Q Financial Results Conference Call Slides

Transcription

1 Q Financial Results Conference Call Slides

2 Amazon.com This presentation may contain forward-looking 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, significant indebtedness, government regulation and taxation, payments, and fraud. 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 Annual Report on Form 10-K for the year ended December 31, 2007, 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 under Financial Documents. 2

3 Our Results Free Cash Flow -- TTM (1) $1,500 Up 51% $750 $521 $788 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Long Term Goal -- Optimize Free Cash Flow Per Share (1) Free cash flow, a non-gaap financial measure, is GAAP Operating Cash Flow Less Purchases of Fixed Assets. See the appendix for reconciliation of Operating Cash Flow to Free Cash Flow. 3

4 Our Results Shares (MM) Q1 07 Q2 07 Q307 Q4 07 Q1 08 Common Shares Outstanding (1) (2) Stock-Based Awards Outstanding Efficiently Managing Dilution Up 1% Y/Y (1) The Company repurchased 6 million shares in Q1 07 (2) Does not include shares issuable upon conversion of outstanding convertible debt 4

5 Our Results Return on Invested Capital -- TTM (1) 60% 30% 30% 32% 0% Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Long Term Expectation -- Triple Digit ROIC (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

6 Our Results Net Sales $6,000 $4,135 $3,000 $3,015 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Up 37% Y/Y (31% F/X Adjusted) 6

7 Our Results Net Sales -- TTM $20,000 Up 39%; 35% F/X Adjusted $15,955 WW Revenue Mix $416 (3%) $9,795 (61%) $11,447 $10,000 $5,744 (36%) Q1 07 Q1 08 WW Media WW Electronics & Other General Merchandise (EGM) WW Other 36% of WW TTM Revenue From EGM, Up from 32% Y/Y 7

8 Our Results GAAP Operating Income $400 $200 $145 Up 36% Y/Y $198 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 8

9 Our Results GAAP Operating Income -- TTM $800 Up 65% Y/Y $708 $400 $429 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 9

10 Our Results Consolidated Segment Operating Income (1) $500 $250 $179 Up 44% Y/Y $258 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 (1) Consolidated Segment Operating Income (CSOI), a non-gaap financial measure, excludes Stock-Based Compensation and Other Operating Expense (Income). See appendix for a reconciliation of CSOI to GAAP Operating Income. 10

11 Our Results Consolidated Segment Operating Income -- TTM (1) $1,000 Up 66% Y/Y $928 $500 $560 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 (1) Consolidated Segment Operating Income (CSOI), a non-gaap financial measure, excludes Stock-Based Compensation and Other Operating Expense (Income). See appendix for a reconciliation of CSOI to GAAP Operating Income. 11

12 Our Results GAAP Net Income $250 Up 30% Y/Y $125 $111 $143 Q1 07 Q2 07 Q3 07 Q4 07 Q

13 Segment Results North America Net Sales Operating Income (1) $4,000 $250 Up 31% Y/Y Up 52% Y/Y $2,000 $1,622 $2,126 $125 $86 $130 Q1 07 Q1 08 TTM Net Sales Over $8.55 Billion Q1 07 Q1 08 (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. 13

14 Segment Results International Net Sales Operating Income $3,500 $250 Up 44%; 31% F/X Adjusted Up 36% Y/Y $2,009 $1,750 $1,393 $125 $93 $128 Q1 07 Q1 08 Q1 07 Q1 08 TTM Net Sales Over $7.35 Billion 14

15 Supplemental Revenue Highlights Media North America International $2,500 $2,500 Up 22% Y/Y Up 34%; 22% F/X Adjusted $1,250 $990 $1,205 $1,250 $1,000 $1,338 Q1 07 Q1 08 Q1 07 Q1 08 Books, Movies, Music, Digital Downloads, Software, Video Games 15

16 Supplemental Revenue Highlights Electronics and Other General Merchandise (EGM) North America International $1,500 Up 46% Y/Y $1,000 Up 71%; 56% F/X Adjusted $655 $826 $750 $500 $564 $383 Q1 07 Q1 08 Q1 07 Q1 08 Electronics & Computers, Devices, Home & Garden, Toys, Kids & Baby, Grocery, Apparel, Shoes & Jewelry, Health & Beauty, Sports & Outdoors, Tools, Auto & Industrial 16

17 Supplemental Revenue Highlights Other North America International $200 $30 Up 58% Y/Y $100 Up 40% Y/Y $95 $15 $16 $68 $10 Q1 07 Q1 08 Q1 07 Q1 08 Amazon Enterprise Solutions, Amazon Web Services, Co-branded Credit Cards & Miscellaneous Marketing 17

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19 Appendix

20 Free Cash Flow Reconciliation -- TTM Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Operating Cash Flow $726 $895 $1,001 $1,405 $1,039 Less: Purchases of Fixed Assets, Including Internal-Use Software and Website Development Free Cash Flow $521 $700 $800 $1,181 $788 20

21 Consolidated Segment Operating Income Reconciliation Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Consolidated Segment Operating Income $ 179 $ 165 $ 177 $328 $258 Less: Stock-Based Compensation Other Operating Expense, net GAAP Operating Income $145 $116 $123 $271 $198 21

22 Consolidated Segment Operating Income Reconciliation -- TTM Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Consolidated Segment Operating Income $560 $645 $749 $849 $928 Less: Stock-Based Compensation Other Operating Expense, net GAAP Operating Income $429 $498 $581 $655 $708 22