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Press release from Business Wire

Amazon.com Announces Third Quarter Sales up 24% to $17.09 Billion

Thursday, October 24, 2013

Amazon.com Announces Third Quarter Sales up 24% to $17.09 Billion

16:05 EDT Thursday, October 24, 2013

SEATTLE (Business Wire) -- Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its third quarter ended September 30, 2013.

Operating cash flow increased 48% to $4.98 billion for the trailing twelve months, compared with $3.37 billion for the trailing twelve months ended September 30, 2012. Free cash flow decreased 63% to $388 million for the trailing twelve months, compared with $1.06 billion for the trailing twelve months ended September 30, 2012. Free cash flow for the trailing twelve months ended September 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 475 million on September 30, 2013, compared with 469 million one year ago.

Net sales increased 24% to $17.09 billion in the third quarter, compared with $13.81 billion in third quarter 2012. Excluding the $332 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales grew 26% compared with third quarter 2012.

Operating loss was $25 million in the third quarter, compared with an operating loss of $28 million in third quarter 2012. The unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating loss was $7 million.

Net loss was $41 million in the third quarter, or $0.09 per diluted share, compared with a net loss of $274 million, or $0.60 per diluted share, in third quarter 2012. The third quarter 2012 includes a loss of $169 million, or $0.37 per diluted share, related to our equity-method share of the losses reported by LivingSocial, primarily attributable to its impairment charge of certain assets, including goodwill.

“It's been a busy few months—we launched a new Paperwhite and new Kindle Fires to positive reviews and surprised people with the revolutionary Mayday button—average Mayday response times are just 11 seconds!” said Jeff Bezos, founder and CEO of Amazon.com. “And that's not all. In the last 90 days, our AWS team got back to work on a big government contract, we brought 8 million square feet of fulfillment center capacity online, deployed 1,382 Kiva robots in three FCs, provided a new venue for artists to reach customers, signed up millions of new Prime members, announced Kindle MatchBook, Login & Pay, and nine new original TV pilots, joined the Code.org coalition, acquired TenMarks—a company that helps kids with math, scored a win for customers who want to use Kindles on airplanes even during takeoff and landing (also, a big hat tip to Nick Bilton on that one), began hiring and training 70,000 new U.S. FC employees to help serve customers this holiday season, and saw the Kindle Million Club grow to include 14 KDP authors.”

