Amazon.com Announces 4th Quarter Profit; Exceeds Sales and Profit Objectives; Lower Prices for Customers Drove Sales and Profits.Business Editors/Retail and Technology Writers SEATTLE--(BUSINESS WIRE)--Jan. 22, 2002 Introduces Everyday Free Super Saver Super saver may refer to:
Option for Orders Over $99 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 fourth quarter ended December December: see month. 31, 2001. 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 for the quarter were a record $1.12 billion, compared with $972 million in the fourth quarter of 2000, an increase of 15%. It was 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 first-ever billion-dollar quarter. Amazon.com exceeded the goal it set a year ago -- to reach 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 profitability during the quarter -- by delivering not only a pro forma 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. , but also a pro forma net profit, which includes net interest expense. Pro forma operating profit was $59 million, compared with a loss of $60 million in the fourth quarter of 2000, an overall improvement of $119 million. Pro forma net profit for the fourth quarter of 2001 was $35 million, or $0.09 per share, compared with a pro forma net loss of $90 million, or $0.25 per share, in the fourth quarter of 2000. On a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis, the Company recorded a fourth quarter 2001 net profit of $5 million, or $0.01 per share, compared with a fourth quarter 2000 net loss of $545 million, or $1.53 per share. Operating profit for the fourth quarter of 2001 was $15 million, compared with a loss of $322 million a year ago. (Details on the differences between GAAP results and pro forma operating profit and pro forma net profit are included below, with a detailed, 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.) The Company also announced that effective today Amazon.com is providing a new class of economy shipping, Super Saver Shipping, which is free on qualifying orders. To qualify, orders must be over $99. (Other details and restrictions can be found at www.amazon.com/supersavershipping.) This is not a seasonal or limited-time promotion, but an indefinite INDEFINITE. That which is undefined; uncertain. INDEFINITE, NUMBER. A number which may be increased or diminished at pleasure. 2. When a corporation is composed of an indefinite number of persons, any number of them consisting of a majority of those , everyday, 365-days-a-year offer. "There are two types of retailers: those that work hard to raise prices and those that work hard to lower prices. Though both models can be successful, we've we've Contraction of we have. we've have decided to relentlessly follow the second model," 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. "In this spirit, we're we're Contraction of we are. we're we are incredibly pleased to introduce Super Saver Shipping -- free on orders over $99." "Our improvements in productivity allowed us to lower book prices and now allow us to offer free shipping," said Warren Warren. 1 City (1990 pop. 144,864), Macomb co., SE Mich., a suburb of Detroit; est. 1837, inc. as a city 1957. It is an important metalworking center where steel is processed. Jenson Jenson is a surname, and may refer to:
International segment sales across the Company's UK, Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). , France and Japan sites grew 81%. Including sales from the U.S. site, more than 29% of the Company's sales were made to international customers. In addition, the Company's operations for the UK and German sites had a combined pro forma operating profit for the fourth quarter of 2001, just three years after their launch. Highlights of Fourth Quarter and Fiscal 2001 Results (comparisons are with fiscal 2000 and the fourth quarter of 2000) -- Our segment reporting includes four segments: U.S. Books, Music and DVD/Video; U.S. Electronics, Tools and Kitchen; International; and Services. Allocation methodologies are consistent with past presentations, and prior period amounts have been reclassified to conform with the current period presentation. -- The U.S. Books, Music and DVD/Video segment includes revenues, direct costs and cost allocations associated with retail sales from www.amazon.com for books, music, DVD and video products and for magazine subscriptions, including commissions earned on sales of similar products, new or used, through Amazon Marketplace. This segment also includes product sales, direct costs and cost allocations associated with stores offering these products through our Syndicated Stores program, such as www.borders.com. -- The U.S. Electronics, Tools and Kitchen segment includes revenues, direct costs and cost allocations associated with www.amazon.com retail sales of electronics, computers, kitchen and housewares, camera and photo items, software, cell phones and service, tools and hardware, outdoor living items, and computer and video games products, sold other than through our Toysrus.com strategic alliance, as well as catalog sales of toys, tools and hardware. This segment also includes commissions earned on sales of similar products, new or used, through Amazon Marketplace. This segment includes commissions and other amounts earned from offerings of these products by third-party sellers under our Merchant@amazon.com Program, including our strategic alliance with Circuit City, and will include stores offering these products, if any, through its Syndicated Stores. -- The International segment includes all revenues, direct costs and cost allocations associated with the retail sales of our four internationally-focused sites: www.amazon.de, www.amazon.fr, www.amazon.co.jp and www.amazon.co.uk. -- The Services segment includes revenues, direct costs and cost allocations associated with our business-to-business strategic alliances, including the Merchant Program and certain aspects of the Merchant@amazon.com Program, as well as the strategic alliance with America Online. This segment also includes Amazon Auctions, zShops and Payments, and miscellaneous marketing and promotional agreements. -- All references to customers mean customer accounts, which are unique e-mail addresses, established either when a customer's order is shipped or when a customer orders from a third-party seller. Customer accounts include customers of Amazon Marketplace, Auctions and zShops services, and customer accounts under our Merchant@amazon.com and Syndicated Stores programs, but exclude Amazon 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 catalogs and certain strategic alliances and sales of inventory to Toysrus.com. A customer is considered active upon placing an order. 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.com's expectations as of January January: see month. 22, 2002. Results may be materially affected by many factors, such as potential 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. First Quarter 2002 Expectations -- Net sales are expected to be between $775 million and $825 million, or grow between 11% and 18%. -- Pro forma loss from operations is expected to be between break-even and $16 million, or between 0% and 2% of net sales. Full Year 2002 Expectations -- Net sales are expected to grow by 10% or more. -- Positive operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. , and possibly free cash flow, is expected. -- Pro forma income from operations is expected to be $30 million or more. 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, 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, fluctuations in the value of securities and non-cash payments Amazon.com receives in connection with such transactions, foreign currency exchange risks, seasonality, international growth and expansion, and 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. 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. , competition, potential fluctuations in operating results, management of potential growth, system interruption INTERRUPTION. The effect of some act or circumstance which stops the course of a prescription or act of limitation's. 2. Interruption of the use of a thing is natural or civil. , 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, fraud and Amazon.com Payments, 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 December 31, 2000, including 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"). A reconciliation of GAAP to pro forma is included in the attached financial statements. Management measures the progress of the business using pro forma operating results, which exclude the following line items on the Company's statements of operations: -- Stock-based compensation -- 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. -- Restructuring-related and other Pro forma net results exclude, in addition to the line items described above, the following line items on our statements of operations: -- Other gains (losses), net -- Equity in losses of equity-method investees, net -- Cumulative effect of change in accounting principle Conference Call A conference call will be Webcast live at www.amazon.com/ir today at 8:30 a.m. EST/5:30 a.m. PST PST Paroxysmal supraventricular tachycardia, see there and will be available through March 31, 2002. This call will contain forward-looking statements and other material information. About Amazon.com Amazon.com opened its virtual doors on the World Wide Web in July July: see month. 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, kitchen 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 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 also offers the Amazon Credit Account, the online equivalent of a department store credit card, which provides shoppers the opportunity to buy now and pay later when shopping at Amazon.com. Amazon.com operates four international Web sites: 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.
