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Exhibit
Exhibit 99.1
 
AMAZON.COM ANNOUNCES SECOND QUARTER SALES UP 31% TO $30.4 BILLION

SEATTLE—(BUSINESS WIRE)—July 28, 2016—Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its second quarter ended June 30, 2016.
Operating cash flow increased 42% to $12.7 billion for the trailing twelve months, compared with $9.0 billion for the trailing twelve months ended June 30, 2015. Free cash flow increased to $7.3 billion for the trailing twelve months, compared with $4.4 billion for the trailing twelve months ended June 30, 2015. Free cash flow less lease principal repayments increased to $3.9 billion for the trailing twelve months, compared with $2.4 billion for the trailing twelve months ended June 30, 2015. Free cash flow less finance lease principal repayments and assets acquired under capital leases increased to $2.5 billion for the trailing twelve months, compared with an outflow of $492 million for the trailing twelve months ended June 30, 2015.
Common shares outstanding plus shares underlying stock-based awards totaled 495 million on June 30, 2016, compared with 488 million one year ago.
Net sales increased 31% to $30.4 billion in the second quarter, compared with $23.2 billion in second quarter 2015. The favorable impact from year-over-year changes in foreign exchange rates throughout the quarter on net sales was $166 million.
Operating income was $1.3 billion in the second quarter, compared with $464 million in second quarter 2015.
Net income was $857 million in the second quarter, or $1.78 per diluted share, compared with $92 million, or $0.19 per diluted share, in second quarter 2015.

“It’s been a busy few months for Amazon around the world, and particularly in India — where we launched a new AWS Region, introduced Prime with unlimited free shipping, and announced that Prime Video is coming soon, offering Prime members in India exclusive access to Amazon Original Series and Movies — including original content featuring top Indian creators and talent,” said Jeff Bezos, founder and CEO of Amazon.com. “The team in India is inventing at a torrid pace, and we’re very grateful to our Indian customers for their welcoming response.”
Highlights
•
The second annual Prime Day was the biggest day ever for Amazon, and was also a record day for Amazon devices globally. Compared to Prime Day 2015, worldwide orders grew by more than 60%, orders from third-party sellers with Prime Day deals nearly tripled, and Prime members saved over twice as much on deals.
•
Amazon launched Prime in India. With Prime, Indian customers in over 100 cities can enjoy unlimited free one-day and two-day delivery on hundreds of thousands of eligible products from India’s largest online shopping selection. Sellers using Fulfillment by Amazon now automatically provide customers with unlimited fast, free delivery. Prime Video is coming, offering Prime members exclusive access to Amazon Original Series and Movies, and premium movies and TV shows from Indian and global content providers.
•
Fire TV, the #1 best-selling streaming media player in the U.S., continues to add new features, including expanded Alexa integration that enables customers to ask Alexa to play TV shows and movies, music, launch apps, and more.
•
Amazon now has over 1,900 third party skills for Alexa, including new skills from Kayak, Lyft, NBC, Honeywell, and more.
•
Amazon introduced the all-new $79.99 Kindle, which is thinner and lighter compared to the previous generation Kindle at the same price, and includes built-in Bluetooth audio support and the VoiceView screen reader that enables visually impaired users to read books without an adapter.
•
Amazon Dash Button added 50 new brands to the program, which now has over 150 buttons including Campbell’s Soup, Cascade, FIJI Water, Pepperidge Farm Goldfish Crackers, and Play-Doh.
•
Amazon introduced exclusive offers on unlocked Android phones for Prime members: the all-new BLU R1 HD for $49.99 and the all-new Moto G4 for $149.99, both $50 off retail price.


