Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 18, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
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 | 481,872,175 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Cash Flows [Abstract] | ||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | $ 13,203 | $ 12,521 | $ 19,334 | $ 15,890 | $ 13,656 | $ 10,709 |
OPERATING ACTIVITIES: | ||||||
Net income | 256 | 252 | 1,176 | 1,622 | 1,926 | 2,105 |
Adjustments to reconcile net income 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 | 2,912 | 2,084 | 7,980 | 5,819 | 10,277 | 7,572 |
Stock-based compensation | 1,085 | 776 | 3,036 | 2,088 | 3,923 | 2,694 |
Other operating expense, net | 43 | 31 | 146 | 128 | 177 | 163 |
Other expense (income), net | (128) | (23) | (288) | (41) | (267) | 39 |
Deferred income taxes | (74) | (81) | 279 | 36 | (2) | 226 |
Changes in operating assets and liabilities: | ||||||
Inventories | (1,593) | (1,095) | (1,328) | (383) | (2,371) | (1,726) |
Accounts receivable, net and other | (1,758) | (671) | (2,005) | (1,443) | (3,929) | (2,621) |
Accounts payable | 3,046 | 2,540 | (1,731) | (2,252) | 5,551 | 3,887 |
Accrued expenses and other | (122) | 441 | (1,778) | (531) | 476 | 1,306 |
Additions to unearned revenue | 3,762 | 2,802 | 10,862 | 7,956 | 14,837 | 10,377 |
Amortization of previously unearned revenue | (3,578) | (2,397) | (10,259) | (6,715) | (13,521) | (9,018) |
Net cash provided by (used in) operating activities | 3,851 | 4,659 | 6,090 | 6,284 | 17,077 | 15,004 |
INVESTING ACTIVITIES: | ||||||
Purchases of property and equipment, including internal-use software and website development, net | (2,659) | (1,841) | (7,022) | (4,731) | (9,027) | (6,040) |
Acquisitions, net of cash acquired, and other | (13,213) | (84) | (13,891) | (113) | (13,893) | (430) |
Sales and maturities of marketable securities | 2,221 | 1,431 | 6,424 | 3,500 | 7,656 | 4,635 |
Purchases of marketable securities | (5,469) | (2,076) | (11,298) | (4,358) | (14,697) | (5,717) |
Net cash provided by (used in) investing activities | (19,120) | (2,570) | (25,787) | (5,702) | (29,961) | (7,552) |
FINANCING ACTIVITIES: | ||||||
Proceeds from long-term debt and other | 16,080 | 8 | 16,170 | 83 | 16,707 | 176 |
Repayments of long-term debt and other | (79) | (26) | (202) | (271) | (285) | (1,212) |
Principal repayments of capital lease obligations | (1,267) | (938) | (3,327) | (2,855) | (4,331) | (3,579) |
Principal repayments of finance lease obligations | (49) | (44) | (134) | (105) | (175) | (131) |
Net cash provided by (used in) financing activities | 14,685 | (1,000) | 12,507 | (3,148) | 11,916 | (4,746) |
Foreign currency effect on cash and cash equivalents | 148 | 46 | 623 | 332 | 79 | 241 |
Net increase (decrease) in cash and cash equivalents | (436) | 1,135 | (6,567) | (2,234) | (889) | 2,947 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 12,767 | 13,656 | 12,767 | 13,656 | 12,767 | 13,656 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||
Cash paid for interest on long-term debt | 5 | 1 | 155 | 146 | 299 | 295 |
Cash paid for interest on capital and finance lease obligations | 112 | 50 | 235 | 145 | 296 | 188 |
Cash paid for income taxes, net of refunds | 172 | 91 | 865 | 317 | 960 | 390 |
Property and equipment acquired under capital leases | 2,256 | 1,369 | 6,867 | 3,666 | 8,905 | 4,998 |
Property and equipment acquired under build-to-suit leases | $ 750 | $ 211 | $ 2,698 | $ 793 | $ 3,114 | $ 956 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Net product sales | $ 28,768 | $ 22,339 | $ 77,248 | $ 64,036 |
Net service sales | 14,976 | 10,375 | 40,165 | 28,210 |
Total net sales | 43,744 | 32,714 | 117,413 | 92,246 |
Operating expenses: | ||||
Cost of sales | 27,549 | 21,260 | 73,439 | 59,306 |
Fulfillment | 6,420 | 4,335 | 16,275 | 11,900 |
Marketing | 2,479 | 1,738 | 6,629 | 4,720 |
Technology and content | 5,944 | 4,135 | 16,306 | 11,541 |
General and administrative | 960 | 639 | 2,630 | 1,715 |
Other operating expense, net | 45 | 32 | 155 | 133 |
Total operating expenses | 43,397 | 32,139 | 115,434 | 89,315 |
Operating income | 347 | 575 | 1,979 | 2,931 |
Interest income | 54 | 26 | 137 | 71 |
Interest expense | (228) | (118) | (510) | (351) |
Other income (expense), net | 143 | 8 | 329 | 75 |
Total non-operating income (expense) | (31) | (84) | (44) | (205) |
Income before income taxes | 316 | 491 | 1,935 | 2,726 |
Provision for income taxes | (58) | (229) | (755) | (1,012) |
Equity-method investment activity, net of tax | (2) | (10) | (4) | (92) |
Net income | $ 256 | $ 252 | $ 1,176 | $ 1,622 |
Basic earnings per share (in usd per share) | $ 0.53 | $ 0.53 | $ 2.46 | $ 3.43 |
Diluted earnings per share (in usd per share) | $ 0.52 | $ 0.52 | $ 2.39 | $ 3.36 |
Weighted-average shares used in computation of earnings per share: | ||||
Basic (in shares) | 481 | 474 | 479 | 473 |
Diluted (in shares) | 494 | 485 | 492 | 483 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 256 | $ 252 | $ 1,176 | $ 1,622 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments, net of tax of $6, $10, $18, and $(5) | 104 | 19 | 486 | 133 |
Net change in unrealized gains (losses) on available-for-sale securities: | ||||
Unrealized gains (losses), net of tax of $(15), $(1), $(32), and $1 | (2) | 29 | (10) | 65 |
Reclassification adjustment for losses (gains) included in “Other income (expense), net,” net of tax of $(1), $0, $(2), and $0 | 3 | 2 | 8 | 4 |
Net unrealized gains (losses) on available-for-sale securities | 1 | 31 | (2) | 69 |
Total other comprehensive income (loss) | 105 | 50 | 484 | 202 |
Comprehensive income | $ 361 | $ 302 | $ 1,660 | $ 1,824 |
Consolidated Statements of Com5
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation adjustments, tax | $ 10 | $ 6 | $ (5) | $ 18 |
Unrealized gains (losses), tax | (1) | (15) | 1 | (32) |
Reclassification adjustment for losses (gains) included in “Other income (expense), net,” tax | $ 0 | $ (1) | $ 0 | $ (2) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 12,767 | $ 19,334 |
Marketable securities | 11,543 | 6,647 |
Inventories | 13,711 | 11,461 |
Accounts receivable, net and other | 10,557 | 8,339 |
Total current assets | 48,578 | 45,781 |
Property and equipment, net | 45,335 | 29,114 |
Goodwill | 13,271 | 3,784 |
Other assets | 8,083 | 4,723 |
Total assets | 115,267 | 83,402 |
Current liabilities: | ||
Accounts payable | 26,075 | 25,309 |
Accrued expenses and other | 15,844 | 13,739 |
Unearned revenue | 5,153 | 4,768 |
Total current liabilities | 47,072 | 43,816 |
Long-term debt | 24,710 | 7,694 |
Other long-term liabilities | 18,827 | 12,607 |
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 - 500 and 505 Outstanding shares - 477 and 482 | 5 | 5 |
Treasury stock, at cost | (1,837) | (1,837) |
Additional paid-in capital | 20,212 | 17,186 |
Accumulated other comprehensive loss | (501) | (985) |
Retained earnings | 6,779 | 4,916 |
Total stockholders’ equity | 24,658 | 19,285 |
Total liabilities and stockholders’ equity | $ 115,267 | $ 83,402 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
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 | 505,000,000 | 500,000,000 |
Common stock, outstanding shares | 482,000,000 | 477,000,000 |
Accounting Policies
Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
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 2017 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 2016 Annual Report on Form 10-K. 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 and that support our seller lending financing activities (collectively, the “Company”). Intercompany balances and transactions between consolidated entities are eliminated. The financial results of Whole Foods Market, Inc. (“Whole Foods Market”) have been included in our consolidated financial statements from the date of acquisition on August 28, 2017. 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. The following table shows the calculation of diluted shares (in millions): Three Months Ended Nine Months Ended 2016 2017 2016 2017 Shares used in computation of basic earnings per share 474 481 473 479 Total dilutive effect of outstanding stock awards 11 13 10 13 Shares used in computation of diluted earnings per share 485 494 483 492 Accounting Pronouncements Recently Adopted In July 2015, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) modifying the accounting for inventory. Under this ASU, the measurement principle for inventory changed 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. We adopted this ASU in Q1 2017 with no material impact to our consolidated financial statements. In March 2016, the FASB issued an ASU amending the accounting for stock-based compensation and requiring excess tax benefits and deficiencies to be recognized as a component of income tax expense rather than equity. The inclusion of excess tax benefits and deficiencies as a component of our income tax expense will increase volatility within our provision for income taxes as the amount of excess tax benefits or deficiencies from stock-based compensation awards depends on our stock price at the date the awards vest. This guidance also requires excess tax benefits to be presented as an operating activity on the statement of cash flows and allows an entity to make an accounting policy election to either estimate expected forfeitures or to account for them as they occur. We adopted this ASU in Q1 2017 by recording the cumulative impact through an increase in retained earnings of $687 million , and we will continue to estimate expected forfeitures. Additionally, we retrospectively adjusted our consolidated statements of cash flows to reclassify excess tax benefits of $173 million , $493 million and $401 million for the three months, nine months, and twelve months ended September 30, 2016 from financing activities to operating activities. Accounting Pronouncements Not Yet Adopted In May 2014, the FASB issued an ASU amending revenue recognition guidance and requiring more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. We will adopt this ASU on January 1, 2018 with a cumulative adjustment that will increase retained earnings as opposed to retrospectively adjusting prior periods. The adjustment will primarily relate to the unredeemed portion of our gift cards, which we will begin to recognize over the expected customer redemption period, which is substantially within nine months, rather than waiting until gift cards expire or when the likelihood of redemption becomes remote, generally two years from the date of issuance. Prospectively, revenue related to Amazon-branded electronic devices sold through retailers will be recognized upon sale to the retailer rather than to end customers. We also anticipate a change to the recognition and classification of Amazon Prime memberships, which are currently considered arrangements with multiple deliverables that are allocated among products sales and service sales. Upon adoption of the ASU, Amazon Prime memberships will be accounted for as a single performance obligation recognized ratably over the membership period and will be classified as service sales. Other changes that we have identified relate primarily to the presentation of revenue. Certain advertising services will be classified as revenue rather than a reduction in cost of sales, and sales of apps and in-app content will primarily be presented on a net basis. Our assessment of policy changes resulting from this ASU is substantially complete and we are currently evaluating the quantitative impact of these changes in both recognition and presentation and the related disclosures. In February 2016, the FASB issued an ASU amending the accounting for leases. The new guidance requires the recognition of lease assets and liabilities for operating leases with terms of more than 12 months, in addition to those currently recorded, on our consolidated balance sheets. Presentation of leases