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

February 2, 2017 4:01 PM

SEATTLE--(BUSINESS WIRE)-- Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results for its fourth quarter ended December 31, 2016.

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

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

Fourth Quarter 2016

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

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

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

Full Year 2016

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

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

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

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

Highlights

Financial Guidance

The following forward-looking statements reflect Amazon.com’s expectations as of February 2, 2017, and are subject to substantial uncertainty. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and customer spending, world events, the rate of growth of the Internet, online commerce, and cloud services, and the various factors detailed below.

First Quarter 2017 Guidance

A conference call will be webcast live today at 2:30 p.m. PT/5:30 p.m. ET, and will be available for at least three months at www.amazon.com/ir. This call will contain forward-looking statements and other material information regarding the Company’s financial and operating results.

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

Our investor relations website is www.amazon.com/ir and we encourage investors to use it as a way of easily finding information about us. We promptly make available on this website, free of charge, the reports that we file or furnish with the SEC, corporate governance information (including our Code of Business Conduct and Ethics), and select press releases and social media postings, which may contain material information about us, and you may subscribe to be notified of new information posted to this site.

About Amazon

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

AMAZON.COM, INC.
Consolidated Statements of Cash Flows
(in millions)

Three Months Ended December 31,

Twelve Months Ended December 31,

2015 2016 2015 2016
(unaudited)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 10,709 $ 13,656 $ 14,557 $ 15,890
OPERATING ACTIVITIES:
Net income 482 749 596 2,371
Adjustments to reconcile net income to net cash from operating activities:
Depreciation of property and equipment, including internal-use software and website development, and other amortization, including capitalized content costs 1,752 2,297 6,281 8,116
Stock-based compensation 606 887 2,119 2,975
Other operating expense, net 35 31 155 160
Other expense (income), net 80 21 250 (20 )
Deferred income taxes 190 (282 ) 81 (246 )
Excess tax benefits from stock-based compensation 93 (336 ) (119 ) (829 )
Changes in operating assets and liabilities:
Inventories (1,343 ) (1,043 ) (2,187 ) (1,426 )
Accounts receivable, net and other (1,178 ) (1,924 ) (1,755 ) (3,367 )
Accounts payable 6,140 7,283 4,294 5,030
Accrued expenses and other 1,836 2,254 913 1,724
Additions to unearned revenue 2,422 3,975 7,401 11,931
Amortization of previously unearned revenue (2,303 ) (3,261 ) (6,109 ) (9,976 )
Net cash provided by (used in) operating activities 8,812 10,651 11,920 16,443
INVESTING ACTIVITIES:
Purchases of property and equipment, including internal-use software and website development, net (1,309 ) (2,005 ) (4,589 ) (6,737 )