AMAZON.COM, INC.
Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
----------------------------------------------------------------------
2001 2000 2001 2000
----------------------------------------------------------------------
Net sales $ 1,115,171 $ 972,360 $ 3,122,433 $ 2,761,983
Cost of sales 841,122 748,060 2,323,875 2,106,206
----------------------------------------------------------------------
Gross profit 274,049 224,300 798,558 655,777
Operating expenses:
Fulfillment 109,019 131,028 374,250 414,509
Marketing 34,450 55,195 138,283 179,980
Technology and
content 52,325 69,791 241,165 269,326
General and
administrative 19,575 28,232 89,862 108,962
Stock-based
compensation 1,937 (1,112) 4,637 24,797
Amortization of
goodwill and
other
intangibles 37,537 79,210 181,033 321,772
Restructuring-
related and
other 4,681 184,052 181,585 200,311
----------------------------------------------------------------------
Total operating
expenses 259,524 546,396 1,210,815 1,519,657
----------------------------------------------------------------------
Income (loss) from
operations 14,525 (322,096) (412,257) (863,880)
Interest income 6,030 10,979 29,103 40,821
Interest expense (35,290) (36,094) (139,232) (130,921)
Other income
(expense), net 5,365 (5,365) (1,900) (10,058)
Other gains
(losses), net 16,312 (155,005) (2,141) (142,639)
----------------------------------------------------------------------
Net interest
expense and other (7,583) (185,485) (114,170) (242,797)
----------------------------------------------------------------------
Income (loss) before
equity in losses of
equity-method
investees 6,942 (507,581) (526,427) (1,106,677)
Equity in losses of
equity-method
investees, net (1,855) (37,559) (30,327) (304,596)
----------------------------------------------------------------------
Income (loss) before
change in
accounting principle 5,087 (545,140) (556,754) (1,411,273)
Cumulative effect of
change in accounting
principle - - (10,523) -
----------------------------------------------------------------------
Net income (loss) $ 5,087 $ (545,140) $ (567,277) $ (1,411,273)
======================================================================
Basic and diluted
income (loss) per share:
Prior to cumulative
effect of change in
accounting
principle $ 0.01 $ (1.53) $ (1.53) $ (4.02)
Cumulative
effect of
change in
accounting
principle - - (0.03) -
----------------------------------------------------------------------
$ 0.01 $ (1.53) $ (1.56) $ (4.02)
======================================================================
Shares used in
computation of
Basic income
(loss) per share 371,420 355,681 364,211 350,873
======================================================================
Diluted income
(loss) per share 384,045 355,681 364,211 350,873
======================================================================
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
December 31, 2001 December 31, 2000
----------------------------------------------------------------------
Pro Forma Pro Forma
As Adjustments Pro As Adjustments Pro
Reported(1) Forma Reported(1) Forma
----------------------------------------------------------------------
Net
sales $1,115,171 $ - $1,115,171 $972,360 $ - $972,360
Cost of
sales 841,122 - 841,122 748,060 - 748,060
----------------------------------------------------------------------
Gross
profit 274,049 - 274,049 224,300 - 224,300
Operating
expenses:
Fulfillment 109,019 - 109,019 131,028 - 131,028
Marketing 34,450 - 34,450 55,195 - 55,195
Technology
and content 52,325 - 52,325 69,791 - 69,791
General and
administrative
19,575 - 19,575 28,232 - 28,232
Stock-based
compensation 1,937 (1,937) - (1,112) 1,112 -
Amortization
of goodwill
and other
intangibles 37,537 (37,537) - 79,210 (79,210) -
Restructuring-
related and
other 4,681 (4,681) - 184,052 (184,052) -
----------------------------------------------------------------------
Total
operating
expenses 259,524 (44,155) 215,369 546,396 (262,150) 284,246
----------------------------------------------------------------------
Income (loss)
from
operations 14,525 44,155 58,680 (322,096) 262,150 (59,946)
Interest
income 6,030 - 6,030 10,979 - 10,979
Interest
expense (35,290) - (35,290) (36,094) - (36,094)
Other income
(expense),
net 5,365 - 5,365 (5,365) - (5,365)
Other gains
(losses),
net 16,312 (16,312) - (155,005) 155,005 -
----------------------------------------------------------------------
Net interest
expense and
other (7,583) (16,312) (23,895) (185,485) 155,005 (30,480)
----------------------------------------------------------------------
Income (loss)
before equity
in losses of
equity-method
investees 6,942 27,843 34,785 (507,581) 417,155 (90,426)
Equity in
losses of
equity-
method
investees,
net (1,855) 1,855 - (37,559) 37,559 -
----------------------------------------------------------------------
Net income
