Stockholders' Equity

6 Months Ended

Jun. 30, 2020

STOCKHOLDERS’ EQUITY

Stock Repurchase Activity

In February 2016, the Board of Directors authorized a program to repurchase up to $5.0 billion of our common stock, with no fixed expiration. There were no repurchases of common stock during the six months ended June 30, 2019 or 2020.

Stock Award Activity

Common shares outstanding plus shares underlying outstanding stock awards totaled 512 million and 517 million as of December 31, 2019 and June 30, 2020. These totals include all vested and unvested stock awards outstanding, including those awards we estimate will be forfeited. Stock-based compensation expense is as follows (in millions):


	Three Months Ended June 30,						Six Months Ended June 30,
	2019		2020		2019		2020
Cost of sales	$	43	$	76	$	67	$	118
Fulfillment	360		417		594		677
Technology and content	1,077		1,421		1,752		2,382
Marketing	307		456		516		787
General and administrative	184		231		316		394
Total stock-based compensation expense	$	1,971	$	2,601	$	3,245	$	4,358

The following table summarizes our restricted stock unit activity for the six months ended June 30, 2020 (in millions):


	Number of Units	Weighted-Average Grant-Date Fair Value
Outstanding as of December 31, 2019	14.3	$	1,458
Units granted	5.7	2,063
Units vested	(3.1)	1,187
Units forfeited	(0.7)	1,493
Outstanding as of June 30, 2020	16.2	1,721

Scheduled vesting for outstanding restricted stock units as of June 30, 2020, is as follows (in millions):


	Six Months Ended December 31,	Year Ended December 31,
	2020	2021	2022	2023	2024	Thereafter	Total
Scheduled vesting—restricted stock units	2.7	5.8	5.1	2.0	0.5	0.1	16.2

As of June 30, 2020, there was $13.1 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. The estimated forfeiture rate as of December 31, 2019 and June 30, 2020 was 27%. Changes in our estimates and assumptions relating to forfeitures may cause us to realize material changes in stock-based compensation expense in the future.

Changes in Stockholders’ Equity

The following table shows the changes in stockholders’ equity (in millions):


	Three Months Ended June 30,						Six Months Ended June 30,
	2019		2020		2019		2020
Total beginning stockholders’ equity	$	48,410	$	65,272	$	43,549	$	62,060

Beginning and ending common stock	5		5		5		5

Beginning and ending treasury stock	(1,837)		(1,837)		(1,837)		(1,837)

Beginning additional paid-in capital	28,059		35,412		26,791		33,658
Stock-based compensation and issuance of employee benefit plan stock	1,976		2,605		3,244		4,359
Ending additional paid-in capital	30,035		38,017		30,035		38,017

Beginning accumulated other comprehensive income (loss)	(1,010)		(2,063)		(1,035)		(986)
Other comprehensive income (loss)	50		608		75		(469)
Ending accumulated other comprehensive income (loss)	(960)		(1,455)		(960)		(1,455)

Beginning retained earnings	23,193		33,755		19,625		31,220
Cumulative effect of changes in accounting principles (1)	—		—		7		—
Net income	2,625		5,243		6,186		7,778
Ending retained earnings	25,818		38,998		25,818		38,998

Total ending stockholders’ equity	$	53,061	$	73,728	$	53,061	$	73,728

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(1)We recorded cumulative effect adjustments related to the new lease standard in Q1 2019 and the new measurement of credit losses standard in Q1 2020.