Sunday, July 25, 2010

Amazon.com Announces Second Quarter Sales up 41% to $6.57 Billion

SEATTLE, Sunday, July 25th 2010 [ME NewsWire]:

(BUSINESS WIRE)-- Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its second quarter ended June 30, 2010.


Operating cash flow was $2.56 billion for the trailing twelve months, compared with $1.88 billion for the trailing twelve months ended June 30, 2009. Free cash flow increased 29% to $1.99 billion for the trailing twelve months, compared with $1.54 billion for the trailing twelve months ended June 30, 2009.


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


Net sales increased 41% to $6.57 billion in the second quarter, compared with $4.65 billion in second quarter 2009. Excluding the $48 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 42% compared with second quarter 2009.


Operating income increased 71% to $270 million in the second quarter, compared with $159 million in second quarter 2009. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $10 million. Second quarter 2009 operating income was negatively impacted by a $51 million legal settlement.


Net income increased 45% to $207 million in the second quarter, or $0.45 per diluted share, compared with net income of $142 million, or $0.32 per diluted share, in second quarter 2009.


“We're seeing rapid growth in Kindle, Amazon Web Services, third-party sales, and retail. We're also encouraged by what we see in mobile. In the last twelve months, customers around the world have ordered more than $1 billion of products from Amazon using a mobile device,” said Jeff Bezos, founder and CEO of Amazon.com. “The leading mobile commerce device today is the smartphone, but we're excited by the potential of the new category of wireless tablet computers. Over time, tablet computers could become a meaningful additional driver for our business.”


Highlights

* Readers are responding to Kindle’s uncompromising approach to the reading experience. Weighing 10.2 ounces, Kindle can be held comfortably in one hand for hours, has an e-ink display that is easy on the eyes even in bright daylight, has two weeks of battery life, and has free 3G wireless with no monthly fees or annual contracts—all at a $189 price.


* Amazon.com is now selling more Kindle books than hardcover books. Over the past three months, for every 100 hardcover books Amazon.com has sold, the Company has sold 143 Kindle books. Over the past month, for every 100 hardcover books Amazon.com has sold, the Company has sold 180 Kindle books. This is across Amazon.com’s entire U.S. book business and includes sales of hardcover books where there is no Kindle edition. Free Kindle books are excluded and if included would make the number even higher.


* Amazon sold more than 3x as many Kindle books in the first half of 2010 as in the first half of 2009.


* The Association of American Publishers’ latest data reports that e-book sales grew 163 percent in the month of May and 207 percent year-to-date through May. Kindle book sales in May and year-to-date through May exceeded those growth rates.


* On July 6, Hachette announced that James Patterson had sold 1.14 million e-books to date. Of those, 867,881 were Kindle books.


* Five authors—Charlaine Harris, Stieg Larsson, Stephenie Meyer, James Patterson, and Nora Roberts—have each sold more than 500,000 Kindle books.


* Amazon.com continues to expand Kindle’s “Buy once, read everywhere” strategy with this quarter’s launch of Kindle for Android. Like all Kindle apps, Kindle for Android includes Whispersync technology, which automatically synchronizes your last page read, bookmarks, notes and highlights across your Kindle, Kindle DX, iPad, iPod touch, iPhone, Mac, PC, BlackBerry, and Android-based devices.


* Kindle offers the largest selection of the most popular books people want to read. The U.S. Kindle Store now has more than 630,000 books, including New Releases and 106 of 110 New York Times Best Sellers. Over 510,000 of these books are $9.99 or less, including 75 New York Times Best Sellers. Over 1.8 million free, out-of-copyright, pre-1923 books are also available to read on Kindle.


* North America segment sales, representing the Company’s U.S. and Canadian sites, were $3.59 billion, up 46% from second quarter 2009.


* International segment sales, representing the Company’s U.K., German, Japanese, French and Chinese sites, were $2.98 billion, up 35% from second quarter 2009. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 38%.


* Worldwide Media sales grew 18% to $2.87 billion.


* Worldwide Electronics & Other General Merchandise sales grew 69% to $3.49 billion. Excluding the unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 70%.


