Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its
fourth quarter ended December 31, 2012.
Operating cash flow increased 7% to $4.18 billion for the trailing
twelve months, compared with $3.90 billion for the trailing twelve
months ended December 31, 2011. Free cash flow decreased 81% to $395
million for the trailing twelve months, compared with $2.09 billion for
the trailing twelve months ended December 31, 2011. Free cash flow for
the trailing twelve months ended December 31, 2012 includes fourth
quarter cash outflows for purchases of corporate office space and
property in Seattle, Washington, of $1.4 billion.
Common shares outstanding plus shares underlying stock-based awards
totaled 470 million on December 31, 2012, compared with 468 million one
Net sales increased 22% to $21.27 billion in the fourth quarter,
compared with $17.43 billion in fourth quarter 2011. Excluding the $178
million unfavorable impact from year-over-year changes in foreign
exchange rates throughout the quarter, net sales grew 23% compared with
fourth quarter 2011.
Operating income increased 56% to $405 million in the fourth quarter,
compared with $260 million in fourth quarter 2011. The favorable impact
from year-over-year changes in foreign exchange rates throughout the
quarter on operating income was $2 million.
Net income decreased 45% to $97 million in the fourth quarter, or $0.21
per diluted share, compared with $177 million, or $0.38 per diluted
share, in fourth quarter 2011.
"We're now seeing the transition we've been expecting," said Jeff Bezos,
founder and CEO of Amazon.com. "After 5 years, eBooks is a multi-billion
dollar category for us and growing fast - up approximately 70% last
year. In contrast, our physical book sales experienced the lowest
December growth rate in our 17 years as a book seller, up just 5%. We're
excited and very grateful to our customers for their response to Kindle
and our ever expanding ecosystem and selection."
Full Year 2012
Net sales increased 27% to $61.09 billion, compared with $48.08 billion
in 2011. Excluding the $854 million unfavorable impact from
year-over-year changes in foreign exchange rates throughout the year,
net sales grew 29% compared with 2011.
Operating income decreased 22% to $676 million, compared with $862
million in 2011. The unfavorable impact from year-over-year changes in
foreign exchange rates throughout the year on operating income was $14
Net loss was $39 million, or $0.09 per diluted share, compared with net
income of $631 million, or $1.37 per diluted share, in 2011.
The following forward-looking statements reflect Amazon.com's
expectations as of January 29, 2013. Our results are inherently
unpredictable and may be materially affected by many factors, such as
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 and the various factors detailed below.
First Quarter 2013 Guidance
A conference call will be webcast live today at 2 p.m. PT/5 p.m. ET, and
will be available for at least three months at www.amazon.com/ir.
This call will contain forward-looking statements and other material
information regarding the Company's financial and operating results.
These forward-looking statements are inherently difficult to predict.
Actual results could differ materially for a variety of reasons,
including, in addition to the factors discussed above, 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 and data
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 ("SEC"), including its most recent Annual Report on Form 10-K
and subsequent filings.
Our investor relations website is www.amazon.com/ir
and we encourage investors to use it as a way of easily finding
information about us. We promptly make available on this website, free
of charge, the reports that we file or furnish with the SEC, corporate
governance information (including our Code of Business Conduct and
Ethics), and select press releases and social media postings.
Amazon.com, Inc. (NASDAQ: AMZN), a Fortune 500 company based in Seattle,
opened on the World Wide Web in July 1995 and today offers Earth's
Biggest Selection. Amazon.com, Inc. seeks to be Earth's most
customer-centric company, where customers can find and discover anything
they might want to buy online, and endeavors to offer its customers the
lowest possible prices. Amazon.com and other sellers offer millions of
unique new, refurbished and used items in categories such as Books;
Movies, Music & Games; Digital Downloads; Electronics & Computers; Home
& Garden; Toys, Kids & Baby; Grocery; Apparel, Shoes & Jewelry; Health &
Beauty; Sports & Outdoors; and Tools, Auto & Industrial. Amazon Web
Services provides Amazon's developer customers with access to
in-the-cloud infrastructure services based on Amazon's own back-end
technology platform, which developers can use to enable virtually any
type of business. Kindle Paperwhite is the most-advanced e-reader ever
constructed with 62% more pixels and 25% increased contrast, a patented
built-in front light for reading in all lighting conditions, extra-long
battery life, and a thin and light design. The new latest generation
Kindle, the lightest and smallest Kindle, now features new, improved
fonts and faster page turns. Kindle Fire HD features a stunning custom
high-definition display, exclusive Dolby audio with dual stereo
speakers, high-end, laptop-grade Wi-Fi with dual-band support,
dual-antennas and MIMO for faster streaming and downloads, enough
storage for HD content, and the latest generation processor and graphics
engine-and it is available in two display sizes-7" and 8.9". The
large-screen Kindle Fire HD is also available with 4G wireless, and
comes with a groundbreaking $49.99 introductory 4G LTE data package. The
all-new Kindle Fire features a 20% faster processor, 40% faster
performance, twice the memory, and longer battery life.
Amazon and its affiliates operate websites, including www.amazon.com,
As used herein, "Amazon.com," "we," "our" and similar terms include
Amazon.com, Inc., and its subsidiaries, unless the context indicates
Adjustments to reconcile net income to net cash from operating
Depreciation of property and equipment, including internal-use
software and website development, and other amortization
Purchases of property and equipment, including internal-use
software and website development
Repayments of long-term debt, capital lease, and finance lease
(1) Represents revenue from the sale of products and related
shipping fees and digital content where we are the seller of
(2) Represents third-party seller fees earned (including
commissions) and related shipping fees, digital content
subscriptions, and non-retail activities.
Reclassification adjustment for losses (gains) included in net
income, net of tax effect of $0, $0, $3, and $1
(1) Represents operating expenses, excluding stock-based
compensation and "Other operating expense (income), net," which
are not allocated to segments.
(1) Includes sales from non-retail activities, such as AWS in the
North America segment, advertising services, and our co-branded
credit card agreements in both segments.
Other long-term liabilities
Purchases of property and equipment (incl. internal-use software &
website development) -- TTM
Free cash flow (operating cash flow less purchases of property and
equipment) -- TTM
Net income (loss) -- TTM
(3) Represents cost of sales, fulfillment, marketing, technology
and content, and general and administrative operating expenses,
excluding stock-based compensation.
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