EX-99.1 2 dex991.htm PRESS RELEASE PRESS RELEASE

Exhibit 99.1

LOGO

AMAZON.COM ANNOUNCES SECOND QUARTER SALES UP 51% TO $9.91 BILLION

SEATTLE—(BUSINESS WIRE)—July 26, 2011—Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its second quarter ended June 30, 2011.

Operating cash flow increased 25% to $3.21 billion for the trailing twelve months, compared with $2.56 billion for the trailing twelve months ended June 30, 2010. Free cash flow decreased 8% to $1.83 billion for the trailing twelve months, compared with $1.99 billion for the trailing twelve months ended June 30, 2010.

Common shares outstanding plus shares underlying stock-based awards totaled 468 million on June 30, 2011, compared with 465 million a year ago.

Net sales increased 51% to $9.91 billion in the second quarter, compared with $6.57 billion in second quarter 2010. Excluding the $477 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 44% compared with second quarter 2010.

Operating income was $201 million in the second quarter, compared with $270 million in second quarter 2010. The favorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $28 million.

Net income decreased 8% to $191 million in the second quarter, or $0.41 per diluted share, compared with net income of $207 million, or $0.45 per diluted share, in second quarter 2010. Second quarter 2011 net income was positively impacted by equity-method investment activity of $15 million, including a $49 million gain on the sale of an equity position partially offset by $34 million in losses from equity-method investments.

“Low prices, expanding selection, fast delivery and innovation are driving the fastest growth we’ve seen in over a decade,” said Jeff Bezos, founder and CEO of Amazon.com. “Kindle 3G with Special Offers has quickly become our bestselling Kindle at only $139. Customers love the convenience of a 3G reader — no hunting for or paying for Wi-Fi hotspots. Amazon picks up the tab for the 3G wireless, so you have no monthly payments or annual contracts.”

Highlights

 

   

Sales growth of Kindle devices accelerated in second quarter 2011 compared to first quarter 2011.

 

   

Since AT&T agreed to sponsor screensavers, Kindle 3G with Special Offers is now our bestselling Kindle device – at only $139. With Kindle 3G, there’s no wireless set up and no paying or hunting for Wi-Fi hotspots. Kindle 3G’s always-on global wireless connectivity means that wherever you are, you can download books and periodicals in less than 60 seconds and start reading instantly. Amazon pays for Kindle’s 3G wireless connectivity, which means the convenience of 3G comes with no monthly fees, data plans or annual contracts.

 

   

Amazon.com announced the launch of Kindle Textbook Rental, offering students savings of up to 80% off textbook list prices. Tens of thousands of textbooks are available for the 2011 school year. In addition, Kindle Textbook Rental offers the ability to customize rental periods to any length between 30 and 360 days, so students only pay for the specific amount of time they need a book.

 

   

The U.S. Kindle Store now has more than 950,000 books, including New Releases and 110 of 111 New York Times Bestsellers. Over 800,000 of these books are $9.99 or less, including 65 New York Times Bestsellers. Millions of free, out-of-copyright, pre-1923 books are also available to read on Kindle.

 

   

The Company launched MyHabit.com, a membership-only fashion destination offering up to 60 percent off list prices of designer and boutique brands in women’s, men’s and children’s departments, with the convenience of free, instant membership; fast, free shipping and free return shipping in the U.S. on eligible items; and fast, $15 international shipping.

 

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Amazon.com announced that customers will be able to stream TV shows from CBS’s vast library. Amazon Prime customers will be able to instantly watch thousands of episodes from the CBS library at no additional cost to their membership. With the deal, Amazon will add 2,000 episodes to grow the total number of Prime instant videos to more than 8,000 movies and TV shows. Starting this summer, dozens of CBS shows will also become available to Amazon Instant Video customers.

 

   

The Company announced three enhancements to Amazon Cloud Drive and Cloud Player: storage plans that include unlimited space for music, free storage for all Amazon MP3 purchases and Cloud Player for Web, now on iPad.

 

   

Amazon announced that Marketplace sellers can list their products across all its European websites using just one single seller account, allowing sellers to make their inventory available across Amazon.co.uk, Amazon.de, Amazon.fr and Amazon.it. Customers benefit from access to millions of additional products. Fulfillment by Amazon (FBA) sellers can now also store their products in an Amazon fulfillment center in one country and offer them for sale across all of Amazon’s European websites.

