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LinkedIn Earnings Solid, Q4 Revenue Up 105%

Chris Crum — Thu, 09 Feb 2012 21:33:06 +0000

LinkedIn just announced its fourth quarter and 2011 Fiscal Year financial results, and they are solid.

The company saw a 105% increase in revenue for the fourth quarter compared to the same period last year. Q4 revenue was $167.7 million, up from last year’s $81.7 million.

For the entire year 2011, revenue increased 115% to $522.2 million (from $243.1 million).

“Q4 once again exceeded our expectations for member engagement and business growth. It was a fitting end to a memorable year in which we reinforced our position as the pre-eminent professional network on the web,” said CEO Jeff Weiner. “We believe continued focus on our members and technology infrastructure positions us well for accelerated product innovation in 2012.”

The company went public last year.

Here’s the release in its entirety:

Mountain View, Calif. — February 9, 2012 – LinkedIn Corporation (NYSE: LNKD), the world’s largest professional network on the Internet with more than 150 million members, today reported its financial results for the fourth quarter and fiscal year ended December 31, 2011:

Revenue for the fourth quarter was $167.7 million, an increase of 105% compared to $81.7 million for the fourth quarter of 2010
Net income for the fourth quarter was $6.9 million, compared to net income of $5.3 million for the fourth quarter of 2010; Non-GAAP net income for the fourth quarter was $13.3 million, compared to $5.2 million for the fourth quarter of 2010. Non-GAAP measures exclude tax-affected stock-based compensation expense and tax-affected amortization of acquired intangible assets
Adjusted EBITDA for the fourth quarter was $34.4 million, or 21% of revenue, compared to $16.3 million for the fourth quarter of 2010, or 20% of revenue
GAAP EPS for the fourth quarter was $0.06; Non-GAAP EPS for the fourth quarter was $0.12
For the full year 2011, revenue increased 115% to $522.2 million from $243.1 million. GAAP EPS increased to $0.11 from $0.07 and Non-GAAP EPS increased to $0.35 from $0.24. Adjusted EBITDA increased to $98.7 million from $48.0 million

“Q4 once again exceeded our expectations for member engagement and business growth. It was a fitting end to a memorable year in which we reinforced our position as the pre-eminent professional network on the web,” said Jeff Weiner, CEO of LinkedIn. “We believe continued focus on our members and technology infrastructure positions us well for accelerated product innovation in 2012.”

Fourth Quarter Financial Details and Operating Summary
LinkedIn reported revenue of $167.7 million for the quarter ended December 31, 2011, an increase of 105% compared to the fourth quarter of 2010, and the 6th straight quarter of greater than 100% year-over-year growth.

Hiring Solutions: Revenue from Hiring Solutions products totaled $84.9 million, an increase of 136% compared to the fourth quarter of 2010. Hiring Solutions revenue represented 50% of total revenue in the fourth quarter of 2011, compared to 44% in the fourth quarter of 2010.
Marketing Solutions: Revenue from Marketing Solutions products totaled $49.5 million, an increase of 77% compared to the fourth quarter of 2010. Marketing Solutions revenue represented 30% of total revenue in the fourth quarter of 2011, compared to 34% in the fourth quarter of 2010.
Premium Subscriptions: Revenue from Premium Subscriptions products totaled $33.3 million, an increase of 87% compared to the fourth quarter of 2010. Premium Subscriptions represented 20% of total revenue in the fourth quarter of 2011, compared to 22% in the fourth quarter of 2010.

Revenue from the U.S. totaled $112.0 million, and represented 67% of total revenue in the fourth quarter of 2011. Revenue from international markets totaled $55.8 million, and represented 33% of total revenue in the fourth quarter of 2011.

Revenue from the field sales channel totaled $95.8 million, and represented 57% of total revenue in the fourth quarter of 2011. Revenue from the online, direct sales channel totaled $71.9 million, and represented 43% of total revenue in the fourth quarter of 2011.

GAAP net income for the fourth quarter was $6.9 million, compared to net income of $5.3 million for the fourth quarter of 2010. Non-GAAP net income for the fourth quarter was $13.3 million, compared to $5.2 million in the fourth quarter of 2010.

Adjusted EBITDA was $34.4 million in the fourth quarter of 2011, or 21% of revenue, compared to $16.3 million in the fourth quarter of 2010, or 20% of revenue.

GAAP EPS was $0.06 based on 108.6 million fully-diluted weighted shares outstanding compared to $0.03 for the fourth quarter of 2010 based on 49.4 million fully-diluted weighted shares outstanding; Non-GAAP EPS was $0.12 based on 108.6 million fully-diluted weighted shares outstanding compared to $0.05 for the fourth quarter of 2010 based on 95.0 million fully-diluted weighted shares outstanding.

“LinkedIn grew over 100% for the sixth consecutive quarter and posted all-time high adjusted EBITDA,” said Steve Sordello, CFO of LinkedIn. “Our fourth quarter results underscore the company’s success in 2011, which saw revenue and adjusted EBITDA more than double. In 2012, we will continue to invest in our product, engineering, and sales infrastructure to capitalize on our long-term opportunity.”

For additional information, please see the “Selected Company Metrics and Financials” page, updated through the end of the fourth quarter of 2011, on LinkedIn’s Investor Relations site.

Fourth Quarter Highlights and Strategic Announcements

LinkedIn completed the latest phase of the re-architecture of its software development and deployment process, known internally as InVersion, which is the foundation for accelerated product innovation in 2012.
LinkedIn continued its international expansion and localization with the addition of three new offices (Tokyo, Japan; Bangalore, India; and Sao Paulo, Brazil), and five new languages (Japanese, Swedish, Indonesian, Malay, and Korean.)
At its Talent Connect conference in October, LinkedIn announced Talent Pipeline, a new solution that allows recruiters and hiring managers to manage, track, and stay in touch with active and passive candidates, regardless of source. Talent Pipeline is currently in pilot testing phase with select Hiring Solutions customers.
LinkedIn unveiled two new offerings for Marketing Solutions customers at Connect:11 in October. Company Status Updates and the Certified Developer Program give brands more powerful ways to connect and engage with LinkedIn members.

Business Outlook
As of today, LinkedIn is providing guidance for the first quarter of 2012 and for the full year 2012 on revenue, adjusted EBITDA, depreciation and amortization, and stock-based compensation.

Q1 FY12 Guidance: Revenue for the first quarter of 2012 is projected to be in the range of $170 million to $175 million. For the first quarter of 2012, the company expects to report adjusted EBITDA of $25 million to $27 million. The company expects depreciation and amortization in the range of $15 million to $17 million, and stock-based compensation in the range of $13 million to $14 million.
Full Year FY12 Guidance: Revenue for the full year of 2012 is projected to be in the range of $840 million to $860 million. For the full year of 2012, the company expects to report adjusted EBITDA of $155 million to $165 million. The company expects depreciation and amortization in the range of $70 million to $80 million, and stock-based compensation in the range of $65 million to $75 million.

Quarterly Conference Call
LinkedIn plans to host a webcast/conference call to discuss its fourth quarter 2011 financial results and business outlook today at 2:00 p.m. Pacific Time. Jeff Weiner and Steve Sordello will host the webcast, which can be viewed on the investor relations section of the LinkedIn website at http://investors.linkedin.com/. This call will contain forward-looking statements and other material information regarding the company’s financial and operating results. Following completion of the call, a recorded replay of the webcast will be available on the website. For those without access to the Internet, a replay of the call will be available beginning at 5:00 p.m. Pacific Time on February 9, 2012 through February 16, 2012 at 9:00 p.m. Pacific Time. To listen to the telephone replay, call (855) 859-2056, access code 45016554.

Upcoming Events
Management will participate in upcoming financial Q&A discussions at investment industry events on February 14th, February 27th, and March 13th. LinkedIn will furnish a link to these events on its investor relations website, http://investors.linkedin.com/for both the live and archived webcasts.

About LinkedIn
Founded in 2003, LinkedIn connects the world’s professionals to make them more productive and successful. With more than 150 million members worldwide, including executives from every Fortune 500 company, LinkedIn is the world’s largest professional network on the Internet. The company has a diversified business model with revenue coming from member subscriptions, marketing solutions and hiring solutions. Headquartered in Silicon Valley, LinkedIn has offices across the globe.

Non-GAAP Financial Measures
To supplement its consolidated financial statements, which are prepared and presented in accordance with GAAP, the company uses the following non-GAAP financial measures: adjusted EBITDA, non-GAAP net income, and non-GAAP EPS (collectively the “non-GAAP financial measures”). The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The company uses these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. The company believes that they provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making.

The company excludes the following items from one or more of its non-GAAP measures:

Stock-based compensation. The company excludes stock-based compensation because it is non-cash in nature and because the company believes that the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding operational performance and liquidity. The company further believes this measure is useful to investors in that it allows for greater transparency to certain line items in its financial statements and facilitates comparisons to competitors’ operating results.

Amortization of acquired intangible assets. The company excludes amortization of acquired intangible assets because it is non-cash in nature and because the company believes that the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding operational performance and liquidity. In addition, excluding this item from various non-GAAP measures facilitates internal comparisons to historical operating results and comparisons to competitors’ operating results.

Income tax effect of non-GAAP adjustments. Excluding the income tax effect of non-GAAP adjustments from the provision for income taxes assists investors in understanding the tax provision related to those adjustments and the effective tax rate related to ongoing operations.

Assumed preferred stock conversion. As a result of the company’s initial public offering, all outstanding shares of preferred stock were automatically converted into shares of Class B common stock. Consequently, non-GAAP diluted net income per share has been calculated assuming the conversion of all outstanding shares of preferred stock into shares of Class B common stock.

For more information on the non-GAAP financial measures, please see the “Reconciliation of GAAP to non-GAAP Financial Measures” table in this press release. This accompanying table has more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliations between these financial measures. Additionally, the company has not reconciled adjusted EBITDA guidance to net income guidance because it does not provide guidance for other income (expense) and provision for income taxes, which are reconciling items between net income (loss) and adjusted EBITDA. As items that impact net income (loss) are out of the company’s control and/or cannot be reasonably predicted, the company is unable to provide such guidance. Accordingly, a reconciliation to net income (loss) is not available without unreasonable effort.

Safe Harbor Statement
“Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements about our products, including plans for 2012 and our Talent Pipeline product, our planned investments in key strategic areas, and our expected financial metrics such as revenue, adjusted EBITDA, depreciation and amortization and stock-based compensation for the first quarter of 2012 and the full fiscal year 2012. The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, the company’s results could differ materially from the results expressed or implied by the forward-looking statements the company makes.

The risks and uncertainties referred to above include – but are not limited to – risks associated with: the company’s short operating history in a new and unproven market; engagement of its members; the price volatility of our Class A common stock, including in connection with the release of any restrictions on trading in the company’s stock; general economic conditions; expectations regarding the return on our strategic investments; execution of our plans and strategies; expectations regarding the company’s ability to timely and effectively scale and adapt existing technology and network infrastructure to ensure that its website is accessible at all times with short or no perceptible load times; security measures and the risk that the company’s website may be subject to attacks that degrade or deny the ability of members to access the company’s solutions; members and customers curtailing or ceasing to use the company’s solutions; the company’s core value of putting members first, which may conflict with the short-term interests of the business; privacy issues; increasing competition in the market for online professional networks; and the dual class structure of the company’s common stock.