Highlights

  • Amazon introduced the third generation of Kindle Fire—the all-new Kindle Fire HDX. The new Kindle Fire HDX tablets combine groundbreaking hardware, the latest version of Fire OS, and exclusive new features and services like X-Ray for Music, Second Screen, Prime Instant Video downloads, and the revolutionary new Mayday button.
  • The new Kindle Fire HDX family features stunning exclusive display with exceptional pixel density (323 ppi for 7”, 339 ppi for 8.9”), a powerful quad-core processor running at 2.2 GHz with over 3x the processing power compared to the previous generation, and a startlingly light design—at just 13.2 ounces, the 8.9” Kindle Fire HDX is the lightest large-screen tablet, 34% lighter than the previous generation.
  • Amazon also introduced the new $139 Kindle Fire HD, with a slimmer and lighter design, HD display, high-performance processor, and dual speakers with Dolby Digital Plus audio.
  • Kindle Fire HDX includes the new Mayday button, delivering revolutionary live tech support—one touch connects you to an Amazon expert who can guide you remotely through any feature—24x7, 365 days a year, and it's free.
  • Amazon introduced new enterprise and productivity features in Fire OS 3.0 “Mojito,”—the next generation of software and services that powers the Kindle Fire tablets—including encryption, secure Wi-Fi, a native VPN client, Kerberos support for Intranet access, integration with leading Mobile Device Management (MDM) solutions, a new email client, built-in OfficeSuite support and wireless printing capabilities. These features will be available on the new Kindle Fire HD and Kindle Fire HDX.
  • Amazon announced that the world's best-selling e-reader—Kindle Paperwhite—is getting even better. The all-new Kindle Paperwhite features new display technology with higher contrast, the next generation built-in light, a faster processor, the latest touch technology, and exclusive new features designed from the ground up for readers, including Kindle Page Flip, Goodreads, Kindle FreeTime, Smart Lookup, Vocabulary Builder, and more.
  • Amazon introduced Kindle MatchBook, a new benefit that gives customers the option to buy—for $2.99, $1.99, $0.99, or free—the Kindle edition of the print books they have purchased new from Amazon. Print purchases all the way back to 1995—when Amazon first opened its online bookstore—will qualify once a publisher enrolls a title in Kindle MatchBook.
  • Amazon launched the Mexico Kindle Store, offering Mexican customers over 2 million titles, hundreds of thousands of which are exclusive, and more than 70,000 in Spanish. In addition, Amazon announced that Kindle and Kindle Paperwhite are now on sale locally in Mexico at Gandhi stores. For more details, visit www.amazon.com.mx.
  • Building on a successful first round of pilots last April, Amazon announced it has given the green light for the production of six new pilots for kids, as well as three new half-hour pilots created by a mix of Oscar, Emmy and Tony-nominated writers. Customers will be invited to watch, provide feedback and help determine which pilots should be produced as series to air exclusively on Prime Instant Video and Amazon's LOVEFiLM in the UK in 2014.
  • Amazon launched Appstore Developer Select, a program for developers who optimize their apps and games for Amazon's Appstore and Fire OS. Developers in the Appstore Developer Select program will receive a broad range of marketing and economic benefits that will help improve app discovery and increase sales even further. Appstore Developer Select apps receive premium placement in the Amazon Appstore, 500,000 ad impressions on the Amazon Mobile Ad Network, and automatic inclusion in the Amazon Appstore Coins Reward category. Customers will receive Amazon Coins when they purchase Appstore Developer Select apps, games, and in-app items. Developers in the program also receive credits equaling 25% off their first $2,000 in AWS services annually.
  • Amazon released Login and Pay with Amazon, a new service that streamlines how customers transact with online merchants, allowing participating companies to empower customers to go from browsing to buying in just a few clicks using their Amazon account information.
  • Amazon.com, Inc. announced the launch of Amazon Art, a marketplace that gives customers direct access to more than 40,000 works of fine art from over 150 galleries and dealers. The store is one of the largest online collections of original and limited edition artwork for purchase directly from galleries and dealers. The new store features easy-to-use discovery tools to help open the art world to customers and offers detailed information about the works of art from galleries of all sizes.
  • Amazon is creating more than 70,000 full-time seasonal jobs across its U.S. fulfillment centers this holiday season in order to meet an increase in customer demand. In 2012, Amazon converted thousands of seasonal employees into regular, full-time roles after the holidays, and expects to do the same this year. On average, seasonal employees earn 94 percent of Amazon fulfillment center employee starting wages and are eligible for health care benefits.
  • Amazon.com, Inc. acquired TenMarks, a company that is helping teachers and parents deliver innovative mathematics curriculum to students across the country.
  • Since launching the marketplace website Amazon.in last quarter, Amazon has rapidly added more selection to serve customers in India with 10 new categories launched in less than 120 days—Kindle, Consumer Electronics, Mobile Phones & Accessories, Computers & Accessories, Toys, Baby, Personal and Health Care Appliances, Watches, Fashion Jewelry, and Home and Kitchen. With Amazon.in customers can shop with ease and confidence from over nine million books, over 130,000 products from hundreds of brands, and more than 1.9 million eBooks from a constantly expanding group of retailers.
  • Amazon Web Services (AWS) introduced more than 15 new features and enhancements to its fully managed relational and NoSQL database services. Amazon Relational Database Service (RDS) now supports Oracle Statspack performance diagnostics and has expanded MySQL support, including capabilities for zero downtime data migration. Enhancements to Amazon DynamoDB include new cross-region support, a local test tool, and location-based query capabilities.
  • AWS continued to bolster its management services, making it easier to provision and manage more AWS resources with AWS CloudFormation and AWS OpsWorks, which both added support for Amazon Virtual Private Cloud (VPC). AWS also enhanced the AWS Console mobile app and introduced a new Command Line Interface.
  • AWS continued to gain momentum in the public sector and now has more than 2,400 education institutions and 600 government agencies as customers, including recent new projects with customers such as the U.S. Federal Drug Administration.

