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EX-99.1

Exhibit 99.1

 

LOGO

AMAZON.COM ANNOUNCES SECOND QUARTER SALES UP 22% TO $15.70 BILLION

SEATTLE—(BUSINESS WIRE)—July 25, 2013—Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its second quarter ended June 30, 2013.

Operating cash flow increased 41% to $4.53 billion for the trailing twelve months, compared with $3.22 billion for the trailing twelve months ended June 30, 2012. Free cash flow decreased 76% to $265 million for the trailing twelve months, compared with $1.10 billion for the trailing twelve months ended June 30, 2012. Free cash flow for the trailing twelve months ended June 30, 2013 includes fourth quarter 2012 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 474 million on June 30, 2013, compared with 468 million one year ago.

Net sales increased 22% to $15.70 billion in the second quarter, compared with $12.83 billion in second quarter 2012. Excluding the $392 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales grew 25% compared with second quarter 2012.

Operating income decreased 26% to $79 million in the second quarter, compared with $107 million in second quarter 2012. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $18 million.

Net loss was $7 million in the second quarter, or $0.02 per diluted share, compared with net income of $7 million, or $0.01 per diluted share, in second quarter 2012.

“We’re so grateful to our customers for their response to Kindle devices and our digital ecosystem. This past quarter, our top 10 selling items worldwide were all digital products – Kindles, Kindle Fire HDs, accessories and digital content,” said Jeff Bezos, founder and CEO of Amazon.com. “The Kindle service keeps getting better. The Kindle Store now offers millions of titles including more than 350,000 exclusives that you won’t find anywhere else. Prime Instant Video has surpassed 40,000 titles, including many premium exclusives like Downton Abbey and Under the Dome. And we’ve added more than a thousand books, games, educational apps, movies and TV shows to Kindle FreeTime Unlimited, bringing together in one place all the types of content kids and parents love.”

Highlights

 

  •  

Amazon and Viacom Inc. announced an expanded multi-year, multi-national digital video licensing agreement to bring hundreds of TV shows and thousands of TV episodes from Viacom to Prime Instant Video, including a collection of TV shows that customers won’t find on any other digital video subscription service. Prime members now have unlimited instant streaming access to popular kids’ titles such as Dora the Explorer and SpongeBob SquarePants, along with top-rated shows from MTV and COMEDY CENTRAL.

 

  •  

Amazon announced expanded multi-year licensing agreements with NBCUniversal Cable & New Media Distribution and PBS Distribution, bringing popular TV shows to Prime Instant Video such as Grimm, Suits, NOVA, and Masterpiece. Prime Instant Video now includes more than 41,000 movies and TV episodes that are available for Prime members to watch at no additional charge.


  •  

Comedy pilots Alpha House and Betas, along with kids pilots Annebots, Creative Galaxy and Tumbleaf, have been given the greenlight to begin production on a full series of episodes that will air exclusively on Prime Instant Video later this year and in early 2014.

 

  •  

Amazon announced that since launch, Kindle FreeTime Unlimited has already added more than a thousand books, games, educational apps, movies and TV shows, including popular kids’ titles from Disney, Warner Bros. Interactive Entertainment, Electronic Arts and more. Kindle FreeTime Unlimited brings together for the first time all the types of content kids and parents love into one simple, unlimited, easy-to-use service for kids ages 3-8.

 

  •  

Amazon announced that the Amazon Appstore is now available to millions of customers in nearly 200 countries, giving them access to apps and games from top brands like Disney and Electronic Arts, new releases including “Angry Birds Friends” and all-time favorites like “Temple Run 2”. Customers around the world can now buy apps and games directly from the Amazon Appstore on Macs, PCs or Android phones and tablets, including Kindle Fire.

 

  •  

Amazon announced that customers can now use Amazon Coins to purchase apps, games and in-app items in the Amazon Appstore and on Kindle Fire. For customers, Amazon Coins is an easy way to purchase apps and in-app items on Kindle Fire, and for developers it’s another opportunity to drive traffic, downloads and increased monetization. With discounts of up to 10% for purchasing Coins in bulk, it’s also an opportunity for customers to save money on their app and game purchases.

