Q Q2 2011 Financial Results Conference Call Slides

This presentation may contain forward-looking statements which are inherently difficult d ff l to predict. Actual results could d ff materially f a variety of reasons, d l l ld differ ll for f including 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, the amount that Amazon.com invests in new business opportunities and the timing of those investments the mix of products investments, 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, expansion the outcomes of legal proceedings and claims fulfillment center claims, 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 p y that potentially could affect Amazon.coms financial results is included in Amazon.coms filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and subsequent filings. Additional information relating to certain of our financial measures contained herein is available in the appendix to our presentation, our most recent earnings release and at our website at www.amazon.com/ir under Financial Documents.

MM

Free Cash Flow -- TTM

(1)

$4,000
Down 8% Y/Y

$2,000

$1,986MM

$1,831MM

$0 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11

Long Term Goal Optimize Free Cash Flow

(1) Free Cash Flow, a non-GAAP financial measure, is GAAP Operating Cash Flow Less Purchases of Fixed Assets. See appendix for a reconciliation of Operating Cash Flow to Free Cash Flow.
3

MM

Shares
468
15

600
465
17

300
448 454

0 Q2 '10 Q3 '10
CommonSharesOutstanding

Q4 '10

Q1 '11

Q2 '11

StockBasedAwardsOutstanding

Efficiently Managing Dilution Up 1% Y/Y

4

Return on Invested Capital -- TTM

80%

(1)

40%

34% 21%

0% Q2 '10 10 Q3 '10 10 Q4 '10 10 Q1 '11 11 Q2 '11 11

Efficient Capital Structure

(1) ROIC = TTM Free Cash Flow divided by average Total Assets minus Current Liabilities, excluding current portion of our Long Term Debt, over 5 quarter ends.
5

MM

Net Sales

$20,000

$10,000
$6,566MM $6 566MM

$9,913MM

$0 Q Q2 '10 Q Q3 '10 Q Q4 '10 Q Q1 '11 Q Q2 '11

Up 51% Y/Y (44% F/X Adjusted)

MM
$50,000

Net Sales -- TTM

WW Revenue Mix
Up U 41% Y/Y Y/Y; 39% F/X Adjusted

$40,278MM

$1,231MM 3% $22,845MM 57%

$28,664MM $28 664MM

$25,000

$16,202MM 40%

$0 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11

57% of WW TTM Revenue from EGM, Up From 49% Y/Y

GAAP Operating Income

MM

$700
Down 25% Y/Y

$350

$270MM $201MM

$0 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11

GAAP Operating Income TTM

MM

(1)

$2,000

Down 9% Y/Y
$1,391MM $1,265MM

$1,000

$0 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11

Consolidated Segment Operating Income

MM

(1)

$800
Down 5% Y/Y /

$400

$406MM

$386MM

$0 Q2 '10
(1)

Q3 '10

Q4 '10

Q1 '11

Q2 '11

Consolidated Segment Operating Income (CSOI), a non-GAAP financial measure, excludes Stock-Based Compensation and Other Operating Income (Expense). See appendix for a reconciliation of CSOI to GAAP Operating Income.
10

Consolidated Segment Operating Income -- TTM

MM

(1)

$3,000
Up 1% Y/Y
$1,859MM $1,874MM

$1,500

$0 Q2 '10
(1)

Q3 '10

Q4 '10

Q1 '11

Q2 '11

Consolidated Segment Operating Income (CSOI), a non-GAAP financial measure, excludes Stock-Based Compensation and Other Operating Income (Expense). See appendix for a reconciliation of CSOI to GAAP Operating Income.
11

GAAP Net Income

MM

$600
Down 8% Y/Y

$300
$207MM $191MM

$0 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11

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Segment Results North America

MM MM

$10,000

NetSales Net Sales

Up 51% Y/Y $5,406MM

$400

OperatingIncome Operating Income (1)

Up 7% Y/Y

$5,000
$3,590MM

$200

$200MM

$214MM

$0 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11

$0 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11

TTM Net Sales Over $22.2B

(1) A 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.

13

Segment Results International

MM MM

$8,000

$500

NetSales Net Sales

Up 51%Y/Y; 36% F/X Adjusted

OperatingIncome Operating Income

Down 16% Y/Y; 34% F/X Adjusted

$4,507MM

$4,000
$2,976MM

$250

$206MM $172MM

$0 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11

$0 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11

TTM Net Sales Over $18.0B

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Supplemental Revenue Highlights Media

MM

$4,000

NorthAmerica North America

Up 20% Y/Y

$4,000

International
Up 34% Y/Y; 20% F/X adjusted

$2,000
$ , $1,324MM

$2,075MM $1,585MM

$2,000

$1,550MM

$0

$0

Q2 '10

Q3 '10

Q4 '10

Q1 '11

Q2 '11

Q2 '10

Q3 '10

Q4 '10

Q1 '11

Q2 '11

Books, Music, Movies, Video Games and Consoles, Software and Digital Downloads

15

Supplemental Revenue Highlights Electronics & Other General Merchandise (EGM)

MM MM

$6,000

NorthAmerica North America

Up 67% Y/Y

$6,000

International
Up 71% Y/Y; 53% F/X Adjusted j

$3,496MM

$3,000
$2,090MM $2 090MM

$3,000

$2,398MM $1,399MM

$0 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11

$0 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11

Computers & Office, Electronics, Home & Garden, Grocery, Health & Beauty, Toys, Kids & Baby, Apparel, Shoes & Jewelry, Sports & Outdoors, Tools, Auto & Industrial and Digital Devices

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Supplemental Revenue Highlights Other

MM MM

$500

NorthAmerica North America

Up 85% Y/Y

$60

International
Up 25% Y/Y; 13% F/X Adjusted

$325MM

$34MM

$250
$176MM

$30

$27MM

$0
Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11

$0 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11

Amazon Web Services, Marketing and Promotional Activities, Other Seller Sites, & Co-branded Credit Cards

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Appendix pp

18

Free Cash Flow Reconciliation -- TTM

$MM Operating Cash Flow

Q2 10 $ 2,561

Q3 10 $ 2,617

Q4 10 $ 3,495

Q1 11 $ 3,033

Q2 11 $ 3,205

Purchases of Fixed Assets, Including Internal-Use Software and W b i Development d Website D l Free Cash Flow

(575) $ 1,986 ,

(788) $ 1,829 ,

(979) $ 2,516 ,

(1,138) (1 138) $ 1,895 ,

(1,374) (1 374) $ 1,831 ,

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Consolidated Segment Operating Income Reconciliation

$MM Consolidated Segment Operating Income Stock-Based Stock Based Compensation Other Operating Income (Expense), (Expense) Net GAAP Operating Income $

Q2 10 $ 406 (111) $

Q3 10 401 (107) $

Q4 10 622 (119) $

Q1 11 465 (110) $

Q2 11 386 (144)

(25) 270 $

(26) 268 $

(29) 474 $

(33) 322 $

(41) 201

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Consolidated Segment Operating Income Reconciliation -- TTM

$MM Consolidated Segment Operating Income Stock-Based Compensation Other Operating Income ( p (Expense), Net ), GAAP Operating Income

Q2 10 $ 1,859 (386) ( ) (82) $ 1,391

Q3 10 $ 1,910 (404) ( ) (98) $ 1,408

Q4 10 $ 1,936 (424) ( (106) ) $ 1,406

Q1 11 $ 1,894 (448) ( (112) ) $ 1,334

Q2 11 $ 1,874 (481) ( (128) ) $ 1,265

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