AMZN
$872.76
Amazon.Com
($1.56)
(.18%)
Earnings Details
4th Quarter December 2016
Thursday, February 02, 2017 4:01:02 PM
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Summary

Amazon.Com Beats but Guides Lower

Amazon.Com (AMZN) reported 4th Quarter December 2016 earnings of $1.54 per share on revenue of $43.7 billion. The consensus earnings estimate was $1.40 per share on revenue of $44.8 billion. The Earnings Whisper number was $1.44 per share. Revenue grew 22.4% on a year-over-year basis.

The company said it expects first quarter revenue of $33.25 billion to $35.75 billion. The current consensus revenue estimate is $35.83 billion for the quarter ending March 31, 2017.

Amazon.com Inc is an online retailer. The Company sells its products through the website which provides services, such as advertising services and co-branded credit card agreements. It also offers electronic devices like Kindle e-readers and Fire tablets.

Results
Reported Earnings
$1.54
Earnings Whisper
$1.44
Consensus Estimate
$1.40
Reported Revenue
$43.74 Bil
Revenue Estimate
$44.84 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Amazon.com Announces Fourth Quarter Sales up 22% to $43.7 Billion

Amazon.com, Inc. (AMZN) today announced financial results for its fourth quarter ended December 31, 2016.

Operating cash flow increased 38% to $16.4 billion for the trailing twelve months, compared with $11.9 billion for the trailing twelve months ended December 31, 2015. Free cash flowincreased to $9.7 billion for the trailing twelve months, compared with $7.3 billion for the trailing twelve months ended December 31, 2015. Free cash flow less lease principal repayments increased to $5.7 billion for the trailing twelve months, compared with $4.7 billion for the trailing twelve months ended December 31, 2015. Free cash flow less finance lease principal repayments and assets acquired under capital leases increased to $3.9 billion for the trailing twelve months, compared with $2.5 billion for the trailing twelve months ended December 31, 2015.

Common shares outstanding plus shares underlying stock-based awards totaled 497 million on December 31, 2016, compared with 490 million one year ago.

Fourth Quarter 2016

Net sales increased 22% to $43.7 billion in the fourth quarter, compared with $35.7 billion in fourth quarter 2015. Excluding the $558 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 24% compared with fourth quarter 2015.

Operating income increased 13% to $1.3 billion in the fourth quarter, compared with operating income of $1.1 billion in fourth quarter 2015.

Net income was $749 million in the fourth quarter, or $1.54 per diluted share, compared with net income of $482 million, or $1.00 per diluted share, in fourth quarter 2015.

Full Year 2016

Net sales increased 27% to $136.0 billion, compared with $107.0 billion in 2015. Excluding the $550 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales increased 28% compared with 2015.

Operating income was $4.2 billion, compared with operating income of $2.2 billion in 2015.

Net income was $2.4 billion, or $4.90 per diluted share, compared with net income of $596 million, or $1.25 per diluted share, in 2015.

"Our Prime team’s customer obsession kept them busy in 2016," said Jeff Bezos, Amazon founder and CEO. "Prime members can now choose from over 50 million items with free two-day shipping -- up 73% since 2015. Prime Video is now available in more than 200 countries and territories. Prime Now added 18 new cities, which means millions more members now get one and two hour delivery. New benefits were also added to the list, like Prime Reading, Audible Channels for Prime, Twitch Prime and more. And customers noticed -- tens of millions of new paid members joined the program in just this past year."

Highlights

Amazon announced that it will create more than 100,000 new, full-time, full-benefit jobs in the U.S. over the next 18 months, and will include positions across the country for all types of experience, education, and skill levels.

Fulfillment by Amazon (FBA) delivered more than two billion units on behalf of sellers in 2016, and the number of active sellers using FBA grew more than 70%. Using the FBA service, Amazon sellers from more than 130 countries fulfilled orders to customers in 185 countries.

In 2016, there were over 100,000 sellers with sales of more than $100,000 selling on Amazon.

In the fourth quarter, FBA units represented more than 55% of total third-party units.

Amazon introduced Amazon Go in Seattle, a new kind of store with no checkout required. With Just Walk Out Shopping, customers simply take the products they want, and go. Our checkout-free shopping experience is made possible by the same types of technologies used in self-driving cars: computer vision, sensor fusion, and deep learning.

In 2016, the U.S. Prime program added Prime Reading, Twitch Prime, Audible Channels for Prime, and the Prime Photo Family Vault as new Prime-exclusive digital benefits.

Prime members engaged with the Prime digital benefits at a voracious rate, more than doubling the number of video, music, and reading activities compared to 2015.

Amazon introduced Prime Video to customers in more than 200 countries and territories around the globe, giving customers access to unlimited streaming of Amazon’s popular and award-winning Original Series, including The Grand Tour, The Man in the High Castle, and Transparent, as well as popular Hollywood movies and TV shows. Prime Video is now automatically available at no additional cost to Amazon Prime members in Belgium, Canada, France, India, Italy, and Spain.

Prime Video is now available on Amazon.in, offering Prime members in India the largest selection of new release Bollywood and regional Indian blockbusters, Hollywood movies, day-after-broadcast U.S. TV shows, kids’ programming, and award-winning Amazon Original Series. Amazon also announced the start of production of new Indian Amazon Original Series featuring top Indian talent and filmmakers, which will be available exclusively to Prime members in India.

