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Press Release dated October 25, 2011

Exhibit 99.1

LOGO

AMAZON.COM ANNOUNCES THIRD QUARTER SALES UP 44% TO $10.88 BILLION;

INTRODUCED FOUR NEW KINDLE DEVICES FOR THE HOLIDAYS

SEATTLE — (BUSINESS WIRE) — October 25, 2011 — Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its third quarter ended September 30, 2011.

Operating cash flow increased 19% to $3.11 billion for the trailing twelve months, compared with $2.62 billion for the trailing twelve months ended September 30, 2010. Free cash flow decreased 17% to $1.53 billion for the trailing twelve months, compared with $1.83 billion for the trailing twelve months ended September 30, 2010.

Common shares outstanding plus shares underlying stock-based awards totaled 469 million on September 30, 2011, compared with 465 million a year ago.

Net sales increased 44% to $10.88 billion in the third quarter, compared with $7.56 billion in third quarter 2010. Excluding the $371 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 39% compared with third quarter 2010.

Operating income was $79 million in the third quarter, compared with $268 million in third quarter 2010. The favorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $14 million.

Net income decreased 73% to $63 million in the third quarter, or $0.14 per diluted share, compared with net income of $231 million, or $0.51 per diluted share, in third quarter 2010.

“September 28th was the biggest order day ever for Kindle, even bigger than previous holiday peak days – we introduced Kindle Fire for $199, Kindle Touch 3G for $149, Kindle Touch for $99, and our all new Kindle for only $79,” said Jeff Bezos, founder and CEO of Amazon.com. “In the three weeks since launch, orders for electronic ink Kindles are double the previous launch. And based on what we’re seeing with Kindle Fire pre-orders, we’re increasing capacity and building millions more than we’d already planned.”

Highlights

 

  •  

Amazon announced the Kindle Fire, a new class of Kindle for movies, TV shows, music, books, magazines, apps, games, and web browsing with all the content, free storage in the Amazon Cloud, Whispersync, vibrant color touch screen, a powerful dual-core processor, and “Amazon Silk” — Amazon’s new revolutionary web browser that accelerates the power of the mobile device by using the computing speed and power of the Amazon Web Services Cloud. Kindle Fire is only $199.

 

  •  

Amazon announced three all-new Kindle e-readers that are smaller, lighter, and more affordable than ever before. The $79 latest generation Kindle is for customers who want the lightest, most compact Kindle at an incredible price. The $99 Kindle Touch includes an easy-to-use touch screen. Kindle Touch 3G is the top of the line e-reader with the unparalleled convenience of free 3G where customers never have to hunt or pay for a Wi-Fi hotspot — you simply download and read books anytime and anywhere — all for $149. Each of these e-readers includes all the benefits of the most advanced electronic ink display that reads like real paper, even in bright sunlight.

 

  •  

Amazon.fr launched the French Kindle Store offering customers a vast selection of over 35,000 French-language Kindle books. Amazon also announced that its series of free “Buy Once, Read Everywhere” apps for the most popular devices, including iPad, iPod touch, iPhone, PCs, Macs and Android-based devices, are now available in French-language versions. In addition, Amazon announced that the all-new Kindle with French navigation is available at Amazon.fr for only 99€.

 

1


  •  

Amazon.com announced licensing agreements with Twentieth Century Fox and PBS that allow the millions of Amazon Prime members to instantly stream a broad selection of popular movies and TV shows from their vast libraries. These deals will bring the total number of Prime instant videos to more than 12,000 movies and TV shows from partners such as CBS, FOX, PBS, NBCUniversal, Sony, Warner Bros., and many more.

 

  •  

Amazon Publishing released 61 titles in the quarter, including Kindle bestsellers “The Detachment” by Barry Eisler, “Dove Season” by Johnny Shaw, and “A Small Fortune” by Audrey Braun. Recent acquisitions include Tim Ferriss’ “The 4-Hour Chef,” Penny Marshall’s memoir “My Mother Was Nuts,” and the epic Foreworld Series project led by Neal Stephenson and Greg Bear. Amazon Publishing also announced a new imprint, 47North, which is dedicated to science-fiction, fantasy, and horror. 47North joins sister imprints AmazonEncore, AmazonCrossing, Powered by Amazon, Montlake Romance, and Thomas & Mercer.