 

  •  

Amazon Publishing announced Kindle Worlds, the new publishing model that allows any writer to publish authorized stories inspired by popular Worlds and make them available for readers to purchase in the Kindle Store, and earn up to a 35% royalty while doing so.

 

  •  

Amazon Publishing announced that Oliver Pötzsch has become the first Amazon Publishing author to sell 1 million copies in combined print, audio, and Kindle English language editions worldwide.

 

  •  

Amazon announced that Kindle Fire HD and Kindle Fire HD 8.9” are now available to customers in over 170 countries and territories around the world through Amazon.com, giving customers access to millions of apps, games, books, audiobooks and magazines, including more than 350,000 books that are exclusive to the Kindle Store.

 

  •  

Amazon introduced Kindle Paperwhite and Kindle Fire HD in China, available both online at amazon.cn and popular retail locations. Customer response to this launch significantly exceeded expectations and product went out of stock in many retail outlets within the first week.

 

  •  

Amazon announced that Kindle Fire HD is now available for customers to purchase in Canada at www.amazon.ca and select retailers. In addition, Kindle Paperwhite and Kindle Fire HD are now available for customers to purchase in India at www.amazon.in and select retailers.

 

  •  

Amazon announced new accessibility features for the free Kindle for iOS reading app, making it easier than ever for blind and visually impaired customers to navigate their Kindle libraries, read and interact with their books and more. Similar accessibility enhancements will be available on additional platforms in the future.

 

  •  

Amazon announced the launch of its marketplace in India, www.amazon.in, providing customers a convenient and trustworthy online shopping experience and Indian retailers of all sizes a robust and scalable platform to sell their products online with no listing fees and pay-as-you-go fulfillment services.

 

  •  

Goodreads announced it now has over 20 million members – up from 10 million in less than one year. Goodreads is a leading site for readers and book recommendations that helps people find and share books they love. Goodreads members can discover new books by seeing what their friends are reading or by using the Goodreads Book Recommendation Engine; share ratings and recommendations; track what they have read, and list what they want to read.

 

  •  

As part of its Amazon Career Choice Program, Amazon is increasing the amount it will pre-pay for hourly employees to pursue associate degrees or vocational certifications. The program is designed to expand the choices available to its employees in well-paying high demand careers, whether its building a career at Amazon or as a step towards a career in another industry, such as computer and information technology, health and sciences, and accounting. Amazon will pre-pay an eligible employee’s tuition up to $3,000 per year or up to $12,000 over four years.

 

  •  

Amazon Web Services (AWS) became the first major cloud provider to achieve FedRAMP Compliance which recognizes the ability of AWS to meet extensive security requirements and compliance mandates for running sensitive US government applications and protecting data. FedRAMP certification simplifies and speeds the ability for government agencies to evaluate and adopt AWS for a wide range of applications and workloads.


  •  

AWS announced the launch of the AWS Certification Program, which recognizes IT professionals that possess the skills and technical knowledge necessary for building and maintaining applications and services on the AWS Cloud. AWS Certifications help organizations identify candidates and consultants who are proficient at architecting and developing for the cloud.

 

  •  

AWS further enhanced its security and identity management capabilities across several services – introducing resource-level permissions for Amazon Elastic Compute Cloud (EC2) and Amazon Relational Database Service (RDS), adding identity federation to AWS Identity and Access Management (IAM), extending Amazon Simple Storage Service (S3) Server Side Encryption support to Amazon Elastic Map Reduce (EMR), and adding custom SSL certificate support for CloudFront. These enhancements give customers more granular security controls over their AWS deployments, applications and sensitive data.

