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AMZN-2014.03.31-EX99.1


Exhibit 99.1
 
AMAZON.COM ANNOUNCES FIRST QUARTER SALES UP 23% TO $19.74 BILLION
SEATTLE—(BUSINESS WIRE)—April 24, 2014—Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its first quarter ended March 31, 2014.
Operating cash flow increased 26% to $5.35 billion for the trailing twelve months, compared with $4.25 billion for the trailing twelve months ended March 31, 2013. Free cash flow increased to $1.49 billion for the trailing twelve months, compared with $177 million for the trailing twelve months ended March 31, 2013. Free cash flow for the trailing twelve months ended March 31, 2013 includes cash outflows for purchases of corporate office space and property in Seattle, Washington, of $1.4 billion.
Common shares outstanding plus shares underlying stock-based awards totaled 476 million on March 31, 2014, compared with 471 million one year ago.
Net sales increased 23% to $19.74 billion in the first quarter, compared with $16.07 billion in first quarter 2013. Excluding the $10 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales grew 23% compared with first quarter 2013.
Operating income decreased 19% to $146 million in the first quarter, compared with $181 million in first quarter 2013. The favorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $18 million.
Net income increased to $108 million in the first quarter, or $0.23 per diluted share, compared with $82 million, or $0.18 per diluted share, in first quarter 2013.

We get our energy from inventing on behalf of customers, and 2014 is off to a kinetic start,” said Jeff Bezos, founder and CEO of Amazon.com. “Our device team launched Fire TV, offering great content, including our recently announced exclusive deal with HBO, and innovative features like unified voice search, which we’re delighted is being adopted by so many new partners, including Netflix, HBO Go, Hulu Plus, Crackle and Showtime Anytime. The team is working hard to keep Fire TV in stock. Our retail team launched Prime Pantry, a new option available only to Prime members offering exclusive access to everyday essentials in non-bulk sizes — ranging from breakfast foods and popular soft drinks, to cleaning and personal care items. And, our AWS team significantly lowered prices on EC2, S3 and RDS, saving AWS customers hundreds of millions of dollars over the next several months alone.”
Highlights
Amazon introduced Fire TV, a tiny box that plugs into your HDTV for easy and instant access to Netflix, Prime Instant Video, Hulu Plus, WatchESPN, Showtime Anytime, low-cost video rentals, and much more, offering an open ecosystem of over 200,000 movies and TV episodes. Fire TV also provides access to games from EA, Disney, Gameloft, Mojang, 2K, Amazon Game Studios, and more. The device offers voice search (that actually works!) to instantly find movies and TV shows, as well as the new ASAP feature which predicts the movies and TV episodes customers will want to watch and prepares them for playback.
Amazon announced that HBO Go will become available for Fire TV, targeting a launch by year-end.
With the launch of Fire TV, Amazon released new developer tools that allow developers to quickly and easily optimize PC, console or Android mobile apps and games for the new Fire TV. The new tools include sample code, as well as documentation and guidelines to help developers design and build living room experiences, including how to manage the input for the Fire game controller and Fire TV remote.
Amazon Game Studios introduced Sev Zero, the Studios’ first game built from the ground up for Fire TV. Sev Zero combines a fast-action third-person shooter experience with the calculated strategy of tower defense gameplay for a fun, big screen experience. 
Amazon announced that video streams on Prime Instant Video nearly tripled year over year.
Amazon announced a content licensing agreement with HBO, making Prime Instant Video the exclusive online-only subscription home for select HBO programming, including The Sopranos, Six Feet Under, The Wire, Big Love, Deadwood, Eastbound and Down, Family Tree, Enlightened, Treme, early seasons of Boardwalk Empire and True





