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Microsoft Cloud Authors: Greg O'Connor, Elizabeth White, Wesley Coelho, Adine Deford, the Editor

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Amazon.com Announces Fourth Quarter Sales up 22% to $21.27 Billion

Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its fourth quarter ended December 31, 2012.

Operating cash flow increased 7% to $4.18 billion for the trailing twelve months, compared with $3.90 billion for the trailing twelve months ended December 31, 2011. Free cash flow decreased 81% to $395 million for the trailing twelve months, compared with $2.09 billion for the trailing twelve months ended December 31, 2011. Free cash flow for the trailing twelve months ended December 31, 2012 includes fourth quarter cash outflows for purchases of corporate office space and property in Seattle, Washington, of $1.4 billion.

Common shares outstanding plus shares underlying stock-based awards totaled 470 million on December 31, 2012, compared with 468 million one year ago.

Net sales increased 22% to $21.27 billion in the fourth quarter, compared with $17.43 billion in fourth quarter 2011. Excluding the $178 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales grew 23% compared with fourth quarter 2011.

Operating income increased 56% to $405 million in the fourth quarter, compared with $260 million in fourth quarter 2011. The favorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $2 million.

Net income decreased 45% to $97 million in the fourth quarter, or $0.21 per diluted share, compared with $177 million, or $0.38 per diluted share, in fourth quarter 2011.

“We’re now seeing the transition we’ve been expecting,” said Jeff Bezos, founder and CEO of Amazon.com. “After 5 years, eBooks is a multi-billion dollar category for us and growing fast – up approximately 70% last year. In contrast, our physical book sales experienced the lowest December growth rate in our 17 years as a book seller, up just 5%. We're excited and very grateful to our customers for their response to Kindle and our ever expanding ecosystem and selection.”

Full Year 2012

Net sales increased 27% to $61.09 billion, compared with $48.08 billion in 2011. Excluding the $854 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales grew 29% compared with 2011.

Operating income decreased 22% to $676 million, compared with $862 million in 2011. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the year on operating income was $14 million.

Net loss was $39 million, or $0.09 per diluted share, compared with net income of $631 million, or $1.37 per diluted share, in 2011.

Highlights

  • For the second year in a row, Amazon’s tablet was the most popular item for customers – Kindle Fire HD continued its run as the #1 best-selling, most gifted, and most wished for product across the millions of items available on Amazon worldwide. At year-end, Kindle Fire HD, Kindle Fire, Kindle Paperwhite and Kindle held the top four spots on the Amazon worldwide best seller charts since launch.
  • Amazon announced the launch of AutoRip, a new service that gives customers free MP3 versions of CDs they purchase from Amazon. Additionally, customers who have purchased AutoRip CDs at any time since Amazon first opened its Music Store in 1998 will find MP3 versions of those albums in their Cloud Player libraries – also automatically and for free.
  • Amazon introduced Kindle FreeTime Unlimited, bringing together for the first time all of the types of content kids and parents love – books, games, educational apps, movies and TV shows – into one simple, unlimited, easy-to-use service for kids ages 3-8.
  • Amazon’s digital media selection has grown to over 23 million movies, TV shows, songs, magazines, books, audiobooks, and popular apps and games in 2012, an increase from 19 million at year-end 2011.
  • Amazon.com announced new licensing agreements with Turner Broadcasting, Warner Bros. Domestic Television Distribution, and A+E Networks, for popular television series including Falling Skies, The Closer, Pawn Stars, Storage Wars, and Dance Moms, expanding its catalog of title offerings for Prime Instant Video to more than 36,000 movies and television episodes.
  • Amazon launched Kindle Stores for Brazil, Canada, China, and Japan, with a large selection of the most popular books, including thousands of local-language books.
  • Amazon announced that 23 KDP authors each sold over 250,000 copies of their books in 2012, and that over 500 KDP Select books have reached the top 100 Kindle best seller lists around the world.
  • Amazon announced that for the eighth consecutive year, the company ranks #1 in customer satisfaction during the holiday shopping season according to the ForeSee annual Holiday E-Retail Satisfaction Index. ForeSee surveyed over 24,000 customers between Thanksgiving and Christmas, asking them to rate their satisfaction with the top 100 retailers. For the second year in a row, Amazon’s score of 88 is the highest ever attained by any retailer in the study.
  • Amazon Web Services (AWS) announced the launch of its newest Asia Pacific Region in Sydney, Australia, now available for multiple services including Amazon Elastic Compute Cloud (EC2), Amazon Simple Storage Service (S3), and Amazon Relational Database Service (RDS). Sydney joins Singapore and Tokyo as the third Region in Asia Pacific and the ninth Region worldwide.
  • AWS announced that SAP Business Suite is now certified to run on the AWS cloud platform. Enterprises running SAP Business Suite can now leverage the on-demand, pay as you go AWS platform to support thousands of concurrent users in production without making costly capital expenditures for their underlying infrastructure. AWS also announced that SAP HANA, SAP’s in-memory database and platform, is certified to run on AWS and is available for purchase via AWS Marketplace.
  • AWS continued its rapid pace of innovation by launching 159 new services and features in 2012. This is nearly double the services and features launched in 2011.
  • AWS has lowered prices 24 times since it launched in 2006, including 10 price reductions in 2012.

