Amazon.com Announces 21% Sales Growth Driven by Lower Prices and Expanded Selection; Raises Financial Guidance.Business Editors SEATTLE--(BUSINESS WIRE)--July 23, 2002 Amazon.com (Amazon.com, Seattle, WA, www.amazon.com) The largest online shopping site and one of the most widely known e-commerce sites on the Web. Founded by Jeff Bezos in 1995, it had 11 employees by year's end. Within four years, it had more than 1,600 employees and four million customers. , Inc. (Nasdaq:AMZN AMZN Amazon.com (NASDAQ symbol) ) today announced financial results for its second quarter ended June June: see month. 30, 2002. Free cash flow was $16 million for the trailing four quarters, compared with negative $270 million for the four quarters ended June 2001. Free cash flow includes interest payments and capital expenditures and excludes proceeds from exercise of stock options. Common stock outstanding was 380 million shares at June 30, 2002, an increase of 5% compared to June 30, 2001 (approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. half of the increase was in connection with a July July: see month. 2001 $100 million investment in the Company). Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight were $806 million, compared with $668 million in the second quarter 2001, an increase of 21%. Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. was $1 million, compared with a loss of $140 million a year ago. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma operating profit was $26 million, or 3% of net sales, exceeding the Company's guidance of $5 million to $15 million. This compares with a pro forma operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $28 million in the second quarter 2001, an improvement of $54 million. Net loss was $94 million, or $0.25 per share, compared with a second quarter 2001 net loss of $168 million, or $0.47 per share. Pro forma net loss, which includes interest expense, was $4 million, or $0.01 per share, compared with a pro forma net loss of $58 million, or $0.16 per share, in the second quarter 2001. (Details on the differences between GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). results and pro forma results are included below, with a tabular tab·u·lar adj. 1. Having a plane surface; flat. 2. Organized as a table or list. 3. Calculated by means of a table. tabular resembling a table. reconciliation of those differences included in the attached financial statements.) "I'm I'm Contraction of I am. Our Living Language Speakers of some scattered varieties of American English sometimes use I'm instead of I've or I have in present perfect constructions, as in especially pleased with the outstanding job our U.S. Books team is doing -- posting another quarter of 20% year-over-year book unit growth, up from 15% growth this past fourth quarter," said Jeff Bezos Jeffrey Preston Bezos (born January 12, 1964 , Albuquerque ) is the founder, president, chief executive officer, and chairman of the board of Amazon.com. Bezos, a Phi Beta Kappa graduate of Princeton University, worked as a financial analyst for D. E. Shaw & Co. , founder and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Amazon.com. "Also, Electronics, Tools and Kitchen revenues accelerated as we lowered prices and expanded Electronics selection by 40% to over 60,000 items, including products from Sony SONY Standard Oil of New York (common, but untrue; it's an urban legend) , Toshiba Toshiba Corporation (株式会社東芝 Kabushiki-gaisha Tōshiba , Yamaha (company) Yamaha - A Japanese company best known for consumer electronics and motorbikes. They make music synthesizers, CD-Rom Writers and HiFi sound equipment. http://yamaha.com/. and Microsoft (Microsoft Corporation, Redmond, WA, www.microsoft.com) The most successful and influential software company. Microsoft's software and Intel's hardware pioneered the PC and revolutionized the computer industry. ." In June, Amazon.com announced its fourth significant price decrease in the past year. In July 2001, the Company lowered book prices to 30% off books over $20, and in January January: see month. introduced its Free Super Saver Super saver may refer to:
Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. test. Additionally, Amazon.com recently reduced prices on electronics, tools and many bestselling bestselling adjective successful, top, hit (informal) smash (informal) flourishing, lucrative, smash-hit (informal) chart-topping (informal) moneymaking, number one, highly successful CDs and DVDs. Highlights of Second Quarter Results (comparisons are with the equivalent period of 2001)
-- Our segment reporting includes four segments: North America Books, Music and DVD/Video ("BMVD"); North America Electronics, Tools and Kitchen ("ETK"); International; and Services.
-- Allocation of centrally incurred operating costs methodologies have been consistently applied and there are no internal transactions between segments.
-- The BMVD segment includes revenues, direct costs and cost allocations primarily associated with retail sales from www.amazon.com and www.amazon.ca for books, music, DVDs, video products and magazine subscription commissions. This segment also includes commissions and other amounts earned from sales of these products, new or used, through Amazon Marketplace and revenues from stores offering these products through our Syndicated Stores Program, such as www.borders.com.
-- The ETK segment includes revenues, direct costs and cost allocations primarily associated with www.amazon.com retail sales of electronics, computers, kitchen products and housewares, camera and photo items, software, cell phones and service, tools and hardware, and outdoor living items, as well as catalog sales of toys and tools and hardware. This segment also includes commissions and other amounts earned from sales of these products, new or used, through Amazon Marketplace and from offerings of these products by third-party sellers under our Merchant@amazon.com Program, such as Target and Circuit City.
-- The International segment includes all revenues, direct costs and cost allocations associated with the retail sales of our German, French, Japanese and U.K. Web sites -- www.amazon.de, www.amazon.fr, www.amazon.co.jp and www.amazon.co.uk. This segment also includes commissions and other amounts earned from sales of products, new or used, through Amazon Marketplace and revenues from stores offering these products through our Syndicated Stores Program.
-- The Services segment includes revenues, direct costs and cost allocations associated with our business-to-business commercial agreements, including the Merchant Program, such as www.target.com beginning third quarter 2002, and, to the extent full product categories are not also offered by our online retail stores, the Merchant@amazon.com Program, such as Toysrus.com. This segment also includes our technology alliance with America Online and miscellaneous marketing, promotional and other agreements.
-- All references to customers mean customer accounts, which are unique e-mail addresses, established either when a customer's initial order is shipped or when a customer orders from certain third-party sellers on our Web sites. Customer accounts include customers of Amazon Marketplace, Auctions and zShops services and from our Merchant@amazon.com and Syndicated Stores Programs, but exclude Merchant Program customers, Amazon.com Payments customers, our catalog customers and the customers of selected companies with whom we have strategic marketing and promotional relationships.
-- Trailing twelve-month net sales per active customer account figures include all amounts earned through Internet sales, including net sales earned from new or used products sold through Amazon Marketplace, Auctions and zShops services, and products sold through our Merchant@amazon.com and Syndicated Stores Programs, but excluding products sold through our Merchant Program, catalogs and certain strategic alliances and sales of inventory to Toysrus.com. A customer is considered active upon placing an order.
Stock Options The Company announced that by the beginning of 2003 all stock-based awards granted thereafter will be expensed. Financial Guidance The following forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. reflect Amazon Amazon, in Greek mythology Amazon (ăm`əzŏn), in Greek mythology, one of a tribe of warlike women who lived in Asia Minor. .com's expectations as of July 23, 2002. Results may be materially affected by many factors, such as changes in general economic conditions and consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. , the emerging nature and rate of growth of the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the and online commerce, and the various factors detailed below. Third Quarter 2002 Expectations
-- Our segment reporting includes four segments: North America Books, Music and DVD/Video ("BMVD"); North America Electronics, Tools and Kitchen ("ETK"); International; and Services.
-- Allocation of centrally incurred operating costs methodologies have been consistently applied and there are no internal transactions between segments.
-- The BMVD segment includes revenues, direct costs and cost allocations primarily associated with retail sales from www.amazon.com and www.amazon.ca for books, music, DVDs, video products and magazine subscription commissions. This segment also includes commissions and other amounts earned from sales of these products, new or used, through Amazon Marketplace and revenues from stores offering these products through our Syndicated Stores Program, such as www.borders.com.
-- The ETK segment includes revenues, direct costs and cost allocations primarily associated with www.amazon.com retail sales of electronics, computers, kitchen products and housewares, camera and photo items, software, cell phones and service, tools and hardware, and outdoor living items, as well as catalog sales of toys and tools and hardware. This segment also includes commissions and other amounts earned from sales of these products, new or used, through Amazon Marketplace and from offerings of these products by third-party sellers under our Merchant@amazon.com Program, such as Target and Circuit City.
-- The International segment includes all revenues, direct costs and cost allocations associated with the retail sales of our German, French, Japanese and U.K. Web sites -- www.amazon.de, www.amazon.fr, www.amazon.co.jp and www.amazon.co.uk. This segment also includes commissions and other amounts earned from sales of products, new or used, through Amazon Marketplace and revenues from stores offering these products through our Syndicated Stores Program.
-- The Services segment includes revenues, direct costs and cost allocations associated with our business-to-business commercial agreements, including the Merchant Program, such as www.target.com beginning third quarter 2002, and, to the extent full product categories are not also offered by our online retail stores, the Merchant@amazon.com Program, such as Toysrus.com. This segment also includes our technology alliance with America Online and miscellaneous marketing, promotional and other agreements.
-- All references to customers mean customer accounts, which are unique e-mail addresses, established either when a customer's initial order is shipped or when a customer orders from certain third-party sellers on our Web sites. Customer accounts include customers of Amazon Marketplace, Auctions and zShops services and from our Merchant@amazon.com and Syndicated Stores Programs, but exclude Merchant Program customers, Amazon.com Payments customers, our catalog customers and the customers of selected companies with whom we have strategic marketing and promotional relationships.
