EX-99.1 2 dex991.htm PRESS RELEASE DATED JANUARY 27, 2011 PRESS RELEASE DATED JANUARY 27, 2011

Exhibit 99.1

LOGO

AMAZON.COM ANNOUNCES FOURTH QUARTER SALES UP 36% TO $12.95 BILLION

SEATTLE—(BUSINESS WIRE)—January 27, 2011—Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its fourth quarter ended December 31, 2010.

Operating cash flow increased 6% to $3.50 billion for the trailing twelve months, compared with $3.29 billion for the trailing twelve months ended December 31, 2009. Free cash flow decreased 14% to $2.52 billion for the trailing twelve months, compared with $2.92 billion for the trailing twelve months ended December 31, 2009.

Common shares outstanding plus shares underlying stock-based awards totaled 465 million on December 31, 2010, compared with 461 million a year ago.

Net sales increased 36% to $12.95 billion in the fourth quarter, compared with $9.52 billion in fourth quarter 2009. Excluding the $139 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 37% compared with fourth quarter 2009.

Operating income was $474 million in the fourth quarter, compared with $476 million in fourth quarter 2009. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $18 million.

Net income increased 8% to $416 million in the fourth quarter, or $0.91 per diluted share, compared with net income of $384 million, or $0.85 per diluted share, in fourth quarter 2009.

“Thanks to our customers, we achieved two big milestones,” said Jeff Bezos, founder and CEO of Amazon.com. “We had our first $10 billion quarter, and after selling millions of third-generation Kindles with the new Pearl e-ink display during the quarter, Kindle books have now overtaken paperback books as the most popular format on Amazon.com. Last July we announced that Kindle books had passed hardcovers and predicted that Kindle would surpass paperbacks in the second quarter of this year, so this milestone has come even sooner than we expected – and it’s on top of continued growth in paperback sales.”

Full Year 2010

Net sales increased 40% to $34.20 billion, compared with $24.51 billion in 2009. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the year on net sales was $86 million.

Operating income increased 25% to $1.41 billion, compared with $1.13 billion in 2009. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the year on operating income was $28 million. In 2009, operating income was negatively impacted by a $51 million legal settlement.

Net income increased 28% to $1.15 billion in 2010, or $2.53 per diluted share, compared with net income of $902 million, or $2.04 per diluted share, in 2009.


Highlights

 

   

Amazon.com is now selling more Kindle books than paperback books. Since the beginning of the year, for every 100 paperback books Amazon has sold, the Company has sold 115 Kindle books. Additionally, during this same time period the Company has sold three times as many Kindle books as hardcover books. This is across Amazon.com’s entire U.S. book business and includes sales of books where there is no Kindle edition. Free Kindle books are excluded and if included would make the numbers even higher.

 

   

The Company sold millions of third-generation Kindle devices with the new advanced paper-like Pearl e-ink display in the fourth quarter and the third-generation Kindle eclipsed “Harry Potter and the Deathly Hallows” as the bestselling product in Amazon’s history.

 

   

The U.S. Kindle Store now has more than 810,000 books including New Releases and 107 of 112 New York Times Bestsellers. Over 670,000 of these books are $9.99 or less, including 74 New York Times Bestsellers. Millions of 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, launching a Kindle app for Windows Phone 7. In addition, the Kindle for Android app was updated to enable users to buy, read and sync over 100 Kindle newspapers and magazines. All Kindle apps let customers “Buy Once, Read Everywhere”—on Kindle, Kindle 3G, Kindle DX, iPad, iPod touch, iPhone, Mac, PC, BlackBerry and Android-based devices. 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 Company announced Price Check for iPhone, a new price comparison app that provides shoppers an easy way to compare in-store prices with the low prices from Amazon.com and other online merchants. Shoppers can use the app to scan a barcode, snap a picture, or say or type a product name to instantly see online prices for that item. Over the Black Friday-Cyber Monday weekend, mobile shoppers used Price Check to look up prices over a million times. In December, shoppers used the app more than two million times to check prices.

 

   

North America segment sales, representing the Company’s U.S. and Canadian sites, were $7.21 billion, up 45% from fourth quarter 2009.

 

   

International segment sales, representing the Company’s U.K., German, Japanese, French, Chinese and Italian sites, were $5.74 billion, up 26% from fourth quarter 2009. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 29%.