(loss) $5,087 $29,698 $34,785 $(545,140) $454,714 $(90,426)
======================================================================
Net cash
provided by
operating
activities $349,120 $349,120 $247,653 $247,653
======================================================================
Basic and
diluted
income (loss)
per share $ 0.01 $ 0.09 $ (1.53) $ (0.25)
======================================================================
Shares used in
computation of
Basic income
(loss) per
share 371,420 371,420 355,681 355,681
======================================================================
Diluted income
(loss) per
share 384,045 384,045 355,681 355,681
======================================================================
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)
Year Ended
December 31, 2001 December 31, 2000
----------------------------------------------------------------------
As Pro Forma Pro As Pro Forma Pro
Reported(1) Adjustments Forma Reported(1) Adjustments Forma
----------------------------------------------------------------------
Net
sales $ 3,122,433 $ - $3,122,433 $2,761,983 $ - $2,761,983
Cost of
sales 2,323,875 - 2,323,875 2,106,206 - 2,106,206
----------------------------------------------------------------------
Gross
profit 798,558 - 798,558 655,777 - 655,777
Operating
expenses:
Fulfillment 374,250 - 374,250 414,509 - 414,509
Marketing 138,283 - 138,283 179,980 - 179,980
Technology
and
content 241,165 - 241,165 269,326 - 269,326
General and
administrative
89,862 - 89,862 108,962 - 108,962
Stock-based
compensation 4,637 (4,637) - 24,797 (24,797) -
Amortization
of goodwill
and other
intangibles
181,033 (181,033) - 321,772 (321,772) -
Restructuring-
related and
other 181,585 (181,585) - 200,311 (200,311) -
----------------------------------------------------------------------
Total
operating
expenses 1,210,815 (367,255) 843,560 1,519,657 (546,880) 972,777
----------------------------------------------------------------------
Loss from
operations
(412,257) 367,255 (45,002) (863,880) 546,880 (317,000)
Interest
income 29,103 - 29,103 40,821 - 40,821
Interest
expense (139,232) - (139,232) (130,921) - (130,921)
Other
expense,
net (1,900) - (1,900) (10,058) - (10,058)
Other gains
(losses),
net (2,141) 2,141 - (142,639) 142,639 -
----------------------------------------------------------------------
Net interest
expense and
other (114,170) 2,141 (112,029) (242,797) 142,639 (100,158)
----------------------------------------------------------------------
Loss before
equity in
losses of
equity-method
investees (526,427) 369,396 (157,031)(1,106,677) 689,519 (417,158)
Equity in
losses of
equity-method
investees,
net (30,327) 30,327 - (304,596) 304,596 -
----------------------------------------------------------------------
Loss before
change in
accounting
principle (556,754) 399,723 (157,031)(1,411,273) 994,115 (417,158)
Cumulative
effect of
change in
accounting
principle (10,523) 10,523 - - - -
----------------------------------------------------------------------
Net loss $(567,277)$410,246$(157,031)$(1,411,273) $994,115 $(417,158)
======================================================================
Net cash
used in
operating
activities
$(119,782) $(119,782) $(130,442) $(130,442)
======================================================================
Basic and
diluted loss
per share:
Prior to
cumulative
effect of
change in
accounting
principle $(1.53) $ (0.43) $ (4.02) $ (1.19)
Cumulative
effect of
change in
accounting
principle (0.03) - - -
----------------------------------------------------------------------
$ (1.56) $ (0.43) $ (4.02) $ (1.19)
======================================================================
Shares used
in computation
of basic
and diluted
loss per
share 364,211 364,211 350,873 350,873
======================================================================
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 December 31, 2001
----------------------------------------------------------------------
U.S. Retail
-------------------------------------
Books, Electronics,
Music Tools Services Consolidated
and DVD/ and
Video Kitchen Total International
----------------------------------------------------------------------
Net sales $538,012 $216,614 $754,626 $98,113 $262,432 $1,115,171
Gross
profit 139,812 34,678 174,490 44,531 55,028 274,049
Pro forma
income (loss)
from
operations 63,938 (20,423) 43,515 25,715 (10,550) 58,680
Stock-based
compensation (1,937)
Amortization of goodwill and other intangibles (37,537)
Restructuring-related and other (4,681)
Net interest expense and other (7,583)
Equity in losses of equity-method investees, net (1,855)
-------
Net income (loss) $5,087
========
Segment highlights:
Y / Y net
sales growth 5% (2%) 3% 3% 81% 15%
Y / Y gross
profit growth 1% 55% 8% 21% 110% 22%
Gross margin 26% 16% 23% 45% 21% 25%
Pro forma
operating
margin 12% (9%) 6% 26% (4%) 5%