Blood, as well as mini-series like Band of Brothers, John Adams, and more. The first wave of content will arrive on Prime Instant Video May 21.
In addition, Prime Instant Video is now the exclusive online-only subscription home for FOX’s 24, BBC America’s Orphan Black, FX’s The Americans, and MTV’s Teen Wolf.
Amazon introduced Prime Instant Video for the U.K. and Germany, offering thousands of popular movies and TV episodes available for unlimited streaming to Prime members. Prime members also continue to receive unlimited One-Day Delivery on millions of items and access to 500,000 Kindle books to borrow from the Kindle Owners’ Lending Library.
Amazon Studios greenlit six original pilots for full seasons available exclusively to Prime members — The After, Bosch, Gortimer Gibbon’s Life on Normal Street, Mozart in the Jungle, Transparent and Wishenpoof! will become the next Amazon Original Series following rave customer reviews of the pilot episodes. In addition, Garry Trudeau’s political series Alpha House will return for a second season.
Amazon Studios announced it has greenlit two new pilots — the half hour dramatic comedy The Cosmopolitans, from Whit Stillman, and the one hour drama Hand of God from Executive Producers Marc Forster, Ben Watkins, Ron Perlman, Brian Wilkins and Jeff King — for its third pilot season debuting later this year on Amazon Instant Video.
Amazon now offers U.S. fulfillment center tours open to the public. Visit www.amazon.com/fctours for information on available tour locations, dates and times.
Amazon introduced Prime Pantry, a new service available only to Prime members offering exclusive access to low-priced everyday essentials in everyday sizes. Available nationally, Prime customers can buy as much or as little as they want and have items conveniently delivered to their home. Selection includes popular soft drinks and bottled water, a new range of paper and laundry products in popular pack sizes, single boxes of breakfast cereal, potato chips, convenience-sized personal care products and more. There’s a flat $5.99 delivery fee per Prime Pantry box.
Amazon introduced Dash, an easy-to-use shopping device that allows Prime Fresh customers, and their families, to effortlessly shop hundreds of thousands of items — ranging from groceries to household essentials — from anywhere in their home without having to browse the AmazonFresh website or app. Dash works directly with a customer’s AmazonFresh account — simply scan items or say the items you want and Dash finds it for you using voice search that actually works.
Amazon Fashion and Shopbop are joining with Vogue and Born Free, a private sector-led initiative with the sole objective of ending mother-to-child HIV transmission by December 31, 2015, to create the Born Free Collection. Amazon Fashion will sponsor the launch event and support the initiative through on-site messaging and social programming. The collaboration, featuring pieces for both women and children from 22 notable female designers, is based on the works of Kenyan-born, New York-based visual artist Wangechi Mutu and is available exclusively on Shopbop. All profits from sales of the Collection will benefit Born Free.
Amazon introduced Flow to the Amazon app for iPhone. Flow offers customers a convenient way to search for products they need to restock in their home without typing, scanning a barcode or taking a photo — simply move your phone over packaged goods you need to restock and the Amazon app recognizes the products and saves them in your search history, where they can be added to the shopping cart or saved for later.
The launch of Amazon Student on Amazon.co.uk was announced, offering students six months of free Prime One-Day Delivery on millions of items, including books, laptops, housewares, kitchen equipment and more. At the end of the six-month free trial, students can convert to a discounted Amazon Prime membership for just £39 per year — less than half the standard cost of Amazon Prime.
Amazon.in continued its rapid pace of category expansion, launching apparel, shoes, video games, music, luggage & bags, health & personal care, and sports, fitness and outdoors stores.
Amazon Publishing announced the launch of a new German-language publishing program under the Amazon Publishing umbrella. The European Amazon Publishing team will acquire German-language fiction for publication in Kindle and print editions available on Amazon.
Amazon announced that it has reached an agreement to acquire comiXology, the company that revolutionized the digital comics reading experience with their immersive Guided View technology and makes discovering, buying, and reading comic books and graphic novels easier and more fun than ever before. The acquisition is expected to close in the second quarter of 2014.
Amazon Web Services (AWS) announced its 42nd price reduction, lowering prices for Amazon Simple Storage Service (S3) by an average of 51 percent, reducing Amazon Elastic Compute Cloud (EC2) prices by up to 40 percent and lowering Amazon Relational Database Service (RDS) prices by an average of 28 percent. To help customers continue to optimize their costs, AWS also introduced Cost Explorer, with advanced reporting, analytics and visualization tools that allow customers to easily view their costs, analyze trends and identify spending patterns.   
AWS announced that all four of AWS’s infrastructure Regions in the U.S., including AWS GovCloud (U.S.), have received a Department of Defense (DoD) Provisional Authorization, which recognizes the ability of AWS to meet the stringent security and compliance requirements to run DoD applications. This certification simplifies and speeds the





