million, net of $92 million of issuance costs. Each of the Notes were issued at par and are senior unsecured obligations of the Company. Interest is payable semi-annually at fixed rates. A portion of the outstanding Notes is denominated in foreign currency (comprised of €5,170 million) and is remeasured into U.S. dollars at each balance sheet date (with remeasurement gain totaling $162 million for the three months ended March 31, 2022).
The following table provides a summary of the Company's outstanding debt and the fair values based on quoted market prices in less active markets as of March 31, 2022 and December 31, 2021:
Principal Amount at ParLevel 2 Fair Value as of
March 31,
2022
December 31,
2021
Issuance DateMaturityMarch 31,
2022
December 31,
2021
(in millions)(in millions)
5.500% Senior Notes
 700 February 2015February 2022 704 
5.750% Senior Notes
400 400 February 2014March 2024419 437 
5.875% Senior Notes
800 800 February 2015February 2025855 899 
3.000% Senior Notes (1)
520 535 April 2020June 2025545 581 
3.625% Senior Notes
500 500 April 2020June 2025502 529 
4.375% Senior Notes
1,000 1,000 October 2016November 20261,039 1,111 
3.625% Senior Notes (1)
1,439 1,480 May 2017May 20271,539 1,702 
4.875% Senior Notes
1,600 1,600 October 2017April 20281,671 1,829 
5.875% Senior Notes
1,900 1,900 April 2018November 20282,096 2,293 
4.625% Senior Notes (1)
1,218 1,252 October 2018May 20291,376 1,565 
6.375% Senior Notes
800 800 October 2018May 2029907 999 
3.875% Senior Notes (1)
1,328 1,366 April 2019November 20291,444 1,651 
5.375% Senior Notes
900 900 April 2019November 2029977 1,068 
3.625% Senior Notes (1)
1,218 1,252 October 2019June 20301,291 1,493 
4.875% Senior Notes
1,000 1,000 October 2019June 20301,068 1,169 
$14,623 $15,485 $15,729 $18,030 
(1) The following Senior Notes have a principal amount denominated in euro: 3.000% Senior Notes for €470 million, 3.625% Senior Notes for €1,300 million, 4.625% Senior Notes for €1,100 million, 3.875% Senior Notes for €1,200 million, and 3.625% Senior Notes for €1,100 million.

In February 2022, the Company repaid upon maturity the $700 million aggregate principal amount of its 5.500% Senior Notes.

Each of the Notes are repayable in whole or in part upon the occurrence of a change of control, at the option of the holders, at a purchase price in cash equal to 101% of the principal plus accrued interest. The Company may redeem the Notes prior to maturity in whole or in part at an amount equal to the principal amount thereof plus accrued and unpaid interest and an applicable premium. The Notes include, among other terms and conditions, limitations on the Company's ability to create, incur or allow certain liens; enter into sale and lease-back transactions; create, assume, incur or guarantee additional indebtedness of certain of the Company's subsidiaries; and consolidate or merge with, or convey, transfer or lease all or substantially all of the Company's and its subsidiaries assets, to another person. As of March 31, 2022 and December 31, 2021, the Company was in compliance with all related covenants.
Revolving Credit Facility
On June 17, 2021, the Company amended its unsecured revolving credit facility ("Revolving Credit Agreement") to, among other things, extend the maturity date from March 29, 2024 to June 17, 2026 and to increase the size of the facility from $750 million to $1 billion. Revolving loans may be borrowed, repaid and reborrowed until June 17, 2026, at which time all amounts borrowed must be repaid. The Company may use the proceeds of future borrowings under the Revolving Credit Agreement for working capital and general corporate purposes. As of March 31, 2022, no amounts have been borrowed under the Revolving Credit Agreement.
The borrowings under the Revolving Credit Agreement bear interest, at the Company’s option, of either (i) a floating rate equal to a base rate (the “Alternate Base Rate”) or (ii) a rate equal to an adjusted London interbank offered rate (the “Adjusted LIBO Rate”), plus a margin of
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0.75%. The Alternate Base Rate is defined as the greatest of (A) the rate of interest published by the Wall Street Journal, from time to time, as the prime rate, (B) the federal funds rate, plus 0.500% and (C) the Adjusted LIBO Rate for a one-month interest period, plus 1.00%. The Adjusted LIBO Rate is defined as the London interbank offered rate for deposits in U.S. dollars, for the relevant interest period, adjusted for statutory reserve requirements, but in no event shall the Adjusted LIBO Rate be less than 0.00% per annum. Regulatory authorities that oversee financial markets have announced that publication of the Adjusted LIBO Rate based upon U.S. Dollars is expected to cease on June 30, 2023. The Revolving Credit Agreement contains customary provisions for the replacement of the Adjusted LIBO Rate with an alternate benchmark rate, including a rate based on the secured overnight financing rate published by the Federal Reserve Bank of New York, as the Adjusted LIBO Rate is phased out in the lending market. The Company does not anticipate that the replacement of the Adjusted LIBO Rate with such alternative benchmark rate, as provided in the Revolving Credit Agreement, will materially impact its liquidity or financial position.
The Company is also obligated to pay a commitment fee on the undrawn amounts of the Revolving Credit Agreement at an annual rate of 0.10%. The Revolving Credit Agreement requires the Company to comply with certain covenants, including covenants that limit or restrict the ability of the Company’s subsidiaries to incur debt and limit or restrict the ability of the Company and its subsidiaries to grant liens and enter into sale and leaseback transactions; and, in the case of the Company or a guarantor, merge, consolidate, liquidate, dissolve or sell, transfer, lease or otherwise dispose of all or substantially all of the assets of the Company and its subsidiaries, taken as a whole. As of March 31, 2022 and December 31, 2021, the Company was in compliance with all related covenants.


