EX-99.1 2 d467316dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

 

LOGO

AMAZON.COM ANNOUNCES FOURTH QUARTER SALES UP 22% TO $21.27 BILLION

Operating income up 56% year-over-year – above high end of guidance

SEATTLE—(BUSINESS WIRE)—January 29, 2013—Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its fourth quarter ended December 31, 2012.

Operating cash flow increased 7% to $4.18 billion for the trailing twelve months, compared with $3.90 billion for the trailing twelve months ended December 31, 2011. Free cash flow decreased 81% to $395 million for the trailing twelve months, compared with $2.09 billion for the trailing twelve months ended December 31, 2011. Free cash flow for the trailing twelve months ended December 31, 2012 includes fourth quarter 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 470 million on December 31, 2012, compared with 468 million one year ago.

Net sales increased 22% to $21.27 billion in the fourth quarter, compared with $17.43 billion in fourth quarter 2011. Excluding the $178 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales grew 23% compared with fourth quarter 2011.

Operating income increased 56% to $405 million in the fourth quarter, compared with $260 million in fourth quarter 2011. The favorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $2 million.

Net income decreased 45% to $97 million in the fourth quarter, or $0.21 per diluted share, compared with $177 million, or $0.38 per diluted share, in fourth quarter 2011.

“We’re now seeing the transition we’ve been expecting,” said Jeff Bezos, founder and CEO of Amazon.com. “After 5 years, eBooks is a multi-billion dollar category for us and growing fast – up approximately 70% last year. In contrast, our physical book sales experienced the lowest December growth rate in our 17 years as a book seller, up just 5%. We’re excited and very grateful to our customers for their response to Kindle and our ever expanding ecosystem and selection.”

Full Year 2012

Net sales increased 27% to $61.09 billion, compared with $48.08 billion in 2011. Excluding the $854 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales grew 29% compared with 2011.

Operating income decreased 22% to $676 million, compared with $862 million in 2011. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the year on operating income was $14 million.

Net loss was $39 million, or $0.09 per diluted share, compared with net income of $631 million, or $1.37 per diluted share, in 2011.


Highlights

 

   

For the second year in a row, Amazon’s tablet was the most popular item for customers – Kindle Fire HD continued its run as the #1 best-selling, most gifted, and most wished for product across the millions of items available on Amazon worldwide. At year-end, Kindle Fire HD, Kindle Fire, Kindle Paperwhite and Kindle held the top four spots on the Amazon worldwide best seller charts since launch.

 

   

Amazon announced the launch of AutoRip, a new service that gives customers free MP3 versions of CDs they purchase from Amazon. Additionally, customers who have purchased AutoRip CDs at any time since Amazon first opened its Music Store in 1998 will find MP3 versions of those albums in their Cloud Player libraries – also automatically and for free.

 

   

Amazon introduced Kindle FreeTime Unlimited, bringing together for the first time all of the types of content kids and parents love – books, games, educational apps, movies and TV shows – into one simple, unlimited, easy-to-use service for kids ages 3-8.

 

   

Amazon’s digital media selection has grown to over 23 million movies, TV shows, songs, magazines, books, audiobooks, and popular apps and games in 2012, an increase from 19 million at year-end 2011.

 

   

Amazon.com announced new licensing agreements with Turner Broadcasting, Warner Bros. Domestic Television Distribution, and A+E Networks, for popular television series including Falling Skies, The Closer, Pawn Stars, Storage Wars, and Dance Moms, expanding its catalog of title offerings for Prime Instant Video to more than 36,000 movies and television episodes.

 

   

Amazon launched Kindle Stores for Brazil, Canada, China, and Japan, with a large selection of the most popular books, including thousands of local-language books.

 

   

Amazon announced that 23 KDP authors each sold over 250,000 copies of their books in 2012, and that over 500 KDP Select books have reached the top 100 Kindle best seller lists around the world.

