x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 91-1646860 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | x | Accelerated filer | ¨ | ||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Page | ||
PART I. FINANCIAL INFORMATION | ||
Item 1 | ||
Item 2 | ||
Item 3 | ||
Item 4 | ||
PART II. OTHER INFORMATION | ||
Item 1 | ||
Item 1A | ||
Item 2 | ||
Item 3 | ||
Item 4 | ||
Item 5 | ||
Item 6 | ||
Item 1. | Financial Statements |
Three Months Ended March 31, | Twelve Months Ended March 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | $ | 15,890 | $ | 14,557 | $ | 10,237 | $ | 5,074 | |||||||
OPERATING ACTIVITIES: | |||||||||||||||
Net income (loss) | 513 | (57 | ) | 1,166 | (405 | ) | |||||||||
Adjustments to reconcile net income (loss) to net cash from operating activities: | |||||||||||||||
Depreciation of property and equipment, including internal-use software and website development, and other amortization, including capitalized content costs | 1,827 | 1,426 | 6,682 | 5,162 | |||||||||||
Stock-based compensation | 544 | 407 | 2,257 | 1,582 | |||||||||||
Other operating expense (income), net | 43 | 44 | 155 | 139 | |||||||||||
Losses (gains) on sales of marketable securities, net | 2 | 1 | 6 | (3 | ) | ||||||||||
Other expense (income), net | (52 | ) | 91 | 102 | 203 | ||||||||||
Deferred income taxes | 11 | (2 | ) | 94 | (136 | ) | |||||||||
Excess tax benefits from stock-based compensation | (207 | ) | (22 | ) | (305 | ) | 94 | ||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Inventories | 769 | 721 | (2,138 | ) | (1,172 | ) | |||||||||
Accounts receivable, net and other | 412 | 441 | (1,784 | ) | (1,324 | ) | |||||||||
Accounts payable | (5,770 | ) | (4,249 | ) | 2,773 | 2,184 | |||||||||
Accrued expenses and other | (956 | ) | (940 | ) | 893 | 500 | |||||||||
Additions to unearned revenue | 2,814 | 1,803 | 8,412 | 5,144 | |||||||||||
Amortization of previously unearned revenue | (2,110 | ) | (1,163 | ) | (7,055 | ) | (4,123 | ) | |||||||
Net cash provided by (used in) operating activities | (2,160 | ) | (1,499 | ) | 11,258 | 7,845 | |||||||||
INVESTING ACTIVITIES: | |||||||||||||||
Purchases of property and equipment, including internal-use software and website development, net | (1,179 | ) | (871 | ) | (4,897 | ) | (4,684 | ) | |||||||
Acquisitions, net of cash acquired, and other | (16 | ) | (365 | ) | (446 | ) | (1,345 | ) | |||||||
Sales and maturities of marketable securities | 1,138 | 375 | 3,788 | 3,131 | |||||||||||
Purchases of marketable securities | (636 | ) | (986 | ) | (3,741 | ) | (3,091 | ) | |||||||
Net cash provided by (used in) investing activities | (693 | ) | (1,847 | ) | (5,296 | ) | (5,989 | ) | |||||||
FINANCING ACTIVITIES: | |||||||||||||||
Excess tax benefits from stock-based compensation | 207 | 22 | 305 | (94 | ) | ||||||||||
Proceeds from long-term debt and other | 9 | 183 | 179 | 6,478 | |||||||||||
Repayments of long-term debt and other | (175 | ) | (316 | ) | (1,512 | ) | (760 | ) | |||||||
Principal repayments of capital lease obligations | (801 | ) | (502 | ) | (2,761 | ) | (1,537 | ) | |||||||
Principal repayments of finance lease obligations | (29 | ) | (39 | ) | (111 | ) | (132 | ) | |||||||
Net cash provided by (used in) financing activities | (789 | ) | (652 | ) | (3,900 | ) | 3,955 | ||||||||
Foreign-currency effect on cash and cash equivalents | 222 | (322 | ) | 171 | (648 | ) | |||||||||
Net increase (decrease) in cash and cash equivalents | (3,420 | ) | (4,320 | ) | 2,233 | 5,163 | |||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 12,470 | $ | 10,237 | $ | 12,470 | $ | 10,237 | |||||||
SUPPLEMENTAL CASH FLOW INFORMATION: | |||||||||||||||
Cash paid for interest on long-term debt | $ | 2 | $ | 17 | $ | 310 | $ | 90 | |||||||
Cash paid for interest on capital and finance lease obligations | 47 | 32 | 168 | 102 | |||||||||||
Cash paid for income taxes (net of refunds) | 139 | 55 | 357 | 194 | |||||||||||
Property and equipment acquired under capital leases | 875 | 954 | 4,638 | 4,246 | |||||||||||
Property and equipment acquired under build-to-suit leases | 351 | 103 | 793 | 897 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Net product sales | $ | 20,581 | $ | 17,084 | |||
Net service sales | 8,547 | 5,633 | |||||
Total net sales | 29,128 | 22,717 | |||||
Operating expenses (1): | |||||||
Cost of sales | 18,866 | 15,395 | |||||
Fulfillment | 3,687 | 2,759 | |||||
Marketing | 1,436 | 1,083 | |||||
Technology and content | 3,526 | 2,754 | |||||
General and administrative | 497 | 427 | |||||
Other operating expense (income), net | 45 | 44 | |||||
Total operating expenses | 28,057 | 22,462 | |||||
Operating income | 1,071 | 255 | |||||
Interest income | 21 | 11 | |||||
Interest expense | (117 | ) | (115 | ) | |||
Other income (expense), net | 81 | (130 | ) | ||||
Total non-operating income (expense) | (15 | ) | (234 | ) | |||
Income (loss) before income taxes | 1,056 | 21 | |||||
Provision for income taxes | (475 | ) | (71 | ) | |||
Equity-method investment activity, net of tax | (68 | ) | (7 | ) | |||
Net income (loss) | $ | 513 | $ | (57 | ) | ||
Basic earnings per share | $ | 1.09 | $ | (0.12 | ) | ||
Diluted earnings per share | $ | 1.07 | $ | (0.12 | ) | ||
Weighted-average shares used in computation of earnings per share: | |||||||
Basic | 471 | 465 | |||||
Diluted | 481 | 465 | |||||
_____________ | |||||||
(1) Includes stock-based compensation as follows: | |||||||
Fulfillment | $ | 116 | $ | 90 | |||
Marketing | 56 | 35 | |||||
Technology and content | 317 | 233 | |||||
General and administrative | 55 | 49 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Net income (loss) | $ | 513 | $ | (57 | ) | ||
Other comprehensive income (loss): | |||||||
Foreign currency translation adjustments, net of tax of $(24) and $(1) | 102 | (243 | ) | ||||
Net change in unrealized gains (losses) on available-for-sale securities: | |||||||
Unrealized gains (losses), net of tax of $0 and $0 | 6 | 1 | |||||
Reclassification adjustment for losses (gains) included in “Other income (expense), net,” net of tax of $(1) and $0 | 1 | 1 | |||||
Net unrealized gains (losses) on available-for-sale securities | 7 | 2 | |||||
Total other comprehensive income (loss) | 109 | (241 | ) | ||||
Comprehensive income (loss) | $ | 622 | $ | (298 | ) |
March 31, 2016 | December 31, 2015 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 12,470 | $ | 15,890 | |||
Marketable securities | 3,389 | 3,918 | |||||
Inventories | 9,582 | 10,243 | |||||
Accounts receivable, net and other | 5,072 | 5,654 | |||||
Total current assets | 30,513 | 35,705 | |||||
Property and equipment, net | 23,308 | 21,838 | |||||
Goodwill | 3,785 | 3,759 | |||||
Other assets | 3,522 | 3,445 | |||||
Total assets | $ | 61,128 | $ | 64,747 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 14,990 | $ | 20,397 | |||
Accrued expenses and other | 9,431 | 10,372 | |||||
Unearned revenue | 3,766 | 3,118 | |||||
Total current liabilities | 28,187 | 33,887 | |||||
Long-term debt | 8,219 | 8,227 | |||||
Other long-term liabilities | 9,966 | 9,249 | |||||
Commitments and contingencies (Note 3) | |||||||
Stockholders’ equity: | |||||||
Preferred stock, $0.01 par value: | |||||||
Authorized shares — 500 | |||||||
Issued and outstanding shares — none | — | — | |||||
Common stock, $0.01 par value: | |||||||
Authorized shares — 5,000 | |||||||
Issued shares — 495 and 494 | |||||||
Outstanding shares — 472 and 471 | 5 | 5 | |||||
Treasury stock, at cost | (1,837 | ) | (1,837 | ) | |||
Additional paid-in capital | 14,144 | 13,394 | |||||
Accumulated other comprehensive loss | (614 | ) | (723 | ) | |||
Retained earnings | 3,058 | 2,545 | |||||
Total stockholders’ equity | 14,756 | 13,384 | |||||
Total liabilities and stockholders’ equity | $ | 61,128 | $ | 64,747 |
Three Months Ended March 31, | |||||
2016 | 2015 | ||||
Shares used in computation of basic earnings per share | 471 | 465 | |||
Total dilutive effect of outstanding stock awards | 10 | — | |||
Shares used in computation of diluted earnings per share | 481 | 465 |
March 31, 2016 | December 31, 2015 | ||||||||||||||||||
Cost or Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Total Estimated Fair Value | Total Estimated Fair Value | |||||||||||||||
Cash | $ | 7,602 | $ | — | $ | — | $ | 7,602 | $ | 6,201 | |||||||||
Level 1 securities: | |||||||||||||||||||
Money market funds | 5,179 | — | — | 5,179 | 8,025 | ||||||||||||||
Equity securities | 3 | 11 | — | 14 | 15 | ||||||||||||||
Level 2 securities: | |||||||||||||||||||
Foreign government and agency securities | 59 | — | — | 59 | 49 | ||||||||||||||
U.S. government and agency securities | 2,704 | 3 | (2 | ) | 2,705 | 5,167 | |||||||||||||
Corporate debt securities | 455 | 2 | (1 | ) | 456 | 477 | |||||||||||||
Asset-backed securities | 111 | — | (1 | ) | 110 | 117 | |||||||||||||
Other fixed income securities | 45 | — | — | 45 | 42 | ||||||||||||||
$ | 16,158 | $ | 16 | $ | (4 | ) | $ | 16,170 | $ | 20,093 | |||||||||
Less: Restricted cash, cash equivalents, and marketable securities (1) | (311 | ) | (285 | ) | |||||||||||||||
Total cash, cash equivalents, and marketable securities | $ | 15,859 | $ | 19,808 |
(1) | We are required to pledge or otherwise restrict a portion of our cash, cash equivalents, and marketable securities as collateral for standby and trade letters of credit, guarantees, debt, real estate leases, and amounts due to third-party sellers in certain jurisdictions. We classify cash, cash equivalents, and marketable securities with use restrictions of less than twelve months as “Accounts receivable, net and other” and of twelve months or longer as non-current “Other assets” on our consolidated balance sheets. See “Note 3 — Commitments and Contingencies.” |
Amortized Cost | Estimated Fair Value | ||||||
Due within one year | $ | 7,135 | $ | 7,137 | |||
Due after one year through five years | 1,175 | 1,176 | |||||
Due after five years through ten years | 92 | 92 | |||||
Due after ten years | 151 | 149 | |||||
Total | $ | 8,553 | $ | 8,554 |
Nine Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | Thereafter | Total | |||||||||||||||||||||
Debt principal and interest | $ | 367 | $ | 1,322 | $ | 310 | $ | 1,272 | $ | 246 | $ | 9,157 | $ | 12,674 | |||||||||||||
Capital lease obligations, including interest (1) | 2,519 | 2,833 | 1,577 | 425 | 185 | 93 | 7,632 | ||||||||||||||||||||
Finance lease obligations, including interest (2) | 130 | 173 | 177 | 180 | 183 | 1,563 | 2,406 | ||||||||||||||||||||
Operating leases | 1,030 | 982 | 872 | 769 | 687 | 2,599 | 6,939 | ||||||||||||||||||||
Unconditional purchase obligations (3) | 483 | 597 | 445 | 200 | 72 | 28 | 1,825 | ||||||||||||||||||||