 

   

Worldwide Media sales grew 12% to $5.23 billion. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 13%.

 

   

Worldwide Electronics & Other General Merchandise sales grew 60% to $7.39 billion. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 62%.

 

   

The Company launched Amazon.it, an Italian-language website offering customers a vast selection of books, DVDs, video games, music and consumer electronics at everyday low prices. Amazon.it’s convenient services include Amazon Prime, the membership program with unlimited free guaranteed 2-3 day delivery at an annual fee of 9.99 Euros. The first product sold on Amazon.it was a Canon Pixma printer to a new Prime customer in Turino, Italy.

 

   

Amazon Web Services (AWS) announced lowered usage pricing on existing Premium Support offerings by 50% and added two new support plans to meet the needs of developers and enterprises of all sizes and technical ability. In addition to the existing Silver and Gold support plans, AWS now offers a Bronze support plan for $49 per month and a Platinum support plan that provides 15 minute response times and dedicated Technical Account Managers.

 

   

AWS achieved Level 1 Payment Card Industry (PCI) compliance, continuing its commitment to providing the security certifications developers and enterprises care about. Merchants and other service providers can now run their applications on AWS PCI-compliant technology infrastructure to store, process and transmit credit card information in the cloud.

 

   

AWS launched Elastic Beanstalk, an easy way for developers to quickly deploy applications to AWS and manage applications in the AWS cloud. Elastic Beanstalk automatically scales up and down as needed so developers don’t need to worry about configuring their infrastructure requirements in AWS. Unlike existing application containers or “platform as a service” offerings that force developers to accept infrastructure decisions predetermined by the vendor, Elastic Beanstalk allows developers to “open the hood” to tinker with the AWS resources powering their applications. AWS customers can now choose to have as much automation or as much control as they wish.


Financial Guidance

The following forward-looking statements reflect Amazon.com’s expectations as of January 27, 2011. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and consumer spending, world events, the rate of growth of the Internet and online commerce and the various factors detailed below

First Quarter 2011 Guidance

 

   

Net sales are expected to be between $9.1 billion and $9.9 billion, or to grow between 28% and 39% compared with first quarter 2010.

 

   

Operating income is expected to be between $260 million and $385 million, or between 34% decline and 2% decline compared with first quarter 2010.

 

   

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 (“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, 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, www.amazon.cn, and www.amazon.it. 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
December 31,
    Twelve Months Ended
December 31,
 
     2010     2009     2010     2009  

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

   $ 1,539      $ 2,514      $ 3,444      $ 2,769   

OPERATING ACTIVITIES:

        

Net income

     416        384        1,152        902   

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

     170        112        568        378   

Stock-based compensation

     120        100        424        341   

Other operating expense (income), net

     29        21        106        103   

Losses (gains) on sales of marketable securities, net

     —          (1     (2     (4

Other expense (income), net

     (17     6        (79     (15

Deferred income taxes

     48        (1     4        81   

Excess tax benefits from stock-based compensation

     (23     (52     (259     (105

Changes in operating assets and liabilities:

        

Inventories

     (693     (340     (1,019     (531

Accounts receivable, net and other

     (531     (509     (295     (481

Accounts payable

     3,442        2,231        2,373        1,859   

Accrued expenses and other

     596        429        740        300   

Additions to unearned revenue

     186        444        687        1,054   

Amortization of previously unearned revenue

     (263     (214     (905     (589
                                

Net cash provided by (used in) operating activities

     3,480        2,610        3,495        3,293   

INVESTING ACTIVITIES:

        

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

     (328     (137     (979     (373

Acquisitions, net of cash acquired, and other

     (271     1        (352     (40

Sales and maturities of marketable securities and other investments

     1,112        688        4,250        1,966   

Purchases of marketable securities and other investments

     (1,728     (2,160     (6,279     (3,890
                                

Net cash provided by (used in) investing activities

     (1,215     (1,608     (3,360     (2,337

FINANCING ACTIVITIES:

        