within the consolidated statements of operations and consolidated statements of cash flows will be generally consistent with the current lease accounting guidance. The ASU is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. We plan to adopt this ASU beginning in Q1 2019. We are currently evaluating the impact and expect the ASU will have a material impact on our consolidated financial statements, primarily to the consolidated balance sheets and related disclosures. In October 2016, the FASB issued an ASU amending the accounting for income taxes. The new guidance requires the recognition of the income tax consequences of an intercompany asset transfer, other than transfers of inventory, when the transfer occurs. For intercompany transfers of inventory, the income tax effects will continue to be deferred until the inventory has been sold to a third party. The ASU is effective for reporting periods beginning after December 15, 2017, with early adoption permitted. We will adopt this ASU beginning in Q1 2018. We estimate the ASU will have an impact of approximately $400 million on our consolidated financial statements, including retained earnings and deferred taxes. This estimate takes into account valuation allowances that we anticipate recording against certain material deferred tax assets. However, the final impact will depend on the balance of property transferred among subsidiaries as of the adoption date. We will recognize incremental deferred tax expense as these deferred tax assets are utilized. Any change in our assessment of the likelihood of our ability to realize deferred tax assets will be reflected as an income tax benefit during the quarter of such change. In November 2016, the FASB issued an ASU amending the presentation of restricted cash within the statement of cash flows. The new guidance requires that restricted cash be included within cash and cash equivalents on the statement of cash flows. The ASU is effective retrospectively for reporting periods beginning after December 15, 2017, with early adoption permitted. We will adopt this ASU beginning in Q1 2018. |
Cash, Cash Equivalents, and Mar
Cash, Cash Equivalents, and Marketable Securities | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Cash, Cash Equivalents, and Marketable Securities | CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES As of December 31, 2016 , and September 30, 2017 , 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 December 31, 2016 , and September 30, 2017 . 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): December 31, 2016 September 30, 2017 Total Cost or Gross Gross Total Cash $ 6,883 $ 8,658 $ — $ — $ 8,658 Level 1 securities: Money market funds 11,940 4,625 — — 4,625 Equity securities 51 34 33 — 67 Level 2 securities: Foreign government and agency securities 337 807 — — 807 U.S. government and agency securities 4,816 5,400 2 (9 ) 5,393 Corporate debt securities 2,104 4,403 2 (3 ) 4,402 Asset-backed securities 353 853 — (2 ) 851 Other fixed income securities 97 701 — — 701 $ 26,581 $ 25,481 $ 37 $ (14 ) $ 25,504 Less: Restricted cash, cash equivalents, and marketable securities (1) (600 ) (1,194 ) Total cash, cash equivalents, and marketable securities $ 25,981 $ 24,310 ___________________ (1) We are required to pledge or otherwise restrict a portion of our cash, cash equivalents, and marketable securities as collateral for real estate leases, workers’ compensation obligations, amounts due to third-party sellers in certain jurisdictions, debt, and standby and trade letters of credit. (2) 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, 2017 (in millions): Amortized Cost Estimated Fair Value Due within one year $ 11,305 $ 11,303 Due after one year through five years 4,355 4,351 Due after five years through ten years 317 316 Due after ten years 812 809 Total $ 16,789 $ 16,779 Actual maturities may differ from the contractual maturities because borrowers may have certain prepayment conditions. We also hold equity warrant assets giving us the right to acquire stock of other companies. As of December 31, 2016 , and September 30, 2017 , these warrants had a fair value of $223 million and $455 million , and are recorded within “Other assets” on our consolidated balance sheets. The related gain (loss) recorded in “Other income (expense), net” was $9 million and $76 million in Q3 2016 and Q3 2017 , and $(11) million and $145 million for the nine months ended September 30, 2016 and 2017 . These assets are primarily classified as Level 2 assets. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
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, physical store, and renewable energy facilities. Rental expense under operating lease agreements was $367 million and $553 million for Q3 2016 and Q3 2017 , and $1.0 billion and $1.4 billion for the nine months ended September 30, 2016 and 2017 . The following summarizes our principal contractual commitments, excluding open orders for purchases that support normal operations and are generally cancellable, as of September 30, 2017 (in millions): Three Months Ended December 31, Year Ended December 31, 2017 2018 2019 2020 2021 Thereafter Total Debt principal and interest $ 1,182 $ 902 $ 2,212 $ 2,087 $ 1,833 $ 33,849 $ 42,065 Capital lease obligations, including interest (1) 1,543 5,406 4,024 1,813 514 671 13,971 Finance lease obligations, including interest (2) 98 391 406 410 421 3,890 5,616 Operating leases 925 2,321 2,254 2,112 1,922 12,535 22,069 Unconditional purchase obligations (3) 817 3,571 3,412 3,115 2,984 10,895 24,794 Other commitments (4) (5) 384 1,241 849 678 522 4,338 8,012 Total commitments $ 4,949 $ 13,832 $ 13,157 $ 10,215 $ 8,196 $ 66,178 $ 116,527 ___________________ (1) Excluding interest, current capital lease obligations of $4.0 billion and $5.3 billion are recorded within “Accrued expenses and other” as of December 31, 2016 , and September 30, 2017 , and $5.1 billion and $7.6 billion are recorded within “Other long-term liabilities” as of December 31, 2016 , and September 30, 2017 . (2) Excluding interest, current finance lease obligations of $144 million and $239 million are recorded within “Accrued expenses and other” as of December 31, 2016 , and September 30, 2017 , and $2.4 billion and $4.3 billion are recorded within “Other long-term liabilities” as of December 31, 2016 , and September 30, 2017 . (3) Includes unconditional purchase obligations related to certain products offered in our Whole Foods Market stores and long-term agreements to acquire and license digital media content that are not reflected on the consolidated balance sheets. For those digital media content agreements with variable terms, we do not estimate the total obligation beyond any minimum quantities and/or pricing as of the reporting date. Purchase obligations associated with renewal provisions solely at the option of the content provider are included to the extent such commitments are fixed or a minimum amount is specified. (4) Includes the estimated timing and amounts of payments for rent and tenant improvements associated with build-to-suit lease arrangements and equipment lease arrangements that have not been placed in service and digital media content liabilities associated with long-term digital media content assets with initial terms greater than one year. (5) Excludes $2.1 billion of accrued tax contingencies for which we cannot make a reasonably reliable estimate of the amount and period of payment, if any. Pledged Assets As of December 31, 2016 , and September 30, 2017 , we have pledged or otherwise restricted $715 million and $1.3 billion of our cash, cash equivalents, and marketable securities, and certain property and equipment as collateral for real estate leases, workers’ compensation obligations, amounts due to third-party sellers in certain jurisdictions, debt, and standby and trade letters of credit. Other Contingencies In 2016, we determined that we processed and delivered orders of consumer products for certain individuals and entities located outside Iran covered by the Iran Threat Reduction and Syria Human Rights Act or other United States sanctions and export control laws. The consumer products included books, music, other media, apparel, home and kitchen, health and beauty, jewelry, office, consumer electronics, software, lawn and patio, grocery, and automotive products. Our review is ongoing and we have voluntarily reported these orders to the United States Treasury Department’s Office of Foreign Assets Control and the United States Department of Commerce’s Bureau of Industry and Security. We intend to cooperate fully with OFAC and BIS with respect to their review, which may result in the imposition of penalties. For additional information, see Item 5 of Part II, “Other Information — Disclosure Pursuant to Section 13(r) of the Exchange Act.” We are subject to claims related to various indirect taxes (such as sales, value added, consumption, service, and similar taxes), including in jurisdictions in which we already collect and remit such taxes. If the relevant taxing authorities were successfully to pursue these claims, we could be subject to significant additional tax liabilities. For example, in June 2017, the State of South Carolina issued an assessment for uncollected sales and use taxes for the period from January 2016 to March 2016, including interest and penalties. South Carolina is alleging that we should have collected sales and use taxes on transactions by our third-party sellers. We believe the assessment is without merit. If South Carolina or other states were successfully to seek additional adjustments of a similar nature, we could be subject to significant additional tax liabilities. We intend to defend ourselves vigorously in this matter. Legal Proceedings The Company is involved from time to time in claims, proceedings, and litigation, including the matters described in Item 8 of Part II, “Financial Statements and Supplementary Data — Note 7 — Commitments and Contingencies — Legal Proceedings” of our 2016 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, 2017 and June 30, 2017, as supplemented by the following: 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 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. In September 2017, the 2015 case was stayed pending resolution of a review petition we filed with the United States Patent and Trademark Office. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in these matters. Beginning in September 2015, two cases have been filed alleging that Amazon violated the Fair Credit Reporting Act with regard to processes undertaken to perform criminal background checks on candidates for employment and employees. In September 2015, Hargrett v. Amazon.com LLC and Amazon.comdedc, LLC was filed in the U.S. District Court for the Middle District of Florida. In August 2017, Mathis v. Amazon.comdedc, LLC and Accurate Background, LLC was filed in the U.S. District Court for the Middle District of Florida. The plaintiffs variously purport to represent a nationwide class of certain candidates for employment and employees who were subject to a background check, and allege that Amazon failed either to provide proper disclosures before obtaining background checks or to provide appropriate notice before using background check information in employment decisions. The complaints seek an unspecified amount of statutory damages, punitive damages, costs, and attorneys’ fees. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in these matters. In October 2017, SRC Labs, LLC and Saint Regis Mohawk Tribe filed in the United States District Court for the Eastern District of Virginia a complaint for patent infringement against Amazon Web Services, Inc., Amazon.com, Inc., and VADATA, Inc. The complaint alleges, among other things, that EC2 F1 Instances infringe U.S. Patent Nos. 6,434,687, entitled “System and method for accelerating web site access and processing utilizing a computer system incorporating reconfigurable processors operating under a single operating system image”; 7,149,867, entitled “System and method of enhancing efficiency and utilization of memory bandwidth in reconfigurable hardware”; 7,225,324 and 7,620,800, both entitled “Multi-adaptive processing systems and techniques for enhancing parallelism and performance of computational functions”; and 9,153,311, entitled “System and method for retaining DRAM data when reprogramming reconfigurable devices with DRAM memory controllers.” The complaint seeks an unspecified amount of damages, enhanced damages, interest, and a compulsory on-going royalty. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in this matter. The outcomes of our legal proceedings and other contingencies 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, 2017 | |