The debut episode of The Grand Tour was the biggest show premiere ever on Prime Video, with millions of Prime members streaming the first episode in the U.S., U.K., Germany, Austria, and Japan over the opening weekend.

Amazon Studios released Manchester by the Sea, The Salesman, Paterson, and Gimme Danger in theaters nationwide.

Amazon Studios was nominated for seven Academy Awards, including Best Picture (Manchester by the Sea), Best Director (Kenneth Lonergan), and Best Foreign Language Film (The Salesman).

Amazon Studios was nominated for 11 Golden Globes and received two awards: Best Performance by an Actor in a Motion Picture - Drama for Casey Affleck in Manchester by the Sea, and Best Performance by an Actor in a Television Series - Drama for Billy Bob Thornton in Goliath.

Amazon Music Unlimited expanded to Austria, Germany, and the U.K. with over 40 million songs, hand-curated playlists, and personalized stations. Prime members in those countries can access Amazon Music Unlimited at a breakthrough price (EUR7.99/?7.99 per month), while the exclusive "for Echo" subscription plan is available to all customers for only EUR3.99/?3.99 per month. All customers listening to Amazon Music Unlimited on Echo, Echo Dot, or Amazon Tap can access their favorite music with new natural language voice controls powered by Alexa.

Alexa-enabled devices were the top-selling products across all categories on Amazon.com this holiday season. Customers purchased and gifted a record-setting number of devices from the Amazon Echo family with sales up over 9x compared to last holiday season.

Customers purchased millions of Fire tablets this holiday season. Additionally, Amazon brought Alexa to Fire HD 10, Fire HD 8, and other Fire tablets via a free software update, making it easy for customers to enjoy endless entertainment at the touch of a button.

Amazon sold millions of Fire TV devices this holiday season. The new Fire TV Stick with Alexa Voice Remote has received over 25,000 5-star customer reviews in just three months, and Amazon released a free, over-the-air software update delivering a new user interface that makes finding what to watch next even easier and more enjoyable.

Third-party developers released more than 4,000 new Alexa Skills since October, including ADT, AT&T, CBS, Pizza Hut, and The Wall Street Journal. Tens of thousands of developers are building skills for Alexa.

Tens of thousands of developers are using the Alexa Voice Service to integrate Alexa into their products, including Dish DVRs, Ford and Volkswagen vehicles, GE C Lamp, Huawei Mate 9, LG Smart Instaview fridge, and Whirlpool appliances.

Amazon selected 12 teams to participate in the inaugural Alexa Prize, an annual university competition dedicated to accelerating the field of conversational artificial intelligence. The teams are building socialbots on Alexa that will converse with humans on popular topics and news events, and the winner will be announced at Amazon Web Services (AWS) re:Invent 2017.

Dash Button is now available in a number of countries throughout Europe and Japan. Prime members can now order hundreds of products from dozens of popular brands with the press of a button.

Amazon launched Prime in China, offering Prime members unlimited, free cross-border shipping on millions of authentic international products from the Amazon Global Store and unlimited, free shipping with no minimum purchase on more than nine million domestic items.

Amazon Launchpad expanded to Canada, India, and Japan and has worked with over 100 leading venture capital firms, startup accelerators, and crowd-funding platforms to help startups launch products in China, France, Germany, the U.K., and the U.S.

Amazon and Chase introduced the Amazon Prime Rewards Visa Signature Card offering Prime members 5% back at Amazon.com, 2% back at restaurants, gas stations, and drugstores, and 1% back on every other purchase.

Amazon Prime Air, the service that uses drones to safely deliver packages to customers in 30 minutes or less, made its first delivery in December. The delivery marks the start of a limited, private trial for customers in a select area of the U.K.

Amazon announced six renewable energy projects during the quarter, including Amazon Wind Farm U.S. Central 2 in Ohio and five new solar farms across the Commonwealth of Virginia, which support the development of an additional 369 megawatts of renewable energy.

With millions of active customers, AWS continues to grow, and enterprise customers have committed to migrating tens of thousands of applications to AWS, including: Workday selected AWS as its preferred public cloud infrastructure provider for customer production workloads; Capital One selected AWS as its predominant cloud infrastructure provider; shipping carrier Matson has closed all of its data centers, completing an "all-in" migration to AWS; McDonald’s is transforming its digital-facing properties with AWS; the Financial Industry Regulatory Authority (FINRA) is going "all-in" on AWS for their data analytics platform, which analyzes up to 75 billion market events daily; and Enel has already moved more than 5,000 servers to AWS as it transforms its technology infrastructure on AWS.

AWS hosted re:Invent 2016, its fifth annual customer and partner conference, with over 30,000 attendees and over 50,000 streaming participants.

AWS accelerated its infrastructure expansion in 2016, opening eleven Availability Zones across five geographic regions in the U.S., Korea, India, and most recently, Canada and the U.K. AWS now operates 42 Availability Zones across 16 infrastructure regions globally and plans to open an additional five Availability Zones in two regions (France and a second region in China) in the coming months.

AWS announced that customers migrated more than 18,000 databases using the AWS Database Migration Service in 2016.

