| << Back | | Amazon.com Announces Third Quarter Sales up 28% to $5.45 Billion; Newest Kindle Now Shipping and Lowering Price to $259 from $279 | SEATTLE--(BUSINESS WIRE)--Oct. 22, 2009--
Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its
third quarter ended September 30, 2009.
Operating cash flow was $2.25 billion for the trailing twelve months,
compared with $1.27 billion for the trailing twelve months
ended September 30, 2008. Free cash flow increased 98% to $1.92 billion
for the trailing twelve months, compared with $0.97 billion for the
trailing twelve months ended September 30, 2008.
Common shares outstanding plus shares underlying stock-based awards
outstanding totaled 451 million on September 30, 2009, compared with 448
million a year ago.
Net sales increased 28% to $5.45 billion in the third quarter, compared
with $4.26 billion in third quarter 2008. Excluding the $41 million
unfavorable impact from year-over-year changes in foreign exchange rates
throughout the quarter, net sales would have grown 29% compared with
third quarter 2008.
Operating income increased 62% to $251 million in the third quarter,
compared with $154 million in third quarter 2008. Excluding the $10
million unfavorable impact from year-over-year changes in foreign
exchange rates throughout the quarter, operating income would have grown
69% compared with third quarter 2008.
Net income increased 68% to $199 million in the third quarter, or $0.45
per diluted share, compared with net income of $118 million, or $0.27
per diluted share, in third quarter 2008.
“Kindle has become the #1 bestselling item by both unit sales and
dollars – not just in our electronics store but across all product
categories on Amazon.com. It’s also the most wished for and the most
gifted. We are grateful for and energized by this customer response,”
said Jeff Bezos, founder and CEO of Amazon.com. “Earlier this week we
began shipping the latest generation Kindle. Its 3G wireless works in
the U.S. and 100 countries, and we’ve just lowered its price to $259.”
Highlights
-
This week we started shipping Kindle with U.S. & International
Wireless and lowered its price to $259 from $279. This newest Kindle
is available to ship to customers living outside the U.S. Customers in
more than 100 countries around the world, and U.S. customers traveling
abroad, can take advantage of Kindle’s 3G wireless technology to
download a title in 60 seconds or less.
-
The U.S. Kindle Store now has more than 360,000 books, including 101
of 112 New York Times Bestsellers, more than 7,000 blogs, and more
than 90 top U.S. and International newspapers and magazines,
including: The New York Times, The Wall Street Journal, The Times
(U.K.), Le Monde, The Economist, Newsweek, Time, and Fortune. Kindle
owners can also select from over 60,000 audiobooks from Audible.com
and listen to them directly on their Kindle.
-
The Company announced “Kindle for PC,” the free application for
reading Kindle books on the PC. Kindle for PC features Amazon’s
Whispersync technology, which automatically saves and synchronizes
customers’ bookmarks and last page read across devices, including the
Kindle, Kindle DX, iPhone, iPod touch, and PC.
-
North America segment sales, representing the Company’s U.S. and
Canadian sites, were $2.84 billion, up 23% from third quarter 2008.
-
International segment sales, representing the Company’s U.K., German,
Japanese, French and Chinese sites, were $2.61 billion, up 33% from
third quarter 2008. Excluding the unfavorable impact from
year-over-year changes in foreign exchange rates throughout the
quarter, International sales grew 35%.
-
Worldwide Media sales grew 17% to $2.93 billion. Excluding the
unfavorable impact from year-over-year changes in foreign exchange
rates throughout the quarter sales grew 18%.
-
Worldwide Electronics & Other General Merchandise sales grew 44% to
$2.36 billion. Excluding the unfavorable impact from year-over-year
changes in foreign exchange rates throughout the quarter sales grew
45%.
-
Amazon.com launched “Local Express Delivery,” a new shipping option
giving customers same-day delivery on thousands of items in seven
major cities: New York, Philadelphia, Boston, Baltimore, Las Vegas,
Seattle and Washington D.C. Amazon Prime members pay just $5.99 per
item for the service.
-
The Company continues to expand and enhance free shipping offers
across the world. Amazon.co.uk began offering free shipping on all
products in the U.K., eliminating the prior threshold of £5; while
Amazon.co.jp now offers free same-day delivery service to Amazon Prime
customers in the Kanto and Kansai regions of Japan.
-
Items shipped on behalf of sellers who utilized Fulfillment by Amazon
(FBA) more than tripled from the prior year. Sellers can still join
FBA and take advantage of Amazon’s extended delivery promise for the
holidays − customers can order items as late as December 23rd and
still get them in time for the holidays.
-
Amazon.com expanded its Frustration-Free Packaging program, offering
additional items from Fisher-Price, Mattel, Kingston and other leading
toy and electronics manufacturers in easy-to-open, environmentally
friendly packaging.
-
Amazon Web Services (AWS) launched Amazon Virtual Private Cloud
(Amazon VPC), a secure and seamless bridge between a company’s
existing IT infrastructure and the AWS cloud, enabling enterprises to
connect their existing infrastructure to AWS compute resources.
Financial Guidance
The following forward-looking statements reflect Amazon.com’s
expectations as of October 22, 2009. This guidance excludes the impact
of Zappos.com, Inc., including approximately $35 million of expenses
primarily related to employee compensation costs, amortization of
intangibles and merger-related expenses that would be recognized in the
fourth quarter 2009 if the transaction closes as planned. 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 2009 Guidance
-
Net sales are expected to be between $8.125 billion and $9.125
billion, or to grow between 21% and 36% compared with fourth quarter
2008.
-
Operating income is expected to be between $300 million and $425
million, or to grow between 10% and 56% compared with fourth quarter
2008. This guidance includes approximately $100 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; Computers & Office;
Electronics; Home & Garden; Grocery, Health & Beauty; Toys, Kids & Baby;
Apparel, Shoes & Jewelry; 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. Examples of the services offered by Amazon Web
Services are Amazon Elastic Compute Cloud (Amazon EC2), Amazon Simple
Storage Service (Amazon S3), Amazon Elastic Block Store, Amazon
SimpleDB, Amazon Simple Queue Service (Amazon SQS), Amazon Flexible
Payments Service (Amazon FPS), Amazon Mechanical Turk and Amazon
CloudFront.
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.
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AMAZON.COM, INC.