•
Amazon Studios received 16 Emmy nominations for Original Series Transparent, The Man in the High Castle, Mozart in the Jungle, and Catastrophe. For the second year in a row, Transparent was nominated for Outstanding Comedy Series and Outstanding Lead Actor in a Comedy Series (Jeffrey Tambor).
•
Amazon Studios is in production on a slate of Original Series that will premiere exclusively for Prime members this fall, including new seasons of Golden Globe and Emmy award-winning Transparent, Golden Globe-winning Mozart in the Jungle, the second season of the critically-acclaimed drama The Man in the High Castle, the first seasons of Good Girls Revolt, Goliath, and Woody Allen’s first-ever TV series, and the new series from Jeremy Clarkson, Richard Hammond, and James May, The Grand Tour.
•
Amazon Original Kids Series Tumble Leaf and Niko and the Sword of Light won a combined four Daytime Emmy Awards.
•
Amazon Studios will release several critically-acclaimed films in theaters this fall, including Manchester by the Sea, The Handmaiden, and Gleason, joining Woody Allen’s recently released Café Society now in theaters. Each film will be available exclusively to Prime members through Prime Video following its theatrical release.
•
Amazon launched Amazon Video Direct, a new self-service program for creators to make their video content available to Amazon customers through many distribution options, including Prime Video, one-time purchase, rental, or ad-supported viewing.
•
Amazon Business now serves more than 400,000 businesses and generated more than $1 billion in sales in its first year. Amazon Business has more than 30,000 third-party sellers who fulfill over half of Amazon Business orders.
•
Amazon Prime Air and the U.K. government announced a partnership to advance the safe use of drones for small parcel delivery, providing Amazon with permission to trial new methods, including beyond line-of-sight operation.
•
Amazon launched the Pan-European Fulfillment Program, a service that helps sellers of all sizes more efficiently export their products to millions of Amazon customers across Europe while allowing customers to benefit from faster delivery and lower shipping costs.
•
AmazonFresh launched in London, the first international location to provide this offering. In the U.S., AmazonFresh launched in Boston, joining northern and southern California, northern New Jersey, Baltimore, New York, Philadelphia, and Seattle.
•
Since launching in Mexico one year ago, Amazon has expanded unique selection to over 50 million items and added categories including Toys & Games, Office Supplies, and Amazon Fashion.
•
Amazon.in was the most visited e-commerce site and the most downloaded mobile shopping app in India in the second quarter, according to third-party reports.
•
Amazon Marketplace announced the inaugural Women’s Entrepreneur Conference, which will be held in August in Seattle. The full-day event will bring together over 300 women entrepreneurs and business owners from around the world to network and learn from experts on how to grow, lead, and scale a business on Amazon.
•
Amazon announced that Career Choice, the program that pre-pays 95% of tuition and books for courses that teach in-demand skills, began to open-source its program roadmap and lessons learned with other companies. Since launching four years ago, over 7,000 Amazon associates across ten countries have participated in Career Choice.
•
Amazon Web Services (AWS) announced that Salesforce selected AWS as its preferred public cloud infrastructure provider. For the first time, Salesforce will expand use of AWS to Salesforce’s core services — including Sales Cloud, Service Cloud, App Cloud, Community Cloud, Analytics Cloud and more — for the company’s planned international infrastructure expansion.
•
AWS announced the industry’s first fully-managed, cloud-based file system, Amazon Elastic File System (Amazon EFS). Amazon EFS is a new service that makes it easy to set up and scale file storage in the AWS Cloud, allowing customers to create petabyte scale file systems with gigabytes of throughput that are accessible to multiple Amazon EC2 instances and can support thousands of concurrent client connections with consistent performance.
•
AWS launched its Asia Pacific (Mumbai) Region, the sixth AWS Region in Asia Pacific. With this launch, AWS provides 35 Availability Zones across 13 technology infrastructure regions globally. 
•
AWS announced the availability of X1 instances, a new Memory Optimized instance for Amazon EC2. X1 instances have 2 TB of memory — the most memory available in any cloud instance offered today by any cloud provider.  Powered by the latest Intel processors and certified by SAP, X1 instances are ideal for running in-memory databases like SAP HANA, big data processing engines like Apache Spark or Presto, and high performance computing (HPC) workloads.
•
AWS also announced that SAP business-critical applications are gaining momentum on AWS as customers including GE Oil & Gas, Kellogg’s, Brooks Brothers, Ferrara Candy Company, GPT Group, Hoya Corporation, Lionsgate, Macmillan Publishers India, RWE Czech Republic, and Bart & Associates Inc., are running SAP on AWS.
•
AWS achieved the new FedRAMP High compliance certification, giving U.S. government agencies the ability to use the AWS Cloud for highly sensitive applications and workloads like patient records, financial data, and law enforcement data.



Financial Guidance
The following forward-looking statements reflect Amazon.com’s expectations as of July 28, 2016, 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 customer spending, world events, the rate of growth of the Internet, online commerce, and cloud services, and the various factors detailed below.
Third Quarter 2016 Guidance
•
Net sales are expected to be between $31.0 billion and $33.5 billion, or to grow between 22% and 32% compared with third quarter 2015.
•
Operating income is expected to be between $50 million and $650 million, compared with $406 million in third quarter 2015.
•
This guidance assumes, among other things, that no additional business acquisitions, investments, restructurings, or legal settlements are concluded.
A conference call will be webcast live today at 2:30 p.m. PT/5:30 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 and services 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, sortation, delivery, 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, payments risks, 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, 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, which may contain material information about us, and you may subscribe to be notified of new information posted to this site.
About Amazon
Amazon is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking. Customer reviews, 1-Click shopping, personalized recommendations, Prime, Fulfillment by Amazon, AWS, Kindle Direct Publishing, Kindle, Fire tablets, Fire TV, Amazon Echo, and Alexa are some of the products and services pioneered by Amazon. For more information, visit www.amazon.com/about.