 

   

Amazon announced that for the eighth consecutive year, the company ranks #1 in customer satisfaction during the holiday shopping season according to the ForeSee annual Holiday E-Retail Satisfaction Index. ForeSee surveyed over 24,000 customers between Thanksgiving and Christmas, asking them to rate their satisfaction with the top 100 retailers. For the second year in a row, Amazon’s score of 88 is the highest ever attained by any retailer in the study.

 

 

   

Amazon Web Services (AWS) announced the launch of its newest Asia Pacific Region in Sydney, Australia, now available for multiple services including Amazon Elastic Compute Cloud (EC2), Amazon Simple Storage Service (S3), and Amazon Relational Database Service (RDS). Sydney joins Singapore and Tokyo as the third Region in Asia Pacific and the ninth Region worldwide.

 

   

AWS announced that SAP Business Suite is now certified to run on the AWS cloud platform. Enterprises running SAP Business Suite can now leverage the on-demand, pay as you go AWS platform to support thousands of concurrent users in production without making costly capital expenditures for their underlying infrastructure. AWS also announced that SAP HANA, SAP’s in-memory database and platform, is certified to run on AWS and is available for purchase via AWS Marketplace.

 

   

AWS continued its rapid pace of innovation by launching 159 new services and features in 2012. This is nearly double the services and features launched in 2011.

 

   

AWS has lowered prices 24 times since it launched in 2006, including 10 price reductions in 2012.

Financial Guidance

The following forward-looking statements reflect Amazon.com’s expectations as of January 29, 2013. 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 2013 Guidance

 

   

Net sales are expected to be between $15.0 billion and $16.6 billion, or to grow between 14% and 26% compared with first quarter 2012.

 

   

Operating income (loss) is expected to be between $(285) million and $65 million, compared to $192 million in the prior year period.


   

This guidance includes approximately $285 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.

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, 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. Kindle Paperwhite is the most-advanced e-reader ever constructed with 62% more pixels and 25% increased contrast, a patented built-in front light for reading in all lighting conditions, extra-long battery life, and a thin and light design. The new latest generation Kindle, the lightest and smallest Kindle, now features new, improved fonts and faster page turns. Kindle Fire HD features a stunning custom high-definition display, exclusive Dolby audio with dual stereo speakers, high-end, laptop-grade Wi-Fi with dual-band support, dual-antennas and MIMO for faster streaming and downloads, enough storage for HD content, and the latest generation processor and graphics engine—and it is available in two display sizes—7” and 8.9”. The large-screen Kindle Fire HD is also available with 4G wireless, and comes with a groundbreaking $49.99 introductory 4G LTE data package. The all-new Kindle Fire features a 20% faster processor, 40% faster performance, twice the memory, and longer battery life.

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 and www.amazon.com.br. 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)

 

     Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
     2012     2011     2012     2011  
     (unaudited)              

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

   $ 2,980      $ 2,823      $ 5,269      $ 3,777   

OPERATING ACTIVITIES:

        

Net income (loss)

     97        177        (39     631   

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

        

Depreciation of property and equipment, including internal-use software and website development, and other amortization

     662        359        2,159        1,083   

Stock-based compensation

     235        159        833        557   

Other operating expense (income), net

     36        43        154        154   

Losses (gains) on sales of marketable securities, net

     (1     —          (9     (4

Other expense (income), net

     100        (16     253        (56

Deferred income taxes

     (148     67        (265     136   

Excess tax benefits from stock-based compensation

     (239     (1     (429     (62

Changes in operating assets and liabilities:

        

Inventories

     (974     (1,260     (999     (1,777

Accounts receivable, net and other

     (1,024     (1,077     (861     (866

Accounts payable

     4,926        4,684        2,070        2,997   

Accrued expenses and other

     1,412        1,076        1,038        1,067   

Additions to unearned revenue

     545        358        1,796        1,064   

Amortization of previously unearned revenue

     (546     (300     (1,521     (1,021
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     5,081        4,269        4,180        3,903   

INVESTING ACTIVITIES:

        

Purchases of property and equipment, including internal-use software and website development

