SEATTLE, Jan 30, 2008 (BUSINESS WIRE) -- Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results
for its fourth quarter and year ended December 31, 2007.
Operating cash flow was $1.41 billion in 2007, compared with $0.70
billion in 2006. Free cash flow increased 143% to $1.18 billion in
2007, compared with $0.49 billion in 2006.
Common shares outstanding plus shares underlying stock-based
awards outstanding totaled 435 million on December 31, 2007, compared
with 436 million a year ago.
Net sales increased 42% to $5.67 billion in the fourth quarter,
compared with $3.99 billion in fourth quarter 2006. Excluding the
$0.20 billion favorable impact from year-over-year changes in foreign
exchange rates throughout the quarter, net sales grew 37% compared
with fourth quarter 2006.
Operating income increased 38% to $271 million in the fourth
quarter, compared with $197 million in fourth quarter 2006. Excluding
the $14 million favorable impact from year-over-year changes in
foreign exchange rates throughout the quarter, operating income grew
31% compared with fourth quarter 2006.
Net income increased 112% to $207 million in the fourth quarter,
or $0.48 per diluted share, compared with net income of $98 million,
or $0.23 per diluted share, in fourth quarter 2006.
"This quarter showed accelerated sales growth and record operating
profits," said Jeff Bezos, founder and CEO of Amazon.com. "In our
view, these unusual financial results are driven by one thing:
continuously improving the customer experience."
Full Year 2007
Net sales increased 39% to $14.84 billion, or 35% excluding the
$0.40 billion favorable impact from year-over-year changes in foreign
exchange rates throughout the year, compared with $10.71 billion in
2006.
Operating income increased 69% to $655 million, or 61% excluding
the $29 million favorable impact from year-over-year changes in
foreign exchange rates throughout the year, compared with $389 million
in 2006.
Net income increased 150% to $476 million in 2007, or $1.12 per
diluted share, compared with net income of $190 million, or $0.45 per
diluted share, in 2006.
Highlights
-- The Company introduced Amazon Kindle, a revolutionary wireless
portable reader that provides instant wireless downloads of
more than 90,000 books, blogs, magazines and newspapers to a
crisp, high-resolution electronic paper display. The Amazon
Kindle team is scrambling to increase manufacturing, as demand
remains higher than supply. Kindles are being delivered to
customers on a first come, first served basis.
-- Amazon MP3 added DRM-free music downloads from Sony BMG Music
Entertainment and Warner Music Group, making it the only
retailer to offer DRM-free MP3 music downloads from all four
major music labels as well as over 50,000 independent labels.
The MP3 store now includes over 3.4 million songs from more
than 270,000 artists. Pepsi will debut the Pepsi Stuff Amazon
MP3 promotion, a massive collect-and-get program, during the
upcoming Super Bowl.
-- Over 330,000 developers have registered to use Amazon Web
Services (AWS), up more than 30,000 from last quarter.
-- Adoption of Amazon Elastic Compute Cloud (EC2) and Amazon
Simple Storage Service (S3) continues to grow. As an indicator
of adoption, bandwidth utilized by these services in fourth
quarter 2007 was even greater than bandwidth utilized in the
same period by all of Amazon.com's global websites combined.
-- AWS launched a limited beta of its SimpleDB Service, which
allows queries to run on structured data in real time. This
service works in conjunction with Amazon EC2 and Amazon S3,
collectively providing the ability to store, process and query
data sets in the cloud.
-- AWS launched European storage for Amazon S3, allowing software
developers and businesses to store their data physically in
Europe. Amazon S3 is a storage service in the cloud offering
software developers and businesses low-cost access to the same
scalable and reliable storage infrastructure Amazon uses to
run its own global network of websites.
-- North America segment sales, representing the Company's U.S.
and Canadian sites, were $3.08 billion, up 40% from fourth
quarter 2006.
-- International segment sales, representing the Company's U.K.,
German, Japanese, French and Chinese sites, were $2.59
billion, up 46% from fourth quarter 2006. Excluding the
favorable impact from year-over-year changes in foreign
exchange rates throughout the quarter, International sales
grew 35%.
-- Worldwide Media sales grew 33% to $3.33 billion in fourth
quarter 2007, compared with $2.50 billion in fourth quarter
2006.
-- Worldwide Electronics & Other General Merchandise sales grew
58% to $2.21 billion in fourth quarter 2007, compared with
$1.40 billion in fourth quarter 2006, and increased to 39% of
worldwide net sales compared with 35%.
-- A record number of customers took advantage of Amazon Prime,
the Company's unlimited free-shipping program. Amazon Prime is
now available in the U.K., Germany, Japan and the U.S.
-- Amazon.com shipped over half-a-million units in fourth quarter
2007 on behalf of sellers who utilized the Fulfillment by
Amazon service.