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,
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
$
12,470

 
$
10,237

 
$
15,890

 
$
14,557

 
$
10,269

 
$
5,057

OPERATING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
857

 
92

 
1,370

 
35

 
1,931

 
(188
)
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, including capitalized content costs
1,909

 
1,504

 
3,736

 
2,930

 
7,087

 
5,557

Stock-based compensation
768

 
563

 
1,312

 
969

 
2,461

 
1,755

Other operating expense (income), net
53

 
42

 
97

 
87

 
166

 
153

Losses (gains) on sales of marketable securities, net
1

 
1

 
3

 
2

 
6

 
(1
)
Other expense (income), net
31

 
18

 
(21
)
 
109

 
115

 
229

Deferred income taxes
106

 
(43
)
 
117

 
(45
)
 
243

 
(130
)
Excess tax benefits from stock-based compensation
(113
)
 
(95
)
 
(320
)
 
(117
)
 
(323
)
 
(1
)
Changes in operating assets and liabilities:
 
 
 
 
 
 
 
 
 
 
 
Inventories
(57
)
 
(27
)
 
712

 
693

 
(2,167
)
 
(1,291
)
Accounts receivable, net and other
(1,184
)
 
(430
)
 
(772
)
 
11

 
(2,538
)
 
(1,456
)
Accounts payable
977

 
373

 
(4,793
)
 
(3,876
)
 
3,377

 
2,901

Accrued expenses and other
(15
)
 
(129
)
 
(972
)
 
(1,068
)
 
1,007

 
387

Additions to unearned revenue
2,340

 
1,397

 
5,154

 
3,200

 
9,355

 
5,647

Amortization of previously unearned revenue
(2,208
)
 
(1,269
)
 
(4,318
)
 
(2,432
)
 
(7,994
)
 
(4,582
)
Net cash provided by (used in) operating activities
3,465

 
1,997

 
1,305

 
498

 
12,726

 
8,980

INVESTING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
 
Purchases of property and equipment, including internal-use software and website development, net
(1,711
)
 
(1,213
)
 
(2,890
)
 
(2,084
)
 
(5,395
)
 
(4,607
)
Acquisitions, net of cash acquired, and other
(14
)
 
(8
)
 
(30
)
 
(374
)
 
(452
)
 
(1,287
)
Sales and maturities of marketable securities
931

 
470

 
2,069

 
845

 
4,249

 
2,639

Purchases of marketable securities
(1,645
)
 
(625
)
 
(2,281
)
 
(1,610
)
 
(4,762
)
 
(3,379
)
Net cash provided by (used in) investing activities
(2,439
)
 
(1,376
)
 
(3,132
)
 
(3,223
)
 
(6,360
)
 
(6,634
)
FINANCING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
 
Excess tax benefits from stock-based compensation
113

 
95

 
320

 
117

 
323

 
1

Proceeds from long-term debt and other
66

 
44

 
75

 
226

 
202

 
6,236

Repayments of long-term debt and other
(70
)
 
(215
)
 
(245
)
 
(531
)
 
(1,366
)
 
(797
)
Principal repayments of capital lease obligations
(1,116
)
 
(580
)
 
(1,917
)
 
(1,082
)
 
(3,298
)
 
(1,832
)
Principal repayments of finance lease obligations
(32
)
 
(35
)
 
(61
)
 
(74
)
 
(108
)
 
(155
)
Net cash provided by (used in) financing activities
(1,039
)
 
(691
)
 
(1,828
)
 
(1,344
)
 
(4,247
)
 
3,453

Foreign currency effect on cash and cash equivalents
64

 
102

 
286

 
(219
)
 
133

 
(587
)
Net increase (decrease) in cash and cash equivalents
51

 
32

 
(3,369
)
 
(4,288
)
 
2,252

 
5,212

CASH AND CASH EQUIVALENTS, END OF PERIOD
$
12,521

 
$
10,269

 
$
12,521

 
$
10,269

 
$
12,521

 
$
10,269

SUPPLEMENTAL CASH FLOW INFORMATION:
 
 
 
 
 
 
 
 
 
 
 
Cash paid for interest on long-term debt
$
143

 
$
152

 
$
145

 
$
169

 
$
301

 
$
212

Cash paid for interest on capital and finance lease obligations
48

 
35

 
95

 
67

 
180

 
119

Cash paid for income taxes (net of refunds)
88

 
65

 
226

 
119

 
380

 
188

Property and equipment acquired under capital leases
1,422

 
1,384

 
2,297

 
2,338

 
4,676

 
4,710

Property and equipment acquired under build-to-suit leases
231

 
153

 
582

 
256

 
870

 
813



AMAZON.COM, INC.
Consolidated Statements of Operations
(in millions, except per share data)
(unaudited)

  
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
2016
 
2015
 
2016
 
2015
Net product sales
$
21,116

 
$
17,104

 
$
41,697

 
$
34,187

Net service sales
9,288

 
6,081

 
17,835

 
11,714

Total net sales
30,404

 
23,185

 
59,532

 
45,901

Operating expenses:
 
 
 
 
 
 
 
Cost of sales
19,180

 
15,160

 
38,047

 
30,555

Fulfillment
3,878

 
2,876

 
7,565

 
5,634

Marketing
1,546

 
1,150

 
2,982

 
2,233

Technology and content
3,880

 
3,020

 
7,405

 
5,774

General and administrative
580

 
467

 
1,077

 
894

Other operating expense (income), net
55

 
48

 
100

 
92

Total operating expenses
29,119

 
22,721

 
57,176

 
45,182

Operating income
1,285

 
464

 
2,356

 
719

Interest income
24

 
12

 
45

 
23

Interest expense
(116
)
 