Financial Guidance

The following forward-looking statements reflect Amazon.com’s expectations as of January 29, 2013. 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.

First Quarter 2013 Guidance

  • Net sales are expected to be between $15.0 billion and $16.6 billion, or to grow between 14% and 26% compared with first quarter 2012.
  • Operating income (loss) is expected to be between $(285) million and $65 million, compared to $192 million in the prior year period.
  • This guidance includes approximately $285 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions or investments are concluded and that there are no further revisions to stock-based compensation estimates.

A conference call will be webcast live today at 2 p.m. PT/5 p.m. ET, and will be available for at least three months at www.amazon.com/ir. This call will contain forward-looking statements and other material information regarding the Company’s financial and operating results.

These forward-looking statements are inherently difficult to predict. Actual results could differ materially for a variety of reasons, including, in addition to the factors discussed above, the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of legal proceedings and claims, fulfillment and data center optimization, risks of inventory management, seasonality, the degree to which the Company enters into, maintains and develops commercial agreements, acquisitions and strategic transactions, and risks of fulfillment throughput and productivity. Other risks and uncertainties include, among others, risks related to new products, services and technologies, system interruptions, government regulation and taxation, payments and fraud. In addition, the current global economic climate amplifies many of these risks. More information about factors that potentially could affect Amazon.com’s financial results is included in Amazon.com’s filings with the Securities and Exchange Commission (“SEC”), including its most recent Annual Report on Form 10-K and subsequent filings.

Our investor relations website is www.amazon.com/ir and we encourage investors to use it as a way of easily finding information about us. We promptly make available on this website, free of charge, the reports that we file or furnish with the SEC, corporate governance information (including our Code of Business Conduct and Ethics), and select press releases and social media postings.

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; and Tools, Auto & Industrial. Amazon Web Services provides Amazon’s developer customers with access to in-the-cloud infrastructure services based on Amazon’s own back-end technology platform, which developers can use to enable virtually any type of business. Kindle Paperwhite is the most-advanced e-reader ever constructed with 62% more pixels and 25% increased contrast, a patented built-in front light for reading in all lighting conditions, extra-long battery life, and a thin and light design. The new latest generation Kindle, the lightest and smallest Kindle, now features new, improved fonts and faster page turns. Kindle Fire HD features a stunning custom high-definition display, exclusive Dolby audio with dual stereo speakers, high-end, laptop-grade Wi-Fi with dual-band support, dual-antennas and MIMO for faster streaming and downloads, enough storage for HD content, and the latest generation processor and graphics engine—and it is available in two display sizes—7” and 8.9”. The large-screen Kindle Fire HD is also available with 4G wireless, and comes with a groundbreaking $49.99 introductory 4G LTE data package. The all-new Kindle Fire features a 20% faster processor, 40% faster performance, twice the memory, and longer battery life.

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, www.amazon.cn, www.amazon.it, www.amazon.es and www.amazon.com.br. 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)
 
 
 
 
Three Months Ended Twelve Months Ended
December 31, December 31,
  2012     2011     2012     2011  
(unaudited)
 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 2,980 $ 2,823 $ 5,269 $ 3,777
 
OPERATING ACTIVITIES:
Net income (loss) 97 177 (39 ) 631

Adjustments to reconcile net income to net cash from operating activities:

Depreciation of property and equipment, including internal-use software and website development, and other amortization