Excess tax benefits from stock-based compensation

     23        52        259        105   

Proceeds from long-term debt and other

     43        25        143        87   

Repayments of long-term debt and of capital and financing leases

     (100     (128     (221     (472
                                

Net cash provided by (used in) financing activities

     (34     (51     181        (280

Foreign-currency effect on cash and cash equivalents

     7        (21     17        (1
                                

Net increase (decrease) in cash and cash equivalents

     2,238        930        333        675   

CASH AND CASH EQUIVALENTS, END OF PERIOD

   $ 3,777      $ 3,444      $ 3,777      $ 3,444   
                                

SUPPLEMENTAL CASH FLOW INFORMATION:

        

Cash paid for interest

   $ 3      $ 2      $ 11      $ 32   

Cash paid for income taxes

     13        4        75        48   

Fixed assets acquired under capital leases

     122        50        405        147   

Fixed assets acquired under build-to-suit leases

     14        55        172        188   


AMAZON.COM, INC.

Consolidated Statements of Operations

(in millions, except per share data)

(unaudited)

 

     Three Months  Ended
December 31,
    Twelve Months  Ended
December 31,
 
     2010     2009     2010     2009  

Net sales

   $ 12,948      $ 9,519      $ 34,204      $ 24,509   

Operating expenses (1):

        

Cost of sales

     10,317        7,543        26,561        18,978   

Fulfillment

     1,090        755        2,898        2,052   

Marketing

     376        274        1,029        680   

Technology and content

     519        350        1,734        1,240   

General and administrative

     143        100        470        328   

Other operating expense (income), net (2)

     29        21        106        102   
                                

Total operating expenses

     12,474        9,043        32,798        23,380   
                                

Income from operations

     474        476        1,406        1,129   

Interest income

     14        9        51        37   

Interest expense

     (11     (8     (39     (34

Other income (expense), net

     29        (6     79        29   
                                

Total non-operating income (expense)

     32        (5     91        32   
                                

Income before income taxes

     506        471        1,497        1,161   

Provision for income taxes

     (84     (85     (352     (253

Equity-method investment activity, net of tax

     (6     (2     7        (6
                                

Net income

   $ 416      $ 384      $ 1,152      $ 902   
                                

Basic earnings per share

   $ 0.93      $ 0.87      $ 2.58      $ 2.08   
                                

Diluted earnings per share

   $ 0.91      $ 0.85      $ 2.53      $ 2.04   
                                

Weighted average shares used in computation of earnings per share:

        

Basic

     450        440        447        433   
                                

Diluted

     458        450        456        442   
                                

 

(1)    Includes stock-based compensation as follows:

        

Fulfillment

   $ 25      $ 23      $ 90      $ 79   

Marketing

     7        6        27        20   

Technology and content

     63        52        223        182   

General and administrative

     24        19        84        60   

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

        


AMAZON.COM, INC.

Segment Information

(in millions)

(unaudited)

 

     Three Months Ended
December 31,
    Twelve Months  Ended
December 31,
 
     2010     2009     2010     2009  

North America

        

Net sales

   $ 7,211      $ 4,956      $ 18,707      $ 12,828   

Segment operating expenses (1)

     6,916        4,678        17,752        12,119   
                                

Segment operating income

   $ 295      $ 278      $ 955      $ 709   
                                

International

        

Net sales

   $ 5,737      $ 4,563      $ 15,497      $ 11,681   

Segment operating expenses (1)

     5,410        4,244        14,516        10,818   
                                

Segment operating income

   $ 327      $ 319      $ 981      $ 863   
                                

Consolidated

        

Net sales

   $ 12,948      $ 9,519      $ 34,204      $ 24,509   

Segment operating expenses

     12,326        8,922        32,268        22,937   
                                

Segment operating income

     622        597        1,936        1,572   

Stock-based compensation

     (119     (100     (424     (341

Other operating income (expense), net (2)

     (29     (21     (106     (102
                                

Income from operations

     474        476        1,406        1,129   

Total non-operating income (expense)

     32        (5     91        32   

Provision for income taxes

     (84     (85     (352     (253

Equity-method investment activity, net of tax

     (6     (2     7        (6
                                

Net income

   $ 416      $ 384      $ 1,152      $ 902   
                                

Segment Highlights:

        

Y/Y net sales growth:

        

North America

     45     36     46     25

International

     26        49        33        31   

Consolidated

     36        42        40        28   

Y/Y segment operating income growth:

        

