SEATTLE--(BUSINESS WIRE)--Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its third quarter ended September 30, 2011.
Operating cash flow increased 19% to $3.11 billion for the trailing twelve months, compared with $2.62 billion for the trailing twelve months ended September 30, 2010. Free cash flow decreased 17% to $1.53 billion for the trailing twelve months, compared with $1.83 billion for the trailing twelve months ended September 30, 2010.
Common shares outstanding plus shares underlying stock-based awards totaled 469 million on September 30, 2011, compared with 465 million a year ago.
Net sales increased 44% to $10.88 billion in the third quarter, compared with $7.56 billion in third quarter 2010. Excluding the $371 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 39% compared with third quarter 2010.
Operating income was $79 million in the third quarter, compared with $268 million in third quarter 2010. The favorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $14 million.
Net income decreased 73% to $63 million in the third quarter, or $0.14 per diluted share, compared with net income of $231 million, or $0.51 per diluted share, in third quarter 2010.
“September 28th was the biggest order day ever for Kindle, even bigger than previous holiday peak days – we introduced Kindle Fire for $199, Kindle Touch 3G for $149, Kindle Touch for $99, and our all new Kindle for only $79,” said Jeff Bezos, founder and CEO of Amazon.com. “In the three weeks since launch, orders for electronic ink Kindles are double the previous launch. And based on what we're seeing with Kindle Fire pre-orders, we're increasing capacity and building millions more than we'd already planned.”
Highlights
- Amazon announced the Kindle Fire, a new class of Kindle for movies, TV shows, music, books, magazines, apps, games, and web browsing with all the content, free storage in the Amazon Cloud, Whispersync, vibrant color touch screen, a powerful dual-core processor, and “Amazon Silk” – Amazon’s new revolutionary web browser that accelerates the power of the mobile device by using the computing speed and power of the Amazon Web Services Cloud. Kindle Fire is only $199.
- Amazon announced three all-new Kindle e-readers that are smaller, lighter, and more affordable than ever before. The $79 latest generation Kindle is for customers who want the lightest, most compact Kindle at an incredible price. The $99 Kindle Touch includes an easy-to-use touch screen. Kindle Touch 3G is the top of the line e-reader with the unparalleled convenience of free 3G where customers never have to hunt or pay for a Wi-Fi hotspot – you simply download and read books anytime and anywhere – all for $149. Each of these e-readers includes all the benefits of the most advanced electronic ink display that reads like real paper, even in bright sunlight.
- Amazon.fr launched the French Kindle Store offering customers a vast selection of over 35,000 French-language Kindle books. Amazon also announced that its series of free “Buy Once, Read Everywhere” apps for the most popular devices, including iPad, iPod touch, iPhone, PCs, Macs and Android-based devices, are now available in French-language versions. In addition, Amazon announced that the all-new Kindle with French navigation is available at Amazon.fr for only 99€.
- Amazon.com announced licensing agreements with Twentieth Century Fox and PBS that allow the millions of Amazon Prime members to instantly stream a broad selection of popular movies and TV shows from their vast libraries. These deals will bring the total number of Prime instant videos to more than 12,000 movies and TV shows from partners such as CBS, FOX, PBS, NBCUniversal, Sony, Warner Bros., and many more.
- Amazon Publishing released 61 titles in the quarter, including Kindle bestsellers “The Detachment” by Barry Eisler, “Dove Season” by Johnny Shaw, and “A Small Fortune” by Audrey Braun. Recent acquisitions include Tim Ferriss’ “The 4-Hour Chef,” Penny Marshall’s memoir “My Mother Was Nuts,” and the epic Foreworld Series project led by Neal Stephenson and Greg Bear. Amazon Publishing also announced a new imprint, 47North, which is dedicated to science-fiction, fantasy, and horror. 47North joins sister imprints AmazonEncore, AmazonCrossing, Powered by Amazon, Montlake Romance, and Thomas & Mercer.
- The Company launched Amazon.es, a Spanish-language website offering customers a vast selection of books, DVDs, video games, music, and consumer electronics at everyday low prices. Amazon.es’s convenient services include Amazon Premium, the local version of Amazon Prime, with unlimited free guaranteed 2-3 day delivery for an annual fee of 14.95€. The first product sold on Amazon.es was a Blu-ray pack of “Star Wars: The Complete Saga” to a new Premium customer in Madrid.
- North America segment sales, representing the Company’s U.S. and Canadian sites, were $5.93 billion, up 44% from third quarter 2010.
- International segment sales, representing the Company’s U.K., German, Japanese, French, Chinese, Italian and Spanish sites, were $4.94 billion, up 44% from third quarter 2010. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 33%.
- Worldwide Media sales grew 24% to $4.15 billion. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 19%.
- Worldwide Electronics and Other General Merchandise sales grew 59% to $6.32 billion. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 54%.
- Amazon Web Services (AWS) announced new features to make it even easier for enterprise customers to utilize the AWS infrastructure. New services like Direct Connect, Identity and Access Management, and Virtual Private Clouds allow enterprises to reliably, securely, and cost effectively use the existing AWS infrastructure for their computing needs.
- AWS launched GovCloud, a new AWS Region designed to allow U.S. government agencies and contractors to move more sensitive workloads into the cloud by addressing their specific regulatory and compliance requirements. AWS also announced it has received Federal Information Security Management Act (FISMA) Moderate Authorization and Accreditation from the U.S. General Services Administration.