Other commitments (4) (5) | 820 | 418 | 283 | 216 | 176 | 1,583 | 3,496 | ||||||||||||||||||||
Total commitments | $ | 5,349 | $ | 6,325 | $ | 3,664 | $ | 3,062 | $ | 1,549 | $ | 15,023 | $ | 34,972 |
(1) | Excluding interest, current capital lease obligations of $3.2 billion and $3.0 billion are recorded within “Accrued expenses and other” as of March 31, 2016, and December 31, 2015, and $4.2 billion are recorded within “Other long-term liabilities” as of March 31, 2016, and December 31, 2015. |
(2) | Excluding interest, current finance lease obligations of $103 million and $99 million are recorded within “Accrued expenses and other” as of March 31, 2016, and December 31, 2015, and $1.8 billion and $1.7 billion are recorded within “Other long-term liabilities” as of March 31, 2016, and December 31, 2015. |
(3) | Includes unconditional purchase obligations related to long-term agreements to acquire and license digital media content that are not reflected on the consolidated balance sheets. For those agreements with variable terms, we do not estimate the total obligation beyond any minimum quantities and/or pricing as of the reporting date. Purchase obligations associated with renewal provisions solely at the option of the content provider are included to the extent such commitments are fixed or a minimum amount is specified. |
(4) | Includes the estimated timing and amounts of payments for rent and tenant improvements associated with build-to-suit lease arrangements and equipment lease arrangements that have not been placed in service and digital media content liabilities associated with long-term digital media content assets with initial terms greater than one year. |
(5) | Excludes $1.3 billion of tax contingencies for which we cannot make a reasonably reliable estimate of the amount and period of payment, if any. |
March 31, 2016 | December 31, 2015 | ||||||
1.20% Notes due on November 29, 2017 (1) | $ | 1,000 | $ | 1,000 | |||
2.50% Notes due on November 29, 2022 (1) | 1,250 | 1,250 | |||||
2.60% Notes due on December 5, 2019 (2) | 1,000 | 1,000 | |||||
3.30% Notes due on December 5, 2021 (2) | 1,000 | 1,000 | |||||
3.80% Notes due on December 5, 2024 (2) | 1,250 | 1,250 | |||||
4.80% Notes due on December 5, 2034 (2) | 1,250 | 1,250 | |||||
4.95% Notes due on December 5, 2044 (2) | 1,500 | 1,500 | |||||
Other long-term debt | 155 | 312 | |||||
Total debt | 8,405 | 8,562 | |||||
Less current portion of long-term debt | (90 | ) | (238 | ) | |||
Face value of long-term debt | $ | 8,315 | $ | 8,324 |
(1) | Issued in November 2012, effective interest rates of the 2017 and 2022 Notes were 1.38% and 2.66%. |
(2) | Issued in December 2014, effective interest rates of the 2019, 2021, 2024, 2034, and 2044 Notes were 2.73%, 3.43%, 3.90%, 4.92%, and 5.11%. |
Number of Units | Weighted-Average Grant-Date Fair Value | |||||
Outstanding as of December 31, 2015 | 18.9 | $ | 362 | |||
Units granted | 0.9 | 566 | ||||
Units vested | (1.0 | ) | 271 | |||
Units forfeited | (0.6 | ) | 374 | |||
Outstanding as of March 31, 2016 | 18.2 | $ | 377 |
Nine Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | Thereafter | Total | ||||||||||||||
Scheduled vesting—restricted stock units | 5.3 | 6.8 | 3.8 | 1.9 | 0.2 | 0.2 | 18.2 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
North America | |||||||
Net sales | $ | 16,996 | $ | 13,406 | |||
Segment operating expenses | 16,072 | 12,889 | |||||
Segment operating income (loss) before stock-based compensation and other | 924 | 517 | |||||
Stock-based compensation and other | 336 | 263 | |||||
Operating income (loss) | $ | 588 | $ | 254 | |||
International | |||||||
Net sales | $ | 9,566 | $ | 7,745 | |||
Segment operating expenses | 9,546 | 7,821 | |||||
Segment operating income (loss) before stock-based compensation and other | 20 | (76 | ) | ||||
Stock-based compensation and other | 141 | 118 | |||||
Operating income (loss) | $ | (121 | ) | $ | (194 | ) | |
AWS | |||||||
Net sales | $ | 2,566 | $ | 1,566 | |||
Segment operating expenses | 1,850 | 1,301 | |||||
Segment operating income (loss) before stock-based compensation and other | 716 | 265 | |||||
Stock-based compensation and other | 112 | 70 | |||||
Operating income (loss) | $ | 604 | $ | 195 | |||
Consolidated | |||||||
Net sales | $ | 29,128 | $ | 22,717 | |||
Segment operating expenses | 27,468 | 22,011 | |||||
Segment operating income (loss) before stock-based compensation and other | 1,660 | 706 | |||||
Stock-based compensation and other | 589 | 451 | |||||
Operating income (loss) | 1,071 | 255 | |||||
Total non-operating income (expense) | (15 | ) | (234 | ) | |||
Provision for income taxes | (475 | ) | (71 | ) | |||
Equity-method investment activity, net of tax | (68 | ) | (7 | ) | |||
Net income (loss) | $ | 513 | $ | (57 | ) |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Net Sales: | |||||||
Media | $ | 5,688 | $ | 5,289 | |||
Electronics and other general merchandise | 20,545 | 15,628 | |||||
AWS | 2,566 | 1,566 | |||||
Other (1) | 329 | 234 | |||||
Consolidated | $ | 29,128 | $ | 22,717 |
(1) | Includes sales from non-retail activities, such as certain advertising services and our co-branded credit card agreements. |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three Months Ended March 31, | Twelve Months Ended March 31, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Cash provided by (used in): | |||||||||||||||
Operating activities | $ | (2,160 | ) | $ | (1,499 | ) | $ | 11,258 | $ | 7,845 | |||||
Investing activities | (693 | ) | (1,847 | ) | (5,296 | ) | (5,989 | ) | |||||||
Financing activities | (789 | ) | (652 | ) | (3,900 | ) | 3,955 |
(1) | Inventory turnover is the quotient of trailing twelve month cost of sales to average inventory over five quarter ends. |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Net Sales: | |||||||
North America | $ | 16,996 | $ | 13,406 | |||
International | 9,566 | 7,745 | |||||
AWS | 2,566 | 1,566 | |||||
Total consolidated | $ | 29,128 | $ | 22,717 | |||
Year-over-year Percentage Growth: | |||||||
North America | 27 | % | 24 | % | |||
International | 24 | (2 | ) | ||||
AWS | 64 | 49 | |||||
Total consolidated | 28 | 15 | |||||
Year-over-year Percentage Growth, excluding the effect of foreign exchange rates: | |||||||
North America | 27 | % | 24 | % | |||
International | 26 | 14 | |||||
AWS | 64 | 49 | |||||
Total consolidated | 29 | 22 | |||||
Net Sales Mix: | |||||||
North America | 58 | % | 59 | % | |||
International | 33 | 34 | |||||
AWS | 9 | 7 | |||||
Total consolidated | 100 | % | 100 | % |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Operating Income (Loss): | |||||||
North America | $ | 588 | $ | 254 | |||
International | (121 | ) | (194 | ) | |||
AWS | 604 | 195 | |||||
Total consolidated | $ | 1,071 | $ | 255 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Outbound Shipping Activity: | |||||||
Shipping revenue (1)(2)(3) | $ | 1,820 | $ | 1,299 | |||
Shipping costs (4) | (3,275 | ) | (2,309 | ) | |||
Net shipping cost | $ | (1,455 | ) | $ | (1,010 | ) | |
Year-over-year Percentage Growth: | |||||||
Shipping revenue | 40 | % | 53 | % | |||
Shipping costs | 42 | 26 | |||||
Net shipping cost | 44 | 3 |
(1) | Excludes amounts charged on shipping activities by third-party sellers where we do not provide the fulfillment service. |
(2) | Includes a portion of amounts earned from Amazon Prime memberships. |
(3) | Includes amounts earned from Fulfillment by Amazon programs related to shipping services. |
(4) | Includes sortation and delivery center costs. |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Net Sales: | |||||||
North America | |||||||
Media | $ | 3,208 | $ | 2,969 | |||
Electronics and other general merchandise | 13,511 | 10,250 | |||||
Other (1) | 277 | 187 | |||||
Total North America | $ | 16,996 | $ | 13,406 | |||
International | |||||||
Media | $ | 2,480 | $ | 2,320 | |||
Electronics and other general merchandise | 7,034 | 5,378 | |||||
Other (1) | 52 | 47 | |||||
Total International | $ | 9,566 | $ | 7,745 | |||
Year-over-year Percentage Growth: | |||||||
North America | |||||||
Media | 8 | % | 5 | % | |||
Electronics and other general merchandise | 32 | 31 | |||||
Other | 48 | 22 | |||||
Total North America | 27 | 24 | |||||
International | |||||||
Media | 7 | % | (12 | )% | |||
Electronics and other general merchandise | 31 | 4 | |||||
Other | 12 | (12 | ) | ||||
Total International | 24 | (2 | ) | ||||
Year-over-year Percentage Growth, excluding the effect of foreign exchange rates: | |||||||
North America | |||||||
Media | 8 | % | 5 | % | |||
Electronics and other general merchandise | 32 | 31 | |||||
Other | 48 | 22 | |||||
Total North America | 27 | 24 | |||||
International | |||||||
Media | 9 | % | 2 | % | |||
Electronics and other general merchandise | 33 | 21 | |||||
Other | 15 | 2 | |||||
Total International | 26 | 14 |
(1) | Includes sales from non-retail activities, such as certain advertising services and our co-branded credit card agreements. |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Operating Expenses: | |||||||
Cost of sales | $ | 18,866 | $ | 15,395 | |||
Fulfillment | 3,687 | 2,759 | |||||
Marketing | 1,436 | 1,083 | |||||
Technology and content | 3,526 | 2,754 | |||||
General and administrative | 497 | 427 | |||||
Other operating expense (income), net | 45 | 44 | |||||
Total operating expenses | $ | 28,057 | $ | 22,462 | |||
Year-over-year Percentage Growth: | |||||||
Cost of sales | 23 | % | 10 | % | |||
Fulfillment | 34 | 19 | |||||
Marketing | 33 | 25 | |||||
Technology and content | 28 | 38 | |||||
General and administrative | 16 | 31 | |||||
Other operating expense (income), net | 2 | 27 | |||||
Percent of Net Sales: | |||||||
Cost of sales | 64.8 | % | 67.8 | % | |||
Fulfillment | 12.7 | 12.1 | |||||
Marketing | 4.9 | 4.8 | |||||
Technology and content | 12.1 | 12.1 | |||||
General and administrative | 1.7 | 1.9 | |||||
Other operating expense (income), net | 0.2 | 0.2 |
Three Months Ended March 31, | |||||||||||||||||||||||
2016 | 2015 | ||||||||||||||||||||||
At Prior Year Rates (1) | Exchange Rate Effect (2) | As Reported | At Prior Year Rates (1) | Exchange Rate Effect (2) | As Reported | ||||||||||||||||||
Net sales | $ | 29,338 | $ | (210 | ) | $ | 29,128 | $ | 24,005 | $ | (1,288 | ) | $ | 22,717 | |||||||||
Operating expenses | 28,317 | (260 | ) | 28,057 | 23,727 | (1,265 | ) | 22,462 | |||||||||||||||
Operating income (loss) | 1,021 | 50 | 1,071 | 278 | (23 | ) | 255 |
(1) | Represents the outcome that would have resulted had foreign exchange rates in the reported period been the same as those in effect in the comparable prior year period for operating results. |