North America

     6     113     35     60

International

     3        39        14        33   

Consolidated

     4        66        23        44   

Net sales mix:

        

North America

     56     52     55     52

International

     44        48        45        48   
                                
     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
December 31,
    Twelve Months  Ended
December 31,
 
     2010     2009     2010     2009  

North America

        

Media

   $ 2,370      $ 2,099      $ 6,881      $ 5,964   

Electronics and other general merchandise

     4,558        2,662        10,998        6,314   

Other

     283        195        828        550   
                                

Total North America

   $ 7,211      $ 4,956      $ 18,707      $ 12,828   
                                

International

        

Media

   $ 2,865      $ 2,580      $ 8,007      $ 6,810   

Electronics and other general merchandise

     2,834        1,947        7,365        4,768   

Other

     38        36        125        103   
                                

Total International

   $ 5,737      $ 4,563      $ 15,497      $ 11,681   
                                

Consolidated

        

Media

   $ 5,235      $ 4,679      $ 14,888      $ 12,774   

Electronics and other general merchandise

     7,392        4,609        18,363        11,082   

Other

     321        231        953        653   
                                

Total Consolidated

   $ 12,948      $ 9,519      $ 34,204      $ 24,509   
                                

Y/Y Net Sales Growth:

        

North America:

        

Media

     13     20     15     11

Electronics and other general merchandise

     71        54        74        43   

Other

     45        33        50        23   

Total North America

     45        36        46        25   

International:

        

Media

     11     37     18     19

Electronics and other general merchandise

     46        68        54        53   

Other

     6        27        22        9   

Total International

     26        49        33        31   

Consolidated:

        

Media

     12     29     17     15

Electronics and other general merchandise

     60        60        66        47   

Other

     39        32        46        20   

Total Consolidated

     36        42        40        28   

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

        

International:

        

Media

     13     26     18     20

Electronics and other general merchandise

     50        56        57        56   

Other

     10        18        24        19   

Total International

     29        37        34        33   

Consolidated:

        

Media

     13     23     16     16

Electronics and other general merchandise

     62        54        67        48   

Other

     40        30        46        22   

Total Consolidated

     37        37        40        29   

Consolidated Net Sales Mix:

        

Media

     40     49     43     52

Electronics and other general merchandise

     57        48        54        45   

Other

     3        3        3        3   
                                
     100     100     100     100
                                


AMAZON.COM, INC.

Consolidated Balance Sheets

(in millions, except per share data)

 

     December 31,
2010
    December 31,
2009
 
ASSETS    (unaudited)        

Current assets:

    

Cash and cash equivalents

   $ 3,777      $ 3,444   

Marketable securities

     4,985        2,922   

Inventories

     3,202        2,171   

Accounts receivable, net and other

     1,587        988   

Deferred tax assets

     196        272   
                

Total current assets

     13,747        9,797   

Fixed assets, net

     2,414        1,290   

Deferred tax assets

     22        18   

Goodwill

     1,349        1,234   

Other assets

     1,265        1,474   
                

Total assets

   $ 18,797      $ 13,813   
                

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Current liabilities:

    

Accounts payable

   $ 8,051      $ 5,605   

Accrued expenses and other

     2,321        1,759   
                

Total current liabilities

     10,372        7,364   

Long-term liabilities

     1,561        1,192   

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 — 468 and 461

    

Outstanding shares — 451 and 444

     5        5   

Treasury stock, at cost

     (600     (600

Additional paid-in capital

     6,325        5,736   

Accumulated other comprehensive loss

     (190     (56

Retained earnings

     1,324        172   
                

Total stockholders’ equity

     6,864        5,257   
                

Total liabilities and stockholders’ equity

   $ 18,797      $ 13,813   
                


AMAZON.COM, INC.