Further information on these and other factors that could affect the company’s financial results is included in filings it makes with the Securities and Exchange Commission from time to time, including the section entitled “Risk Factors” in the company’s Form 10-Q that was filed for the quarter ended September 30, 2011, and additional information will also be set forth in our Annual Report on Form 10-K for the year ended December 31, 2011. These documents are available on the SEC Filings section of the Investor Information section of the company’s website at http://investors.linkedin.com/. All information provided in this release and in the attachments is as of February 9, 2012, and LinkedIn undertakes no duty to update this information.

AOL Releases Q4 2011 Earnings

Drew Bowling — Wed, 01 Feb 2012 14:14:53 +0000

AOL released their financial earnings for the fourth quarter of the 2011 financial year this morning and initial reviews seem to be more positive than negative for the media company. It announced that their shares are up $0.23 and revenue exceeded Wall Street’s expectations at $571.9 million; Wall Street had anticipated the shares would be $0.17 revenue to be slightly lower at $571.9 million.

In an accompanying statement, AOL Chairman and CEO Tim Armstrong expressed satisfaction with the company’s performance and said they “took a large step forward in Q4.” He added, “I am very pleased with the way we ended the year. Our Q4 results highlight AOL’s ability to methodically improve our consumer offering and financial performance.”

Despite besting Wall Street’s expectations, AOL’s subscription revenue was down 18% from where it was last year: $194.6 million in Q4 2011 versus $235.9 million in Q4 2010. Additionally, subscription revenue was down 22% for the overall year, as well, with $803.2 million in FY 2011 versus $1,023.6 million in FY 2010.

While it AOL’s operating income was down considerably since last year at $124.6 million, the figure wasn’t as low as Wall Street’s prediction of $101.3 million.

Some other highlights from the release:

Advertising revenue grew 10% for the 3 consecutive year.

AOL’s total revenue growth is at the lowest rate of decline in 5 years.

Search revenue declines are at the lowest rate in almost 3 years.

AOL grew it’s videos, video views, & video ad impressions and revenue at double-digit rates.

Project Devil advertisers, impressiona and revenue grew at double-digit rates.

Patch grew traffic, advertisers, and ad impressions over 100%.

AOL repurchased 3.3 million shares of common stock.

Armstrong and AOL CFO Arte Minson are scheduled to take questions from reporters later today during a press call to discuss the implications of the release.

Amazon Q4 Earnings Report Released, Net Income Plummets, Kindle Unit Sales Up 177%

Chris Crum — Tue, 31 Jan 2012 21:24:20 +0000

Amazon just released its earnings report for the fourth quarter. This includes an increase in net sales of 35% to $17.43 billion. Still, net income decreased 58% to $177 million for the quarter.

Kindle unit sales (including Kindles and Kindle Fires) increased 177% over the same period last year.

“We are grateful to the millions of customers who purchased the Kindle Fire and Kindle e-reader devices this holiday season, making Kindle our bestselling product across both the U.S. and Europe,” said CEO Jeff Bezos.

Below is the release in its entirety:

SEATTLE–(BUSINESS WIRE)–Jan. 31, 2012– Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its fourth quarter ended December 31, 2011.

Operating cash flow increased 12% to $3.90 billion for the trailing twelve months, compared with $3.50 billion for the trailing twelve months ended December 31, 2010. Free cash flow decreased 17% to $2.09 billion for the trailing twelve months, compared with $2.52 billion for the trailing twelve months ended December 31, 2010.

Common shares outstanding plus shares underlying stock-based awards totaled 468 million on December 31, 2011, compared with 465 million a year ago.

Net sales increased 35% to $17.43 billion in the fourth quarter, compared with $12.95 billion in fourth quarter 2010. Excluding the $101 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales would have grown 34% compared with fourth quarter 2010.

Operating income was $260 million in the fourth quarter, compared with $474 million in fourth quarter 2010. The favorable impact from year-over-year changes in foreign exchange rates throughout the quarter on operating income was $5 million.

Net income decreased 58% to $177 million in the fourth quarter, or $0.38 per diluted share, compared with net income of $416 million, or $0.91 per diluted share, in fourth quarter 2010.

“We are grateful to the millions of customers who purchased the Kindle Fire and Kindle e-reader devices this holiday season, making Kindle our bestselling product across both the U.S. and Europe,” said Jeff Bezos, founder and CEO of Amazon.com. “Our millions of third-party sellers had a tremendous holiday season with 65% unit growth and now represent 36% of total units sold.”

Full Year 2011

Net sales increased 41% to $48.08 billion, compared with $34.20 billion in 2010. Excluding the $1.09 billionfavorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales would have grown 37% compared with 2010.

Operating income decreased 39% to $862 million, compared with $1.41 billion in 2010. The favorable impact from year-over-year changes in foreign exchange rates throughout the year on operating income was $53 million.

Net income decreased 45% to $631 million in 2011, or $1.37 per diluted share, compared with net income of$1.15 billion, or $2.53 per diluted share, in 2010.

Highlights

During the nine-week holiday period ending December 31, 2011, Kindle unit sales, including both the Kindle Fire and e-reader devices, increased 177% over the same period last year.

Kindle Fire is the #1 bestselling, most gifted, and most wished for product across the millions of items available on Amazon.com since its introduction 17 weeks ago.

Amazon launched Kindle Stores at Amazon.it and Amazon.es. Kindle moved to the top of the bestseller list on launch day in both countries and held the top spot this holiday season. The new Kindle was also the bestselling product on Amazon.co.uk, Amazon.de and Amazon.fr.

Amazon.com announced the Kindle Owners’ Lending Library, a benefit of Prime membership that offers over 80,000 books to borrow for free – including over 100 current and former New York Times bestsellers – as frequently as a book a month, with no due dates.

Kindle Direct Publishing (KDP) announced KDP Select, an annual fund of at least $6 million dedicated to independent authors and publishers who participate in the Kindle Owners’ Lending Library. In December alone, customers borrowed 295,000 KDP Select titles, and KDP Select has helped grow the total library selection of books by over 16X.

Amazon continued to expand its catalog of title offerings for Prime Instant Video, announcing licensing agreements with Twentieth Century Fox Television Distribution, which added the popular FOX and FX television shows Glee and Sons of Anarchy, and Disney-ABC Television, which added popular television shows including Lost and Grey’s Anatomy. These deals bring the total number of Prime Instant Videos to more than 13,000 movies and TV shows from partners such as CBS, Fox, NBCUniversal, Sony, Warner Bros., PBS, ABC-Disney and many more.

The number of videos purchased or rented from Amazon Instant Video and the number of Amazon Instant Video customers both more than doubled year-over-year in the fourth quarter. In addition, the number of Prime Instant Video streams increased nearly 300% in the fourth quarter compared to the third quarter.

Amazon Appstore for Android customers nearly tripled in the fourth quarter compared to the third quarter. In addition, customers downloaded more apps from the Amazon Appstore during the fourth quarter than they had during all previous quarters combined.

North America segment sales, representing the Company’s U.S. and Canadian sites, were $9.90 billion, up 37% from fourth quarter 2010.

International segment sales, representing the Company’s U.K., German, Japanese, French, Chinese, Italian and Spanish sites, were $7.53 billion, up 31% from fourth quarter 2010. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 29%.

Worldwide Media sales grew 15% to $6.01 billion. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 14%.

Worldwide Electronics and Other General Merchandise sales grew 48% to $10.91 billion. Excluding the favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, sales grew 47%.

Amazon Web Services (AWS) announced the launch of its new South America (Sao Paulo) Region and U.S. West (Oregon) Region, bringing the total to eight geographic regions worldwide to which the company has deployed its global cloud computing services.

AWS announced the launch of Amazon DynamoDB, a fully managed NoSQL database service that provides extremely fast and predictable performance with seamless scalability. With a few clicks in the AWS Management Console, customers can launch a new Amazon DynamoDB database table, scale up or down their request capacity for the table without downtime or performance degradation, and gain visibility into resource utilization and performance metrics.

AWS announced that customers can now run their Microsoft Windows Server applications within the AWS Free Usage Tier – a program designed to help new AWS customers get started in the cloud. Developers and businesses with Windows Server applications can take advantage of 750 hours of Amazon Elastic Compute Cloud (Amazon EC2) Micro Instance usage per month, at no charge for a one-year period.

Financial Guidance

The following forward-looking statements reflect Amazon.com’s expectations as of January 31, 2012. 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.

First Quarter 2012 Guidance

Net sales are expected to be between $12.0 billion and $13.4 billion, or to grow between 22% and 36% compared with first quarter 2011.

Operating income (loss) is expected to be between $(200) million and $100 million, or between 162% decline and 69% decline compared with first quarter 2011.

This guidance includes approximately $200 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 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 (“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.

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. The new latest generation Kindle is the lightest, most compact Kindle ever and features the same 6-inch, most advanced electronic ink display that reads like real paper even in bright sunlight. Kindle Touch is a new addition to the Kindle family with an easy-to-use touch screen that makes it easier than ever to turn pages, search, shop, and take notes – still with all the benefits of the most advanced electronic ink display. Kindle Touch 3G is the top of the line e-reader and offers the same new design and features of Kindle Touch, with the unparalleled added convenience of free 3G. Kindle Fire is the Kindle for movies, TV shows, music, books, magazines, apps, games and web browsing with all the content, free storage in the Amazon Cloud, Whispersync, Amazon Silk (Amazon’s new revolutionary cloud-accelerated web browser), vibrant color touch screen, and powerful dual-core processor.

Amazon and its affiliates operate websites… As used herein, “Amazon.com,” “we,” “our” and similar terms includeAmazon.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

December 31, December 31,

2011 2010 2011 2010

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 2,823 $ 1,539 $ 3,777 $ 3,444

OPERATING ACTIVITIES:

Net income 177 416 631 1,152

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 359 170 1,083 568

Stock-based compensation 159 120 557 424

Other operating expense (income), net 43 29 154 106

Losses (gains) on sales of marketable securities, net - - (4 ) (2 )

Other expense (income), net (16 ) (17 ) (56 ) (79 )

Deferred income taxes 67 48 136 4

Excess tax benefits from stock-based compensation (1 ) (23 ) (62 ) (259 )

Changes in operating assets and liabilities:

Inventories (1,260 ) (693 ) (1,777 ) (1,019 )

Accounts receivable, net and other (1,077 ) (531 ) (866 ) (295 )

Accounts payable 4,684 3,442 2,997 2,373

Accrued expenses and other 1,076 596 1,067 740

Additions to unearned revenue 358 186 1,064 687

Amortization of previously unearned revenue (300 ) (263 ) (1,021 ) (905 )

Net cash provided by (used in) operating activities 4,269 3,480 3,903 3,495

INVESTING ACTIVITIES:

Purchases of fixed assets, including internal-use software and website development (550 ) (328 ) (1,811 ) (979 )

Acquisitions, net of cash acquired, and other (49 ) (271 ) (705 ) (352 )

Sales and maturities of marketable securities and other investments 912 1,112 6,843 4,250

Purchases of marketable securities and other investments (1,782 ) (1,728 ) (6,257 ) (6,279 )

Net cash provided by (used in) investing activities (1,469 ) (1,215 ) (1,930 ) (3,360 )

FINANCING ACTIVITIES:

Excess tax benefits from stock-based compensation 1 23 62 259

Common stock repurchased (277 ) - (277 ) -

Proceeds from long-term debt and other 47 43 177 143

Repayments of long-term debt, capital lease, and finance lease obligations (104 ) (100 ) (444 ) (221 )

Net cash provided by (used in) financing activities (333 ) (34 ) (482 ) 181

Foreign-currency effect on cash and cash equivalents (21 ) 7 1 17

Net increase (decrease) in cash and cash equivalents 2,446 2,238 1,492 333

CASH AND CASH EQUIVALENTS, END OF PERIOD $ 5,269 $ 3,777 $ 5,269 $ 3,777

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for interest on long term debt $ 4 $ 3 $ 14 $ 11

Cash paid for income taxes (net of refunds) 15 13 33 75

Fixed assets acquired under capital leases 187 122 753 405

Fixed assets acquired under build-to-suit leases 39 14 259 172

AMAZON.COM, INC.