AWS continues to accelerate its pace of innovation with the release of 308 significant new services and features in the fourth quarter, bringing the total number of launches in 2016 to 1,017.

AWS announced three Artificial Intelligence (AI) services that make it easy for any developer to build apps that can understand natural language, turn text into lifelike speech, have conversations using voice or text, analyze images and recognize faces, objects, and scenes. Amazon Lex, Amazon Polly, and Amazon Rekognition are based on the same proven, highly scalable AI technology built by the thousands of deep learning and machine learning experts across Amazon. AWS also announced a significant investment in MXNet, an open source distributed deep learning framework. AWS will contribute code and improve the MXNet developer experience to enable machine learning scientists to build scalable deep learning models that can significantly reduce the training time for their applications.

AWS announced Amazon Athena, a pay-as-you-go, interactive query service that makes it easy for customers to analyze data directly in Amazon Simple Storage Service (Amazon S3) using standard SQL. With a few clicks in the AWS Management Console, customers can point Amazon Athena at their data stored in Amazon S3 and begin using standard SQL to run queries and get results in seconds. With Amazon Athena there are no clusters to manage and tune, no infrastructure to setup or manage, and customers pay only for the queries they run.

AWS announced AWS Greengrass and AWS Snowball Edge, hybrid services that help customers extend the power of the AWS Cloud to connected devices and other environments that exist beyond the network edge.

AWS announced AWS Snowmobile, an Exabyte-scale data transfer service that customers can use to move extremely large amounts of data to AWS. Each Snowmobile is a 45-foot long ruggedized shipping container pulled by a semi-trailer truck that is capable of moving up to 100 PB of data -- from video libraries and image repositories to entire data centers -- to the AWS Cloud in as little as a few weeks.

AWS announced seven new compute services and capabilities to support an even wider range of applications, introducing the next generations of Amazon Elastic Compute Cloud (Amazon EC2) Memory Optimized, Compute Optimized, and High input/output (I/O) instances, adding a way for customers to get started quickly with virtual private servers (VPS) through Amazon Lightsail, and delivering hardware acceleration with Elastic GPUs and Field Programmable Gate Array (FPGA)-enabled F1 instances.

AWS announced the expansion of Amazon Aurora to include full PostgreSQL compatibility. With Amazon Aurora’s new PostgreSQL support, customers can get up to several times better performance than the typical PostgreSQL database and take advantage of the scalability, durability, and security capabilities of Amazon Aurora -- all for one-tenth the cost of commercial grade databases.

AWS announced the general availability of Amazon QuickSight, a very fast, cloud-powered business analytics service that makes it easy for all employees, regardless of their technical skill, to build visualizations, perform ad-hoc analysis, and quickly get business insights from their data at one-tenth the cost of traditional solutions.

Financial Guidance

The following forward-looking statements reflect Amazon.com’s expectations as of February 2, 2017, and are subject to substantial uncertainty. 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 customer spending, world events, the rate of growth of the Internet, online commerce, and cloud services, and the various factors detailed below.

First Quarter 2017 Guidance

Net sales are expected to be between $33.25 billion and $35.75 billion, or to grow between 14% and 23% compared with first quarter 2016. This guidance anticipates an unfavorable impact of approximately $730 million or 250 basis points from foreign exchange rates.

Operating income is expected to be between $250 million and $900 million, compared with $1.1 billion in first quarter 2016.

This guidance assumes, among other things, that no additional business acquisitions, investments, restructurings, or legal settlements are concluded.

A conference call will be webcast live today at 2:30 p.m. PT/5:30 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 and services sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income or other taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of legal proceedings and claims, fulfillment, sortation, delivery, 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, payments risks, 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, 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, which may contain material information about us, and you may subscribe to be notified of new information posted to this site.

About Amazon

Amazon is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking. Customer reviews, 1-Click shopping, personalized recommendations, Prime, Fulfillment by Amazon, AWS, Kindle Direct Publishing, Kindle, Fire tablets, Fire TV, Amazon Echo, and Alexa are some of the products and services pioneered by Amazon. For more information, visit www.amazon.com/about.

