Q Financial Results Conference Call Slides

Transcription

1 Q Financial Results Conference Call Slides

2 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 Free Cash Flow -- TTM (1) Up 16% Y/Y $700 $816 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 appendix for a reconciliation of Operating Cash Flow to Free Cash Flow. 3

4 Shares Efficiently Managing Dilution Up 2% Y/Y (1) Does not include shares issuable upon conversion of outstanding convertible debt. 4

5 Return on Invested Capital -- TTM (1) 39% 29% 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 Net Sales $4,063 $2,886 Up 41% Y/Y (35% F/X Adjusted) 6

7 Net Sales -- TTM Up 41% Y/Y; 35% F/X Adjusted $17,133 $12,193 37% of WW TTM Revenue from EGM, Up From 33% Y/Y 7

8 GAAP Operating Income Up 86% Y/Y $217 $116 8

9 GAAP Operating Income -- TTM Up 62% Y/Y $808 $498 9

10 Consolidated Segment Operating Income (1) Up 49% Y/Y $245 $165 (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 Consolidated Segment Operating Income -- TTM (1) Up 56% Y/Y $1,008 $645 (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 GAAP Net Income Up 102% Y/Y $158 $78 12

13 Segment Results North America Up 35% Y/Y $2,168 Up 17% Y/Y $1,601 $82 $96 TTM Net Sales Over $9.1B (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 Up 47%Y/Y; 34% F/X Adjusted $1,895 Up 80% Y/Y; 56% F/X Adjusted $149 $1,285 $83 TTM Net Sales Over $7.9B 14

15 Supplemental Revenue Highlights Media Up 25% Y/Y Up 38% Y/Y; 25% F/X Adjusted $1,148 $1,258 $923 $910 Books, Movies, Music, Digital Downloads, Software, Video Games 15

16 Supplemental Revenue Highlights Electronics & Other General Merchandise (EGM) Up 52% Y/Y $920 Up 68% Y/Y; 52% F/X Adjusted $611 $606 $364 Electronics & Computers, Devices, Office Supplies, Home & Garden, Toys, Kids & Baby, Grocery, Apparel, Shoes & Jewelry, Health & Beauty, Sports & Outdoors, Tools, Auto & Industrial 16

17 Supplemental Revenue Highlights Other Up 38% Y/Y Up 140% Y/Y; 121% F/X Adjusted $26 $100 $72 $11 Amazon Enterprise Solutions, Amazon Web Services, Co-branded Credit Cards & Miscellaneous Marketing 17

18 Appendix 18

19 Free Cash Flow Reconciliation -- TTM $ Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 Operating Cash Flow $895 $1,001 $1,405 $1,039 $1,088 Less: Purchases of Fixed Assets, Including Internal-Use Software and Website Development Free Cash Flow $700 $ 800 $1,181 $ 788 $

20 Consolidated Segment Operating Income Reconciliation $ Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 Consolidated Segment Operating Income $165 $ 177 $ 328 $ 258 $ 245 Less: Stock-Based Compensation Other Operating Expense (Income), Net (45) GAAP Operating Income $116 $ 123 $ 271 $ 198 $

21 Consolidated Segment Operating Income Reconciliation -- TTM $ Q2 '07 Q3 '07 Q4 '07 Q1 '08 Q2 '08 Consolidated Segment Operating Income $645 $ 749 $ 849 $ 928 $1,008 Less: Stock-Based Compensation Other Operating Expense (Income), Net (32) GAAP Operating Income $498 $ 581 $ 655 $ 708 $