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Amazon.com Announces Second Quarter Sales up 35% Year over Year -- Media Grows 27% -- Electronics and Other General Merchandise Grows 55% -- Record Free Cash Flow

SEATTLE--(BUSINESS WIRE)--July 24, 2007--Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its second quarter ended June 30, 2007.

Operating cash flow was $895 million for the trailing twelve months, compared with $610 million for the trailing twelve months ended June 30, 2006. Free cash flow was $700 million for the trailing twelve months, an increase of 87% compared with $375 million for the trailing twelve months ended June 30, 2006.

Common shares outstanding plus shares underlying stock-based awards outstanding totaled 435 million on June 30, 2007, compared with 443 million a year ago.

Net sales increased 35% to $2.89 billion in the second quarter, compared with $2.14 billion in second quarter 2006. Excluding the $46 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales grew 33% compared with second quarter 2006.

Operating income increased 149% to $116 million in the second quarter, compared with $47 million in second quarter 2006.

Net income increased 257% to $78 million in the second quarter, or $0.19 per diluted share, compared with net income of $22 million, or $0.05 per diluted share in second quarter 2006.

"Our strong revenue growth this quarter was fueled by low prices and the added convenience of Amazon Prime," said Jeff Bezos, founder and CEO of Amazon.com. "More and more customers are taking advantage of Amazon Prime and we're pleased with the acceleration in subscriber growth this quarter."

Amazon Prime, Amazon.com's first-ever membership program, was introduced in February 2005. For a flat membership fee of $79 per year, Amazon Prime members get unlimited, express two-day shipping for free, with no minimum purchase requirement on over a million eligible items sold by Amazon.com and our Fulfillment by Amazon (FBA) partners. Members can order as late as 6:30 p.m. ET and still receive their order the next day for only $3.99 per item, and they can share the benefits of Amazon Prime with up to four family members living in their household. Sign up for Amazon Prime at www.amazon.com/prime.

    Highlights

    --  North America segment sales, representing the Company's U.S.
        and Canadian sites, were $1.60 billion, up 38% from second
        quarter 2006.

    --  International segment sales, representing the Company's U.K.,
        German, Japanese, French and Chinese sites, were $1.28
        billion, up 31% from second quarter 2006. Excluding the
        favorable impact from year-over-year changes in foreign
        exchange rates throughout the quarter, International net sales
        growth was 26%.

    --  Worldwide Media grew 27% to $1.83 billion in second quarter
        2007, compared to $1.45 billion in second quarter 2006.

    --  Worldwide Electronics & Other General Merchandise grew 55% to
        $970 million in second quarter 2007 and increased to 34% of
        worldwide net sales compared with 29% in second quarter 2006.

    --  The Company received orders for more than 2.2 million copies
        of Harry Potter and the Deathly Hallows worldwide in advance
        of its July 21 release, making it Amazon's largest new product
        release.

    --  Amazon.co.jp launched Amazon Prime for its Japanese customers
        in June. Members pay an annual fee of JPY 3,900 for access to
        unlimited express delivery service that can be used throughout
        Japan. The service offers same-day delivery for the Kanto area
        and next-day delivery to other locations.

    --  Amazon Enterprise Solutions and Lacoste launched a
        multi-channel e-commerce solution, including a website
        (www.lacoste.com), phone ordering, customer service, and
        fulfillment.

    --  Amazon Europe launched a Jewelry and Watches store on its
        amazon.co.uk website and a Watches store on its amazon.de
        website, both offering customers thousands of items from
        brands such as Rotary, Diesel, Timex and Citizen.

    --  Amazon Europe launched Merchants@ technology on its amazon.fr
        website, enabling branded businesses to offer their selection
        of new products.

    --  Joyo.com has been re-branded as Joyo Amazon and now
        incorporates many of the features and functionalities found on
        other Amazon websites.

    --  Over 265,000 developers have registered to use Amazon Web
        Services, up 25,000 from the prior quarter.

    Financial Guidance

The following forward-looking statements reflect Amazon.com's expectations as of July 24, 2007. Results may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and consumer spending, world events, the rate of growth of the Internet and online commerce, and the various factors detailed below.

    Third Quarter 2007 Guidance

    --  Net sales are expected to be between $3.0 billion and $3.175
        billion, or to grow between 30% and 38% compared with third
        quarter 2006.

    --  Operating income is expected to be between $75 million and
        $110 million, or grow between 88% and 175% compared with third
        quarter 2006. This guidance includes $50 million for
        stock-based compensation and amortization of intangible
        assets, and it assumes, among other things, that no additional
        intangible assets are recorded and that there are no further
        revisions to stock-based compensation estimates.

    Full Year 2007 Expectations

    --  Net sales are expected to be between $13.80 billion and $14.30
        billion, or to grow between 29% and 34% compared with 2006.

    --  Operating income is expected to be between $540 million and
        $640 million, or grow between 39% and 65% compared with 2006.
        This guidance includes $185 million for stock-based
        compensation and amortization of intangible assets, and it
        assumes, among other things, that no additional intangible
        assets are recorded 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, significant indebtedness, government regulation and taxation, payments and fraud. 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 Annual Report on Form 10-K for the year ended December 31, 2006, and all 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 health and personal care, jewelry and watches, gourmet food, sports and outdoors, apparel and accessories, books, music, DVDs, electronics and office, toys and baby, and home and garden.

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 the Joyo Amazon websites at www.joyo.cn and www.amazon.cn.

As used herein, "Amazon.com," "we," "our" and similar terms include Amazon.com, Inc., and its subsidiaries, unless the context indicates otherwise.

