Amazon.

com DCF Analysis based on McKinsey's Analysis from 2000

Annual Financials
Income Statement (All dollar amounts in millions except per share amounts.)
Dec98 Dec99 Dec00 Dec01

Growth
Revenue 1,639.80 2,762.00 3,122.40
Costs of Goods Sold 78.17% 76.22% 76.06%
SGAE 41.08% 36.12% 27.17%
NPPE/Depr. 1.13 1.14 2.09

Working Capital 262.7 273.20 386.10 286.50

Cash 25.6 117 822.4 540.3
Net Recievables 0 0 0 0
Inventories 29.5 220.6 174.6 143.7
Other Current Assets 369.2 674.5 364.1 523.9
Total Current Liabilities 161.6 738.9 975 921.4
45.06% 35.30% 29.51%
Net Fixed Assets (NPPE) 29.8 317.6 366.4 271.8
Depreciation & Amortization 282.1 322.8 129.9
NPPE + Depreciation 599.7 689.2 401.7
Capital Expenditures -656.7 -134.8 -50.3
40.05% 4.88% 1.61%
Change in Working Capital 10.50 112.90 -99.60
0.64% 4.09% -3.19%

Capital Turnover (1/(CapEx%+Chng.WC%) 2.46 11.15 -63.33

Revenue 1,639.80 2,762.00 3,122.40

Costs of Goods Sold 1,281.80 2,105.20 2,375.00
SG&A Expense 673.7 997.6 848.2
Depreciation & Amortization 282.1 322.8 129.9

EBIT -597.80 -663.60 -230.70

Income Taxes 0 0 0
(Tax Loss C/F)
NOPLAT -597.80 -663.60 -230.70

Depreciation & Amortization 282.1 322.8 129.9

Change in Working Capital 10.50 112.90 -99.60
Capital Expenditures 569.9 371.6 35.3

Free Cash Flow (FCF) -896.1 -825.3 -36.5

Terminal Value

Discounted FCF

PV(FCF)
Other Noncurrent Assets 1,141.70 407.6 157.8
Long-Term Debt 1,466.30 2,127.50 2,156.10

Equity Value
Shares Outstanding (millions) 345.2 357.1 373.2
Price per Share

Total Current Assets 1,012.20 1,361.10 1,207.90

Other Noncurrent Assets 1,141.70 407.6 157.8

Total Assets 2,471.60 2,135.20 1,637.50

Accounts Payable 463 485.4 444.7

Short-Term Debt 14.3 16.6 15
Other Current Liabilities 261.6 473 461.7

Long-Term Debt 1,466.30 2,127.50 2,156.10

Other Noncurrent Liabilities 0 0 0
Total Liabilities 2,205.20 3,102.50 3,077.50

Preferred Stock Equity 0 0 0

Common Stock Equity 266.3 -967.3 -1,440.00
Total Equity 266.3 -967.3 -1,440.00
Shares Outstanding (mil.) 345.2 357.1 373.2

CashFlowStatement Dec99 Dec00 Dec01

Net Operating Cash Flow -90.9 -130.4 -119.8
Net Investing Cash Flow -922.3 164 -253.3
Net Financing Cash Flow 1,104.10 693.1 106.9
Net Change in Cash 91.4 689.1 -282.2

Cash Dividends Paid 0 0 0

 Dec02 Dec03 Dec04 Dec05 Dec06 Dec07 Dec08 Dec09 Dec10
1 2 3 4 5 6 7

3,932.90 5,263.70 37.00% 34.00% 32.00% 30.00% 25.00% 20.00% 15.00%

72.67% 74.68% 71.68% 68.68% 65.68% 62.68% 59.68% 56.68% 53.68%
22.41% 18.69% 16.69% 14.69% 12.69% 10.69% 8.69% 6.69% 4.69%
2.73 2.86 3.36 3.86 4.36 4.86 5.36 5.86 6.36