7. Commitments and Contingencies

Content
As of March 31, 2022, the Company had $22.4 billion of obligations comprised of $4.1 billion included in "Current content liabilities" and $2.9 billion of "Non-current content liabilities" on the Consolidated Balance Sheets and $15.4 billion of obligations that are not reflected on the Consolidated Balance Sheets as they did not yet meet the criteria for asset recognition.
As of December 31, 2021, the Company had $23.2 billion of obligations comprised of $4.3 billion included in "Current content liabilities" and $3.1 billion of "Non-current content liabilities" on the Consolidated Balance Sheets and $15.8 billion of obligations that are not reflected on the Consolidated Balance Sheets as they did not yet meet the criteria for asset recognition.
The expected timing of payments for these content obligations is as follows:
As of 
March 31,
2022
December 31,
2021
(in thousands)
Less than one year
$9,861,979 $10,019,306 
Due after one year and through three years
9,089,537 9,238,315 
Due after three years and through five years
3,072,216 3,238,977 
Due after five years
341,828 664,762 
Total content obligations
$22,365,560 $23,161,360 
Content obligations include amounts related to the acquisition, licensing and production of content. Obligations that are in non-U.S. dollar currencies are translated to the U.S. dollar at period end rates. An obligation for the production of content includes non-cancelable commitments under creative talent and employment agreements as well as other production related commitments. An obligation for the acquisition and licensing of content is incurred at the time the Company enters into an agreement to obtain future titles. Once a title becomes available, a content liability is recorded on the Consolidated Balance Sheets. Certain agreements include the obligation to license rights for unknown future titles, the ultimate quantity and/or fees for which are not yet determinable as of the reporting date. Traditional film output deals, or certain TV series license agreements where the number of seasons to be aired is unknown, are examples of such license agreements. The Company does not include any estimated obligation for these future titles beyond the known minimum amount. However, the unknown obligations are expected to be significant.
Legal Proceedings
From time to time, in the normal course of its operations, the Company is subject to litigation matters and claims, including claims relating to employee relations, business practices and patent infringement. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict and the Company's view of these matters may change in the future as the litigation and events related thereto unfold. The Company expenses legal fees as incurred. The Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Company's operations or its financial position, liquidity or results of operations.
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The Company is involved in litigation matters not listed herein but does not consider the matters to be material either individually or in the aggregate at this time. The Company's view of the matters not listed may change in the future as the litigation and events related thereto unfold.
Indemnification
In the ordinary course of business, the Company has entered into contractual arrangements under which it has agreed to provide indemnification of varying scope and terms to business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements and out of intellectual property infringement claims made by third parties. In these circumstances, payment may be conditional on the other party making a claim pursuant to the procedures specified in the particular contract.
The Company's obligations under these agreements may be limited in terms of time or amount, and in some instances, the Company may have recourse against third parties for certain payments. In addition, the Company has entered into indemnification agreements with its directors and certain of its officers that will require it, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers. The terms of such obligations vary.
It is not possible to make a reasonable estimate of the maximum potential amount of future payments under these or similar agreements due to the conditional nature of the Company’s obligations and the unique facts and circumstances involved in each particular agreement. No amount has been accrued in the accompanying consolidated financial statements with respect to these indemnification obligations.


