Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 14, 2015 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | AMZN | |
Entity Registrant Name | AMAZON COM INC | |
Entity Central Index Key | 1,018,724 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 468,762,005 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | $ 10,269 | $ 5,057 | $ 14,557 | $ 8,658 | $ 5,258 | $ 3,872 |
OPERATING ACTIVITIES: | ||||||
Net income (loss) | 79 | (437) | 114 | (455) | 328 | (216) |
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 | 1,599 | 1,247 | 4,529 | 3,366 | 5,908 | 4,329 |
Stock-based compensation | 544 | 377 | 1,513 | 1,089 | 1,921 | 1,414 |
Other operating expense (income), net | 34 | 31 | 120 | 93 | 156 | 133 |
Losses (gains) on sales of marketable securities, net | 2 | (3) | 4 | (4) | 4 | (3) |
Other expense (income), net | 56 | 42 | 166 | (16) | 244 | 36 |
Deferred income taxes | (63) | (270) | (108) | (503) | 76 | (613) |
Excess tax benefits from stock-based compensation | (95) | 0 | (212) | (121) | (96) | (199) |
Changes in operating assets and liabilities: | ||||||
Inventories | (1,537) | (845) | (844) | (54) | (1,983) | (1,383) |
Accounts receivable, net and other | (588) | (362) | (577) | 66 | (1,681) | (1,173) |
Accounts payable | 2,030 | 1,724 | (1,846) | (3,294) | 3,207 | 1,834 |
Accrued expenses and other | 143 | 4 | (925) | (742) | 525 | 847 |
Additions to unearned revenue | 1,779 | 1,069 | 4,979 | 3,055 | 6,358 | 3,874 |
Amortization of previously unearned revenue | (1,373) | (811) | (3,805) | (2,353) | (5,144) | (3,175) |
Net cash provided by (used in) operating activities | 2,610 | 1,766 | 3,108 | 127 | 9,823 | 5,705 |
INVESTING ACTIVITIES: | ||||||
Purchases of property and equipment, including internal-use software and website development | (1,195) | (1,378) | (3,280) | (3,748) | (4,424) | (4,628) |
Acquisitions, net of cash acquired, and other | (105) | (860) | (478) | (926) | (531) | (986) |
Sales and maturities of marketable securities | 1,045 | 1,439 | 1,890 | 2,994 | 2,244 | 3,509 |
Purchases of marketable securities | (1,122) | (147) | (2,732) | (920) | (4,354) | (1,339) |
Net cash provided by (used in) investing activities | (1,377) | (946) | (4,600) | (2,600) | (7,065) | (3,444) |
FINANCING ACTIVITIES: | ||||||
Excess tax benefits from stock-based compensation | 95 | 0 | 212 | 121 | 96 | 199 |
Proceeds from long-term debt and other | 33 | 28 | 260 | 379 | 6,241 | 628 |
Repayments of long-term debt and other | (181) | (84) | (712) | (331) | (894) | (371) |
Principal repayments of capital lease obligations | (656) | (343) | (1,738) | (878) | (2,144) | (1,103) |
Principal repayments of finance lease obligations | (21) | (13) | (95) | (68) | (163) | (73) |
Net cash provided by (used in) financing activities | (730) | (412) | (2,073) | (777) | 3,136 | (720) |
Foreign-currency effect on cash and cash equivalents | (63) | (207) | (283) | (150) | (443) | (155) |
Net increase (decrease) in cash and cash equivalents | 440 | 201 | (3,848) | (3,400) | 5,451 | 1,386 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 10,709 | 5,258 | 10,709 | 5,258 | 10,709 | 5,258 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||
Cash paid for interest on long-term debt | 7 | 7 | 177 | 56 | 212 | 93 |
Cash paid for income taxes (net of refunds) | 80 | 38 | 200 | 148 | 230 | 173 |
Assets Held under Capital Leases | ||||||
SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||
Property and equipment acquired | 1,047 | 1,158 | 3,385 | 2,794 | 4,599 | 3,347 |
Assets Held under Build-To-Suit Leases | ||||||
SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||
Property and equipment acquired | $ 125 | $ 343 | $ 381 | $ 707 | $ 595 | $ 920 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Net product sales | $ 18,463 | $ 16,022 | $ 52,650 | $ 46,978 |
Net service sales | 6,895 | 4,557 | 18,609 | 12,681 |
Total net sales | 25,358 | 20,579 | 71,259 | 59,659 |
Operating expenses | ||||
Cost of sales | 16,755 | 14,627 | 47,310 | 42,080 |
Fulfillment | 3,230 | 2,643 | 8,865 | 7,342 |
Marketing | 1,264 | 993 | 3,496 | 2,806 |
Technology and content | 3,197 | 2,423 | 8,971 | 6,639 |
General and administrative | 463 | 406 | 1,357 | 1,110 |
Other operating expense (income), net | 43 | 31 | 136 | 94 |
Total operating expenses | 24,952 | 21,123 | 70,135 | 60,071 |
Income (loss) from operations | 406 | (544) | 1,124 | (412) |
Interest income | 13 | 9 | 37 | 31 |
Interest expense | (116) | (49) | (344) | (136) |
Other income (expense), net | (56) | (50) | (187) | (23) |
Total non-operating income (expense) | (159) | (90) | (494) | (128) |
Income (loss) before income taxes | 247 | (634) | 630 | (540) |
Benefit (provision) for income taxes | (161) | 205 | (498) | 38 |
Equity-method investment activity, net of tax | (7) | (8) | (18) | 47 |
Net income (loss) | $ 79 | $ (437) | $ 114 | $ (455) |
Basic earnings per share (in usd per share) | $ 0.17 | $ (0.95) | $ 0.24 | $ (0.99) |
Diluted earnings per share (in usd per share) | $ 0.17 | $ (0.95) | $ 0.24 | $ (0.99) |
Weighted average shares used in computation of earnings per share: | ||||
Basic (in shares) | 468 | 463 | 467 | 461 |
Diluted (in shares) | 478 | 463 | 476 | 461 |
Consolidated Statements Of Ope4
Consolidated Statements Of Operations (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Fulfillment | ||||
Stock-based compensation | $ 122 | $ 93 | $ 344 | $ 278 |
Marketing | ||||
Stock-based compensation | 48 | 32 | 133 | 91 |
Technology and content | ||||
Stock-based compensation | 309 | 204 | 861 | 579 |
General and administrative | ||||
Stock-based compensation | $ 65 | $ 48 | $ 175 | $ 141 |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Net income (loss) | $ 79 | $ (437) | $ 114 | $ (455) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments, net of tax of $4, $(1), $3, and $0 | (56) | (248) | (170) | (209) |
Net change in unrealized gains (losses) on available-for-sale securities: | ||||
Unrealized gains (losses), net of tax of $3, $2, $(5), and $1 | (3) | (1) | 3 | 2 |
Reclassification adjustment for losses (gains) included in “Other income (expense), net,” net of tax of $(1), $(1), $(1), and $(1) | 1 | (2) | 3 | (2) |
Net unrealized gains (losses) on available-for-sale securities | (2) | (3) | 6 | 0 |
Total other comprehensive income (loss) | (58) | (251) | (164) | (209) |
Comprehensive income (loss) | $ 21 | $ (688) | $ (50) | $ (664) |
Consolidated Statements Of Com6
Consolidated Statements Of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation adjustments, tax | $ 4 | $ (1) | $ 3 | $ 0 |
Unrealized gains (losses), tax | 3 | 2 | (5) | 1 |
Reclassification adjustment for losses (gains) included in other income (expense), net, tax | $ (1) | $ (1) | $ (1) | $ (1) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 10,709 | $ 14,557 |
Marketable securities | 3,719 | 2,859 |
Inventories | 8,981 | 8,299 |
Accounts receivable, net and other | 5,440 | 5,612 |
Total current assets | 28,849 | 31,327 |
Property and equipment, net | 20,636 | 16,967 |
Goodwill | 3,529 | 3,319 |
Other assets | 3,216 | 2,892 |
Total assets | 56,230 | 54,505 |
Current liabilities: | ||
Accounts payable | 14,437 | 16,459 |
Accrued expenses and other | 9,157 | 9,807 |
Unearned revenue | 3,063 | 1,823 |
Total current liabilities | 26,657 | 28,089 |
Long-term debt | 8,243 | 8,265 |
Other long-term liabilities | $ 8,900 | $ 7,410 |
Commitments and contingencies (Note 3) | ||
Stockholders’ equity: | ||
Preferred stock, $0.01 par value: Authorized shares - 500 Issued and outstanding shares - none | $ 0 | $ 0 |
Common stock, $0.01 par value: Authorized shares - 5,000 Issued shares - 492 and 488 Outstanding shares - 469 and 465 | 5 | 5 |
Treasury stock, at cost | (1,837) | (1,837) |
Additional paid-in capital | 12,874 | 11,135 |
Accumulated other comprehensive loss | (675) | (511) |
