Amazon.com Q4 2009 Financial Results Conference Call Slides
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Transcript of Amazon.com Q4 2009 Financial Results Conference Call Slides
Q4 2009 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’.
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Free Cash Flow -- TTM (1)
(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.
Up 114% Y/Y
Long Term Goal – Optimize Free Cash Flow
$1,364MM
$2,920MM
MM
3
Efficiently Managing Dilution – Up 3% Y/Y
MMShares (1)
461446
4
(1) Q4 2009 includes the issuance of 9 million shares of common stock to acquire Zappos.com, Inc.
Return on Invested Capital -- TTM (1)
(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.
Efficient Capital Structure
41%
66%
5
Net Sales
Up 42% Y/Y (37% F/X Adjusted)
$6,704MM
$9,519MM
MM
6
Net Sales -- TTM
45% of WW TTM Revenue from EGM, Up From 39% Y/Y
MM
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Up 28% Y/Y; 29% F/X Adjusted
$24,509MM
$19,166MM
Up 75% Y/Y
$272MM
$476MM
MM
GAAP Operating Income (1)
8
(1) Q2 2009 includes the impact of our settlement with Toysrus.com LLC for $51 million.
Up 34% Y/Y
$842MM
$1,129MM
MM
GAAP Operating Income – TTM (1)
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(1) Q2 2008 includes a $53 million non-cash 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.
Up 66% Y/Y
$359MM
$597MM
MM
Consolidated Segment Operating Income (1)
(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.
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Up 44% Y/Y
$1,093MM
$1,572MM
MM
Consolidated Segment Operating Income -- TTM (1)
(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.
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Up 71% Y/Y
$225MM
$384MM
MM
GAAP Net Income (1)
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(1) Q2 2009 includes the impact of our settlement with Toysrus.com LLC for $51 million.
Segment Results – North America
TTM Net Sales Over $12.8B
$3,631MM
$4,956MM
MM
(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.
Up 36% Y/Y
MM
Up 113% Y/Y
$130MM
$278MM
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Segment Results – International
TTM Net Sales Over $11.6B
$3,073MM
$4,563MM
MM
Up 49%Y/Y; 37% F/X Adjusted
MM
$229MM
$319MM
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Up 39% Y/Y; 25% F/X Adjusted
Supplemental Revenue Highlights – Media
Books, Music, Movies, Video Games and Consoles, Software and Digital Downloads
$1,751MM
$2,099MM
MM
Up 37% Y/Y; 26% F/X Adjusted
MM
Up 20% Y/Y
$1,889MM
$2,580MM
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Supplemental Revenue Highlights –Electronics & Other General Merchandise (EGM)
Computers & Office, Electronics, Home & Garden, Grocery, Health & Beauty, Toys, Kids & Baby, Apparel, Shoes & Jewelry, Sports & Outdoors, Tools, Auto & Industrial
$1,733MM
$2,662MM
MM
Up 68% Y/Y; 56% F/X Adjusted
MM
Up 54% Y/Y
$1,156MM
$1,947MM
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Supplemental Revenue Highlights – Other
Marketing and Promotional Activities, Amazon Web Services, Amazon Enterprise Solutions, & Co-branded Credit Cards
$147MM
$195MM
MM MM
Up 33% Y/Y
$28MM
$36MM
17
Up 27% Y/Y; 18% F/X Adjusted
Appendix
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Free Cash Flow Reconciliation -- TTM
Q4 ‘08 Q1 ‘09 Q2 ‘09 Q3 ‘09 Q4 ‘09
Operating Cash Flow $ 1,697 $ 1,757 $ 1,878 $ 2,253 $ 3,293
Purchases of Fixed Assets, Including Internal-Use Software and Website Development (333) (326) (336) (337) (373)
Free Cash Flow $ 1,364 $ 1,431 $ 1,542 $ 1,916 $ 2,920
$MM
19
Q4 ‘08 Q1 ‘09 Q2 ‘09 Q3 ‘09 Q4 ‘09
Consolidated Segment Operating Income $ 359 $ 322 $ 304 $ 350 $ 597
Stock-Based Compensation (79) (67) (85) (90) (100)
Other Operating Income (Expense), Net (8) (11) (60) (9) (21)
GAAP Operating Income $ 272 $ 244 $ 159 $ 251 $ 476
Consolidated Segment Operating Income Reconciliation
$MM
20
Q4 ‘08 Q1 ‘09 Q2 ‘09 Q3 ‘09 Q4 ‘09
Consolidated Segment Operating Income $ 1,093 $ 1,156 $ 1,216 $ 1,335 $ 1,572
Stock-Based Compensation (275) (288) (300) (320) (341)
Other Operating Income (Expense), Net 24 19 (87) (90) (102)
GAAP Operating Income $ 842 $ 887 $ 829 $ 925 $ 1,129
Consolidated Segment Operating Income Reconciliation -- TTM
$MM
21