SEATTLE, Apr 22, 2010 (BUSINESS WIRE) --Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its first quarter ended March 31, 2010.

Operating cash flow was $2.78 billion for the trailing twelve months, compared with $1.76 billion for the trailing twelve months ended March 31, 2009. Free cash flow increased 62% to $2.32 billion for the trailing twelve months, compared with $1.43 billion for the trailing twelve months ended March 31, 2009.

Common shares outstanding plus shares underlying stock-based awards totaled 463 million on March 31, 2010, compared with 447 million a year ago.

Net sales increased 46% to $7.13 billion in the first quarter, compared with $4.89 billion in first quarter 2009. Excluding the $185 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 42% compared with first quarter 2009.

Operating income increased 62% to $394 million in the first quarter, compared with $244 million in first quarter 2009. Excluding the $15 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, operating income would have grown 56% compared with first quarter 2009.

Net income increased 68% to $299 million in the first quarter, or $0.66 per diluted share, compared with net income of $177 million, or $0.41 per diluted share, in first quarter 2009.

"We remain heads-down focused on customers," said Jeff Bezos, founder and CEO of Amazon.com. "Amazon Prime has just celebrated its fifth anniversary, adoption of Amazon Web Services continues to accelerate, Kindle remains our #1 bestselling product, and earlier this week, Kindle selection reached 500,000 titles."

Highlights

 

  • North America segment sales, representing the Company's U.S. and Canadian sites, were $3.78 billion, up 47% from first quarter 2009.
  • International segment sales, representing the Company's U.K., German, Japanese, French and Chinese sites, were $3.35 billion, up 45% from first quarter 2009. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 37%.
  • Worldwide Media sales grew 26% to $3.43 billion. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 22%.
  • Worldwide Electronics & Other General Merchandise sales grew 72% to $3.51 billion. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 68%.
  • Amazon Prime, a program that allows customers to take advantage of unlimited expedited shipping for a low annual fee, celebrated its fifth anniversary. In the last five years, we have introduced Amazon Prime to customers in the U.S., Japan, the United Kingdom, Germany, and France.
  • Amazon WebStore introduced new capabilities and a self-service toolset that improve flexibility and control over a Seller's site design, branding, and catalog offering. Amazon WebStore incorporates Amazon's expertise, and makes building and operating an eCommerce business fast, easy and low cost.
  • Amazon Web Services (AWS) introduced Amazon Simple Notification Service (Amazon SNS), a new offering that provides developers with a highly scalable, flexible, and cost-effective capability to publish messages from an application and immediately deliver them to subscribers or other applications.
  • During the quarter, AWS lowered pricing for outbound data transfer by up to 40%. By aggregating total Data Transfer Out usage across multiple services, customers can reach higher tiers and lower pricing more quickly.
  • AWS announced the availability of Reserved Instances with Windows for Amazon EC2. Customers running Windows Server can choose to pay a low, upfront fee to guarantee the right to run a compute instance at a significantly discounted hourly price.
  • The Company announced that authors and publishers around the world can now use the self-service Kindle Digital Text Platform (DTP) to upload and make available their books in Spanish, Portuguese and Italian to customers worldwide in the Kindle Store. Authors and publishers already have the ability to upload and make available their books in English, French and German.
  • The U.S. Kindle Store now has more than 500,000 books, including 100 of 111 New York Times Bestsellers, more than 9,000 blogs, and more than 175 top U.S. and International newspapers and magazines, including: The New York Times, Le Monde, USA Today, The Times (U.K.), The Economist, Fortune, Newsweek, and Time.
  • Kindle, the #1 bestselling product on Amazon, is available for immediate shipment for $259 and comes with 3G wireless with no annual contract or monthly fees. Kindle weighs only 10.2 ounces and reads like real paper without glare - even in bright sunlight.

 

Financial Guidance

The following forward-looking statements reflect Amazon.com's expectations as of April 22, 2010. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and consumer spending, world events, the rate of growth of the Internet and online commerce and the various factors detailed below.