(2) | Represents the increase or decrease in reported amounts resulting from changes in foreign exchange rates from those in effect in the comparable prior year period for operating results. |
Twelve Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Net cash provided by (used in) operating activities | $ | 11,258 | $ | 7,845 | |||
Purchases of property and equipment, including internal-use software and website development, net | (4,897 | ) | (4,684 | ) | |||
Free cash flow | $ | 6,361 | $ | 3,161 | |||
Net cash provided by (used in) investing activities | $ | (5,296 | ) | $ | (5,989 | ) | |
Net cash provided by (used in) financing activities | $ | (3,900 | ) | $ | 3,955 |
Twelve Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Net cash provided by (used in) operating activities | $ | 11,258 | $ | 7,845 | |||
Purchases of property and equipment, including internal-use software and website development, net | (4,897 | ) | (4,684 | ) | |||
Principal repayments of capital lease obligations | (2,761 | ) | (1,537 | ) | |||
Principal repayments of finance lease obligations | (111 | ) | (132 | ) | |||
Free cash flow less lease principal repayments | $ | 3,489 | $ | 1,492 | |||
Net cash provided by (used in) investing activities | $ | (5,296 | ) | $ | (5,989 | ) | |
Net cash provided by (used in) financing activities | $ | (3,900 | ) | $ | 3,955 |
Twelve Months Ended March 31, | |||||||
2016 | 2015 | ||||||
Net cash provided by (used in) operating activities | $ | 11,258 | $ | 7,845 | |||
Purchases of property and equipment, including internal-use software and website development, net | (4,897 | ) | (4,684 | ) | |||
Property and equipment acquired under capital leases | (4,638 | ) | (4,246 | ) | |||
Principal repayments of finance lease obligations | (111 | ) | (132 | ) | |||
Free cash flow less finance lease principal repayments and assets acquired under capital leases | $ | 1,612 | $ | (1,217 | ) | ||
Net cash provided by (used in) investing activities | $ | (5,296 | ) | $ | (5,989 | ) | |
Net cash provided by (used in) financing activities | $ | (3,900 | ) | $ | 3,955 |
• | Net sales are expected to be between $28.0 billion and $30.5 billion, or to grow between 21% and 32% compared with second quarter 2015. |
• | Operating income is expected to be between $375 million and $975 million, compared with $464 million in second quarter 2015. |
• | This guidance includes approximately $825 million for stock-based compensation and other operating expense (income), net. It assumes, among other things, that no additional business acquisitions, investments, restructurings, or legal settlements are concluded and that there are no further revisions to stock-based compensation estimates. |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
• | our ability to retain and increase sales to existing customers, attract new customers, and satisfy our customers’ demands; |
• | our ability to retain and expand our network of sellers; |
• | our ability to offer products on favorable terms, manage inventory, and fulfill orders; |
• | the introduction of competitive websites, products, services, price decreases, or improvements; |
• | changes in usage or adoption rates of the Internet, e-commerce, electronic devices, and web services, including outside the U.S.; |
• | timing, effectiveness, and costs of expansion and upgrades of our systems and infrastructure; |
• | the success of our geographic, service, and product line expansions; |
• | the extent to which we finance, and the terms of any such financing for, our current operations and future growth; |
• | the outcomes of legal proceedings and claims, which may include significant monetary damages or injunctive relief and could have a material adverse impact on our operating results; |
• | variations in the mix of products and services we sell; |
• | variations in our level of merchandise and vendor returns; |
• | the extent to which we offer free shipping, continue to reduce prices worldwide, and provide additional benefits to our customers; |
• | the extent to which we invest in technology and content, fulfillment, and other expense categories; |
• | increases in the prices of fuel and gasoline, as well as increases in the prices of other energy products and commodities like paper and packing supplies; |
• | the extent to which our equity-method investees record significant operating and non-operating items; |
• | the extent to which operators of the networks between our customers and our websites successfully charge fees to grant our customers unimpaired and unconstrained access to our online services; |
• | our ability to collect amounts owed to us when they become due; |
• | the extent to which use of our services is affected by spyware, viruses, phishing and other spam emails, denial of service attacks, data theft, computer intrusions, outages, and similar events; and |
• | terrorist attacks and armed hostilities. |
• | local economic and political conditions; |
• | government regulation of e-commerce and other services, electronic devices, and competition, and restrictive governmental actions (such as trade protection measures, including export duties and quotas and custom duties and tariffs), nationalization, and restrictions on foreign ownership; |
• | restrictions on sales or distribution of certain products or services and uncertainty regarding liability for products, services, and content, including uncertainty as a result of less Internet-friendly legal systems, local laws, lack of legal precedent, and varying rules, regulations, and practices regarding the physical and digital distribution of media products and enforcement of intellectual property rights; |
• | business licensing or certification requirements, such as for imports, exports, web services, and electronic devices; |
• | limitations on the repatriation and investment of funds and foreign currency exchange restrictions; |
• | limited fulfillment and technology infrastructure; |
• | shorter payable and longer receivable cycles and the resultant negative impact on cash flow; |
• | laws and regulations regarding consumer and data protection, privacy, network security, encryption, payments, and restrictions on pricing or discounts; |
• | lower levels of use of the Internet; |
• | lower levels of consumer spending and fewer opportunities for growth compared to the U.S.; |
• | lower levels of credit card usage and increased payment risk; |
• | difficulty in staffing, developing, and managing foreign operations as a result of distance, language, and cultural differences; |
• | different employee/employer relationships and the existence of works councils and labor unions; |
• | compliance with the U.S. Foreign Corrupt Practices Act and other applicable U.S. and foreign laws prohibiting corrupt payments to government officials and other third parties; |
• | laws and policies of the U.S. and other jurisdictions affecting trade, foreign investment, loans, and taxes; and |
• | geopolitical events, including war and terrorism. |
• | disruption of our ongoing business, including loss of management focus on existing businesses; |
• | impairment of other relationships; |
• | variability in revenue and income from entering into, amending, or terminating such agreements or relationships; and |
• | difficulty integrating under the commercial agreements. |
• | disruption of our ongoing business, including loss of management focus on existing businesses; |
• | problems retaining key personnel; |
• | additional operating losses and expenses of the businesses we acquired or in which we invested; |
• | the potential impairment of tangible and intangible assets and goodwill, including as a result of acquisitions; |
• | the potential impairment of customer and other relationships of the company we acquired or in which we invested or our own customers as a result of any integration of operations; |
• | the difficulty of incorporating acquired technology and rights into our offerings and unanticipated expenses related to such integration; |
• | the difficulty of integrating a new company’s accounting, financial reporting, management, information and information security, human resource, and other administrative systems to permit effective management, and the lack of control if such integration is delayed or not implemented; |
• | for investments in which an investee’s financial performance is incorporated into our financial results, either in full or in part, the dependence on the investee’s accounting, financial reporting, and similar systems, controls, and processes; |
• | the difficulty of implementing at companies we acquire the controls, procedures, and policies appropriate for a larger public company; |
• | potential unknown liabilities associated with a company we acquire or in which we invest; and |
• | for foreign transactions, additional risks related to the integration of operations across different cultures and languages, and the economic, political, and regulatory risks associated with specific countries. |
• | changes in interest rates; |
• | conditions or trends in the Internet and the industry segments we operate in; |
• | quarterly variations in operating results; |
• | fluctuations in the stock market in general and market prices for Internet-related companies in particular; |
• | changes in financial estimates by us or securities analysts and recommendations by securities analysts; |
• | changes in our capital structure, including issuance of additional debt or equity to the public; |
• | changes in the valuation methodology of, or performance by, other e-commerce or technology companies; and |
• | transactions in our common stock by major investors and certain analyst reports, news, and speculation. |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. | Defaults Upon Senior Securities |
Item 4. | Mine Safety Disclosures |
Item 5. | Other Information |
Item 6. | Exhibits |
AMAZON.COM, INC. (REGISTRANT) | ||
By: | /s/ Shelley Reynolds | |
Shelley Reynolds | ||
Vice President, Worldwide Controller | ||
(Principal Accounting Officer) |
Exhibit Number | Description | |
3.1 | Restated Certificate of Incorporation of the Company (incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the Quarter ended March 31, 2000). | |
3.2 | Amended and Restated Bylaws of the Company (incorporated by reference to the Company’s Current Report on Form 8-K, filed February 25, 2016). | |
31.1 | Certification of Jeffrey P. Bezos, Chairman and Chief Executive Officer of Amazon.com, Inc., pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. | |
31.2 | Certification of Brian T. Olsavsky, Senior Vice President and Chief Financial Officer of Amazon.com, Inc., pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. | |