     (2,025     (550     (3,785     (1,811

Acquisitions, net of cash acquired, and other

     (35     (49     (745     (705

Sales and maturities of marketable securities and other investments

     506        912        4,237        6,843   

Purchases of marketable securities and other investments

     (1,528     (1,782     (3,302     (6,257
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) investing activities

     (3,082     (1,469     (3,595     (1,930

FINANCING ACTIVITIES:

        

Excess tax benefits from stock-based compensation

     239        1        429        62   

Common stock repurchased

     —          (277     (960     (277

Proceeds from long-term debt and other

     3,083        47        3,378        177   

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

     (156     (104     (588     (444
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     3,166        (333     2,259        (482

Foreign-currency effect on cash and cash equivalents

     (61     (21     (29     1   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     5,104        2,446        2,815        1,492   

CASH AND CASH EQUIVALENTS, END OF PERIOD

   $ 8,084      $ 5,269      $ 8,084      $ 5,269   
  

 

 

   

 

 

   

 

 

   

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION:

        

Cash paid for interest on long-term debt

   $ 10      $ 4      $ 31      $ 14   

Cash paid for income taxes (net of refunds)

     52        15        112        33   

Property and equipment acquired under capital leases

     239        187        802        753   

Property and equipment acquired, net, under build-to-suit leases

     (17     39        29        259   


AMAZON.COM, INC.

Consolidated Statements of Operations

(in millions, except per share data)

 

     Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
     2012     2011     2012     2011  
     (unaudited)              

Net product sales (1)

   $ 18,147      $ 15,309      $ 51,733      $ 42,000   

Net services sales (2)

     3,121        2,122        9,360        6,077   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net sales

     21,268        17,431        61,093        48,077   

Operating expenses (3):

        

Cost of sales

     16,136        13,830        45,971        37,288   

Fulfillment

     2,258        1,659        6,419        4,576   

Marketing

     851        593        2,408        1,630   

Technology and content

     1,345        862        4,564        2,909   

General and administrative

     235        184        896        658   

Other operating expense (income), net

     38        43        159        154   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     20,863        17,171        60,417        47,215   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     405        260        676        862   

Interest income

     9        14        40        61   

Interest expense

     (28     (20     (92     (65

Other income (expense), net

     (49     19        (80     76   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total non-operating income (expense)

     (68     13        (132     72   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     337        273        544        934   

Provision for income taxes

     (194     (86     (428     (291

Equity-method investment activity, net of tax

     (46     (10     (155     (12
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 97      $ 177      $ (39   $ 631   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per share

   $ 0.21      $ 0.39      $ (0.09   $ 1.39   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per share

   $ 0.21      $ 0.38      $ (0.09   $ 1.37   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares used in computation of earnings per share:

        

Basic

     454        455        453        453   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     461        462        453        461   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)    Represents revenue from the sale of products and related shipping fees and digital content where we are the seller of record.

        

(2)    Represents third-party seller fees earned (including commissions) and related shipping fees, digital content subscriptions, and non-retail activities.

        

(3)    Includes stock-based compensation as follows:

        

Fulfillment

   $ 62      $ 42      $ 212      $ 133   

Marketing

     18        12        61        39   

Technology and content

     124        80        434        292   

General and administrative

     31        25        126        93   


AMAZON.COM, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in millions)

 

     Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
     2012     2011     2012     2011  
     (unaudited)              

Net income (loss)

   $ 97      $ 177      $ (39   $ 631   

Other comprehensive income (loss):

        

Foreign currency translation adjustments, net of tax of $(12), $3, $(30), and $20

     60        (77     76        (123

Net change in unrealized gains on available-for-sale securities:

        

Unrealized gains (losses), net of tax of $1, $0, $(3), and $1

     (1     1        8        (1

Reclassification adjustment for losses (gains) included in net income, net of tax effect of $0, $0, $3, and $1

     (1     —          (7     (2
  

 

 

   

 

 

   

 

 

   

 

 

 

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

     (2     1        1        (3
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other comprehensive income (loss)

     58        (76     77        (126
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income

   $ 155      $ 101      $ 38      $ 505   
  

 

 

   

 

 

   

 

 

   

 

 

 


AMAZON.COM, INC.

