Amazon.com Announces Second Quarter Sales up 20% to $23.18 Billion

Amazon.com today announced financial results for its second quarter ended June 30, 2015.

Operating cash flow increased 69% to $8.98 billion for the trailing twelve months, compared with $5.33 billion for the trailing twelve months ended June 30, 2014. Free cash flow increased to $4.37 billion for the trailing twelve months, compared with $1.04 billion for the trailing twelve months ended June 30, 2014.

Common shares outstanding plus shares underlying stock-based awards totaled 488 million on June 30, 2015, compared with 480 million one year ago.

Net sales increased 20% to $23.18 billion in the second quarter, compared with $19.34 billion in second quarter 2014. Excluding the $1.39 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 27% compared to second quarter 2014.

Operating income was $464 million in the second quarter, compared with operating loss of $15 million in second quarter 2014.

Net income was $92 million in the second quarter, or $0.19 per diluted share, compared with net loss of $126 million, or $0.27 per diluted share, in second quarter 2014.

“The teams at Amazon have been working hard for customers,” said Jeff Bezos, founder and CEO of Amazon.com.

“We unveiled Amazon Business, opened Amazon Mexico, launched Prime free same-day, rolled out our ninth Prime Now city, broke our Black Friday record with the first-ever Prime Day, received 11 Emmy nominations for Transparent, debuted six new kids pilots, brought Echo to general availability, introduced the Alexa Skills Kit and Alexa Voice Service, opened FBA Small and Light, continued to double down on our fastest growing geography — India, launched 350 significant AWS features and services so far this year (ahead of last year’s pace), introduced AWS Educate, and entered into agreements for new solar and wind farms — enough to exceed our 2016 goal of 40% renewable energy.”