Second Quarter 2010 Guidance

 

  • Net sales are expected to be between $6.1 billion and $6.7 billion, or to grow between 31% and 44% compared with second quarter 2009.
  • Operating income is expected to be between $220 million and $320 million, or to grow between 39% and 102% compared with second quarter 2009. The second quarter 2009 results include the impact of our settlement with Toysrus.com LLC for $51 million, substantially all of which was expensed during the quarter.
  • This guidance includes approximately $130 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions or investments are concluded and that there are no further revisions to stock-based compensation estimates.

 

A conference call will be webcast live today at 2 p.m. PT/5 p.m. ET, and will be available for at least three months at http://www.amazon.com/ir. This call will contain forward-looking statements and other material information regarding the Company's financial and operating results.

These forward-looking statements are inherently difficult to predict. Actual results could differ materially for a variety of reasons, including, in addition to the factors discussed above, the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of legal proceedings and claims, fulfillment center optimization, risks of inventory management, seasonality, the degree to which the Company enters into, maintains and develops commercial agreements, acquisitions and strategic transactions, and risks of fulfillment throughput and productivity. Other risks and uncertainties include, among others, risks related to new products, services and technologies, system interruptions, government regulation and taxation, payments and fraud. In addition, the current global economic climate amplifies many of these risks. More information about factors that potentially could affect Amazon.com's financial results is included in Amazon.com's filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and subsequent filings.

About Amazon.com

Amazon.com, Inc. (NASDAQ:AMZN), a Fortune 500 company based in Seattle, opened on the World Wide Web in July 1995 and today offers Earth's Biggest Selection. Amazon.com, Inc. seeks to be Earth's most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices. Amazon.com and other sellers offer millions of unique new, refurbished and used items in categories such as Books; Movies, Music & Games; Digital Downloads; Electronics & Computers; Home & Garden; Toys, Kids & Baby; Grocery; Apparel, Shoes & Jewelry; Health & Beauty; Sports & Outdoors; and Tools, Auto & Industrial. Amazon Web Services provides Amazon's developer customers with access to in-the-cloud infrastructure services based on Amazon's own back-end technology platform, which developers can use to enable virtually any type of business. Kindle and Kindle DX are the revolutionary portable readers that wirelessly download books, magazines, newspapers, blogs and personal documents to a crisp, high-resolution electronic ink display that looks and reads like real paper. Kindle and Kindle DX utilize the same 3G wireless technology as advanced cell phones, so users never need to hunt for a Wi-Fi hotspot. Kindle is the #1 bestselling product across the millions of items sold on Amazon.

Amazon and its affiliates operate websites, including http://www.amazon.comhttp://www.amazon.co.ukhttp://www.amazon.dehttp://www.amazon.co.jphttp://www.amazon.frhttp://www.amazon.ca, and http://www.amazon.cn. As used herein, "Amazon.com," "we," "our" and similar terms include Amazon.com, Inc., and its subsidiaries, unless the context indicates otherwise.

AMAZON.COM, INC.
Consolidated Statements of Cash Flows
(in millions)
(unaudited)
         
         
         
  Three Months Ended Twelve Months Ended
  March 31, March 31,
  2010 2009 2010 2009
         
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD$3,444  $2,769  $1,701  $1,496 
         
OPERATING ACTIVITIES:        
Net income  299   177   1,024   679 

Adjustments to reconcile net income to net cash from operating activities:

        

Depreciation of fixed assets, including internal-use software and website development, and other amortization

  119   87   411   309 
Stock-based compensation  87   67   360   288 
Other operating expense (income), net  26   11   118   (19)
Losses (gains) on sales of marketable securities, net  -   (2)  (2)  (1)
Other expense (income), net  (6)  2   (23)  (30)
Deferred income taxes  (20)  -   63   14 
Excess tax benefits from stock-based compensation  (86)  (49)  (141)  (145)
Changes in operating assets and liabilities:        
Inventories  321   107   (317)  (273)
Accounts receivable, net and other  454   167   (195)  (190)
Accounts payable  (1,892)  (1,129)  1,096   686 
Accrued expenses and other  (361)  (122)  60   249 
Additions to unearned revenue  188   206   1,036   576 
Amortization of previously unearned revenue  (227)  (107)  (710)  (386)
Net cash provided by (used in) operating activities  (1,098)  (585)  2,780   1,757 
         
INVESTING ACTIVITIES:        

Purchases of fixed assets, including internal-use software and website development