Segment Information

(in millions)

 

     Three Months Ended
December 31,
    Twelve Months
Ended December 31,
 
     2012     2011     2012     2011  
     (unaudited)              

North America

        

Net sales

   $ 12,175      $ 9,902      $ 34,813      $ 26,705   

Segment operating expenses (1)

     11,567        9,617        33,221        25,772   
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment operating income

   $ 608      $ 285      $ 1,592      $ 933   
  

 

 

   

 

 

   

 

 

   

 

 

 

International

        

Net sales

   $ 9,093      $ 7,529      $ 26,280      $ 21,372   

Segment operating expenses (1)

     9,023        7,352        26,204        20,732   
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment operating income

   $ 70      $ 177      $ 76      $ 640   
  

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated

        

Net sales

   $ 21,268      $ 17,431      $ 61,093      $ 48,077   

Segment operating expenses (1)

     20,590        16,969        59,425        46,504   
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment operating income

     678        462        1,668        1,573   

Stock-based compensation

     (235     (159     (833     (557

Other operating income (expense), net

     (38     (43     (159     (154
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     405        260        676        862   

Total non-operating income (expense)

     (68     13        (132     72   

Provision for income taxes

     (194     (86     (428     (291

Equity-method investment activity, net of tax

     (46     (10     (155     (12
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 97      $ 177      $ (39   $ 631   
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment Highlights:

        

Y/Y net sales growth:

        

North America

     23     37     30     43

International

     21        31        23        38   

Consolidated

     22        35        27        41   

Y/Y segment operating income growth (decline):

        

North America

     114     (4 )%      71     (2 )% 

International

     (61     (46     (88     (35

Consolidated

     47        (26     6        (19

Net sales mix:

        

North America

     57     57     57     56

International

     43        43        43        44   
  

 

 

   

 

 

   

 

 

   

 

 

 
     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,
 
     2012     2011     2012     2011  
     (unaudited)              

North America

        

Media

   $ 2,903      $ 2,562      $ 9,189      $ 7,959   

Electronics and other general merchandise

     8,503        6,881        23,273        17,315   

Other (1)

     769        459        2,351        1,431   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total North America

   $ 12,175      $ 9,902      $ 34,813      $ 26,705   
  

 

 

   

 

 

   

 

 

   

 

 

 

International

        

Media

   $ 3,611      $ 3,447      $ 10,753      $ 9,820   

Electronics and other general merchandise

     5,431        4,032        15,355        11,397   

Other (1)

     51        50        172        155   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total International

   $ 9,093      $ 7,529      $ 26,280      $ 21,372   
  

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated

        

Media

   $ 6,514      $ 6,009      $ 19,942      $ 17,779   

Electronics and other general merchandise

     13,934        10,913        38,628        28,712   

Other (1)

     820        509        2,523        1,586   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Consolidated

   $ 21,268      $ 17,431      $ 61,093      $ 48,077   
  

 

 

   

 

 

   

 

 

   

 

 

 

Y/Y Net Sales Growth:

        

North America:

        

Media

     13     8     15     16

Electronics and other general merchandise

     24        51        34        57   

Other

     68        62        64        73   

Total North America

     23        37        30        43   

International:

        

Media

     5     20     9     23

Electronics and other general merchandise

     35        42        35        55   

Other

     4        32        11        24   

Total International

     21        31        23        38   

Consolidated:

        

Media

     8     15     12     19

Electronics and other general merchandise

     28        48        35        56   

Other

     61        58        59        66   

Total Consolidated

     22        35        27        41   

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

        

International:

        

Media

     7     18     12     16

Electronics and other general merchandise

     37        41        40        47   

Other

     5        31        15        18   

Total International

     23        29        27        31   

Consolidated:

        

Media

     10     14     14     16

Electronics and other general merchandise

     29        47        36        53   

Other

     61        58        59        66   

Total Consolidated

     23        34        29        37   

Consolidated Net Sales Mix:

        

Media

     31     34     33     37

Electronics and other general merchandise

     65        63        63        60   

Other

     4        3        4        3   
  

 

 

   

 

 

   

 

 

   

 

 

 
     100     100     100     100
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Includes sales from non-retail activities, such as AWS in the North America segment, advertising services, and our co-branded credit card agreements in both segments.


