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Sorry to be so long getting back to this but I wanted the 10Q for Q3 to be out before I tried to see what you are doing.

Cash cost for streaming content for 9 months is $2175.7 million.

See if you think this is the right way to do it. BTW, this is a lot of expense considering revenue was $2664 million

Starting with cash flow statement

additions to SC 1883.9
change in SC liability 631.8
cash cost cash flow 1252.1

This is only the cash cost we can see on the cash flow statement. There is that off balance sheet cash paid that is included in net income that we can't see.

You said add back current liabilities from December 2011. I think this may be double counting. All the current and long term liability has been accounted for in the change in SC liability that is on the cash flow statement

You can do the math--I wont put it here. If you go to the footnotes and calculate the changes in current and LT SC liabilities it is $631 million

What we need to get to is the off balance sheet current liabilities that are in the footnotes in the table of obligations.

They do now put the amount of current liabilities that are in these obligations that are not on the balance sheet. I don't think they used to do that so now we do have a way to find the amount that is not on the balance sheet and has changed in the current 9 months.

Specifically, payments for streaming content obligations expected to be made in less than one year as of September 30, 2012 and December 31, 2011, as shown above, include $1.3 billion and $0.9 billion, respectively, of current "Content liabilities" reflected on the Consolidated Balance Sheets.

If we take these off the obligations table for current SC liabilities we finally get that amount that has been paid off in 9 months that is not reflected on the cash flow statement entry "change in SC liabilities"

That value is ($923.6) indicating they have that much in fewer current liabilities meaning it had to be paid.

Add that to the $1252.1 and we get $2175.7.

What do you think?
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