  (140)  (55)  (458)  (326)
Acquisitions, net of cash acquired, and other  (19)  (15)  (43)  (155)
Sales and maturities of marketable securities and other investments 872   314   2,524   1,348 
Purchases of marketable securities and other investments  (1,255)  (391)  (4,755)  (1,686)
Net cash provided by (used in) investing activities  (542)  (147)  (2,732)  (819)
         
FINANCING ACTIVITIES:        
Excess tax benefits from stock-based compensation  86   49   141   145 
Common stock repurchased  -   -   -   (100)
Proceeds from long-term debt and other  62   3   124   48 
Repayments of long-term debt and capital lease obligations  (61)  (343)  (168)  (673)
Net cash provided by (used in) financing activities  87   (291)  97   (580)
         
Foreign-currency effect on cash and cash equivalents  (47)  (45)  (2)  (153)
Net increase (decrease) in cash and cash equivalents  (1,600)  (1,068)  143   205 
         
CASH AND CASH EQUIVALENTS, END OF PERIOD $1,844  $1,701  $1,844  $1,701 
AMAZON.COM, INC.
Consolidated Statements of Operations
(in millions, except per share data)
(unaudited)
     
     
     
  Three Months Ended
  March 31,
  2010 2009
     
Net sales $7,131  $4,889 
     
Operating expenses (1):    
Cost of sales  5,501   3,741 
Fulfillment  546   422 
Marketing  201   128 
Technology and content  366   275 
General and administrative  97   68 
Other operating expense (income), net  26   11 
Total operating expenses  6,737   4,645 
     
Income from operations  394   244 
     
Interest income  11   12 
Interest expense  (7)  (12)
Other income (expense), net  3   4 
Total non-operating income (expense)  7   4 
     
Income before income taxes  401   248 
     
Provision for income taxes  (100)  (69)
Equity-method investment activity, net of tax  (2)  (2)
Net income $299  $177 
     
Basic earnings per share $0.67  $0.41 
     
Diluted earnings per share $0.66  $0.41 
     
     
Weighted average shares used in computation of earnings per share:    
Basic  445   429 
Diluted  454   437 
__________________________    
(1) Includes stock-based compensation as follows:    
Fulfillment $18  $15 
Marketing  5   4 
Technology and content  47   36 
General and administrative  17   12 
AMAZON.COM, INC.
Segment Information
(in millions)
(unaudited)
     
     
     
  Three Months Ended
  March 31,
  2010 2009
North America    
Net sales $3,780  $2,578 
Operating expenses:    
Cost of sales  2,761   1,884 
Direct segment operating expenses (1)  746   544 
Segment operating income $273  $150 
     
International    
Net sales $3,351  $2,311 
Operating expenses:    
Cost of sales  2,740   1,857 
Direct segment operating expenses (1)  377   282 
Segment operating income $234  $172 
     
Consolidated    
Net sales $7,131  $4,889 
Operating expenses:    
Cost of sales  5,501   3,741 
Direct segment operating expenses  1,123   826 
Segment operating income  507   322 
Stock-based compensation  (87)  (67)
Other operating income (expense), net  (26)  (11)
Income from operations  394   244 
Total non-operating income (expense), net  7   4 
Provision for income taxes  (100)  (69)
Equity-method investment activity, net of tax  (2)  (2)
Net income $299  $177 
     
Segment Highlights:    
Y/Y net sales growth:    
North America  47%  21%
International  45   15 
Consolidated  46   18 
Y/Y segment operating income growth:    
North America  81%  15%
International  37   34 
Consolidated  58   25 
Net sales mix:    
North America  53%  53%
International  47   47 
__________________________    

(1) A significant majority of our costs for "Technology and content" are incurred in the United States and most of these costs are allocated to our North America segment.