Financial Guidance

The following forward-looking statements reflect Amazon.com's expectations as of October 24, 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.

Fourth Quarter 2013 Guidance

  • Net sales are expected to be between $23.5 billion and $26.5 billion, or to grow between 10% and 25% compared with fourth quarter 2012.
  • Operating income (loss) is expected to be between $(500) million and $500 million, compared to $405 million in fourth quarter 2012.
  • This guidance includes approximately $350 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 world's best-selling and most advanced e-reader. It features new display technology with higher contrast, the next generation built-in light, a faster processor, the latest touch technology, and exclusive new features designed from the ground up for readers. Kindle, the lightest and smallest Kindle, features improved fonts and faster page turns. The new Kindle Fire HDX features a stunning exclusive 7” or 8.9” HDX display, a quad-core 2.2 GHz processor, 2x more memory, and 11 hours of battery life, as well as exclusive new features of Fire OS 3.0 including X-Ray for Music, Second Screen, Prime Instant Video downloads, and the revolutionary new Mayday button. The all-new Kindle Fire HD includes an HD display, high-performance processor and dual speakers at a breakthrough price.

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, www.amazon.in, and www.amazon.com.mx. 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
September 30,

  Nine Months Ended
September 30,
  Twelve Months Ended
September 30,
2013   2012 2013   2012 2013   2012
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 3,704 $ 2,335 $ 8,084 $ 5,269 $ 2,980 $ 2,823
OPERATING ACTIVITIES:
Net income (loss) (41 ) (274 ) 34 (137 ) 132 40
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 834 554 2,291 1,497 2,953 1,856
Stock-based compensation 281 217 808 597 1,043 756
Other operating expense (income), net 11 40 74 118 110 161
Losses (gains) on sales of marketable securities, net 1 (4 ) 1 (8 ) (8 )
Other expense (income), net 5 157 115 153 214 137
Deferred income taxes 11 (36 ) (47 ) (117 ) (195 ) (50 )
Excess tax benefits from stock-based compensation (66 ) (190 ) (239 ) (191 )
Changes in operating assets and liabilities:
Inventories (586 ) (647 ) (80 ) (25 ) (1,054 ) (1,285 )
Accounts receivable, net and other (125 ) (416 ) 393 164 (632 ) (913 )
Accounts payable 947 1,223 (3,240 ) (2,856 ) 1,686 1,828
Accrued expenses and other (72 ) 96 (853 ) (373 ) 558 703
Additions to unearned revenue 672 472 1,872 1,251 2,417 1,609
Amortization of previously unearned revenue (550 ) (373 ) (1,471 ) (975 ) (2,016 ) (1,275 )
Net cash provided by (used in) operating activities 1,388 943 (103 ) (901 ) 4,977 3,368
INVESTING ACTIVITIES:
Purchases of property and equipment, including internal-use software and website development (1,038 ) (716 ) (2,565 ) (1,759 ) (4,589 ) (2,310 )
Acquisitions, net of cash acquired, and other (1 ) (37 ) (252 ) (711 ) (287 ) (759 )
Sales and maturities of marketable securities and other investments 494 742 1,791 3,731 2,296 4,643
Purchases of marketable securities and other investments (518 ) (358 ) (2,406 ) (1,774 ) (3,934 ) (3,556 )
Net cash provided by (used in) investing activities (1,063 ) (369 ) (3,432 ) (513 ) (6,514 ) (1,982 )
FINANCING ACTIVITIES:
Excess tax benefits from stock-based compensation 66 190 239 191
Common stock repurchased (960 ) (1,237 )
Proceeds from long-term debt and other 25 109 132 300 3,189 343
Repayments of long-term debt, capital lease, and finance lease obligations (255 ) (144 ) (728 ) (437 ) (858 ) (537 )
Net cash provided by (used in) financing activities (230 ) 31 (596 ) (907 ) 2,570 (1,240 )
Foreign-currency effect on cash and cash equivalents 73   40   (81 ) 32   (141 ) 11  
Net increase (decrease) in cash and cash equivalents 168   645   (4,212 ) (2,289 ) 892   157  
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 3,872   $ 2,980   $ 3,872   $ 2,980   $ 3,872   $ 2,980  
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest on long-term debt $ 8 $ 7 $ 60 $ 21 $ 70 $ 25
Cash paid for income taxes (net of refunds) 23 21 143 60 195 75
Property and equipment acquired under capital leases 526 207 1,313 564 1,552 751
Property and equipment acquired under build-to-suit leases 269 14 663 46 647 85
 
