Amazon.com Announces Third Quarter Sales up 44% to $10.88 Billion; Introduced Four New Kindle Devices for the Holidays

SEATTLE--()--Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its third quarter ended September 30, 2011.

Operating cash flow increased 19% to $3.11 billion for the trailing twelve months, compared with $2.62 billion for the trailing twelve months ended September 30, 2010. Free cash flow decreased 17% to $1.53 billion for the trailing twelve months, compared with $1.83 billion for the trailing twelve months ended September 30, 2010.

Common shares outstanding plus shares underlying stock-based awards totaled 469 million on September 30, 2011, compared with 465 million a year ago.

Net sales increased 44% to $10.88 billion in the third quarter, compared with $7.56 billion in third quarter 2010. Excluding the $371 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 39% compared with third quarter 2010.

Operating income was $79 million in the third quarter, compared with $268 million in third quarter 2010. The favorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $14 million.

Net income decreased 73% to $63 million in the third quarter, or $0.14 per diluted share, compared with net income of $231 million, or $0.51 per diluted share, in third quarter 2010.

“September 28th was the biggest order day ever for Kindle, even bigger than previous holiday peak days – we introduced Kindle Fire for $199, Kindle Touch 3G for $149, Kindle Touch for $99, and our all new Kindle for only $79,” said Jeff Bezos, founder and CEO of Amazon.com. “In the three weeks since launch, orders for electronic ink Kindles are double the previous launch. And based on what we're seeing with Kindle Fire pre-orders, we're increasing capacity and building millions more than we'd already planned.”

Highlights

  • Amazon announced the Kindle Fire, a new class of Kindle for movies, TV shows, music, books, magazines, apps, games, and web browsing with all the content, free storage in the Amazon Cloud, Whispersync, vibrant color touch screen, a powerful dual-core processor, and “Amazon Silk” – Amazon’s new revolutionary web browser that accelerates the power of the mobile device by using the computing speed and power of the Amazon Web Services Cloud. Kindle Fire is only $199.
  • Amazon announced three all-new Kindle e-readers that are smaller, lighter, and more affordable than ever before. The $79 latest generation Kindle is for customers who want the lightest, most compact Kindle at an incredible price. The $99 Kindle Touch includes an easy-to-use touch screen. Kindle Touch 3G is the top of the line e-reader with the unparalleled convenience of free 3G where customers never have to hunt or pay for a Wi-Fi hotspot – you simply download and read books anytime and anywhere – all for $149. Each of these e-readers includes all the benefits of the most advanced electronic ink display that reads like real paper, even in bright sunlight.
  • Amazon.fr launched the French Kindle Store offering customers a vast selection of over 35,000 French-language Kindle books. Amazon also announced that its series of free “Buy Once, Read Everywhere” apps for the most popular devices, including iPad, iPod touch, iPhone, PCs, Macs and Android-based devices, are now available in French-language versions. In addition, Amazon announced that the all-new Kindle with French navigation is available at Amazon.fr for only 99€.
  • Amazon.com announced licensing agreements with Twentieth Century Fox and PBS that allow the millions of Amazon Prime members to instantly stream a broad selection of popular movies and TV shows from their vast libraries. These deals will bring the total number of Prime instant videos to more than 12,000 movies and TV shows from partners such as CBS, FOX, PBS, NBCUniversal, Sony, Warner Bros., and many more.
  • Amazon Publishing released 61 titles in the quarter, including Kindle bestsellers “The Detachment” by Barry Eisler, “Dove Season” by Johnny Shaw, and “A Small Fortune” by Audrey Braun. Recent acquisitions include Tim Ferriss’ “The 4-Hour Chef,” Penny Marshall’s memoir “My Mother Was Nuts,” and the epic Foreworld Series project led by Neal Stephenson and Greg Bear. Amazon Publishing also announced a new imprint, 47North, which is dedicated to science-fiction, fantasy, and horror. 47North joins sister imprints AmazonEncore, AmazonCrossing, Powered by Amazon, Montlake Romance, and Thomas & Mercer.
  • The Company launched Amazon.es, a Spanish-language website offering customers a vast selection of books, DVDs, video games, music, and consumer electronics at everyday low prices. Amazon.es’s convenient services include Amazon Premium, the local version of Amazon Prime, with unlimited free guaranteed 2-3 day delivery for an annual fee of 14.95€. The first product sold on Amazon.es was a Blu-ray pack of “Star Wars: The Complete Saga” to a new Premium customer in Madrid.
  • North America segment sales, representing the Company’s U.S. and Canadian sites, were $5.93 billion, up 44% from third quarter 2010.
  • International segment sales, representing the Company’s U.K., German, Japanese, French, Chinese, Italian and Spanish sites, were $4.94 billion, up 44% from third quarter 2010. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 33%.
  • Worldwide Media sales grew 24% to $4.15 billion. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 19%.
  • Worldwide Electronics and Other General Merchandise sales grew 59% to $6.32 billion. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 54%.
  • Amazon Web Services (AWS) announced new features to make it even easier for enterprise customers to utilize the AWS infrastructure. New services like Direct Connect, Identity and Access Management, and Virtual Private Clouds allow enterprises to reliably, securely, and cost effectively use the existing AWS infrastructure for their computing needs.
  • AWS launched GovCloud, a new AWS Region designed to allow U.S. government agencies and contractors to move more sensitive workloads into the cloud by addressing their specific regulatory and compliance requirements. AWS also announced it has received Federal Information Security Management Act (FISMA) Moderate Authorization and Accreditation from the U.S. General Services Administration.

Financial Guidance

The following forward-looking statements reflect Amazon.com’s expectations as of October 25, 2011. 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 2011 Guidance

  • Net sales are expected to be between $16.45 billion and $18.65 billion, or to grow between 27% and 44% compared with fourth quarter 2010.
  • Operating income (loss) is expected to be between $(200) million and $250 million, or between 142% decline and 47% decline compared with fourth quarter 2010.
  • This guidance includes approximately $200 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions or investments are concluded and that there are no further revisions to stock-based compensation estimates.

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

These forward-looking statements are inherently difficult to predict. Actual results could differ materially for a variety of reasons, including, in addition to the factors discussed above, the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of legal proceedings and claims, fulfillment 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. The new latest generation Kindle is the lightest, most compact Kindle ever and features the same 6-inch, most advanced electronic ink display that reads like real paper even in bright sunlight. Kindle Touch is a new addition to the Kindle family with an easy-to-use touch screen that makes it easier than ever to turn pages, search, shop, and take notes – still with all the benefits of the most advanced electronic ink display. Kindle Touch 3G is the top of the line e-reader and offers the same new design and features of Kindle Touch, with the unparalleled added convenience of free 3G. Kindle Fire is the Kindle for movies, TV shows, music, books, magazines, apps, games and web browsing with all the content, free storage in the Amazon Cloud, Whispersync, Amazon Silk (Amazon’s new revolutionary cloud-accelerated web browser), vibrant color touch screen, and powerful dual-core processor.

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, and www.amazon.es. 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 Nine Months Ended Twelve Months Ended
September 30, September 30, September 30,
2011 2010 2011 2010 2011 2010
 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 2,047 $ 1,629 $ 3,777 $ 3,444 $ 1,539 $ 2,514
 
OPERATING ACTIVITIES:
Net income 63 231 454 736 871 1,120

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

Depreciation of fixed assets, including internal-use software and website development, and other amortization

278 150 724 399 894 510
Stock-based compensation 144 107 397 304 518 404
Other operating expense (income), net 37 26 112 77 140 98
Losses (gains) on sales of marketable securities, net (6 ) (2 ) (4 ) (2 ) (4 ) (2 )
Other expense (income), net (38 ) (35 ) (39 ) (62 ) (56 ) (56 )
Deferred income taxes 34 (16 ) 68 (44 ) 116 (44 )
Excess tax benefits from stock-based compensation - (75 ) (61 ) (236 ) (84 ) (288 )
Changes in operating assets and liabilities:
Inventories (587 ) (505 ) (517 ) (326 ) (1,211 ) (666 )
Accounts receivable, net and other (75 ) (64 ) 211 348 (320 ) (161 )
Accounts payable 848 894 (1,687 ) (1,078 ) 1,755 1,152
Accrued expenses and other 109 192 (9 ) 31 587 460
Additions to unearned revenue 239 152 706 502 892 946
Amortization of previously unearned revenue   (249 )   (200 )   (721 )   (642 )   (984 )   (856 )
Net cash provided by (used in) operating activities 797 855 (366 ) 7 3,114 2,617
 
INVESTING ACTIVITIES:

Purchases of fixed assets, including internal-use software and website development

(529 ) (315 ) (1,261 ) (651 ) (1,589 ) (788 )
Acquisitions, net of cash acquired, and other (48 ) (42 ) (656 ) (82 ) (927 ) (81 )
Sales and maturities of marketable securities and other investments 1,964 1,059 5,931 3,139 7,043 3,827
Purchases of marketable securities and other investments   (1,287 )   (1,830 )   (4,475 )   (4,551 )   (6,203 )   (6,711 )
Net cash provided by (used in) investing activities 100 (1,128 ) (461 ) (2,145 ) (1,676 ) (3,753 )
 
FINANCING ACTIVITIES:
Excess tax benefits from stock-based compensation - 75 61 236 84 288
Proceeds from long-term debt and other 9 67 131 110 173 125

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

(91 ) (49 ) (341 ) (122 ) (440 ) (241 )
Net cash provided by (used in) financing activities (82 ) 93 (149 ) 224 (183 ) 172
 
Foreign-currency effect on cash and cash equivalents   (39 )   90     22     9     29     (11 )
Net increase (decrease) in cash and cash equivalents 776 (90 ) (954 ) (1,905 ) 1,284 (975 )
 
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,823   $ 1,539   $ 2,823   $ 1,539   $ 2,823   $ 1,539  
 
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest on long term debt $ 4 $ 3 $ 10 $ 8 $ 13 $ 10
Cash paid for income taxes (net of refunds) 12 16 18 62 31 66
Fixed assets acquired under capital leases 155 141 566 283 688 333
Fixed assets acquired under build-to-suit leases 54 39 220 159 234 214
AMAZON.COM, INC.
Consolidated Statements of Operations
(in millions, except per share data)
(unaudited)
       
 
 

Three Months Ended

Nine Months Ended

September 30,

September 30,

2011 2010 2011 2010
 
Net sales $ 10,876 $ 7,560 $ 30,646 $ 21,257
 
Operating expenses (1):
Cost of sales 8,325 5,786 23,457 16,244
Fulfillment 1,121 680 2,917 1,808
Marketing 370 241 1,037 653
Technology and content 769 442 2,047 1,216
General and administrative 175 117 474 327
Other operating expense (income), net   37     26     112     77  
Total operating expenses   10,797     7,292     30,044     20,325  
 
Income from operations 79 268 602 932
 
Interest income 16 13 47 36
Interest expense (17 ) (11 ) (45 ) (28 )
Other income (expense), net   52     22     57     50  
Total non-operating income (expense)   51     24     59     58  
 
Income before income taxes 130 292 661 990
 
Provision for income taxes (67 ) (79 ) (205 ) (267 )
Equity-method investment activity, net of tax   -     18     (2 )   13  
Net income $ 63   $ 231   $ 454   $ 736  
 
Basic earnings per share $ 0.14   $ 0.51   $ 1.00   $ 1.65  
 
Diluted earnings per share $ 0.14   $ 0.51   $ 0.99   $ 1.62  
 
 
Weighted average shares used in computation of earnings per share:
Basic   454       448     453       447  
Diluted   461       456     460       455  
 
(1) Includes stock-based compensation as follows:
Fulfillment 35 23 91 65
Marketing 10 7 27 19
Technology and content 75 56 211 159
General and administrative 24 21 68 61
AMAZON.COM, INC.
Segment Information
(in millions)
(unaudited)
 
 
 
Three Months Ended Nine Months Ended
September 30, September 30,
2011 2010 2011 2010
North America
Net sales $ 5,932 $ 4,126 $ 16,804 $ 11,496
Segment operating expenses (1)   5,788     3,940     16,156     10,837  
Segment operating income $ 144   $ 186   $ 648   $ 659  
 
International
Net sales $ 4,944 $ 3,434 $ 13,842 $ 9,761
Segment operating expenses (1)   4,828     3,219     13,379     9,107  
Segment operating income $ 116   $ 215   $ 463   $ 654  
 
Consolidated
Net sales $ 10,876 $ 7,560 $ 30,646 $ 21,257
Segment operating expenses   10,616     7,159     29,535     19,944  
Segment operating income 260 401 1,111 1,313
Stock-based compensation (144 ) (107 ) (397 ) (304 )
Other operating income (expense), net   (37 )   (26 )   (112 )   (77 )
Income from operations 79 268 602 932
Total non-operating income (expense) 51 24 59 58
Provision for income taxes (67 ) (79 ) (205 ) (267 )
Equity-method investment activity, net of tax   -     18     (2 )   13  
Net income $ 63   $ 231   $ 454   $ 736  
 
Segment Highlights:
Y/Y net sales growth:
North America 44 % 45 % 46 % 46 %
International 44 32 42 37
Consolidated 44 39 44 42
Y/Y segment operating income growth (decline):
North America (23 ) % 19 % (2 ) % 53 %
International (46 ) 11 (29 ) 20
Consolidated (35 ) 15 (15 ) 35
Net sales mix:
North America 55 % 55 % 55 % 54 %
International   45     45     45     46  
  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 Nine Months Ended
September 30, September 30,
2011 2010 2011 2010
North America
Media $ 1,927 $ 1,591 $ 5,397 $ 4,512
Electronics and other general merchandise 3,635 2,326 10,435 6,440
Other (1)   370   209   972   544
Total North America $ 5,932 $ 4,126 $ 16,804 $ 11,496
 
International
Media $ 2,226 $ 1,759 $ 6,373 $ 5,142
Electronics and other general merchandise 2,681 1,644 7,364 4,531
Other (1)   37   31   105   88
Total International $ 4,944 $ 3,434 $ 13,842 $ 9,761
 
Consolidated
Media $ 4,153 $ 3,350 $ 11,770 $ 9,654
Electronics and other general merchandise 6,316 3,970 17,799 10,971
Other (1)   407   240   1,077   632
Total Consolidated $ 10,876 $ 7,560 $ 30,646 $ 21,257
 
Y/Y Net Sales Growth:
North America:
Media 21 % 13 % 20 % 17 %
Electronics and other general merchandise 56 80 62 76
Other 77 52 79 53
Total North America 44 45 46 46
 
International:
Media 27 % 16 % 24 % 22 %
Electronics and other general merchandise 63 54 63 61
Other 21 26 20 30

Total International

44 32 42 37
 
Consolidated:
Media 24 % 14 % 22 % 19 %
Electronics and other general merchandise 59 68 62 69
Other 70 48 70 50
Total Consolidated 44 39 44 42
 
Y/Y Net Sales Growth Excluding Effect of Exchange Rates:
International:
Media 17 % 18 % 15 % 20 %
Electronics and other general merchandise 51 60 51 61
Other 13 33 13 32
Total International 33 35 32 37
 
Consolidated:
Media 19 % 15 % 17 % 18 %
Electronics and other general merchandise 54 71 58 70
Other 69 49 69 50
Total Consolidated 39 40 40 41
 
Consolidated Net Sales Mix:
Media 38 % 44 % 38 % 45 %
Electronics and other general merchandise 58 53 58 52
Other   4   3   4   3
  100 %   100 %   100 %   100 %
 

(1) Includes non-retail activities, such as AWS, miscellaneous marketing and promotional agreements, other seller sites, and co-branded credit card agreements

AMAZON.COM, INC.
Consolidated Balance Sheets
(in millions, except per share data)
     
 
 
September 30, December 31, September 30,
2011 2010 2010
ASSETS (unaudited) (unaudited)
Current assets:
Cash and cash equivalents $ 2,823 $ 3,777 $ 1,539
Marketable securities 3,503 4,985 4,346
Inventories 3,770 3,202 2,515
Accounts receivable, net and other 1,496 1,587 959
Deferred tax assets   312     196     200  
Total current assets 11,904 13,747 9,559
Fixed assets, net 3,999 2,414 2,099
Deferred tax assets 27 22 43
Goodwill 1,934 1,349 1,277
Other assets   1,190     1,265     1,184  
Total assets $ 19,054   $ 18,797   $ 14,162  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,552 $ 8,051 $ 4,614
Accrued expenses and other   2,426     2,321     1,761  
Total current liabilities 8,978 10,372 6,375
Long-term liabilities 2,310 1,561 1,390
 
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 — 471, 468, and 466
Outstanding shares — 455, 451, and 449 5 5 5
Treasury stock, at cost (600 ) (600 ) (600 )
Additional paid-in capital 6,824 6,325 6,215
Accumulated other comprehensive loss (241 ) (190 ) (131 )
Retained earnings   1,778     1,324     908  
Total stockholders' equity   7,766     6,864     6,397  
Total liabilities and stockholders' equity $ 19,054   $ 18,797   $ 14,162  
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except per share data)
(unaudited)
                         
            Y/Y %
Q3 2010   Q4 2010   Q1 2011   Q2 2011   Q3 2011   Change
Cash Flows and Shares
Operating cash flow -- trailing twelve months (TTM) $ 2,617 $ 3,495 $ 3,033 $ 3,205 $ 3,114 19 %
Purchases of fixed assets (incl. internal-use software & website development) -- TTM $ 788 $ 979 $ 1,138 $ 1,374 $ 1,589 102 %
Free cash flow (operating cash flow less purchases of fixed assets) -- TTM $ 1,829 $ 2,516 $ 1,895 $ 1,831 $ 1,525 (17 %)
Free cash flow -- TTM Y/Y growth (5 %) (14 %) (18 %) (8 %) (17 %) N/A
Invested capital (1) $ 6,576 $ 7,380 $ 7,931 $ 8,551 $ 9,147 N/A
Return on invested capital (2) 28 % 34 % 24 % 21 % 17 % N/A
 
Common shares and stock-based awards outstanding 465 465 466 468 469 1 %
Common shares outstanding 449 451 452 454 455 1 %
Stock-based awards outstanding 16 15 14 15 14 (11 %)
Stock-based awards outstanding -- % of common shares outstanding 3.6 % 3.2 % 3.1 % 3.2 % 3.2 % N/A
 
Results of Operations
Worldwide (WW) net sales $ 7,560 $ 12,948 $ 9,857 $ 9,913 $ 10,876 44 %
WW net sales -- Y/Y growth, excluding F/X 40 % 37 % 36 % 44 % 39 % N/A
WW net sales -- TTM $ 30,776 $ 34,204 $ 36,931 $ 40,278 $ 43,594 42 %
WW net sales -- TTM Y/Y growth, excluding F/X 40 % 40 % 39 % 39 % 39 % N/A
 
Operating income $ 268 $ 474 $ 322 $ 201 $ 79 (71 %)
Operating income -- Y/Y growth, excluding F/X 13 % 3 % (20 %) (36 %) (77 %) N/A
Operating margin -- % of WW net sales 3.5 % 3.7 % 3.3 % 2.0 % 0.7 % N/A
Operating income -- TTM $ 1,408 $ 1,406 $ 1,334 $ 1,265 $ 1,076 (24 %)
Operating income -- TTM Y/Y growth, excluding F/X 50 % 27 % 7 % (7 %) (25 %) N/A
Operating margin -- TTM % of WW net sales 4.6 % 4.1 % 3.6 % 3.1 % 2.5 % N/A
 
Net income $ 231 $ 416 $ 201 $ 191 $ 63 (73 %)
Net income per diluted share $ 0.51 $ 0.91 $ 0.44 $ 0.41 $ 0.14 (73 %)
Net income -- TTM $ 1,120 $ 1,152 $ 1,054 $ 1,038 $ 871 (22 %)
Net income per diluted share -- TTM $ 2.47 $ 2.53 $ 2.30 $ 2.26 $ 1.89 (23 %)
 
Segments
North America Segment:
Net sales $ 4,126 $ 7,211 $ 5,465 $ 5,406 $ 5,932 44 %
Net sales -- Y/Y growth, excluding F/X 45 % 45 % 45 % 50 % 44 % N/A
Net sales -- TTM $ 16,452 $ 18,707 $ 20,392 $ 22,208 $ 24,014 46 %
Operating income $ 186 $ 295 $ 290 $ 214 $ 144 (23 %)
Operating margin -- % of North America net sales 4.5 % 4.1 % 5.3 % 4.0 % 2.4 % N/A
Operating income -- TTM $ 937 $ 955 $ 972 $ 986 $ 943 1 %
Operating income -- TTM Y/Y growth, excluding F/X 67 % 35 % 17 % 9 % 1 % N/A
Operating margin -- TTM % of North America net sales 5.7 % 5.1 % 4.8 % 4.4 % 3.9 % N/A
 
International Segment:
Net sales $ 3,434 $ 5,737 $ 4,392 $ 4,507 $ 4,944 44 %
Net sales -- Y/Y growth, excluding F/X 35 % 29 % 27 % 36 % 33 % N/A
Net sales -- TTM $ 14,324 $ 15,497 $ 16,539 $ 18,070 $ 19,580 37 %
Net sales -- TTM % of WW net sales 47 % 45 % 45 % 45 % 45 % N/A
Operating income $ 215 $ 327 $ 175 $ 172 $ 116 (46 %)
Operating margin -- % of International net sales 6.2 % 5.7 % 4.0 % 3.8 % 2.4 % N/A
Operating income -- TTM $ 973 $ 981 $ 922 $ 888 $ 790 (19 %)
Operating income -- TTM Y/Y growth, excluding F/X 23 % 20 % 4 % (7 %) (23 %) N/A
Operating margin -- TTM % of International net sales 6.8 % 6.3 % 5.6 % 4.9 % 4.0 % N/A
 
Consolidated Segments:
Operating expenses (3) $ 7,159 $ 12,326 $ 9,392 $ 9,527 $ 10,616 48 %
Operating expenses -- TTM (3) $ 28,866 $ 32,268 $ 35,037 $ 38,404 $ 41,860 45 %
Operating income $ 401 $ 622 $ 465 $ 386 $ 260 (35 %)
Operating margin -- % of Consolidated sales 5.3 % 4.8 % 4.7 % 3.9 % 2.4 % N/A
Operating income -- TTM $ 1,910 $ 1,936 $ 1,894 $ 1,874 $ 1,734 (9 %)
Operating income -- TTM Y/Y growth, excluding F/X 42 % 25 % 10 % 1 % (11 %) N/A
Operating margin -- TTM % of Consolidated net sales     6.2 %     5.7 %     5.1 %     4.7 %     4.0 %   N/A  
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except inventory turnover, accounts payable days and employee data)
(unaudited)
                         
            Y/Y %
Q3 2010   Q4 2010   Q1 2011   Q2 2011   Q3 2011   Change
Supplemental
Supplemental North America Segment Net Sales:
Media $ 1,591 $ 2,370 $ 1,885 $ 1,585 $ 1,927 21 %
Media -- Y/Y growth, excluding F/X 12 % 13 % 18 % 19 % 21 % N/A
Media -- TTM $ 6,610 $ 6,881 $ 7,170 $ 7,430 $ 7,767 17 %
Electronics and other general merchandise $ 2,326 $ 4,558 $ 3,303 $ 3,496 $ 3,635 56 %
Electronics and other general merchandise -- Y/Y growth, excluding F/X 80 % 71 % 63 % 67 % 56 % N/A
Electronics and other general merchandise -- TTM $ 9,103 $ 10,998 $ 12,277 $ 13,683 $ 14,992 65 %
Electronics and other general merchandise -- TTM % of North America net sales 55 % 59 % 60 % 62 % 62 % N/A
Other $ 209 $ 283 $ 277 $ 325 $ 370 77 %
Other -- TTM $ 739 $ 828 $ 945 $ 1,095 $ 1,255 70 %
 
Supplemental International Segment Net Sales:
Media $ 1,759 $ 2,865 $ 2,073 $ 2,075 $ 2,226 27 %
Media -- Y/Y growth, excluding F/X 18 % 13 % 9 % 20 % 17 % N/A
Media -- TTM $ 7,723 $ 8,007 $ 8,247 $ 8,772 $ 9,238 20 %
Electronics and other general merchandise $ 1,644 $ 2,834 $ 2,285 $ 2,398 $ 2,681 63 %
Electronics and other general merchandise -- Y/Y growth, excluding F/X 60 % 50 % 49 % 53 % 51 % N/A
Electronics and other general merchandise -- TTM $ 6,478 $ 7,365 $ 8,162 $ 9,162 $ 10,199 57 %
Electronics and other general merchandise -- TTM % of International net sales 45 % 48 % 49 % 51 % 52 % N/A
Other $ 31 $ 38 $ 34 $ 34 $ 37 21 %
Other -- TTM $ 123 $ 125 $ 130 $ 136 $ 143 16 %
 
Supplemental Worldwide Net Sales:
Media $ 3,350 $ 5,235 $ 3,958 $ 3,660 $ 4,153 24 %
Media -- Y/Y growth, excluding F/X 15 % 13 % 13 % 20 % 19 % N/A
Media -- TTM $ 14,333 $ 14,888 $ 15,417 $ 16,202 $ 17,005 19 %
Electronics and other general merchandise $ 3,970 $ 7,392 $ 5,588 $ 5,894 $ 6,316 59 %
Electronics and other general merchandise -- Y/Y growth, excluding F/X 71 % 62 % 57 % 62 % 54 % N/A
Electronics and other general merchandise -- TTM $ 15,581 $ 18,363 $ 20,439 $ 22,845 $ 25,191 62 %
Electronics and other general merchandise -- TTM % of WW net sales 51 % 54 % 55 % 57 % 58 % N/A
Other $ 240 $ 321 $ 311 $ 359 $ 407 70 %
Other -- TTM $ 862 $ 953 $ 1,075 $ 1,231 $ 1,398 62 %
 
Balance Sheet
Cash and marketable securities (4) $ 6,123 $ 8,919 $ 7,019 $ 6,503 $ 6,474 6 %
Inventory, net -- ending $ 2,515 $ 3,202 $ 2,888 $ 3,229 $ 3,770 50 %
Inventory turnover, average -- TTM 11.8 11.4 11.6 11.3 10.8 (8 %)
Fixed assets, net $ 2,099 $ 2,414 $ 2,902 $ 3,470 $ 3,999 91 %
 
Accounts payable -- ending $ 4,614 $ 8,051 $ 5,540 $ 5,721 $ 6,552 42 %
Accounts payable days -- ending 73 72 66 69 72 (1 %)
 
Other
WW shipping revenue $ 270 $ 437 $ 330 $ 331 $ 360 33 %
WW shipping costs $ 576 $ 999 $ 786 $ 820 $ 918 59 %
WW net shipping costs $ 306 $ 562 $ 456 $ 489 $ 558 83 %
WW net shipping costs -- % of WW net sales 4.0 % 4.3 % 4.6 % 4.9 % 5.1 % N/A
 
 
Employees (full-time and part-time; excludes contractors & temporary personnel)     31,200       33,700       37,900       43,200       51,300     64 %

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 Enterprise Solutions program customers, Amazon.com Payments customers, Amazon Web Services customers, and the customers of select companies with whom we have a technology alliance or marketing and promotional relationship. Customers are considered active when they have placed an order during the preceding twelve-month period.

Seller Accounts

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

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

Contacts

Amazon.com Investor Relations
John Felton, 206-266-2171
www.amazon.com/ir
or
Amazon.com Public Relations
Mary Osako, 206/266-7180

Sharing

Contacts

Amazon.com Investor Relations
John Felton, 206-266-2171
www.amazon.com/ir
or
Amazon.com Public Relations
Mary Osako, 206/266-7180