Financial Guidance
The following forward-looking statements reflect Amazon.com's
expectations as of January 30, 2008. 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.
First Quarter 2008 Guidance
-- Net sales are expected to be between $3.95 billion and $4.15
billion, or to grow between 31% and 38% compared with first
quarter 2007.
-- Operating income is expected to be between $155 million and
$200 million, or to grow between 7% and 38% compared with
first quarter 2007. This guidance includes $55 million for
stock-based compensation and amortization of intangible
assets, and it assumes, among other things, that no additional
acquired intangible assets are recorded and that there are no
further revisions to stock-based compensation estimates.
Full Year 2008 Expectations
-- Net sales are expected to be between $18.75 billion and $19.75
billion, or to grow between 26% and 33% compared with 2007.
-- Operating income is expected to be between $785 million and
$985 million, or to grow between 20% and 50% compared with
2007. This guidance includes $240 million for stock-based
compensation and amortization of intangible assets, and it
assumes, among other things, that no additional acquired
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
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, electronics &
computers, home & garden, toys, kids & baby, grocery, apparel, shoes &
jewelry, health & beauty, sports & outdoors, tools, and 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 SimpleDB, Amazon
Simple Queue Service (Amazon SQS), Amazon Flexible Payments Service
(Amazon FPS) and Amazon Mechanical Turk.
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 Twelve Months
Ended Ended
December 31, December 31,
---------------- ----------------
2007 2006 2007 2006
------- -------- ------- --------
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD $1,366 $ 693 $1,022 $ 1,013
OPERATING ACTIVITIES:
Net income 207 98 476 190
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 63 59 246 205
Stock-based compensation 54 30 185 101
Other operating expense, net 3 2 9 10
Losses (gains) on sales of
marketable securities, net - - 1 (2)
Remeasurements and other (1) - 12 (6)
Deferred income taxes (97) 8 (99) 22
Excess tax benefits from stock-
based compensation (163) (64) (257) (102)
Changes in operating assets and
liabilities:
Inventories (231) (127) (303) (282)
Accounts receivable, net and other (237) (116) (255) (103)
Accounts payable 1,144 588 928 402
Accrued expenses and other 399 246 429 241
Additions to unearned revenue 79 75 244 206
Amortization of previously
unearned revenue (71) (55) (211) (180)
------- -------- ------- --------
Net cash provided by operating
activities 1,149 744 1,405 702
INVESTING ACTIVITIES:
Purchases of fixed assets, including
internal-use software and website
development (73) (50) (224) (216)
Acquisitions, net of cash acquired,
and other (29) (2) (75) (32)
Sales and maturities of marketable
securities and other investments 115 869 1,271 1,845
Purchases of marketable securities
and other investments (153) (1,340) (930) (1,930)
------- -------- ------- --------
Net cash provided by (used in)
investing activities (140) (523) 42 (333)
FINANCING ACTIVITIES:
Proceeds from exercises of stock
options 12 18 91 35
Excess tax benefits from stock-based
compensation 164 64 257 102
Common stock repurchased - - (248) (252)
Proceeds from long-term debt and
other 3 17 24 98
Repayments of long-term debt and
capital lease obligations (11) (7) (74) (383)
------- -------- ------- --------
Net cash provided by (used in)
financing activities 168 92 50 (400)
Foreign-currency effect on cash and
cash equivalents (4) 16 20 40
------- -------- ------- --------
Net increase in cash and cash
equivalents 1,173 329 1,517 9
------- -------- ------- --------
CASH AND CASH EQUIVALENTS, END OF
PERIOD $2,539 $ 1,022 $2,539 $ 1,022
======= ======== ======= ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest $ 1 $ 1 $ 67 $ 86
Cash paid for income taxes 10 1 24 15
Fixed assets acquired under capital
leases and other financing
arrangements 32 7 74 69
Fixed assets acquired under build-
to-suit leases 15 - 15 -
AMAZON.COM, INC.