 

   

North America segment sales, representing the Company’s U.S. and Canadian sites, were $5.41 billion, up 51% from second quarter 2010.

 

   

International segment sales, representing the Company’s U.K., German, Japanese, French, Chinese and Italian sites, were $4.51 billion, up 51% from second quarter 2010. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 36%.

 

   

Worldwide Media sales grew 27% to $3.66 billion. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 20%.

 

   

Worldwide Electronics and Other General Merchandise sales grew 69% to $5.89 billion. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 62%.

 

   

Amazon Web Services (AWS) and SAP announced that AWS has been certified as a global technology partner of SAP. Customers can now deploy a variety of SAP solutions in full production environments including SAP® Rapid Deployment and SAP® BusinessObjects™.

 

   

AWS announced the availability of Amazon Relational Database Service (RDS) for Oracle databases, allowing customers to easily set up, operate and scale fully managed Oracle databases in the cloud.

 

   

AWS lowered prices for the fifteenth time in four years by eliminating inbound internet data transfer costs and reducing outbound data transfer costs.

Financial Guidance

The following forward-looking statements reflect Amazon.com’s expectations as of July 26, 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.

Third Quarter 2011 Guidance

 

   

Net sales are expected to be between $10.3 billion and $11.1 billion, or to grow between 36% and 47% compared with third quarter 2010.

 

   

Operating income is expected to be between $20 million and $170 million, or between 93% decline and 37% decline compared with third quarter 2010.

 

   

This guidance includes approximately $180 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.

 

2


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, Kindle with Special Offers, Kindle 3G with Special Offers 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, Kindle 3G with Special Offers 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.

 

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AMAZON.COM, INC.

Consolidated Statements of Cash Flows

(in millions)

(unaudited)

 

     Three Months Ended
June  30,
    Six Months Ended
June 30,
    Twelve Months Ended
June  30,
 
     2011     2010     2011     2010     2011     2010  

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

   $ 2,641      $ 1,844      $ 3,777      $ 3,444      $ 1,629      $ 1,936   

OPERATING ACTIVITIES:

            

Net income

     191        207        391        505        1,038        1,088   

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

     244        129        446        249        766        456   

Stock-based compensation

     144        111        254        196        481        386   

Other operating expense (income), net

     41        25        74        51        129        83   

Losses (gains) on sales of marketable securities, net

     1        —          3        —          2        (2

Other expense (income), net

     (39     (22     (2     (27     (53     (31

Deferred income taxes

     20        (8     35        (28     67        49   

Excess tax benefits from stock-based compensation

     (15     (75     (61     (161     (159     (196

Changes in operating assets and liabilities:

            

Inventories

     (274     (141     69        180        (1,130     (435

Accounts receivable, net and other

     (73     (42     286        412        (304     (252

Accounts payable

     114        (81     (2,535     (1,972     1,835        959   

Accrued expenses and other

     63        200        (119     (161     663        265   

Additions to unearned revenue

     257        161        467        349        805        990   

Amortization of previously unearned revenue

     (251     (214     (471     (441     (935     (799
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     423        250        (1,163     (848     3,205        2,561   

INVESTING ACTIVITIES:

            

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

     (433     (196     (731     (336     (1,374     (575

Acquisitions, net of cash acquired, and other

     (469     (21     (608     (40     (921     (45

Sales and maturities of marketable securities and other investments

     2,028        1,208        3,967        2,080        6,138        3,354   

Purchases of marketable securities and other investments

     (2,077     (1,466     (3,189     (2,721     (6,746     (5,661
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) investing activities

     (951     (475     (561     (1,017     (2,903     (2,927

FINANCING ACTIVITIES:

            

Excess tax benefits from stock-based compensation

     15        75        61        161        159        196   

Proceeds from long-term debt and other

     34        5        123        67        197        133   

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

     (140     (37     (251     (98     (398     (186
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     (91     43        (67     130        (42     143   

Foreign-currency effect on cash and cash equivalents

     25        (33     61        (80     158        (84
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     (594     (215     (1,730     (1,815     418        (307

CASH AND CASH EQUIVALENTS, END OF PERIOD

   $ 2,047      $ 1,629      $ 2,047      $ 1,629      $ 2,047      $ 1,629   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION:

            

Cash paid for interest on long term debt

   $ 3      $ 3      $ 6      $ 5      $ 12      $ 9   

Cash paid for income taxes (net of refunds)

     (1     43        6        46        35        60   

Fixed assets acquired under capital leases

     230        83        411        142        673        252   

Fixed assets acquired under build-to-suit leases

     97        60        166        120        219        191   


AMAZON.COM, INC.