 

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

 
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
2013   2012 2013   2012
Net product sales $ 13,808 $ 11,546 $ 39,831 $ 33,586
Net services sales 3,284   2,260   9,034   6,239  
Total net sales 17,092 13,806 48,865 39,825
Operating expenses (1):
Cost of sales 12,366 10,319 35,375 29,834
Fulfillment 2,034 1,510 5,667 4,161
Marketing 694 540 2,001 1,557
Technology and content 1,734 1,192 4,703 3,219
General and administrative 278 230 810 662
Other operating expense (income), net 11   43   74   121  
Total operating expenses 17,117   13,834   48,630   39,554  
Income (loss) from operations (25 ) (28 ) 235 271
Interest income 9 10 28 32
Interest expense (36 ) (22 ) (102 ) (65 )
Other income (expense), net 9   18   (107 ) (31 )
Total non-operating income (expense) (18 ) 6   (181 ) (64 )
Income (loss) before income taxes (43 ) (22 ) 54 207
Benefit (provision) for income taxes 12 (83 ) 18 (234 )
Equity-method investment activity, net of tax (10 ) (169 ) (38 ) (110 )
Net income (loss) $ (41 ) $ (274 ) $ 34   $ (137 )
Basic earnings per share $ (0.09 ) $ (0.60 ) $ 0.08   $ (0.30 )
Diluted earnings per share $ (0.09 ) $ (0.60 ) $ 0.07   $ (0.30 )
Weighted average shares used in computation of earnings per share:
Basic 457   452   456   452  
Diluted 457   452   464   452  
_____________
(1) Includes stock-based compensation as follows:
Fulfillment $ 70 $ 56 $ 213 $ 149
Marketing 23 16 63 43
Technology and content 154 112 428 310
General and administrative 34 33 104 95
 
 

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

 
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
2013   2012 2013   2012
Net income (loss) $ (41 ) $ (274 ) $ 34 $ (137 )
Other comprehensive income:
Foreign currency translation adjustments, net of tax of $(1), $4, $(14), and $(17) 111 30 41 16
Net change in unrealized gains on available-for-sale securities:
Unrealized gains (losses), net of tax of $(1), $(1), $3, and $(4) 1 5 (8 ) 11
Reclassification adjustment for losses (gains) included in “Other income (expense), net,” net of tax effect of $0, $1, $(1) and $2 1   (3 )   (7 )
Net unrealized gains (losses) on available-for-sale securities 2   2   (8 ) 4  
Total other comprehensive income 113   32   33   20  
Comprehensive income (loss) $ 72   $ (242 ) $ 67   $ (117 )
 
 

AMAZON.COM, INC.
Segment Information
(in millions)
(unaudited)