Financial Guidance
The following forward-looking statements reflect Amazon.com’s expectations as of October 25, 2011. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and consumer spending, world events, the rate of growth of the Internet and online commerce and the various factors detailed below.
Fourth Quarter 2011 Guidance
- Net sales are expected to be between $16.45 billion and $18.65 billion, or to grow between 27% and 44% compared with fourth quarter 2010.
- Operating income (loss) is expected to be between $(200) million and $250 million, or between 142% decline and 47% decline compared with fourth quarter 2010.
- This guidance includes approximately $200 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions or investments are concluded and that there are no further revisions to stock-based compensation estimates.
A conference call will be webcast live today at 2 p.m. PT/5 p.m. ET, and will be available for at least three months at www.amazon.com/ir. This call will contain forward-looking statements and other material information regarding the Company’s financial and operating results.
These forward-looking statements are inherently difficult to predict. Actual results could differ materially for a variety of reasons, including, in addition to the factors discussed above, the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of legal proceedings and claims, fulfillment center optimization, risks of inventory management, seasonality, the degree to which the Company enters into, maintains and develops commercial agreements, acquisitions and strategic transactions, and risks of fulfillment throughput and productivity. Other risks and uncertainties include, among others, risks related to new products, services and technologies, system interruptions, government regulation and taxation, payments and fraud. In addition, the current global economic climate amplifies many of these risks. More information about factors that potentially could affect Amazon.com’s financial results is included in Amazon.com’s filings with the Securities and Exchange Commission (“SEC”), including its most recent Annual Report on Form 10-K and subsequent filings.
Our investor relations website is www.amazon.com/ir and we encourage investors to use it as a way of easily finding information about us. We promptly make available on this website, free of charge, the reports that we file or furnish with the SEC, corporate governance information (including our Code of Business Conduct and Ethics), and select press releases and social media postings.
About Amazon.com
Amazon.com, Inc. (NASDAQ:AMZN), a Fortune 500 company based in Seattle, opened on the World Wide Web in July 1995 and today offers Earth’s Biggest Selection. Amazon.com, Inc. seeks to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices. Amazon.com and other sellers offer millions of unique new, refurbished and used items in categories such as Books; Movies, Music & Games; Digital Downloads; Electronics & Computers; Home & Garden; Toys, Kids & Baby; Grocery; Apparel, Shoes & Jewelry; Health & Beauty; Sports & Outdoors; and Tools, Auto & Industrial. Amazon Web Services provides Amazon’s developer customers with access to in-the-cloud infrastructure services based on Amazon’s own back-end technology platform, which developers can use to enable virtually any type of business. The new latest generation Kindle is the lightest, most compact Kindle ever and features the same 6-inch, most advanced electronic ink display that reads like real paper even in bright sunlight. Kindle Touch is a new addition to the Kindle family with an easy-to-use touch screen that makes it easier than ever to turn pages, search, shop, and take notes – still with all the benefits of the most advanced electronic ink display. Kindle Touch 3G is the top of the line e-reader and offers the same new design and features of Kindle Touch, with the unparalleled added convenience of free 3G. Kindle Fire is the Kindle for movies, TV shows, music, books, magazines, apps, games and web browsing with all the content, free storage in the Amazon Cloud, Whispersync, Amazon Silk (Amazon’s new revolutionary cloud-accelerated web browser), vibrant color touch screen, and powerful dual-core processor.
Amazon and its affiliates operate websites, including www.amazon.com, www.amazon.co.uk, www.amazon.de, www.amazon.co.jp, www.amazon.fr, www.amazon.ca, www.amazon.cn, www.amazon.it, and www.amazon.es. As used herein, “Amazon.com,” “we,” “our” and similar terms include Amazon.com, Inc., and its subsidiaries, unless the context indicates otherwise.
