 Printer-friendly view | | << Back | | Amazon.com Announces Third Quarter Sales up 31% to $4.26 Billion; Sales Growth Fueled by Lower Prices, Expanded Selection and Free Shipping |  | SEATTLE--(BUSINESS WIRE)--
Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results
for its third quarter ended September 30, 2008.
Operating cash flow was $1.27 billion for the trailing twelve
months, compared with $1.0 billion for the trailing twelve months
ended September 30, 2007. Free cash flow increased 21% to $0.97
billion for the trailing twelve months, compared with $0.80 billion
for the trailing twelve months ended September 30, 2007.
Common shares outstanding plus shares underlying stock-based
awards outstanding totaled 448 million on September 30, 2008, compared
with 435 million a year ago.
Net sales increased 31% to $4.26 billion in the third quarter,
compared with $3.26 billion in third quarter 2007. Excluding the $80
million favorable impact from year-over-year changes in foreign
exchange rates throughout the quarter, net sales grew 28% compared
with third quarter 2007.
Operating income increased 26% to $154 million in the third
quarter, compared with $123 million in third quarter 2007. Excluding
the $5 million favorable impact from year-over-year changes in foreign
exchange rates throughout the quarter, operating income grew 22%
compared with third quarter 2007.
Net income increased 48% to $118 million in the third quarter, or
$0.27 per diluted share, compared with net income of $80 million, or
$0.19 per diluted share, in third quarter 2007. Net income includes a
benefit of $15 million related to net foreign currency remeasurements.
"We remain relentlessly focused on delivering value to customers
through lower prices, improved selection and our free shipping offers,
including Amazon Prime," said Jeff Bezos, founder and CEO of
Amazon.com. "Customers saved more than $700 million with our global
free-shipping programs over the past twelve months, and we expect more
customers than ever will take advantage of the benefits of Amazon
Prime this holiday season."
Highlights
- Kindle selection continues to grow, with available book titles
more than doubling since launch to over 185,000, including 105
out of 112 of the New York Times bestsellers, all priced at
$9.99 or less. Additionally, newspaper, magazine and blog
selection have each more than doubled since launch. The Kindle
Store has added periodicals such as the Chicago Tribune,
Financial Times, Los Angeles Times, MIT Technology Review, and
U.S. News & World Report to a list that already included the
New York Times, Wall Street Journal, Washington Post, Forbes,
Fortune, Newsweek and Time.
- Kindle titles already account for more than 10% of unit sales
for books that are available in both digital and print
formats.
- Worldwide Media sales grew 19% to $2.49 billion, compared with
$2.09 billion in third quarter 2007.
- Worldwide Electronics & Other General Merchandise sales grew
52% to $1.64 billion, compared with $1.08 billion in third
quarter 2007, and increased to 38% of worldwide net sales
compared with 33%.
- North America segment sales, representing the Company's U.S.
and Canadian sites, were $2.30 billion, up 29% from third
quarter 2007.
- International segment sales, representing the Company's U.K.,
German, Japanese, French and Chinese sites, were $1.96
billion, up 33% from third quarter 2007, and increased to 46%
of worldwide net sales compared with 45%. Excluding the
favorable impact from year-over-year changes in foreign
exchange rates throughout the quarter, International sales
grew 28%.
- Amazon.com shipped over 1 million units in third quarter 2008
on behalf of sellers who utilized Fulfillment by Amazon.
- Amazon.fr launched Amazon Premium, the local version of Amazon
Prime, on October 1, 2008. Members pay an annual fee of EUR 49
for unlimited express delivery throughout France.
- Amazon.co.uk lowered its free shipping threshold from GBP 15
to GBP 5.
- Amazon Europe launched Automotive and Apparel stores on its
amazon.de website and a Health and Personal Care store on its
amazon.co.uk website, offering customers tens of thousands of
new items from hundreds of top brands.
- Amazon Payments launched two new products, Checkout by Amazon
and Amazon Simple Pay, enabling merchants to allow their
customers to use their Amazon account to complete a
transaction.
- Amazon Web Services (AWS) launched the Amazon Elastic Block
Store (Amazon EBS), a new persistent storage feature for the
Amazon Elastic Compute Cloud (Amazon EC2). With Amazon EBS,
storage volumes can be programmatically created, attached to
Amazon EC2 instances, and if more durability is desired, can
be backed up with a snapshot to the Amazon Simple Storage
Service (Amazon S3).
- Oracle announced that they will be supporting Oracle Database
11g on Amazon EC2, as well as supporting other services such
as Amazon S3.
Financial Guidance
The following forward-looking statements reflect Amazon.com's
expectations as of October 22, 2008. While guidance takes into account
recent growth rates, our results are inherently unpredictable and may
be materially affected by many factors, such as fluctuations in
foreign exchange rates, changes in global economic conditions and
consumer spending, world events, the rate of growth of the Internet
and online commerce and the various factors detailed below.
Fourth Quarter 2008 Guidance
- Net sales are expected to be between $6.0 billion and $7.0
billion, or to grow between 6% and 23% compared with fourth
quarter 2007.