Net sales mix 48% 19% 67% 9% 24% 100%
Three Months Ended December 31, 2000
----------------------------------------------------------------------
U.S. Retail
-------------------------------------
Books, Electronics,
Music Tools Services Consolidated
and DVD/ and
Video Kitchen Total International
----------------------------------------------------------------------
Net sales $511,671 $220,203 $731,874 $95,601 $144,885 $972,360
Gross
profit 138,989 22,407 161,396 36,672 26,232 224,300
Pro forma
income (loss)
from
operations 39,122 (72,725) (33,603) 17,207 (43,550) (59,946)
Stock-based
compensation 1,112
Amortization of goodwill and other intangibles (79,210)
Restructuring-related and other (184,052)
Net interest expense and other (185,485)
Equity in losses of equity-method investees, net (37,559)
--------
Net loss $ (545,140)
===========
Segment highlights:
Y / Y net
sales growth 11% 62% 23% 967% 104% 44%
Y / Y gross
profit growth 79% N/A 152% 315% 77% 155%
Gross margin 27% 10% 22% 38% 18% 23%
Pro forma
operating
margin 8% (33%) (5%) 18% (30%) (6%)
Net sales mix 53% 22% 75% 10% 15% 100%
Year Ended December 31, 2001
----------------------------------------------------------------------
U.S. Retail
-------------------------------------
Books, Electronics,
Music Tools Services Consolidated
and DVD/ and
Video Kitchen Total International
----------------------------------------------------------------------
Net
sales $1,688,752 $547,190 $2,235,942 $225,117 $661,374 $3,122,433
Gross
profit 453,129 78,384 531,513 126,439 140,606 798,558
Pro forma
income (loss)
from
operations 156,753 (140,685) 16,068 42,042 (103,112) (45,002)
Stock-based
compensation (4,637)
Amortization of goodwill and other intangibles (181,033)
Restructuring-related and other (181,585)
Net interest expense and other (114,170)
Equity in losses of equity-method investees, net (30,327)
Cumulative effect of change in accounting principle (10,523)
--------
Net loss $ (567,277)
===========
Segment highlights:
Y / Y net
sales growth (1%) 13% 2% 13% 74% 13%
Y / Y gross
profit growth 9% 76% 15% 9% 82% 22%
Gross margin 27% 14% 24% 56% 21% 26%
Pro forma
operating
margin 9% (26%) 1% 19% (16%) (1%)
Net sales mix 54% 18% 72% 7% 21% 100%
Year Ended December 31, 2000
----------------------------------------------------------------------
U.S. Retail
-------------------------------------
Books, Electronics,
Music Tools Services Consolidated
and DVD/ and
Video Kitchen Total International
----------------------------------------------------------------------
Net
sales $1,698,266 $484,151 $2,182,417 $198,491 $381,075 $2,761,983
Gross
profit 417,452 44,655 462,107 116,234 77,436 655,777
Pro forma
income (loss)
from
operations 71,441 (269,890) (198,449) 26,519 (145,070) (317,000)
Stock-based
compensation (24,797)
Amortization of goodwill and other intangibles (321,772)
Restructuring-related and other (200,311)
Net interest expense and other (242,797)
Equity in losses of equity-method investees, net (304,596)
---------
Net loss $ (1,411,273)
=============
Segment highlights:
Y / Y net
sales growth 30% 221% 50% N/A 127% 68%
Y / Y gross
profit growth 59% N/A 90% N/A 118% 126%
Gross margin 25% 9% 21% 59% 20% 24%
Pro forma
operating
margin 4% (56%) (9%) 13% (38%) (11%)
Net sales mix 61% 18% 79% 7% 14% 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)
December 31, December 31,
2001 2000
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $ 540,282 $ 822,435
Marketable securities 456,303 278,087
Inventories 143,722 174,563
Prepaid expenses and
other current assets 67,613 86,044
--------- ---------
Total current assets 1,207,920 1,361,129
Fixed assets, net 271,751 366,416
Goodwill, net 45,367 158,990
Other intangibles, net 34,382 96,335
Investments in equity-method
investees 10,387 52,073
Other equity investments 17,972 40,177
Other assets 49,768 60,049
--------- ---------
Total assets $ 1,637,547 $ 2,135,169
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 444,748 $ 485,383
Accrued expenses and
other current liabilities 305,064 272,683
Unearned revenue 87,978 131,117
Interest payable 68,632 69,196
Current portion of
long-term debt and other 14,992 16,577
--------- ---------
Total current liabilities 921,414 974,956
Long-term debt and other 2,156,133 2,127,464
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 --
373,218 and 357,140,
respectively 3,732 3,571
Additional paid-in capital 1,462,769 1,338,303
Deferred stock-based
compensation (9,853) (13,448)
Accumulated other comprehensive
loss (36,070) (2,376)
Accumulated deficit (2,860,578) (2,293,301)
---------- ----------
Total stockholders' deficit (1,440,000) (967,251)
---------- ----------
Total liabilities and
stockholders' deficit $ 1,637,547 $ 2,135,169
========== ==========
Note: The attached "Financial and Operational Highlights" are an
integral part of the press release financial statements.
AMAZON.COM, INC.