(114
)
 
(233
)
 
(228
)
Other income (expense), net
(14
)
 
—

 
66

 
(131
)
Total non-operating income (expense)
(106
)
 
(102
)
 
(122
)
 
(336
)
Income before income taxes
1,179

 
362

 
2,234

 
383

Provision for income taxes
(307
)
 
(266
)
 
(782
)
 
(337
)
Equity-method investment activity, net of tax
(15
)
 
(4
)
 
(82
)
 
(11
)
Net income
$
857

 
$
92

 
$
1,370

 
$
35

Basic earnings per share
$
1.81

 
$
0.20

 
$
2.90

 
$
0.07

Diluted earnings per share
$
1.78

 
$
0.19

 
$
2.84

 
$
0.07

Weighted-average shares used in computation of earnings per share:
 
 
 
 
 
 
 
Basic
473

 
467

 
472

 
466

Diluted
483

 
476

 
482

 
475




AMAZON.COM, INC.
Consolidated Statements of Comprehensive Income (Loss)
(in millions)
(unaudited)

 
  
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
2016
 
2015
 
2016
 
2015
Net income
$
857

 
$
92

 
$
1,370

 
$
35

Other comprehensive income (loss):
 
 
 
 
 
 
 
Foreign currency translation adjustments, net of tax of $36, $1, $13, and $0
11

 
128

 
113

 
(114
)
Net change in unrealized gains (losses) on available-for-sale securities:
 
 
 
 
 
 
 
Unrealized gains (losses), net of tax of $(17), $(8), $(17), and $(8)
31

 
6

 
37

 
7

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

 
1

 
2

 
1

Net unrealized gains (losses) on available-for-sale securities
32

 
7

 
39

 
8

Total other comprehensive income (loss)
43

 
135

 
152

 
(106
)
Comprehensive income (loss)
$
900

 
$
227

 
$
1,522

 
$
(71
)



AMAZON.COM, INC.
Segment Information
(in millions)
(unaudited)
 
  
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
2016
 
2015
 
2016
 
2015
North America
 
 
 
 
 
 
 
Net sales
$
17,674

 
$
13,796

 
$
34,670

 
$
27,202

Operating expenses
16,517

 
13,093

 
32,590

 
25,982

Operating income before stock-based compensation and other
1,157

 
703

 
2,080

 
1,220

Stock-based compensation and other
455

 
355

 
790

 
617

Operating income
$
702

 
$
348

 
$
1,290

 
$
603

International
 
 
 
 
 
 
 
Net sales
$
9,844

 
$
7,565

 
$
19,410

 
$
15,310

Operating expenses
9,756

 
7,584

 
19,301

 
15,405

Operating income (loss) before stock-based compensation and other
88

 
(19
)
 
109

 
(95
)
Stock-based compensation and other
223

 
170

 
364

 
288

Operating income (loss)
$
(135
)
 
$
(189
)
 
$
(255
)
 
$
(383
)
AWS
 
 
 
 
 
 
 
Net sales
$
2,886

 
$
1,824

 
$
5,452

 
$
3,389

Operating expenses
2,023

 
1,433

 
3,873

 
2,734

Operating income before stock-based compensation and other
863

 
391

 
1,579

 
655

Stock-based compensation and other
145

 
86

 
258

 
156

Operating income
$
718

 
$
305

 
$
1,321

 
$
499

Consolidated
 
 
 
 
 
 
 
Net sales
$
30,404

 
$
23,185

 
$
59,532

 
$
45,901

Operating expenses
28,296

 
22,110

 
55,764

 
44,121

Operating income before stock-based compensation and other
2,108

 
1,075

 
3,768

 
1,780

Stock-based compensation and other
823

 
611

 
1,412

 
1,061

Operating income
1,285

 
464

 
2,356

 
719

Total non-operating income (expense)
(106
)
 
(102
)
 
(122
)
 
(336
)
Provision for income taxes
(307
)
 
(266
)
 
(782
)
 
(337
)
Equity-method investment activity, net of tax
(15
)
 
(4
)
 
(82
)
 
(11
)
Net income
$
857

 
$
92

 
$
1,370

 
$
35

Segment Highlights:
 
 
 
 
 
 
 
Y/Y net sales growth:
 
 
 
 
 
 
 
North America
28
%
 
26
%
 
27
%
 
25
%
International
30

 
3

 
27

 
1

AWS
58

 
81

 
61

 
65

Consolidated
31

 
20

 
30

 
17

Net sales mix:
 
 
 
 
 
 
 
North America
58
%
 
59
%
 
58
%
 
59
%
International
32

 
33

 
33

 
33

AWS
10

 
8

 
9

 
8

Consolidated
100
%
 
100
%
 
100
%
 
100
%



AMAZON.COM, INC.
Supplemental Net Sales Information
(in millions)
(unaudited)
  
