Lex on Amazon

I am rather puzzled by the Lex column today which has produced a piece on Amazon's free cash flow. The Lex hypothesis is that Amazon's free cash flow is after capex but does not include capital lease repayments.

Now I freely admit that I have not looked into this, and it has been a while since I looked at an Amazon 10-K, but I am not sure that everyone understands the problem.

Assets purchased under capital leases get added to the balance sheet in the same way as assets purchased for cash or on HP. Capital lease repayments are a repayment of money borrowed to finance the asset; they should not get added to capex.

The problem here I think is that some analysts believe the capex number is in the cash flow. It's not. If you want to calculate a company's capital expenditure, you need to look at the fixed asset notes.

It amazes me how little the sell-side (and many of the buy-side) really understand about financial statements.