- Operating income is expected to be between $145 million and
$305 million, or between 46% decline and 13% growth compared
with fourth quarter 2007. This guidance includes approximately
$85 million for stock-based compensation and amortization of
intangible assets, and it assumes, among other things, that no
additional business acquisitions or investments are concluded
and that there are no further revisions to stock-based
compensation estimates.
Full Year 2008 Expectations
- Net sales are expected to be between $18.46 billion and $19.46
billion, or to grow between 24% and 31% compared with 2007.
- Operating income is expected to be between $716 million and
$876 million, or to grow between 9% and 34% compared with
2007. This guidance includes approximately $300 million for
stock-based compensation and amortization of intangible assets
and includes the impact of the $53 million non-cash gain
recognized in the second quarter 2008 on the sale of the
Company's European DVD rental assets. It assumes, among other
things, that no additional business acquisitions or
investments are concluded and that there are no further
revisions to stock-based compensation estimates.
A conference call will be webcast live today at 2 p.m. PT/5 p.m.
ET, and will be available for at least three months at
www.amazon.com/ir. This call will contain forward-looking statements
and other material information regarding the Company's financial and
operating results.
These forward-looking statements are inherently difficult to
predict. Actual results could differ materially for a variety of
reasons, including, in addition to the factors discussed above, the
amount that Amazon.com invests in new business opportunities and the
timing of those investments, the mix of products sold to customers,
the mix of net sales derived from products as compared with services,
the extent to which we owe income taxes, competition, management of
growth, potential fluctuations in operating results, international
growth and expansion, the outcomes of legal proceedings and claims,
fulfillment center optimization, risks of inventory management,
seasonality, the degree to which the Company enters into, maintains
and develops commercial agreements, acquisitions and strategic
transactions, and risks of fulfillment throughput and productivity.
Other risks and uncertainties include, among others, risks related to
new products, services and technologies, system interruptions,
indebtedness, government regulation and taxation, payments and fraud.
In addition, the recent disruptions in the global financial markets
amplify many of these risks. More information about factors that
potentially could affect Amazon.com's financial results is included in
Amazon.com's filings with the Securities and Exchange Commission,
including its Annual Report on Form 10-K for the year ended
December 31, 2007, 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 Nine Months Twelve Months
Ended Ended Ended
September 30, September 30, September 30,
--------------- ---------------- -----------------
2008 2007 2008 2007 2008 2007
------- ------- -------- ------- -------- --------
CASH AND CASH
EQUIVALENTS,
BEGINNING OF
PERIOD $1,548 $1,004 $ 2,539 $1,022 $ 1,366 $ 693
OPERATING
ACTIVITIES:
Net income 118 80 420 269 627 367
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 76 61 210 183 273 242
Stock-based
compensation 70 51 197 130 251 161
Other operating
expense
(income), net 7 3 (32) 6 (29) 8
Losses (gains) on
sales of
marketable
securities, net 1 - (2) 1 (2) 1
Other expense
(income), net (24) 3 (17) 12 (18) 12
Deferred income
taxes (17) (2) (47) (1) (144) 6
Excess tax
benefits from
stock-based
compensation (53) (34) (160) (93) (323) (157)
Changes in
operating assets
and liabilities:
Inventories (243) (223) (130) (72) (361) (199)
Accounts
receivable, net
and other (9) (73) 106 (17) (131) (134)
Accounts payable 362 304 (524) (216) 620 372
Accrued expenses
and other 101 58 39 29 437 276
Additions to
unearned revenue 121 56 286 165 366 240
Amortization of
previously
unearned revenue (86) (47) (220) (139) (291) (194)
------- ------- -------- ------- -------- --------
Net cash
provided by
operating
activities 424 237 126 257 1,275 1,001
INVESTING
ACTIVITIES:
Purchases of fixed
assets, including
internal-use
software and
website
development (102) (69) (231) (151) (305) (201)
Acquisitions, net
of cash acquired,
and other (8) (24) (408) (47) (436) (48)
Sales and
maturities of
marketable
securities and
other investments 582 210 1,033 1,156 1,149 2,025
Purchases of
marketable
securities and
other investments (478) (83) (1,229) (777) (1,382) (2,118)
------- ------- -------- ------- -------- --------
Net cash
provided by
(used in)
investing
activities (6) 34 (835) 181 (974) (342)
FINANCING
ACTIVITIES:
Proceeds from
exercises of stock
options 2 35 10 79 23 97
Excess tax benefits
from stock-based
compensation 53 34 160 93 323 157
Common stock
repurchased - - - (248) - (248)
Proceeds from long-
term debt and
other - 33 52 21 68 31
Repayments of long-
term debt and
capital lease
obligations (295) (29) (355) (63) (380) (63)
------- ------- -------- ------- -------- --------
Net cash
provided by
(used in)
financing
activities (240) 73 (133) (118) 34 (26)
Foreign-currency
effect on cash and
cash equivalents (76) 18 (47) 24 (51) 40
------- ------- -------- ------- -------- --------
Net increase
(decrease) in
cash and cash
equivalents 102 362 (889) 344 284 673
------- ------- -------- ------- -------- --------
CASH AND CASH
EQUIVALENTS, END
OF PERIOD $1,650 $1,366 $ 1,650 $1,366 $ 1,650 $ 1,366
======= ======= ======== ======= ======== ========
SUPPLEMENTAL CASH
FLOW INFORMATION:
Cash paid for
interest $ 14 $ 22 $ 61 $ 67 $ 62 $ 67
Cash paid for
income taxes 5 4 28 14 38 15
Fixed assets
acquired under
capital leases and
other financing
arrangements 37 22 104 43 136 50
Fixed assets
acquired under
build-to-suit
leases 19 - 35 - 50 -
Conversion of debt 132 1 605 1 605 1
AMAZON.COM, INC.