 

  •  

AWS announced it had lowered prices by up to 80% on Amazon EC2 Dedicated Instances, instances that run on single-tenant hardware dedicated to a single customer account. In addition, AWS lowered prices on Amazon RDS instances with On-Demand price reductions of up to 28% and Reserved Instance (RI) price reductions of up to 27%.

Financial Guidance

The following forward-looking statements reflect Amazon.com’s expectations as of July 25, 2013, and are subject to substantial uncertainty. 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.

Third Quarter 2013 Guidance

 

  •  

Net sales are expected to be between $15.45 billion and $17.15 billion, or to grow between 12% and 24% compared with third quarter 2012.

 

  •  

Operating loss is expected to be between $440 million and $65 million, compared to $28 million in third quarter 2012.

 

  •  

This guidance includes approximately $340 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions, investments, restructurings or legal settlements 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, www.amazon.com.br and amazon.in. 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 Ended
June 30,
    Six Months Ended
June 30,
    Twelve Months Ended
June 30,
 
     2013     2012     2013     2012     2013     2012  

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

   $ 4,481      $ 2,288      $ 8,084      $ 5,269      $ 2,335      $ 2,047   

OPERATING ACTIVITIES:

            

Net income (loss)

     (7     7        75        137        (101     377   

Adjustments to reconcile net income (loss) to net cash from operating activities:

            

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

     756        485        1,457        942        2,673        1,579   

Stock-based compensation

     298        221        526        381        978        684   

Other operating expense (income), net

     32        32        63        79        139        158   

Losses (gains) on sales of marketable securities, net

     —          (2     —          (4     (6     (10

Other expense (income), net

     42        (19     110        (4     367        (58

Deferred income taxes

     21        (43     (58     (81     (243     20   

Excess tax benefits from stock-based compensation

     —          (85     —          (125     (304     (126

Changes in operating assets and liabilities:

            

Inventories

     (30     (124     505        622        (1,116     (1,224

Accounts receivable, net and other

     (211     (166     518        580        (922     (572

Accounts payable

     —          180        (4,187     (4,078     1,962        1,453   

Accrued expenses and other

     (77     59        (780     (470     728        716   

Additions to unearned revenue

     516        382        1,200        779        2,217        1,376   

Amortization of previously unearned revenue

     (460     (333     (921     (602     (1,840     (1,151
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     880        594        (1,492     (1,844     4,532        3,222   

INVESTING ACTIVITIES:

            

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

     (855     (657     (1,526     (1,043     (4,267     (2,123

Acquisitions, net of cash acquired, and other

     (148     (624     (251     (673     (323     (770

Sales and maturities of marketable securities and other investments

     696        1,251        1,296        2,989        2,544        5,864   

Purchases of marketable securities and other investments

     (1,113     (565     (1,888     (1,417     (3,774     (4,485
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) investing activities

     (1,420     (595     (2,369     (144     (5,820     (1,514

FINANCING ACTIVITIES:

            

Excess tax benefits from stock-based compensation

     —          85        —          125        304        126   

Common stock repurchased

     —          —          —          (960     —          (1,237

Proceeds from long-term debt and other

     81        123        107        190        3,274        242   

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

     (290     (141     (473     (293     (748     (483
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     (209     67        (366     (938     2,830        (1,352

Foreign-currency effect on cash and cash equivalents

     (28     (19     (153     (8     (173     (68
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     (777     47        (4,380     (2,934     1,369        288   

CASH AND CASH EQUIVALENTS, END OF PERIOD

   $ 3,704      $ 2,335      $ 3,704      $ 2,335      $ 3,704      $ 2,335   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION:

            

Cash paid for interest on long-term debt

   $ 39      $ 8      $ 52      $ 14      $ 68      $ 22   

Cash paid for income taxes (net of refunds)

     34        20        120        39        193        66   

Property and equipment acquired under capital leases

     447        207        787        356        1,233        699   

Property and equipment acquired under build-to-suit leases

     244        15        394        31        392        125   


AMAZON.COM, INC.

