AMAZON.COM ANNOUNCES 45% FREE CASH FLOW GROWTH AND 26% SALES GROWTH,
FUELED BY LOW PRICES AND FREE SHIPPING; RAISES FINANCIAL GUIDANCE
SEATTLE—(BUSINESS WIRE)—July 22, 2004—Amazon.com, Inc. (NASDAQ: AMZN) today announced financial results
for its second quarter ended June 30, 2004.
Operating cash flow was $410 million for the trailing twelve months, compared with $285 million for the trailing twelve
months ended June 30, 2003. Free cash flow grew 45% to $354 million for the trailing twelve months, compared with $245
million for the trailing twelve months ended June 30, 2003.
Common shares outstanding plus shares underlying stock-based awards outstanding totaled 434 million at June 30, 2004,
compared with 433 million a year ago.
Net sales were $1.39 billion in the second quarter, compared with $1.10 billion in second quarter 2003, an increase of 26%. Net
sales, excluding the $47 million benefit from changes in foreign exchange rates, grew 22% compared with second quarter 2003.
Operating income was $86 million in the second quarter, compared with $42 million in second quarter 2003. Consolidated
segment operating income grew 50% to $101 million in the second quarter, compared with $67 million in second quarter 2003.
Consolidated segment operating income, excluding the $4 million benefit from changes in foreign exchange rates, grew 44%
compared with second quarter 2003.
Net income was $76 million in the second quarter, or $0.18 per diluted share, compared with a net loss of $43 million, or $(0.11)
per share, in second quarter 2003. Pro forma net income in the second quarter grew 77% to $75 million, or $0.18 per diluted
share, compared with $42 million, or $0.10 per diluted share, in second quarter 2003.
“Worldwide adoption of our everyday free shipping reached another record high point this quarter,” said Jeff Bezos, founder
and CEO of Amazon.com. “While free shipping is expensive for the Company, it saves our customers tens of millions of dollars
each quarter, and we plan to keep it in place indefinitely.”
Amazon.com continues to offer Free Super Saving Shipping on orders over $25 at www.amazon.com and also has free shipping
offers at its U.K., German, French, Japanese and Canadian sites. Amazon.com offers 30% off books over $15 and continues to
lower prices every day across its product offerings, ranging from electronics to jewelry to sports and outdoors items to tools.
See “Financial Measures” for additional information.
Highlights
o  North America segment sales, representing the Company’s U.S. and Canadian sites, grew 13% to $792 million and
segment operating income grew 21% to $66 million, compared with second quarter 2003.
o  International segment sales, representing the Company’s U.K., German, French and Japanese sites, grew 50% to $595
million. Net sales, excluding the benefit from changes in foreign exchange rates, grew 38% compared with second
quarter 2003. International segment operating income grew to $35 million, compared with $13 million in second
quarter 2003.
o International segment sales on a trailing-twelve-month basis were $2.51 billion, representing 42% of worldwide net
sales.
o  Electronics & Other General Merchandise sales were $1.36 billion for the trailing twelve months, representing 23% of
worldwide net sales.
o  Inventory turns for the trailing twelve months were 18, down from 20 a year ago, as the Company continues to expand
selection and availability.
o  The Company introduced two new stores in the U.S., offering more than 20,000 Beauty products and over 30,000
Musical Instrument items.