Statements of Cash Flows
(in thousands)
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
------------------ ------------------
2001 2000 2001 2000
------------------ ------------------
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD $ 432,307 $ 647,048 $ 822,435 $ 133,309
OPERATING ACTIVITIES:
Net income (loss) 5,087 (545,140) (567,277) (1,411,273)
Adjustments to
reconcile net income
(loss) to net cash
provided by (used in)
operating activities:
Depreciation of fixed assets
and other amortization 21,047 22,741 84,709 84,460
Stock-based compensation 1,937 (1,112) 4,637 24,797
Equity in losses of
equity-method investees,
net 1,855 37,559 30,327 304,596
Amortization of goodwill
and other intangibles 37,537 79,210 181,033 321,772
Non-cash
restructuring-related
and other 2,883 184,052 73,293 200,311
Loss (gain) on sale of
marketable securities, net (198) 3,877 (1,335) (280)
Other losses (gains), net (16,312) 155,005 2,141 142,639
Non-cash interest expense
and other 6,510 6,450 26,629 24,766
Cumulative effect of change
in accounting principle - - 10,523 -
Changes in operating assets
and liabilities:
Inventories (13,813) (10,683) 30,628 46,083
Prepaid expenses and
other current assets 2,641 3,412 20,732 (8,585)
Accounts payable 209,546 180,674 (44,438) 22,357
Accrued expenses and
other current liabilities 65,243 113,374 50,031 93,967
Unearned revenue 38,098 31,727 114,738 97,818
Amortization of
previously unearned
revenue (40,408) (42,653) (135,808) (108,211)
Interest payable 27,467 29,160 (345) 34,341
------- ------- ------- -------
Net cash provided by
(used in) operating
activities 349,120 247,653 (119,782) (130,442)
INVESTING ACTIVITIES:
Sales and maturities of
marketable securities 67,316 23,811 370,377 545,724
Purchases of marketable
securities (286,214) (88,715) (567,152) (184,455)
Purchases of fixed assets,
including internal-use
software and web-site
development (7,534) (37,331) (50,321) (134,758)
Investments in equity-method
investees and other
investments (6,198) (691) (6,198) (62,533)
------- ------- ------- -------
Net cash provided by
(used in) investing
activities (232,630) (102,926) (253,294) 163,978
FINANCING ACTIVITIES:
Proceeds from exercise
of stock options and other 2,047 4,980 16,625 44,697
Proceeds from issuance
of common stock, net of
issuance costs - - 99,831 -
Proceeds from long-term
debt and other - - 10,000 681,499
Repayment of long-term
debt and other (4,440) (3,930) (19,575) (16,927)
Financing costs - - - (16,122)
------- ------- ------- -------
Net cash provided by
(used in) financing
activities (2,393) 1,050 106,881 693,147
Effect of exchange-rate
changes on cash and cash
equivalents (6,122) 29,610 (15,958) (37,557)
------- ------- -------- -------
Net increase (decrease) in
cash and cash equivalents 107,975 175,387 (282,153) 689,126
------- ------- -------- -------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 540,282 $ 822,435 $ 540,282 $ 822,435
======= ======= ======= =======
SUPPLEMENTAL CASH FLOW
INFORMATION:
Fixed assets acquired
under capital leases $ 114 $ 113 $ 4,597 $ 4,459
Fixed assets acquired
under financing agreements 1,000 - 1,000 4,844
Equity securities
received for commercial
agreements - - 331 106,848
Stock issued in connection
with business acquisitions
and minority investments 5,000 - 5,000 32,130
Cash paid for interest 1,194 1,870 112,184 67,252
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
Q4 2000 Q1 2001 Q2 2001 Q3 2001 Q4 2001 Growth %
--------- --------- --------- -------- ------- --------
Results of Operations
Net sales $ 972 $ 700 $ 668 $ 639 $ 1,115 15%
Net sales --
trailing
twelve months
(TTM) $ 2,762 $ 2,888 $ 2,978 $ 2,980 $ 3,122 13%
Net sales to
customers outside
the U.S. --
% of net sales 21% 26% 28% 29% 29% N/A
Gross profit $ 224 $ 183 $ 180 $ 162 $ 274 22%
Gross margin --
% of net sales 23.1% 26.1% 26.9% 25.4% 24.6% N/A
Gross profit --
TTM $ 656 $ 710 $ 754 $ 749 $ 799 22%
Gross margin --
TTM % of net
sales 23.7% 24.6% 25.3% 25.1% 25.6% N/A
Fulfillment costs
-- % of net
sales 13.5% 14.0% 12.8% 12.7% 9.8% N/A
Fulfillment costs
-- % of U.S.
Retail and
International
combined net
sales 14.9% 14.9% 13.6% 13.7% 10.7% N/A
Pro forma operating
expenses $ 284 $ 231 $ 208 $ 189 $ 215 (24%)
Pro forma operating
expenses
-- TTM $ 973 $ 977 $ 959 $ 912 $ 844 (13%)
Pro forma operating
income (loss) $ (60) $ (49) $ (28) $ (27) $ 59 N/A
Pro forma operating
margin -- % of
net sales (6.2%) (6.9%) (4.2%) (4.2%) 5.3% N/A
Pro forma operating
income (loss)
-- TTM $ (317) $ (266) $ (205) $ (164) $ (45) (86%)
GAAP operating
income (loss) $ (322) $ (217) $ (140) $ (70) $ 15 N/A
GAAP operating
income (loss)
-- % of net
sales (33.1%) (30.9%) (20.9%) (11.0%) 1.3% N/A
GAAP operating
income (loss)
-- TTM $ (864) $ (883) $ (842) $ (749) $ (412) (52%)
Pro forma net
income (loss) $ (90) $ (76) $ (58) $ (58) $ 35 N/A
Pro forma net
income (loss)
per share $ (0.25) $ (0.21) $ (0.16) $ (0.16) $ 0.09 N/A
Pro forma net
income (loss)
-- TTM $ (417) $ (372) $ (314) $ (282) $ (157) (62%)
GAAP net income
(loss) $ (545) $ (234) $ (168) $ (170) $ 5 N/A
GAAP net income
(loss) per
share $ (1.53) $ (0.66) $ (0.47) $ (0.46) $ 0.01 N/A
GAAP net income
(loss) -- TTM $ (1,411) $ (1,337) $ (1,188) $ (1,118) $ (567) (60%)
U.S. books, music and
DVD/video (US BMVD) segment:
US BMVD
net sales $ 512 $ 410 $ 390 $ 351 $ 538 5%
US BMVD
net sales
-- TTM $ 1,698 $ 1,706 $ 1,711 $ 1,662 $ 1,689 (1%)
US BMVD
gross
profit $ 139 $ 109 $ 111 $ 93 $ 140 1%
US BMVD
pro forma
operating
margin --
% of US
BMVD net
sales 8% 7% 10% 7% 12% N/A
U.S. electronics,
tools and
kitchen
(US ETK)
segment:
US ETK net
sales $ 220 $ 117 $ 111 $ 103 $ 217 (2%)
US ETK net
sales --
TTM $ 484 $ 526 $ 545 $ 551 $ 547 13%
US ETK gross
profit $ 22 $ 17 $ 13 $ 13 $ 35 55%
US ETK
pro forma
operating
margin --
% of US ETK
net sales (33%) (39%) (37%) (32%) (9%) N/A
Services segment:
Services net
sales $ 96 $ 42 $ 39 $ 46 $ 98 3%
Services net
sales -- TTM $ 198 $ 218 $ 229 $ 223 $ 225 13%
Services gross
profit $ 37 $ 28 $ 26 $ 27 $ 45 21%
Services pro
forma
operating
margin --
% of Services
net sales 18% 10% 11% 17% 26% N/A
International segment:
International net
sales $ 145 $ 132 $ 128 $ 138 $ 262 81%
International net
sales -- TTM $ 381 $ 438 $ 493 $ 544 $ 661 74%
International
gross profit $ 26 $ 28 $ 29 $ 28 $ 55 110%
International pro
forma
operating
margin --
% of
International
net sales (30%) (26%) (23%) (20%) (4%) 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, net sales per active customer, marketing cost