Consolidated Statements of Operations

(in millions, except per share data)

(unaudited)

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2013     2012     2013     2012  

Net product sales

   $ 12,752      $ 10,791      $ 26,023      $ 22,040   

Net services sales

     2,952        2,043        5,751        3,979   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total net sales

     15,704        12,834        31,774        26,019   

Operating expenses (1):

        

Cost of sales

     11,209        9,488        23,010        19,515   

Fulfillment

     1,837        1,356        3,633        2,651   

Marketing

     675        537        1,307        1,017   

Technology and content

     1,586        1,082        2,969        2,027   

General and administrative

     286        232        531        432   

Other operating expense (income), net

     32        32        64        79   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     15,625        12,727        31,514        25,721   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     79        107        260        298   

Interest income

     9        10        19        22   

Interest expense

     (33     (21     (66     (42

Other income (expense), net

     (38     50        (115     (49
  

 

 

   

 

 

   

 

 

   

 

 

 

Total non-operating income (expense)

     (62     39        (162     (69
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     17        146        98        229   

Benefit (provision) for income taxes

     (13     (109     6        (151

Equity-method investment activity, net of tax

     (11     (30     (29     59   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ (7   $ 7      $ 75      $ 137   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per share

   $ (0.02   $ 0.02      $ 0.16      $ 0.30   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per share

   $ (0.02   $ 0.01      $ 0.16      $ 0.30   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares used in computation of earnings per share:

        

Basic

     456        451        455        452   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     456        458        463        459   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

        

(1)    Includes stock-based compensation as follows:

        

Fulfillment

   $ 81      $ 58      $ 142      $ 94   

Marketing

     24        16        40        28   

Technology and content

     155        112        274        198   

General and administrative

     38        35        70        61   


AMAZON.COM, INC.

Consolidated Statements Of Comprehensive Income (Loss)

(in millions)

(unaudited)

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2013     2012     2013     2012  

Net income (loss)

   $ (7   $ 7      $ 75      $ 137   

Other comprehensive income (loss):

        

Foreign currency translation adjustments, net of tax of $(4), $17, $(13), and $(21)

     7        (151     (71     (14

Net change in unrealized gains on available-for-sale securities:

        

Unrealized gains (losses), net of tax of $3, $0, $4, and $(3)

     (7     (1     (9     6   

Reclassification adjustment for losses (gains) included in “Other income (expense), net,” net of tax effect of $0, $0, $0, and $1

     —          (2     —          (4
  

 

 

   

 

 

   

 

 

   

 

 

 

Net unrealized gains (losses) on available-for-sale securities

     (7     (3     (9     2   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other comprehensive income (loss)

     —          (154     (80     (12
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income (loss)

   $ (7   $ (147   $ (5   $ 125   
  

 

 

   

 

 

   

 

 

   

 

 

 


AMAZON.COM, INC.

Segment Information

(in millions)

(unaudited)

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2013     2012     2013     2012  

North America

        

Net sales

   $ 9,495      $ 7,326      $ 18,886      $ 14,754   

Segment operating expenses (1)

     9,086        6,982        18,020        14,061   
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment operating income

   $ 409      $ 344      $ 866      $ 693   
  

 

 

   

 

 

   

 

 

   

 

 

 

International

        

Net sales

   $ 6,209      $ 5,508      $ 12,888      $ 11,265   

Segment operating expenses (1)

     6,209        5,492        12,904        11,200   
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment operating income (loss)

   $ —        $ 16      $ (16   $ 65   
  

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated

        

Net sales

   $ 15,704      $ 12,834      $ 31,774      $ 26,019   

Segment operating expenses (1)

     15,295        12,474        30,924        25,261   
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment operating income

     409        360        850        758   

Stock-based compensation

     (298     (221     (526     (381

Other operating income (expense), net

     (32     (32     (64     (79
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     79        107        260        298   

Total non-operating income (expense)

     (62     39        (162     (69

Benefit (provision) for income taxes

     (13     (109     6        (151

Equity-method investment activity, net of tax

     (11     (30     (29     59   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ (7   $ 7      $ 75      $ 137   
  