AMAZON.COM, INC.
Consolidated Statements of Cash Flows
(in millions)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2015
2016
2015
2016
(unaudited)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
$ 10,709
$ 13,656
$ 14,557
$ 15,890
OPERATING ACTIVITIES:
Net income
482
749
596
2,371
Adjustments to reconcile net income to net cash from operating
activities:
Depreciation of property and equipment, including internal-use
1,752
2,297
6,281
8,116
software and website development, and other amortization, including
capitalized content costs
Stock-based compensation
606
887
2,119
2,975
Other operating expense, net
35
31
155
160
Other expense (income), net
80
21
250
(20 )
Deferred income taxes
190
(282 )
81
(246 )
Excess tax benefits from stock-based compensation
93
(336 )
(119 )
(829 )
Changes in operating assets and liabilities:
Inventories
(1,343 )
(1,043 )
(2,187 )
(1,426 )
Accounts receivable, net and other
(1,178 )
(1,924 )
(1,755 )
(3,367 )
Accounts payable
6,140
7,283
4,294
5,030
Accrued expenses and other
1,836
2,254
913
1,724
Additions to unearned revenue
2,422
3,975
7,401
11,931
Amortization of previously unearned revenue
(2,303 )
(3,261 )
(6,109 )
(9,976 )
Net cash provided by (used in) operating activities
8,812
10,651
11,920
16,443
INVESTING ACTIVITIES:
Purchases of property and equipment, including internal-use software
(1,309 )
(2,005 )
(4,589 )
(6,737 )
and website development, net
Acquisitions, net of cash acquired, and other
(317 )
(3 )
(795 )
(116 )
Sales and maturities of marketable securities
1,135
1,233
3,025
4,733
Purchases of marketable securities
(1,359 )
(3,399 )
(4,091 )
(7,756 )
Net cash provided by (used in) investing activities
(1,850 )
(4,174 )
(6,450 )
(9,876 )
FINANCING ACTIVITIES:
Excess tax benefits from stock-based compensation
(93 )
336
119
829
Proceeds from long-term debt and other
93
537
353
621
Repayments of long-term debt and other
(940 )
(84 )
(1,652 )
(354 )
Principal repayments of capital lease obligations
(724 )
(1,004 )
(2,462 )
(3,860 )
Principal repayments of finance lease obligations
(26 )
(41 )
(121 )
(147 )
Net cash provided by (used in) financing activities
(1,690 )
(256 )
(3,763 )
(2,911 )
Foreign currency effect on cash and cash equivalents
(91 )
(543 )
(374 )
(212 )
Net increase (decrease) in cash and cash equivalents
5,181
5,678
1,333
3,444
CASH AND CASH EQUIVALENTS, END OF PERIOD
$ 15,890
$ 19,334
$ 15,890
$ 19,334
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest on long-term debt
$
148
$
144
$
325
$
290
Cash paid for interest on capital and finance lease obligations
44
61
153
206
Cash paid for income taxes, net of refunds
73
95
273
412
Property and equipment acquired under capital leases
1,332
2,038
4,717
5,704
Property and equipment acquired under build-to-suit leases
163
416
544
1,209
AMAZON.COM, INC.
Consolidated Statements of Operations
(in millions, except per share data)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2015
2016
2015
2016
(unaudited)
Net product sales
$ 26,618
$ 30,629
$ 79,268
$ 94,665
Net service sales
9,129
13,112
27,738
41,322
Total net sales
35,747
43,741
107,006
135,987
Operating expenses:
Cost of sales
24,341
28,958
71,651
88,265
Fulfillment
4,546
5,719
13,410
17,619
Marketing
1,755
2,513
5,254
7,233
Technology and content
3,571
4,545
12,540
16,085
General and administrative
390
717
1,747
2,432
Other operating expense, net
36
34
171
167
Total operating expenses
34,639
42,486
104,773
131,801
Operating income
1,108
1,255
2,233
4,186
Interest income
13
30
50
100
Interest expense
(115 )
(133 )
(459 )
(484 )
Other income (expense), net
(68 )
14
(256 )
90
Total non-operating income (expense)
(170 )
(89 )
(665 )
(294 )
Income before income taxes
938
1,166
1,568
3,892
Provision for income taxes
(453 )
(414 )
(950 )
(1,425 )
Equity-method investment activity, net of tax
(3 )
(3 )
(22 )
(96 )
Net income
$
482
$
749
$
596
$
2,371
Basic earnings per share
$
1.03
$
1.57
$
1.28
$
5.01
Diluted earnings per share
$
1.00
$
1.54
$
1.25
$
4.90
Weighted-average shares used in computation of earnings per share:
Basic
470
476
467
474
Diluted
481
486
477
484
AMAZON.COM, INC.
Consolidated Statements of Comprehensive Income (Loss)
(in millions)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2015
2016
2015
2016
(unaudited)
Net income
$ 482
$ 749
$ 596
$ 2,371
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax of $7, $(68),
(40 )
(412 )
(210 )
(279 )
$10, and $(49)
Net change in unrealized gains (losses) on available-for-sale
securities:
Unrealized gains (losses), net of tax of $1, $22, $(5), and $(12)
(9 )
(54 )
(7 )
9
Reclassification adjustment for losses (gains) included in "Other
1
3
5
8
income (expense), net," net of tax of $0, $0, $0, and $0
Net unrealized gains (losses) on available-for-sale securities
(8 )
(51 )
(2 )
17
(48 )
(463 )
(212 )
(262 )
Total other comprehensive income (loss)
Comprehensive income (loss)
$ 434
$ 286
$ 384
$ 2,109
AMAZON.COM, INC.
Segment Information
(in millions)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2015
2016
2015
2016
(unaudited)
North America
Net sales
$ 21,501
$ 26,240