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Consolidated Statements of Cash Flows
|
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(in millions)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
Twelve Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
|
|
2009
|
|
|
|
2008
|
|
|
|
2009
|
|
|
|
2008
|
|
|
|
2009
|
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
|
$
|
1,936
|
|
|
$
|
1,548
|
|
|
$
|
2,769
|
|
|
$
|
2,539
|
|
|
$
|
1,650
|
|
|
$
|
1,366
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING ACTIVITIES:
|
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|
|
|
|
|
|
|
|
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|
|
|
Net income
|
|
|
199
|
|
|
|
118
|
|
|
|
518
|
|
|
|
420
|
|
|
|
743
|
|
|
|
627
|
|
|
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
|
|
|
96
|
|
|
|
76
|
|
|
|
266
|
|
|
|
210
|
|
|
|
343
|
|
|
|
273
|
|
|
Stock-based compensation
|
|
|
90
|
|
|
|
70
|
|
|
|
242
|
|
|
|
197
|
|
|
|
320
|
|
|
|
251
|
|
|
Other operating expense (income), net
|
|
|
9
|
|
|
|
7
|
|
|
|
80
|
|
|
|
(32
|
)
|
|
|
90
|
|
|
|
(29
|
)
|
|
Losses (gains) on sales of marketable securities, net
|
|
|
(1
|
)
|
|
|
1
|
|
|
|
(3
|
)
|
|
|
(2
|
)
|
|
|
(3
|
)
|
|
|
(2
|
)
|
|
Other expense (income), net
|
|
|
(9
|
)
|
|
|
(24
|
)
|
|
|
(21
|
)
|
|
|
(17
|
)
|
|
|
(38
|
)
|
|
|
(18
|
)
|
|
Deferred income taxes
|
|
|
77
|
|
|
|
(17
|
)
|
|
|
84
|
|
|
|
(47
|
)
|
|
|
125
|
|
|
|
(144
|
)
|
|
Excess tax charges (benefits) from stock-based compensation
|
|
|
17
|
|
|
|
(53
|
)
|
|
|
(52
|
)
|
|
|
(160
|
)
|
|
|
(52
|
)
|
|
|
(323
|
)
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventories
|
|
|
(276
|
)
|
|
|
(243
|
)
|
|
|
(192
|
)
|
|
|
(130
|
)
|
|
|
(293
|
)
|
|
|
(361
|
)
|
|
Accounts receivable, net and other
|
|
|
(155
|
)
|
|
|
(9
|
)
|
|
|
28
|
|
|
|
106
|
|
|
|
(296
|
)
|
|
|
(131
|
)
|
|
Accounts payable
|
|
|
701
|
|
|
|
362
|
|
|
|
(372
|
)
|
|
|
(524
|
)
|
|
|
964
|
|
|
|
620
|
|
|
Accrued expenses and other
|
|
|
(3
|
)
|
|
|
101
|
|
|
|
(131
|
)
|
|
|
39
|
|
|
|
77
|
|
|
|
437
|
|
|
Additions to unearned revenue
|
|
|
197
|
|
|
|
121
|
|
|
|
610
|
|
|
|
286
|
|
|
|
772
|
|
|
|
366
|
|
|
Amortization of previously unearned revenue
|
|
|
(143
|
)
|
|
|
(86
|
)
|
|
|
(375
|
)
|
|
|
(220
|
)
|
|
|
(499
|
)
|
|
|
(291
|
)
|
|
Net cash provided by (used in) operating activities
|
|
|
799
|
|
|
|
424
|
|
|
|
682
|
|
|
|
126
|
|
|
|
2,253
|
|
|
|
1,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of fixed assets, including internal-use software and
website development
|
|
|
(103
|
)
|
|
|
(102
|
)
|
|
|
(236
|
)
|
|
|
(231
|
)
|
|
|
(337
|
)
|
|
|
(305
|
)
|
|
Acquisitions, net of cash acquired, and other
|
|
|
(5
|
)
|
|
|
(8
|
)
|
|
|
(40
|
)
|
|
|
(408
|
)
|
|
|
(127
|
)
|
|
|
(436
|
)
|
|
Sales and maturities of marketable securities and other investments
|
|
|
586
|
|
|
|
582
|
|
|
|
1,277
|
|
|
|
1,033
|
|
|
|
1,550
|
|
|
|
1,149
|
|
|
Purchases of marketable securities and other investments
|
|
|
(780
|
)
|
|
|
(478
|
)
|
|
|
(1,730
|
)
|
|
|
(1,229
|
)
|
|
|
(2,179
|
)
|
|
|
(1,382
|
)
|
|
Net cash provided by (used in) investing activities
|
|
|
(302
|
)
|
|
|
(6
|
)
|
|
|
(729
|
)
|
|
|
(835
|
)
|
|
|
(1,093
|
)
|
|
|
(974
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excess tax benefits (charges) from stock-based compensation
|
|
|
(17
|
)
|
|
|
53
|
|
|
|
53
|
|
|
|
160
|
|
|
|
52
|
|
|
|
323
|
|
|
Common stock repurchased
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(100
|
)
|
|
|
-
|
|
|
Proceeds from long-term debt and other
|
|
|
101
|
|
|
|
2
|
|
|
|
97
|
|
|
|
62
|
|
|
|
149
|
|
|
|
91
|
|
|
Repayments of long-term debt and capital lease obligations
|
|
|
(20
|
)
|
|
|
(295
|
)
|
|
|
(379
|
)
|
|
|
(355
|
)
|
|
|
(394
|
)
|
|
|
(380
|
)
|
|
Net cash provided by (used in) financing activities
|
|
|
64
|
|
|
|
(240
|
)
|
|
|
(229
|
)
|
|
|
(133
|
)
|
|
|
(293
|
)
|
|
|
34
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign-currency effect on cash and cash equivalents
|
|
|
17
|
|
|
|
(76
|
)
|
|
|
21
|
|
|
|
(47
|
)
|
|
|
(3
|
)
|
|
|
(51
|
)
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
578
|
|
|
|
102
|
|
|
|
(255
|
)
|
|
|
(889
|
)
|
|
|
864
|
|
|
|
284
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
|
$
|
2,514
|
|
|
$
|
1,650
|
|
|
$
|
2,514
|
|
|
$
|
1,650
|
|
|
$
|
2,514
|
|
|
$
|
1,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
$
|
2
|
|
|
$
|
14
|
|
|
$
|
30
|
|
|
$
|
61
|
|
|
$
|
32
|
|
|
$
|
62
|
|
|
Cash paid for income taxes
|
|
|
10
|
|
|
|
5
|
|
|
|
44
|
|
|
|
28
|
|
|
|
69
|
|
|
|
38
|
|
|
Fixed assets acquired under capital leases and other financing
arrangements
|
|
|
60
|
|
|
|
37
|
|
|
|
97
|
|
|
|
104
|
|
|
|
141
|
|
|
|
136
|
|
|
Fixed assets acquired under build-to-suit leases
|
|
|
16
|
|
|
|
19
|
|
|
|
133
|
|
|
|
35
|
|
|
|
170
|
|
|
|
50
|
|
|
Conversion of debt
|
|
|
-
|
|
|
|
132
|
|
|
|
-
|
|
|
|
605
|
|
|
|
-
|
|
|
|
605
|
|
|
|
|
AMAZON.COM, INC.
