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SEC Filings

10-K
AMAZON COM INC filed this Form 10-K on 01/30/2013
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Table of Contents

Operating Expenses

Information about operating expenses with and without stock-based compensation is as follows (in millions):

 

    Year Ended December 31, 2012     Year Ended December 31, 2011     Year Ended December 31, 2010  
    As
Reported
    Stock-Based
Compensation
    Net     As
Reported
    Stock-Based
Compensation
    Net     As
Reported
    Stock-Based
Compensation
    Net  

Operating Expenses:

                 

Cost of sales

  $ 45,971      $ —        $ 45,971      $ 37,288      $ —        $ 37,288      $ 26,561      $ —        $ 26,561   

Fulfillment

    6,419        (212     6,207        4,576        (133     4,443        2,898        (90     2,808   

Marketing

    2,408        (61     2,347        1,630        (39     1,591        1,029        (27     1,002   

Technology and content

    4,564        (434     4,130        2,909        (292     2,617        1,734        (223     1,511   

General and administrative

    896        (126     770        658        (93     565        470        (84     386   

Other operating expense (income), net

    159        —          159        154        —          154        106        —          106   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

  $ 60,417      $ (833   $ 59,584      $ 47,215      $ (557   $ 46,658      $ 32,798      $ (424   $ 32,374   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Year-over-year Percentage Growth:

                 

Fulfillment

    40       40     58       58     41       42

Marketing

    48          47        58          59        51          52   

Technology and content

    57          58        68          73        40          43   

General and administrative

    36          36        40          46        44          45   

Percent of Net Sales:

                 

Fulfillment

    10.5       10.2     9.5       9.2     8.5       8.2

Marketing

    3.9          3.8        3.4          3.3        3.0          2.9   

Technology and content

    7.5          6.8        6.1          5.4        5.1          4.4   

General and administrative

    1.5          1.3        1.4          1.2        1.4          1.1   

Operating expenses without stock-based compensation are non-GAAP financial measures. See “Non-GAAP Financial Measures” and Item 8 of Part I, “Financial Statements and Supplementary Data—Note 1—Description of Business and Accounting Policies—Stock-Based Compensation.”

Cost of Sales

Cost of sales consists of the purchase price of consumer products and digital content where we are the seller of record, including Prime Instant Video, inbound and outbound shipping charges, and packaging supplies. Shipping charges to receive products from our suppliers are included in our inventory, and recognized as cost of sales upon sale of products to our customers.

The increase in cost of sales in absolute dollars in 2012, 2011, and 2010 compared to the comparable prior year periods, is primarily due to increased product, digital content, and shipping costs resulting from increased sales, as well as from expansion of digital offerings.

Consolidated gross profit and gross margin for each of the periods presented were as follows:

 

     Year Ended December 31,  
     2012     2011     2010  

Gross profit (in millions)

   $ 15,122      $ 10,789      $ 7,643   

Gross margin

     24.8     22.4     22.3

Gross margin increased in 2012, compared to the comparable prior year periods, primarily due to services sales increasing as a percentage of total sales. We believe that income from operations is a more meaningful measure than gross profit and gross margin due to the diversity of our product categories and services.

 

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