8. Stockholders’ Equity
Stock Option Plan
In June 2020, the Company's stockholders approved the 2020 Stock Plan, which was adopted by the Company’s Board of Directors in March 2020 subject to stockholder approval. The 2020 Stock Plan is the successor to the 2011 Stock Plan and provides for the grant of incentive stock options to employees and for the grant of non-statutory stock options, stock appreciation rights, restricted stock and restricted stock units to employees, directors and consultants.
A summary of the activities related to the Company’s stock option plans is as follows:
Options Outstanding
Shares
Available
for Grant
Number of
Shares
Weighted-
Average
Exercise Price
(per share)
Balances as of December 31, 202120,145,360 17,595,851 $219.83 
Granted
(523,787)523,787 460.28
Exercised
— (310,743)38.00 
Expired
— (1,246)16.11 
Balances as of March 31, 202219,621,573 17,807,649 $230.09 

The aggregate intrinsic value of the Company's outstanding stock options as of March 31, 2022 was $3,024 million and represents the total pretax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the first quarter of 2022 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on the last trading day of the first quarter of 2022. This amount changes based on the fair market value of the Company’s common stock. The weighted-average remaining contractual term of the Company's outstanding stock options as of March 31, 2022 included in the table above was 5.33 years. All options outstanding are vested and exercisable.
A summary of the amounts related to option exercises, is as follows:
Three Months Ended
March 31,
2022
March 31,
2021
(in thousands)
Total intrinsic value of options exercised$114,762 $228,020 
Cash received from options exercised13,678 48,071 
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Stock-based Compensation
Stock options granted are exercisable for the full ten year contractual term regardless of employment status. The following table summarizes the assumptions used to value option grants using the lattice-binomial model and the valuation data:
Three Months Ended
March 31,
2022
March 31,
2021
Dividend yield % %
Expected volatility38 %41 %
Risk-free interest rate1.71 %1.08 %
Suboptimal exercise factor4.71 3.81 
Weighted-average fair value (per share)$228 $268 
Total stock-based compensation expense (in thousands)$119,209 $107,230 
Total income tax impact on provision (in thousands)$26,413 $24,079 

The Company considers several factors in determining the suboptimal exercise factor, including the historical and estimated option exercise behavior.
The Company calculates expected volatility based solely on implied volatility. The Company believes that implied volatility of publicly traded options in its common stock is more reflective of market conditions, and given consistently high trade volumes of the options, can reasonably be expected to be a better indicator of expected volatility than historical volatility of its common stock.
In valuing shares issued under the Company’s employee stock option plans, the Company bases the risk-free interest rate on U.S. Treasury zero-coupon issues with terms similar to the contractual term of the options. The Company does not anticipate paying any cash dividends in the foreseeable future and therefore uses an expected dividend yield of zero in the option valuation model. The Company does not use a post-vesting termination rate as options are fully vested upon grant date.
Stock Repurchases
In March 2021, the Company’s Board of Directors authorized the repurchase of up to $5 billion of its common stock, with no expiration date. Stock repurchases may be effected through open market repurchases in compliance with Rule 10b-18 under the Exchange Act, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act, privately-negotiated transactions, accelerated stock repurchase plans, block purchases, or other similar purchase techniques and in such amounts as management deems appropriate. The Company is not obligated to repurchase any specific number of shares, and the timing and actual number of shares repurchased will depend on a variety of factors, including the Company’s stock price, general economic, business and market conditions, and alternative investment opportunities. The Company may discontinue any repurchases of its common stock at any time without prior notice. There were no repurchases during the three months ended March 31, 2022. As of March 31, 2022, $4.4 billion remain available for repurchases. Shares repurchased by the Company are accounted for when the transaction is settled. As of March 31, 2022, there were no unsettled share repurchases. Direct costs incurred to acquire the shares are included in the total cost of the shares.