* The Company introduced Textbook Buyback, an easy-to-use program that helps students lower their textbook costs, giving them great value for their used textbooks.


* The Amazon.co.uk and Amazon.de websites each launched Grocery stores offering customers free delivery on thousands of new items from brands such as Kraft, Nestlé, Mars, PepsiCo, Proctor & Gamble, and Unilever.


* Businesses and developers in over 190 countries are taking advantage of Amazon Web Services (AWS). In the first half of 2010, AWS continued significant geographic expansion, launching the first Asia Pacific Region in Singapore as well as extending additional services including Amazon Virtual Private Cloud and Amazon Relational Database Service into the EU.


* AWS announced a new storage option within the Amazon Simple Storage Service (S3), Amazon S3 Reduced Redundancy Storage (RRS), which enables customers to reduce their costs by storing non-critical, reproducible data at lower levels of redundancy than Amazon S3's standard storage.


* AWS introduced Cluster Compute Instances, an Amazon Elastic Compute Cloud (EC2) instance type specifically tailored for high-performance computing.


Financial Guidance


The following forward-looking statements reflect Amazon.com’s expectations as of July 22, 2010. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and consumer spending, world events, the rate of growth of the Internet and online commerce and the various factors detailed below.


Third Quarter 2010 Guidance

* Net sales are expected to be between $6.900 billion and $7.625 billion, or to grow between 27% and 40% compared with third quarter 2009.


* Operating income is expected to be between $210 million and $310 million, or between 16% decline and 24% growth compared with third quarter 2009.


* This guidance includes approximately $130 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions or investments are concluded and that there are no further revisions to stock-based compensation estimates.


A conference call will be webcast live today at 2 p.m. PT/5 p.m. ET, and will be available for at least three months at www.amazon.com/ir. This call will contain forward-looking statements and other material information regarding the Company’s financial and operating results.


These forward-looking statements are inherently difficult to predict. Actual results could differ materially for a variety of reasons, including, in addition to the factors discussed above, the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of legal proceedings and claims, fulfillment center optimization, risks of inventory management, seasonality, the degree to which the Company enters into, maintains and develops commercial agreements, acquisitions and strategic transactions, and risks of fulfillment throughput and productivity. Other risks and uncertainties include, among others, risks related to new products, services and technologies, system interruptions, government regulation and taxation, payments and fraud. In addition, the current global economic climate amplifies many of these risks. More information about factors that potentially could affect Amazon.com’s financial results is included in Amazon.com’s filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and subsequent filings.


About Amazon.com


Amazon.com, Inc. (NASDAQ:AMZN), a Fortune 500 company based in Seattle, opened on the World Wide Web in July 1995 and today offers Earth’s Biggest Selection. Amazon.com, Inc. seeks to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices. Amazon.com and other sellers offer millions of unique new, refurbished and used items in categories such as Books; Movies, Music & Games; Digital Downloads; Electronics & Computers; Home & Garden; Toys, Kids & Baby; Grocery; Apparel, Shoes & Jewelry; Health & Beauty; Sports & Outdoors; and Tools, Auto & Industrial. Amazon Web Services provides Amazon’s developer customers with access to in-the-cloud infrastructure services based on Amazon’s own back-end technology platform, which developers can use to enable virtually any type of business. Kindle 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 and Kindle DX utilize the same 3G wireless technology as advanced cell phones, so users never need to hunt for a Wi-Fi hotspot. Kindle is the #1 bestselling product across the millions of items sold on Amazon.


Amazon and its affiliates operate websites, including www.amazon.com, www.amazon.co.uk, www.amazon.de, www.amazon.co.jp, www.amazon.fr, www.amazon.ca, and www.amazon.cn. As used herein, “Amazon.com,” “we,” “our” and similar terms include Amazon.com, Inc., and its subsidiaries, unless the context indicates otherwise.

AMAZON.COM, INC.