Retained earnings | 2,063 | 1,949 |
Total stockholders’ equity | 12,430 | 10,741 |
Total liabilities and stockholders’ equity | $ 56,230 | $ 54,505 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2015 | Dec. 31, 2014 |
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 | 492,000,000 | 488,000,000 |
Common stock, Outstanding shares | 469,000,000 | 465,000,000 |
Accounting Policies
Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
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 2015 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 2014 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 expanded presentation of “Net cash provided by (used in) financing activities” on our consolidated statements of cash flows and recasting the segment financial information within “Note 4 — Acquisitions, Goodwill, and Acquired Intangible Assets” and “Note 8 — Segment Information” as a result of changing our reportable segments to include an Amazon Web Services (“AWS”) segment. 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 Q3 2014 and for the nine months ended September 30, 2014 , we excluded stock awards of 18 million and 17 million . The following table shows the calculation of diluted shares (in millions): Three Months Ended Nine Months Ended 2015 2014 2015 2014 Shares used in computation of basic earnings per share 468 463 467 461 Total dilutive effect of outstanding stock awards 10 — 9 — Shares used in computation of diluted earnings per share 478 463 476 461 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, account, 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 will have on our consolidated financial statements. In July 2015, the FASB issued an ASU modifying the accounting for inventory. Under this ASU, the measurement principle for inventory will change from lower of cost or market value to lower of cost and net realizable value. The ASU defines net realizable value as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The ASU is applicable to inventory that is accounted for under the first-in, first-out method and is effective for reporting periods after December 15, 2016, with early adoption permitted. We do not expect adoption to have a material impact on our consolidated financial statements. |
Cash, Cash Equivalents, and Mar
Cash, Cash Equivalents, and Marketable Securities | 9 Months Ended |
Sep. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Cash, Cash Equivalents, and Marketable Securities | CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES As of September 30, 2015 , and December 31, 2014 , 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 September 30, 2015 , or December 31, 2014 . The following table summarizes, 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): September 30, 2015 December 31, 2014 Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Total Estimated Fair Value Total Estimated Fair Value Cash $ 5,026 $ — $ — $ 5,026 $ 4,155 Level 1 securities: Money market funds 5,921 — — 5,921 10,718 Equity securities 4 14 — 18 4 Level 2 securities: Foreign government and agency securities 48 — — 48 80 U.S. government and agency securities 3,009 2 (2 ) 3,009 2,406 Corporate debt securities 483 1 (1 ) 483 401 Asset-backed securities 120 — — 120 69 Other fixed income securities 42 — — 42 33 $ 14,653 $ 17 $ (3 ) $ 14,667 $ 17,866 Less restricted cash, cash equivalents, and marketable securities (1) (239 ) (450 ) Total cash, cash equivalents, and marketable securities $ 14,428 $ 17,416 ___________________ (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.” The following table summarizes the contractual maturities of our cash equivalents and marketable fixed-income securities as of September 30, 2015 (in millions): Amortized Cost Estimated Fair Value Due within one year $ 8,053 $ 8,054 Due after one year through five years 1,252 1,252 Due after five years through ten years 141 141 Due after ten years 177 176 Total $ 9,623 $ 9,623 Actual maturities may differ from the contractual maturities because borrowers may have certain prepayment conditions. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
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 $291 million and $252 million for Q3 2015 and Q3 2014 , and $824 million and $700 million for the nine months ended September 30, 2015 and 2014 . The following summarizes our principal contractual commitments, excluding open orders for purchases that support normal operations, as of September 30, 2015 (in millions): Three Months Ended December 31, Year Ended December 31, 2015 2016 2017 2018 2019 Thereafter Total Debt principal and interest $ 1,237 $ 323 $ 1,322 $ 310 $ 1,272 $ 9,403 $ 13,867 Capital lease obligations, including interest 729 2,758 2,119 860 239 162 6,867 Finance lease obligations, including interest 40 161 163 167 171 1,658 2,360 Operating leases 317 964 878 779 688 2,875 6,501 Unconditional purchase obligations (1) 116 632 539 386 152 43 1,868 Other commitments (2) (3) 446 482 240 170 107 963 2,408 Total commitments $ 2,885 $ 5,320 $ 5,261 $ 2,672 $ 2,629 $ 15,104 $ 33,871 ___________________ (1) Includes unconditional purchase obligations related to long-term agreements to acquire and license digital 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. (2) Includes the estimated timing and amounts of payments for rent and tenant improvements associated with build-to-suit lease arrangements that have not been placed in service and media content liabilities associated with long-term media content assets with initial terms greater than one year. (3) Excludes $895 million of tax contingencies for which we cannot make a reasonably reliable estimate of the amount and period of payment, if any. Pledged Assets As of September 30, 2015 , and December 31, 2014 , we have pledged or otherwise restricted $377 million and $602 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 8 — Commitments and Contingencies — Legal Proceedings” of our 2014 Annual Report on Form 10-K and in Item 1 of Part I, “Financial Statements — Note 3 — Commitments and Contingencies — Legal Proceedings” of our Quarterly Reports on Form 10-Q for the Periods Ended March 31, 2015 and June 30, 2015, 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 Sarl, 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 addition, in December 2012, a German copyright collection society, Zentralstelle für private Überspielungsrechte (“ZPU”), filed a complaint against Amazon EU Sarl, Amazon Media EU Sarl, Amazon Services Europe Sarl, Amazon Payments Europe SCA, Amazon Europe Holding Technologies SCS, and Amazon Eurasia Holdings Sarl 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 Sarl 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 July 2013, Telebuyer, LLC filed a complaint against Amazon.com, Inc., Amazon Web Services, LLC, and VADATA, Inc. in the United States District Court for the Eastern District of Virginia. The complaint alleges, among other things, that certain features used on our retail website-including high resolution video and still images, user-indicated areas of interest, targeted follow-up communications, vendor proposals, on-line chat, Gold Box and Lightning Deals, and vendor ratings-infringe seven U.S. patents: Nos. 6,323,894, 7,835,508, 7,835,509, 7,839,984, 8,059,796, and 8,098,272, all entitled “Commercial Product Routing System With Video Vending Capability,” and 8,315,364, entitled “Commercial Product Routing System With Mobile Wireless And Video Vending Capability.” The complaint seeks an unspecified amount of damages, interest, and injunctive relief. In September 2013, the case was transferred to the United States District Court for the Western District of Washington. In July 2015, the court invalidated all asserted claims of all asserted patents and dismissed the case with prejudice. In August 2015, Telebuyer