Supplemental Financial Information and Business Metrics

(in millions, except per share data)

(unaudited)

 

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

Cash Flows and Shares

            

Operating cash flow — trailing twelve months (TTM)

   $ 3,293      $ 2,780      $ 2,561      $ 2,617      $ 3,495        6

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

   $ 373      $ 458      $ 575      $ 788      $ 979        163

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

   $ 2,920      $ 2,322      $ 1,986      $ 1,829      $ 2,516        (14 %) 

Free cash flow — TTM Y/Y growth

     114     62     29     (5 %)      (14 %)      N/A   

Invested capital (1)

   $ 4,449      $ 5,104      $ 5,820      $ 6,576      $ 7,380        N/A   

Return on invested capital (2)

     66     45     34     28     34     N/A   

Common shares and stock-based awards outstanding

     461        463        465        465        465        1

Common shares outstanding

     444        446        448        449        451        1

Stock-based awards outstanding

     17        18        17        16        15        (14 %) 

Stock-based awards outstanding — % of common shares outstanding

     3.8     4.0     3.8     3.6     3.2     N/A   

Results of Operations

            

Worldwide (WW) net sales

   $ 9,519      $ 7,131      $ 6,566      $ 7,560      $ 12,948        36

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

     37     42     42     40     37     N/A   

WW net sales — TTM

   $ 24,509      $ 26,750      $ 28,664      $ 30,776      $ 34,204        40

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

     29     33     38     40     40     N/A   

Operating income (3)

   $ 476      $ 394      $ 270      $ 268      $ 474        (0 %) 

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

     63     56     77     13     3     N/A   

Operating margin — % of WW net sales

     5.0     5.5     4.1     3.5     3.7     N/A   

Operating income — TTM (3)

   $ 1,129      $ 1,279      $ 1,391      $ 1,408      $ 1,406        25

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

     39     44     65     50     27     N/A   

Operating margin — TTM % of WW net sales

     4.6     4.8     4.9     4.6     4.1     N/A   

Net income (3)

   $ 384      $ 299      $ 207      $ 231      $ 416        8

Net income per diluted share

   $ 0.85      $ 0.66      $ 0.45      $ 0.51      $ 0.91        6

Net income — TTM (3)

   $ 902      $ 1,024      $ 1,088      $ 1,120      $ 1,152        28

Net income per diluted share — TTM

   $ 2.04      $ 2.30      $ 2.42      $ 2.47      $ 2.53        24

Segments

            

North America Segment:

            

Net sales

   $ 4,956      $ 3,780      $ 3,590      $ 4,126      $ 7,211        45

Net sales — Y/Y growth, excluding F/X

     36     46     46     45     45     N/A   

Net sales — TTM

   $ 12,828      $ 14,030      $ 15,168      $ 16,452      $ 18,707        46

Operating income

   $ 278      $ 273      $ 200      $ 186      $ 295        6

Operating margin — % of North America net sales

     5.6     7.2     5.6     4.5     4.1     N/A   

Operating income — TTM

   $ 709      $ 832      $ 907      $ 937      $ 955        35

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

     59     79     84     67     35     N/A   

Operating margin — TTM % of North America net sales

     5.5     5.9     6.0     5.7     5.1     N/A   

International Segment:

            

Net sales

   $ 4,563      $ 3,351      $ 2,976      $ 3,434      $ 5,737        26

Net sales — Y/Y growth, excluding F/X

     37     37     38     35     29     N/A   

Net sales — TTM

   $ 11,681      $ 12,720      $ 13,496      $ 14,324      $ 15,497        33

Net sales — TTM % of WW net sales

     48     48     47     47     45     N/A   

Operating income

   $ 319      $ 234      $ 206      $ 215      $ 327        3

Operating margin — % of International net sales

     7.0     7.0     6.9     6.2     5.7     N/A   

Operating income — TTM

   $ 863      $ 925      $ 952      $ 973      $ 981        14

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

     41     33     28     23     20     N/A   

Operating margin — TTM % of International net sales

     7.4     7.3     7.1     6.8     6.3     N/A   

Consolidated Segments:

            

Operating expenses (4)

   $ 8,922      $ 6,624      $ 6,160      $ 7,159      $ 12,326        38

Operating expenses — TTM (4)

   $ 22,937      $ 24,993      $ 26,805      $ 28,866      $ 32,268        40

Operating income

   $ 597      $ 507      $ 406      $ 401      $ 622        4

Operating margin — % of Consolidated sales

     6.3     7.1     6.2     5.3     4.8     N/A   

Operating income — TTM

   $ 1,572      $ 1,757      $ 1,859      $ 1,910      $ 1,936        23

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

     48     51     51     42     25     N/A   

Operating margin — TTM % of Consolidated net sales

     6.4     6.6     6.5     6.2     5.7     N/A   


AMAZON.COM, INC.