Consolidated Statements of Cash Flows

(in millions)

(unaudited)

























































































































Three Months Ended





Six Months Ended





Twelve Months Ended







June 30,





June 30,





June 30,







2010





2009





2010





2009





2010





2009







































CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD


$


1,844








$


1,701








$


3,444








$


2,769








$


1,936








$


1,548










































OPERATING

ACTIVITIES:





































Net income








207











142











505











319











1,088











663




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





129











84











249











171











456











323




Stock-based compensation








111











85











196











152











386











300




Other operating expense (income), net








25











60











51











71











83











86




Losses (gains) on sales of marketable securities, net





-











-











-











(2


)








(2


)








(1


)

Other expense (income), net








(22


)








(14


)








(27


)








(12


)








(31


)








(53


)

Deferred income taxes








(8


)








6











(28


)








7











49











30




Excess tax benefits from stock-based compensation





(75


)








(20


)








(161


)








(70


)








(196


)








(122


)

Changes in operating assets and liabilities:





































Inventories








(141


)








(23


)








180











84











(435


)








(261


)

Accounts receivable, net and other








(42


)








16











412











183











(252


)








(149


)

Accounts payable








(81


)








56











(1,972


)








(1,073


)








959











625




Accrued expenses and other








200











(6


)








(161


)








(128


)








265











182




Additions to unearned revenue








161











207











349











413











990











696




Amortization of previously unearned revenue








(214


)








(125


)








(441


)








(232


)








(799


)








(441


)

Net cash provided by (used in) operating activities





250











468











(848


)








(117


)








2,561











1,878










































INVESTING ACTIVITIES:





































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





(196


)








(78


)








(336


)








(133


)








(575


)








(336


)

Acquisitions, net of cash acquired, and other








(21


)








(19


)








(40


)








(35


)








(45


)








(129


)

Sales and maturities of marketable securities and other investments





1,208











378











2,080











692











3,354











1,545




Purchases of marketable securities and other investments





(1,466


)








(560


)








(2,721


)








(951


)








(5,661


)








(1,877


)

Net cash provided by (used in) investing activities





(475


)








(279


)








(1,017


)








(427


)








(2,927


)








(797


)







































FINANCING ACTIVITIES:





































Excess tax benefits from stock-based compensation





75











20











161











70











196











122




Common stock repurchased








-











-











-











-











-











(100


)

Proceeds from long-term debt and other








5











2











67











6











133











44




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





(37


)








(25


)








(98


)








(368


)








(186


)








(663


)

Net cash provided by (used in) financing activities





43











(3


)








130











(292


)








143











(597


)







































Foreign-currency effect on cash and cash equivalents





(33


)








49











(80


)








3











(84


)








(96


)

Net increase (decrease) in cash and cash equivalents





(215


)








235











(1,815


)








(833


)








(307


)








388










































CASH AND CASH EQUIVALENTS, END OF PERIOD


$


1,629








$


1,936








$


1,629








$


1,936








$


1,629








$


1,936










































SUPPLEMENTAL CASH FLOW INFORMATION:


































Cash paid for interest





$


3








$


2








$


5








$


28








$


9








$


43




Cash paid for income taxes








43











23











46











34











60











64




Fixed assets acquired under capital leases








83











19











142











37











252











118




Fixed assets acquired under build-to-suit leases








60











61











120











117











191











173






AMAZON.COM, INC.

Consolidated Statements of Operations

(in millions, except per share data)

(unaudited)





















































































Three Months Ended





Six Months Ended







June 30,





June 30,







2010





2009





2010





2009



























Net sales





$


6,566








$


4,651








$


13,697








$


9,541






























Operating expenses (1):

























Cost of sales








4,957











3,518











10,458











7,260




Fulfillment








582











409











1,128











831




Marketing








211











129











412











257




Technology and content








408











299











773











575




General and administrative








113











77











210











145




Other operating expense (income), net (2)








25











60











51











71




Total operating expenses








6,296











4,492











13,032











9,139






























Income from operations








270











159











665











402






























Interest income








12











8











23











20




Interest expense








(9


)








(7


)








(16


)








(19


)

Other income (expense), net








24











19











27











24




Total non-operating income (expense)








27











20











34











25






























Income before income taxes








297











179











699











427






























Provision for income taxes








(88


)








(39


)








(189


)








(108


)

Equity-method investment activity, net of tax








(2


)








2











(5


)








-




Net income





$


207








$


142








$


505








$


319






























Basic earnings per share





$


0.46








$


0.33








$


1.13








$


0.74






























Diluted earnings per share





$


0.45








$


0.32








$


1.11








$


0.73
























































Weighted average shares used in computation of earnings per share:

























Basic








447











431











446











430




Diluted








455











440











455











438




__________________________

























(1) Includes stock-based compensation as follows:

























Fulfillment





$


24








$


20








$


42








$


35




Marketing








7











5











12











9




Technology and content








58











46











103











82




General and administrative








22











14











39











26






























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





















AMAZON.COM, INC.