Consolidated Statements of Operations

(in millions, except per share data)

(unaudited)

Three Months Ended Twelve Months Ended

December 31, December 31,

2011 2010 2011 2010

Product sales $ 15,309 $ 11,729 $ 42,000 $ 30,792

Services sales 2,122 1,219 6,077 3,412

Net sales 17,431 12,948 48,077 34,204

Operating expenses (1):

Cost of sales 13,830 10,317 37,288 26,561

Fulfillment 1,659 1,090 4,576 2,898

Marketing 593 376 1,630 1,029

Technology and content 862 519 2,909 1,734

General and administrative 184 143 658 470

Other operating expense (income), net 43 29 154 106

Total operating expenses 17,171 12,474 47,215 32,798

Income from operations 260 474 862 1,406

Interest income 14 14 61 51

Interest expense (20 ) (11 ) (65 ) (39 )

Other income (expense), net 19 29 76 79

Total non-operating income (expense) 13 32 72 91

Income before income taxes 273 506 934 1,497

Provision for income taxes (86 ) (84 ) (291 ) (352 )

Equity-method investment activity, net of tax (10 ) (6 ) (12 ) 7

Net income $ 177 $ 416 $ 631 $ 1,152

Basic earnings per share $ 0.39 $ 0.93 $ 1.39 $ 2.58

Diluted earnings per share $ 0.38 $ 0.91 $ 1.37 $ 2.53

Weighted average shares used in computation of earnings per share:

Basic 455 450 453 447

Diluted 462 458 461 456

(1) Includes stock-based compensation as follows:

Fulfillment $ 42 $ 25 $ 133 $ 90

Marketing 12 7 39 27

Technology and content 80 63 292 223

General and administrative 25 24 93 84

AMAZON.COM, INC.

Segment Information

(in millions)

(unaudited)

Three Months Ended Twelve Months Ended

December 31, December 31,

2011 2010 2011 2010

North America

Net sales $ 9,902 $ 7,211 $ 26,705 $ 18,707

Segment operating expenses (1) 9,617 6,916 25,772 17,752

Segment operating income $ 285 $ 295 $ 933 $ 955

International

Net sales $ 7,529 $ 5,737 $ 21,372 $ 15,497

Segment operating expenses (1) 7,352 5,410 20,732 14,516

Segment operating income $ 177 $ 327 $ 640 $ 981

Consolidated

Net sales $ 17,431 $ 12,948 $ 48,077 $ 34,204

Segment operating expenses 16,969 12,326 46,504 32,268

Segment operating income 462 622 1,573 1,936

Stock-based compensation (159 ) (119 ) (557 ) (424 )

Other operating income (expense), net (43 ) (29 ) (154 ) (106 )

Income from operations 260 474 862 1,406

Total non-operating income (expense) 13 32 72 91

Provision for income taxes (86 ) (84 ) (291 ) (352 )

Equity-method investment activity, net of tax (10 ) (6 ) (12 ) 7

Net income $ 177 $ 416 $ 631 $ 1,152

Segment Highlights:

Y/Y net sales growth:

North America 37 % 45 % 43 % 46 %

International 31 26 38 33

Consolidated 35 36 41 40

Y/Y segment operating income growth (decline):

North America (4 ) % 6 % (2 ) % 35 %

International (46 ) 3 (35 ) 14

Consolidated (26 ) 4 (19 ) 23

Net sales mix:

North America 57 % 56 % 56 % 55 %

International 43 44 44 45

100 % 100 % 100 % 100 %

_______________________

(1) Represents operating expenses, excluding stock-based compensation and “Other operating expense (income), net,” which are not allocated to segments

AMAZON.COM, INC.

Supplemental Net Sales Information

(in millions)

(unaudited)

Three Months Ended Twelve Months Ended

December 31, December 31,

2011 2010 2011 2010

North America

Media $ 2,562 $ 2,370 $ 7,959 $ 6,881

Electronics and other general merchandise 6,881 4,558 17,315 10,998

Other (1) 459 283 1,431 828

Total North America $ 9,902 $ 7,211 $ 26,705 $ 18,707

International

Media $ 3,447 $ 2,865 $ 9,820 $ 8,007

Electronics and other general merchandise 4,032 2,834 11,397 7,365

Other (1) 50 38 155 125

Total International $ 7,529 $ 5,737 $ 21,372 $ 15,497

Consolidated

Media $ 6,009 $ 5,235 $ 17,779 $ 14,888

Electronics and other general merchandise 10,913 7,392 28,712 18,363

Other (1) 509 321 1,586 953

Total Consolidated $ 17,431 $ 12,948 $ 48,077 $ 34,204

Y/Y Net Sales Growth:

North America:

Media 8 % 13 % 16 % 15 %

Electronics and other general merchandise 51 71 57 74

Other 62 45 73 50

Total North America 37 45 43 46

International:

Media 20 % 11 % 23 % 18 %

Electronics and other general merchandise 42 46 55 54

Other 32 6 24 22

Total International 31 26 38 33

Consolidated:

Media 15 % 12 % 19 % 17 %

Electronics and other general merchandise 48 60 56 66

Other 58 39 66 46

Total Consolidated 35 36 41 40

Y/Y Net Sales Growth Excluding Effect of Exchange Rates:

International:

Media 18 % 13 % 16 % 18 %

Electronics and other general merchandise 41 50 47 57

Other 31 10 18 24

Total International 29 29 31 34

Consolidated:

Media 14 % 13 % 16 % 16 %

Electronics and other general merchandise 47 62 53 67

Other 58 40 66 46

Total Consolidated 34 37 37 40

Consolidated Net Sales Mix:

Media 34 % 40 % 37 % 43 %

Electronics and other general merchandise 63 57 60 54

Other 3 3 3 3

100 % 100 % 100 % 100 %

____________________________

(1) Includes non-retail activities, such as AWS, miscellaneous marketing and promotional agreements, other seller sites, and co-branded credit card agreements

AMAZON.COM, INC.

Consolidated Balance Sheets

(in millions, except per share data)

December 31, December 31,

2011 2010

ASSETS (unaudited)

Current assets:

Cash and cash equivalents $ 5,269 $ 3,777

Marketable securities 4,307 4,985

Inventories 4,992 3,202

Accounts receivable, net and other 2,571 1,587

Deferred tax assets 351 196

Total current assets 17,490 13,747

Fixed assets, net 4,417 2,414

Deferred tax assets 28 22

Goodwill 1,955 1,349

Other assets 1,388 1,265

Total assets $ 25,278 $ 18,797

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable $ 11,145 $ 8,051

Accrued expenses and other 3,751 2,321

Total current liabilities 14,896 10,372

Long-term liabilities 2,625 1,561

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 — 473 and 468

Outstanding shares — 455 and 451 5 5

Treasury stock, at cost (877 ) (600 )

Additional paid-in capital 6,990 6,325

Accumulated other comprehensive loss (316 ) (190 )

Retained earnings 1,955 1,324

Total stockholders’ equity 7,757 6,864

Total liabilities and stockholders’ equity $ 25,278 $ 18,797

AMAZON.COM, INC.

Supplemental Financial Information and Business Metrics

(in millions, except per share data)

(unaudited)

Y/Y %

Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Change

Cash Flows and Shares

Operating cash flow — trailing twelve months (TTM) $ 3,495 $ 3,033 $ 3,205 $ 3,114 $ 3,903 12 %

Purchases of fixed assets (incl. internal-use software & website development) — TTM $ 979 $ 1,138 $ 1,374 $ 1,589 $ 1,811 85 %

Free cash flow (operating cash flow less purchases of fixed assets) — TTM $ 2,516 $ 1,895 $ 1,831 $ 1,525 $ 2,092 (17 %)

Free cash flow — TTM Y/Y growth (14 %) (18 %) (8 %) (17 %) (17 %) N/A

Invested capital (1) $ 7,380 $ 7,931 $ 8,551 $ 9,147 $ 9,680 31 %

Return on invested capital (2) 34 % 24 % 21 % 17 % 22 % N/A

Common shares and stock-based awards outstanding 465 466 468 469 468 1 %

Common shares outstanding 451 452 454 455 455 1 %

Stock-based awards outstanding 15 14 15 14 14 (7 %)

Stock-based awards outstanding — % of common shares outstanding 3.2 % 3.1 % 3.2 % 3.2 % 3.0 % N/A

Results of Operations

Worldwide (WW) net sales $ 12,948 $ 9,857 $ 9,913 $ 10,876 $ 17,431 35 %

WW net sales — Y/Y growth, excluding F/X 37 % 36 % 44 % 39 % 34 % N/A

WW net sales — TTM $ 34,204 $ 36,931 $ 40,278 $ 43,594 $ 48,077 41 %

WW net sales — TTM Y/Y growth, excluding F/X 40 % 39 % 39 % 39 % 37 % N/A

Operating income $ 474 $ 322 $ 201 $ 79 $ 260 (45 %)

Operating income — Y/Y growth, excluding F/X 3 % (20 )% (36 %) (77 %) (48 %) N/A

Operating margin — % of WW net sales 3.7 % 3.3 % 2.0 % 0.7 % 1.5 % N/A

Operating income — TTM $ 1,406 $ 1,334 $ 1,265 $ 1,076 $ 862 (39 %)

Operating income — TTM Y/Y growth, excluding F/X 27 % 7 % (7 %) (25 %) (44 %) N/A

Operating margin — TTM % of WW net sales 4.1 % 3.6 % 3.1 % 2.5 % 1.8 % N/A

Net income $ 416 $ 201 $ 191 $ 63 $ 177 (58 %)

Net income per diluted share $ 0.91 $ 0.44 $ 0.41 $ 0.14 $ 0.38 (58 %)

Net income — TTM $ 1,152 $ 1,054 $ 1,038 $ 871 $ 631 (45 %)

Net income per diluted share — TTM $ 2.53 $ 2.30 $ 2.26 $ 1.89 $ 1.37 (46 %)

Segments

North America Segment:

Net sales $ 7,211 $ 5,465 $ 5,406 $ 5,932 $ 9,902 37 %

Net sales — Y/Y growth, excluding F/X 45 % 45 % 50 % 44 % 37 % N/A

Net sales — TTM $ 18,707 $ 20,392 $ 22,208 $ 24,014 $ 26,705 43 %

Operating income $ 295 $ 290 $ 214 $ 144 $ 285 (4 %)

Operating margin — % of North America net sales 4.1 % 5.3 % 4.0 % 2.4 % 2.9 % N/A

Operating income — TTM $ 955 $ 972 $ 986 $ 943 $ 933 (2 %)

Operating income — TTM Y/Y growth, excluding F/X 35 % 17 % 9 % 1 % (2 %) N/A

Operating margin — TTM % of North America net sales 5.1 % 4.8 % 4.4 % 3.9 % 3.5 % N/A

International Segment:

Net sales $ 5,737 $ 4,392 $ 4,507 $ 4,944 $ 7,529 31 %

Net sales — Y/Y growth, excluding F/X 29 % 27 % 36 % 33 % 29 % N/A

Net sales — TTM $ 15,497 $ 16,539 $ 18,070 $ 19,580 $ 21,372 38 %

Net sales — TTM % of WW net sales 45 % 45 % 45 % 45 % 44 % N/A

Operating income $ 327 $ 175 $ 172 $ 116 $ 177 (46 %)

Operating margin — % of International net sales 5.7 % 4.0 % 3.8 % 2.4 % 2.4 % N/A

Operating income — TTM $ 981 $ 922 $ 888 $ 790 $ 640 (35 %)

Operating income — TTM Y/Y growth, excluding F/X 20 % 4 % (7 %) (23 %) (41 %) N/A

Operating margin — TTM % of International net sales 6.3 % 5.6 % 4.9 % 4.0 % 3.0 % N/A

Consolidated Segments:

Operating expenses (3) $ 12,326 $ 9,392 $ 9,527 $ 10,616 $ 16,969 38 %

Operating expenses — TTM (3) $ 32,268 $ 35,037 $ 38,404 $ 41,860 $ 46,504 44 %

Operating income $ 622 $ 465 $ 386 $ 260 $ 462 (26 %)

Operating margin — % of Consolidated sales 4.8 % 4.7 % 3.9 % 2.4 % 2.7 % N/A

Operating income — TTM $ 1,936 $ 1,894 $ 1,874 $ 1,734 $ 1,573 (19 %)

Operating income — TTM Y/Y growth, excluding F/X 25 % 10 % 1 % (11 %) (21 %) N/A

Operating margin — TTM % of Consolidated net sales 5.7 % 5.1 % 4.7 % 4.0 % 3.3 % 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 %

Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Change

Supplemental

Supplemental North America Segment Net Sales:

Media $ 2,370 $ 1,885 $ 1,585 $ 1,927 $ 2,562 8 %

Media — Y/Y growth, excluding F/X 13 % 18 % 19 % 21 % 8 % N/A

Media — TTM $ 6,881 $ 7,170 $ 7,430 $ 7,767 $ 7,959 16 %

Electronics and other general merchandise $ 4,558 $ 3,303 $ 3,496 $ 3,635 $ 6,881 51 %

Electronics and other general merchandise — Y/Y growth, excluding F/X 71 % 63 % 67 % 56 % 51 % N/A

Electronics and other general merchandise — TTM $ 10,998 $ 12,277 $ 13,683 $ 14,992 $ 17,315 57 %

Electronics and other general merchandise — TTM % of North America net sales 59 % 60 % 62 % 62 % 65 % N/A

Other $ 283 $ 277 $ 325 $ 370 $ 459 62 %

Other — TTM $ 828 $ 945 $ 1,095 $ 1,255 $ 1,431 73 %

Supplemental International Segment Net Sales:

Media $ 2,865 $ 2,073 $ 2,075 $ 2,226 $ 3,447 20 %

Media — Y/Y growth, excluding F/X 13 % 9 % 20 % 17 % 18 % N/A

Media — TTM $ 8,007 $ 8,247 $ 8,772 $ 9,238 $ 9,820 23 %

Electronics and other general merchandise $ 2,834 $ 2,285 $ 2,398 $ 2,681 $ 4,032 42 %

Electronics and other general merchandise — Y/Y growth, excluding F/X 50 % 49 % 53 % 51 % 41 % N/A

Electronics and other general merchandise — TTM $ 7,365 $ 8,162 $ 9,162 $ 10,199 $ 11,397 55 %

Electronics and other general merchandise — TTM % of International net sales 48 % 49 % 51 % 52 % 53 % N/A

Other $ 38 $ 34 $ 34 $ 37 $ 50 32 %

Other — TTM $ 125 $ 130 $ 136 $ 143 $ 155 24 %

Supplemental Worldwide Net Sales:

Media $ 5,235 $ 3,958 $ 3,660 $ 4,153 $ 6,009 15 %

Media — Y/Y growth, excluding F/X 13 % 13 % 20 % 19 % 14 % N/A

Media — TTM $ 14,888 $ 15,417 $ 16,202 $ 17,005 $ 17,779 19 %

Electronics and other general merchandise $ 7,392 $ 5,588 $ 5,894 $ 6,316 $ 10,913 48 %

Electronics and other general merchandise — Y/Y growth, excluding F/X 62 % 57 % 62 % 54 % 47 % N/A

Electronics and other general merchandise — TTM $ 18,363 $ 20,439 $ 22,845 $ 25,191 $ 28,712 56 %

Electronics and other general merchandise — TTM % of WW net sales 54 % 55 % 57 % 58 % 60 % N/A

Other $ 321 $ 311 $ 359 $ 407 $ 509 58 %

Other — TTM $ 953 $ 1,075 $ 1,231 $ 1,398 $ 1,586 66 %

Balance Sheet

Cash and marketable securities $ 8,762 $ 6,881 $ 6,355 $ 6,326 $ 9,576 9 %

Inventory, net — ending $ 3,202 $ 2,888 $ 3,229 $ 3,770 $ 4,992 56 %

Inventory turnover, average — TTM 11.4 11.6 11.3 10.8 10.3 (10 %)

Fixed assets, net $ 2,414 $ 2,902 $ 3,470 $ 3,999 $ 4,417 83 %

Accounts payable — ending $ 8,051 $ 5,540 $ 5,721 $ 6,552 $ 11,145 38 %

Accounts payable days — ending 72 66 69 72 74 3 %

Other

WW shipping revenue $ 437 $ 330 $ 331 $ 360 $ 531 21 %

WW shipping costs $ 999 $ 786 $ 820 $ 918 $ 1,466 47 %

WW net shipping costs $ 562 $ 456 $ 489 $ 558 $ 935 66 %

WW net shipping costs — % of WW net sales 4.3 % 4.6 % 4.9 % 5.1 % 5.4 % N/A

Employees (full-time and part-time; excludes contractors & temporary personnel) 33,700 37,900 43,200 51,300 56,200 67 %

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

Amazon.com, Inc.

Certain Definitions

Customer Accounts

References to customers mean customer accounts, which are unique e-mail addresses, established either when a customer places an order 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

References to units mean physical and digital units sold (net of returns and cancellations) by us and sellers at Amazon domains worldwide…
– as well as Amazon-owned items sold through non-Amazon domains. Units sold are paid units and do not include units associated with certain acquisitions, rental businesses, web services or advertising businesses, or Amazon gift certificates.

Source: Amazon.com,

Gannett Print Revenue Down, Digital Up

Chris Crum — Mon, 30 Jan 2012 21:46:14 +0000

Gannett, publisher of USA Today and a number of other newspapers, reported its Q4 earnings today, missing analysts’ estimates.

The company’s publishing segment operating revenue was down 5.3% year-over-year to $1.01 billion for the quarter. Ad revenues were $670.7 million in the quarter compared to $722.3 million in the fourth quarter last year.

Digital revenues in the Publishing segment, however, were up 6.9% in the quarter.

Here’s the part of the report that pertains to Gannett’s digital business:

Digital segment operating revenues were 9.4 percent higher in the quarter and totaled $181.5 million due primarily to strong revenue growth at CareerBuilder. Digital Segment operating expenses increased 10.6 percent to $142.8 million reflecting significantly higher sales incentive and bonus costs associated with higher revenue levels for CareerBuilder. Due to substantially higher year-over-year revenue as the quarter progressed, a significant number of sales personnel exceeded their annual sales goals very late in the quarter, and were therefore entitled to incremental commissions and bonuses. There were also incremental costs for new initiatives and new product development by PointRoll and ShopLocal. These incremental costs for CareerBuilder, PointRoll and ShopLocal together totaled approximately $9 million for the quarter. Digital segment operating income was 5.3 percent higher on a reported basis and was up 2.5 percent on a non-GAAP basis. Operating cash flow was $46.6 million, an increase of 3.2 percent.

Digital revenues company-wide, including the Digital segment and all digital revenues generated by the other business segments, totaled $290.3 million, an increase of 6.5 percent. Digital revenues for the 2011 fiscal year were up 10.1 percent and totaled $1.1 billion, about 21 percent of total operating revenues. At the end of the quarter, Gannett had about 120 domestic web sites affiliated with its local publishing and television markets, USA TODAY, Gannett Government Media and Gannett Healthcare Group.

USATODAY.com is one of the most popular newspaper sites on the Web and the USA TODAY app is now a top news app with more than 11 million downloads including those across iPad, iPhone, Android and Windows. In December, Gannett’s consolidated domestic Internet audience share was 50.8 million unique visitors reaching 23.0 percent of the Internet audience, according to Comscore Media Metrix. Newsquest is also an Internet leader in the UK where its network of web sites attracted 66.3 million monthly page impressions from approximately 8.7 million unique users in December 2011. CareerBuilder’s unique visitors in the fourth quarter averaged 21.2 million.

Apple’s Quarterly Earnings In Perspective

Shaylin Clark — Fri, 27 Jan 2012 21:05:33 +0000

Earlier this week Apple released their earnings report for the first quarter of FY2012. As we reported then, the company had its best quarter ever, bringing in $46.33 billion dollars in revenue, beating estimates by more than $8 billion. That’s an awful lot of money; more money, in fact, than most of us can wrap our heads around. To help with that problem, Ryan Orbuch and Caroline Quinlan have produced a website that puts Apple’s best quarter ever in perspective.

At Applemademoremoneythan.com you can see a list of things that, well, Apple made more money than. Here are some examples of things and people Apple made more than this quarter:

- 2,204 Mitt Romneys in 2011

- the amount that 1,447 Alex Rodriguezes would make in an entire year.

- the value of all NFL franchises combined.

- over 160 times the cost of the Louisiana Purchase (in 2011 dollars)

- the cost of sending the entire population of Vatican City to space. Twice.

- what is needed to buy 20% of Google’s outstanding shares.

- a stack of $1 bills over 3,000 miles high.

- twice as much as RIM did over the whole year.

- the amount needed to make 4 Large Hadron Colliders

- two Microsofts.

- the cost of all 10 Nimitz-class aircraft carriers.

- any non oil and gas company in history in a single quarter

- Me.

Tim Cook Announces New Mac, iPad Discounts For Apple Employees

Josh Wolford — Thu, 26 Jan 2012 13:56:09 +0000

If you haven’t already heard, Apple had a big quarter.

The company just released their Q4 earnings, and with the help of the holiday season, absolutely destroyed all expectations. Apple posted Q4 revenue of $46.33 billion, beating the expected figure of $38 billion. They also reported a record quarterly net profit of $13.06 billion.

Partly in celebration of these record numbers, and party to talk about the future, Apple CEO Tim Cook held a Town Hall with Apple employees Wednesday morning. Employees could attend in person or online via AppleWeb. Cook said in an email “we’ll review our record-setting results and discuss some exciting new things going on at Apple.”

But Apple employees were treated to another surprise, as Cook announced an incentive that will help them upgrade to the latest Apple technology for their personal use. According to 9to5Mac, Cook told everyone that soon, they will get $500 credits on new Mac purchases and $250 credits on new iPad purchases.

These will kick in sometime in June of this year with two catches: First, employees can only use the credit once every three years. Second, employees must have been at Apple for at least 90 days before they can use the discounts.

I guess Apple’s huge successes as of late are trickling down to employees. And if they keep selling iPhones faster than babies are being born, Apple employees can probably expect stuff like this to continue.