662 359 2,159 1,083
Stock-based compensation 235 159 833 557
Other operating expense (income), net 36 43 154 154
Losses (gains) on sales of marketable securities, net (1 ) - (9 ) (4 )
Other expense (income), net 100 (16 ) 253 (56 )
Deferred income taxes (148 ) 67 (265 ) 136
Excess tax benefits from stock-based compensation (239 ) (1 ) (429 ) (62 )
Changes in operating assets and liabilities:
Inventories (974 ) (1,260 ) (999 ) (1,777 )
Accounts receivable, net and other (1,024 ) (1,077 ) (861 ) (866 )
Accounts payable 4,926 4,684 2,070 2,997
Accrued expenses and other 1,412 1,076 1,038 1,067
Additions to unearned revenue 545 358 1,796 1,064
Amortization of previously unearned revenue   (546 )   (300 )   (1,521 )   (1,021 )
Net cash provided by (used in) operating activities 5,081 4,269 4,180 3,903
 
INVESTING ACTIVITIES:

Purchases of property and equipment, including internal-use software and website development

(2,025 ) (550 ) (3,785 ) (1,811 )
Acquisitions, net of cash acquired, and other (35 ) (49 ) (745 ) (705 )
Sales and maturities of marketable securities and other investments 506 912 4,237 6,843
Purchases of marketable securities and other investments   (1,528 )   (1,782 )   (3,302 )   (6,257 )
Net cash provided by (used in) investing activities (3,082 ) (1,469 ) (3,595 ) (1,930 )
 
FINANCING ACTIVITIES:
Excess tax benefits from stock-based compensation 239 1 429 62
Common stock repurchased - (277 ) (960 ) (277 )
Proceeds from long-term debt and other 3,083 47 3,378 177

Repayments of long-term debt, capital lease, and finance lease obligations

  (156 )   (104 )   (588 )   (444 )
Net cash provided by (used in) financing activities 3,166 (333 ) 2,259 (482 )
 
Foreign-currency effect on cash and cash equivalents   (61 )   (21 )   (29 )   1  
Net increase (decrease) in cash and cash equivalents 5,104 2,446 2,815 1,492
 
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 8,084   $ 5,269   $ 8,084   $ 5,269  
 
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest on long-term debt $ 10 $ 4 $ 31 $ 14
Cash paid for income taxes (net of refunds) 52 15 112 33
Property and equipment acquired under capital leases 239 187 802 753
Property and equipment acquired, net, under build-to-suit leases (17 ) 39 29 259
 
                                   
AMAZON.COM, INC.
Consolidated Statements of Operations
(in millions, except per share data)
 
 
 
 
Three Months Ended Twelve Months Ended
December 31, December 31,
  2012     2011     2012     2011  
(unaudited)
 
Net product sales (1) $ 18,147 $ 15,309 $ 51,733 $ 42,000
Net services sales (2)   3,121     2,122     9,360     6,077  
Net sales 21,268 17,431 61,093 48,077
 
Operating expenses (3):
Cost of sales 16,136 13,830 45,971 37,288
Fulfillment 2,258 1,659 6,419 4,576
Marketing 851 593 2,408 1,630
Technology and content 1,345 862 4,564 2,909
General and administrative 235 184 896 658
Other operating expense (income), net   38     43     159     154  
Total operating expenses   20,863     17,171     60,417     47,215  
 
Income from operations 405 260 676 862
 
Interest income 9 14 40 61
Interest expense (28 ) (20 ) (92 ) (65 )
Other income (expense), net   (49 )   19     (80 )   76  
Total non-operating income (expense)   (68 )   13     (132 )   72  
 
Income before income taxes 337 273 544 934
 
Provision for income taxes (194 ) (86 ) (428 ) (291 )
Equity-method investment activity, net of tax   (46 )   (10 )   (155 )   (12 )
Net income (loss) $ 97   $ 177   $ (39 ) $ 631  
 
Basic earnings per share $ 0.21   $ 0.39   $ (0.09 ) $ 1.39  
 
Diluted earnings per share $ 0.21   $ 0.38   $ (0.09 ) $ 1.37  
 
 
Weighted average shares used in computation of earnings per share:
Basic   454     455     453     453  
Diluted   461     462     453     461  
 

(1) Represents revenue from the sale of products and related shipping fees and digital content where we are the seller of record.

(2) Represents third-party seller fees earned (including commissions) and related shipping fees, digital content subscriptions, and non-retail activities.