Consolidated Statements of Operations
(in millions, except per share data)
(unaudited)
Three Months Twelve Months
Ended Ended
December 31, December 31,
--------------- -----------------
2007 2006 2007 2006
------- ------- -------- --------
Net sales $5,673 $3,986 $14,835 $10,711
Cost of sales 4,503 3,136 11,482 8,255
------- ------- -------- --------
Gross profit 1,170 850 3,353 2,456
Operating expenses (1):
Fulfillment 478 337 1,292 937
Marketing 133 92 344 263
Technology and content 221 177 818 662
General and administrative 64 45 235 195
Other operating expense, net 3 2 9 10
------- ------- -------- --------
Total operating expenses 899 653 2,698 2,067
------- ------- -------- --------
Income from operations 271 197 655 389
Interest income 28 18 90 59
Interest expense (21) (19) (77) (78)
Other income (expense), net 1 (8) (1) (4)
Remeasurements and other 2 1 (7) 11
------- ------- -------- --------
Total non-operating income
(expense) 10 (8) 5 (12)
------- ------- -------- --------
Income before income taxes 281 189 660 377
Provision for income taxes 74 91 184 187
------- ------- -------- --------
Net income $ 207 $ 98 $ 476 $ 190
======= ======= ======== ========
Basic earnings per share $ 0.50 $ 0.24 $ 1.15 $ 0.46
======= ======= ======== ========
Diluted earnings per share $ 0.48 $ 0.23 $ 1.12 $ 0.45
======= ======= ======== ========
Weighted average shares used in
computation of earnings per share:
Basic 416 413 413 416
======= ======= ======== ========
Diluted 427 422 424 424
======= ======= ======== ========
(1) Includes stock-based
compensation as follows:
Fulfillment $ 11 $ 6 $ 39 $ 24
Marketing 2 2 8 4
Technology and content 31 15 103 54
General and administrative 10 7 35 19
AMAZON.COM, INC.
Segment Information
(in millions)
(unaudited)
Three Months Twelve Months
Ended Ended
December 31, December 31,
---------------- ------------------
2007 2006 2007 2006
-------- ------- -------- ---------
North America
Net sales $ 3,084 $2,208 $ 8,095 $ 5,869
Cost of sales 2,386 1,676 6,064 4,344
-------- ------- -------- ---------
Gross profit 698 532 2,031 1,525
Direct segment operating
expenses (1) 545 409 1,631 1,295
-------- ------- -------- ---------
Segment operating income $ 153 $ 123 $ 400 $ 230
======== ======= ======== =========
International
Net sales $ 2,589 $1,778 $ 6,740 $ 4,842
Cost of sales 2,117 1,460 5,418 3,911
-------- ------- -------- ---------
Gross profit 472 318 1,322 931
Direct segment operating
expenses (1) 297 212 873 661
-------- ------- -------- ---------
Segment operating income $ 175 $ 106 $ 449 $ 270
======== ======= ======== =========
Consolidated
Net sales $ 5,673 $3,986 $14,835 $10,711
Cost of sales 4,503 3,136 11,482 8,255
-------- ------- -------- ---------
Gross profit 1,170 850 3,353 2,456
Direct segment operating
expenses 842 621 2,504 1,956
-------- ------- -------- ---------
Segment operating income 328 229 849 500
Stock-based compensation (54) (30) (185) (101)
Other operating expense, net (3) (2) (9) (10)
-------- ------- -------- ---------
Income from operations 271 197 655 389
Total non-operating income
(expense) 10 (8) 5 (12)
Provision for income taxes (74) (91) (184) (187)
-------- ------- -------- ---------
Net income $ 207 $ 98 $ 476 $ 190
======== ======= ======== =========
Segment Highlights:
Y/Y net sales growth:
North America 40% 31% 38% 25%
International 46 37 39 28
Consolidated 42 34 39 26
Y/Y gross profit growth:
North America 31% 27% 33% 20%
International 48 28 42 21
Consolidated 38 27 37 20
Y/Y segment operating income
growth:
North America 25% 33% 74% (22%)
International 65 15 66 -
Consolidated 44 24 70 (12)
Net sales mix:
North America 54% 55% 55% 55%
International 46 45 45 45
----------------------------------
(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 Twelve Months
Ended Ended
December 31, December 31,
---------------- -----------------
2007 2006 2007 2006
-------- ------- -------- --------
North America
Media $ 1,637 $1,251 $ 4,630 $ 3,582
Electronics and other general
merchandise 1,336 876 3,139 2,024
Other 111 81 326 263
-------- ------- -------- --------
Total North America 3,084 2,208 8,095 5,869
International
Media 1,692 1,247 4,612 3,485
Electronics and other general
merchandise 877 523 2,071 1,337
Other 20 8 57 20
-------- ------- -------- --------
Total International 2,589 1,778 6,740 4,842
Consolidated
Media 3,329 2,498 9,242 7,067
Electronics and other general
merchandise 2,213 1,399 5,210 3,361
Other 131 89 383 283
-------- ------- -------- --------
Total Consolidated $ 5,673 $3,986 $14,835 $10,711
======== ======= ======== ========
Y/Y Net Sales Growth:
North America:
Media 31% 21% 29% 18%
Electronics and other general
merchandise 53 51 55 40
Other 37 11 24 18
Total North America 40 31 38 25
International:
Media 36% 29% 32% 21%
Electronics and other general
merchandise 68 63 55 51
Other 143 68 186 151
Total International 46 37 39 28
Consolidated:
Media 33% 25% 31% 19%
Electronics and other general
merchandise 58 55 55 44
Other 47 14 35 23
Total Consolidated 42 34 39 26
Y/Y Net Sales Growth Excluding
Effect of Exchange Rates:
International:
Media 26% 21% 25% 21%
Electronics and other general
merchandise 55 50 45 49
Other 124 55 165 147
Total International 35 28 31 28
Consolidated:
Media 28% 21% 27% 19%
Electronics and other general
merchandise 54 51 51 43
Other 45 14 34 23
Total Consolidated 37 30 35 26
Consolidated Net Sales Mix:
Media 59% 63% 62% 66%
Electronics and other general
merchandise 39 35 35 31
Other 2 2 3 3
AMAZON.COM, INC.