 
  Three Months Ended
September 30,
  Nine Months Ended
September 30,
2013   2012 2013   2012
North America
Net sales $ 10,301 $ 7,884 $ 29,186 $ 22,638
Segment operating expenses (1) 10,006   7,593   28,024   21,655  
Segment operating income $ 295   $ 291   $ 1,162   $ 983  
International
Net sales $ 6,791 $ 5,922 $ 19,679 $ 17,187
Segment operating expenses (1) 6,819   5,981   19,724   17,181  
Segment operating income (loss) $ (28 ) $ (59 ) $ (45 ) $ 6  
Consolidated
Net sales $ 17,092 $ 13,806 $ 48,865 $ 39,825
Segment operating expenses (1) 16,825   13,574   47,748   38,836  
Segment operating income 267 232 1,117 989
Stock-based compensation (281 ) (217 ) (808 ) (597 )
Other operating income (expense), net (11 ) (43 ) (74 ) (121 )
Income (loss) from operations (25 ) (28 ) 235 271
Total non-operating income (expense) (18 ) 6 (181 ) (64 )
Benefit (provision) for income taxes 12 (83 ) 18 (234 )
Equity-method investment activity, net of tax (10 ) (169 ) (38 ) (110 )
Net income (loss) $ (41 ) $ (274 ) $ 34   $ (137 )
Segment Highlights:
Y/Y net sales growth:
North America 31 % 33 % 29 % 35 %
International 15 20 15 24
Consolidated 24 27 23 30
Y/Y segment operating income growth (decline):
North America 1 % 102 % 18 % 52 %
International

(52

)

(151 ) (854 ) (99 )
Consolidated 15 (11 ) 13 (11 )
Net sales mix:
North America 60 % 57 % 60 % 57 %
International 40   43   40   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
September 30,
  Nine Months Ended
September 30,
2013   2012 2013   2012
Net Sales:
North America
Media $ 2,609 $ 2,215 $ 7,295 $ 6,285
Electronics and other general merchandise 6,732 5,061 19,337 14,771
Other (1) 960   608   2,554   1,582  
Total North America $ 10,301   $ 7,884   $ 29,186   $ 22,638  
International
Media $ 2,424 $ 2,385 $ 7,193 $ 7,142
Electronics and other general merchandise 4,316 3,497 12,340 9,924
Other (1) 51   40   146   121  
Total International $ 6,791   $ 5,922   $ 19,679   $ 17,187  
Consolidated
Media $ 5,033 $ 4,600 $ 14,488 $ 13,427
Electronics and other general merchandise 11,048 8,558 31,677 24,695
Other (1) 1,011   648   2,700   1,703  
Total consolidated $ 17,092   $ 13,806   $ 48,865   $ 39,825  
Year-over-year Percentage Growth:
North America
Media 18 % 15 % 16 % 16 %
Electronics and other general merchandise 33 39 31 42
Other 58 64 61 63
Total North America 31 33 29 35
International
Media 2 % 7 % 1 % 12 %
Electronics and other general merchandise 23 30 24 35
Other 28 7 21 15
Total International 15 20 15 24
Consolidated
Media 9 % 11 % 8 % 14 %
Electronics and other general merchandise 29 36 28 39
Other 56 59 59 58
Total consolidated 24 27 23 30
Year-over-year Percentage Growth:
Excluding the effect of exchange rates
International
Media 9 % 12 % 7 % 15 %
Electronics and other general merchandise 28 39 30 41
Other 32 13 26 20
Total International 20 27 20 29
Consolidated
Media 13 % 14 % 12 % 16 %
Electronics and other general merchandise 31 39 30 41
Other 56 60 59 59
Total consolidated 26 30 25 32
Consolidated Net Sales Mix:
Media 29 % 33 % 30 % 34 %
Electronics and other general merchandise 65 62 65 62
Other 6   5   5   4  
Total consolidated 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)

 
  September 30, 2013   December 31, 2012
(unaudited)