(3) Includes stock-based compensation as follows:
Fulfillment $ 62 $ 42 $ 212 $ 133
Marketing 18 12 61 39
Technology and content 124 80 434 292
General and administrative 31 25 126 93
 
                           
AMAZON.COM, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
 
 
Three Months Ended Twelve Months Ended
December 31, December 31,
  2012     2011     2012     2011  
(unaudited)
 
Net income (loss) $ 97 $ 177 $ (39 ) $ 631
 
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax of $(12), $3, $(30), and $20 60 (77 ) 76 (123 )
Net change in unrealized gains on available-for-sale securities:
Unrealized gains (losses), net of tax of $1, $0, $(3), and $1 (1 ) 1 8 (1 )

Reclassification adjustment for losses (gains) included in net income, net of tax effect of $0, $0, $3, and $1

  (1 )   -     (7 )   (2 )
Net unrealized gains (losses) on available-for-sale securities   (2 )   1     1     (3 )
Total other comprehensive income (loss)   58     (76 )   77     (126 )
 
Comprehensive income $ 155   $ 101   $ 38   $ 505  
 
                       
AMAZON.COM, INC.
Segment Information
(in millions)
 
 
 
 
Three Months Ended Twelve Months Ended
December 31, December 31,
  2012     2011     2012     2011  
(unaudited)
North America
Net sales $ 12,175 $ 9,902 $ 34,813 $ 26,705
Segment operating expenses (1)   11,567     9,617     33,221     25,772  
Segment operating income $ 608   $ 285   $ 1,592   $ 933  
 
International
Net sales $ 9,093 $ 7,529 $ 26,280 $ 21,372
Segment operating expenses (1)   9,023     7,352     26,204     20,732  
Segment operating income $ 70   $ 177   $ 76   $ 640  
 
Consolidated
Net sales $ 21,268 $ 17,431 $ 61,093 $ 48,077
Segment operating expenses (1)   20,590     16,969     59,425     46,504  
Segment operating income 678 462 1,668 1,573
Stock-based compensation (235 ) (159 ) (833 ) (557 )
Other operating income (expense), net   (38 )   (43 )   (159 )   (154 )
Income from operations 405 260 676 862
Total non-operating income (expense) (68 ) 13 (132 ) 72
Provision for income taxes (194 ) (86 ) (428 ) (291 )
Equity-method investment activity, net of tax   (46 )   (10 )   (155 )   (12 )
Net income (loss) $ 97   $ 177   $ (39 ) $ 631  
 
Segment Highlights:
Y/Y net sales growth:
North America 23 % 37 % 30 % 43 %
International 21 31 23 38
Consolidated 22 35 27 41
Y/Y segment operating income growth (decline):
North America 114 % (4 ) % 71 % (2 ) %
International (61 ) (46 ) (88 ) (35 )
Consolidated 47 (26 ) 6 (19 )
Net sales mix:
North America 57 % 57 % 57 % 56 %
International   43     43     43     44  
  100   %   100   %   100   %   100   %
 

(1) Represents operating expenses, excluding stock-based compensation and "Other operating expense (income), net," which are not allocated to segments.

 
                       
AMAZON.COM, INC.
Supplemental Net Sales Information
(in millions)
 
 
 
 
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 2012 2011
(unaudited)
North America
Media $ 2,903 $ 2,562 $ 9,189 $ 7,959
Electronics and other general merchandise 8,503 6,881 23,273 17,315
Other (1)   769   459   2,351   1,431
Total North America $ 12,175 $ 9,902 $ 34,813 $ 26,705
 
International
Media $ 3,611 $ 3,447 $ 10,753 $ 9,820
Electronics and other general merchandise 5,431 4,032 15,355 11,397
Other (1)   51   50   172   155
Total International $ 9,093 $ 7,529 $ 26,280 $ 21,372
 
Consolidated
Media $ 6,514 $ 6,009 $ 19,942 $ 17,779
Electronics and other general merchandise 13,934 10,913 38,628 28,712
Other (1)   820   509   2,523   1,586
Total Consolidated $ 21,268 $ 17,431 $ 61,093 $ 48,077
 
Y/Y Net Sales Growth:
North America:
Media 13 % 8 % 15 % 16 %
Electronics and other general merchandise 24 51 34 57
Other 68 62 64 73
Total North America 23 37 30 43
 
International:
Media 5 % 20 % 9 % 23 %
Electronics and other general merchandise 35 42 35 55
Other 4 32 11 24
Total International 21 31 23 38
 