Highlights

  • Amazon celebrated Prime Day on July 15th, a global shopping event that offered Prime members more deals than Black Friday. More new members tried Prime worldwide than any single day in Amazon history. Customers purchased more units on Prime Day than Black Friday 2014, and saved millions of dollars on deals around the world. Sellers using Fulfillment by Amazon (FBA) also benefited, experiencing record-breaking unit sales on Prime Day.
  • Amazon launched Prime free same-day delivery in 14 U.S. metro areas, serving more than 500 cities and towns. Prime members can choose from over one million items and order as late as noon to receive their order on the same day, for free.
  • Prime Now expanded to three additional cities including London, the first international location to offer the service. Prime Now is available in nine cities, bringing Prime members one-hour delivery on thousands of daily essentials.
  • Amazon Echo, the first device designed entirely around your voice, moved to general availability in the U.S. Customer response to Echo has been overwhelmingly positive with over 14,000 5-star reviews and an average customer rating of 4.5 stars.
  • Amazon announced the Alexa Fund — named for Alexa, the cloud-based voice service that powers Echo — which will invest up to $100 million to support developers, manufacturers, and start-ups of all sizes to create new experiences designed around the human voice.
  • Amazon opened the Alexa Voice Service to third-party hardware makers, giving them the tools to integrate Alexa into internet-connected devices.
  • Amazon introduced the Alexa Skills Kit, a free SDK that makes it fast and easy for developers to create new voice-driven capabilities for Alexa.
  • Amazon introduced the new Kindle Paperwhite with twice the pixels of the previous Paperwhite, the exclusive Bookerly font, and a new typesetting engine for more beautiful pages.
  • Amazon announced the expansion of the Fire HD Kids Edition tablet to the U.K. and Germany. Fire HD Kids Edition is the first tablet built from the ground up for kids, and comes with a two-year worry-free guarantee and access to thousands of kid-friendly books, videos, educational apps, and games.
  • Amazon Fire TV now offers nearly 2,000 channels, apps, and games. Popular new additions include STARZ Play, Candy Crush Saga, and Popcornflix.
  • Amazon Original Series Transparent is the most nominated Comedy Series at this year’s Emmys with 11 nominations, including Outstanding Comedy Series and Lead Actor, Comedy (Jeffrey Tambor).
  • Amazon Original Series Tumble Leaf won five Daytime Emmy Awards, including Outstanding Preschool Children’s Animated Program.
  • Amazon Studios launched six new pilots for kids and debuted a second season of Annedroids on Prime Instant Video.
  • Amazon announced Amazon Business, a new business-to-business marketplace that offers hundreds of millions of products.
  • Amazon introduced the FBA Small and Light program, a new fulfillment solution for fast-moving, small, and light products that increases free shipping selection for customers and provides a low-cost shipping option for sellers.
  • The Council of Fashion Designers of America held the inaugural showcase for American men’s fashion, New York Fashion Week: Men’s, which was presented by Amazon Fashion, East Dane, and MyHabit.
  • Amazon announced the launch of its Mexico physical goods store, Amazon.com.mx, with the largest selection in Mexico and more categories, items, and features than any previous Amazon launch anywhere in the world. Amazon also launched Selling on Amazon and FBA in Mexico, allowing third-party sellers to list and sell their products at Amazon.com.mx.
  • Amazon announced the Global Selling Program for sellers in India, which enables them to access hundreds of millions of customers around the world.
  • Amazon.in introduced Sunday delivery across 100 cities in India for all FBA products at no additional cost.
  • Amazon India continues to be Amazon’s fastest growing geography in sales, and India’s largest online store with over 25 million products.
  • Amazon Prime members in Italy now receive free one-day shipping on more than one million items with their Prime subscription.
  • Amazon hosted its first-ever “Amazon Academy” in Berlin. Over 250 sellers, software developers, and authors from across Germany gathered to share their experiences and ideas on how to build thriving businesses and careers with Amazon’s platforms. Additional Amazon Academy events are scheduled for this fall across Europe.
  • Amazon has tripled the selection available on the Amazon Global Store on Amazon.cn, allowing Chinese customers to choose from three million products curated from the U.S. Amazon website.
  • Amazon Web Services (AWS) announced that it will open a new region in India in 2016, which will enable customers to run workloads in India and serve Indian end-users with even better latency.
  • AWS announced that the EU (Frankfurt) region, which opened in October 2014, is AWS’ fastest growing international region to date.
  • AWS announced AWS Educate, a free program that helps educators and students use real-world cloud technology in the classroom to prepare students for the cloud workforce.
  • AWS entered into separate agreements to support the construction and operation of Amazon Solar Farm U.S. East and Amazon Wind Farm U.S. East. These are expected to generate approximately 170,000 megawatt hours (MWh) of solar power and 670,000 MWh of wind energy on an annual basis. The energy generated from these facilities will be delivered into the electrical grids that power both current and future AWS data centers.
  • AWS announced Amazon API Gateway, a new fully managed service that makes it easy for AWS customers to create, publish, maintain, monitor, and secure APIs at any scale.
  • AWS Device Farm is a new service that helps mobile app developers quickly and securely test their apps on smartphones, tablets, and other devices to improve the quality of their Android and Fire OS apps.

A conference call will be webcast live today at 2:00 p.m. PT/5:00 p.m. ET, and will be available for at least three months at www.amazon.com/ir. This call will contain forward-looking statements and other material information regarding the Company’s financial and operating results.

