EX-99.1 2 amzn-20141231xex991.htm EXHIBIT 99.1 AMZN-2014.12.31-EX99.1


Exhibit 99.1
 
AMAZON.COM ANNOUNCES FOURTH QUARTER SALES UP 15% TO $29.33 BILLION
SEATTLE—(BUSINESS WIRE)—January 29, 2015—Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its fourth quarter ended December 31, 2014.
Operating cash flow increased 25% to $6.84 billion for the trailing twelve months, compared with $5.47 billion for the trailing twelve months ended December 31, 2013. Free cash flow decreased to $1.95 billion for the trailing twelve months, compared with $2.03 billion for the trailing twelve months ended December 31, 2013.
Common shares outstanding plus shares underlying stock-based awards totaled 483 million on December 31, 2014, compared with 476 million one year ago.
Fourth Quarter 2014
Net sales increased 15% to $29.33 billion in the fourth quarter, compared with $25.59 billion in fourth quarter 2013. Excluding the $895 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 18% compared to fourth quarter 2013.
Operating income was $591 million in the fourth quarter, compared with operating income of $510 million in fourth quarter 2013.
Net income was $214 million in the fourth quarter, or $0.45 per diluted share, compared with net income of $239 million, or $0.51 per diluted share, in fourth quarter 2013.

Full Year 2014
Net sales increased 20% to $88.99 billion, compared with $74.45 billion in 2013. Excluding the $636 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales increased 20% compared with 2013.
Operating income was $178 million, compared with operating income of $745 million in 2013.
Net loss was $241 million, or $0.52 per diluted share, compared with net income of $274 million, or $0.59 per diluted share, in 2013.

“When we raised the price of Prime membership last year, we were confident that customers would continue to find it the best bargain in the history of shopping. The data is in and customers agree — on a base of tens of millions, worldwide paid membership grew 53% last year — 50% in the U.S. and even a bit faster outside the U.S.,” said Jeff Bezos, founder and CEO of Amazon.com. “Prime is a one-of-a-kind, all-you-can-eat, physical-digital hybrid — in 2014 alone we paid billions of dollars for Prime shipping and invested $1.3 billion in Prime Instant Video. We’ll continue to work hard for our Prime members.”
Highlights
Amazon announced Prime Now, a new service offering paid one-hour and free two-hour delivery on tens of thousands of daily essentials via a new mobile app. The service is currently available in Manhattan and will expand to other cities this year.
Amazon introduced Prime Photos, providing free unlimited photo storage in Amazon Cloud Drive. Prime members now have a simple, secure place to store their existing collections of photos, automatically upload new photos as they are taken, and access them anytime, anywhere, at no cost.
Amazon introduced Fire TV Stick, bringing the same experience customers love about Amazon Fire TV — ease of use, great performance, and vast selection — to a smaller and even more affordable device. Fire TV Stick plugs into the HDMI port on an HDTV and provides instant access to movies, TV shows, music, photos, apps, and games.
Amazon introduced Echo, a new category of device designed around voice recognition. Echo is hands-free and always on — customers can ask it for information, music, news, and weather from across the room and get results or answers instantly. Echo uses far-field voice recognition with an advanced array of seven microphones to clearly hear around




