Amazon on Thursday reported its financial results for the first quarter of 2012. Analysts were looking for a profit of $0.07 per share on $12.86 billion in sales, and Amazon posted earnings of $0.28 per share on revenue of $13.18 billion, crushing expectations. The retailer netted $0.38 per share on revenue of $17.4 billion this past holiday quarter, and $0.44 per share on $9.86 billion in sales during the first quarter last year. The nationwide retailer’s stock had been up and down all week as Wall Street’s concerns over margins continued to rattle investors. Amazon’s operating margin fell 3.7% to 1.5% of global revenue in the fourth quarter and in the first quarter a year ago, Amazon’s margins sat at 3.3%. In the first quarter of 2012, Amazon’s operating margins stayed flat at 1.5%. For the second quarter, Amazon forecasts a profit of $40 million, up from a loss of $260 million in the second quarter last year, on revenue of between $11.9 billion and $13.3 billion. Amazon’s stock was up more than 12% percent during after-hours trading on Thursday. The company’s full press release follows below.
AMAZON.COM ANNOUNCES FIRST QUARTER SALES UP 34% TO $13.18 BILLION; 16 OF THE TOP 100 BESTSELLING TITLES ARE EXCLUSIVE TO THE KINDLE STORE
SEATTLE–(BUSINESS WIRE)–Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its first quarter ended March 31, 2012.
“I’m excited to announce that we now have more than 130,000 new, in-copyright books that are exclusive to the Kindle Store – you won’t find them anywhere else. They include many of our top bestsellers – in fact, 16 of our top 100 bestselling titles are exclusive to our store”
Operating cash flow increased 1% to $3.05 billion for the trailing twelve months, compared with $3.03 billion for the trailing twelve months ended March 31, 2011. Free cash flow decreased 39% to $1.15 billion for the trailing twelve months, compared with $1.90 billion for the trailing twelve months ended March 31, 2011.
Common shares outstanding plus shares underlying stock-based awards totaled 464 million on March 31, 2012, compared with 466 million a year ago. During the quarter, the Company repurchased 5.3 million shares, or $960 million, under its previously announced authorization to repurchase up to $2 billion of the Company’s common stock.
Net sales increased 34% to $13.18 billion in the first quarter, compared with $9.86 billion in first quarter 2011. Excluding the $56 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 34% compared with first quarter 2011.
Operating income was $192 million in the first quarter, compared with $322 million in first quarter 2011. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $4 million.
Net income decreased 35% to $130 million in the first quarter, or $0.28 per diluted share, compared with net income of $201 million, or $0.44 per diluted share, in first quarter 2011.
“I’m excited to announce that we now have more than 130,000 new, in-copyright books that are exclusive to the Kindle Store – you won’t find them anywhere else. They include many of our top bestsellers – in fact, 16 of our top 100 bestselling titles are exclusive to our store,” said Jeff Bezos, founder and CEO of Amazon.com. “If you’re an
Amazon Prime member, you don’t even need to buy these titles – you can borrow them for free – with no due dates – from our revolutionary Kindle Owners’ Lending Library. The Kindle Owners’ Lending Library is heavily used by Kindle owners, and it has extremely unusual features that both authors and customers love. Every time you borrow a book, the author gets paid – and we have an inexhaustible supply of each title so you never have to wait in a queue for the book you want. Kindle is the bestselling e-reader in the world by far, and I assure you we’ll keep working hard so that the Kindle Store remains yet another reason to buy a Kindle!”Highlights
- Kindle Fire remains the #1 bestselling, most gifted, and most wished for product across the millions of items available on Amazon.com since launch. In the first quarter, 9 out of 10 of the top sellers on Amazon.com were digital products – Kindle, Kindle books, movies, music and apps.