                           AMAZON.COM, INC.
                Consolidated Statements of Cash Flows
                            (in millions)
                             (unaudited)

                      Three Months     Six Months     Twelve Months
                           Ended          Ended            Ended
                         June 30,       June 30,         June 30,
                      -------------- --------------- -----------------
                        2007   2006    2007    2006     2007     2006
                      ------- ------ ------- ------- -------- --------

CASH AND CASH
 EQUIVALENTS,
 BEGINNING OF PERIOD  $  748  $ 507  $1,022  $1,013  $   683  $   629

OPERATING ACTIVITIES:
Net income                78     22     189      73      306      302
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     60     43     122      83      244      149
  Stock-based
   compensation           46     30      80      41      140       84
  Other operating
   expense, net            3      3       3       6        7       10
  Losses (gains) on
   sales of
   marketable
   securities, net         -     (1)      1       1       (2)       -
  Remeasurements and
   other                   5    (11)      9      (7)       9      (14)
  Deferred income
   taxes                  (2)    (2)      -       8       14      (15)
  Excess tax benefit
   on stock awards       (35)   (21)    (60)    (29)    (133)     (34)
Changes in operating
 assets and
 liabilities:
  Inventories             25     30     151      63     (193)    (128)
  Accounts
   receivable, net
   and other             (10)    16      56      66     (113)     (37)
  Accounts payable        82      4    (520)   (438)     319      207
  Accrued expenses
   and other              31     22     (28)    (42)     256       88
  Additions to
   unearned revenue       64     38     109      92      223      181
  Amortization of
   previously
   unearned revenue      (48)   (43)    (92)    (90)    (182)    (183)
                      ------- ------ ------- ------- -------- --------
   Net cash provided
    by (used in)
    operating
    activities           299    130      20    (173)     895      610

INVESTING ACTIVITIES:
Purchases of fixed
 assets, including
 internal-use
 software and website
 development             (47)   (58)    (82)   (104)    (195)    (235)
Acquisitions, net of
 cash acquired           (22)     -     (22)    (28)     (26)     (32)
Sales and maturities
 of marketable
 securities and other
 investments             161    249     945     537    2,253      883
Purchases of
 marketable
 securities and other
 investments            (180)  (232)   (694)   (362)  (2,262)  (1,009)
                      ------- ------ ------- ------- -------- --------
    Net cash provided
     by (used in)
     investing
     activities          (88)   (41)    147      43     (230)    (393)

FINANCING ACTIVITIES:
Proceeds from
 exercises of stock
 options                  35      7      44      13       65       55
Excess tax benefit on
 stock awards             35     21      60      29      133       34
Common stock
 repurchased               -      -    (248)      -     (500)       -
Proceeds from long-
 term debt and other       -     66       -      69        3       82
Repayments of long-
 term debt and
 capital lease
 obligations             (29)   (21)    (46)   (334)     (67)    (341)
                      ------- ------ ------- ------- -------- --------
    Net cash provided
     by (used in)
     financing
     activities           41     73    (190)   (223)    (366)    (170)

Foreign-currency
 effect on cash and
 cash equivalents          4     14       5      23       22        7
                      ------- ------ ------- ------- -------- --------
    Net increase
     (decrease) in
     cash and cash
     equivalents         256    176     (18)   (330)     321       54
                      ------- ------ ------- ------- -------- --------

CASH AND CASH
 EQUIVALENTS, END OF
 PERIOD               $1,004  $ 683  $1,004  $  683  $ 1,004  $   683
                      ======= ====== ======= ======= ======== ========

SUPPLEMENTAL CASH
 FLOW INFORMATION:
Cash paid for
 interest             $    1  $   -  $   44  $   63  $    68  $    84
Cash paid for income
 taxes                     7      3      10       8       17       15
Fixed assets acquired
 under capital leases
 and other financing
 arrangements              9     17      21      21       68       27
                           AMAZON.COM, INC.
                Consolidated Statements of Operations
                 (in millions, except per share data)
                             (unaudited)

                                        Three Months     Six Months
                                            Ended           Ended
                                          June 30,        June 30,
                                       --------------- ---------------
                                         2007    2006    2007    2006
                                       ------- ------- ------- -------

Net sales                              $2,886  $2,139  $5,901  $4,418
Cost of sales                           2,185   1,630   4,480   3,361
                                       ------- ------- ------- -------
Gross profit                              701     509   1,421   1,057

Operating expenses (1):
  Fulfillment                             258     189     518     383
  Marketing                                65      53     137     107
  Technology and content                  201     167     387     314
  General and administrative               58      50     114      95
  Other operating expense, net              3       3       3       6
                                       ------- ------- ------- -------
    Total operating expenses              585     462   1,159     905
                                       ------- ------- ------- -------

Income from operations                    116      47     262     152

Interest income                            20      13      39      27
Interest expense                          (19)    (19)    (38)    (38)
Other income (expense), net                (1)      1      (1)      -
Remeasurements and other                   (5)     12      (7)      9
                                       ------- ------- ------- -------
    Total non-operating expense            (5)      7      (7)     (2)
                                       ------- ------- ------- -------

Income before income taxes                111      54     255     150

Provision for income taxes                 33      32      66      77
                                       ------- ------- ------- -------

Net income                             $   78  $   22  $  189  $   73
                                       ======= ======= ======= =======


Basic earnings per share               $ 0.19  $ 0.05  $ 0.46  $ 0.18
                                       ======= ======= ======= =======

Diluted earnings per share             $ 0.19  $ 0.05  $ 0.45  $ 0.17
                                       ======= ======= ======= =======

Weighted average shares used in computation of
 earnings per share:
  Basic                                   412     418 #   412     417
                                       ======= ======= ======= =======

  Diluted                                 423     426 #   421     426
                                       ======= ======= ======= =======

(1) Includes stock-based compensation
 as follows:
    Fulfillment                        $   10  $    7  $   17  $   10
    Marketing                               2       1       3       2
    Technology and content                 25      16      44      23
    General and administrative              9       6      16       6
                           AMAZON.COM, INC.
                         Segment Information
                            (in millions)
                             (unaudited)

                                   Three Months Ended Six Months Ended
                                        June 30,          June 30,
                                   ------------------ ----------------
                                       2007    2006     2007    2006
                                   --------- -------- ------- --------
North America
  Net sales                          $1,601  $1,157   $3,223  $2,404
  Cost of sales                       1,167     848    2,350   1,753
                                   --------- -------- ------- --------
  Gross profit                          434     309      873     651
  Direct segment operating
   expenses(1)                          352     284      705     565
                                   --------- -------- ------- --------
  Segment operating income           $   82  $   25   $  168  $   86
                                   ========= ======== ======= ========