the room, and has advanced audio design that includes dual downward-firing speakers that produce 360˚ omni-directional, room-filling audio.
The critically-acclaimed Prime-exclusive series, Transparent, received two Golden Globes. Transparent is the first series from a streaming video service to win a Golden Globe for best series.
Amazon Studios announced it will begin to produce and acquire original movies for theatrical release and early window distribution on Prime Instant Video. Production will begin in 2015 with the goal of bringing a dozen original, prestige movies to customers each year.
Amazon debuted its first pilot season of 2015, which is available exclusively on Amazon Instant Video in the U.S., U.K., and Germany. The new pilots include Cocked, Mad Dogs, The Man in the High Castle, Point of Honor, Down Dog, Salem Rogers, and The New Yorker Presents, as well as six new kids pilots. All ten episodes of the highly-anticipated dramatic comedy series Mozart in the Jungle premiered on Prime Instant Video in the U.S., U.K., and Germany. In addition, all ten episodes of the drama series, Bosch, will premiere in February on Prime Instant Video in the U.S., U.K., and Germany.
Amazon Studios announced it will produce the first television series from Oscar-winning director and producer Woody Allen, which will debut exclusively on Prime Instant Video in the U.S., U.K., and Germany in 2015. Untitled Woody Allen Project has received a full season order and will be written and directed by Allen.
Amazon launched the Kindle Store in the Netherlands, offering over 3 million titles in many languages, over 700,000 Kindle exclusives, and more than 20,000 titles in Dutch.
AmazonFresh expanded to Manhattan and Philadelphia. Prime members in eligible zip codes can combine grocery and other shopping into one seamless experience. Customers can order from over 500,000 items for same-day and early morning delivery.
The number of Amazon sellers using Fulfillment by Amazon (FBA) grew by more than 65% year-over-year in 2014. In the fourth quarter, FBA units represented more than 40% of total third-party units.
Amazon unveiled its 8th generation fulfillment center which utilizes robotics, vision systems, and almost 20 years worth of software and mechanical innovations to fulfill customer orders. During the holiday season, the fulfillment network included more than 15,000 robots in 10 fulfillment centers across the U.S.
Amazon.co.uk announced that Sunday deliveries have grown by more than 4x in the last year as more customers across the U.K. discover the benefits of receiving orders seven days a week. The increase in Sunday deliveries has been made possible in large part due to the introduction of Amazon Logistics, a technology and logistics platform that empowers independent local, regional, and national delivery companies across the U.K. to deliver Amazon parcels to customers seven days a week.
Amazon announced it will open a 46,000 square-foot fashion photography studio in Shoreditch, London in 2015. The studio will be one of the largest of its kind in Europe and will provide both on-model and off-model imaging for Amazon’s rapidly growing European fashion business.
In 2014, the second year of its operation, Amazon.in emerged as India’s largest online store. It launched 24 new departments, increasing selection to over 19 million products, and grew its seller base exponentially to more than 16,000 sellers.
Amazon launched Amazon Global Store on the China site, www.amazon.cn. The store provides approximately 200,000 products selected from the Amazon U.S. website based on the most popular Chinese customer demands. Chinese customers are now able to enjoy the same quality product at the same price as U.S. customers, while having a Chinese shopping experience, local customer service, and direct shipment to their homes.
With over 515 significant service and feature releases in 2014 (up more than 80% year-over-year), and over one million active customers, Amazon Web Services (AWS) continues to grow strongly, with usage growth close to 90% year-over-year for the fourth quarter.
AWS announced that more than 13,500 attendees from 63 countries attended AWS re:Invent 2014, its third annual customer and partner conference.
AWS announced Amazon Aurora, a MySQL-compatible database engine for Amazon Relational Database Service that combines the speed and availability of high-end commercial databases with the simplicity and cost-effectiveness of open source databases. Amazon Aurora provides up to 5x better performance than the typical MySQL database, availability as good or better than commercial databases or high-end SANs, and superior scalability and security — all at one-tenth the cost of high-end commercial database offerings.
AWS announced AWS Lambda, a compute service that runs developers’ code in response to events and automatically manages the required compute resources, making it easy to build and manage applications that respond quickly to new information.
AWS announced three new services to make it even easier for enterprises to maintain security, governance, and compliance of their resources in the AWS cloud: AWS Key Management Service, AWS Config, and AWS Service Catalog.
AWS announced AWS CodeDeploy, a fully managed, high-scale deployment service that lets developers quickly and simply automate the process of deploying and updating applications on Amazon EC2. 




AWS announced the Amazon EC2 Container Service, a highly scalable, high-performance container management service that makes it easy to run and manage distributed applications using containers on AWS.
AWS has teamed with Pattern Energy Group LP to support the construction and operation of a 150 megawatt wind farm in Benton County, Indiana, called the Amazon Wind Farm (Fowler Ridge). It is expected to generate approximately 500,000 megawatt hours of wind power annually that will be used to help power both current and future AWS data centers.
AWS announced Amazon WorkMail, a cloud-based business email and calendaring service with strong security controls and support for popular email clients.

Financial Guidance
The following forward-looking statements reflect Amazon.com’s expectations as of January 29, 2015, 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.
First Quarter 2015 Guidance
Net sales are expected to be between $20.9 billion and $22.9 billion, or to grow between 6% and 16% compared with first quarter 2014.
Operating income (loss) is expected to be between $(450) million and $50 million, compared to $146 million in first quarter 2014.
This guidance includes approximately $450 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, sortation, delivery, 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
Amazon.com opened on the World Wide Web in July 1995. The company is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking. Customer reviews, 1-Click shopping, personalized recommendations, Prime, Fulfillment by Amazon, AWS, Kindle Direct Publishing, Kindle, Fire phone, Fire tablets, and Fire TV are some of the products and services pioneered by Amazon.






