Item 2.02 Results of Operations and Financial Condition.
OnJanuary 19, 2023 ,Netflix, Inc. (the "Company") announced its financial results for the quarter endedDecember 31, 2022 . The Letter to Shareholders, which is attached hereto as Exhibit 99.1 and is incorporated herein by reference, includes reference to the non-GAAP financial measures of F/X neutral revenue and operating margin, free cash flow, last twelve months ("LTM") EBITDA, and adjusted EBITDA. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles inthe United States . Management believes that the non-GAAP measures of free cash flow, LTM EBITDA and adjusted EBITDA are important liquidity metrics because they measure, during a given period, the amount of cash generated that is available to repay debt obligations, make strategic acquisitions and investments and for certain other activities like stock repurchases. Management believes that F/X neutral revenue and operating margin allows investors to compare our projected results to our actual results absent intra-year currency fluctuations. However, these non-GAAP measures should be considered in addition to, not as a substitute for or superior to, net income, operating income, operating margin, diluted earnings per share and net cash provided by (used in) operating activities, or other financial measures prepared in accordance with GAAP. Reconciliation to the GAAP equivalent of this non-GAAP measure is contained in tabular form in Exhibit 99.1. The information contained in this Item 2.02 and the accompanying Exhibit 99.1 are "furnished" and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
OnJanuary 13, 2023 ,Reed Hastings was appointed as Executive Chairman of the Board of Directors (the "Board") of the Company, effective immediately. At that time,Mr. Hastings resigned his role as co-Chief Executive Officer and President of the Company, but remains an employee of the Company in his new role as Executive Chairman. Also onJanuary 13, 2023 ,Greg Peters , age 52, was appointed as co-Chief Executive Officer of the Company.Mr. Peters will serve as co-Chief Executive Officer withTed Sarandos , the Company's co-Chief Executive Officer. Additionally,Mr. Peters has been appointed to the Board and will hold office as a Class I director. He has not yet been appointed to serve as a member of any Board committee. Both appointments were effective as ofJanuary 13, 2023 . Biographical and other information aboutMr. Peters can be found in the section ofNetflix 's 2022 Proxy Statement, filed with theSecurities and Exchange Commission onApril 22, 2022 , entitled "Our Company-- Executive Officers-Greg Peters ", which is incorporated by reference herein.Mr. Peters brings to the Board a deep understanding of the Company's business, including its technology and worldwide operations, as well as executive leadership experience. There is no family relationship betweenMr. Peters and any other person that would require disclosure under Item 401(d) of Regulation S-K. Mr. Peters is also not a party to any transactions that would require disclosure under Item 404(a) of Regulation S-K.
In connection with the above appointments and resignation, on
ANNUAL STOCK ESTIMATED TARGET
ANNUAL SALARY OPTION ALLOCATION BONUS Greg Peters, Co-Chief Executive Officer$ 3,000,000 $ 17,325,000 $ 14,325,000 Reed Hastings, Executive Chairman of the Board 500,000 2,500,000 N/A
All other terms relating to the 2023 compensation for
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit Number Description of Exhibit 99.1 Letter to Shareholders datedJanuary 19, 2023 Cover Page Interactive Data File (embedded within the Inline XBRL 104 document)
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