appealed that 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. In September 2013, Personalized Media Communications, LLC filed a complaint against Amazon.com, Inc. and Amazon Web Services, LLC in the United States District Court for the District of Delaware. The complaint alleges, among other things, that the use of certain Kindle devices, Kindle apps and/or Amazon.com, Inc.’s website to purchase and receive electronic media infringes nine U.S. Patents: Nos. 5,887,243, 7,801,304, 7,805,749, 7,940,931, 7,769,170, 7,864,956, 7,827,587, 8,046,791, and 7,883,252, all entitled “Signal Processing Apparatus And Methods.” The complaint also alleges, among other things, that CloudFront, S3, and EC2 web services infringe three of those patents, Nos. 7,801,304, 7,864,956, and 7,827,587. The complaint seeks an unspecified amount of damages, interest, and injunctive relief. In August 2015, the court invalidated all asserted claims of all asserted patents and dismissed the case with prejudice. In September 2015, Personalized Media appealed that 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. In December 2013, Appistry, Inc. filed a complaint against Amazon.com, Inc. and Amazon Web Services, Inc. for patent infringement in the United States District Court for the Eastern District of Missouri. The complaint alleges, among other things, that Amazon’s Elastic Compute Cloud infringes U.S. Patent Nos. 8,200,746, entitled “System And Method For Territory-Based Processing Of Information,” and 8,341,209, entitled “System And Method For Processing Information Via Networked Computers Including Request Handlers, Process Handlers, And Task Handlers.” The complaint seeks injunctive relief, an unspecified amount of damages, treble damages, costs, and interest. In March 2015, the case was transferred to the United States District Court for the Western District of Washington. In July 2015, the court granted our motion for judgment on the pleadings and invalidated the patents-in-suit. In August 2015, the court entered judgment in our favor. In September 2015, the plaintiff appealed that judgment to the United States Court of Appeals for the Federal Circuit, and filed a new complaint against Amazon.com, Inc. and Amazon Web Services, Inc. in the United States District Court for the Western District of Washington. The 2015 complaint alleges, among other things, that Amazon’s Elastic Compute Cloud, Simple Workflow, and Herd infringe U.S. Patent Nos. 8,682,959, entitled “System And Method For Fault Tolerant Processing Of Information Via Networked Computers Including Request Handlers, Process Handlers, And Task Handlers,” and 9,049,267, entitled “System And Method For Processing Information Via Networked Computers Including Request Handlers, Process Handlers, And Task Handlers.” The 2015 complaint seeks injunctive relief, an unspecified amount of damages, treble damages, costs, and interest. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in these matters. In March 2014, Kaavo, Inc. filed a complaint against Amazon.com, Inc. and Amazon Web Services, Inc. for patent infringement in the United States District Court for the District of Delaware. The complaint alleges, among other things, that Amazon Web Services’ Elastic Beanstalk and CloudFormation infringe U.S. Patent No. 8,271,974, entitled “Cloud Computing Lifecycle Management For N-Tier Applications.” The complaint seeks injunctive relief, an unspecified amount of damages, costs, and interest. In June 2015, the case was stayed pending resolution of a motion for judgment on the pleadings in a related case. In July 2015, Kaavo Inc. filed another complaint against Amazon.com, Inc. and Amazon Web Services, Inc. in the United States District Court for the District of Delaware. The 2015 complaint alleges, among other things, that CloudFormation infringes U.S. Patent No. 9,043,751, entitled “Methods And Devices For Managing A Cloud Computing Environment.” The 2015 complaint seeks injunctive relief, an unspecified amount of damages, enhanced damages, attorneys’ fees, costs, and interest. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in these matters. In October 2015, St. Luke Technologies, LLC filed a complaint against Amazon.com, Inc. and Amazon Web Services, Inc. for patent infringement in the United States District Court for the Eastern District of Texas alleging, among other things, that AWS WorkMail, Identity and Access Management, CloudTrail, Key Management Service, and Data Stores infringe U.S. Patent Nos. 8,316,237, 7,181,017, 7,869,591, and 8,904,181, all entitled “System and Method for Secure Three-Party Communication,” and that WorkMail, Identity and Access Management, CloudTrail, Key Management Service, Data Stores, DynamoDB, SDK, and the “AWS platform” infringe U.S. Patent Nos. 7,587,368, 8,498,941, 8,380,630, and 8,600,895, all entitled “Information Record Infrastructure, System and Method.” The complaint seeks an unspecified amount of damages together with pre- and post-judgment interest. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in this matter. 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 7 — Income Taxes.” |
Acquisitions, Goodwill, and Acq
Acquisitions, Goodwill, and Acquired Intangible Assets | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Acquisitions, Goodwill, and Acquired Intangible Assets | ACQUISITIONS, GOODWILL, AND ACQUIRED INTANGIBLE ASSETS 2015 Acquisition Activity During the nine months ended September 30, 2015 , we acquired certain companies for an aggregate purchase price of $393 million . The primary reasons for these acquisitions, none of which was individually material to our consolidated financial statements, were to acquire technologies and know-how to enable Amazon to serve customers more effectively. Acquisition-related costs were expensed as incurred and not significant. The aggregate purchase price of these acquisitions was allocated as follows (in millions): Purchase Price Cash paid, net of cash acquired $ 340 Indemnification holdback 53 $ 393 Allocation Goodwill $ 239 Intangible assets (1): Contract-based 1 Technology-based 181 Customer-related 4 186 Property and equipment 1 Deferred tax assets 34 Other assets acquired 23 Deferred tax liabilities (65 ) Other liabilities assumed (25 ) $ 393 ___________________ (1) Acquired intangible assets have estimated useful lives of between one and six years, with a weighted-average amortization period of five years. We determined the estimated fair value of identifiable intangible assets acquired primarily by using the income approach. These assets are included within “Other assets” on our consolidated balance sheets and are being amortized to operating expenses on a straight-line basis over their estimated useful lives. On October 19, 2015, we acquired Elemental Technologies, Inc. (“Elemental”), for total consideration of approximately $296 million . The acquisition combines Elemental’s video solutions with the AWS Cloud platform to provide customers integrated solutions to efficiently and economically scale video infrastructures. We are currently in the process of estimating the fair values of the assets acquired and liabilities assumed and will include the impact of this acquisition in our 2015 Annual Report on Form 10-K. Pro Forma Financial Information (unaudited) The acquired companies were consolidated into our financial statements starting on their respective acquisition dates. The aggregate net sales and operating loss of the companies acquired was $7 million and $(78) million for the nine months ended September 30, 2015 . The following financial information, which excludes certain acquired companies for which the pro forma impact is not meaningful, presents our results as if the companies acquired during the nine months ended September 30, 2015 had occurred at the beginning of 2014 (in millions): Nine Months Ended September 30, 2015 2014 Net sales $ 71,261 $ 59,660 Net income (loss) $ 126 $ (486 ) 2014 Acquisition Activity During the nine months ended September 30, 2014 , we acquired companies for an aggregate purchase price of approximately $862 million in cash, as adjusted for the assumption of options and other items, which resulted in goodwill of $707 million and acquired intangible assets of $230 million . The primary reasons for these acquisitions were to acquire technologies and know-how to enable Amazon to serve customers more effectively. We determined the estimated fair value of identifiable intangible assets acquired primarily by using the income approach. These assets are included within “Other assets” on our consolidated balance sheets and are being amortized to operating expenses on a straight-line basis over their estimated useful lives. Acquisition-related costs were expensed as incurred and not significant. Pro forma results of operations have not been presented because the effects of these acquisitions, individually and in the aggregate, were not material to our consolidated results of operations. Goodwill The goodwill of the acquired companies is generally not deductible for tax purposes and is primarily related to expected improvements in technology performance and functionality, as well as sales growth from future product and service offerings and new customers, together with certain intangible assets that do not qualify for separate recognition. The following summarizes our goodwill activity during the nine months ended September 30, 2015 by segment (in millions): North America International AWS Consolidated Goodwill - January 1, 2015 $ 1,978 $ 735 $ 606 $ 3,319 New acquisitions 41 17 181 239 Other adjustments (1) (5 ) (22 ) (2 ) (29 ) Goodwill - September 30, 2015 $ 2,014 $ 730 $ 785 $ 3,529 ___________________ (1) Primarily includes changes in foreign exchange rates. During the second quarter of 2015, we changed the measurement date of our annual goodwill impairment test from October 1 to April 1. This change was not material to our consolidated financial statements as it did not result in the delay, acceleration, or avoidance of an impairment charge. We believe this timing better aligns the goodwill impairment test with our strategic business planning process, which is a key component of the goodwill impairment test. We completed the required annual testing of goodwill for impairment for all reporting units as of April 1, 2015 and determined that goodwill is not impaired. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
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 as described in the table below (collectively, the “Notes”). As of September 30, 2015 , and December 31, 2014 , the unamortized discount on the Notes was $91 million and $96 million . We also have other long-term debt with a carrying amount, including the current portion, of $451 million and $881 million as of September 30, 2015 , and December 31, 2014 . The face value of our total long-term debt obligations is as follows (in millions): September 30, December 31, 2014 0.65% Notes due on November 27, 2015 (1) $ 750 $ 750 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 451 881 Total debt 9,451 9,881 Less current portion of long-term debt (1,117 ) (1,520 ) Face value of long-term debt $ 8,334 $ 8,361 _____________________________ (1) Issued in November 2012, effective interest rates of the 2015, 2017, and 2022 Notes were 0.84% , 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% . 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 $9.2 billion and $9.1 billion as of September 30, 2015 , and December 31, 2014 , 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 3.7% and 5.5% as of September 30, 2015 , and December 31, 2014 . 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 September 30, 2015 , and December 31, 2014 . 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 September 30, 2015 . |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY Stock Award Activity Common shares outstanding plus shares underlying outstanding stock awards totaled 489 million as of September 30, 2015 , and 483 million as of December 31, 2014 . 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 nine months ended September 30, 2015 . The following table summarizes our restricted stock unit activity for the nine months ended September 30, 2015 (in millions): Number of Units Weighted Average Grant-Date Fair Value Outstanding as of December 31, 2014 17.4 $ 285 Units granted 8.7 400 Units vested (3.8 ) 244 Units forfeited (2.2 ) 312 Outstanding as of September 30, 2015 20.1 $ 339 Scheduled vesting for outstanding restricted stock units as of September 30, 2015 , is as follows (in millions): Three Months Ended December 31, Year Ended December 31, 2015 2016 2017 2018 2019 Thereafter Total Scheduled vesting—restricted stock units 1.8 6.5 6.9 3.3 1.3 0.3 20.1 As of September 30, 2015 , there was $3.1 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. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
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 2015 , our effective tax rate will be significantly affected by the favorable impact of earnings in lower tax rate jurisdictions and the adverse effect of losses incurred in certain foreign jurisdictions for which we may not realize a tax benefit. Income earned in lower tax jurisdictions is primarily related to our European operations, which are headquartered in Luxembourg. Losses for which we may not realize a related tax benefit, primarily due to losses of foreign subsidiaries, 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 adversely impacted by the amount of our pre-tax income, or loss, relative to our income tax expense, nondeductible expenses, and changes in tax law such as the expiration of the U.S. federal research and development credit at the end of 2014. Our income tax provision for the nine months ended September 30, 2015 was $498 million , which included $37 million of discrete tax items primarily attributed to acquisition integrations. Our income tax benefit for the nine months ended September 30, 2014 was $38 million , which included $82 million of discrete tax items primarily attributable to audit-related developments. Cash paid for income taxes (net of refunds) was $80 million and $38 million in Q3 2015 and Q3 2014 , and $200 million and $148 million for the nine months ended September 30, 2015 and 2014 . As of September 30, 2015 , and December 31, 2014 , tax contingencies were $895 million and $710 million . We expect the total amount of tax contingencies will grow in 2015 . 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, 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