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

 
  
Three Months Ended 
 December 31,
 
Twelve Months Ended 
 December 31,
 
2014
 
2013
 
2014
 
2013
 
 
 
 
 
 
 
 
 
(unaudited)
 
 
 
 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
$
5,258

 
$
3,872

 
$
8,658

 
$
8,084

OPERATING ACTIVITIES:
 
 
 
 
 
 
 
Net income (loss)
214

 
239

 
(241
)
 
274

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
1,379

 
963

 
4,746

 
3,253

Stock-based compensation
408

 
326

 
1,497

 
1,134

Other operating expense (income), net
36

 
40

 
129

 
114

Losses (gains) on sales of marketable securities, net

 

 
(3
)
 
1

Other expense (income), net
78

 
51

 
62

 
166

Deferred income taxes
185

 
(109
)
 
(316
)
 
(156
)
Excess tax benefits from stock-based compensation
115

 
(78
)
 
(6
)
 
(78
)
Changes in operating assets and liabilities:
 
 
 
 
 
 
 
Inventories
(1,139
)
 
(1,330
)
 
(1,193
)
 
(1,410
)
Accounts receivable, net and other
(1,104
)
 
(1,239
)
 
(1,039
)
 
(846
)
Accounts payable
5,053

 
5,128

 
1,759

 
1,888

Accrued expenses and other
1,451

 
1,589

 
706

 
736

Additions to unearned revenue
1,378

 
819

 
4,433

 
2,691

Amortization of previously unearned revenue
(1,339
)
 
(821
)
 
(3,692
)
 
(2,292
)
Net cash provided by (used in) operating activities
6,715

 
5,578

 
6,842

 
5,475

INVESTING ACTIVITIES:
 
 
 
 
 
 
 
Purchases of property and equipment, including internal-use software and website development
(1,144
)
 
(880
)
 
(4,893
)
 
(3,444
)
Acquisitions, net of cash acquired, and other
(53
)
 
(59
)
 
(979
)
 
(312
)
Sales and maturities of marketable securities and other investments
355

 
515

 
3,349

 
2,306

Purchases of marketable securities and other investments
(1,623
)
 
(419
)
 
(2,542
)
 
(2,826
)
Net cash provided by (used in) investing activities
(2,465
)
 
(843
)
 
(5,065
)
 
(4,276
)
FINANCING ACTIVITIES:
 
 
 
 
 
 
 
Excess tax benefits from stock-based compensation
(115
)
 
78

 
6

 
78

Proceeds from long-term debt and other
5,981

 
249

 
6,359

 
394

Repayments of long-term debt
(183
)
 
(40
)
 
(513
)
 
(231
)
Principal repayments of capital lease obligations
(406
)
 
(225
)
 
(1,285
)
 
(775
)
Principal repayments of finance lease obligations
(68
)
 
(5
)
 
(135
)
 
(5
)
Net cash provided by (used in) financing activities
5,209

 
57

 
4,432

 
(539
)
Foreign-currency effect on cash and cash equivalents
(160
)
 
(6
)
 
(310
)
 
(86
)
Net increase (decrease) in cash and cash equivalents
9,299

 
4,786

 
5,899

 
574

CASH AND CASH EQUIVALENTS, END OF PERIOD
$
14,557

 
$
8,658

 
$
14,557

 
$
8,658

SUPPLEMENTAL CASH FLOW INFORMATION:
 
 
 
 
 
 
 
Cash paid for interest on long-term debt
$
36

 
$
37

 
$
91

 
$
97

Cash paid for income taxes (net of refunds)
30

 
25

 
177

 
169

Property and equipment acquired under capital leases
1,214

 
554

 
4,008

 
1,867

Property and equipment acquired under build-to-suit leases
214

 
213

 
920

 
877





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

  
Three Months Ended 
 December 31,
 
Twelve Months Ended 
 December 31,
 
2014
 
2013
 
2014
 
2013
 
 
 
 
 
 
 
 
 
(unaudited)
 
 
 
 
Net product sales
$
23,102

 
$
21,072

 
$
70,080

 
$
60,903

Net service sales
6,226

 
4,515

 
18,908

 
13,549

Total net sales
29,328

 
25,587

 
88,988

 
74,452

Operating expenses (1):
 
 
 
 
 
 
 
Cost of sales
20,671

 
18,806

 
62,752

 
54,181

Fulfillment
3,424

 
2,918

 
10,766

 
8,585

Marketing
1,526

 
1,133

 
4,332

 
3,133

Technology and content
2,635

 
1,862

 
9,275

 
6,565

General and administrative
442

 
318

 
1,552

 
1,129

Other operating expense (income), net
39

 
40

 
133

 
114

Total operating expenses
28,737

 
25,077

 
88,810

 
73,707

Income from operations
591

 
510

 
178

 
745

Interest income
8

 
10

 
39

 
38

Interest expense
(74
)
 