AMAZON.COM, INC.

Consolidated Balance Sheets

(in millions, except per share data)

 

     December 31,
2012
    December 31,
2011
 

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 8,084      $ 5,269   

Marketable securities

     3,364        4,307   

Inventories

     6,031        4,992   

Accounts receivable, net and other

     3,364        2,571   

Deferred tax assets

     453        351   
  

 

 

   

 

 

 

Total current assets

     21,296        17,490   

Property and equipment, net

     7,060        4,417   

Deferred tax assets

     123        28   

Goodwill

     2,552        1,955   

Other assets

     1,524        1,388   
  

 

 

   

 

 

 

Total assets

   $ 32,555      $ 25,278   
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Current liabilities:

    

Accounts payable

   $ 13,318      $ 11,145   

Accrued expenses and other

     5,684        3,751   
  

 

 

   

 

 

 

Total current liabilities

     19,002        14,896   

Long-term debt

     3,084        255   

Other long-term liabilities

     2,277        2,370   

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 — 478 and 473

    

Outstanding shares — 454 and 455

     5        5   

Treasury stock, at cost

     (1,837     (877

Additional paid-in capital

     8,347        6,990   

Accumulated other comprehensive loss

     (239     (316

Retained earnings

     1,916        1,955   
  

 

 

   

 

 

 

Total stockholders’ equity

     8,192        7,757   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 32,555      $ 25,278   
  

 

 

   

 

 

 


AMAZON.COM, INC.

Supplemental Financial Information and Business Metrics

(in millions, except per share data)

(unaudited)

 

     Q4 2011     Q1 2012     Q2 2012     Q3 2012     Q4 2012     Y/Y%
Change
 

Cash Flows and Shares

            

Operating cash flow — trailing twelve months (TTM)

   $ 3,903      $ 3,051      $ 3,222      $ 3,368      $ 4,180        7

Purchases of property and equipment (incl. internal-use software & website development) — TTM

   $ 1,811      $ 1,899      $ 2,123      $ 2,310      $ 3,785        109

Free cash flow (operating cash flow less purchases of property and equipment) — TTM

   $ 2,092      $ 1,152      $ 1,099      $ 1,058      $ 395        (81 %) 

Free cash flow — TTM Y/Y growth (decline)

     (17 %)      (39 %)      (40 %)      (31 %)      (81 %)      N/A   

Invested capital (1)

   $ 9,680      $ 10,006      $ 10,250      $ 10,392      $ 11,181        16

Return on invested capital (2)

     22     12     11     10     4     N/A   

Common shares and stock-based awards outstanding

     468        464        468        469        470        0

Common shares outstanding

     455        450        452        453        454        0

Stock-based awards outstanding

     14        13        16        16        16        17

Stock-based awards outstanding — % of common shares outstanding

     3.0     2.9     3.6     3.6     3.5     N/A   

Results of Operations

            

Worldwide (WW) net sales

   $ 17,431      $ 13,185      $ 12,834      $ 13,806      $ 21,268        22

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

     34     34     32     30     23     N/A   

WW net sales — TTM

   $ 48,077      $ 51,404      $ 54,325      $ 57,256      $ 61,093        27

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

     37     37     35     33     29     N/A   

Operating income (loss)