Acquisitions, net of cash acquired, and other (317 ) (3 ) (795 ) (116 )
Sales and maturities of marketable securities 1,135 1,233 3,025 4,733
Purchases of marketable securities (1,359 ) (3,399 ) (4,091 ) (7,756 )
Net cash provided by (used in) investing activities (1,850 ) (4,174 ) (6,450 ) (9,876 )
FINANCING ACTIVITIES:
Excess tax benefits from stock-based compensation (93 ) 336 119 829
Proceeds from long-term debt and other 93 537 353 621
Repayments of long-term debt and other (940 ) (84 ) (1,652 ) (354 )
Principal repayments of capital lease obligations (724 ) (1,004 ) (2,462 ) (3,860 )
Principal repayments of finance lease obligations (26 ) (41 ) (121 ) (147 )
Net cash provided by (used in) financing activities (1,690 ) (256 ) (3,763 ) (2,911 )
Foreign currency effect on cash and cash equivalents (91 ) (543 ) (374 ) (212 )
Net increase (decrease) in cash and cash equivalents 5,181 5,678 1,333 3,444
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 15,890 $ 19,334 $ 15,890 $ 19,334
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest on long-term debt $ 148 $ 144 $ 325 $ 290
Cash paid for interest on capital and finance lease obligations 44 61 153 206
Cash paid for income taxes, net of refunds 73 95 273 412
Property and equipment acquired under capital leases 1,332 2,038 4,717 5,704
Property and equipment acquired under build-to-suit leases 163 416 544 1,209
AMAZON.COM, INC.
Consolidated Statements of Operations
(in millions, except per share data)
Three Months Ended December 31, Twelve Months Ended December 31,
2015 2016 2015 2016
(unaudited)
Net product sales $ 26,618 $ 30,629 $ 79,268 $ 94,665
Net service sales 9,129 13,112 27,738 41,322
Total net sales 35,747 43,741 107,006 135,987
Operating expenses:
Cost of sales 24,341 28,958 71,651 88,265
Fulfillment 4,546 5,719 13,410 17,619
Marketing 1,755 2,513 5,254 7,233
Technology and content 3,571 4,545 12,540 16,085
General and administrative 390 717 1,747 2,432
Other operating expense, net 36 34 171 167
Total operating expenses 34,639 42,486 104,773 131,801
Operating income 1,108 1,255 2,233 4,186
Interest income 13 30 50 100
Interest expense (115 ) (133 ) (459 ) (484 )
Other income (expense), net (68 ) 14 (256 ) 90
Total non-operating income (expense) (170 ) (89 ) (665 ) (294 )
Income before income taxes 938 1,166 1,568 3,892
Provision for income taxes (453 ) (414 ) (950 ) (1,425 )
Equity-method investment activity, net of tax (3 ) (3 ) (22 ) (96 )
Net income $ 482 $ 749 $ 596 $ 2,371
Basic earnings per share $ 1.03 $ 1.57 $ 1.28 $ 5.01
Diluted earnings per share $ 1.00 $ 1.54 $ 1.25 $ 4.90
Weighted-average shares used in computation of earnings per share:
Basic 470 476 467 474
Diluted 481 486 477 484
AMAZON.COM, INC.
Consolidated Statements of Comprehensive Income (Loss)
(in millions)
Three Months Ended December 31, Twelve Months Ended December 31,
2015 2016 2015 2016
(unaudited)
Net income $ 482 $ 749 $ 596 $ 2,371
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax of $7, $(68), $10, and $(49) (40 ) (412 ) (210 ) (279 )
Net change in unrealized gains (losses) on available-for-sale securities:
Unrealized gains (losses), net of tax of $1, $22, $(5), and $(12) (9 ) (54 ) (7 ) 9
Reclassification adjustment for losses (gains) included in “Other income (expense), net,” net of tax of $0, $0, $0, and $0 1 3 5 8
Net unrealized gains (losses) on available-for-sale securities (8 ) (51 ) (2 ) 17