AMAZON.COM, INC.
Supplemental Net Sales Information
(in millions)
(unaudited)
     
     
     
  Three Months Ended
  March 31,
  2010 2009
North America    
Media $1,597  $1,305 
Electronics and other general merchandise  2,024   1,172 
Other  159   101 
Total North America  3,780   2,578 
     
International    
Media  1,833   1,418 
Electronics and other general merchandise  1,489   874 
Other  29   19 
Total International  3,351   2,311 
     
Consolidated    
Media  3,430   2,723 
Electronics and other general merchandise  3,513   2,046 
Other  188   120 
Total Consolidated $7,131  $4,889 
     
Y/Y Net Sales Growth:    
North America:    
Media  22%  8%
Electronics and other general merchandise  73   42 
Other  57   7 
Total North America  47   21 
     
International:    
Media  29%  6%
Electronics and other general merchandise  70   34 
Other  57   14 
Total International  45   15 
     
Consolidated:    
Media  26%  7%
Electronics and other general merchandise  72   38 
Other  57   8 
Total Consolidated  46   18 
     
Y/Y Net Sales Growth Excluding Effect of Exchange Rates:    
International:    
Media  23%  17%
Electronics and other general merchandise  61   50 
Other  47   40 
Total International  37   28 
     
Consolidated:    
Media  22%  13%
Electronics and other general merchandise  68   46 
Other  56   11 
Total Consolidated  42   25 
     
Consolidated Net Sales Mix:    
Media  48%  56%
Electronics and other general merchandise  49   42 
Other  3   2 
AMAZON.COM, INC.
Consolidated Balance Sheets
(in millions, except per share data)
     
     
     
  March 31, December 31,
  2010 2009
ASSETS (unaudited)  
Current assets:    
Cash and cash equivalents $1,844  $3,444 
Marketable securities  3,219   2,922 
Inventories  1,820   2,171 
Accounts receivable, net and other  815   988 
Deferred tax assets  266   272 
Total current assets  7,964   9,797 
Fixed assets, net  1,436   1,290 
Deferred tax assets  16   18 
Goodwill  1,234   1,234 
Other assets  1,392   1,474 
Total assets $12,042  $13,813 
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Accounts payable $3,619  $5,605 
Accrued expenses and other  1,574   1,759 
Total current liabilities  5,193   7,364 
Long-term debt  131   109 
Other long-term liabilities  1,100   1,083 
     
Commitments and contingencies    
     
Stockholders' equity:    
Preferred stock, $0.01 par value:    
Authorized shares -- 500    
Issued and outstanding shares -- none  -   - 
Common stock, $0.01 par value:    
Authorized shares -- 5,000    
Issued shares -- 462 and 461    
Outstanding shares -- 446 and 444  5   5 
Treasury stock, at cost  (600)  (600)
Additional paid-in capital  5,887   5,736 
Accumulated other comprehensive loss  (145)  (56)
Retained earnings  471   172 
Total stockholders' equity  5,618   5,257 
Total liabilities and stockholders' equity $12,042  $13,813 
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except per share data)
(unaudited)
             
            Y/Y %
  Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Change
Cash Flows and Shares            
Operating cash flow -- trailing twelve months (TTM) $1,757  $1,878  $2,253  $3,293  $2,780  58%
Purchases of fixed assets (incl. internal-use software & website development) -- TTM $326  $336  $337  $373  $458  40%
Free cash flow (operating cash flow less purchases of fixed assets) -- TTM $1,431  $1,542  $1,916  $2,920  $2,322  62%
Free cash flow -- TTM Y/Y growth  82%  89%  98%  114%  62% N/A 
Invested capital (1) $3,501  $3,666  $3,847  $4,449  $5,104  N/A 
Return on invested capital (2)  41%  42%  50%  66%  45% N/A 
             
Common shares and stock-based awards outstanding  447   451   451   461   463  4%
Common shares outstanding  429   432   433   444   446  4%
Stock-based awards outstanding  17   19   18   17   18  4%
Stock-based awards outstanding -- % of common shares outstanding  4.0%  4.4%  4.2%  3.8%  4.0% N/A 
             
Results of Operations            
Worldwide (WW) net sales $4,889  $4,651  $5,449  $9,519  $7,131  46%
WW net sales -- Y/Y growth, excluding F/X  25%  20%  29%  37%  42% N/A 
WW net sales -- TTM $19,921  $20,509  $21,693  $24,509  $26,750  34%
WW net sales -- TTM Y/Y growth, excluding F/X  27%  24%  24%  29%  33% N/A 
             