 

  •  

The Company launched Amazon.es, a Spanish-language website offering customers a vast selection of books, DVDs, video games, music, and consumer electronics at everyday low prices. Amazon.es’s convenient services include Amazon Premium, the local version of Amazon Prime, with unlimited free guaranteed 2-3 day delivery for an annual fee of 14.95€. The first product sold on Amazon.es was a Blu-ray pack of “Star Wars: The Complete Saga” to a new Premium customer in Madrid.

 

  •  

North America segment sales, representing the Company’s U.S. and Canadian sites, were $5.93 billion, up 44% from third quarter 2010.

 

  •  

International segment sales, representing the Company’s U.K., German, Japanese, French, Chinese, Italian and Spanish sites, were $4.94 billion, up 44% from third quarter 2010. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 33%.

 

  •  

Worldwide Media sales grew 24% to $4.15 billion. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 19%.

 

  •  

Worldwide Electronics and Other General Merchandise sales grew 59% to $6.32 billion. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 54%.

 

  •  

Amazon Web Services (AWS) announced new features to make it even easier for enterprise customers to utilize the AWS infrastructure. New services like Direct Connect, Identity and Access Management, and Virtual Private Clouds allow enterprises to reliably, securely, and cost effectively use the existing AWS infrastructure for their computing needs.

 

  •  

AWS launched GovCloud, a new AWS Region designed to allow U.S. government agencies and contractors to move more sensitive workloads into the cloud by addressing their specific regulatory and compliance requirements. AWS also announced it has received Federal Information Security Management Act (FISMA) Moderate Authorization and Accreditation from the U.S. General Services Administration.

Financial Guidance

The following forward-looking statements reflect Amazon.com’s expectations as of October 25, 2011. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and consumer spending, world events, the rate of growth of the Internet and online commerce and the various factors detailed below.

Fourth Quarter 2011 Guidance

 

  •  

Net sales are expected to be between $16.45 billion and $18.65 billion, or to grow between 27% and 44% compared with fourth quarter 2010.

 

  •  

Operating income (loss) is expected to be between $(200) million and $250 million, or between 142% decline and 47% decline compared with fourth quarter 2010.

 

  •  

This guidance includes approximately $200 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions or investments are concluded and that there are no further revisions to stock-based compensation estimates.

A conference call will be webcast live today at 2 p.m. PT/5 p.m. ET, and will be available for at least three months at www.amazon.com/ir. This call will contain forward-looking statements and other material information regarding the Company’s financial and operating results.

 

2


These forward-looking statements are inherently difficult to predict. Actual results could differ materially for a variety of reasons, including, in addition to the factors discussed above, the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of legal proceedings and claims, fulfillment center optimization, risks of inventory management, seasonality, the degree to which the Company enters into, maintains and develops commercial agreements, acquisitions and strategic transactions, and risks of fulfillment throughput and productivity. Other risks and uncertainties include, among others, risks related to new products, services and technologies, system interruptions, government regulation and taxation, payments and fraud. In addition, the current global economic climate amplifies many of these risks. More information about factors that potentially could affect Amazon.com’s financial results is included in Amazon.com’s filings with the Securities and Exchange Commission (“SEC”), including its most recent Annual Report on Form 10-K and subsequent filings.

Our investor relations website is www.amazon.com/ir and we encourage investors to use it as a way of easily finding information about us. We promptly make available on this website, free of charge, the reports that we file or furnish with the SEC, corporate governance information (including our Code of Business Conduct and Ethics), and select press releases and social media postings.

