Amazon.com Announces Fourth Quarter Sales up 22% to $21.27 Billion

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Operating income up 56% year-over-year – above high end of guidance

SEATTLE--(BUSINESS WIRE)--Jan. 29, 2013-- Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its fourth quarter ended December 31, 2012.

Operating cash flow increased 7% to $4.18 billion for the trailing twelve months, compared with $3.90 billion for the trailing twelve months ended December 31, 2011. Free cash flow decreased 81% to $395 million for the trailing twelve months, compared with$2.09 billion for the trailing twelve months ended December 31, 2011. Free cash flow for the trailing twelve months ended December 31, 2012 includes fourth quarter cash outflows for purchases of corporate office space and property in Seattle, Washington, of $1.4 billion.

Common shares outstanding plus shares underlying stock-based awards totaled 470 million on December 31, 2012, compared with 468 million one year ago.

Net sales increased 22% to $21.27 billion in the fourth quarter, compared with $17.43 billion in fourth quarter 2011. Excluding the$178 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales grew 23% compared with fourth quarter 2011.

Operating income increased 56% to $405 million in the fourth quarter, compared with $260 million in fourth quarter 2011. The favorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $2 million.

Net income decreased 45% to $97 million in the fourth quarter, or $0.21 per diluted share, compared with $177 million, or $0.38 per diluted share, in fourth quarter 2011.

"We're now seeing the transition we've been expecting," said Jeff Bezos, founder and CEO of Amazon.com. "After 5 years, eBooks is a multi-billion dollar category for us and growing fast – up approximately 70% last year. In contrast, our physical book sales experienced the lowest December growth rate in our 17 years as a book seller, up just 5%. We're excited and very grateful to our customers for their response to Kindle and our ever expanding ecosystem and selection."

Full Year 2012

Net sales increased 27% to $61.09 billion, compared with $48.08 billion in 2011. Excluding the $854 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales grew 29% compared with 2011.

Operating income decreased 22% to $676 million, compared with $862 million in 2011. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the year on operating income was $14 million.

Net loss was $39 million, or $0.09 per diluted share, compared with net income of $631 million, or $1.37 per diluted share, in 2011.

Highlights

  • For the second year in a row, Amazon's tablet was the most popular item for customers – Kindle Fire HD continued its run as the #1 best-selling, most gifted, and most wished for product across the millions of items available on Amazon worldwide. At year-end, Kindle Fire HD, Kindle Fire, Kindle Paperwhite and Kindle held the top four spots on the Amazon worldwide best seller charts since launch.
  • Amazon announced the launch of AutoRip, a new service that gives customers free MP3 versions of CDs they purchase fromAmazon. Additionally, customers who have purchased AutoRip CDs at any time since Amazon first opened its Music Store in 1998 will find MP3 versions of those albums in their Cloud Player libraries – also automatically and for free.
  • Amazon introduced Kindle FreeTime Unlimited, bringing together for the first time all of the types of content kids and parents love – books, games, educational apps, movies and TV shows – into one simple, unlimited, easy-to-use service for kids ages 3-8.
  • Amazon's digital media selection has grown to over 23 million movies, TV shows, songs, magazines, books, audiobooks, and popular apps and games in 2012, an increase from 19 million at year-end 2011.
  • Amazon.com announced new licensing agreements with Turner BroadcastingWarner Bros. Domestic Television Distribution, and A+E Networks, for popular television series including Falling SkiesThe CloserPawn StarsStorage Wars, and Dance Moms, expanding its catalog of title offerings for Prime Instant Video to more than 36,000 movies and television episodes.
  • Amazon launched Kindle Stores for BrazilCanadaChina, and Japan, with a large selection of the most popular books, including thousands of local-language books.
  • Amazon announced that 23 KDP authors each sold over 250,000 copies of their books in 2012, and that over 500 KDP Select books have reached the top 100 Kindle best seller lists around the world.
  • Amazon announced that for the eighth consecutive year, the company ranks #1 in customer satisfaction during the holiday shopping season according to the ForeSee annual Holiday E-Retail Satisfaction Index. ForeSee surveyed over 24,000 customers between Thanksgiving and Christmas, asking them to rate their satisfaction with the top 100 retailers. For the second year in a row, Amazon's score of 88 is the highest ever attained by any retailer in the study.
  • Amazon Web Services (AWS) announced the launch of its newest Asia Pacific Region in Sydney, Australia, now available for multiple services including Amazon Elastic Compute Cloud (EC2), Amazon Simple Storage Service (S3), and Amazon Relational Database Service (RDS). Sydney joins Singapore and Tokyo as the third Region in Asia Pacific and the ninth Region worldwide.
  • AWS announced that SAP Business Suite is now certified to run on the AWS cloud platform. Enterprises running SAP Business Suite can now leverage the on-demand, pay as you go AWS platform to support thousands of concurrent users in production without making costly capital expenditures for their underlying infrastructure. AWS also announced that SAP HANA, SAP's in-memory database and platform, is certified to run on AWS and is available for purchase via AWS Marketplace.
  • AWS continued its rapid pace of innovation by launching 159 new services and features in 2012. This is nearly double the services and features launched in 2011.
  • AWS has lowered prices 24 times since it launched in 2006, including 10 price reductions in 2012.