per new customer account, inventory turnover, accounts payable days,
and employee data)
Y/Y
Q4 2000 Q1 2001 Q2 2001 Q3 2001 Q4 2001 Growth %
------- ------- ------- ------- ------- --------
Customer Data (1)
New customer
accounts 4.1 3.0 2.6 2.9 4.7 15%
Active customer
accounts
-- TTM 19.8 20.5 21.1 23.0 24.7 25%
New customer accounts
-- international 1.1 1.0 0.9 1.0 1.6 45%
Active customer
accounts --
international
-- TTM 4.2 4.9 5.4 6.1 6.9 64%
Net sales
(excluding
catalog sales)
per active
customer
account -- TTM $ 134 $ 135 $ 136 $ 126 $ 123 (8%)
Marketing cost
per new
customer
account $ 13 $ 12 $ 14 $ 11 $ 7 (46%)
U.S. customers
(excluding
Marketplace,
Auctions and
zShops customers)
ordering from
non-US BMVD stores 36% 19% 21% 22% 37% N/A
Balance Sheet
Cash and
marketable
securities $ 1,101 $ 643 $ 609 $ 668 $ 997 (9%)
Inventory, net $ 175 $ 156 $ 129 $ 131 $ 144 (18%)
Inventory --
% of net sales 17% 24% 21% 20% 12% N/A
Inventory --
% of TTM
net sales 7% 6% 5% 5% 5% N/A
Inventory
turnover --
annualized 17.7 12.6 13.7 14.7 24.5 38%
Inventory
turnover --
TTM 11.7 13.0 14.0 14.8 15.8 35%
Fixed assets,
net $ 366 $ 304 $ 292 $ 288 $ 272 (26%)
Accounts payable
days -- ending 60 45 48 46 49 (18%)
Cash Flows
Cash generated
by (used in)
operations $ 248 $ (407) $ 2 $ (64) $ 349 41%
Cash used in
operations
-- TTM $ (130) $ (217) $ (161) $ (221) $ (120) (8%)
Purchases of
fixed assets $ (37) $ (19) $ (10) $ (13) $ (8) (78%)
Purchases of
fixed assets
-- TTM $ (135) $ (128) $ (109) $ (80) $ (50) (63%)
Other
Common shares
outstanding 357 359 362 372 373 5%
Options
outstanding
-- % of common
shares outstanding 20% 12% 12% 18% 18% N/A
Employees (full-time
and part-time) 9,000 8,600 7,800 7,900 7,800 (13%)
Note: The attached "Financial and Operational Highlights" are an
integral part of this Supplemental Financial Information and Business
Metrics.
(1) 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, new customer accounts, active customer accounts,
International customer accounts, International active customer
accounts, TTM net sales per active customer account, and marketing
cost per new customer account would have been 2.7 million, 21.9
million, .8 million, 5.5 million, $131, and $13, respectively. Amounts
prior to the 2001 second quarter have not been recalculated under the
current methodology.
AMAZON.COM, INC. Financial and Operational Highlights Fourth Quarter Ended December 31, 2001 (unaudited) Results of Operations (all comparisons are with the comparable period of 2000) Net Sales -- Our segment reporting includes four segments: U.S. Books, Music and DVD/Video; U.S. Electronics, Tools and Kitchen; International; and Services. Allocation methodologies are consistent with past presentations, and prior period amounts have been reclassified to conform with the current period presentation. -- The U.S. Books, Music and DVD/Video segment includes revenues, direct costs and cost allocations associated with retail sales from www.amazon.com for books, music, DVD and video products and for magazine subscriptions, including commissions earned on sales of similar products, new or used, through Amazon Marketplace. This segment also includes product sales, direct costs and cost allocations associated with stores offering these products through our Syndicated Stores program, such as www.borders.com. -- The U.S. Electronics, Tools and Kitchen segment includes revenues, direct costs and cost allocations associated with www.amazon.com retail sales of electronics, computers, kitchen and housewares, camera and photo items, software, cell phones and service, tools and hardware, outdoor living items, and computer and video games products, sold other than through our Toysrus.com strategic alliance, as well as catalog sales of toys, tools and hardware. This segment also includes commissions earned on sales of similar products, new or used, through Amazon Marketplace. This segment includes commissions and other amounts earned from offerings of these products by third-party sellers under our Merchant@amazon.com Program, including our strategic alliance with Circuit City, and will include stores offering these products, if any, through its Syndicated Stores. -- The International segment includes all revenues, direct costs and cost allocations associated with the retail sales of our four internationally-focused sites: www.amazon.de, www.amazon.fr, www.amazon.co.jp and www.amazon.co.uk. -- The Services segment includes revenues, direct costs and cost allocations associated with our business-to-business strategic alliances, including the Merchant Program and certain aspects of the Merchant@amazon.com Program, as well as the strategic alliance with America Online. This segment also includes Amazon Auctions, zShops and Payments, and miscellaneous marketing and promotional agreements. -- All references to customers mean customer accounts, which are unique e-mail addresses, established either when a customer's order is shipped or when a customer orders from a third-party seller. Customer accounts include customers of Amazon Marketplace, Auctions and zShops services, and customer accounts under our Merchant@amazon.com and Syndicated Stores programs, but exclude Amazon 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 catalogs and certain strategic alliances and sales of inventory to Toysrus.com. A customer is considered active upon placing an order. Gross Profit -- Gross margin, excluding the results of our Services segment, would have been 23%, up from 21%. -- Costs associated with our service revenues classified as cost of services generally include fulfillment-related costs to ship products on behalf of third-party sellers, costs to provide customer service, credit card fees and other related costs. -- Shipping gross loss was approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $11 million, down from $17 million; this includes the International segment's shipping gross loss of approximately $6 million, up from $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 promotional tool. We will 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. Stock-Based Compensation -- During the first quarter of 2001, we offered a limited non-compulsory exchange of employee stock options. This option exchange offer results in variable accounting treatment for approximately 12 million stock options at December 31, 2001, which includes approximately 11 million options granted under the exchange offer with an exercise price of $13.375, and approximately 1 million