Thank you for standing by. Good day, everyone, and welcome to the Amazon.com fourth quarter 2008 financial results teleconference. At this time, all participants are in a listen-only mode. (Operator instructions) Today’s call is being recorded. And for opening remarks, I will be turning the call over to the Vice President of Investor Relations, Mr. Rob Eldridge. Please go ahead, sir.

Hello and welcome to our Q4 ‘08 financial results conference call. Joining us today is Thomas Szkutak, our CFO. Jeff Bezos, our Founder and CEO, and Tom will both be available for Q&A. The following discussion and responses to your questions reflect management’s views as of today, January 29, 2009 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 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 will 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 2007. Now I’ll turn the call over to Tom.

Thanks, Rob. Let me start by reviewing our fourth quarter financial results. Trailing 12-month free cash flow grew 16% to $1.36 billion. Return on invested capital was 41%, down from 55%. ROIC is trailing 12-month 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 446 million shares compared with 435 million. Worldwide revenue grew 18% to $6.7 billion, or 24% excluding the $320 million unfavorable impact from year-over-year changes in foreign exchange rate. Media revenue increased to $3.64 billion, up 9%, or 15% excluding FX. EGM revenue increased to $2.89 billion, up 31%, or 36% excluding FX. Worldwide EGM increased to 43% of worldwide sales, up from 39%. Worldwide unit growth was 28%. Active customer accounts exceeded 88 million, up 16%. Worldwide active seller accounts were more than 1.5 million, up 18%. Seller units were 27% of total units versus 26%. Worldwide gross profit was $1.35 billion, up 15%. Now I’ll discuss operating expenses excluding stock-based compensation. Fulfillment, marketing, technology and content, and G&A combined was $989 million, or 14.7% of sales, down 9 basis points year-over-year. Fulfillment was $530 million, or 7.9% of revenue compared with 8.2%. Tech and content was $236 million, or 3.5% of revenue compared with 3.4%. Now I’ll talk about our segment results. And consistent with prior periods, we do not allocate the segments our stock-based compensation or other operating expense/income, net line item. In the North America segment, revenue grew 18% to $3.63 billion. Media revenue grew 7% to $1.75 billion. EGM revenue grew 30% to $1.73 billion, representing 48% of North America revenues, up from 43%. We are particularly pleased with Kindle demand during the fourth quarter. We want to remind everyone that Kindle revenue and cost are recognized over a two-year period. The Kindle Store contains the largest collection of e-books available anywhere in the world. Selection increased by 45,000 titles in the fourth quarter, bringing the total to 230,000 titles. 103 out of 112 current New York Times Best Sellers are available and, along with most new releases, are priced at $9.99 or less. In addition, the Kindle Store recently added the Arizona Republic, Baltimore Sun, Orange County Register and USA Today and now offers newspapers from eight of the top ten metro areas in the United States. North America gross profit grew 12% to $781 million and gross margin decreased 114 basis points to 21.5%, driven by lower prices for our customers, including free shipping offers in Amazon Prime, and changes in product mix, partially offset by higher other revenue. North America segment operating income declined 15% to $130 million, a 3.6% operating margin. In the International segment, revenue grew 19% to $3.07 billion. Revenue growth was 31%, adjusting for the $308 million year-over-year unfavorable FX impact during the quarter. Media revenue grew 12% to $1.89 billion, or 22% excluding FX. And EGM grew 32% to $1.16 billion, or 46% excluding FX. EGM now represents 38% of international revenues, up from 34%. International gross profit grew 20% to $567 million, or grew 32% excluding the impact from foreign exchange rates, while gross margin increased 23 basis points to 18.5%, driven by improvements in our vendor pricing and increases in 3P product sales, partially offset by lower prices for our customers and changes in product mix. International segment operating income increased 31% to $229 million, a 7.4% operating margin. Excluding the favorable impact from foreign exchange, International segment operating income increased 48%. CSOI grew 9% to $359 million, or 5.4% of