Consolidated Balance Sheets
(in millions, except per share data)
December 31, December 31,
2007 2006
------------- -------------
ASSETS (unaudited)
Current assets:
Cash and cash equivalents $ 2,539 $ 1,022
Marketable securities 573 997
Inventories 1,200 877
Accounts receivable, net and other 705 399
Deferred tax assets 147 78
------------- -------------
Total current assets 5,164 3,373
Fixed assets, net 543 457
Deferred tax assets 260 199
Goodwill 222 195
Other assets 296 139
------------- -------------
Total assets $ 6,485 $ 4,363
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 2,795 $ 1,816
Accrued expenses and other 919 716
------------- -------------
Total current liabilities 3,714 2,532
Long-term debt 1,282 1,247
Other long-term liabilities 292 153
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 -- 431 and 422
Outstanding shares -- 416 and 414 4 4
Treasury stock, at cost (500) (252)
Additional paid-in capital 3,063 2,517
Accumulated other comprehensive income
(loss) 5 (1)
Accumulated deficit (1,375) (1,837)
------------- -------------
Total stockholders' equity 1,197 431
------------- -------------
Total liabilities and stockholders'
equity $ 6,485 $ 4,363
============= =============
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except per share data)
(unaudited)
----------------------------------------------------------------------
Y/Y %
Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Change
----------------------------------------------
Cash Flows and Shares
Operating cash flow --
trailing twelve months
(TTM) $ 702 $ 726 $ 895 $ 1,001 $ 1,405 100%
Purchases of fixed
assets (incl.
internal-use software
& website development)
-- TTM $ 216 $ 205 $ 195 $ 201 $ 224 4%
Free cash flow
(operating cash flow
less purchases of
fixed assets) -- TTM $ 486 $ 521 $ 700 $ 800 $ 1,181 143%
Free cash flow -- TTM
Y/Y growth (8%) 4% 87% 118% 143% N/A
Common shares and
stock-based awards
outstanding 436 430 435 435 435 0%
Common shares
outstanding 414 409 413 415 416 1%
Stock-based awards
outstanding 22 21 22 20 18 (17%)
Stock-based awards
outstanding -- % of
common shares
outstanding 5.3% 5.1% 5.3% 4.9% 4.4% N/A
Results of Operations
Worldwide (WW) net
sales $ 3,986 $ 3,015 $ 2,886 $ 3,262 $ 5,673 42%
WW net sales -- Y/Y
growth, excluding F/X 30% 29% 33% 38% 37% N/A
WW net sales -- TTM $10,711 $11,447 $12,193 $13,149 $14,835 39%
WW net sales -- TTM Y/Y
growth, excluding F/X 26% 27% 29% 32% 35% N/A
Gross profit $ 850 $ 719 $ 701 $ 762 $ 1,170 38%
Gross margin -- % of WW
net sales 21.3% 23.8% 24.3% 23.4% 20.6% N/A
Gross profit -- TTM $ 2,456 $ 2,628 $ 2,820 $ 3,032 $ 3,353 37%
Gross margin -- TTM %
of WW net sales 22.9% 23.0% 23.1% 23.1% 22.6% N/A
Operating income $ 197 $ 145 $ 116 $ 123 $ 271 38%
Operating margin -- %
of WW net sales 4.9% 4.8% 4.0% 3.8% 4.8% N/A
Operating income -- TTM
(1) $ 389 $ 429 $ 498 $ 581 $ 655 69%
Operating income -- TTM
Y/Y growth, excluding
F/X (10%) (4%) 29% 56% 61% N/A
Operating margin -- TTM
% of WW net sales 3.6% 3.7% 4.1% 4.4% 4.4% N/A
Net income $ 98 $ 111 $ 78 $ 80 $ 207 112%
Net income per diluted
share $ 0.23 $ 0.26 $ 0.19 $ 0.19 $ 0.48 109%
Net income -- TTM $ 190 $ 249 $ 306 $ 367 $ 476 150%
Net income per diluted
share -- TTM $ 0.45 $ 0.59 $ 0.72 $ 0.87 $ 1.12 150%
Segments
North America Segment:
Net sales $ 2,208 $ 1,622 $ 1,601 $ 1,788 $ 3,084 40%
Net sales -- Y/Y
growth, excluding
F/X 31% 30% 38% 42% 39% N/A
Net sales -- TTM $ 5,869 $ 6,244 $ 6,687 $ 7,219 $ 8,095 38%
Gross profit $ 532 $ 439 $ 434 $ 460 $ 698 31%
Gross margin -- % of
North America net
sales 24.1% 27.1% 27.1% 25.7% 22.6% N/A
Gross profit -- TTM $ 1,525 $ 1,623 $ 1,747 $ 1,864 $ 2,031 33%
Gross margin -- TTM %
of North America net
sales 26.0% 26.0% 26.1% 25.8% 25.1% N/A
Operating income $ 123 $ 86 $ 82 $ 79 $ 153 25%
Operating margin -- %
of North America net
sales 5.5% 5.3% 5.1% 4.4% 5.0% N/A
Operating income --
TTM (1) $ 230 $ 254 $ 312 $ 369 $ 400 74%
Operating income --
TTM Y/Y growth,