$500 off a Mac is a really nice discount. But Google had one of the best employee giveaways ever when they gifted brand new customized Galaxy Nexus phones to employees for the holidays.

Apple Earnings Show iPhones Sold Faster Than Babies Are Born

Josh Wolford — Wed, 25 Jan 2012 15:59:05 +0000

Apple released their Q4 earnings yesterday, and reported a record revenue of $46.33 billion and a record net profit of $13.06 billion. Not only are these figures all-time records, but they absolutely demolished all expectations ($38 billion revenue).

As part of those earnings, they also reported that during the quarter, they sold 37.04 million iPhones. That number sounds huge (and it is), but once you get to talking about tens of millions, things become a little abstract.

So think about it this way: Every day, there are more iPhones sold than babies born…worldwide.

Once you take that 37.04 million sold during the quarter figure and divide it by the 98-day period in question, you get that Apple sells about 378,000 iPhones every day. The average birth rate worldwide clocks in at 371,000 a day.

As The Next Web points out, birth rate is always a moving figure and Apple’s Q4 returns were bolstered by the holiday shopping season – but damn. That’s one hell of a comparison.

While fascinating, that comparison is rather arbitrary. This comparison, however, is truly astonishing:

@fmanjoo
Farhad ManjooApple’s profits ($13 billion) exceeded Google’s entire revenue ($10.6 billion). 17 hours ago via web · powered by @socialditto

Yahoo Q4 Earnings Released

Josh Wolford — Tue, 24 Jan 2012 23:28:40 +0000

Yahoo released their 4th quarter earnings today, and for the most part met expectations.

They reported earnings of $0.24 per share, which amounts to no change from Q4 of 2010. Yahoo’s fourth quarter revenue declined 3% – $1.17 billion in 2011 down from $1.2 billion in 2010 (these figures exclude traffic acquisition costs).

Both display ad revenue and search revenue decreased as well. Display ad revenue dropped from $567 million to $546 million year-over-year, a decrease of 4%. Search revenue was down 3%, falling to $376 million from $388 million.

Yahoo CEO Scott Thompson highlights the positives:

“Yahoo! continued to make progress in the quarter with operating income increasing ten percent year over year. In 2012 we will be aligning resources behind key areas of focus to enable us to move aggressively in market and grow our business, bringing innovative new products and experiences to both our users and advertisers.”

Revenue (minus TAC) is expected to drop more in the first quarter of 2012. They project it to be in the range of 1.02 billion to 1.1 billion.

Check out more below:

Revenue excluding traffic acquisition costs (“revenue ex-TAC”) was $1,169 million for the fourth quarter of 2011, a 3 percent decrease from the fourth quarter of 2010. Income from operations increased 10 percent to $242 million in the fourth quarter of 2011, compared to $220 million in the fourth quarter of 2010.

GAAP revenue was $1,324 million for the fourth quarter of 2011, a 13 percent decrease from the fourth quarter of 2010.

Revenue ex-TAC was $4,381 million for the full year ended December 31, 2011, a 5 percent decrease from the same period of 2010. The year over year decrease was primarily due to the revenue share related to the Search Agreement with Microsoft. Income from operations increased 4 percent to $800 million for the full year ended December 31, 2011, compared to $773 million for the same period of 2010.

GAAP revenue was $4,984 million for the full year ended December 31, 2011, a 21 percent decrease from the same period of 2010, primarily due to the required change in revenue presentation related to the Search Agreement and the associated revenue share with Microsoft.

Net earnings per diluted share was $0.24 in both the fourth quarter of 2011 and the fourth quarter of 2010.

Business Highlights

Yahoo! is home to 11 number one properties globally and ranks in the top three in 20 categories worldwide. (comScore, December 2011)

Yahoo! continued to modernize its technology platforms, with additional sites across the Americas, EMEA and Asia Pacific going live on the new global Yahoo! Publishing Platform, bringing the total more than 130.

Yahoo! acquired interclick, inc., which has built an industry-leading data valuation platform optimized to work with large data volumes across multiple providers and marketplaces.

Yahoo!, AOL and Microsoft announced agreements to allow ad networks operated by the three companies to offer each other’s premium nonreserved online display inventory to their respective advertising customers.

Yahoo! launched its 2012 U.S. presidential election programming, beginning with exclusive ABC News and Yahoo! News “Newsmaker” interviews with Republican candidates.

Yahoo! launched Livestand, a personalized living magazine for iPad. Livestand weaves together content from leading third-party publishers and Yahoo!’s global media network to create a visually stunning and deeply personalized digital experience tailored to its users’ interests and passions.

Yahoo! introduced additional products for the iPad such as Yahoo! Mail and IntoNow, an app that makes watching TV more engaging, social and fun.

Yahoo!, in conjunction with Playtone and Reliance Entertainment, will be the exclusive online broadcast partner for Tom Hanks’ multi-dimensional animated series “Electric City”.
Search Alliance Impact

Yahoo!’s results for the fourth quarter of 2011 reflect $48 million in search operating cost reimbursements from Microsoft under the Search Agreement, which amount is equal to the search operating costs incurred by Yahoo! in the fourth quarter. Search operating cost reimbursements are expected to decline as Yahoo! fully transitions all markets to Microsoft’s search platform and, in the long term, the underlying expenses are not expected to be incurred under Yahoo!’s cost structure. Our business outlook for total expenses reflects these anticipated savings.

As previously reported, Microsoft has agreed to extend the RPS Guarantee in the U.S. and Canada through March 2013.

Fourth Quarter 2011 Revenue Highlights

Display revenue ex-TAC was $546 million, a 4 percent decrease compared to $567 million for the fourth quarter of 2010.

GAAP display revenue was $612 million, a 4 percent decrease compared to $635 million for the fourth quarter of 2010.

Search revenue ex-TAC was $376 million, a 3 percent decrease compared to $388 million for the fourth quarter of 2010.

GAAP search revenue was $465 million, a 27 percent decrease compared to $640 million for the fourth quarter of 2010.

Cash Flow and Cash Balance

Cash flow from operating activities for the fourth quarter of 2011 was $431 million, a 7 percent increase compared to $403 million for the same period of 2010.

Free cash flow was $327 million for the fourth quarter of 2011, a 111 percent increase compared to $155 million for the same period of 2010.
Cash, cash equivalents, and investments in marketable debt securities were $2,530 million at December 31, 2011 compared to $3,629 million at December 31, 2010, a decrease of $1,099 million. During the fourth quarter of 2011, Yahoo! repurchased 27 million shares for $416 million. During the year ended December 31, 2011, Yahoo! repurchased 110 million shares for $1,619 million.

Business Outlook

Revenue ex-TAC for the first quarter of 2012 is expected to be in the range of $1,025 million to $1,105 million. Based on the terms of the Search Agreement with Microsoft, Microsoft retains a revenue share of 12 percent of the net (after TAC) search revenue generated on Yahoo! Properties and Affiliate sites in transitioned markets. Yahoo! reports the net revenue it receives under the Search Agreement as revenue and no longer presents the associated TAC within cost of revenue. Accordingly, for transitioned markets Yahoo! reports GAAP revenue associated with the Search Agreement on a net (after TAC) basis rather than a gross basis. For markets that have not yet transitioned, revenue continues to be recorded on a gross basis, and TAC is recorded in cost of revenue. GAAP revenue for the first quarter of 2012 is expected to be in the range of $1,170 million to $1,260 million. Total expenses (cost of revenue plus total operating expenses) for the first quarter of 2012 is expected to be in the range of $1,065 million to $1,105 million. Total expenses less TAC for the first quarter of 2012 is expected to be in the range of $920 million to $950 million. Income from operations for the first quarter of 2012 is expected to be in the range of $105 million to $155 million.

Business outlook for revenue ex-TAC is being provided to reflect the underlying dynamics of the business during the Microsoft transition and to facilitate comparisons to prior periods.

Apple’s Record Quarter: Record iPhone, iPad & Mac Sales, And Other Key Stats

Chris Crum — Tue, 24 Jan 2012 23:28:04 +0000

Apple released its Q1 earnings report today. It was the company’s biggest quarter ever, with record sales for iPhones, iPads and Macs. You can read all of the financials here.

Following the release the company held its conference call discussing the report, dropping a number of stats.

CFO Peter Oppenheimer rattled them off. Here are some highlights:

37.04 million iPhones sold in the quarter (up 128% from last year).
15.43 million iPads sold in the quarter (up 111%).
5.2 million Macs (up 26%).
Over 100 million apps downloaded in less than a year from the Mac App Store
15.4 million ipods sold – “ahead of our expectations.”
iPod holds over 70% of market share for mp3 players
Record iTunes store revenue: $ 1.7 billion
iTunes Music Store launched in Brazil and 27 other countries in Latin America and Europe
$120 million worth of apps and content on Christmas Day
iPhone handset and accessory sales accounted for $24.4 billion in revenue
1.5 million iPads in use in educational institutions
iPhone 4S now available in over 90 countries (the most popular iPhone in the quarter, CEO TIm Cook says).
$9.1 billion in iPad and iPad accessory sales
600,000 copies of iBooks Author downloaded since release last week
3 million copies of iTunes U app downloaded
Over 62 million iOS devices sold in the quarter
Developers have earned over $4 billion from the App Store
$17.1 million – the average revenue from Mac Retail Stores
110 million visitors to the Apple retail stores
22,000 visitors to Apple Retail Stores per week
2.8 million units sold (Apple TV) – quarterly record of 104 million units

Apple Q1 Earnings Released, Biggest Quarter Ever

Chris Crum — Tue, 24 Jan 2012 21:41:51 +0000

Apple just posted its earnings for its fiscal year 2012 first quarter.

Last quarter, Apple didn’t live up to analysts’ expectations, but the company still had a record September quarter. This quarter, they had the holidays, and this quarter, they blew estimates out of the water.

The Company posted record quarterly revenue of $46.33 billion and record quarterly net profit of $13.06 billion. Expectations were closer to $38 billion in the revenue category.

37.04 million iPhones sold in the quarter (up 128% from last year).

15.43 million iPads sold in the quarter (up 111%).

5.2 million Macs (up 26%).

iPod sales declined again, but they still sold 15.4 million iPods during the quarter (down 21%).

“We’re thrilled with our outstanding results and record-breaking sales of iPhones, iPads and Macs,” said Tim Cook, Apple’s CEO. “Apple’s momentum is incredibly strong, and we have some amazing new products in the pipeline.”

“We are very happy to have generated over $17.5 billion in cash flow from operations during the December quarter,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the second fiscal quarter of 2012, which will span 13 weeks, we expect revenue of about $32.5 billion and we expect diluted earnings per share of about $8.50.”

Stay tuned for more from the conference call.

Here’s the release in its entirety:

Apple® today announced financial results for its fiscal 2012 first quarter which spanned 14 weeks and ended December 31, 2011. The Company posted record quarterly revenue of $46.33 billion and record quarterly net profit of $13.06 billion, or $13.87 per diluted share. These results compare to revenue of $26.74 billion and net quarterly profit of $6 billion, or $6.43 per diluted share, in the year-ago quarter. Gross margin was 44.7 percent compared to 38.5 percent in the year-ago quarter. International sales accounted for 58 percent of the quarter’s revenue.

“Apple’s momentum is incredibly strong, and we have some amazing new products in the pipeline.”

The Company sold 37.04 million iPhones in the quarter, representing 128 percent unit growth over the year-ago quarter. Apple sold 15.43 million iPads during the quarter, a 111 percent unit increase over the year-ago quarter. The Company sold 5.2 million Macs during the quarter, a 26 percent unit increase over the year-ago quarter. Apple sold 15.4 million iPods, a 21 percent unit decline from the year-ago quarter.