32.1 | Certification of Jeffrey P. Bezos, Chairman and Chief Executive Officer of Amazon.com, Inc., pursuant to 18 U.S.C. Section 1350. | |
32.2 | Certification of Brian T. Olsavsky, Senior Vice President and Chief Financial Officer of Amazon.com, Inc., pursuant to 18 U.S.C. Section 1350. | |
101 | The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, formatted in XBRL: (i) Consolidated Statements of Cash Flows, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Balance Sheets, and (v) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags. |
/s/ Jeffrey P. Bezos | |
Jeffrey P. Bezos | |
Chairman and Chief Executive Officer (Principal Executive Officer) |
/s/ Brian T. Olsavsky | |
Brian T. Olsavsky | |
Senior Vice President and Chief Financial Officer (Principal Financial Officer) |
/s/ Jeffrey P. Bezos | |
Jeffrey P. Bezos | |
Chairman and Chief Executive Officer | |
(Principal Executive Officer) |
/s/ Brian T. Olsavsky | |
Brian T. Olsavsky | |
Senior Vice President and Chief Financial Officer | |
(Principal Financial Officer) |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Apr. 20, 2016 |
|
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | AMZN | |
Entity Registrant Name | AMAZON COM INC | |
Entity Central Index Key | 0001018724 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 471,827,960 |
Consolidated Statements Of Operations (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Fulfillment | ||
Stock-based compensation | $ 116 | $ 90 |
Marketing | ||
Stock-based compensation | 56 | 35 |
Technology and content | ||
Stock-based compensation | 317 | 233 |
General and administrative | ||
Stock-based compensation | $ 55 | $ 49 |
Consolidated Statements Of Comprehensive Income (Loss) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Net income (loss) | $ 513 | $ (57) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments, net of tax of $(24) and $(1) | 102 | (243) |
Net change in unrealized gains (losses) on available-for-sale securities: | ||
Unrealized gains (losses), net of tax of $0 and $0 | 6 | 1 |
Reclassification adjustment for losses (gains) included in “Other income (expense), net,” net of tax of $(1) and $0 | 1 | 1 |
Net unrealized gains (losses) on available-for-sale securities | 7 | 2 |
Total other comprehensive income (loss) | 109 | (241) |
Comprehensive income (loss) | $ 622 | $ (298) |
Consolidated Statements Of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||
Foreign currency translation adjustments, tax | $ (24) | $ (1) |
Unrealized gains (losses), tax | 0 | 0 |
Reclassification adjustment for losses (gains) included in other income (expense), net, tax | $ (1) | $ 0 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Mar. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, Authorized shares | 500,000,000 | 500,000,000 |
Preferred stock, Issued shares | 0 | 0 |
Preferred stock, Outstanding shares | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, Authorized shares | 5,000,000,000 | 5,000,000,000 |
Common stock, Issued shares | 495,000,000 | 494,000,000 |
Common stock, Outstanding shares | 472,000,000 | 471,000,000 |
Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||
Accounting Policies | ACCOUNTING POLICIES Unaudited Interim Financial Information We have prepared the accompanying consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. These consolidated financial statements are unaudited and, in our opinion, include all adjustments, consisting of normal recurring adjustments and accruals necessary for a fair presentation of our consolidated balance sheets, operating results, and cash flows for the periods presented. Operating results for the periods presented are not necessarily indicative of the results that may be expected for 2016 due to seasonal and other factors. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted in accordance with the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes in Item 8 of Part II, “Financial Statements and Supplementary Data,” of our 2015 Annual Report on Form 10-K. Prior Period Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation, including the allocation of stock-based compensation and “Other operating expense (income), net” to segment results within “Note 7 — Segment Information.” These revised segment results reflect the way the Company evaluates its business performance and manages its operations. Current deferred tax assets and current deferred tax liabilities were reclassified as non-current. See “Recent Accounting Pronouncements” below. We also reclassified our capitalized debt issuance costs from “Other assets” to “Long-term debt” as a result of the adoption of new accounting guidance. The adoption of this guidance did not have a material impact on our consolidated financial statements. Principles of Consolidation The consolidated financial statements include the accounts of Amazon.com, Inc., its wholly-owned subsidiaries, and those entities in which we have a variable interest and of which we are the primary beneficiary, including certain entities in India and China (collectively, the “Company”). Intercompany balances and transactions between consolidated entities are eliminated. Use of Estimates The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, determining the selling price of products and services in multiple element revenue arrangements and determining the amortization period of these elements, incentive discount offers, sales returns, vendor funding, stock-based compensation forfeiture rates, income taxes, valuation and impairment of investments, inventory valuation and inventory purchase commitments, collectability of receivables, valuation of acquired intangibles and goodwill, depreciable lives of property and equipment, internal-use software and website development costs, acquisition purchase price allocations, investments in equity interests, and contingencies. Actual results could differ materially from those estimates. Earnings per Share Basic earnings per share is calculated using our weighted-average outstanding common shares. Diluted earnings per share is calculated using our weighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method. In periods when we have a net loss, stock awards are excluded from our calculation of earnings per share as their inclusion would have an antidilutive effect. In Q1 2015, we excluded stock awards of 17 million. The following table shows the calculation of diluted shares (in millions):
Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) amending revenue recognition guidance and requiring more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB deferred the effective date of the revenue recognition guidance to reporting periods beginning after December 15, 2017. Early adoption is permitted for reporting periods beginning after December 15, 2016. We are continuing to evaluate our method of adoption and the impact this ASU, and related amendments and interpretations, will have on our consolidated financial statements. In November 2015, the FASB issued an ASU amending the accounting for income taxes and requiring all deferred tax assets and liabilities to be classified as non-current on the consolidated balance sheets. The ASU is effective for reporting periods beginning after December 15, 2016, with early adoption permitted. The ASU may be adopted either prospectively or retrospectively. We adopted this ASU in Q1 2016 and retrospectively adjusted prior periods. Upon adoption, current deferred tax assets of $769 million and current deferred tax liabilities of $13 million in our December 31, 2015 consolidated balance sheet were reclassified as non-current. In February 2016, the FASB issued an ASU amending the accounting for leases. The new guidance requires the recognition of lease assets and liabilities for operating leases with terms of more than 12 months, in addition to those currently recorded, on our consolidated balance sheets. Presentation of leases within the consolidated statements of operations and consolidated statements of cash flows will be generally consistent with the current lease accounting guidance. The ASU is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the impact of the ASU; however, we expect the ASU will have a material impact on our consolidated financial statements, primarily to the consolidated balance sheets and related disclosures. In March 2016, the FASB issued an ASU amending the accounting for stock-based compensation and requiring excess tax benefits and deficiencies to be recognized as a component of income tax expense rather than equity. This guidance also requires excess tax benefits to be presented as an operating activity on the statement of cash flows and allows an entity to make an accounting policy election to either estimate expected forfeitures or to account for them as they occur. The ASU is effective for reporting periods beginning after December 15, 2016, with early adoption permitted. We are currently evaluating the impact of the ASU; however, we expect the ASU will have a material impact on our consolidated financial statements. |
Cash, Cash Equivalents, and Marketable Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash, Cash Equivalents, and Marketable Securities | CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES As of March 31, 2016, and December 31, 2015, our cash, cash equivalents, and marketable securities primarily consisted of cash, U.S. and foreign government and agency securities, AAA-rated money market funds, and other investment grade securities. Cash equivalents and marketable securities are recorded at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3—Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. We measure the fair value of money market funds and equity securities based on quoted prices in active markets for identical assets or liabilities. All other financial instruments were valued either based on recent trades of securities in inactive markets or based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data. We did not hold any cash, cash equivalents, or marketable securities categorized as Level 3 assets as of March 31, 2016, or December 31, 2015. The following tables summarize, by major security type, our cash, cash equivalents, and marketable securities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in millions):
___________________
The following table summarizes the contractual maturities of our cash equivalents and marketable fixed-income securities as of March 31, 2016 (in millions):