 

 

   

 

 

   

 

 

   

 

 

 

Segment Highlights:

        

Y/Y net sales growth:

        

North America

     30     36     28     36

International

     13        22        14        27   

Consolidated

     22        29        22        32   

Y/Y segment operating income growth (decline):

        

North America

     19     61     25     37

International

     (99     (91     (125     (81

Consolidated

     14        (7     12        (11

Net sales mix:

        

North America

     60     57     59     57

International

     40        43        41        43   
  

 

 

   

 

 

   

 

 

   

 

 

 
     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)

(unaudited)

 

     Three Months Ended
June 30,
    Six Months Ended
June 30,
 
     2013     2012     2013     2012  

North America

        

Media

   $ 2,173      $ 1,874      $ 4,686      $ 4,070   

Electronics and other general merchandise

     6,478        4,937        12,606        9,710   

Other (1)

     844        515        1,594        974   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total North America

   $ 9,495      $ 7,326      $ 18,886      $ 14,754   
  

 

 

   

 

 

   

 

 

   

 

 

 

International

        

Media

   $ 2,224      $ 2,245      $ 4,769      $ 4,758   

Electronics and other general merchandise

     3,937        3,224        8,024        6,426   

Other (1)

     48        39        95        81   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total International

   $ 6,209      $ 5,508      $ 12,888      $ 11,265   
  

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated

        

Media

   $ 4,397      $ 4,119      $ 9,455      $ 8,828   

Electronics and other general merchandise

     10,415        8,161        20,629        16,136   

Other (1)

     892        554        1,690        1,055   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total consolidated

   $ 15,704      $ 12,834      $ 31,774      $ 26,019   
  

 

 

   

 

 

   

 

 

   

 

 

 

Y/Y Net Sales Growth:

        

North America:

        

Media

     16     18     15     17

Electronics and other general merchandise

     31        41        30        43   

Other

     64        58        64        62   

Total North America

     30        36        28        36   

International:

        

Media

     (1 )%      8     —       15

Electronics and other general merchandise

     22        34        25        37   

Other

     22        14        18        19   

Total International

     13        22        14        27   

Consolidated:

        

Media

     7     13     7     16

Electronics and other general merchandise

     28        38        28        41   

Other

     61        54        60        57   

Total consolidated

     22        29        22        32   

Y/Y Net Sales Growth Excluding Effect of Exchange Rates:

        

International:

        

Media

     7     12     7     17

Electronics and other general merchandise

     29        42        31        42   

Other

     27        20        22        23   

Total International

     20        28        21        30   

Consolidated:

        

Media

     11     15     11     17

Electronics and other general merchandise

     30        42        30        42   

Other

     61        55        61        58   

Total consolidated

     25        32        25        33   

Consolidated Net Sales Mix:

        

Media

     28     32     30     34

Electronics and other general merchandise

     66        64        65        62   

Other

     6        4        5        4   
  

 

 

   

 

 

   

 

 

   

 

 

 
     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)

 

     June 30,
2013
    December 31,
2012
 
     (unaudited)        

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 3,704      $ 8,084   

Marketable securities

     3,759        3,364   

Inventories

     5,420        6,031   

Accounts receivable, net and other

     2,861        3,364   

Deferred tax assets

     541        453   
  

 

 

   

 

 

 

Total current assets

     16,285        21,296   

Property and equipment, net

     8,789        7,060   

Deferred tax assets

     128        123   

Goodwill

     2,614        2,552   

Other assets

     1,807        1,524   
  

 

 

   

 

 

 

Total assets

   $ 29,623      $ 32,555   
  

 

 

   

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

    

Current liabilities:

    

Accounts payable

   $ 8,990      $ 13,318   

Accrued expenses and other

     5,745        5,684   
  

 

 

   

 

 

 

Total current liabilities

     14,735        19,002   

Long-term debt

     3,042        3,084   

Other long-term liabilities

     3,113        2,277   

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 — 480 and 478

    

Outstanding shares — 457 and 454

     5        5   

Treasury stock, at cost

     (1,837     (1,837

Additional paid-in capital

     8,893        8,347   

Accumulated other comprehensive loss

     (319     (239

Retained earnings

     1,991        1,916   
  

 

 

   

 

 

 

Total stockholders’ equity

     8,733        8,192   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 29,623      $ 32,555   
  

 

 

   

 

 

 


AMAZON.COM, INC.