- Amazon launched Kindle Touch Wi-Fi and Kindle Touch 3G on Amazon.co.uk, Amazon.de, Amazon.fr, Amazon.it, and Amazon.es. The full line of Kindle e-ink readers is now available in over 175 countries around the world. Kindle Touch 3G is the most full-featured e-reader with an easy to use touchscreen and the unparalleled convenience of free 3G – no hunting for Wi-Fi spots, simply think of a book and download it. Kindle remains the bestseller on Amazon.co.uk, Amazon.de, Amazon.fr, Amazon.it and Amazon.es since their launches.
- Amazon introduced a new version of its popular Kindle for iPad app, which is the #5 free iPad app of all time and the #1 free books app on iPad. Millions of customers are using the new Kindle for iPad app, which is optimized for the high resolution display of the newest iPad.
- Amazon announced an In-App Purchasing service, making it easy for Amazon Appstore developers to offer digital content and subscriptions for purchase within apps and games that are available on millions of Kindle Fires and other Android devices. Amazon Appstore’s In-App Purchasing service is simple for developers to integrate and helps monetize their apps and games, while offering customers a seamless and secure 1-Click purchasing experience.
- Amazon.com announced the launch of the Amazon Instant Video app for PlayStation 3 (PS3), making the PS3 system the first video game console system to offer Amazon Instant Video, and allowing PS3 users to stream Prime Instant Videos and rent or buy the latest movies and TV episodes directly from their PS3. Customers can also access Amazon Instant Video and Prime Instant Video from Kindle Fire, Mac or PC, or on a TV using either a compatible connected device such as a Blu-ray player or a Roku or directly on compatible Smart TVs.
- Amazon continued to expand its catalog of title offerings for Prime Instant Video, announcing licensing agreements with Discovery Communications and Viacom. Among the programs added are Discovery Channel’s Dirty Jobs, TLC’s Say Yes To The Dress and Animal Planet’s Whale Wars, as well as thousands of TV episodes from MTV, Comedy Central, Nickelodeon, TV Land, Spike, VH1, BET, CMT and Logo. These deals bring the total number of Prime Instant Videos to more than 17,000 movies and TV episodes from partners such as CBS, Fox, NBCUniversal, Sony, Warner Bros., PBS, Disney-ABC and many more.
- North America segment sales, representing the Company’s U.S. and Canadian sites, were $7.43 billion, up 36% from first quarter 2011.
- International segment sales, representing the Company’s U.K., German, Japanese, French, Chinese, Italian and Spanish sites, were $5.76 billion, up 31% from first quarter 2011. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 32%.
- Worldwide Media sales grew 19% to $4.71 billion. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 19%.
- Worldwide Electronics and Other General Merchandise sales grew 43% to $7.97 billion. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 43%.
- Amazon Web Services (AWS) announced that Amazon DynamoDB – the fastest growing AWS service ever – is now available in both the EU (Ireland) and Asia Pacific (Tokyo) Regions. Amazon DynamoDB is a fully managed NoSQL database service that provides extremely fast and predictable performance with seamless scalability.
- AWS lowered prices for the 19th time in five years by reducing reserved instance prices for Amazon EC2 and Amazon RDS, as well as reducing on-demand pricing for Amazon EC2, Amazon RDS, and Amazon ElastiCache.
- AWS launched AWS Marketplace, an online store that makes it easy for customers to find, compare, and immediately start using the software and services they need to build software systems and products, and run their businesses. With AWS Marketplace, software and SaaS providers with offerings that run in the AWS Cloud can benefit from increased awareness, simplified deployment, and automated billing. AWS Marketplace brings the same simple, trusted, and secure online shopping experience that customers enjoy on Amazon.com to software built for the AWS platform, streamlining the process of doing research and purchasing software.
Financial Guidance
The following forward-looking statements reflect Amazon.com’s expectations as of April 26, 2012, and exclude financial results of the Kiva Systems, Inc. acquisition which we expect to close in second quarter 2012. 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.
Second Quarter 2012 Guidance
- Net sales are expected to be between $11.9 billion and $13.3 billion, or to grow between 20% and 34% compared with second quarter 2011.
- Operating income (loss) is expected to be between $(260) million and $40 million, or between 229% decline and 80% decline compared with second quarter 2011.
