Q1 2012 Earnings Call Transcript

Transcript Call Date 04/26/2012

Operator: Thank you for standing by. Good day everyone and welcome to the First Quarter 2012 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 - Vice President of Investor Relations: Hello and welcome to our Q1, 2012 financial results conference call. Joining us today is Tom Szkutak, our CFO. 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, April 26, 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 2011.

Now I will turn the call over to Tom.

Thomas J. Szkutak - SVP and CFO: Thanks, Sean. I will begin with comments on our first quarter financial results. Trailing 12-month operating cash flow increased 1% to $3.05 billion. Trailing 12-month free cash flow decrease 39% to $1.15 billion. Return on invested capital was 12%, down from 24%. ROIC is TTM free cash flow divided by average total assets minus current liabilities excluding the current portion of long-term debt over five quarter ends.

The combination of common stock and stock-based awards outstanding was 454 million shares per group 466 million shares. During the quarter we repurchased 5.3 million shares of our common stock for $960 million.

Worldwide revenue grew 34% to $13.18 billion or 34% excluding the $56 million unfavorable impact from year-over-year changes in foreign exchange rates. We are grateful to our customers who continue to take advantage of our low prices, best selection and shipping offers.

Media revenue increased to $4.71 billion, up 19% or 19% excluding foreign exchange. EGM revenue increased to $7.97 billion, up 43% or 43% excluding foreign exchange. Worldwide EGM increased to 60% of worldwide sales, up from 57%. Worldwide paid unit growth was 49%. Active customer accounts exceeded $173 million. Worldwide active seller accounts were more than 2 million. Seller units were 39% of paid units compared to 36% of paid units in the Q1 2011.

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