International
  Net sales                          $1,285  $  982   $2,678  $2,014
  Cost of sales                       1,018     782    2,130   1,608
                                   --------- -------- ------- --------
  Gross profit                          267     200      548     406
  Direct segment operating
   expenses(1)                          184     145      371     293
                                   --------- -------- ------- --------
  Segment operating income           $   83  $   55   $  177  $  113
                                   ========= ======== ======= ========

Consolidated
  Net sales                          $2,886  $2,139   $5,901  $4,418
  Cost of sales                       2,185   1,630    4,480   3,361
                                   --------- -------- ------- --------
  Gross profit                          701     509    1,421   1,057
  Direct segment operating
   expenses                             536     429    1,076     858
                                   --------- -------- ------- --------
  Segment operating income              165      80      345     199
  Stock-based compensation              (46)    (30)     (80)    (41)
  Other operating expense, net           (3)     (3)      (3)     (6)
                                   --------- -------- ------- --------
  Income from operations                116      47      262     152
  Total non-operating income
   (expense)                             (5)      7       (7)     (2)
  Provision for income taxes            (33)    (32)     (66)    (77)
                                   --------- -------- ------- --------

  Net income                         $   78  $   22   $  189  $   73
                                   ========= ======== ======= ========

Segment Highlights:
  Y/Y net sales growth:
    North America                        38%     21%      34%     21%
    International                        31      24       33      21
    Consolidated                         35      22       34      21
  Y/Y gross profit growth:
    North America                        40%     11%      34%     17%
    International                        34      16       35      16
    Consolidated                         38      13       34      16
  Y/Y segment operating income
   growth:
    North America                       233%    (66%)     94%    (37%)
    International                        50      (8)      56      (8)
    Consolidated                        106     (39)      72     (23)
  Net sales mix:
    North America                        55%     54%      55%     54%
    International                        45      46       45      46
__________________________
(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.
                           AMAZON.COM, INC.
                  Supplemental Net Sales Information
                            (in millions)
                             (unaudited)

                                   Three Months Ended Six Months Ended
                                        June 30,          June 30,
                                   ------------------ ----------------
                                        2007    2006     2007    2006
                                   ---------- ------- -------- -------
North America
  Media                               $  923  $  730   $1,913  $1,545
  Electronics and other general
   merchandise                           606     365    1,170     738
  Other                                   72      62      140     121
                                   ---------- ------- -------- -------
    Total North America                1,601   1,157    3,223   2,404

International
  Media                                  910     718    1,910   1,481
  Electronics and other general
   merchandise                           364     259      747     524
  Other                                   11       5       21       9
                                   ---------- ------- -------- -------
    Total International                1,285     982    2,678   2,014

Consolidated
  Media                                1,833   1,448    3,823   3,026
  Electronics and other general
   merchandise                           970     624    1,917   1,262
  Other                                   83      67      161     130
                                   ---------- ------- -------- -------
    Total Consolidated                $2,886  $2,139   $5,901  $4,418
                                   ========== ======= ======== =======

Y/Y Net Sales Growth:
North America:
  Media                                   26%     15%      24%     16%
  Electronics and other general
   merchandise                            66      32       58      32
  Other                                   15      25       16      25
    Total North America                   38      21       34      21

International:
  Media                                   27%     17%      29%     15%
  Electronics and other general
   merchandise                            40      45       42      39
  Other                                  143     354      147     388
    Total International                   31      24       33      21

Consolidated:
  Media                                   27%     16%      26%     16%
  Electronics and other general
   merchandise                            55      37       52      35
  Other                                   23      32       25      31
    Total Consolidated                    35      22       34      21

Y/Y Net Sales Growth Excluding
 Effect of Exchange Rates:
International:
  Media                                   23%     20%      23%     22%
  Electronics and other general
   merchandise                            34      48       34      46
  Other                                  128     362      128     412
    Total International                   26      27       27      28

Consolidated:
  Media                                   25%     18%      24%     19%
  Electronics and other general
   merchandise                            53      38       48      38
  Other                                   22      32       23      32
    Total Consolidated                    33      23       31      24

Consolidated Net Sales Mix:
  Media                                   63%     68%      65%     68%
  Electronics and other general
   merchandise                            34      29       32      29
  Other                                    3       3        3       3
                           AMAZON.COM, INC.
                     Consolidated Balance Sheets
                 (in millions, except per share data)


                                       June 30,   Dec. 31,  June 30,
                                           2007     2006        2006
                                      ----------- -------- -----------
ASSETS                                (unaudited)          (unaudited)
Current assets:
  Cash and cash equivalents
                                         $ 1,004  $ 1,022     $   683
  Marketable securities
                                             661      997         736
  Inventories
                                             735      877         521
  Accounts receivable, net and other         384      399         225
  Deferred tax assets
                                              75       78          66
                                      ----------- -------- -----------
    Total current assets                   2,859    3,373       2,231
Fixed assets, net                            443      457         405
Deferred tax assets                          224      199         208
Goodwill                                     214      195         193
Other assets                                 244      139         128
                                      ----------- -------- -----------
    Total assets                         $ 3,984  $ 4,363     $ 3,165
                                      =========== ======== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable
                                         $ 1,295  $ 1,816     $   943
  Accrued expenses and other                 641      716         467
                                      ----------- -------- -----------
    Total current liabilities              1,936    2,532       1,410
Long-term debt                             1,256    1,247       1,237
Other long-term liabilities                  242      153         135

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 -- 427, 422 and 419
    Outstanding shares -- 413, 414
     and 419                                   4        4           4
Treasury stock, at cost                     (500)    (252)          -
Additional paid-in capital                 2,704    2,517       2,334
Accumulated other comprehensive
 income (loss)                                 3       (1)         (2)
Accumulated deficit                       (1,661)  (1,837)     (1,953)
                                      ----------- -------- -----------
    Total stockholders' equity               550      431         383
                                      ----------- -------- -----------
    Total liabilities and
     stockholders' equity                $ 3,984  $ 4,363     $ 3,165
                                      =========== ======== ===========
                           AMAZON.COM, INC.
       Supplemental Financial Information and Business Metrics
                 (in millions, except per share data)
                             (unaudited)