- This guidance includes approximately $260 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. The new latest generation Kindle is the lightest, most compact Kindle ever and features the same 6-inch, most advanced electronic ink display that reads like real paper even in bright sunlight. Kindle Touch is a new addition to the Kindle family with an easy-to-use touch screen that makes it easier than ever to turn pages, search, shop, and take notes – still with all the benefits of the most advanced electronic ink display. Kindle Touch 3G is the top of the line e-reader and offers the same new design and features of Kindle Touch, with the unparalleled added convenience of free 3G. Kindle Fire is the Kindle for movies, TV episodes, music, books, magazines, apps, games and web browsing with all the content, free storage in the Amazon Cloud, Whispersync, Amazon Silk (Amazon’s new revolutionary cloud-accelerated web browser), vibrant color touch screen, and powerful dual-core processor.
Amazon and its affiliates operate websites, including www.amazon.com, www.amazon.co.uk, www.amazon.de, www.amazon.co.jp, www.amazon.fr, www.amazon.ca, www.amazon.cn,www.amazon.it, and www.amazon.es. 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 Twelve Months Ended March 31, March 31, 2012 2011 2012 2011 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 5,269 $ 3,777 $ 2,641 $ 1,844 OPERATING ACTIVITIES: Net income 130 201 561 1,054 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 457 202 1,338 652 Stock-based compensation 160 110 605 448 Other operating expense (income), net 46 33 168 112 Losses (gains) on sales of marketable securities, net (2 ) 2 (8 ) 1 Other expense (income), net 15 37 (78 ) (36 ) Deferred income taxes (38 ) 15 83 38 Excess tax benefits from stock-based compensation (40 ) (46 ) (56 ) (219 ) Changes in operating assets and liabilities: Inventories 747 343 (1,374 ) (997 ) Accounts receivable, net and other 746 359 (479 ) (170 ) Accounts payable (4,258 ) (2,649 ) 1,388 1,641 Accrued expenses and other (529 ) (183 ) 721 697 Additions to unearned revenue 397 210 1,252 709 Amortization of previously unearned revenue (269 ) (220 ) (1,070 ) (897 ) Net cash provided by (used in) operating activities (2,438 ) (1,586 ) 3,051 3,033 INVESTING ACTIVITIES: Purchases of fixed assets, including internal-use software and website development (386 ) (298 ) (1,899 ) (1,138 ) Acquisitions, net of cash acquired, and other (50 ) (139 ) (615 ) (473 ) Sales and maturities of marketable securities and other investments 1,738 1,939 6,641 5,318 Purchases of marketable securities and other investments (852 ) (1,112 ) (5,997 ) (6,135 ) Net cash provided by (used in) investing activities 450 390 (1,870 ) (2,428 ) FINANCING ACTIVITIES: Excess tax benefits from stock-based compensation 40 46 56 219 Common stock repurchased (960 ) – (1,237 ) – Proceeds from long-term debt and other 68 89 154 168 Repayments of long-term debt, capital lease, and finance lease obligations (153 ) (111 ) (483 ) (295 ) Net cash provided by (used in) financing activities (1,005 ) 24 (1,510 ) 92 Foreign-currency effect on cash and cash equivalents 12 36 (24 ) 100 Net increase (decrease) in cash and cash equivalents (2,981 ) (1,136 ) (353 ) 797 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,288 $ 2,641 $ 2,288 $ 2,641 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for interest on long term debt $ 6 $ 3 $ 17 $ 12 Cash paid for income taxes (net of refunds) 19 7 45 79 Fixed assets acquired under capital leases 149 181 721 526 Fixed assets acquired under build-to-suit leases 17 69 207 182