Financial Guidance

The following forward-looking statements reflect Amazon.com's expectations as of January 29, 2013. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and consumer spending, world events, the rate of growth of the Internet and online commerce and the various factors detailed below.

First Quarter 2013 Guidance

  • Net sales are expected to be between $15.0 billion and $16.6 billion, or to grow between 14% and 26% compared with first quarter 2012.
  • Operating income (loss) is expected to be between $(285) million and $65 million, compared to $192 million in the prior year period.
  • This guidance includes approximately $285 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 atwww.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 and data 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 Paperwhite is the most-advanced e-reader ever constructed with 62% more pixels and 25% increased contrast, a patented built-in front light for reading in all lighting conditions, extra-long battery life, and a thin and light design. The new latest generation Kindle, the lightest and smallest Kindle, now features new, improved fonts and faster page turns. Kindle Fire HD features a stunning custom high-definition display, exclusive Dolby audio with dual stereo speakers, high-end, laptop-grade Wi-Fi with dual-band support, dual-antennas and MIMO for faster streaming and downloads, enough storage for HD content, and the latest generation processor and graphics engine—and it is available in two display sizes—7" and 8.9". The large-screen Kindle Fire HD is also available with 4G wireless, and comes with a groundbreaking $49.99 introductory 4G LTE data package. The all-new Kindle Fire features a 20% faster processor, 40% faster performance, twice the memory, and longer battery life.

Amazon and its affiliates operate websites, including www.amazon.comwww.amazon.co.ukwww.amazon.dewww.amazon.co.jp,www.amazon.frwww.amazon.cawww.amazon.cnwww.amazon.itwww.amazon.es and www.amazon.com.br. 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)
                                   
                                   
                                   
                                   
          Three Months Ended       Twelve Months Ended
          December 31,       December 31,
            2012           2011           2012           2011  
          (unaudited)                
                                   
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD         $ 2,980         $ 2,823         $ 5,269         $ 3,777  
                                   
OPERATING ACTIVITIES:                                  
Net income (loss)           97           177           (39 )         631  

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

                                 

Depreciation of property and equipment, including internal-use software and website development, and other amortization

          662           359           2,159           1,083  
Stock-based compensation           235           159           833           557  
Other operating expense (income), net           36           43           154           154  
Losses (gains) on sales of marketable securities, net           (1 )         -           (9 )         (4 )
Other expense (income), net           100           (16 )         253           (56 )
Deferred income taxes           (148 )         67           (265 )         136  
Excess tax benefits from stock-based compensation           (239 )         (1 )         (429 )         (62 )
Changes in operating assets and liabilities:                                  
Inventories           (974 )         (1,260 )         (999 )         (1,777 )
Accounts receivable, net and other           (1,024 )         (1,077 )         (861 )         (866 )
Accounts payable           4,926           4,684           2,070           2,997  
Accrued expenses and other           1,412           1,076           1,038           1,067  
Additions to unearned revenue           545           358           1,796           1,064  
Amortization of previously unearned revenue           (546 )         (300 )         (1,521 )         (1,021 )
Net cash provided by (used in) operating activities           5,081           4,269           4,180           3,903  
                                   
INVESTING ACTIVITIES:                                  

Purchases of property and equipment, including internal-use software and website development

          (2,025 )         (550 )         (3,785 )         (1,811 )
Acquisitions, net of cash acquired, and other           (35 )         (49 )         (745 )         (705 )
Sales and maturities of marketable securities and other investments           506           912           4,237           6,843  
Purchases of marketable securities and other investments           (1,528 )         (1,782 )         (3,302 )         (6,257 )
Net cash provided by (used in) investing activities           (3,082 )         (1,469 )         (3,595 )         (1,930 )
                                   