Consolidated Statements of Operations
(in millions, except per share data)
(unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
--------------- ----------------
2008 2007 2008 2007
------- ------- -------- -------
Net sales $4,264 $3,262 $12,463 $9,163
Cost of sales 3,265 2,500 9,541 6,980
------- ------- -------- -------
Gross profit 999 762 2,922 2,183
Operating expenses(1):
Fulfillment 393 296 1,109 815
Marketing 108 74 313 211
Technology and content 264 209 755 596
General and administrative 73 57 208 171
Other operating expense (income),
net(2) 7 3 (32) 6
------- ------- -------- -------
Total operating expenses 845 639 2,353 1,799
------- ------- -------- -------
Income from operations 154 123 569 384
Interest income 21 23 67 62
Interest expense (17) (19) (60) (57)
Other income (expense), net 24 (3) 22 (10)
------- ------- -------- -------
Total non-operating income
(expense) 28 1 29 (5)
------- ------- -------- -------
Income before income taxes 182 124 598 379
Provision for income taxes 59 44 167 110
Equity-method investment activity,
net of tax 5 - 11 -
------- ------- -------- -------
Net income $ 118 $ 80 $ 420 $ 269
======= ======= ======== =======
Basic earnings per share $ 0.28 $ 0.19 $ 1.00 $ 0.65
======= ======= ======== =======
Diluted earnings per share $ 0.27 $ 0.19 $ 0.97 $ 0.64
======= ======= ======== =======
Weighted average shares used in
computation of earnings per share:
Basic 427 414 421 412
======= ======= ======== =======
Diluted 436 425 431 423
======= ======= ======== =======
__________________________
(1) Includes stock-based compensation
as follows:
Fulfillment $ 15 $ 11 $ 42 $ 27
Marketing 4 2 10 6
Technology and content 38 28 109 72
General and administrative 13 10 36 25
(2) Q2 2008 includes a $53 million non-cash gain associated with the
sale of our European DVD rental assets.
AMAZON.COM, INC.
Segment Information
(in millions)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2008 2007 2008 2007
---------- ------- --------- -------
North America
Net sales $2,302 $1,788 $ 6,597 $5,012
Cost of sales 1,716 1,328 4,883 3,679
---------- ------- --------- -------
Gross profit 586 460 1,714 1,333
Direct segment operating
expenses(1) 498 381 1,400 1,087
---------- ------- --------- -------
Segment operating income $ 88 $ 79 $ 314 $ 246
========== ======= ========= =======
International
Net sales $1,962 $1,474 $ 5,866 $4,151
Cost of sales 1,549 1,172 4,658 3,301
---------- ------- --------- -------
Gross profit 413 302 1,208 850
Direct segment operating
expenses(1) 270 204 788 576
---------- ------- --------- -------
Segment operating income $ 143 $ 98 $ 420 $ 274
========== ======= ========= =======
Consolidated
Net sales $4,264 $3,262 $12,463 $9,163
Cost of sales 3,265 2,500 9,541 6,980
---------- ------- --------- -------
Gross profit 999 762 2,922 2,183
Direct segment operating
expenses 768 585 2,188 1,663
---------- ------- --------- -------
Segment operating income 231 177 734 520
Stock-based compensation (70) (51) (197) (130)
Other operating income
(expense), net(2) (7) (3) 32 (6)
---------- ------- --------- -------
Income from operations 154 123 569 384
Total non-operating income
(expense), net 28 1 29 (5)
Provision for income taxes (59) (44) (167) (110)
Equity-method investment
activity, net of tax (5) - (11) -
---------- ------- --------- -------
Net income $ 118 $ 80 $ 420 $ 269
========== ======= ========= =======
Segment Highlights:
Y/Y net sales growth:
North America 29% 42% 32% 37%
International 33 40 41 35
Consolidated 31 41 36 36
Y/Y gross profit growth:
North America 28% 34% 29% 34%
International 37 47 42 39
Consolidated 31 39 34 36
Y/Y segment operating income
growth:
North America 12% 263% 27% 128%
International 46 94 53 67
Consolidated 31 145 41 91
Net sales mix:
North America 54% 55% 53% 55%
International 46 45 47 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.