9. Income Taxes
 Three Months Ended
 March 31,
2022
March 31,
2021
 (in thousands, except percentages)
Provision for income taxes$382,245 $327,787 
Effective tax rate19 %16 %
The effective tax rate for the three months ended March 31, 2022 differed from the Federal statutory rate primarily due to an increase in foreign taxes, offset by the impact of international provisions of the Tax Cuts and Jobs Act, and the recognition of excess tax benefits of stock-based compensation. The effective tax rate for the three months ended March 31, 2021 differed from the Federal statutory rate primarily due to the impact of international provisions of the Tax Cuts and Jobs Act and recognition of excess tax benefits of stock-based compensation.
The increase in the effective tax rate for the three months ended March 31, 2022, as compared to the same period in 2021 was primarily due to an increase in foreign taxes and a reduction to excess tax benefits of stock-based compensation. For the three months ended March 31, 2022, the Company recognized a discrete tax benefit related to the excess tax benefits from stock-based compensation of $25 million, compared to the three months ended March 31, 2021 of $47 million.
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Gross unrecognized tax benefits were $215 million and $203 million as of March 31, 2022 and December 31, 2021, respectively. The gross unrecognized tax benefits as of March 31, 2022, if recognized by the Company, will result in a reduction of approximately $143 million to the provision for income taxes thereby favorably impacting the Company’s effective tax rate.
The Company files U.S. Federal, state and foreign tax returns. The Company is currently under examination by the IRS for 2016 through 2018 and is subject to examination for 2019 through 2021. The foreign and state tax returns for years 2015 through 2021 are subject to examination by various states and foreign jurisdictions.
Given the potential outcome of the current examinations, as well as the impact of the current examinations on the potential expiration of the statute of limitations, it is reasonably possible that the balance of unrecognized tax benefits could significantly change within the next twelve months. However, an estimate of the range of reasonably possible adjustments cannot be made at this time.


10. Segment and Geographic Information

The Company operates as one operating segment. The Company's chief operating decision maker ("CODM") is its co-chief executive officers, who review financial information presented on a consolidated basis for the purposes of making operating decisions, assessing financial performance and allocating resources.
Total U.S. revenues were $3.1 billion and $3.0 billion for the three months ended March 31, 2022 and 2021, respectively. See Note 2 Revenue Recognition for additional information about streaming revenue by region.
The Company's long-lived tangible assets, as well as the Company's operating lease right-of-use assets recognized on the Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021, were located as follows:
As of
March 31,
2022
December 31,
2021
(in thousands)
United States$2,885,860 $2,833,059 
International981,681 936,967 



Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements include, but are not limited to statements regarding: our core strategy; our future financial performance, including expectations regarding revenues, deferred revenue, operating income and margin, net income, expenses, and profitability; liquidity, including the sufficiency of our capital resources, adequacy of existing facilities, net cash provided by (used in) operating activities, access to financing sources, and free cash flows; capital allocation strategies, including any stock repurchases or repurchase programs; seasonality; impact of foreign exchange rate fluctuations; the impact of the discontinuance of the LIBO Rate; future regulatory changes and their impact on our business; price changes and testing; impact of recently adopted accounting pronouncements; accounting treatment for changes related to content assets; membership growth, including impact of content and pricing changes on membership growth; partnerships; member viewing patterns; dividends; future contractual obligations, including unknown content obligations and timing of payments; our global content and marketing investments, including investments in original programming; content amortization; tax expense; unrecognized tax benefits; deferred tax assets; our ability to effectively manage change and growth; and the impact of the coronavirus (COVID-19) pandemic and our response to it. These forward-looking statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those included in forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (“SEC”) on January 27, 2022, in particular the risk factors discussed under the heading “Risk Factors” in Part I, Item IA. 
We assume no obligation to revise or publicly release any revision to any forward-looking statements contained in this Quarterly Report on Form 10-Q, unless required by law.
Investors and others should note that we announce material financial information to our investors using our investor relations website (ir.netflix.net), SEC filings, press releases, public conference calls and webcasts. We use these channels, as well as social media and blogs to communicate with our members and the public about our company, our services and other issues. It is possible that the information we post on social media and blogs could be deemed to be material information. Therefore, we encourage investors, the media, and others interested in our company to review the information we post on the social media channels and blogs listed on our investor relations website.


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Overview
We are one of the world’s leading entertainment services with approximately 222 million paid memberships in over 190 countries enjoying TV series, documentaries, feature films and mobile games across a wide variety of genres and languages. Members can engage as much as they want, anytime, anywhere, on any internet-connected screen. Members can play, pause and resume watching, all without commercials. Additionally, we continue to offer our DVD-by-mail service in the United States (“U.S.”).
We are a pioneer in the delivery of streaming entertainment, launching our streaming service in 2007. Since this launch, we have developed an ecosystem for internet-connected screens and have added increasing amounts of content that enable consumers to enjoy entertainment directly on their internet-connected screens. As a result of these efforts, we have experienced growing consumer acceptance of, and interest in, the delivery of streaming entertainment.
Our core strategy is to grow our streaming membership business globally within the parameters of our operating margin target. We are continuously improving our members’ experience by expanding our content with a focus on a programming mix of content that delights our members and attracts new members. For example, in 2021 we added mobile games to our service. In addition, we are continuously enhancing our user interface and extending our streaming service to more internet-connected screens. Our members can download a selection of titles for offline viewing.
Our membership growth exhibits a seasonal pattern that reflects variations when consumers buy internet-connected screens and when they tend to increase their viewing. Historically, the fourth quarter represents our greatest streaming membership growth. In addition, our membership growth can be impacted by our content release schedule and changes to pricing.


Results of Operations

The following represents our consolidated performance highlights:
As of/ Three Months EndedChange
March 31,
2022
March 31,
2021
Q1'22 vs. Q1'21
(in thousands, except revenue per membership and percentages)
Financial Results:
Streaming revenues
$7,827,957 $7,113,707 $714,250 10 %
DVD revenues39,810 49,575 (9,765)(20)%
Total revenues$7,867,767 $7,163,282 $704,485 10 %
Operating income1,971,626 1,959,856 $11,770 %
Operating margin25 %27 %(2)%
Global Streaming Memberships:
Paid net membership additions (losses)(203)3,976 (4,179)(105)%
Paid memberships at end of period221,641 207,639 14,002 %
Average paying memberships
221,743 205,651 16,092 %
Average monthly revenue per paying membership
$11.77 $11.53 $0.24 %

Consolidated revenues for the three months ended March 31, 2022 increased 10% as compared to the three months ended March 31, 2021 due to the 8% growth in average paying memberships and a 2% increase in average monthly revenue per paying membership. The increase in average monthly revenue per paying membership resulted from our price changes, partially offset by the strengthening of the U.S. dollar relative to certain foreign currencies.
The decrease in operating margin is primarily due to revenues growing at a slower rate as compared to the 16% increase in content amortization. Content amortization increased as a result of delays in content releases due to the COVID-19 pandemic impacting the comparable prior year period.
The full extent of the impact of the COVID-19 pandemic on our business, operations and financial results will depend on numerous evolving factors that we may not be able to accurately predict. See Part I, Item 1A: “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 for additional details. While most of our productions have resumed, certain of our productions continue to experience disruption, as do the productions of our third-party content suppliers. Other partners have similarly had their operations disrupted, including those partners that we use for our operations as well as development, production, and post-production of content. Production
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disruptions and new health and safety protocols and requirements can result in additional costs including additional pay to cast and crew and use of Personal Protective Equipment (“PPE”) and testing. We will continue to actively monitor the issues raised by the COVID-19 pandemic and may take further actions that alter our business operations as may be required by federal, state, local or foreign authorities, or that we determine are in the best interests of our employees, customers, partners and stockholders.  It is not clear what the potential effects any such alterations or modifications may have on our business, including the effects on our customers, suppliers or vendors, or on our financial results.

Streaming Revenues
We derive revenues from monthly membership fees for services related to streaming content to our members. We offer a variety of streaming membership plans, the price of which varies by country and the features of the plan. As of March 31, 2022, pricing on our paid plans ranged from the U.S. dollar equivalent of $1 to $27 per month. We expect that from time to time the prices of our membership plans in each country may change and we may test other plan and price variations.
The following tables summarize streaming revenue and other streaming membership information by region for the three months ended March 31, 2022 and 2021.

United States and Canada (UCAN)
As of/ Three Months EndedChange
 March 31, 2022March 31, 2021Q1'22 vs. Q1'21
 (in thousands, except revenue per membership and percentages)
Revenues$3,350,424 $3,170,972 $179,452 %
Paid net membership additions (losses)(636)448 (1,084)(242)%
Paid memberships at end of period74,579 74,384 195 — %
Average paying memberships74,897 74,160 737 %
Average monthly revenue per paying membership$14.91 $14.25 $0.66 %
Constant currency change (1)%


Europe, Middle East, and Africa (EMEA)
As of/ Three Months EndedChange
 March 31, 2022March 31, 2021Q1'22 vs. Q1'21
 (in thousands, except revenue per membership and percentages)
Revenues$2,561,831 $2,343,674 $218,157 %
Paid net membership additions (losses)(303)1,810 (2,113)(117)%
Paid memberships at end of period73,733 68,508 5,225 %
Average paying memberships73,885 67,603 6,282 %
Average monthly revenue per paying membership$11.56 $11.56 $— — %
Constant currency change (1)%


Latin America (LATAM)
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As of/ Three Months EndedChange
 March 31, 2022March 31, 2021Q1'22 vs. Q1'21
 (in thousands, except revenue per membership and percentages)
Revenues$998,948 $836,647 $162,301 19 %
Paid net membership additions (losses)(351)357 (708)(198)%
Paid memberships at end of period39,610 37,894 1,716 %
Average paying memberships39,786 37,716 2,070 %
Average monthly revenue per paying membership$8.37 $7.39 $0.98 13 %
Constant currency change (1)20 %



Asia-Pacific (APAC)
As of/ Three Months EndedChange
 March 31, 2022March 31, 2021Q1'22 vs. Q1'21
 (in thousands, except revenue per membership and percentages)
Revenues$916,754 $762,414 $154,340 20 %
Paid net membership additions1,087 1,361 (274)(20)%
Paid memberships at end of period33,719 26,853 6,866 26 %
Average paying memberships33,176 26,173 7,003 27 %
Average monthly revenue per paying membership$9.21 $9.71 $(0.50)(5)%
Constant currency change (1)%

(1) We believe constant currency information is useful in analyzing the underlying trends in average monthly revenue per paying membership. In order to exclude the effect of foreign currency rate fluctuations on average monthly revenue per paying membership, we estimate current period revenue assuming foreign exchange rates had remained constant with foreign exchange rates from each of the corresponding months of the prior-year period. For the three months ended March 31, 2022, our revenues would have been approximately $280 million higher had foreign currency exchange rates remained constant with those for the three months ended March 31, 2021.

Cost of Revenues
Amortization of content assets makes up the majority of cost of revenues. Expenses directly associated with the acquisition, licensing and production of content (such as payroll and related personnel expenses, costs associated with obtaining rights to music included in our content, overall deals with talent, miscellaneous production related costs and participations and residuals), streaming delivery costs and other operations costs make up the remainder of cost of revenues. We have built our own global content delivery network (“Open Connect”) to help us efficiently stream a high volume of content to our members over the internet. Delivery expenses, therefore, include equipment costs related to Open Connect, payroll and related personnel expenses and all third-party costs, such as cloud computing costs, associated with delivering content over the internet. Other operations costs include customer service and payment processing fees, including those we pay to our integrated payment partners, as well as other costs directly incurred in making our content available to members.
 
Three Months EndedChange
March 31,
2022
March 31,
2021
Q1'22 vs. Q1'21
(in thousands, except percentages)
Cost of revenues
$4,284,705$3,868,511$416,194 11 %
As a percentage of revenues
54 %54 %

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The increase in cost of revenues was primarily due to a $447 million increase in content amortization relating to our existing and new content, including more exclusive and original programming, partially offset by a decrease in other costs of revenues.
Marketing
Marketing expenses consist primarily of advertising expenses and certain payments made to our marketing partners, including consumer electronics (“CE”) manufacturers, multichannel video programming distributors (“MVPDs”), mobile operators and internet service providers (“ISPs”). Advertising expenses include promotional activities such as digital and television advertising. Marketing expenses also include payroll and related expenses for personnel that support marketing activities.
 
Three Months EndedChange
March 31,
2022
March 31,
2021
Q1'22 vs. Q1'21
(in thousands, except percentages)
Marketing
$555,978 $512,512 $43,466 %
As a percentage of revenues
%%

The increase in marketing expenses was primarily due to a $46 million increase in personnel-related costs primarily due to growth in average headcount to support the increase in our production activity.
Technology and Development
Technology and development expenses consist primarily of payroll and related expenses for technology personnel responsible for making improvements to our service offerings, including testing, maintaining and modifying our user interface, our recommendations, merchandising and infrastructure. Technology and development expenses also include costs associated with general use computer hardware and software.
 