|
|
Consolidated Statements of Operations
|
|
(in millions, except per share data)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
2009
|
|
|
|
2008
|
|
|
|
2009
|
|
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
5,449
|
|
|
$
|
4,264
|
|
|
$
|
14,989
|
|
|
$
|
12,463
|
|
|
Cost of sales
|
|
|
4,176
|
|
|
|
3,265
|
|
|
|
11,435
|
|
|
|
9,541
|
|
|
Gross profit
|
|
|
1,273
|
|
|
|
999
|
|
|
|
3,554
|
|
|
|
2,922
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses (1):
|
|
|
|
|
|
|
|
|
|
Fulfillment
|
|
|
466
|
|
|
|
393
|
|
|
|
1,297
|
|
|
|
1,109
|
|
|
Marketing
|
|
|
149
|
|
|
|
108
|
|
|
|
406
|
|
|
|
313
|
|
|
Technology and content
|
|
|
315
|
|
|
|
264
|
|
|
|
890
|
|
|
|
755
|
|
|
General and administrative
|
|
|
83
|
|
|
|
73
|
|
|
|
228
|
|
|
|
208
|
|
|
Other operating expense (income), net (2)
|
|
|
9
|
|
|
|
7
|
|
|
|
80
|
|
|
|
(32
|
)
|
|
Total operating expenses
|
|
|
1,022
|
|
|
|
845
|
|
|
|
2,901
|
|
|
|
2,353
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
251
|
|
|
|
154
|
|
|
|
653
|
|
|
|
569
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
7
|
|
|
|
21
|
|
|
|
28
|
|
|
|
67
|
|
|
Interest expense
|
|
|
(7
|
)
|
|
|
(17
|
)
|
|
|
(26
|
)
|
|
|
(60
|
)
|
|
Other income, net
|
|
|
11
|
|
|
|
24
|
|
|
|
35
|
|
|
|
22
|
|
|
Total non-operating income
|
|
|
11
|
|
|
|
28
|
|
|
|
37
|
|
|
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
262
|
|
|
|
182
|
|
|
|
690
|
|
|
|
598
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
(60
|
)
|
|
|
(59
|
)
|
|
|
(169
|
)
|
|
|
(167
|
)
|
|
Equity-method investment activity, net of tax
|
|
|
(3
|
)
|
|
|
(5
|
)
|
|
|
(3
|
)
|
|
|
(11
|
)
|
|
Net income
|
|
$
|
199
|
|
|
$
|
118
|
|
|
$
|
518
|
|
|
$
|
420
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
$
|
0.46
|
|
|
$
|
0.28
|
|
|
$
|
1.20
|
|
|
$
|
1.00
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
$
|
0.45
|
|
|
$
|
0.27
|
|
|
$
|
1.18
|
|
|
$
|
0.97
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used in computation of earnings per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
432
|
|
|
|
427
|
|
|
|
431
|
|
|
|
421
|
|
|
Diluted
|
|
|
441
|
|
|
|
436
|
|
|
|
439
|
|
|
|
431
|
|
|
__________________________
|
|
|
|
|
|
|
|
|
|
(1) Includes stock-based compensation as follows:
|
|
|
|
|
|
|
|
|
|
Fulfillment
|
|
$
|
22
|
|
|
$
|
15
|
|
|
$
|
57
|
|
|
$
|
42
|
|
|
Marketing
|
|
|
5
|
|
|
|
4
|
|
|
|
14
|
|
|
|
10
|
|
|
Technology and content
|
|
|
48
|
|
|
|
38
|
|
|
|
130
|
|
|
|
109
|
|
|
General and administrative
|
|
|
15
|
|
|
|
13
|
|
|
|
41
|
|
|
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Q2 2008 includes a $53 million non-cash gain recognized on the
sale of our European DVD rental assets. Q2 2009 includes the
impact of our settlement with Toysrus.com LLC for $51 million,
substantially all of which was expensed in Q2 2009.
|
|
|
|
AMAZON.COM, INC.
|
|
Segment Information
|
|
(in millions)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
2009
|
|
|
|
2008
|
|
|
|
2009
|
|
|
|
2008
|
|
|
North America
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
2,843
|
|
|
$
|
2,302
|
|
|
$
|
7,872
|
|
|
$
|
6,597
|
|
|
Cost of sales
|
|
|
2,091
|
|
|
|
1,716
|
|
|
|
5,754
|
|
|
|
4,883
|
|
|
Gross profit
|
|
|
752
|
|
|
|
586
|
|
|
|
2,118
|
|
|
|
1,714
|
|
|
Direct segment operating expenses (1)
|
|
|
596
|
|
|
|
498
|
|
|
|
1,687
|
|
|
|
1,400
|
|
|
Segment operating income
|
|
$
|
156
|
|
|
$
|
88
|
|
|
$
|
431
|
|
|
$
|
314
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
2,606
|
|
|
$
|
1,962
|
|
|
$
|
7,117
|
|
|
$
|
5,866
|
|
|
Cost of sales
|
|
|
2,085
|
|
|
|
1,549
|
|
|
|
5,681
|
|
|
|
4,658
|
|
|
Gross profit
|
|
|
521
|
|
|
|
413
|
|
|
|
1,436
|
|
|
|
1,208
|
|
|
Direct segment operating expenses (1)
|
|
|
327
|
|
|
|
270
|
|
|
|
892
|
|
|
|
788
|
|
|
Segment operating income
|
|
$
|
194
|
|
|
$
|
143
|
|
|
$
|
544
|
|
|
$
|
420
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
5,449
|
|
|
$
|
4,264
|
|
|
$
|
14,989
|
|
|
$
|
12,463
|
|
|
Cost of sales
|
|
|
4,176
|
|
|
|
3,265
|
|
|
|
11,435
|
|
|
|
9,541
|
|
|
Gross profit
|
|
|
1,273
|
|
|
|
999
|
|
|
|
3,554
|
|
|
|
2,922
|
|
|
Direct segment operating expenses
|
|
|
923
|
|
|
|
768
|
|
|
|
2,579
|
|
|
|
2,188
|
|
|
Segment operating income
|
|
|
350
|
|
|
|
231
|
|
|
|
975
|
|
|
|
734
|
|
|
Stock-based compensation
|
|
|
(90
|
)
|
|
|
(70
|
)
|
|
|
(242
|
)
|
|
|
(197
|
)
|
|
Other operating income (expense), net (2)
|
|
|
(9
|
)
|
|
|
(7
|
)
|
|
|
(80
|
)
|
|
|
32
|
|
|
Income from operations
|
|
|
251
|
|
|
|
154
|
|
|
|
653
|
|
|
|
569
|
|
|
Total non-operating income, net
|
|
|
11
|
|
|
|
28
|
|
|
|
37
|
|
|
|
29
|
|
|
Provision for income taxes
|
|
|
(60
|
)
|
|
|
(59
|
)
|
|
|
(169
|
)
|
|
|
(167
|
)
|
|
Equity-method investment activity, net of tax
|
|
|
(3
|
)
|