“We’re thrilled with our outstanding results and record-breaking sales of iPhones, iPads and Macs,” said Tim Cook, Apple’s CEO. “Apple’s momentum is incredibly strong, and we have some amazing new products in the pipeline.”

“We are very happy to have generated over $17.5 billion in cash flow from operations during the December quarter,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the second fiscal quarter of 2012, which will span 13 weeks, we expect revenue of about $32.5 billion and we expect diluted earnings per share of about $8.50.”

Apple will provide live streaming of its Q1 2012 financial results conference call beginning at 2:00 p.m. PST on January 24, 2012 atwww.apple.com/quicktime/qtv/earningsq112. This webcast will also be available for replay for approximately two weeks thereafter.

This press release contains forward-looking statements including without limitation those about the Company’s estimated revenue and earnings per share. These statements involve risks and uncertainties, and actual results may differ. Risks and uncertainties include without limitation the effect of competitive and economic factors, and the Company’s reaction to those factors, on consumer and business buying decisions with respect to the Company’s products; continued competitive pressures in the marketplace; the ability of the Company to deliver to the marketplace and stimulate customer demand for new programs, products, and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on the Company’s gross margin; the inventory risk associated with the Company’s need to order or commit to order product components in advance of customer orders; the continued availability on acceptable terms, or at all, of certain components and services essential to the Company’s business currently obtained by the Company from sole or limited sources; the effect that the Company’s dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity or cost of products manufactured or services rendered; risks associated with the Company’s international operations; the Company’s reliance on third-party intellectual property and digital content; the potential impact of a finding that the Company has infringed on the intellectual property rights of others; the Company’s dependency on the performance of distributors, carriers and other resellers of the Company’s products; the effect that product and service quality problems could have on the Company’s sales and operating profits; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other circumstances that could disrupt supply, delivery, or demand of products; and unfavorable results of other legal proceedings. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s public reports filed with the SEC, including the Company’s Form 10-K for the fiscal year ended September 24, 2011 and its Form 10-Q for the fiscal quarter ended December 31, 2011 to be filed with the SEC. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.

NOTE TO EDITORS: For additional information visit Apple’s PR website (www.apple.com/pr), or call Apple’s Media Helpline at (408) 974-2042.

© 2012 Apple Inc. All rights reserved. Apple, the Apple logo, Mac, Mac OS and Macintosh are trademarks of Apple. Other company and product names may be trademarks of their respective owners.

Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except number of shares which are reflected in thousands and per share amounts)

Three Months Ended

December 31, 2011 December 25, 2010

Net sales $ 46,333 $ 26,741

Cost of sales ⁽¹⁾ 25,630 16,443

Gross margin 20,703 10,298

Operating expenses:

Research and development ⁽¹⁾ 758 575

Selling, general and administrative ⁽¹⁾ 2,605 1,896

Total operating expenses 3,363 2,471

Operating income 17,340 7,827

Other income and expense 137 136

Income before provision for income taxes 17,477 7,963

Provision for income taxes 4,413 1,959

Net income $ 13,064 $ 6,004

Earnings per common share:

Basic $ 14.03 $ 6.53

Diluted $ 13.87 $ 6.43

Shares used in computing earnings per share:

Basic 931,041 919,294

Diluted 941,572 933,154

⁽¹⁾ Includes share-based compensation expense as follows:

Cost of sales $ 63 $ 52

Research and development $ 160 $ 113

Selling, general and administrative $ 197 $ 134

Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except number of shares which are reflected in thousands)

December 31, 2011 September 24, 2011

ASSETS:

Current assets:

Cash and cash equivalents $ 10,310 $ 9,815

Short-term marketable securities 19,846 16,137

Accounts receivable, less allowances of $78 and $53, respectively 8,930 5,369

Inventories 1,236 776

Deferred tax assets 1,937 2,014

Vendor non-trade receivables 7,554 6,348

Other current assets 4,958 4,529

Total current assets 54,771 44,988

Long-term marketable securities 67,445 55,618

Property, plant and equipment, net 7,816 7,777

Goodwill 896 896

Acquired intangible assets, net 3,472 3,536

Other assets 4,281 3,556

Total assets $ 138,681 $ 116,371

LIABILITIES AND SHAREHOLDERS’ EQUITY:

Current liabilities:

Accounts payable $ 18,221 $ 14,632

Accrued expenses 11,500 9,247

Deferred revenue 4,886 4,091

Total current liabilities 34,607 27,970

Deferred revenue – non-current 2,187 1,686

Other non-current liabilities 11,833 10,100

Total liabilities 48,627 39,756

Commitments and contingencies

Shareholders’ equity:

Common stock, no par value; 1,800,000 shares authorized; 932,214 and 929,277 shares issued and outstanding, respectively 13,961 13,331

Retained earnings 75,709 62,841

Accumulated other comprehensive income 384 443

Total shareholders’ equity 90,054 76,615

Total liabilities and shareholders’ equity $ 138,681 $ 116,371

Apple Inc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

Three Months Ended

December 31, 2011 December 25, 2010

Cash and cash equivalents, beginning of the period $ 9,815 $ 11,261

Operating activities:

Net income 13,064 6,004

Adjustments to reconcile net income to cash generated by operating activities:

Depreciation, amortization and accretion 721 356

Share-based compensation expense 420 299

Deferred income tax expense 1,456 823

Changes in operating assets and liabilities:

Accounts receivable, net (3,561 ) (517 )

Inventories (460 ) 166

Vendor non-trade receivables (1,206 ) (433 )

Other current and non-current assets (962 ) (558 )

Accounts payable 4,314 2,346

Deferred revenue 1,296 634

Other current and non-current liabilities 2,472 653

Cash generated by operating activities 17,554 9,773

Investing activities:

Purchases of marketable securities (40,175 ) (19,575 )

Proceeds from maturities of marketable securities 3,038 3,279

Proceeds from sales of marketable securities 21,472 6,853

Payments for acquisition of property, plant and equipment (1,321 ) (1,214 )

Payments for acquisition of intangible assets (108 ) (49 )

Other (34 ) (23 )

Cash used in investing activities (17,128 ) (10,729 )

Financing activities:

Proceeds from issuance of common stock 91 208

Excess tax benefits from equity awards 333 454

Taxes paid related to net share settlement of equity awards (355 ) (233 )

Cash generated by financing activities 69 429

Increase/(decrease) in cash and cash equivalents 495 (527 )

Cash and cash equivalents, end of the period $ 10,310 $ 10,734

Supplemental cash flow disclosure:

Cash paid for income taxes, net $ 1,474 $ 826

Apple Inc.

Q1 2012 Unaudited Summary Data

(Units in thousands, Revenue in millions)

Q4 2011 Q1 2011 Q1 2012

Sequential Change Year/Year Change

Operating Segments Mac

Units
Revenue Mac

Units
Revenue Mac

Units
Revenue Mac Units Revenue Mac Units Revenue

Americas 1,716 $ 9,648 1,360 $ 9,218 1,612 $ 17,714 - 6 % 84 % 19 % 92 %

Europe 1,176 7,397 1,245 7,256 1,482 11,256 26 % 52 % 19 % 55 %

Japan 175 1,111 162 1,433 184 3,550 5 % 220 % 14 % 148 %

Asia Pacific 731 6,530 516 4,987 814 7,697 11 % 18 % 58 % 54 %

Retail 1,096 3,584 851 3,847 1,106 6,116 1 % 71 % 30 % 59 %

Total Operating Segments 4,894 $ 28,270 4,134 $ 26,741 5,198 $ 46,333 6 % 64 % 26 % 73 %

Sequential Change Year/Year Change

Product Summary Units Revenue Units Revenue Units Revenue Units Revenue Units Revenue

Mac Desktops (1)(9) 1,278 $ 1,687 1,227 $ 1,731 1,479 $ 1,936 16 % 15 % 21 % 12 %

Mac Portables (2)(9) 3,616 4,585 2,907 3,699 3,719 4,662 3 % 2 % 28 % 26 %

Subtotal Mac 4,894 6,272 4,134 5,430 5,198 6,598 6 % 5 % 26 % 22 %

iPod (3)(9) 6,622 1,103 19,446 3,425 15,397 2,528 133 % 129 % - 21 % - 26 %

Other Music Related Products and Services (4) 1,678 1,431 2,027 21 % 42 %

iPhone and Related Products and Services (5)(9) 17,073 10,980 16,235 10,468 37,044 24,417 117 % 122 % 128 % 133 %

iPad and Related Products and Services (6)(9) 11,123 6,868 7,331 4,608 15,434 9,153 39 % 33 % 111 % 99 %

Peripherals and Other Hardware (7) 640 593 766 20 % 29 %

Software, Service and Other Sales (8) 729 786 844 16 % 7 %

Total Apple $ 28,270 $ 26,741 $ 46,333 64 % 73 %

(1) Includes revenue from iMac, Mac mini and Mac Pro sales.

(2) Includes revenue from MacBook, MacBook Air and MacBook Pro sales.

(3) Includes revenue from iPod sales.

(4) Includes revenue from sales from the iTunes Store, App Store, and iBookstore in addition to sales of iPod services and Apple-branded and third-party iPod accessories.

(5) Includes revenue from sales of iPhone, iPhone services, and Apple-branded and third-party iPhone accessories.

(6) Includes revenue from sales of iPad, iPad services, and Apple-branded and third-party iPad accessories.

(7) Includes revenue from sales of displays, networking products, and other hardware.

(8) Includes revenue from sales of Apple-branded and third-party Mac software, and services.

(9) Includes amortization of related revenue deferred for non-software services and embedded software upgrade rights.


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

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2011			2010			2011			2010

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	$	2,823		$	1,539		$	3,777		$	3,444

OPERATING ACTIVITIES:
Net income		177			416			631			1,152
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		359			170			1,083			568
Stock-based compensation		159			120			557			424
Other operating expense (income), net		43			29			154			106
Losses (gains) on sales of marketable securities, net		-			-			(4	)		(2	)
Other expense (income), net		(16	)		(17	)		(56	)		(79	)
Deferred income taxes		67			48			136			4
Excess tax benefits from stock-based compensation		(1	)		(23	)		(62	)		(259	)
Changes in operating assets and liabilities:
Inventories		(1,260	)		(693	)		(1,777	)		(1,019	)
Accounts receivable, net and other		(1,077	)		(531	)		(866	)		(295	)
Accounts payable		4,684			3,442			2,997			2,373
Accrued expenses and other		1,076			596			1,067			740
Additions to unearned revenue		358			186			1,064			687
Amortization of previously unearned revenue		(300	)		(263	)		(1,021	)		(905	)
Net cash provided by (used in) operating activities		4,269			3,480			3,903			3,495

INVESTING ACTIVITIES:
Purchases of fixed assets, including internal-use software and website development		(550	)		(328	)		(1,811	)		(979	)
Acquisitions, net of cash acquired, and other		(49	)		(271	)		(705	)		(352	)
Sales and maturities of marketable securities and other investments		912			1,112			6,843			4,250
Purchases of marketable securities and other investments		(1,782	)		(1,728	)		(6,257	)		(6,279	)
Net cash provided by (used in) investing activities		(1,469	)		(1,215	)		(1,930	)		(3,360	)