Actual maturities may differ from the contractual maturities because borrowers may have certain prepayment conditions. We also hold equity warrant assets giving us the right to acquire stock of other companies. As of March 31, 2016, and December 31, 2015, these warrants had a fair value of $95 million and $16 million, and are recorded within “Other assets” on our consolidated balance sheets. The related gain (loss) recorded in “Other income (expense), net” was $5 million and $2 million in Q1 2016 and Q1 2015. These assets are primarily classified as Level 2 assets. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Commitments We have entered into non-cancellable operating, capital, and finance leases for equipment and office, fulfillment, sortation, delivery, data center, and renewable energy facilities. Rental expense under operating lease agreements was $322 million and $266 million for Q1 2016 and Q1 2015. The following summarizes our principal contractual commitments, excluding open orders for purchases that support normal operations, as of March 31, 2016 (in millions):
___________________
Pledged Assets As of March 31, 2016, and December 31, 2015, we have pledged or otherwise restricted $440 million and $418 million of our cash, cash equivalents, and marketable securities, and certain property and equipment as collateral for standby and trade letters of credit, guarantees, debt relating to certain international operations, real estate leases, and amounts due to third-party sellers in certain jurisdictions. Legal Proceedings The Company is involved from time to time in claims, proceedings, and litigation, including the matters described in Item 8 of Part II, “Financial Statements and Supplementary Data — Note 7 — Commitments and Contingencies — Legal Proceedings” of our 2015 Annual Report on Form 10-K, as supplemented by the following: In November 2007, an Austrian copyright collection society, Austro-Mechana, filed lawsuits against Amazon.com International Sales, Inc., Amazon EU S.à r.l., Amazon.de GmbH, Amazon.com GmbH, and Amazon Logistik in the Commercial Court of Vienna, Austria and in the District Court of Munich, Germany seeking to collect a tariff on blank digital media sold by our EU-based retail websites to customers located in Austria. In July 2008, the German court stayed the German case pending a final decision in the Austrian case. In July 2010, the Austrian court ruled in favor of Austro-Mechana and ordered us to report all sales of products to which the tariff potentially applies for a determination of damages. We contested Austro-Mechana’s claim and in September 2010 commenced an appeal in the Commercial Court of Vienna. We lost this appeal and in March 2011 commenced an appeal in the Supreme Court of Austria. In October 2011, the Austrian Supreme Court referred the case to the European Court of Justice (“ECJ”). In July 2013, the ECJ ruled that EU law does not preclude application of the tariff where certain conditions are met and directed the case back to the Austrian Supreme Court for further proceedings. In October 2013, the Austrian Supreme Court referred the case back to the Commercial Court of Vienna for further fact finding to determine whether the tariff on blank digital media meets the conditions set by the ECJ. In August 2015, the Commercial Court of Vienna ruled that the Austrian tariff regime does not meet the conditions the ECJ set and dismissed Austro-Mechana’s claims. In September 2015, Austro-Mechana appealed that judgment to the Higher Commercial Court of Vienna. In December 2015, the Higher Commercial Court of Vienna confirmed that the Austrian tariff regime does not meet the conditions the ECJ set and dismissed Austro-Mechana’s appeal. In February 2016, Austro-Mechana appealed that judgment to the Austrian Supreme Court. A number of additional actions have been filed making similar allegations. In December 2012, a German copyright collection society, Zentralstelle für private Überspielungsrechte (“ZPU”), filed a complaint against Amazon EU S.à r.l., Amazon Media EU S.à r.l., Amazon Services Europe S.à r.l., Amazon Payments Europe SCA, Amazon Europe Holding Technologies SCS, and Amazon Eurasia Holdings S.à r.l. in the District Court of Luxembourg seeking to collect a tariff on blank digital media sold by the Amazon.de retail website to customers located in Germany. In January 2013, a Belgian copyright collection society, AUVIBEL, filed a complaint against Amazon EU S.à r.l. in the Court of First Instance of Brussels, Belgium, seeking to collect a tariff on blank digital media sold by the Amazon.fr retail website to customers located in Belgium. In November 2013, the Belgian court ruled in favor of AUVIBEL and ordered us to report all sales of products to which the tariff potentially applies for a determination of damages. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in these matters. In June 2012, Hand Held Products, Inc., a subsidiary of Honeywell, filed a complaint against Amazon.com, Inc., AMZN Mobile, LLC, AmazonFresh, LLC, A9.com, Inc., A9 Innovations, LLC, and Quidsi, Inc. in the United States District Court for the District of Delaware. The complaint alleges, among other things, that the use of mobile barcode reader applications, including Amazon Mobile, Amazon Price Check, Flow, and AmazonFresh, infringes U.S. Patent No. 6,015,088, entitled “Decoding Of Real Time Video Imaging.” The complaint seeks an unspecified amount of damages, interest, and an injunction. In March 2016, the district court granted our motion for summary judgment of non-infringement and dismissed the case with prejudice. In April 2016, Hand Held Products appealed the district court’s judgment to the United States Court of Appeals for the Federal Circuit. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in this matter. Beginning in August 2013, a number of complaints were filed alleging, among other things, that Amazon.com, Inc. and several of its subsidiaries failed to compensate hourly workers for time spent waiting in security lines and otherwise violated federal and state wage and hour statutes and common law. In August 2013, Busk v. Integrity Staffing Solutions, Inc. and Amazon.com, Inc. was filed in the United States District Court for the District of Nevada, and Vance v. Amazon.com, Inc., Zappos.com Inc., another affiliate of Amazon.com, Inc., and Kelly Services, Inc. was filed in the United States District Court for the Western District of Kentucky. In September 2013, Allison v. Amazon.com, Inc. and Integrity Staffing Solutions, Inc. was filed in the United States District Court for the Western District of Washington, and Johnson v. Amazon.com, Inc. and an affiliate of Amazon.com, Inc. was filed in the United States District Court for the Western District of Kentucky. In October 2013, Davis v. Amazon.com, Inc., an affiliate of Amazon.com, Inc., and Integrity Staffing Solutions, Inc. was filed in the United States District Court for the Middle District of Tennessee. The plaintiffs variously purport to represent a nationwide class of certain current and former employees under the Fair Labor Standards Act and/or state-law-based subclasses for certain current and former employees in states including Arizona, California, Pennsylvania, South Carolina, Kentucky, Washington, and Nevada, and one complaint asserts nationwide breach of contract and unjust enrichment claims. The complaints seek an unspecified amount of damages, interest, injunctive relief, and attorneys’ fees. We have been named in several other similar cases. In December 2014, the Supreme Court ruled in Busk that time spent waiting for and undergoing security screening is not compensable working time under the federal wage and hour statute. In February 2015, the courts in those actions alleging only federal law claims entered stipulated orders dismissing those actions without prejudice. In March 2016, the United States District Court for the Western District of Kentucky dismissed the Vance case with prejudice. In April 2016, the plaintiffs appealed the district court’s judgment to the United States Court of Appeals for the Federal Circuit. We dispute any remaining allegations of wrongdoing and intend to defend ourselves vigorously in these matters. The outcomes of our legal proceedings are inherently unpredictable, subject to significant uncertainties, and could be material to our operating results and cash flows for a particular period. In addition, for some matters for which a loss is probable or reasonably possible, an estimate of the amount of loss or range of losses is not possible and we may be unable to estimate the possible loss or range of losses that could potentially result from the application of non-monetary remedies. See also “Note 6 — Income Taxes.” |
Long-Term Debt |
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Long-Term Debt | LONG-TERM DEBT In December 2014 and November 2012, we issued $6.0 billion and $3.0 billion of unsecured senior notes, of which $8.3 billion is outstanding, as described in the table below (collectively, the “Notes”). As of March 31, 2016, and December 31, 2015, the unamortized discount on the Notes was $96 million and $97 million. We also have other long-term debt with a carrying amount, including the current portion, of $155 million and $312 million as of March 31, 2016, and December 31, 2015. The face value of our total long-term debt obligations is as follows (in millions):
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Interest on the Notes issued in 2014 is payable semi-annually in arrears in June and December. Interest on the Notes issued in 2012 is payable semi-annually in arrears in May and November. We may redeem the Notes at any time in whole, or from time to time, in part at specified redemption prices. We are not subject to any financial covenants under the Notes. The proceeds from the Notes are used for general corporate purposes. The estimated fair value of the Notes was approximately $8.9 billion and $8.5 billion as of March 31, 2016, and December 31, 2015, which is based on quoted prices for our publicly-traded debt as of those dates. The other debt, including the current portion, had a weighted-average interest rate of 3.40% and 3.74% as of March 31, 2016, and December 31, 2015. We used the net proceeds from the issuance of this debt primarily to fund certain international operations. The estimated fair value of the other long-term debt, which is based on Level 2 inputs, approximated its carrying value as of March 31, 2016, and December 31, 2015. On September 5, 2014, we entered into an unsecured revolving credit facility (the “Credit Agreement”) with a syndicate of lenders that provides us with a borrowing capacity of up to $2.0 billion. The Credit Agreement has a term of two years, but it may be extended for up to three additional one-year terms if approved by the lenders. The initial interest rate applicable to outstanding balances under the Credit Agreement is the London interbank offered rate (“LIBOR”) plus 0.625%, under our current credit ratings. If our credit ratings are downgraded this rate could increase to as much as LIBOR plus 1.00%. There were no borrowings outstanding under the Credit Agreement as of March 31, 2016, and December 31, 2015. |