$
63,708
$
79,785
Operating expenses
20,498
24,916
60,957
75,686
Operating income before stock-based compensation and other
1,003
1,324
2,751
4,099
Stock-based compensation and other
367
508
1,326
1,738
Operating income
$
636
$
816
$
1,425
$
2,361
International
Net sales
$ 11,841
$ 13,965
$
35,418
$
43,983
Operating expenses
11,781
14,219
35,509
44,460
Operating income (loss) before stock-based compensation and other
60
(254 )
(91 )
(477 )
Stock-based compensation and other
168
233
608
806
Operating income (loss)
$
(108 )
$
(487 )
$
(699 )
$
(1,283 )
AWS
Net sales
$
2,405
$
3,536
$
7,880
$
12,219
Operating expenses
1,718
2,430
6,017
8,513
Operating income before stock-based compensation and other
687
1,106
1,863
3,706
Stock-based compensation and other
107
180
356
598
Operating income
$
580
$
926
$
1,507
$
3,108
Consolidated
Net sales
$ 35,747
$ 43,741
$ 107,006
$ 135,987
Operating expenses
33,997
41,565
102,483
128,659
Operating income before stock-based compensation and other
1,750
2,176
4,523
7,328
Stock-based compensation and other
642
921
2,290
3,142
Operating income
1,108
1,255
2,233
4,186
Total non-operating income (expense)
(170 )
(89 )
(665 )
(294 )
Provision for income taxes
(453 )
(414 )
(950 )
(1,425 )
Equity-method investment activity, net of tax
(3 )
(3 )
(22 )
(96 )
Net income
$
482
$
749
$
596
$
2,371
Segment Highlights:
Y/Y net sales growth:
North America
24 %
22 %
25 %
25 %
International
12
18
6
24
AWS
69
47
70
55
Consolidated
22
22
20
27
Net sales mix:
North America
60 %
60 %
60 %
59 %
International
33
32
33
32
AWS
7
8
7
9
Consolidated
100
%
100 %
100 %
100 %
AMAZON.COM, INC.
Supplemental Net Sales Information
(in millions)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2015
2016
2015
2016
(unaudited)
Net Sales:
North America
Media
$
3,931
$
4,208
$ 12,483
$ 13,580
Electronics and other general merchandise
17,325
21,590
50,401
64,887
Other (1)
245
442
824
1,318
Total North America
$ 21,501
$ 26,240
$ 63,708
$ 79,785
International
Media
$
3,292
$
3,377
$ 10,026
$ 10,631
Electronics and other general merchandise
8,491
10,514
25,196
33,107
Other (1)
58
74
196
245
Total International
$ 11,841
$ 13,965
$ 35,418
$ 43,983
Year-over-year Percentage Growth:
North America
Media
11 %
7 %
8 %
9 %
Electronics and other general merchandise
28
25
31
29
Other
(6 )
81
10
60
Total North America
24
22
25
25
International
Media
(3 )%
3 %
(8 )%
6 %
Electronics and other general merchandise
19
24
13
31
Other
(3 )
26
(3 )
25
Total International
12
18
6
24
Year-over-year Percentage Growth, excluding the effect of foreign
exchange rates:
North America
Media
12 %
7 %
8 %
9 %
Electronics and other general merchandise
28
25
31
29
Other
(6 )
81
10
60
Total North America
24
22
26
25
International
Media
5 %
7 %
4 %
7 %
Electronics and other general merchandise
31
28
29
33
Other
5
36
10
30
Total International
22
23
21
26
______________________________
(1) Includes sales from non-retail activities, such as certain
advertising services and our co-branded credit card agreements.
AMAZON.COM, INC.
Consolidated Balance Sheets
(in millions, except per share data)
December 31, 2015
December 31, 2016
ASSETS
Current assets:
Cash and cash equivalents
$
15,890
$
19,334
Marketable securities
3,918
6,647
Inventories
10,243
11,461
Accounts receivable, net and other
5,654
8,339
Total current assets
35,705
45,781
Property and equipment, net
21,838
29,114
Goodwill
3,759
3,784
Other assets
3,445
4,723
Total assets
$
64,747
$
83,402
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
20,397
$
25,309
Accrued expenses and other
10,372
13,739
Unearned revenue
3,118
4,768
Total current liabilities
33,887
43,816
Long-term debt
8,227
7,694
Other long-term liabilities
9,249
12,607
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value:
Authorized shares -- 500
Issued and outstanding shares -- none
--
--
Common stock, $0.01 par value:
Authorized shares -- 5,000
Issued shares -- 494 and 500
Outstanding shares -- 471 and 477
5
5
Treasury stock, at cost
(1,837 )
(1,837 )
Additional paid-in capital
13,394
17,186
Accumulated other comprehensive loss
(723 )
(985 )
Retained earnings
2,545
4,916
Total stockholders’ equity
13,384
19,285
Total liabilities and stockholders’ equity
$
64,747
$
83,402
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except per share data)
(unaudited)
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Y/Y %
Change
Cash Flows and Shares
Operating cash flow -- trailing twelve months (TTM)
$
9,823
$
11,920
$
11,258
$
12,726
$
14,603
$
16,443
38 %
Operating cash flow -- TTM Y/Y growth
72
%
74
%
44
%
42
%
49
%
38
%
N/A
Purchases of property and equipment, including internal-use software
$
4,424
$
4,589
$
4,897
$
5,395
$
6,040
$
6,737
47 %
and website development, net -- TTM
Principal repayments of capital lease obligations -- TTM
$
2,144
$
2,462
$
2,761
$
3,298
$
3,579
$
3,860
57 %
Principal repayments of finance lease obligations -- TTM
$
163
$
121
$
111
$
108
$
131
$
147
21 %
Property and equipment acquired under capital leases -- TTM
$
4,599
$
4,717
$
4,638
$
4,676
$
4,998
$
5,704
21 %
Free cash flow -- TTM (1)