Consolidated Statements of Operations

(in millions, except per share data)

(unaudited)

 

     Three Months Ended
June  30,
    Six Months Ended
June 30,
 
     2011     2010     2011     2010  

Net sales

   $ 9,913      $ 6,566      $ 19,770      $ 13,697   

Operating expenses (1):

        

Cost of sales

     7,525        4,957        15,133        10,458   

Fulfillment

     941        582        1,795        1,128   

Marketing

     341        211        667        412   

Technology and content

     698        408        1,278        773   

General and administrative

     166        113        300        210   

Other operating expense (income), net

     41        25        74        51   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     9,712        6,296        19,247        13,032   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     201        270        523        665   

Interest income

     16        12        31        23   

Interest expense

     (15     (9     (27     (16

Other income (expense), net

     23        24        4        27   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total non-operating income (expense)

     24        27        8        34   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     225        297        531        699   

Provision for income taxes

     (49     (88     (138     (189

Equity-method investment activity, net of tax

     15        (2     (2     (5
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 191      $ 207      $ 391      $ 505   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per share

   $ 0.42      $ 0.46      $ 0.87      $ 1.13   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per share

   $ 0.41      $ 0.45      $ 0.85      $ 1.11   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares used in computation of earnings per share:

        

Basic

     453        447        452        446   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     460        455        460        455   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)    Includes stock-based compensation as follows:

        

Fulfillment

   $ 32      $ 24      $ 56      $ 42   

Marketing

     10        7        17        12   

Technology and content

     75        58        136        103   

General and administrative

     27        22        45        39   


AMAZON.COM, INC.

Segment Information

(in millions)

(unaudited)

 

     Three Months Ended
June  30,
    Six Months Ended
June 30,
 
     2011     2010     2011     2010  

North America

        

Net sales

   $ 5,406      $ 3,590      $ 10,871      $ 7,370   

Segment operating expenses (1)

     5,192        3,390        10,367        6,897   
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment operating income

   $ 214      $ 200      $ 504      $ 473   
  

 

 

   

 

 

   

 

 

   

 

 

 

International

        

Net sales

   $ 4,507      $ 2,976      $ 8,899      $ 6,327   

Segment operating expenses (1)

     4,335        2,770        8,552        5,888   
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment operating income

   $ 172      $ 206      $ 347      $ 439   
  

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated

        

Net sales

   $ 9,913      $ 6,566      $ 19,770      $ 13,697   

Segment operating expenses

     9,527        6,160        18,919        12,785   
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment operating income

     386        406        851        912   

Stock-based compensation

     (144     (111     (254     (196

Other operating income (expense), net

     (41     (25     (74     (51
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     201        270        523        665   

Total non-operating income (expense)

     24        27        8        34   

Provision for income taxes

     (49     (88     (138     (189

Equity-method investment activity, net of tax

     15        (2     (2     (5
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 191      $ 207      $ 391      $ 505   
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment Highlights:

        

Y/Y net sales growth:

        

North America

     51     46     48     47

International

     51        35        41        40   

Consolidated

     51        41        44        44   

Y/Y segment operating income growth (decline):

        

North America

     7     61     7     72

International

     (16     15        (21     25   

Consolidated

     (5     34        (7     46   

Net sales mix:

        

North America

     55     55     55     54

International

     45        45        45        46   
  

 

 

   

 

 

   

 

 

   

 

 

 
     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)

(unaudited)

 

     Three Months Ended
June  30,
    Six Months Ended
June 30,
 
     2011     2010     2011     2010  

North America

        

Media

   $ 1,585      $ 1,324      $ 3,470      $ 2,921   

Electronics and other general merchandise

     3,496        2,090        6,799        4,114   

Other (1)

     325        176        602        335   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total North America

   $ 5,406      $ 3,590      $ 10,871      $ 7,370   
  

 

 

   

 

 

   

 

 

   

 

 

 

International

        

Media

   $ 2,075      $ 1,550      $ 4,147      $ 3,383   

Electronics and other general merchandise

     2,398        1,399        4,684        2,887   

Other (1)

     34        27        68        57   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total International