Consolidated:
Media 8 % 15 % 12 % 19 %
Electronics and other general merchandise 28 48 35 56
Other 61 58 59 66
Total Consolidated 22 35 27 41
 
Y/Y Net Sales Growth Excluding Effect of Exchange Rates:
International:
Media 7 % 18 % 12 % 16 %
Electronics and other general merchandise 37 41 40 47
Other 5 31 15 18
Total International 23 29 27 31
 
Consolidated:
Media 10 % 14 % 14 % 16 %
Electronics and other general merchandise 29 47 36 53
Other 61 58 59 66
Total Consolidated 23 34 29 37
 
Consolidated Net Sales Mix:
Media 31 % 34 % 33 % 37 %
Electronics and other general merchandise 65 63 63 60
Other   4   3   4   3
  100 %   100 %   100 %   100 %
 

(1) Includes sales from non-retail activities, such as AWS in the North America segment, advertising services, and our co-branded credit card agreements in both segments.

 
                   
AMAZON.COM, INC.
Consolidated Balance Sheets
(in millions, except per share data)
 
 
 
December 31, December 31,
  2012     2011  
ASSETS
Current assets:
Cash and cash equivalents $ 8,084 $ 5,269
Marketable securities 3,364 4,307
Inventories 6,031 4,992
Accounts receivable, net and other 3,364 2,571
Deferred tax assets   453     351  
Total current assets 21,296 17,490
Property and equipment, net 7,060 4,417
Deferred tax assets 123 28
Goodwill 2,552 1,955
Other assets   1,524     1,388  
Total assets $ 32,555   $ 25,278  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 13,318 $ 11,145
Accrued expenses and other   5,684     3,751  
Total current liabilities 19,002 14,896
Long-term debt 3,084 255

Other long-term liabilities

2,277 2,370
 
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 — 478 and 473
Outstanding shares — 454 and 455 5 5
Treasury stock, at cost (1,837 ) (877 )
Additional paid-in capital 8,347 6,990
Accumulated other comprehensive loss (239 ) (316 )
Retained earnings   1,916     1,955  
Total stockholders' equity   8,192     7,757  
Total liabilities and stockholders' equity $ 32,555   $ 25,278  
 
                                               

AMAZON.COM, INC.

Supplemental Financial Information and Business Metrics
(in millions, except per share data)
(unaudited)
                                                             
Y/Y %
Q4 2011         Q1 2012         Q2 2012         Q3 2012         Q4 2012         Change
Cash Flows and Shares
Operating cash flow -- trailing twelve months (TTM) $ 3,903 $ 3,051 $ 3,222 $ 3,368 $ 4,180 7 %

Purchases of property and equipment (incl. internal-use software & website development) -- TTM

$ 1,811 $ 1,899 $ 2,123 $ 2,310 $ 3,785 109 %

Free cash flow (operating cash flow less purchases of property and equipment) -- TTM

$ 2,092 $ 1,152 $ 1,099 $ 1,058 $ 395 (81 %)
Free cash flow -- TTM Y/Y growth (decline) (17 %) (39 %) (40 %) (31 %) (81 %) N/A
Invested capital (1) $ 9,680 $ 10,006 $ 10,250 $ 10,392 $ 11,181 16 %
Return on invested capital (2) 22 % 12 % 11 % 10 % 4 % N/A
 
Common shares and stock-based awards outstanding 468 464 468 469 470 0 %
Common shares outstanding 455 450 452 453 454 0 %
Stock-based awards outstanding 14 13 16 16 16 17 %
Stock-based awards outstanding -- % of common shares outstanding 3.0 % 2.9 % 3.6 % 3.6 % 3.5 % N/A
 
Results of Operations
Worldwide (WW) net sales $ 17,431 $ 13,185 $ 12,834 $ 13,806 $ 21,268 22 %
WW net sales -- Y/Y growth, excluding F/X 34 % 34 % 32 % 30 % 23 % N/A
WW net sales -- TTM $ 48,077 $ 51,404 $ 54,325 $ 57,256 $ 61,093 27 %
WW net sales -- TTM Y/Y growth, excluding F/X 37 % 37 % 35 % 33 % 29 % N/A
 