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Stockholders' Equity | STOCKHOLDERS’ EQUITY Stock Repurchase Activity In February 2016, the Board of Directors authorized a program to repurchase up to $5 billion of our common stock, with no fixed expiration. This stock repurchase authorization replaces the previous $2 billion stock repurchase authorization, approved by the Board of Directors in 2010. There were no repurchases of common stock in Q1 2016 or Q1 2015. Stock Award Activity Common shares outstanding plus shares underlying outstanding stock awards totaled 490 million as of March 31, 2016 and December 31, 2015. These totals include all vested and unvested stock awards outstanding, including those awards we estimate will be forfeited. The compensation expense for stock options, the total intrinsic value for stock options outstanding, the amount of cash received from the exercise of stock options, and the related tax benefits were not material for the three months ended March 31, 2016. The following table summarizes our restricted stock unit activity for the three months ended March 31, 2016 (in millions):
Scheduled vesting for outstanding restricted stock units as of March 31, 2016, is as follows (in millions):
As of March 31, 2016, there was $2.9 billion of net unrecognized compensation cost related to unvested stock-based compensation arrangements. This compensation is recognized on an accelerated basis with approximately half of the compensation expected to be expensed in the next twelve months, and has a weighted-average recognition period of 1.1 years. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Our tax provision or benefit from income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment. Our quarterly tax provision, and our quarterly estimate of our annual effective tax rate, is subject to significant variation due to several factors, including variability in accurately predicting our pre-tax and taxable income and loss and the mix of jurisdictions to which they relate, changes in how we do business, acquisitions (including integrations) and investments, audit-related developments, foreign currency gains (losses), changes in law, regulations, and administrative practices, and relative changes of expenses or losses for which tax benefits are not recognized. Additionally, our effective tax rate can be more or less volatile based on the amount of pre-tax income or loss. For example, the impact of discrete items and non-deductible expenses on our effective tax rate is greater when our pre-tax income is lower. In 2016, our effective tax rate will be affected by the adverse impact of nondeductible expenses, state income taxes, and losses incurred in certain foreign jurisdictions for which we may not realize a related tax benefit, partially offset by the favorable effect of the U.S. federal research and development credit. We expect a decline in the proportion of losses for which we may not realize a related tax benefit in 2016. These losses are primarily due to losses of foreign subsidiaries, which reduce our pre-tax income without a corresponding reduction in our tax expense, and therefore increase our effective tax rate. We record valuation allowances against the deferred tax assets associated with losses for which we may not realize a related tax benefit. Our effective tax rate may also be impacted by the amount of pre-tax income relative to income tax expense and changes in tax law. We will generate income in lower tax jurisdictions primarily related to our European operations, which are headquartered in Luxembourg. Our income tax provision was $475 million and $71 million in Q1 2016 and Q1 2015. Cash paid for income taxes (net of refunds) was $139 million and $55 million in Q1 2016 and Q1 2015. As of March 31, 2016, and December 31, 2015, tax contingencies were $1.3 billion and $1.2 billion. We expect the total amount of tax contingencies will grow in 2016. In addition, changes in state, federal, and foreign tax laws may increase our tax contingencies. The timing of the resolution of income tax examinations is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ from the amounts accrued. It is reasonably possible that within the next 12 months we will receive additional assessments by various tax authorities or possibly reach resolution of income tax examinations in one or more jurisdictions. These assessments or settlements may or may not result in changes to our contingencies related to positions on prior years’ tax filings. We are under examination, or may be subject to examination, by the Internal Revenue Service (“IRS”) for the calendar year 2005 and thereafter. These examinations may lead to ordinary course adjustments or proposed adjustments to our taxes or our net operating losses with respect to years under examination as well as subsequent periods. As previously disclosed, we have received Notices of Proposed Adjustment from the IRS for transactions undertaken in the 2005 and 2006 calendar years relating to transfer pricing with our foreign subsidiaries. The IRS is seeking to increase our U.S. taxable income by an amount that would result in additional federal tax of approximately $1.5 billion, subject to interest. To date, we have not resolved this matter administratively and are currently contesting it in U.S. Tax Court. We continue to disagree with these IRS positions and intend to defend ourselves vigorously in this matter. In addition to the risk of additional tax for 2005 and 2006 transactions, if this litigation is adversely determined or if the IRS were to seek transfer pricing adjustments of a similar nature for transactions in subsequent years, we could be subject to significant additional tax liabilities. Certain of our subsidiaries are under examination or investigation or may be subject to examination or investigation by the French Tax Administration (“FTA”) for calendar year 2006 and thereafter. These examinations may lead to ordinary course adjustments or proposed adjustments to our taxes. In September 2012, we received proposed tax assessment notices for calendar years 2006 through 2010 relating to the allocation of income between foreign jurisdictions. In June 2015, we received final tax collection notices for these years assessing additional French tax of €196 million, including interest and penalties through September 2012. We disagree with the assessment and intend to contest it vigorously. We plan to pursue all available administrative remedies at the FTA, and if we are not able to resolve this matter with the FTA, we plan to pursue judicial remedies. In addition to the risk of additional tax for years 2006 through 2010, if this litigation is adversely determined or if the FTA were to seek adjustments of a similar nature for subsequent years, we could be subject to significant additional tax liabilities. In addition, in October 2014, the European Commission opened a formal investigation to examine whether decisions by the tax authorities in Luxembourg with regard to the corporate income tax paid by certain of our subsidiaries comply with European Union rules on state aid. If this matter is adversely resolved, Luxembourg may be required to assess, and we may be required to pay, additional amounts with respect to current and prior periods and our taxes in the future could increase. We are also subject to taxation in various states and other foreign jurisdictions including Canada, China, Germany, India, Italy, Japan, Luxembourg, and the United Kingdom. We are under, or may be subject to, audit or examination and additional assessments in respect of these particular jurisdictions for 2003 and thereafter. |
Segment Information |
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Segment Information | SEGMENT INFORMATION We have organized our operations into three segments: North America, International, and AWS. We allocate to segment results the operating expenses “Fulfillment,” “Marketing,” “Technology and content,” and “General and administrative” based on usage, which is generally reflected in the segment in which the costs are incurred. The majority of technology infrastructure expenses are allocated to the AWS segment based on usage. The majority of the remaining non-infrastructure technology costs are incurred in the U.S. and are allocated to our North America segment. In Q1 2016, we began allocating stock-based compensation and “Other operating expense (income), net” to our segment results. In our segment results, these amounts are combined and titled “Stock-based compensation and other.” There are no internal revenue transactions between our reportable segments. These segments reflect the way the Company evaluates its business performance and manages its operations. North America The North America segment primarily consists of amounts earned from retail sales of consumer products (including from sellers) and subscriptions through North America-focused websites such as www.amazon.com, www.amazon.ca, and www.amazon.com.mx. This segment includes export sales from these websites. International The International segment primarily consists of amounts earned from retail sales of consumer products (including from sellers) and subscriptions through internationally-focused websites such as www.amazon.com.au, www.amazon.com.br, www.amazon.cn, www.amazon.fr, www.amazon.de, www.amazon.in, www.amazon.it, www.amazon.co.jp, www.amazon.nl, www.amazon.es, and www.amazon.co.uk. This segment includes export sales from these internationally-focused websites (including export sales from these sites to customers in the U.S., Mexico, and Canada), but excludes export sales from our North American websites. AWS The AWS segment consists of amounts earned from global sales of compute, storage, database, and other AWS service offerings for start-ups, enterprises, government agencies, and academic institutions. Information on reportable segments and reconciliation to consolidated net income (loss) is as follows (in millions):
We have aggregated our products and services into groups of similar products and services and provided the supplemental disclosure of net sales (in millions) below. We evaluate whether additional disclosure is appropriate when a product or service category begins to approach a significant level of net sales. For the periods presented, no individual product or service represented more than 10% of net sales.