Business Combinations [Abstract] | |
Acquisitions, Goodwill, and Acquired Intangible Assets | ACQUISITIONS, GOODWILL, AND ACQUIRED INTANGIBLE ASSETS 2017 Acquisition Activity On May 12, 2017 , we acquired Souq Group Ltd. (“Souq”), an e-commerce company, for approximately $579 million , net of cash acquired, and on August 28, 2017 , we acquired Whole Foods Market, a grocery store chain, for approximately $13.2 billion , net of cash acquired. Both acquisitions are intended to expand our retail presence. During the nine months ended September 30, 2017 , we also acquired certain other companies for an aggregate purchase price of $126 million . The primary reason for our other 2017 acquisitions was to acquire technologies and know-how to enable Amazon to serve customers more effectively. Acquisition-related costs were expensed as incurred and were not significant. Due to the limited amount of time since the Whole Foods Market acquisition, the valuation of certain assets and liabilities is preliminary and subject to change. The aggregate purchase price of Whole Foods Market and the other 2017 acquisitions, which primarily includes the acquisition of Souq, was allocated as follows (in millions): Whole Foods Market Other 2017 Acquisitions Total Purchase Price Cash paid, net of cash acquired $ 13,176 $ 612 $ 13,788 Indemnification holdback — 93 93 $ 13,176 $ 705 $ 13,881 Allocation Goodwill $ 8,985 $ 446 $ 9,431 Intangible assets (1): Marketing-related 1,928 59 1,987 Contract-based 408 33 441 Technology-based — 129 129 Customer-related — 48 48 2,336 269 2,605 Property and equipment 3,826 16 3,842 Deferred tax assets 96 15 111 Other assets acquired 1,710 130 1,840 Long-term debt (1,158 ) (7 ) (1,165 ) Deferred tax liabilities (934 ) (20 ) (954 ) Other liabilities assumed (1,685 ) (144 ) (1,829 ) $ 13,176 $ 705 $ 13,881 ___________________ (1) Acquired intangible assets for Whole Foods Market have estimated useful lives of between one and twenty-five years, with a weighted-average amortization period of twenty-four years, primarily driven by the Whole Foods Market tradename, and acquired intangible assets for other 2017 acquisitions have estimated useful lives of between one and seven years, with a weighted-average amortization period of four 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. 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 income of Whole Foods Market consolidated into our financial statements since the date of acquisition was $1.3 billion and $21 million for the nine months ended September 30, 2017 . The aggregate net sales and operating loss of other acquisitions consolidated into our financial statements since the respective dates of acquisition was $222 million and $(80) million for the nine months ended September 30, 2017 . The following financial information, which excludes certain acquired companies for which the pro forma impact is not meaningful, presents our results as if the acquisitions during the nine months ended September 30, 2017 had occurred on January 1, 2016 (in millions): Nine Months Ended 2016 2017 Net sales $ 103,476 $ 127,441 Net income $ 1,597 $ 1,137 These pro forma results are based on estimates and assumptions, which we believe are reasonable. They are not the results that would have been realized had the acquisitions actually occurred on January 1, 2016 and are not necessarily indicative of our consolidated results of operations in future periods. The pro forma results include adjustments related to purchase accounting, primarily interest expense related to the proceeds from the issuance of the August 2017 Notes used in connection with the acquisition of Whole Foods Market and amortization of intangible assets. Goodwill The goodwill of the acquired companies 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 goodwill of acquired companies is generally not deductible for tax purposes. The following summarizes our goodwill activity in the first nine months of 2017 by segment (in millions): North America International AWS Consolidated Goodwill - December 31, 2016 $ 2,044 $ 694 $ 1,046 $ 3,784 New acquisitions (1) 9,056 357 18 9,431 Other adjustments (2) 5 40 11 56 Goodwill - September 30, 2017 $ 11,105 $ 1,091 $ 1,075 $ 13,271 ___________________ (1) Primarily includes the acquisition of Whole Foods Market in the North America segment and Souq in the International segment. (2) Primarily includes changes in foreign exchange rates. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | LONG-TERM DEBT In November 2012, December 2014, and August 2017, we issued $3.0 billion , $6.0 billion , and $16.0 billion of unsecured senior notes, and in August 2017, with our acquisition of Whole Foods Market, we assumed $1.0 billion of unsecured senior notes (collectively, the “Notes”). As described in the table below, $25.3 billion was outstanding as of September 30, 2017 . As of December 31, 2016 , and September 30, 2017 , the net unamortized discount and debt issuance costs on the Notes was $90 million and $100 million . We also have other long-term debt with a carrying amount, including the current portion and borrowings under our credit facility, of $588 million and $597 million as of December 31, 2016 , and September 30, 2017 . The face value of our total long-term debt obligations is as follows (in millions): December 31, 2016 September 30, 2017 1.200% Notes due on November 29, 2017 (1) $ 1,000 $ 1,000 2.600% Notes due on December 5, 2019 (2) 1,000 1,000 1.900% Notes due on August 21, 2020 (3) — 1,000 3.300% Notes due on December 5, 2021 (2) 1,000 1,000 2.500% Notes due on November 29, 2022 (1) 1,250 1,250 2.400% Notes due on February 22, 2023 (3) — 1,000 2.800% Notes due on August 22, 2024 (3) — 2,000 3.800% Notes due on December 5, 2024 (2) 1,250 1,250 5.200% Notes due on December 3, 2025 (4) — 1,000 3.150% Notes due on August 22, 2027 (3) — 3,500 4.800% Notes due on December 5, 2034 (2) 1,250 1,250 3.875% Notes due on August 22, 2037 (3) — 2,750 4.950% Notes due on December 5, 2044 (2) 1,500 1,500 4.050% Notes due on August 22, 2047 (3) — 3,500 4.250% Notes due on August 22, 2057 (3) — 2,250 Credit Facility 495 550 Other long-term debt 93 47 Total debt 8,838 25,847 Less current portion of long-term debt (1,056 ) (1,037 ) Face value of long-term debt $ 7,782 $ 24,810 _____________________________ (1) Issued in November 2012, effective interest rates of the 2017 and 2022 Notes were 1.38% and 2.66% . (2) Issued in December 2014, effective interest rates of the 2019, 2021, 2024, 2034, and 2044 Notes were 2.73% , 3.43% , 3.90% , 4.92% , and 5.11% . (3) Issued in August 2017, effective interest rates of the 2020, 2023, 2024, 2027, 2037, 2047, and 2057 Notes were 2.16% , 2.56% , 2.95% , 3.25% , 3.94% , 4.13% , and 4.33% . (4) Assumed in connection with the acquisition of Whole Foods Market, the effective interest rate of the 2025 Notes was 3.03% . Interest on the Notes issued in 2012 is payable semi-annually in arrears in May and November. Interest on the Notes issued in 2014 is payable semi-annually in arrears in June and December. Interest on the Notes issued in 2017 is payable semi-annually in arrears in February and August. Interest on the 2025 Notes is payable semi-annually in arrears in June and December. 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 November 2012 and the December 2014 Notes were used for general corporate purposes. The proceeds from the August 2017 Notes were used to fund the consideration for the acquisition of Whole Foods Market and will be used to repay the 1.200% Notes due 2017 and for general corporate purposes. The estimated fair value of the Notes was approximately $8.7 billion and $26.2 billion as of December 31, 2016 , and September 30, 2017 , which is based on quoted prices for our debt as of those dates. In October 2016, we entered into a $500 million secured revolving credit facility with a lender that is secured by certain seller receivables, which we subsequently increased to $600 million and may from time to time increase in the future subject to lender approval (the “Credit Facility”). The Credit Facility is available for a term of three years , bears interest at the London interbank offered rate (“LIBOR”) plus 1.65% , and has a commitment fee of 0.50% on the undrawn portion. There were $495 million and $550 million of borrowings outstanding under the Credit Facility as of December 31, 2016, and September 30, 2017 , with weighted-average interest rates of 2.3% and 2.6% as of December 31, 2016 , and September 30, 2017 . As of December 31, 2016 , and September 30, 2017 , we have pledged $579 million and $639 million of our cash and seller receivables as collateral for debt related to our Credit Facility. The estimated fair value of the Credit Facility, which is based on Level 2 inputs, approximated its carrying value as of December 31, 2016 , and September 30, 2017 . The other debt, including the current portion, had a weighted-average interest rate of 3.4% and 1.9% as of December 31, 2016 , and September 30, 2017 . We used the net proceeds from the issuance of this debt primarily to fund certain business operations. The estimated fair value of the other long-term debt, which is based on Level 2 inputs, approximated its carrying value as of December 31, 2016 , and September 30, 2017 . In May 2016, 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 $3.0 billion . The Credit Agreement has a term of three 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 LIBOR plus 0.60% , with a commitment fee of 0.05% on the undrawn portion of the credit facility, under our current credit ratings. If our credit ratings are downgraded these rates could increase to as much as LIBOR plus 1.00% and 0.09% , respectively. There were no borrowings outstanding under the credit agreements as of December 31, 2016 , and September 30, 2017 . |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY Stock Repurchase Activity In February 2016, the Board of Directors authorized a program to repurchase up to $5.0 billion of our common stock, with no fixed expiration. This stock repurchase authorization replaced the previous $2.0 billion stock repurchase authorization, approved by the Board of Directors in 2010. There were no repurchases of common stock in Q3 2016 or Q3 2017 . Stock Award Activity Common shares outstanding plus shares underlying outstanding stock awards totaled 497 million and 503 million as of December 31, 2016 , and September 30, 2017 . These totals include all vested and unvested stock awards outstanding, including those awards we estimate will be forfeited. Stock-based compensation expense is as follows (in millions): Three Months Ended Nine Months Ended 2016 2017 2016 2017 Cost of sales (1) $ 7 $ 13 $ 7 $ 33 Fulfillment 165 230 467 655 Marketing 85 135 221 363 Technology and content 434 595 1,171 1,668 General and administrative 85 112 222 317 Total stock-based compensation expense $ 776 $ 1,085 $ 2,088 $ 3,036 ___________________ (1) Beginning in Q3 2016, stock-based compensation expense was recorded to cost of sales for eligible employees providing delivery services. The following table summarizes our restricted stock unit activity for the nine months ended September 30, 2017 (in millions): Number of Units Weighted-Average Grant-Date Fair Value Outstanding as of December 31, 2016 19.8 $ 506 Units granted 7.2 918 Units vested (4.6 ) 387 Units forfeited (1.3 ) 620 Outstanding as of September 30, 2017 21.1 $ 666 Scheduled vesting for outstanding restricted stock units as of September 30, 2017 , is as follows (in millions): Three Months Ended December 31, Year Ended December 31, 2017 2018 2019 2020 2021 Thereafter Total Scheduled vesting—restricted stock units 2.2 7.3 7.0 3.1 1.1 0.4 21.1 As of September 30, 2017 , there was $6.3 billion of net unrecognized compensation cost related to unvested stock-based compensation arrangements. This compensation is recognized on an accelerated basis with approximately half of the compensation expected to be expensed in the next twelve months, and has a weighted-average recognition period of 1.1 years. The estimated forfeiture rate as of December 31, 2016 and September 30, 2017 , was 28% . Changes in our estimates and assumptions relating to forfeitures may cause us to realize material changes in stock-based compensation expense in the future. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