(39
)
 
(210
)
 
(141
)
Other income (expense), net
(96
)
 
(30
)
 
(118
)
 
(136
)
Total non-operating income (expense)
(162
)
 
(59
)
 
(289
)
 
(239
)
Income (loss) before income taxes
429

 
451

 
(111
)
 
506

Provision for income taxes
(205
)
 
(179
)
 
(167
)
 
(161
)
Equity-method investment activity, net of tax
(10
)
 
(33
)
 
37

 
(71
)
Net income (loss)
$
214

 
$
239

 
$
(241
)
 
$
274

Basic earnings per share
$
0.46

 
$
0.52

 
$
(0.52
)
 
$
0.60

Diluted earnings per share
$
0.45

 
$
0.51

 
$
(0.52
)
 
$
0.59

Weighted average shares used in computation of earnings per share:
 
 
 
 
 
 
 
Basic
464

 
458

 
462

 
457

Diluted
472

 
467

 
462

 
465

_____________
 
 
 
 
 
 
 
(1)    Includes stock-based compensation as follows:
 
 
 
 
 
 
 
Fulfillment
$
97

 
$
81

 
$
375

 
$
294

Marketing
34

 
25

 
125

 
88

Technology and content
226

 
175

 
804

 
603

General and administrative
51

 
45

 
193

 
149






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

 
  
Three Months Ended 
 December 31,
 
Twelve Months Ended 
 December 31,
 
2014
 
2013
 
2014
 
2013
 
 
 
 
 
 
 
 
 
(unaudited)
 
 
 
 
Net income (loss)
$
214

 
$
239

 
$
(241
)
 
$
274

Other comprehensive income (loss):
 
 
 
 
 
 
 
Foreign currency translation adjustments, net of tax of $(3), $(6), $(3) and $(20)
(116
)
 
23

 
(325
)
 
63

Net change in unrealized gains on available-for-sale securities:
 
 
 
 
 
 
 
Unrealized gains (losses), net of tax of $1, $0, $1 and $3
2

 
(1
)
 
2

 
(10
)
Reclassification adjustment for losses (gains) included in “Other income (expense), net,” net of tax of $(1), $0, $(1) and $(1)
(2
)
 

 
(3
)
 
1

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

 
(1
)
 
(1
)
 
(9
)
Total other comprehensive income (loss)
(116
)
 
22

 
(326
)
 
54

Comprehensive income (loss)
$
98

 
$
261

 
$
(567
)
 
$
328






AMAZON.COM, INC.
Segment Information
(in millions)
 
  
Three Months Ended 
 December 31,
 
Twelve Months Ended 
 December 31,
 
2014
 
2013
 
2014
 
2013
 
 
 
 
 
 
 
 
 
(unaudited)
 
 
 
 
North America
 
 
 
 
 
 
 
Net sales
$
18,747

 
$
15,331

 
$
55,469

 
$
44,517

Segment operating expenses (1)
17,729

 
14,606

 
53,364

 
42,631

Segment operating income
$
1,018

 
$
725

 
$
2,105

 
$
1,886

International
 
 
 
 
 
 
 
Net sales
$
10,581

 
$
10,256

 
$
33,519

 
$
29,935

Segment operating expenses (1)
10,561

 
10,105

 
33,816

 
29,828

Segment operating income (loss)
$
20

 
$
151

 
$
(297
)
 
$
107

Consolidated
 
 
 
 
 
 
 
Net sales
$
29,328

 
$
25,587

 
$
88,988

 
$
74,452

Segment operating expenses (1)
28,290

 
24,711

 
87,180

 
72,459

Segment operating income
1,038

 
876

 
1,808

 
1,993

Stock-based compensation
(408
)
 
(326
)
 
(1,497
)
 
(1,134
)
Other operating income (expense), net
(39
)
 
(40
)
 
(133
)
 
(114
)
Income from operations
591

 
510

 
178

 
745

Total non-operating income (expense)
(162
)
 
(59
)
 
(289
)
 
(239
)
Benefit (provision) for income taxes
(205
)
 
(179
)
 
(167
)
 
(161
)
Equity-method investment activity, net of tax
(10
)
 
(33
)
 
37

 
(71
)
Net income (loss)
$
214

 
$
239

 
$
(241
)
 
$
274

Segment Highlights:
 
 
 
 
 
 
 
Y/Y net sales growth:
 
 
 
 
 
 
 