-- Trailing twelve-month net sales per active customer account figures include all amounts earned through Internet sales, including net sales earned from new or used products sold through Amazon Marketplace, Auctions and zShops services, and products sold through our Merchant@amazon.com and Syndicated Stores Programs, but excluding products sold through our Merchant Program, catalogs and certain strategic alliances and sales of inventory to Toysrus.com. A customer is considered active upon placing an order.
Full Year 2002 Expectations
-- Our segment reporting includes four segments: North America Books, Music and DVD/Video ("BMVD"); North America Electronics, Tools and Kitchen ("ETK"); International; and Services.
-- Allocation of centrally incurred operating costs methodologies have been consistently applied and there are no internal transactions between segments.
-- The BMVD segment includes revenues, direct costs and cost allocations primarily associated with retail sales from www.amazon.com and www.amazon.ca for books, music, DVDs, video products and magazine subscription commissions. This segment also includes commissions and other amounts earned from sales of these products, new or used, through Amazon Marketplace and revenues from stores offering these products through our Syndicated Stores Program, such as www.borders.com.
-- The ETK segment includes revenues, direct costs and cost allocations primarily associated with www.amazon.com retail sales of electronics, computers, kitchen products and housewares, camera and photo items, software, cell phones and service, tools and hardware, and outdoor living items, as well as catalog sales of toys and tools and hardware. This segment also includes commissions and other amounts earned from sales of these products, new or used, through Amazon Marketplace and from offerings of these products by third-party sellers under our Merchant@amazon.com Program, such as Target and Circuit City.
-- The International segment includes all revenues, direct costs and cost allocations associated with the retail sales of our German, French, Japanese and U.K. Web sites -- www.amazon.de, www.amazon.fr, www.amazon.co.jp and www.amazon.co.uk. This segment also includes commissions and other amounts earned from sales of products, new or used, through Amazon Marketplace and revenues from stores offering these products through our Syndicated Stores Program.
-- The Services segment includes revenues, direct costs and cost allocations associated with our business-to-business commercial agreements, including the Merchant Program, such as www.target.com beginning third quarter 2002, and, to the extent full product categories are not also offered by our online retail stores, the Merchant@amazon.com Program, such as Toysrus.com. This segment also includes our technology alliance with America Online and miscellaneous marketing, promotional and other agreements.
-- All references to customers mean customer accounts, which are unique e-mail addresses, established either when a customer's initial order is shipped or when a customer orders from certain third-party sellers on our Web sites. Customer accounts include customers of Amazon Marketplace, Auctions and zShops services and from our Merchant@amazon.com and Syndicated Stores Programs, but exclude Merchant Program customers, Amazon.com Payments customers, our catalog customers and the customers of selected companies with whom we have strategic marketing and promotional relationships.
-- Trailing twelve-month net sales per active customer account figures include all amounts earned through Internet sales, including net sales earned from new or used products sold through Amazon Marketplace, Auctions and zShops services, and products sold through our Merchant@amazon.com and Syndicated Stores Programs, but excluding products sold through our Merchant Program, catalogs and certain strategic alliances and sales of inventory to Toysrus.com. A customer is considered active upon placing an order.
A conference call will be Webcast live at www.amazon.com/ir today at 2 p.m. PT/5 p.m. ET and will be available through Sept. 30, 2002. This call will contain forward-looking statements and other material information. These forward-looking statements are inherently difficult to predict. Actual results could differ materially for a variety of reasons, including, among others, the rate of growth of the economy in general and of the Internet and online commerce; customer spending patterns; 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 de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from products as compared with services; competition; risks of inventory management; the degree to which the Company enters into, maintains and develops service relationships with third-party sellers and other strategic transactions; foreign-currency exchange risks; seasonality; international growth and expansion; risks of fulfillment ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. throughput The speed with which a computer processes data. It is a combination of internal processing speed, peripheral speeds (I/O) and the efficiency of the operating system and other system software all working together. 1. and productivity; and fluctuations in the value of securities and non-cash payments Amazon.com receives in connection with such transactions. Other risks and uncertainties include, among others, risk of future losses, significant amount of indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. , potential fluctuations in operating results, management of potential growth, system interruptions, consumer trends, fulfillment center optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. , inventory, limited operating history, government regulation and taxation, customer or third-party sellers fraud, Amazon.com Payments, and new business areas, business combinations and strategic alliances. 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended Dec. 31, 2001, and all subsequent filings. The Company intends to continue its practice of not updating forward-looking statements other than in publicly available documents. Pro Forma Results Pro forma results, which generally exclude non-operational, non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. and benefits as well as one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charges, are provided as a complement to results provided in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with accounting principles generally accepted in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. (known as "GAAP"). Management uses such pro forma measures internally to evaluate the Company's performance and manage its operations. A reconciliation of GAAP to pro forma is included in the attached financial statements. Pro forma operating results exclude the following line items on the Company's statements of operations:
-- Our segment reporting includes four segments: North America Books, Music and DVD/Video ("BMVD"); North America Electronics, Tools and Kitchen ("ETK"); International; and Services.
-- Allocation of centrally incurred operating costs methodologies have been consistently applied and there are no internal transactions between segments.
-- The BMVD segment includes revenues, direct costs and cost allocations primarily associated with retail sales from www.amazon.com and www.amazon.ca for books, music, DVDs, video products and magazine subscription commissions. This segment also includes commissions and other amounts earned from sales of these products, new or used, through Amazon Marketplace and revenues from stores offering these products through our Syndicated Stores Program, such as www.borders.com.
-- The ETK segment includes revenues, direct costs and cost allocations primarily associated with www.amazon.com retail sales of electronics, computers, kitchen products and housewares, camera and photo items, software, cell phones and service, tools and hardware, and outdoor living items, as well as catalog sales of toys and tools and hardware. This segment also includes commissions and other amounts earned from sales of these products, new or used, through Amazon Marketplace and from offerings of these products by third-party sellers under our Merchant@amazon.com Program, such as Target and Circuit City.
-- The International segment includes all revenues, direct costs and cost allocations associated with the retail sales of our German, French, Japanese and U.K. Web sites -- www.amazon.de, www.amazon.fr, www.amazon.co.jp and www.amazon.co.uk. This segment also includes commissions and other amounts earned from sales of products, new or used, through Amazon Marketplace and revenues from stores offering these products through our Syndicated Stores Program.
-- The Services segment includes revenues, direct costs and cost allocations associated with our business-to-business commercial agreements, including the Merchant Program, such as www.target.com beginning third quarter 2002, and, to the extent full product categories are not also offered by our online retail stores, the Merchant@amazon.com Program, such as Toysrus.com. This segment also includes our technology alliance with America Online and miscellaneous marketing, promotional and other agreements.
-- All references to customers mean customer accounts, which are unique e-mail addresses, established either when a customer's initial order is shipped or when a customer orders from certain third-party sellers on our Web sites. Customer accounts include customers of Amazon Marketplace, Auctions and zShops services and from our Merchant@amazon.com and Syndicated Stores Programs, but exclude Merchant Program customers, Amazon.com Payments customers, our catalog customers and the customers of selected companies with whom we have strategic marketing and promotional relationships.
-- Trailing twelve-month net sales per active customer account figures include all amounts earned through Internet sales, including net sales earned from new or used products sold through Amazon Marketplace, Auctions and zShops services, and products sold through our Merchant@amazon.com and Syndicated Stores Programs, but excluding products sold through our Merchant Program, catalogs and certain strategic alliances and sales of inventory to Toysrus.com. A customer is considered active upon placing an order.
Pro forma net results exclude, in addition to the line items described above, the following line items on the Company's statements of operations:
-- Our segment reporting includes four segments: North America Books, Music and DVD/Video ("BMVD"); North America Electronics, Tools and Kitchen ("ETK"); International; and Services.
-- Allocation of centrally incurred operating costs methodologies have been consistently applied and there are no internal transactions between segments.
-- The BMVD segment includes revenues, direct costs and cost allocations primarily associated with retail sales from www.amazon.com and www.amazon.ca for books, music, DVDs, video products and magazine subscription commissions. This segment also includes commissions and other amounts earned from sales of these products, new or used, through Amazon Marketplace and revenues from stores offering these products through our Syndicated Stores Program, such as www.borders.com.
-- The ETK segment includes revenues, direct costs and cost allocations primarily associated with www.amazon.com retail sales of electronics, computers, kitchen products and housewares, camera and photo items, software, cell phones and service, tools and hardware, and outdoor living items, as well as catalog sales of toys and tools and hardware. This segment also includes commissions and other amounts earned from sales of these products, new or used, through Amazon Marketplace and from offerings of these products by third-party sellers under our Merchant@amazon.com Program, such as Target and Circuit City.
-- The International segment includes all revenues, direct costs and cost allocations associated with the retail sales of our German, French, Japanese and U.K. Web sites -- www.amazon.de, www.amazon.fr, www.amazon.co.jp and www.amazon.co.uk. This segment also includes commissions and other amounts earned from sales of products, new or used, through Amazon Marketplace and revenues from stores offering these products through our Syndicated Stores Program.
-- The Services segment includes revenues, direct costs and cost allocations associated with our business-to-business commercial agreements, including the Merchant Program, such as www.target.com beginning third quarter 2002, and, to the extent full product categories are not also offered by our online retail stores, the Merchant@amazon.com Program, such as Toysrus.com. This segment also includes our technology alliance with America Online and miscellaneous marketing, promotional and other agreements.