Segment Information

(in millions)

(unaudited)





















































































Three Months Ended





Six Months Ended







June 30,





June 30,







2010





2009





2010





2009

North America

























Net sales





$


3,590








$


2,451








$


7,370








$


5,030




Operating expenses

























Cost of sales








2,570











1,779











5,332











3,664




Direct segment operating expenses (1)








820











547











1,565











1,091




Segment operating income





$


200








$


125








$


473








$


275






























International

























Net sales





$


2,976








$


2,200








$


6,327








$


4,511




Operating expenses

























Cost of sales








2,387











1,739











5,126











3,596




Direct segment operating expenses (1)








383











282











762











565




Segment operating income





$


206








$


179








$


439








$


350






























Consolidated

























Net sales





$


6,566








$


4,651








$


13,697








$


9,541




Operating expenses

























Cost of sales








4,957











3,518











10,458











7,260




Direct segment operating expenses








1,203











829











2,327











1,656




Segment operating income








406











304











912











625




Stock-based compensation








(111


)








(85


)








(196


)








(152


)

Other operating income (expense), net (2)








(25


)








(60


)








(51


)








(71


)

Income from operations








270











159











665











402




Total non-operating income (expense), net








27











20











34











25




Provision for income taxes








(88


)








(39


)








(189


)








(108


)

Equity-method investment activity, net of tax








(2


)








2











(5


)








-




Net income





$


207








$


142








$


505








$


319






























Segment Highlights:

























Y/Y net sales growth:

























North America








46


%








13


%








47


%








17


%

International








35











16











40











16




Consolidated








41











14











44











16




Y/Y segment operating income growth:

























North America








61


%








30


%








72


%








22


%

International








15











20











25











27




Consolidated








34











24











46











24




Net sales mix:

























North America








55


%








53


%








54


%








53


%

International








45











47











46











47













100


%








100


%








100


%








100


%

__________________________

























(1) A significant 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





Six Months Ended







June 30,





June 30,







2010





2009





2010





2009

North America

























Media





$


1,324








$


1,148








$


2,921








$


2,454




Electronics and other general merchandise








2,090











1,187











4,114











2,359




Other








176











116











335











217




Total North America





$


3,590








$


2,451








$


7,370








$


5,030






























International

























Media





$


1,550








$


1,294








$


3,383








$


2,712




Electronics and other general merchandise








1,399











882











2,887











1,756




Other








27











24











57











43




Total International





$


2,976








$


2,200








$


6,327








$


4,511






























Consolidated

























Media





$


2,874








$


2,442








$


6,304








$


5,166




Electronics and other general merchandise








3,489











2,069











7,001











4,115




Other








203











140











392











260




Total Consolidated





$


6,566








$


4,651








$


13,697








$


9,541






























Y/Y Net Sales Growth:

























North America:

























Media








15


%








0


%








19


%








4


%

Electronics and other general merchandise








76











29











74











35




Other








52











16











54











12




Total North America








46











13











47











17






























International:

























Media








20


%








3


%








25


%








4


%

Electronics and other general merchandise








59











45











64











39




Other








13











(8


)








32











1




Total International








35











16











40











16






























Consolidated:

























Media








18


%








1


%








22


%








4


%

Electronics and other general merchandise








69











35











70











37




Other








45











11











51











10




Total Consolidated








41











14











44











16






























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

























International:

























Media








21


%








12


%








22


%








15


%

Electronics and other general merchandise








63











60











62











55




Other








18











10











31











22




Total International








38











28











38











28






























Consolidated:

























Media








18


%








7


%








20


%








10


%

Electronics and other general merchandise








70











41











69











44




Other








46











15











50











13




Total Consolidated








42











20











42











22






























Consolidated Net Sales Mix:

























Media








44


%








52


%








46


%








54


%

Electronics and other general merchandise








53











45











51











43




Other








3











3











3











3













100


%








100


%








100


%








100


%



AMAZON.COM, INC.