Operating income (loss) $ 260 $ 192 $ 107 $ (28 ) $ 405 56 %
Operating income -- Y/Y growth (decline), excluding F/X (48 %) (38 %) (34 %) (137 %) 59 % N/A
Operating margin -- % of WW net sales 1.5 % 1.5 % 0.8 % (0.2 %) 1.9 % N/A
Operating income -- TTM $ 862 $ 732 $ 637 $ 531 $ 676 (22 %)
Operating income -- TTM Y/Y growth (decline), excluding F/X (44 %) (50 %) (50 %) (48 %) (15 %) N/A
Operating margin -- TTM % of WW net sales 1.8 % 1.4 % 1.2 % 0.9 % 1.1 % N/A
 
Net income (loss) $ 177 $ 130 $ 7 $ (274 ) $ 97 (45 %)
Net income (loss) per diluted share $ 0.38 $ 0.28 $ 0.01 $ (0.60 ) $ 0.21 (45 %)

Net income (loss) -- TTM

$ 631 $ 561 $ 377 $ 40 $ (39 ) (106 %)
Net income (loss) per diluted share -- TTM $ 1.37 $ 1.22 $ 0.82 $ 0.09 $ (0.09 ) (106 %)
 
Segments
North America Segment:
Net sales $ 9,902 $ 7,427 $ 7,326 $ 7,884 $ 12,175 23 %
Net sales -- Y/Y growth, excluding F/X 37 % 36 % 36 % 33 % 23 % N/A
Net sales -- TTM $ 26,705 $ 28,667 $ 30,587 $ 32,540 $ 34,813 30 %
Operating income $ 285 $ 349 $ 344 $ 291 $ 608 114 %
Operating margin -- % of North America net sales 2.9 % 4.7 % 4.7 % 3.7 % 5.0 % N/A
Operating income -- TTM $ 933 $ 991 $ 1,120 $ 1,268 $ 1,592 71 %
Operating income -- TTM Y/Y growth (decline), excluding F/X (2 %) 2 % 14 % 34 % 71 % N/A
Operating margin -- TTM % of North America net sales 3.5 % 3.5 % 3.7 % 3.9 % 4.6 % N/A
 
International Segment:
Net sales $ 7,529 $ 5,758 $ 5,508 $ 5,922 $ 9,093 21 %
Net sales -- Y/Y growth, excluding F/X 29 % 32 % 28 % 27 % 23 % N/A
Net sales -- TTM $ 21,372 $ 22,737 $ 23,738 $ 24,716 $ 26,280 23 %
Net sales -- TTM % of WW net sales 44 % 44 % 44 % 43 % 43 % N/A
Operating income (loss) $ 177 $ 49 $ 16 $ (59 ) $ 70 (61 %)
Operating margin -- % of International net sales 2.4 % 0.9 % 0.3 % (1.0 %) 0.8 % N/A
Operating income -- TTM $ 640 $ 515 $ 359 $ 183 $ 76 (88 %)
Operating income -- TTM Y/Y growth (decline), excluding F/X (41 %) (49 %) (57 %) (68 %) (77 %) N/A
Operating margin -- TTM % of International net sales 3.0 % 2.3 % 1.5 % 0.7 % 0.3 % N/A
 
Consolidated Segments:
Operating expenses (3) $ 16,969 $ 12,787 $ 12,474 $ 13,574 $ 20,590 21 %
Operating expenses -- TTM (3) $ 46,504 $ 49,899 $ 52,846 $ 55,805 $ 59,425 28 %
Operating income $ 462 $ 398 $ 360 $ 232 $ 678 47 %
Operating margin -- % of Consolidated sales 2.7 % 3.0 % 2.8 % 1.7 % 3.2 % N/A
Operating income -- TTM $ 1,573 $ 1,505 $ 1,480 $ 1,451 $ 1,668 6 %
Operating income -- TTM Y/Y growth (decline), excluding F/X (21 %) (22 %) (21 %) (15 %) 7 % N/A
Operating margin -- TTM % of Consolidated net sales           3.3 %           2.9 %           2.7 %           2.5 %           2.7 %         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 2011       Q1 2012       Q2 2012       Q3 2012       Q4 2012       Change
Supplemental
Supplemental North America Segment Net Sales:
Media $ 2,562 $ 2,197 $ 1,874 $ 2,215 $ 2,903 13 %
Media -- Y/Y growth, excluding F/X 8 % 17 % 18 % 15 % 13 % N/A
Media -- TTM $ 7,959 $ 8,270 $ 8,559 $ 8,847 $ 9,189 15 %
Electronics and other general merchandise $ 6,881 $ 4,772 $ 4,937 $ 5,061 $ 8,503 24 %
Electronics and other general merchandise -- Y/Y growth, excluding F/X 51 % 44 % 41 % 39 % 24 % N/A
Electronics and other general merchandise -- TTM $ 17,315 $ 18,784 $ 20,226 $ 21,652 $ 23,273 34 %
Electronics and other general merchandise -- TTM % of North America net sales 65 % 66 % 66 % 67 % 67 % N/A
Other $ 459 $ 458 $ 515 $ 608 $ 769 68 %
Other -- TTM $ 1,431 $ 1,613 $ 1,802 $ 2,041 $ 2,351 64 %
 