-- All references to customers mean customer accounts, which are unique e-mail addresses, established either when a customer's initial order is shipped or when a customer orders from certain third-party sellers on our Web sites. Customer accounts include customers of Amazon Marketplace, Auctions and zShops services and from our Merchant@amazon.com and Syndicated Stores Programs, but exclude Merchant Program customers, Amazon.com Payments customers, our catalog customers and the customers of selected companies with whom we have strategic marketing and promotional relationships.
-- Trailing twelve-month net sales per active customer account figures include all amounts earned through Internet sales, including net sales earned from new or used products sold through Amazon Marketplace, Auctions and zShops services, and products sold through our Merchant@amazon.com and Syndicated Stores Programs, but excluding products sold through our Merchant Program, catalogs and certain strategic alliances and sales of inventory to Toysrus.com. A customer is considered active upon placing an order.
About Amazon.com Amazon.com, a Fortune 500 company based in Seattle Seattle (sēăt`əl), city (1990 pop. 516,259), seat of King co., W Wash., built on seven hills, between Elliott Bay of Puget Sound and Lake Washington; inc. 1869. , opened its virtual doors on the World Wide Web in July 1995 and today offers Earth's Biggest Selection. Amazon.com seeks to be the world's most customer-centric company, where customers can find and discover anything they might want to buy online. Amazon.com and sellers list millions of unique new and used items in categories such as electronics, computers, kitchenware and housewares house·wares pl.n. Cooking utensils, dishes, and other small articles used in a household, especially in the kitchen. , books, music, DVDs, videos, camera and photo items, toys, baby items and baby registry The configuration database in all 32-bit versions of Windows that contains settings for the hardware and software in the PC it is installed in. The Registry is made up of the SYSTEM.DAT and USER.DAT files. Many settings previously stored in the WIN.INI and SYSTEM. , software, computer and video games This article is about the British magazine covering computer and video games. For the American magazine, see Computer Games Magazine. Computer And Video Games (CVG , cell phones and service, tools and hardware, travel services, magazine subscriptions and outdoor living items. Through Amazon Marketplace Amazon Marketplace ( i.e:Third-party Marketplace ) is Amazon.com's fixed-price online marketplace that allows sellers to survey their goods alongside Amazon's offerings. Buyers can buy new and used items sold directly by a third party through Amazon. , zShops and Auctions, any business or individual can sell virtually anything to Amazon.com's millions of customers, and with Amazon.com Payments, sellers can accept credit card transactions, avoiding the hassles of offline (1) Not connected to the Internet, online service or internal network. See offline file. (2) Not connected to or not installed in the computer. If a terminal, printer or other device is physically connected to the computer, but is not turned on or in ready mode, it is payments. Amazon.com operates five international Web sites: www.amazon.ca, www.amazon.co.uk, www.amazon.de, www.amazon.fr and www.amazon.co.jp. It also operates the Internet Movie Database (www.imdb.com), the Web's comprehensive and authoritative source of information on more than 300,000 movies and entertainment titles and 1 million cast and crew members dating from the birth of film. CONTACT: Amazon.com Tim Halladay, 206/266-2171 (Investor Relations Investor relations The process by which the corporation communicates with its investors. ) ir@amazon.com or Bill Curry William "Bill" Curry (born October 21, 1942) is a former NFL football player and NCAA football coach. He currently works as a football analyst for ESPN and the director of the Leadership Baylor program at Baylor School in Chattanooga, Tennessee. , 206/266-7180 (Public Relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most )
AMAZON.COM, INC.
Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- ---------------------
2002 2001 2002 2001
---------- ---------- ---------- ----------
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD $ 296,689 $ 446,944 $ 540,282 $ 822,435
OPERATING ACTIVITIES:
Net loss (93,553) (168,359) (116,703) (402,490)
Adjustments to reconcile
net loss to net cash
provided by (used in)
operating activities:
Depreciation of fixed
assets and other
amortization 20,970 20,794 41,910 43,867
Stock-based compensation 23,148 2,351 34,079 5,267
Equity in losses of
equity-method investees,
net 1,168 10,315 2,912 23,490
Amortization of goodwill
and other intangibles 1,374 50,830 3,353 101,661
Non-cash restructuring-
related and other - 6,525 - 68,529
Loss (gain) on sale of
marketable securities,
net (437) 187 (813) 214
Other losses (gains), net 63,454 (11,315) 57,938 (45,172)
Non-cash interest expense
and other 7,464 6,713 14,525 13,285
Cumulative effect of
change in accounting
principle - - (801) 10,523
Changes in operating
assets and liabilities:
Inventories 16,420 25,277 21,094 45,100
Prepaid expenses and
other current assets (13,430) (12,203) (16,750) 15,131
Accounts payable (27,418) (1,632) (155,704) (231,390)
Accrued expenses and
other current
liabilities (12,489) 52,271 (78,350) (5,491)
Unearned revenue 20,688 25,192 49,404 43,197
Amortization of
previously unearned
revenue (30,921) (31,908) (68,254) (65,300)
Interest payable 28,199 27,447 (24,236) (24,920)
---------- ---------- ---------- ----------
Net cash provided by (used
in) operating activities 4,637 2,485 (236,396) (404,499)
INVESTING ACTIVITIES:
Sales and maturities of
marketable securities and
other investments 213,336 66,971 349,911 161,337
Purchases of marketable
securities (299,877) (26,743) (434,104) (57,121)
Purchases of fixed assets,
including internal-use
software and Web site
development (7,440) (10,425) (12,294) (29,862)
---------- ---------- ---------- ----------
Net cash provided by
(used in) investing
activities (93,981) 29,803 (96,487) 74,354
FINANCING ACTIVITIES:
Proceeds from exercise of
stock options and other 42,866 7,644 50,275 13,477
Proceeds from long-term
debt and other - - - 10,000
Repayment of capital lease
obligations and other (3,432) (4,094) (7,995) (8,669)
---------- ---------- ---------- ----------
Net cash provided by
financing activities 39,434 3,550 42,280 14,808
Effect of exchange-rate
changes on cash and cash
equivalents 23,659 (19,833) 20,759 (44,149)
---------- ---------- ---------- ----------
Net increase (decrease) in
cash and cash equivalents (26,251) 16,005 (269,844) (359,486)
---------- ---------- ---------- ----------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 270,438 $ 462,949 $ 270,438 $ 462,949
========== ========== ========== ==========
SUPPLEMENTAL CASH FLOW
INFORMATION:
Fixed assets acquired
under capital leases $ 1,211 $ 171 $ 2,135 $ 2,469
Equity securities received
for commercial agreements - - - 331
Cash paid for interest 566 1,198 81,049 80,715
Note: The attached "Financial and Operational Highlights" are an
integral part of the press release financial statements.
AMAZON.COM, INC.
Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- -------------------------
2002 2001 2002 2001
---------- ----------- ------------ ------------
Net sales $ 805,605 $ 667,625 $ 1,653,027 $ 1,367,981
Cost of sales 587,438 487,905 1,211,735 1,005,664
---------- ----------- ------------ ------------
Gross profit 218,167 179,720 441,292 362,317
Operating expenses:
Fulfillment 85,751 85,583 175,566 183,831
Marketing 28,832 34,658 61,076 71,296
Technology and
content 58,165 64,710 113,662 134,994
General and
administrative 19,425 22,778 40,336 48,806
Stock-based
compensation 23,148 2,351 34,079 5,267
Amortization of
goodwill and
other
intangibles 1,374 50,830 3,353 101,661
Restructuring-
related and
other - 58,650 9,974 172,910
---------- ----------- ------------ ------------
Total operating
expenses 216,695 319,560 438,046 718,765
---------- ----------- ------------ ------------
Income (loss) from
operations 1,472 (139,840) 3,246 (356,448)
Interest income 5,650 6,807 11,302 16,757
Interest expense (35,651) (35,148) (70,895) (68,896)
Other income
(expense), net (402) (1,178) (307) (5,062)
Other gains (losses),
net (63,454) 11,315 (57,938) 45,172
---------- ----------- ------------ ------------
Total non-
operating
expenses, net (93,857) (18,204) (117,838) (12,029)
---------- ----------- ------------ ------------
Loss before equity in
losses of equity-
method investees (92,385) (158,044) (114,592) (368,477)
Equity in losses of
equity-method
investees, net (1,168) (10,315) (2,912) (23,490)
---------- ----------- ------------ ------------
Loss before change in
accounting principle (93,553) (168,359) (117,504) (391,967)
Cumulative effect of
change in accounting
principle - - 801 (10,523)
---------- ----------- ------------ ------------
Net loss $ (93,553) $ (168,359) $ (116,703) $ (402,490)
========== =========== ============ ============
Basic and diluted
loss per share:
Prior to
cumulative
effect of change
in accounting
principle $ (0.25) $ (0.47) $ (0.31) $ (1.09)
Cumulative
effect of change
in accounting
principle - - - (0.03)
---------- ----------- ------------ ------------
$ (0.25) $ (0.47) $ (0.31) $ (1.12)
========== =========== ============ ============
Shares used in
computation of basic
and diluted loss
per share: 376,937 359,752 374,995 358,595
========== =========== ============ ============
Note: The attached "Financial and Operational Highlights" are an
integral part of the press release financial statements.
AMAZON.COM, INC.