revenue, down 44 basis points year-over-year. Excluding the $26 million unfavorable impact from foreign exchange rates, CSOI grew 17%. Unlike CSOI, our GAAP operating income includes stock-based compensation expense and other operating expense. GAAP operating income increased $1 million to $272 million, or 4.1% of net sales. Our income tax expense was $79 million in Q4, or 26% rate for the quarter. In 2008, we paid $53 million in cash taxes. A majority of our tax expense is non-cash because we have current tax benefits and NOLs related to excess stock-based compensation. GAAP net income was $225 million, or $0.52 per diluted share, compared with $207 million and $0.48 per diluted share. Now I’ll discuss the full year results. Revenue grew 29% to $19.17 billion, or 28% excluding $127 million favorable impact from year-over-year changes in FX. North America revenue grew 26% to $10.23 billion and international grew 33% to $8.94 billion, or 31% year-over-year growth, excluding the year-over-year changes in foreign exchange rates. Consolidated segment operating income or CSOI grew 29% to $1.09 billion, or 28% excluding $10 million of favorable year-over-year impact from foreign exchange, and operating margin remained at 5.7%. GAAP operating income grew 28% to $842 million, or 4.4% of net sales. Turning to the balance sheet, cash and marketable securities increased $615 million year-over-year to $3.73 billion. Our cash and marketable securities primarily consist of cash, government, and government agency securities, AAA-rated money market funds, and other investment grade securities. Such amounts are recorded at fair value. During the quarter, we repurchased $2.2 million of our common stock for $100 million. Inventory increased 17% to $1.4 billion, and inventory turns were 12.2, down half a turn from prior year, as we expanded selection, improved in-stock levels globally, and introduced new product categories. Accounts payable increased 29% to $3.59 billion, and accounts payable days increased to 62 from 57 in the prior year. Our investment in net fixed assets increased $311 million from a year ago to $854 million. Our 2008 capital expenditures were $333 million. I will conclude my portion of today’s call with guidance. Incorporated into our guidance are the order trends that we have seen to date and what we believe today to be appropriately conservative assumptions. Our results are inherently unpredictable and may be materially affected by many factors, including the high level of uncertainty surrounding exchange rate fluctuations as well as the global economy and consumer spending. It is not possible to accurately predict demand and therefore our actual results could differ materially from our guidance. As we describe in more detail in our public filings, issues such as marking our Euro-denominated debt to market quarterly, intra-company balances and foreign currencies that settle amongst our subsidiaries, unfavorable resolutions of legal matters and changes to our effective tax rates can all have material effect on guidance. Our guidance assumes that we don’t conclude any additional business acquisitions or investments, record any further revisions to stock-based compensation estimates, and that FX rates remain approximately where they have been recently. For Q1, we expect net sales of between $4.525 billion and $4.925 billion, a growth of between 9% and 19%. This guidance anticipates approximately 600 basis points of negative impact from foreign exchange rates. GAAP operating income to be between $125 million and $210 million, or between 37% decline and 6% growth. This includes approximately $75 million for stock-based compensation and amortization of intangible assets. We anticipate consolidated segment operating income, which excludes stock-based compensation and other operating expense, to be between $200 million and $285 million, or between 23% decline and 10% growth. This guidance anticipates approximately 600 basis points of negative impact from foreign exchange. We anticipate our free cash flow growth rate to trend similar to our operating profit growth rate over time with some variability, including from changes in working capital and excess tax benefits from stock-based compensation. We remain heads down focused on driving a better customer experience through price, selection, and convenience. We believe putting customers first is the only reliable way to create lasting value for shareholders. Thanks. And with that, Rob, let’s move to questions.