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Consolidated Statements of Cash Flows
(in millions)
(unaudited)
Three Months Ended Six Months Ended Twelve Months Ended
June 30, June 30, June 30,
2015 2014 2015 2014 2015 2014
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 10,237 $ 5,074 $ 14,557 $ 8,658 $ 5,057 $ 3,704
OPERATING ACTIVITIES:
Net income (loss) 92 (126 ) 35 (18 ) (188 ) 181
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation of property and equipment, including internal-use software and website development, and other amortization, including capitalized content costs 1,504 1,109 2,930 2,119 5,557 3,916
Stock-based compensation 563 391 969 711 1,755 1,318
Other operating expense (income), net 42 28 87 62 153 113
Losses (gains) on sales of marketable securities, net 1 (1 ) 2 (1 ) (1 ) 1
Other expense (income), net 18 (8 ) 109 (57 ) 229 (1 )
Deferred income taxes (43 ) (49 ) (45 ) (234 ) (130 ) (332 )
Excess tax benefits from stock-based compensation (95 ) (117 ) (121 ) (1 ) (199 )
Changes in operating assets and liabilities:
Inventories (27 ) 92 693 791 (1,291 ) (1,124 )
Accounts receivable, net and other (430 ) (299 ) 11 428 (1,456 ) (936 )
Accounts payable 373 (344 ) (3,876 ) (5,018 ) 2,901 1,056
Accrued expenses and other (129 ) (15 ) (1,068 ) (746 ) 387 770
Additions to unearned revenue 1,397 894 3,200 1,986 5,647 3,477
Amortization of previously unearned revenue (1,269 ) (810 ) (2,432 ) (1,542 ) (4,582 ) (2,913 )
Net cash provided by (used in) operating activities 1,997 862 498 (1,640 ) 8,980 5,327
INVESTING ACTIVITIES:
Purchases of property and equipment, including internal-use software and website development (1,213 ) (1,290 ) (2,084 ) (2,370 ) (4,607 ) (4,288 )
Acquisitions, net of cash acquired, and other (8 ) (67 ) (374 ) (66 ) (1,287 ) (127 )
Sales and maturities of marketable securities 470 962 845 1,555 2,639 2,565
Purchases of marketable securities (625 ) (336 ) (1,610 ) (773 ) (3,379 ) (1,710 )
Net cash provided by (used in) investing activities (1,376 ) (731 ) (3,223 ) (1,654 ) (6,634 ) (3,560 )
FINANCING ACTIVITIES:
Excess tax benefits from stock-based compensation 95 117 121 1 199
Proceeds from long-term debt 44 286 226 351 6,236 627
Repayments of long-term debt (215 ) (178 ) (531 ) (247 ) (797 ) (334 )
Principal repayments of capital lease obligations (580 ) (285 ) (1,082 ) (535 ) (1,832 ) (969 )
Principal repayments of finance lease obligations (35 ) (12 ) (74 ) (54 ) (155 ) (60 )
Net cash provided by (used in) financing activities (691 ) (189 ) (1,344 ) (364 ) 3,453 (537 )
Foreign-currency effect on cash and cash equivalents 102 41 (219 ) 57 (587 ) 123
Net increase (decrease) in cash and cash equivalents 32 (17 ) (4,288 ) (3,601 ) 5,212 1,353
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 10,269 $ 5,057 $ 10,269 $ 5,057 $ 10,269 $ 5,057
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest on long-term debt $ 152 $ 31 $ 169 $ 49 $ 212 $ 94
Cash paid for income taxes (net of refunds) 65 71 119 109 188 158
Property and equipment acquired under capital leases 1,384 920 2,338 1,636 4,710 2,716
Property and equipment acquired under build-to-suit leases 153 237 256 363 813 846

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AMAZON.COM, INC.
Consolidated Statements of Operations
(in millions, except per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2015 2014 2015 2014
Net product sales $ 17,104 $ 15,251 $ 34,187 $ 30,956
Net service sales 6,081 4,089 11,714 8,125
Total net sales 23,185 19,340 45,901 39,081
Operating expenses (1):
Cost of sales 15,160 13,399 30,555 27,453
Fulfillment 2,876 2,382 5,634 4,699
Marketing 1,150 943 2,233 1,813
Technology and content 3,020 2,226 5,774 4,217
General and administrative 467 377 894 704
Other operating expense (income), net 48 28 92 63
Total operating expenses 22,721 19,355 45,182 38,949
Income (loss) from operations 464 (15 ) 719 132
Interest income 12 11 23 21
Interest expense (114 ) (45 ) (228 ) (87 )
Other income (expense), net 22 (131 ) 27
Total non-operating income (expense) (102 ) (12 ) (336 ) (39 )
Income (loss) before income taxes 362 (27 ) 383 93
Provision for income taxes (266 ) (94 ) (337 ) (167 )
Equity-method investment activity, net of tax (4 ) (5 ) (11 ) 56
Net income (loss) $ 92 $ (126 ) $ 35 $ (18 )
Basic earnings per share $ 0.20 $ (0.27 ) $ 0.07 $ (0.04 )
Diluted earnings per share $ 0.19 $ (0.27 ) $ 0.07 $ (0.04 )
Weighted average shares used in computation of earnings per share:
Basic 467 461 466 460
Diluted 476 461 475 460
_____________
(1) Includes stock-based compensation as follows:
Fulfillment $ 132 $ 104 $ 222 $ 184
Marketing 50 32 84 59
Technology and content 319 206 552 375
General and administrative 62 49 111 93