About Amazon.com

Amazon.com, Inc. (NASDAQ: AMZN), a Fortune 500 company based in Seattle, opened on the World Wide Web in July 1995 and today offers Earth’s Biggest Selection. Amazon.com, Inc. seeks to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices. Amazon.com and other sellers offer millions of unique new, refurbished and used items in categories such as Books; Movies, Music & Games; Digital Downloads; Electronics & Computers; Home & Garden; Toys, Kids & Baby; Grocery; Apparel, Shoes & Jewelry; Health & Beauty; Sports & Outdoors; and Tools, Auto & Industrial. Amazon Web Services provides Amazon’s developer customers with access to in-the-cloud infrastructure services based on Amazon’s own back-end technology platform, which developers can use to enable virtually any type of business. The new latest generation Kindle is the lightest, most compact Kindle ever and features the same 6-inch, most advanced electronic ink display that reads like real paper even in bright sunlight. Kindle Touch is a new addition to the Kindle family with an easy-to-use touch screen that makes it easier than ever to turn pages, search, shop, and take notes — still with all the benefits of the most advanced electronic ink display. Kindle Touch 3G is the top of the line e-reader and offers the same new design and features of Kindle Touch, with the unparalleled added convenience of free 3G. Kindle Fire is the Kindle for movies, TV shows, music, books, magazines, apps, games and web browsing with all the content, free storage in the Amazon Cloud, Whispersync, Amazon Silk (Amazon’s new revolutionary cloud-accelerated web browser), vibrant color touch screen, and powerful dual-core processor.

Amazon and its affiliates operate websites, including www.amazon.com, www.amazon.co.uk, www.amazon.de, www.amazon.co.jp, www.amazon.fr, www.amazon.ca, www.amazon.cn, www.amazon.it, and www.amazon.es. As used herein, “Amazon.com,” “we,” “our” and similar terms include Amazon.com, Inc., and its subsidiaries, unless the context indicates otherwise.

 

3


AMAZON.COM, INC.

Consolidated Statements of Cash Flows

(in millions)

(unaudited)

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
    Twelve Months Ended
September 30,
 
     2011     2010     2011     2010     2011     2010  

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

   $ 2,047      $ 1,629      $ 3,777      $ 3,444      $ 1,539      $ 2,514   

OPERATING ACTIVITIES:

            

Net income

     63        231        454        736        871        1,120   

Adjustments to reconcile net income to net cash from operating activities:

            

Depreciation of fixed assets, including internal-use software and website development, and other amortization

     278        150        724        399        894        510   

Stock-based compensation

     144        107        397        304        518        404   

Other operating expense (income), net

     37        26        112        77        140        98   

Losses (gains) on sales of marketable securities, net

     (6     (2     (4     (2     (4     (2

Other expense (income), net

     (38     (35     (39     (62     (56     (56

Deferred income taxes

     34        (16     68        (44     116        (44

Excess tax benefits from stock-based compensation

     —          (75     (61     (236     (84     (288

Changes in operating assets and liabilities:

            

Inventories

     (587     (505     (517     (326     (1,211     (666

Accounts receivable, net and other

     (75     (64     211        348        (320     (161

Accounts payable

     848        894        (1,687     (1,078     1,755        1,152   

Accrued expenses and other

     109        192        (9     31        587        460   

Additions to unearned revenue

     239        152        706        502        892        946   

Amortization of previously unearned revenue

     (249     (200     (721     (642     (984     (856
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     797        855        (366     7        3,114        2,617   

INVESTING ACTIVITIES:

            

Purchases of fixed assets, including internal-use software and website development

     (529     (315     (1,261     (651     (1,589     (788

Acquisitions, net of cash acquired, and other

     (48     (42     (656     (82     (927     (81

Sales and maturities of marketable securities and other investments

     1,964        1,059        5,931        3,139        7,043        3,827   

Purchases of marketable securities and other investments

     (1,287     (1,830     (4,475     (4,551     (6,203     (6,711
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) investing activities

     100        (1,128     (461     (2,145     (1,676     (3,753

FINANCING ACTIVITIES:

            

Excess tax benefits from stock-based compensation

     —          75        61        236        84        288   

Proceeds from long-term debt and other

     9        67        131        110        173        125   

Repayments of long-term debt, capital lease, and finance lease obligations

     (91     (49     (341     (122     (440     (241
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     (82     93        (149     224        (183     172   

Foreign-currency effect on cash and cash equivalents

     (39     90        22        9        29        (11
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     776        (90     (954     (1,905     1,284        (975

CASH AND CASH EQUIVALENTS, END OF PERIOD

   $ 2,823      $ 1,539      $ 2,823      $ 1,539      $ 2,823      $ 1,539   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION:

            

Cash paid for interest on long term debt

   $ 4      $ 3      $ 10      $ 8      $ 13      $ 10   

Cash paid for income taxes (net of refunds)

     12        16        18        62        31        66   

Fixed assets acquired under capital leases

     155        141        566        283        688        333   

Fixed assets acquired under build-to-suit leases

     54        39        220        159        234        214   


AMAZON.COM, INC.