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, changes in our stock price, foreign currency gains (losses), tax law developments (including changes in statutes, regulations, case law, 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. For 2017 , we estimate that our effective tax rate will be favorably affected by the impact of excess tax benefits from stock-based compensation and the U.S. federal research and development credit and adversely affected by the recording of valuation allowances against the deferred tax assets related to net operating losses generated in Luxembourg and state income taxes. Our income tax provision for the nine months ended September 30, 2016 was $1.0 billion , which included $50 million of discrete tax benefits primarily attributable to audit-related and tax law developments. Our income tax provision for the nine months ended September 30, 2017 was $755 million , which included $422 million of net discrete tax benefits primarily attributable to excess tax benefits from stock-based compensation, partially offset by a valuation allowance we recorded against the deferred tax assets related to net operating losses generated in Luxembourg and the estimated impact of audit-related developments. We regularly assess whether it is more likely than not that we will realize our deferred tax assets in each taxing jurisdiction in which we operate. In performing this assessment with respect to each jurisdiction, we review all available evidence, including recent cumulative loss experience and expectations of future earnings, capital gains, and investment in such jurisdiction, the carry-forward periods available to us for tax reporting purposes, and other relevant factors. In Q2 2017, we recognized an estimated charge to tax expense of $600 million to record a valuation allowance against the net deferred tax assets in Luxembourg. Cash paid for income taxes, net of refunds was $91 million and $172 million in Q3 2016 and Q3 2017 , and $317 million and $865 million for the nine months ended September 30, 2016 and 2017 . As of December 31, 2016 , and September 30, 2017 , tax contingencies were $1.7 billion and $2.1 billion . We expect the total amount of tax contingencies will grow in 2017 . 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 could result in changes to our contingencies related to positions on tax filings 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 (“NOPAs”) 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. On March 23, 2017, the U.S. Tax Court issued its decision regarding the issues raised in the IRS NOPAs. The Tax Court rejected the approach from the IRS NOPAs in determining transfer pricing adjustments in 2005 and 2006 for the transactions undertaken with our foreign subsidiaries and adopted, with adjustments, our suggested approach. On September 29, 2017, the IRS filed a notice of appeal to the U.S. Court of Appeals for the Ninth Circuit. We will continue to defend ourselves vigorously in this matter. If the Tax Court decision were reversed on appeal or if the IRS were to successfully assert transfer pricing adjustments of a similar nature to the NOPAs 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, and if we are not able to resolve this matter, 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. On October 4, 2017, the European Commission announced its decision that determinations by the tax authorities in Luxembourg did not comply with European Union rules on state aid. This decision orders Luxembourg to calculate and recover additional taxes from us for the period May 2006 through June 2014. We believe this decision to be without merit and will consider our legal options, including an appeal. While the European Commission announced an estimated recovery amount of approximately €250 million , plus interest, the actual amount of additional taxes subject to recovery is to be calculated by the Luxembourg tax authorities in accordance with the European Commission’s guidance. Once the recovery amount is computed by Luxembourg, we anticipate funding it, including interest, into escrow, where it will remain pending conclusion of all appeals. We are also subject to taxation in various states and other foreign jurisdictions including Canada, China, Germany, India, Italy, Japan, Luxembourg, and the United Kingdom. We are under, or may be subject to, audit or examination and additional assessments by the relevant authorities in respect of these particular jurisdictions primarily for 2008 and thereafter. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION We have organized our operations into three segments: North America, International, and AWS. We allocate to segment results the operating expenses “Fulfillment,” “Marketing,” “Technology and content,” and “General and administrative” based on usage, which is generally reflected in the segment in which the costs are incurred. The majority of technology infrastructure 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. In Q1 2017, we combined stock-based compensation and “Other operating expense, net” with operating expenses in our presentation of segment results. While we continue to evaluate the integration of Whole Foods Market within our segments, we have included Whole Foods Market in our North America and International segments based on physical location. There are no internal revenue transactions between our reportable segments. These segments reflect the way our chief operating decision maker evaluates the Company’s business performance and manages its operations. North America The North America segment primarily consists of amounts earned from retail sales of consumer products (including from sellers) and subscriptions through North America-focused websites, such as www.amazon.com, www.amazon.ca, and www.amazon.com.mx, and physical stores. This segment includes export sales from these websites. International The International segment primarily consists of amounts earned from retail sales of consumer products (including from sellers) and subscriptions through internationally-focused websites such as www.amazon.com.au, www.amazon.com.br, www.amazon.cn, www.amazon.fr, www.amazon.de, www.amazon.in, www.amazon.it, www.amazon.co.jp, www.amazon.nl, www.amazon.es, and www.amazon.co.uk. This segment includes export sales from these internationally-focused websites (including export sales from these sites to customers in the U.S., Mexico, and Canada), but excludes export sales from our North American websites. AWS The AWS segment consists of amounts earned from global sales of compute, storage, database, and other service offerings for start-ups, enterprises, government agencies, and academic institutions. Information on reportable segments and reconciliation to consolidated net income is as follows (in millions): Three Months Ended Nine Months Ended 2016 2017 2016 2017 North America Net sales $ 18,874 $ 25,446 $ 53,544 $ 68,808 Operating expenses 18,619 25,334 51,999 67,664 Operating income $ 255 $ 112 $ 1,545 $ 1,144 International Net sales $ 10,609 $ 13,714 $ 30,019 $ 36,259 Operating expenses 11,150 14,650 30,815 38,401 Operating income (loss) $ (541 ) $ (936 ) $ (796 ) $ (2,142 ) AWS Net sales $ 3,231 $ 4,584 $ 8,683 $ 12,346 Operating expenses 2,370 3,413 6,501 9,369 Operating income $ 861 $ 1,171 $ 2,182 $ 2,977 Consolidated Net sales $ 32,714 $ 43,744 $ 92,246 $ 117,413 Operating expenses 32,139 43,397 89,315 115,434 Operating income 575 347 2,931 1,979 Total non-operating income (expense) (84 ) (31 ) (205 ) (44 ) Provision for income taxes (229 ) (58 ) (1,012 ) (755 ) Equity-method investment activity, net of tax (10 ) (2 ) (92 ) (4 ) Net income $ 252 $ 256 $ 1,622 $ 1,176 Net sales by groups of similar products and services is as follows (in millions): Three Months Ended Nine Months Ended 2016 2017 2016 2017 Net Sales: Online stores (1) $ 21,590 $ 26,392 $ 61,883 $ 72,971 Physical stores (2) — 1,276 — 1,276 Third-party seller services (3) 5,652 7,928 15,537 21,357 Subscription services (4) 1,532 2,441 4,264 6,544 AWS 3,231 4,584 8,683 12,346 Other (5) 709 1,123 1,879 2,919 Consolidated $ 32,714 $ 43,744 $ 92,246 $ 117,413 ____________________________ (1) Includes product sales and digital media content where we record revenue gross. We leverage our retail infrastructure to offer a wide selection of consumable and durable goods that includes electronics and general merchandise as well as media products available in both a physical and digital format, such as books, music, videos, games, and software. These product sales include digital products sold on a transactional basis. Digital product subscriptions that provide unlimited viewing or usage rights are included in Subscription services. (2) Includes product sales where our customers physically select items in a store. (3) Includes commissions, related fulfillment and shipping fees, and other third-party seller services. (4) Includes annual and monthly fees associated with Amazon Prime membership, as well as audiobook, e-book, digital video, digital music, and other non-AWS subscription services. (5) Includes sales not otherwise included above, such as certain advertising services and our co-branded credit card agreements. |
Accounting Policies (Policies)
Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Unaudited Interim Financial Information | Unaudited Interim Financial Information We have prepared the accompanying consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. These consolidated financial statements are unaudited and, in our opinion, include all adjustments, consisting of normal recurring adjustments and accruals necessary for a fair presentation of our consolidated balance sheets, operating results, and cash flows for the periods presented. Operating results for the periods presented are not necessarily indicative of the results that may be expected for 2017 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 2016 Annual Report on Form 10-K. |
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 and that support our seller lending financing activities (collectively, the “Company”). Intercompany balances and transactions between consolidated entities are eliminated. The financial results of Whole Foods Market, Inc. (“Whole Foods Market”) have been included in our consolidated financial statements from the date of acquisition on August 28, 2017. |
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. |