options that were subject to the exchange offer but were not exchanged. Variable accounting treatment will result in unpredictable and potentially significant charges or credits, dependent on fluctuations in quoted prices for our common stock, which we are unable to forecast. Amortization of Goodwill and Other Intangibles -- The Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). issued SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 142, "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. " which requires use of a non-amortization approach to account for purchased goodwill and certain intangibles, effective January 1, 2002. We expect the adoption of this accounting standard will result in approximately $25 million of intangible assets being subsumed into goodwill, and will have the impact of substantially reducing our amortization of goodwill and intangibles effective January 1, 2002. Transitional impairments, if any, are not expected to be material; however, impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. reviews may result in future periodic write-downs. Restructuring-Related and Other -- We continued the implementation of our operational restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). plan to reduce our operating costs operating costs npl → gastos mpl operacionales , streamline streamline, path of a fluid flowing steadily and without appreciable turbulence. A body is said to be streamlined if its shape offers the least possible resistance to a current of air, water, or other fluid. our organizational structure  This article has no lead section.To comply with Wikipedia's lead section guidelines, one should be written. and consolidate Consolidate To combine the assets, liabilities, and other financial items of two or more entities into one. Notes: This term is generally used in the context of consolidated financial statements. certain of our fulfillment and customer service operations. As a result of this initiative, we recorded restructuring and other charges of approximately $177 million during the first three quarters of 2001, and $5 million in the fourth quarter ended December 31, 2001. This initiative involved the reduction of employee staff by approximately 1,300 positions throughout the Company in managerial, professional, clerical, technical and fulfillment roles; consolidation of our 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. corporate office locations; closure of our McDonough, Georgia McDonough is a city in Henry County, Georgia, United States. The population was 8,493 at the 2000 census. Census Estimates of 2005 indicate a population of 15,523. This is due both in part to growth of the city and extension of the city limits. , fulfillment center; seasonal operation of our Seattle fulfillment center (if necessary); closure of our customer service centers in Seattle and The Hague Hague , The or 's Gra·ven·ha·ge The de facto capital of the Netherlands, in the western part of the country near the North Sea. The Hague grew around a palace built c. , Netherlands Netherlands (nĕth`ərləndz), Du. Nederland or Koninkrijk der Nederlanden, officially Kingdom of the Netherlands, constitutional monarchy (2005 est. pop. 16,407,000), 15,963 sq mi (41,344 sq km), NW Europe. ; and ongoing lease obligations for technology infrastructure no longer utilized. Each component of the restructuring plan has been substantially completed. -- Costs that relate to ongoing operations, including inventory write-downs, are not part of restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. . There have been no significant inventory write-downs resulting from the restructuring, and none are anticipated. -- Cash payments resulting from the restructuring were $49 million in 2001, $14 million of which was paid in the December quarter. We anticipate the restructuring charges will result in the following net cash outflows:
(in thousands) Termination
Leases(a) Benefits Other Total
--------- -------- ----- -----
Year Ending December 31,
2002................ $35,578 $61 $5,159 $40,798
2003................ 5,476 -- 3,031 8,507
2004................ 2,016 -- -- 2,016
2005................ 1,983 -- -- 1,983
2006................ 2,068 -- -- 2,068
Thereafter.......... 6,066 -- -- 6,066
------- ----- ------ -------
Total estimated
cash outflows.......... $53,187 $61 $8,190 $61,438
======= ===== ====== =======
(a) Net of anticipated sublease income of approximately
$68 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 , miscellaneous state and foreign taxes and certain foreign-currency-related transaction gains and losses. Other Gains (Losses), Net -- Our segment reporting includes four segments: U.S. Books, Music and DVD/Video; U.S. Electronics, Tools and Kitchen; International; and Services. Allocation methodologies are consistent with past presentations, and prior period amounts have been reclassified to conform with the current period presentation. -- The U.S. Books, Music and DVD/Video segment includes revenues, direct costs and cost allocations associated with retail sales from www.amazon.com for books, music, DVD and video products and for magazine subscriptions, including commissions earned on sales of similar products, new or used, through Amazon Marketplace. This segment also includes product sales, direct costs and cost allocations associated with stores offering these products through our Syndicated Stores program, such as www.borders.com. -- The U.S. Electronics, Tools and Kitchen segment includes revenues, direct costs and cost allocations associated with www.amazon.com retail sales of electronics, computers, kitchen and housewares, camera and photo items, software, cell phones and service, tools and hardware, outdoor living items, and computer and video games products, sold other than through our Toysrus.com strategic alliance, as well as catalog sales of toys, tools and hardware. This segment also includes commissions earned on sales of similar products, new or used, through Amazon Marketplace. This segment includes commissions and other amounts earned from offerings of these products by third-party sellers under our Merchant@amazon.com Program, including our strategic alliance with Circuit City, and will include stores offering these products, if any, through its Syndicated Stores. -- The International segment includes all revenues, direct costs and cost allocations associated with the retail sales of our four internationally-focused sites: www.amazon.de, www.amazon.fr, www.amazon.co.jp