Consolidated Statements of Operations

(in millions, except per share data)

(unaudited)

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2011     2010     2011     2010  

Net sales

   $ 10,876      $ 7,560      $ 30,646      $ 21,257   

Operating expenses (1):

        

Cost of sales

     8,325        5,786        23,457        16,244   

Fulfillment

     1,121        680        2,917        1,808   

Marketing

     370        241        1,037        653   

Technology and content

     769        442        2,047        1,216   

General and administrative

     175        117        474        327   

Other operating expense (income), net

     37        26        112        77   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     10,797        7,292        30,044        20,325   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     79        268        602        932   

Interest income

     16        13        47        36   

Interest expense

     (17     (11     (45     (28

Other income (expense), net

     52        22        57        50   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total non-operating income (expense)

     51        24        59        58   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     130        292        661        990   

Provision for income taxes

     (67     (79     (205     (267

Equity-method investment activity, net of tax

     —          18        (2     13   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 63      $ 231      $ 454      $ 736   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per share

   $ 0.14      $ 0.51      $ 1.00      $ 1.65   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per share

   $ 0.14      $ 0.51      $ 0.99      $ 1.62   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares used in computation of earnings per share:

        

Basic

     454        448        453        447   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     461        456        460        455   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)    Includes stock-based compensation as follows:

        

Fulfillment

     35        23        91        65   

Marketing

     10        7        27        19   

Technology and content

     75        56        211        159   

General and administrative

     24        21        68        61   


AMAZON.COM, INC.

Segment Information

(in millions)

(unaudited)

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2011     2010     2011     2010  

North America

        

Net sales

   $ 5,932      $ 4,126      $ 16,804      $ 11,496   

Segment operating expenses (1)

     5,788        3,940        16,156        10,837   
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment operating income

   $ 144      $ 186      $ 648      $ 659   
  

 

 

   

 

 

   

 

 

   

 

 

 

International

        

Net sales

   $ 4,944      $ 3,434      $ 13,842      $ 9,761   

Segment operating expenses (1)

     4,828        3,219        13,379        9,107   
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment operating income

   $ 116      $ 215      $ 463      $ 654   
  

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated

        

Net sales

   $ 10,876      $ 7,560      $ 30,646      $ 21,257   

Segment operating expenses

     10,616        7,159        29,535        19,944   
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment operating income

     260        401        1,111        1,313   

Stock-based compensation

     (144     (107     (397     (304

Other operating income (expense), net

     (37     (26     (112     (77
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     79        268        602        932   

Total non-operating income (expense)

     51        24        59        58   

Provision for income taxes

     (67     (79     (205     (267

Equity-method investment activity, net of tax

     —          18        (2     13   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 63      $ 231      $ 454      $ 736   
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment Highlights:

        

Y/Y net sales growth:

        

North America

     44     45     46     46

International

     44        32        42        37   

Consolidated

     44        39        44        42   

Y/Y segment operating income growth (decline):

        

North America

     (23 )%      19     (2 )%      53

International

     (46     11        (29     20   

Consolidated

     (35     15        (15     35   

Net sales mix:

        

North America

     55     55     55     54

International

     45        45        45        46   
  

 

 

   

 

 

   

 

 

   

 

 

 
     100     100     100     100
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Represents operating expenses, excluding stock-based compensation and “Other operating expense (income), net,” which are not allocated to segments


AMAZON.COM, INC.