Total other comprehensive income (loss)

(48 ) (463 ) (212 ) (262 )
Comprehensive income (loss) $ 434 $ 286 $ 384 $ 2,109
AMAZON.COM, INC.
Segment Information
(in millions)
Three Months Ended December 31, Twelve Months Ended December 31,
2015 2016 2015 2016
(unaudited)
North America
Net sales $ 21,501 $ 26,240 $ 63,708 $ 79,785
Operating expenses 20,498 24,916 60,957 75,686
Operating income before stock-based compensation and other 1,003 1,324 2,751 4,099
Stock-based compensation and other 367 508 1,326 1,738
Operating income $ 636 $ 816 $ 1,425 $ 2,361
International
Net sales $ 11,841 $ 13,965 $ 35,418 $ 43,983
Operating expenses 11,781 14,219 35,509 44,460
Operating income (loss) before stock-based compensation and other 60 (254 ) (91 ) (477 )
Stock-based compensation and other 168 233 608 806
Operating income (loss) $ (108 ) $ (487 ) $ (699 ) $ (1,283 )
AWS
Net sales $ 2,405 $ 3,536 $ 7,880 $ 12,219
Operating expenses 1,718 2,430 6,017 8,513
Operating income before stock-based compensation and other 687 1,106 1,863 3,706
Stock-based compensation and other 107 180 356 598
Operating income $ 580 $ 926 $ 1,507 $ 3,108
Consolidated
Net sales $ 35,747 $ 43,741 $ 107,006 $ 135,987
Operating expenses 33,997 41,565 102,483 128,659
Operating income before stock-based compensation and other 1,750 2,176 4,523 7,328
Stock-based compensation and other 642 921 2,290 3,142
Operating income 1,108 1,255 2,233 4,186
Total non-operating income (expense) (170 ) (89 ) (665 ) (294 )
Provision for income taxes (453 ) (414 ) (950 ) (1,425 )
Equity-method investment activity, net of tax (3 ) (3 ) (22 ) (96 )
Net income $ 482 $ 749 $ 596 $ 2,371
Segment Highlights:
Y/Y net sales growth:
North America 24 % 22 % 25 % 25 %
International 12 18 6 24
AWS 69 47 70 55
Consolidated 22 22 20 27
Net sales mix:
North America 60 % 60 % 60 % 59 %
International 33 32 33 32
AWS 7 8 7 9
Consolidated 100 % 100 % 100 % 100 %
AMAZON.COM, INC.
Supplemental Net Sales Information
(in millions)
Three Months Ended December 31, Twelve Months Ended December 31,
2015 2016 2015 2016
(unaudited)
Net Sales:
North America
Media $ 3,931 $ 4,208 $ 12,483 $ 13,580
Electronics and other general merchandise 17,325 21,590 50,401 64,887
Other (1) 245 442 824 1,318
Total North America $ 21,501 $ 26,240 $ 63,708 $ 79,785
International
Media $ 3,292 $ 3,377 $ 10,026 $ 10,631
Electronics and other general merchandise 8,491 10,514 25,196 33,107
Other (1) 58 74 196 245
Total International $ 11,841 $ 13,965 $ 35,418 $ 43,983
Year-over-year Percentage Growth:
North America
Media 11 % 7 % 8 % 9 %
Electronics and other general merchandise 28 25 31 29
Other (6 ) 81 10 60
Total North America 24 22 25 25
International
Media (3 )% 3 % (8 )% 6 %
Electronics and other general merchandise 19 24 13 31
Other (3 ) 26 (3 ) 25
Total International 12 18 6 24
Year-over-year Percentage Growth, excluding the effect of foreign exchange rates:
North America
Media 12 % 7 % 8 % 9 %
Electronics and other general merchandise 28 25 31 29
Other (6 ) 81 10 60
Total North America 24 22 26 25
International
Media 5 % 7 % 4 % 7 %
Electronics and other general merchandise 31 28 29 33
Other 5 36 10 30
Total International 22 23 21 26
______________________________
(1) Includes sales from non-retail activities, such as certain advertising services and our co-branded credit card agreements.
AMAZON.COM, INC.
Consolidated Balance Sheets
(in millions, except per share data)
December 31, 2015 December 31, 2016
ASSETS
Current assets:
Cash and cash equivalents $ 15,890 $ 19,334
Marketable securities 3,918 6,647
Inventories 10,243 11,461
Accounts receivable, net and other 5,654 8,339
Total current assets 35,705 45,781
Property and equipment, net 21,838 29,114
Goodwill 3,759 3,784
Other assets 3,445 4,723
Total assets $ 64,747 $ 83,402
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 20,397 $ 25,309
Accrued expenses and other 10,372 13,739
Unearned revenue 3,118 4,768
Total current liabilities 33,887 43,816
Long-term debt 8,227 7,694
Other long-term liabilities 9,249 12,607
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value:
Authorized shares — 500
Issued and outstanding shares — none — —
Common stock, $0.01 par value:
Authorized shares — 5,000
Issued shares — 494 and 500
Outstanding shares — 471 and 477 5 5
Treasury stock, at cost (1,837 ) (1,837 )
Additional paid-in capital 13,394 17,186
Accumulated other comprehensive loss (723 ) (985 )
Retained earnings 2,545 4,916
Total stockholders’ equity 13,384 19,285
Total liabilities and stockholders’ equity $ 64,747 $ 83,402
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except per share data)
(unaudited)
Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016