   $ 260      $ 192      $ 107      $ (28   $ 405        56

Operating income — Y/Y growth (decline), excluding F/X

     (48 %)      (38 %)      (34 %)      (137 %)      59     N/A   

Operating margin — % of WW net sales

     1.5     1.5     0.8     (0.2 %)      1.9     N/A   

Operating income — TTM

   $ 862      $ 732      $ 637      $ 531      $ 676        (22 %) 

Operating income — TTM Y/Y growth (decline), excluding F/X

     (44 %)      (50 %)      (50 %)      (48 %)      (15 %)      N/A   

Operating margin — TTM% of WW net sales

     1.8     1.4     1.2     0.9     1.1     N/A   

Net income (loss)

   $ 177      $ 130      $ 7      $ (274   $ 97        (45 %) 

Net income (loss) per diluted share

   $ 0.38      $ 0.28      $ 0.01      $ (0.60   $ 0.21        (45 %) 

Net income (loss) — TTM

   $ 631      $ 561      $ 377      $ 40      $ (39     (106 %) 

Net income (loss) per diluted share — TTM

   $ 1.37      $ 1.22      $ 0.82      $ 0.09      $ (0.09     (106 %) 

Segments

            

North America Segment:

            

Net sales

   $ 9,902      $ 7,427      $ 7,326      $ 7,884      $ 12,175        23

Net sales — Y/Y growth, excluding F/X

     37     36     36     33     23     N/A   

Net sales — TTM

   $ 26,705      $ 28,667      $ 30,587      $ 32,540      $ 34,813        30

Operating income

   $ 285      $ 349      $ 344      $ 291      $ 608        114

Operating margin — % of North America net sales

     2.9     4.7     4.7     3.7     5.0     N/A   

Operating income — TTM

   $ 933      $ 991      $ 1,120      $ 1,268      $ 1,592        71

Operating income — TTM Y/Y growth (decline), excluding F/X

     (2 %)      2     14     34     71     N/A   

Operating margin — TTM% of North America net sales

     3.5     3.5     3.7     3.9     4.6     N/A   

International Segment:

            

Net sales

   $ 7,529      $ 5,758      $ 5,508      $ 5,922      $ 9,093        21

Net sales — Y/Y growth, excluding F/X

     29     32     28     27     23     N/A   

Net sales — TTM

   $ 21,372      $ 22,737      $ 23,738      $ 24,716      $ 26,280        23

Net sales — TTM% of WW net sales

     44     44     44     43     43     N/A   

Operating income (loss)

   $ 177      $ 49      $ 16      $ (59   $ 70        (61 %) 

Operating margin — % of International net sales

     2.4     0.9     0.3     (1.0 %)      0.8     N/A   

Operating income — TTM

   $ 640      $ 515      $ 359      $ 183      $ 76        (88 %) 

Operating income — TTM Y/Y growth (decline), excluding F/X

     (41 %)      (49 %)      (57 %)      (68 %)      (77 %)      N/A   

Operating margin — TTM% of International net sales

     3.0     2.3     1.5     0.7     0.3     N/A   

Consolidated Segments:

            

Operating expenses (3)

   $ 16,969      $ 12,787      $ 12,474      $ 13,574      $ 20,590        21

Operating expenses — TTM (3)

   $ 46,504      $ 49,899      $ 52,846      $ 55,805      $ 59,425        28

Operating income

   $ 462      $ 398      $ 360      $ 232      $ 678        47

Operating margin — % of Consolidated sales

     2.7     3.0     2.8     1.7     3.2     N/A   

Operating income — TTM

   $ 1,573      $ 1,505      $ 1,480      $ 1,451      $ 1,668        6

Operating income — TTM Y/Y growth (decline), excluding F/X

     (21 %)      (22 %)      (21 %)      (15 %)      7     N/A   

Operating margin — TTM% of Consolidated net sales

     3.3     2.9     2.7     2.5     2.7     N/A   


AMAZON.COM, INC.