Consolidated Balance Sheets

(in millions, except per share data)



































































June 30,





December 31,





June 30,







2010





2009





2009

ASSETS





(unaudited)











(unaudited)

Current assets:



















Cash and cash equivalents





$


1,629








$


3,444








$


1,936




Marketable securities








3,479











2,922











1,276




Inventories








1,940











2,171











1,325




Accounts receivable, net and other








805











988











584




Deferred tax assets








265











272











183




Total current assets








8,118











9,797











5,304




Fixed assets, net








1,704











1,290











981




Deferred tax assets








29











18











118




Goodwill








1,229











1,234











451




Other assets








1,317











1,474











821




Total assets





$


12,397








$


13,813








$


7,675
























LIABILITIES AND STOCKHOLDERS' EQUITY



















Current liabilities:



















Accounts payable





$


3,545








$


5,605








$


2,508




Accrued expenses and other








1,705











1,759











1,128




Total current liabilities








5,250











7,364











3,636




Long-term debt








132











109











109




Other long-term liabilities








1,158











1,083











674
























Commitments and contingencies







































Stockholders' equity:



















Preferred stock, $0.01 par value:



















Authorized shares -- 500



















Issued and outstanding shares -- none








-











-











-




Common stock, $0.01 par value:



















Authorized shares -- 5,000



















Issued shares -- 464, 461 and 448



















Outstanding shares -- 448, 444 and 432








5











5











4




Treasury stock, at cost








(600


)








(600


)








(600


)

Additional paid-in capital








6,056











5,736











4,321




Accumulated other comprehensive loss








(282


)








(56


)








(58


)

Retained earnings (accumulated deficit)








678











172











(411


)

Total stockholders' equity








5,857











5,257











3,256




Total liabilities and stockholders' equity





$


12,397








$


13,813








$


7,675






AMAZON.COM, INC.

Supplemental Financial Information and Business Metrics

(in millions, except per share data)

(unaudited)











































































Y/Y %







Q2 2009





Q3 2009





Q4 2009





Q1 2010





Q2 2010





Change

Cash Flows and Shares





































Operating cash flow -- trailing twelve months (TTM)





$


1,878








$


2,253








$


3,293








$


2,780








$


2,561








36


%

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





$


336








$


337








$


373








$


458








$


575








71


%

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





$


1,542








$


1,916








$


2,920








$


2,322








$


1,986








29


%

Free cash flow -- TTM Y/Y growth








89


%








98


%








114


%








62


%








29


%





N/A




Invested capital (1)





$


3,666








$


3,847








$


4,449








$


5,104








$


5,820








N/A




Return on invested capital (2)








42


%








50


%








66


%








45


%








34


%





N/A










































Common shares and stock-based awards outstanding








451











451











461











463











465








3


%

Common shares outstanding








432











433











444











446











448








4


%

Stock-based awards outstanding








19











18











17











18











17








(11


%)

Stock-based awards outstanding -- % of common shares outstanding








4.4


%








4.2


%








3.8


%








4.0


%








3.8


%





N/A










































Results of Operations





































Worldwide (WW) net sales





$


4,651








$


5,449








$


9,519








$


7,131








$


6,566








41


%

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








20


%








29


%








37


%








42


%








42


%





N/A




WW net sales -- TTM





$


20,509








$


21,693








$


24,509








$


26,750








$


28,664








40


%

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








24


%








24


%








29


%








33


%








38


%





N/A










































Operating income (3)





$


159








$


251








$


476








$


394








$


270








71


%

Operating income -- Y/Y growth (decrease), excluding F/X








(13


%)








69


%








63


%








56


%








77


%





N/A




Operating margin -- % of WW net sales








3.4


%








4.6


%








5.0


%








5.5


%








4.1


%





N/A




Operating income -- TTM (3)