| AMAZON.COM, INC. | ||||||||||||||||||||||||
| Consolidated Statements of Cash Flows | ||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | Twelve Months Ended | ||||||||||||||||||||||
| September 30, | September 30, | September 30, | ||||||||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | 2011 | 2010 | |||||||||||||||||||
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | $ | 2,047 | $ | 1,629 | $ | 3,777 | $ | 3,444 | $ | 1,539 | $ | 2,514 | ||||||||||||
| OPERATING ACTIVITIES: | ||||||||||||||||||||||||
| Net income | 63 | 231 | 454 | 736 | 871 | 1,120 | ||||||||||||||||||
|
Adjustments to reconcile net income to net cash from operating activities: |
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|
Depreciation of fixed assets, including internal-use software and website development, and other amortization |
278 | 150 | 724 | 399 | 894 | 510 | ||||||||||||||||||
| Stock-based compensation | 144 | 107 | 397 | 304 | 518 | 404 | ||||||||||||||||||
| Other operating expense (income), net | 37 | 26 | 112 | 77 | 140 | 98 | ||||||||||||||||||
| Losses (gains) on sales of marketable securities, net | (6 | ) | (2 | ) | (4 | ) | (2 | ) | (4 | ) | (2 | ) | ||||||||||||
| Other expense (income), net | (38 | ) | (35 | ) | (39 | ) | (62 | ) | (56 | ) | (56 | ) | ||||||||||||
| Deferred income taxes | 34 | (16 | ) | 68 | (44 | ) | 116 | (44 | ) | |||||||||||||||
| Excess tax benefits from stock-based compensation | - | (75 | ) | (61 | ) | (236 | ) | (84 | ) | (288 | ) | |||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||||||||||
| Inventories | (587 | ) | (505 | ) | (517 | ) | (326 | ) | (1,211 | ) | (666 | ) | ||||||||||||
| Accounts receivable, net and other | (75 | ) | (64 | ) | 211 | 348 | (320 | ) | (161 | ) | ||||||||||||||
| Accounts payable | 848 | 894 | (1,687 | ) | (1,078 | ) | 1,755 | 1,152 | ||||||||||||||||
| Accrued expenses and other | 109 | 192 | (9 | ) | 31 | 587 | 460 | |||||||||||||||||
| Additions to unearned revenue | 239 | 152 | 706 | 502 | 892 | 946 | ||||||||||||||||||
| Amortization of previously unearned revenue | (249 | ) | (200 | ) | (721 | ) | (642 | ) | (984 | ) | (856 | ) | ||||||||||||
| Net cash provided by (used in) operating activities | 797 | 855 | (366 | ) | 7 | 3,114 | 2,617 | |||||||||||||||||
| INVESTING ACTIVITIES: | ||||||||||||||||||||||||
|
Purchases of fixed assets, including internal-use software and website development |
(529 | ) | (315 | ) | (1,261 | ) | (651 | ) | (1,589 | ) | (788 | ) | ||||||||||||
| Acquisitions, net of cash acquired, and other | (48 | ) | (42 | ) | (656 | ) | (82 | ) | (927 | ) | (81 | ) | ||||||||||||
| Sales and maturities of marketable securities and other investments | 1,964 | 1,059 | 5,931 | 3,139 | 7,043 | 3,827 | ||||||||||||||||||
| Purchases of marketable securities and other investments | (1,287 | ) | (1,830 | ) | (4,475 | ) | (4,551 | ) | (6,203 | ) | (6,711 | ) | ||||||||||||
| Net cash provided by (used in) investing activities | 100 | (1,128 | ) | (461 | ) | (2,145 | ) | (1,676 | ) | (3,753 | ) | |||||||||||||
| FINANCING ACTIVITIES: | ||||||||||||||||||||||||
| Excess tax benefits from stock-based compensation | - | 75 | 61 | 236 | 84 | 288 | ||||||||||||||||||
| Proceeds from long-term debt and other | 9 | 67 | 131 | 110 | 173 | 125 | ||||||||||||||||||
|
Repayments of long-term debt, capital lease, and finance lease obligations |
(91 | ) | (49 | ) | (341 | ) | (122 | ) | (440 | ) | (241 | ) | ||||||||||||
| Net cash provided by (used in) financing activities | (82 | ) | 93 | (149 | ) | 224 | (183 | ) | 172 | |||||||||||||||
| Foreign-currency effect on cash and cash equivalents | (39 | ) | 90 | 22 | 9 | 29 | (11 | ) | ||||||||||||||||
| Net increase (decrease) in cash and cash equivalents | 776 | (90 | ) | (954 | ) | (1,905 | ) | 1,284 | (975 | ) | ||||||||||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 2,823 | $ | 1,539 | $ | 2,823 | $ | 1,539 | $ | 2,823 | $ | 1,539 | ||||||||||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||||||||||||||||||
| Cash paid for interest on long term debt | $ | 4 | $ | 3 | $ | 10 | $ | 8 | $ | 13 | $ | 10 | ||||||||||||
| Cash paid for income taxes (net of refunds) | 12 | 16 | 18 | 62 | 31 | 66 | ||||||||||||||||||
| Fixed assets acquired under capital leases | 155 | 141 | 566 | 283 | 688 | 333 | ||||||||||||||||||
| Fixed assets acquired under build-to-suit leases | 54 | 39 | 220 | 159 | 234 | 214 | ||||||||||||||||||