----------------------------------------------------------------------
                                                                Y/Y %
                   Q2 2006  Q3 2006  Q4 2006  Q1 2007  Q2 2007  Change
                   ---------------------------------------------------
Cash Flows and
 Shares

Operating cash
 flow -- trailing
 twelve months
 (TTM)             $   610  $   587  $   702  $   726  $   895    47%

Purchases of fixed
 assets (incl.
 internal-use
 software &
 website
 development) --
 TTM               $   235  $   221  $   216  $   205  $   195   (17%)

Free cash flow
 (operating cash
 flow less
 purchases of
 fixed assets) --
 TTM               $   375  $   366  $   486  $   521  $   700    87%

Common shares and
 stock-based
 awards
 outstanding           443      435      436      430      435    (2%)
Common shares
 outstanding           419      411      414      409      413    (1%)
Stock-based awards
 outstanding            24       24       22       21       22   (10%)
Stock-based awards
 outstanding -- %
 of common shares
 outstanding           5.8%     5.8%     5.3%     5.1%     5.3%  N/A

Results of
 Operations

Worldwide (WW) net
 sales             $ 2,139  $ 2,307  $ 3,986  $ 3,015  $ 2,886    35%
WW net sales --
 Y/Y growth,
 excluding F/X          23%      23%      30%      29%      33%  N/A
WW net sales --
 TTM               $ 9,253  $ 9,701  $10,711  $11,447  $12,193    32%
WW net sales --
 TTM Y/Y growth,
 excluding F/X          24%      23%      26%      27%      29%  N/A

Gross profit       $   509  $   549  $   850  $   719  $   701    38%
Gross margin -- %
 of WW net sales      23.8%    23.8%    21.3%    23.8%    24.3%  N/A
Gross profit --
 TTM               $ 2,187  $ 2,273  $ 2,456  $ 2,628  $ 2,820    29%
Gross margin --
 TTM % of WW net
 sales                23.6%    23.4%    22.9%    23.0%    23.1%  N/A

Operating income
 (1)               $    47  $    40  $   197  $   145  $   116   149%
Operating margin
 -- % of WW net
 sales                 2.2%     1.7%     4.9%     4.8%     4.0%  N/A
Operating income
 -- TTM (1)        $   372  $   357  $   389  $   429  $   498    34%
Operating margin
 -- TTM % of WW
 net sales             4.0%     3.7%     3.6%     3.7%     4.1%  N/A

Net income (2)     $    22  $    19  $    98  $   111  $    78   257%
Net income per
 diluted share (2) $  0.05  $  0.05  $  0.23  $  0.26  $  0.19   261%
Net income -- TTM
 (2)               $   302  $   292  $   190  $   249  $   306     1%
Net income per
 diluted share --
 TTM (2)           $  0.71  $  0.69  $  0.45  $  0.59  $  0.72     2%

Segments

North America
 Segment:
  Net sales        $ 1,157  $ 1,257  $ 2,208  $ 1,622  $ 1,601    38%
  Net sales -- Y/Y
   growth,
   excluding F/X        20%      21%      31%      30%      38%  N/A
  Net sales -- TTM $ 5,128  $ 5,343  $ 5,869  $ 6,244  $ 6,687    30%
  Gross profit     $   309  $   343  $   532  $   439  $   434    40%
  Gross margin --
   % of North
   America net
   sales              26.7%    27.3%    24.1%    27.1%    27.1%  N/A
  Gross profit --
   TTM             $ 1,361  $ 1,411  $ 1,525  $ 1,623  $ 1,747    28%
  Gross margin --
   TTM % of North
   America net
   sales              26.5%    26.4%    26.0%    26.0%    26.1%  N/A
  Operating income
   (1)             $    25  $    22  $   123  $    86  $    82   233%
  Operating margin
   -- % of North
   America net
   sales               2.1%     1.7%     5.5%     5.3%     5.1%  N/A
  Operating income
   -- TTM (1)      $   245  $   200  $   230  $   254  $   312    27%
  Operating margin
   -- TTM % of
   North America
   net sales           4.8%     3.8%     3.9%     4.1%     4.7%  N/A

International
 Segment:
  Net sales        $   982  $ 1,050  $ 1,778  $ 1,393  $ 1,285    31%
  Net sales -- Y/Y
   growth,
   excluding F/X        27%      26%      28%      27%      26%  N/A
  Net sales -- TTM $ 4,125  $ 4,358  $ 4,842  $ 5,203  $ 5,506    33%
  Net sales -- TTM
   % of WW net
   sales                45%      45%      45%      45%      45%  N/A
  Gross profit     $   200  $   206  $   318  $   280  $   267    34%
  Gross margin --
   % of
   International
   net sales          20.4%    19.6%    17.9%    20.1%    20.8%  N/A
  Gross profit --
   TTM             $   827  $   862  $   931  $ 1,005  $ 1,072    30%
  Gross margin --
   TTM % of
   International
   net sales          20.0%    19.8%    19.2%    19.3%    19.5%  N/A
  Operating income $    55  $    50  $   106  $    93  $    83    50%
  Operating margin
   -- % of
   International
   net sales           5.6%     4.8%     6.0%     6.7%     6.4%  N/A
  Operating income
   -- TTM          $   260  $   256  $   270  $   306  $   333    28%
  Operating margin
   -- TTM % of
   International
   net sales           6.3%     5.9%     5.6%     5.9%     6.0%  N/A

Consolidated
 Segments:
  Operating
   expenses        $   429  $   477  $   621  $   540  $   536    25%
  Operating
   expenses -- TTM $ 1,681  $ 1,816  $ 1,956  $ 2,068  $ 2,175    29%
  Operating income
   (1)             $    80  $    72  $   229  $   179  $   165   106%
  Operating margin
   -- % of
   consolidated
   sales               3.7%     3.1%     5.7%     6.0%     5.7%  N/A
  Operating income
   -- TTM (1)      $   506  $   457  $   500  $   560  $   645    28%
  Operating margin
   -- TTM % of
   consolidated
   net sales           5.5%     4.7%     4.7%     4.9%     5.3%  N/A