Y/Y %Change

Cash Flows and Shares
Operating cash flow -- trailing twelve months (TTM) $ 9,823 $ 11,920 $ 11,258 $ 12,726 $ 14,603 $ 16,443 38 %
Operating cash flow -- TTM Y/Y growth 72 % 74 % 44 % 42 % 49 % 38 % N/A
Purchases of property and equipment, including internal-use software and website development, net -- TTM $ 4,424 $ 4,589 $ 4,897 $ 5,395 $ 6,040 $ 6,737 47 %
Principal repayments of capital lease obligations -- TTM $ 2,144 $ 2,462 $ 2,761 $ 3,298 $ 3,579 $ 3,860 57 %
Principal repayments of finance lease obligations -- TTM $ 163 $ 121 $ 111 $ 108 $ 131 $ 147 21 %
Property and equipment acquired under capital leases -- TTM $ 4,599 $ 4,717 $ 4,638 $ 4,676 $ 4,998 $ 5,704 21 %
Free cash flow -- TTM (1) $ 5,399 $ 7,331 $ 6,361 $ 7,331 $ 8,563 $ 9,706 32 %
Free cash flow less lease principal repayments -- TTM (2) $ 3,092 $ 4,748 $ 3,489 $ 3,925 $ 4,853 $ 5,699 20 %
Free cash flow less finance lease principal repayments and assets acquired under capital leases -- TTM (3) $ 637 $ 2,493 $ 1,612 $ 2,547 $ 3,434 $ 3,855 55 %
Invested capital (4) $ 28,860 $ 31,393 $ 32,824 $ 34,695 $ 36,722 $ 39,126 25 %
Common shares and stock-based awards outstanding 489 490 490 495 496 497 1 %
Common shares outstanding 469 471 472 474 475 477 1 %
Stock-based awards outstanding 20 19 18 21 21 20 4 %
Stock-based awards outstanding -- % of common shares outstanding 4.3 % 4.1 % 3.9 % 4.4 % 4.4 % 4.2 % N/A
Results of Operations
Worldwide (WW) net sales $ 25,358 $ 35,747 $ 29,128 $ 30,404 $ 32,714 $ 43,741 22 %
WW net sales -- Y/Y growth, excluding F/X 30 % 26 % 29 % 30 % 29 % 24 % N/A
WW net sales -- TTM $ 100,588 $ 107,006 $ 113,418 $ 120,637 $ 127,993 $ 135,987 27 %
WW net sales -- TTM Y/Y growth, excluding F/X 24 % 26 % 28 % 29 % 28 % 28 % N/A
Operating income $ 406 $ 1,108 $ 1,071 $ 1,285 $ 575 $ 1,255 13 %
FX impact -- favorable (unfavorable) $ 25 $ 20 $ 50 $ 45 $ 8 $ 7 N/A
Operating income -- Y/Y growth, excluding F/X N/A 84 % 300 % 168 % 40 % 13 % N/A
Operating margin -- % of WW net sales 1.6 % 3.1 % 3.7 % 4.2 % 1.8 % 2.9 % N/A
Operating income -- TTM $ 1,715 $ 2,233 $ 3,049 $ 3,871 $ 4,040 $ 4,186 87 %
Operating income -- TTM Y/Y growth, excluding F/X N/A N/A 933 % 388 % 128 % 83 % N/A
Operating margin -- TTM % of WW net sales 1.7 % 2.1 % 2.7 % 3.2 % 3.2 % 3.1 % N/A
Net income $ 79 $ 482 $ 513 $ 857 $ 252 $ 749 55 %
Net income per diluted share $ 0.17 $ 1.00 $ 1.07 $ 1.78 $ 0.52 $ 1.54 54 %
Net income -- TTM $ 328 $ 596 $ 1,166 $ 1,931 $ 2,105 $ 2,371 298 %
Net income per diluted share -- TTM $ 0.69 $ 1.25 $ 2.43 $ 4.02 $ 4.38 $ 4.90 292 %
______________________________
(1) Free cash flow is cash flow from operations reduced by “Purchases of property and equipment, including internal-use software and website development, net,” which is included in cash flow from investing activities.
(2) Free cash flow less lease principal repayments is free cash flow reduced by “Principal repayments of capital lease obligations,” and “Principal repayments of finance lease obligations,” which are included in cash flow from financing activities.
(3) Free cash flow less finance lease principal repayments and assets acquired under capital leases is free cash flow reduced by “Principal repayments of finance lease obligations,” which are included in cash flow from financing activities, and property and equipment acquired under capital leases. In this measure, property and equipment acquired under capital leases is reflected as if these assets had been purchased with cash, which is not the case as these assets have been leased.
(4) Average Total Assets minus Current Liabilities (excluding current portion of Long-Term Debt and current portion of capital lease obligations and finance lease obligations) over five quarter ends.
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions)
(unaudited)
Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016