FINANCING ACTIVITIES:
Excess tax benefits from stock-based compensation		1			23			62			259
Common stock repurchased		(277	)		-			(277	)		-
Proceeds from long-term debt and other		47			43			177			143
Repayments of long-term debt, capital lease, and finance lease obligations		(104	)		(100	)		(444	)		(221	)
Net cash provided by (used in) financing activities		(333	)		(34	)		(482	)		181

Foreign-currency effect on cash and cash equivalents		(21	)		7			1			17
Net increase (decrease) in cash and cash equivalents		2,446			2,238			1,492			333

CASH AND CASH EQUIVALENTS, END OF PERIOD	$	5,269		$	3,777		$	5,269		$	3,777

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest on long term debt	$	4		$	3		$	14		$	11
Cash paid for income taxes (net of refunds)		15			13			33			75
Fixed assets acquired under capital leases		187			122			753			405
Fixed assets acquired under build-to-suit leases		39			14			259			172


AMAZON.COM, INC.
Consolidated Statements of Operations
(in millions, except per share data)
(unaudited)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2011			2010			2011			2010

Product sales	$	15,309		$	11,729		$	42,000		$	30,792
Services sales		2,122			1,219			6,077			3,412
Net sales		17,431			12,948			48,077			34,204

Operating expenses (1):
Cost of sales		13,830			10,317			37,288			26,561
Fulfillment		1,659			1,090			4,576			2,898
Marketing		593			376			1,630			1,029
Technology and content		862			519			2,909			1,734
General and administrative		184			143			658			470
Other operating expense (income), net		43			29			154			106
Total operating expenses		17,171			12,474			47,215			32,798

Income from operations		260			474			862			1,406

Interest income		14			14			61			51
Interest expense		(20	)		(11	)		(65	)		(39	)
Other income (expense), net		19			29			76			79
Total non-operating income (expense)		13			32			72			91

Income before income taxes		273			506			934			1,497

Provision for income taxes		(86	)		(84	)		(291	)		(352	)
Equity-method investment activity, net of tax		(10	)		(6	)		(12	)		7
Net income	$	177		$	416		$	631		$	1,152

Basic earnings per share	$	0.39		$	0.93		$	1.39		$	2.58

Diluted earnings per share	$	0.38		$	0.91		$	1.37		$	2.53


Weighted average shares used in computation of earnings per share:
Basic		455			450			453			447
Diluted		462			458			461			456

(1) Includes stock-based compensation as follows:
Fulfillment	$	42		$	25		$	133		$	90
Marketing		12			7			39			27
Technology and content		80			63			292			223
General and administrative		25			24			93			84


AMAZON.COM, INC.
Segment Information
(in millions)
(unaudited)

	Three Months Ended								Twelve Months Ended
	December 31,								December 31,
	2011				2010				2011				2010
North America
Net sales	$	9,902			$	7,211			$	26,705			$	18,707
Segment operating expenses (1)		9,617				6,916				25,772				17,752
Segment operating income	$	285			$	295			$	933			$	955

International
Net sales	$	7,529			$	5,737			$	21,372			$	15,497
Segment operating expenses (1)		7,352				5,410				20,732				14,516
Segment operating income	$	177			$	327			$	640			$	981

Consolidated
Net sales	$	17,431			$	12,948			$	48,077			$	34,204
Segment operating expenses		16,969				12,326				46,504				32,268
Segment operating income		462				622				1,573				1,936
Stock-based compensation		(159	)			(119	)			(557	)			(424	)
Other operating income (expense), net		(43	)			(29	)			(154	)			(106	)
Income from operations		260				474				862				1,406
Total non-operating income (expense)		13				32				72				91
Provision for income taxes		(86	)			(84	)			(291	)			(352	)
Equity-method investment activity, net of tax		(10	)			(6	)			(12	)			7
Net income	$	177			$	416			$	631			$	1,152

Segment Highlights:
Y/Y net sales growth:
North America		37		%		45		%		43		%		46		%
International		31				26				38				33
Consolidated		35				36				41				40
Y/Y segment operating income growth (decline):
North America		(4	)	%		6		%		(2	)	%		35		%
International		(46	)			3				(35	)			14
Consolidated		(26	)			4				(19	)			23
Net sales mix:
North America		57		%		56		%		56		%		55		%
International		43				44				44				45
		100		%		100		%		100		%		100		%
_______________________
(1) Represents operating expenses, excluding stock-based compensation and “Other operating expense (income), net,” which are not allocated to segments


AMAZON.COM, INC.
Supplemental Net Sales Information
(in millions)
(unaudited)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2011			2010			2011			2010
North America
Media	$	2,562		$	2,370		$	7,959		$	6,881
Electronics and other general merchandise		6,881			4,558			17,315			10,998
Other (1)		459			283			1,431			828
Total North America	$	9,902		$	7,211		$	26,705		$	18,707

International
Media	$	3,447		$	2,865		$	9,820		$	8,007
Electronics and other general merchandise		4,032			2,834			11,397			7,365
Other (1)		50			38			155			125
Total International	$	7,529		$	5,737		$	21,372		$	15,497

Consolidated
Media	$	6,009		$	5,235		$	17,779		$	14,888
Electronics and other general merchandise		10,913			7,392			28,712			18,363
Other (1)		509			321			1,586			953
Total Consolidated	$	17,431		$	12,948		$	48,077		$	34,204

Y/Y Net Sales Growth:
North America:
Media		8	%		13	%		16	%		15	%
Electronics and other general merchandise		51			71			57			74
Other		62			45			73			50
Total North America		37			45			43			46

International:
Media		20	%		11	%		23	%		18	%
Electronics and other general merchandise		42			46			55			54
Other		32			6			24			22
Total International		31			26			38			33

Consolidated:
Media		15	%		12	%		19	%		17	%
Electronics and other general merchandise		48			60			56			66
Other		58			39			66			46
Total Consolidated		35			36			41			40

Y/Y Net Sales Growth Excluding Effect of Exchange Rates:
International:
Media		18	%		13	%		16	%		18	%
Electronics and other general merchandise		41			50			47			57
Other		31			10			18			24
Total International		29			29			31			34

Consolidated:
Media		14	%		13	%		16	%		16	%
Electronics and other general merchandise		47			62			53			67
Other		58			40			66			46
Total Consolidated		34			37			37			40

Consolidated Net Sales Mix:
Media		34	%		40	%		37	%		43	%
Electronics and other general merchandise		63			57			60			54
Other		3			3			3			3
		100	%		100	%		100	%		100	%
____________________________
(1) Includes non-retail activities, such as AWS, miscellaneous marketing and promotional agreements, other seller sites, and co-branded credit card agreements


AMAZON.COM, INC.
Consolidated Balance Sheets
(in millions, except per share data)

	December 31,			December 31,
	2011			2010
ASSETS	(unaudited)
Current assets:
Cash and cash equivalents	$	5,269		$	3,777
Marketable securities		4,307			4,985
Inventories		4,992			3,202
Accounts receivable, net and other		2,571			1,587
Deferred tax assets		351			196
Total current assets		17,490			13,747
Fixed assets, net		4,417			2,414
Deferred tax assets		28			22
Goodwill		1,955			1,349
Other assets		1,388			1,265
Total assets	$	25,278		$	18,797

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	11,145		$	8,051
Accrued expenses and other		3,751			2,321
Total current liabilities		14,896			10,372
Long-term liabilities		2,625			1,561

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 — 473 and 468
Outstanding shares — 455 and 451		5			5
Treasury stock, at cost		(877	)		(600	)
Additional paid-in capital		6,990			6,325
Accumulated other comprehensive loss		(316	)		(190	)
Retained earnings		1,955			1,324
Total stockholders’ equity		7,757			6,864
Total liabilities and stockholders’ equity	$	25,278		$	18,797


AMAZON.COM, INC.
Supplemental Financial Information and Business Metrics
(in millions, except per share data)
(unaudited)

																Y/Y %
	Q4 2010			Q1 2011			Q2 2011			Q3 2011			Q4 2011			Change
Cash Flows and Shares
Operating cash flow — trailing twelve months (TTM)	$	3,495		$	3,033		$	3,205		$	3,114		$	3,903		12	%
Purchases of fixed assets (incl. internal-use software & website development) — TTM	$	979		$	1,138		$	1,374		$	1,589		$	1,811		85	%
Free cash flow (operating cash flow less purchases of fixed assets) — TTM	$	2,516		$	1,895		$	1,831		$	1,525		$	2,092		(17	%)
Free cash flow — TTM Y/Y growth		(14	%)		(18	%)		(8	%)		(17	%)		(17	%)	N/A
Invested capital (1)	$	7,380		$	7,931		$	8,551		$	9,147		$	9,680		31	%
Return on invested capital (2)		34	%		24	%		21	%		17	%		22	%	N/A

Common shares and stock-based awards outstanding		465			466			468			469			468		1	%
Common shares outstanding		451			452			454			455			455		1	%
Stock-based awards outstanding		15			14			15			14			14		(7	%)
Stock-based awards outstanding — % of common shares outstanding		3.2	%		3.1	%		3.2	%		3.2	%		3.0	%	N/A

Results of Operations
Worldwide (WW) net sales	$	12,948		$	9,857		$	9,913		$	10,876		$	17,431		35	%
WW net sales — Y/Y growth, excluding F/X		37	%		36	%		44	%		39	%		34	%	N/A
WW net sales — TTM	$	34,204		$	36,931		$	40,278		$	43,594		$	48,077		41	%
WW net sales — TTM Y/Y growth, excluding F/X		40	%		39	%		39	%		39	%		37	%	N/A

Operating income	$	474		$	322		$	201		$	79		$	260		(45	%)
Operating income — Y/Y growth, excluding F/X		3	%		(20	)%		(36	%)		(77	%)		(48	%)	N/A
Operating margin — % of WW net sales		3.7	%		3.3	%		2.0	%		0.7	%		1.5	%	N/A
Operating income — TTM	$	1,406		$	1,334		$	1,265		$	1,076		$	862		(39	%)
Operating income — TTM Y/Y growth, excluding F/X		27	%		7	%		(7	%)		(25	%)		(44	%)	N/A
Operating margin — TTM % of WW net sales		4.1	%		3.6	%		3.1	%		2.5	%		1.8	%	N/A

Net income	$	416		$	201		$	191		$	63		$	177		(58	%)
Net income per diluted share	$	0.91		$	0.44		$	0.41		$	0.14		$	0.38		(58	%)
Net income — TTM	$	1,152		$	1,054		$	1,038		$	871		$	631		(45	%)
Net income per diluted share — TTM	$	2.53		$	2.30		$	2.26		$	1.89		$	1.37		(46	%)

Segments
North America Segment:
Net sales	$	7,211		$	5,465		$	5,406		$	5,932		$	9,902		37	%
Net sales — Y/Y growth, excluding F/X		45	%		45	%		50	%		44	%		37	%	N/A
Net sales — TTM	$	18,707		$	20,392		$	22,208		$	24,014		$	26,705		43	%
Operating income	$	295		$	290		$	214		$	144		$	285		(4	%)
Operating margin — % of North America net sales		4.1	%		5.3	%		4.0	%		2.4	%		2.9	%	N/A
Operating income — TTM	$	955		$	972		$	986		$	943		$	933		(2	%)
Operating income — TTM Y/Y growth, excluding F/X		35	%		17	%		9	%		1	%		(2	%)	N/A
Operating margin — TTM % of North America net sales		5.1	%		4.8	%		4.4	%		3.9	%		3.5	%	N/A