Pro Forma Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended
June 30, 2002
-----------------------------------
Pro Forma
As Reported Adjustments Pro Forma
(1)
-----------------------------------
Net sales $ 805,605 $ - $ 805,605
Cost of sales 587,438 - 587,438
-----------------------------------
Gross profit 218,167 - 218,167
Operating expenses:
Fulfillment 85,751 - 85,751
Marketing 28,832 - 28,832
Technology and content 58,165 - 58,165
General and administrative 19,425 - 19,425
Stock-based compensation 23,148 (23,148) -
Amortization of goodwill and
other intangibles 1,374 (1,374) -
Restructuring-related and other - - -
-----------------------------------
Total operating
expenses 216,695 (24,522) 192,173
-----------------------------------
Income (loss) from operations 1,472 24,522 25,994
Interest income 5,650 - 5,650
Interest expense (35,651) - (35,651)
Other income (expense), net (402) - (402)
Other gains (losses), net (63,454) 63,454 -
-----------------------------------
Total non-operating
expenses, net (93,857) 63,454 (30,403)
-----------------------------------
Loss before equity in losses of
equity-method investees (92,385) 87,976 (4,409)
Equity in losses of equity-method
investees, net (1,168) 1,168 -
-----------------------------------
Net loss $ (93,553) $ 89,144 $ (4,409)
===================================
Net cash provided by operating
activities $ 4,637 $ 4,637
============ ============
Basic and diluted loss per share $ (0.25) $ 0.24 $ (0.01)
===================================
Shares used in computation of
basic and diluted loss per share: 376,937 376,937
============ ============
Three Months Ended
June 30, 2001
-----------------------------------
Pro Forma
As Reported Adjustments Pro Forma
(1)
-----------------------------------
Net sales $ 667,625 $ - $ 667,625
Cost of sales 487,905 - 487,905
-----------------------------------
Gross profit 179,720 - 179,720
Operating expenses:
Fulfillment 85,583 - 85,583
Marketing 34,658 - 34,658
Technology and content 64,710 - 64,710
General and administrative 22,778 - 22,778
Stock-based compensation 2,351 (2,351) -
Amortization of goodwill and
other intangibles 50,830 (50,830) -
Restructuring-related and other 58,650 (58,650) -
-----------------------------------
Total operating expenses 319,560 (111,831) 207,729
-----------------------------------
Income (loss) from operations (139,840) 111,831 (28,009)
Interest income 6,807 - 6,807
Interest expense (35,148) - (35,148)
Other income (expense), net (1,178) - (1,178)
Other gains (losses), net 11,315 (11,315) -
-----------------------------------
Total non-operating
expenses, net (18,204) (11,315) (29,519)
-----------------------------------
Loss before equity in losses of
equity-method investees (158,044) 100,516 (57,528)
Equity in losses of equity-method
investees, net (10,315) 10,315 -
-----------------------------------
Net loss $ (168,359) $ 110,831 $ (57,528)
===================================
Net cash provided by operating
activities $ 2,485 $ 2,485
============ ============
Basic and diluted loss per share $ (0.47) $ 0.31 $ (0.16)
===================================
Shares used in computation of
basic and diluted loss per share: 359,752 359,752
============ ============
Note: The attached "Financial and Operational Highlights" are an
integral part of the press release financial statements.
(1) In accordance with accounting principles generally accepted in the
United States.
AMAZON.COM, INC.
Pro Forma Statements of Operations
(in thousands, except per share data)
(unaudited)
Six Months Ended
June 30, 2002
-----------------------------------
Pro Forma
As Reported Adjustments Pro Forma
(1)
-----------------------------------
Net sales $ 1,653,027 $ - $ 1,653,027
Cost of sales 1,211,735 - 1,211,735
-----------------------------------
Gross profit 441,292 - 441,292
Operating expenses:
Fulfillment 175,566 - 175,566
Marketing 61,076 - 61,076
Technology and content 113,662 - 113,662
General and administrative 40,336 - 40,336
Stock-based compensation 34,079 (34,079) -
Amortization of goodwill and
other intangibles 3,353 (3,353) -
Restructuring-related and other 9,974 (9,974) -
-----------------------------------
Total operating
expenses 438,046 (47,406) 390,640
-----------------------------------
Income (loss) from operations 3,246 47,406 50,652
Interest income 11,302 - 11,302
Interest expense (70,895) - (70,895)
Other income (expense), net (307) - (307)
Other gains (losses), net (57,938) 57,938 -
-----------------------------------
Total non-operating
expenses,net (117,838) 57,938 (59,900)
-----------------------------------
Loss before equity in losses of
equity-method investees (114,592) 105,344 (9,248)
Equity in losses of equity-method
investees, net (2,912) 2,912 -
-----------------------------------
Loss before change in accounting
principle (117,504) 108,256 (9,248)
Cumulative effect of change in
accounting principle 801 (801) -
-----------------------------------
Net loss $ (116,703) $ 107,455 $ (9,248)
===================================
Net cash used in operating
activities $ (236,396) $ (236,396)
============ ============
Basic and diluted loss per share:
Prior to cumulative effect of
change in accounting principle $ (0.31) 0.29 $ (0.02)
Cumulative effect of change in
accounting principle - - -
-----------------------------------
$ (0.31) $ 0.29 $ (0.02)
===================================
Shares used in computation of
basic and diluted loss per share: 374,995 374,995
============ ============
AMAZON.COM, INC.
Pro Forma Statements of Operations
(in thousands, except per share data)
(unaudited)
Six Months Ended
June 30, 2001
-----------------------------------
Pro Forma
As Reported Adjustments Pro Forma
(1)
-----------------------------------
Net sales $ 1,367,981 $ - $ 1,367,981
Cost of sales 1,005,664 - 1,005,664
-----------------------------------
Gross profit 362,317 - 362,317
Operating expenses:
Fulfillment 183,831 - 183,831
Marketing 71,296 - 71,296
Technology and content 134,994 - 134,994
General and administrative 48,806 - 48,806
Stock-based compensation 5,267 (5,267) -
Amortization of goodwill and
other intangibles 101,661 (101,661) -
Restructuring-related and other 172,910 (172,910) -
-----------------------------------
Total operating expenses 718,765 (279,838) 438,927
-----------------------------------
Income (loss) from operations (356,448) 279,838 (76,610)
Interest income 16,757 - 16,757
Interest expense (68,896) - (68,896)
Other income (expense), net (5,062) - (5,062)
Other gains (losses), net 45,172 (45,172) -
-----------------------------------
Total non-operating
expenses, net (12,029) (45,172) (57,201)
-----------------------------------
Loss before equity in losses of
equity-method investees (368,477) 234,666 (133,811)
Equity in losses of equity-method
investees, net (23,490) 23,490 -
-----------------------------------
Loss before change in accounting
principle (391,967) 258,156 (133,811)
Cumulative effect of change in
accounting principle (10,523) 10,523 -
-----------------------------------
Net loss $ (402,490) $ 268,679 $ (133,811)
===================================
Net cash used in operating
activities $ (404,499) $ (404,499)
============ ============
Basic and diluted loss per share:
Prior to cumulative effect of
change in accounting principle $ (1.09) 0.72 $ (0.37)
Cumulative effect of change in
accounting principle (0.03) 0.03 -
-----------------------------------
$ (1.12) $ 0.75 $ (0.37)
===================================
Shares used in computation of
basic and diluted loss per share: 358,595 358,595
============ ============
Note: The attached "Financial and Operational Highlights" are an
integral part of the press release financial statements.
(1) In accordance with accounting principles generally accepted in the
United States.
AMAZON.COM, INC.
Segment Information
(in thousands)
(unaudited)
Three Months Ended June 30, 2002
----------------------------------
North America
---------------------------------
Books,
Music Electronics,
and Tools and
DVD/Video Kitchen Total
----------------------------------
Net sales $ 411,727 $ 128,431 $ 540,158
Gross profit 123,673 18,518 142,191
Pro forma income (loss) from
operations 49,093 (18,498) 30,595
Stock-based compensation
Amortization of other intangibles
Total non-operating expenses, net
Equity in losses of equity-
method investees, net
Net loss
Segment highlights:
Y / Y net sales growth 6% 16% 8%
Y / Y gross profit growth 12% 41% 15%
Gross margin 30% 14% 26%
Pro forma operating margin 12% (14%) 6%
Net sales mix 51% 16% 67%
Three Months Ended June 30, 2002
----------------------------------
International Services Consolidated
----------------------------------
Net sales $ 218,457 $ 46,990 $ 805,605
Gross profit 47,369 28,607 218,167
Pro forma income (loss) from
operations (10,187) 5,586 25,994
Stock-based compensation (23,148)
Amortization of other intangibles (1,374)
Total non-operating expenses, net (93,857)
Equity in losses of equity-
method investees, net (1,168)
------------
Net loss $ (93,553)
============
Segment highlights:
Y / Y net sales growth 70% 22% 21%
Y / Y gross profit growth 61% 9% 21%
Gross margin 22% 61% 27%
Pro forma operating margin (5%) 12% 3%
Net sales mix 27% 6% 100%
Three Months Ended June 30, 2001
----------------------------------
North America
----------------------------------
Books,
Music Electronics,
and Tools and
DVD/Video Kitchen Total
----------------------------------
Net sales $ 389,723 $ 110,957 $ 500,680
Gross profit 110,844 13,159 124,003
Pro forma income (loss) from
operations 38,967 (41,322) (2,355)
Stock-based compensation
Amortization of goodwill and
other intangibles
Restructuring-related and other
Total non-operating expenses, net
Equity in losses of equity-
method investees, net
Net loss
Segment highlights:
Y / Y net sales growth 1% 21% 5%
Y / Y gross profit growth 28% 111% 33%
Gross margin 28% 12% 25%
Pro forma operating margin 10% (37%) (0%)
Net sales mix 58% 17% 75%
Three Months Ended June 30, 2001
----------------------------------
International Services Consolidated
----------------------------------
Net sales $ 128,346 $ 38,599 $ 667,625
Gross profit 29,365 26,352 179,720
Pro forma income (loss) from
operations (29,993) 4,339 (28,009)
Stock-based compensation (2,351)
Amortization of goodwill and other
intangibles (50,830)
Restructuring-related and other (58,650)
Total non-operating expenses, net (18,204)
Equity in losses of equity-method
investees, net (10,315)
------------
Net loss $ (168,359)
============
Segment highlights:
Y / Y net sales growth 75% 41% 16%
Y / Y gross profit growth 80% (1%) 32%
Gross margin 23% 68% 27%
Pro forma operating margin (23%) 11% (4%)
Net sales mix 19% 6% 100%
Note: The attached "Financial and Operational Highlights" are an
integral part of the press release financial statements.