Great. Thanks, Tom. Let’s move on to the Q&A portion of the call with Jeff and Tom. Operator, will you please remind our listeners how to initiate a question?

Thank you. (Operator instructions) Our first question this afternoon will come from Scott Devitt with Stifel Nicolaus.

Hi, thanks and congratulations on the continued success. I have two questions if I could. They are a little bit longer term in nature. First, I was wondering if you could just comment on the early progress of your large company focus, cloud computing initiative that you recently launched with Gemini and whether you think that you would pursue further initiatives or partnerships in that area to target enterprise level customers. And then secondly, on Amazon Video, which is now being distributed through several partners to get it towards the TV and it’s now a pay-per-view service, could you just comment on what your long-term ambitions are in terms of a business model potentially shifting from pay-per-view toward a subscription model as more digital content is available? Thanks.

I’ll answer those. As far as – on the first question, we think there is a very significant and meaningful opportunity over time for enterprise level customers with our web services business. This is the Elastic Compute Cloud and the Simple Storage Service are already being used by a number of enterprise level customers, and we expect that trend to continue. On the business models for video, did you say we have a pay-per-view model now? I just wouldn’t want to speculate too much on what we might do in the future.

Thank you.

Our next question comes from Mark Mahaney with Citi. Your line is open.

Great. Thanks. Jeff, just on the Kindle, I know you’re not disclosing a lot on it, but any major surprises from your perspective, maybe in terms of overall usage, any cannibalization, or do you just sense that overall it just materially increase the overall book purchases of customers? And then, Tom, really quickly, did you see material signs of discounting in the quarter? I assume you did. And just thoughts on if your strategy for dealing with significant discounting in the marketplace was different this year than in prior years, given the large third party base you have now. Thank you.

With Kindle sales, we see that when people buy a Kindle, they actually continue to buy the same number of physical books going forward as they did before they owned a Kindle. And then incrementally, they buy about 1.6 to 1.7 electronic books, Kindle books, for every physical book that they buy. So, so far what we’re seeing is very strong incremental book unit sales, which of course we’re very pleased to see. The biggest surprises so far for Kindle have just been the unusually strong demand that we saw in the fourth quarter. We had anticipated strong demand, and what we saw was stronger than that. So we are extremely grateful for that, and we will keep marching forward here.

In terms of your second half of your question, Mark, there is absolutely no change in strategy related to pricing. We are trying to make sure we offer a great value to customers. We operate in a very competitive marketplace. And certainly we saw that in Q4, which is reflected in the gross margins that you see in our Q4 results. So again, no change in strategy, and it was certainly very competitive and that’s reflected in the results that you see.

Thank you, Tom. Thank you, Jeff.

Our next question will come from James Mitchell with Goldman Sachs.

Thank you very much for taking my question. I guess I noticed that your additions drawn under [ph] revenue approximately doubled year-over-year despite Kindle was being out of stock most of the quarter. Could you speak to whether that reflects very strong uptick of Prime or very heavy Kindle sales, the period when they were in stock? And then separately, it looks like your North American media revenue growth decelerated quite sharply from 3Q to 4Q, right? Your international media revenue ex-FX was fairly stable in terms of year-over-year growth rates from 3Q to 4Q. I was wondering if that reflected purely macro economic motives or if there was anything else such as Harry Potter or video game strike there? Thank you.

The other revenue, in addition to the items that you mentioned, contains a number of things, including Prime and our credit card relationships and advertising et cetera. And so we did very solid growth there. In terms of your – can you repeat the second half of your question, James? Sorry.

Sure. It looks that your North American media growth decelerated I think mid-teens year-over-year growth in the third quarter, 7% in the fourth quarter, whereas your international media revenue growth remained at around 20% in both 3Q and 4Q ex-FX. I was wondering if there was anything kind of special behind the divergence in growth paths other than the US economy path slowing more sharply.

Yes – no – we had – it wasn’t just the media. It was across the board. If you look at media and EGM, we had stronger growth in international. We saw growth in total exchange of 31% in international. And we have – we focus on the same things that we focus in North America are the fundamentals, making sure we have great pricing. Certainly Prime is having any impact in international as well as North America, and offering just a great value proposition. Certainly one thing to keep in mind, we look at international though we have launched in addition to adding a lot of selection within existing categories, in all of our categories globally. We’ve launched approximately 25 categories over the past two years or so that certainly have an impact on the growth rates as well.

Thank you.

Our next question comes from Justin Post with Merrill Lynch.

Looks like a lot of offline retail stores are under some pressure, and there is a lot of store closures. Can you talk a little bit about anything you’ve seen in the music category historically from that? Has it helped you at all? And how can you take advantage of maybe some of that next year, any competitive initiatives that might help the company?

I think it’s difficult to say what, if any, short-term impacts you might see from that. And in the long-term, these are – fortunately the markets that we operate in are very large markets and there is room for lots of winners. And so I don’t think there is going to be much impact to the long-term – continue to be a very competitive environment.

Mr. Post, any further questions?

No, that’s all. Thank you.

Thank you. We will move next to Douglas Anmuth with Barclays Capital.

Great. Thanks for taking my questions. Could you talk about how you’ve been impacted or I guess maybe whether you’ve been impacted at all since you’ve begun collecting taxes in New York in the middle part of the year? And then also, what are you seeing in terms of new Prime memberships? Is there any kind of slowdown or deceleration in this type of macro environment? Thanks.