$
5,399
$
7,331
$
6,361
$
7,331
$
8,563
$
9,706
32 %
Free cash flow less lease principal repayments -- TTM (2)
$
3,092
$
4,748
$
3,489
$
3,925
$
4,853
$
5,699
20 %
Free cash flow less finance lease principal repayments and assets
$
637
$
2,493
$
1,612
$
2,547
$
3,434
$
3,855
55 %
acquired under capital leases -- TTM (3)
Invested capital (4)
$
28,860
$
31,393
$
32,824
$
34,695
$
36,722
$
39,126
25 %
Common shares and stock-based awards outstanding
489
490
490
495
496
497
1 %
Common shares outstanding
469
471
472
474
475
477
1 %
Stock-based awards outstanding
20
19
18
21
21
20
4 %
Stock-based awards outstanding -- % of common shares outstanding
4.3
%
4.1
%
3.9
%
4.4
%
4.4
%
4.2
%
N/A
Results of Operations
Worldwide (WW) net sales
$
25,358
$
35,747
$
29,128
$
30,404
$
32,714
$
43,741
22 %
WW net sales -- Y/Y growth, excluding F/X
30
%
26
%
29
%
30
%
29
%
24
%
N/A
WW net sales -- TTM
$ 100,588
$ 107,006
$ 113,418
$ 120,637
$ 127,993
$ 135,987
27 %
WW net sales -- TTM Y/Y growth, excluding F/X
24
%
26
%
28
%
29
%
28
%
28
%
N/A
Operating income
$
406
$
1,108
$
1,071
$
1,285
$
575
$
1,255
13 %
FX impact -- favorable (unfavorable)
$
25
$
20
$
50
$
45
$
8
$
7
N/A
Operating income -- Y/Y growth, excluding F/X
N/A
84
%
300
%
168
%
40
%
13
%
N/A
Operating margin -- % of WW net sales
1.6
%
3.1
%
3.7
%
4.2
%
1.8
%
2.9
%
N/A
Operating income -- TTM
$
1,715
$
2,233
$
3,049
$
3,871
$
4,040
$
4,186
87 %
Operating income -- TTM Y/Y growth, excluding F/X
N/A
N/A
933
%
388
%
128
%
83
%
N/A
Operating margin -- TTM % of WW net sales
1.7
%
2.1
%
2.7
%
3.2
%
3.2
%
3.1
%
N/A
Net income
$
79
$
482
$
513
$
857
$
252
$
749
55 %
Net income per diluted share
$
0.17
$
1.00
$
1.07
$
1.78
$
0.52
$
1.54
54 %
Net income -- TTM
$
328
$
596
$
1,166
$
1,931
$
2,105
$
2,371
298 %
Net income per diluted share -- TTM
$
0.69
$
1.25
$
2.43
$
4.02
$
4.38
$
4.90
292 %
______________________________
(1) Free cash flow is cash flow from operations reduced by
"Purchases of property and equipment, including internal-use
software and website development, net," which is included in cash
flow from investing activities.
(2) Free cash flow less lease principal repayments is free cash flow
reduced by "Principal repayments of capital lease obligations," and
"Principal repayments of finance lease obligations," which are
included in cash flow from financing activities.
(3) Free cash flow less finance lease principal repayments and
assets acquired under capital leases is free cash flow reduced by
"Principal repayments of finance lease obligations," which are
included in cash flow from financing activities, and property and
equipment acquired under capital leases. In this measure, property
and equipment acquired under capital leases is reflected as if these
assets had been purchased with cash, which is not the case as these
assets have been leased.
(4) Average Total Assets minus Current Liabilities (excluding
current portion of Long-Term Debt and current portion of capital
lease obligations and finance lease obligations) over five quarter
ends.
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions)
(unaudited)
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Y/Y %
Change
Segments
North America Segment:
Net sales
$ 15,006
$ 21,501
$
16,996
$ 17,674
$ 18,874
$ 26,240
22 %
Net sales -- Y/Y growth, excluding F/X
29 %
24 %
27 %
28 %
26 %
22 %
N/A
Net sales -- TTM
$ 59,540
$ 63,708
$
67,299
$ 71,176
$ 75,045
$ 79,785
25 %
Operating income before stock-based compensation and other:
Operating income
$
528
$
1,003
$
924
$
1,157
$
694
$
1,324
32 %
Operating income -- Y/Y growth, excluding F/X
N/A
36 %
78 %
64 %
30 %
30 %
N/A
Operating margin -- % of North America net sales
3.5 %
4.7 %
5.4 %
6.6 %
3.7 %
5.0 %
N/A
Operating income -- TTM
$
2,480
$
2,751
$
3,157
$
3,611
$
3,778
$
4,099
49 %
Operating margin -- TTM % of North America net sales
4.2 %
4.3 %
4.7 %
5.1 %
5.0 %
5.1 %
N/A
Operating Income:
Operating income
$
186
$
636
$
588
$
702
$
255
$
816
28 %
FX impact -- favorable (unfavorable)
$
11
$
6
$
5
$
5
$
6
$
11
N/A
Operating income -- Y/Y growth, excluding F/X
129 %
100 %
34 %
26 %
N/A
Operating margin -- % of North America net sales
1.2 %
3.0 %
3.5 %
4.0 %
1.3 %
3.1 %
N/A
Operating income -- TTM
$
1,425
$
1,759
$
2,113
$
2,182
$
2,361
66 %
Operating margin -- TTM % of North America net sales
2.2 %
2.6 %
3.0 %
2.9 %
3.0 %
N/A
International Segment:
Net sales
$
8,267
$ 11,841
$
9,566
$
9,844
$ 10,609
$ 13,965
18 %
Net sales -- Y/Y growth, excluding F/X
24 %
22 %
26 %
28 %
28 %
23 %
N/A
Net sales -- TTM
$ 34,154
$ 35,418
$
37,239
$ 39,518
$ 41,860
$ 43,983
24 %
Operating income (loss) before stock-based compensation and other:
Operating income (loss)
$
(56 )
$
60
$
20
$
88
$
(332 )
$
(254 )
N/A
Operating income/loss -- Y/Y growth (decline), excluding F/X
N/A
65 %
N/A
N/A
539 %
N/A
N/A
Operating margin -- % of International net sales
(0.7 )%
0.5 %
0.2 %
0.9 %
(3.1 )%
(1.8 )%
N/A
Operating income (loss) -- TTM
$
(86 )
$
(91 )
$
6
$
113
$
(163 )
$
(477 )
426 %
Operating margin -- TTM % of International net sales
(0.3 )%
(0.3 )%
-- %
0.3 %
(0.4 )%
(1.1 )%
N/A