AMAZON.COM, INC.
Segment Information
(in thousands)
(unaudited)
Six Months Ended June 30, 2002
----------------------------------
North America
----------------------------------
Books,
Music Electronics,
and Tools and
DVD/Video Kitchen Total
----------------------------------
Net sales $ 854,765 $ 254,634 $ 1,109,399
Gross profit 246,808 37,941 284,749
Pro forma income (loss) from
operations 95,456 (39,254) 56,202
Stock-based compensation
Amortization of other intangibles
Restructuring-related and other
Total non-operating expenses, net
Equity in losses of equity-
method investees, net
Cumulative effect of change
in accounting principle
Net loss
Segment highlights:
Y / Y net sales growth 7% 12% 8%
Y / Y gross profit growth 12% 25% 14%
Gross margin 29% 15% 26%
Pro forma operating margin 11% (15%) 5%
Net sales mix 52% 15% 67%
Six Months Ended June 30, 2002
----------------------------------
International Services Consolidated
----------------------------------
Net sales $ 443,977 $ 99,651 $ 1,653,027
Gross profit 96,373 60,170 441,292
Pro forma income (loss) from
operations (21,451) 15,901 50,652
Stock-based compensation (34,079)
Amortization of other intangibles (3,353)
Restructuring-related and other (9,974)
Total non-operating expenses, net (117,838)
Equity in losses of equity-
method investees, net (2,912)
Cumulative effect of change
in accounting principle 801
------------
Net loss $ (116,703)
============
Segment highlights:
Y / Y net sales growth 70% 23% 21%
Y / Y gross profit growth 68% 10% 22%
Gross margin 22% 60% 27%
Pro forma operating margin (5%) 16% 3%
Net sales mix 27% 6% 100%
Six Months Ended June 30, 2001
----------------------------------
North America
----------------------------------
Books,
Music Electronics,
and Tools and
DVD/Video Kitchen Total
Net sales $ 799,309 $ 227,464 $ 1,026,773
Gross profit 219,963 30,379 250,342
Pro forma income (loss) from
operations 66,592 (87,155) (20,563)
Stock-based compensation
Amortization of goodwill and
other intangibles
Restructuring-related and other
Total non-operating expenses, net
Equity in losses of equity-
method investees, net
Cumulative effect of change
in accounting principle
Net loss
Segment highlights:
Y / Y net sales growth 2% 37% 8%
Y / Y gross profit growth 30% 128% 37%
Gross margin 28% 13% 24%
Pro forma operating margin 8% (38%) (2%)
Net sales mix 58% 17% 75%
Six Months Ended June 30, 2001
-----------------------------------
International Services Consolidated
-----------------------------------
Net sales $ 260,451 $ 80,757 $ 1,367,981
Gross profit 57,415 54,560 362,317
Pro forma income (loss) from
operations (64,562) 8,515 (76,610)
Stock-based compensation (5,267)
Amortization of goodwill and
other intangibles (101,661)
Restructuring-related and other (172,910)
Total non-operating expenses, net (12,029)
Equity in losses of equity-
method investees, net (23,490)
Cumulative effect of change
in accounting principle (10,523)
------------
Net loss $ (402,490)
============
Segment highlights:
Y / Y net sales growth 75% 61% 19%
Y / Y gross profit growth 78% 12% 37%
Gross margin 22% 68% 26%
Pro forma operating margin (25%) 11% (6%)
Net sales mix 19% 6% 100%
Note: The attached "Financial and Operational Highlights" are an
integral part of the press release financial statements.
AMAZON.COM, INC.
Balance Sheets
(in thousands, except per share data)
(unaudited)
June 30, December 31,
2002 2001
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 270,438 $ 540,282
Marketable securities 553,141 456,303
Inventories 126,794 143,722
Prepaid expenses and other current
assets 93,204 67,613
------------ ------------
Total current assets 1,043,577 1,207,920
Fixed assets, net 249,452 271,751
Goodwill, net 70,811 45,367
Other intangibles, net 5,585 34,382
Investments in equity-method investees 3,188 10,387
Other equity investments 15,288 17,972
Other assets 47,146 49,768
------------ ------------
Total assets $ 1,435,047 $ 1,637,547
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 296,368 $ 444,748
Accrued expenses and other current
liabilities 236,234 305,064
Unearned revenue 69,128 87,978
Interest payable 44,396 68,632
Current portion of long-term debt and
other 14,406 14,992
------------ ------------
Total current liabilities 660,532 921,414
Long-term debt and other 2,218,426 2,156,133
Commitments and contingencies
Stockholders' deficit:
Preferred stock, $0.01 par value:
Authorized shares -- 500,000
Issued and outstanding
shares -- none - -
Common stock, $0.01 par value:
Authorized shares -- 5,000,000
Issued and outstanding
shares -- 380,304 and
373,218, respectively 3,803 3,732
Additional paid-in capital 1,546,941 1,462,769
Deferred stock-based compensation (9,778) (9,853)
Accumulated other comprehensive loss (7,596) (36,070)
Accumulated deficit (2,977,281) (2,860,578)
------------ ------------
Total stockholders' deficit (1,443,911) (1,440,000)
------------ ------------
Total liabilities and
stockholders' deficit $ 1,435,047 $ 1,637,547
============ ============
Note: The attached "Financial and Operational Highlights" are an
integral part of the press release financial statements.
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(unaudited)
(in millions, except per share data)
Y / Y
%
Q2 2001 Q3 2001 Q4 2001 Q1 2002 Q2 2002 Growth
------------------------------------------------
Results of Operations
Net sales $ 668 $ 639 $ 1,115 $ 847 $ 806 21%
Net sales -- trailing
twelve months (TTM) $ 2,978 $ 2,980 $ 3,122 $ 3,269 $ 3,407 14%
Net sales shipped
outside the U.S.
(excluding
Marketplace) -- % of
net sales 28% 29% 29% 34% 34% N/A
Gross profit $ 180 $ 162 $ 274 $ 223 $ 218 21%
Gross margin -- % of
net sales 26.9% 25.4% 24.6% 26.3% 27.1% N/A
Gross profit -- TTM $ 754 $ 749 $ 799 $ 839 $ 878 16%
Gross margin -- TTM %
of net sales 25.3% 25.1% 25.6% 25.7% 25.8% N/A
Fulfillment costs --
% of net sales 12.8% 12.7% 9.8% 10.6% 10.6% N/A
Fulfillment costs --
TTM % of net sales 13.8% 13.3% 12.0% 11.2% 10.7% N/A
Fulfillment costs -- %
of North America and
International
combined net sales 13.6% 13.7% 10.7% 11.3% 11.3% N/A
Pro forma operating
expenses $ 208 $ 189 $ 215 $ 198 $ 192 (7%)
Pro forma operating
expenses -- TTM $ 959 $ 912 $ 844 $ 811 $ 795 (17%)
Pro forma operating
income (loss) $ (28) $ (27) $ 59 $ 25 $ 26 N/A
Pro forma operating
margin -- % of net
sales (4.2%) (4.2%) 5.3% 2.9% 3.2% N/A
Pro forma operating
income (loss) -- TTM $ (205) $ (164) $ (45) $ 28 $ 82 N/A
Pro forma operating
income (loss) -- TTM
% of net sales (6.9%) (5.5%) (1.4%) 0.9% 2.4% N/A
GAAP operating income
(loss) $ (140) $ (70) $ 15 $ 2 $ 1 N/A
GAAP operating income
(loss) -- % of net
sales (20.9%) (11.0%) 1.3% 0.2% 0.2% N/A
GAAP operating income
(loss) -- TTM $ (842) $ (749) $ (412) $ (194) $ (53) (94%)
GAAP operating income
(loss) -- TTM % of
net sales (28.3%) (25.1%) (13.2%) (5.9%) (1.5%) N/A
Pro forma net income
(loss) $ (58) $ (58) $ 35 $ (5) $ (4) (92%)
Pro forma net income
(loss) per share $ (0.16) $ (0.16) $ 0.09 $ (0.01)$ (0.01) N/A
Pro forma net income
(loss) -- TTM $ (314) $ (282) $ (157) $ (86) $ (32) (90%)
GAAP net income
(loss) $ (168) $ (170) $ 5 $ (23) $ (94) (44%)
GAAP net income
(loss) per share $ (0.47) $ (0.46) $ 0.01 $ (0.06)$ (0.25) N/A
GAAP net income
(loss) -- TTM $ (1,188)$ (1,118) $ (567) $ (356) $ (281) (76%)
North America Books, Music and
DVD/Video (BMVD) segment:
BMVD net sales $ 390 $ 351 $ 538 $ 443 $ 412 6%
BMVD net sales --
TTM $ 1,711 $ 1,662 $ 1,689 $ 1,722 $ 1,744 2%
BMVD gross profit $ 111 $ 93 $ 140 $ 123 $ 124 12%
BMVD pro forma
operating margin --
% of BMVD net sales 10% 7% 12% 10% 12% N/A
North America
Electronics, Tools
and Kitchen (ETK)
segment:
ETK net sales $ 111 $ 103 $ 217 $ 126 $ 128 16%
ETK net sales --
TTM $ 545 $ 551 $ 547 $ 557 $ 574 5%
ETK gross profit $ 13 $ 13 $ 35 $ 19 $ 19 41%
ETK pro forma
operating margin --
% of ETK net sales (37%) (32%) (9%) (16%) (14%) N/A
International
segment:
International net
sales $ 128 $ 138 $ 262 $ 226 $ 218 70%
International net
sales -- TTM $ 493 $ 544 $ 661 $ 755 $ 845 71%
International gross
profit $ 29 $ 28 $ 55 $ 49 $ 47 61%
International pro
forma operating
margin -- % of
International net
sales (23%) (20%) (4%) (5%) (5%) N/A
Services segment:
Services net sales $ 39 $ 46 $ 98 $ 53 $ 47 22%
Services net sales
-- TTM $ 229 $ 223 $ 225 $ 236 $ 244 7%
Services gross
profit $ 26 $ 27 $ 45 $ 32 $ 29 9%
Services pro forma
operating margin --
% of Services net
sales 11% 17% 26% 20% 12% N/A
Note: The attached "Financial and Operational Highlights" are an
integral part of this Supplemental Financial Information and Business
Metrics.