process for DoD agencies to evaluate and adopt AWS, allowing more DoD agencies to use AWS’s secure, compliant infrastructure.
AWS continued to expand the AWS Activate program, which helps startups launch and quickly scale their businesses on AWS. With AWS credits, training, support, forums, and exclusive offers from AWS partners, AWS Activate makes it easy for new companies to join some of the world’s fastest-growing startups who use AWS.
AWS announced the broad availability of Amazon WorkSpaces, a fully managed desktop computing service in the cloud that allows end-users to access the documents, applications and resources they need with the device of their choice. 
AWS announced the broad availability of Amazon AppStream, a service that allows developers to stream resource-intensive applications, such as 3D games or interactive HD applications, from the cloud to a broad range of devices.
Financial Guidance
The following forward-looking statements reflect Amazon.com’s expectations as of April 24, 2014, and are subject to substantial uncertainty. 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.
Second Quarter 2014 Guidance
Net sales are expected to be between $18.1 billion and $19.8 billion, or to grow between 15% and 26% compared with second quarter 2013.
Operating income (loss) is expected to be between $(455) million and $(55) million, compared to $79 million in second quarter 2013.
This guidance includes approximately $455 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions, investments, restructurings, or legal settlements 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.
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 and data center optimization, risks of inventory management, seasonality, the degree to which the Company enters into, maintains, and develops commercial agreements, acquisitions and strategic transactions, payments risks, 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, 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. Amazon Fire TV is a tiny box that





plugs into your HDTV for easy and instant access to Netflix, Prime Instant Video, Hulu Plus, WatchESPN, SHOWTIME, low-cost video rentals, and much more. Kindle Paperwhite is the world’s best-selling and most advanced e-reader. It features new display technology with higher contrast, the next generation built-in light, a faster processor, the latest touch technology, and exclusive new features designed from the ground up for readers. Kindle, the lightest and smallest Kindle, features improved fonts and faster page turns. The new Kindle Fire HDX features a stunning exclusive 7” or 8.9” HDX display, a quad-core 2.2 GHz processor, 2x more memory, and 11 hours of battery life, as well as exclusive new features of Fire OS 3.0 including X-Ray for Music, Second Screen, Prime Instant Video downloads, and the revolutionary new Mayday button. The all-new Kindle Fire HD includes an HD display, high-performance processor and dual speakers at a breakthrough price.
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, www.amazon.es, www.amazon.com.br, www.amazon.in, www.amazon.com.mx, and www.amazon.com.au. As used herein, “Amazon.com,” “we,” “our” and similar terms include Amazon.com, Inc., and its subsidiaries, unless the context indicates otherwise.





AMAZON.COM, INC.
Consolidated Statements of Cash Flows
(in millions)
(unaudited)

 
  
Three Months Ended 
 March 31,
 
Twelve Months Ended 
 March 31,
 
2014
 
2013
 
2014
 
2013
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
$
8,658

 
$
8,084

 
$
4,481

 
$
2,288

OPERATING ACTIVITIES:
 
 
 
 
 
 
 
Net income (loss)
108

 
82

 
299

 
(87
)
Adjustments to reconcile net income (loss) to net cash from operating activities:
 
 
 
 
 
 
 
Depreciation of property and equipment, including internal-use software and website development, and other amortization
1,010

 
700

 
3,563

 
2,402

Stock-based compensation
321

 
229

 
1,226

 
901

Other operating expense (income), net
35

 
31

 
117

 
139

Losses (gains) on sales of marketable securities, net

 

 
2

 
(7
)
Other expense (income), net
(50
)
 
68

 
48

 
306

Deferred income taxes
(185
)
 
(80
)
 
(261
)
 
(307
)
Excess tax benefits from stock-based compensation
(121
)
 

 
(199
)
 
(390
)
Changes in operating assets and liabilities:
 
 
 
 
 
 
 