Supplemental North
 America Segment
 Net Sales:
  Media            $   730  $   785  $ 1,251  $   990  $   923    26%
  Media -- Y/Y
   growth,
   excluding F/X        15%      14%      21%      21%      26%  N/A
  Media -- TTM     $ 3,260  $ 3,361  $ 3,582  $ 3,757  $ 3,949    21%
  Electronics and
   other general
   merchandise     $   365  $   409  $   876  $   564  $   606    66%
  Electronics and
   other general
   merchandise --
   Y/Y growth,
   excluding F/X        32%      35%      51%      51%      66%  N/A
  Electronics and
   other general
   merchandise --
   TTM             $ 1,622  $ 1,727  $ 2,024  $ 2,214  $ 2,456    51%
  Electronics and
   other general
   merchandise --
   TTM % of North
   America net
   sales                32%      32%      34%      35%      37%  N/A
  Other            $    62  $    63  $    81  $    68  $    72    15%
  Other -- TTM     $   246  $   255  $   263  $   273  $   282    15%

Supplemental
 International
 Segment Net
 Sales:
  Media            $   718  $   757  $ 1,247  $ 1,000  $   910    27%
  Media -- Y/Y
   growth,
   excluding F/X        20%      19%      21%      24%      23%  N/A
  Media -- TTM     $ 3,077  $ 3,205  $ 3,485  $ 3,722  $ 3,914    27%
  Electronics and
   other general
   merchandise     $   259  $   290  $   523  $   383  $   364    40%
  Electronics and
   other general
   merchandise --
   Y/Y growth,
   excluding F/X        48%      51%      50%      34%      34%  N/A
  Electronics and
   other general
   merchandise --
   TTM             $ 1,033  $ 1,136  $ 1,337  $ 1,455  $ 1,560    51%
  Electronics and
   other general
   merchandise --
   TTM % of
   International
   net sales            25%      26%      28%      28%      28%  N/A
  Other            $     5  $     3  $     8  $    10  $    11   143%
  Other -- TTM     $    15  $    17  $    20  $    26  $    33   120%

Supplemental
 Worldwide Net
 Sales:
  Media            $ 1,448  $ 1,542  $ 2,498  $ 1,990  $ 1,833    27%
  Media -- Y/Y
   growth,
   excluding F/X        18%      17%      21%      23%      25%  N/A
  Media -- TTM     $ 6,337  $ 6,566  $ 7,067  $ 7,479  $ 7,863    24%
  Electronics and
   other general
   merchandise     $   624  $   699  $ 1,399  $   947  $   970    55%
  Electronics and
   other general
   merchandise --
   Y/Y growth,
   excluding F/X        38%      41%      51%      44%      53%  N/A
  Electronics and
   other general
   merchandise --
   TTM             $ 2,655  $ 2,863  $ 3,361  $ 3,669  $ 4,015    51%
  Electronics and
   other general
   merchandise --
   TTM % of WW net
   sales                29%      30%      31%      32%      33%  N/A
  Other            $    67  $    66  $    89  $    78  $    83    23%
  Other -- TTM     $   261  $   272  $   283  $   299  $   315    21%

Balance Sheet

Cash and
 marketable
 securities        $ 1,419  $ 1,219  $ 2,019  $ 1,420  $ 1,665    17%

Inventory, net --
 ending            $   521  $   736  $   877  $   754  $   735    41%
Inventory --
 average inventory
 % of TTM net
 sales                 5.3%     5.8%     6.0%     6.0%     5.9%  N/A
Inventory
 turnover, average
 -- TTM               14.3     13.2     12.7     12.9     12.9   (10%)

Fixed assets, net  $   405  $   449  $   457  $   442  $   443    10%

Accounts payable
 days -- ending         53       63       53       47       54     2%

Other

Employees (full-
 time and part-
 time; excludes
 contractors &
 temporary
 personnel)         12,700   13,300   13,900   14,000   14,400    14%

----------------------------------------------------------------------
Note: The attached "Financial and Operational Summary" is an integral
 part of this Supplemental Financial Information and Business Metrics.


(1) In Q2 2006, a fee dispute with Toysrus.com reduced our operating
 income by $20 million.
(2) Q4 2005 net income includes a tax benefit of $90 million related
 to determining that certain of our deferred tax assets are
 realizable.
    Amazon.com, Inc.

    Financial and Operational Summary

    (Unaudited)

Quarterly Results of Operations (comparisons are with the equivalent period of the prior year, unless otherwise stated)


    Net Sales

    --  Generally, revenue is recorded gross for sales of our own
        inventory and net for sales by third parties.

    --  Amounts paid in advance for subscription services, including
        amounts received from Amazon Prime, online DVD rentals and
        other membership programs, are deferred and recognized as
        revenue over the subscription term.

    --  Shipping revenue was $152 million, up 19% from $128 million.

    Cost of Sales

    --  Cost of sales consists of the purchase price of consumer
        products sold by us, inbound and outbound shipping charges,
        packaging supplies, amortization of our DVD rental library and
        costs incurred in operating and staffing our fulfillment and
        customer service centers on behalf of other businesses.

    --  Payment processing and related transaction costs, including
        those associated with our third-party seller transactions, are
        classified in "Fulfillment" on our consolidated statements of
        operations.

    --  Outbound shipping costs totaled $227 million, up 21% from $188
        million. Net shipping cost was $75 million or 2.6% of net
        sales, up 25% from a net shipping cost of $60 million or 2.8%
        of net sales in the prior period.

    --  We offer free-shipping and subscriptions to Amazon Prime,
        which result in a net cost to us in delivery of products.

    Operating Expenses

    --  Depreciation expense for fixed assets, including amortization
        of internal-use software and website development, was $63
        million, up from $41 million.

    --  Depreciation is recorded on a straight-line basis over the
        estimated useful lives of the assets (generally two years or
        less for assets such as internal-use software and our DVD
        rental library, two or three years for our technology
        infrastructure, five years for furniture and fixtures, and ten
        years for heavy equipment).

    --  We utilize the accelerated method, rather than a straight-line
        method, for recognizing stock-based compensation expense.
        Under this method, over 50% of the compensation cost would be
        expensed in the first year of a four-year vesting term.

    --  Stock-based compensation was $46 million, compared to $30
        million.