Y/Y %Change

Segments
North America Segment:
Net sales $ 15,006 $ 21,501 $ 16,996 $ 17,674 $ 18,874 $ 26,240 22 %
Net sales -- Y/Y growth, excluding F/X 29 % 24 % 27 % 28 % 26 % 22 % N/A
Net sales -- TTM $ 59,540 $ 63,708 $ 67,299 $ 71,176 $ 75,045 $ 79,785 25 %
Operating income before stock-based compensation and other:
Operating income $ 528 $ 1,003 $ 924 $ 1,157 $ 694 $ 1,324 32 %
Operating income -- Y/Y growth, excluding F/X N/A 36 % 78 % 64 % 30 % 30 % N/A
Operating margin -- % of North America net sales 3.5 % 4.7 % 5.4 % 6.6 % 3.7 % 5.0 % N/A
Operating income -- TTM $ 2,480 $ 2,751 $ 3,157 $ 3,611 $ 3,778 $ 4,099 49 %
Operating margin -- TTM % of North America net sales 4.2 % 4.3 % 4.7 % 5.1 % 5.0 % 5.1 % N/A
Operating Income:
Operating income $ 186 $ 636 $ 588 $ 702 $ 255 $ 816 28 %
FX impact -- favorable (unfavorable) $ 11 $ 6 $ 5 $ 5 $ 6 $ 11 N/A
Operating income -- Y/Y growth, excluding F/X 129 % 100 % 34 % 26 % N/A
Operating margin -- % of North America net sales 1.2 % 3.0 % 3.5 % 4.0 % 1.3 % 3.1 % N/A
Operating income -- TTM $ 1,425 $ 1,759 $ 2,113 $ 2,182 $ 2,361 66 %
Operating margin -- TTM % of North America net sales 2.2 % 2.6 % 3.0 % 2.9 % 3.0 % N/A
International Segment:
Net sales $ 8,267 $ 11,841 $ 9,566 $ 9,844 $ 10,609 $ 13,965 18 %
Net sales -- Y/Y growth, excluding F/X 24 % 22 % 26 % 28 % 28 % 23 % N/A
Net sales -- TTM $ 34,154 $ 35,418 $ 37,239 $ 39,518 $ 41,860 $ 43,983 24 %
Operating income (loss) before stock-based compensation and other:
Operating income (loss) $ (56 ) $ 60 $ 20 $ 88 $ (332 ) $ (254 ) N/A
Operating income/loss -- Y/Y growth (decline), excluding F/X N/A 65 % N/A N/A 539 % N/A N/A
Operating margin -- % of International net sales (0.7 )% 0.5 % 0.2 % 0.9 % (3.1 )% (1.8 )% N/A
Operating income (loss) -- TTM $ (86 ) $ (91 ) $ 6 $ 113 $ (163 ) $ (477 ) 426 %
Operating margin -- TTM % of International net sales (0.3 )% (0.3 )% — % 0.3 % (0.4 )% (1.1 )% N/A
Operating income (loss):
Operating income (loss) $ (208 ) $ (108 ) $ (121 ) $ (135 ) $ (541 ) $ (487 ) 349 %
FX impact -- favorable (unfavorable) $ (64 ) $ (47 ) $ 21 $ 40 $ 22 $ 5 N/A
Operating income/loss -- Y/Y growth (decline), excluding F/X (27 )% (8 )% 171 % 354 % N/A