ASSETS

Current assets:
Cash and cash equivalents $ 3,872 $ 8,084
Marketable securities 3,817 3,364
Inventories 6,068 6,031
Accounts receivable, net and other 3,057 3,364
Deferred tax assets 520   453  
Total current assets 17,334 21,296
Property and equipment, net 9,991 7,060
Deferred tax assets 128 123
Goodwill 2,635 2,552
Other assets 1,773   1,524  
Total assets $ 31,861   $ 32,555  

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable $ 10,037 $ 13,318
Accrued expenses and other 6,098   5,684  
Total current liabilities 16,135 19,002
Long-term debt 3,043 3,084
Other long-term liabilities 3,596 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 — 481 and 478
Outstanding shares — 458 and 454 5 5
Treasury stock, at cost (1,837 ) (1,837 )
Additional paid-in capital 9,175 8,347
Accumulated other comprehensive loss (206 ) (239 )
Retained earnings 1,950   1,916  
Total stockholders' equity 9,087   8,192  
Total liabilities and stockholders' equity $ 31,861   $ 32,555  
 
 

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

 
  Q3 2012   Q4 2012   Q1 2013   Q2 2013   Q3 2013  

Y/Y %
Change

Cash Flows and Shares          
Operating cash flow -- trailing twelve months (TTM) $ 3,368 $ 4,180 $ 4,245 $ 4,532 $ 4,977 48 %
Purchases of property and equipment (incl. internal-use software & website development) -- TTM $ 2,310 $ 3,785 $ 4,068 $ 4,267 $ 4,589 99 %
Free cash flow (operating cash flow less purchases of property and equipment) -- TTM $ 1,058 $ 395 $ 177 $ 265 $ 388 (63 )%
Free cash flow -- TTM Y/Y growth (decline) (31 )% (81 )% (85 )% (76 )% (63 )% N/A
Invested capital (1) $ 10,392 $ 11,181 $ 12,019 $ 13,115 $ 14,306 38 %
Return on invested capital (2) 10 % 4 % 1 % 2 % 3 % N/A
Common shares and stock-based awards outstanding 469 470 471 474 475 1 %
Common shares outstanding 453 454 455 457 458 1 %
Stock awards outstanding 16 16 16 17 17 7 %
Stock awards outstanding -- % of common shares outstanding 3.6 % 3.5 % 3.4 % 3.8 % 3.8 % N/A
Results of Operations
Worldwide (WW) net sales $ 13,806 $ 21,268 $ 16,070 $ 15,704 $ 17,092 24 %
WW net sales -- Y/Y growth, excluding F/X 30 % 23 % 24 % 25 % 26 % N/A
WW net sales -- TTM $ 57,256 $ 61,093 $ 63,978 $ 66,848 $ 70,133 22 %
WW net sales -- TTM Y/Y growth, excluding F/X 33 % 29 % 27 % 25 % 25 % N/A
Operating income (loss) $ (28 ) $ 405 $ 181 $ 79 $ (25 ) (9 )%
Operating income -- Y/Y growth (decline), excluding F/X (137 )% 59 % 1 % (9 )% (33 )% N/A