----------------------------------------------------------------------
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(unaudited)
(in millions, except per active customer account data, inventory
turnover, accounts payable days, and employee data)
Y / Y
%
Q2 2001 Q3 2001 Q4 2001 Q1 2002 Q2 2002 Growth
------------------------------------------------
Customer Data (a)
Active customer
accounts -- TTM 21.1 23.0 24.7 26.2 27.3 30%
Net sales (excluding
catalog sales) per
active customer
account -- TTM $ 136 $ 126 $ 123 $ 122 $ 122 (10%)
Marketing cost per
active customer
account -- TTM $ 8 $ 7 $ 6 $ 5 $ 5 (41%)
Balance Sheet
Cash and marketable
securities $ 609 $ 668 $ 997 $ 745 $ 824 35%
Inventory, net $ 129 $ 131 $ 144 $ 139 $ 127 (2%)
Inventory -- % of net
sales 21% 20% 12% 17% 17% N/A
Inventory -- % of TTM
net sales 5% 5% 5% 4% 4% N/A
Inventory turnover --
annualized 13.7 14.7 24.5 17.7 17.7 29%
Inventory turnover --
TTM 14.0 14.8 15.8 17.4 18.9 35%
Fixed assets, net $ 292 $ 288 $ 272 $ 256 $ 249 (15%)
Accounts payable days
-- ending 48 46 49 45 46 (5%)
Cash Flows
Operating cash flow
-- TTM $ (161) $ (221) $ (120) $ 46 $ 48 N/A
Free cash flow
(operating cash flow
less purchases of
fixed assets) -- TTM $ (270) $ (301) $ (170) $ 10 $ 16 N/A
Adjusted free cash flow (free
cash flow less repayment of
capital lease
obligations) -- TTM $ (286) $ (320) $ (190) $ (9) $ (3) (99%)
Other
Common shares
outstanding 362 372 373 375 380 5%
Options outstanding --
% of common shares
outstanding 12% 18% 18% 17% 13% N/A
Employees (full-time
and part-time) 7,800 7,900 7,800 7,900 7,700 (1%)
Note: The attached "Financial and Operational Highlights" are an
integral part of this Supplemental Financial Information and Business
Metrics.
(a) Our customer account and active customer calculation methodology
was modified in the third quarter 2001, primarily to include all
customers who order new and used products through Amazon
Marketplace. Our prior methodology did not capture all such
customers. If second quarter 2001 customer metrics were presented
under the modified methodology, active customer accounts, TTM net
sales per active customer account, and marketing cost per active
customer account would have been 21.9 million, $131, and $8,
respectively.
AMAZON.COM, INC. Financial and Operational Highlights Second Quarter Ended June 30, 2002 (unaudited) Results of Operations (all comparisons are with the equivalent period of 2001) Net Sales
-- Our segment reporting includes four segments: North America Books, Music and DVD/Video ("BMVD"); North America Electronics, Tools and Kitchen ("ETK"); International; and Services.
-- Allocation of centrally incurred operating costs methodologies have been consistently applied and there are no internal transactions between segments.
-- The BMVD segment includes revenues, direct costs and cost allocations primarily associated with retail sales from www.amazon.com and www.amazon.ca for books, music, DVDs, video products and magazine subscription commissions. This segment also includes commissions and other amounts earned from sales of these products, new or used, through Amazon Marketplace and revenues from stores offering these products through our Syndicated Stores Program, such as www.borders.com.
-- The ETK segment includes revenues, direct costs and cost allocations primarily associated with www.amazon.com retail sales of electronics, computers, kitchen products and housewares, camera and photo items, software, cell phones and service, tools and hardware, and outdoor living items, as well as catalog sales of toys and tools and hardware. This segment also includes commissions and other amounts earned from sales of these products, new or used, through Amazon Marketplace and from offerings of these products by third-party sellers under our Merchant@amazon.com Program, such as Target and Circuit City.
-- The International segment includes all revenues, direct costs and cost allocations associated with the retail sales of our German, French, Japanese and U.K. Web sites -- www.amazon.de, www.amazon.fr, www.amazon.co.jp and www.amazon.co.uk. This segment also includes commissions and other amounts earned from sales of products, new or used, through Amazon Marketplace and revenues from stores offering these products through our Syndicated Stores Program.
-- The Services segment includes revenues, direct costs and cost allocations associated with our business-to-business commercial agreements, including the Merchant Program, such as www.target.com beginning third quarter 2002, and, to the extent full product categories are not also offered by our online retail stores, the Merchant@amazon.com Program, such as Toysrus.com. This segment also includes our technology alliance with America Online and miscellaneous marketing, promotional and other agreements.
-- All references to customers mean customer accounts, which are unique e-mail addresses, established either when a customer's initial order is shipped or when a customer orders from certain third-party sellers on our Web sites. Customer accounts include customers of Amazon Marketplace, Auctions and zShops services and from our Merchant@amazon.com and Syndicated Stores Programs, but exclude Merchant Program customers, Amazon.com Payments customers, our catalog customers and the customers of selected companies with whom we have strategic marketing and promotional relationships.
-- Trailing twelve-month net sales per active customer account figures include all amounts earned through Internet sales, including net sales earned from new or used products sold through Amazon Marketplace, Auctions and zShops services, and products sold through our Merchant@amazon.com and Syndicated Stores Programs, but excluding products sold through our Merchant Program, catalogs and certain strategic alliances and sales of inventory to Toysrus.com. A customer is considered active upon placing an order.
Gross Profit -- Shipping profit was approximately $2 million, improving from a loss of $2 million. We continue to measure our shipping results relative to their impact on our overall financial results, with the viewpoint that shipping promotions are an effective marketing tool. We expect to continue offering shipping promotions to our customers, which reduce shipping revenue as a percentage of sales and will negatively affect gross margins on our retail sales. Fulfillment -- Fulfillment costs represent those costs incurred in operating and staffing our fulfillment and customer service centers, including costs attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to receiving, inspecting and warehousing inventories; picking, packaging and preparing customers' orders for shipment; credit card fees and bad debt costs; and responding to inquiries from customers. Fulfillment costs also include amounts paid to third-party cosourcers, who assist us in fulfillment and customer service operations. Certain fulfillment-related costs incurred on behalf of third-party sellers, excluding those costs associated with Syndicated Stores, are classified as cost of sales rather than fulfillment. Stock-Based Compensation
-- Our segment reporting includes four segments: North America Books, Music and DVD/Video ("BMVD"); North America Electronics, Tools and Kitchen ("ETK"); International; and Services.
-- Allocation of centrally incurred operating costs methodologies have been consistently applied and there are no internal transactions between segments.
-- The BMVD segment includes revenues, direct costs and cost allocations primarily associated with retail sales from www.amazon.com and www.amazon.ca for books, music, DVDs, video products and magazine subscription commissions. This segment also includes commissions and other amounts earned from sales of these products, new or used, through Amazon Marketplace and revenues from stores offering these products through our Syndicated Stores Program, such as www.borders.com.