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Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |
Unaudited Interim Financial Information | Unaudited Interim Financial Information We have prepared the accompanying consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. These consolidated financial statements are unaudited and, in our opinion, include all adjustments, consisting of normal recurring adjustments and accruals necessary for a fair presentation of our consolidated balance sheets, operating results, and cash flows for the periods presented. Operating results for the periods presented are not necessarily indicative of the results that may be expected for 2016 due to seasonal and other factors. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted in accordance with the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes in Item 8 of Part II, “Financial Statements and Supplementary Data,” of our 2015 Annual Report on Form 10-K. |
Prior Period Reclassifications | Prior Period Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation, including the allocation of stock-based compensation and “Other operating expense (income), net” to segment results within “Note 7 — Segment Information.” These revised segment results reflect the way the Company evaluates its business performance and manages its operations. Current deferred tax assets and current deferred tax liabilities were reclassified as non-current. See “Recent Accounting Pronouncements” below. We also reclassified our capitalized debt issuance costs from “Other assets” to “Long-term debt” as a result of the adoption of new accounting guidance. The adoption of this guidance did not have a material impact on our consolidated financial statements. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Amazon.com, Inc., its wholly-owned subsidiaries, and those entities in which we have a variable interest and of which we are the primary beneficiary, including certain entities in India and China (collectively, the “Company”). Intercompany balances and transactions between consolidated entities are eliminated. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, determining the selling price of products and services in multiple element revenue arrangements and determining the amortization period of these elements, incentive discount offers, sales returns, vendor funding, stock-based compensation forfeiture rates, income taxes, valuation and impairment of investments, inventory valuation and inventory purchase commitments, collectability of receivables, valuation of acquired intangibles and goodwill, depreciable lives of property and equipment, internal-use software and website development costs, acquisition purchase price allocations, investments in equity interests, and contingencies. Actual results could differ materially from those estimates. |
Earnings per Share | Earnings per Share Basic earnings per share is calculated using our weighted-average outstanding common shares. Diluted earnings per share is calculated using our weighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method. In periods when we have a net loss, stock awards are excluded from our calculation of earnings per share as their inclusion would have an antidilutive effect. In Q1 2015, we excluded stock awards of 17 million. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) amending revenue recognition guidance and requiring more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB deferred the effective date of the revenue recognition guidance to reporting periods beginning after December 15, 2017. Early adoption is permitted for reporting periods beginning after December 15, 2016. We are continuing to evaluate our method of adoption and the impact this ASU, and related amendments and interpretations, will have on our consolidated financial statements. In November 2015, the FASB issued an ASU amending the accounting for income taxes and requiring all deferred tax assets and liabilities to be classified as non-current on the consolidated balance sheets. The ASU is effective for reporting periods beginning after December 15, 2016, with early adoption permitted. The ASU may be adopted either prospectively or retrospectively. We adopted this ASU in Q1 2016 and retrospectively adjusted prior periods. Upon adoption, current deferred tax assets of $769 million and current deferred tax liabilities of $13 million in our December 31, 2015 consolidated balance sheet were reclassified as non-current. In February 2016, the FASB issued an ASU amending the accounting for leases. The new guidance requires the recognition of lease assets and liabilities for operating leases with terms of more than 12 months, in addition to those currently recorded, on our consolidated balance sheets. Presentation of leases within the consolidated statements of operations and consolidated statements of cash flows will be generally consistent with the current lease accounting guidance. The ASU is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the impact of the ASU; however, we expect the ASU will have a material impact on our consolidated financial statements, primarily to the consolidated balance sheets and related disclosures. In March 2016, the FASB issued an ASU amending the accounting for stock-based compensation and requiring excess tax benefits and deficiencies to be recognized as a component of income tax expense rather than equity. This guidance also requires excess tax benefits to be presented as an operating activity on the statement of cash flows and allows an entity to make an accounting policy election to either estimate expected forfeitures or to account for them as they occur. The ASU is effective for reporting periods beginning after December 15, 2016, with early adoption permitted. We are currently evaluating the impact of the ASU; however, we expect the ASU will have a material impact on our consolidated financial statements. |
Accounting Policies (Tables) |
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Calculation of Diluted Shares | The following table shows the calculation of diluted shares (in millions):
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Cash, Cash Equivalents, and Marketable Securities (Tables) |
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Fair Value by Major Security Type | The following tables summarize, by major security type, our cash, cash equivalents, and marketable securities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in millions):
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Investments Classified by Contractual Maturity Date | The following table summarizes the contractual maturities of our cash equivalents and marketable fixed-income securities as of March 31, 2016 (in millions):
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Commitments and Contingencies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | The following summarizes our principal contractual commitments, excluding open orders for purchases that support normal operations, as of March 31, 2016 (in millions):
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Long-Term Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt Obligations | The face value of our total long-term debt obligations is as follows (in millions):
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Stockholders' Equity (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nonvested Restricted Stock Units Activity | The following table summarizes our restricted stock unit activity for the three months ended March 31, 2016 (in millions):
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Nonvested Share Activity | Scheduled vesting for outstanding restricted stock units as of March 31, 2016, is as follows (in millions):
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Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information by Segment | Information on reportable segments and reconciliation to consolidated net income (loss) is as follows (in millions):
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Revenue from External Customers by Products and Services |
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Accounting Policies Calculation of Diluted Shares (Detail) - shares shares in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|
Earnings Per Share [Abstract] | ||
Shares used in computation of basic earnings per share | 471 | 465 |
Total dilutive effect of outstanding stock awards | 10 | 0 |
Shares used in computation of diluted earnings per share | 481 | 465 |
Accounting Policies Calculation of Diluted Shares Additional Information (Details) shares in Millions |
3 Months Ended |
---|---|
Mar. 31, 2015
shares
| |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Stock awards excluded from the computation of earnings per share as their inclusion would have an antidilutive effect | 17 |
Cash, Cash Equivalents, and Marketable Securities Summary of Contractual Maturities of Cash Equivalent and Marketable Fixed Income Securities (Detail) $ in Millions |
Mar. 31, 2016
USD ($)
|
---|---|
Investments Classified by Contractual Maturity Date [Line Items] | |
Amortized Cost | $ 8,553 |
Estimated Fair Value | 8,554 |
Due within one year | |
Investments Classified by Contractual Maturity Date [Line Items] | |
Amortized Cost | 7,135 |
Estimated Fair Value | 7,137 |
Due after one year through five years | |
Investments Classified by Contractual Maturity Date [Line Items] | |
Amortized Cost | 1,175 |
Estimated Fair Value | 1,176 |
Due after five years through ten years | |
Investments Classified by Contractual Maturity Date [Line Items] | |
Amortized Cost | 92 |
Estimated Fair Value | 92 |
Due after ten years | |
Investments Classified by Contractual Maturity Date [Line Items] | |
Amortized Cost | 151 |
Estimated Fair Value | $ 149 |
Cash, Cash Equivalents, and Marketable Securities Cash, Cash Equivalents, and Marketable Securities - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2015 |
|
Investments, Warrant Assets | |||
Fair Value Adjustment of Warrant Assets | $ 5 | $ 2 | |
Level 2 Securities | |||
Investments, Warrant Assets | |||
Warrants and Rights Outstanding | $ 95 | $ 16 |
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2015 |
|
Loss Contingencies [Line Items] | |||
Rental expense under operating lease agreements | $ 322 | $ 266 | |
Capital Lease Obligations, Current | 3,200 | $ 3,000 | |
Capital Lease Obligations, Noncurrent | 4,200 | 4,200 | |
Finance Lease Obligations, Current | 103 | 99 | |
Finance Lease Obligations, Noncurrent | 1,800 | 1,700 | |
Tax contingencies | 1,300 | 1,200 | |
Pledged Assets | $ 440 | $ 418 |
Commitments and Contingencies Principal Contractual Commitments Excluding Open Orders for Inventory Purchases That Support Normal Operations (Detail) $ in Millions |
Mar. 31, 2016
USD ($)
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Contractual commitments | ||||||||||||
Nine Months Ended December 31, 2016 | $ 5,349 | |||||||||||
Year Ended December 31, 2017 | 6,325 | |||||||||||
Year Ended December 31, 2018 | 3,664 | |||||||||||
Year Ended December 31, 2019 | 3,062 | |||||||||||
Year Ended December 31, 2020 | 1,549 | |||||||||||
Thereafter | 15,023 | |||||||||||
Total | 34,972 | |||||||||||
Capital lease obligations, including interest | ||||||||||||
Nine Months Ended December 31, 2016 | 2,519 | [1] | ||||||||||
Year Ended December 31, 2017 | 2,833 | [1] | ||||||||||
Year Ended December 31, 2018 | 1,577 | [1] | ||||||||||
Year Ended December 31, 2019 | 425 | [1] | ||||||||||
Year Ended December 31, 2020 | 185 | [1] | ||||||||||
Thereafter | 93 | [1] | ||||||||||
Total | 7,632 | [1] | ||||||||||
Operating leases | ||||||||||||
Nine Months Ended December 31, 2016 | 1,030 | |||||||||||
Year Ended December 31, 2017 | 982 | |||||||||||
Year Ended December 31, 2018 | 872 | |||||||||||
Year Ended December 31, 2019 | 769 | |||||||||||
Year Ended December 31, 2020 | 687 | |||||||||||
Thereafter | 2,599 | |||||||||||
Total | 6,939 | |||||||||||
Unconditional purchase obligations | ||||||||||||
Nine Months Ended December 31, 2016 | 483 | [2] | ||||||||||
Year Ended December 31, 2017 | 597 | [2] | ||||||||||
Year Ended December 31, 2018 | 445 | [2] | ||||||||||
Year Ended December 31, 2019 | 200 | [2] | ||||||||||