FINANCING ACTIVITIES:                                  
Excess tax benefits from stock-based compensation           239           1           429           62  
Common stock repurchased           -           (277 )         (960 )         (277 )
Proceeds from long-term debt and other           3,083           47           3,378           177  

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

          (156 )         (104 )         (588 )         (444 )
Net cash provided by (used in) financing activities           3,166           (333 )         2,259           (482 )
                                   
Foreign-currency effect on cash and cash equivalents           (61 )         (21 )         (29 )         1  
Net increase (decrease) in cash and cash equivalents           5,104           2,446           2,815           1,492  
                                   
CASH AND CASH EQUIVALENTS, END OF PERIOD         $ 8,084         $ 5,269         $ 8,084         $ 5,269  
                                   
SUPPLEMENTAL CASH FLOW INFORMATION:                                  
Cash paid for interest on long-term debt         $ 10         $ 4         $ 31         $ 14  
Cash paid for income taxes (net of refunds)           52           15           112           33  
Property and equipment acquired under capital leases           239           187           802           753  
Property and equipment acquired, net, under build-to-suit leases           (17 )         39           29           259  
                                   
                                             
AMAZON.COM, INC.
Consolidated Statements of Operations
(in millions, except per share data)
                                             
                                             
                                             
                                             
              Three Months Ended         Twelve Months Ended
              December 31,         December 31,
                2012             2011             2012             2011  
              (unaudited)                    
                                             
Net product sales (1)             $ 18,147           $ 15,309           $ 51,733           $ 42,000  
Net services sales (2)               3,121             2,122             9,360             6,077  
Net sales               21,268             17,431             61,093             48,077  
                                             
Operating expenses (3):                                            
Cost of sales               16,136             13,830             45,971             37,288  
Fulfillment               2,258             1,659             6,419             4,576  
Marketing               851             593             2,408             1,630  
Technology and content               1,345             862             4,564             2,909  
General and administrative               235             184             896             658  
Other operating expense (income), net               38             43             159             154  
Total operating expenses               20,863             17,171             60,417             47,215  
                                             
Income from operations               405             260             676             862  
                                             
Interest income               9             14             40             61  
Interest expense               (28 )           (20 )           (92 )           (65 )
Other income (expense), net               (49 )           19             (80 )           76  
Total non-operating income (expense)               (68 )           13             (132 )           72  
                                             
Income before income taxes               337             273             544             934  
                                             
Provision for income taxes               (194 )           (86 )           (428 )           (291 )
Equity-method investment activity, net of tax               (46 )           (10 )           (155 )           (12 )
Net income (loss)             $ 97           $ 177           $ (39 )         $ 631  
                                             
Basic earnings per share             $ 0.21           $ 0.39           $ (0.09 )         $ 1.39  
                                             
Diluted earnings per share             $ 0.21           $ 0.38           $ (0.09 )         $ 1.37  
                                             
                                             
Weighted average shares used in computation of earnings per share:                                            
Basic               454             455             453             453  
Diluted               461             462             453             461  
                                             

(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             $ 62           $ 42           $ 212           $ 133  
Marketing               18             12             61             39  
Technology and content               124             80             434             292  
General and administrative               31             25             126             93  
                                             
                                     
AMAZON.COM, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
                                     
                                     
            Three Months Ended       Twelve Months Ended
            December 31,       December 31,
              2012           2011           2012           2011  
            (unaudited)                
                                     
Net income (loss)           $ 97         $ 177         $ (39 )       $ 631  
                                     
Other comprehensive income (loss):                                    
Foreign currency translation adjustments, net of tax of $(12), $3, $(30), and $20             60           (77 )         76           (123 )
Net change in unrealized gains on available-for-sale securities:                                    
Unrealized gains (losses), net of tax of $1, $0, $(3), and $1             (1 )         1           8           (1 )

Reclassification adjustment for losses (gains) included in net income, net of tax effect of $0, $0, $3, and $1

            (1 )         -           (7 )         (2 )
Net unrealized gains (losses) on available-for-sale securities             (2 )         1           1           (3 )
Total other comprehensive income (loss)             58           (76 )         77           (126 )
                                     
Comprehensive income           $ 155         $ 101         $ 38         $ 505  
                                     
                                         
AMAZON.COM, INC.
Segment Information
(in millions)
                                         
                                         
                                         
                                         
              Three Months Ended       Twelve Months Ended  
              December 31,       December 31,  
                2012           2011           2012           2011    
              (unaudited)                  
North America                                        
Net sales             $ 12,175         $ 9,902         $ 34,813         $ 26,705    
Segment operating expenses (1)               11,567           9,617           33,221           25,772    
Segment operating income             $ 608         $ 285         $ 1,592         $ 933    
                                         
International                                        
Net sales             $ 9,093         $ 7,529         $ 26,280         $ 21,372    
Segment operating expenses (1)               9,023           7,352           26,204           20,732    
Segment operating income             $ 70         $ 177         $ 76         $ 640    
                                         
Consolidated                                        
Net sales             $ 21,268         $ 17,431         $ 61,093         $ 48,077    
Segment operating expenses (1)               20,590           16,969           59,425           46,504    
Segment operating income               678           462           1,668           1,573    
Stock-based compensation               (235 )         (159 )         (833 )         (557 )  
Other operating income (expense), net               (38 )         (43 )         (159 )         (154 )  
Income from operations               405           260           676           862    
Total non-operating income (expense)               (68 )         13           (132 )         72    
Provision for income taxes               (194 )         (86 )         (428 )         (291 )  
Equity-method investment activity, net of tax               (46 )         (10 )         (155 )         (12 )  
Net income (loss)             $ 97         $ 177         $ (39 )       $ 631    
                                         
Segment Highlights:                                        
Y/Y net sales growth:                                        
North America               23   %       37   %       30   %       43   %
International               21           31           23           38    
Consolidated               22           35           27           41    
Y/Y segment operating income growth (decline):                              
North America               114   %       (4 ) %       71   %       (2 ) %
International               (61 )         (46 )         (88 )         (35 )  
Consolidated               47           (26 )         6           (19 )  
Net sales mix:                                        
North America               57   %       57   %       57   %       56   %
International               43           43           43           44    
                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)
                                         
                                         
                                         
                                         
              Three Months Ended       Twelve Months Ended  
              December 31,       December 31,  
              2012       2011       2012       2011  
              (unaudited)                  
North America                                        
Media             $ 2,903       $ 2,562       $ 9,189       $ 7,959  
Electronics and other general merchandise               8,503         6,881         23,273         17,315  
Other (1)               769         459         2,351         1,431  
Total North America             $ 12,175       $ 9,902       $ 34,813       $ 26,705  
                                         
International                                        
Media             $ 3,611       $ 3,447       $ 10,753       $ 9,820  
Electronics and other general merchandise               5,431         4,032         15,355         11,397  
Other (1)               51         50         172         155  
Total International             $ 9,093       $ 7,529       $ 26,280       $ 21,372  
                                         
Consolidated                                        
Media             $ 6,514       $ 6,009       $ 19,942       $ 17,779  
Electronics and other general merchandise               13,934         10,913         38,628         28,712  
Other (1)               820         509         2,523         1,586  
Total Consolidated             $ 21,268       $ 17,431       $ 61,093       $ 48,077  
                                         
Y/Y Net Sales Growth:                                        
North America:                                        
Media               13 %       8 %       15 %       16 %
Electronics and other general merchandise               24         51         34         57  
Other               68         62         64         73  
Total North America               23         37         30         43  
                                         
International:                                        
Media               5 %       20 %       9 %       23 %
Electronics and other general merchandise               35         42         35         55  
Other               4         32         11         24  
Total International               21         31         23         38  
                                         
Consolidated:                                        
Media               8 %       15 %       12 %       19 %
Electronics and other general merchandise               28         48         35         56  
Other               61         58         59         66  
Total Consolidated               22         35         27         41  
                                         
Y/Y Net Sales Growth Excluding Effect of Exchange Rates:                                        
International:                                        
Media               7 %       18 %       12 %       16 %
Electronics and other general merchandise               37         41         40         47  
Other               5         31         15         18  
Total International               23         29         27         31  
                                         
Consolidated:                                        
Media               10 %       14 %       14 %       16 %
Electronics and other general merchandise               29         47         36         53  
Other               61         58         59         66  
Total Consolidated               23         34         29         37  
                                         
Consolidated Net Sales Mix:                                        
Media               31 %       34 %       33 %       37 %
Electronics and other general merchandise               65         63         63         60  
Other               4         3         4         3  
                100 %       100 %       100 %       100 %
                                         

(1) Includes sales from non-retail activities, such as AWS in the North America segment, advertising services, and our co-branded credit card agreements in both segments.

                                         
                         
AMAZON.COM, INC.
Consolidated Balance Sheets
(in millions, except per share data)
                         
                         
                         
              December 31,         December 31,
                2012             2011  
ASSETS                        
Current assets:                        
Cash and cash equivalents             $ 8,084           $ 5,269  
Marketable securities               3,364             4,307  
Inventories               6,031             4,992  
Accounts receivable, net and other               3,364             2,571  
Deferred tax assets               453             351  
Total current assets               21,296             17,490  
Property and equipment, net               7,060             4,417  
Deferred tax assets               123             28  
Goodwill               2,552             1,955  
Other assets               1,524             1,388  
Total assets             $ 32,555           $ 25,278  
                         
LIABILITIES AND STOCKHOLDERS' EQUITY                        
Current liabilities:                        
Accounts payable             $ 13,318           $ 11,145  
Accrued expenses and other               5,684             3,751  
Total current liabilities               19,002             14,896  
Long-term debt               3,084             255  

Other long-term liabilities

              2,277             2,370  
                         
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 — 478 and 473                        
Outstanding shares — 454 and 455               5             5  
Treasury stock, at cost               (1,837 )           (877 )
Additional paid-in capital               8,347             6,990  
Accumulated other comprehensive loss               (239 )           (316 )
Retained earnings               1,916             1,955  
Total stockholders' equity               8,192             7,757  
Total liabilities and stockholders' equity             $ 32,555           $ 25,278  
                         
                                                             

AMAZON.COM, INC.

Supplemental Financial Information and Business Metrics
(in millions, except per share data)
(unaudited)
                                                             
                                                            Y/Y %
          Q4 2011         Q1 2012         Q2 2012         Q3 2012         Q4 2012         Change
Cash Flows and Shares                                                            
Operating cash flow -- trailing twelve months (TTM)         $ 3,903           $ 3,051           $ 3,222           $ 3,368           $ 4,180           7 %

Purchases of property and equipment (incl. internal-use software & website development) -- TTM

        $ 1,811           $ 1,899           $ 2,123           $ 2,310           $ 3,785           109 %

Free cash flow (operating cash flow less purchases of property and equipment) -- TTM

        $ 2,092           $ 1,152           $ 1,099           $ 1,058           $ 395           (81 %)
Free cash flow -- TTM Y/Y growth (decline)           (17 %)           (39 %)           (40 %)           (31 %)           (81 %)         N/A  
Invested capital (1)         $ 9,680           $ 10,006           $ 10,250           $ 10,392           $ 11,181           16 %
Return on invested capital (2)           22 %           12 %           11 %           10 %           4 %         N/A  
                                                             
Common shares and stock-based awards outstanding           468             464             468             469             470           0 %
Common shares outstanding           455             450             452             453             454           0 %
Stock-based awards outstanding           14             13             16             16             16           17 %
Stock-based awards outstanding -- % of common shares outstanding           3.0 %           2.9 %           3.6 %           3.6 %           3.5 %         N/A  
                                                             
Results of Operations                                                            
Worldwide (WW) net sales         $ 17,431           $ 13,185           $ 12,834           $ 13,806           $ 21,268           22 %
WW net sales -- Y/Y growth, excluding F/X           34 %           34 %           32 %           30 %           23 %         N/A  
WW net sales -- TTM         $ 48,077           $ 51,404           $ 54,325           $ 57,256           $ 61,093           27 %
WW net sales -- TTM Y/Y growth, excluding F/X           37 %           37 %           35 %           33 %           29 %         N/A  
                                                             
Operating income (loss)         $ 260           $ 192           $ 107           $ (28 )         $ 405           56 %
Operating income -- Y/Y growth (decline), excluding F/X           (48 %)           (38 %)           (34 %)           (137 %)           59 %         N/A  
Operating margin -- % of WW net sales           1.5 %           1.5 %           0.8 %           (0.2 %)           1.9 %         N/A  
Operating income -- TTM         $ 862           $ 732           $ 637           $ 531           $ 676           (22 %)
Operating income -- TTM Y/Y growth (decline), excluding F/X           (44 %)           (50 %)           (50 %)           (48 %)           (15 %)         N/A  
Operating margin -- TTM % of WW net sales           1.8 %           1.4 %           1.2 %           0.9 %           1.1 %         N/A  
                                                             
Net income (loss)         $ 177           $ 130           $ 7           $ (274 )         $ 97           (45 %)
Net income (loss) per diluted share         $ 0.38           $ 0.28           $ 0.01           $ (0.60 )         $ 0.21           (45 %)

Net income (loss) -- TTM

        $ 631           $ 561           $ 377           $ 40           $ (39 )         (106 %)
Net income (loss) per diluted share -- TTM         $ 1.37           $ 1.22           $ 0.82           $ 0.09           $ (0.09 )         (106 %)
                                                             
Segments                                                            
North America Segment:                                                            
Net sales         $ 9,902           $ 7,427           $ 7,326           $ 7,884           $ 12,175           23 %
Net sales -- Y/Y growth, excluding F/X           37 %           36 %           36 %           33 %           23 %         N/A  
Net sales -- TTM         $ 26,705           $ 28,667           $ 30,587           $ 32,540           $ 34,813           30 %
Operating income         $ 285           $ 349           $ 344           $ 291           $ 608           114 %
Operating margin -- % of North America net sales           2.9 %           4.7 %           4.7 %           3.7 %           5.0 %         N/A  
Operating income -- TTM         $ 933           $ 991           $ 1,120           $ 1,268           $ 1,592           71 %
Operating income -- TTM Y/Y growth (decline), excluding F/X           (2 %)           2 %           14 %           34 %           71 %         N/A  
Operating margin -- TTM % of North America net sales           3.5 %           3.5 %           3.7 %           3.9 %           4.6 %         N/A  
                                                             
International Segment:                                                            
Net sales         $ 7,529           $ 5,758           $ 5,508           $ 5,922           $ 9,093           21 %
Net sales -- Y/Y growth, excluding F/X           29 %           32 %           28 %           27 %           23 %         N/A  
Net sales -- TTM         $ 21,372           $ 22,737           $ 23,738           $ 24,716           $ 26,280           23 %
Net sales -- TTM % of WW net sales           44 %           44 %           44 %           43 %           43 %         N/A  
Operating income (loss)         $ 177           $ 49           $ 16           $ (59 )         $ 70           (61 %)
Operating margin -- % of International net sales           2.4 %           0.9 %           0.3 %           (1.0 %)           0.8 %         N/A  
Operating income -- TTM         $ 640           $ 515           $ 359           $ 183           $ 76           (88 %)
Operating income -- TTM Y/Y growth (decline), excluding F/X           (41 %)           (49 %)           (57 %)           (68 %)           (77 %)         N/A  
Operating margin -- TTM % of International net sales           3.0 %           2.3 %           1.5 %           0.7 %           0.3 %         N/A  
                                                             
Consolidated Segments:                                                            
Operating expenses (3)         $ 16,969           $ 12,787           $ 12,474           $ 13,574           $ 20,590           21 %
Operating expenses -- TTM (3)         $ 46,504           $ 49,899           $ 52,846           $ 55,805           $ 59,425           28 %
Operating income         $ 462           $ 398           $ 360           $ 232           $ 678           47 %
Operating margin -- % of Consolidated sales           2.7 %           3.0 %           2.8 %           1.7 %           3.2 %         N/A  
Operating income -- TTM         $ 1,573           $ 1,505           $ 1,480           $ 1,451           $ 1,668           6 %
Operating income -- TTM Y/Y growth (decline), excluding F/X           (21 %)           (22 %)           (21 %)           (15 %)           7 %         N/A  
Operating margin -- TTM % of Consolidated net sales           3.3 %           2.9 %           2.7 %           2.5 %           2.7 %         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 %
              Q4 2011       Q1 2012       Q2 2012       Q3 2012       Q4 2012       Change
Supplemental                                                      
Supplemental North America Segment Net Sales:                                                      
Media             $ 2,562         $ 2,197         $ 1,874         $ 2,215         $ 2,903         13 %
Media -- Y/Y growth, excluding F/X               8 %         17 %         18 %         15 %         13 %       N/A  
Media -- TTM             $ 7,959         $ 8,270         $ 8,559         $ 8,847         $ 9,189         15 %
Electronics and other general merchandise             $ 6,881         $ 4,772         $ 4,937         $ 5,061         $ 8,503         24 %
Electronics and other general merchandise -- Y/Y growth, excluding F/X               51 %         44 %         41 %         39 %         24 %       N/A  
Electronics and other general merchandise -- TTM             $ 17,315         $ 18,784         $ 20,226         $ 21,652         $ 23,273         34 %
Electronics and other general merchandise -- TTM % of North America net sales               65 %         66 %         66 %         67 %         67 %       N/A  
Other             $ 459         $ 458         $ 515         $ 608         $ 769         68 %
Other -- TTM             $ 1,431         $ 1,613         $ 1,802         $ 2,041         $ 2,351         64 %
                                                       