549.70 568.20
738.3 1,102.30
112.3 132.1
202.4 293.9
562.7 292.6
1,066.00 1,252.70
27.10% 23.80% 21.30% 18.80% 16.30% 13.80% 11.30% 8.80% 6.30%
239.4 224.3
87.8 78.3
327.2 302.6
-39.2 -46
1.00% 0.87% -1.13% -3.13% -5.13% -7.13% -9.13% -11.13% -13.13%
263.20 18.50
6.69% 0.35%

13.01 81.61 -88.80 -31.99 -19.51 -14.03 -10.96 -8.99 -7.62

3,932.90 5,263.70 7,211.27 9,663.10 12,755.29 16,581.88 20,727.35 24,872.82 28,603.74

2,858.00 3,931.00 5,169.13 6,636.74 8,377.84 10,393.74 12,370.35 14,098.24 15,354.86
881.4 983.7 1,203.44 1,419.35 1,618.44 1,772.33 1,800.87 1,663.59 1,341.05
87.8 78.3 428.65 500.08 584.49 681.73 772.74 848.23 898.84

105.70 270.70 410.04 1,106.92 2,174.52 3,734.07 5,783.38 8,262.76 11,008.99

0 0 0 140.4429 761.083696 1306.926 2024.185 2891.966 3853.148

-1115.7 -705.6589 0 0 0 0 0
105.70 270.70 410.04 966.48 1,413.44 2,427.15 3,759.20 5,370.79 7,155.85

87.8 78.3 428.65 500.08 584.49 681.73 772.74 848.23 898.84

263.20 18.50 283.22 280.63 262.41 209.14 53.84 -153.43 -386.82
55.4 63.2 -81.21 -302.08 -653.85 -1,181.64 -1,891.60 -2,767.37 -3,754.55

-125.1 267.3 636.68 1,488.00 2,389.36 4,081.38 6,369.70 9,139.83 12,196.05

557.12 1,139.37 1,600.92 2,392.91 3,267.89 4,103.14 4,791.02

252,744.63 WACC Calculation

135.4 116.9 Years 1-10 Years 10+
2,277.30 1,945.40 Target D/E 0.30 0.30
Unlevered Beta 2 1.07
250,916.13 Levered Beta 2.39 1.28
387.9 403.4
622.00 Cost of Equity 17.32% 11.76%
Cost of Debt 6.37% 6.37%
WACC 14.28% 10%

1,615.70 1,820.80

135.4 116.9
1,990.40 2,162.00

618.1 819.8
13.3 4.2
434.5 428.6

2,277.30 1,945.40
0 0
3,343.20 3,198.00

0 0
-1,352.80 -1,036.10
-1,352.80 -1,036.10
387.9 403.4

Dec02 Dec03
 174.3 392
-121.7 236.7
106.9 -332
198 364

0 0
 Dec11 Dec12 Dec13 Dec14 Dec15
8 9 10 11 12

15.00% 15.00% 15.00% 15.00% 15.00% 4.00%

50.68% 47.68% 44.68% 41.68% 38.68%
2.69% 0.69% -1.31% -3.31% -5.31%
6.86 7.36 7.86 8.36 8.86

3.80% 1.30% -1.20% -3.70% -6.20%

-15.13% -17.13% -19.13% -21.13% -23.13%

-6.61 -5.84 -5.23 -4.73 -4.32

32,894.31 37,828.45 43,502.72 50,028.13 57,532.35

16,671.26 18,037.10 19,437.58 20,852.38 22,254.26
884.32 260.40 -570.59 -1,656.74 -3,055.90
958.37 1,027.30 1,106.29 1,196.18 1,298.02

14,380.35 18,503.65 23,529.44 29,636.31 37,035.96

5033.121 6476.277 8235.304 10372.708 12962.587

0 0 0 0 0
9,347.23 12,027.37 15,294.14 19,263.60 24,073.38

958.37 1,027.30 1,106.29 1,196.18 1,298.02

-552.10 -758.27 -1013.87 -1329.08 -1716.05
-4,975.62 -6,478.53 -8,320.37 -10,568.99 -13,304.98

15,833.32 20,291.48 25,734.66 32,357.85 40,392.43

997,227.32

5,442.65 6,103.54 6,773.55 7,452.59 209,119.94