(2) Q2 2008 includes a $53 million non-cash gain associated with the
sale of our European DVD rental assets.
AMAZON.COM, INC.
Supplemental Net Sales Information
(in millions)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2008 2007 2008 2007
---------- ------- --------- -------
North America
Media $1,245 $1,081 $ 3,599 $2,995
Electronics and other general
merchandise 950 631 2,697 1,801
Other 107 76 301 216
---------- ------- --------- -------
Total North America 2,302 1,788 6,597 5,012
International
Media 1,249 1,010 3,845 2,919
Electronics and other general
merchandise 690 448 1,955 1,195
Other 23 16 66 37
---------- ------- --------- -------
Total International 1,962 1,474 5,866 4,151
Consolidated
Media 2,494 2,091 7,444 5,914
Electronics and other general
merchandise 1,640 1,079 4,652 2,996
Other 130 92 367 253
---------- ------- --------- -------
Total Consolidated $4,264 $3,262 $12,463 $9,163
========== ======= ========= =======
Y/Y Net Sales Growth:
North America:
Media 15% 38% 20% 28%
Electronics and other general
merchandise 51 54 50 57
Other 41 22 40 18
Total North America 29 42 32 37
International:
Media 24% 33% 32% 30%
Electronics and other general
merchandise 54 54 64 47
Other 49 410 78 216
Total International 33 40 41 35
Consolidated:
Media 19% 36% 26% 29%
Electronics and other general
merchandise 52 54 55 53
Other 42 41 45 30
Total Consolidated 31 41 36 36
Y/Y Net Sales Growth Excluding Effect of
Exchange Rates:
International:
Media 18% 27% 22% 25%
Electronics and other general
merchandise 48 45 52 38
Other 52 379 71 194
Total International 28 33 31 29
Consolidated:
Media 17% 32% 21% 27%
Electronics and other general
merchandise 49 51 51 49
Other 43 39 44 29
Total Consolidated 28 38 31 33
Consolidated Net Sales Mix:
Media 59% 64% 60% 64%
Electronics and other general
merchandise 38 33 37 33
Other 3 3 3 3
AMAZON.COM, INC.
Consolidated Balance Sheets
(in millions, except per share data)
September 30, December 31, September 30,
2008 2007 2007
------------- ------------ -------------
ASSETS (unaudited) (unaudited)
Current assets:
Cash and cash equivalents $ 1,650 $ 2,539 $ 1,366
Marketable securities 674 573 543
Inventories 1,315 1,200 970
Accounts receivable, net
and other 597 705 474
Deferred tax assets 194 147 71
------------- ------------ -------------
Total current assets 4,430 5,164 3,424
Fixed assets, net 731 543 491
Deferred tax assets 278 260 231
Goodwill 405 222 218
Other assets 722 296 254
------------- ------------ -------------
Total assets $ 6,566 $ 6,485 $ 4,618
============= ============ =============
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable $ 2,242 $ 2,795 $ 1,674
Accrued expenses and other 860 902 645
Current portion of long-
term debt 42 17 -
------------- ------------ -------------
Total current liabilities 3,144 3,714 2,319
Long-term debt 393 1,282 1,273
Other long-term liabilities 502 292 265
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 -- 443,
431, and 429
Outstanding shares --
429, 416, and 415 4 4 4
Treasury stock, at cost (500) (500) (500)
Additional paid-in capital 4,051 3,063 2,827
Accumulated other
comprehensive income (loss) (73) 5 11
Accumulated deficit (955) (1,375) (1,581)
------------- ------------ -------------
Total stockholders'
equity 2,527 1,197 761
------------- ------------ -------------
Total liabilities and
stockholders' equity $ 6,566 $ 6,485 $ 4,618
============= ============ =============
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except per share data)
(unaudited)
Y/Y %
Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Change
---------------------------------------------------
Cash Flows and
Shares
Operating cash
flow -- trailing
twelve months
(TTM) $ 1,001 $ 1,405 $ 1,039 $ 1,088 $ 1,275 27%
Purchases of fixed
assets (incl.