Operating margin -- % of WW net sales (0.2 )% 1.9 % 1.1 % 0.5 % (0.1 )% N/A
Operating income -- TTM $ 531 $ 676 $ 665 $ 637 $ 640 21 %
Operating income -- TTM Y/Y growth (decline), excluding F/X (48 )% (15 )% (6 )% 3 % 27 % N/A
Operating margin -- TTM % of WW net sales 0.9 % 1.1 % 1.0 % 1.0 % 0.9 % N/A
Net income (loss) $ (274 ) $ 97 $ 82 $ (7 ) $ (41 ) (85 )%
Net income (loss) per diluted share $ (0.60 ) $ 0.21 $ 0.18 $ (0.02 ) $ (0.09 ) (85 )%
Net income (loss) -- TTM $ 40 $ (39 ) $ (87 ) $ (101 ) $ 132 229 %
Net income (loss) per diluted share -- TTM $ 0.09 $ (0.09 ) $ (0.19 ) $ (0.22 ) $ 0.28 227 %
Segments
North America Segment:
Net sales $ 7,884 $ 12,175 $ 9,391 $ 9,495 $ 10,301 31 %
Net sales -- Y/Y growth, excluding F/X 33 % 23 % 26 % 30 % 31 % N/A
Net sales -- TTM $ 32,540 $ 34,813 $ 36,777 $ 38,945 $ 41,361 27 %
Operating income $ 291 $ 608 $ 457 $ 409 $ 295 1 %
Operating margin -- % of North America net sales 3.7 % 5 % 4.9 % 4.3 % 2.9 % N/A
Operating income -- TTM $ 1,268 $ 1,592 $ 1,700 $ 1,766 $ 1,770 40 %
Operating income -- TTM Y/Y growth, excluding F/X 34 % 71 % 72 % 58 % 40 % N/A
Operating margin -- TTM % of North America net sales 3.9 % 4.6 % 4.6 % 4.5 % 4.3 % N/A
International Segment:
Net sales $ 5,922 $ 9,093 $ 6,679 $ 6,209 $ 6,791 15 %
Net sales -- Y/Y growth, excluding F/X 27 % 23 % 21 % 20 % 20 % N/A
Net sales -- TTM $ 24,716 $ 26,280 $ 27,201 $ 27,903 $ 28,772 16 %
Net sales -- TTM % of WW net sales 43 % 43 % 43 % 42 % 41 % N/A
Operating income (loss) $ (59 ) $ 70 $ (16 ) $ $ (28 ) (52 )%
Operating margin -- % of International net sales (1.0 )% 0.8 % (0.2 )% % (0.4 )% N/A
Operating income (loss) -- TTM $ 183 $ 76 $ 11 $ (6 ) $ 25 (86 )%
Operating income -- TTM Y/Y growth (decline), excluding F/X (68 )% (77 )% (83 )% (82 )% (56 )% N/A
Operating margin -- TTM % of International net sales 0.7 % 0.3 % % % 0.1 % N/A
Consolidated Segments:
Operating expenses (3) $ 13,574 $ 20,590 $ 15,629 $ 15,295 $ 16,825 24 %
Operating expenses -- TTM (3) $ 55,805 $ 59,425 $ 62,267 $ 65,087 $ 68,338 22 %
Operating income $ 232 $ 678 $ 441 $ 409 $ 267 15 %
Operating margin -- % of Consolidated sales 1.7 % 3.2 % 2.7 % 2.6 % 1.6 % N/A
Operating income -- TTM $ 1,451 $ 1,668 $ 1,711 $ 1,760 $ 1,795 24 %
Operating income -- TTM Y/Y growth (decline), excluding F/X (15 )% 7 % 15 % 21 % 26 % N/A
Operating margin -- TTM % of Consolidated net sales 2.5 % 2.7 % 2.7 % 2.6 % 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)