AMAZON.COM, INC. Consolidated Statements of Operations (in millions, except per share data) (unaudited) Three Months Ended March 31, 2012 2011 Net product sales (1) $ 11,249 $ 8,698 Net services sales (2) 1,936 1,159 Net sales 13,185 9,857 Operating expenses (3): Cost of sales 10,027 7,608 Fulfillment 1,295 855 Marketing 480 327 Technology and content 945 579 General and administrative 200 133 Other operating expense (income), net 46 33 Total operating expenses 12,993 9,535 Income from operations 192 322 Interest income 12 15 Interest expense (21 ) (12 ) Other income (expense), net (99 ) (18 ) Total non-operating income (expense) (108 ) (15 ) Income before income taxes 84 307 Provision for income taxes (43 ) (89 ) Equity-method investment activity, net of tax 89 (17 ) Net income $ 130 $ 201 Basic earnings per share $ 0.29 $ 0.44 Diluted earnings per share $ 0.28 $ 0.44 Weighted average shares used in computation of earnings per share: Basic 453 451 Diluted 460 459 (1) Represents revenue from the sale of products and related shipping fees and digital content where we are the seller of record. (2) Represents third-party seller fees earned (including commissions) and related shipping fees, digital content subscriptions, and non-retail activities. (3) Includes stock-based compensation as follows: Fulfillment $ 37 $ 24 Marketing 12 7 Technology and content 85 61 General and administrative 26 18
AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in millions) (unaudited) Three Months Ended March 31, 2012 2011 Net income $ 130 $ 201 Other comprehensive income: Foreign currency translation adjustments, net of tax of $(38) and $(7) 137 135 Change in unrealized gains on available-for-sale securities, net of tax of $(2) and $(5) 5 (11 ) Total other comprehensive income 142 124 Comprehensive income $ 272 $ 325
AMAZON.COM, INC. Segment Information (in millions) (unaudited) Three Months Ended March 31, 2012 2011 North America Net sales $ 7,427 $ 5,465 Segment operating expenses (1) 7,078 5,175 Segment operating income $ 349 $ 290 International Net sales $ 5,758 $ 4,392 Segment operating expenses (1) 5,709 4,217 Segment operating income $ 49 $ 175 Consolidated Net sales $ 13,185 $ 9,857 Segment operating expenses (1) 12,787 9,392 Segment operating income 398 465 Stock-based compensation (160 ) (110 ) Other operating income (expense), net (46 ) (33 ) Income from operations 192 322 Total non-operating income (expense) (108 ) (15 ) Provision for income taxes (43 ) (89 ) Equity-method investment activity, net of tax 89 (17 ) Net income $ 130 $ 201 Segment Highlights: Y/Y net sales growth: North America 36 % 45 % International 31 31 Consolidated 34 38 Y/Y segment operating income growth (decline): North America 20 % 6 % International (72 ) (25 ) Consolidated (15 ) (8 ) Net sales mix: North America 56 % 55 % International 44 45 100 % 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 March 31, 2012 2011 North America Media $ 2,197 $ 1,885 Electronics and other general merchandise 4,772 3,303 Other (1) 458 277 Total North America $ 7,427 $ 5,465 International Media $ 2,513 $ 2,073 Electronics and other general merchandise 3,203 2,285 Other (1) 42 34 Total International $ 5,758 $ 4,392 Consolidated Media $ 4,710 $ 3,958 Electronics and other general merchandise 7,975 5,588 Other (1) 500 311 Total Consolidated $ 13,185 $ 9,857 Y/Y Net Sales Growth: North America: Media 17 % 18 % Electronics and other general merchandise 44 63 Other 66 74 Total North America 36 45 International: Media 21 % 13 % Electronics and other general merchandise 40 54 Other 24 15 Total International 31 31 Consolidated: Media 19 % 15 % Electronics and other general merchandise 43 59 Other 61 65 Total Consolidated 34 38 Y/Y Net Sales Growth Excluding Effect of Exchange Rates: International: Media 22 % 9 % Electronics and other general merchandise 42 49 Other 26 12 Total International 32 27 Consolidated: Media 19 % 13 % Electronics and other general merchandise 43 57 Other 61 64 Total Consolidated 34 36 Consolidated Net Sales Mix: Media 36 % 40 % Electronics and other general merchandise 60 57 Other 4 3 100 % 100 % (1) Includes non-retail activities, such as AWS, miscellaneous marketing and promotional activities, co-branded credit card agreements, and other seller sites.