and www.amazon.co.uk. -- The Services segment includes revenues, direct costs and cost allocations associated with our business-to-business strategic alliances, including the Merchant Program and certain aspects of the Merchant@amazon.com Program, as well as the strategic alliance with America Online. This segment also includes Amazon Auctions, zShops and Payments, and miscellaneous marketing and promotional agreements. -- All references to customers mean customer accounts, which are unique e-mail addresses, established either when a customer's order is shipped or when a customer orders from a third-party seller. Customer accounts include customers of Amazon Marketplace, Auctions and zShops services, and customer accounts under our Merchant@amazon.com and Syndicated Stores programs, but exclude Amazon 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 catalogs and certain strategic alliances and sales of inventory to Toysrus.com. A customer is considered active upon placing an order. Equity in Losses of Equity-Method Investees -- Equity in losses of equity-method investees represents our share of losses of companies in which we have investments that give us the ability to exercise significant influence, but not control, over an investee. Equity-method losses reduce our underlying investment balances until the recorded basis is reduced to zero. Income Taxes -- At December 31, 2001, we had net operating losses Net operating losses Losses that a firm can take advantage of to reduce taxes. of approximately $2.3 billion related to U.S. federal, state and foreign jurisdictions. Earnings per Share -- Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of is computed using the weighted average number of common and common stock equivalent shares outstanding during the period; common stock equivalent shares such as options, warrants and convertible securities are excluded from the computation Computation is a general term for any type of information processing that can be represented mathematically. This includes phenomena ranging from simple calculations to human thinking. if their effect is antidilutive antidilutive Of or relating to the conversion of convertible securities into common stock when such conversion would result in an increase in diluted earnings per share or a decrease in diluted loss per share. . Financial Condition Cash and Marketable Securities -- Cash and marketable securities are impacted by the effect of quarterly fluctuations in foreign-currency exchange rates, particularly the Euro. Our Euro investments, classified as available for sale, had a balance of 179 million Euros ($158 million, based on the exchange rate as of December 31, 2001). -- Our marketable securities, at estimated fair value, consist of the following, as of December 31, 2001 (in thousands):
Certificates of deposit........................... $ 18,159
Commercial paper and short-term obligations....... 28,622
Corporate notes and bonds......................... 37,602
Asset-backed and agency securities................ 232,821
Treasury notes and bonds.......................... 125,947
Equity securities................................. 13,152
--------
$456,303
========
Certain Definitions and Other -- Our segment reporting includes four segments: U.S. Books, Music and DVD/Video; U.S. Electronics, Tools and Kitchen; International; and Services. Allocation methodologies are consistent with past presentations, and prior period amounts have been reclassified to conform with the current period presentation. -- The U.S. Books, Music and DVD/Video segment includes revenues, direct costs and cost allocations associated with retail sales from www.amazon.com for books, music, DVD and video products and for magazine subscriptions, including commissions earned on sales of similar products, new or used, through Amazon Marketplace. This segment also includes product sales, direct costs and cost allocations associated with stores offering these products through our Syndicated Stores program, such as www.borders.com. -- The U.S. Electronics, Tools and Kitchen segment includes revenues, direct costs and cost allocations associated with www.amazon.com retail sales of electronics, computers, kitchen and housewares, camera and photo items, software, cell phones and service, tools and hardware, outdoor living items, and computer and video games products, sold other than through our Toysrus.com strategic alliance, as well as catalog sales of toys, tools and hardware. This segment also includes commissions earned on sales of similar products, new or used, through Amazon Marketplace. This segment includes commissions and other amounts earned from offerings of these products by third-party sellers under our Merchant@amazon.com Program, including our strategic alliance with Circuit City, and will include stores offering these products, if any, through its Syndicated Stores. -- The International segment includes all revenues, direct costs and cost allocations associated with the retail sales of our four internationally-focused sites: www.amazon.de, www.amazon.fr, www.amazon.co.jp and www.amazon.co.uk. -- The Services segment includes revenues, direct costs and cost allocations associated with our business-to-business strategic alliances, including the Merchant Program and certain aspects of the Merchant@amazon.com Program, as well as the strategic alliance with America Online. This segment also includes Amazon Auctions, zShops and Payments, and miscellaneous marketing and promotional agreements. -- All references to customers mean customer accounts, which are unique e-mail addresses, established either when a customer's order is shipped or when a customer orders from a third-party seller. Customer accounts include customers of Amazon Marketplace, Auctions and zShops services, and customer accounts under our Merchant@amazon.com and Syndicated Stores programs, but exclude Amazon 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 catalogs and certain strategic alliances and sales of inventory to Toysrus.com. A customer is considered active upon placing an order. --30--kmw/atr/cla se*
CONTACT: Amazon.com Investor Relations
Tim Halladay, 206/266-2171
ir@amazon.com
or
Amazon.com Public Relations
Bill Curry, 206/266-7180
KEYWORD: WASHINGTON UNITED KINGDOM FRANCE GERMANY JAPAN
INTERNATIONAL EUROPE ASIA PACIFIC
INDUSTRY KEYWORD: E-COMMERCE RETAIL INTERNET ENTERTAINMENT
CONFERENCE CALLS EARNINGS
SOURCE: Amazon.com
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