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Hi,

Can someone help me in figuring out the FCF. I understand it's Net Cash from OpActivities - Capital Expenditures. In this particular cash flow statement (NFLX), what is the FCF? (I hope the statement comes out ok, I'm using the pre tag)

Net Cash fro Op Activities = $147M -- do we need to adjust this amount at all or just drop it here from the statement?

Capital Expenditure:
Purchases of property and equipment: (14M)

How about the following (from investing activities)?
Proceeds from sale of short-term investments 45M -- one time?
Acquisitions of DVD library (102M) -- this is CapEx, right?
Proceeds from sale of DVDs 5.6M -- how about this?

FCF = 145 - 14 - 102 ??

thanks much,
MG



2002 2003 2004
-------------------------------

Cash flows from operating activities:
-------------------------------------
Net income (loss) $ (20,948 ) $ 6,512 $ 21,595

Adjustments to reconcile net income (loss) to net
cash provided by operating activities:

Depreciation of property and equipment 5,919 4,720 5,871
Amortization of DVD library 17,417 43,125 80,346
Amortization of intangible assets 3,141 3,146 1,987

Non-cash charges for equity
instruments granted to non-employees 40 - -

Stock-based compensation expense 8,832 10,719 16,587
Stock option income tax benefits - - 176
Loss on disposal of property and equipment - - 135
Loss on disposal of short-term investments - - 274
Gain on disposal of DVDs (1,674) (1,604) (2,912)
Non-cash interest expense 11,384 103 44

Changes in operating assets and liabilities:
Prepaid expenses and other current assets (44) (290) (9,130 )
Accounts payable 6,635 12,304 17,121
Accrued expenses 4,558 2,523 1,506
Deferred revenue 4,806 8,581 13,612
Deferred rent 48 (47) 359


==>Net cash provided by operating
activities: 40,114 89,792 147,571


Cash flows from investing activities:
-------------------------------------


Purchases of short-term investments (43,022) (1,679) (586)
Proceeds from sale of short-term
investments - - 45,013
Purchases of property and equipment (2,751) (8,872) (14,962)
Acquisitions of DVD library (24,070) (55,620) (102,971)
Proceeds from sale of DVDs 1,988 1,833 5,617
Deposits and other assets 554 (339) (492)

=>Net cash used in investing
activities (67,301) (64,677) (68,381)


Cash flows from financing activities:
------------------------------------

Proceeds from issuance of common stock 88,020 6,299 6,035
Repurchases of common stock (6 ) - -
Principal payments on notes payable and
capital lease obligations: (17,144) (1,334) (436)
Net cash provided by financing activities 70,870 4,965 5,599
Effect of exchange rate changes on cash and
cash equivalents - - (222)

=>Net increase in cash and cash
equivalents 43,683 30,080 84,567
Cash and cash equivalents, beginning
of period 16,131 59,814 89,894
=>Cash and cash equivalents, end
of period $59,814 $89,894 $174,461
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