    --  Operating expenses with and without stock-based compensation
        are as follows:

                    Three Months Ended         Three Months Ended
                      June 30, 2007              June 30, 2006
                -------------------------- --------------------------
                  As     Stock-Based         As     Stock-Based
                Reported Compensation Net  Reported Compensation Net
                -------- ------------ ---- -------- ------------ ----
Operating
 Expenses:
 Fulfillment      $ 258     $  (10)   $248   $ 189      $   (7)  $182
 Marketing           65         (2)     63      53          (1)    52
 Technology and
  content           201        (25)    176     167         (16)   151
 General and
  administrative     58         (9)     49      50          (6)    44
 Other operating
  expense             3          -       3       3           -      3
                -------  ----------   ---- -------  -----------  ----
    Total
     operating
     expenses     $ 585     $  (46)   $539   $ 462      $  (30)  $432
                =======  ==========   ==== =======  ===========  ====

Year-over-year
 Percentage
 Growth:
 Fulfillment         36%                36%     20%                20%
 Marketing           23                 23      26                 28
 Technology and
  content            20                 16      58                 63
 General and
  administrative     15                 11      32                 37

Percent of Net
 Sales:
 Fulfillment        9.0%               8.6%    8.9%               8.5%
 Marketing          2.2                2.2     2.5                2.4
 Technology and
  content           7.0                6.1     7.8                7.1
 General and
  administrative    2.0                1.7     2.4                2.1
    Fulfillment

    --  Certain of our fulfillment-related costs that are incurred on
        behalf of other businesses are classified as cost of sales
        rather than fulfillment.

    --  The increase in fulfillment costs in absolute dollars relates
        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 from certain third-party
        seller transactions; and costs from expanding fulfillment
        capacity.

    --  Additionally, because payment processing costs associated with
        third-party seller transactions are based on the gross
        purchase price of underlying transactions, and payment
        processing and related transaction costs are higher as a
        percentage of revenue versus our retail sales, our third-party
        sales have higher fulfillment costs as a percentage of net
        sales.

    --  We expanded our fulfillment capacity in the first half of 2007
        and throughout 2006 through gains in efficiencies as well as
        increases in leased warehouse space. This expansion is
        designed to accommodate greater selection and in-stock
        inventory levels and meet anticipated shipment volumes from
        sales of our own products as well as sales by third parties
        for whom we provide the fulfillment.

    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 systems and telecommunications
        infrastructure.

    --  We continue to invest in several areas of technology and
        content including seller platforms, web services, and digital
        initiatives, as well as expansion of new and existing product
        categories. We are also investing in technology infrastructure
        so that we can continue to enhance the customer experience and
        improve our process efficiency. The growth rate of our
        technology and content spending decreased in Q2 2007 and the
        six months ended June 30, 2007 compared to the comparable
        prior period. We intend to continue investing in areas of
        technology and content as we continue to add employees to our
        staff and add technology infrastructure.

    --  Certain costs relating to development of internal-use
        software, including development of software to upgrade and
        enhance our websites and processes supporting our business,
        are capitalized and depreciated over two years.
                                                   Q2 2007    Q2 2006
                                                  ---------- ---------
                                                     (in millions)
Capitalized costs of internal-use software        $     33   $     32
and website development

Amortization of previously capitalized amounts         (28)       (20)
                                                  ---------- ---------
   Net capitalization                             $      5   $     12
                                                  ========== =========
    Stockholders' Equity and Stock-Based Awards

    --  We granted restricted stock unit awards of 5.8 million shares
        in Q2 2007 with a per share weighted average fair value of
        $44.

    --  As of June 30, 2007, there were 22.1 million shares underlying
        outstanding stock awards, consisting of 18.6 million shares
        underlying restricted stock units and 3.5 million shares
        underlying stock options with a $23 weighted-average exercise
        price.

    --  As of June 30, 2007, outstanding common shares plus shares
        underlying outstanding stock-based awards were 435 million,
        down 2% from 443 million as of June 30, 2006. This total
        includes all stock-based awards outstanding, without regard
        for estimated forfeitures, consisting of vested and unvested
        awards and in-the-money and out-of-the-money stock options.

    --  The increase in stock-based compensation is primarily
        attributable to the increased number of outstanding restricted
        stock units and higher grant date fair value per share.

    --  In August 2006, our Board of Directors authorized a 24-month
        program to repurchase up to an aggregate of $500 million of
        our common stock from which we repurchased 8.2 million shares
        for $252 million in 2006 and 6.3 million shares for $248
        million in Q1 2007.

    --  In April 2007, our Board of Directors authorized a new
        24-month program to repurchase up to an aggregate of $500
        million of our common stock.

    Other Expense, net

    --  Other expense, net consists primarily of gains or losses on
        marketable securities, foreign-currency transaction gains and
        losses, and other miscellaneous gains and losses.

    --  Foreign-currency transaction gains (losses) primarily relate
        to the interest payable on our 6.875% PEACS, as well as
        foreign-currency gains and losses on cross-currency
        investments. Since interest payments on our 6.875% PEACS are
        settled in Euros, the balance of interest payable is subject
        to gains or losses resulting from changes in exchange rates
        between the U.S. Dollar and Euro between reporting dates and
        payment.

    Remeasurements and Other

    --  The remeasurement of our 6.875% PEACS and intercompany
        balances can result in significant gains and losses associated
        with the effect of movements in currency exchange rates.

    Income Taxes

    --  Our tax provision for interim periods is determined using an
        estimate of our annual effective tax rate. The 2007 effective
        tax rate is estimated to be lower than the 35% statutory rate
        primarily due to anticipated earnings of our subsidiaries
        outside of the U.S. in jurisdictions where our effective tax
        rate is lower than in the U.S. There is a potential for
        significant volatility of our 2007 effective tax rate due to
        several factors, including variability in accurately
        predicting our taxable income and the taxable jurisdictions to
        which it relates.

    --  The effective tax rate in 2006 was higher than the 35%
        statutory rate resulting from establishing our European
        headquarters in Luxembourg, which we expect will benefit our
        effective tax rate over time. Associated with the
        establishment of our European headquarters, we transferred
        certain of our operating assets in 2005 and 2006 from the U.S.
        to international locations.