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
2016
 
2015
 
2016
 
2015
Net Sales:
 
 
 
North America
 
 
 
 
 
 
 
Media
$
2,928

 
$
2,620

 
$
6,136

 
$
5,589

Electronics and other general merchandise
14,459

 
10,987

 
27,970

 
21,237

Other (1)
287

 
189

 
564

 
376

Total North America
$
17,674

 
$
13,796

 
$
34,670

 
$
27,202

International
 
 
 
 
 
 
 
Media
$
2,283

 
$
2,094

 
$
4,763

 
$
4,413

Electronics and other general merchandise
7,504

 
5,425

 
14,537

 
10,804

Other (1)
57

 
46

 
110

 
93

Total International
$
9,844

 
$
7,565

 
$
19,410

 
$
15,310

 
 
 
 
 
 
 
 
Year-over-year Percentage Growth:
 
 
 
 
 
 
 
North America
 
 
 
 
 
 
 
Media
12
%
 
6
 %
 
10
%
 
6
 %
Electronics and other general merchandise
32

 
31

 
32

 
31

Other
52

 
16

 
50

 
19

Total North America
28

 
26

 
27

 
25

International
 
 
 
 
 
 
 
Media
9
%
 
(12
)%
 
8
%
 
(12
)%
Electronics and other general merchandise
38

 
10

 
35

 
7

Other
25

 
(7
)
 
18

 
(10
)
Total International
30

 
3

 
27

 
1

Year-over-year Percentage Growth, excluding the effect of foreign exchange rates:
 
 
 
 
 
 
 
North America
 
 
 
 
 
 
 
Media
12
%
 
7
 %
 
10
%
 
6
 %
Electronics and other general merchandise
32

 
32

 
32

 
31

Other
52

 
16

 
50

 
19

Total North America
28

 
26

 
28

 
25

International
 
 
 
 
 
 
 
Media
7
%
 
3
 %
 
8
%
 
2
 %
Electronics and other general merchandise
36

 
31

 
35

 
26

Other
25

 
8

 
20

 
5

Total International
28

 
22

 
27

 
18

______________________________
(1)
Includes sales from non-retail activities, such as certain advertising services and our co-branded credit card agreements.

















AMAZON.COM, INC.
Consolidated Balance Sheets
(in millions, except per share data)
 
 
June 30, 2016
 
December 31, 2015
 
(unaudited)
 
 
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
12,521

 
$
15,890

Marketable securities
4,019

 
3,918

Inventories
9,588

 
10,243

Accounts receivable, net and other
6,092

 
5,654

Total current assets
32,220

 
35,705

Property and equipment, net
25,190

 
21,838

Goodwill
3,774

 
3,759

Other assets
3,892

 
3,445

Total assets
$
65,076

 
$
64,747

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
16,123

 
$
20,397

Accrued expenses and other
9,613

 
10,372

Unearned revenue
3,851

 
3,118

Total current liabilities
29,587

 
33,887

Long-term debt
8,212

 
8,227

Other long-term liabilities
10,739

 
9,249

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 — 497 and 494
 
 
 
Outstanding shares — 474 and 471
5

 
5

Treasury stock, at cost
(1,837
)
 
(1,837
)
Additional paid-in capital
15,026

 
13,394

Accumulated other comprehensive loss
(571
)
 
(723
)
Retained earnings
3,915

 
2,545

Total stockholders’ equity
16,538

 
13,384

Total liabilities and stockholders’ equity
$
65,076

 
$
64,747




AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except per share data)
(unaudited)
 
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Y/Y %
Change
Cash Flows and Shares
 
 
 
 
 
 
 
Operating cash flow -- trailing twelve months (TTM)
$
7,845

$
8,980

$
9,823

$
11,920

$
11,258

$
12,726

42
 %
Operating cash flow -- TTM Y/Y growth
47
 %
69
%
72
%
74
%
44
%
42
%
N/A

Purchases of property and equipment, including internal-use software and website development, net -- TTM
$
4,684

$
4,607

$
4,424

$
4,589

$
4,897

$
5,395

17
 %
Principal repayments of capital lease obligations -- TTM
$
1,537

$
1,832

$
2,144

$
2,462

$
2,761

$
3,298

80
 %
Principal repayments of finance lease obligations -- TTM
$
132

$
155

$
163

$
121

$
111

$
108

(31
)%
Property and equipment acquired under capital leases -- TTM
$
4,246

$
4,710

$
4,599

$
4,717

$
4,638

$
4,676

(1
)%
Free cash flow -- TTM (1)
$
3,161

$
4,373

$
5,399

$
7,331

$
6,361

$
7,331

68
 %
Free cash flow less lease principal repayments -- TTM (2)
$
1,492

$
2,386

$
3,092

$
4,748

$
3,489

$
3,925

65
 %
Free cash flow less finance lease principal repayments and assets acquired under capital leases -- TTM (3)
$
(1,217
)
$
(492
)
$
637