Inventories
699

 
535

 
(1,245
)
 
(1,211
)
Accounts receivable, net and other
727

 
729

 
(849
)
 
(877
)
Accounts payable
(4,675
)
 
(4,187
)
 
1,400

 
2,141

Accrued expenses and other
(731
)
 
(703
)
 
708

 
864

Additions to unearned revenue
1,092

 
684

 
3,100

 
2,083

Amortization of previously unearned revenue
(732
)
 
(460
)
 
(2,564
)
 
(1,712
)
Net cash provided by (used in) operating activities
(2,502
)
 
(2,372
)
 
5,345

 
4,245

INVESTING ACTIVITIES:
 
 
 
 
 
 
 
Purchases of property and equipment, including internal-use software and website development
(1,080
)
 
(670
)
 
(3,854
)
 
(4,068
)
Acquisitions, net of cash acquired, and other

 
(103
)
 
(208
)
 
(798
)
Sales and maturities of marketable securities and other investments
593

 
599

 
2,299

 
3,098

Purchases of marketable securities and other investments
(437
)
 
(776
)
 
(2,487
)
 
(3,227
)
Net cash provided by (used in) investing activities
(924
)
 
(950
)
 
(4,250
)
 
(4,995
)
FINANCING ACTIVITIES:
 
 
 
 
 
 
 
Excess tax benefits from stock-based compensation
121

 

 
199

 
390

Proceeds from long-term debt and other
65

 
25

 
426

 
3,319

Repayments of long-term debt, capital lease, and finance lease obligations
(361
)
 
(182
)
 
(1,182
)
 
(603
)
Net cash provided by (used in) financing activities
(175
)
 
(157
)
 
(557
)
 
3,106

Foreign-currency effect on cash and cash equivalents
17

 
(124
)
 
55

 
(163
)
Net increase (decrease) in cash and cash equivalents
(3,584
)
 
(3,603
)
 
593

 
2,193

CASH AND CASH EQUIVALENTS, END OF PERIOD
$
5,074

 
$
4,481

 
$
5,074

 
$
4,481

SUPPLEMENTAL CASH FLOW INFORMATION:
 
 
 
 
 
 
 
Cash paid for interest on long-term debt
$
18

 
$
13

 
$
102

 
$
37

Cash paid for income taxes (net of refunds)
38

 
86

 
121

 
179

Property and equipment acquired under capital leases
716

 
340

 
2,243

 
993

Property and equipment acquired under build-to-suit leases
126

 
150

 
852

 
163

 
 
 
 
 
 
 
 





AMAZON.COM, INC.
Consolidated Statements of Operations
(in millions, except per share data)
(unaudited)

  
Three Months Ended 
 March 31,
 
2014
 
2013
Net product sales
$
15,705

 
$
13,271

Net services sales
4,036

 
2,799

Total net sales
19,741

 
16,070

Operating expenses (1):
 
 
 
Cost of sales
14,055

 
11,801

Fulfillment
2,317

 
1,796

Marketing
870

 
632

Technology and content
1,991

 
1,383

General and administrative
327

 
246

Other operating expense (income), net
35

 
31

Total operating expenses
19,595

 
15,889

Income from operations
146

 
181

Interest income
11

 
10

Interest expense
(42
)
 
(33
)
Other income (expense), net
5

 
(77
)
Total non-operating income (expense)
(26
)
 
(100
)
Income before income taxes
120

 
81

Benefit (provision) for income taxes
(73
)
 
18

Equity-method investment activity, net of tax
61

 
(17
)
Net income
$
108

 
$
82

Basic earnings per share
$
0.23

 
$
0.18

Diluted earnings per share
$
0.23

 
$
0.18

Weighted average shares used in computation of earnings per share:
 
 
 
Basic
460

 
455

Diluted
468

 
463

_____________
 
 
 
(1)    Includes stock-based compensation as follows:
 
 
 
Fulfillment
$
81

 
$
61

Marketing
27

 
16

Technology and content
169

 
120

General and administrative
44

 
32







AMAZON.COM, INC.
Consolidated Statements of Comprehensive Income
(in millions)
(unaudited)

 
  