Segment Information | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION Beginning in the first quarter of 2015, we changed our reportable segments to North America, International, and AWS. These segments reflect the way the Company evaluates its business performance and manages its operations. 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 costs 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. We exclude from our allocations the portions of these operating expense lines attributable to stock-based compensation. We do not allocate the line item “Other operating expense (income), net” to our segment operating results. There are no internal revenue transactions between our reportable segments. North America The North America segment consists primarily 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 consists primarily 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): Three Months Ended Nine Months Ended 2015 2014 2015 2014 North America Net sales $ 15,006 $ 11,699 $ 42,208 $ 33,499 Segment operating expenses (1) 14,478 11,759 40,461 32,940 Segment operating income (loss) $ 528 $ (60 ) $ 1,747 $ 559 International Net sales $ 8,267 $ 7,711 $ 23,577 $ 22,936 Segment operating expenses (1) 8,323 7,885 23,728 23,144 Segment operating income (loss) $ (56 ) $ (174 ) $ (151 ) $ (208 ) AWS Net sales $ 2,085 $ 1,169 $ 5,474 $ 3,224 Segment operating expenses (1) 1,564 1,071 4,297 2,804 Segment operating income (loss) $ 521 $ 98 $ 1,177 $ 420 Consolidated Net sales $ 25,358 $ 20,579 $ 71,259 $ 59,659 Segment operating expenses (1) 24,365 20,715 68,486 58,888 Segment operating income (loss) 993 (136 ) 2,773 771 Stock-based compensation (544 ) (377 ) (1,513 ) (1,089 ) Other operating income (expense), net (43 ) (31 ) (136 ) (94 ) Income (loss) from operations 406 (544 ) 1,124 (412 ) Total non-operating income (expense) (159 ) (90 ) (494 ) (128 ) Benefit (provision) for income taxes (161 ) 205 (498 ) 38 Equity-method investment activity, net of tax (7 ) (8 ) (18 ) 47 Net income (loss) $ 79 $ (437 ) $ 114 $ (455 ) ___________________ (1) Excludes stock-based compensation and “Other operating expense (income), net” which are not allocated to segments. 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. Three Months Ended Nine Months Ended 2015 2014 2015 2014 Net Sales: Media $ 5,283 $ 5,244 $ 15,286 $ 15,554 Electronics and other general merchandise 17,741 13,953 49,782 40,248 AWS 2,085 1,169 5,474 3,224 Other (1) 249 213 717 633 Consolidated $ 25,358 $ 20,579 $ 71,259 $ 59,659 ___________________ (1) Includes sales from non-retail activities, such as certain advertising services and our co-branded credit card agreements. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
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, account, 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 will have on our consolidated financial statements. In July 2015, the FASB issued an ASU modifying the accounting for inventory. Under this ASU, the measurement principle for inventory will change from lower of cost or market value to lower of cost and net realizable value. The ASU defines net realizable value as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The ASU is applicable to inventory that is accounted for under the first-in, first-out method and is effective for reporting periods after December 15, 2016, with early adoption permitted. We do not expect adoption to have a material impact on our consolidated financial statements. |
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 2015 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 2014 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 expanded presentation of “Net cash provided by (used in) financing activities” on our consolidated statements of cash flows and recasting the segment financial information within “Note 4 — Acquisitions, Goodwill, and Acquired Intangible Assets” and “Note 8 — Segment Information” as a result of changing our reportable segments to include an Amazon Web Services (“AWS”) segment. |
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 Q3 2014 and for the nine months ended September 30, 2014 , we excluded stock awards of 18 million and 17 million . |
Accounting Policies (Tables)
Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Calculation of Diluted Shares | The following table shows the calculation of diluted shares (in millions): Three Months Ended Nine Months Ended 2015 2014 2015 2014 Shares used in computation of basic earnings per share 468 463 467 461 Total dilutive effect of outstanding stock awards 10 — 9 — Shares used in computation of diluted earnings per share 478 463 476 461 |
Cash, Cash Equivalents, and M19
Cash, Cash Equivalents, and Marketable Securities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Fair Value by Major Security Type | The following table summarizes, 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): September 30, 2015 December 31, 2014 Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Total Estimated Fair Value Total Estimated Fair Value Cash $ 5,026 $ — $ — $ 5,026 $ 4,155 Level 1 securities: Money market funds 5,921 — — 5,921 10,718 Equity securities 4 14 — 18 4 Level 2 securities: Foreign government and agency securities 48 — — 48 80 U.S. government and agency securities 3,009 2 (2 ) 3,009 2,406 Corporate debt securities 483 1 (1 ) 483 401 Asset-backed securities 120 — — 120 69 Other fixed income securities 42 — — 42 33 $ 14,653 $ 17 $ (3 ) $ 14,667 $ 17,866 Less restricted cash, cash equivalents, and marketable securities (1) (239 ) (450 ) Total cash, cash equivalents, and marketable securities $ 14,428 $ 17,416 ___________________ (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.” |
Investments Classified by Contractual Maturity Date | The following table summarizes the contractual maturities of our cash equivalents and marketable fixed-income securities as of September 30, 2015 (in millions): Amortized Cost Estimated Fair Value Due within one year $ 8,053 $ 8,054 Due after one year through five years 1,252 1,252 Due after five years through ten years 141 141 Due after ten years 177 176 Total $ 9,623 $ 9,623 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments Disclosure | The following summarizes our principal contractual commitments, excluding open orders for purchases that support normal operations, as of September 30, 2015 (in millions): Three Months Ended December 31, Year Ended December 31, 2015 2016 2017 2018 2019 Thereafter Total Debt principal and interest $ 1,237 $ 323 $ 1,322 $ 310 $ 1,272 $ 9,403 $ 13,867 Capital lease obligations, including interest 729 2,758 2,119 860 239 162 6,867 Finance lease obligations, including interest 40 161 163 167 171 1,658 2,360 Operating leases 317 964 878 779 688 2,875 6,501 Unconditional purchase obligations (1) 116 632 539 386 152 43 1,868 Other commitments (2) (3) 446 482 240 170 107 963 2,408 Total commitments $ 2,885 $ 5,320 $ 5,261 $ 2,672 $ 2,629 $ 15,104 $ 33,871 ___________________ (1) Includes unconditional purchase obligations related to long-term agreements to acquire and license digital 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. (2) Includes the estimated timing and amounts of payments for rent and tenant improvements associated with build-to-suit lease arrangements that have not been placed in service and media content liabilities associated with long-term media content assets with initial terms greater than one year. (3) Excludes $895 million of tax contingencies for which we cannot make a reasonably reliable estimate of the amount and period of payment, if any. |
Acquisitions, Goodwill, and A21
Acquisitions, Goodwill, and Acquired Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The aggregate purchase price of these acquisitions was allocated as follows (in millions): Purchase Price Cash paid, net of cash acquired $ 340 Indemnification holdback 53 $ 393 Allocation Goodwill $ 239 Intangible assets (1): Contract-based 1 Technology-based 181 Customer-related 4 186 Property and equipment 1 Deferred tax assets 34 Other assets acquired 23 Deferred tax liabilities (65 ) Other liabilities assumed (25 ) $ 393 ___________________ (1) Acquired intangible assets have estimated useful lives of between one and six years, with a weighted-average amortization period of five years. |
Pro Forma Financial Information | The following financial information, which excludes certain acquired companies for which the pro forma impact is not meaningful, presents our results as if the companies acquired during the nine months ended September 30, 2015 had occurred at the beginning of 2014 (in millions): Nine Months Ended September 30, 2015 2014 Net sales $ 71,261 $ 59,660 Net income (loss) $ 126 $ (486 ) |
