EX-99.1 2 dex991.htm PRESS RELEASE DATED OCTOBER 21, 2010 Press Release Dated October 21, 2010

 

Exhibit 99.1

LOGO

AMAZON.COM ANNOUNCES THIRD QUARTER SALES UP 39% TO $7.56 BILLION

SEATTLE—(BUSINESS WIRE)—October 21, 2010—Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its third quarter ended September 30, 2010.

Operating cash flow increased 16% to $2.62 billion for the trailing twelve months, compared with $2.25 billion for the trailing twelve months ended September 30, 2009. Free cash flow decreased 5% to $1.83 billion for the trailing twelve months, compared with $1.92 billion for the trailing twelve months ended September 30, 2009.

Common shares outstanding plus shares underlying stock-based awards totaled 465 million on September 30, 2010, compared with 451 million a year ago.

Net sales increased 39% to $7.56 billion in the third quarter, compared with $5.45 billion in third quarter 2009. Excluding the $83 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 40% compared with third quarter 2009.

Operating income increased 7% to $268 million in the third quarter, compared with $251 million in third quarter 2009. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $15 million.

Net income increased 16% to $231 million in the third quarter, or $0.51 per diluted share, compared with net income of $199 million, or $0.45 per diluted share, in third quarter 2009.

“Every year for the last 15 years we’ve worked to improve the things customers care about, and this year is no exception,” said Jeff Bezos, founder and CEO of Amazon.com. “This holiday season we’ll have the best prices, the biggest selection, the highest in-stock, and the fastest delivery in our history.”

Highlights

 

   

Amazon began shipping a new Kindle that offers an electronic-ink screen with 50 percent better contrast, a 21 percent smaller body, a 15 percent lighter weight, 20 percent faster page turns, up to one-month of battery life with wireless off, double the storage, and built-in Wi-Fi—all for only $139. Kindle 3G adds free 3G wireless—no monthly bills or annual contracts—all for only $189.

 

   

The new generation Kindle devices are the fastest-selling Kindles of all time and the bestselling products on Amazon.com and Amazon.co.uk. More new generation Kindle devices were ordered in the first twelve weeks of availability than in the same time frame following any other Kindle launch. In addition, in the twelve weeks following the introduction of the new generation of Kindles, customers ordered more Kindle devices on Amazon.com and Amazon.co.uk than any other product.

 

   

The U.S. Kindle Store now has more than 720,000 books, including New Releases and 108 of 111 New York Times Best Sellers. Over 590,000 of these books are $9.99 or less, including 78 New York Times Best Sellers. Over 1.8 million free, out-of-copyright, pre-1923 books are also available to read on Kindle.

 

   

Amazon added to its growing list of Buy Once, Read Everywhere Kindle apps, announcing it will launch a Kindle App for the new BlackBerry PlayBook tablet computer. All Kindle apps let customers Buy Once, Read Everywhere—on Kindle, Kindle 3G, Kindle DX, iPad, iPod touch, iPhone, Mac, PC, BlackBerry, Android-based devices, and in the coming months the BlackBerry PlayBook. All Kindle apps are free and incorporate Amazon’s Whispersync technology, which allows readers to seamlessly switch between devices. With Kindle Worry-Free Archive, books purchased from the Kindle Store are automatically backed up online in the Kindle library on Amazon where they can be re-downloaded wirelessly for free, anytime.


 

   

The popular Kindle for Android app was updated with a number of new features that allow customers to search the full text of Kindle books by voice or text, seamlessly look up words and phrases in Wikipedia, lock screen orientation in portrait or landscape mode, and view details about a book on Shelfari, the books-focused social networking site—all without leaving the app.

 

   

Amazon announced that it will launch “Kindle Singles”—compelling ideas expressed at their natural length. Kindle Singles, which can be twice the length of a New Yorker feature or as much as a few chapters of a typical book might be the perfect, natural length to lay out a single killer idea, well researched, well argued and well illustrated—whether it’s a business lesson, a political point of view, a scientific argument, or a beautifully crafted essay on a current event. Kindle Singles will have their own section in the Kindle Store and be priced much lower than a typical book.