Accounting Pronouncements Recently Adopted and Accounting Pronouncements Not Yet Adopted | Accounting Pronouncements Recently Adopted In July 2015, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) modifying the accounting for inventory. Under this ASU, the measurement principle for inventory changed 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. We adopted this ASU in Q1 2017 with no material impact to our consolidated financial statements. In March 2016, the FASB issued an ASU amending the accounting for stock-based compensation and requiring excess tax benefits and deficiencies to be recognized as a component of income tax expense rather than equity. The inclusion of excess tax benefits and deficiencies as a component of our income tax expense will increase volatility within our provision for income taxes as the amount of excess tax benefits or deficiencies from stock-based compensation awards depends on our stock price at the date the awards vest. This guidance also requires excess tax benefits to be presented as an operating activity on the statement of cash flows and allows an entity to make an accounting policy election to either estimate expected forfeitures or to account for them as they occur. We adopted this ASU in Q1 2017 by recording the cumulative impact through an increase in retained earnings of $687 million , and we will continue to estimate expected forfeitures. Additionally, we retrospectively adjusted our consolidated statements of cash flows to reclassify excess tax benefits of $173 million , $493 million and $401 million for the three months, nine months, and twelve months ended September 30, 2016 from financing activities to operating activities. Accounting Pronouncements Not Yet Adopted In May 2014, the FASB issued an ASU amending revenue recognition guidance and requiring more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. We will adopt this ASU on January 1, 2018 with a cumulative adjustment that will increase retained earnings as opposed to retrospectively adjusting prior periods. The adjustment will primarily relate to the unredeemed portion of our gift cards, which we will begin to recognize over the expected customer redemption period, which is substantially within nine months, rather than waiting until gift cards expire or when the likelihood of redemption becomes remote, generally two years from the date of issuance. Prospectively, revenue related to Amazon-branded electronic devices sold through retailers will be recognized upon sale to the retailer rather than to end customers. We also anticipate a change to the recognition and classification of Amazon Prime memberships, which are currently considered arrangements with multiple deliverables that are allocated among products sales and service sales. Upon adoption of the ASU, Amazon Prime memberships will be accounted for as a single performance obligation recognized ratably over the membership period and will be classified as service sales. Other changes that we have identified relate primarily to the presentation of revenue. Certain advertising services will be classified as revenue rather than a reduction in cost of sales, and sales of apps and in-app content will primarily be presented on a net basis. Our assessment of policy changes resulting from this ASU is substantially complete and we are currently evaluating the quantitative impact of these changes in both recognition and presentation and the related disclosures. In February 2016, the FASB issued an ASU amending the accounting for leases. The new guidance requires the recognition of lease assets and liabilities for operating leases with terms of more than 12 months, in addition to those currently recorded, on our consolidated balance sheets. Presentation of leases within the consolidated statements of operations and consolidated statements of cash flows will be generally consistent with the current lease accounting guidance. The ASU is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. We plan to adopt this ASU beginning in Q1 2019. We are currently evaluating the impact and expect the ASU will have a material impact on our consolidated financial statements, primarily to the consolidated balance sheets and related disclosures. In October 2016, the FASB issued an ASU amending the accounting for income taxes. The new guidance requires the recognition of the income tax consequences of an intercompany asset transfer, other than transfers of inventory, when the transfer occurs. For intercompany transfers of inventory, the income tax effects will continue to be deferred until the inventory has been sold to a third party. The ASU is effective for reporting periods beginning after December 15, 2017, with early adoption permitted. We will adopt this ASU beginning in Q1 2018. We estimate the ASU will have an impact of approximately $400 million on our consolidated financial statements, including retained earnings and deferred taxes. This estimate takes into account valuation allowances that we anticipate recording against certain material deferred tax assets. However, the final impact will depend on the balance of property transferred among subsidiaries as of the adoption date. We will recognize incremental deferred tax expense as these deferred tax assets are utilized. Any change in our assessment of the likelihood of our ability to realize deferred tax assets will be reflected as an income tax benefit during the quarter of such change. In November 2016, the FASB issued an ASU amending the presentation of restricted cash within the statement of cash flows. The new guidance requires that restricted cash be included within cash and cash equivalents on the statement of cash flows. The ASU is effective retrospectively for reporting periods beginning after December 15, 2017, with early adoption permitted. We will adopt this ASU beginning in Q1 2018. |
Accounting Policies (Tables)
Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Calculation of Diluted Shares | The following table shows the calculation of diluted shares (in millions): Three Months Ended Nine Months Ended 2016 2017 2016 2017 Shares used in computation of basic earnings per share 474 481 473 479 Total dilutive effect of outstanding stock awards 11 13 10 13 Shares used in computation of diluted earnings per share 485 494 483 492 |
Cash, Cash Equivalents, and M18
Cash, Cash Equivalents, and Marketable Securities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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): December 31, 2016 September 30, 2017 Total Cost or Gross Gross Total Cash $ 6,883 $ 8,658 $ — $ — $ 8,658 Level 1 securities: Money market funds 11,940 4,625 — — 4,625 Equity securities 51 34 33 — 67 Level 2 securities: Foreign government and agency securities 337 807 — — 807 U.S. government and agency securities 4,816 5,400 2 (9 ) 5,393 Corporate debt securities 2,104 4,403 2 (3 ) 4,402 Asset-backed securities 353 853 — (2 ) 851 Other fixed income securities 97 701 — — 701 $ 26,581 $ 25,481 $ 37 $ (14 ) $ 25,504 Less: Restricted cash, cash equivalents, and marketable securities (1) (600 ) (1,194 ) Total cash, cash equivalents, and marketable securities $ 25,981 $ 24,310 ___________________ (1) We are required to pledge or otherwise restrict a portion of our cash, cash equivalents, and marketable securities as collateral for real estate leases, workers’ compensation obligations, amounts due to third-party sellers in certain jurisdictions, debt, and standby and trade letters of credit. (2) 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, 2017 (in millions): Amortized Cost Estimated Fair Value Due within one year $ 11,305 $ 11,303 Due after one year through five years 4,355 4,351 Due after five years through ten years 317 316 Due after ten years 812 809 Total $ 16,789 $ 16,779 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Principal Contractual Commitments, Excluding Open Orders for Purchases | The following summarizes our principal contractual commitments, excluding open orders for purchases that support normal operations and are generally cancellable, as of September 30, 2017 (in millions): Three Months Ended December 31, Year Ended December 31, 2017 2018 2019 2020 2021 Thereafter Total Debt principal and interest $ 1,182 $ 902 $ 2,212 $ 2,087 $ 1,833 $ 33,849 $ 42,065 Capital lease obligations, including interest (1) 1,543 5,406 4,024 1,813 514 671 13,971 Finance lease obligations, including interest (2) 98 391 406 410 421 3,890 5,616 Operating leases 925 2,321 2,254 2,112 1,922 12,535 22,069 Unconditional purchase obligations (3) 817 3,571 3,412 3,115 2,984 10,895 24,794 Other commitments (4) (5) 384 1,241 849 678 522 4,338 8,012 Total commitments $ 4,949 $ 13,832 $ 13,157 $ 10,215 $ 8,196 $ 66,178 $ 116,527 ___________________ (1) Excluding interest, current capital lease obligations of $4.0 billion and $5.3 billion are recorded within “Accrued expenses and other” as of December 31, 2016 , and September 30, 2017 , and $5.1 billion and $7.6 billion are recorded within “Other long-term liabilities” as of December 31, 2016 , and September 30, 2017 . (2) Excluding interest, current finance lease obligations of $144 million and $239 million are recorded within “Accrued expenses and other” as of December 31, 2016 , and September 30, 2017 , and $2.4 billion and $4.3 billion are recorded within “Other long-term liabilities” as of December 31, 2016 , and September 30, 2017 . (3) Includes unconditional purchase obligations related to certain products offered in our Whole Foods Market stores and long-term agreements to acquire and license digital media content that are not reflected on the consolidated balance sheets. For those digital media content agreements with variable terms, we do not estimate the total obligation beyond any minimum quantities and/or pricing as of the reporting date. Purchase obligations associated with renewal provisions solely at the option of the content provider are included to the extent such commitments are fixed or a minimum amount is specified. (4) Includes the estimated timing and amounts of payments for rent and tenant improvements associated with build-to-suit lease arrangements and equipment lease arrangements that have not been placed in service and digital media content liabilities associated with long-term digital media content assets with initial terms greater than one year. (5) Excludes $2.1 billion of accrued tax contingencies for which we cannot make a reasonably reliable estimate of the amount and period of payment, if any. |
Acquisitions, Goodwill, and A20
Acquisitions, Goodwill, and Acquired Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Allocation of Aggregate Purchase Price of Acquisitions | The aggregate purchase price of Whole Foods Market and the other 2017 acquisitions, which primarily includes the acquisition of Souq, was allocated as follows (in millions): Whole Foods Market Other 2017 Acquisitions Total Purchase Price Cash paid, net of cash acquired $ 13,176 $ 612 $ 13,788 Indemnification holdback — 93 93 $ 13,176 $ 705 $ 13,881 Allocation Goodwill $ 8,985 $ 446 $ 9,431 Intangible assets (1): Marketing-related 1,928 59 1,987 Contract-based 408 33 441 Technology-based — 129 129 Customer-related — 48 48 2,336 269 2,605 Property and equipment 3,826 16 3,842 Deferred tax assets 96 15 111 Other assets acquired 1,710 130 1,840 Long-term debt (1,158 ) (7 ) (1,165 ) Deferred tax liabilities (934 ) (20 ) (954 ) Other liabilities assumed (1,685 ) (144 ) (1,829 ) $ 13,176 $ 705 $ 13,881 ___________________ (1) Acquired intangible assets for Whole Foods Market have estimated useful lives of between one and twenty-five years, with a weighted-average amortization period of twenty-four years, primarily driven by the Whole Foods Market tradename, and acquired intangible assets for other 2017 acquisitions have estimated useful lives of between one and seven years, with a weighted-average amortization period of four 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 acquisitions during the nine months ended September 30, 2017 had occurred on January 1, 2016 (in millions): Nine Months Ended 2016 2017 Net sales $ 103,476 $ 127,441 Net income $ 1,597 $ 1,137 |