Supplemental Net Sales Information

(in millions)

(unaudited)

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2011     2010     2011     2010  

North America

        

Media

   $ 1,927      $ 1,591      $ 5,397      $ 4,512   

Electronics and other general merchandise

     3,635        2,326        10,435        6,440   

Other (1)

     370        209        972        544   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total North America

   $ 5,932      $ 4,126      $ 16,804      $ 11,496   
  

 

 

   

 

 

   

 

 

   

 

 

 

International

        

Media

   $ 2,226      $ 1,759      $ 6,373      $ 5,142   

Electronics and other general merchandise

     2,681        1,644        7,364        4,531   

Other (1)

     37        31        105        88   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total International

   $ 4,944      $ 3,434      $ 13,842      $ 9,761   
  

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated

        

Media

   $ 4,153      $ 3,350      $ 11,770      $ 9,654   

Electronics and other general merchandise

     6,316        3,970        17,799        10,971   

Other (1)

     407        240        1,077        632   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Consolidated

   $ 10,876      $ 7,560      $ 30,646      $ 21,257   
  

 

 

   

 

 

   

 

 

   

 

 

 

Y/Y Net Sales Growth:

        

North America:

        

Media

     21     13     20     17

Electronics and other general merchandise

     56        80        62        76   

Other

     77        52        79        53   

Total North America

     44        45        46        46   

International:

        

Media

     27     16     24     22

Electronics and other general merchandise

     63        54        63        61   

Other

     21        26        20        30   

Total International

     44        32        42        37   

Consolidated:

        

Media

     24     14     22     19

Electronics and other general merchandise

     59        68        62        69   

Other

     70        48        70        50   

Total Consolidated

     44        39        44        42   

Y/Y Net Sales Growth Excluding Effect of Exchange Rates:

        

International:

        

Media

     17     18     15     20

Electronics and other general merchandise

     51        60        51        61   

Other

     13        33        13        32   

Total International

     33        35        32        37   

Consolidated:

        

Media

     19     15     17     18

Electronics and other general merchandise

     54        71        58        70   

Other

     69        49        69        50   

Total Consolidated

     39        40        40        41   

Consolidated Net Sales Mix:

        

Media

     38     44     38     45

Electronics and other general merchandise

     58        53        58        52   

Other

     4        3        4        3   
  

 

 

   

 

 

   

 

 

   

 

 

 
     100     100     100     100
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Includes non-retail activities, such as AWS, miscellaneous marketing and promotional agreements, other seller sites, and co-branded credit card agreements


AMAZON.COM, INC.

Consolidated Balance Sheets

(in millions, except per share data)

 

     September 30,
2011
    December 31,
2010
    September 30,
2010
 
     (unaudited)           (unaudited)  

ASSETS

      

Current assets:

      

Cash and cash equivalents

   $ 2,823      $ 3,777      $ 1,539   

Marketable securities

     3,503        4,985        4,346   

Inventories

     3,770        3,202        2,515   

Accounts receivable, net and other

     1,496        1,587        959   

Deferred tax assets

     312        196        200   
  

 

 

   

 

 

   

 

 

 

Total current assets

     11,904        13,747        9,559   

Fixed assets, net

     3,999        2,414        2,099   

Deferred tax assets

     27        22        43   

Goodwill

     1,934        1,349        1,277   

Other assets

     1,190        1,265        1,184   
  

 

 

   

 

 

   

 

 

 

Total assets

   $ 19,054      $ 18,797      $ 14,162   
  

 

 

   

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

      

Current liabilities:

      

Accounts payable

   $ 6,552      $ 8,051      $ 4,614   

Accrued expenses and other

     2,426        2,321        1,761   
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     8,978        10,372        6,375   

Long-term liabilities

     2,310        1,561        1,390   

Commitments and contingencies

      

Stockholders’ equity:

      

Preferred stock, $0.01 par value:

      

Authorized shares — 500

      

Issued and outstanding shares — none

     —          —          —     

Common stock, $0.01 par value:

      

Authorized shares — 5,000

      

Issued shares — 471, 468, and 466

      

Outstanding shares — 455, 451, and 449

     5        5        5   

Treasury stock, at cost

     (600     (600     (600

Additional paid-in capital

     6,824        6,325        6,215   

Accumulated other comprehensive loss

     (241     (190     (131

Retained earnings

     1,778        1,324        908   
  

 

 

   

 

 

   

 

 

 

Total stockholders’ equity

     7,766        6,864        6,397   
  

 

 

   

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 19,054      $ 18,797      $ 14,162   
  

 

 

   

 

 

   

 

 

 


AMAZON.COM, INC.