| AMAZON.COM, INC. | ||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||
| (in millions, except per share data) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
|
Three Months Ended |
Nine Months Ended |
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|
September 30, |
September 30, |
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| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Net sales | $ | 10,876 | $ | 7,560 | $ | 30,646 | $ | 21,257 | ||||||||
| Operating expenses (1): | ||||||||||||||||
| Cost of sales | 8,325 | 5,786 | 23,457 | 16,244 | ||||||||||||
| Fulfillment | 1,121 | 680 | 2,917 | 1,808 | ||||||||||||
| Marketing | 370 | 241 | 1,037 | 653 | ||||||||||||
| Technology and content | 769 | 442 | 2,047 | 1,216 | ||||||||||||
| General and administrative | 175 | 117 | 474 | 327 | ||||||||||||
| Other operating expense (income), net | 37 | 26 | 112 | 77 | ||||||||||||
| Total operating expenses | 10,797 | 7,292 | 30,044 | 20,325 | ||||||||||||
| Income from operations | 79 | 268 | 602 | 932 | ||||||||||||
| Interest income | 16 | 13 | 47 | 36 | ||||||||||||
| Interest expense | (17 | ) | (11 | ) | (45 | ) | (28 | ) | ||||||||
| Other income (expense), net | 52 | 22 | 57 | 50 | ||||||||||||
| Total non-operating income (expense) | 51 | 24 | 59 | 58 | ||||||||||||
| Income before income taxes | 130 | 292 | 661 | 990 | ||||||||||||
| Provision for income taxes | (67 | ) | (79 | ) | (205 | ) | (267 | ) | ||||||||
| Equity-method investment activity, net of tax | - | 18 | (2 | ) | 13 | |||||||||||
| Net income | $ | 63 | $ | 231 | $ | 454 | $ | 736 | ||||||||
| Basic earnings per share | $ | 0.14 | $ | 0.51 | $ | 1.00 | $ | 1.65 | ||||||||
| Diluted earnings per share | $ | 0.14 | $ | 0.51 | $ | 0.99 | $ | 1.62 | ||||||||
| Weighted average shares used in computation of earnings per share: | ||||||||||||||||
| Basic | 454 | 448 | 453 | 447 | ||||||||||||
| Diluted | 461 | 456 | 460 | 455 | ||||||||||||
| (1) Includes stock-based compensation as follows: | ||||||||||||||||
| Fulfillment | 35 | 23 | 91 | 65 | ||||||||||||
| Marketing | 10 | 7 | 27 | 19 | ||||||||||||
| Technology and content | 75 | 56 | 211 | 159 | ||||||||||||
| General and administrative | 24 | 21 | 68 | 61 | ||||||||||||
| AMAZON.COM, INC. | |||||||||||||||||
| Segment Information | |||||||||||||||||
| (in millions) | |||||||||||||||||
| (unaudited) | |||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||
| September 30, | September 30, | ||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||||
| North America | |||||||||||||||||
| Net sales | $ | 5,932 | $ | 4,126 | $ | 16,804 | $ | 11,496 | |||||||||
| Segment operating expenses (1) | 5,788 | 3,940 | 16,156 | 10,837 | |||||||||||||
| Segment operating income | $ | 144 | $ | 186 | $ | 648 | $ | 659 | |||||||||
| International | |||||||||||||||||
| Net sales | $ | 4,944 | $ | 3,434 | $ | 13,842 | $ | 9,761 | |||||||||
| Segment operating expenses (1) | 4,828 | 3,219 | 13,379 | 9,107 | |||||||||||||
| Segment operating income | $ | 116 | $ | 215 | $ | 463 | $ | 654 | |||||||||
| Consolidated | |||||||||||||||||
| Net sales | $ | 10,876 | $ | 7,560 | $ | 30,646 | $ | 21,257 | |||||||||
| Segment operating expenses | 10,616 | 7,159 | 29,535 | 19,944 | |||||||||||||
| Segment operating income | 260 | 401 | 1,111 | 1,313 | |||||||||||||
| Stock-based compensation | (144 | ) | (107 | ) | (397 | ) | (304 | ) | |||||||||
| Other operating income (expense), net | (37 | ) | (26 | ) | (112 | ) | (77 | ) | |||||||||
| Income from operations | 79 | 268 | 602 | 932 | |||||||||||||
| Total non-operating income (expense) | 51 | 24 | 59 | 58 | |||||||||||||
| Provision for income taxes | (67 | ) | (79 | ) | (205 | ) | (267 | ) | |||||||||
| Equity-method investment activity, net of tax | - | 18 | (2 | ) | 13 | ||||||||||||
| Net income | $ | 63 | $ | 231 | $ | 454 | $ | 736 | |||||||||
| Segment Highlights: | |||||||||||||||||
| Y/Y net sales growth: | |||||||||||||||||
| North America | 44 | % | 45 | % | 46 | % | 46 | % | |||||||||
| International | 44 | 32 | 42 | 37 | |||||||||||||
| Consolidated | 44 | 39 | 44 | 42 | |||||||||||||
| Y/Y segment operating income growth (decline): | |||||||||||||||||
| North America | (23 | ) | % | 19 | % | (2 | ) | % | 53 | % | |||||||
| International | (46 | ) | 11 | (29 | ) | 20 | |||||||||||
| Consolidated | (35 | ) | 15 | (15 | ) | 35 | |||||||||||
| Net sales mix: | |||||||||||||||||