    --  Effective January 1, 2007, we adopted the provisions of FIN
        48. As of January 1, 2007, our unrecognized tax benefits ("tax
        contingencies") totaled $110 million.

    --  As a result of the implementation of FIN 48, our tax
        contingencies increased $8 million, which was accounted for as
        a decrease to retained earnings of $11 million, which would
        otherwise have increased our income tax expense in prior
        periods, and an increase to additional paid-in capital of $3
        million related to the tax benefits of excess stock-based
        compensation deductions. These amounts do not include the
        federal tax benefit associated with these tax contingencies
        that will be available to us. To reflect the federal benefit
        upon the implementation of FIN 48, we also recorded an
        increase to our deferred tax assets of $2 million which was
        accounted for as a $3 million increase to retained earnings
        and a $1 million decrease to additional paid-in capital. As of
        June 30, 2007, changes to our tax contingencies that are
        reasonably possible in the next 12 months are not material.

    --  We recognize accrued interest and penalties related to our tax
        contingencies as income tax expense. Our January 1, 2007 tax
        contingencies include $13 million of interest and penalties,
        including a $9 million increase related to our adoption of FIN
        48. This increase decreased retained earnings by $6 million,
        net of a $3 million federal tax benefit.

    --  We file U.S. federal income tax returns as well as income tax
        returns in various states and foreign jurisdictions. We may be
        subject to examination by the Internal Revenue Service ("IRS")
        for calendar years 2003 through 2006. Additionally, any net
        operating losses that were generated in prior years and
        utilized in these years may also be subject to examination by
        the IRS. We are under examination, or may be subject to
        examination, in the following major jurisdictions for the
        years specified: Pennsylvania for 2002 through 2006, Kentucky
        for 2003 through 2006, Delaware for 2004 through 2006, France
        for 2003 through 2006, Germany for 1998 through 2006,
        Luxembourg for 2003 through 2006, and the United Kingdom for
        1999 through 2006. In addition, in February 2007, Japanese tax
        authorities assessed income tax, including penalties and
        interest, of approximately $90 million against one of our U.S.
        subsidiaries for the years 2003 through 2005. We believe that
        these claims are without merit and are disputing the
        assessment. Further proceedings on the assessment will be
        stayed during negotiations between U.S. and Japanese
        authorities over the double taxation issues the assessment
        raises, and we have provided bank guarantees to suspend
        enforcement of the assessment. We also may be subject to
        income tax examination by Japanese tax authorities for 2006.

    --  We have U.S. federal net operating losses that are classified
        as deferred tax assets and are being utilized to reduce our
        taxes payable to nominal levels.

    Foreign Exchange

    --  The effect on our consolidated statements of operations from
        year-over-year changes in exchange rates versus the U.S.
        dollar throughout the period is as follows:
                               Three Months Ended June 30,
                   ---------------------------------------------------
                             2007                      2006
                   ------------------------- -------------------------
                     At                        At
                    Prior  Exchange           Prior  Exchange
                    Year     Rate             Year     Rate
                   Rates   Effect      As    Rates   Effect      As
                     (1)      (2)   Reported   (1)      (2)   Reported
                   ------- -------- -------- ------- -------- --------

Net sales          $2,840      $46   $2,886  $2,163    $ (24)  $2,139
Gross profit          691       10      701     514       (5)     509
Operating expenses    578        7      585     464       (2)     462
Income from
 operations           113        3      116      49       (2)      47
Net interest
 expense and
 other(3)               -        -        -      (4)      (1)      (5)
Remeasurements and
 other income
 (expense)(4)          (3)      (2)      (5)      2       10       12
Net income             77        1       78      19        3       22
Diluted earnings
 per share         $ 0.19      $ -   $ 0.19  $ 0.04    $0.01   $ 0.05

(1) Represents the outcome that would have resulted had currency
exchange rates in the current period been the same as those in effect
in the comparable prior year period for operating results, and if we
did not incur the variability associated with remeasurements for our
6.875% PEACS and intercompany balances.

(2) Represents the increase or decrease in reported amounts resulting
from changes in exchange rates from those in effect in the comparable
prior year period for operating results, and if we did not incur the
variability associated with remeasurements for our 6.875% PEACS and
intercompany balances.

(3) Includes foreign-currency gains and losses on cross-currency
investments.

(4) Includes foreign-currency gains and losses on remeasurement of
6.875% PEACS and intercompany balances.
    Cash Flows and Balance Sheet

    --  Tax benefits resulting from stock-based compensation
        deductions in excess of amounts reported for financial
        reporting purposes were $35 million in Q2 2007 and $133
        million for the trailing twelve months, compared to $21
        million in Q2 2006 and $34 million for the trailing twelve
        months ended June 30, 2006.

    --  Our cash, cash equivalents and marketable securities of $1.66
        billion, at fair value, primarily consist of cash, investment
        grade securities and AAA-rated money market mutual funds.
        Included are amounts held in foreign currencies of $530
        million, primarily in Euros, British Pounds and Japanese Yen.

    --  Other assets include, among other things, $171 million of
        marketable securities restricted for longer than one year, $39
        million of intangible assets net, $19 million of certain
        equity investments, and $6 million of deferred issuance costs
        on long-term debt. Marketable securities restricted for longer
        than one year primarily relate to amounts pledged or otherwise
        restricted as collateral for standby letters of credit,
        guarantees, debt, and real estate leases.

    --  Accrued expenses and other current liabilities include, among
        other things, liabilities for gift certificates of $173
        million, professional fees, marketing activities, workforce
        costs - including accrued payroll, vacation and other
        benefits--and unearned revenue of $77 million, which is
        recorded when payments are received in advance of performing
        our service obligations and is recognized ratably over the
        service period.