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AMAZON.COM, INC.
Consolidated Statements of Comprehensive Income (Loss)
(in millions)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2015 2014 2015 2014
Net income (loss) $ 92 $ (126 ) $ 35 $ (18 )
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax of $1, $0, $0, and $1 128 11 (114 ) 39
Net change in unrealized gains on available-for-sale securities:
Unrealized gains, net of tax of $(8), $0, $(8), and $(1) 6 3 7 4
Reclassification adjustment for losses included in “Other income (expense), net,” net of tax of $0, $0, $(1), and $0 1 (1 ) 1 (1 )
Net unrealized gains on available-for-sale securities 7 2 8 3
Total other comprehensive income (loss) 135 13 (106 ) 42
Comprehensive income (loss) $ 227 $ (113 ) $ (71 ) $ 24

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AMAZON.COM, INC.
Segment Information
(in millions)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2015 2014 2015 2014
North America
Net sales $ 13,796 $ 10,994 $ 27,202 $ 21,802
Segment operating expenses (1) 13,093 10,665 25,982 21,183
Segment operating income $ 703 $ 329 $ 1,220 $ 619
International
Net sales $ 7,565 $ 7,341 $ 15,310 $ 15,224
Segment operating expenses (1) 7,584 7,343 15,405 15,259
Segment operating income (loss) $ (19 ) $ (2 ) $ (95 ) $ (35 )
AWS
Net sales $ 1,824 $ 1,005 $ 3,389 $ 2,055
Segment operating expenses (1) 1,433 928 2,734 1,733
Segment operating income $ 391 $ 77 $ 655 $ 322
Consolidated
Net sales $ 23,185 $ 19,340 $ 45,901 $ 39,081
Segment operating expenses (1) 22,110 18,936 44,121 38,175
Segment operating income 1,075 404 1,780 906
Stock-based compensation (563 ) (391 ) (969 ) (711 )
Other operating income (expense), net (48 ) (28 ) (92 ) (63 )
Income (loss) from operations 464 (15 ) 719 132
Total non-operating income (expense) (102 ) (12 ) (336 ) (39 )
Provision for income taxes (266 ) (94 ) (337 ) (167 )
Equity-method investment activity, net of tax (4 ) (5 ) (11 ) 56
Net income (loss) $ 92 $ (126 ) $ 35 $ (18 )
Segment Highlights:
Y/Y net sales growth:
North America 26 % 25 % 25 % 24 %
International 3 18 1 18
AWS 81 43 65 55
Consolidated 20 23 17 23
Net sales mix:
North America 59 % 57 % 59 % 56 %
International 33 38 33 39
AWS 8 5 8 5
Consolidated 100 % 100 % 100 % 100 %

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______________________________
(1) Excludes stock-based compensation and “Other operating expense (income), net,” which are not allocated to segments.

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AMAZON.COM, INC.
Supplemental Net Sales Information
(in millions)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2015 2014 2015 2014
Net Sales:
North America
Media $ 2,620 $ 2,464 $ 5,589 $ 5,289
Electronics and other general merchandise 10,987 8,366 21,237 16,196
Other (1) 189 164 376 317
Total North America $ 13,796 $ 10,994 $ 27,202 $ 21,802
International
Media $ 2,094 $ 2,380 $ 4,413 $ 5,022
Electronics and other general merchandise 5,425 4,912 10,804 10,100
Other (1) 46 49 93 102
Total International $ 7,565 $ 7,341 $ 15,310 $ 15,224
Year-over-year Percentage Growth:
North America
Media 6 % 13 % 6 % 13 %
Electronics and other general merchandise 31 29 31 28
Other 16 17 19 18
Total North America 26 25 25 24
International
Media (12 )% 7 % (12 )% 5 %
Electronics and other general merchandise 10 25 7 26
Other (7 ) 4 (10 ) 8
Total International 3 18 1 18
Year-over-year Percentage Growth, excluding the effect of foreign exchange rates:
North America
Media 7 % 14 % 6 % 13 %
Electronics and other general merchandise 32 29 31 29
Other 16 17 19 18
Total North America 26 25 25 24
International
Media 3 % 4 % 2 % 4 %
Electronics and other general merchandise 31 20 26 23
Other 8 (1 ) 5 5
Total International 22 14 18 16

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______________________________
(1) Includes sales from non-retail activities, such as certain advertising services and our co-branded credit card agreements.