| North America | 55 | % | 55 | % | 55 | % | 54 | % | |||||||||
| International | 45 | 45 | 45 | 46 | |||||||||||||
| 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
|
(1) Represents operating expenses, excluding stock-based compensation and "Other operating expense (income), net," which are not allocated to segments |
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| AMAZON.COM, INC. | |||||||||||||
| Supplemental Net Sales Information | |||||||||||||
| (in millions) | |||||||||||||
| (unaudited) | |||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||
| September 30, | September 30, | ||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||
| North America | |||||||||||||
| Media | $ | 1,927 | $ | 1,591 | $ | 5,397 | $ | 4,512 | |||||
| Electronics and other general merchandise | 3,635 | 2,326 | 10,435 | 6,440 | |||||||||
| Other (1) | 370 | 209 | 972 | 544 | |||||||||
| Total North America | $ | 5,932 | $ | 4,126 | $ | 16,804 | $ | 11,496 | |||||
| International | |||||||||||||
| Media | $ | 2,226 | $ | 1,759 | $ | 6,373 | $ | 5,142 | |||||
| Electronics and other general merchandise | 2,681 | 1,644 | 7,364 | 4,531 | |||||||||
| Other (1) | 37 | 31 | 105 | 88 | |||||||||
| Total International | $ | 4,944 | $ | 3,434 | $ | 13,842 | $ | 9,761 | |||||
| Consolidated | |||||||||||||
| Media | $ | 4,153 | $ | 3,350 | $ | 11,770 | $ | 9,654 | |||||
| Electronics and other general merchandise | 6,316 | 3,970 | 17,799 | 10,971 | |||||||||
| Other (1) | 407 | 240 | 1,077 | 632 | |||||||||
| Total Consolidated | $ | 10,876 | $ | 7,560 | $ | 30,646 | $ | 21,257 | |||||
| Y/Y Net Sales Growth: | |||||||||||||
| North America: | |||||||||||||
| Media | 21 | % | 13 | % | 20 | % | 17 | % | |||||
| Electronics and other general merchandise | 56 | 80 | 62 | 76 | |||||||||
| Other | 77 | 52 | 79 | 53 | |||||||||
| Total North America | 44 | 45 | 46 | 46 | |||||||||
| International: | |||||||||||||
| Media | 27 | % | 16 | % | 24 | % | 22 | % | |||||
| Electronics and other general merchandise | 63 | 54 | 63 | 61 | |||||||||
| Other | 21 | 26 | 20 | 30 | |||||||||
|
Total International |
44 | 32 | 42 | 37 | |||||||||
| Consolidated: | |||||||||||||
| Media | 24 | % | 14 | % | 22 | % | 19 | % | |||||
| Electronics and other general merchandise | 59 | 68 | 62 | 69 | |||||||||
| Other | 70 | 48 | 70 | 50 | |||||||||
| Total Consolidated | 44 | 39 | 44 | 42 | |||||||||
| Y/Y Net Sales Growth Excluding Effect of Exchange Rates: | |||||||||||||
| International: | |||||||||||||
| Media | 17 | % | 18 | % | 15 | % | 20 | % | |||||
| Electronics and other general merchandise | 51 | 60 | 51 | 61 | |||||||||
| Other | 13 | 33 | 13 | 32 | |||||||||
| Total International | 33 | 35 | 32 | 37 | |||||||||
| Consolidated: | |||||||||||||
| Media | 19 | % | 15 | % | 17 | % | 18 | % | |||||
| Electronics and other general merchandise | 54 | 71 | 58 | 70 | |||||||||
| Other | 69 | 49 | 69 | 50 | |||||||||
| Total Consolidated | 39 | 40 | 40 | 41 | |||||||||
| Consolidated Net Sales Mix: | |||||||||||||
| Media | 38 | % | 44 | % | 38 | % | 45 | % | |||||
| Electronics and other general merchandise | 58 | 53 | 58 | 52 | |||||||||
| Other | 4 | 3 | 4 | 3 | |||||||||
| 100 | % | 100 | % | 100 | % | 100 | % | ||||||
|
(1) Includes non-retail activities, such as AWS, miscellaneous marketing and promotional agreements, other seller sites, and co-branded credit card agreements |
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| AMAZON.COM, INC. | ||||||||||||
| Consolidated Balance Sheets | ||||||||||||
| (in millions, except per share data) | ||||||||||||
| September 30, | December 31, | September 30, | ||||||||||
| 2011 | 2010 | 2010 | ||||||||||
| ASSETS | (unaudited) | (unaudited) | ||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 2,823 | $ | 3,777 | $ | 1,539 | ||||||
| Marketable securities | 3,503 | 4,985 | 4,346 | |||||||||
| Inventories | 3,770 | 3,202 | 2,515 | |||||||||
| Accounts receivable, net and other | 1,496 | 1,587 | 959 | |||||||||
| Deferred tax assets | 312 | 196 | 200 | |||||||||
| Total current assets | 11,904 | 13,747 | 9,559 | |||||||||
| Fixed assets, net | 3,999 | 2,414 | 2,099 | |||||||||
| Deferred tax assets | 27 | 22 | 43 | |||||||||
| Goodwill | 1,934 | 1,349 | 1,277 | |||||||||
| Other assets | 1,190 | 1,265 | 1,184 | |||||||||
| Total assets | $ | 19,054 | $ | 18,797 | $ | 14,162 | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable | $ | 6,552 | $ | 8,051 | $ | 4,614 | ||||||
| Accrued expenses and other | 2,426 | 2,321 | 1,761 | |||||||||