 

   

North America segment sales, representing the Company’s U.S. and Canadian sites, were $4.13 billion, up 45% from third quarter 2009.

 

   

International segment sales, representing the Company’s U.K., German, Japanese, French and Chinese sites, were $3.43 billion, up 32% from third quarter 2009. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 35%.

 

   

Worldwide Media sales grew 14% to $3.35 billion. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 15%.

 

   

Worldwide Electronics & Other General Merchandise sales grew 68% to $3.97 billion. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 71%.

 

   

Amazon.com announced the launch of Amazon Mom—a new, free membership program that offers exclusive promotions and discounts available only to parents and caregivers. Customers who sign up for Amazon Mom can receive one year of Amazon Prime’s Unlimited Free Two-Day Shipping on items ranging from baby bottles to video cameras, and 30 percent off select diapers and wipes with Subscribe & Save.

 

   

The Company introduced Amazon Student, offering college students Amazon Prime Unlimited Free Two-Day Shipping free for one year on textbooks and millions of other items.

 

   

The Company announced the Heidi Klum for New Balance collection, exclusively available at Amazon.com. The collection includes tunics, knits, woven tops, leggings and outerwear pieces, all created for active women and featuring high-end fabrics such as cashmere blends, cottons and silks.

 

   

Amazon Elastic Compute Cloud (EC2) and Amazon Relational Database Service (RDS) lowered On-Demand and Reserved Instance prices for their largest high-memory instances, making it even more cost efficient for developers to take advantage of Amazon Web Services (AWS).

 

   

AWS announced the launch of a free usage tier. Beginning November 1, new AWS customers will be able to run a free Amazon EC2 instance for a year, while also leveraging a new free usage tier for Amazon S3, Amazon Elastic Block Store, Amazon Elastic Load Balancer, and AWS data transfer. This will enable developers to launch new applications, broaden their AWS knowledge, or simply gain hands-on familiarity with the services—all while incurring no charges.

 

   

AWS announced that a wide selection of Oracle enterprise software, including Oracle E-Business Suite, PeopleSoft Enterprise, Siebel CRM, Oracle Fusion Middleware, Oracle Database, and Oracle Linux, has been certified to run on Amazon EC2, enabling customers who power their businesses with Oracle software to fully leverage the scalability, reliability, and utility-based pricing model of AWS.

Financial Guidance

The following forward-looking statements reflect Amazon.com’s expectations as of October 21, 2010. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and consumer spending, world events, the rate of growth of the Internet and online commerce and the various factors detailed below.

Fourth Quarter 2010 Guidance

 

   

Net sales are expected to be between $12.0 billion and $13.3 billion, or to grow between 26% and 40% compared with fourth quarter 2009.

 

   

Operating income is expected to be between $360 million and $560 million, or between 24% decline and 18% growth compared with fourth quarter 2009.

 

   

This guidance includes approximately $140 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 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, including its most recent Annual Report on Form 10-K and subsequent filings.

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, Kindle 3G and Kindle DX are the revolutionary portable readers that wirelessly download books, magazines, newspapers, blogs and personal documents to a crisp, high-resolution electronic ink display that looks and reads like real paper. Kindle 3G and Kindle DX utilize the same 3G wireless technology as advanced cell phones, so users never need to hunt for a Wi-Fi hotspot. Kindle is the #1 bestselling product across the millions of items sold on Amazon.

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, and www.amazon.cn. 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     Nine Months Ended     Twelve Months Ended  
     September 30,     September 30,     September 30,  
     2010     2009     2010     2009     2010     2009  

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

   $ 1,629      $ 1,936      $ 3,444      $ 2,769      $ 2,514      $ 1,650   

OPERATING ACTIVITIES:

            

Net income

     231        199        736        518        1,120        743   

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

            

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

     150        96        399        266        510        343   

Stock-based compensation

     107        90        304        242        404        320   

Other operating expense (income), net

     26        9        77        80        98        90   

Losses (gains) on sales of marketable securities, net

     (2     (1     (2     (3     (2     (3

Other expense (income), net

     (35     (9     (62     (21     (56     (38

Deferred income taxes

     (16     77        (44     84        (44     125   

Excess tax benefits (charges) from stock-based compensation

     (75     17        (236     (52     (288     (52

Changes in operating assets and liabilities:

            

Inventories

     (505     (276     (326     (192     (666     (293

Accounts receivable, net and other

     (64     (155     348        28        (161     (296

Accounts payable

     894        701        (1,078     (372     1,152        964   

Accrued expenses and other

     192        (3     31        (131     460        77   

Additions to unearned revenue

     152        197        502        610        946        772   

Amortization of previously unearned revenue

     (200     (143     (642     (375     (856     (499
                                                

Net cash provided by (used in) operating activities

     855        799        7        682        2,617        2,253   

INVESTING ACTIVITIES:

            

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

     (315     (103     (651     (236     (788     (337

Acquisitions, net of cash acquired, and other

     (42     (5     (82     (40     (81     (127

Sales and maturities of marketable securities and other investments

     1,059        586        3,139        1,277        3,827        1,550   

Purchases of marketable securities and other investments

     (1,830     (780     (4,551     (1,730     (6,711     (2,179
                                                

Net cash provided by (used in) investing activities

     (1,128     (302     (2,145     (729     (3,753     (1,093

FINANCING ACTIVITIES:

            

Excess tax benefits (charges) from stock-based compensation

     75        (17     236        53        288        52   

Common stock repurchased

     —          —          —          —          —          (100

Proceeds from long-term debt and other

     67        101        110        97        125        149   

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

     (49     (20     (122     (379     (241     (394
                                                

Net cash provided by (used in) financing activities

     93        64        224        (229     172        (293

Foreign-currency effect on cash and cash equivalents

     90        17        9        21        (11     (3
                                                

Net increase (decrease) in cash and cash equivalents

     (90     578        (1,905     (255     (975     864   

CASH AND CASH EQUIVALENTS, END OF PERIOD

   $ 1,539      $ 2,514      $ 1,539      $ 2,514      $ 1,539      $ 2,514   
                                                

SUPPLEMENTAL CASH FLOW INFORMATION:

            

Cash paid for interest

   $ 3      $ 2      $ 8      $ 30      $ 10      $ 32   

Cash paid for income taxes

     16        10        62        44        66        69   

Fixed assets acquired under capital leases

     141        60        283        97        333        141   

Fixed assets acquired under build-to-suit leases

     39        16        159        133        214        170   


 

AMAZON.COM, INC.

Consolidated Statements of Operations

(in millions, except per share data)

(unaudited)

 

     Three Months Ended     Nine Months Ended  
     September 30,     September 30,  
     2010     2009     2010     2009  

Net sales

   $ 7,560      $ 5,449      $ 21,257      $ 14,989   

Operating expenses (1):

        

Cost of sales

     5,786        4,176        16,244        11,435   

Fulfillment

     680        466        1,808        1,297   

Marketing

     241        149        653        406   

Technology and content

     442        315        1,216        890   

General and administrative

     117        83        327        228   

Other operating expense (income), net (2)

     26        9        77        80   
                                

Total operating expenses

     7,292        5,198        20,325        14,336   
                                

Income from operations

     268        251        932        653   

Interest income

     13        7        36        28   

Interest expense

     (11     (7     (28     (26

Other income (expense), net

     22        11        50        35   
                                

Total non-operating income (expense)

     24        11        58        37   
                                

Income before income taxes

     292        262        990        690   

Provision for income taxes

     (79     (60     (267     (169

Equity-method investment activity, net of tax

     18        (3     13        (3
                                

Net income

   $ 231      $ 199      $ 736      $ 518   
                                

Basic earnings per share

   $ 0.51      $ 0.46      $ 1.65      $ 1.20   
                                

Diluted earnings per share

   $ 0.51      $ 0.45      $ 1.62      $ 1.18   
                                

Weighted average shares used in computation of earnings per share:

        

Basic

     448        432        447        431   
                                

Diluted

     456        441        455        439   
                                

 

(1)     Includes stock-based compensation as follows:

        

Fulfillment

   $ 23      $ 22      $ 65      $ 57   

Marketing

     7        5        19        14   

Technology and content

     56        48        159        130   

General and administrative

     21        15        61        41   
(2)     Q2 2009 was negatively impacted by a $51 million legal settlement.         


