Q4 2011 Earnings Call Transcript

Transcript Call Date 01/31/2012

Operator: Thank you for standing by. Good day everyone and welcome to the Fourth Quarter 2011 Financial Results Teleconference. At this time, all participants are in a listen-only mode. After the presentation, we will conduct a question-and-answer session. Today's call is being recorded.

For opening remarks, I would like to turn the call over to Vice President of Investor Relations, (Sean Boyle). Please go ahead, sir.

Sean Boyle - VP, IR: Hello and welcome to our Q4, 2011 financial results conference call. Joining us today is Tom Szkutak, our CFO, and John Felton, our Director of Investor Relations. We will be available for questions after our prepared remarks.

The following discussion and responses to your questions reflect management's views as of today, January 31st, 2012 only, and will include forward-looking statements. Actual results may differ materially. Additional information about factors that could potentially impact our financial results is included in today's press release and our filings with the SEC, including our most recent Annual Report on Form 10-K.

As you listen to today's conference call, we encourage you to have our press release in front of you which includes our financial results as well as metrics and commentary on the quarter.

During this call, we will discuss certain non-GAAP financial measures. In our press release, slides accompanying this webcast and our filings with the SEC, each of which is posted on our IR website, you'll find additional disclosures regarding these non-GAAP measures, including reconciliations of these measures with comparable GAAP measures.

Finally, unless otherwise stated, all comparisons in this call will be against our results for the comparable period of 2010.

Now I will turn the call over to Tom.

Thomas J. Szkutak - SVP and CFO: Thanks, John. I'll begin with comments on our fourth quarter financial results. Trailing 12 months operating cash flow increased 12% to $3.9 billion. Trailing 12 month free cash flow decreased 17% to $2.09 billion. Return on invested capital was 22% down from 34%. Return on invested capital is TTM free cash flow divided by average total assets minus current liabilities, excluding the current portion of long-term debt over five quarter end.

The combination of common stock and stock-based awards outstanding was 468 million shares compared with 465 million shares. During the quarter, we repurchased 1.5 million shares of our common stock for $277 million. Worldwide revenue grew 35% to $17.43 billion or 34%, excluding the $101 million favorable impact from year-over-year changes in foreign exchange rates. We're grateful to our customers who continue to take advantage for our low prices, fast selection and shipping offers.

Media revenue increased to $6.01 billion, up 15% or 14% excluding foreign exchange. EGM revenue increased to $10.91 billion, up 48% or 47% excluding foreign exchange. Worldwide EGM increased to 63% of worldwide sales, up from 57%.

Worldwide paid unit growth was 46%. Active customer accounts exceeded 164 million. Worldwide active sellers' accounts were more than 2 million. Seller units were 36% of paid units compared to 32% of paid units in Q4 2010.

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