Operating income (loss):
Operating income (loss)
$
(208 )
$
(108 )
$
(121 )
$
(135 )
$
(541 )
$
(487 )
349 %
FX impact -- favorable (unfavorable)
$
(64 )
$
(47 )
$
21
$
40
$
22
$
5
N/A
Operating income/loss -- Y/Y growth (decline), excluding F/X
(27 )%
(8 )%
171 %
354 %
N/A
Operating margin -- % of International net sales
(2.5 )%
(0.9 )%
(1.3 )%
(1.4 )%
(5.1 )%
(3.5 )%
N/A
Operating income (loss) -- TTM
$
(699 )
$
(626 )
$
(571 )
$
(905 )
$ (1,283 )
83 %
Operating margin -- TTM % of International net sales
(2.0 )%
(1.7 )%
(1.4 )%
(2.2 )%
(2.9 )%
N/A
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions)
(unaudited)
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Y/Y %
Change
Segments (continued)
AWS Segment:
Net sales
$ 2,085
$ 2,405
$ 2,566
$
2,886
$
3,231
$
3,536
47 %
Net sales -- Y/Y growth, excluding F/X
78 %
69 %
64 %
58 %
55 %
47 %
N/A
Net sales -- TTM
$ 6,894
$ 7,880
$ 8,880
$
9,943
$ 11,088
$ 12,219
55 %
Operating income before stock-based compensation and other:
Operating income
$
521
$
687
$
716
$
863
$
1,021
$
1,106
61 %
Operating income -- Y/Y growth (decline), excluding F/X
353 %
161 %
161 %
121 %
100 %
62 %
N/A
Operating margin -- % of AWS net sales
25.0 %
28.5 %
27.9 %
29.9 %
31.6 %
31.3 %
N/A
Operating income -- TTM
$ 1,417
$ 1,863
$ 2,315
$
2,787
$
3,286
$
3,706
99 %
Operating margin -- TTM % of AWS net sales
20.6 %
23.6 %
26.1 %
28.0 %
29.6 %
30.3 %
N/A
Operating income:
Operating income
$
428
$
580
$
604
$
718
$
861
$
926
60 %
FX impact -- favorable (unfavorable)
$
78
$
60
$
24
$ --
$
(20 )
$
(9 )
N/A
Operating income -- Y/Y growth, excluding F/X
198 %
136 %
106 %
61 %
N/A
Operating margin -- % of AWS net sales
20.5 %
24.1 %
23.5 %
24.9 %
26.6 %
26.2 %
N/A
Operating income -- TTM
$ 1,507
$ 1,916
$
2,329
$
2,762
$
3,108
106 %
Operating margin -- TTM % of AWS net sales
19.1 %
21.6 %
23.4 %
24.9 %
25.4 %
N/A
Consolidated Segments Before Stock-Based Compensation and Other:
Operating income
$
993
$ 1,750
$ 1,660
$
2,108
$
1,383
$
2,176
24 %
Operating income -- Y/Y growth, excluding F/X
N/A
67 %
128 %
92 %
38 %
23 %
N/A
Operating margin -- % of Consolidated net sales
3.9 %
4.9 %
5.7 %
6.9 %
4.2 %
5.0 %
N/A
Operating income -- TTM
$ 3,811
$ 4,523
$ 5,478
$
6,511
$
6,902
$
7,328
62 %
Operating margin -- TTM % of Consolidated net sales
3.8 %
4.2 %
4.8 %
5.4 %
5.4 %
5.4 %
N/A
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except employee data)
(unaudited)
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Y/Y %
Change
Supplemental
Supplemental North America Segment Net Sales:
Media
$
2,963
$
3,931
$
3,208
$
2,928
$
3,237
$
4,208
7 %
Media -- Y/Y growth, excluding F/X
9 %
12 %
8 %
12 %
9 %
7 %
N/A
Media -- TTM
$ 12,096
$ 12,483
$ 12,722
$ 13,030
$ 13,304
$ 13,580
9 %
Electronics and other general merchandise
$ 11,840
$ 17,325
$ 13,511
$ 14,459
$ 15,327
$ 21,590
25 %
Electronics and other general merchandise -- Y/Y growth, excluding
35 %
28 %
32 %
32 %
29 %
25 %
N/A
F/X
Electronics and other general merchandise -- TTM
$ 46,606
$ 50,401
$ 53,663
$ 57,134
$ 60,622
$ 64,887
29 %
Electronics and other general merchandise -- TTM % of North America
78 %
79 %
80 %
80 %
81 %
81 %
N/A
net sales
Other
$
203
$
245
$
277
$
287
$
310
$
442
81 %
Supplemental International Segment Net Sales:
Media
$
2,320
$
3,292
$
2,480
$
2,283
$
2,491
$
3,377
3 %
Media -- Y/Y growth, excluding F/X
6 %
5 %
9 %
7 %
7 %
7 %
N/A
Media -- TTM
$ 10,140
$ 10,026
$ 10,186
$ 10,375
$ 10,546
$ 10,631
6 %
Electronics and other general merchandise
$
5,901
$
8,491
$
7,034
$
7,504
$
8,056
$ 10,514
24 %
Electronics and other general merchandise -- Y/Y growth, excluding
32 %
31 %
33 %
36 %
36 %
28 %
N/A
F/X
Electronics and other general merchandise -- TTM
$ 23,814
$ 25,196
$ 26,851
$ 28,930
$ 31,084
$ 33,107
31 %
Electronics and other general merchandise -- TTM % of International
70 %
71 %
72 %
73 %
74 %
75 %
N/A
net sales
Other
$
46
$
58
$
52
$
57
$
62
$
74
26 %
Stock-based Compensation Expense
Cost of sales
$
7
$
9
N/A
Fulfillment
$
122
$
137
$
116
$
186
$
165
$
190
38 %
Marketing
$
48
$
57
$
56
$
80
$
85
$
102
79 %
Technology and content
$
309
$
364
$
317
$
419
$
434
$
493
36 %
General and administrative
$
65
$
48
$
55
$
83
$
85
$
93
94 %
Total stock-based compensation expense
$
544
$
606
$
544
$
768
$
776
$
887
46 %
Other
WW shipping revenue
$
1,494
$
2,328
$
1,820
$
2,000
2,154
$
3,003
29 %
WW shipping revenue -- Y/Y growth
43 %
37 %
40 %
43 %
44 %
29 %
N/A
WW shipping costs
$
2,720
$
4,170
$
3,275
$
3,362
3,897
$
5,634
35 %
WW shipping costs -- Y/Y growth
35 %
37 %
42 %
44 %
43 %
35 %
N/A
WW net shipping costs
$
1,226
$
1,842
$
1,455
$
1,362
$
1,743
$
2,631
43 %
WW net shipping costs -- Y/Y growth
26 %
37 %
44 %
45 %
42 %
43 %
N/A
WW paid units -- Y/Y growth
26 %
26 %
27 %
28 %
28 %
24 %
N/A
WW seller unit mix -- % of WW paid units
46 %
47 %
48 %
49 %
50 %
49 %
N/A
Employees (full-time and part-time; excludes contractors & temporary
222,400
230,800
245,200
268,900
306,800
341,400
48 %
personnel)
Employees (full-time and part-time; excludes contractors & temporary
49 %
50 %
49 %
47 %
38 %
48 %
N/A
personnel) -- Y/Y growth