$


829








$


925








$


1,129








$


1,279








$


1,391








68


%

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








13


%








22


%








39


%








44


%








65


%





N/A




Operating margin -- TTM % of WW net sales








4.0


%








4.3


%








4.6


%








4.8


%








4.9


%





N/A










































Net income (3)





$


142








$


199








$


384








$


299








$


207








45


%

Net income per diluted share





$


0.32








$


0.45








$


0.85








$


0.66








$


0.45








41


%

Net income -- TTM (3)





$


663








$


743








$


902








$


1,024








$


1,088








64


%

Net income per diluted share -- TTM





$


1.52








$


1.69








$


2.04








$


2.30








$


2.42








59


%







































Segments





































North America Segment:





































Net sales





$


2,451








$


2,843








$


4,956








$


3,780








$


3,590








46


%

Net sales -- Y/Y growth, excluding F/X








13


%








24


%








36


%








46


%








46


%





N/A




Net sales -- TTM





$


10,963








$


11,503








$


12,828








$


14,030








$


15,168








38


%

Operating income





$


125








$


156








$


278








$


273








$


200








61


%

Operating margin -- % of North America net sales








5.1


%








5.5


%








5.6


%








7.2


%








5.6


%





N/A




Operating income -- TTM





$


494








$


562








$


709








$


832








$


907








84


%

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








8


%








20


%








59


%








79


%








84


%





N/A




Operating margin -- TTM % of North America net sales








4.5


%








4.9


%








5.5


%








5.9


%








6.0


%





N/A










































International Segment:





































Net sales





$


2,200








$


2,606








$


4,563








$


3,351








$


2,976








35


%

Net sales -- Y/Y growth, excluding F/X








28


%








35


%








37


%








37


%








38


%





N/A




Net sales -- TTM





$


9,546








$


10,190








$


11,681








$


12,720








$


13,496








41


%

Net sales -- TTM % of WW net sales








47


%








47


%








48


%








48


%








47


%





N/A




Operating income





$


179








$


194








$


319








$


234








$


206








15


%

Operating margin -- % of International net sales








8.1


%








7.4


%








7.0


%








7.0


%








6.9


%





N/A




Operating income -- TTM





$


722








$


773








$


863








$


925








$


952








32


%

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








49


%








49


%








41


%








33


%








28


%





N/A




Operating margin -- TTM % of International net sales








7.6


%








7.6


%








7.4


%








7.3


%








7.1


%





N/A










































Consolidated Segments:





































Operating expenses (4)





$


4,347








$


5,099








$


8,922








$


6,624








$


6,160








42


%

Operating expenses -- TTM (4)





$


19,293








$


20,358








$


22,937








$


24,993








$


26,805








39


%

Operating income





$


304








$


350








$


597








$


507








$


406








34


%

Operating margin -- % of consolidated sales








6.5


%








6.4


%








6.3


%








7.1


%








6.2


%





N/A




Operating income -- TTM





$


1,216








$


1,335








$


1,572








$


1,757








$


1,859








53


%

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








29


%








35


%








48


%








51


%








51


%





N/A




Operating margin -- TTM % of consolidated net sales








5.9


%








6.2


%








6.4


%








6.6


%








6.5


%





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 %







Q2 2009





Q3 2009





Q4 2009





Q1 2010





Q2 2010





Change

Supplemental





































Supplemental North America Segment Net Sales:





































Media





$


1,148








$


1,412








$


2,099








$


1,597








$


1,324








15


%

Media -- Y/Y growth, excluding F/X








0


%








14


%








19


%








22


%








15


%





N/A




Media -- TTM





$


5,449








$


5,616








$


5,964








$


6,255








$


6,432








18


%

Electronics and other general merchandise





$


1,187








$


1,293








$


2,662








$


2,024








$


2,090








76


%

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








29


%








36


%








54


%








73


%








76


%





N/A




Electronics and other general merchandise -- TTM





$


5,043








$


5,385








$


6,314








$


7,166








$


8,069








60


%

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








46


%








47


%








49


%








51


%








53


%





N/A




Other





$


116








$


138








$


195








$


159








$


176








52


%

Other -- TTM





$


471








$


502








$


550








$


608








$


668








42


%







































Supplemental International Segment Net Sales:





