International Segment:
Net sales	$	5,737		$	4,392		$	4,507		$	4,944		$	7,529		31	%
Net sales — Y/Y growth, excluding F/X		29	%		27	%		36	%		33	%		29	%	N/A
Net sales — TTM	$	15,497		$	16,539		$	18,070		$	19,580		$	21,372		38	%
Net sales — TTM % of WW net sales		45	%		45	%		45	%		45	%		44	%	N/A
Operating income	$	327		$	175		$	172		$	116		$	177		(46	%)
Operating margin — % of International net sales		5.7	%		4.0	%		3.8	%		2.4	%		2.4	%	N/A
Operating income — TTM	$	981		$	922		$	888		$	790		$	640		(35	%)
Operating income — TTM Y/Y growth, excluding F/X		20	%		4	%		(7	%)		(23	%)		(41	%)	N/A
Operating margin — TTM % of International net sales		6.3	%		5.6	%		4.9	%		4.0	%		3.0	%	N/A

Consolidated Segments:
Operating expenses (3)	$	12,326		$	9,392		$	9,527		$	10,616		$	16,969		38	%
Operating expenses — TTM (3)	$	32,268		$	35,037		$	38,404		$	41,860		$	46,504		44	%
Operating income	$	622		$	465		$	386		$	260		$	462		(26	%)
Operating margin — % of Consolidated sales		4.8	%		4.7	%		3.9	%		2.4	%		2.7	%	N/A
Operating income — TTM	$	1,936		$	1,894		$	1,874		$	1,734		$	1,573		(19	%)
Operating income — TTM Y/Y growth, excluding F/X		25	%		10	%		1	%		(11	%)		(21	%)	N/A
Operating margin — TTM % of Consolidated net sales		5.7	%		5.1	%		4.7	%		4.0	%		3.3	%	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 %
	Q4 2010			Q1 2011			Q2 2011			Q3 2011			Q4 2011			Change
Supplemental
Supplemental North America Segment Net Sales:
Media	$	2,370		$	1,885		$	1,585		$	1,927		$	2,562		8	%
Media — Y/Y growth, excluding F/X		13	%		18	%		19	%		21	%		8	%	N/A
Media — TTM	$	6,881		$	7,170		$	7,430		$	7,767		$	7,959		16	%
Electronics and other general merchandise	$	4,558		$	3,303		$	3,496		$	3,635		$	6,881		51	%
Electronics and other general merchandise — Y/Y growth, excluding F/X		71	%		63	%		67	%		56	%		51	%	N/A
Electronics and other general merchandise — TTM	$	10,998		$	12,277		$	13,683		$	14,992		$	17,315		57	%
Electronics and other general merchandise — TTM % of North America net sales		59	%		60	%		62	%		62	%		65	%	N/A
Other	$	283		$	277		$	325		$	370		$	459		62	%
Other — TTM	$	828		$	945		$	1,095		$	1,255		$	1,431		73	%

Supplemental International Segment Net Sales:
Media	$	2,865		$	2,073		$	2,075		$	2,226		$	3,447		20	%
Media — Y/Y growth, excluding F/X		13	%		9	%		20	%		17	%		18	%	N/A
Media — TTM	$	8,007		$	8,247		$	8,772		$	9,238		$	9,820		23	%
Electronics and other general merchandise	$	2,834		$	2,285		$	2,398		$	2,681		$	4,032		42	%
Electronics and other general merchandise — Y/Y growth, excluding F/X		50	%		49	%		53	%		51	%		41	%	N/A
Electronics and other general merchandise — TTM	$	7,365		$	8,162		$	9,162		$	10,199		$	11,397		55	%
Electronics and other general merchandise — TTM % of International net sales		48	%		49	%		51	%		52	%		53	%	N/A
Other	$	38		$	34		$	34		$	37		$	50		32	%
Other — TTM	$	125		$	130		$	136		$	143		$	155		24	%

Supplemental Worldwide Net Sales:
Media	$	5,235		$	3,958		$	3,660		$	4,153		$	6,009		15	%
Media — Y/Y growth, excluding F/X		13	%		13	%		20	%		19	%		14	%	N/A
Media — TTM	$	14,888		$	15,417		$	16,202		$	17,005		$	17,779		19	%
Electronics and other general merchandise	$	7,392		$	5,588		$	5,894		$	6,316		$	10,913		48	%
Electronics and other general merchandise — Y/Y growth, excluding F/X		62	%		57	%		62	%		54	%		47	%	N/A
Electronics and other general merchandise — TTM	$	18,363		$	20,439		$	22,845		$	25,191		$	28,712		56	%
Electronics and other general merchandise — TTM % of WW net sales		54	%		55	%		57	%		58	%		60	%	N/A
Other	$	321		$	311		$	359		$	407		$	509		58	%
Other — TTM	$	953		$	1,075		$	1,231		$	1,398		$	1,586		66	%

Balance Sheet
Cash and marketable securities	$	8,762		$	6,881		$	6,355		$	6,326		$	9,576		9	%
Inventory, net — ending	$	3,202		$	2,888		$	3,229		$	3,770		$	4,992		56	%
Inventory turnover, average — TTM		11.4			11.6			11.3			10.8			10.3		(10	%)
Fixed assets, net	$	2,414		$	2,902		$	3,470		$	3,999		$	4,417		83	%

Accounts payable — ending	$	8,051		$	5,540		$	5,721		$	6,552		$	11,145		38	%
Accounts payable days — ending		72			66			69			72			74		3	%

Other
WW shipping revenue	$	437		$	330		$	331		$	360		$	531		21	%
WW shipping costs	$	999		$	786		$	820		$	918		$	1,466		47	%
WW net shipping costs	$	562		$	456		$	489		$	558		$	935		66	%
WW net shipping costs — % of WW net sales		4.3	%		4.6	%		4.9	%		5.1	%		5.4	%	N/A

Employees (full-time and part-time; excludes contractors & temporary personnel)		33,700			37,900			43,200			51,300			56,200		67	%


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

Apple Inc. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except number of shares which are reflected in thousands and per share amounts)

	Three Months Ended
	December 31, 2011		December 25, 2010

Net sales	$	46,333	$	26,741
Cost of sales ⁽¹⁾		25,630		16,443

Gross margin		20,703		10,298

Operating expenses:
Research and development ⁽¹⁾		758		575
Selling, general and administrative ⁽¹⁾		2,605		1,896

Total operating expenses		3,363		2,471

Operating income		17,340		7,827

Other income and expense		137		136

Income before provision for income taxes		17,477		7,963

Provision for income taxes		4,413		1,959

Net income	$	13,064	$	6,004

Earnings per common share:
Basic	$	14.03	$	6.53
Diluted	$	13.87	$	6.43

Shares used in computing earnings per share:
Basic		931,041		919,294
Diluted		941,572		933,154

⁽¹⁾ Includes share-based compensation expense as follows:
Cost of sales	$	63	$	52
Research and development	$	160	$	113
Selling, general and administrative	$	197	$	134

Apple Inc. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In millions, except number of shares which are reflected in thousands)

	December 31, 2011		September 24, 2011

ASSETS:

Current assets:
Cash and cash equivalents	$	10,310	$	9,815
Short-term marketable securities		19,846		16,137
Accounts receivable, less allowances of $78 and $53, respectively		8,930		5,369
Inventories		1,236		776
Deferred tax assets		1,937		2,014
Vendor non-trade receivables		7,554		6,348
Other current assets		4,958		4,529
Total current assets		54,771		44,988

Long-term marketable securities		67,445		55,618
Property, plant and equipment, net		7,816		7,777
Goodwill		896		896
Acquired intangible assets, net		3,472		3,536
Other assets		4,281		3,556
Total assets	$	138,681	$	116,371


LIABILITIES AND SHAREHOLDERS’ EQUITY:

Current liabilities:
Accounts payable	$	18,221	$	14,632
Accrued expenses		11,500		9,247
Deferred revenue		4,886		4,091
Total current liabilities		34,607		27,970

Deferred revenue – non-current		2,187		1,686
Other non-current liabilities		11,833		10,100
Total liabilities		48,627		39,756

Commitments and contingencies

Shareholders’ equity:
Common stock, no par value; 1,800,000 shares authorized; 932,214 and 929,277 shares issued and outstanding, respectively		13,961		13,331
Retained earnings		75,709		62,841
Accumulated other comprehensive income		384		443
Total shareholders’ equity		90,054		76,615

Total liabilities and shareholders’ equity	$	138,681	$	116,371

Apple Inc.
Q1 2012 Unaudited Summary Data
(Units in thousands, Revenue in millions)

		Q4 2011			Q1 2011			Q1 2012
											Sequential Change				Year/Year Change
Operating Segments		Mac Units	Revenue		Mac Units	Revenue		Mac Units	Revenue		Mac Units		Revenue		Mac Units		Revenue
	Americas	1,716	$	9,648	1,360	$	9,218	1,612	$	17,714	- 6	%	84	%	19	%	92	%
	Europe	1,176		7,397	1,245		7,256	1,482		11,256	26	%	52	%	19	%	55	%
	Japan	175		1,111	162		1,433	184		3,550	5	%	220	%	14	%	148	%
	Asia Pacific	731		6,530	516		4,987	814		7,697	11	%	18	%	58	%	54	%
	Retail	1,096		3,584	851		3,847	1,106		6,116	1	%	71	%	30	%	59	%
Total Operating Segments		4,894	$	28,270	4,134	$	26,741	5,198	$	46,333	6	%	64	%	26	%	73	%


											Sequential Change				Year/Year Change
Product Summary		Units	Revenue		Units	Revenue		Units	Revenue		Units		Revenue		Units		Revenue
	Mac Desktops (1)(9)	1,278	$	1,687	1,227	$	1,731	1,479	$	1,936	16	%	15	%	21	%	12	%
	Mac Portables (2)(9)	3,616		4,585	2,907		3,699	3,719		4,662	3	%	2	%	28	%	26	%
Subtotal Mac		4,894		6,272	4,134		5,430	5,198		6,598	6	%	5	%	26	%	22	%
	iPod (3)(9)	6,622		1,103	19,446		3,425	15,397		2,528	133	%	129	%	- 21	%	- 26	%
	Other Music Related Products and Services (4)			1,678			1,431			2,027			21	%			42	%
	iPhone and Related Products and Services (5)(9)	17,073		10,980	16,235		10,468	37,044		24,417	117	%	122	%	128	%	133	%
	iPad and Related Products and Services (6)(9)	11,123		6,868	7,331		4,608	15,434		9,153	39	%	33	%	111	%	99	%
	Peripherals and Other Hardware (7)			640			593			766			20	%			29	%
	Software, Service and Other Sales (8)			729			786			844			16	%			7	%
Total Apple			$	28,270		$	26,741		$	46,333			64	%			73	%

(1)	Includes revenue from iMac, Mac mini and Mac Pro sales.
(2)	Includes revenue from MacBook, MacBook Air and MacBook Pro sales.
(3)	Includes revenue from iPod sales.
(4)	Includes revenue from sales from the iTunes Store, App Store, and iBookstore in addition to sales of iPod services and Apple-branded and third-party iPod accessories.
(5)	Includes revenue from sales of iPhone, iPhone services, and Apple-branded and third-party iPhone accessories.
(6)	Includes revenue from sales of iPad, iPad services, and Apple-branded and third-party iPad accessories.
(7)	Includes revenue from sales of displays, networking products, and other hardware.
(8)	Includes revenue from sales of Apple-branded and third-party Mac software, and services.
(9)	Includes amortization of related revenue deferred for non-software services and embedded software upgrade rights.