Supplemental Financial Information and Business Metrics

(in millions, except per share data)

(unaudited)

 

     Q3 2010     Q4 2010     Q1 2011     Q2 2011     Q3 2011     Y/Y %
Change
 

Cash Flows and Shares

            

Operating cash flow — trailing twelve months (TTM)

   $ 2,617      $ 3,495      $ 3,033      $ 3,205      $ 3,114        19

Purchases of fixed assets (incl. internal-use software & website development) — TTM

   $ 788      $ 979      $ 1,138      $ 1,374      $ 1,589        102

Free cash flow (operating cash flow less purchases of fixed assets) — TTM

   $ 1,829      $ 2,516      $ 1,895      $ 1,831      $ 1,525        (17 %) 

Free cash flow — TTM Y/Y growth

     (5 %)      (14 %)      (18 %)      (8 %)      (17 %)      N/A   

Invested capital (1)

   $ 6,576      $ 7,380      $ 7,931      $ 8,551      $ 9,147        N/A   

Return on invested capital (2)

     28     34     24     21     17     N/A   

Common shares and stock-based awards outstanding

     465        465        466        468        469        1

Common shares outstanding

     449        451        452        454        455        1

Stock-based awards outstanding

     16        15        14        15        14        (11 %) 

Stock-based awards outstanding — % of common shares outstanding

     3.6     3.2     3.1     3.2     3.2     N/A   

Results of Operations

            

Worldwide (WW) net sales

   $ 7,560      $ 12,948      $ 9,857      $ 9,913      $ 10,876        44

WW net sales — Y/Y growth, excluding F/X

     40     37     36     44     39     N/A   

WW net sales — TTM

   $ 30,776      $ 34,204      $ 36,931      $ 40,278      $ 43,594        42

WW net sales — TTM Y/Y growth, excluding F/X

     40     40     39     39     39     N/A   

Operating income

   $ 268      $ 474      $ 322      $ 201      $ 79        (71 %) 

Operating income — Y/Y growth, excluding F/X

     13     3     (20 %)      (36 %)      (77 %)      N/A   

Operating margin — % of WW net sales

     3.5     3.7     3.3     2.0     0.7     N/A   

Operating income — TTM

   $ 1,408      $ 1,406      $ 1,334      $ 1,265      $ 1,076        (24 %) 

Operating income — TTM Y/Y growth, excluding F/X

     50     27     7     (7 %)      (25 %)      N/A   

Operating margin — TTM % of WW net sales

     4.6     4.1     3.6     3.1     2.5     N/A   

Net income

   $ 231      $ 416      $ 201      $ 191      $ 63        (73 %) 

Net income per diluted share

   $ 0.51      $ 0.91      $ 0.44      $ 0.41      $ 0.14        (73 %) 

Net income — TTM

   $ 1,120      $ 1,152      $ 1,054      $ 1,038      $ 871        (22 %) 

Net income per diluted share — TTM

   $ 2.47      $ 2.53      $ 2.30      $ 2.26      $ 1.89        (23 %) 

Segments

            

North America Segment:

            

Net sales

   $ 4,126      $ 7,211      $ 5,465      $ 5,406      $ 5,932        44

Net sales — Y/Y growth, excluding F/X

     45     45     45     50     44     N/A   

Net sales — TTM

   $ 16,452      $ 18,707      $ 20,392      $ 22,208      $ 24,014        46

Operating income

   $ 186      $ 295      $ 290      $ 214      $ 144        (23 %) 

Operating margin — % of North America net sales

     4.5     4.1     5.3     4.0     2.4     N/A   

Operating income — TTM

   $ 937      $ 955      $ 972      $ 986      $ 943        1

Operating income — TTM Y/Y growth, excluding F/X

     67     35     17     9     1     N/A   

Operating margin — TTM % of North America net sales

     5.7     5.1     4.8     4.4     3.9     N/A   

International Segment:

            