Media





$


1,294








$


1,517








$


2,580








$


1,833








$


1,550








20


%

Media -- Y/Y growth, excluding F/X








12


%








22


%








26


%








23


%








21


%





N/A




Media -- TTM





$


5,849








$


6,118








$


6,810








$


7,225








$


7,480








28


%

Electronics and other general merchandise





$


882








$


1,064








$


1,947








$


1,489








$


1,399








59


%

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








60


%








58


%








56


%








61


%








63


%





N/A




Electronics and other general merchandise -- TTM





$


3,603








$


3,977








$


4,768








$


5,382








$


5,899








64


%

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








38


%








39


%








41


%








42


%








44


%





N/A




Other





$


24








$


25








$


36








$


29








$


27








13


%

Other -- TTM





$


94








$


95








$


103








$


114








$


117








24


%







































Supplemental Worldwide Net Sales:





































Media





$


2,442








$


2,929








$


4,679








$


3,430








$


2,874








18


%

Media -- Y/Y growth, excluding F/X








7


%








18


%








23


%








22


%








18


%





N/A




Media -- TTM





$


11,298








$


11,734








$


12,774








$


13,480








$


13,912








23


%

Electronics and other general merchandise





$


2,069








$


2,357








$


4,609








$


3,513








$


3,489








69


%

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








41


%








45


%








54


%








68


%








70


%





N/A




Electronics and other general merchandise -- TTM





$


8,646








$


9,362








$


11,082








$


12,548








$


13,968








62


%

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








42


%








43


%








45


%








47


%








49


%





N/A




Other





$


140








$


163








$


231








$


188








$


203








45


%

Other -- TTM





$


565








$


597








$


653








$


722








$


785








39


%







































Balance Sheet





































Cash and marketable securities (5)





$


3,504








$


4,304








$


6,672








$


5,381








$


5,419








55


%

Inventory, net -- ending





$


1,325








$


1,617








$


2,171








$


1,820








$


1,940








46


%

Inventory turnover, average -- TTM








12.4











12.1











12.2











12.6











12.5








1


%

Fixed assets, net





$


981








$


1,086








$


1,290








$


1,436








$


1,704








74


%







































Accounts payable -- ending





$


2,508








$


3,354








$


5,605








$


3,619








$


3,545








41


%

Accounts payable days -- ending








65











72











68











59











65








0


%







































Other





































WW shipping revenue





$


185








$


208








$


341








$


248








$


239








29


%

WW shipping costs





$


332








$


388








$


696








$


518








$


487








47


%

WW net shipping costs





$


147








$


180








$


355








$


270








$


248








69


%

WW net shipping costs -- % of WW net sales








3.1


%








3.3


%








3.7


%








3.8


%








3.8


%





N/A
















































































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








21,000











21,700











24,300











26,100











28,300








35


%













































































(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: $292 million Q2 2009, $303 million Q3 2009, $306 million in Q4 2009, $318 million in Q1 2010 and $311 million in Q2 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’s initial order is shipped or when a customer orders from other sellers on our websites. Customer accounts exclude certain customers, including customers associated with certain of our acquisitions, Amazon Enterprise Solutions program customers, Amazon.com Payments customers, Amazon Web Services customers, and the customers of select companies with whom we have a technology alliance or marketing and promotional relationship. Customers are considered active when they have placed an order during the preceding twelve-month period.

Seller Accounts

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

Registered Developers

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

Units

· References to units mean physical and digital units sold (net of returns and cancellations) by us and sellers at Amazon.com domains worldwide – such as www.amazon.com, www.amazon.co.uk, www.amazon.de, www.amazon.co.jp, www.amazon.fr, www.amazon.ca and www.amazon.cn, as well as Amazon.com-owned items sold through non-Amazon.com domains. Units sold do not include units associated with certain of our acquisitions or Amazon.com gift certificates.
For media enquiries, please contact:
Amazon.com Investor Relations
Rob Eldridge,
206/266-2171
www.amazon.com/ir


Amazon.com Public Relations
Mary Osako,
206/266-7180

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