 
  Q3 2012   Q4 2012   Q1 2013   Q2 2013   Q3 2013  

Y/Y %
Change

Supplemental          
Supplemental North America Segment Net Sales:
Media $ 2,215 $ 2,903 $ 2,513 $ 2,173 $ 2,609 18 %
Media -- Y/Y growth, excluding F/X 15 % 13 % 14 % 16 % 18 % N/A
Media -- TTM $ 8,847 $ 9,189 $ 9,506 $ 9,805 $ 10,199 15 %
Electronics and other general merchandise $ 5,061 $ 8,503 $ 6,128 $ 6,478 $ 6,732 33 %
Electronics and other general merchandise -- Y/Y growth, excluding F/X 39 % 24 % 28 % 31 % 33 % N/A
Electronics and other general merchandise -- TTM $ 21,652 $ 23,273 $ 24,629 $ 26,169 $ 27,840 29 %
Electronics and other general merchandise -- TTM % of North America net sales 67 % 67 % 67 % 67 % 67 % N/A
Other $ 608 $ 769 $ 750 $ 844 $ 960 58 %
Other -- TTM $ 2,041 $ 2,351 $ 2,642 $ 2,971 $ 3,322 63 %
Supplemental International Segment Net Sales:
Media $ 2,385 $ 3,611 $ 2,545 $ 2,224 $ 2,424 2 %
Media -- Y/Y growth, excluding F/X 12 % 7 % 7 % 7 % 9 % N/A
Media -- TTM $ 10,590 $ 10,753 $ 10,785 $ 10,764 $ 10,803 2 %
Electronics and other general merchandise $ 3,497 $ 5,431 $ 4,086 $ 3,937 $ 4,316 23 %
Electronics and other general merchandise -- Y/Y growth, excluding F/X 39 % 37 % 32 % 29 % 28 % N/A
Electronics and other general merchandise -- TTM $ 13,956 $ 15,355 $ 16,238 $ 16,952 $ 17,771 27 %
Electronics and other general merchandise -- TTM % of International net sales 56 % 58 % 60 % 61 % 62 % N/A
Other $ 40 $ 51 $ 48 $ 48 $ 51 28 %
Other -- TTM $ 170 $ 172 $ 178 $ 187 $ 198 16 %
Supplemental Worldwide Net Sales:
Media $ 4,600 $ 6,514 $ 5,058 $ 4,397 $ 5,033 9 %
Media -- Y/Y growth, excluding F/X 14 % 10 % 10 % 11 % 13 % N/A
Media -- TTM $ 19,437 $ 19,942 $ 20,291 $ 20,569 $ 21,002 8 %
Electronics and other general merchandise $ 8,558 $ 13,934 $ 10,214 $ 10,415 $ 11,048 29 %

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

39

%

29

%

30

%

30

%

31

%

N/A

Electronics and other general merchandise -- TTM $ 35,608 $ 38,628 $ 40,867 $ 43,121 $ 45,611 28 %
Electronics and other general merchandise -- TTM % of WW net sales 62 % 63 % 64 % 65 % 65 % N/A
Other $ 648 $ 820 $ 798 $ 892 $ 1,011 56 %
Other -- TTM $ 2,211 $ 2,523 $ 2,820 $ 3,158 $ 3,520 59 %
Balance Sheet
Cash and marketable securities $ 5,248 $ 11,448 $ 7,895 $ 7,463 $ 7,689 47 %
Inventory, net -- ending $ 5,065 $ 6,031 $ 5,395 $ 5,420 $ 6,068 20 %
Inventory turnover, average -- TTM 9.7 9.3 9.5 9.4 9.2 (5 )%
Property and equipment, net $ 5,662 $ 7,060 $ 7,674 $ 8,789 $ 9,991 76 %
Accounts payable -- ending $ 8,369 $ 13,318 $ 8,916 $ 8,990 $ 10,037 20 %
Accounts payable days -- ending 75 76 68 73 75 %
Other
WW shipping revenue $ 517 $ 832 $ 633 $ 646 $ 721 39 %
WW shipping costs $ 1,153 $ 1,798 $ 1,396 $ 1,364 $ 1,532 33 %
WW net shipping costs $ 636 $ 966 $ 763 $ 718 $ 811 28 %
WW net shipping costs -- % of WW net sales 4.6 % 4.5 % 4.7 % 4.6 % 4.7 % N/A
Employees (full-time and part-time; excludes contractors & temporary personnel) 81,400 88,400 91,300 97,000 109,800 35 %
 

(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.amazon.com.mx, 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.

Amazon.com
Investor Relations
Sean Boyle, 206-266-2171
www.amazon.com/ir
or
Public Relations
Ty Rogers, 206-266-7180
www.amazon.com/pr

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