internal-use
software &
website
development) --
TTM $ 201 $ 224 $ 251 $ 272 $ 305 52%
Free cash flow
(operating cash
flow less
purchases of
fixed assets) --
TTM $ 800 $ 1,181 $ 788 $ 816 $ 970 21%
Free cash flow --
TTM Y/Y growth 118% 143% 51% 16% 21% N/A
Common shares and
stock-based
awards
outstanding 435 435 435 446 448 3%
Common shares
outstanding 415 416 417 426 429 3%
Stock-based awards
outstanding 20 18 18 20 19 (5%)
Stock-based awards
outstanding -- %
of common shares
outstanding 4.9% 4.4% 4.3% 4.6% 4.5% N/A
Results of
Operations
Worldwide (WW) net
sales $ 3,262 $ 5,673 $ 4,135 $ 4,063 $ 4,264 31%
WW net sales --
Y/Y growth,
excluding F/X 38% 37% 31% 35% 28% N/A
WW net sales --
TTM $13,149 $14,835 $15,955 $17,133 $18,135 38%
WW net sales --
TTM Y/Y growth,
excluding F/X 32% 35% 35% 35% 33% N/A
Gross profit $ 762 $ 1,170 $ 956 $ 967 $ 999 31%
Gross profit --
Y/Y growth,
excluding F/X 36% 33% 28% 32% 29% N/A
Gross margin -- %
of WW net sales 23.4% 20.6% 23.1% 23.8% 23.4% N/A
Gross profit --
TTM $ 3,032 $ 3,353 $ 3,589 $ 3,855 $ 4,092 35%
Gross profit --
TTM Y/Y growth,
excluding F/X 31% 33% 33% 32% 31% N/A
Gross margin --
TTM % of WW net
sales 23.1% 22.6% 22.5% 22.5% 22.6% N/A
Operating income
(1) $ 123 $ 271 $ 198 $ 217 $ 154 26%
Operating margin
-- % of WW net
sales 3.8% 4.8% 4.8% 5.3% 3.6% N/A
Operating income
-- TTM (1) $ 581 $ 655 $ 708 $ 808 $ 840 45%
Operating income
-- TTM Y/Y
growth, excluding
F/X 56% 61% 57% 52% 36% N/A
Operating margin
-- TTM % of WW
net sales 4.4% 4.4% 4.4% 4.7% 4.6% N/A
Net income(1) $ 80 $ 207 $ 143 $ 158 $ 118 48%
Net income per
diluted share $ 0.19 $ 0.48 $ 0.34 $ 0.37 $ 0.27 44%
Net income --
TTM(1) $ 367 $ 476 $ 508 $ 588 $ 627 71%
Net income per
diluted share --
TTM $ 0.87 $ 1.12 $ 1.20 $ 1.38 $ 1.46 68%
Segments
North America
Segment:
Net sales $ 1,788 $ 3,084 $ 2,126 $ 2,168 $ 2,302 29%
Net sales -- Y/Y
growth,
excluding F/X 42% 39% 31% 35% 29% N/A
Net sales -- TTM $ 7,219 $ 8,095 $ 8,598 $ 9,166 $ 9,680 34%
Gross profit $ 460 $ 698 $ 569 $ 559 $ 586 28%
Gross margin --
% of North
America net
sales 25.7% 22.6% 26.7% 25.8% 25.5% N/A
Gross profit --
TTM $ 1,864 $ 2,031 $ 2,160 $ 2,286 $ 2,412 29%
Gross margin --
TTM % of North
America net
sales 25.8% 25.1% 25.1% 24.9% 24.9% N/A
Operating income $ 79 $ 153 $ 130 $ 96 $ 88 12%
Operating margin
-- % of North
America net
sales 4.4% 5.0% 6.1% 4.4% 3.8% N/A
Operating income
-- TTM $ 369 $ 400 $ 445 $ 458 $ 468 27%
Operating income
-- TTM Y/Y
growth,
excluding F/X 84% 73% 74% 46% 26% N/A
Operating margin
-- TTM % of
North America
net sales 5.1% 4.9% 5.2% 5.0% 4.8% N/A
International
Segment:
Net sales $ 1,474 $ 2,589 $ 2,009 $ 1,895 $ 1,962 33%
Net sales -- Y/Y
growth,
excluding F/X 33% 35% 31% 34% 28% N/A
Net sales -- TTM $ 5,930 $ 6,740 $ 7,357 $ 7,967 $ 8,455 43%
Net sales -- TTM
% of WW net
sales 45% 45% 46% 47% 47% N/A
Gross profit $ 302 $ 472 $ 387 $ 408 $ 413 37%
Gross margin --
% of
International
net sales 20.5% 18.2% 19.3% 21.5% 21.1% N/A
Gross profit --
TTM $ 1,168 $ 1,322 $ 1,430 $ 1,569 $ 1,680 44%
Gross margin --
TTM % of
International
net sales 19.7% 19.6% 19.4% 19.7% 19.9% N/A
Operating income $ 98 $ 175 $ 128 $ 149 $ 143 46%
Operating margin
-- % of
International
net sales 6.6% 6.8% 6.4% 7.9% 7.3% N/A
Operating income
-- TTM $ 380 $ 449 $ 483 $ 550 $ 594 56%
Operating income
-- TTM Y/Y
growth,
excluding F/X 37% 53% 44% 47% 41% N/A
Operating margin
-- TTM % of
International
net sales 6.4% 6.7% 6.6% 6.9% 7.0% N/A
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except inventory turnover, accounts payable days and
employee data)
(unaudited)
Y/Y %
Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Change
---------------------------------------------------
Segments
(continued)
Consolidated
Segments:
Operating
expenses $ 585 $ 842 $ 698 $ 722 $ 768 31%
Operating
expenses -- TTM $ 2,283 $ 2,504 $ 2,661 $ 2,847 $ 3,030 33%
Operating income $ 177 $ 328 $ 258 $ 245 $ 231 31%
Operating margin