Summary of Goodwill Activity | The following summarizes our goodwill activity in the first nine months of 2017 by segment (in millions): North America International AWS Consolidated Goodwill - December 31, 2016 $ 2,044 $ 694 $ 1,046 $ 3,784 New acquisitions (1) 9,056 357 18 9,431 Other adjustments (2) 5 40 11 56 Goodwill - September 30, 2017 $ 11,105 $ 1,091 $ 1,075 $ 13,271 ___________________ (1) Primarily includes the acquisition of Whole Foods Market in the North America segment and Souq in the International segment. (2) Primarily includes changes in foreign exchange rates. |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Long-Term Debt Obligations | The face value of our total long-term debt obligations is as follows (in millions): December 31, 2016 September 30, 2017 1.200% Notes due on November 29, 2017 (1) $ 1,000 $ 1,000 2.600% Notes due on December 5, 2019 (2) 1,000 1,000 1.900% Notes due on August 21, 2020 (3) — 1,000 3.300% Notes due on December 5, 2021 (2) 1,000 1,000 2.500% Notes due on November 29, 2022 (1) 1,250 1,250 2.400% Notes due on February 22, 2023 (3) — 1,000 2.800% Notes due on August 22, 2024 (3) — 2,000 3.800% Notes due on December 5, 2024 (2) 1,250 1,250 5.200% Notes due on December 3, 2025 (4) — 1,000 3.150% Notes due on August 22, 2027 (3) — 3,500 4.800% Notes due on December 5, 2034 (2) 1,250 1,250 3.875% Notes due on August 22, 2037 (3) — 2,750 4.950% Notes due on December 5, 2044 (2) 1,500 1,500 4.050% Notes due on August 22, 2047 (3) — 3,500 4.250% Notes due on August 22, 2057 (3) — 2,250 Credit Facility 495 550 Other long-term debt 93 47 Total debt 8,838 25,847 Less current portion of long-term debt (1,056 ) (1,037 ) Face value of long-term debt $ 7,782 $ 24,810 _____________________________ (1) Issued in November 2012, effective interest rates of the 2017 and 2022 Notes were 1.38% and 2.66% . (2) Issued in December 2014, effective interest rates of the 2019, 2021, 2024, 2034, and 2044 Notes were 2.73% , 3.43% , 3.90% , 4.92% , and 5.11% . (3) Issued in August 2017, effective interest rates of the 2020, 2023, 2024, 2027, 2037, 2047, and 2057 Notes were 2.16% , 2.56% , 2.95% , 3.25% , 3.94% , 4.13% , and 4.33% . (4) Assumed in connection with the acquisition of Whole Foods Market, the effective interest rate of the 2025 Notes was 3.03% . |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Expense | Stock-based compensation expense is as follows (in millions): Three Months Ended Nine Months Ended 2016 2017 2016 2017 Cost of sales (1) $ 7 $ 13 $ 7 $ 33 Fulfillment 165 230 467 655 Marketing 85 135 221 363 Technology and content 434 595 1,171 1,668 General and administrative 85 112 222 317 Total stock-based compensation expense $ 776 $ 1,085 $ 2,088 $ 3,036 ___________________ (1) Beginning in Q3 2016, stock-based compensation expense was recorded to cost of sales for eligible employees providing delivery services. |
Nonvested Restricted Stock Units Activity | The following table summarizes our restricted stock unit activity for the nine months ended September 30, 2017 (in millions): Number of Units Weighted-Average Grant-Date Fair Value Outstanding as of December 31, 2016 19.8 $ 506 Units granted 7.2 918 Units vested (4.6 ) 387 Units forfeited (1.3 ) 620 Outstanding as of September 30, 2017 21.1 $ 666 |
Nonvested Share Activity | Scheduled vesting for outstanding restricted stock units as of September 30, 2017 , is as follows (in millions): Three Months Ended December 31, Year Ended December 31, 2017 2018 2019 2020 2021 Thereafter Total Scheduled vesting—restricted stock units 2.2 7.3 7.0 3.1 1.1 0.4 21.1 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Information on Reportable Segments and Reconciliation to Consolidated Net Income | Information on reportable segments and reconciliation to consolidated net income is as follows (in millions): Three Months Ended Nine Months Ended 2016 2017 2016 2017 North America Net sales $ 18,874 $ 25,446 $ 53,544 $ 68,808 Operating expenses 18,619 25,334 51,999 67,664 Operating income $ 255 $ 112 $ 1,545 $ 1,144 International Net sales $ 10,609 $ 13,714 $ 30,019 $ 36,259 Operating expenses 11,150 14,650 30,815 38,401 Operating income (loss) $ (541 ) $ (936 ) $ (796 ) $ (2,142 ) AWS Net sales $ 3,231 $ 4,584 $ 8,683 $ 12,346 Operating expenses 2,370 3,413 6,501 9,369 Operating income $ 861 $ 1,171 $ 2,182 $ 2,977 Consolidated Net sales $ 32,714 $ 43,744 $ 92,246 $ 117,413 Operating expenses 32,139 43,397 89,315 115,434 Operating income 575 347 2,931 1,979 Total non-operating income (expense) (84 ) (31 ) (205 ) (44 ) Provision for income taxes (229 ) (58 ) (1,012 ) (755 ) Equity-method investment activity, net of tax (10 ) (2 ) (92 ) (4 ) Net income $ 252 $ 256 $ 1,622 $ 1,176 |
Net Sales by Groups of Similar Products and Services | Net sales by groups of similar products and services is as follows (in millions): Three Months Ended Nine Months Ended 2016 2017 2016 2017 Net Sales: Online stores (1) $ 21,590 $ 26,392 $ 61,883 $ 72,971 Physical stores (2) — 1,276 — 1,276 Third-party seller services (3) 5,652 7,928 15,537 21,357 Subscription services (4) 1,532 2,441 4,264 6,544 AWS 3,231 4,584 8,683 12,346 Other (5) 709 1,123 1,879 2,919 Consolidated $ 32,714 $ 43,744 $ 92,246 $ 117,413 ____________________________ (1) Includes product sales and digital media content where we record revenue gross. We leverage our retail infrastructure to offer a wide selection of consumable and durable goods that includes electronics and general merchandise as well as media products available in both a physical and digital format, such as books, music, videos, games, and software. These product sales include digital products sold on a transactional basis. Digital product subscriptions that provide unlimited viewing or usage rights are included in Subscription services. (2) Includes product sales where our customers physically select items in a store. (3) Includes commissions, related fulfillment and shipping fees, and other third-party seller services. (4) Includes annual and monthly fees associated with Amazon Prime membership, as well as audiobook, e-book, digital video, digital music, and other non-AWS subscription services. (5) Includes sales not otherwise included above, such as certain advertising services and our co-branded credit card agreements. |
Accounting Policies - Calculati
Accounting Policies - Calculation of Diluted Shares (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accounting Policies [Abstract] | ||||
Shares used in computation of basic earnings per share | 481 | 474 | 479 | 473 |
Total dilutive effect of outstanding stock awards | 13 | 11 | 13 | 10 |
Shares used in computation of diluted earnings per share | 494 | 485 | 492 | 483 |
Accounting Policies - Recent Ac
Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Mar. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Net cash provided by (used in) financing activities | $ 14,685 | $ (1,000) | $ 12,507 | $ (3,148) | $ 11,916 | $ (4,746) | |
Net cash provided by (used in) operating activities | 3,851 | 4,659 | 6,090 | 6,284 | 17,077 | 15,004 | |
Accounting Standards Update 2016-09 | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Net cash provided by (used in) financing activities | (173) | (493) | (401) | ||||
Net cash provided by (used in) operating activities | $ 173 | $ 493 | $ 401 | ||||
Accounting Standards Update 2016-09 | Retained Earnings | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Cumulative impact of adoption | $ 687 | ||||||
Adoption of ASU 2016-16 | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets | $ 400 | $ 400 | $ 400 |
Cash, Cash Equivalents, and M26
Cash, Cash Equivalents, and Marketable Securities - Fair Values on Recurring Basis (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Total Estimated Fair Value | ||
Cash equivalents and marketable securities | $ 16,779 | |
Cost or Amortized Cost | ||
Cash equivalents and marketable securities | 16,789 | |
Recurring | ||
Schedule of Investments [Line Items] | ||
Cash | 8,658 | $ 6,883 |
Total Estimated Fair Value | ||
Cash, cash equivalents and short-term investments | 25,504 | 26,581 |
Less: Restricted cash, cash equivalents, and marketable securities | (1,194) | (600) |
Total cash, cash equivalents, and marketable securities | 24,310 | 25,981 |
Cost or Amortized Cost | ||
Cash, cash equivalents and short-term investments | 25,481 | |
Gross Unrealized Gains | ||
Short-term investments | 37 | |
Gross Unrealized Losses | ||
Short-term investments | (14) | |
Recurring | Level 1 securities | ||
Total Estimated Fair Value | ||
Equity securities | 67 | 51 |
Cost or Amortized Cost | ||
Equity securities | 34 | |
Gross Unrealized Gains | ||
Equity securities | 33 | |
Gross Unrealized Losses | ||
Equity securities | 0 | |
Recurring | Level 1 securities | Money market funds | ||
Schedule of Investments [Line Items] | ||
Money market funds | 4,625 | 11,940 |
Recurring | Level 2 securities | Foreign government and agency securities | ||
Total Estimated Fair Value | ||
Cash equivalents and marketable securities | 807 | 337 |
Cost or Amortized Cost | ||
Cash equivalents and marketable securities | 807 | |
Gross Unrealized Gains | ||
Cash equivalents and marketable securities | 0 | |
Gross Unrealized Losses | ||
Cash equivalents and marketable securities | 0 | |
Recurring | Level 2 securities | U.S. government and agency securities | ||
Total Estimated Fair Value | ||
Cash equivalents and marketable securities | 5,393 | 4,816 |
Cost or Amortized Cost | ||
Cash equivalents and marketable securities | 5,400 | |
Gross Unrealized Gains | ||
Cash equivalents and marketable securities | 2 | |
Gross Unrealized Losses | ||
Cash equivalents and marketable securities | (9) | |
Recurring | Level 2 securities | Corporate debt securities | ||
Total Estimated Fair Value | ||
Cash equivalents and marketable securities | 4,402 | 2,104 |
Cost or Amortized Cost | ||
Cash equivalents and marketable securities | 4,403 | |
Gross Unrealized Gains | ||
Cash equivalents and marketable securities | 2 | |
Gross Unrealized Losses | ||
Cash equivalents and marketable securities | (3) | |
Recurring | Level 2 securities | Asset-backed securities | ||
Total Estimated Fair Value | ||
Cash equivalents and marketable securities | 851 | 353 |
Cost or Amortized Cost | ||
Cash equivalents and marketable securities | 853 | |
Gross Unrealized Gains | ||
Cash equivalents and marketable securities | 0 | |
Gross Unrealized Losses | ||
Cash equivalents and marketable securities | (2) | |
Recurring | Level 2 securities | Other fixed income securities | ||
Total Estimated Fair Value | ||
Cash equivalents and marketable securities | 701 | $ 97 |
Cost or Amortized Cost | ||
Cash equivalents and marketable securities | 701 | |
Gross Unrealized Gains | ||
Cash equivalents and marketable securities | 0 | |
Gross Unrealized Losses | ||
Cash equivalents and marketable securities | $ 0 |
Cash, Cash Equivalents, and M27
Cash, Cash Equivalents, and Marketable Securities - Contractual Maturities (Details) $ in Millions | Sep. 30, 2017USD ($) |
Amortized Cost | |
Due within one year | $ 11,305 |
Due after one year through five years | 4,355 |
Due after five years through ten years | 317 |
Due after ten years | 812 |
Cash equivalents and marketable securities | 16,789 |
Estimated Fair Value | |
Due within one year | 11,303 |
Due after one year through five years | 4,351 |
Due after five years through ten years | 316 |
Due after ten years | 809 |
Cash equivalents and marketable securities | $ 16,779 |
Cash, Cash Equivalents, and M28
Cash, Cash Equivalents, and Marketable Securities - Additional Information (Details) - Warrant - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Investments, Warrant Assets | |||||
Gain (loss) on warrant assets | $ 76 | $ 9 | $ 145 | $ (11) | |
Level 2 assets | |||||
Investments, Warrant Assets | |||||