$
2,493

$
1,612

$
2,547

N/A

Invested capital (4)
$
24,040

$
26,478

$
28,860

$
31,393

$
32,824

$
34,695

31
 %
Common shares and stock-based awards outstanding
483

488

489

490

490

495

1
 %
Common shares outstanding
466

468

469

471

472

474

1
 %
Stock-based awards outstanding
17

20

20

19

18

21

2
 %
Stock-based awards outstanding -- % of common shares outstanding
3.8
 %
4.4
%
4.3
%
4.1
%
3.9
%
4.4
%
N/A

Results of Operations
 
 
 
 
 
 
 
Worldwide (WW) net sales
$
22,717

$
23,185

$
25,358

$
35,747

$
29,128

$
30,404

31
 %
WW net sales -- Y/Y growth, excluding F/X
22
 %
27
%
30
%
26
%
29
%
30
%
N/A

WW net sales -- TTM
$
91,963

$
95,808

$
100,588

$
107,006

$
113,418

$
120,637

26
 %
WW net sales -- TTM Y/Y growth, excluding F/X
20
 %
22
%
24
%
26
%
28
%
29
%
N/A

Operating income
$
255

$
464

$
406

$
1,108

$
1,071

$
1,285

177
 %
Operating income -- Y/Y growth, excluding F/X
90
 %
N/A

N/A

84
%
300
%
168
%
N/A

Operating margin -- % of WW net sales
1.1
 %
2.0
%
1.6
%
3.1
%
3.7
%
4.2
%
N/A

Operating income -- TTM
$
287

$
765

$
1,715

$
2,233

$
3,049

$
3,871

406
 %
Operating income -- TTM Y/Y growth (decline), excluding F/X
(56
)%
35
%
N/A

N/A

933
%
388
%
N/A

Operating margin -- TTM % of WW net sales
0.3
 %
0.8
%
1.7
%
2.1
%
2.7
%
3.2
%
N/A

Net income (loss)
$
(57
)
$
92

$
79

$
482

$
513

$
857

836
 %
Net income (loss) per diluted share
$
(0.12
)
$
0.19

$
0.17

$
1.00

$
1.07

$
1.78

822
 %
Net income (loss) -- TTM
$
(405
)
$
(188
)
$
328

$
596

$
1,166

$
1,931

N/A

Net income (loss) per diluted share -- TTM
$
(0.88
)
$
(0.41
)
$
0.69

$
1.25

$
2.43

$
4.02

N/A

______________________________
(1)
Free cash flow is cash flow from operations reduced by “Purchases of property and equipment, including internal-use software and website development, net,” which is included in cash flow from investing activities.
(2)
Free cash flow less lease principal repayments is free cash flow reduced by “Principal repayments of capital lease obligations,” and “Principal repayments of finance lease obligations,” which are included in cash flow from financing activities.
(3)
Free cash flow less finance lease principal repayments and assets acquired under capital leases is free cash flow reduced by “Principal repayments of finance lease obligations,” which are included in cash flow from financing activities, and property and equipment acquired under capital leases. In this measure, property and equipment acquired under capital leases is reflected as if these assets had been purchased with cash, which is not the case as these assets have been leased.
(4)
Average Total Assets minus Current Liabilities (excluding current portion of Long-Term Debt and current portion of capital lease obligations and finance lease obligations) over five quarter ends.














AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions)
(unaudited)

 
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Y/Y %
Change
Segments
 
 
 
 
 
 
 
North America Segment:
 
 
 
 
 
 
 
Net sales
$
13,406

$
13,796

$
15,006

$
21,501

$
16,996

$
17,674

28
 %
Net sales -- Y/Y growth, excluding F/X
24
 %
26
 %
29
 %
24
 %
27
 %
28
 %
N/A

Net sales -- TTM
$
53,432

$
56,233

$
59,540

$
63,708

$
67,299

$
71,176

27
 %
Operating income before stock-based compensation and other:
 
 
 
 
 
 
 
Operating income
$
517

$
703

$
528

$
1,003

$
924

$
1,157

65
 %
Operating income -- Y/Y growth, excluding F/X
77
 %
111
 %
N/A

36
 %
78
 %
64
 %
N/A

Operating margin -- % of North America net sales
3.9
 %
5.1
 %
3.5
 %
4.7
 %
5.4
 %
6.6
 %
N/A

Operating income -- TTM
$
1,520

$
1,893

$
2,480

$
2,751

$
3,157

$
3,611

91
 %
Operating margin -- TTM % of North America net sales
2.8
 %
3.4
 %
4.2
 %
4.3
 %
4.7
 %
5.1
 %
N/A

Operating income:
 
 
 
 
 
 
 
Operating income
$
254

$
348

$
186

$
636

$
588

$
702

102
 %
Operating income -- Y/Y growth, excluding F/X








129
 %
100
 %
N/A

Operating margin -- % of North America net sales
1.9
 %
2.5
 %
1.2
 %
3.0
 %
3.5
 %
4.0
 %
N/A