| Total current liabilities | 8,978 | 10,372 | 6,375 | |||||||||
| Long-term liabilities | 2,310 | 1,561 | 1,390 | |||||||||
| Commitments and contingencies | ||||||||||||
| Stockholders' equity: | ||||||||||||
| Preferred stock, $0.01 par value: | ||||||||||||
| Authorized shares — 500 | ||||||||||||
| Issued and outstanding shares — none | - | - | - | |||||||||
| Common stock, $0.01 par value: | ||||||||||||
| Authorized shares — 5,000 | ||||||||||||
| Issued shares — 471, 468, and 466 | ||||||||||||
| Outstanding shares — 455, 451, and 449 | 5 | 5 | 5 | |||||||||
| Treasury stock, at cost | (600 | ) | (600 | ) | (600 | ) | ||||||
| Additional paid-in capital | 6,824 | 6,325 | 6,215 | |||||||||
| Accumulated other comprehensive loss | (241 | ) | (190 | ) | (131 | ) | ||||||
| Retained earnings | 1,778 | 1,324 | 908 | |||||||||
| Total stockholders' equity | 7,766 | 6,864 | 6,397 | |||||||||
| Total liabilities and stockholders' equity | $ | 19,054 | $ | 18,797 | $ | 14,162 | ||||||
| AMAZON.COM, INC. | |||||||||||||||||||||||
| Supplemental Financial Information and Business Metrics | |||||||||||||||||||||||
| (in millions, except per share data) | |||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||
| Y/Y % | |||||||||||||||||||||||
| Q3 2010 | Q4 2010 | Q1 2011 | Q2 2011 | Q3 2011 | Change | ||||||||||||||||||
| Cash Flows and Shares | |||||||||||||||||||||||
| Operating cash flow -- trailing twelve months (TTM) | $ | 2,617 | $ | 3,495 | $ | 3,033 | $ | 3,205 | $ | 3,114 | 19 | % | |||||||||||
| Purchases of fixed assets (incl. internal-use software & website development) -- TTM | $ | 788 | $ | 979 | $ | 1,138 | $ | 1,374 | $ | 1,589 | 102 | % | |||||||||||
| Free cash flow (operating cash flow less purchases of fixed assets) -- TTM | $ | 1,829 | $ | 2,516 | $ | 1,895 | $ | 1,831 | $ | 1,525 | (17 | %) | |||||||||||
| Free cash flow -- TTM Y/Y growth | (5 | %) | (14 | %) | (18 | %) | (8 | %) | (17 | %) | N/A | ||||||||||||
| Invested capital (1) | $ | 6,576 | $ | 7,380 | $ | 7,931 | $ | 8,551 | $ | 9,147 | N/A | ||||||||||||
| Return on invested capital (2) | 28 | % | 34 | % | 24 | % | 21 | % | 17 | % | N/A | ||||||||||||
| Common shares and stock-based awards outstanding | 465 | 465 | 466 | 468 | 469 | 1 | % | ||||||||||||||||
| Common shares outstanding | 449 | 451 | 452 | 454 | 455 | 1 | % | ||||||||||||||||
| Stock-based awards outstanding | 16 | 15 | 14 | 15 | 14 | (11 | %) | ||||||||||||||||
| Stock-based awards outstanding -- % of common shares outstanding | 3.6 | % | 3.2 | % | 3.1 | % | 3.2 | % | 3.2 | % | N/A | ||||||||||||
| Results of Operations | |||||||||||||||||||||||
| Worldwide (WW) net sales | $ | 7,560 | $ | 12,948 | $ | 9,857 | $ | 9,913 | $ | 10,876 | 44 | % | |||||||||||
| WW net sales -- Y/Y growth, excluding F/X | 40 | % | 37 | % | 36 | % | 44 | % | 39 | % | N/A | ||||||||||||
| WW net sales -- TTM | $ | 30,776 | $ | 34,204 | $ | 36,931 | $ | 40,278 | $ | 43,594 | 42 | % | |||||||||||
| WW net sales -- TTM Y/Y growth, excluding F/X | 40 | % | 40 | % | 39 | % | 39 | % | 39 | % | N/A | ||||||||||||
| Operating income | $ | 268 | $ | 474 | $ | 322 | $ | 201 | $ | 79 | (71 | %) | |||||||||||
| Operating income -- Y/Y growth, excluding F/X | 13 | % | 3 | % | (20 | %) | (36 | %) | (77 | %) | N/A | ||||||||||||
| Operating margin -- % of WW net sales | 3.5 | % | 3.7 | % | 3.3 | % | 2.0 | % | 0.7 | % | N/A | ||||||||||||
| Operating income -- TTM | $ | 1,408 | $ | 1,406 | $ | 1,334 | $ | 1,265 | $ | 1,076 | (24 | %) | |||||||||||
| Operating income -- TTM Y/Y growth, excluding F/X | 50 | % | 27 | % | 7 | % | (7 | %) | (25 | %) | N/A | ||||||||||||
| Operating margin -- TTM % of WW net sales | 4.6 | % | 4.1 | % | 3.6 | % | 3.1 | % | 2.5 | % | N/A | ||||||||||||
| Net income | $ | 231 | $ | 416 | $ | 201 | $ | 191 | $ | 63 | (73 | %) | |||||||||||
| Net income per diluted share | $ | 0.51 | $ | 0.91 | $ | 0.44 | $ | 0.41 | $ | 0.14 | (73 | %) | |||||||||||
| Net income -- TTM | $ | 1,120 | $ | 1,152 | $ | 1,054 | $ | 1,038 | $ | 871 | (22 | %) | |||||||||||
| Net income per diluted share -- TTM | $ | 2.47 | $ | 2.53 | $ | 2.30 | $ | 2.26 | $ | 1.89 | (23 | %) | |||||||||||
| Segments | |||||||||||||||||||||||
| North America Segment: | |||||||||||||||||||||||
| Net sales | $ | 4,126 | $ | 7,211 | $ | 5,465 | $ | 5,406 | $ | 5,932 | 44 | % | |||||||||||
| Net sales -- Y/Y growth, excluding F/X | 45 | % | 45 | % | 45 | % | 50 | % | 44 | % | N/A | ||||||||||||