 

AMAZON.COM, INC.

Segment Information

(in millions)

(unaudited)

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2010     2009     2010     2009  

North America

        

Net sales

   $ 4,126      $ 2,843      $ 11,496      $ 7,872   

Operating expenses

        

Cost of sales

     3,011        2,091        8,343        5,754   

Direct segment operating expenses (1)

     929        596        2,494        1,687   
                                

Segment operating income

   $ 186      $ 156      $ 659      $ 431   
                                

International

        

Net sales

   $ 3,434      $ 2,606      $ 9,761      $ 7,117   

Operating expenses

        

Cost of sales

     2,775        2,085        7,901        5,681   

Direct segment operating expenses (1)

     444        327        1,206        892   
                                

Segment operating income

   $ 215      $ 194      $ 654      $ 544   
                                

Consolidated

        

Net sales

   $ 7,560      $ 5,449      $ 21,257      $ 14,989   

Operating expenses

        

Cost of sales

     5,786        4,176        16,244        11,435   

Direct segment operating expenses

     1,373        923        3,700        2,579   
                                

Segment operating income

     401        350        1,313        975   

Stock-based compensation

     (107     (90     (304     (242

Other operating income (expense), net (2)

     (26     (9     (77     (80
                                

Income from operations

     268        251        932        653   

Total non-operating income (expense)

     24        11        58        37   

Provision for income taxes

     (79     (60     (267     (169

Equity-method investment activity, net of tax

     18        (3     13        (3
                                

Net income

   $ 231      $ 199      $ 736      $ 518   
                                

Segment Highlights:

        

Y/Y net sales growth:

        

North America

     45     23     46     19

International

     32        33        37        21   

Consolidated

     39        28        42        20   

Y/Y segment operating income growth:

        

North America

     19     77     53     37

International

     11        36        20        30   

Consolidated

     15        52        35        33   

Net sales mix:

        

North America

     55     52     54     53

International

     45        48        46        47   
                                
     100     100     100     100
                                

 

(1) A majority of our costs for “Technology and content” are incurred in the United States and most of these costs are allocated to our North America segment.

 

(2) Q2 2009 was negatively impacted by a $51 million legal settlement.


 

AMAZON.COM, INC.

Supplemental Net Sales Information

(in millions)

(unaudited)

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2010     2009     2010     2009  

North America

        

Media

   $ 1,591      $ 1,412      $ 4,512      $ 3,865   

Electronics and other general merchandise

     2,326        1,293        6,440        3,652   

Other

     209        138        544        355   
                                

Total North America

   $ 4,126      $ 2,843      $ 11,496      $ 7,872   
                                

International

        

Media

   $ 1,759      $ 1,517      $ 5,142      $ 4,229   

Electronics and other general merchandise

     1,644        1,064        4,531        2,821   

Other

     31        25        88        67   
                                

Total International

   $ 3,434      $ 2,606      $ 9,761      $ 7,117   
                                

Consolidated

        

Media

   $ 3,350      $ 2,929      $ 9,654      $ 8,094   

Electronics and other general merchandise

     3,970        2,357        10,971        6,473   

Other

     240        163        632        422   
                                

Total Consolidated

   $ 7,560      $ 5,449      $ 21,257      $ 14,989   
                                

Y/Y Net Sales Growth:

        

North America:

        

Media

     13     13     17     7

Electronics and other general merchandise

     80        36        76        35   

Other

     52        29        53        18   

Total North America

     45        23        46        19   

International:

        

Media

     16     22     22     10

Electronics and other general merchandise

     54        54        61        44   

Other

     26        4        30        2   

Total International

     32        33        37        21   

Consolidated:

        

Media

     14     17     19     9

Electronics and other general merchandise

     68        44        69        39   

Other

     48        25        50        15   

Total Consolidated

     39        28        42        20   

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

        

International:

        

Media

     18     22     20     17

Electronics and other general merchandise

     60        58        61        56   

Other

     33        14        32        19   

Total International

     35        35        37        30   

Consolidated:

        

Media

     15     18     18     13

Electronics and other general merchandise

     71        45        70        44   

Other

     49        26        50        18   

Total Consolidated

     40        29        41        25   

Consolidated Net Sales Mix:

        

Media

     44     54     45     54

Electronics and other general merchandise

     53        43        52        43   

Other

     3        3        3        3   
                                
     100     100     100     100
                                


 

AMAZON.COM, INC.