Supplemental Financial Information and Business Metrics

(in millions, except per share data)

(unaudited)

 

     Q2 2012     Q3 2012     Q4 2012     Q1 2013     Q2 2013     Y/Y %
Change
 

Cash Flows and Shares

            

Operating cash flow — trailing twelve months (TTM)

   $ 3,222      $ 3,368      $ 4,180      $ 4,245      $ 4,532        41

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

   $ 2,123      $ 2,310      $ 3,785      $ 4,068      $ 4,267        101

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

   $ 1,099      $ 1,058      $ 395      $ 177      $ 265        (76 %) 

Free cash flow — TTM Y/Y growth (decline)

     (40 %)      (31 %)      (81 %)      (85 %)      (76 %)      N/A   

Invested capital (1)

   $ 10,250      $ 10,392      $ 11,181      $ 12,019      $ 13,115        28

Return on invested capital (2)

     11     10     4     1     2     N/A   

Common shares and stock-based awards outstanding

     468        469        470        471        474        1

Common shares outstanding

     452        453        454        455        457        1

Stock-based awards outstanding

     16        16        16        16        17        7

Stock-based awards outstanding — % of common shares outstanding

     3.6     3.6     3.5     3.4     3.8     N/A   

Results of Operations

            

Worldwide (WW) net sales

   $ 12,834      $ 13,806      $ 21,268      $ 16,070      $ 15,704        22

WW net sales — Y/Y growth, excluding F/X

     32     30     23     24     25     N/A   

WW net sales — TTM

   $ 54,325      $ 57,256      $ 61,093      $ 63,978      $ 66,848        23

WW net sales — TTM Y/Y growth, excluding F/X

     35     33     29     27     25     N/A   

Operating income (loss)

   $ 107      $ (28   $ 405      $ 181      $ 79        (26 %) 

Operating income — Y/Y growth (decline), excluding F/X

     (34 %)      (137 %)      59     1     (9 %)      N/A   

Operating margin — % of WW net sales

     0.8     (0.2 %)      1.9     1.1     0.5     N/A   

Operating income — TTM

   $ 637      $ 531      $ 676      $ 665      $ 637        0

Operating income — TTM Y/Y growth (decline), excluding F/X

     (50 %)      (48 %)      (15 %)      (6 %)      3     N/A   

Operating margin — TTM % of WW net sales

     1.2     0.9     1.1     1.0     1.0     N/A   

Net income (loss)

   $ 7      $ (274   $ 97      $ 82      $ (7     (208 %) 

Net income (loss) per diluted share

   $ 0.01      $ (0.60   $ 0.21      $ 0.18      $ (0.02     (207 %) 

Net income (loss) — TTM

   $ 377      $ 40      $ (39   $ (87   $ (101     (127 %) 

Net income (loss) per diluted share — TTM

   $ 0.82      $ 0.09      $ (0.09   $ (0.19   $ (0.22     (127 %) 

Segments

            

North America Segment:

            

Net sales

   $ 7,326      $ 7,884      $ 12,175      $ 9,391      $ 9,495        30

Net sales — Y/Y growth, excluding F/X

     36     33     23     26     30     N/A   

Net sales — TTM

   $ 30,587      $ 32,540      $ 34,813      $ 36,777      $ 38,945        27

Operating income

   $ 344      $ 291      $ 608      $ 457      $ 409        19

Operating margin — % of North America net sales

     4.7     3.7     5.0     4.9     4.3     N/A   

Operating income — TTM

   $ 1,120      $ 1,268      $ 1,592      $ 1,700      $ 1,766        58

Operating income — TTM Y/Y growth, excluding F/X

     14     34     71     72     58     N/A   

Operating margin — TTM % of North America net sales

     3.7     3.9     4.6     4.6     4.5     N/A   

International Segment:

            

Net sales

   $ 5,508      $ 5,922      $ 9,093      $ 6,679      $ 6,209        13

Net sales — Y/Y growth, excluding F/X

     28     27     23     21     20     N/A   

Net sales — TTM

   $ 23,738      $ 24,716      $ 26,280      $ 27,201      $ 27,903        18

Net sales — TTM % of WW net sales

     44     43     43     43     42     N/A   

Operating income (loss)

   $ 16      $ (59   $ 70      $ (16   $ —          (99 %) 

Operating margin — % of International net sales

     0.3     (1.0 %)      0.8     (0.2 %)      0.0     N/A   

Operating income (loss) — TTM

   $ 359      $ 183      $ 76      $ 11      $ (6     (102 %) 

Operating income — TTM Y/Y growth (decline), excluding F/X

     (57 %)      (68 %)      (77 %)      (83 %)      (82 %)      N/A   

Operating margin — TTM % of International net sales

     1.5     0.7     0.3     0.0     0.0     N/A   

Consolidated Segments:

            

Operating expenses (3)

   $ 12,474      $ 13,574      $ 20,590      $ 15,629      $ 15,295        23

Operating expenses — TTM (3)

   $ 52,846      $ 55,805      $ 59,425      $ 62,267      $ 65,087        23

Operating income

   $ 360      $ 232      $ 678      $ 441      $ 409        14

Operating margin — % of Consolidated sales

     2.8     1.7     3.2     2.7     2.6     N/A   

Operating income — TTM

   $ 1,480      $ 1,451      $ 1,668      $ 1,711      $ 1,760        19

Operating income — TTM Y/Y growth (decline), excluding F/X

     (21 %)      (15 %)      7     15     21     N/A   

Operating margin — TTM % of Consolidated net sales

     2.7     2.5     2.7     2.7     2.6     N/A   


AMAZON.COM, INC.

Supplemental Financial Information and Business Metrics

(in millions, except inventory turnover, accounts payable days and employee data)

(unaudited)

 

     Q2 2012     Q3 2012     Q4 2012     Q1 2013     Q2 2013     Y/Y %
Change
 

Supplemental

            

Supplemental North America Segment Net Sales:

            

Media

   $ 1,874      $ 2,215      $ 2,903      $ 2,513      $ 2,173        16

Media — Y/Y growth, excluding F/X

     18     15     13     14     16     N/A   

Media — TTM

   $ 8,559      $ 8,847      $ 9,189      $ 9,506      $ 9,805        15

Electronics and other general merchandise

   $ 4,937      $ 5,061      $ 8,503      $ 6,128      $ 6,478        31

Electronics and other general merchandise — Y/Y growth, excluding F/X

     41     39     24     28     31     N/A   

Electronics and other general merchandise — TTM

   $ 20,226      $ 21,652      $ 23,273      $ 24,629      $ 26,169        29

Electronics and other general merchandise — TTM % of North America net sales

     66     67     67     67     67     N/A   

Other

   $ 515      $ 608      $ 769      $ 750      $ 844        64

Other — TTM

   $ 1,802      $ 2,041      $ 2,351      $ 2,642      $ 2,971        65

Supplemental International Segment Net Sales:

            

Media

   $ 2,245      $ 2,385      $ 3,611      $ 2,545      $ 2,224        (1 %) 