Net sales

   $ 3,434      $ 5,737      $ 4,392      $ 4,507      $ 4,944        44

Net sales — Y/Y growth, excluding F/X

     35     29     27     36     33     N/A   

Net sales — TTM

   $ 14,324      $ 15,497      $ 16,539      $ 18,070      $ 19,580        37

Net sales — TTM % of WW net sales

     47     45     45     45     45     N/A   

Operating income

   $ 215      $ 327      $ 175      $ 172      $ 116        (46 %) 

Operating margin — % of International net sales

     6.2     5.7     4.0     3.8     2.4     N/A   

Operating income — TTM

   $ 973      $ 981      $ 922      $ 888      $ 790        (19 %) 

Operating income — TTM Y/Y growth, excluding F/X

     23     20     4     (7 %)      (23 %)      N/A   

Operating margin — TTM % of International net sales

     6.8     6.3     5.6     4.9     4.0     N/A   

Consolidated Segments:

            

Operating expenses (3)

   $ 7,159      $ 12,326      $ 9,392      $ 9,527      $ 10,616        48

Operating expenses — TTM (3)

   $ 28,866      $ 32,268      $ 35,037      $ 38,404      $ 41,860        45

Operating income

   $ 401      $ 622      $ 465      $ 386      $ 260        (35 %) 

Operating margin — % of Consolidated sales

     5.3     4.8     4.7     3.9     2.4     N/A   

Operating income — TTM

   $ 1,910      $ 1,936      $ 1,894      $ 1,874      $ 1,734        (9 %) 

Operating income — TTM Y/Y growth, excluding F/X

     42     25     10     1     (11 %)      N/A   

Operating margin — TTM % of Consolidated net sales

     6.2     5.7     5.1     4.7     4.0     N/A   


AMAZON.COM, INC.

Supplemental Financial Information and Business Metrics

(in millions, except inventory turnover, accounts payable days and employee data)

(unaudited)

 

     Q3 2010     Q4 2010     Q1 2011     Q2 2011     Q3 2011     Y/Y %
Change
 

Supplemental

            

Supplemental North America Segment Net Sales:

            

Media

   $ 1,591      $ 2,370      $ 1,885      $ 1,585      $ 1,927        21

Media — Y/Y growth, excluding F/X

     12     13     18     19     21     N/A   

Media — TTM

   $ 6,610      $ 6,881      $ 7,170      $ 7,430      $ 7,767        17

Electronics and other general merchandise

   $ 2,326      $ 4,558      $ 3,303      $ 3,496      $ 3,635        56

Electronics and other general merchandise — Y/Y growth, excluding F/X

     80     71     63     67     56     N/A   

Electronics and other general merchandise — TTM

   $ 9,103      $ 10,998      $ 12,277      $ 13,683      $ 14,992        65

Electronics and other general merchandise — TTM % of North America net sales

     55     59     60     62     62     N/A   

Other

   $ 209      $ 283      $ 277      $ 325      $ 370        77

Other — TTM

   $ 739      $ 828      $ 945      $ 1,095      $ 1,255        70

Supplemental International Segment Net Sales:

            

Media

   $ 1,759      $ 2,865      $ 2,073      $ 2,075      $ 2,226        27

Media — Y/Y growth, excluding F/X

     18     13     9     20     17     N/A   

Media — TTM

   $ 7,723      $ 8,007      $ 8,247      $ 8,772      $ 9,238        20

Electronics and other general merchandise

   $ 1,644      $ 2,834      $ 2,285      $ 2,398      $ 2,681        63

Electronics and other general merchandise — Y/Y growth, excluding F/X

     60     50     49     53     51     N/A   

Electronics and other general merchandise — TTM

   $ 6,478      $ 7,365      $ 8,162      $ 9,162      $ 10,199        57

Electronics and other general merchandise — TTM % of International net sales

     45     48     49     51     52     N/A   

Other

   $ 31      $ 38      $ 34      $ 34      $ 37        21

Other — TTM

   $ 123      $ 125      $ 130      $ 136      $ 143        16

Supplemental Worldwide Net Sales:

            