North America
22
 %
 
26
%
 
25
 %
 
28
%
International
3

 
13

 
12

 
14

Consolidated
15

 
20

 
20

 
22

Y/Y segment operating income/loss growth (decline):
 
 
 
 
 
 
 
North America
40
 %
 
19
%
 
12
 %
 
19
%
International
(87
)
 
116

 
(379
)
 
41

Consolidated
18

 
29

 
(9
)
 
20

Net sales mix:
 
 
 
 
 
 
 
North America
64
 %
 
60
%
 
62
 %
 
60
%
International
36

 
40

 
38

 
40

 
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)
  
Three Months Ended 
 December 31,
 
Twelve Months Ended 
 December 31,
 
2014
 
2013
 
2014
 
2013
 
 
 
 
 
 
 
 
 
(unaudited)
 
 
 
 
Net Sales:
 
 
 
North America
 
 
 
 
 
 
 
Media
$
3,544

 
$
3,513

 
$
11,567

 
$
10,809

Electronics and other general merchandise
13,529

 
10,648

 
38,517

 
29,985

Other (1)
1,674

 
1,170

 
5,385

 
3,723

Total North America
$
18,747

 
$
15,331

 
$
55,469

 
$
44,517

International
 
 
 
 
 
 
 
Media
$
3,406

 
$
3,714

 
$
10,938

 
$
10,907

Electronics and other general merchandise
7,109

 
6,478

 
22,369

 
18,817

Other (1)
66

 
64

 
212

 
211

Total International
$
10,581

 
$
10,256

 
$
33,519

 
$
29,935

Consolidated
 
 
 
 
 
 
 
Media
$
6,950

 
$
7,227

 
$
22,505

 
$
21,716

Electronics and other general merchandise
20,638

 
17,126

 
60,886

 
48,802

Other (1)
1,740

 
1,234

 
5,597

 
3,934

Total consolidated
$
29,328

 
$
25,587

 
$
88,988

 
$
74,452

Year-over-year Percentage Growth:
 
 
 
 
 
 
 
North America
 
 
 
 
 
 
 
Media
1
 %
 
21
%
 
7
%
 
18
%
Electronics and other general merchandise
27

 
25

 
28

 
29

Other
43

 
52

 
45

 
58

Total North America
22

 
26

 
25

 
28

International
 
 
 
 
 
 
 
Media
(8
)%
 
3
%
 
%
 
1
%
Electronics and other general merchandise
10

 
19

 
19

 
23

Other
3

 
25

 
1

 
22

Total International
3

 
13

 
12

 
14

Consolidated
 
 
 
 
 
 
 
Media
(4
)%
 
11
%
 
4
%
 
9
%
Electronics and other general merchandise
21

 
23

 
25

 
26

Other
41

 
50

 
42

 
56

Total consolidated
15

 
20

 
20

 
22

Year-over-year Percentage Growth, excluding effect of foreign exchange rates:
 
 
 
 
 
 
 
International
 
 
 
 
 
 
 
Media
(1
)%
 
6
%
 
2
%
 
7
%
Electronics and other general merchandise
19

 
21

 
21

 
27

Other
11

 
27

 
1

 
26

Total International
12

 
15

 
14

 
19

Consolidated
 
 
 
 
 
 
 
Media
 %
 
13
%
 
5
%
 
12
%
Electronics and other general merchandise
24

 
24

 
26

 
28

Other
41

 
51

 
42

 
56

Total consolidated
18

 
22

 
20

 
24

Consolidated Net Sales Mix:
 
 
 
 
 
 
 
Media
24
 %
 
28
%
 
25
%
 
29
%
Electronics and other general merchandise
70

 
67

 
68

 
66

Other
6

 
5

 
7

 
5

Total consolidated
100
 %
 
100
%
 
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)
 
 
December 31, 2014
 
December 31, 2013
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
14,557

 
$
8,658

Marketable securities
2,859

 
3,789

Inventories
8,299

 
7,411

Accounts receivable, net and other
5,612

 
4,767

Total current assets
31,327

 
24,625

Property and equipment, net
16,967

 
10,949

Goodwill
3,319

 
2,655

Other assets
2,892

 
1,930

Total assets
$
54,505

 
$
40,159

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
16,459

 
$
15,133

Accrued expenses and other
9,807

 
6,688

Unearned revenue
1,823

 
1,159

Total current liabilities
28,089

 
22,980

Long-term debt
8,265

 
3,191

Other long-term liabilities
7,410

 
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 — 488 and 483
 
 
 
Outstanding shares — 465 and 459
5

 
5

Treasury stock, at cost
(1,837
)
 
(1,837
)
Additional paid-in capital
11,135

 
9,573

Accumulated other comprehensive loss
(511
)
 