| Net sales -- TTM | $ | 16,452 | $ | 18,707 | $ | 20,392 | $ | 22,208 | $ | 24,014 | 46 | % | |||||||||||
| Operating income | $ | 186 | $ | 295 | $ | 290 | $ | 214 | $ | 144 | (23 | %) | |||||||||||
| Operating margin -- % of North America net sales | 4.5 | % | 4.1 | % | 5.3 | % | 4.0 | % | 2.4 | % | N/A | ||||||||||||
| Operating income -- TTM | $ | 937 | $ | 955 | $ | 972 | $ | 986 | $ | 943 | 1 | % | |||||||||||
| Operating income -- TTM Y/Y growth, excluding F/X | 67 | % | 35 | % | 17 | % | 9 | % | 1 | % | N/A | ||||||||||||
| Operating margin -- TTM % of North America net sales | 5.7 | % | 5.1 | % | 4.8 | % | 4.4 | % | 3.9 | % | N/A | ||||||||||||
| International Segment: | |||||||||||||||||||||||
| Net sales | $ | 3,434 | $ | 5,737 | $ | 4,392 | $ | 4,507 | $ | 4,944 | 44 | % | |||||||||||
| Net sales -- Y/Y growth, excluding F/X | 35 | % | 29 | % | 27 | % | 36 | % | 33 | % | N/A | ||||||||||||
| Net sales -- TTM | $ | 14,324 | $ | 15,497 | $ | 16,539 | $ | 18,070 | $ | 19,580 | 37 | % | |||||||||||
| Net sales -- TTM % of WW net sales | 47 | % | 45 | % | 45 | % | 45 | % | 45 | % | N/A | ||||||||||||
| Operating income | $ | 215 | $ | 327 | $ | 175 | $ | 172 | $ | 116 | (46 | %) | |||||||||||
| Operating margin -- % of International net sales | 6.2 | % | 5.7 | % | 4.0 | % | 3.8 | % | 2.4 | % | N/A | ||||||||||||
| Operating income -- TTM | $ | 973 | $ | 981 | $ | 922 | $ | 888 | $ | 790 | (19 | %) | |||||||||||
| Operating income -- TTM Y/Y growth, excluding F/X | 23 | % | 20 | % | 4 | % | (7 | %) | (23 | %) | N/A | ||||||||||||
| Operating margin -- TTM % of International net sales | 6.8 | % | 6.3 | % | 5.6 | % | 4.9 | % | 4.0 | % | N/A | ||||||||||||
| Consolidated Segments: | |||||||||||||||||||||||
| Operating expenses (3) | $ | 7,159 | $ | 12,326 | $ | 9,392 | $ | 9,527 | $ | 10,616 | 48 | % | |||||||||||
| Operating expenses -- TTM (3) | $ | 28,866 | $ | 32,268 | $ | 35,037 | $ | 38,404 | $ | 41,860 | 45 | % | |||||||||||
| Operating income | $ | 401 | $ | 622 | $ | 465 | $ | 386 | $ | 260 | (35 | %) | |||||||||||
| Operating margin -- % of Consolidated sales | 5.3 | % | 4.8 | % | 4.7 | % | 3.9 | % | 2.4 | % | N/A | ||||||||||||
| Operating income -- TTM | $ | 1,910 | $ | 1,936 | $ | 1,894 | $ | 1,874 | $ | 1,734 | (9 | %) | |||||||||||
| Operating income -- TTM Y/Y growth, excluding F/X | 42 | % | 25 | % | 10 | % | 1 | % | (11 | %) | N/A | ||||||||||||
| Operating margin -- TTM % of Consolidated net sales | 6.2 | % | 5.7 | % | 5.1 | % | 4.7 | % | 4.0 | % | 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 % | |||||||||||||||||||||||
| Q3 2010 | Q4 2010 | Q1 2011 | Q2 2011 | Q3 2011 | Change | ||||||||||||||||||
| Supplemental | |||||||||||||||||||||||
| Supplemental North America Segment Net Sales: | |||||||||||||||||||||||
| Media | $ | 1,591 | $ | 2,370 | $ | 1,885 | $ | 1,585 | $ | 1,927 | 21 | % | |||||||||||
| Media -- Y/Y growth, excluding F/X | 12 | % | 13 | % | 18 | % | 19 | % | 21 | % | N/A | ||||||||||||
| Media -- TTM | $ | 6,610 | $ | 6,881 | $ | 7,170 | $ | 7,430 | $ | 7,767 | 17 | % | |||||||||||
| Electronics and other general merchandise | $ | 2,326 | $ | 4,558 | $ | 3,303 | $ | 3,496 | $ | 3,635 | 56 | % | |||||||||||
| Electronics and other general merchandise -- Y/Y growth, excluding F/X | 80 | % | 71 | % | 63 | % | 67 | % | 56 | % | N/A | ||||||||||||
| Electronics and other general merchandise -- TTM | $ | 9,103 | $ | 10,998 | $ | 12,277 | $ | 13,683 | $ | 14,992 | 65 | % | |||||||||||
| Electronics and other general merchandise -- TTM % of North America net sales | 55 | % | 59 | % | 60 | % | 62 | % | 62 | % | N/A | ||||||||||||
| Other | $ | 209 | $ | 283 | $ | 277 | $ | 325 | $ | 370 | 77 | % | |||||||||||
| Other -- TTM | $ | 739 | $ | 828 | $ | 945 | $ | 1,095 | $ | 1,255 | 70 | % | |||||||||||
| Supplemental International Segment Net Sales: | |||||||||||||||||||||||
| Media | $ | 1,759 | $ | 2,865 | $ | 2,073 | $ | 2,075 | $ | 2,226 | 27 | % | |||||||||||
| Media -- Y/Y growth, excluding F/X | 18 | % | 13 | % | 9 | % | 20 | % | 17 | % | N/A | ||||||||||||
| Media -- TTM | $ | 7,723 | $ | 8,007 | $ | 8,247 | $ | 8,772 | $ | 9,238 | 20 | % | |||||||||||
| Electronics and other general merchandise | $ | 1,644 | $ | 2,834 | $ | 2,285 | $ | 2,398 | $ | 2,681 | 63 | % | |||||||||||
| Electronics and other general merchandise -- Y/Y growth, excluding F/X | 60 | % | 50 | % | 49 | % | 53 | % | 51 | % | N/A | ||||||||||||
| Electronics and other general merchandise -- TTM | $ | 6,478 | $ | 7,365 | $ | 8,162 | $ | 9,162 | $ | 10,199 | 57 | % | |||||||||||