Media

   $ 3,350      $ 5,235      $ 3,958      $ 3,660      $ 4,153        24

Media — Y/Y growth, excluding F/X

     15     13     13     20     19     N/A   

Media — TTM

   $ 14,333      $ 14,888      $ 15,417      $ 16,202      $ 17,005        19

Electronics and other general merchandise

   $ 3,970      $ 7,392      $ 5,588      $ 5,894      $ 6,316        59

Electronics and other general merchandise — Y/Y growth, excluding F/X

     71     62     57     62     54     N/A   

Electronics and other general merchandise — TTM

   $ 15,581      $ 18,363      $ 20,439      $ 22,845      $ 25,191        62

Electronics and other general merchandise — TTM % of WW net sales

     51     54     55     57     58     N/A   

Other

   $ 240      $ 321      $ 311      $ 359      $ 407        70

Other — TTM

   $ 862      $ 953      $ 1,075      $ 1,231      $ 1,398        62

Balance Sheet

            

Cash and marketable securities (4)

   $ 6,123      $ 8,919      $ 7,019      $ 6,503      $ 6,474        6

Inventory, net — ending

   $ 2,515      $ 3,202      $ 2,888      $ 3,229      $ 3,770        50

Inventory turnover, average — TTM

     11.8        11.4        11.6        11.3        10.8        (8 %) 

Fixed assets, net

   $ 2,099      $ 2,414      $ 2,902      $ 3,470      $ 3,999        91

Accounts payable — ending

   $ 4,614      $ 8,051      $ 5,540      $ 5,721      $ 6,552        42

Accounts payable days — ending

     73        72        66        69        72        (1 %) 

Other

            

WW shipping revenue

   $ 270      $ 437      $ 330      $ 331      $ 360        33

WW shipping costs

   $ 576      $ 999      $ 786      $ 820      $ 918        59

WW net shipping costs

   $ 306      $ 562      $ 456      $ 489      $ 558        83

WW net shipping costs — % of WW net sales

     4.0     4.3     4.6     4.9     5.1     N/A   

Employees (full-time and part-time; excludes contractors & temporary personnel)

     31,200        33,700        37,900        43,200        51,300        64

 

(1) Average Total Assets minus Current Liabilities (excluding current portion of Long Term Debt) over five quarter ends.
(2) TTM Free Cash Flow divided by Invested Capital.
(3) Represents cost of sales, fulfillment, marketing, technology and content, and general and administrative operating expenses, excluding stock-based compensation.
(4) Includes restricted cash, classified within “Other Assets” on our consolidated balance sheet, of: $238 million in Q3 2010, $157 million in Q4 2010, $138 million in Q1 2011, $148 million in Q2 2011, and $148 million in Q3 2011.


Amazon.com, Inc.

Certain Definitions

Customer Accounts

 

  •  

References to customers mean customer accounts, which are unique e-mail addresses, established either when a customer places an order or when a customer orders from other sellers on our websites. Customer accounts exclude certain customers, including customers associated with certain of our acquisitions, Amazon Enterprise Solutions program customers, Amazon.com Payments customers, Amazon Web Services customers, and the customers of select companies with whom we have a technology alliance or marketing and promotional relationship. Customers are considered active when they have placed an order during the preceding twelve-month period.

Seller Accounts

 

  •  

References to sellers means seller accounts, which are established when a seller receives an order from a customer account. Seller accounts exclude Amazon Enterprise Solutions sellers. Sellers are considered active when they have received an order from a customer during the preceding twelve-month period.

Registered Developers

 

  •  

References to registered developers mean cumulative registered developer accounts, which are established when potential developers enroll with Amazon Web Services and receive a developer access key.

Units

 

  •  

References to units mean physical and digital units sold (net of returns and cancellations) by us and sellers at Amazon domains worldwide — for example www.amazon.com, www.amazon.co.uk, www.amazon.de, www.amazon.co.jp, www.amazon.fr, www.amazon.ca, www.amazon.cn, www.amazon.it, www.amazon.es, www.diapers.com, www.endless.com, www.shopbop.com and www.zappos.com — as well as Amazon-owned items sold through non-Amazon domains. Units sold are paid units and do not include units associated with certain acquisitions, rental businesses, web services or advertising businesses, or Amazon gift certificates.

 

Contacts:   
Amazon.com Investor Relations    Amazon.com Public Relations
John Felton, 206/266-2171    Mary Osako, 206/266-7180
www.amazon.com/ir   
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