In terms of sales tax, we collect in certainly a number of states in the US, many jurisdictions outside of the US. In fact, approximately half of our business today that we are actually collecting some type of either sales tax or value-added tax. And we have very good businesses in those geographies. And so I can’t comment much beyond that. In terms of Prime, we are very pleased with what we’re seeing in Prime. We have very good subscriber growth and customers like it. We certainly saw that was evidence further in Q4 during the holiday season and reflect in the results that you see for Q4. So again, we’re very pleased. And again, it’s something that we offer in most geographies today, and we’re very pleased with how it’s performing.

Our next question will come from Imran Khan with J.P. Morgan.

Yes, hi. Thank you for taking my questions. Two questions. First, active seller accounts were up 18% on a year-over-year basis. If my memory is correct, it accelerated from 17% in Q3, better understanding what’s really driving the active seller accounts so much for you guys. Second question, it’s been reported that DVD sales are pretty weak. And I was wondering if you are seeing any weakness on the DVD sales. In fact, those changes (inaudible) that, and any comments on Blu-ray. Thank you.

Sure. In terms of the active sellers, as we’ve talked about in the past, we have three customer sets, are the consumers, sellers, and developers. And we start with those customers in each of the things that we do and work backwards. And we’ve focused very heavily on the seller experience over the last several years, and that’s what’s we believe is driving the active seller account growth. In terms of categories, any accounts on categories within the breakouts that we have, like for DVD, I can’t comment much. And – but certainly, we think we like the – you mentioned Blu-ray, we like the Blu-ray business. And we certainly have great selection in DVDs as well as – in the original format as well as Blu-ray. And you are certainly seeing the customers like that. But beyond that, there is not a lot I can add to it.

Okay. Thank you.

We will take our next question from Jeetil Patel with Deutsche Bank.

Great. Thank you. Congrats. Two questions. In the current environment, how much data do you have or analysis do you actually do in your customer base to figure out spending propensities by, say, geographies, zip codes, vintage of when they were added, household income to better forecast the business. Are you getting to that granular level of detail to assess kind of your trend lines of business as you look at Q1 guidance and I guess how you look internally into budgets? And then second, does the current environment, as enterprise level spending slows down, create increased interest or open up the conversation around the web services? What you can provide for enterprises these days, or can you just comment a little bit more about how those conversations are progressing?

In terms of the first part of your question, it’s certainly a very data-driven business. And we look at many, many different things, primarily though from a – when you think about some of the data that we do look at, it’s very heavily focused on the customer experience side, how do we make sure that we are priced appropriately in our products, how we make sure that we’re serving our customers the way we want to and reducing all the customer facing defects in every way that we touch the customer. And so those are the areas that we focus very, very heavily on. And certainly we look at other metrics as you would expect, but that’s really where the focus is. Could you repeat the web services question?

Yes. On web services, I guess there is – you lower the cost of a computing for companies that utilize the service. I’m curious, as I guess the budgets become tighter as you look ahead for enterprises out there, does that open up the conversation for what you can provide larger companies on web services, or is that still ways to go in terms of that conversation with larger Fortune 500 accounts in the market?

I think it does open up those conversations. The people are, in this macro environment, looking for ways to save money, and cloud computing does do that. So it improves utilization, improves deficiency. There is a lot that can be done there. And so if you’re looking for a silver lining in the macro environment, I think that is – what you are suggesting is correct.

Do you think it’s still too early to see the impact of that in terms of, I guess, conversations? Or are we just still too early in terms of the business cycle and the downturn?

No, I think on the edges, you’re seeing it already. And I suspect that that momentum will continue.

Thanks.

We will go next to Jeffrey Lindsay with Sanford Bernstein.

Thank you for taking my question. Could you share with us any of your thinking on your next product categories and your geographic priorities going forward, international versus the US, why you see the kind of expansion opportunities to drive growth going forward? And then could you just mention – could I ask Tom – do you plan to put any hedging programs in place? Thank you.

In terms of the product categories and geographies, fortunately we have a longstanding practice of not talking about which categories will launch next. So I apologize, I can't help on that. But again, we – in addition, just as a reminder, in addition to looking to new categories to add selection, we’re continually adding selection within the categories that we’re in. In terms of hedging, we are not doing really any hedging today using instruments. We have certainly a lot of natural hedging. And what I mean by that we are predominantly in those geographies that we operate in. We’re pricing in local currency. The vast majority of both the COGS as well as operating costs are in local currency. We’re certainly exposed to the income and the cash flows that we generate in those geographies, but we’re not hedging those. That’s something that’s been consistent for sometime, and again because we’re taking as long-term view and again trying to approach it mostly from a natural perspective.