| Electronics and other general merchandise -- TTM % of International net sales | 45 | % | 48 | % | 49 | % | 51 | % | 52 | % | N/A | ||||||||||||
| Other | $ | 31 | $ | 38 | $ | 34 | $ | 34 | $ | 37 | 21 | % | |||||||||||
| Other -- TTM | $ | 123 | $ | 125 | $ | 130 | $ | 136 | $ | 143 | 16 | % | |||||||||||
| Supplemental Worldwide Net Sales: | |||||||||||||||||||||||
| Media | $ | 3,350 | $ | 5,235 | $ | 3,958 | $ | 3,660 | $ | 4,153 | 24 | % | |||||||||||
| Media -- Y/Y growth, excluding F/X | 15 | % | 13 | % | 13 | % | 20 | % | 19 | % | N/A | ||||||||||||
| Media -- TTM | $ | 14,333 | $ | 14,888 | $ | 15,417 | $ | 16,202 | $ | 17,005 | 19 | % | |||||||||||
| Electronics and other general merchandise | $ | 3,970 | $ | 7,392 | $ | 5,588 | $ | 5,894 | $ | 6,316 | 59 | % | |||||||||||
| Electronics and other general merchandise -- Y/Y growth, excluding F/X | 71 | % | 62 | % | 57 | % | 62 | % | 54 | % | N/A | ||||||||||||
| Electronics and other general merchandise -- TTM | $ | 15,581 | $ | 18,363 | $ | 20,439 | $ | 22,845 | $ | 25,191 | 62 | % | |||||||||||
| Electronics and other general merchandise -- TTM % of WW net sales | 51 | % | 54 | % | 55 | % | 57 | % | 58 | % | N/A | ||||||||||||
| Other | $ | 240 | $ | 321 | $ | 311 | $ | 359 | $ | 407 | 70 | % | |||||||||||
| Other -- TTM | $ | 862 | $ | 953 | $ | 1,075 | $ | 1,231 | $ | 1,398 | 62 | % | |||||||||||
| Balance Sheet | |||||||||||||||||||||||
| Cash and marketable securities (4) | $ | 6,123 | $ | 8,919 | $ | 7,019 | $ | 6,503 | $ | 6,474 | 6 | % | |||||||||||
| Inventory, net -- ending | $ | 2,515 | $ | 3,202 | $ | 2,888 | $ | 3,229 | $ | 3,770 | 50 | % | |||||||||||
| Inventory turnover, average -- TTM | 11.8 | 11.4 | 11.6 | 11.3 | 10.8 | (8 | %) | ||||||||||||||||
| Fixed assets, net | $ | 2,099 | $ | 2,414 | $ | 2,902 | $ | 3,470 | $ | 3,999 | 91 | % | |||||||||||
| Accounts payable -- ending | $ | 4,614 | $ | 8,051 | $ | 5,540 | $ | 5,721 | $ | 6,552 | 42 | % | |||||||||||
| Accounts payable days -- ending | 73 | 72 | 66 | 69 | 72 | (1 | %) | ||||||||||||||||
| Other | |||||||||||||||||||||||
| WW shipping revenue | $ | 270 | $ | 437 | $ | 330 | $ | 331 | $ | 360 | 33 | % | |||||||||||
| WW shipping costs | $ | 576 | $ | 999 | $ | 786 | $ | 820 | $ | 918 | 59 | % | |||||||||||
| WW net shipping costs | $ | 306 | $ | 562 | $ | 456 | $ | 489 | $ | 558 | 83 | % | |||||||||||
| WW net shipping costs -- % of WW net sales | 4.0 | % | 4.3 | % | 4.6 | % | 4.9 | % | 5.1 | % | N/A | ||||||||||||
| Employees (full-time and part-time; excludes contractors & temporary personnel) | 31,200 | 33,700 | 37,900 | 43,200 | 51,300 | 64 | % | ||||||||||||||||
Amazon.com, Inc.
Certain Definitions
Customer Accounts
- References to customers mean customer accounts, which are unique e-mail addresses, established either when a customer places an order or when a customer orders from other sellers on our websites. Customer accounts exclude certain customers, including customers associated with certain of our acquisitions, Amazon Enterprise Solutions program customers, Amazon.com Payments customers, Amazon Web Services customers, and the customers of select companies with whom we have a technology alliance or marketing and promotional relationship. Customers are considered active when they have placed an order during the preceding twelve-month period.
Seller Accounts
- References to sellers means seller accounts, which are established when a seller receives an order from a customer account. Seller accounts exclude Amazon Enterprise Solutions sellers. Sellers are considered active when they have received an order from a customer during the preceding twelve-month period.
Registered Developers
- References to registered developers mean cumulative registered developer accounts, which are established when potential developers enroll with Amazon Web Services and receive a developer access key.
Units
- References to units mean physical and digital units sold (net of returns and cancellations) by us and sellers at Amazon domains worldwide – for example www.amazon.com, www.amazon.co.uk, www.amazon.de, www.amazon.co.jp, www.amazon.fr, www.amazon.ca, www.amazon.cn, www.amazon.it, www.amazon.es, www.diapers.com, www.endless.com, www.shopbop.com and www.zappos.com – as well as Amazon-owned items sold through non-Amazon domains. Units sold are paid units and do not include units associated with certain acquisitions, rental businesses, web services or advertising businesses, or Amazon gift certificates.