-- % of
consolidated
sales 5.4% 5.8% 6.2% 6.0% 5.4% N/A
Operating income
-- TTM $ 749 $ 849 $ 928 $ 1,008 $ 1,062 42%
Operating income
-- TTM Y/Y
growth,
excluding F/X 59% 64% 59% 49% 35% N/A
Operating margin
-- TTM % of
consolidated
net sales 5.7% 5.7% 5.8% 5.9% 5.9% N/A
Supplemental North
America Segment
Net Sales:
Media $ 1,081 $ 1,637 $ 1,205 $ 1,148 $ 1,245 15%
Media -- Y/Y
growth,
excluding F/X 37% 30% 21% 24% 15% N/A
Media -- TTM $ 4,245 $ 4,630 $ 4,845 $ 5,071 $ 5,235 23%
Electronics and
other general
merchandise $ 631 $ 1,336 $ 826 $ 920 $ 950 51%
Electronics and
other general
merchandise --
Y/Y growth,
excluding F/X 54% 53% 46% 52% 51% N/A
Electronics and
other general
merchandise --
TTM $ 2,678 $ 3,139 $ 3,400 $ 3,714 $ 4,033 51%
Electronics and
other general
merchandise --
TTM % of North
America net
sales 37% 39% 40% 41% 42% N/A
Other $ 76 $ 111 $ 95 $ 100 $ 107 41%
Other -- TTM $ 296 $ 326 $ 353 $ 381 $ 412 39%
Supplemental
International
Segment Net
Sales:
Media $ 1,010 $ 1,692 $ 1,338 $ 1,258 $ 1,249 24%
Media -- Y/Y
growth,
excluding F/X 27% 26% 22% 25% 18% N/A
Media -- TTM $ 4,167 $ 4,612 $ 4,950 $ 5,299 $ 5,537 33%
Electronics and
other general
merchandise $ 448 $ 877 $ 655 $ 611 $ 690 54%
Electronics and
other general
merchandise --
Y/Y growth,
excluding F/X 45% 55% 56% 52% 48% N/A
Electronics and
other general
merchandise --
TTM $ 1,717 $ 2,071 $ 2,344 $ 2,590 $ 2,832 65%
Electronics and
other general
merchandise --
TTM % of
International
net sales 29% 31% 32% 33% 33% N/A
Other $ 16 $ 20 $ 16 $ 26 $ 23 49%
Other -- TTM $ 46 $ 57 $ 63 $ 78 $ 86 90%
Supplemental
Worldwide Net
Sales:
Media $ 2,091 $ 3,329 $ 2,543 $ 2,406 $ 2,494 19%
Media -- Y/Y
growth,
excluding F/X 32% 28% 21% 25% 17% N/A
Media -- TTM $ 8,412 $ 9,242 $ 9,795 $10,370 $10,772 28%
Electronics and
other general
merchandise $ 1,079 $ 2,213 $ 1,481 $ 1,531 $ 1,640 52%
Electronics and
other general
merchandise --
Y/Y growth,
excluding F/X 51% 54% 50% 52% 49% N/A
Electronics and
other general
merchandise --
TTM $ 4,395 $ 5,210 $ 5,744 $ 6,304 $ 6,865 56%
Electronics and
other general
merchandise --
TTM % of WW net
sales 33% 35% 36% 37% 38% N/A
Other $ 92 $ 131 $ 111 $ 126 $ 130 42%
Other -- TTM $ 342 $ 383 $ 416 $ 459 $ 498 46%
Balance Sheet
Cash and
marketable
securities(2) $ 2,087 $ 3,309 $ 2,395 $ 2,625 $ 2,572 23%
Inventory, net --
ending $ 970 $ 1,200 $ 1,077 $ 1,107 $ 1,315 36%
Inventory --
average inventory
% of TTM net
sales 6.2% 6.1% 5.9% 5.9% 6.3% N/A
Inventory
turnover, average
-- TTM 12.4 12.7 13.1 13.0 12.4 0%
Fixed assets, net $ 491 $ 543 $ 594 $ 651 $ 731 49%
Accounts payable
days -- ending 62 57 53 58 63 3%
Other
Employees (full-
time and part-
time; excludes
contractors &
temporary
personnel) 15,800 17,000 17,800 18,400 20,500 30%
Note: The attached "Financial and Operational Summary" is an integral
part of this Supplemental Financial Information and Business Metrics.
(1) Q2 2008 includes a $53 million non-cash gain associated with the
sale of our European DVD rental assets.
(2) Includes restricted cash, classified within "Other Assets" on our
consolidated balance sheet, of: $179 million Q3 2007, $197 million Q4
2007, $245 million Q1 2008, $245 million Q2 2008 and $248 million Q3
2008.
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. For our
products with multiple elements, where a standalone value for
each element cannot be established, we recognize the revenue
and related cost over the estimated economic life of the
product.
- Shipping revenue, which includes amounts earned from our
Amazon Prime membership and Fulfillment by Amazon programs,
was $191 million, up 12% from $171 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 $323 million, up 24% from $260
million. Net shipping cost was $132 million, or 3.1% of net
sales, up 48% from $89 million, or 2.7% 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 $80
million, up from $65 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).