-- The ETK segment includes revenues, direct costs and cost allocations primarily associated with www.amazon.com retail sales of electronics, computers, kitchen products and housewares, camera and photo items, software, cell phones and service, tools and hardware, and outdoor living items, as well as catalog sales of toys and tools and hardware. This segment also includes commissions and other amounts earned from sales of these products, new or used, through Amazon Marketplace and from offerings of these products by third-party sellers under our Merchant@amazon.com Program, such as Target and Circuit City.
-- The International segment includes all revenues, direct costs and cost allocations associated with the retail sales of our German, French, Japanese and U.K. Web sites -- www.amazon.de, www.amazon.fr, www.amazon.co.jp and www.amazon.co.uk. This segment also includes commissions and other amounts earned from sales of products, new or used, through Amazon Marketplace and revenues from stores offering these products through our Syndicated Stores Program.
-- The Services segment includes revenues, direct costs and cost allocations associated with our business-to-business commercial agreements, including the Merchant Program, such as www.target.com beginning third quarter 2002, and, to the extent full product categories are not also offered by our online retail stores, the Merchant@amazon.com Program, such as Toysrus.com. This segment also includes our technology alliance with America Online and miscellaneous marketing, promotional and other agreements.
-- All references to customers mean customer accounts, which are unique e-mail addresses, established either when a customer's initial order is shipped or when a customer orders from certain third-party sellers on our Web sites. Customer accounts include customers of Amazon Marketplace, Auctions and zShops services and from our Merchant@amazon.com and Syndicated Stores Programs, but exclude Merchant Program customers, Amazon.com Payments customers, our catalog customers and the customers of selected companies with whom we have strategic marketing and promotional relationships.
-- Trailing twelve-month net sales per active customer account figures include all amounts earned through Internet sales, including net sales earned from new or used products sold through Amazon Marketplace, Auctions and zShops services, and products sold through our Merchant@amazon.com and Syndicated Stores Programs, but excluding products sold through our Merchant Program, catalogs and certain strategic alliances and sales of inventory to Toysrus.com. A customer is considered active upon placing an order.
Hypothetical
Hypothetical vs. June 30,
Cumulative 2002, Cumulative
Hypothetical Compensation Compensation
Hypothetical Increase Market Price Expense Expense
Over $13.375 per Share
------------------------ ------------ ------------- -------------
5% $14.04 $16,463 $(15,027)
10% $14.71 $21,161 $(10,329)
15% $15.38 $25,858 $ (5,632)
25% $16.72 $35,252 $ 3,762
50% $20.06 $58,738 $ 27,248
Amortization of Goodwill and Other Intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. -- As a result of our adoption of the full provisions of Statement of Financial Accounting Standards No. 141 and No. 142, during the first quarter we reclassified $25 million of other intangibles (comprising only assembled as·sem·ble v. as·sem·bled, as·sem·bling, as·sem·bles v.tr. 1. To bring or call together into a group or whole: assembled the jury. 2. workforce intangibles) to goodwill and discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: the amortization of our goodwill assets. Restructuring-Related and Other
-- Our segment reporting includes four segments: North America Books, Music and DVD/Video ("BMVD"); North America Electronics, Tools and Kitchen ("ETK"); International; and Services.
-- Allocation of centrally incurred operating costs methodologies have been consistently applied and there are no internal transactions between segments.
-- The BMVD segment includes revenues, direct costs and cost allocations primarily associated with retail sales from www.amazon.com and www.amazon.ca for books, music, DVDs, video products and magazine subscription commissions. This segment also includes commissions and other amounts earned from sales of these products, new or used, through Amazon Marketplace and revenues from stores offering these products through our Syndicated Stores Program, such as www.borders.com.
-- The ETK segment includes revenues, direct costs and cost allocations primarily associated with www.amazon.com retail sales of electronics, computers, kitchen products and housewares, camera and photo items, software, cell phones and service, tools and hardware, and outdoor living items, as well as catalog sales of toys and tools and hardware. This segment also includes commissions and other amounts earned from sales of these products, new or used, through Amazon Marketplace and from offerings of these products by third-party sellers under our Merchant@amazon.com Program, such as Target and Circuit City.
-- The International segment includes all revenues, direct costs and cost allocations associated with the retail sales of our German, French, Japanese and U.K. Web sites -- www.amazon.de, www.amazon.fr, www.amazon.co.jp and www.amazon.co.uk. This segment also includes commissions and other amounts earned from sales of products, new or used, through Amazon Marketplace and revenues from stores offering these products through our Syndicated Stores Program.
-- The Services segment includes revenues, direct costs and cost allocations associated with our business-to-business commercial agreements, including the Merchant Program, such as www.target.com beginning third quarter 2002, and, to the extent full product categories are not also offered by our online retail stores, the Merchant@amazon.com Program, such as Toysrus.com. This segment also includes our technology alliance with America Online and miscellaneous marketing, promotional and other agreements.
-- All references to customers mean customer accounts, which are unique e-mail addresses, established either when a customer's initial order is shipped or when a customer orders from certain third-party sellers on our Web sites. Customer accounts include customers of Amazon Marketplace, Auctions and zShops services and from our Merchant@amazon.com and Syndicated Stores Programs, but exclude Merchant Program customers, Amazon.com Payments customers, our catalog customers and the customers of selected companies with whom we have strategic marketing and promotional relationships.
-- Trailing twelve-month net sales per active customer account figures include all amounts earned through Internet sales, including net sales earned from new or used products sold through Amazon Marketplace, Auctions and zShops services, and products sold through our Merchant@amazon.com and Syndicated Stores Programs, but excluding products sold through our Merchant Program, catalogs and certain strategic alliances and sales of inventory to Toysrus.com. A customer is considered active upon placing an order.
(in thousands)
Leases(a) Other Total
---------- ------- ------
Six Months Ending December 31,
2002 $12,438 $3,677 $16,115
Year Ending December 31,
2003 6,410 3,037 9,447
2004 2,761 -- 2,761
2005 2,770 -- 2,770
2006 3,036 -- 3,036
Thereafter 10,909 -- 10,909
------- ------ -------
Total estimated cash outflows $38,324 $6,714 $45,038
======= ====== =======
(a) Net of anticipated sublease income of approximately $59
million on gross lease obligations of $97 million.
Other Income (Expense), Net -- Other income (expense) consists primarily of net realized gains and losses on sales of marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has and disposals of fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → , miscellaneous state and foreign taxes and certain foreign-currency-related transaction gains and losses. Other Gains (Losses), Net
-- Our segment reporting includes four segments: North America Books, Music and DVD/Video ("BMVD"); North America Electronics, Tools and Kitchen ("ETK"); International; and Services.
-- Allocation of centrally incurred operating costs methodologies have been consistently applied and there are no internal transactions between segments.
-- The BMVD segment includes revenues, direct costs and cost allocations primarily associated with retail sales from www.amazon.com and www.amazon.ca for books, music, DVDs, video products and magazine subscription commissions. This segment also includes commissions and other amounts earned from sales of these products, new or used, through Amazon Marketplace and revenues from stores offering these products through our Syndicated Stores Program, such as www.borders.com.
-- The ETK segment includes revenues, direct costs and cost allocations primarily associated with www.amazon.com retail sales of electronics, computers, kitchen products and housewares, camera and photo items, software, cell phones and service, tools and hardware, and outdoor living items, as well as catalog sales of toys and tools and hardware. This segment also includes commissions and other amounts earned from sales of these products, new or used, through Amazon Marketplace and from offerings of these products by third-party sellers under our Merchant@amazon.com Program, such as Target and Circuit City.
-- The International segment includes all revenues, direct costs and cost allocations associated with the retail sales of our German, French, Japanese and U.K. Web sites -- www.amazon.de, www.amazon.fr, www.amazon.co.jp and www.amazon.co.uk. This segment also includes commissions and other amounts earned from sales of products, new or used, through Amazon Marketplace and revenues from stores offering these products through our Syndicated Stores Program.
-- The Services segment includes revenues, direct costs and cost allocations associated with our business-to-business commercial agreements, including the Merchant Program, such as www.target.com beginning third quarter 2002, and, to the extent full product categories are not also offered by our online retail stores, the Merchant@amazon.com Program, such as Toysrus.com. This segment also includes our technology alliance with America Online and miscellaneous marketing, promotional and other agreements.
-- All references to customers mean customer accounts, which are unique e-mail addresses, established either when a customer's initial order is shipped or when a customer orders from certain third-party sellers on our Web sites. Customer accounts include customers of Amazon Marketplace, Auctions and zShops services and from our Merchant@amazon.com and Syndicated Stores Programs, but exclude Merchant Program customers, Amazon.com Payments customers, our catalog customers and the customers of selected companies with whom we have strategic marketing and promotional relationships.
-- Trailing twelve-month net sales per active customer account figures include all amounts earned through Internet sales, including net sales earned from new or used products sold through Amazon Marketplace, Auctions and zShops services, and products sold through our Merchant@amazon.com and Syndicated Stores Programs, but excluding products sold through our Merchant Program, catalogs and certain strategic alliances and sales of inventory to Toysrus.com. A customer is considered active upon placing an order.
Earnings per Share
-- Our segment reporting includes four segments: North America Books, Music and DVD/Video ("BMVD"); North America Electronics, Tools and Kitchen ("ETK"); International; and Services.
-- Allocation of centrally incurred operating costs methodologies have been consistently applied and there are no internal transactions between segments.