Consolidated Balance Sheets

(in millions, except per share data)

 

     September 30,
2010
    December 31,
2009
    September 30,
2009
 
     (unaudited)           (unaudited)  

ASSETS

      

Current assets:

      

Cash and cash equivalents

   $ 1,539      $ 3,444      $ 2,514   

Marketable securities

     4,346        2,922        1,487   

Inventories

     2,515        2,171        1,617   

Accounts receivable, net and other

     959        988        671   

Deferred tax assets

     200        272        80   
                        

Total current assets

     9,559        9,797        6,369   

Fixed assets, net

     2,099        1,290        1,086   

Deferred tax assets

     43        18        206   

Goodwill

     1,277        1,234        457   

Other assets

     1,184        1,474        854   
                        

Total assets

   $ 14,162      $ 13,813      $ 8,972   
                        

LIABILITIES AND STOCKHOLDERS’ EQUITY

      

Current liabilities:

      

Accounts payable

   $ 4,614      $ 5,605      $ 3,354   

Accrued expenses and other

     1,761        1,759        1,183   
                        

Total current liabilities

     6,375        7,364        4,537   

Long-term debt

     164        109        116   

Other long-term liabilities

     1,226        1,083        734   

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 — 464, 461 and 449

      

Outstanding shares — 448, 444 and 433

     5        5        4   

Treasury stock, at cost

     (600     (600     (600

Additional paid-in capital

     6,215        5,736        4,428   

Accumulated other comprehensive loss

     (131     (56     (35

Retained earnings (accumulated deficit)

     908        172        (212
                        

Total stockholders’ equity

     6,397        5,257        3,585   
                        

Total liabilities and stockholders’ equity

   $ 14,162      $ 13,813      $ 8,972   
                        


 

AMAZON.COM, INC.

Supplemental Financial Information and Business Metrics

(in millions, except per share data)

(unaudited)

 

     Q3 2009     Q4 2009     Q1 2010     Q2 2010     Q3 2010     Y/Y %
Change
 

Cash Flows and Shares

            

Operating cash flow — trailing twelve months (TTM)

   $ 2,253      $ 3,293      $ 2,780      $ 2,561      $ 2,617        16

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

   $ 337      $ 373      $ 458      $ 575      $ 788        134

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

   $ 1,916      $ 2,920      $ 2,322      $ 1,986      $ 1,829        (5 %) 

Free cash flow — TTM Y/Y growth

     98     114     62     29     (5 %)      N/A   

Invested capital (1)

   $ 3,847      $ 4,449      $ 5,104      $ 5,820        6,576        N/A   

Return on invested capital (2)

     50     66     45     34     28     N/A   

Common shares and stock-based awards outstanding

     451        461        463        465        465        3

Common shares outstanding

     433        444        446        448        449        4

Stock-based awards outstanding

     18        17        18        17        16        (11 %) 

Stock-based awards outstanding — % of common shares outstanding

     4.2     3.8     4.0     3.8     3.6     N/A   

Results of Operations

            

Worldwide (WW) net sales

   $ 5,449      $ 9,519      $ 7,131      $ 6,566      $ 7,560        39

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

     29     37     42     42     40     N/A   

WW net sales — TTM

   $ 21,693      $ 24,509      $ 26,750      $ 28,664      $ 30,776        42

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

     24     29     33     38     40     N/A   

Operating income (3)

   $ 251      $ 476      $ 394      $ 270      $ 268        7

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

     69     63     56     77     13     N/A   

Operating margin — % of WW net sales

     4.6     5.0     5.5     4.1     3.5     N/A   

Operating income — TTM (3)