Three Months Ended 
 March 31,
 
2014
 
2013
Net income
$
108

 
$
82

Other comprehensive income (loss):
 
 
 
Foreign currency translation adjustments, net of tax of $0 and $(9)
27

 
(78
)
Net change in unrealized gains on available-for-sale securities:
 
 
 
Unrealized gains (losses), net of tax of $(1) and $1
1

 
(2
)
Reclassification adjustment for losses (gains) included in “Other income (expense), net,” net of tax of $0 and $0

 

Net unrealized gains (losses) on available-for-sale securities
1

 
(2
)
Total other comprehensive income (loss)
28

 
(80
)
Comprehensive income
$
136

 
$
2







AMAZON.COM, INC.
Segment Information
(in millions)
(unaudited)
 
  
Three Months Ended 
 March 31,
 
2014
 
2013
North America
 
 
 
Net sales
$
11,858

 
$
9,391

Segment operating expenses (1)
11,296

 
8,934

Segment operating income
$
562

 
$
457

International
 
 
 
Net sales
$
7,883

 
$
6,679

Segment operating expenses (1)
7,943

 
6,695

Segment operating income (loss)
$
(60
)
 
$
(16
)
Consolidated
 
 
 
Net sales
$
19,741

 
$
16,070

Segment operating expenses (1)
19,239

 
15,629

Segment operating income
502

 
441

Stock-based compensation
(321
)
 
(229
)
Other operating income (expense), net
(35
)
 
(31
)
Income from operations
146

 
181

Total non-operating income (expense)
(26
)
 
(100
)
Benefit (provision) for income taxes
(73
)
 
18

Equity-method investment activity, net of tax
61

 
(17
)
Net income
$
108

 
$
82

Segment Highlights:
 
 
 
Y/Y net sales growth:
 
 
 
North America
26
%
 
26
%
International
18

 
16

Consolidated
23

 
22

Y/Y segment operating income/loss growth (decline):
 
 
 
North America
23
%
 
31
%
International
269

 
(133
)
Consolidated
14

 
11

Net sales mix:
 
 
 
North America
60
%
 
58
%
International
40

 
42

 
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 
 March 31,
 
2014
 
2013
Net Sales:
 
North America
 
 
 
Media
$
2,825

 
$
2,513

Electronics and other general merchandise
7,829

 
6,128

Other (1)
1,204

 
750

Total North America
$
11,858

 
$
9,391

International
 
 
 
Media
$
2,642

 
$
2,545

Electronics and other general merchandise
5,188

 
4,086

Other (1)
53

 
48

Total International
$
7,883

 
$
6,679

Consolidated
 
 
 
Media
$
5,467

 
$
5,058

Electronics and other general merchandise
13,017

 
10,214

Other (1)
1,257

 
798

Total consolidated
$
19,741

 
$
16,070

Year-over-year Percentage Growth:
 
 
 
North America
 
 
 
Media
12
%
 
14
%
Electronics and other general merchandise
28

 
28

Other
60

 
64

Total North America
26

 
26

International
 
 
 
Media
4
%
 
1
%
Electronics and other general merchandise
27

 
28

Other
13

 
14

Total International
18

 
16

Consolidated
 
 
 
Media
8
%
 
7
%
Electronics and other general merchandise
27

 
28

Other
58

 
59

Total consolidated
23

 
22

Year-over-year Percentage Growth:
 
 
 
Excluding the effect of exchange rates
 
 
 
International
 
 
 
Media
4
%
 
7
%
Electronics and other general merchandise
26

 
32

Other
11

 
18

Total International
18

 
21

Consolidated
 
 
 
Media
8
%
 
10
%
Electronics and other general merchandise
27

 
30

Other
58

 
60

Total consolidated
23

 
24

Consolidated Net Sales Mix:
 
 
 
Media
28
%
 
31
%
Electronics and other general merchandise
66

 
64

Other
6

 
5

Total consolidated
100
%
 
100
%
______________________________
(1)
Includes sales from non-retail activities, such as AWS sales, which are included in the North America segment, and advertising services and our co-branded credit card agreements, which are included in both segments.





