Amazon's Leasing Cash Flow

In the textbook, we argue that cash flows are most often a better measure of company performance than net income. Amazon fully exploits this concept. In most recent quarters, the company has shown an operating loss, but has touted its positive operating cash flow as the measure that investors should examine. Now, it appears that Amazon may have been glossing over a more negative reality for the company. In the company's most recent earnings announcement, it disclosed another cash flow, which is the operating cash flow minus the capital leases. Amazon has a large number of capital leases. Ignoring the cash flows necessary to pay these leases ignores a significant outflow each year to which Amazon has committed to paying.