Supplemental International Segment Net Sales:                                                      
Media             $ 3,447         $ 2,513         $ 2,245         $ 2,385         $ 3,611         5 %
Media -- Y/Y growth, excluding F/X               18 %         22 %         12 %         12 %         7 %       N/A  
Media -- TTM             $ 9,820         $ 10,261         $ 10,431         $ 10,590         $ 10,753         9 %
Electronics and other general merchandise             $ 4,032         $ 3,203         $ 3,224         $ 3,497         $ 5,431         35 %
Electronics and other general merchandise -- Y/Y growth, excluding F/X               41 %         42 %         42 %         39 %         37 %       N/A  
Electronics and other general merchandise -- TTM             $ 11,397         $ 12,314         $ 13,139         $ 13,956         $ 15,355         35 %
Electronics and other general merchandise -- TTM % of International net sales               53 %         54 %         55 %         56 %         58 %       N/A  
Other             $ 50         $ 42         $ 39         $ 40         $ 51         4 %
Other -- TTM             $ 155         $ 162         $ 168         $ 170         $ 172         11 %
                                                       
Supplemental Worldwide Net Sales:                                                      
Media             $ 6,009         $ 4,710         $ 4,119         $ 4,600         $ 6,514         8 %
Media -- Y/Y growth, excluding F/X               14 %         19 %         15 %         14 %         10 %       N/A  
Media -- TTM             $ 17,779         $ 18,531         $ 18,990         $ 19,437         $ 19,942         12 %
Electronics and other general merchandise             $ 10,913         $ 7,975         $ 8,161         $ 8,558         $ 13,934         28 %
Electronics and other general merchandise -- Y/Y growth, excluding F/X               47 %         43 %         42 %         39 %         29 %       N/A  
Electronics and other general merchandise -- TTM             $ 28,712         $ 31,098         $ 33,365         $ 35,608         $ 38,628         35 %
Electronics and other general merchandise -- TTM % of WW net sales               60 %         60 %         61 %         62 %         63 %       N/A  
Other             $ 509         $ 500         $ 554         $ 648         $ 820         61 %
Other -- TTM             $ 1,586         $ 1,775         $ 1,970         $ 2,211         $ 2,523         59 %
                                                       
Balance Sheet                                                      
Cash and marketable securities             $ 9,576         $ 5,715         $ 4,970         $ 5,248         $ 11,448         20 %
Inventory, net -- ending             $ 4,992         $ 4,255         $ 4,380         $ 5,065         $ 6,031         21 %
Inventory turnover, average -- TTM               10.3           10.4           10.1           9.7           9.3         (10 %)
Fixed assets, net             $ 4,417         $ 4,653         $ 5,097         $ 5,662         $ 7,060         60 %
                                                       
Accounts payable -- ending             $ 11,145         $ 6,886         $ 7,072         $ 8,369         $ 13,318         20 %
Accounts payable days -- ending               74           62           68           75           76         2 %
                                                       
Other                                                      
WW shipping revenue             $ 531         $ 461         $ 469         $ 517         $ 832         57 %
WW shipping costs             $ 1,466         $ 1,129         $ 1,054         $ 1,153         $ 1,798         23 %
WW net shipping costs             $ 935         $ 668         $ 585         $ 636         $ 966         3 %
WW net shipping costs -- % of WW net sales               5.4 %         5.1 %         4.6 %         4.6 %         4.5 %       N/A  
                                                       
                                                       
Employees (full-time and part-time; excludes contractors & temporary personnel)               56,200           65,600           69,100           81,400           88,400         57 %
                                                       
                                                       
(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 Payments customers, AmazonWeb 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. 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

 

Source: Amazon.com, Inc.

Amazon.com, Inc.
Investor Relations:
Sean Boyle, 206-266-2171
www.amazon.com/ir
or
Public Relations:
Ty Rogers, 206-266-7180