|
|
(5
|
)
|
|
|
(3
|
)
|
|
|
(11
|
)
|
|
Net income
|
|
$
|
199
|
|
|
$
|
118
|
|
|
$
|
518
|
|
|
$
|
420
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Highlights:
|
|
|
|
|
|
|
|
|
|
Y/Y net sales growth:
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
23
|
%
|
|
|
29
|
%
|
|
|
19
|
%
|
|
|
32
|
%
|
|
International
|
|
|
33
|
|
|
|
33
|
|
|
|
21
|
|
|
|
41
|
|
|
Consolidated
|
|
|
28
|
|
|
|
31
|
|
|
|
20
|
|
|
|
36
|
|
|
Y/Y gross profit growth:
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
28
|
%
|
|
|
28
|
%
|
|
|
24
|
%
|
|
|
29
|
%
|
|
International
|
|
|
26
|
|
|
|
37
|
|
|
|
19
|
|
|
|
42
|
|
|
Consolidated
|
|
|
27
|
|
|
|
31
|
|
|
|
22
|
|
|
|
34
|
|
|
Y/Y segment operating income growth:
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
77
|
%
|
|
|
12
|
%
|
|
|
37
|
%
|
|
|
27
|
%
|
|
International
|
|
|
36
|
|
|
|
46
|
|
|
|
30
|
|
|
|
53
|
|
|
Consolidated
|
|
|
52
|
|
|
|
31
|
|
|
|
33
|
|
|
|
41
|
|
|
Net sales mix:
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
52
|
%
|
|
|
54
|
%
|
|
|
53
|
%
|
|
|
53
|
%
|
|
International
|
|
|
48
|
|
|
|
46
|
|
|
|
47
|
|
|
|
47
|
|
|
__________________________
|
|
|
|
|
|
|
|
|
|
(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 2008 includes a $53 million non-cash gain recognized on the
sale of our European DVD rental assets. Q2 2009 includes the
impact of our settlement with Toysrus.com LLC for $51 million,
substantially all of which was expensed in Q2 2009.
|
|
|
|
AMAZON.COM, INC.
|
|
Supplemental Net Sales Information
|
|
(in millions)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
2009
|
|
|
|
2008
|
|
|
|
2009
|
|
|
|
2008
|
|
|
North America
|
|
|
|
|
|
|
|
|
|
Media
|
|
$
|
1,412
|
|
|
$
|
1,245
|
|
|
$
|
3,865
|
|
|
$
|
3,599
|
|
|
Electronics and other general merchandise
|
|
|
1,293
|
|
|
|
950
|
|
|
|
3,652
|
|
|
|
2,697
|
|
|
Other
|
|
|
138
|
|
|
|
107
|
|
|
|
355
|
|
|
|
301
|
|
|
Total North America
|
|
|
2,843
|
|
|
|
2,302
|
|
|
|
7,872
|
|
|
|
6,597
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
Media
|
|
|
1,517
|
|
|
|
1,249
|
|
|
|
4,229
|
|
|
|
3,845
|
|
|
Electronics and other general merchandise
|
|
|
1,064
|
|
|
|
690
|
|
|
|
2,821
|
|
|
|
1,955
|
|
|
Other
|
|
|
25
|
|
|
|
23
|
|
|
|
67
|
|
|
|
66
|
|
|
Total International
|
|
|
2,606
|
|
|
|
1,962
|
|
|
|
7,117
|
|
|
|
5,866
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
Media
|
|
|
2,929
|
|
|
|
2,494
|
|
|
|
8,094
|
|
|
|
7,444
|
|
|
Electronics and other general merchandise
|
|
|
2,357
|
|
|
|
1,640
|
|
|
|
6,473
|
|
|
|
4,652
|
|
|
Other
|
|
|
163
|
|
|
|
130
|
|
|
|
422
|
|
|
|
367
|
|
|
Total Consolidated
|
|
$
|
5,449
|
|
|
$
|
4,264
|
|
|
$
|
14,989
|
|
|
$
|
12,463
|
|
|
|
|
|
|
|
|
|
|
|
|
Y/Y Net Sales Growth:
|
|
|
|
|
|
|
|
|
|
North America:
|
|
|
|
|
|
|
|
|
|
Media
|
|
|
13
|
%
|
|
|
15
|
%
|
|
|
7
|
%
|
|
|
20
|
%
|
|
Electronics and other general merchandise
|
|
|
36
|
|
|
|
51
|
|
|
|
35
|
|
|
|
50
|
|
|
Other
|
|
|
29
|
|
|
|
41
|
|
|
|
18
|
|
|
|
40
|
|
|
Total North America
|
|
|
23
|
|
|
|
29
|
|
|
|
19
|
|
|
|
32
|
|
|
|
|
|
|
|
|
|
|
|
|
International:
|
|
|
|
|
|
|
|
|
|
Media
|
|
|
22
|
%
|
|
|
24
|
%
|
|
|
10
|
%
|
|
|
32
|
%
|
|
Electronics and other general merchandise
|
|
|
54
|
|
|
|
54
|
|
|
|
44
|
|
|
|
64
|
|
|
Other
|
|
|
4
|
|
|
|
49
|
|
|
|
2
|
|
|
|
78
|
|
|
Total International
|
|
|
33
|
|
|
|
33
|
|
|
|
21
|
|
|
|
41
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated:
|
|
|
|
|
|
|
|
|
|
Media
|
|
|
17
|
%
|
|
|
19
|
%
|
|
|
9
|
%
|
|
|
26
|
%
|
|
Electronics and other general merchandise
|
|
|
44
|
|
|
|
52
|
|
|
|
39
|
|
|
|
55
|
|
|
Other
|
|
|
25
|
|
|
|
42
|
|
|
|
15
|
|
|
|
45
|
|
|
Total Consolidated
|
|
|
28
|
|
|
|
31
|
|
|
|
20
|
|
|
|
36
|
|
|
|
|
|
|
|
|
|
|
|
|
Y/Y Net Sales Growth Excluding Effect of Exchange Rates:
|
|
|
|
|
|
|
|
|
|
International:
|
|
|
|
|
|
|
|
|
|
Media
|
|
|
22
|
%
|
|
|
18
|
%
|
|
|
17
|
%
|
|
|
22
|
%
|
|
Electronics and other general merchandise
|
|
|
58
|
|
|
|
48
|
|
|
|
56
|
|
|
|
52
|
|
|
Other
|
|
|
14
|
|
|
|
52
|
|
|
|
19
|
|
|
|
71
|
|
|
Total International
|
|
|
35
|
|
|
|
28
|
|
|
|
30
|
|
|
|
31
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated:
|
|
|
|
|
|
|
|
|
|
Media
|
|
|
18
|
%
|
|
|
17
|
%
|
|
|
13
|
%
|
|
|
21
|
%
|
|
Electronics and other general merchandise
|
|
|
45
|
|
|
|
49
|
|
|
|
44
|
|
|
|
51
|
|
|
Other
|
|
|
26
|
|
|
|
43
|
|
|
|
18
|
|
|
|
44
|
|
|
Total Consolidated
|
|
|
29
|
|
|
|
28
|
|
|
|
25
|
|
|
|
31
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Net Sales Mix:
|
|
|
|
|
|
|
|
|
|
Media
|
|
|
54
|
%
|
|
|
59
|
%
|
|
|
54
|
%
|
|
|
60
|
%
|
|
Electronics and other general merchandise
|
|
|
43
|
|
|
|
38
|
|
|
|
43
|
|
|
|
37
|
|
|
Other
|
|
|
3
|
|
|
|
3
|
|
|
|
3
|
|
|
|
3
|
|
|
|
|
AMAZON.COM, INC.