Operating income (3) $244  $159  $251  $476  $394  62%
Operating income -- Y/Y growth (decrease), excluding F/X  39%  (13)%  69%  63%  56% N/A 
Operating margin -- % of WW net sales  5.0%  3.4%  4.6%  5.0%  5.5% N/A 
Operating income -- TTM (3) (4) $887  $829  $925  $1,129  $1,279  44%
Operating income -- TTM Y/Y growth, excluding F/X  30%  13%  22%  39%  44% N/A 
Operating margin -- TTM % of WW net sales  4.5%  4.0%  4.3%  4.6%  4.8% N/A 
             
Net income (3) $177  $142  $199  $384  $299  68%
Net income per diluted share $0.41  $0.32  $0.45  $0.85  $0.66  62%
Net income -- TTM (3) (4) $679  $663  $743  $902  $1,024  51%
Net income per diluted share -- TTM $1.56  $1.52  $1.69  $2.04  $2.30  47%
             
Segments            
North America Segment:            
Net sales $2,578  $2,451  $2,843  $4,956  $3,780  47%
Net sales -- Y/Y growth, excluding F/X  22%  13%  24%  36%  46% N/A 
Net sales -- TTM $10,681  $10,963  $11,503  $12,828  $14,030  31%
Operating income $150  $125  $156  $278  $273  81%
Operating margin -- % of North America net sales  5.8%  5.1%  5.5%  5.6%  7.2% N/A 
Operating income -- TTM $464  $494  $562  $709  $832  79%
Operating income -- TTM Y/Y growth, excluding F/X  5%  8%  20%  59%  79% N/A 
Operating margin -- TTM % of North America net sales  4.4%  4.5%  4.9%  5.5%  5.9% N/A 
             
International Segment:            
Net sales $2,311  $2,200  $2,606  $4,563  $3,351  45%
Net sales -- Y/Y growth, excluding F/X  28%  28%  35%  37%  37% N/A 
Net sales -- TTM $9,240  $9,546  $10,190  $11,681  $12,720  38%
Net sales -- TTM % of WW net sales  46%  47%  47%  48%  48% N/A 
Operating income $172  $179  $194  $319  $234  37%
Operating margin -- % of International net sales  7.4%  8.1%  7.4%  7.0%  7.0% N/A 
Operating income -- TTM $692  $722  $773  $863  $925  34%
Operating income -- TTM Y/Y growth, excluding F/X  52%  49%  49%  41%  33% N/A 
Operating margin -- TTM % of International net sales  7.5%  7.6%  7.6%  7.4%  7.3% N/A 
             
Consolidated Segments:            
Operating expenses (5) $4,567  $4,347  $5,099  $8,922  $6,624  45%
Operating expenses -- TTM (5) $18,765  $19,293  $20,358  $22,937  $24,993  33%
Operating income $322  $304  $350  $597  $507  58%
Operating margin -- % of consolidated sales  6.6%  6.5%  6.4%  6.3%  7.1% N/A 
Operating income -- TTM $1,156  $1,216  $1,335  $1,572  $1,757  52%
Operating income -- TTM Y/Y growth, excluding F/X  28%  29%  35%  48%  51% N/A 
Operating margin -- TTM % of consolidated net sales  5.8%  5.9%  6.2%  6.4%  6.6% N/A 
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except inventory turnover, accounts payable days and employee data)
(unaudited)
             
            Y/Y %
  Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Change
Supplemental            
Supplemental North America Segment Net Sales:            
Media $1,305  $1,148  $1,412  $2,099  $1,597  22%
Media -- Y/Y growth, excluding F/X  9%  0%  14%  19%  22% N/A 
Media -- TTM $5,450  $5,449  $5,616  $5,964  $6,255  15%
Electronics and other general merchandise $1,172  $1,187  $1,293  $2,662  $2,024  73%
Electronics and other general merchandise -- Y/Y growth, excluding F/X  42%  29%  36%  54%  73% N/A 
Electronics and other general merchandise -- TTM $4,776  $5,043  $5,385  $6,314  $7,166  50%
Electronics and other general merchandise -- TTM % of North America net sales  45%  46%  47%  49%  51% N/A 
Other $101  $116  $138  $195  $159  57%
Other -- TTM $455  $471  $502  $550  $608  34%
             