- Stock-based compensation was $70 million, compared with $51
million. The increase in stock-based compensation is primarily
attributable to an increase in total stock compensation value
granted to our employees. 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 Three Months Ended
September 30, 2008 September 30, 2007
-------------------------- ---------------------------
As Stock-Based As Stock-Based
Reported Compensation Net Reported Compensation Net
-------------------------- ---------------------------
(in millions)
Operating
Expenses:
Fulfillment $ 393 $ (15) $378 $ 296 $ (11) $285
Marketing 108 (4) 104 74 (2) 72
Technology and
content 264 (38) 226 209 (28) 181
General and
administrative 73 (13) 60 57 (10) 47
Other operating
expense
(income) net 7 - 7 3 - 3
-------- ------------ ---- -------- ------------ -----
Total
operating
expenses $ 845 $ (70) $775 $ 639 $ (51) $588
-------- ------------ ---- -------- ------------ -----
Year-over-year
Percentage
Growth:
Fulfillment 33% 33% 37% 37%
Marketing 46 45 16 15
Technology and
content 26 25 22 16
General and
administrative 29 28 4 (4)
Percent of Net
Sales:
Fulfillment 9.2% 8.9% 9.1% 8.7%
Marketing 2.5 2.5 2.3 2.2
Technology and
content 6.2 5.3 6.4 5.6
General and
administrative 1.7 1.4 1.7 1.4
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 our sellers have higher fulfillment
costs as a percent of net sales.
- We expanded our fulfillment capacity during the first nine
months of 2008 and throughout 2007 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
third parties for whom we provide the fulfillment services.
Marketing
- We direct customers to our websites primarily through a number
of targeted online marketing channels, such as our Associates
program, sponsored search, portal advertising, e-mail
campaigns, and other initiatives. Our marketing expenses are
largely variable, based on growth in sales and changes in
rates. To the extent there is increased or decreased
competition for these traffic sources, or to the extent our
mix of these channels shifts, we would expect to see a
corresponding change in our marketing expense or its effect.
- Marketing costs increased in absolute dollars in Q3 2008 due
to increased spending in variable online marketing channels,
such as our Associates program and sponsored search programs.
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 seek to efficiently invest in several areas of technology
and content including seller platforms, web services, digital
initiatives and the expansion of new and existing product
categories, as well as in technology infrastructure to enhance
the customer experience, improve our process efficiencies and
support our infrastructure web services.
- 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.
- During Q3 2008 and Q3 2007, we capitalized $41 million
(including $7 million of stock-based compensation) and $35
million (including $6 million of stock-based compensation) of
costs associated with internal-use software and website
development. Amortization of previously capitalized amounts
was $37 million and $30 million for Q3 2008 and Q3 2007.
Stockholders' Equity and Stock-Based Awards
- As of September 30, 2008, outstanding common shares plus
shares underlying outstanding stock-based awards were 448
million, up from 435 million as of September 30, 2007. 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.
- In Q3 2008 we called for redemption principal amounts of $399
million of our outstanding 4.75% Convertible Subordinated
Notes. Holders elected to convert a total of $132 million in
principal amount of the 4.75% Convertible Subordinated Notes,
and we issued 1.7 million shares of our common stock as a
result; we redeemed the remaining $266 million of the called
principal amount for cash.
- As of September 30, 2008, stock-based awards outstanding were
19.2 million, or 4.5% of shares outstanding, down from 20.2
million, or 4.9% of outstanding shares. Outstanding stock
awards consist of 17.9 million restricted stock units and 1.3
million stock options with a $25.06 weighted-average exercise
price.
- We granted restricted stock units representing 0.9 million and
0.4 million shares of common stock during Q3 2008 and Q3 2007.
Other Operating Expense (Income), Net
- Other operating expense (income), net, was $7 million and $3
million during Q3 2008 and Q3 2007.
Other Income (Expense), Net
- Other income (expense), net, was $24 million and ($3) million
during Q3 2008 and Q3 2007. The amount consists primarily of
gains and losses related to foreign currency remeasurement.
- 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 adjusted for
discrete items, if any, that are taken into account in the
relevant period. Each quarter we update our estimate of the
annual effective tax rate, and if our estimated tax rate
changes we make a cumulative adjustment. The 2008 annual
effective tax rate is estimated to be lower than the 35% U.S.
federal 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.
- 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 Q3 2008
was $5 million compared with $4 million in Q3 2007.
- We estimate our 2008 effective tax rate will be approximately
28% and cash taxes paid will be less than $75 million.
However, there is a potential for significant volatility of
our 2008 effective tax rate due to several factors including
variability in accurately predicting the taxable income, the
taxable jurisdiction to which it relates, and business
acquisitions and investments. We endeavor to optimize our
global taxes on a cash basis, rather than on a financial
reporting basis.