Year Ended December 31, 2020 | 72 | [2] | ||||||||||
Thereafter | 28 | [2] | ||||||||||
Total | 1,825 | [2] | ||||||||||
Other commitments | ||||||||||||
Nine Months Ended December 31, 2016 | 820 | [3],[4] | ||||||||||
Year Ended December 31, 2017 | 418 | [3],[4] | ||||||||||
Year Ended December 31, 2018 | 283 | [3],[4] | ||||||||||
Year Ended December 31, 2019 | 216 | [3],[4] | ||||||||||
Year Ended December 31, 2020 | 176 | [3],[4] | ||||||||||
Thereafter | 1,583 | [3],[4] | ||||||||||
Total | 3,496 | [3],[4] | ||||||||||
Debt principal and interest | ||||||||||||
Contractual commitments | ||||||||||||
Nine Months Ended December 31, 2016 | 367 | |||||||||||
Year Ended December 31, 2017 | 1,322 | |||||||||||
Year Ended December 31, 2018 | 310 | |||||||||||
Year Ended December 31, 2019 | 1,272 | |||||||||||
Year Ended December 31, 2020 | 246 | |||||||||||
Thereafter | 9,157 | |||||||||||
Total | 12,674 | |||||||||||
Finance lease obligations, including interest | ||||||||||||
Contractual commitments | ||||||||||||
Nine Months Ended December 31, 2016 | 130 | [5] | ||||||||||
Year Ended December 31, 2017 | 173 | [5] | ||||||||||
Year Ended December 31, 2018 | 177 | [5] | ||||||||||
Year Ended December 31, 2019 | 180 | [5] | ||||||||||
Year Ended December 31, 2020 | 183 | [5] | ||||||||||
Thereafter | 1,563 | [5] | ||||||||||
Total | $ 2,406 | [5] | ||||||||||
|
Long-Term Debt - Additional Information (Detail) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2016 |
Dec. 31, 2015 |
Nov. 30, 2012 |
|
Debt Instrument [Line Items] | |||
Unamortized discount | $ 96,000,000 | $ 97,000,000 | |
Carrying amount of other long-term debt including current portion | 155,000,000 | 312,000,000 | |
Total estimated fair value of notes | $ 8,900,000,000 | $ 8,500,000,000 | |
Other long-term debt, weighted average interest rate | 3.40% | 3.74% | |
Credit Agreement, initiation date | Sep. 05, 2014 | ||
Credit Agreement, maximum borrowing capacity | $ 2,000,000,000 | ||
Credit Agreement, term | 2 years | ||
Credit Agreement, term additional information | may be extended for up to three additional one-year terms if approved by the lenders | ||
Credit Agreement, variable rate basis | LIBOR | ||
Credit Agreement, basis spread on variable rate | 0.625% | ||
Credit Agreement, borrowings outstanding | $ 0 | ||
Issued in December 2014 | |||
Debt Instrument [Line Items] | |||
Face amount | $ 6,000,000,000 | ||
Interest payment frequency | semi-annually in arrears in June and December | ||
Issued in November 2012 | |||
Debt Instrument [Line Items] | |||
Face amount | $ 3,000,000,000 | ||
Interest payment frequency | semi-annually in arrears in May and November | ||
Maximum | |||
Debt Instrument [Line Items] | |||
Credit Agreement, basis spread on variable rate | 1.00% |
Long-Term Debt Long-Term Debt Obligations (Detail) - USD ($) $ in Millions |
Mar. 31, 2016 |
Dec. 31, 2015 |
|||||
---|---|---|---|---|---|---|---|
Debt Instrument [Line Items] | |||||||
Long-term debt | $ 8,405 | $ 8,562 | |||||
Other long-term debt | 155 | 312 | |||||
Less current portion of long-term debt | (90) | (238) | |||||
Face value of long-term debt | $ 8,315 | 8,324 | |||||
1.20% Notes due on November 29, 2017 | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate | 1.20% | ||||||
Long-term debt | [1] | $ 1,000 | 1,000 | ||||
Effective interest rates | 1.38% | ||||||
2.50% Notes due on November 29, 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate | 2.50% | ||||||
Long-term debt | [1] | $ 1,250 | 1,250 | ||||
Effective interest rates | 2.66% | ||||||
2.60% Notes due on December 5, 2019 | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate | 2.60% | ||||||
Long-term debt | [2] | $ 1,000 | 1,000 | ||||
Effective interest rates | 2.73% | ||||||
3.30% Notes due on December 5, 2021 | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate | 3.30% | ||||||
Long-term debt | [2] | $ 1,000 | 1,000 | ||||
Effective interest rates | 3.43% | ||||||
3.80% Notes due on December 5, 2024 | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate | 3.80% | ||||||
Long-term debt | [2] | $ 1,250 | 1,250 | ||||
Effective interest rates | 3.90% | ||||||
4.80% Notes due on December 5, 2034 | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate | 4.80% | ||||||
Long-term debt | [2] | $ 1,250 | 1,250 | ||||
Effective interest rates | 4.92% | ||||||
4.95% Notes due on December 5, 2044 | |||||||
Debt Instrument [Line Items] | |||||||
Stated interest rate | 4.95% | ||||||
Long-term debt | [2] | $ 1,500 | $ 1,500 | ||||
Effective interest rates | 5.11% | ||||||
|
Stockholders Equity - Additional Information (Detail) - USD ($) shares in Millions, $ in Billions |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2016 |
Feb. 29, 2016 |
Dec. 31, 2015 |
Jan. 31, 2010 |
|
Stockholders Equity Note [Line Items] | ||||
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | 5,000 | 2,000 | ||
Common shares outstanding plus shares underlying outstanding stock awards, including all stock-based awards outstanding, including estimated forfeiture | 490 | 490 | ||
Net unrecognized compensation cost related to unvested stock-based compensation arrangements | $ 2.9 | |||
Net unrecognized compensation cost related to unvested stock-based compensation arrangements, weighted average recognition period (in years) | 1 year 1 month |
Stockholders' Equity Restricted Stock Unit Activity (Detail) - Restricted Stock Units shares in Millions |
3 Months Ended |
---|---|
Mar. 31, 2016
$ / shares
shares
| |
Number of units | |
Beginning balance (in shares) | shares | 18.9 |
Units granted (in shares) | shares | 0.9 |
Units vested (in shares) | shares | (1.0) |
Units forfeited (in shares) | shares | (0.6) |
Ending balance (in shares) | shares | 18.2 |
Weighted Average Grant-Date Fair Value | |
Beginning balance (in usd per share) | $ / shares | $ 362 |
Units granted (in usd per share) | $ / shares | 566 |
Units vested (in usd per share) | $ / shares | 271 |
Units forfeited (in usd per share) | $ / shares | 374 |
Ending balance (in usd per share) | $ / shares | $ 377 |
Stockholders' Equity Scheduled Vesting for Outstanding Restricted Stock Units (Detail) - Restricted Stock Units shares in Millions |
Mar. 31, 2016
shares
|
---|---|
Schedule of Vesting [Line Items] | |
Nine Months Ended December 31, 2016 | 5.3 |
Year Ended December 31, 2017 | 6.8 |
Year Ended December 31, 2018 | 3.8 |
Year Ended December 31, 2019 | 1.9 |
Year Ended December 31, 2020 | 0.2 |
Thereafter | 0.2 |
Total | 18.2 |
Income Taxes - Additional Information (Detail) € in Millions, $ in Millions |
3 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Mar. 31, 2016
EUR (€)
|
Mar. 31, 2016
USD ($)
|
Mar. 31, 2015
USD ($)
|
Mar. 31, 2016
USD ($)
|
Mar. 31, 2015
USD ($)
|
Dec. 31, 2015
USD ($)
|
|
Income Taxes [Line Items] | ||||||
Provision for income taxes | $ (475) | $ (71) | ||||
Cash taxes paid, net of refunds | 139 | $ 55 | $ 357 | $ 194 | ||
Tax contingencies | $ 1,300 | $ 1,300 | $ 1,200 | |||
Internal Revenue Service (IRS) | ||||||
Income Taxes [Line Items] | ||||||
Description of the status of the tax examination | We are under examination, or may be subject to examination, by the Internal Revenue Service (“IRS”) for the calendar year 2005 and thereafter | We are under examination, or may be subject to examination, by the Internal Revenue Service (“IRS”) for the calendar year 2005 and thereafter | ||||
Tax examination, estimate of additional tax expense | $ 1,500 | |||||
France | ||||||
Income Taxes [Line Items] | ||||||
Description of the status of the tax examination | Certain of our subsidiaries are under examination or investigation or may be subject to examination or investigation by the French Tax Administration (“FTA”) for calendar year 2006 and thereafter | Certain of our subsidiaries are under examination or investigation or may be subject to examination or investigation by the French Tax Administration (“FTA”) for calendar year 2006 and thereafter | ||||
Tax examination, estimate of additional tax expense | € | € 196 | |||||
European Union | ||||||
Income Taxes [Line Items] | ||||||
Description of the status of the tax examination | In addition, in October 2014, the European Commission opened a formal investigation to examine whether decisions by the tax authorities in Luxembourg with regard to the corporate income tax paid by certain of our subsidiaries comply with European Union rules on state aid. | In addition, in October 2014, the European Commission opened a formal investigation to examine whether decisions by the tax authorities in Luxembourg with regard to the corporate income tax paid by certain of our subsidiaries comply with European Union rules on state aid. | ||||
Other Foreign Jurisdictions | ||||||
Income Taxes [Line Items] | ||||||
Description of the status of the tax examination | We are also subject to taxation in various states and other foreign jurisdictions including Canada, China, Germany, India, Italy, Japan, Luxembourg, and the United Kingdom. We are under, or may be subject to, audit or examination and additional assessments in respect of these particular jurisdictions for 2003 and thereafter. | We are also subject to taxation in various states and other foreign jurisdictions including Canada, China, Germany, India, Italy, Japan, Luxembourg, and the United Kingdom. We are under, or may be subject to, audit or examination and additional assessments in respect of these particular jurisdictions for 2003 and thereafter. |
Segment Information Reportable Segments and Reconciliation to Consolidated Net Income (Detail) $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2016
USD ($)
Segment
|
Mar. 31, 2015
USD ($)
|
Mar. 31, 2016
USD ($)
|
Mar. 31, 2015
USD ($)
|
|
Segment Reporting Disclosure [Line Items] | ||||
Number of Reportable Segments | Segment | 3 | |||
Net sales | $ 29,128 | $ 22,717 | ||
Segment operating expenses | 28,057 | 22,462 | ||
Operating income | 1,071 | 255 | ||
Total non-operating income (expense) | (15) | (234) | ||
Provision for income taxes | (475) | (71) | ||
Equity-method investment activity, net of tax | (68) | (7) | ||
Net income (loss) | 513 | (57) | $ 1,166 | $ (405) |
Operating Segments | ||||
Segment Reporting Disclosure [Line Items] | ||||
Net sales | 29,128 | 22,717 | ||
Segment operating expenses | 27,468 | 22,011 | ||
Segment operating income (loss) before stock-based compensation and other | 1,660 | 706 | ||
Stock-based compensation and other | 589 | 451 | ||
North America | Operating Segments | ||||
Segment Reporting Disclosure [Line Items] | ||||
Net sales | 16,996 | 13,406 | ||
Segment operating expenses | 16,072 | 12,889 | ||
Segment operating income (loss) before stock-based compensation and other | 924 | 517 | ||
Stock-based compensation and other | 336 | 263 | ||
Operating income | 588 | 254 | ||
International | Operating Segments | ||||
Segment Reporting Disclosure [Line Items] | ||||
Net sales | 9,566 | 7,745 | ||
Segment operating expenses | 9,546 | 7,821 | ||
Segment operating income (loss) before stock-based compensation and other | 20 | (76) | ||
Stock-based compensation and other | 141 | 118 | ||
Operating income | (121) | (194) | ||
AWS | Operating Segments | ||||
Segment Reporting Disclosure [Line Items] | ||||
Net sales | 2,566 | 1,566 | ||
Segment operating expenses | 1,850 | 1,301 | ||
Segment operating income (loss) before stock-based compensation and other | 716 | 265 | ||
Stock-based compensation and other | 112 | 70 | ||
Operating income | 604 | 195 | ||
AWS | ||||
Segment Reporting Disclosure [Line Items] | ||||
Net sales | $ 2,566 | $ 1,566 |
Segment Information Net Sales of Similar Products and Services (Detail) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2016 |
Mar. 31, 2015 |
|||
Revenue from External Customer [Line Items] | ||||
Net sales | $ 29,128 | $ 22,717 | ||
Media | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 5,688 | 5,289 | ||
Electronics and other general merchandise | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 20,545 | 15,628 | ||
AWS | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 2,566 | 1,566 | ||
Other | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | [1] | $ 329 | $ 234 | |
|
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