|
|
Consolidated Balance Sheets
|
|
(in millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
September 30,
|
|
|
|
|
2009
|
|
|
|
2008
|
|
|
|
2008
|
|
|
ASSETS
|
|
(unaudited)
|
|
|
|
(unaudited)
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
2,514
|
|
|
$
|
2,769
|
|
|
$
|
1,650
|
|
|
Marketable securities
|
|
|
1,487
|
|
|
|
958
|
|
|
|
674
|
|
|
Inventories
|
|
|
1,617
|
|
|
|
1,399
|
|
|
|
1,315
|
|
|
Accounts receivable, net and other
|
|
|
671
|
|
|
|
827
|
|
|
|
597
|
|
|
Deferred tax assets
|
|
|
80
|
|
|
|
204
|
|
|
|
194
|
|
|
Total current assets
|
|
|
6,369
|
|
|
|
6,157
|
|
|
|
4,430
|
|
|
Fixed assets, net
|
|
|
1,086
|
|
|
|
854
|
|
|
|
731
|
|
|
Deferred tax assets
|
|
|
206
|
|
|
|
145
|
|
|
|
278
|
|
|
Goodwill
|
|
|
457
|
|
|
|
438
|
|
|
|
405
|
|
|
Other assets
|
|
|
854
|
|
|
|
720
|
|
|
|
722
|
|
|
Total assets
|
|
$
|
8,972
|
|
|
$
|
8,314
|
|
|
$
|
6,566
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
3,354
|
|
|
$
|
3,594
|
|
|
$
|
2,242
|
|
|
Accrued expenses and other
|
|
|
1,183
|
|
|
|
1,152
|
|
|
|
902
|
|
|
Total current liabilities
|
|
|
4,537
|
|
|
|
4,746
|
|
|
|
3,144
|
|
|
Long-term debt
|
|
|
116
|
|
|
|
409
|
|
|
|
393
|
|
|
Other long-term liabilities
|
|
|
734
|
|
|
|
487
|
|
|
|
502
|
|
|
|
|
|
|
|
|
|
|
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 -- 449, 445 and 443
|
|
|
|
|
|
|
|
Outstanding shares -- 433, 428 and 429
|
|
|
4
|
|
|
|
4
|
|
|
|
4
|
|
|
Treasury stock, at cost
|
|
|
(600
|
)
|
|
|
(600
|
)
|
|
|
(500
|
)
|
|
Additional paid-in capital
|
|
|
4,428
|
|
|
|
4,121
|
|
|
|
4,051
|
|
|
Accumulated other comprehensive income (loss)
|
|
|
(35
|
)
|
|
|
(123
|
)
|
|
|
(73
|
)
|
|
Accumulated deficit
|
|
|
(212
|
)
|
|
|
(730
|
)
|
|
|
(955
|
)
|
|
Total stockholders' equity
|
|
|
3,585
|
|
|
|
2,672
|
|
|
|
2,527
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
8,972
|
|
|
$
|
8,314
|
|
|
$
|
6,566
|
|
|
|
|
AMAZON.COM, INC.
|
|
Supplemental Financial Information and Business Metrics
|
|
(in millions, except per share data)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Y/Y %
|
|
|
|
Q3 2008
|
|
Q4 2008
|
|
Q1 2009
|
|
Q2 2009
|
|
Q3 2009
|
|
Change
|
|
Cash Flows and Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating cash flow -- trailing twelve months (TTM)
|
|
$
|
1,275
|
|
$
|
1,697
|
|
$
|
1,757
|
|
$
|
1,878
|
|
$
|
2,253
|
|
77%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of fixed assets (incl. internal-use software & website
development) -- TTM
|
|
$
|
305
|
|
$
|
333
|
|
$
|
326
|
|
$
|
336
|
|
$
|
337
|
|
11%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free cash flow (operating cash flow less purchases of fixed assets)
-- TTM
|
|
$
|
970
|
|
$
|
1,364
|
|
$
|
1,431
|
|
$
|
1,542
|
|
$
|
1,916
|
|
98%
|
|
Free cash flow -- TTM Y/Y growth
|
|
|
21%
|
|
|
16%
|
|
|
82%
|
|
|
89%
|
|
|
98%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares and stock-based awards outstanding
|
|
|
448
|
|
|
446
|
|
|
447
|
|
|
451
|
|
|
451
|
|
1%
|
|
Common shares outstanding
|
|
|
429
|
|
|
428
|
|
|
429
|
|
|
432
|
|
|
433
|
|
1%
|
|
Stock-based awards outstanding
|
|
|
19
|
|
|
18
|
|
|
17
|
|
|
19
|
|
|
18
|
|
(6%)
|
|
Stock-based awards outstanding -- % of common shares outstanding
|
|
|
4.5%
|
|
|
4.2%
|
|
|
4.0%
|
|
|
4.4%
|
|
|
4.2%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Results of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide (WW) net sales
|
|
$
|
4,264
|
|
$
|
6,704
|
|
$
|
4,889
|
|
$
|
4,651
|
|
$
|
5,449
|
|
28%
|
|
WW net sales -- Y/Y growth, excluding F/X
|
|
|
28%
|
|
|
24%
|
|
|
25%
|
|
|
20%
|
|
|
29%
|
|
N/A
|
|
WW net sales -- TTM
|
|
$
|
18,135
|
|
$
|
19,166
|
|
$
|
19,921
|
|
$
|
20,509
|
|
$
|
21,693
|
|
20%
|
|
WW net sales -- TTM Y/Y growth, excluding F/X
|
|
|
33%
|
|
|
28%
|
|
|
27%
|
|
|
24%
|
|
|
24%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
|
999
|
|
$
|
1,348
|
|
$
|
1,148
|
|
$
|
1,133
|
|
$
|
1,273
|
|
27%
|
|
Gross profit -- Y/Y growth, excluding F/X
|
|
|
29%
|
|
|
20%
|
|
|
27%
|
|
|
23%
|
|
|
29%
|
|
N/A
|
|
Gross margin -- % of WW net sales
|
|
|
23.4%
|
|
|
20.1%
|
|
|
23.5%
|
|
|
24.4%
|
|
|
23.4%
|
|
N/A
|
|
Gross profit -- TTM
|
|
$
|
4,092
|
|
$
|
4,270
|
|
$
|
4,462
|
|
$
|
4,628
|
|
$
|
4,902
|
|
20%
|
|
Gross profit -- TTM Y/Y growth, excluding F/X
|
|
|
31%
|
|
|
26%
|
|
|
26%
|
|
|
24%
|
|
|
25%
|
|
N/A
|
|
Gross margin -- TTM % of WW net sales
|
|
|
22.6%
|
|
|
22.3%
|
|
|
22.4%
|
|
|
22.6%
|
|
|
22.6%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (1)
|
|
$
|
154
|
|
$
|
272
|
|
$
|
244
|
|
$
|
159
|
|
$
|
251
|
|
62%
|
|
Operating margin -- % of WW net sales
|
|
|
3.6%
|
|
|
4.1%
|
|
|
5.0%
|
|
|
3.4%
|
|
|
4.6%
|
|
N/A
|
|
Operating income -- TTM (1) (2)
|
|
$
|
840
|
|
$
|
842
|
|
$
|
887
|
|
$
|
829
|
|
$
|
925
|