   $ 4,507      $ 2,976      $ 8,899      $ 6,327   
  

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated

        

Media

   $ 3,660      $ 2,874      $ 7,617      $ 6,304   

Electronics and other general merchandise

     5,894        3,489        11,483        7,001   

Other (1)

     359        203        670        392   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Consolidated

   $ 9,913      $ 6,566      $ 19,770      $ 13,697   
  

 

 

   

 

 

   

 

 

   

 

 

 

Y/Y Net Sales Growth:

        

North America:

        

Media

     20     15     19     19

Electronics and other general merchandise

     67        76        65        74   

Other

     85        52        80        54   

Total North America

     51        46        48        47   

International:

        

Media

     34     20     23     25

Electronics and other general merchandise

     71        59        62        64   

Other

     25        13        20        32   

Total International

     51        35        41        40   

Consolidated:

        

Media

     27     18     21     22

Electronics and other general merchandise

     69        69        64        70   

Other

     77        45        71        51   

Total Consolidated

     51        41        44        44   

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

        

International:

        

Media

     20     21     14     22

Electronics and other general merchandise

     53        63        51        62   

Other

     13        18        12        31   

Total International

     36        38        31        38   

Consolidated:

        

Media

     20     18     16     20

Electronics and other general merchandise

     62        70        59        69   

Other

     75        46        70        50   

Total Consolidated

     44        42        40        42   

Consolidated Net Sales Mix:

        

Media

     37     44     39     46

Electronics and other general merchandise

     59        53        58        51   

Other

     4        3        3        3   
  

 

 

   

 

 

   

 

 

   

 

 

 
     100     100     100     100
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) Includes non-retail activities, such as AWS, miscellaneous marketing and promotional agreements, other seller sites, and co-branded credit card agreements


AMAZON.COM, INC.

Consolidated Balance Sheets

(in millions, except per share data)

 

     June 30,
2011
    December 31,
2010
    June 30,
2010
 
     (unaudited)           (unaudited)  

ASSETS

      

Current assets:

      

Cash and cash equivalents

   $ 2,047      $ 3,777      $ 1,629   

Marketable securities

     4,308        4,985        3,479   

Inventories

     3,229        3,202        1,940   

Accounts receivable, net and other

     1,438        1,587        805   

Deferred tax assets

     257        196        265   
  

 

 

   

 

 

   

 

 

 

Total current assets

     11,279        13,747        8,118   

Fixed assets, net

     3,470        2,414        1,704   

Deferred tax assets

     30        22        29   

Goodwill

     1,909        1,349        1,229   

Other assets

     1,253        1,265        1,317   
  

 

 

   

 

 

   

 

 

 

Total assets

   $ 17,941      $ 18,797      $ 12,397   
  

 

 

   

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

      

Current liabilities:

      

Accounts payable

   $ 5,721      $ 8,051      $ 3,545   

Accrued expenses and other

     2,324        2,321        1,705   
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     8,045        10,372        5,250   

Long-term liabilities

     2,131        1,561        1,290   

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 - 471, 468, and 464

      

Outstanding shares - 454, 451, and 448

     5        5        5   

Treasury stock, at cost

     (600     (600     (600

Additional paid-in capital

     6,675        6,325        6,056   

Accumulated other comprehensive loss

     (30     (190     (282

Retained earnings

     1,715        1,324        678   
  

 

 

   

 

 

   

 

 

 

Total stockholders’ equity

     7,765        6,864        5,857   
  

 

 

   

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 17,941      $ 18,797      $ 12,397   
  

 

 

   

 

 

   

 

 

 


AMAZON.COM, INC.

Supplemental Financial Information and Business Metrics

(in millions, except per share data)

(unaudited)

 

     Q2 2010     Q3 2010     Q4 2010     Q1 2011     Q2 2011     Y/Y %
Change
 

Cash Flows and Shares

            

Operating cash flow — trailing twelve months (TTM)

   $ 2,561      $ 2,617      $ 3,495      $ 3,033      $ 3,205        25

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

   $ 575      $ 788      $ 979      $ 1,138      $ 1,374        139

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

   $ 1,986      $ 1,829      $ 2,516      $ 1,895      $ 1,831        (8 %) 

Free cash flow — TTM Y/Y growth

     29     (5 %)      (14 %)      (18 %)      (8 %)      N/A   

Invested capital (1)

