Q4 2009 Financial Results Conference Call Slides
This presentation may contain forwardlooking statements which are inherently difficult to predict. Actual results could differ materially for a variety of reasons, including 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, 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, including its most recent Annual Report on Form 10K and subsequent filings. Additional information relating to certain of our financial measures contained herein is available in the appendix to our presentation, our most recent earnings release and at our website at www.amazon.com/ir under ‘Financial Documents’.
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MM
Free Cash Flow TTM
Up 114% Y/Y
(1)
$2,920MM
$1,364MM
Long Term Goal – Optimize Free Cash Flow
(1) Free Cash Flow, a nonGAAP 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
MM
Shares
(1)
446
461
Efficiently Managing Dilution – Up 3% Y/Y
(1) Q4 2009 includes the issuance of 9 million shares of common stock to acquire Zappos.com, Inc.
4
Return on Invested Capital TTM
(1)
66%
41%
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
$9,519MM
$6,704MM
Up 42% Y/Y (37% F/X Adjusted)
6
MM
Net Sales TTM
Up 28% Y/Y; 29% F/X Adjusted
$24,509MM
$19,166MM
45% of WW TTM Revenue from EGM, Up From 39% Y/Y
7
GAAP Operating Income
MM
(1)
Up 75% Y/Y
$476MM
$272MM
(1)
Q2 2009 includes the impact of our settlement with Toysrus.com LLC for $51 million.
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GAAP Operating Income – TTM
MM
(1)
Up 34% Y/Y
$1,129MM
$842MM
(1)
Q2 2008 includes a $53 million noncash gain recognized on the sale of our European DVD rental assets. Q2 2009 includes the impact of our settlement with Toysrus.com LLC for $51 million.
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Consolidated Segment Operating Income
MM
(1)
Up 66% Y/Y
$597MM
$359MM
(1)
Consolidated Segment Operating Income (CSOI), a nonGAAP financial measure, excludes StockBased Compensation and Other Operating Income (Expense). See appendix for a reconciliation of CSOI to GAAP Operating Income.
10
Consolidated Segment Operating Income TTM
MM
(1)
Up 44% Y/Y
$1,572MM
$1,093MM
(1)
Consolidated Segment Operating Income (CSOI), a nonGAAP financial measure, excludes StockBased Compensation and Other Operating Income (Expense). See appendix for a reconciliation of CSOI to GAAP Operating Income.
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GAAP Net Income
MM
(1)
Up 71% Y/Y
$384MM
$225MM
(1)
Q2 2009 includes the impact of our settlement with Toysrus.com LLC for $51 million.
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Segment Results – North America
MM MM
Up 36% Y/Y
Up 113% Y/Y $4,956MM $278MM
$3,631MM
$130MM
TTM Net Sales Over $12.8B
(1) A significant 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.
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Segment Results – International
MM MM
Up 49%Y/Y; 37% F/X Adjusted
Up 39% Y/Y; 25% F/X Adjusted
$4,563MM $229MM $3,073MM
$319MM
TTM Net Sales Over $11.6B
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Supplemental Revenue Highlights – Media
MM MM
Up 20% Y/Y
Up 37% Y/Y; 26% F/X Adjusted
$2,580MM
$2,099MM $1,751MM $1,889MM
Books, Music, Movies, Video Games and Consoles, Software and Digital Downloads
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Supplemental Revenue Highlights – Electronics & Other General Merchandise (EGM)
MM MM
Up 54% Y/Y
Up 68% Y/Y; 56% F/X Adjusted
$2,662MM
$1,947MM
$1,733MM
$1,156MM
Computers & Office, Electronics, Home & Garden, Grocery, Health & Beauty, Toys, Kids & Baby, Apparel, Shoes & Jewelry, Sports & Outdoors, Tools, Auto & Industrial
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Supplemental Revenue Highlights – Other
MM MM
Up 33% Y/Y
Up 27% Y/Y; 18% F/X Adjusted
$36MM $195MM $28MM $147MM
Marketing and Promotional Activities, Amazon Web Services, Amazon Enterprise Solutions, & Cobranded Credit Cards
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Appendix
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Free Cash Flow Reconciliation TTM
$MM Operating Cash Flow
Q4 ‘08
Q1 ‘09
Q2 ‘09
Q3 ‘09
Q4 ‘09
$ 1,697 $ 1,757 $ 1,878 $ 2,253 $ 3,293
Purchases of Fixed Assets, Including InternalUse Software and Website Development Free Cash Flow
(333) $ 1,364
(326)
(336)
(337)
(373)
$ 1,431 $ 1,542 $ 1,916 $ 2,920
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Consolidated Segment Operating Income Reconciliation
$MM
Consolidated Segment Operating Income StockBased Compensation
Q4 ‘08 $ 359 (79)
Q1 ‘09 $ 322 (67)
Q2 ‘09 $ 304 (85)
Q3 ‘09 $ 350 (90)
Q4 ‘09 $ 597 (100)
Other Operating Income (Expense), Net
GAAP Operating Income
(8) $ 272
(11) $ 244
(60) $ 159
(9)
(21)
$ 251 $ 476
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Consolidated Segment Operating Income Reconciliation TTM
$MM
Consolidated Segment Operating Income
Q4 ‘08
$ 1,093
Q1 ‘09
$ 1,156
Q2 ‘09
$ 1,216
Q3 ‘09
$ 1,335
Q4 ‘09
$ 1,572
StockBased Compensation
Other Operating Income (Expense), Net GAAP Operating Income
(275)
24 $ 842
(288)
19 $ 887
(300)
(87) $ 829
(320)
(90) $ 925
(341)
(102) $ 1,129
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