 

AMAZON.COM, INC.
Consolidated Balance Sheets
(in millions, except per share data)
June 30, 2015 December 31, 2014
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 10,269 $ 14,557
Marketable securities 3,732 2,859
Inventories 7,470 8,299
Accounts receivable, net and other 4,920 5,612
Total current assets 26,391 31,327
Property and equipment, net 19,479 16,967
Goodwill 3,523 3,319
Other assets 3,047 2,892
Total assets $ 52,440 $ 54,505
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 12,391 $ 16,459
Accrued expenses and other 8,959 9,807
Unearned revenue 2,562 1,823
Total current liabilities 23,912 28,089
Long-term debt 8,250 8,265
Other long-term liabilities 8,510 7,410
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 — 491 and 488
Outstanding shares — 468 and 465 5 5
Treasury stock, at cost (1,837 ) (1,837 )
Additional paid-in capital 12,233 11,135
Accumulated other comprehensive loss (617 ) (511 )
Retained earnings 1,984 1,949
Total stockholders’ equity 11,768 10,741
Total liabilities and stockholders’ equity $ 52,440 $ 54,505

 

AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except per share data)
(unaudited)
Y/Y %
Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Change
Cash Flows and Shares
Operating cash flow — trailing twelve months (TTM) $ 5,327 $ 5,705 $ 6,842 $ 7,845 $ 8,980 69 %
Purchases of property and equipment (incl. internal-use software & website development) — TTM $ 4,288 $ 4,628 $ 4,893 $ 4,684 $ 4,607 7 %
Principal repayments of capital lease obligations — TTM $ 969 $ 1,103 $ 1,285 $ 1,537 $ 1,832 89 %
Principal repayments of finance lease obligations — TTM $ 60 $ 73 $ 135 $ 132 $ 155 162 %
Property and equipment acquired under capital leases — TTM $ 2,716 $ 3,347 $ 4,008 $ 4,246 $ 4,710 73 %
Free cash flow — TTM (1) $ 1,039 $ 1,077 $ 1,949 $ 3,161 $ 4,373 321 %
Free cash flow — TTM Y/Y growth (decline) 292 % 178 % (4 )% 112 % 321 % N/A
Invested capital (2) $ 17,743 $ 18,715 $ 21,021 $ 23,090 $ 25,289 43 %
Return on invested capital (3) 6 % 6 % 9 % 14 % 17 % N/A
Free cash flow less lease principal repayments — TTM (4) $ 10 $ (99 ) $ 529 $ 1,492 $ 2,386 N/A
Free cash flow less finance lease principal repayments and capital acquired under capital leases — TTM (5) $ (1,737 ) $ (2,343 ) $ (2,194 ) $ (1,217 ) $ (492 ) (72 )%
Common shares and stock-based awards outstanding 480 481 483 483 488 2 %
Common shares outstanding 462 463 465 466 468 1 %
Stock awards outstanding 18 18 18 17 20 16 %
Stock awards outstanding — % of common shares outstanding 3.9 % 3.9 % 3.8 % 3.8 % 4.4 % N/A
Results of Operations
Worldwide (WW) net sales $ 19,340 $ 20,579 $ 29,328 $ 22,717 $ 23,185 20 %
WW net sales — Y/Y growth, excluding F/X 22 % 20 % 18 % 22 % 27 % N/A
WW net sales — TTM $ 81,759 $ 85,246 $ 88,988 $ 91,963 $ 95,808 17 %
WW net sales — TTM Y/Y growth, excluding F/X 23 % 22 % 20 % 20 % 22 % N/A
Operating income (loss) $ (15 ) $ (544 ) $ 591 $ 255 $ 464 N/A
Operating income/loss — Y/Y growth (decline), excluding F/X (158 )% N/A 22 % 90 % N/A N/A
Operating margin — % of WW net sales (0.1 )% (2.6 )% 2.0 % 1.1 % 2.0 % N/A
Operating income — TTM $ 617 $ 97 $ 178 $ 287 $ 765 24 %
Operating income — TTM Y/Y growth (decline), excluding F/X (11 )% (94 )% (79 )% (56 )% 35 % N/A
Operating margin — TTM % of WW net sales 0.8 % 0.1 % 0.2 % 0.3 % 0.8 % N/A
Net income (loss) $ (126 ) $ (437 ) $ 214 $ (57 ) $ 92 N/A
Net income (loss) per diluted share $ (0.27 ) $ (0.95 ) $ 0.45 $ (0.12 ) $ 0.19 N/A
Net income (loss) — TTM $ 181 $ (216 ) $ (241 ) $ (405 ) $ (188 ) (204 )%
Net income (loss) per diluted share — TTM $ 0.39 $ (0.47 ) $ (0.52 ) $ (0.88 ) $ (0.41 ) (203 )%