Fair value of warrant assets | $ 455 | $ 455 | $ 223 |
Commitments and Contingencies -
Commitments and Contingencies - Commitments (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Rental expense under operating lease agreements | $ 553 | $ 367 | $ 1,400 | $ 1,000 |
Commitments and Contingencies30
Commitments and Contingencies - Principal Contractual Commitments Excluding Open Orders (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Debt principal and interest | ||
Three Months Ended December 31, 2017 | $ 1,182 | |
Year Ended December 31, 2018 | 902 | |
Year Ended December 31, 2019 | 2,212 | |
Year Ended December 31, 2020 | 2,087 | |
Year Ended December 31, 2021 | 1,833 | |
Thereafter | 33,849 | |
Total | 42,065 | |
Operating leases | ||
Three Months Ended December 31, 2017 | 925 | |
Year Ended December 31, 2018 | 2,321 | |
Year Ended December 31, 2019 | 2,254 | |
Year Ended December 31, 2020 | 2,112 | |
Year Ended December 31, 2021 | 1,922 | |
Thereafter | 12,535 | |
Total | 22,069 | |
Unconditional purchase obligations | ||
Three Months Ended December 31, 2017 | 817 | |
Year Ended December 31, 2018 | 3,571 | |
Year Ended December 31, 2019 | 3,412 | |
Year Ended December 31, 2020 | 3,115 | |
Year Ended December 31, 2021 | 2,984 | |
Thereafter | 10,895 | |
Total | 24,794 | |
Other commitments | ||
Three Months Ended December 31, 2017 | 384 | |
Year Ended December 31, 2018 | 1,241 | |
Year Ended December 31, 2019 | 849 | |
Year Ended December 31, 2020 | 678 | |
Year Ended December 31, 2021 | 522 | |
Thereafter | 4,338 | |
Total | 8,012 | |
Total commitments | ||
Three Months Ended December 31, 2017 | 4,949 | |
Year Ended December 31, 2018 | 13,832 | |
Year Ended December 31, 2019 | 13,157 | |
Year Ended December 31, 2020 | 10,215 | |
Year Ended December 31, 2021 | 8,196 | |
Thereafter | 66,178 | |
Total | 116,527 | |
Accrued tax contingencies | 2,100 | $ 1,700 |
Capital lease obligations | ||
Lease obligations, including interest | ||
Three Months Ended December 31, 2017 | 1,543 | |
Year Ended December 31, 2018 | 5,406 | |
Year Ended December 31, 2019 | 4,024 | |
Year Ended December 31, 2020 | 1,813 | |
Year Ended December 31, 2021 | 514 | |
Thereafter | 671 | |
Total | 13,971 | |
Current lease obligations | 5,300 | 4,000 |
Noncurrent lease obligations | 7,600 | 5,100 |
Finance lease obligations | ||
Lease obligations, including interest | ||
Three Months Ended December 31, 2017 | 98 | |
Year Ended December 31, 2018 | 391 | |
Year Ended December 31, 2019 | 406 | |
Year Ended December 31, 2020 | 410 | |
Year Ended December 31, 2021 | 421 | |
Thereafter | 3,890 | |
Total | 5,616 | |
Current lease obligations | 239 | 144 |
Noncurrent lease obligations | $ 4,300 | $ 2,400 |
Commitments and Contingencies31
Commitments and Contingencies - Pledged Assets (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Commitments and Contingencies Disclosure [Abstract] | ||
Pledged assets | $ 1,300 | $ 715 |
Acquisitions, Goodwill, and A32
Acquisitions, Goodwill, and Acquired Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | Aug. 28, 2017 | May 12, 2017 | Sep. 30, 2017 |
Souq Group Ltd [Member] | |||
Business Acquisition [Line Items] | |||
Aggregate purchase price | $ 579 | ||
Business Acquisition, Effective Date of Acquisition | May 12, 2017 | ||
Whole Foods Market, Inc [Member] | |||
Business Acquisition [Line Items] | |||
Aggregate purchase price | $ 13,176 | $ 13,176 | |
Business Acquisition, Effective Date of Acquisition | Aug. 28, 2017 | ||
Acquisition of Certain Other Companies | |||
Business Acquisition [Line Items] | |||
Aggregate purchase price | $ 126 |
Acquisitions, Goodwill, and A33
Acquisitions, Goodwill, and Acquired Intangible Assets - Allocation of Purchase Price (Details) - USD ($) $ in Millions | Aug. 28, 2017 | May 12, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Purchase Price | |||||||||
Cash paid, net of cash acquired | $ 13,213 | $ 84 | $ 13,891 | $ 113 | $ 13,893 | $ 430 | |||
Allocation | |||||||||
Goodwill | 13,271 | 13,271 | 13,271 | $ 3,784 | |||||
Souq Group Ltd [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Business Acquisition, Effective Date of Acquisition | May 12, 2017 | ||||||||
Purchase Price | |||||||||
Purchase price | $ 579 | ||||||||
Whole Foods Market, Inc [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Business Acquisition, Effective Date of Acquisition | Aug. 28, 2017 | ||||||||
Purchase Price | |||||||||
Cash paid, net of cash acquired | 13,176 | ||||||||
Indemnification holdback | 0 | ||||||||
Purchase price | $ 13,176 | 13,176 | |||||||
Allocation | |||||||||
Goodwill | 8,985 | 8,985 | 8,985 | ||||||
Intangible assets | 2,336 | 2,336 | 2,336 | ||||||
Property and equipment | 3,826 | 3,826 | 3,826 | ||||||
Deferred tax assets | 96 | 96 | 96 | ||||||
Other assets acquired | 1,710 | 1,710 | 1,710 | ||||||
Long-term debt | (1,158) | (1,158) | (1,158) | ||||||
Deferred tax liabilities | (934) | (934) | (934) | ||||||
Other liabilities assumed | (1,685) | (1,685) | (1,685) | ||||||
Allocation | 13,176 | $ 13,176 | 13,176 | ||||||
Acquired intangible assets, weighted-average useful life | 24 years | ||||||||
Whole Foods Market, Inc [Member] | Minimum | |||||||||
Allocation | |||||||||
Acquired intangible assets, estimated useful life | 1 year | ||||||||
Whole Foods Market, Inc [Member] | Maximum | |||||||||
Allocation | |||||||||
Acquired intangible assets, estimated useful life | 25 years | ||||||||
Whole Foods Market, Inc [Member] | Marketing-related | |||||||||
Allocation | |||||||||
Intangible assets | 1,928 | $ 1,928 | 1,928 | ||||||
Whole Foods Market, Inc [Member] | Contract-based | |||||||||
Allocation | |||||||||
Intangible assets | 408 | 408 | 408 | ||||||
Whole Foods Market, Inc [Member] | Technology-based | |||||||||
Allocation | |||||||||
Intangible assets | 0 | 0 | 0 | ||||||
Whole Foods Market, Inc [Member] | Customer-related | |||||||||
Allocation | |||||||||
Intangible assets | 0 | 0 | 0 | ||||||
Other 2017 Acquisitions | |||||||||
Purchase Price | |||||||||
Cash paid, net of cash acquired | 612 | ||||||||
Indemnification holdback | 93 | ||||||||
Purchase price | 705 | ||||||||
Allocation | |||||||||
Goodwill | 446 | 446 | 446 | ||||||
Intangible assets | 269 | 269 | 269 | ||||||
Property and equipment | 16 | 16 | 16 | ||||||
Deferred tax assets | 15 | 15 | 15 | ||||||
Other assets acquired | 130 | 130 | 130 | ||||||
Long-term debt | (7) | (7) | (7) | ||||||
Deferred tax liabilities | (20) | (20) | (20) | ||||||
Other liabilities assumed | (144) | (144) | (144) | ||||||
Allocation | 705 | $ 705 | 705 | ||||||
Acquired intangible assets, weighted-average useful life | 4 years | ||||||||
Other 2017 Acquisitions | Minimum | |||||||||
Allocation | |||||||||
Acquired intangible assets, estimated useful life | 1 year | ||||||||
Other 2017 Acquisitions | Maximum | |||||||||
Allocation | |||||||||
Acquired intangible assets, estimated useful life | 7 years | ||||||||
Other 2017 Acquisitions | Marketing-related | |||||||||
Allocation | |||||||||
Intangible assets | 59 | $ 59 | 59 | ||||||
Other 2017 Acquisitions | Contract-based | |||||||||
Allocation | |||||||||
Intangible assets | 33 | 33 | 33 | ||||||
Other 2017 Acquisitions | Technology-based | |||||||||
Allocation | |||||||||
Intangible assets | 129 | 129 | 129 | ||||||
Other 2017 Acquisitions | Customer-related | |||||||||
Allocation | |||||||||
Intangible assets | 48 | 48 | 48 | ||||||
2017 Acquisitions | |||||||||
Purchase Price | |||||||||
Cash paid, net of cash acquired | 13,788 | ||||||||
Indemnification holdback | 93 | ||||||||
Purchase price | 13,881 | ||||||||
Allocation | |||||||||
Goodwill | 9,431 | 9,431 | 9,431 | ||||||
Intangible assets | 2,605 | 2,605 | 2,605 | ||||||
Property and equipment | 3,842 | 3,842 | 3,842 | ||||||
Deferred tax assets | 111 | 111 | 111 | ||||||
Other assets acquired | 1,840 | 1,840 | 1,840 | ||||||
Long-term debt | (1,165) | (1,165) | (1,165) | ||||||
Deferred tax liabilities | (954) | (954) | (954) | ||||||
Other liabilities assumed | (1,829) | (1,829) | (1,829) | ||||||
Allocation | 13,881 | 13,881 | 13,881 | ||||||
2017 Acquisitions | Marketing-related | |||||||||
Allocation | |||||||||
Intangible assets | 1,987 | 1,987 | 1,987 | ||||||
2017 Acquisitions | Contract-based | |||||||||
Allocation | |||||||||
Intangible assets | 441 | 441 | 441 | ||||||
2017 Acquisitions | Technology-based | |||||||||
Allocation | |||||||||
Intangible assets | 129 | 129 | 129 | ||||||
2017 Acquisitions | Customer-related | |||||||||
Allocation | |||||||||
Intangible assets | $ 48 | $ 48 | $ 48 |
Acquisitions, Goodwill, and A34
Acquisitions, Goodwill, and Acquired Intangible Assets - Pro Forma Financial Information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Business Acquisition [Line Items] | ||
Net sales | $ 127,441 | $ 103,476 |
Net income | 1,137 | $ 1,597 |
Other 2017 Acquisitions | ||
Business Acquisition [Line Items] | ||
Aggregate net sales of companies acquired | 222 | |
Aggregate operating income (loss) of companies acquired | (80) | |
Whole Foods Market, Inc [Member] | ||
Business Acquisition [Line Items] | ||
Aggregate net sales of companies acquired | 1,300 | |
Aggregate operating income (loss) of companies acquired | $ 21 |
Acquisitions, Goodwill, and A35
Acquisitions, Goodwill, and Acquired Intangible Assets - Goodwill Activity (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, balance at beginning of period | $ 3,784 |
New acquisitions (1) | 9,431 |
Other adjustments (2) | 56 |
Goodwill, balance at end of period | 13,271 |
North America | |
Goodwill [Roll Forward] | |
Goodwill, balance at beginning of period | 2,044 |
New acquisitions (1) | 9,056 |
Other adjustments (2) | 5 |
Goodwill, balance at end of period | 11,105 |
International | |
Goodwill [Roll Forward] | |
Goodwill, balance at beginning of period | 694 |
New acquisitions (1) | 357 |
Other adjustments (2) | 40 |
Goodwill, balance at end of period | 1,091 |
AWS | |
Goodwill [Roll Forward] | |
Goodwill, balance at beginning of period | 1,046 |
New acquisitions (1) | 18 |
Other adjustments (2) | 11 |
Goodwill, balance at end of period | $ 1,075 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) | 1 Months Ended | ||||||||
Oct. 31, 2016USD ($) | May 31, 2016USD ($)extension | Oct. 04, 2017USD ($) | Sep. 30, 2017USD ($) | Aug. 31, 2017USD ($) | Aug. 28, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2014USD ($) | Nov. 30, 2012USD ($) | |
Debt Instrument [Line Items] | |||||||||
Borrowings outstanding | $ 25,847,000,000 | $ 8,838,000,000 | |||||||
Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Face amount of notes | $ 16,000,000,000 | $ 1,000,000,000 | $ 6,000,000,000 | $ 3,000,000,000 | |||||
Borrowings outstanding | 25,300,000,000 | ||||||||
Unamortized discount | 100,000,000 | 90,000,000 | |||||||
Estimated fair value of notes | 26,200,000,000 | 8,700,000,000 | |||||||
Line of Credit and Other Long-term Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Borrowings outstanding | 597,000,000 | 588,000,000 | |||||||
Credit Facility | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Borrowings outstanding | 550,000,000 | 495,000,000 | |||||||
Credit Facility | Revolving Credit Facility | October 2016 Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum Borrowing Capacity | $ 500,000,000 | ||||||||
Credit term | 3 years | ||||||||
Commitment fee percentage | 0.50% | ||||||||
Borrowings outstanding | $ 550,000,000 | $ 495,000,000 | |||||||
Weighted average interest rate | 2.60% | 2.30% | |||||||
Collateral amount | $ 639,000,000 | $ 579,000,000 | |||||||
Credit Facility | Revolving Credit Facility | October 2016 Revolving Credit Facility | LIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (as a percent) | 1.65% | ||||||||
Credit Facility | Revolving Credit Facility | May 2016 Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum Borrowing Capacity | $ 3,000,000,000 | ||||||||
Credit term | 3 years | ||||||||