Thank you.

Gene Munster with Piper Jaffray, your line is open.

Good afternoon, and congratulations on impressing results. If you could talk a little bit about the margin side of the equation? I know you had briefly touched on it, but a lot of the offline retailers had given up top line – given up bottom line to hit top line. And you guys got the best of both worlds. It sounds like that going forward you don’t see any changes into how you think about gross margin. If the environment would get progressively more difficult, do you see yourself potentially changing some of your perspective on margins and intend to keep the traffic in the volume and keep building the platform that’s been successful?

There is no – again, we operate in a competitive environment. Like we talked about earlier as well as in the past calls that we’ve had, we’re going to offer great values to customers. You can expect that to continue going forward. We certainly did see an impact and you can see that our gross margins during Q4. We had a larger decline certainly than we’ve had year-over-year than we’ve had – if you look at the trailing 12-month trend, and that’s one of the reasons that certainly pricing is certainly a part of that, but certainly a foundation of our models to make sure that we offer great value to customers and we’ll continue to do so going forward.

Thank you.

Youssef Squali with Jefferies & Company.

Thank you very much. Just a follow-up on the same kind of line of questioning. As – I guess with the ongoing closure of brick-and-mortar stores, short-term not within next two years as you were talking about earlier, but short-term within the next three to six months, what is the risk to pricing from just the –out of inventory that’s likely to persist from the troubled retailers through the summer? How much of that have you kind of modeled into your numbers? And then a quick question for Tom. The midpoint of Q1 implies about a 14% in revenue growth and about 3.5% margin versus 4.8% in Q1 of last year, where do you see the most pressure on the P&L? Is it on the gross margin side or in OpEx? Thanks.

In terms of the first part of your question, that’s really hard to know. And so if you look at our Q1 guidance, you can see that we’ve given a pretty wide range. If you look at the high end of the range, you can see that the growth rate, excluding the impact from foreign exchange rates, would be 25%, little bit above where we came in in Q4. If you look at the bottom line CSOI, the growth rate excluding the impact of exchange is approximately when we came in again in Q4. But again it’s a wide range. And that wide range reflects both the macro environment and the uncertainty. And so we think it’s appropriately conservative but reflects that uncertainty.

And Tom?

Mr. Squali, any further questions, sir?

Yes. Maybe just a follow-up on the second question for Tom about the impacts on the P&L from the – what the implied guidance implies? Is there more of a pressure on gross margin or the P&L – I’m sorry – or OpEx?

Yes. In terms of – we’re not giving line item detail in terms of our guidance range. But if you take a look at Q4, you can see that our operating margins were down year-over-year. And that was largely driven by gross margins being down. All that said, we still had growth in CSOI as well as free cash flow, and the revenue growth of 24% excluding the impact from foreign exchange rates. So that’s what we saw in Q4. And we’ll have to get back to you when we close the quarter and share with you what happened in Q1.

Okay. Thanks a lot.

We will take our next question from Spencer Wang with Credit Suisse.

Thanks. Good afternoon. So the North American operating expenses were up about 19% year-over-year. I know that includes a lot of the allocation for the technology and content cost. But I was wondering if you could just speak to excluding some of the growth initiatives like Kindle, what was the kind of underlying cost growth in North America. And then secondly, I know you guys bought back about $100 million of stock in the fourth quarter, which was I think the first time all year you bought back stock. Can you just help us understand how you’d be redeploying your free cash flow in ’09? Thank you.

In terms of the first question, we haven’t split out the operating expenses by segment, but you can see it in total. You can see that we did get some leverage in our total operating expense. One thing to keep in mind is, when you look at our operating expense for Q4, it does not reflect just what happened in Q4. In other words, we were adding resources throughout the year in 2008. You can see from looking at the headcount that we had in – the reporting that we show in the press release that certainly our headcount growth slowed in Q4 – sequentially from Q3 to Q4. And so again, we’re not giving line item details, but you can look at the totals between G&A, marketing, technology and content, and G&A for our business. In terms of the – from a cash standpoint, we’re not – there is not a lot I can comment on going forward. What I can tell you related to the $100 million was an opportunistic buy. And we’re being what we believe to be appropriately conservative with our cash.