|
10%
|
|
Operating income -- TTM Y/Y growth, excluding F/X
|
|
|
36%
|
|
|
27%
|
|
|
30%
|
|
|
13%
|
|
|
22%
|
|
N/A
|
|
Operating margin -- TTM % of WW net sales
|
|
|
4.6%
|
|
|
4.4%
|
|
|
4.5%
|
|
|
4.0%
|
|
|
4.3%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (1)
|
|
$
|
118
|
|
$
|
225
|
|
$
|
177
|
|
$
|
142
|
|
$
|
199
|
|
68%
|
|
Net income per diluted share
|
|
$
|
0.27
|
|
$
|
0.52
|
|
$
|
0.41
|
|
$
|
0.32
|
|
$
|
0.45
|
|
66%
|
|
Net income -- TTM (1) (2)
|
|
$
|
627
|
|
$
|
645
|
|
$
|
679
|
|
$
|
663
|
|
$
|
743
|
|
19%
|
|
Net income per diluted share -- TTM
|
|
$
|
1.46
|
|
$
|
1.49
|
|
$
|
1.56
|
|
$
|
1.52
|
|
$
|
1.69
|
|
16%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America Segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
2,302
|
|
$
|
3,631
|
|
$
|
2,578
|
|
$
|
2,451
|
|
$
|
2,843
|
|
23%
|
|
Net sales -- Y/Y growth, excluding F/X
|
|
|
29%
|
|
|
18%
|
|
|
22%
|
|
|
13%
|
|
|
24%
|
|
N/A
|
|
Net sales -- TTM
|
|
$
|
9,680
|
|
$
|
10,228
|
|
$
|
10,681
|
|
$
|
10,963
|
|
$
|
11,503
|
|
19%
|
|
Gross profit
|
|
$
|
586
|
|
$
|
781
|
|
$
|
694
|
|
$
|
672
|
|
$
|
752
|
|
28%
|
|
Gross margin -- % of North America net sales
|
|
|
25.5%
|
|
|
21.5%
|
|
|
26.9%
|
|
|
27.4%
|
|
|
26.5%
|
|
N/A
|
|
Gross profit -- TTM
|
|
$
|
2,412
|
|
$
|
2,495
|
|
$
|
2,620
|
|
$
|
2,733
|
|
$
|
2,899
|
|
20%
|
|
Gross margin -- TTM % of North America net sales
|
|
|
24.9%
|
|
|
24.4%
|
|
|
24.5%
|
|
|
24.9%
|
|
|
25.2%
|
|
N/A
|
|
Operating income
|
|
$
|
88
|
|
$
|
130
|
|
$
|
150
|
|
$
|
125
|
|
$
|
156
|
|
77%
|
|
Operating margin -- % of North America net sales
|
|
|
3.8%
|
|
|
3.6%
|
|
|
5.8%
|
|
|
5.1%
|
|
|
5.5%
|
|
N/A
|
|
Operating income -- TTM
|
|
$
|
468
|
|
$
|
445
|
|
$
|
464
|
|
$
|
494
|
|
$
|
562
|
|
20%
|
|
Operating income -- TTM Y/Y growth, excluding F/X
|
|
|
26%
|
|
|
11%
|
|
|
5%
|
|
|
8%
|
|
|
20%
|
|
N/A
|
|
Operating margin -- TTM % of North America net sales
|
|
|
4.8%
|
|
|
4.4%
|
|
|
4.4%
|
|
|
4.5%
|
|
|
4.9%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International Segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
1,962
|
|
$
|
3,073
|
|
$
|
2,311
|
|
$
|
2,200
|
|
$
|
2,606
|
|
33%
|
|
Net sales -- Y/Y growth, excluding F/X
|
|
|
28%
|
|
|
31%
|
|
|
28%
|
|
|
28%
|
|
|
35%
|
|
N/A
|
|
Net sales -- TTM
|
|
$
|
8,455
|
|
$
|
8,938
|
|
$
|
9,240
|
|
$
|
9,546
|
|
$
|
10,190
|
|
21%
|
|
Net sales -- TTM % of WW net sales
|
|
|
47%
|
|
|
47%
|
|
|
46%
|
|
|
47%
|
|
|
47%
|
|
N/A
|
|
Gross profit
|
|
$
|
413
|
|
$
|
567
|
|
$
|
454
|
|
$
|
461
|
|
$
|
521
|
|
26%
|
|
Gross margin -- % of International net sales
|
|
|
21.1%
|
|
|
18.5%
|
|
|
19.6%
|
|
|
20.9%
|
|
|
20.0%
|
|
N/A
|
|
Gross profit -- TTM
|
|
$
|
1,680
|
|
$
|
1,775
|
|
$
|
1,842
|
|
$
|
1,895
|
|
$
|
2,003
|
|
19%
|
|
Gross margin -- TTM % of International net sales
|
|
|
19.9%
|
|
|
19.9%
|
|
|
19.9%
|
|
|
19.9%
|
|
|
19.7%
|
|
N/A
|
|
Operating income
|
|
$
|
143
|
|
$
|
229
|
|
$
|
172
|
|
$
|
179
|
|
$
|
194
|
|
36%
|
|
Operating margin -- % of International net sales
|
|
|
7.3%
|
|
|
7.4%
|
|
|
7.4%
|
|
|
8.1%
|
|
|
7.4%
|
|
N/A
|
|
Operating income -- TTM
|
|
$
|
594
|
|
$
|
648
|
|
$
|
692
|
|
$
|
722
|
|
$
|
773
|
|
30%
|
|
Operating income -- TTM Y/Y growth, excluding F/X
|
|
|
41%
|
|
|
42%
|
|
|
52%
|
|
|
49%
|
|
|
49%
|
|
N/A
|
|
Operating margin -- TTM % of International net sales
|
|
|
7.0%
|
|
|
7.3%
|
|
|
7.5%
|
|
|
7.6%
|
|
|
7.6%
|
|
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 2008
|
|
Q4 2008
|
|
Q1 2009
|
|
Q2 2009
|
|
Q3 2009
|
|
Change
|
|
Segments (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Segments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
$
|
768
|
|
$
|
989
|
|
$
|
826
|
|
$
|
829
|
|
$
|
923
|
|
20%
|
|
Operating expenses -- TTM
|
|
$
|
3,030
|
|
$
|
3,177
|
|
$
|
3,306
|
|
$
|
3,412
|
|
$
|
3,567
|
|
18%
|
|
Operating income
|
|
$
|
231
|
|
$
|
359
|
|
$
|
322
|
|
$
|
304
|
|
$
|
350
|
|
52%
|
|
Operating margin -- % of consolidated sales
|
|
|
5.4%
|
|
|
5.4%
|
|
|
6.6%
|
|
|
6.5%
|
|
|
6.4%
|
|
N/A
|
|
Operating income -- TTM
|
|
$
|
1,062
|
|
$
|
1,093
|
|
$
|
1,156
|
|
$
|
1,216
|
|
$
|
1,335
|
|
26%
|
|
Operating income -- TTM Y/Y growth, excluding F/X
|
|
|
35%
|
|
|
28%
|
|
|
28%
|
|
|
29%
|
|
|
35%
|
|
N/A
|
|
Operating margin -- TTM % of consolidated net sales
|
|
|
5.9%
|
|
|
5.7%
|
|
|
5.8%
|
|
|
5.9%
|
|
|
6.2%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental North America Segment Net Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media
|
|
$
|
1,245
|
|
$
|
1,751
|
|
$
|
1,305
|
|
$
|
1,148
|
|
$
|
1,412
|
|
13%
|
|
Media -- Y/Y growth, excluding F/X
|
|
|
15%
|
|
|
8%
|
|
|
9%
|
|
|
0%
|
|
|
14%
|
|
N/A
|
|
Media -- TTM
|
|
$
|
5,235
|
|
$
|
5,350
|
|
$
|
5,450
|
|
$
|
5,449
|
|
$
|
5,616
|
|
7%
|
