Q1 2013 Earnings Call Transcript

Transcript Call Date 04/25/2013

Operator: Good day everyone and thank you for standing by. Welcome to the First Quarter 2013 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 will be turning the call over to the Vice President of Investor Relations, Mr. Sean Boyle. Mr. Boyle, please go ahead.

Sean Boyle - IR: Hello and welcome to our Q1 2013 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 25, 2013 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 2012.

Now, I will turn the call over to Tom.

Thomas J. Szkutak - SVP and CFO: Thanks Sean. I'll begin with comments on our first quarter financial results. Trailing 12 months operating cash flow increased 39% to $4.25 billion. Trailing 12 month free cash flow decreased to 85% to $177 million. Trailing 12 months capital expenditures were $4.07 billion. This amount includes $1.4 billion in purchases of our previously leased corporate office space as well as property for development of additional corporate office space located at Seattle, Washington which we purchased in fourth quarter 2012. The increase in capital expenditures reflects additional investments in support of continued business growth consisting of investments in technology, infrastructure, including the Amazon Web Services and additional capacity to support our fulfillment operations.

Return on invested capital was 1%, down from 12%. 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 471 million shares, compared with 461 million one year ago. Worldwide revenue grew 22% to $16.07 billion, or 24% excluding the $302 million unfavorable impact from year-over-year changes in foreign exchange rates. We're grateful to our customers who continue to take advantage of our low prices, vast selection and shipping offers.

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