Operating income -- TTM






$
1,425

$
1,759

$
2,113

170
 %
Operating margin -- TTM % of North America net sales






2.2
 %
2.6
 %
3.0
 %
N/A

International Segment:
 
 
 
 
 
 
 
Net sales
$
7,745

$
7,565

$
8,267

$
11,841

$
9,566

$
9,844

30
 %
Net sales -- Y/Y growth, excluding F/X
14
 %
22
 %
24
 %
22
 %
26
 %
28
 %
N/A

Net sales -- TTM
$
33,371

$
33,598

$
34,154

$
35,418

$
37,239

$
39,518

18
 %
Operating income (loss) before stock-based compensation and other:
 
 
 
 
 
 
 
Operating income (loss)
$
(76
)
$
(19
)
$
(56
)
$
60

$
20

$
88

N/A

Operating income/loss -- Y/Y growth (decline), excluding F/X
N/A

N/A

N/A

65
 %
N/A

N/A

N/A

Operating margin -- % of International net sales
(1.0
)%
(0.2
)%
(0.7
)%
0.5
 %
0.2
 %
0.9
 %
N/A

Operating income (loss) -- TTM
$
(188
)
$
(205
)
$
(86
)
$
(91
)
$
6

$
113

N/A

Operating margin -- TTM % of International net sales
(0.6
)%
(0.6
)%
(0.3
)%
(0.3
)%
—
 %
0.3
 %
N/A

Operating income (loss):
 
 
 
 
 
 
 
Operating income (loss)
$
(194
)
$
(189
)
$
(208
)
$
(108
)
$
(121
)
$
(135
)
(29
)%
Operating income/loss -- Y/Y growth (decline), excluding F/X








(27
)%
(8
)%
N/A

Operating margin -- % of International net sales
(2.5
)%
(2.5
)%
(2.5
)%
(0.9
)%
(1.3
)%
(1.4
)%
N/A

Operating income (loss) -- TTM






$
(699
)
$
(626
)
$
(571
)
N/A

Operating margin -- TTM % of International net sales






(2.0
)%
(1.7
)%
(1.4
)%
N/A





AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions)
(unaudited)

 
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Y/Y %
Change
Segments (continued)
 
 
 
 
 
 
 
AWS Segment:
 
 
 
 
 
 
 
Net sales
$
1,566

$
1,824

$
2,085

$
2,405

$
2,566

$
2,886

58
%
Net sales -- Y/Y growth, excluding F/X
49
 %
81
%
78
%
69
%
64
%
58
%
N/A

Net sales -- TTM
$
5,160

$
5,977

$
6,894

$
7,880

$
8,880

$
9,943

66
%
Operating income before stock-based compensation and other:
 
 
 
 
 
 
 
Operating income
$
265

$
391

$
521

$
687

$
716

$
863

121
%
Operating income -- Y/Y growth (decline), excluding F/X
(13
)%
314
%
353
%
161
%
161
%
121
%
N/A

Operating margin -- % of AWS net sales
16.9
 %
21.4
%
25.0
%
28.5
%
27.9
%
29.9
%
N/A

Operating income -- TTM
$
680

$
993

$
1,417

$
1,863

$
2,315

$
2,787

181
%
Operating margin -- TTM % of AWS net sales
13.2
 %
16.6
%
20.6
%
23.6
%
26.1
%
28.0
%
N/A

Operating income:
 
 
 
 
 
 
 
Operating income
$
195

$
305

$
428

$
580

$
604

$
718

135
%
Operating income -- Y/Y growth, excluding F/X








198
%
136
%
N/A

Operating margin -- % of AWS net sales
12.4
 %
16.7
%
20.5
%
24.1
%
23.5
%
24.9
%
N/A

Operating income -- TTM






$
1,507

$
1,916

$
2,329

N/A

Operating margin -- TTM % of AWS net sales






19.1
%
21.6
%
23.4
%
N/A

Consolidated Segments Before Stock-Based Compensation and Other:
 
 
 
 
 
 
 
Operating income
$
706

$
1,075

$
993

$
1,750

$
1,660

$
2,108

96
%
Operating income -- Y/Y growth, excluding F/X
45
 %
168
%
N/A

67
%
128
%
92
%
N/A

Operating margin -- % of Consolidated net sales
3.1
 %
4.6
%
3.9
%
4.9
%
5.7
%
6.9
%
N/A

Operating income -- TTM
$
2,012

$
2,682

$
3,811

$
4,523

$
5,478

$
6,511

143
%
Operating margin -- TTM % of Consolidated net sales
2.2
 %
2.8
%
3.8
%
4.2
%
4.8
%
5.4
%
N/A














AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except inventory turnover, accounts payable days, and employee data)
(unaudited)

 
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Y/Y %
Change
Supplemental
 
 
 
 
 
 
 
Supplemental North America Segment Net Sales:
 
 
 
 
 
 
 