excluding F/X (22%) (13%) 27% 84% 73% N/A
Operating margin --
TTM % of North
America net sales 3.9% 4.1% 4.7% 5.1% 4.9% N/A
International Segment:
Net sales $ 1,778 $ 1,393 $ 1,285 $ 1,474 $ 2,589 46%
Net sales -- Y/Y
growth, excluding
F/X 28% 27% 26% 33% 35% N/A
Net sales -- TTM $ 4,842 $ 5,203 $ 5,506 $ 5,930 $ 6,740 39%
Net sales -- TTM % of
WW net sales 45% 45% 45% 45% 45% N/A
Gross profit $ 318 $ 280 $ 267 $ 302 $ 472 48%
Gross margin -- % of
International net
sales 17.9% 20.1% 20.8% 20.5% 18.2% N/A
Gross profit -- TTM $ 931 $ 1,005 $ 1,072 $ 1,168 $ 1,322 42%
Gross margin -- TTM %
of International net
sales 19.2% 19.3% 19.5% 19.7% 19.6% N/A
Operating income $ 106 $ 93 $ 83 $ 98 $ 175 65%
Operating margin -- %
of International net
sales 6.0% 6.7% 6.4% 6.6% 6.8% N/A
Operating income --
TTM $ 270 $ 306 $ 333 $ 380 $ 449 66%
Operating income --
TTM Y/Y growth,
excluding F/X 0% 9% 19% 37% 53% N/A
Operating margin --
TTM % of
International net
sales 5.6% 5.9% 6.0% 6.4% 6.7% N/A
----------------------------------------------------------------------
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except inventory turnover, accounts payable days, and
employee data)
(unaudited)
----------------------------------------------------------------------
Y/Y %
Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Change
----------------------------------------------
Segments (continued)
Consolidated Segments:
Operating expenses $ 621 $ 540 $ 536 $ 585 $ 842 35%
Operating expenses --
TTM $ 1,956 $ 2,068 $ 2,175 $ 2,283 $ 2,504 28%
Operating income $ 229 $ 179 $ 165 $ 177 $ 328 44%
Operating margin -- %
of consolidated
sales 5.7% 6.0% 5.7% 5.4% 5.8% N/A
Operating income --
TTM (1) $ 500 $ 560 $ 645 $ 749 $ 849 70%
Operating income --
TTM Y/Y growth,
excluding F/X (11%) (2%) 24% 59% 64% N/A
Operating margin --
TTM % of
consolidated net
sales 4.7% 4.9% 5.3% 5.7% 5.7% N/A
Supplemental North
America Segment Net
Sales:
Media $ 1,251 $ 990 $ 923 $ 1,081 $ 1,637 31%
Media -- Y/Y growth,
excluding F/X 21% 21% 26% 37% 30% N/A
Media -- TTM $ 3,582 $ 3,757 $ 3,949 $ 4,245 $ 4,630 29%
Electronics and other
general merchandise $ 876 $ 564 $ 606 $ 631 $ 1,336 53%
Electronics and other
general merchandise
-- Y/Y growth,
excluding F/X 51% 51% 66% 54% 53% N/A
Electronics and other
general merchandise
-- TTM $ 2,024 $ 2,214 $ 2,456 $ 2,678 $ 3,139 55%
Electronics and other
general merchandise
-- TTM % of North
America net sales 34% 35% 37% 37% 39% N/A
Other $ 81 $ 68 $ 72 $ 76 $ 111 37%
Other -- TTM $ 263 $ 273 $ 282 $ 296 $ 326 24%
Supplemental
International Segment
Net Sales:
Media $ 1,247 $ 1,000 $ 910 $ 1,010 $ 1,692 36%
Media -- Y/Y growth,
excluding F/X 21% 24% 23% 27% 26% N/A
Media -- TTM $ 3,485 $ 3,722 $ 3,914 $ 4,167 $ 4,612 32%
Electronics and other
general merchandise $ 523 $ 383 $ 364 $ 448 $ 877 68%
Electronics and other
general merchandise
-- Y/Y growth,
excluding F/X 50% 34% 34% 45% 55% N/A
Electronics and other
general merchandise
-- TTM $ 1,337 $ 1,455 $ 1,560 $ 1,717 $ 2,071 55%
Electronics and other
general merchandise
-- TTM % of
International net
sales 28% 28% 28% 29% 31% N/A
Other $ 8 $ 10 $ 11 $ 16 $ 20 143%
Other -- TTM $ 20 $ 26 $ 33 $ 46 $ 57 186%
Supplemental Worldwide
Net Sales:
Media $ 2,498 $ 1,990 $ 1,833 $ 2,091 $ 3,329 33%
Media -- Y/Y growth,
excluding F/X 21% 23% 25% 32% 28% N/A
Media -- TTM $ 7,067 $ 7,479 $ 7,863 $ 8,412 $ 9,242 31%
Electronics and other
general merchandise $ 1,399 $ 947 $ 970 $ 1,079 $ 2,213 58%
Electronics and other
general merchandise
-- Y/Y growth,
excluding F/X 51% 44% 53% 51% 54% N/A
Electronics and other
general merchandise
-- TTM $ 3,361 $ 3,669 $ 4,015 $ 4,395 $ 5,210 55%
Electronics and other
general merchandise
-- TTM % of WW net
sales 31% 32% 33% 33% 35% N/A
Other $ 89 $ 78 $ 83 $ 92 $ 131 47%
Other -- TTM $ 283 $ 299 $ 315 $ 342 $ 383 35%
Balance Sheet
Cash and marketable
securities (2) $ 2,105 $ 1,565 $ 1,836 $ 2,087 $ 3,309 57%
Inventory, net --
ending $ 877 $ 754 $ 735 $ 970 $ 1,200 37%