Supplemental International Segment Net Sales:            
Media $1,418  $1,294  $1,517  $2,580  $1,833  29%
Media -- Y/Y growth, excluding F/X  17%  12%  22%  26%  23% N/A 
Media -- TTM $5,814  $5,849  $6,118  $6,810  $7,225  24%
Electronics and other general merchandise $874  $882  $1,064  $1,947  $1,489  70%
Electronics and other general merchandise -- Y/Y growth, excluding F/X  50%  60%  58%  56%  61% N/A 
Electronics and other general merchandise -- TTM $3,330  $3,603  $3,977  $4,768  $5,382  62%
Electronics and other general merchandise -- TTM % of International net sales  36%  38%  39%  41%  42% N/A 
Other $19  $24  $25  $36  $29  57%
Other -- TTM $96  $94  $95  $103  $114  18%
             
Supplemental Worldwide Net Sales:            
Media $2,723  $2,442  $2,929  $4,679  $3,430  26%
Media -- Y/Y growth, excluding F/X  13%  7%  18%  23%  22% N/A 
Media -- TTM $11,264  $11,298  $11,734  $12,774  $13,480  20%
Electronics and other general merchandise $2,046  $2,069  $2,357  $4,609  $3,513  72%
Electronics and other general merchandise -- Y/Y growth, excluding F/X  46%  41%  45%  54%  68% N/A 
Electronics and other general merchandise -- TTM $8,106  $8,646  $9,362  $11,082  $12,548  55%
Electronics and other general merchandise -- TTM % of WW net sales  41%  42%  43%  45%  47% N/A 
Other $120  $140  $163  $231  $188  57%
Other -- TTM $551  $565  $597  $653  $722  31%
             
Balance Sheet            
Cash and marketable securities (6) $3,025  $3,504  $4,304  $6,672  $5,381  78%
Inventory, net -- ending $1,266  $1,325  $1,617  $2,171  $1,820  44%
Inventory turnover, average -- TTM  12.5   12.4   12.1   12.2   12.6  1%
Fixed assets, net $889  $981  $1,086  $1,290  $1,436  61%
             
Accounts payable -- ending $2,380  $2,508  $3,354  $5,605  $3,619  52%
Accounts payable days -- ending  57   65   72   68   59  3%
             
Other            
WW shipping revenue $190  $185  $208  $341  $248  30%
WW shipping costs $358  $332  $388  $696  $518  45%
WW net shipping costs $168  $147  $180  $355  $270  61%
WW net shipping costs -- % of WW net sales  3.4%  3.1%  3.3%  3.7%  3.8% N/A 
             
             
Employees (full-time and part-time; excludes contractors & temporary personnel)  20,600   21,000   21,700   24,300   26,100  27%
             
             
(1) Average Total Assets minus Current Liabilities (excluding current portion of Long Term Debt) over five quarter ends.
(2) TTM Free Cash Flow divided by Invested Capital.
(3) Q2 2009 includes the impact of our settlement with Toysrus.com LLC for $51 million.
(4) Q2 2008 includes a $53 million non-cash gain recognized on the sale of our European DVD rental assets.

(5) Represents cost of sales, fulfillment, marketing, technology and content, and general and administrative operating expenses, excluding stock-based compensation.

(6) Includes restricted cash, classified within "Other Assets" on our consolidated balance sheet, of: $295 million Q1 2009, $292 million Q2 2009, $303 million Q3 2009, $306 million in Q4 2009 and $318 million in Q1 2010.

Amazon.com, Inc.

Certain Definitions

Customer Accounts

 

  • 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 other sellers on our websites. Customer accounts exclude certain customers, including customers associated with certain of our acquisitions, Amazon Enterprise Solutions program customers, Amazon.com Payments customers, Amazon Web Services customers, and the customers of select companies with whom we have a technology alliance or marketing and promotional relationship. Customers are considered active when they have placed an order during the preceding twelve-month period.

 

Seller Accounts

 

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

 

Registered Developers

 

  • References to registered developers mean cumulative registered developer accounts, which are established when potential developers enroll with Amazon Web Services and receive a developer access key.

 

Units

 

 

SOURCE: Amazon.com, Inc.

Amazon.com Investor Relations
Rob Eldridge, 206-266-2171
http://www.amazon.com/ir
or
Amazon.com Public Relations
Mary Osako, 206-266-7180