Balance Sheet Components

12 Months Ended

Dec. 31, 2023

Balance Sheet Related Disclosures [Abstract]

Content Assets, Net

Content assets consisted of the following:


	As of December 31,
	2023		2022
	(in thousands)
Licensed content, net	$	12,722,701	$	12,732,549

Produced content, net
Released, less amortization	9,843,150		9,110,518
In production	8,247,578		10,255,940
In development and pre-production	844,627		637,706
	18,935,355		20,004,164

Content assets, net	$	31,658,056	$	32,736,713

As of December 31, 2023, approximately $5,777 million, $2,860 million, and $1,842 million of the $12,723 million unamortized cost of the licensed content is expected to be amortized in each of the next three years. As of December 31, 2023, approximately $3,766 million, $2,622 million, and $1,793 million of the $9,843 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, 2023, the amount of accrued participations and residuals was not material.

The following table represents the amortization of content assets:


	Year Ended December 31,
	2023		2022		2021
	(in thousands)
Licensed content	$	7,145,446	$	7,681,978	$	8,055,811
Produced content (1)	7,051,991		6,344,154		4,174,556
Total	$	14,197,437	$	14,026,132	$	12,230,367

(1) Tax incentives earned on qualified production spend generally reduce the cost-basis of content assets and result in lower content amortization over the life of the title. For the years ended December 31, 2023 and 2022, tax incentives resulted in lower content amortization on produced content of approximately $835 million and $719 million, respectively.

Property and Equipment, Net

Property and equipment and accumulated depreciation consisted of the following:


	As of December 31,				Estimated Useful Lives (in Years)
	2023		2022
	(in thousands)
Land	$	88,429	$	85,005
Buildings	150,736		52,106		30 years
Leasehold improvements	1,032,492		1,040,570		Over life of lease
Furniture and fixtures	144,737		153,682		3 years
Information technology	414,092		442,681		3 years
Corporate aircraft	99,175		115,578		8-10 years
Machinery and equipment	10,334		26,821		3-5 years
Capital work-in-progress	406,492		235,555
Property and equipment, gross	2,346,487		2,151,998
Less: Accumulated depreciation	(855,043)		(753,741)
Property and equipment, net	$	1,491,444	$	1,398,257

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 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. The Company has certain contracts for real estate which may contain lease and non-lease components which it has elected to treat as a single lease component.

The components of lease costs for the years ended December 31, 2023, 2022 and 2021 were as follows:


	Year ended December 31,
	2023		2022		2021
	(in thousands)
Operating lease cost	$	430,856	$	413,664	$	389,805
Short-term lease cost	207,822		194,764		152,765
Total lease cost	$	638,678	$	608,428	$	542,570

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


	Year ended December 31,
	2023		2022		2021
	(in thousands)
Cash paid for operating lease liabilities	$	451,525	$	413,034	$	349,586
Right-of-use assets obtained in exchange for new operating lease obligations	196,639		252,393		764,142


	As of December 31,
	2023			2022
	(in thousands, except lease term and discount rate)
Operating lease right-of-use assets, net	$	2,076,899		$	2,227,122

Current operating lease liabilities	$	383,312		$	355,985
Non-current operating lease liabilities	2,046,801			2,222,503
Total operating lease liabilities	$	2,430,113		$	2,578,488

Weighted-average remaining lease term	7.5 years			8.3 years
Weighted-average discount rate	3.3		%	3.2		%

Maturities of operating lease liabilities as of December 31, 2023 were as follows (in thousands):


Due in 12 month period ended December 31,
2024	$	460,353
2025	424,897
2026	401,306
2027	340,245
2028	282,465
Thereafter	827,117
	2,736,383
Less imputed interest	(306,270)
Total operating lease liabilities	$	2,430,113

The Company has additional operating leases for real estate of $343 million which have not commenced as of December 31, 2023, and as such, have not been recognized on the Company's Consolidated Balance Sheets. These operating leases are expected to commence in 2024 with lease terms between 2 and 11 years.

Other Current Assets

Other current assets consisted of the following:


	As of
	December 31, 2023		December 31, 2022
	(in thousands)
Trade receivables	$	1,287,054	$	988,898
Prepaid expenses	408,936		392,735
Other (1)	1,084,257		1,826,388
Total other current assets	$	2,780,247	$	3,208,021

(1) $555 million and $598 million of receivables related to tax incentives earned on production spend are included in Other as of December 31, 2023 and 2022, respectively.

The decrease in Other was primarily driven by receipt of amounts due under a modified content licensing arrangement.