AMAZON.COM, INC.
Consolidated Balance Sheets
(in millions, except per share data)
 
 
March 31, 2014
 
December 31, 2013
 
(unaudited)
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
5,074

 
$
8,658

Marketable securities
3,592

 
3,789

Inventories
6,716

 
7,411

Accounts receivable, net and other
3,945

 
4,767

Total current assets
19,327

 
24,625

Property and equipment, net
12,267

 
10,949

Goodwill
2,653

 
2,655

Other assets
2,117

 
1,930

Total assets
$
36,364

 
$
40,159

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
10,590

 
$
15,133

Accrued expenses and other
6,251

 
6,688

Unearned revenue
1,516

 
1,159

Total current liabilities
18,357

 
22,980

Long-term debt
3,147

 
3,191

Other long-term liabilities
4,532

 
4,242

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 — 484 and 483
 
 
 
Outstanding shares — 460 and 459
5

 
5

Treasury stock, at cost
(1,837
)
 
(1,837
)
Additional paid-in capital
10,019

 
9,573

Accumulated other comprehensive loss
(157
)
 
(185
)
Retained earnings
2,298

 
2,190

Total stockholders’ equity
10,328

 
9,746

Total liabilities and stockholders’ equity
$
36,364

 
$
40,159







AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except per share data)
(unaudited)
 
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Y/Y %
Change
Cash Flows and Shares
 
 
 
 
 
 
Operating cash flow -- trailing twelve months (TTM)
$
4,245

$
4,532

$
4,977

$
5,475

$
5,345

26
 %
Purchases of property and equipment (incl. internal-use software & website development) -- TTM
$
4,068

$
4,267

$
4,589

$
3,444

$
3,854

(5
)%
Free cash flow (operating cash flow less purchases of property and equipment) -- TTM
$
177

$
265

$
388

$
2,031

$
1,491

744
 %
Free cash flow -- TTM Y/Y growth (decline)
(85
)%
(76
)%
(63
)%
414
%
744
 %
N/A

Invested capital (1)
$
12,019

$
13,115

$
14,306

$
15,749

$
16,681

39
 %
Return on invested capital (2)
1
 %
2
 %
3
 %
13
%
9
 %
N/A

Common shares and stock-based awards outstanding
471

474

475

476

476

1
 %
Common shares outstanding
455

457

458

459

460

1
 %
Stock awards outstanding
16

17

17

17

16

3
 %
Stock awards outstanding -- % of common shares outstanding
3.4
 %
3.8
 %
3.8
 %
3.6
%
3.5
 %
N/A

Results of Operations
 
 
 
 
 
 
Worldwide (WW) net sales
$
16,070

$
15,704

$
17,092

$
25,587

$
19,741

23
 %
WW net sales -- Y/Y growth, excluding F/X
24
 %
25
 %
26
 %
22
%
23
 %
N/A

WW net sales -- TTM
$
63,978

$
66,848

$
70,133

$
74,452

$
78,124

22
 %
WW net sales -- TTM Y/Y growth, excluding F/X
27
 %
25
 %
25
 %
24
%
24
 %
N/A

Operating income (loss)
$
181

$
79

$
(25
)
$
510

$
146

(19
)%
Operating income -- Y/Y growth (decline), excluding F/X
1
 %
(9
)%
(33
)%
24
%
(29
)%
N/A

Operating margin -- % of WW net sales
1.1
 %
0.5
 %
(0.1
)%
2.0
%
0.7
 %
N/A

Operating income -- TTM
$
665

$
637

$
640

$
745

$
710

7
 %
Operating income -- TTM Y/Y growth (decline), excluding F/X
(6
)%
3
 %
27
 %
14
%
7
 %
N/A

Operating margin -- TTM % of WW net sales
1.0
 %
1.0
 %
0.9
 %
1.0
%
0.9
 %
N/A

Net income (loss)
$
82

$
(7
)
$
(41
)
$
239

$
108

31
 %
Net income (loss) per diluted share
$
0.18

$
(0.02
)
$
(0.09
)
$
0.51

$
0.23

29
 %
Net income (loss) -- TTM
$
(87
)
$
(101
)
$
132

$
274

$
299

N/A

Net income (loss) per diluted share -- TTM
$
(0.19
)
$
(0.22
)
$
0.28

$
0.59

$
0.64

N/A

Segments
 
 
 