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______________________________
(1) “Free cash flow” is defined as net cash provided by operating activities less cash expenditures for purchases of property and equipment, including internal-use software and website development.
(2) Average Total Assets minus Current Liabilities (excluding current portion of Long-Term Debt) over five quarter ends.
(3) TTM Free Cash Flow divided by Invested Capital.
(4) “Free cash flow less lease principal repayments” is defined as net cash provided by operating activities, less (i) purchases of property and equipment, including internal-use software and website development, (ii) principal repayments of capital lease obligations, and (iii) principal repayments of finance lease obligations. Free cash flow less lease principal repayments approximates the actual payments of cash for our capital and finance leases.
(5) “Free cash flow less finance lease principal repayments and capital acquired under capital leases” is defined as net cash provided by operating activities, less (i) purchases of property and equipment, including internal-use software and website development, (ii) principal repayments of finance lease obligations, and (iii) property and equipment acquired under capital leases. In this measure, property and equipment acquired under capital leases is reflected as if these assets had been purchased for cash, which is not the case as these assets have been leased.

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AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions)
(unaudited)
Y/Y %
Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Change
Segments
North America Segment:
Net sales $ 10,994 $ 11,699 $ 17,333 $ 13,406 $ 13,796 26 %
Net sales — Y/Y growth, excluding F/X 25 % 23 % 21 % 24 % 26 % N/A
Net sales — TTM $ 50,834 $ 53,432 $ 56,233 23 %
Operating income (loss) $ 329 $ (60 ) $ 733 $ 517 $ 703 113 %
Operating income/loss — Y/Y growth, excluding F/X 77 % 111 % N/A
Operating margin — % of North America net sales 3.0 % (0.5 )% 4.2 % 3.9 % 5.1 % N/A
Operating income — TTM $ 1,292 $ 1,520 $ 1,893 N/A
Operating margin — TTM % of North America net sales 2.5 % 2.8 % 3.4 % N/A
International Segment:
Net sales $ 7,341 $ 7,711 $ 10,575 $ 7,745 $ 7,565 3 %
Net sales — Y/Y growth, excluding F/X 14 % 13 % 12 % 14 % 22 % N/A
Net sales — TTM $ 33,510 $ 33,371 $ 33,598 4 %
Net sales — TTM % of WW net sales 38 % 36 % 35 % N/A
Operating income (loss) $ (2 ) $ (174 ) $ 65 $ (76 ) $ (19 ) 734 %
Operating income/loss — Y/Y growth (decline), excluding F/X N/A N/A N/A
Operating margin — % of International net sales % (2.3 )% 0.6 % (1.0 )% (0.2 )% N/A
Operating income (loss) — TTM $ (144 ) $ (188 ) $ (205 ) N/A
Operating margin — TTM % of International net sales (0.4 )% (0.6 )% (0.6 )% N/A
AWS Segment:
Net sales $ 1,005 $ 1,169 $ 1,420 $ 1,566 $ 1,824 81 %
Net sales — Y/Y growth, excluding F/X 43 % 43 % 47 % 49 % 81 % N/A
Net sales — TTM 4,644 $ 5,160 $ 5,977 56 %
Net sales — TTM % of WW net sales 5 % 6 % 6 % N/A
Operating income $ 77 $ 98 $ 240 $ 265 $ 391 407 %
Operating income — Y/Y growth (decline), excluding F/X (13 )% 314 % N/A
Operating margin — % of AWS net sales 7.7 % 8.4 % 16.9 % 16.9 % 21.4 % N/A
Operating income — TTM 660 $ 680 $ 993 N/A
Operating margin — TTM % of AWS net sales 14.2 % 13.2 % 16.6 % N/A
Consolidated Segments:
Operating expenses (6) $ 18,936 $ 20,715 $ 28,290 $ 22,011 $ 22,110 17 %
Operating expenses — TTM (6) $ 79,710 $ 83,599 $ 87,180 $ 89,951 $ 93,126 17 %
Operating income (loss) $ 404 $ (136 ) $ 1,038 $ 706 $ 1,075 166 %
Operating income/loss — Y/Y growth (decline), excluding F/X (9 )% (151 )% 22 % 45 % 168 % N/A
Operating margin — % of Consolidated net sales 2.1 % (0.7 )% 3.5 % 3.1 % 4.6 % N/A
Operating income — TTM $ 2,049 $ 1,647 $ 1,808 $ 2,012 $ 2,682 31 %
Operating income — TTM Y/Y growth (decline), excluding F/X 14 % (12 )% (10 )% (1 )% 34 % N/A
Operating margin — TTM % of Consolidated net sales 2.5 % 1.9 % 2.0 % 2.2 % 2.8 % N/A