Amazon.com, Inc. Certain Definitions

Customer Accounts

References to customers mean customer accounts, which are unique e-mail addresses, established either when a customer places an order or when a customer orders from other sellers on our websites. Customer accounts exclude certain customers, including customers associated with certain of our acquisitions, Amazon Payments customers, AWS customers, and the customers of select companies with whom we have a technology alliance or marketing and promotional relationship. Customers are considered active when they have placed an order during the preceding twelve-month period.

Seller Accounts

References to sellers means seller accounts, which are established when a seller receives an order from a customer account. Sellers are considered active when they have received an order from a customer during the preceding twelve-month period.

AWS Customers

References to AWS customers mean unique AWS customer accounts, which are unique customer account IDs that are eligible to use AWS services. This includes AWS accounts in the AWS free tier. Multiple users accessing AWS services via one account ID are counted as a single account. Customers are considered active when they have had AWS usage activity during the preceding one-month period.

Units

References to units mean physical and digital units sold (net of returns and cancellations) by us and sellers at Amazon domains worldwide -- for example www.amazon.com, www.amazon.co.uk, www.amazon.de, www.amazon.co.jp, www.amazon.fr, www.amazon.ca, www.amazon.cn, www.amazon.it, www.amazon.es, www.amazon.com.br, www.amazon.in, www.amazon.com.mx, www.amazon.com.au, www.amazon.nl, www.diapers.com, www.shopbop.com, and www.zappos.com -- as well as Amazon-owned items sold through non-Amazon domains. Units sold are paid units and do not include units associated with AWS, certain acquisitions, rental businesses, or advertising businesses, or Amazon gift cards.

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SOURCE: Amazon.com, Inc.

Amazon.com Investor Relations
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www.amazon.com/ir
or
Amazon.com Public Relations
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www.amazon.com/about