    Long-term debt primarily includes the following (in millions):
                                      Principal
                                         at     Interest Principal Due
                                       Maturity   Rate        Date
                                      --------- -------- -------------
Convertible Subordinated Notes        $  900(1)   4.750% February 2009
Premium Adjustable Convertible
 Securities ("PEACS")                    325(2)   6.785% February 2010
                                      ------
                                      $1,225
                                      ------

(1) The 4.75% Convertible Subordinated Notes are convertible into our
 common stock at the holders' option at a conversion price of $78.0275
 per share. Total common stock issuable upon conversion of our
 outstanding 4.75% Convertible Subordinated Notes is 11.5 million
 shares, which is excluded from our calculation of earnings per share
 as its effect is anti-dilutive. We have the right to redeem the 4.75%
 Convertible Subordinated Notes, in whole or in part, by paying the
 principal and a redemption premium, plus any accrued and unpaid
 interest. At June 30, 2007, the redemption premium, which decreases
 by 47.5 basis points on February 1 of each year until maturity, was
 0.95%.

(2) The 6.875% Premium Adjustable Convertible Securities ("6.875%
 PEACS") are convertible into our common stock at the holders' option
 at a conversion price of EUR 84.883 per share ($114.96 per share,
 based on the exchange rate as of June 30, 2007). Total common stock
 issuable upon conversion of our outstanding 6.875% PEACS is 2.8
 million shares, which is excluded from our calculation of earnings
 per share as its effect is anti-dilutive. The U.S. Dollar equivalent
 principal, interest, and conversion price fluctuate based on the
 Euro/U.S. Dollar exchange ratio. We have the right to redeem the
 6.875% PEACS, in whole or in part, by paying the principal plus any
 accrued and unpaid interest.
    --  Other long-term liabilities include tax contingencies,
        long-term capital lease obligations, and other long-term
        obligations. For further discussion of long-term tax
        contingencies, see our discussion of "Income Taxes" above.

    --  We acquired certain companies during Q2 2007 for an aggregate
        purchase price of $33 million, including cash payments of $24
        million in the three months ended June 30, 2007 and future
        cash payments of $9 million. We also made principal payments
        of $13 million on acquired debt in connection with one of
        these acquisitions. Additional consideration for these
        acquisitions is contingent upon continued employment. This
        amount is expensed as compensation over the employment period
        and not included in the purchase price. Acquired intangibles
        totaled $24 million and have estimated useful lives of between
        two and ten years. The excess of purchase price over the fair
        value of the net assets acquired was $17 million and is
        classified as "Goodwill" on our consolidated balance sheets.
        The purchase price allocation for each acquisition is
        preliminary and subject to revision, and any change to the
        fair value of net assets acquired will lead to a corresponding
        change to the purchase price allocable to goodwill. The
        results of operations of the acquired companies have been
        included in our consolidated results from each closing date
        forward. The effect of these acquisitions on consolidated net
        sales and operating income for Q2 2007 was not significant.

    Certain Definitions and Other

    --  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 third-party
        sellers) and subscriptions through North America-focused
        websites such as www.amazon.com, www.shopbop.com,
        www.endless.com and www.amazon.ca; from our Amazon Prime
        membership program; and from non-retail activities such as
        North America-focused Amazon Enterprise Solutions program, and
        marketing and promotional agreements. 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 third-party
        sellers) and subscriptions through internationally focused
        websites such as www.amazon.co.uk, www.amazon.de,
        www.amazon.co.jp, www.amazon.fr, and Joyo Amazon websites at
        www.joyo.cn and www.amazon.cn; from our International DVD
        rental service; and from non-retail activities such as
        internationally focused marketing and promotional agreements.
        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
        DVD rentals and retail sales from all sellers of books, music,
        DVD/video, magazine subscriptions, software, video games and
        video-game consoles. Electronics and Other General Merchandise
        consists of amounts earned from retail sales from all sellers
        of items not included in Media, such as electronics and
        office, camera and photo, toys and baby, tools, home and
        garden, apparel, shoes, sports and outdoors, kitchen and
        housewares, gourmet food, grocery, jewelry and watches, health
        and personal care and beauty. The Other category consists of
        non-retail activities, such as the Amazon Enterprise Solutions
        program and miscellaneous marketing and promotional
        activities, such as our co-branded credit card programs.

    --  Operating cash flow is net cash provided by (used in)
        operating activities, including cash outflows for interest and
        excluding proceeds from the exercise of stock-based employee
        awards. Free cash flow is operating cash flow less cash
        outflows for purchases of fixed assets, including internal-use
        software and website development.

    --  Operating cycle is number of days of sales in inventory plus
        number of days of sales in accounts receivable minus accounts
        payable days. Accounts payable days are calculated as the
        quotient of accounts payable to cost of sales, multiplied by
        the number of days in the period. Inventory turns are
        calculated as the quotient of trailing twelve month cost of
        sales to average inventory over five quarter ends.

    --  Return on invested capital is trailing-twelve-month free cash
        flow divided by average total assets less current liabilities
        over five quarter ends.

    --  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
        certain third-party sellers on our websites. Customer accounts
        include customers of Amazon Marketplace, and our Merchants@
        and Syndicated Stores programs, but exclude certain customers,
        including DVD rental customers, customers associated with
        certain of our acquisitions (including Joyo Amazon customers),
        Amazon Enterprise Solutions program customers, Amazon.com
        Payments 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.

    --  References to sellers or merchants mean active seller
        accounts, which are established when a seller receives an
        order from a customer account. Seller accounts include sellers
        in Amazon Marketplace, and Merchants@ platforms, but exclude
        Amazon Enterprise Solutions sellers. Sellers are considered
        active when they have received an order during the preceding
        twelve-month period.

    --  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.

    --  References to units mean units sold (net of returns and
        cancellations) by us and by third-party sellers at Amazon.com
        domains worldwide - such as www.amazon.com, www.amazon.co.uk,
        www.amazon.de, www.amazon.co.jp, www.amazon.fr and
        www.amazon.ca - and at Syndicated Stores domains, as well as
        Amazon.com-owned items sold through catalogs and at
        non-Amazon.com domains, such as books, music and DVD/video
        items ordered from Amazon.com's store at www.target.com. Units
        sold do not include units associated with certain of our
        acquisitions (including Joyo Amazon units), Amazon.com gift
        certificates or DVD rentals.

    CONTACT: Amazon.com Investor Relations
             Kim Nelson, 206/266-2171
             ir@amazon.com
             www.amazon.com/ir
             or
             Amazon.com Public Relations
             Patty Smith, 206/266-7180

    SOURCE: Amazon.com, Inc.
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