Inventory -- average
inventory % of TTM net
sales 6.0% 6.0% 5.9% 6.2% 6.1% N/A
Inventory turnover,
average -- TTM 12.7 12.9 12.9 12.4 12.7 (1%)
Fixed assets, net $ 457 $ 442 $ 443 $ 491 $ 543 19%
Accounts payable days
-- ending 53 47 54 62 57 7%
Other
Employees (full-time
and part-time;
excludes contractors &
temporary personnel) 13,900 14,000 14,400 15,800 17,000 22%
----------------------------------------------------------------------
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) Includes restricted cash, classified within "Other Assets" on our
consolidated balance sheet, of: $86 million Q4 2006, $145 million Q1
2007, $171 million Q2 2007, $179 million Q3 2007 and $197 million Q4
2007.
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
-- 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.
-- Shipping revenue, which includes amounts earned from our
Amazon Prime membership and Fulfillment by Amazon programs,
was $265 million, up 38% from $192 million.
Cost of Sales
-- Cost of sales consists of the purchase price of products 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.
-- Payment processing and related transaction costs, including
those associated with seller transactions, are classified in
"Fulfillment" on our consolidated statements of operations.
-- 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.
-- Outbound shipping costs totaled $449 million, up 42% from $317
million. Net shipping cost was $184 million, or 3.2% of net
sales, up 47% from $125 million, or 3.1% of net sales. One way
we offer lower prices is through free-shipping offers that
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 $69
million, up from $59 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, two or three years for our technology
infrastructure, five years for furniture and fixtures, and ten
years for heavy equipment).
-- General and administrative expenses increased $16 million from
the prior year due to increases in payroll and related
expenses, professional fees, and the impact of last year's $8
million insurance recovery benefit.
-- Stock-based compensation was $54 million, compared with $30
million. We utilize the accelerated, rather than a
straight-line, method for recognizing stock-based
compensation. Under this method, over 50% of the compensation
cost would be expensed in the first year of a typical
four-year vesting term.
-- Operating expenses with and without stock-based compensation
are as follows:
Three Months Ended December
31, 2007
----------------------------
As Stock-Based
Reported Compensation Net
----------------------------
(in millions)
Operating Expenses:
Fulfillment $ 478 $ (11) $467
Marketing 133 (2) 131
Technology and content 221 (31) 190
General and administrative 64 (10) 54
Other operating expenses 3 - 3
-------- ------------ ----
Total operating expenses $ 899 $ (54) $845
-------- ------------ ----
Year-over-year Percentage Growth:
Fulfillment 42% 41%
Marketing 45 45
Technology and content 25 18
General and administrative 41 42
Percent of Net Sales:
Fulfillment 8.4% 8.2%
Marketing 2.3 2.3
Technology and content 3.9 3.4
General and administrative 1.1 1.0
Three Months Ended December
31, 2006
----------------------------
As Stock-Based
Reported Compensation Net
----------------------------
(in millions)
Operating Expenses:
Fulfillment $ 337 $ (6) $331
Marketing 92 (2) 90
Technology and content 177 (15) 162
General and administrative 45 (7) 38
Other operating expenses 2 - 2
-------- ------------ -----
Total operating expenses $ 653 $ (30) $623
-------- ------------ -----
Year-over-year Percentage Growth:
Fulfillment 35% 34%
Marketing 35 35
Technology and content 34 32
General and administrative (7) (16)
Percent of Net Sales:
Fulfillment 8.5% 8.3%
Marketing 2.3 2.3
Technology and content 4.5 4.1
General and administrative 1.1 1.0
-- The increase in stock-based compensation is primarily
attributable to an increase in total stock compensation value
granted to our employees.