   $ 5,820      $ 6,576      $ 7,380      $ 7,931      $ 8,551        N/A   

Return on invested capital (2)

     34     28     34     24     21     N/A   

Common shares and stock-based awards outstanding

     465        465        465        466        468        1

Common shares outstanding

     448        449        451        452        454        1

Stock-based awards outstanding

     17        16        15        14        15        (13 %) 

Stock-based awards outstanding — % of common shares outstanding

     3.8     3.6     3.2     3.1     3.2     N/A   

Results of Operations

            

Worldwide (WW) net sales

   $ 6,566      $ 7,560      $ 12,948      $ 9,857      $ 9,913        51

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

     42     40     37     36     44     N/A   

WW net sales — TTM

   $ 28,664      $ 30,776      $ 34,204      $ 36,931      $ 40,278        41

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

     38     40     40     39     39     N/A   

Operating income

   $ 270      $ 268      $ 474      $ 322      $ 201        (25 %) 

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

     77     13     3     (20 %)      (36 %)      N/A   

Operating margin — % of WW net sales

     4.1     3.5     3.7     3.3     2.0     N/A   

Operating income — TTM

   $ 1,391      $ 1,408      $ 1,406      $ 1,334      $ 1,265        (9 %) 

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

     65     50     27     7     (7 %)      N/A   

Operating margin — TTM % of WW net sales

     4.9     4.6     4.1     3.6     3.1     N/A   

Net income

   $ 207      $ 231      $ 416      $ 201      $ 191        (8 %) 

Net income per diluted share

   $ 0.45      $ 0.51      $ 0.91      $ 0.44      $ 0.41        (9 %) 

Net income — TTM

   $ 1,088      $ 1,120      $ 1,152      $ 1,054      $ 1,038        (5 %) 

Net income per diluted share — TTM

   $ 2.42      $ 2.47      $ 2.53      $ 2.30      $ 2.26        (6 %) 

Segments

            

North America Segment:

            

Net sales

   $ 3,590      $ 4,126      $ 7,211      $ 5,465      $ 5,406        51

Net sales — Y/Y growth, excluding F/X

     46     45     45     45     50     N/A   

Net sales — TTM

   $ 15,168      $ 16,452      $ 18,707      $ 20,392      $ 22,208        46

Operating income

   $ 200      $ 186      $ 295      $ 290      $ 214        7

Operating margin — % of North America net sales

     5.6     4.5     4.1     5.3     4.0     N/A   

Operating income — TTM

   $ 907      $ 937      $ 955      $ 972      $ 986        9

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

     84     67     35     17     9     N/A   

Operating margin — TTM % of North America net sales

     6.0     5.7     5.1     4.8     4.4     N/A   

International Segment:

            

Net sales

   $ 2,976      $ 3,434      $ 5,737      $ 4,392      $ 4,507        51

Net sales — Y/Y growth, excluding F/X

     38     35     29     27     36     N/A   

Net sales — TTM

   $ 13,496      $ 14,324      $ 15,497      $ 16,539      $ 18,070        34

Net sales — TTM % of WW net sales

     47     47     45     45     45     N/A   

Operating income

   $ 206      $ 215      $ 327      $ 175      $ 172        (16 %) 

Operating margin — % of International net sales

     6.9     6.2     5.7     4.0     3.8     N/A   

Operating income — TTM

   $ 952      $ 973      $ 981      $ 922      $ 888        (7 %) 

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

     28     23     20     4     (7 %)      N/A   

Operating margin — TTM % of International net sales

     7.1     6.8     6.3     5.6     4.9     N/A   

Consolidated Segments:

            

Operating expenses (3)

   $ 6,160      $ 7,159      $ 12,326      $ 9,392      $ 9,527        55

Operating expenses — TTM (3)

   $ 26,805      $ 28,866      $ 32,268      $ 35,037      $ 38,404        43

Operating income

   $ 406      $ 401      $ 622      $ 465      $ 386        (5 %) 

Operating margin — % of Consolidated sales

     6.2     5.3     4.8     4.7     3.9     N/A   

Operating income — TTM

   $ 1,859      $ 1,910      $ 1,936      $ 1,894      $ 1,874        1

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

     51     42     25     10     1     N/A   

Operating margin — TTM % of Consolidated net sales

     6.5     6.2     5.7     5.1     4.7     N/A   


AMAZON.COM, INC.