Supplemental Financial Information and Business Metrics

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

(unaudited)

 

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

Supplemental

            

Supplemental North America Segment Net Sales:

            

Media

   $ 2,099      $ 1,597      $ 1,324      $ 1,591      $ 2,370        13

Media — Y/Y growth, excluding F/X

     19     22     15     12     13     N/A   

Media — TTM

   $ 5,964      $ 6,255      $ 6,432      $ 6,610      $ 6,881        15

Electronics and other general merchandise

   $ 2,662      $ 2,024      $ 2,090      $ 2,326      $ 4,558        71

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

     54     73     76     80     71     N/A   

Electronics and other general merchandise — TTM

   $ 6,314      $ 7,166      $ 8,069      $ 9,103      $ 10,998        74

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

     49     51     53     55     59     N/A   

Other

   $ 195      $ 159      $ 176      $ 209      $ 283        45

Other — TTM

   $ 550      $ 608      $ 668      $ 739      $ 828        50

Supplemental International Segment Net Sales:

            

Media

   $ 2,580      $ 1,833      $ 1,550      $ 1,759      $ 2,865        11

Media — Y/Y growth, excluding F/X

     26     23     21     18     13     N/A   

Media — TTM

   $ 6,810      $ 7,225      $ 7,480      $ 7,723      $ 8,007        18

Electronics and other general merchandise

   $ 1,947      $ 1,489      $ 1,399      $ 1,644      $ 2,834        46

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

     56     61     63     60     50     N/A   

Electronics and other general merchandise — TTM

   $ 4,768      $ 5,382      $ 5,899      $ 6,478      $ 7,365        54

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

     41     42     44     45     48     N/A   

Other

   $ 36      $ 29      $ 27      $ 31      $ 38        6

Other — TTM

   $ 103      $ 114      $ 117      $ 123      $ 125        22

Supplemental Worldwide Net Sales:

            

Media

   $ 4,679      $ 3,430      $ 2,874      $ 3,350      $ 5,235        12

Media — Y/Y growth, excluding F/X

     23     22     18     15     13     N/A   

Media — TTM

   $ 12,774      $ 13,480      $ 13,912      $ 14,333      $ 14,888        17

Electronics and other general merchandise

   $ 4,609      $ 3,513      $ 3,489      $ 3,970      $ 7,392        60

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

     54     68     70     71     62     N/A   

Electronics and other general merchandise — TTM

   $ 11,082      $ 12,548      $ 13,968      $ 15,581      $ 18,363        66

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

     45     47     49     51     54     N/A   

Other

   $ 231      $ 188      $ 203      $ 240      $ 321        39

Other — TTM

   $ 653      $ 722      $ 785      $ 862      $ 953        46

Balance Sheet

            

Cash and marketable securities (5)

   $ 6,672      $ 5,381      $ 5,419      $ 6,123      $ 8,919        34

Inventory, net — ending

   $ 2,171      $ 1,820      $ 1,940      $ 2,515      $ 3,202        48

Inventory turnover, average — TTM

     12.2        12.6        12.5        11.8        11.4        (7 %) 

Fixed assets, net

   $ 1,290      $ 1,436      $ 1,704      $ 2,099      $ 2,414        87

Accounts payable — ending

   $ 5,605      $ 3,619      $ 3,545      $ 4,614      $ 8,051        44

Accounts payable days — ending

     68        59        65        73        72        5

Other

            

WW shipping revenue

   $ 341      $ 248      $ 239      $ 270      $ 437        28

WW shipping costs

   $ 696      $ 518      $ 487      $ 576      $ 999        44

WW net shipping costs

   $ 355      $ 270      $ 248      $ 306      $ 562        58

WW net shipping costs — % of WW net sales

     3.7     3.8     3.8     4.0     4.3     N/A   

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

     24,300        26,100        28,300        31,200        33,700        39

 

(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: $306 million in Q4 2009, $318 million Q1 2010, $311 million in Q2 2010, $238 million in Q3 2010 and $157 million in Q4 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, www.amazon.cn and www.amazon.it, 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    Amazon.com Public Relations
Rob Eldridge, 206/266-2171    Mary Osako, 206/266-7180
www.amazon.com/ir