 
 
 
North America Segment:
 
 
 
 
 
 
  Net sales
$
9,391

$
9,495

$
10,301

$
15,331

$
11,858

26
 %
  Net sales -- Y/Y growth, excluding F/X
26
 %
30
 %
31
 %
26
%
26
 %
N/A

  Net sales -- TTM
$
36,777

$
38,945

$
41,361

$
44,517

$
46,984

28
 %
  Operating income
$
457

$
409

$
295

$
725

$
562

23
 %
  Operating margin -- % of North America net sales
4.9
 %
4.3
 %
2.9
 %
4.7
%
4.7
 %
N/A

  Operating income -- TTM
$
1,700

$
1,766

$
1,770

$
1,886

$
1,992

17
 %
  Operating income -- TTM Y/Y growth, excluding F/X
72
 %
58
 %
40
 %
18
%
17
 %
N/A

  Operating margin -- TTM % of North America net sales
4.6
 %
4.5
 %
4.3
 %
4.2
%
4.2
 %
N/A

International Segment:
 
 
 
 
 
 
  Net sales
$
6,679

$
6,209

$
6,791

$
10,256

$
7,883

18
 %
  Net sales -- Y/Y growth, excluding F/X
21
 %
20
 %
20
 %
15
%
18
 %
N/A

  Net sales -- TTM
$
27,201

$
27,903

$
28,772

$
29,935

$
31,140

14
 %
  Net sales -- TTM % of WW net sales
43
 %
42
 %
41
 %
40
%
40
 %
N/A

  Operating income (loss)
$
(16
)
$

$
(28
)
$
151

$
(60
)
269
 %
  Operating margin -- % of International net sales
(0.2
)%
 %
(0.4
)%
1.5
%
(0.8
)%
N/A

  Operating income (loss) -- TTM
$
11

$
(6
)
$
25

$
107

$
63

493
 %
  Operating income/loss -- TTM Y/Y growth (decline), excluding F/X
(83
)%
(82
)%
(56
)%
106
%
770
 %
N/A

  Operating margin -- TTM % of International net sales
 %
 %
0.1
 %
0.4
%
0.2
 %
N/A

Consolidated Segments:
 
 
 
 
 
 
  Operating expenses (3)
$
15,629

$
15,295

$
16,825

$
24,711

$
19,239

23
 %
  Operating expenses -- TTM (3)
$
62,267

$
65,087

$
68,338

$
72,459

$
76,069

22
 %
  Operating income
$
441

$
409

$
267

$
876

$
502

14
 %
  Operating margin -- % of Consolidated net sales
2.7
 %
2.6
 %
1.6
 %
3.4
%
2.5
 %
N/A

  Operating income -- TTM
$
1,711

$
1,760

$
1,795

$
1,993

$
2,055

20
 %
  Operating income -- TTM Y/Y growth, excluding F/X
15
 %
21
 %
26
 %
21
%
20
 %
N/A

  Operating margin -- TTM % of Consolidated net sales
2.7
 %
2.6
 %
2.6
 %
2.7
%
2.6
 %
N/A






AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except inventory turnover, accounts payable days and employee data)
(unaudited)
 
 
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Y/Y %
Change
Supplemental
 
 
 
 
 
 
Supplemental North America Segment Net Sales:
 
 
 
 
 
 
  Media
$
2,513

$
2,173

$
2,609

$
3,513

$
2,825

12
 %
  Media -- Y/Y growth, excluding F/X
14
%
16
%
18
%
21
%
13
%
N/A

  Media -- TTM
$
9,506

$
9,805

$
10,199

$
10,809

$
11,121

17
 %
  Electronics and other general merchandise
$
6,128

$
6,478

$
6,732

$
10,648

$
7,829

28
 %
  Electronics and other general merchandise -- Y/Y growth, excluding F/X
28
%
31
%
33
%
25
%
28
%
N/A

