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by maoistinquisitr 2963 days ago
Amazon makes weird non-GAAP claims. In terms of GAAP, Amazon had negative free cash flow of $4.2 billion in Q1.
3 comments

If you are referring to the cash flow statement, which I think you are, there are no "weird non-GAAP claims" involved.

Their latest 10Q shows GAAP pretax income of $1.9 billion.

If you're referring to total change in cash which was -$4.2 billion, that's because they reduced their accounts payable by $10.2 billion from paying all the suppliers after the holiday season. Looking at the consolidated statement of cash flows of a seasonal business very, very easily leads to misunderstanding the business.

Operating cash flow was $18 billion for the year ending 3/31.

I'm talking on a yearly basis, not a quarterly basis. Due to the seasonal nature of their business, I'm sure the quarterly numbers are more choppy. I think the general point, that they've been able to self-finance this enormous growth (save for some certain real estate purchases or acquisitions), stands.
“Self-finance” may not be the best term to use, given that their asset growth of $90bn (from $40bn in 2013 to $131bn in 2017) is mostly coming from the increase in liabilities (equity has increased less than $20bn, from $10bn to $28bn).

Long-term debt was $3bn in 2013, increasing to $8bn in 2014 and $25bn in 2017. Capital leases have also gradually increased from $2bn in 2013 to $8bn in 2016 and $13bn in 2017.

Free cash flow is a non-GAAP metric. Amazon provides three different free cash flow calculations (depending on how leases are accounted for). In 2015-2017 the corresponding figures are $26.4bn (7.5+10.5+8.4), $14.8bn (4.9+6.5+3.4) and $5.8bn (2.6+4.7-1.5).
A 2015 commentary on this issue: https://www.ft.com/content/cfb6975d-4503-3fb5-85f4-5c11c142b...

The three different cash flow calculations in 2012-2015 were $4.4bn (0.4+2+2), $1.7bn (-0.1+1.3+0.5) and -$2.4bn (-0.4+0.2-2.2).

As forecasted, the divergence of these metrics has continued.