  Media
$
2,969

$
2,620

$
2,963

$
3,931

$
3,208

$
2,928

12
 %
  Media -- Y/Y growth, excluding F/X
5
%
7
%
9
%
12
%
8
%
12
%
N/A

  Media -- TTM
$
11,711

$
11,867

$
12,096

$
12,483

$
12,722

$
13,030

10
 %
  Electronics and other general merchandise
$
10,250

$
10,987

$
11,840

$
17,325

$
13,511

$
14,459

32
 %
  Electronics and other general merchandise -- Y/Y growth, excluding F/X
31
%
32
%
35
%
28
%
32
%
32
%
N/A

  Electronics and other general merchandise -- TTM
$
40,938

$
43,559

$
46,606

$
50,401

$
53,663

$
57,134

31
 %
  Electronics and other general merchandise -- TTM % of North America
net sales
77
%
77
%
78
%
79
%
80
%
80
%
N/A

  Other
$
187

$
189

$
203

$
245

$
277

$
287

52
 %
Supplemental International Segment Net Sales:
 
 
 
 
 
 
 
  Media
$
2,320

$
2,094

$
2,320

$
3,292

$
2,480

$
2,283

9
 %
  Media -- Y/Y growth, excluding F/X
2
%
3
%
6
%
5
%
9
%
7
%
N/A

  Media -- TTM
$
10,615

$
10,329

$
10,140

$
10,026

$
10,186

$
10,375

—
 %
  Electronics and other general merchandise
$
5,378

$
5,425

$
5,901

$
8,491

$
7,034

$
7,504

38
 %
  Electronics and other general merchandise -- Y/Y growth, excluding F/X
21
%
31
%
32
%
31
%
33
%
36
%
N/A

  Electronics and other general merchandise -- TTM
$
22,559

$
23,072

$
23,814

$
25,196

$
26,851

$
28,930

25
 %
  Electronics and other general merchandise -- TTM % of International net sales
68
%
69
%
70
%
71
%
72
%
73
%
N/A

  Other
$
47

$
46

$
46

$
58

$
52

$
57

25
 %
Balance Sheet
 
 
 
 
 
 
 
Cash and marketable securities -- ending
$
13,781

$
14,001

$
14,428

$
19,808

$
15,859

$
16,540

18
 %
Inventory, net -- ending
$
7,369

$
7,470

$
8,981

$
10,243

$
9,582

$
9,588

28
 %
Inventory turnover, average -- TTM
8.8

8.9

8.6

8.5

8.6

8.6

(3
)%
Property and equipment, net -- ending
$
17,736

$
19,479

$
20,636

$
21,838

$
23,308

$
25,190

29
 %
Accounts payable -- ending
$
11,917

$
12,391

$
14,437

$
20,397

$
14,990

$
16,123

30
 %
Accounts payable days -- ending
70

74

79

77

72

77

3
 %
Stock-based Compensation Expense
 
 
 
 
 
 
 
Fulfillment
$
90

$
132

$
122

$
137

$
116

$
186

41
 %
Marketing
$
35

$
50

$
48

$
57

$
56

$
80

62
 %
Technology and content
$
233

$
319

$
309

$
364

$
317

$
419

31
 %
General and administrative
$
49

$
62

$
65

$
48

$
55

$
83

32
 %
Total stock-based compensation expense
$
407

$
563

$
544

$
606

$
544

$
768

36%

Other
 
 
 
 
 
 
 
WW shipping revenue
$
1,299

$
1,399

$
1,494

$
2,328

$
1,820

$
2,000

43
 %
WW shipping revenue -- Y/Y growth
53
%
57
%
43
%
37
%
40
%
43
%
N/A

WW shipping costs
$
2,309

$
2,340

$
2,720

$
4,170

$
3,275

$
3,362

44
 %
WW shipping costs -- Y/Y growth
26
%
29
%
35
%
37
%
42
%
44
%
N/A

WW net shipping costs
$
1,010

$
941

$
1,226

$
1,842

$
1,455

$
1,362

45
 %
WW net shipping costs -- Y/Y growth
3
%
2
%
26
%
37
%
44
%
45
%
N/A

WW paid units -- Y/Y growth
20
%
22
%
26
%
26
%
27
%
28
%
N/A

WW seller unit mix -- % of WW paid units
44
%
45
%
46
%
47
%
48
%
49
%
N/A

Employees (full-time and part-time; excludes contractors & temporary personnel)
165,000

183,100

222,400

230,800

245,200

268,900

47
 %




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, AWS 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.

AWS Customers

•
References to AWS customers mean unique AWS customer accounts, which are unique e-mail addresses that are eligible to use AWS services. This includes AWS accounts in the AWS free tier. Multiple users accessing AWS services via one account are counted as a single account. Customers are considered active when they have had AWS usage activity during the preceding one-month period.
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.amazon.com.mx, www.amazon.com.au, www.amazon.nl, 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 AWS, certain acquisitions, rental businesses, or advertising businesses, or Amazon gift cards.

Contacts:
 
 
 
Amazon.com Investor Relations
 
Amazon.com Public Relations
Darin Manney, ir@amazon.com
 
Ty Rogers, amazon-pr@amazon.com
www.amazon.com/ir
 
www.amazon.com/about


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