(185
)
Retained earnings
1,949

 
2,190

Total stockholders’ equity
10,741

 
9,746

Total liabilities and stockholders’ equity
$
54,505

 
$
40,159






AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except per share data)
(unaudited)
 
Q4 2013
Q1 2014
Q2 2014
Q3 2014
Q4 2014
Y/Y %
Change
Cash Flows and Shares
 
 
 
 
 
 
Operating cash flow -- trailing twelve months (TTM)
$
5,475

$
5,345

$
5,327

$
5,705

$
6,842

25
 %
Purchases of property and equipment (incl. internal-use software & website development) -- TTM
$
3,444

$
3,854

$
4,288

$
4,628

$
4,893

42
 %
Principal repayments of capital lease obligations -- TTM
$
775

$
863

$
969

$
1,103

$
1,285

66
 %
Principal repayments of finance lease obligations -- TTM
$
5

$
47

$
60

$
73

$
135

N/A

Property and equipment acquired under capital leases -- TTM
$
1,867

$
2,243

$
2,716

$
3,347

$
4,008

115
 %
Free cash flow -- TTM (1)
$
2,031

$
1,491

$
1,039

$
1,077

$
1,949

(4
)%
Free cash flow -- TTM Y/Y growth (decline)
414
%
744
 %
292
 %
178
 %
(4
)%
N/A

Invested capital (2)
$
15,749

$
16,681

$
17,743

$
18,715

$
21,021

33
 %
Return on invested capital (3)
13
%
9
 %
6
 %
6
 %
9
 %
N/A

Free cash flow less lease principal repayments -- TTM (4)
$
1,251

$
581

$
10

$
(99
)
$
529

(58
)%
Free cash flow less finance principal lease repayments and capital acquired under capital leases -- TTM (5)
$
159

$
(799
)
$
(1,737
)
$
(2,343
)
$
(2,194
)
N/A

Common shares and stock-based awards outstanding
476

476

480

481

483

1
 %
Common shares outstanding
459

460

462

463

465

1
 %
Stock awards outstanding
17

16

18

18

18

8
 %
Stock awards outstanding -- % of common shares outstanding
3.6
%
3.5
 %
3.9
 %
3.9
 %
3.8
 %
N/A

Results of Operations
 
 
 
 
 
 
Worldwide (WW) net sales
$
25,587

$
19,741

$
19,340

$
20,579

$
29,328

15
 %
WW net sales -- Y/Y growth, excluding F/X
22
%
23
 %
22
 %
20
 %
18
 %
N/A

WW net sales -- TTM
$
74,452

$
78,124

$
81,759

$
85,246

$
88,988

20
 %
WW net sales -- TTM Y/Y growth, excluding F/X
24
%
24
 %
23
 %
22
 %
20
 %
N/A

Operating income (loss)
$
510

$
146

$
(15
)
$
(544
)
$
591

16
 %
Operating income/loss -- Y/Y growth (decline), excluding F/X
24
%
(29
)%
(158
)%
N/A

22
 %
N/A

Operating margin -- % of WW net sales
2.0
%
0.7
 %
(0.1
)%
(2.6
)%
2.0
 %
N/A

Operating income -- TTM
$
745

$
710

$
617

$
97

$
178

(76
)%
Operating income -- TTM Y/Y growth (decline), excluding F/X
14
%
7
 %
(11
)%
(94
)%
(79
)%
N/A

Operating margin -- TTM % of WW net sales
1.0
%
0.9
 %
0.8
 %
0.1
 %
0.2
 %
N/A

Net income (loss)
$
239

$
108

$
(126
)
$
(437
)
$
214

(10
)%
Net income (loss) per diluted share
$
0.51

$
0.23

$
(0.27
)
$
(0.95
)
$
0.45

(11
)%
Net income (loss) -- TTM
$
274

$
299

$
181

$
(216
)
$
(241
)
(188
)%
Net income (loss) per diluted share -- TTM
$
0.59

$
0.64

$
0.39

$
(0.47
)
$
(0.52
)
(187
)%
______________________________
(1)
“Free cash flow” is defined as net cash provided by operating activities less cash expenditures for purchases of property and equipment, including internal-use software and website development.
(2)
Average Total Assets minus Current Liabilities (excluding current portion of Long-Term Debt) over five quarter ends.
(3)
TTM Free Cash Flow divided by Invested Capital.
(4)
“Free cash flow less lease principal repayments” is defined as net cash provided by operating activities, less (i) purchases of property and equipment, including internal-use software and website development, (ii) principal repayments of capital lease obligations, and (iii) principal repayments of finance lease obligations.
(5)
“Free cash flow less finance principal lease repayments and capital acquired under capital leases” is defined as net cash provided by operating activities, less (i) purchases of property and equipment, including internal-use software and website development, (ii) property and equipment acquired under capital leases, and (iii) principal repayments of finance lease obligations.






AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions)
(unaudited)

 
Q4 2013
Q1 2014
Q2 2014
Q3 2014
Q4 2014
Y/Y %
Change
Segments
 
 
 
 
 
 
North America Segment:
 
 
 
 
 
 
  Net sales
$
15,331

$
11,858

$
11,998

$
12,867

$
18,747

22
 %
  Net sales -- Y/Y growth, excluding F/X
26
%
26
 %
26
 %
25
 %
22
 %
N/A

  Net sales -- TTM
$
44,517

$
46,984

$
49,487

$
52,053

$
55,469

25
 %
  Operating income
$
725

$
562

$
438

$
88

$
1,018

40
 %
  Operating margin -- % of North America net sales
4.7
%
4.7
 %
3.7
 %
0.7
 %
5.4
 %
N/A

  Operating income -- TTM
$
1,886

$
1,992

$
2,020

$
1,813

$
2,105

12
 %
  Operating income -- TTM Y/Y growth, excluding F/X
18
%
17
 %
14
 %
2
 %
12
 %
N/A

  Operating margin -- TTM % of North America net sales
4.2
%
4.2
 %
4.1
 %
3.5
 %
3.8
 %
N/A

International Segment:
 
 
 
 
 
 
  Net sales
$
10,256

$
7,883

$
7,342

$
7,712

$
10,581

3
 %
  Net sales -- Y/Y growth, excluding F/X
15
%
18
 %
14
 %
13
 %
12
 %
N/A

  Net sales -- TTM
$
29,935

$
31,140

$
32,272

$
33,193

$
33,519

12
 %
  Net sales -- TTM % of WW net sales
40
%
40
 %
39
 %
39
 %
38
 %
N/A

  Operating income (loss)
$
151

$
(60
)
$
(34
)
$
(224
)
$
20

(87
)%
  Operating margin -- % of International net sales
1.5
%
(0.8
)%
(0.5
)%
(2.9
)%
0.2
 %
N/A

  Operating income (loss) -- TTM
$
107

$
63

$
29

$
(166
)
$
(297
)
(379
)%
  Operating income/loss -- TTM Y/Y growth (decline), excluding F/X
106
%
770
 %
N/A

(877
)%
(348
)%
N/A

  Operating margin -- TTM % of International net sales
0.4
%
0.2
 %
0.1
 %
(0.5
)%
(0.9
)%
N/A

Consolidated Segments:
 
 
 
 
 
 
  Operating expenses (6)
$
24,711

$
19,239

$
18,936

$
20,715

$
28,290

14
 %
  Operating expenses -- TTM (6)
$
72,459

$
76,069

$
79,710

$
83,599

$
87,180

20
 %
  Operating income (loss)
$
876

$
502

$
404

$
(136
)
$
1,038

18
 %
  Operating margin -- % of Consolidated net sales
3.4
%
2.5
 %
2.1
 %
(0.7
)%
3.5
 %
N/A

  Operating income -- TTM
$
1,993

$
2,055

$
2,049

$
1,647

$
1,808

(9
)%
  Operating income -- TTM Y/Y growth (decline), excluding F/X
21
%
20
 %
14
 %
(12
)%
(10
)%
N/A

  Operating margin -- TTM % of Consolidated net sales
2.7
%
2.6
 %
2.5
 %
1.9
 %
2.0
 %
N/A

______________________________
(6)
Represents cost of sales, fulfillment, marketing, technology and content, and general and administrative operating expenses, excluding stock-based compensation.






AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except inventory turnover, accounts payable days and employee data)
(unaudited)
 
 
Q4 2013
Q1 2014
Q2 2014
Q3 2014
Q4 2014
Y/Y %
Change
Supplemental
 
 
 
 
 
 
Supplemental North America Segment Net Sales:
 
 
 
 
 
 
  Media
$
3,513

$
2,825

$
2,464

$
2,734

$
3,544

1
 %
  Media -- Y/Y growth, excluding F/X
21
%
13
%
14
%
5
%
1
 %
N/A

  Media -- TTM
$
10,809

$
11,121

$
11,411

$
11,536

$
11,567

7
 %
  Electronics and other general merchandise
$
10,648

$
7,829

$
8,366

$
8,793

$
13,529

27
 %
  Electronics and other general merchandise -- Y/Y growth, excluding F/X
25
%
28
%
29
%
31
%
27
 %
N/A