-- The BMVD segment includes revenues, direct costs and cost allocations primarily associated with retail sales from www.amazon.com and www.amazon.ca for books, music, DVDs, video products and magazine subscription commissions. This segment also includes commissions and other amounts earned from sales of these products, new or used, through Amazon Marketplace and revenues from stores offering these products through our Syndicated Stores Program, such as www.borders.com.
-- The ETK segment includes revenues, direct costs and cost allocations primarily associated with www.amazon.com retail sales of electronics, computers, kitchen products and housewares, camera and photo items, software, cell phones and service, tools and hardware, and outdoor living items, as well as catalog sales of toys and tools and hardware. This segment also includes commissions and other amounts earned from sales of these products, new or used, through Amazon Marketplace and from offerings of these products by third-party sellers under our Merchant@amazon.com Program, such as Target and Circuit City.
-- The International segment includes all revenues, direct costs and cost allocations associated with the retail sales of our German, French, Japanese and U.K. Web sites -- www.amazon.de, www.amazon.fr, www.amazon.co.jp and www.amazon.co.uk. This segment also includes commissions and other amounts earned from sales of products, new or used, through Amazon Marketplace and revenues from stores offering these products through our Syndicated Stores Program.
-- The Services segment includes revenues, direct costs and cost allocations associated with our business-to-business commercial agreements, including the Merchant Program, such as www.target.com beginning third quarter 2002, and, to the extent full product categories are not also offered by our online retail stores, the Merchant@amazon.com Program, such as Toysrus.com. This segment also includes our technology alliance with America Online and miscellaneous marketing, promotional and other agreements.
-- All references to customers mean customer accounts, which are unique e-mail addresses, established either when a customer's initial order is shipped or when a customer orders from certain third-party sellers on our Web sites. Customer accounts include customers of Amazon Marketplace, Auctions and zShops services and from our Merchant@amazon.com and Syndicated Stores Programs, but exclude Merchant Program customers, Amazon.com Payments customers, our catalog customers and the customers of selected companies with whom we have strategic marketing and promotional relationships.
-- Trailing twelve-month net sales per active customer account figures include all amounts earned through Internet sales, including net sales earned from new or used products sold through Amazon Marketplace, Auctions and zShops services, and products sold through our Merchant@amazon.com and Syndicated Stores Programs, but excluding products sold through our Merchant Program, catalogs and certain strategic alliances and sales of inventory to Toysrus.com. A customer is considered active upon placing an order.
Financial Condition
-- Our segment reporting includes four segments: North America Books, Music and DVD/Video ("BMVD"); North America Electronics, Tools and Kitchen ("ETK"); International; and Services.
-- Allocation of centrally incurred operating costs methodologies have been consistently applied and there are no internal transactions between segments.
-- The BMVD segment includes revenues, direct costs and cost allocations primarily associated with retail sales from www.amazon.com and www.amazon.ca for books, music, DVDs, video products and magazine subscription commissions. This segment also includes commissions and other amounts earned from sales of these products, new or used, through Amazon Marketplace and revenues from stores offering these products through our Syndicated Stores Program, such as www.borders.com.
-- The ETK segment includes revenues, direct costs and cost allocations primarily associated with www.amazon.com retail sales of electronics, computers, kitchen products and housewares, camera and photo items, software, cell phones and service, tools and hardware, and outdoor living items, as well as catalog sales of toys and tools and hardware. This segment also includes commissions and other amounts earned from sales of these products, new or used, through Amazon Marketplace and from offerings of these products by third-party sellers under our Merchant@amazon.com Program, such as Target and Circuit City.
-- The International segment includes all revenues, direct costs and cost allocations associated with the retail sales of our German, French, Japanese and U.K. Web sites -- www.amazon.de, www.amazon.fr, www.amazon.co.jp and www.amazon.co.uk. This segment also includes commissions and other amounts earned from sales of products, new or used, through Amazon Marketplace and revenues from stores offering these products through our Syndicated Stores Program.
-- The Services segment includes revenues, direct costs and cost allocations associated with our business-to-business commercial agreements, including the Merchant Program, such as www.target.com beginning third quarter 2002, and, to the extent full product categories are not also offered by our online retail stores, the Merchant@amazon.com Program, such as Toysrus.com. This segment also includes our technology alliance with America Online and miscellaneous marketing, promotional and other agreements.
-- All references to customers mean customer accounts, which are unique e-mail addresses, established either when a customer's initial order is shipped or when a customer orders from certain third-party sellers on our Web sites. Customer accounts include customers of Amazon Marketplace, Auctions and zShops services and from our Merchant@amazon.com and Syndicated Stores Programs, but exclude Merchant Program customers, Amazon.com Payments customers, our catalog customers and the customers of selected companies with whom we have strategic marketing and promotional relationships.
-- Trailing twelve-month net sales per active customer account figures include all amounts earned through Internet sales, including net sales earned from new or used products sold through Amazon Marketplace, Auctions and zShops services, and products sold through our Merchant@amazon.com and Syndicated Stores Programs, but excluding products sold through our Merchant Program, catalogs and certain strategic alliances and sales of inventory to Toysrus.com. A customer is considered active upon placing an order.
Asset-backed and agency securities $371,010
Treasury notes and bonds 108,051
Commercial paper and short-term obligations 29,800
Certificates of deposit 20,663
Corporate notes and bonds 16,885
Equity securities 6,732
--------
$553,141
--------
-- We have pledged pledge n. 1. A solemn binding promise to do, give, or refrain from doing something: signed a pledge never to reveal the secret; a pledge of money to a charity. 2. a. approximately $124 million of our marketable Marketable are securities that can be easily converted into cash. Such securities will generally have highly liquid markets allowing the security to be sold at a reasonable price very quickly. securities as collateral collateral (kəlăt`ərəl), something of value given or pledged as security for payment of a loan. Collateral consists usually of financial instruments, such as stocks, bonds, and negotiable paper, rather than physical goods, although for certain contractual obligations, compared with $167 million as of December December: see month. 31, 2001. Amounts pledged for standby standby Medtalk adjective Referring to the immediate availability of a certain specialist–anesthesiologist, surgeon, who can be deployed in a medical emergency. Cf Concurrent. letters of credit that guarantee certain contractual obligations, primarily property leases, were $56 million; $28 million is pledged for a swap agreement that hedges the foreign-exchange rate risk on a portion of our 6.875% convertible subordinated Subordinated A claim ranked lower in priority than other claims. Common stock claims are always subordinated to debt. notes; and $40 million is pledged for certain of our real estate lease agreements. The amount of marketable securities we are required to pledge A Bailment or delivery of Personal Property to a creditor as security for a debt or for the performance of an act. Sometimes called bailment, pledges are a form of security to assure that a person will repay a debt or perform an act under contract. pursuant to the swap agreement fluctuates with the fair market value of the swap obligation. Certain Definitions and Other
-- Our segment reporting includes four segments: North America Books, Music and DVD/Video ("BMVD"); North America Electronics, Tools and Kitchen ("ETK"); International; and Services.
-- Allocation of centrally incurred operating costs methodologies have been consistently applied and there are no internal transactions between segments.
-- The BMVD segment includes revenues, direct costs and cost allocations primarily associated with retail sales from www.amazon.com and www.amazon.ca for books, music, DVDs, video products and magazine subscription commissions. This segment also includes commissions and other amounts earned from sales of these products, new or used, through Amazon Marketplace and revenues from stores offering these products through our Syndicated Stores Program, such as www.borders.com.
-- The ETK segment includes revenues, direct costs and cost allocations primarily associated with www.amazon.com retail sales of electronics, computers, kitchen products and housewares, camera and photo items, software, cell phones and service, tools and hardware, and outdoor living items, as well as catalog sales of toys and tools and hardware. This segment also includes commissions and other amounts earned from sales of these products, new or used, through Amazon Marketplace and from offerings of these products by third-party sellers under our Merchant@amazon.com Program, such as Target and Circuit City.
-- The International segment includes all revenues, direct costs and cost allocations associated with the retail sales of our German, French, Japanese and U.K. Web sites -- www.amazon.de, www.amazon.fr, www.amazon.co.jp and www.amazon.co.uk. This segment also includes commissions and other amounts earned from sales of products, new or used, through Amazon Marketplace and revenues from stores offering these products through our Syndicated Stores Program.
-- The Services segment includes revenues, direct costs and cost allocations associated with our business-to-business commercial agreements, including the Merchant Program, such as www.target.com beginning third quarter 2002, and, to the extent full product categories are not also offered by our online retail stores, the Merchant@amazon.com Program, such as Toysrus.com. This segment also includes our technology alliance with America Online and miscellaneous marketing, promotional and other agreements.
-- All references to customers mean customer accounts, which are unique e-mail addresses, established either when a customer's initial order is shipped or when a customer orders from certain third-party sellers on our Web sites. Customer accounts include customers of Amazon Marketplace, Auctions and zShops services and from our Merchant@amazon.com and Syndicated Stores Programs, but exclude Merchant Program customers, Amazon.com Payments customers, our catalog customers and the customers of selected companies with whom we have strategic marketing and promotional relationships.
-- Trailing twelve-month net sales per active customer account figures include all amounts earned through Internet sales, including net sales earned from new or used products sold through Amazon Marketplace, Auctions and zShops services, and products sold through our Merchant@amazon.com and Syndicated Stores Programs, but excluding products sold through our Merchant Program, catalogs and certain strategic alliances and sales of inventory to Toysrus.com. A customer is considered active upon placing an order.
|
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion