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70285794 amzn-q3-2011-slides 70285794 amzn-q3-2011-slides Presentation Transcript

  • Q3 2011 Financial Results Conference Call Slides
  • This presentation may contain forward-looking statements which are inherentlydifficult to predict. Actual results could differ materially for a variety of reasons,including fluctuations in foreign exchange rates, changes in global economicconditions and consumer spending, world events, the rate of growth of theInternet and online commerce, the amount that Amazon.com invests in newbusiness opportunities and the timing of those investments, the mix of productssold to customers, the mix of net sales derived from products as compared withservices, the extent to which we owe income taxes, competition, managementof growth, potential fluctuations in operating results, international growth andexpansion, the outcomes of legal proceedings and claims, fulfillment centeroptimization, risks of inventory management, seasonality, the degree to whichthe Company enters into, maintains and develops commercial agreements,acquisitions and strategic transactions, and risks of fulfillment throughput andproductivity. Other risks and uncertainties include, among others, risks related tonew products, services and technologies, system interruptions, governmentregulation and taxation, payments, and fraud. In addition, the current globaleconomic climate amplifies many of these risks. More information about factorsthat potentially could affect Amazon.com’s financial results is included inAmazon.com’s filings with the Securities and Exchange Commission, including itsmost recent Annual Report on Form 10-K and subsequent filings.Additional information relating to certain of our financial measures containedherein is available in the appendix to our presentation, our most recent earningsrelease and at our website at www.amazon.com/ir under ‘Financial Documents’. 2
  • MM Free Cash Flow -- TTM (1)$4,000 Down 17% Y/Y $1,829MM$2,000 $1,525MM $0 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Long Term Goal – Optimize Free Cash Flow(1) Free Cash Flow, a non-GAAP financial measure, is GAAP Operating Cash Flow Less Purchases of Fixed Assets. See appendix for a reconciliation of Operating Cash Flow to Free Cash Flow. 3
  • SharesMM 600 465 469 16 14 300 449 455 0 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Common Shares Outstanding Stock-Based Awards Outstanding Efficiently Managing Dilution – Up 1% Y/Y 4
  • Return on Invested Capital -- TTM (1)80%40% 28% 17% 0% Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Efficient Capital Structure(1) ROIC = TTM Free Cash Flow divided by average Total Assets minus Current Liabilities, excluding current portion of our Long Term Debt, over 5 quarter ends. 5
  • MM Net Sales$20,000 $10,876MM$10,000 $7,560MM $0 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Up 44% Y/Y (39% F/X Adjusted) 6
  • MM Net Sales -- TTM$60,000 WW Revenue Mix $1,398MM Up 42% Y/Y; 3% 39% F/X Adjusted $43,594MM $25,191MM 58% $30,776MM$30,000 $17,005MM 39% $0 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 58% of WW TTM Revenue from EGM, Up From 51% Y/Y 7
  • GAAP Operating IncomeMM$700 Down 71% Y/Y$350 $268MM $79MM $0 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 8
  • GAAP Operating Income – TTM (1) MM$2,000 Down 24% Y/Y $1,408MM $1,076MM$1,000 $0 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 9
  • Consolidated Segment Operating Income (1) MM $800 Down 35% Y/Y $401MM $400 $260MM $0 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11(1) Consolidated Segment Operating Income (CSOI), a non-GAAP financial measure, excludes Stock-Based Compensation and Other Operating Income (Expense). See appendix for a reconciliation of CSOI to GAAP Operating Income. 10
  • Consolidated Segment Operating Income -- TTM (1) MM $3,000 Down 9% Y/Y $1,910MM $1,734MM $1,500 $0 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11(1) Consolidated Segment Operating Income (CSOI), a non-GAAP financial measure, excludes Stock-Based Compensation and Other Operating Income (Expense). See appendix for a reconciliation of CSOI to GAAP Operating Income. 11
  • GAAP Net IncomeMM$600 Down 73% Y/Y$300 $231MM $63MM $0 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 12
  • Segment Results – North AmericaMM MM$10,000 $400 Net Sales Operating Income (1) Up 44% Down 23% Y/Y Y/Y $5,932MM $5,000 $200 $186MM $4,126MM $144MM $0 $0 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 TTM Net Sales Over $24.0B (1) A majority of our costs for "Technology and Content" are incurred in the United States and most of these costs are allocated to our North America segment. 13
  • Segment Results – InternationalMM MM$10,000 $500 Net Sales Operating Income Up 44%Y/Y; 33% Down 46% Y/Y; F/X Adjusted 55% F/X Adjusted $4,944MM $5,000 $250 $215MM $3,434MM $116MM $0 $0 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 TTM Net Sales Over $19.5B 14
  • Supplemental Revenue Highlights – MediaMM$4,000 $4,000 North America International Up 27% Y/Y; 17% Up 21% Y/Y F/X adjusted $2,226MM$2,000 $1,927MM $2,000 $1,759MM $1,591MM $0 $0 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Books, Music, Movies, Video Games and Consoles, Software and Digital Downloads 15
  • Supplemental Revenue Highlights – Electronics & Other General Merchandise (EGM)MM MM$6,000 $6,000 North America International Up 56% Y/Y Up 63% Y/Y; 51% F/X $3,635MM Adjusted $3,000 $2,681MM$3,000 $2,326MM $1,644MM $0 $0 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Computers & Office, Electronics, Home & Garden, Grocery, Health & Beauty, Toys, Kids & Baby, Apparel, Shoes & Jewelry, Sports & Outdoors, Tools, Auto & Industrial and Digital Devices 16
  • Supplemental Revenue Highlights – OtherMM MM $500 $60 North America International Up 21% Y/Y; 13% $370MM F/X Adjusted Up 77% Y/Y $37MM $31MM $250 $30 $209MM $0 $0 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Amazon Web Services, Marketing and Promotional Activities, Other Seller Sites, & Co-branded Credit Cards 17
  • Appendix 18
  • Free Cash Flow Reconciliation -- TTM$MM Q3 ‘10 Q4 ‘10 Q1 ‘11 Q2 ‘11 Q3 ‘11Operating Cash Flow $ 2,617 $ 3,495 $ 3,033 $ 3,205 $ 3,114 Purchases of Fixed Assets, Including Internal-Use Software and Website Development (788) (979) (1,138) (1,374) (1,589)Free Cash Flow $ 1,829 $ 2,516 $ 1,895 $ 1,831 $ 1,525 19
  • Consolidated Segment Operating Income Reconciliation$MM Q3 ‘10 Q4 ‘10 Q1 ‘11 Q2 ‘11 Q3 ‘11Consolidated Segment OperatingIncome $ 401 $ 622 $ 465 $ 386 $ 260 Stock-Based Compensation (107) (119) (110) (144) (144) Other Operating Income (Expense), Net (26) (29) (33) (41) (37)GAAP Operating Income $ 268 $ 474 $ 322 $ 201 $ 79 20
  • Consolidated Segment Operating Income Reconciliation -- TTM$MM Q3 ‘10 Q4 ‘10 Q1 ‘11 Q2 ‘11 Q3 ‘11Consolidated Segment OperatingIncome $ 1,910 $ 1,936 $ 1,894 $ 1,874 $ 1,734 Stock-Based Compensation (404) (424) (448) (481) (518) Other Operating Income (Expense), Net (98) (106) (112) (128) (140)GAAP Operating Income $ 1,408 $ 1,406 $ 1,334 $ 1,265 $ 1,076 21