Great. Thank you.

Sandeep Aggarwal with Collins Stewart.

Thanks for taking my question. Just if you can talk about, Jeff, on the Prime members in terms of as they enter from one year to second year, have you seen their propensity to buy changing and what about the average selling price? And we’ll appreciate any comments in terms of the traction you are seeing with Fulfillment by Amazon.

Sure. One of the things that we see with Prime in terms of customer behavior is that Amazon Prime members tend to buy a wider range of categories, of product categories. And we also see incremental lift from those customers. I think both of those things you would expect to see given the people have made a commitment by buying the $79 membership and equivalent kinds of memberships for different prices around the world. So anyway, that’s – Amazon Prime is doing what we hoped it would do in that regard. And we’re pleased with the traction. We work very hard to make sure that the customer experience for Prime members makes it worth their while to pay that $79 and to renew that membership. Fulfillment by Amazon is getting very good traction. And one of the nice kind of closing of a feedback cycle there is that you get now some of the third party sales are eligible for Amazon Prime. So, to the degree that customers like Amazon Prime and to the degree that sellers like Fulfillment by Amazon, they are closing that loop and helping each other. So we are very pleased with both of those programs. Every time a third party seller starts using Fulfillment by Amazon, their sales go up, which the seller likes. And the customers all of a sudden get Amazon Prime membership privileges on those third party items, which the consumer likes. So the two things that really is nice to close that loop, and we’re excited about the potential that will keep pushing ahead on it.

Our next question comes from Heath Terry with FBR Capital Markets.

Great, thank you. Jeff, can you look at the third party efforts in Europe? How would you compare the growth and the product offering and the composition of your partners there to where the US was at the same stage of that business? And then also if you can give us an idea of if you’ve seen any attrition in your third party seller base in the US or Europe that you might feel would be related to the economy, I’d appreciate it.

Anecdotally I don’t think we have seen the kind of attrition that you’re talking about. We are – our third party business continues to do well. And as Tom said earlier, we’ve been working for many years on the seller experience and we will continue to work on that. And with things like Fulfillment by Amazon, it is one of the ways that we work on improving that seller experience.

Great. And then as far as how Europe compares to the US at the same point and your development of that offering there?

We don’t break that out, at least quantitatively. But we are very happy with the way that third party sellers are – how that’s performing globally.

Great. Thank you.

Jim Friedland with Cowen and Company. Please go ahead.

The P&L from Q4, there was some leverage than usual gains on a year-over-year basis in Fulfillment and a little bit in G&A as well. And I was just wondering if there is anything unique going on there, were there any one-time items.

In fulfillment and G&A –

Yes.

No, not really. I think it’s – you’re seeing certainly – we gave a wide range of guidance. We were in the upper end of the guidance range. And we’ve got decent leverage on our operating costs as a result.

And in terms of the utilization of your Fulfillment synergy, you’ve invested a lot lately. How much incremental investment do you need there? Is it something that you need to spend less on versus previous years or more? And I’m not –

I appreciate it. We did not give total year guidance, and we just gave Q1 guidance. So in terms of moving forward, there is not a lot I can talk to there. And again the reason why we didn’t give guidance is because of the uncertainty in macro environment.

Fair enough. Thanks.

Our final question will come from James Mitchell with Goldman Sachs.

Great. Thank you for taking a further question from me. It relates to the accounts payable. It looks like your accounts payable days increased from 57 to 62 year-on-year. There’s obviously been a lot of anecdotes about working capital tightness among suppliers. I wonder if you could talk about whether achieving the increase in accounts payable days in this environment was unusually challenging or not, given I assume (inaudible) big well-capitalized buyers. Thanks.

We work with our suppliers for our overall terms. The payment terms happen to be just one piece of that. And we continue to work and partner with those suppliers. That was really the result of a lot of work that happened throughout the year and Q4. There is not a lot more beyond that I could comment.

Thank you.

And that would conclude our question-and-answer session. I would like to turn the program back to our speakers for any additional or closing comments.

Thank you for joining us on the call today and your questions. A replay will be available on our Investor Relations website at least through the end of the quarter. We appreciate your interest in Amazon.com and look forward to talking with you again next quarter. Thank you.

Thank you.

Thank you, everyone, for your participation. And you may now disconnect.