|
Electronics and other general merchandise
|
|
$
|
950
|
|
$
|
1,733
|
|
$
|
1,172
|
|
$
|
1,187
|
|
$
|
1,293
|
|
36%
|
|
Electronics and other general merchandise -- Y/Y growth, excluding
F/X
|
|
|
51%
|
|
|
30%
|
|
|
42%
|
|
|
29%
|
|
|
36%
|
|
N/A
|
|
Electronics and other general merchandise -- TTM
|
|
$
|
4,033
|
|
$
|
4,430
|
|
$
|
4,776
|
|
$
|
5,043
|
|
$
|
5,385
|
|
34%
|
|
Electronics and other general merchandise -- TTM % of North America
net sales
|
|
|
42%
|
|
|
43%
|
|
|
45%
|
|
|
46%
|
|
|
47%
|
|
N/A
|
|
Other
|
|
$
|
107
|
|
$
|
147
|
|
$
|
101
|
|
$
|
116
|
|
$
|
138
|
|
29%
|
|
Other -- TTM
|
|
$
|
412
|
|
$
|
448
|
|
$
|
455
|
|
$
|
471
|
|
$
|
502
|
|
22%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental International Segment Net Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media
|
|
$
|
1,249
|
|
$
|
1,889
|
|
$
|
1,418
|
|
$
|
1,294
|
|
$
|
1,517
|
|
22%
|
|
Media -- Y/Y growth, excluding F/X
|
|
|
18%
|
|
|
22%
|
|
|
17%
|
|
|
12%
|
|
|
22%
|
|
N/A
|
|
Media -- TTM
|
|
$
|
5,537
|
|
$
|
5,734
|
|
$
|
5,814
|
|
$
|
5,849
|
|
$
|
6,118
|
|
10%
|
|
Electronics and other general merchandise
|
|
$
|
690
|
|
$
|
1,156
|
|
$
|
874
|
|
$
|
882
|
|
$
|
1,064
|
|
54%
|
|
Electronics and other general merchandise -- Y/Y growth, excluding
F/X
|
|
|
48%
|
|
|
46%
|
|
|
50%
|
|
|
60%
|
|
|
58%
|
|
N/A
|
|
Electronics and other general merchandise -- TTM
|
|
$
|
2,832
|
|
$
|
3,110
|
|
$
|
3,330
|
|
$
|
3,603
|
|
$
|
3,977
|
|
40%
|
|
Electronics and other general merchandise -- TTM % of International
net sales
|
|
|
33%
|
|
|
35%
|
|
|
36%
|
|
|
38%
|
|
|
39%
|
|
N/A
|
|
Other
|
|
$
|
23
|
|
$
|
28
|
|
$
|
19
|
|
$
|
24
|
|
$
|
25
|
|
4%
|
|
Other -- TTM
|
|
$
|
86
|
|
$
|
94
|
|
$
|
96
|
|
$
|
94
|
|
$
|
95
|
|
11%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Worldwide Net Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media
|
|
$
|
2,494
|
|
$
|
3,640
|
|
$
|
2,723
|
|
$
|
2,442
|
|
$
|
2,929
|
|
17%
|
|
Media -- Y/Y growth, excluding F/X
|
|
|
17%
|
|
|
15%
|
|
|
13%
|
|
|
7%
|
|
|
18%
|
|
N/A
|
|
Media -- TTM
|
|
$
|
10,772
|
|
$
|
11,084
|
|
$
|
11,264
|
|
$
|
11,298
|
|
$
|
11,734
|
|
9%
|
|
Electronics and other general merchandise
|
|
$
|
1,640
|
|
$
|
2,889
|
|
$
|
2,046
|
|
$
|
2,069
|
|
$
|
2,357
|
|
44%
|
|
Electronics and other general merchandise -- Y/Y growth, excluding
F/X
|
|
|
49%
|
|
|
36%
|
|
|
46%
|
|
|
41%
|
|
|
45%
|
|
N/A
|
|
Electronics and other general merchandise -- TTM
|
|
$
|
6,865
|
|
$
|
7,540
|
|
$
|
8,106
|
|
$
|
8,646
|
|
$
|
9,362
|
|
36%
|
|
Electronics and other general merchandise -- TTM % of WW net sales
|
|
|
38%
|
|
|
39%
|
|
|
41%
|
|
|
42%
|
|
|
43%
|
|
N/A
|
|
Other
|
|
$
|
130
|
|
$
|
175
|
|
$
|
120
|
|
$
|
140
|
|
$
|
163
|
|
25%
|
|
Other -- TTM
|
|
$
|
498
|
|
$
|
542
|
|
$
|
551
|
|
$
|
565
|
|
$
|
597
|
|
20%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and marketable securities (3)
|
|
$
|
2,572
|
|
$
|
4,035
|
|
$
|
3,025
|
|
$
|
3,504
|
|
$
|
4,304
|
|
67%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory, net -- ending
|
|
$
|
1,315
|
|
$
|
1,399
|
|
$
|
1,266
|
|
$
|
1,325
|
|
$
|
1,617
|
|
23%
|
|
Inventory turnover, average -- TTM
|
|
|
12.4
|
|
|
12.2
|
|
|
12.5
|
|
|
12.4
|
|
|
12.1
|
|
(2%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed assets, net
|
|
$
|
731
|
|
$
|
854
|
|
$
|
889
|
|
$
|
981
|
|
$
|
1,086
|
|
49%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable days -- ending
|
|
|
63
|
|
|
62
|
|
|
57
|
|
|
65
|
|
|
72
|
|
14%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WW shipping revenue
|
|
$
|
191
|
|
$
|
266
|
|
$
|
190
|
|
$
|
185
|
|
$
|
208
|
|
8%
|
|
WW shipping costs
|
|
$
|
323
|
|
$
|
508
|
|
$
|
358
|
|
$
|
332
|
|
$
|
388
|
|
20%
|
|
WW net shipping costs
|
|
$
|
132
|
|
$
|
242
|
|
$
|
168
|
|
$
|
147
|
|
$
|
180
|
|
37%
|
|
WW net shipping costs -- % of WW net sales
|
|
|
3.1%
|
|
|
3.6%
|
|
|
3.4%
|
|
|
3.1%
|
|
|
3.3%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employees (full-time and part-time; excludes contractors & temporary
personnel)
|
|
|
20,500
|
|
|
20,700
|
|
|
20,600
|
|
|
21,000
|
|
|
21,700
|
|
6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Q2 2009 includes the impact of our settlement with Toysrus.com
LLC for $51 million, substantially all of which was expensed in Q2
2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Q2 2008 includes a $53 million non-cash gain recognized on the
sale of our European DVD rental assets.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Includes restricted cash, classified within "Other Assets" on
our consolidated balance sheet, of: $248 million Q3 2008, $308
million Q4 2008, $295 million Q1 2009, $292 million Q2 2009, and
$303 million Q3 2009.
|
Amazon.com, Inc.
Certain Definitions and Other