  Electronics and other general merchandise -- TTM
$
24,629

$
26,169

$
27,840

$
29,985

$
31,686

29
 %
  Electronics and other general merchandise -- TTM % of North America net sales
67
%
67
%
67
%
67
%
67
%
N/A

  Other
$
750

$
844

$
960

$
1,170

$
1,204

60
 %
  Other -- TTM
$
2,642

$
2,971

$
3,322

$
3,723

$
4,177

58
 %
Supplemental International Segment Net Sales:
 
 
 
 
 
 
  Media
$
2,545

$
2,224

$
2,424

$
3,714

$
2,642

4
 %
  Media -- Y/Y growth, excluding F/X
7
%
7
%
9
%
6
%
4
%
N/A

  Media -- TTM
$
10,785

$
10,764

$
10,803

$
10,907

$
11,004

2
 %
  Electronics and other general merchandise
$
4,086

$
3,937

$
4,316

$
6,478

$
5,188

27
 %
  Electronics and other general merchandise -- Y/Y growth, excluding F/X
32
%
29
%
28
%
21
%
26
%
N/A

  Electronics and other general merchandise -- TTM
$
16,238

$
16,952

$
17,771

$
18,817

$
19,919

23
 %
  Electronics and other general merchandise -- TTM % of International net sales
60
%
61
%
62
%
63
%
64
%
N/A

  Other
$
48

$
48

$
51

$
64

$
53

13
 %
  Other -- TTM
$
178

$
187

$
198

$
211

$
217

22
 %
Supplemental Worldwide Net Sales:
 
 
 
 
 
 
  Media
$
5,058

$
4,397

$
5,033

$
7,227

$
5,467

8
 %
  Media -- Y/Y growth, excluding F/X
10
%
11
%
13
%
13
%
8
%
N/A

  Media -- TTM
$
20,291

$
20,569

$
21,002

$
21,716

$
22,125

9
 %
  Electronics and other general merchandise
$
10,214

$
10,415

$
11,048

$
17,126

$
13,017

27
 %
  Electronics and other general merchandise -- Y/Y growth, excluding F/X
30
%
30
%
31
%
24
%
27
%
N/A

  Electronics and other general merchandise -- TTM
$
40,867

$
43,121

$
45,611

$
48,802

$
51,605

26
 %
  Electronics and other general merchandise -- TTM % of WW net sales
64
%
65
%
65
%
66
%
66
%
N/A

  Other
$
798

$
892

$
1,011

$
1,234

$
1,257

58
 %
  Other -- TTM
$
2,820

$
3,158

$
3,520

$
3,934

$
4,394

56
 %
Balance Sheet
 
 
 
 
 
 
Cash and marketable securities
$
7,895

$
7,463

$
7,689

$
12,447

$
8,666

10
 %
Inventory, net -- ending
$
5,395

$
5,420

$
6,068

$
7,411

$
6,716

24
 %
Inventory turnover, average -- TTM
9.5

9.4

9.2

8.9

9.1

(4
)%
Property and equipment, net
$
7,674

$
8,789

$
9,991

$
10,949

$
12,267

60
 %
Accounts payable -- ending
$
8,916

$
8,990

$
10,037

$
15,133

$
10,590

19
 %
Accounts payable days -- ending
68

73

75

74

68

 %
Other
 
 
 
 
 
 
WW shipping revenue
$
633

$
646

$
721

$
1,137

$
849

34
 %
WW shipping costs
$
1,396

$
1,364

$
1,532

$
2,344

$
1,829

31
 %
WW net shipping costs
$
763

$
718

$
811

$
1,207

$
980

28
 %
WW net shipping costs -- % of WW net sales
4.7
%
4.6
%
4.7
%
4.7
%
5.0
%
N/A

Employees (full-time and part-time; excludes contractors & temporary personnel)
91,300

97,000

109,800

117,300

124,600

36
 %
______________________________
(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.





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 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. 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.amazon.com.br, www.amazon.in, www.amazon.com.mx, www.amazon.com.au, www.diapers.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
Dave Fildes, 206/266-2171
 
Ty Rogers, 206/266-7180
www.amazon.com/ir
 
www.amazon.com/pr


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