   $ 925      $ 1,129      $ 1,279      $ 1,391      $ 1,408        52

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

     22     39     44     65     50     N/A   

Operating margin — TTM % of WW net sales

     4.3     4.6     4.8     4.9     4.6     N/A   

Net income (3)

   $ 199      $ 384      $ 299      $ 207      $ 231        16

Net income per diluted share

   $ 0.45      $ 0.85      $ 0.66      $ 0.45      $ 0.51        12

Net income — TTM (3)

   $ 743      $ 902      $ 1,024      $ 1,088      $ 1,120        51

Net income per diluted share — TTM

   $ 1.69      $ 2.04      $ 2.30      $ 2.42      $ 2.47        46

Segments

            

North America Segment:

            

Net sales

   $ 2,843      $ 4,956      $ 3,780      $ 3,590      $ 4,126        45

Net sales — Y/Y growth, excluding F/X

     24     36     46     46     45     N/A   

Net sales — TTM

   $ 11,503      $ 12,828      $ 14,030      $ 15,168      $ 16,452        43

Operating income

   $ 156      $ 278      $ 273      $ 200      $ 186        19

Operating margin — % of North America net sales

     5.5     5.6     7.2     5.6     4.5     N/A   

Operating income — TTM

   $ 562      $ 709      $ 832      $ 907      $ 937        67

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

     20     59     79     84     67     N/A   

Operating margin — TTM % of North America net sales

     4.9     5.5     5.9     6.0     5.7     N/A   

International Segment:

            

Net sales

   $ 2,606      $ 4,563      $ 3,351      $ 2,976      $ 3,434        32

Net sales — Y/Y growth, excluding F/X

     35     37     37     38     35     N/A   

Net sales — TTM

   $ 10,190      $ 11,681      $ 12,720      $ 13,496      $ 14,324        41

Net sales — TTM % of WW net sales

     47     48     48     47     47     N/A   

Operating income

   $ 194      $ 319      $ 234      $ 206      $ 215        11

Operating margin — % of International net sales

     7.4     7.0     7.0     6.9     6.2     N/A   

Operating income — TTM

   $ 773      $ 863      $ 925      $ 952      $ 973        26

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

     49     41     33     28     23     N/A   

Operating margin — TTM % of International net sales

     7.6     7.4     7.3     7.1     6.8     N/A   

Consolidated Segments:

            

Operating expenses (4)

   $ 5,099      $ 8,922      $ 6,624      $ 6,160      $ 7,159        40

Operating expenses — TTM (4)

   $ 20,358      $ 22,937      $ 24,993      $ 26,805      $ 28,866        42

Operating income

   $ 350      $ 597      $ 507      $ 406      $ 401        15

Operating margin — % of consolidated sales

     6.4     6.3     7.1     6.2     5.3     N/A   

Operating income — TTM

   $ 1,335      $ 1,572      $ 1,757      $ 1,859      $ 1,910        43

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

     35     48     51     51     42     N/A   

Operating margin — TTM % of consolidated net sales

     6.2     6.4     6.6     6.5     6.2     N/A   


 

AMAZON.COM, INC.

Supplemental Financial Information and Business Metrics

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

(unaudited)

 

     Q3 2009     Q4 2009     Q1 2010     Q2 2010     Q3 2010     Y/Y %
Change
 

Supplemental

            

Supplemental North America Segment Net Sales:

            

Media

   $ 1,412      $ 2,099      $ 1,597      $ 1,324      $ 1,591        13

Media — Y/Y growth, excluding F/X

     14     19     22     15     12     N/A   

Media — TTM

   $ 5,616      $ 5,964      $ 6,255      $ 6,432      $ 6,610        18

Electronics and other general merchandise

   $ 1,293      $ 2,662      $ 2,024      $ 2,090      $ 2,326        80

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

     36     54     73     76     80     N/A   

Electronics and other general merchandise — TTM

   $ 5,385      $ 6,314      $ 7,166      $ 8,069      $ 9,103        69

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

     47     49     51     53     55     N/A   

Other

   $ 138      $ 195      $ 159      $ 176      $ 209        52

Other — TTM

   $ 502      $ 550      $ 608      $ 668      $ 739        47

Supplemental International Segment Net Sales:

            

Media

   $ 1,517      $ 2,580      $ 1,833      $ 1,550      $ 1,759        16

Media — Y/Y growth, excluding F/X

     22     26     23     21     18     N/A   

Media — TTM

   $ 6,118      $ 6,810      $ 7,225      $ 7,480      $ 7,723        26

Electronics and other general merchandise

   $ 1,064      $ 1,947      $ 1,489      $ 1,399      $ 1,644        54

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

     58     56     61     63     60     N/A   

Electronics and other general merchandise — TTM

   $ 3,977      $ 4,768      $ 5,382      $ 5,899      $ 6,478        63

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

     39     41     42     44     45     N/A   

Other

   $ 25      $ 36      $ 29      $ 27      $ 31        26

Other — TTM

   $ 95      $ 103      $ 114      $ 117      $ 123        29

Supplemental Worldwide Net Sales:

            

Media

   $ 2,929      $ 4,679      $ 3,430      $ 2,874      $ 3,350        14

Media — Y/Y growth, excluding F/X

     18     23     22     18     15     N/A   

Media — TTM

   $ 11,734      $ 12,774      $ 13,480      $ 13,912      $ 14,333        22

Electronics and other general merchandise

   $ 2,357      $ 4,609      $ 3,513      $ 3,489      $ 3,970        68

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

     45     54     68     70     71     N/A   

Electronics and other general merchandise — TTM

   $ 9,362      $ 11,082      $ 12,548      $ 13,968      $ 15,581        66

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

     43     45     47     49     51     N/A   

Other

   $ 163      $ 231      $ 188      $ 203      $ 240        48

Other — TTM

   $ 597      $ 653      $ 722      $ 785      $ 862        44

Balance Sheet

            

Cash and marketable securities (5)

   $ 4,304      $ 6,672      $ 5,381      $ 5,419      $ 6,123        42

Inventory, net — ending

   $ 1,617      $ 2,171      $ 1,820      $ 1,940      $ 2,515        56

Inventory turnover, average — TTM

     12.1        12.2        12.6        12.5        11.8        (3 %) 

Fixed assets, net

   $ 1,086      $ 1,290      $ 1,436      $ 1,704      $ 2,099        93

Accounts payable — ending

   $ 3,354      $ 5,605      $ 3,619      $ 3,545      $ 4,614        38

Accounts payable days — ending

     72        68        59        65        73        2

Other

            

WW shipping revenue

   $ 208      $ 341      $ 248      $ 239      $ 270        30

WW shipping costs

   $ 388      $ 696      $ 518      $ 487      $ 576        48

WW net shipping costs

   $ 180      $ 355      $ 270      $ 248      $ 306        70

WW net shipping costs — % of WW net sales

     3.3     3.7     3.8     3.8     4.0     N/A   

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

     21,700        24,300        26,100        28,300        31,200        44

 

(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) Q2 2009 was negatively impacted by a $51 million legal settlement.
(4) Represents cost of sales, fulfillment, marketing, technology and content, and general and administrative operating expenses, excluding stock-based compensation.
(5) Includes restricted cash, classified within “Other Assets” on our consolidated balance sheet, of: $303 million in Q3 2009, $306 million in Q4 2009, $318 million in Q1 2010, $311 million in Q2 2010 and $238 million in Q3 2010.  


 

Amazon.com, Inc.

Certain Definitions

Customer Accounts

 

   

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

Seller Accounts

 

   

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

Registered Developers

 

   

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

Units

 

   

References to units mean physical and digital units sold (net of returns and cancellations) by us and sellers at Amazon.com domains worldwide – such as www.amazon.com, www.amazon.co.uk, www.amazon.de, www.amazon.co.jp, www.amazon.fr, www.amazon.ca and www.amazon.cn, as well as Amazon.com-owned items sold through non-Amazon.com domains. Units sold do not include units associated with certain of our acquisitions or Amazon.com gift certificates.

 

Contacts:

Amazon.com Investor Relations

Rob Eldridge, 206/266-2171

www.amazon.com/ir

  

    

Amazon.com Public Relations

Mary Osako, 206/266-7180