Commitment fee percentage | 0.05% | ||||||||
Borrowings outstanding | 0 | 0 | |||||||
Credit Agreement, number of extensions | extension | 3 | ||||||||
Credit Agreement, additional term | 1 year | ||||||||
Credit Facility | Revolving Credit Facility | May 2016 Revolving Credit Facility | Downgraded Credit Ratings | |||||||||
Debt Instrument [Line Items] | |||||||||
Commitment fee percentage | 0.09% | ||||||||
Credit Facility | Revolving Credit Facility | May 2016 Revolving Credit Facility | LIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (as a percent) | 0.60% | ||||||||
Credit Facility | Revolving Credit Facility | May 2016 Revolving Credit Facility | LIBOR | Downgraded Credit Ratings | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (as a percent) | 1.00% | ||||||||
Other Long-term Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Borrowings outstanding | $ 47,000,000 | $ 93,000,000 | |||||||
Weighted average interest rate | 1.90% | 3.40% | |||||||
Subsequent Event [Member] | Credit Facility | Revolving Credit Facility | October 2016 Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum Borrowing Capacity | $ 600,000,000 |
Long-Term Debt - Long-Term Debt
Long-Term Debt - Long-Term Debt Obligations (Details) - USD ($) | Oct. 04, 2017 | Sep. 30, 2017 | Aug. 31, 2017 | Aug. 28, 2017 | Dec. 31, 2016 | Oct. 31, 2016 | Dec. 31, 2014 | Nov. 30, 2012 |
Debt Instrument [Line Items] | ||||||||
Total debt | $ 25,847,000,000 | $ 8,838,000,000 | ||||||
Less current portion of long-term debt | (1,037,000,000) | (1,056,000,000) | ||||||
Face value of long-term debt | 24,810,000,000 | 7,782,000,000 | ||||||
Senior Notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Face amount of notes | $ 16,000,000,000 | $ 1,000,000,000 | $ 6,000,000,000 | $ 3,000,000,000 | ||||
Total debt | $ 25,300,000,000 | |||||||
Senior Notes | 1.200% Notes due on November 29, 2017 (1) | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate | 1.20% | |||||||
Total debt | $ 1,000,000,000 | 1,000,000,000 | ||||||
Effective interest rates | 1.38% | |||||||
Senior Notes | 2.600% Notes due on December 5, 2019 (2) | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate | 2.60% | |||||||
Total debt | $ 1,000,000,000 | 1,000,000,000 | ||||||
Effective interest rates | 2.73% | |||||||
Senior Notes | 1.900% Notes due on August 21, 2020 (3) | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate | 1.90% | |||||||
Total debt | $ 1,000,000,000 | |||||||
Effective interest rates | 2.16% | |||||||
Senior Notes | 3.300% Notes due on December 5, 2021 (2) | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate | 3.30% | |||||||
Total debt | $ 1,000,000,000 | 1,000,000,000 | ||||||
Effective interest rates | 3.43% | |||||||
Senior Notes | 2.500% Notes due on November 29, 2022 (1) | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate | 2.50% | |||||||
Total debt | $ 1,250,000,000 | 1,250,000,000 | ||||||
Effective interest rates | 2.66% | |||||||
Senior Notes | 2.400% Notes due on February 22, 2023 (3) | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate | 2.40% | |||||||
Total debt | $ 1,000,000,000 | |||||||
Effective interest rates | 2.56% | |||||||
Senior Notes | 2.800% Notes due on August 22, 2024 (3) | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate | 2.80% | |||||||
Total debt | $ 2,000,000,000 | |||||||
Effective interest rates | 2.95% | |||||||
Senior Notes | 3.800% Notes due on December 5, 2024 (2) | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate | 3.80% | |||||||
Total debt | $ 1,250,000,000 | 1,250,000,000 | ||||||
Effective interest rates | 3.90% | |||||||
Senior Notes | 5.200% Notes due on December 3, 2025 (4) | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate | 5.20% | |||||||
Total debt | $ 1,000,000,000 | |||||||
Effective interest rates | 3.03% | |||||||
Senior Notes | 3.150% Notes due on August 22, 2027 (3) | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate | 3.15% | |||||||
Total debt | $ 3,500,000,000 | |||||||
Effective interest rates | 3.25% | |||||||
Senior Notes | 4.800% Notes due on December 5, 2034 (2) | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate | 4.80% | |||||||
Total debt | $ 1,250,000,000 | 1,250,000,000 | ||||||
Effective interest rates | 4.92% | |||||||
Senior Notes | 3.875% Notes due on August 22, 2037 (3) | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate | 3.875% | |||||||
Total debt | $ 2,750,000,000 | |||||||
Effective interest rates | 3.94% | |||||||
Senior Notes | 4.950% Notes due on December 5, 2044 (2) | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate | 4.95% | |||||||
Total debt | $ 1,500,000,000 | 1,500,000,000 | ||||||
Effective interest rates | 5.11% | |||||||
Senior Notes | 4.050% Notes due on August 22, 2047 (3) | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate | 4.05% | |||||||
Total debt | $ 3,500,000,000 | |||||||
Effective interest rates | 4.13% | |||||||
Senior Notes | 4.250% Notes due on August 22, 2057 (3) | ||||||||
Debt Instrument [Line Items] | ||||||||
Stated interest rate | 4.25% | |||||||
Total debt | $ 2,250,000,000 | |||||||
Effective interest rates | 4.33% | |||||||
Credit Facility | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Total debt | $ 550,000,000 | 495,000,000 | ||||||
Credit Facility | October 2016 Revolving Credit Facility | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum Borrowing Capacity | $ 500,000,000 | |||||||
Other Long-term Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Total debt | $ 47,000,000 | $ 93,000,000 | ||||||
Subsequent Event [Member] | Credit Facility | October 2016 Revolving Credit Facility | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum Borrowing Capacity | $ 600,000,000 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) shares in Millions | 9 Months Ended | |||
Sep. 30, 2017 | Dec. 31, 2016 | Feb. 29, 2016 | Dec. 31, 2010 | |
Class of Stock [Line Items] | ||||
Common shares outstanding plus underlying outstanding stock awards | 503 | 497 | ||
Net unrecognized compensation cost related to unvested stock-based compensation arrangements | $ 6,300,000,000 | |||
Compensation cost expected to be expensed in next twelve months, percentage | 50.00% | |||
Net unrecognized compensation cost related to unvested stock-based compensation arrangements, weighted average recognition period (in years) | 1 year 1 month 12 days | |||
Estimated forfeiture rate | 28.00% | 28.00% | ||
February 2016 Program | ||||
Class of Stock [Line Items] | ||||
Stock repurchase, authorized amount | $ 5,000,000,000 | |||
2010 Program | ||||
Class of Stock [Line Items] | ||||
Stock repurchase, authorized amount | $ 2,000,000,000 |
Stockholders' Equity - Stock-ba
Stockholders' Equity - Stock-based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | $ 1,085 | $ 776 | $ 3,036 | $ 2,088 |
Cost of sales | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | 13 | 7 | 33 | 7 |
Fulfillment | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | 230 | 165 | 655 | 467 |
Marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | 135 | 85 | 363 | 221 |
Technology and content | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | 595 | 434 | 1,668 | 1,171 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation expense | $ 112 | $ 85 | $ 317 | $ 222 |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted Stock Unit Activity (Details) - Restricted Stock Units shares in Millions, $ in Millions | 9 Months Ended |
Sep. 30, 2017USD ($)shares | |
Number of Units | |
Beginning balance (in shares) | shares | 19.8 |
Units granted (in shares) | shares | 7.2 |
Units vested (in shares) | shares | (4.6) |
Units forfeited (in shares) | shares | (1.3) |
Ending balance (in shares) | shares | 21.1 |
Weighted-Average Grant-Date Fair Value | |
Beginning balance | $ | $ 506 |
Units granted | $ | 918 |
Units vested | $ | 387 |
Units forfeited | $ | 620 |
Ending balance | $ | $ 666 |
Stockholders' Equity - Schedule
Stockholders' Equity - Scheduled Vesting for Outstanding Restricted Stock Units (Details) - Restricted Stock Units - shares shares in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Three Months Ended December 31, 2017 | 2.2 | |
Year Ended December 31, 2018 | 7.3 | |
Year Ended December 31, 2019 | 7 | |
Year Ended December 31, 2020 | 3.1 | |
Year Ended December 31, 2021 | 1.1 | |
Thereafter | 0.4 | |
Total | 21.1 | 19.8 |
Income Taxes (Details)
Income Taxes (Details) € in Millions, $ in Millions | Oct. 04, 2017EUR (€) | Jun. 30, 2015EUR (€) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) |
Income Tax Disclosure [Abstract] | ||||||||||
Provision for income taxes | $ 58 | $ 229 | $ 755 | $ 1,012 | ||||||
Discrete tax benefits | 422 | 50 | ||||||||
Valuation allowance against the net deferred tax assets | $ 600 | |||||||||
Cash taxes paid, net of refunds | 172 | $ 91 | 865 | $ 317 | $ 960 | $ 390 | ||||
Tax contingencies | $ 2,100 | 2,100 | $ 2,100 | $ 1,700 | ||||||
Internal Revenue Service (IRS) | Domestic Tax Authority [Member] | ||||||||||
Income Tax Examination [Line Items] | ||||||||||
Tax examination, estimate of additional tax expense | $ 1,500 | |||||||||
French Tax Administration | Foreign Tax Authority [Member] | ||||||||||
Income Tax Examination [Line Items] | ||||||||||
Tax examination, estimate of additional tax expense | € | € 196 | |||||||||
Subsequent Event [Member] | European Commission | Foreign Tax Authority [Member] | ||||||||||
Income Tax Examination [Line Items] | ||||||||||
Tax examination, estimate of additional tax expense | € | € 250 |
Segment Information - Reportabl
Segment Information - Reportable Segments and Reconciliation to Consolidated Net Income (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)segment | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | |
Segment Reporting [Abstract] | ||||||
Number of operating segments | segment | 3 | |||||
Segment Reporting Disclosure [Line Items] | ||||||
Net sales | $ 43,744 | $ 32,714 | $ 117,413 | $ 92,246 | ||
Operating expenses | 43,397 | 32,139 | 115,434 | 89,315 | ||
Operating income (loss) | 347 | 575 | 1,979 | 2,931 | ||
Total non-operating income (expense) | (31) | (84) | (44) | (205) | ||
Provision for income taxes | (58) | (229) | (755) | (1,012) | ||
Equity-method investment activity, net of tax | (2) | (10) | (4) | (92) | ||
Net income | 256 | 252 | 1,176 | 1,622 | $ 1,926 | $ 2,105 |
North America | ||||||
Segment Reporting Disclosure [Line Items] | ||||||
Net sales | 25,446 | 18,874 | 68,808 | 53,544 | ||
Operating expenses | 25,334 | 18,619 | 67,664 | 51,999 | ||
Operating income (loss) | 112 | 255 | 1,144 | 1,545 | ||
International | ||||||
Segment Reporting Disclosure [Line Items] | ||||||
Net sales | 13,714 | 10,609 | 36,259 | 30,019 | ||
Operating expenses | 14,650 | 11,150 | 38,401 | 30,815 | ||
Operating income (loss) | (936) | (541) | (2,142) | (796) | ||
AWS | ||||||
Segment Reporting Disclosure [Line Items] | ||||||
Net sales | 4,584 | 3,231 | 12,346 | 8,683 | ||
Operating expenses | 3,413 | 2,370 | 9,369 | 6,501 | ||
Operating income (loss) | $ 1,171 | $ 861 | $ 2,977 | $ 2,182 |
Segment Information - Net Sales
Segment Information - Net Sales of Similar Products and Services (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue from External Customer [Line Items] | ||||
Net sales | $ 43,744 | $ 32,714 | $ 117,413 | $ 92,246 |
Online stores (1) | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 26,392 | 21,590 | 72,971 | 61,883 |
Physical stores (2) | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 1,276 | 1,276 | ||
Third-party seller services (3) | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 7,928 | 5,652 | 21,357 | 15,537 |
Subscription services (4) | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 2,441 | 1,532 | 6,544 | 4,264 |
AWS | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 4,584 | 3,231 | 12,346 | 8,683 |
Other (5) | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | $ 1,123 | $ 709 | $ 2,919 | $ 1,879 |