Three Months EndedChange
March 31,
2022
March 31,
2021
Q1'22 vs. Q1'21
(in thousands, except percentages)
Technology and development
$657,530 $525,207 $132,323 25 %
As a percentage of revenues
%%

The increase in technology and development expenses was primarily due to a $113 million increase in personnel-related costs, primarily due to growth in average headcount to support the increase in our production activity and continued improvements in our streaming service.
General and Administrative
General and administrative expenses consist of payroll and related expenses for corporate personnel. General and administrative expenses also include professional fees and other general corporate expenses.

Three Months EndedChange
March 31,
2022
March 31,
2021
Q1'22 vs. Q1'21
(in thousands, except percentages)
General and administrative
$397,928 $297,196 $100,732 34 %
As a percentage of revenues
%%

The increase in general and administrative expenses was primarily due to a $80 million increase in personnel-related costs, primarily due to growth in average headcount to support the increase in our production activity and continued improvements in our streaming service.
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Interest Expense
Interest expense consists primarily of the interest associated with our outstanding debt obligations, including the amortization of debt issuance costs. See Note 6 Debt in the accompanying notes to our consolidated financial statements for further detail on our debt obligations.

 Three Months EndedChange
 March 31,
2022
March 31,
2021
Q1'22 vs. Q1'21
 (in thousands, except percentages)
Interest expense$187,579 $194,440 $(6,861)(4)%
As a percentage of revenues%%

Interest expense primarily consists of $178 million of interest on our Notes for the three months ended March 31, 2022. The decrease in interest expense for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021 was due to the lower average aggregate principal of interest bearing notes outstanding.

Interest and Other Income
Interest and other income consists primarily of foreign exchange gains and losses on foreign currency denominated balances and interest earned on cash and cash equivalents.

 Three Months EndedChange
 March 31,
2022
March 31,
2021
Q1'22 vs. Q1'21
 (in thousands, except percentages)
Interest and other income$195,645 $269,086 $(73,441)(27)%
As a percentage of revenues%%

Interest and other income decreased in the three months ended March 31, 2022 primarily due to foreign exchange gains of $192 million, compared to gains of $258 million for the corresponding period in 2021. In the three months ended March 31, 2022, the foreign exchange gains were primarily driven by the $162 million non-cash gain from the remeasurement of our €5,170 million Senior Notes, coupled with the remeasurement of cash and content liability positions in currencies other than the functional currencies. In the three months ended March 31, 2021, the foreign exchange gains were primarily driven by the $253 million non-cash gain from the remeasurement of our €5,170 million Senior Notes, coupled with the remeasurement of cash and content liability positions in currencies other than the functional currencies.

Provision for Income Taxes
 Three Months EndedChange
 March 31,
2022
March 31,
2021
Q1'22 vs. Q1'21
 (in thousands, except percentages)
Provision for income taxes$382,245 $327,787 $54,458 17 %
Effective tax rate19 %16 %

The effective tax rate for the three months ended March 31, 2022 differed from the Federal statutory rate primarily due to an increase in foreign taxes, offset by the impact of international provisions of the Tax Cuts and Jobs Act, and the recognition of excess tax benefits of stock-based compensation.
The increase in the effective tax rate for the three months ended March 31, 2022, as compared to the same period in 2021 was primarily due to an increase in foreign taxes and a reduction to excess tax benefits of stock-based compensation.


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Liquidity and Capital Resources
As ofChange
March 31,
2022
December 31,
2021
March 31, 2022 vs. December 31, 2021
(in thousands, except percentages)
Cash, cash equivalents and restricted cash$6,034,501 $6,055,111 $(20,610)— %
Short-term and long-term debt14,534,561 15,392,895 (858,334)(6)%

Cash, cash equivalents and restricted cash decreased $21 million in the three months ended March 31, 2022 primarily due to the repayment of debt, acquisitions and purchases of property and equipment, partially offset by cash provided by operations.
Debt, net of debt issuance costs, decreased $858 million primarily due to the repayment upon maturity of the $700 million aggregate principal amount of our 5.500% Senior Notes in February 2022, coupled with the remeasurement of our euro-denominated notes. The amount of interest on our outstanding notes due in the next twelve months is $689 million. As of March 31, 2022, no amounts had been borrowed under the $1 billion Revolving Credit Agreement. See Note 6