Supplemental International Segment Net Sales:
Media $ 3,447 $ 2,513 $ 2,245 $ 2,385 $ 3,611 5 %
Media -- Y/Y growth, excluding F/X 18 % 22 % 12 % 12 % 7 % N/A
Media -- TTM $ 9,820 $ 10,261 $ 10,431 $ 10,590 $ 10,753 9 %
Electronics and other general merchandise $ 4,032 $ 3,203 $ 3,224 $ 3,497 $ 5,431 35 %
Electronics and other general merchandise -- Y/Y growth, excluding F/X 41 % 42 % 42 % 39 % 37 % N/A
Electronics and other general merchandise -- TTM $ 11,397 $ 12,314 $ 13,139 $ 13,956 $ 15,355 35 %
Electronics and other general merchandise -- TTM % of International net sales 53 % 54 % 55 % 56 % 58 % N/A
Other $ 50 $ 42 $ 39 $ 40 $ 51 4 %
Other -- TTM $ 155 $ 162 $ 168 $ 170 $ 172 11 %
 
Supplemental Worldwide Net Sales:
Media $ 6,009 $ 4,710 $ 4,119 $ 4,600 $ 6,514 8 %
Media -- Y/Y growth, excluding F/X 14 % 19 % 15 % 14 % 10 % N/A
Media -- TTM $ 17,779 $ 18,531 $ 18,990 $ 19,437 $ 19,942 12 %
Electronics and other general merchandise $ 10,913 $ 7,975 $ 8,161 $ 8,558 $ 13,934 28 %
Electronics and other general merchandise -- Y/Y growth, excluding F/X 47 % 43 % 42 % 39 % 29 % N/A
Electronics and other general merchandise -- TTM $ 28,712 $ 31,098 $ 33,365 $ 35,608 $ 38,628 35 %
Electronics and other general merchandise -- TTM % of WW net sales 60 % 60 % 61 % 62 % 63 % N/A
Other $ 509 $ 500 $ 554 $ 648 $ 820 61 %
Other -- TTM $ 1,586 $ 1,775 $ 1,970 $ 2,211 $ 2,523 59 %
 
Balance Sheet
Cash and marketable securities $ 9,576 $ 5,715 $ 4,970 $ 5,248 $ 11,448 20 %
Inventory, net -- ending $ 4,992 $ 4,255 $ 4,380 $ 5,065 $ 6,031 21 %
Inventory turnover, average -- TTM 10.3 10.4 10.1 9.7 9.3 (10 %)
Fixed assets, net $ 4,417 $ 4,653 $ 5,097 $ 5,662 $ 7,060 60 %
 
Accounts payable -- ending $ 11,145 $ 6,886 $ 7,072 $ 8,369 $ 13,318 20 %
Accounts payable days -- ending 74 62 68 75 76 2 %
 
Other
WW shipping revenue $ 531 $ 461 $ 469 $ 517 $ 832 57 %
WW shipping costs $ 1,466 $ 1,129 $ 1,054 $ 1,153 $ 1,798 23 %
WW net shipping costs $ 935 $ 668 $ 585 $ 636 $ 966 3 %
WW net shipping costs -- % of WW net sales 5.4 % 5.1 % 4.6 % 4.6 % 4.5 % N/A
 
 
Employees (full-time and part-time; excludes contractors & temporary personnel)               56,200           65,600           69,100           81,400           88,400         57 %
 
 
(1) Average Total Assets minus Current Liabilities (excluding current portion of Long Term Debt) over five quarter ends.
(2) TTM Free Cash Flow divided by Invested Capital.

(3) Represents cost of sales, fulfillment, marketing, technology and content, and general and administrative operating expenses, excluding stock-based compensation.

 

Amazon.com, Inc.

Certain Definitions

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