- We are under examination, or may be subject to examination, by
the Internal Revenue Service ("IRS") for calendar years 2004
through 2007. 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 2007, France for 2005 through 2007,
Germany for 2003 through 2007, Luxembourg for 2003 through
2007, and the United Kingdom for 2003 through 2007. In
addition, in 2007, Japanese tax authorities assessed income
tax, including penalties and interest, of approximately $101
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
and 2007.
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 September 30,
--------------------------------------------------
2008 2007
------------------------ -------------------------
At At
Prior Exchange Prior Exchange
Year Rate Year Rate
Rates Effect As Rates Effect As
(1) (2) Reported (1) (2) Reported
------ -------- -------- ------- -------- --------
(in millions)
Net sales $4,184 $ 80 $4,264 $3,187 $ 75 $3,262
Gross profit 984 15 999 747 15 762
Operating expenses 835 10 845 628 11 639
Income from
operations 149 5 154 118 5 123
Net interest income
(expense) and
other(3) 3 25 28 (4) (1) (5)
Net income 98 20 118 78 2 80
Diluted earnings
per share $ 0.22 $0.05 $ 0.27 $ 0.18 $0.01 $ 0.19
(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, remeasurement of 6.875% PEACS, and intercompany balances.
Net Income
- Net income includes the impact of foreign currency
remeasurements included in "Other income (expense), net" which
fluctuate with changes in exchange rates. For Q3 2008, these
remeasurements resulted in an after tax benefit of $15
million.
Cash Flows and Balance Sheet
- SFAS 123(R) requires the reporting of tax benefits relating to
excess stock-based compensation as financing cash flows.
Excess tax benefits from stock-based compensation were $53
million in Q3 2008 and $323 million for the trailing twelve
months, compared with $34 million in Q3 2007 and $157 million
for the trailing twelve months ended September 30, 2007.
- Our cash, cash equivalents and marketable securities of $2.32
billion, at fair value, primarily consist of cash, government
and government agency securities, AAA-rated money market funds
and other investment grade securities. Included are amounts
held in foreign currencies of $1.2 billion, primarily in
Euros, British Pounds and Japanese Yen.
- Other assets include, among other things, $248 million of
marketable securities restricted for longer than one year,
$247 million of certain equity investments, $143 million of
intangibles, net, and $44 million of intellectual property
rights. Marketable securities restricted for longer than one
year relate primarily to collateralization of bank guarantees
and debt for our international operations.
- Accrued expenses and other current liabilities include, among
other things, liabilities for gift certificates of $216
million, professional fees, marketing activities, workforce
costs - including accrued payroll, vacation and other benefits
- and current unearned revenue of $158 million, which is
recorded when payments are received in advance of performing
our service obligations and is recognized over the service
period.
- Long-term debt primarily includes the following:
September 30, December 31,
2008 2007
------------ ------------
(in millions)
6.875% PEACS due February 2010 (1) $ 338 $ 350
4.75% Convertible Subordinated Notes - 899
Other long-term debt 97 50
------------ ------------
435 1,299
Less current portion of long-term debt (42) (17)
------------ ------------
$ 393 $ 1,282
============ ============
Fair value of long-term debt (2) $ 431 $ 1,466
============ ============
(1) 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 ($119.62 per share,
based on the exchange rate as of September 30, 2008). 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.
(2) The fair value of our 6.875% PEACS was $334 million and $358
million at September 30, 2008 and December 31, 2007. The fair value of
our 4.75% Convertible Subordinated Notes was $1.1 billion at December
31, 2007. Such amounts are determined based on quoted prices in active
markets for similar instruments (Level 2 as defined under SFAS No.
157).
- Other long-term liabilities include tax contingencies,
long-term capital lease obligations, deferred tax liabilities,
non-current unearned revenue and other long-term obligations.
- In December 2007, we entered into a series of leases and other
agreements for the lease of corporate office space to be
developed in Seattle, Washington with initial terms of up to
16 years commencing on completion of development in 2010 and
2011. Under these agreements we committed to occupy
approximately 1,360,000 square feet of corporate office space.
In Q3 2008, we elected to occupy an additional approximately
330,000 square feet subject to a termination fee estimated to
be up to approximately $10 million. We also have options to
lease up to an additional approximately 500,000 square feet at
rates based on fair market values at the time the options are
exercised, subject to certain conditions. The amount of space
available and our financial and other obligations under the
lease agreements are affected by various factors, including
government approvals and permits, interest rates, development
costs and other expenses and our exercise of certain rights
under the lease agreements.
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.audible.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; from our Amazon Prime membership program; and
from non-retail activities such as internationally-focused
Amazon Enterprise Solutions program, 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, devices, home and garden, toys,
kids and baby, grocery, apparel, shoes and jewelry, health and
beauty, sports and outdoors, tools, and auto and industrial.
Other consists of non-retail activities, such as the Amazon
Enterprise Solutions program, Amazon Web Services, and
miscellaneous marketing and promotional activities, such as
our co-branded credit card programs.
- 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 trade accounts receivable minus
accounts payable days. Accounts payable days are calculated as
the quotient of ending 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
(excluding current portion of our long-term debt) 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 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 or
Amazon.com gift certificates.
Source: Amazon.com, Inc.
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