Operating margin -- % of International net sales (2.5 )% (0.9 )% (1.3 )% (1.4 )% (5.1 )% (3.5 )% N/A
Operating income (loss) -- TTM $ (699 ) $ (626 ) $ (571 ) $ (905 ) $ (1,283 ) 83 %
Operating margin -- TTM % of International net sales (2.0 )% (1.7 )% (1.4 )% (2.2 )% (2.9 )% N/A
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions)
(unaudited)
Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Y/Y %Change
Segments (continued)
AWS Segment:
Net sales $ 2,085 $ 2,405 $ 2,566 $ 2,886 $ 3,231 $ 3,536 47 %
Net sales -- Y/Y growth, excluding F/X 78 % 69 % 64 % 58 % 55 % 47 % N/A
Net sales -- TTM $ 6,894 $ 7,880 $ 8,880 $ 9,943 $ 11,088 $ 12,219 55 %
Operating income before stock-based compensation and other:
Operating income $ 521 $ 687 $ 716 $ 863 $ 1,021 $ 1,106 61 %
Operating income -- Y/Y growth (decline), excluding F/X 353 % 161 % 161 % 121 % 100 % 62 % N/A
Operating margin -- % of AWS net sales 25.0 % 28.5 % 27.9 % 29.9 % 31.6 % 31.3 % N/A
Operating income -- TTM $ 1,417 $ 1,863 $ 2,315 $ 2,787 $ 3,286 $ 3,706 99 %
Operating margin -- TTM % of AWS net sales 20.6 % 23.6 % 26.1 % 28.0 % 29.6 % 30.3 % N/A
Operating income:
Operating income $ 428 $ 580 $ 604 $ 718 $ 861 $ 926 60 %
FX impact -- favorable (unfavorable) $ 78 $ 60 $ 24 $ — $ (20 ) $ (9 ) N/A
Operating income -- Y/Y growth, excluding F/X 198 % 136 % 106 % 61 % N/A
Operating margin -- % of AWS net sales 20.5 % 24.1 % 23.5 % 24.9 % 26.6 % 26.2 % N/A
Operating income -- TTM $ 1,507 $ 1,916 $ 2,329 $ 2,762 $ 3,108 106 %
Operating margin -- TTM % of AWS net sales 19.1 % 21.6 % 23.4 % 24.9 % 25.4 % N/A
Consolidated Segments Before Stock-Based Compensation and Other:
Operating income $ 993 $ 1,750 $ 1,660 $ 2,108 $ 1,383 $ 2,176 24 %
Operating income -- Y/Y growth, excluding F/X N/A 67 % 128 % 92 % 38 % 23 % N/A
Operating margin -- % of Consolidated net sales 3.9 % 4.9 % 5.7 % 6.9 % 4.2 % 5.0 % N/A
Operating income -- TTM $ 3,811 $ 4,523 $ 5,478 $ 6,511 $ 6,902 $ 7,328 62 %
Operating margin -- TTM % of Consolidated net sales 3.8 % 4.2 % 4.8 % 5.4 % 5.4 % 5.4 % N/A
AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except employee data)
(unaudited)
Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016