Goodwill | The following summarizes our goodwill activity during the nine months ended September 30, 2015 by segment (in millions): North America International AWS Consolidated Goodwill - January 1, 2015 $ 1,978 $ 735 $ 606 $ 3,319 New acquisitions 41 17 181 239 Other adjustments (1) (5 ) (22 ) (2 ) (29 ) Goodwill - September 30, 2015 $ 2,014 $ 730 $ 785 $ 3,529 ___________________ (1) Primarily includes changes in foreign exchange rates. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Long-Term Debt Obligations | The face value of our total long-term debt obligations is as follows (in millions): September 30, December 31, 2014 0.65% Notes due on November 27, 2015 (1) $ 750 $ 750 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 451 881 Total debt 9,451 9,881 Less current portion of long-term debt (1,117 ) (1,520 ) Face value of long-term debt $ 8,334 $ 8,361 _____________________________ (1) Issued in November 2012, effective interest rates of the 2015, 2017, and 2022 Notes were 0.84% , 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% . |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Nonvested Restricted Stock Units Activity | The following table summarizes our restricted stock unit activity for the nine months ended September 30, 2015 (in millions): Number of Units Weighted Average Grant-Date Fair Value Outstanding as of December 31, 2014 17.4 $ 285 Units granted 8.7 400 Units vested (3.8 ) 244 Units forfeited (2.2 ) 312 Outstanding as of September 30, 2015 20.1 $ 339 |
Nonvested Share Activity | Scheduled vesting for outstanding restricted stock units as of September 30, 2015 , is as follows (in millions): Three Months Ended December 31, Year Ended December 31, 2015 2016 2017 2018 2019 Thereafter Total Scheduled vesting—restricted stock units 1.8 6.5 6.9 3.3 1.3 0.3 20.1 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
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): Three Months Ended Nine Months Ended 2015 2014 2015 2014 North America Net sales $ 15,006 $ 11,699 $ 42,208 $ 33,499 Segment operating expenses (1) 14,478 11,759 40,461 32,940 Segment operating income (loss) $ 528 $ (60 ) $ 1,747 $ 559 International Net sales $ 8,267 $ 7,711 $ 23,577 $ 22,936 Segment operating expenses (1) 8,323 7,885 23,728 23,144 Segment operating income (loss) $ (56 ) $ (174 ) $ (151 ) $ (208 ) AWS Net sales $ 2,085 $ 1,169 $ 5,474 $ 3,224 Segment operating expenses (1) 1,564 1,071 4,297 2,804 Segment operating income (loss) $ 521 $ 98 $ 1,177 $ 420 Consolidated Net sales $ 25,358 $ 20,579 $ 71,259 $ 59,659 Segment operating expenses (1) 24,365 20,715 68,486 58,888 Segment operating income (loss) 993 (136 ) 2,773 771 Stock-based compensation (544 ) (377 ) (1,513 ) (1,089 ) Other operating income (expense), net (43 ) (31 ) (136 ) (94 ) Income (loss) from operations 406 (544 ) 1,124 (412 ) Total non-operating income (expense) (159 ) (90 ) (494 ) (128 ) Benefit (provision) for income taxes (161 ) 205 (498 ) 38 Equity-method investment activity, net of tax (7 ) (8 ) (18 ) 47 Net income (loss) $ 79 $ (437 ) $ 114 $ (455 ) ___________________ (1) Excludes stock-based compensation and “Other operating expense (income), net” which are not allocated to segments. |
Revenue from External Customers by Products and Services | Three Months Ended Nine Months Ended 2015 2014 2015 2014 Net Sales: Media $ 5,283 $ 5,244 $ 15,286 $ 15,554 Electronics and other general merchandise 17,741 13,953 49,782 40,248 AWS 2,085 1,169 5,474 3,224 Other (1) 249 213 717 633 Consolidated $ 25,358 $ 20,579 $ 71,259 $ 59,659 ___________________ (1) Includes sales from non-retail activities, such as certain advertising services and our co-branded credit card agreements. |
Accounting Policies Calculation
Accounting Policies Calculation of Diluted Shares (Detail) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings Per Share [Abstract] | ||||
Shares used in computation of basic earnings per share | 468 | 463 | 467 | 461 |
Total dilutive effect of outstanding stock awards | 10 | 0 | 9 | 0 |
Shares used in computation of diluted earnings per share | 478 | 463 | 476 | 461 |
Accounting Policies Calculati26
Accounting Policies Calculation of Diluted Shares Additional Information (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2014 | Sep. 30, 2014 | |
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, Amount | 18 | 17 |
Cash, Cash Equivalents, and M27
Cash, Cash Equivalents, and Marketable Securities Summary by Major Security Type Cash Cash Equivalents and Marketable Securities Measured at Fair Value on Recurring Basis and Categorized Using Fair Value Hierarchy (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 | |
Cash, cash equivalents and marketable securities [Line Items] | |||
Less: Restricted cash, cash equivalents, and marketable securities | [1] | $ (239) | $ (450) |
Cash, Cash Equivalents, and Marketable Securities Total Estimated Fair Value | 14,428 | 17,416 | |
Cash | |||
Cash, cash equivalents and marketable securities [Line Items] | |||
Cost or Amortized Cost | 5,026 | ||
Gross Unrealized Gains | 0 | ||
Gross Unrealized Losses | 0 | ||
Cash, Cash Equivalents, and Marketable Securities Total Estimated Fair Value | 5,026 | 4,155 | |
Cash, cash equivalents, and marketable securities | |||
Cash, cash equivalents and marketable securities [Line Items] | |||
Cost or Amortized Cost | 14,653 | ||
Gross Unrealized Gains | 17 | ||
Gross Unrealized Losses | (3) | ||
Cash, Cash Equivalents, and Marketable Securities Total Estimated Fair Value | 14,667 | 17,866 | |
Level 1 Securities | Money market funds | |||
Cash, cash equivalents and marketable securities [Line Items] | |||
Cost or Amortized Cost | 5,921 | ||
Gross Unrealized Gains | 0 | ||
Gross Unrealized Losses | 0 | ||
Cash, Cash Equivalents, and Marketable Securities Total Estimated Fair Value | 5,921 | 10,718 | |
Level 1 Securities | Equity securities | |||
Cash, cash equivalents and marketable securities [Line Items] | |||
Cost or Amortized Cost | 4 | ||
Gross Unrealized Gains | 14 | ||
Gross Unrealized Losses | 0 | ||
Cash, Cash Equivalents, and Marketable Securities Total Estimated Fair Value | 18 | 4 | |
Level 2 Securities | Foreign government and agency securities | |||
Cash, cash equivalents and marketable securities [Line Items] | |||
Cost or Amortized Cost | 48 | ||
Gross Unrealized Gains | 0 | ||
Gross Unrealized Losses | 0 | ||
Cash, Cash Equivalents, and Marketable Securities Total Estimated Fair Value | 48 | 80 | |
Level 2 Securities | U.S. government and agency securities | |||
Cash, cash equivalents and marketable securities [Line Items] | |||
Cost or Amortized Cost | 3,009 | ||
Gross Unrealized Gains | 2 | ||
Gross Unrealized Losses | (2) | ||
Cash, Cash Equivalents, and Marketable Securities Total Estimated Fair Value | 3,009 | 2,406 | |
Level 2 Securities | Corporate debt securities | |||
Cash, cash equivalents and marketable securities [Line Items] | |||
Cost or Amortized Cost | 483 | ||
Gross Unrealized Gains | 1 | ||
Gross Unrealized Losses | (1) | ||
Cash, Cash Equivalents, and Marketable Securities Total Estimated Fair Value | 483 | 401 | |
Level 2 Securities | Asset-backed securities | |||
Cash, cash equivalents and marketable securities [Line Items] | |||
Cost or Amortized Cost | 120 | ||
Gross Unrealized Gains | 0 | ||
Gross Unrealized Losses | 0 | ||
Cash, Cash Equivalents, and Marketable Securities Total Estimated Fair Value | 120 | 69 | |
Level 2 Securities | Other fixed income securities | |||
Cash, cash equivalents and marketable securities [Line Items] | |||
Cost or Amortized Cost | 42 | ||
Gross Unrealized Gains | 0 | ||
Gross Unrealized Losses | 0 | ||
Cash, Cash Equivalents, and Marketable Securities Total Estimated Fair Value | $ 42 | $ 33 | |
[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.” |
Cash, Cash Equivalents, and M28
Cash, Cash Equivalents, and Marketable Securities Summary of Contractual Maturities of Cash Equivalent and Marketable Fixed Income Securities (Detail) $ in Millions | Sep. 30, 2015USD ($) |