Media — Y/Y growth, excluding F/X

     12     12     7     7     7     N/A   

Media — TTM

   $ 10,431      $ 10,590      $ 10,753      $ 10,785      $ 10,764        3

Electronics and other general merchandise

   $ 3,224      $ 3,497      $ 5,431      $ 4,086      $ 3,937        22

Electronics and other general merchandise — Y/Y growth, excluding F/X

     42     39     37     32     29     N/A   

Electronics and other general merchandise — TTM

   $ 13,139      $ 13,956      $ 15,355      $ 16,238      $ 16,952        29

Electronics and other general merchandise — TTM % of International net sales

     55     56     58     60     61     N/A   

Other

   $ 39      $ 40      $ 51      $ 48      $ 48        22

Other — TTM

   $ 168      $ 170      $ 172      $ 178      $ 187        11

Supplemental Worldwide Net Sales:

            

Media

   $ 4,119      $ 4,600      $ 6,514      $ 5,058      $ 4,397        7

Media — Y/Y growth, excluding F/X

     15     14     10     10     11     N/A   

Media — TTM

   $ 18,990      $ 19,437      $ 19,942      $ 20,291      $ 20,569        8

Electronics and other general merchandise

   $ 8,161      $ 8,558      $ 13,934      $ 10,214      $ 10,415        28

Electronics and other general merchandise — Y/Y growth, excluding F/X

     42     39     29     30     30     N/A   

Electronics and other general merchandise — TTM

   $ 33,365      $ 35,608      $ 38,628      $ 40,867      $ 43,121        29

Electronics and other general merchandise — TTM % of WW net sales

     61     62     63     64     65     N/A   

Other

   $ 554      $ 648      $ 820      $ 798      $ 892        61

Other — TTM

   $ 1,970      $ 2,211      $ 2,523      $ 2,820      $ 3,158        60

Balance Sheet

            

Cash and marketable securities

   $ 4,970      $ 5,248      $ 11,448      $ 7,895      $ 7,463        50

Inventory, net — ending

   $ 4,380      $ 5,065      $ 6,031      $ 5,395      $ 5,420        24

Inventory turnover, average — TTM

     10.1        9.7        9.3        9.5        9.4        (7 %) 

Property and equipment, net

   $ 5,097      $ 5,662      $ 7,060      $ 7,674      $ 8,789        72

Accounts payable — ending

   $ 7,072      $ 8,369      $ 13,318      $ 8,916      $ 8,990        27

Accounts payable days — ending

     68        75        76        68        73        8

Other

            

WW shipping revenue

   $ 469      $ 517      $ 832      $ 633      $ 646        38

WW shipping costs

   $ 1,054      $ 1,153      $ 1,798      $ 1,396      $ 1,364        29

WW net shipping costs

   $ 585      $ 636      $ 966      $ 763      $ 718        23

WW net shipping costs — % of WW net sales

     4.6     4.6     4.5     4.7     4.6     N/A   

Employees (full-time and part-time; excludes contractors & temporary personnel)

     69,100        81,400        88,400        91,300        97,000        40

 

(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

Customer Accounts

 

  •  

References to customers mean customer accounts, which are unique e-mail addresses, established either when a customer places an order or when a customer orders from other sellers on our websites. Customer accounts exclude certain customers, including customers associated with certain of our acquisitions, Amazon 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.

Seller Accounts

 

  •  

References to sellers means seller accounts, which are established when a seller receives an order from a customer account. Sellers are considered active when they have received an order from a customer during the preceding twelve-month period.

Registered Developers

 

  •  

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.

Units

 

  •  

References to units mean physical and digital units sold (net of returns and cancellations) by us and sellers at Amazon domains worldwide – for example 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, www.amazon.com.br, www.amazon.in, www.diapers.com, www.shopbop.com and www.zappos.com – as well as Amazon-owned items sold through non-Amazon domains. Units sold are paid units and do not include units associated with certain acquisitions, rental businesses, web services or advertising businesses, or Amazon gift certificates.

Contacts:

Amazon.com Investor Relations   Amazon.com Public Relations
Sean Boyle, 206/266-2171   Mary Osako, 206/266-9651
www.amazon.com/ir   www.amazon.com/pr
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