Y/Y %Change

Supplemental
Supplemental North America Segment Net Sales:
Media $ 2,963 $ 3,931 $ 3,208 $ 2,928 $ 3,237 $ 4,208 7 %
Media -- Y/Y growth, excluding F/X 9 % 12 % 8 % 12 % 9 % 7 % N/A
Media -- TTM $ 12,096 $ 12,483 $ 12,722 $ 13,030 $ 13,304 $ 13,580 9 %
Electronics and other general merchandise $ 11,840 $ 17,325 $ 13,511 $ 14,459 $ 15,327 $ 21,590 25 %
Electronics and other general merchandise -- Y/Y growth, excluding F/X 35 % 28 % 32 % 32 % 29 % 25 % N/A
Electronics and other general merchandise -- TTM $ 46,606 $ 50,401 $ 53,663 $ 57,134 $ 60,622 $ 64,887 29 %
Electronics and other general merchandise -- TTM % of North America net sales 78 % 79 % 80 % 80 % 81 % 81 % N/A
Other $ 203 $ 245 $ 277 $ 287 $ 310 $ 442 81 %
Supplemental International Segment Net Sales:
Media $ 2,320 $ 3,292 $ 2,480 $ 2,283 $ 2,491 $ 3,377 3 %
Media -- Y/Y growth, excluding F/X 6 % 5 % 9 % 7 % 7 % 7 % N/A
Media -- TTM $ 10,140 $ 10,026 $ 10,186 $ 10,375 $ 10,546 $ 10,631 6 %
Electronics and other general merchandise $ 5,901 $ 8,491 $ 7,034 $ 7,504 $ 8,056 $ 10,514 24 %
Electronics and other general merchandise -- Y/Y growth, excluding F/X 32 % 31 % 33 % 36 % 36 % 28 % N/A
Electronics and other general merchandise -- TTM $ 23,814 $ 25,196 $ 26,851 $ 28,930 $ 31,084 $ 33,107 31 %
Electronics and other general merchandise -- TTM % of International net sales 70 % 71 % 72 % 73 % 74 % 75 % N/A
Other $ 46 $ 58 $ 52 $ 57 $ 62 $ 74 26 %
Stock-based Compensation Expense
Cost of sales $ 7 $ 9 N/A
Fulfillment $ 122 $ 137 $ 116 $ 186 $ 165 $ 190 38 %
Marketing $ 48 $ 57 $ 56 $ 80 $ 85 $ 102 79 %
Technology and content $ 309 $ 364 $ 317 $ 419 $ 434 $ 493 36 %
General and administrative $ 65 $ 48 $ 55 $ 83 $ 85 $ 93 94 %
Total stock-based compensation expense $ 544 $ 606 $ 544 $ 768 $ 776 $ 887 46 %
Other
WW shipping revenue $ 1,494 $ 2,328 $ 1,820 $ 2,000 2,154 $ 3,003 29 %
WW shipping revenue -- Y/Y growth 43 % 37 % 40 % 43 % 44 % 29 % N/A
WW shipping costs $ 2,720 $ 4,170 $ 3,275 $ 3,362 3,897 $ 5,634 35 %
WW shipping costs -- Y/Y growth 35 % 37 % 42 % 44 % 43 % 35 % N/A
WW net shipping costs $ 1,226 $ 1,842 $ 1,455 $ 1,362 $ 1,743 $ 2,631 43 %
WW net shipping costs -- Y/Y growth 26 % 37 % 44 % 45 % 42 % 43 % N/A
WW paid units -- Y/Y growth 26 % 26 % 27 % 28 % 28 % 24 % N/A
WW seller unit mix -- % of WW paid units 46 % 47 % 48 % 49 % 50 % 49 % N/A
Employees (full-time and part-time; excludes contractors & temporary personnel) 222,400 230,800 245,200 268,900 306,800 341,400 48 %
Employees (full-time and part-time; excludes contractors & temporary personnel) -- Y/Y growth 49 % 50 % 49 % 47 % 38 % 48 % N/A

Amazon.com, Inc.Certain Definitions

Customer Accounts

Seller Accounts

AWS Customers

Units

Amazon.com Investor Relations

Darin Manney, [email protected]

www.amazon.com/ir

or

Amazon.com Public Relations

Ty Rogers, [email protected]

www.amazon.com/about

Source: Amazon.com, Inc.

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