If rev's continue growing around 10% this is a decent entry point for long term investors. Good amount of share buybacks, the only negative is high leverage. FCF/Share keeps increasing , 27% FCF/Revenue ratio

FCF: $1.5B

Mkt cap: 352mn shares x 67 ~ $23.5B market cap

I apologize for my ignorance as I have done little research here, but could you provide some more detail as to how you get to 1.5B of FCF?

Thanks.

I made a mistake and as per my latest calculations it should be 1.36B , earlier I did a rough calculation of

(TTM EBITDA ($2354mn) - Maintenance capex ($117mn))*(1 - 0.33) = $1476mn.

My mistake being I did not adjust Changes to working capital and DISCK has consistently high -ve working capital changes. After you asked the question, I went back to look at the details. These are my caluculations

Numbers are from latest 10-K. Everything is in millions

FCF: EBIT - Taxes + Depr & Amortization - Changes in Net working capital - maintenance capex

**EBIT/ Op Income:** 1998

**Provision for taxes:** 659

**Depreciation:** 276

**Content Amortization & Impairment:** 1190

**Changes in working capital: **-95 [ Adding this back in the formula below ]

**Content rights:** 1426 [ IMO this should be treated as maintenance capex, based on previous 3 years this has been consistently increasing and they are spending working capital on this. One can argue that this is growth capex, but we don't know what will happen when it stops. It's up to your judgement ]

**Property and equipment:** 117

1998 - 659 + 276 + 1190 + 95 - 1426 - 117 = 1357mn

Also when i look at the numbers, FCF is 25% of revenue I like firms that have consistently large percentage of revenue as FCF. Buybacks are great. The high leverage worries me a bit and i need to do some comparisons. I am still doing my research