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 for certain seller
transactions; and costs from expanding fulfillment capacity.
-- Additionally, because payment processing costs associated with
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, sales by sellers have higher fulfillment
costs as a percent of net sales.
-- We expanded our fulfillment capacity in 2007 and 2006 through
gains in efficiencies and 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
sellers 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 compute, storage 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 and support our infrastructure
web services. The growth rate of our technology and content
spending decreased in 2007 compared with the prior year.
-- 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
and website development, including development of software to
upgrade and enhance our websites and processes supporting our
business, are capitalized and amortized over two years.
Q4 2007 Q4 2006
------- -------
(in millions)
Capitalization $ 33 $ 31
Amortization (31) (26)
------- -------
Net capitalization $ 2 $ 5
======= =======
Stockholders' Equity and Stock-Based Awards
-- As of December 31, 2007, outstanding common shares plus shares
underlying outstanding stock-based awards were 435 million,
down from 436 million as of December 31, 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.
-- As of December 31, 2007, stock-based awards outstanding were
18 million, or 4.4% of shares outstanding, down from 22
million, or 5.3% of outstanding shares. Underlying outstanding
stock awards consist of 16 million shares of restricted stock
units and 2 million stock options with a $17.46
weighted-average exercise price.
-- We granted restricted stock unit awards of 0.3 million shares
in fourth quarter and 8 million shares in 2007, compared with
1.3 million shares and 9 million shares.
-- We repurchased 8.2 million shares of our common stock for $252
million in 2006 and 6.3 million shares for $248 million in
first quarter 2007. In April 2007, our Board of Directors
authorized a 24-month program to repurchase up to an aggregate
of $500 million of our common stock.
Other Operating Expense, Net
-- Other operating expense, net, primarily includes costs related
to intangibles amortization.
Other Income (Expense), Net
-- Other income (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 annual effective tax rate was 28%, compared with 50%. The
effective tax rate in 2007 was lower than the 35% statutory
rate primarily due to earnings of our subsidiaries outside of
the U.S. in jurisdictions where our effective tax rate is
lower than in the U.S. The effective tax rate in 2006 was
higher than the 35% U.S. federal statutory rate resulting from
the establishment of 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 2006 from the U.S. to international locations, which
resulted in taxable income and exposure to additional taxable
income assertions by taxing jurisdictions.
-- A majority of our tax provision is non-cash. We have current
tax benefits and net operating losses relating to excess
stock-based compensation that are being utilized to reduce our
taxable income. As such, cash paid for income taxes in 2007
was $24 million compared with $15 million in 2006.
-- We expect our 2008 effective tax rate to be approximately 30%
and we estimate cash taxes paid to be less than $75 million.
However, our effective tax rate is subject to significant
variation due to several factors, including variability in
accurately predicting the amount and mix of taxable income by
jurisdiction and business acquisitions or investments. We
endeavor to optimize our global taxes on a cash basis, rather
than on a financial reporting basis.
-- We file U.S. federal income tax returns as well as income tax
returns in various states and foreign jurisdictions. We are
under examination, or may be subject to examination, by the
Internal Revenue Service ("IRS") for calendar years 2004
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:
Kentucky for 2003 through 2006, France for 2005 through 2006,
Germany for 2004 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
$93 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.
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 December 31,
----------------------------------------------------
2007 2006
-------------------------- -------------------------
At Prior Exchange At Exchange
Prior
Year Rate As Year Rate As
Rates Effect Reported Rates Effect Reported
(1) (2) (1) (2)
-------- -------- -------- ------- -------- --------
(in millions)
Net sales $ 5,478 $ 195 $ 5,673 $3,864 $ 122 $ 3,986
Gross profit 1,134 36 1,170 829 21 850
Operating
expenses 877 22 899 640 13 653
Income from
operations 257 14 271 189 8 197
Net interest
income (expense)
and other (3) 8 - 8 (2) (7) (9)
Remeasurements
and other income
(expense) (4) - 2 2 1 - 1
Net income 195 12 207 97 1 98
Diluted earnings
per share $ 0.45 $ 0.03 $ 0.48 $ 0.23 $ - $ 0.23
(1) Represents the outcome that would have resulted had exchange
rates in the reported 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
-- SFAS 123(R) requires tax benefits relating to excess
stock-based compensation to be presented as financing cash
flows. Excess tax benefits from stock-based compensation were
$257 million in 2007, compared with $102 million in 2006.