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

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AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except inventory turnover, accounts payable days and employee data)
(unaudited)
Y/Y %
Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Change
Supplemental
Supplemental North America Segment Net Sales:
Media $ 2,464 $ 2,734 $ 3,544 $ 2,969 $ 2,620 6 %
Media — Y/Y growth, excluding F/X 14 % 5 % 1 % 5 % 7 % N/A
Media — TTM $ 11,411 $ 11,536 $ 11,567 $ 11,711 $ 11,867 4 %
Electronics and other general merchandise $ 8,366 $ 8,793 $ 13,529 $ 10,250 $ 10,987 31 %
Electronics and other general merchandise — Y/Y growth, excluding F/X 29 % 31 % 27 % 31 % 32 % N/A
Electronics and other general merchandise — TTM $ 33,575 $ 35,636 $ 38,517 $ 40,938 $ 43,559 30 %
Electronics and other general merchandise — TTM % of North America net sales 74 % 74 % 76 % 77 % 77 % N/A
Other $ 164 $ 172 $ 260 $ 187 $ 189 16 %
Supplemental International Segment Net Sales:
Media $ 2,380 $ 2,510 $ 3,406 $ 2,320 $ 2,094 (12 )%
Media — Y/Y growth, excluding F/X 4 % 3 % (1 )% 2 % 3 % N/A
Media — TTM $ 11,160 $ 11,246 $ 10,938 $ 10,615 $ 10,329 (7 )%
Electronics and other general merchandise $ 4,912 $ 5,160 $ 7,109 $ 5,378 $ 5,425 10 %
Electronics and other general merchandise — Y/Y growth, excluding F/X 20 % 19 % 19 % 21 % 31 % N/A
Electronics and other general merchandise — TTM $ 20,894 $ 21,737 $ 22,369 $ 22,559 $ 23,072 10 %
Electronics and other general merchandise — TTM % of International net sales 65 % 65 % 67 % 68 % 69 % N/A
Other $ 49 $ 41 $ 60 $ 47 $ 46 (7 )%
Balance Sheet
Cash and marketable securities $ 7,986 $ 6,883 $ 17,416 $ 13,781 $ 14,001 75 %
Inventory, net — ending $ 6,644 $ 7,316 $ 8,299 $ 7,369 $ 7,470 12 %
Inventory turnover, average — TTM 9.1 8.9 8.6 8.8 8.9 (2 )%
Property and equipment, net $ 14,089 $ 15,702 $ 16,967 $ 17,736 $ 19,479 38 %
Accounts payable — ending $ 10,457 $ 11,811 $ 16,459 $ 11,917 $ 12,391 18 %
Accounts payable days — ending 71 74 73 70 74 5 %
Other
WW shipping revenue $ 889 $ 1,048 $ 1,701 $ 1,299 $ 1,399 57 %
WW shipping costs $ 1,812 $ 2,020 $ 3,049 $ 2,309 $ 2,340 29 %
WW net shipping costs $ 923 $ 972 $ 1,348 $ 1,010 $ 941 2 %
WW net shipping costs — % of net sales (7) 5.0 % 5.0 % 4.8 % 4.8 % 4.4 % N/A
WW paid units — Y/Y growth 23 % 21 % 20 % 20 % 22 % N/A
WW seller unit mix — % of WW paid units 41 % 42 % 43 % 44 % 45 % N/A
Employees (full-time and part-time; excludes contractors & temporary personnel) 132,600 149,500 154,100 165,000 183,100 38 %

[/table]

[table style=”table-striped”]

______________________________
(7) Includes North America and International segment net sales.

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