  Electronics and other general merchandise -- TTM
$
29,985

$
31,686

$
33,575

$
35,636

$
38,517

28
 %
  Electronics and other general merchandise -- TTM % of North America net sales
67
%
67
%
68
%
68
%
69
 %
N/A

  Other
$
1,170

$
1,204

$
1,168

$
1,340

$
1,674

43
 %
  Other -- Y/Y growth
52
%
60
%
38
%
40
%
43
 %
N/A

  Other -- TTM
$
3,723

$
4,177

$
4,501

$
4,881

$
5,385

45
 %
Supplemental International Segment Net Sales:
 
 
 
 
 
 
  Media
$
3,714

$
2,642

$
2,380

$
2,510

$
3,406

(8
)%
  Media -- Y/Y growth, excluding F/X
6
%
4
%
4
%
3
%
(1
)%
N/A

  Media -- TTM
$
10,907

$
11,004

$
11,160

$
11,246

$
10,938

 %
  Electronics and other general merchandise
$
6,478

$
5,188

$
4,912

$
5,160

$
7,109

10
 %
  Electronics and other general merchandise -- Y/Y growth, excluding F/X
21
%
26
%
20
%
19
%
19
 %
N/A

  Electronics and other general merchandise -- TTM
$
18,817

$
19,919

$
20,894

$
21,737

$
22,369

19
 %
  Electronics and other general merchandise -- TTM % of International net sales
63
%
64
%
65
%
65
%
67
 %
N/A

  Other
$
64

$
53

$
50

$
42

$
66

3
 %
  Other -- TTM
$
211

$
217

$
218

$
210

$
212

1
 %
Supplemental Worldwide Net Sales:
 
 
 
 
 
 
  Media
$
7,227

$
5,467

$
4,844

$
5,244

$
6,950

(4
)%
  Media -- Y/Y growth, excluding F/X
13
%
8
%
9
%
4
%
 %
N/A

  Media -- TTM
$
21,716

$
22,125

$
22,571

$
22,782

$
22,505

4
 %
  Electronics and other general merchandise
$
17,126

$
13,017

$
13,278

$
13,953

$
20,638

21
 %
  Electronics and other general merchandise -- Y/Y growth, excluding F/X
24
%
27
%
26
%
26
%
24
 %
N/A

  Electronics and other general merchandise -- TTM
$
48,802

$
51,605

$
54,469

$
57,373

$
60,886

25
 %
  Electronics and other general merchandise -- TTM % of WW net sales
66
%
66
%
67
%
67
%
68
 %
N/A

  Other
$
1,234

$
1,257

$
1,218

$
1,382

$
1,740

41
 %
  Other -- TTM
$
3,934

$
4,394

$
4,719

$
5,091

$
5,597

42
 %
Balance Sheet
 
 
 
 
 
 
Cash and marketable securities
$
12,447

$
8,666

$
7,986

$
6,883

$
17,416

40
 %
Inventory, net -- ending
$
7,411

$
6,716

$
6,644

$
7,316

$
8,299

12
 %
Inventory turnover, average -- TTM
8.9

9.1

9.1

8.9

8.6

(3
)%
Property and equipment, net
$
10,949

$
12,267

$
14,089

$
15,702

$
16,967

55
 %
Accounts payable -- ending
$
15,133

$
10,590

$
10,457

$
11,811

$
16,459

9
 %
Accounts payable days -- ending
74

68

71

74

73

(1
)%
Other
 
 
 
 
 
 
WW shipping revenue
$
1,137

$
849

$
889

$
1,048

$
1,701

50
 %
WW shipping costs
$
2,344

$
1,829

$
1,812

$
2,020

$
3,049

30
 %
WW net shipping costs
$
1,207

$
980

$
923

$
972

$
1,348

12
 %
WW net shipping costs -- % of WW net sales
4.7
%
5.0
%
4.8
%
4.7
%
4.6
 %
N/A

Employees (full-time and part-time; excludes contractors & temporary personnel)
117,300

124,600

132,600

149,500

154,100

31
 %





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, AWS 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.

AWS Customers

References to AWS customers mean unique AWS customer accounts, which are unique e-mail addresses that are eligible to use AWS services. This includes AWS accounts in the AWS free tier. Multiple users accessing AWS services via one account are counted as a single account. Customers are considered active when they have had AWS usage activity during the preceding one-month period.
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.amazon.nl, 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
Phil Hardin, 206/266-2171
 
Ty Rogers, 206/266-7180
www.amazon.com/ir
 
www.amazon.com/pr