Annual Shareholder Meeting June 14 th, 2007

Transcription

1 Annual Shareholder Meeting June 14 th, 2007

2 6/13/2007 6:38 PM 2 Amazon.com This presentation may contain forward-looking statements, including statements regarding expectations of sales, gross margin, productivity, leverage, operating results, consolidated segment operating results, capital investment, return on capital, free cash flow and other financial statement or balance sheet items or ratios, all of which are inherently difficult to predict. Actual results could differ materially for a variety of reasons, 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 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, significant indebtedness, government regulation and taxation, payments, and fraud. 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 for the year ended December 31, 2006, and all 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 under Financial Documents.

3 Financial Highlights

4 Operating Results Free Cash Flow* ($MM) $600 $529 $486 $521 ($7) ($400) Q107 TTM Long Term Goal -- Optimize Free Cash Flow Per Share * Operating Cash Flow Less Capital Expenditures, see appendix 6/13/2007 6:38 PM 4

5 Operating Results Common Shares and Stock-Based Awards Outstanding (MM) (1) (2) Q1 07 Efficiently Managing Dilution (1) The Company repurchased 8 million shares in Q3 06 (2) The Company repurchased 6 million shares in Q1 07 6/13/2007 6:38 PM 5

6 6/13/2007 6:38 PM 6 Operating Results Net Sales ($MM) $12,000 61% Compounded Annual Growth Rate $8,490 $10,711 $11,447 $8,000 $4,000 $0 $ Q107 TTM Q1 07 TTM Net Sales Up 29%, Up 27% Excluding F/X

7 Operating Results First Quarter Highlights ($MM) Q1 06 Q1 07 Change Free Cash Flow TTM $ 501 $ 521 4% Shares % Net Sales Excluding F/X $2,279 $ 3,015 32% 29% Consolidated Segment Operating Income* Consolidated Segment Operating Margin $ % $ % 50% 69bps Q107 Net Sales Up 29% Excluding F/X; Operating Margin Up 69 Bps * GAAP Operating income less Stock-based compensation and Other operating expense (income), see appendix 6/13/2007 6:38 PM 7

8 6/13/2007 6:38 PM 8 Vision Earth s Most Customer-Centric Company Start with the customer and work backwards

9 Selection Availability Price

10 Global Selection Books Music/Video DVD/Rental* Video Games & Software Electronics Toys & Baby Tools & Hardware Kitchen & Housewares Magazines Office Products Apparel & Accessories Sports & Outdoors Gourmet Food Jewelry/Watches Health & Personal Care Beauty Musical Instruments Grocery Automotive Third Party Sellers Marketplace US UK Germany Japan France / 04* 99 99/ 05* Expect More Category and Country Expansion Over Time Canada China 04 6/13/2007 6:38 PM 10

11 6/13/2007 6:38 PM 11 Availability Amazon.com - Prime

12 6/13/2007 6:38 PM 12 Availability Amazon.com - Prime

13 6/13/2007 6:38 PM 13 Availability Amazon.co.jp - Prime

14 6/13/2007 6:38 PM 14 Low Prices Everyday Low Pricing Our objective is not to discount a small number of products for a limited period of time, but to offer low prices everyday and apply them broadly across our entire product range.

15 6/13/2007 6:38 PM 15 Everyday Low Prices U.S. U.K. Germany France Japan Canada China

16 Free Shipping 6/13/2007 6:38 PM 16 $600 Million in Foregone Shipping Revenue

17 6/13/2007 6:38 PM 17 Free Shipping U.S. U.K. Germany France Japan Canada China 购物满 99 元免配送费

18 Selection Availability Price Active Customers: > 66 Million

19 6/13/2007 6:38 PM 19 Other Customer Sets Sellers Developers

20 6/13/2007 6:38 PM 20 Sellers Over 1.1 Million Active Sellers * Q1 07 Third Party Units were 30% of Total Units; Up from 29% Y/Y Merchants@ Now Available in UK, Germany and Japan * Sellers who have had an order in the past 12 months as of the end of Q107

21 Sellers 6/13/2007 6:38 PM 21

22 Sellers 6/13/2007 6:38 PM 22

23 Developers Amazon Web Services Delivering Web-Scale Computing Over 240,000 registered developers (>50% Yr/Yr) 10 different web service offerings, including: Amazon Simple Storage Service (Amazon S3) Amazon Elastic Compute Cloud (Amazon EC2) Registered developers as of the end of Q107 6/13/2007 6:38 PM 23

24 6/13/2007 6:38 PM 24 Amazon Web Services What You Want Your Idea Successful Product

25 6/13/2007 6:38 PM 25 Amazon Web Services Reality Your Idea Undifferentiated Heavy Lifting Successful Product

26 6/13/2007 6:38 PM 26 Amazon Web Services Heavy Lifting: Price of Admission Server hosting Contract negotiation Bandwidth management Purchase decisions Moving facilities Scaling and managing physical growth Heterogeneous hardware Innovation?? Coordinating large teams

27 6/13/2007 6:38 PM 27 Amazon Web Services Muck Heavy Lifting: Price of Admission Server hosting Contract negotiation Bandwidth management Purchase decisions Moving facilities Scaling and managing physical growth Heterogeneous hardware Innovation?? Coordinating large teams

28 6/13/2007 6:38 PM 28 Amazon Web Services Building Block Services Amazon EC Amazon Mechanical Turk 2005 Amazon S Amazon SQS 2004

29 6/13/2007 6:38 PM 29 Amazon Web Services Amazon Simple Storage Services (Amazon S3) Storage in the cloud Programmatic access via web service API s Easy to use Fast Reliable Low, pay-by-the-drink pricing

30 6/13/2007 6:38 PM 30 Amazon Web Services Amazon S3 Objects Stored >5,000,000, ,000,000 July 2006 Today

31 6/13/2007 6:38 PM 31 Amazon Web Services Amazon S3 Request Volume Peak Day: 920,847,345 Requests Peak Second: 16,607 Requests

32 6/13/2007 6:38 PM 32 Amazon Web Services Amazon Elastic Compute Cloud (Amazon EC2) Compute capacity in the cloud Scale capacity up and down in minutes Developers control their machine instances Very inexpensive Integrated with Amazon S3

33

34 Appendix

35 6/13/2007 6:38 PM 35 Free Cash Flow Reconciliation -- TTM ($MM) Q1 06 Q1 07 Operating Cash Flow $1 $31 ($91) ($130) ($120) $174 $392 $566 $733 $702 $724 $726 Less: Purchase of Fixed Assets Free Cash Flow ($7) $3 ($378) ($265) ($170) $135 $346 $477 $529 $486 $501 $521

36 6/13/2007 6:38 PM 36 Consolidated Segment Operating Income Reconciliation ($MM) Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Consolidated Segment Operating Income $ 120 $ 80 $ 72 $ 229 $179 Less: Stock-Based Compensation Other Operating Expense (Income) GAAP Operating Income $106 $47 $40 $197 $145