Investments Classified by Contractual Maturity Date [Line Items] | |
Amortized Cost | $ 9,623 |
Estimated Fair Value | 9,623 |
Due within one year | |
Investments Classified by Contractual Maturity Date [Line Items] | |
Amortized Cost | 8,053 |
Estimated Fair Value | 8,054 |
Due after one year through five years | |
Investments Classified by Contractual Maturity Date [Line Items] | |
Amortized Cost | 1,252 |
Estimated Fair Value | 1,252 |
Due after five years through ten years | |
Investments Classified by Contractual Maturity Date [Line Items] | |
Amortized Cost | 141 |
Estimated Fair Value | 141 |
Due after ten years | |
Investments Classified by Contractual Maturity Date [Line Items] | |
Amortized Cost | 177 |
Estimated Fair Value | $ 176 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2013 | Jul. 31, 2013 | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Loss Contingencies [Line Items] | |||||||
Rental expense under operating lease agreements | $ 291 | $ 252 | $ 824 | $ 700 | |||
Tax contingencies | 895 | 895 | $ 710 | ||||
Pledged Assets | $ 377 | $ 377 | $ 602 | ||||
TelebuyerLLC [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Loss Contingency, Patents Allegedly Infringed, Number | 7 | ||||||
PersonalizedMediaCommunicationsLLC [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Loss Contingency, Patents Allegedly Infringed, Number | 9 | ||||||
PersonalizedMediaCommunicationsLLCAWS [Member] | |||||||
Loss Contingencies [Line Items] | |||||||
Loss Contingency, Patents Allegedly Infringed, Number | 3 |
Commitments and Contingencies P
Commitments and Contingencies Principal Contractual Commitments Excluding Open Orders for Inventory Purchases That Support Normal Operations (Detail) $ in Millions | Sep. 30, 2015USD ($) | |
Contractual commitments | ||
Three Months Ended December 31, 2015 | $ 2,885 | |
Year Ended December 31, 2016 | 5,320 | |
Year Ended December 31, 2017 | 5,261 | |
Year Ended December 31, 2018 | 2,672 | |
Year Ended December 31, 2019 | 2,629 | |
Thereafter | 15,104 | |
Total | 33,871 | |
Capital lease obligations, including interest | ||
Three Months Ended December 31, 2015 | 729 | |
Year Ended December 31, 2016 | 2,758 | |
Year Ended December 31, 2017 | 2,119 | |
Year Ended December 31, 2018 | 860 | |
Year Ended December 31, 2019 | 239 | |
Thereafter | 162 | |
Total | 6,867 | |
Operating leases | ||
Three Months Ended December 31, 2015 | 317 | |
Year Ended December 31, 2016 | 964 | |
Year Ended December 31, 2017 | 878 | |
Year Ended December 31, 2018 | 779 | |
Year Ended December 31, 2019 | 688 | |
Thereafter | 2,875 | |
Total | 6,501 | |
Unconditional purchase obligations | ||
Three Months Ended December 31, 2015 | 116 | [1] |
Year Ended December 31, 2016 | 632 | [1] |
Year Ended December 31, 2017 | 539 | [1] |
Year Ended December 31, 2018 | 386 | [1] |
Year Ended December 31, 2019 | 152 | [1] |
Thereafter | 43 | [1] |
Total | 1,868 | [1] |
Other commitments | ||
Three Months Ended December 31, 2015 | 446 | [2],[3] |
Year Ended December 31, 2016 | 482 | [2],[3] |
Year Ended December 31, 2017 | 240 | [2],[3] |
Year Ended December 31, 2018 | 170 | [2],[3] |
Year Ended December 31, 2019 | 107 | [2],[3] |
Thereafter | 963 | [2],[3] |
Total | 2,408 | [2],[3] |
Debt principal and interest | ||
Contractual commitments | ||
Three Months Ended December 31, 2015 | 1,237 | |
Year Ended December 31, 2016 | 323 | |
Year Ended December 31, 2017 | 1,322 | |
Year Ended December 31, 2018 | 310 | |
Year Ended December 31, 2019 | 1,272 | |
Thereafter | 9,403 | |
Total | 13,867 | |
Finance lease obligations, including interest | ||
Contractual commitments | ||
Three Months Ended December 31, 2015 | 40 | |
Year Ended December 31, 2016 | 161 | |
Year Ended December 31, 2017 | 163 | |
Year Ended December 31, 2018 | 167 | |
Year Ended December 31, 2019 | 171 | |
Thereafter | 1,658 | |
Total | $ 2,360 | |
[1] | Includes unconditional purchase obligations related to long-term agreements to acquire and license digital 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. | |
[2] | Excludes $895 million of tax contingencies for which we cannot make a reasonably reliable estimate of the amount and period of payment, if any. | |
[3] | Includes the estimated timing and amounts of payments for rent and tenant improvements associated with build-to-suit lease arrangements that have not been placed in service and media content liabilities associated with long-term media content assets with initial terms greater than one year. |
Acquisitions, Goodwill, and A31
Acquisitions, Goodwill, and Acquired Intangible Assets - Additional Informaiton (Detail) - USD ($) $ in Millions | Oct. 19, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Business Acquisition [Line Items] | |||||
Cash paid, net of cash acquired | $ 340 | ||||
Indemnification holdback | 53 | ||||
Business Combination, Consideration Transferred | 393 | $ 862 | |||
Goodwill | 3,529 | $ 3,319 | |||
Series of Individually Immaterial Business Acquisitions [Member] | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 239 | 707 | |||
Intangible assets | [1] | 186 | $ 230 | ||
Property and equipment | 1 | ||||
Deferred tax assets | 34 | ||||
Other assets acquired | 23 | ||||
Deferred tax liabilities | (65) | ||||
Other liabilities assumed | (25) | ||||
Business acquisition, allocation | $ 393 | ||||
Acquired intangible assets weighted-average amortization period | 5 years | ||||
Contract-based | Series of Individually Immaterial Business Acquisitions [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | [1] | $ 1 | |||
Technology-based | Series of Individually Immaterial Business Acquisitions [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | [1] | 181 | |||
Customer-related | Series of Individually Immaterial Business Acquisitions [Member] | |||||
Business Acquisition [Line Items] | |||||
Intangible assets | [1] | $ 4 | |||
Minimum | Series of Individually Immaterial Business Acquisitions [Member] | |||||
Business Acquisition [Line Items] | |||||
Acquired intangible assets estimated useful lives | 1 year | ||||
Maximum | Series of Individually Immaterial Business Acquisitions [Member] | |||||
Business Acquisition [Line Items] | |||||
Acquired intangible assets estimated useful lives | 6 years | ||||
Subsequent Event [Member] | |||||
Business Acquisition [Line Items] | |||||
Business Combination, Consideration Transferred | $ 296 | ||||
[1] | Acquired intangible assets have estimated useful lives of between one and six years, with a weighted-average amortization period of five years. |
Acquisitions, Goodwill, and A32
Acquisitions, Goodwill, and Acquired Intangible Assets Pro Forma Financial Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Business Combinations [Abstract] | ||
Net sales of acquired companies included in our consolidated financial statements since acquisition dates | $ 7 | |
Operating loss of acquired companies included in our consolidated financial statements since acquisition dates | (78) | |
Pro Forma - Net sales | 71,261 | $ 59,660 |
Pro Forma - Net income (loss) | $ 126 | $ (486) |
Acquisitions, Goodwill, and A33
Acquisitions, Goodwill, and Acquired Intangible Assets Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2015 | Sep. 30, 2015 | ||
Goodwill [Line Items] | |||
Disclosure of Change of Date for Annual Goodwill Impairment Test | During the second quarter of 2015, we changed the measurement date of our annual goodwill impairment test from October 1 to April 1. This change was not material to our consolidated financial statements as it did not result in the delay, acceleration, or avoidance of an impairment charge. We believe this timing better aligns the goodwill impairment test with our strategic business planning process, which is a key component of the goodwill impairment test. We completed the required annual testing of goodwill for impairment for all reporting units as of April 1, 2015 and determined that goodwill is not impaired. | ||