Supplemental Financial Information and Business Metrics

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

(unaudited)

 

     Q2 2010     Q3 2010     Q4 2010     Q1 2011     Q2 2011     Y/Y %
Change
 

Supplemental

            

Supplemental North America Segment Net Sales:

            

Media

   $ 1,324      $ 1,591      $ 2,370      $ 1,885      $ 1,585        20

Media — Y/Y growth, excluding F/X

     15     12     13     18     19     N/A   

Media — TTM

   $ 6,432      $ 6,610      $ 6,881      $ 7,170      $ 7,430        16

Electronics and other general merchandise

   $ 2,090      $ 2,326      $ 4,558      $ 3,303      $ 3,496        67

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

     76     80     71     63     67     N/A   

Electronics and other general merchandise — TTM

   $ 8,069      $ 9,103      $ 10,998      $ 12,277      $ 13,683        70

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

     53     55     59     60     62     N/A   

Other

   $ 176      $ 209      $ 283      $ 277      $ 325        85

Other — TTM

   $ 668      $ 739      $ 828      $ 945      $ 1,095        64

Supplemental International Segment Net Sales:

            

Media

   $ 1,550      $ 1,759      $ 2,865      $ 2,073      $ 2,075        34

Media — Y/Y growth, excluding F/X

     21     18     13     9     20     N/A   

Media — TTM

   $ 7,480      $ 7,723      $ 8,007      $ 8,247      $ 8,772        17

Electronics and other general merchandise

   $ 1,399      $ 1,644      $ 2,834      $ 2,285      $ 2,398        71

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

     63     60     50     49     53     N/A   

Electronics and other general merchandise — TTM

   $ 5,899      $ 6,478      $ 7,365      $ 8,162      $ 9,162        55

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

     44     45     48     49     51     N/A   

Other

   $ 27      $ 31      $ 38      $ 34      $ 34        25

Other — TTM

   $ 117      $ 123      $ 125      $ 130      $ 136        17

Supplemental Worldwide Net Sales:

            

Media

   $ 2,874      $ 3,350      $ 5,235      $ 3,958      $ 3,660        27

Media — Y/Y growth, excluding F/X

     18     15     13     13     20     N/A   

Media — TTM

   $ 13,912      $ 14,333      $ 14,888      $ 15,417      $ 16,202        16

Electronics and other general merchandise

   $ 3,489      $ 3,970      $ 7,392      $ 5,588      $ 5,894        69

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

     70     71     62     57     62     N/A   

Electronics and other general merchandise — TTM

   $ 13,968      $ 15,581      $ 18,363      $ 20,439      $ 22,845        64

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

     49     51     54     55     57     N/A   

Other

   $ 203      $ 240      $ 321      $ 311      $ 359        77

Other — TTM

   $ 785      $ 862      $ 953      $ 1,075      $ 1,231        57

Balance Sheet

            

Cash and marketable securities (4)

   $ 5,419      $ 6,123      $ 8,919      $ 7,019      $ 6,503        20

Inventory, net — ending

   $ 1,940      $ 2,515      $ 3,202      $ 2,888      $ 3,229        66

Inventory turnover, average — TTM

     12.5        11.8        11.4        11.6        11.3        (9 %) 

Fixed assets, net

   $ 1,704      $ 2,099      $ 2,414      $ 2,902      $ 3,470        104

Accounts payable — ending

   $ 3,545      $ 4,614      $ 8,051      $ 5,540      $ 5,721        61

Accounts payable days — ending

     65        73        72        66        69        6

Other

            

WW shipping revenue

   $ 239      $ 270      $ 437      $ 330      $ 331        39

WW shipping costs

   $ 487      $ 576      $ 999      $ 786      $ 820        68

WW net shipping costs

   $ 248      $ 306      $ 562      $ 456      $ 489        97

WW net shipping costs — % of WW net sales

     3.8     4.0     4.3     4.6     4.9     N/A   

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

     28,300        31,200        33,700        37,900        43,200        53

 

(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.
(4) Includes restricted cash, classified within “Other Assets” on our consolidated balance sheet, of: $311 million in Q2 2010, $238 million in Q3 2010, $157 million in Q4 2010, $138 million in Q1 2011, $148 million in Q2 2011.


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 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.diapers.com, www.endless.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 Public Relations    Amazon.com Investor Relations
John Felton, 206/266-2171    Mary Osako, 206/266-7180
www.amazon.com/ir