Supplemental Financial Information and Business Metrics

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

(unaudited)

 

     Q4 2011     Q1 2012     Q2 2012     Q3 2012     Q4 2012     Y/Y%
Change
 

Supplemental

            

Supplemental North America Segment Net Sales:

            

Media

   $ 2,562      $ 2,197      $ 1,874      $ 2,215      $ 2,903        13

Media — Y/Y growth, excluding F/X

     8     17     18     15     13     N/A   

Media — TTM

   $ 7,959      $ 8,270      $ 8,559      $ 8,847      $ 9,189        15

Electronics and other general merchandise

   $ 6,881      $ 4,772      $ 4,937      $ 5,061      $ 8,503        24

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

     51     44     41     39     24     N/A   

Electronics and other general merchandise — TTM

   $ 17,315      $ 18,784      $ 20,226      $ 21,652      $ 23,273        34

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

     65     66     66     67     67     N/A   

Other

   $ 459      $ 458      $ 515      $ 608      $ 769        68

Other — TTM

   $ 1,431      $ 1,613      $ 1,802      $ 2,041      $ 2,351        64

Supplemental International Segment Net Sales:

            

Media

   $ 3,447      $ 2,513      $ 2,245      $ 2,385      $ 3,611        5

Media — Y/Y growth, excluding F/X

     18     22     12     12     7     N/A   

Media — TTM

   $ 9,820      $ 10,261      $ 10,431      $ 10,590      $ 10,753        9

Electronics and other general merchandise

   $ 4,032      $ 3,203      $ 3,224      $ 3,497      $ 5,431        35

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

     41     42     42     39     37     N/A   

Electronics and other general merchandise — TTM

   $ 11,397      $ 12,314      $ 13,139      $ 13,956      $ 15,355        35

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

     53     54     55     56     58     N/A   

Other

   $ 50      $ 42      $ 39      $ 40      $ 51        4

Other — TTM

   $ 155      $ 162      $ 168      $ 170      $ 172        11

Supplemental Worldwide Net Sales:

            

Media

   $ 6,009      $ 4,710      $ 4,119      $ 4,600      $ 6,514        8

Media — Y/Y growth, excluding F/X

     14     19     15     14     10     N/A   

Media — TTM

   $ 17,779      $ 18,531      $ 18,990      $ 19,437      $ 19,942        12

Electronics and other general merchandise

   $ 10,913      $ 7,975      $ 8,161      $ 8,558      $ 13,934        28

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

     47     43     42     39     29     N/A   

Electronics and other general merchandise — TTM

   $ 28,712      $ 31,098      $ 33,365      $ 35,608      $ 38,628        35

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

     60     60     61     62     63     N/A   

Other

   $ 509      $ 500      $ 554      $ 648      $ 820        61

Other — TTM

   $ 1,586      $ 1,775      $ 1,970      $ 2,211      $ 2,523        59

Balance Sheet

            

Cash and marketable securities

   $ 9,576      $ 5,715      $ 4,970      $ 5,248      $ 11,448        20

Inventory, net — ending

   $ 4,992      $ 4,255      $ 4,380      $ 5,065      $ 6,031        21

Inventory turnover, average — TTM

     10.3        10.4        10.1        9.7        9.3        (10 %) 

Fixed assets, net

   $ 4,417      $ 4,653      $ 5,097      $ 5,662      $ 7,060        60

Accounts payable — ending

   $ 11,145      $ 6,886      $ 7,072      $ 8,369      $ 13,318        20

Accounts payable days — ending

     74        62        68        75        76        2

Other

            

WW shipping revenue

   $ 531      $ 461      $ 469      $ 517      $ 832        57

WW shipping costs

   $ 1,466      $ 1,129      $ 1,054      $ 1,153      $ 1,798        23

WW net shipping costs

   $ 935      $ 668      $ 585      $ 636      $ 966        3

WW net shipping costs — % of WW net sales

     5.4     5.1     4.6     4.6     4.5     N/A   

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

     56,200        65,600        69,100        81,400        88,400        57

 

(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.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
Sean Boyle, 206/266-2171    Ty Rogers, 206/266-7180
www.amazon.com/ir