Goodwill - January 1, 2015 | $ 3,319 | ||
New acquisitions | 239 | ||
Other adjustments | [1] | (29) | |
Goodwill - September 30, 2015 | 3,529 | ||
North America | |||
Goodwill [Line Items] | |||
Goodwill - January 1, 2015 | 1,978 | ||
New acquisitions | 41 | ||
Other adjustments | [1] | (5) | |
Goodwill - September 30, 2015 | 2,014 | ||
International | |||
Goodwill [Line Items] | |||
Goodwill - January 1, 2015 | 735 | ||
New acquisitions | 17 | ||
Other adjustments | [1] | (22) | |
Goodwill - September 30, 2015 | 730 | ||
AWS | |||
Goodwill [Line Items] | |||
Goodwill - January 1, 2015 | 606 | ||
New acquisitions | 181 | ||
Other adjustments | [1] | (2) | |
Goodwill - September 30, 2015 | $ 785 | ||
[1] | Primarily includes changes in foreign exchange rates. |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2014 | Nov. 30, 2012 | |
Debt Instrument [Line Items] | |||
Unamortized discount | $ 91,000,000 | $ 96,000,000 | |
Carrying amount of other long-term debt including current portion | 451,000,000 | 881,000,000 | |
Total estimated fair value of notes | $ 9,200,000,000 | $ 9,100,000,000 | |
Other long-term debt, weighted average interest rate | 3.70% | 5.50% | |
Credit Agreement, initiation date | Sep. 5, 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 O
Long-Term Debt Long-Term Debt Obligations (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | |||
Long-term debt | $ 9,451 | $ 9,881 | |
Other long-term debt | 451 | 881 | |
Less current portion of long-term debt | (1,117) | (1,520) | |
Face value of long-term debt | $ 8,334 | 8,361 | |
0.65% Notes due on November 27, 2015 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 0.65% | ||
Long-term debt | [1] | $ 750 | 750 |
Effective interest rates | 0.84% | ||
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% | ||
[1] | Issued in November 2012, effective interest rates of the 2015, 2017, and 2022 Notes were 0.84%, 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%. |
Stockholders Equity - Additiona
Stockholders Equity - Additional Information (Detail) - USD ($) shares in Millions, $ in Billions | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Stockholders Equity Note [Line Items] | ||
Common shares outstanding plus shares underlying outstanding stock awards, including all stock-based awards outstanding, including estimated forfeiture | 489 | 483 |
Net unrecognized compensation cost related to unvested stock-based compensation arrangements | $ 3.1 | |
Net unrecognized compensation cost related to unvested stock-based compensation arrangements, weighted average recognition period (in years) | 1 year 1 month |
Stockholders' Equity Restricted
Stockholders' Equity Restricted Stock Unit Activity (Detail) - Restricted Stock Units shares in Millions | 9 Months Ended |
Sep. 30, 2015$ / sharesshares | |
Number of units | |
Beginning balance (in shares) | shares | 17.4 |
Units granted (in shares) | shares | 8.7 |
Units vested (in shares) | shares | (3.8) |
Units forfeited (in shares) | shares | (2.2) |
Ending balance (in shares) | shares | 20.1 |
Weighted Average Grant-Date Fair Value | |
Beginning balance (in usd per share) | $ 285 |
Units granted (in usd per share) | 400 |
Units vested (in usd per share) | 244 |
Units forfeited (in usd per share) | 312 |
Ending balance (in usd per share) | $ 339 |
Stockholders' Equity Scheduled
Stockholders' Equity Scheduled Vesting for Outstanding Restricted Stock Units (Detail) - Restricted Stock Units shares in Millions | Sep. 30, 2015shares |
Schedule of Vesting [Line Items] | |
Three Months Ended December 31, 2015 | 1.8 |
Year Ended December 31, 2016 | 6.5 |
Year Ended December 31, 2017 | 6.9 |
Year Ended December 31, 2018 | 3.3 |
Year Ended December 31, 2019 | 1.3 |
Thereafter | 0.3 |
Total | 20.1 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) € in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2015EUR (€) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Income Taxes [Line Items] | ||||||||
Benefit (provision) for income taxes | $ (161) | $ 205 | $ (498) | $ 38 | ||||
Discrete Tax Items | 37 | 82 | ||||||
Cash taxes paid, net of refunds | 80 | $ 38 | 200 | $ 148 | $ 230 | $ 173 | ||
Tax contingencies | $ 895 | $ 895 | $ 895 | $ 710 | ||||
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, 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, 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
Segment Information Reportable Segments and Reconciliation to Consolidated Net Income (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Segment Reporting Disclosure [Line Items] | |||||||
Net sales | $ 25,358 | $ 20,579 | $ 71,259 | $ 59,659 | |||
Segment operating expenses | 24,952 | 21,123 | 70,135 | 60,071 | |||
Income (loss) from operations | 406 | (544) | 1,124 | (412) | |||
Stock-based compensation | (544) | (377) | (1,513) | (1,089) | $ (1,921) | $ (1,414) | |
Other operating income (expense), net | (43) | (31) | (136) | (94) | |||
Total non-operating income (expense) | (159) | (90) | (494) | (128) | |||
Benefit (provision) for income taxes | (161) | 205 | (498) | 38 | |||
Equity-method investment activity, net of tax | (7) | (8) | (18) | 47 | |||
Net income (loss) | 79 | (437) | 114 | (455) | $ 328 | $ (216) | |
Operating Segments | |||||||
Segment Reporting Disclosure [Line Items] | |||||||
Net sales | 25,358 | 20,579 | 71,259 | 59,659 | |||
Segment operating expenses | [1] | 24,365 | 20,715 | 68,486 | 58,888 | ||
Income (loss) from operations | 993 | (136) | 2,773 | 771 | |||
North America | Operating Segments | |||||||
Segment Reporting Disclosure [Line Items] | |||||||
Net sales | 15,006 | 11,699 | 42,208 | 33,499 | |||
Segment operating expenses | [1] | 14,478 | 11,759 | 40,461 | 32,940 | ||
Income (loss) from operations | 528 | (60) | 1,747 | 559 | |||
International | Operating Segments | |||||||
Segment Reporting Disclosure [Line Items] | |||||||
Net sales | 8,267 | 7,711 | 23,577 | 22,936 | |||
Segment operating expenses | [1] | 8,323 | 7,885 | 23,728 | 23,144 | ||
Income (loss) from operations | (56) | (174) | (151) | (208) | |||
AWS | Operating Segments | |||||||
Segment Reporting Disclosure [Line Items] | |||||||
Net sales | 2,085 | 1,169 | 5,474 | 3,224 | |||
Segment operating expenses | [1] | 1,564 | 1,071 | 4,297 | 2,804 | ||
Income (loss) from operations | 521 | 98 | 1,177 | 420 | |||
AWS | |||||||
Segment Reporting Disclosure [Line Items] | |||||||
Net sales | $ 2,085 | $ 1,169 | $ 5,474 | $ 3,224 | |||
[1] | Excludes stock-based compensation and “Other operating expense (income), net” which are not allocated to segments. |
Segment Information - Net Sales
Segment Information - Net Sales of Similar Products and Services (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Revenue from External Customer [Line Items] | |||||
Net sales | $ 25,358 | $ 20,579 | $ 71,259 | $ 59,659 | |
Media | |||||
Revenue from External Customer [Line Items] | |||||
Net sales | 5,283 | 5,244 | 15,286 | 15,554 | |
Electronics and other general merchandise | |||||
Revenue from External Customer [Line Items] | |||||
Net sales | 17,741 | 13,953 | 49,782 | 40,248 | |
AWS | |||||
Revenue from External Customer [Line Items] | |||||
Net sales | 2,085 | 1,169 | 5,474 | 3,224 | |
Other | |||||
Revenue from External Customer [Line Items] | |||||
Net sales | [1] | 249 | 213 | 717 | 633 |
Operating Segments | |||||
Revenue from External Customer [Line Items] | |||||
Net sales | 25,358 | 20,579 | 71,259 | 59,659 | |
Operating Segments | AWS | |||||
Revenue from External Customer [Line Items] | |||||
Net sales | $ 2,085 | $ 1,169 | $ 5,474 | $ 3,224 | |
[1] | Includes sales from non-retail activities, such as certain advertising services and our co-branded credit card agreements. |