-- Our cash, cash equivalents and marketable securities of $3.11
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 $1.20
billion, primarily in Euros, British Pounds and Japanese Yen.
-- Other assets include, among other things, $197 million of
marketable securities restricted for longer than one year, $28
million of intellectual property rights, $26 million of other
intangibles, net, and $17 million of certain equity
investments. Marketable securities restricted for longer than
one year relate to collateralization of bank guarantees and
debt for our international operations.
-- We acquired certain companies during 2007 for an aggregate
purchase price of $33 million, including cash payments of $24
million 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 cash
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 $18 million and have
estimated useful lives of between one and ten years. The
excess of purchase price over the fair value of the net assets
acquired was $21 million and is classified as "Goodwill" on
our consolidated balance sheets. 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
was not significant.
-- Accrued expenses and other current liabilities include, among
other things, liabilities for gift certificates of $240
million, professional fees, marketing activities, workforce
costs - including accrued payroll, vacation and other benefits
- and unearned revenue of $91 million, which is recorded when
payments are received in advance of performing our service
obligations and is recognized over the service period. At
December 31, 2006, accrued expenses and other current
liabilities included liabilities for gift certificates of $183
million and unearned revenue of $78 million.
-- Long-term debt primarily includes the following:
December 31, December 31,
2007 2006
------------ ------------
(in millions)
4.75% Convertible Subordinated
Notes due February 2009 (1) $ 899 $ 900
6.875% PEACS due February 2010 (2) 350 317
Other long-term debt 50 46
------------ ------------
1,299 1,263
Less current portion of long-term
debt (17) (16)
------------ ------------
$1,282 $1,247
============ ============
(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 currently
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. The redemption premium was 0.95%
of the principal at December 31, 2007, and decreases to
0.475% on February 1, 2008, and will decrease to zero at
maturity in February 2009.
(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
($123.84 per share, based on the exchange rate as of December
31, 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 currently 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, deferred tax liabilities,
non-current unearned revenue and other long-term obligations.
-- We capitalized construction in progress of $15 million and
recorded a corresponding long-term liability related to our
Seattle corporate office space subject to leases scheduled to
begin in 2010 and 2011. Where we are involved in the
construction of structural improvements prior to the
commencement of the lease or take some level of construction
risk, we are considered the owner of the assets during the
construction period under generally accepted accounting
principles. Accordingly, as the landlord incurs the
construction project costs, the assets and corresponding
financial obligation are recorded in "Fixed assets, net" and
"Other long-term liabilities" on our consolidated balance
sheet. Once the construction is completed, if the lease meets
certain "sale-leaseback" criteria, we will remove the asset
and related financial obligation from the balance sheet and
treat the building lease as an operating lease. If upon
completion of construction, the project does not meet the
"sale-leaseback" criteria, the leased property will be treated
as a capital lease for financial reporting purposes.
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. A significant majority of
our technology costs are incurred in the U.S. and most of them
are allocated to our North America segment.
-- The North America segment consists of amounts earned from
retail sales of products (including from 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 our North America-focused
Amazon Enterprise Solutions program, Amazon Web Services, 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 sellers) and
subscriptions through internationally focused websites such as
www.amazon.co.uk, www.amazon.de, www.amazon.co.jp,
www.amazon.fr, and our Joyo Amazon websites at www.joyo.cn and
www.amazon.cn; and from non-retail activities such as
internationally-focused Amazon Enterprise Solutions program,
Amazon Web Services, 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
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, Amazon Kindle, home and garden,
toys, kids and baby, grocery, apparel, shoes and jewelry,
health and beauty, sports and outdoors, tools, and auto and
industrial. The Other category 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.
-- Operating cash flow is net cash provided by (used in)
operating activities, including cash outflows for interest and
excluding excess tax benefits from stock-based compensation.
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 other
sellers on our websites. Customer accounts exclude certain
customers, including DVD rental customers, customers
associated with certain of our acquisitions (including
Joyo.com 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.
-- 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.
-- 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 physical and digital units sold (net
of returns and cancellations) by us and 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, www.amazon.ca
and the Joyo Amazon websites at www.joyo.cn and www.amazon.cn,
as well as Amazon.com-owned items sold through non-Amazon.com
domains, such as books, music and movie items ordered from
Amazon.com's store at www.target.com. Units sold do not
include units associated with certain of our acquisitions,
Amazon.com gift certificates or DVD rentals.
SOURCE: Amazon.com, Inc.
Amazon.com, Inc.
Investor Relations
Curt Fischer, 206-266-2171
ir@amazon.com
www.amazon.com/ir
or
Public Relations
Patty Smith, 206-266-7180