AMAZON.COM, INC. Consolidated Balance Sheets (in millions, except per share data) March 31, December 31, 2012 2011 ASSETS (unaudited) Current assets: Cash and cash equivalents $ 2,288 $ 5,269 Marketable securities 3,427 4,307 Inventories 4,255 4,992 Accounts receivable, net and other 1,813 2,571 Deferred tax assets 371 351 Total current assets 12,154 17,490 Fixed assets, net 4,653 4,417 Deferred tax assets 27 28 Goodwill 1,970 1,955 Other assets 1,535 1,388 Total assets $ 20,339 $ 25,278 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 6,886 $ 11,145 Accrued expenses and other 3,602 3,751 Total current liabilities 10,488 14,896 Long-term liabilities 2,580 2,625 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 — 474 and 473 Outstanding shares — 450 and 455 5 5 Treasury stock, at cost (1,837 ) (877 ) Additional paid-in capital 7,192 6,990 Accumulated other comprehensive loss (174 ) (316 ) Retained earnings 2,085 1,955 Total stockholders’ equity 7,271 7,757 Total liabilities and stockholders’ equity $ 20,339 $ 25,278
AMAZON.COM, INC. Supplemental Financial Information and Business Metrics (in millions, except per share data) (unaudited) Y/Y % Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Change Cash Flows and Shares Operating cash flow — trailing twelve months (TTM) $ 3,033 $ 3,205 $ 3,114 $ 3,903 $ 3,051 1 % Purchases of fixed assets (incl. internal-use software & website development) — TTM $ 1,138 $ 1,374 $ 1,589 $ 1,811 $ 1,899 67 % Free cash flow (operating cash flow less purchases of fixed assets) — TTM $ 1,895 $ 1,831 $ 1,525 $ 2,092 $ 1,152 (39 %) Free cash flow — TTM Y/Y growth (18 %) (8 %) (17 %) (17 %) (39 %) N/A Invested capital (1) $ 7,931 $ 8,551 $ 9,147 $ 9,680 $ 10,006 N/A Return on invested capital (2) 24 % 21 % 17 % 22 % 12 % N/A Common shares and stock-based awards outstanding 466 468 469 468 464 – Common shares outstanding 452 454 455 455 450 – Stock-based awards outstanding 14 15 14 14 13 (4 %) Stock-based awards outstanding — % of common shares outstanding 3.1 % 3.2 % 3.2 % 3.0 % 2.9 % N/A Results of Operations Worldwide (WW) net sales $ 9,857 $ 9,913 $ 10,876 $ 17,431 $ 13,185 34 % WW net sales — Y/Y growth, excluding F/X 36 % 44 % 39 % 34 % 34 % N/A WW net sales — TTM $ 36,931 $ 40,278 $ 43,594 $ 48,077 $ 51,404 39 % WW net sales — TTM Y/Y growth, excluding F/X 39 % 39 % 39 % 37 % 37 % N/A Operating income $ 322 $ 201 $ 79 $ 260 $ 192 (40 %) Operating income — Y/Y growth, excluding F/X (20 %) (36 %) (77 %) (48 %) (38 %) N/A Operating margin — % of WW net sales 3.3 % 2.0 % 0.7 % 1.5 % 1.5 % N/A Operating income — TTM $ 1,334 $ 1,265 $ 1,076 $ 862 $ 732 (45 %) Operating income — TTM Y/Y growth, excluding F/X 7 % (7 %) (25 %) (44 %) (50 %) N/A Operating margin — TTM % of WW net sales 3.6 % 3.1 % 2.5 % 1.8 % 1.4 % N/A Net income $ 201 $ 191 $ 63 $ 177 $ 130 (35 %) Net income per diluted share $ 0.44 $ 0.41 $ 0.14 $ 0.38 $ 0.28 (35 %) Net income — TTM $ 1,054 $ 1,038 $ 871 $ 631 $ 561 (47 %) Net income per diluted share — TTM $ 2.30 $ 2.26 $ 1.89 $ 1.37 $ 1.22 (47 %) Segments North America Segment: Net sales $ 5,465 $ 5,406 $ 5,932 $ 9,902 $ 7,427 36 % Net sales — Y/Y growth, excluding F/X 45 % 50 % 44 % 37 % 36 % N/A Net sales — TTM $ 20,392 $ 22,208 $ 24,014 $ 26,705 $ 28,667 41 % Operating income $ 290 $ 214 $ 144 $ 285 $ 349 20 % Operating margin — % of North America net sales 5.3 % 4.0 % 2.4 % 2.9 % 4.7 % N/A Operating income — TTM $ 972 $ 986 $ 943 $ 933 $ 991 2 % Operating income — TTM Y/Y growth, excluding F/X 17 % 9 % 1 % (2 %) 2 % N/A Operating margin — TTM % of North America net sales 4.8 % 4.4 % 3.9 % 3.5 % 3.5 % N/A International Segment: Net sales $ 4,392 $ 4,507 $ 4,944 $ 7,529 $ 5,758 31 % Net sales — Y/Y growth, excluding F/X 27 % 36 % 33 % 29 % 32 % N/A Net sales — TTM $ 16,539 $ 18,070 $ 19,580 $ 21,372 $ 22,737 37 % Net sales — TTM % of WW net sales 45 % 45 % 45 % 44 % 44 % N/A Operating income $ 175 $ 172 $ 116 $ 177 $ 49 (72 %) Operating margin — % of International net sales 4.0 % 3.8 % 2.4 % 2.4 % 0.9 % N/A Operating income — TTM $ 922 $ 888 $ 790 $ 640 $ 515 (44 %) Operating income — TTM Y/Y growth, excluding F/X 4 % (7 %) (23 %) (41 %) (49 %) N/A Operating margin — TTM % of International net sales 5.6 % 4.9 % 4.0 % 3.0 % 2.3 % N/A Consolidated Segments: Operating expenses (3) $ 9,392 $ 9,527 $ 10,616 $ 16,969 $ 12,787 36 % Operating expenses — TTM (3) $ 35,037 $ 38,404 $ 41,860 $ 46,504 $ 49,899 42 % Operating income $ 465 $ 386 $ 260 $ 462 $ 398 (15 %) Operating margin — % of Consolidated sales 4.7 % 3.9 % 2.4 % 2.7 % 3.0 % N/A Operating income — TTM $ 1,894 $ 1,874 $ 1,734 $ 1,573 $ 1,505 (21 %) Operating income — TTM Y/Y growth, excluding F/X 10 % 1 % (11 %) (21 %) (22 %) N/A Operating margin — TTM % of Consolidated net sales 5.1 % 4.7 % 4.0 % 3.3 % 2.9 % N/A
AMAZON.COM, INC. Supplemental Financial Information and Business Metrics (in millions, except inventory turnover, accounts payable days and employee data) (unaudited) Y/Y % Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Change Supplemental Supplemental North America Segment Net Sales: Media $ 1,885 $ 1,585 $ 1,927 $ 2,562 $ 2,197 17 % Media — Y/Y growth, excluding F/X 18 % 19 % 21 % 8 % 17 % N/A Media — TTM $ 7,170 $ 7,430 $ 7,767 $ 7,959 $ 8,270 15 % Electronics and other general merchandise $ 3,303 $ 3,496 $ 3,635 $ 6,881 $ 4,772 44 % Electronics and other general merchandise — Y/Y growth, excluding F/X 63 % 67 % 56 % 51 % 44 % N/A Electronics and other general merchandise — TTM $ 12,277 $ 13,683 $ 14,992 $ 17,315 $ 18,784 53 % Electronics and other general merchandise — TTM % of North America net sales 60 % 62 % 62 % 65 % 66 % N/A Other $ 277 $ 325 $ 370 $ 459 $ 458 66 % Other — TTM $ 945 $ 1,095 $ 1,255 $ 1,431 $ 1,613 71 % Supplemental International Segment Net Sales: Media $ 2,073 $ 2,075 $ 2,226 $ 3,447 $ 2,513 21 % Media — Y/Y growth, excluding F/X 9 % 20 % 17 % 18 % 22 % N/A Media — TTM $ 8,247 $ 8,772 $ 9,238 $ 9,820 $ 10,261 24 % Electronics and other general merchandise $ 2,285 $ 2,398 $ 2,681 $ 4,032 $ 3,203 40 % Electronics and other general merchandise — Y/Y growth, excluding F/X 49 % 53 % 51 % 41 % 42 % N/A Electronics and other general merchandise — TTM $ 8,162 $ 9,162 $ 10,199 $ 11,397 $ 12,314 51 % Electronics and other general merchandise — TTM % of International net sales 49 % 51 % 52 % 53 % 54 % N/A Other $ 34 $ 34 $ 37 $ 50 $ 42 24 % Other — TTM $ 130 $ 136 $ 143 $ 155 $ 162 26 % Supplemental Worldwide Net Sales: Media $ 3,958 $ 3,660 $ 4,153 $ 6,009 $ 4,710 19 % Media — Y/Y growth, excluding F/X 13 % 20 % 19 % 14 % 19 % N/A Media — TTM $ 15,417 $ 16,202 $ 17,005 $ 17,779 $ 18,531 20 % Electronics and other general merchandise $ 5,588 $ 5,894 $ 6,316 $ 10,913 $ 7,975 43 % Electronics and other general merchandise — Y/Y growth, excluding F/X 57 % 62 % 54 % 47 % 43 % N/A Electronics and other general merchandise — TTM $ 20,439 $ 22,845 $ 25,191 $ 28,712 $ 31,098 52 % Electronics and other general merchandise — TTM % of WW net sales 55 % 57 % 58 % 60 % 60 % N/A Other $ 311 $ 359 $ 407 $ 509 $ 500 61 % Other — TTM $ 1,075 $ 1,231 $ 1,398 $ 1,586 $ 1,775 65 % Balance Sheet Cash and marketable securities $ 6,881 $ 6,355 $ 6,326 $ 9,576 $ 5,715 (17 %) Inventory, net — ending $ 2,888 $ 3,229 $ 3,770 $ 4,992 $ 4,255 47 % Inventory turnover, average — TTM 11.6 11.3 10.8 10.3 10.4 (10 %) Fixed assets, net $ 2,902 $ 3,470 $ 3,999 $ 4,417 $ 4,653 60 % Accounts payable — ending $ 5,540 $ 5,721 $ 6,552 $ 11,145 $ 6,886 24 % Accounts payable days — ending 66 69 72 74 62 (5 %) Other WW shipping revenue $ 330 $ 331 $ 360 $ 531 $ 461 40 % WW shipping costs $ 786 $ 820 $ 918 $ 1,466 $ 1,129 44 % WW net shipping costs $ 456 $ 489 $ 558 $ 935 $ 668 47 % WW net shipping costs — % of WW net sales 4.6 % 4.9 % 5.1 % 5.4 % 5.1 % N/A Employees (full-time and part-time; excludes contractors & temporary personnel) 37,900 43,200 51,300 56,200 65,600 73 % (1) Average Total Assets minus Current Liabilities (excluding current portion of Long Term Debt) over five quarter ends. (2) TTM Free Cash Flow divided by Invested Capital. (3) Represents cost of sales, fulfillment, marketing, technology and content, and general and administrative operating expenses, excluding stock-based compensation. Amazon.com, Inc.
Certain Definitions
Customer Accounts
- References to customers mean customer accounts, which are unique e-mail addresses, established either when a customer places an order or when a customer orders from other sellers on our websites. Customer accounts exclude certain customers, including customers associated with certain of our acquisitions, Amazon 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 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.