Segment Reporting
-
We present segment information for North America and International. We
measure operating results of our segments using an internal
performance measure of direct segment operating expenses that excludes
stock-based compensation and other operating expense, each of which is
not allocated to segment results. Other centrally incurred operating
costs are fully allocated to segment results. Our operating results,
particularly for the International segment, are affected by movements
in foreign exchange rates.
-
The North America segment consists of amounts earned from retail sales
of consumer products (including from sellers) and subscriptions
through North America-focused websites such as www.amazon.com
and www.amazon.ca.
This segment includes export sales from www.amazon.com
and www.amazon.ca.
-
The International segment consists of amounts earned from retail sales
of consumer products (including from sellers) and subscriptions
through internationally focused websites such as www.amazon.co.uk,
www.amazon.de,
www.amazon.co.jp,
www.amazon.fr,
and www.amazon.cn.
This segment includes export sales from these internationally based
sites (including export sales from these sites to customers in the
U.S. and Canada), but excludes export sales from www.amazon.com
and www.amazon.ca.
-
We provide supplemental sales information within each segment for
three categories: Media, Electronics and Other General Merchandise,
and Other. Media consists of amounts earned from retail sales from all
sellers in categories such as books, movies, music, digital downloads,
software and video games (including game consoles). Electronics and
Other General Merchandise consists of amounts earned from retail sales
from all sellers of items in categories not included in Media, such as
electronics and computers, devices, home and garden, toys, kids and
baby, grocery, apparel, shoes and jewelry, health and beauty, sports
and outdoors, tools, and auto and industrial. Other consists of
non-retail activities, such as the Amazon Enterprise Solutions
program, Amazon Web Services, and miscellaneous marketing and
promotional activities, such as our co-branded credit card programs.
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 (including www.amazon.cn
customers), 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
Cash Flows and Return on Invested Capital
-
Free cash flow is cash flow from operations reduced by purchases of
fixed assets, including internal-use software and website development.
-
Tax benefits relating to excess stock-based compensation deductions
are reported as financing cash flows.
-
Return on invested capital is trailing-twelve-month free cash flow
divided by average total assets less current liabilities (excluding
current portion of our long-term debt) over five quarter ends.
Net Sales
-
Revenue is generally recorded gross for sales of our own inventory and
net for sales by other sellers. Amounts paid in advance for
subscription services, including amounts received for Amazon Prime and
other membership programs, are deferred and recognized as revenue over
the subscription term. For our products with multiple elements, where
a standalone value for each element cannot be established, we
recognize the revenue and related cost over the estimated economic
life of the product.
Cost of Sales
-
Cost of sales consists of the purchase price of consumer products and
content sold by us, inbound and outbound shipping charges, packaging
supplies, and costs incurred in operating and staffing our fulfillment
and customer service centers on behalf of other businesses.
Fulfillment
-
Fulfillment costs relate to variable costs corresponding with sales
volume and inventory levels; our mix of product sales; payment
processing and related transaction costs, including mix of payment
methods and costs from our guarantee for certain seller transactions;
and costs from expanding fulfillment capacity.
Marketing
-
Marketing consists primarily of online advertising, including through
our Associates program, sponsored search, portal advertising, e-mail
campaigns, and other initiatives.
Technology and Content
-
Technology and content expenses consist principally of payroll and
related expenses for employees involved in application development,
category expansion, editorial content, buying, merchandising
selection, and systems support, as well as costs associated with the
compute, storage and telecommunications infrastructure.
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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.
Source: Amazon.com, Inc.
Amazon.com Investor Relations
Rob Eldridge, 206-266-2171
www.amazon.com/ir
or
Amazon.com
Public Relations
Craig Berman, 206-266-7180
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