10-k Example

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\par\pard\plain\fs16
\par\pard\plain
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rh298\row}}}\pard\plain\cf1\f51\fs32\b\qc UNITED STATES\par\pard\plain\cf1\f51\f
s32\b\qc SECURITIES AND EXCHANGE COMMISSION\par\pard\plain\cf1\f51\fs22\b\qc Was
hington, D.C. 20549\par\pard\plain\cf1\f51\fs20\qc \~\plain\cf1\f51\fs14\qc ____
________________________________\par\pard\plain\cf1\f51\fs32\b\qc FORM 10-K\par\
pard\plain\cf1\f51\fs14\qc ____________________________________\~\par\pard\plain
\cf1\f51\fs18\b\ql (Mark One)
\par\pard\plain
{\trowd\clvertalc\cellx10800\trrh-66
{\trowd\clvertalc\cellx10800\trrh-66\row}}}
{\trowd\clvertalc\cellx647\clvertalc\cellx10799\trrh-66
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{\trowd\cellx647\cellx10799\trrh257
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22\ri22\sb22\sa22\cf1\f51\fs18\b\ql ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d
) OF THE SECURITIES EXCHANGE ACT OF 1934\cell{
{\trowd\cellx647\cellx10799\trrh257\row}}}\pard\plain\cf1\f51\fs16\b\ql For the
fiscal year ended December\~31, 2015 \par\pard\plain\cf1\f51\fs18\b\qc or
\par\pard\plain
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f54\fs18\ql \cell\pard\plain\intbl\li22
\ri22\sb22\sa22\cf1\f51\fs18\b\ql TRANSITION REPORT PURSUANT TO SECTION 13 OR 15
(d) OF THE SECURITIES EXCHANGE ACT OF 1934\cell{
{\trowd\cellx647\cellx10799\trrh257\row}}}\pard\plain\cf1\f51\fs16\b\ql For the
transition period from\~\~\~\~\~\~\~\~\~\~\~\~to\~\~\~\~\~\~\~\~\~\~\~\~ .\par\p
ard\plain\cf1\f51\fs18\b\qc Commission File No. 000-22513\par\pard\plain\cf1\f51
\fs14\qc ____________________________________\par\pard\plain\cf1\f51\fs44\b\qc A
MAZON.COM, INC.\par\pard\plain\cf1\f51\fs16\b\qc (Exact Name of Registrant as Sp
ecified in its Charter)
\par\pard\plain
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{\trowd\cellx5183\clvertalb\cellx5507\cellx10799\trrh232
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Delaware\cell\pard\plain
\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\ql \~\cell\pard\plain\intbl\li22\ri22\sb
22\sa22\cf1\f51\fs16\b\qc 91-1646860\cell{
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\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs13\b\qc (State or Other Jurisdic
tion of\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs13\b\qc Incorporation
or Organization)\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\ql \~\c
ell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs13\b\qc (I.R.S. Employer\par\
pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs13\b\qc Identification No.)\cell{
{\trowd\clvertalb\cellx5183\clvertalb\cellx5507\clvertalb\cellx10799\trrh355\row
}}}\pard\plain\cf1\f51\fs16\b\qc 410 Terry Avenue North\par\pard\plain\cf1\f51\f
s16\b\qc Seattle, Washington\~98109-5210\par\pard\plain\cf1\f51\fs16\b\qc (206)
266-1000\par\pard\plain\cf1\f51\fs15\b\qc (Address and telephone number, includi
ng area code, of registrant\u8217?s principal executive offices)\par\pard\plain\
sb132\cf1\f51\fs16\b\qc Securities registered pursuant to Section\~12(b) of the
Act:
\par\pard\plain
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\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs13\b\qc Title of Each Class\cell
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i22\ri22\sb22\sa22\cf1\f51\fs13\b\qc Name of Each Exchange on Which Registered\c
ell{
5\row}}}
{\trowd\trqc\cellx5292\clvertalb\cellx5616\cellx10799\trrh232
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\qc Common Stock, par value $.
01 per share\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\ql \~\cell\p
ard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\qc NASDAQ Global Select Market\
cell{
{\trowd\trqc\cellx5292\clvertalb\cellx5616\cellx10799\trrh232\row}}}\pard\plain\
sb132\cf1\f51\fs16\b\qc Securities registered pursuant to Section\~12(g) of the
Act:\par\pard\plain\cf1\f51\fs16\b\qc None\par\pard\plain\cf1\f51\fs16\qc \~\pla
in\cf1\f51\fs14\qc ____________________________________\par\pard\plain\sb132\fi3
96\cf1\f51\fs16\ql Indicate by check mark if the registrant is a well-known seas
oned issuer, as defined in Rule 405 of the Securities Act.\~\~\~\~Yes\~\~\plain\
cf1\f54\fs16\ql x\plain\cf1\f51\fs16\ql \~\~\~\~No\~\~\plain\cf1\f54\fs16\ql \par
\pard\plain\sb132\fi396\cf1\f51\fs16\ql Indicate by check mark if the registrant
is not required to file reports pursuant to Section\~13 or Section\~15(d) of th
e Exchange Act.\~\~\~\~Yes\~\~\plain\cf1\f54\fs16\ql \plain\cf1\f51\fs16\ql \~\~\
~\~No\~\~\plain\cf1\f54\fs16\ql x\par\pard\plain\sb132\fi396\cf1\f51\fs16\ql Ind
icate by check mark whether the registrant (1)\~has filed all reports required t
o be filed by Section\~13 or 15(d) of the Securities Exchange Act of 1934\plain\
cf1\f51\fs16\ql during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2)\~has been subject to
such filing\plain\cf1\f51\fs16\ql requirements for the past 90\~days.\~\~\~\~Y
es\~\~\plain\cf1\f54\fs16\ql x\plain\cf1\f51\fs16\ql \~\~\~\~No\~\~\plain\cf1\
f54\fs16\ql \par\pard\plain\sb132\fi396\cf1\f51\fs16\ql Indicate by check mark w
hether the registrant has submitted electronically and posted on its corporate W
eb\~site, if any, every Interactive Data File required\plain\cf1\f51\fs16\ql to
be submitted and posted pursuant to Rule 405 of Regulation\~S-T during the prec
eding 12 months (or for such shorter period that the registrant was required\pla
in\cf1\f51\fs16\ql to submit and post such files).\~\~\~\~Yes\~\~\plain\cf1\f54
\fs16\ql x\plain\cf1\f51\fs16\ql \~\~\~\~No\~\~\plain\cf1\f54\fs16\ql \par\par
d\plain\sb132\fi396\cf1\f51\fs16\ql Indicate by check mark if disclosure of deli
nquent filers pursuant to Item\~405 of Regulation S-K is not contained herein, a
nd will not be contained, to the\plain\cf1\f51\fs16\ql best of registrant\u8217
?s knowledge, in definitive proxy or information statements incorporated by refe
rence in Part III of this Form 10-K or any amendment\plain\cf1\f51\fs16\ql to t
his Form 10-K.\~\~\plain\cf1\f54\fs16\ql x\par\pard\plain\sb132\fi396\cf1\f51\f
s16\ql Indicate by check mark whether the registrant is a large accelerated file
r, an accelerated filer, a non-accelerated filer, or a smaller reporting company
. See\plain\cf1\f51\fs16\ql definitions of \u8220?large accelerated filer,\u822
1? \u8220?accelerated filer\u8221? and \u8220?smaller reporting company\u8221? i
n Rule 12b-2 of the\plain\cf1\f51\fs16\ql Exchange Act.
\par\pard\plain
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\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\ql Large\~accelerated\~filer\
cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\int
bl\li22\ri22\sb22\sa22\cf1\f54\fs16\ql x\cell\pard\plain\intbl\li22\ri22\sb22\sa
22\cf1\f51\fs16\ql Accelerated\~filer\cell\pard\plain\intbl\li22\ri22\sb22\sa22\
cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f54\fs16\ql \cel
l{
llx9758\clvertalb\cellx9859\clvertalb\cellx10164\trrh281\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\ql Non-accelerated filer\cell
i22\ri22\sb22\cf1\f54\fs16\ql \plain\intbl\li22\ri22\sa22\cf1\f51\fs16\ql \~\~(Do
not check if a smaller reporting company)\cell\pard\plain\intbl\li22\ri22\sb22\
sa22\cf1\f51\fs16\ql Smaller\~reporting\~company\cell\pard\plain\intbl\li22\ri22
\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f54\
fs16\ql \cell{
llx9758\clvertalb\cellx9859\clvertalb\cellx10164\trrh281\row}}}\pard\plain\sb132
\fi396\cf1\f51\fs16\ql Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act).\~\~\~\~Yes\~\~\plain\cf1
\f54\fs16\ql \plain\cf1\f51\fs16\ql \~\~\~\~No\~\~\plain\cf1\f54\fs16\ql x
\par\pard\plain
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\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\ql Aggregate market value of
voting stock held by non-affiliates of the registrant as of June\~30, 2015\cell\
pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs16\ql $\cell\pard\plain\intbl\sb22\sa2
2\cf1\f51\fs16\qr 166,381,236,673\cell
\par\pard\plain\intbl\fs16\pard\plain\intbl\f0\fs16\ql \~\cell{
trrh248\row}}}
{\trowd\cellx8336\clvertalb\cellx10315\clvertalb\cellx10419\trrh248
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\ql Number of shares of common
stock outstanding as of January\~20, 2016\cell\pard\plain\intbl\li22\sb22\sa22\
cf1\f51\fs16\qr 470,842,035\cell
{\trowd\cellx8336\clvertalb\cellx10315\clvertalb\cellx10419\trrh248\row}}}\pard\
plain\cf1\f51\fs14\qc ____________________________________\~\par\pard\plain\sb13
2\cf1\f51\fs16\b\qc DOCUMENTS INCORPORATED BY REFERENCE\par\pard\plain\sb132\fi3
96\cf1\f51\fs16\ql The information required by Part III of this Report, to the e
xtent not set forth herein, is incorporated herein by reference from the registr
ant\u8217?s\plain\cf1\f51\fs16\ql definitive proxy statement relating to the An
nual Meeting of Shareholders to be held in 2016, which definitive proxy statemen
t shall be filed with the Securities\plain\cf1\f51\fs16\ql and Exchange Commiss
ion within 120 days after the end of the fiscal year to which this Report relate
s.
\par\pard\plain
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\par\pard\plain\fs16\pard\plain\cf1\f51\fs20\b\qc AMAZON.COM, INC.\par\pard\plai
n\cf1\f51\fs20\b\qc FORM 10-K\par\pard\plain\cf1\f51\fs20\b\qc For the Fiscal Ye
ar Ended December\~31, 2015 \par\pard\plain\sb132\cf1\f51\fs20\b\qc INDEX\par\pa
rd\plain\cf1\f51\fs18\ql \~{\*\bkmkstart part_1_2_1}{\*\bkmkend part_1_2_1}{\*\b
kmkstart item_1_3_1}{\*\bkmkend item_1_3_1}
\par\pard\plain
}}}
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\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\qc PART\~I\cell\pard\plain\
intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
{\trowd\clvertalb\cellx9926\clvertalb\cellx10673\trrh281\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Item\~1.\cell\pard\plain\i
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}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Item 1A.\cell\pard\plain\i
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\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Item 1B.\cell\pard\plain\i
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\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Item 2.\cell\pard\plain\in
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cf1\f51\fs20\ql \~\cell{
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\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\qc PART\~II\cell\pard\plain
\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
tbl\li22\ri22\sb22\ul{\field{\*\fldinst HYPERLINK \\l "s1434763B09F480B7DDC8ABB2
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tock, Related Shareholder Matters, and Issuer Purchases of}}\plain\intbl\li22\ri
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\*\fldrslt\cf3\f51\fs20\ql Equity Securities}}\cell\pard\plain\intbl\li22\ri22\
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\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\qc PART\~IV\cell\pard\plain
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\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Item 15.\cell\pard\plain\i
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\par\pard\plain\fs16\pard\plain\cf1\f51\fs20\qc 2\par\pard\plain\f0\fs4\par\pard
\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par
\page{\*\bkmkstart sC51519C5460F4804FA29ABB2497C082}{\*\bkmkend sC51519C5460F480
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\par\pard\plain\fs16\par\pard\plain\cf1\f51\fs20\b\qc AMAZON.COM, INC.
\par\pard\plain\fs16{\*\bkmkstart part_1_2_2}{\*\bkmkend part_1_2_2}\par\pard\pl

ain\cf1\f51\fs20\b\qc PART I
\par\pard\plain\fs16{\*\bkmkstart s11F3F7EE8265039A73D7ABB214F2F34}{\*\bkmkend s
11F3F7EE8265039A73D7ABB214F2F34}{\*\bkmkstart item_1_3_2}{\*\bkmkend item_1_3_2}
\par\pard\plain
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{\trowd\trqc\cellx1188\cellx10800\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\ql Item\~1.\cell\pard\plain
\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\i\ql Business\cell{
{\trowd\trqc\cellx1188\cellx10800\trrh281\row}}}\pard\plain\sb132\fi528\cf1\f51\
fs20\i\ql This Annual Report on Form 10-K and the documents incorporated herein
by reference contain forward-looking\plain\cf1\f51\fs20\i\ql statements based o
n expectations, estimates, and projections as of the date of this filing. Actual
results may differ materially from\plain\cf1\f51\fs20\i\ql those expressed in
forward-looking statements. See Item\~1A of Part I\u8212?\u8220?Risk Factors.\u8
221?\par\pard\plain\sb264\fi528\cf1\f51\fs20\ql Amazon.com, Inc. was incorporate
d in 1994 in the state of Washington and reincorporated in 1996 in the state of
Delaware.\plain\cf1\f51\fs20\ql Our principal corporate offices are located in
Seattle, Washington. We completed our initial public offering in May 1997 and ou
r\plain\cf1\f51\fs20\ql common stock is listed on the NASDAQ Global Select Mark
et under the symbol \u8220?AMZN.\u8221?\par\pard\plain\sb132\fi528\cf1\f51\fs20\
ql As used herein, \u8220?Amazon.com,\u8221? \u8220?we,\u8221? \u8220?our,\u8221
? and similar terms include\plain\cf1\f51\fs20\ql Amazon.com, Inc. and its subs
idiaries, unless the context indicates otherwise.\par\pard\plain\sb396\cf1\f51\f
s20\b\ql General\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Amazon.com opened it
s virtual doors on the World Wide Web in July 1995. We seek to be Earth\u8217?s
most\plain\cf1\f51\fs20\ql customer-centric company. We are guided by four prin
ciples: customer obsession rather than competitor focus, passion for\plain\cf1\f
51\fs20\ql invention, commitment to operational excellence, and long-term think
ing. In each of our segments, we serve our primary\plain\cf1\f51\fs20\ql custom
er sets, consisting of consumers, sellers, developers, enterprises, and content
creators. In addition, we provide services,\plain\cf1\f51\fs20\ql such as adver
tising services and co-branded credit card agreements.\par\pard\plain\sb132\fi52
8\cf1\f51\fs20\ql Beginning in the first quarter of 2015, we changed our reporta
ble segments to North America, International, and Amazon\plain\cf1\f51\fs20\ql
Web Services (\u8220?AWS\u8221?). These segments reflect the way the Company eva
luates its business performance and\plain\cf1\f51\fs20\ql manages its operation
s. Additional information on our operating segments and product information is c
ontained in Item\~8 of Part\plain\cf1\f51\fs20\ql II, \u8220?Financial Statemen
ts and Supplementary Data\u8212?Note 11\u8212?Segment Information.\u8221? See It
em\~7 of\plain\cf1\f51\fs20\ql Part\~II, \u8220?Management\u8217?s Discussion a
nd Analysis of Financial Condition and Results of Operations\u8212?Results of\pl
ain\cf1\f51\fs20\ql Operations\u8212?Supplemental Information\u8221? for supple
mental information about our net sales. Our company-sponsored\plain\cf1\f51\fs20
\ql research and development expense is set forth within \u8220?Technology and
content\u8221? in Item\~8 of Part II,\plain\cf1\f51\fs20\ql \u8220?Financial St
atements and Supplementary Data\u8212?Consolidated Statements of Operations.\u82
21?\par\pard\plain\sb396\cf1\f51\fs20\b\ql Consumers\par\pard\plain\sb132\fi528\
cf1\f51\fs20\ql We serve consumers through our retail websites and focus on sele
ction, price, and convenience. We design our websites to\plain\cf1\f51\fs20\ql
enable millions of unique products to be sold by us and by third parties across
dozens of product categories. Customers access\plain\cf1\f51\fs20\ql our websit
es directly and through our mobile websites and apps. We also manufacture and se
ll electronic devices, including\plain\cf1\f51\fs20\ql Kindle e-readers, Fire t
ablets, Fire TVs, and Echo. We strive to offer our customers the lowest prices p
ossible through low\plain\cf1\f51\fs20\ql everyday product pricing and shipping

offers, and to improve our operating efficiencies so that we can continue to lo
wer prices\plain\cf1\f51\fs20\ql for our customers. We also provide easy-to-use
functionality, fast and reliable fulfillment, and timely customer service. In\p
lain\cf1\f51\fs20\ql addition, we offer Amazon Prime, an annual membership prog
ram that includes unlimited free shipping on millions of items,\plain\cf1\f51\fs
20\ql access to unlimited instant streaming of thousands of movies and TV episo
des, and other benefits.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql We fulfill c
ustomer orders in a number of ways, including through: North America and Interna
tional fulfillment and\plain\cf1\f51\fs20\ql delivery networks that we operate;
co-sourced and outsourced arrangements in certain countries; and digital delive
ry. We operate\plain\cf1\f51\fs20\ql customer service centers globally, which a
re supplemented by co-sourced arrangements. See Item\~2 of Part\~I,\plain\cf1\f5
1\fs20\ql \u8220?Properties.\u8221?\par\pard\plain\sb396\cf1\f51\fs20\b\ql Sell
ers\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql We offer programs that enable sel
lers to sell their products on our websites and their own branded websites and t
o fulfill\plain\cf1\f51\fs20\ql orders through us. We are not the seller of rec
ord in these transactions, but instead earn fixed fees, a percentage of sales,\p
lain\cf1\f51\fs20\ql per-unit activity fees, or some combination thereof.\par\p
ard\plain\sb396\cf1\f51\fs20\b\ql Developers and Enterprises\par\pard\plain\sb13
2\fi528\cf1\f51\fs20\ql We serve developers and enterprises of all sizes, includ
ing start-ups, government agencies, and academic institutions,\plain\cf1\f51\fs2
0\ql through our AWS segment, which offers a broad set of global compute, stora
ge, database, and other service offerings.
\par\pard\plain\fs16\par\pard\plain\cf1\f51\fs20\qc 3\par\pard\plain\f0\fs4\par\
pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par
\page\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251FD6C2CAABB249
5413F" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}
\par\pard\plain\fs16\par\pard\plain\sb396\cf1\f51\fs20\b\ql Content Creators\par
\pard\plain\sb132\fi528\cf1\f51\fs20\ql We serve authors and independent publish
ers with Kindle Direct Publishing, an online platform that lets independent\plai
n\cf1\f51\fs20\ql authors and publishers choose a 70% royalty option and make t
heir books available in the Kindle Store, along with\plain\cf1\f51\fs20\ql Amaz
on\u8217?s own publishing arm, Amazon Publishing. We also offer programs that al
low authors, musicians, filmmakers,\plain\cf1\f51\fs20\ql app developers, and o
thers to publish and sell content.\par\pard\plain\sb396\cf1\f51\fs20\b\ql Compet
ition\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Our businesses encompass a larg
e variety of product types, service offerings, and delivery channels. The intern
ational\plain\cf1\f51\fs20\ql marketplace in which we compete is evolving rapid
ly and intensely competitive, and we face a broad array of competitors from\plai
n\cf1\f51\fs20\ql many different industry sectors around the world. Our current
and potential competitors include: (1)\~online, offline, and\plain\cf1\f51\fs20
\ql multichannel retailers, publishers, vendors, distributors, manufacturers, a
nd producers of the products we offer and sell to\plain\cf1\f51\fs20\ql consume
rs and businesses; (2)\~publishers, producers, and distributors of physical, dig
ital, and interactive media of all types and all\plain\cf1\f51\fs20\ql distribu
tion channels; (3)\~web search engines, comparison shopping websites, social net
works, web portals, and other online and\plain\cf1\f51\fs20\ql app-based means
of discovering, using, or acquiring goods and services, either directly or in co
llaboration with other retailers;\plain\cf1\f51\fs20\ql (4)\~companies that pro
vide e-commerce services, including website development, advertising, fulfillmen
t, customer service, and\plain\cf1\f51\fs20\ql payment processing; (5)\~compani
es that provide fulfillment and logistics services for themselves or for third p
arties, whether\plain\cf1\f51\fs20\ql online or offline; (6) companies that pro
vide information technology services or products, including on-premises or cloud
-based\plain\cf1\f51\fs20\ql infrastructure and other services; and (7)\~compan
ies that design, manufacture, market, or sell consumer electronics,\plain\cf1\f5
1\fs20\ql telecommunication, and electronic devices. We believe that the princi
pal competitive factors in our retail businesses include\plain\cf1\f51\fs20\ql
selection, price, and convenience, including fast and reliable fulfillment. Addi
tional competitive factors for our seller and\plain\cf1\f51\fs20\ql enterprise
services include the quality, speed, and reliability of our services and tools,
as well as customers\u8217? ability and\plain\cf1\f51\fs20\ql willingness to ch
ange business practices. Some of our current and potential competitors have grea
ter resources, longer histories,\plain\cf1\f51\fs20\ql more customers, greater
brand recognition, and greater control over inputs critical to our various busin
esses. They may secure\plain\cf1\f51\fs20\ql better terms from suppliers, adopt
more aggressive pricing, pursue restrictive distribution agreements that restri
ct our access to\plain\cf1\f51\fs20\ql supply, direct consumers to their own of
ferings instead of ours, lock-in potential customers with restrictive terms, and
devote\plain\cf1\f51\fs20\ql more resources to technology, infrastructure, ful
fillment, and marketing. Each of our businesses is also subject to rapid change\
plain\cf1\f51\fs20\ql and the development of new business models and the entry
of new and well-funded competitors. Other companies also may enter\plain\cf1\f51
\fs20\ql into business combinations or alliances that strengthen their competit
ive positions.\par\pard\plain\sb396\cf1\f51\fs20\b\ql Intellectual Property\par\
pard\plain\sb132\fi528\cf1\f51\fs20\ql We regard our trademarks, service marks,
copyrights, patents, domain names, trade dress, trade secrets, proprietary\plain
\cf1\f51\fs20\ql technologies, and similar intellectual property as critical to
our success, and we rely on trademark, copyright, and patent law,\plain\cf1\f51
\fs20\ql trade-secret protection, and confidentiality and/or license agreements
with our employees, customers, partners, and others to\plain\cf1\f51\fs20\ql p
rotect our proprietary rights. We have registered, or applied for the registrati
on of, a number of U.S. and international domain\plain\cf1\f51\fs20\ql names, t
rademarks, service marks, and copyrights. Additionally, we have filed U.S. and i
nternational patent applications covering\plain\cf1\f51\fs20\ql certain of our
proprietary technology. We have licensed in the past, and expect that we may lic
ense in the future, certain of our\plain\cf1\f51\fs20\ql proprietary rights to
third parties.\par\pard\plain\sb396\cf1\f51\fs20\b\ql Seasonality\par\pard\plain
\sb132\fi528\cf1\f51\fs20\ql Our business is affected by seasonality, which hist
orically has resulted in higher sales volume during our fourth quarter,\plain\cf
1\f51\fs20\ql which ends December\~31. We recognized 33%, 33%, and 34% of our a
nnual revenue during the fourth quarter of 2015, 2014,\plain\cf1\f51\fs20\ql an
d 2013.\par\pard\plain\sb396\cf1\f51\fs20\b\ql Employees\par\pard\plain\sb132\fi
528\cf1\f51\fs20\ql We employed approximately 230,800 full-time and part-time em
ployees as of December\~31, 2015. However, employment\plain\cf1\f51\fs20\ql lev
els fluctuate due to seasonal factors affecting our business. Additionally, we u
tilize independent contractors and temporary\plain\cf1\f51\fs20\ql personnel to
supplement our workforce. We have works councils, statutory employee representa
tion obligations, and union\plain\cf1\f51\fs20\ql agreements in certain countri
es outside the United States. We consider our employee relations to be good. Com
petition for\plain\cf1\f51\fs20\ql qualified personnel in our industry has hist
orically been intense, particularly for software engineers, computer scientists,
and other\plain\cf1\f51\fs20\ql technical staff.\par\pard\plain\sb396\cf1\f51\
fs20\b\ql Available Information\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Our i
nvestor relations website is www.amazon.com/ir and we encourage investors to use
it as a way of easily finding\plain\cf1\f51\fs20\ql information about us. We p
romptly make available on this website, free of charge, the reports that we file
or furnish with the
\par\pard\plain\fs16\par\pard\plain\sb132\cf1\f51\fs20\ql Securities and Exchang
e Commission (\u8220?SEC\u8221?), corporate governance information (including ou
r Code of Business\plain\cf1\f51\fs20\ql Conduct and Ethics), and select press
releases and social media postings.\par\pard\plain\sb396\cf1\f51\fs20\b\ql Execu
tive Officers and Directors\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql The follo
wing tables set forth certain information regarding our Executive Officers and D
irectors as of January\~20, 2016:\par\pard\plain\sb396\cf1\f51\fs20\b\ql Executi
ve Officers of the Registrant\par\pard\plain\cf1\f51\fs18\ql \~
\par\pard\plain
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\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Jeffrey\~P.\~Bezos\cell\pa
rd\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22
\ri22\sb22\sa22\cf1\f51\fs20\qc 52\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1
\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Presid
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{\trowd\cellx2376\clvertalb\cellx2484\clvertalb\cellx4320\clvertalb\cellx4427\cl
vertalb\cellx10799\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Jeffrey\~M.\~Blackburn\cel
l\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\
li22\ri22\sb22\sa22\cf1\f51\fs20\qc 46\cell\pard\plain\intbl\li22\ri22\sb22\sa22
\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Se
nior Vice President, Business Development\cell{
vertalb\cellx10799\trrh281\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Andrew R. Jassy\cell\pard\
plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri
22\sb22\sa22\cf1\f51\fs20\qc 48\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f5
1\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Senior Vi
ce President, Amazon Web Services\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Brian T. Olsavsky\cell\par
d\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\
ri22\sb22\sa22\cf1\f51\fs20\qc 52\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\
f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Senior
Vice President and Chief Financial Officer\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Diego Piacentini\cell\pard
\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\r
i22\sb22\sa22\cf1\f51\fs20\qc 55\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f
51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Senior V
ice President, International Consumer Business\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Shelley L. Reynolds\cell\p
ard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li2
2\ri22\sb22\sa22\cf1\f51\fs20\qc 51\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf
1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Vice
President, Worldwide Controller, and Principal Accounting Officer\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Jeffrey A. Wilke\cell\pard
51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Senior V
ice President, Consumer Business\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql David A. Zapolsky\cell\par
f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Senior
Vice President, General Counsel, and Secretary\cell{
vertalb\cellx10799\trrh281\row}}}\pard\plain\sb264\fi528\cf1\f51\fs20\b\ql Jeffr
ey P. Bezos.\plain\cf1\f51\fs20\ql \~Mr. Bezos has been Chairman of the Board of
Amazon.com since founding it in 1994 and Chief\plain\cf1\f51\fs20\ql Executive
Officer since May 1996. Mr.\~Bezos served as President of the Company from foun
ding until June 1999 and again from\plain\cf1\f51\fs20\ql October 2000 to the p
resent.\par\pard\plain\sb132\fi528\cf1\f51\fs20\b\ql Jeffrey\~M. Blackburn.\plai
n\cf1\f51\fs20\ql \~Mr.\~Blackburn has served as Senior Vice President, Business
Development, since April 2006.\par\pard\plain\sb132\fi528\cf1\f51\fs20\b\ql And
rew R. Jassy.\plain\cf1\f51\fs20\ql \~Mr.\~Jassy has served as Senior Vice Presi

dent, Amazon Web Services, since April 2006.\par\pard\plain\sb132\fi528\cf1\f51\
fs20\b\ql Brian T. Olsavsky.\plain\cf1\f51\fs20\ql \~Mr. Olsavsky has served as
Senior Vice President and Chief Financial Officer since June 2015, Vice\plain\cf
1\f51\fs20\ql President, Finance for the Global Consumer Business from December
2011 to June 2015, and numerous financial leadership roles\plain\cf1\f51\fs20\q
l across Amazon with global responsibility since April 2002.\par\pard\plain\sb1
32\fi528\cf1\f51\fs20\b\ql Diego Piacentini.\plain\cf1\f51\fs20\ql \~Mr. Piacent
ini has served as Senior Vice President, International Consumer Business, since
February\plain\cf1\f51\fs20\ql 2012, and as Senior Vice President, Internationa
l Retail, from January 2007 until February 2012.\par\pard\plain\sb132\fi528\cf1\
f51\fs20\b\ql Shelley L. Reynolds.\plain\cf1\f51\fs20\ql \~Ms.\~Reynolds has ser
ved as Vice President, Worldwide Controller, and Principal Accounting Officer\pl
ain\cf1\f51\fs20\ql since April 2007.\par\pard\plain\sb132\fi528\cf1\f51\fs20\b
\ql Jeffrey A. Wilke.\plain\cf1\f51\fs20\ql \~Mr. Wilke has served as Senior Vic
e President, Consumer Business, since February 2012, and as Senior\plain\cf1\f51
\fs20\ql Vice President, North America Retail, from January 2007 until February
2012.\par\pard\plain\sb132\fi528\cf1\f51\fs20\b\ql David A. Zapolsky.\plain\cf1
\f51\fs20\ql \~Mr. Zapolsky has served as Senior Vice President, General Counsel
, and Secretary since May 2014,\plain\cf1\f51\fs20\ql Vice President, General C
ounsel, and Secretary from September 2012 to May 2014, and as Vice President and
Associate General\plain\cf1\f51\fs20\ql Counsel for Litigation and Regulatory
matters from April 2002 until September 2012.\par\pard\plain\sb396\cf1\f51\fs20\
b\ql Board of Directors\par\pard\plain\cf1\f51\fs18\ql \~
\par\pard\plain
l\f0\fs16\ql \~\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\ql Name\cell\pard\plain\int
a22\cf1\f51\fs16\b\qc Age\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20
\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Position\cell
{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Jeffrey\~P.\~Bezos\cell\pa
\ri22\sb22\sa22\cf1\f51\fs20\qc 52\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1
\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Presid
ent, Chief Executive Officer, and Chairman of the Board\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Tom A. Alberg\cell\pard\pl
ain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22
\sb22\sa22\cf1\f51\fs20\qc 75\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\
fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Managing Di
rector, Madrona Venture Group\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql John Seely Brown\cell\pard
51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Visiting
Scholar and Advisor to the Provost, University of Southern California\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql William\~B.\~Gordon\cell\p
1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Partn
er, Kleiner Perkins Caufield & Byers\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Jamie\~S.\~Gorelick\cell\p
1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Partn
er, Wilmer Cutler Pickering Hale and Dorr LLP\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Judith A. McGrath\cell\par
f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Preside
nt, Astronauts Wanted * No experience necessary\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Alain Moni\u233?\cell\pard
51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Chief Ex
ecutive Officer, Ingram Micro Inc.\cell{

\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Jonathan\~J.\~Rubinstein\c
ell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intb
l\li22\ri22\sb22\sa22\cf1\f51\fs20\qc 59\cell\pard\plain\intbl\li22\ri22\sb22\sa
22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql
Former Chairman and CEO, Palm, Inc.\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Thomas O. Ryder\cell\pard\
22\sb22\sa22\cf1\f51\fs20\qc 71\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f5
1\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Retired,
Former Chairman, Reader\u8217?s Digest Association, Inc.\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Patricia Q. Stonesifer\cel
li22\ri22\sb22\sa22\cf1\f51\fs20\qc 59\cell\pard\plain\intbl\li22\ri22\sb22\sa22
\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Pr
esident and Chief Executive Officer, Martha\u8217?s Table\cell{
\page{\*\bkmkstart s0F3F81489D452975CF77ABB249CCB8A}{\*\bkmkend s0F3F81489D45297
5CF77ABB249CCB8A}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F
\par\pard\plain\fs16{\*\bkmkstart item_1_3_3}{\*\bkmkend item_1_3_3}
\par\pard\plain
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\ql Item\~1A.\cell\pard\plai
n\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\i\ql Risk Factors\cell{
fs20\ql Please carefully consider the following risk factors. If any of the foll
owing risks occur, our business, financial condition,\plain\cf1\f51\fs20\ql ope
rating results, and cash flows could be materially adversely affected. In additi
on, the current global economic climate\plain\cf1\f51\fs20\ql amplifies many of
these risks.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql We Face Intense Com
petition\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Our businesses are rapidly e

volving and intensely competitive, and we have many competitors in different ind
ustries,\plain\cf1\f51\fs20\ql including retail, e-commerce services, digital c
ontent and electronic devices, and web and infrastructure computing services.\pl
ain\cf1\f51\fs20\ql Some of our current and potential competitors have greater
resources, longer histories, more customers, and/or greater brand\plain\cf1\f51\
fs20\ql recognition. They may secure better terms from vendors, adopt more aggr
essive pricing, and devote more resources to\plain\cf1\f51\fs20\ql technology,
infrastructure, fulfillment, and marketing.\par\pard\plain\sb132\fi528\cf1\f51\f
s20\ql Competition may intensify as our competitors enter into business combinat
ions or alliances and established companies in\plain\cf1\f51\fs20\ql other mark
et segments expand to become competitive with our business. In addition, new and
enhanced technologies, including\plain\cf1\f51\fs20\ql search, web and infrast
ructure computing services, digital content, and electronic devices, may increas
e our competition. The\plain\cf1\f51\fs20\ql Internet facilitates competitive e
ntry and comparison shopping, and increased competition may reduce our sales and
profits.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Our Expansion Places a
Significant Strain on our Management, Operational, Financial, and Other Resource
s\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql We are rapidly and significantly ex
panding our global operations, including increasing our product and service offe
rings\plain\cf1\f51\fs20\ql and scaling our infrastructure to support our retai
l and services businesses. This expansion increases the complexity of our\plain\
cf1\f51\fs20\ql business and places significant strain on our management, perso
nnel, operations, systems, technical performance, financial\plain\cf1\f51\fs20\q
l resources, and internal financial control and reporting functions. We may not
be able to manage growth effectively, which could\plain\cf1\f51\fs20\ql damage
our reputation, limit our growth, and negatively affect our operating results.\
par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Our Expansion into New Products,
Services, Technologies, and Geographic Regions Subjects Us to Additional Busines
s,\plain\cf1\f51\fs20\b\i\ql Legal, Financial, and Competitive Risks\par\pard\p
lain\sb132\fi528\cf1\f51\fs20\ql We may have limited or no experience in our new
er market segments, and our customers may not adopt our new offerings.\plain\cf1
\f51\fs20\ql These offerings may present new and difficult technology challenge
s, and we may be subject to claims if customers of these\plain\cf1\f51\fs20\ql
offerings experience service disruptions or failures or other quality issues. In
addition, profitability, if any, in our newer activities\plain\cf1\f51\fs20\ql
may be lower than in our older activities, and we may not be successful enough
in these newer activities to recoup our\plain\cf1\f51\fs20\ql investments in th
em. If any of this were to occur, it could damage our reputation, limit our grow
th, and negatively affect our\plain\cf1\f51\fs20\ql operating results.\par\pard
\plain\sb396\fi264\cf1\f51\fs20\b\i\ql We May Experience Significant Fluctuation
s in Our Operating Results and Growth Rate\par\pard\plain\sb132\fi528\cf1\f51\fs
20\ql We may not be able to accurately forecast our growth rate. We base our exp
ense levels and investment plans on sales\plain\cf1\f51\fs20\ql estimates. A si
gnificant portion of our expenses and investments is fixed, and we may not be ab
le to adjust our spending quickly\plain\cf1\f51\fs20\ql enough if our sales are
less than expected.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Our revenue grow
th may not be sustainable, and our percentage growth rates may decrease. Our rev
enue and operating\plain\cf1\f51\fs20\ql profit growth depends on the continued
growth of demand for the products and services offered by us or our sellers, an
d our\plain\cf1\f51\fs20\ql business is affected by general economic and busine
ss conditions worldwide. A softening of demand, whether caused by changes\plain\
cf1\f51\fs20\ql in customer preferences or a weakening of the U.S. or global ec
onomies, may result in decreased revenue or growth.\par\pard\plain\sb132\fi528\c
f1\f51\fs20\ql Our sales and operating results will also fluctuate for many othe
r reasons, including due to risks described elsewhere in this\plain\cf1\f51\fs20
\ql section and the following:
\par\pard\plain
\pard\plain\intbl\li484\cf1\f51\fs20\ql \u8226?\cell\pard\plain\intbl\cf1\f51\fs
20\ql our ability to retain and increase sales to existing customers, attract ne
w customers, and satisfy our customers\u8217?\plain\intbl\cf1\f51\fs20\ql deman
ds;\cell{
{\trowd\cellx810\cellx10800\trrh495\row}}}
\pard\plain
20\ql our ability to retain and expand our network\plain\intbl\cf1\f51\fs20\ql
of sellers;\cell{
\pard\plain
20\ql our ability to offer products on favorable terms, manage inventory, and fu
lfill\plain\intbl\cf1\f51\fs20\ql orders;\cell{
\pard\plain
20\ql the introduction of competitive websites, products, services, price decrea
ses, or\plain\intbl\cf1\f51\fs20\ql improvements;\cell{
\pard\plain
20\ql changes in usage or adoption rates of the Internet, e-commerce, electronic
devices, and web services, including outside\plain\intbl\cf1\f51\fs20\ql the U
.S.;\cell{
\pard\plain
20\ql timing, effectiveness, and costs of expansion and upgrades of our systems
and\plain\intbl\cf1\f51\fs20\ql infrastructure;\cell{
\pard\plain
20\ql the success of our geographic, service, and product line\plain\intbl\cf1\f
51\fs20\ql expansions;\cell{
\pard\plain
20\ql the extent to which we finance, and the terms of any such financing for, o
ur current operations and future growth;\cell{
\pard\plain
20\ql the outcomes of legal proceedings and claims, which may include significan
t monetary damages or injunctive relief and\plain\intbl\cf1\f51\fs20\ql could h
ave a material adverse impact on our operating results;\cell{
\pard\plain
20\ql variations in the mix of products and\plain\intbl\cf1\f51\fs20\ql service
s we sell;\cell{
\pard\plain
20\ql variations in our level of merchandise and\plain\intbl\cf1\f51\fs20\ql ve
ndor returns;\cell{
\pard\plain
20\ql the extent to which we offer free shipping, continue to reduce prices worl
dwide, and provide additional benefits to our\plain\intbl\cf1\f51\fs20\ql custo
mers;\cell{
\pard\plain
20\ql the extent to which we invest in technology and content, fulfillment, and
other expense\plain\intbl\cf1\f51\fs20\ql categories;\cell{
\pard\plain
20\ql increases in the prices of fuel and gasoline, as well as increases in the
prices of other energy products and commodities\plain\intbl\cf1\f51\fs20\ql lik
e paper and packing supplies;\cell{
\pard\plain
20\ql the extent to which our equity-method investees record significant operati
ng and non-operating items;\cell{
\pard\plain
20\ql the extent to which operators of the networks between our customers and ou
r websites successfully charge fees to grant\plain\intbl\cf1\f51\fs20\ql our cu
stomers unimpaired and unconstrained access to our online services;\cell{
\pard\plain
20\ql our ability to collect amounts owed to us when they\plain\intbl\cf1\f51\fs
20\ql become due;\cell{
\pard\plain
20\ql the extent to which use of our services is affected by spyware, viruses, p
hishing and other spam emails, denial of\plain\intbl\cf1\f51\fs20\ql service at
tacks, data theft, computer intrusions, outages, and similar events; and\cell{
\pard\plain
20\ql terrorist attacks and armed\plain\intbl\cf1\f51\fs20\ql hostilities.\cell
{
{\trowd\cellx700\cellx3154\trrh495\row}}}\pard\plain\sb396\fi264\cf1\f51\fs20\b\
i\ql Our International Operations Expose Us to a Number of Risks\par\pard\plain\
sb132\fi528\cf1\f51\fs20\ql Our international activities are significant to our
revenues and profits, and we plan to further expand internationally. In\plain\cf
1\f51\fs20\ql certain international market segments, we have relatively little
operating experience and may not benefit from any first-to-market\plain\cf1\f51\
fs20\ql advantages or otherwise succeed. It is costly to establish, develop, an
d maintain international operations and websites, and\plain\cf1\f51\fs20\ql pro
mote our brand internationally. Our international operations may not be profitab
le on a sustained basis.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql In addition
to risks described elsewhere in this section, our international sales and operat
ions are subject to a number of\plain\cf1\f51\fs20\ql risks, including:
\par\pard\plain
20\ql local economic and political\plain\intbl\cf1\f51\fs20\ql conditions;\cell
{
\pard\plain
20\ql government regulation of e-commerce and other services, electronic devices
, and competition, and restrictive\plain\intbl\cf1\f51\fs20\ql governmental act
ions (such as trade protection measures, including export duties and quotas and
custom duties and\plain\intbl\cf1\f51\fs20\ql tariffs), nationalization, and re
strictions on foreign ownership;\cell{
\pard\plain
20\ql restrictions on sales or distribution of certain products or services and
uncertainty regarding liability for products,\plain\intbl\cf1\f51\fs20\ql servi
ces, and content, including uncertainty as a result of less Internet-friendly le
gal systems, local laws, lack of legal\plain\intbl\cf1\f51\fs20\ql precedent, a
nd varying rules, regulations, and practices regarding the physical and digital
distribution of media products\plain\intbl\cf1\f51\fs20\ql and enforcement of i
ntellectual property rights;\cell{
\pard\plain
20\ql business licensing or certification requirements, such as for imports, exp
orts, web services, and electronic devices;\cell{
\pard\plain
20\ql limitations on the repatriation and investment of funds and foreign curren
cy exchange\plain\intbl\cf1\f51\fs20\ql restrictions;\cell{
\pard\plain
20\ql limited fulfillment and technology\plain\intbl\cf1\f51\fs20\ql infrastruc
ture;\cell{
\pard\plain
20\ql shorter payable and longer receivable cycles and the resultant negative im
pact on cash\plain\intbl\cf1\f51\fs20\ql flow;\cell{
\pard\plain
20\ql laws and regulations regarding consumer and data protection, privacy, netw
ork security, encryption, payments, and\plain\intbl\cf1\f51\fs20\ql restriction
s on pricing or discounts;\cell{
\pard\plain
20\ql lower levels of use of the\plain\intbl\cf1\f51\fs20\ql Internet;\cell{
\pard\plain
20\ql lower levels of consumer spending and fewer opportunities for growth compa
red to the\plain\intbl\cf1\f51\fs20\ql U.S.;\cell{
\pard\plain
20\ql lower levels of credit card usage and increased\plain\intbl\cf1\f51\fs20\q
l payment risk;\cell{
\pard\plain
{\trowd\clvertalc\cellx810\clvertalc\cellx10800\trrh0
{\trowd\clvertalc\cellx810\clvertalc\cellx10800\trrh0\row}}}
20\ql difficulty in staffing, developing, and managing foreign operations as a r
esult of distance, language, and cultural\plain\intbl\cf1\f51\fs20\ql differenc
es;\cell{
\pard\plain
20\ql different employee/employer relationships and the existence of works counc
ils and labor unions;\cell{
\pard\plain
20\ql compliance with the U.S. Foreign Corrupt Practices Act and other applicabl
e U.S. and foreign laws prohibiting corrupt\plain\intbl\cf1\f51\fs20\ql payment
s to government officials and other third parties;\cell{
\pard\plain
20\ql laws and policies of the U.S. and other jurisdictions affecting trade, for
eign investment, loans, and taxes; and\cell{
\pard\plain
20\ql geopolitical events, including war and\plain\intbl\cf1\f51\fs20\ql terror
ism.\cell{
{\trowd\cellx714\cellx3956\trrh495\row}}}\pard\plain\sb132\fi528\cf1\f51\fs20\ql
As international e-commerce and other online and web services grow, competition
will intensify. Local companies may\plain\cf1\f51\fs20\ql have a substantial c
ompetitive advantage because of their greater understanding of, and focus on, th
e local customer, as well as\plain\cf1\f51\fs20\ql their more established local
brand names. We may not be able to hire, train, retain, and manage required per
sonnel, which may\plain\cf1\f51\fs20\ql limit our international growth.\par\par
d\plain\sb132\fi528\cf1\f51\fs20\ql The People\u8217?s Republic of China (\u8220
?PRC\u8221?) and India regulate Amazon\u8217?s and its affiliates\u8217?\plain\c
f1\f51\fs20\ql businesses and operations in country through regulations and lic

ense requirements that may restrict (i)\~foreign investment in and\plain\cf1\f51
\fs20\ql operation of the Internet, IT infrastructure, data centers, retail, de
livery, and other sectors, (ii)\~Internet content, and (iii)\~the sale of\plain\
cf1\f51\fs20\ql media and other products and services. For example, in order to
meet local ownership and regulatory licensing requirements,\plain\cf1\f51\fs20\
ql www.amazon.cn is operated by PRC companies that are indirectly owned, either
wholly or partially, by PRC nationals. In\plain\cf1\f51\fs20\ql addition, we p
rovide certain technology services in China in conjunction with third parties th
at hold PRC licenses to provide\plain\cf1\f51\fs20\ql services. In India, the g
overnment restricts the ownership or control of Indian companies by foreign enti
ties involved in online\plain\cf1\f51\fs20\ql multi-brand retail trading activi
ties. For www.amazon.in, we provide certain marketing tools and logistics servic
es to third party\plain\cf1\f51\fs20\ql sellers to enable them to sell online a
nd deliver to customers, and we hold an indirect minority interest in an entity
that is a\plain\cf1\f51\fs20\ql third-party seller on the www.amazon.in marketp
lace. Although we believe these structures and activities comply with existing\p
lain\cf1\f51\fs20\ql laws, they involve unique risks, and the PRC is actively c
onsidering changes in its foreign investment rules that could impact\plain\cf1\f
51\fs20\ql these structures and activities. There are substantial uncertainties
regarding the interpretation of PRC and Indian laws and\plain\cf1\f51\fs20\ql
regulations, and it is possible that these governments will ultimately take a vi
ew contrary to ours. In addition, our Chinese and\plain\cf1\f51\fs20\ql Indian
businesses and operations may be unable to continue to operate if we or our affi
liates are unable to access sufficient\plain\cf1\f51\fs20\ql funding or in Chin
a enforce contractual relationships with respect to management and control of su
ch businesses. If our\plain\cf1\f51\fs20\ql international activities were found
to be in violation of any existing or future PRC, Indian or other laws or regul
ations or if\plain\cf1\f51\fs20\ql interpretations of those laws and regulation
s were to change, our businesses in those countries could be subject to fines an
d other\plain\cf1\f51\fs20\ql financial penalties, have licenses revoked, or be
forced to shut down entirely.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql If
We Do Not Successfully Optimize and Operate Our Fulfillment Network and Data Ce
nters, Our Business Could Be\plain\cf1\f51\fs20\b\i\ql Harmed\par\pard\plain\sb
132\fi528\cf1\f51\fs20\ql If we do not adequately predict customer demand or oth
erwise optimize and operate our fulfillment network and data\plain\cf1\f51\fs20\
ql centers successfully, it could result in excess or insufficient fulfillment
or data center capacity, or result in increased costs,\plain\cf1\f51\fs20\ql im
pairment charges, or both, or harm our business in other ways. As we continue to
add fulfillment and data center capability or\plain\cf1\f51\fs20\ql add new bu
sinesses with different requirements, our fulfillment and data center networks b
ecome increasingly complex and\plain\cf1\f51\fs20\ql operating them becomes mor
e challenging. There can be no assurance that we will be able to operate our net
works effectively.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql In addition, a fai
lure to optimize inventory in our fulfillment network will increase our net ship
ping cost by requiring\plain\cf1\f51\fs20\ql long-zone or partial shipments. Or
ders from several of our websites are fulfilled primarily from a single location
, and we have\plain\cf1\f51\fs20\ql only a limited ability to reroute orders to
third parties for drop-shipping. We and our co-sourcers may be unable to adequa
tely\plain\cf1\f51\fs20\ql staff our fulfillment network and customer service c
enters. If the other businesses on whose behalf we perform inventory\plain\cf1\f
51\fs20\ql fulfillment services deliver product to our fulfillment centers in e
xcess of forecasts, we may be unable to secure sufficient storage\plain\cf1\f51\
fs20\ql space and may be unable to optimize our fulfillment network.\par\pard\p
lain\sb132\fi528\cf1\f51\fs20\ql We rely on a limited number of shipping compani
es to deliver inventory to us and completed orders to our customers. If\plain\cf
1\f51\fs20\ql we are not able to negotiate acceptable terms with these companie
s or they experience performance problems or other difficulties,\plain\cf1\f51\f
s20\ql it could negatively impact our operating results and customer experience
. In addition, our ability to receive inbound inventory\plain\cf1\f51\fs20\ql e
fficiently and ship completed orders to customers also may be negatively affecte
d by inclement weather, fire, flood, power loss,\plain\cf1\f51\fs20\ql earthqua
kes, labor disputes, acts of war or terrorism, acts of God, and similar factors.
\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Third parties either drop-ship or ot
herwise fulfill an increasing portion of our customers\u8217? orders, and we are
\plain\cf1\f51\fs20\ql increasingly reliant on the reliability, quality, and fu
ture procurement of their services. Under some of our commercial\plain\cf1\f51\f
s20\ql agreements, we maintain the inventory of other companies, thereby increa
sing the complexity of tracking inventory and operating\plain\cf1\f51\fs20\ql o
ur fulfillment network. Our failure to properly handle such inventory or the ina
bility of these other companies to accurately\plain\cf1\f51\fs20\ql forecast pr
oduct demand would result in unexpected costs and other harm to our business and
reputation.
\par\pard\plain\fs16\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql The Seasonal
ity of Our Business Places Increased Strain on Our Operations\par\pard\plain\sb1
32\fi528\cf1\f51\fs20\ql We expect a disproportionate amount of our net sales to
occur during our fourth quarter. If we do not stock or restock\plain\cf1\f51\fs
20\ql popular products in sufficient amounts such that we fail to meet customer
demand, it could significantly affect our revenue and\plain\cf1\f51\fs20\ql ou
r future growth. If we overstock products, we may be required to take significan
t inventory markdowns or write-offs and incur\plain\cf1\f51\fs20\ql commitment
costs, which could reduce profitability. We may experience an increase in our ne
t shipping cost due to\plain\cf1\f51\fs20\ql complimentary upgrades, split-ship
ments, and additional long-zone shipments necessary to ensure timely delivery fo
r the holiday\plain\cf1\f51\fs20\ql season. If too many customers access our we
bsites within a short period of time due to increased holiday demand, we may\pla
in\cf1\f51\fs20\ql experience system interruptions that make our websites unava
ilable or prevent us from efficiently fulfilling orders, which may\plain\cf1\f51
\fs20\ql reduce the volume of goods we sell and the attractiveness of our produ
cts and services. In addition, we may be unable to\plain\cf1\f51\fs20\ql adequa
tely staff our fulfillment network and customer service centers during these pea
k periods and delivery and other fulfillment\plain\cf1\f51\fs20\ql companies an
d customer service co-sourcers may be unable to meet the seasonal demand. We als
o face risks described elsewhere\plain\cf1\f51\fs20\ql in this Item\~1A relatin
g to fulfillment network optimization and inventory.\par\pard\plain\sb132\fi528\
cf1\f51\fs20\ql We generally have payment terms with our retail vendors that ext
end beyond the amount of time necessary to collect\plain\cf1\f51\fs20\ql procee
ds from our consumer customers. As a result of holiday sales, as of December\~31
of each year, our cash, cash equivalents,\plain\cf1\f51\fs20\ql and marketable
securities balances typically reach their highest level (other than as a result
of cash flows provided by or used in\plain\cf1\f51\fs20\ql investing and finan
cing activities). This operating cycle results in a corresponding increase in ac
counts payable as of\plain\cf1\f51\fs20\ql December\~31. Our accounts payable b
alance generally declines during the first three months of the year, resulting i
n a\plain\cf1\f51\fs20\ql corresponding decline in our cash, cash equivalents,
and marketable securities balances.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\
ql Our Business Could Suffer if We Are Unsuccessful in Making, Integrating, and
Maintaining Commercial Agreements,\plain\cf1\f51\fs20\b\i\ql Strategic Alliance
s, and Other Business Relationships\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql W
e provide e-commerce and other services to businesses through commercial agreeme
nts, strategic alliances, and business\plain\cf1\f51\fs20\ql relationships. Und
er these agreements, we provide web services, technology, fulfillment, computing
, digital storage, and other\plain\cf1\f51\fs20\ql services, as well as enable
sellers to offer products or services through our websites. These arrangements a
re complex and require\plain\cf1\f51\fs20\ql substantial infrastructure capacit
y, personnel, and other resource commitments, which may limit the amount of busi
ness we can\plain\cf1\f51\fs20\ql service. We may not be able to implement, mai
ntain, and develop the components of these commercial relationships, which may\p
lain\cf1\f51\fs20\ql include web services, fulfillment, customer service, inven
tory management, tax collection, payment processing, hardware, content,\plain\cf
1\f51\fs20\ql and third-party software, and engaging third parties to perform s
ervices. The amount of compensation we receive under certain\plain\cf1\f51\fs20\
ql of our commercial agreements is partially dependent on the volume of the oth
er company\u8217?s sales. Therefore, if the other\plain\cf1\f51\fs20\ql company
\u8217?s offering is not successful, the compensation we receive may be lower th
an expected or the agreement may be\plain\cf1\f51\fs20\ql terminated. Moreover,
we may not be able to enter into additional commercial relationships and strate
gic alliances on favorable\plain\cf1\f51\fs20\ql terms. We also may be subject
to claims from businesses to which we provide these services if we are unsuccess
ful in\plain\cf1\f51\fs20\ql implementing, maintaining, or developing these ser
vices.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql As our agreements terminate, w
e may be unable to renew or replace these agreements on comparable terms, or at
all. We\plain\cf1\f51\fs20\ql may in the future enter into amendments on less f
avorable terms or encounter parties that have difficulty meeting their\plain\cf1
\f51\fs20\ql contractual obligations to us, which could adversely affect our op
erating results.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Our present and futu
re e-commerce services agreements, other commercial agreements, and strategic al
liances create\plain\cf1\f51\fs20\ql additional risks such as:
\par\pard\plain
20\ql disruption of our ongoing business, including loss of management focus on
existing\plain\intbl\cf1\f51\fs20\ql businesses;\cell{
\pard\plain
20\ql impairment of other\plain\intbl\cf1\f51\fs20\ql relationships;\cell{
\pard\plain
20\ql variability in revenue and income from entering into, amending, or termina
ting such agreements or relationships; and\cell{
\pard\plain
20\ql difficulty integrating under the commercial\plain\intbl\cf1\f51\fs20\ql a
greements.\cell{
i\ql Our Business Could Suffer if We Are Unsuccessful in Making, Integrating, an
d Maintaining Acquisitions and Investments\par\pard\plain\sb132\fi528\cf1\f51\fs
20\ql We have acquired and invested in a number of companies, and we may acquire
or invest in or enter into joint ventures with\plain\cf1\f51\fs20\ql additiona
l companies. These transactions create risks such as:
\par\pard\plain
20\ql disruption of our ongoing business, including loss of management focus on
existing\plain\intbl\cf1\f51\fs20\ql businesses;\cell{
\pard\plain
20\ql problems retaining key\plain\intbl\cf1\f51\fs20\ql personnel;\cell{
\pard\plain
20\ql additional operating losses and expenses of the businesses we acquired or
in which we\plain\intbl\cf1\f51\fs20\ql invested;\cell{
\pard\plain
20\ql the potential impairment of tangible and intangible assets and goodwill, i
ncluding as a result of acquisitions;\cell{
\pard\plain
20\ql the potential impairment of customer and other relationships of the compan
y we acquired or in which we invested or\plain\intbl\cf1\f51\fs20\ql our own cu
stomers as a result of any integration of operations;\cell{
\pard\plain
20\ql the difficulty of incorporating acquired technology and rights into our of
ferings and unanticipated expenses related to\plain\intbl\cf1\f51\fs20\ql such
integration;\cell{
\pard\plain
20\ql the difficulty of integrating a new company\u8217?s accounting, financial
reporting, management, information and\plain\intbl\cf1\f51\fs20\ql information
security, human resource, and other administrative systems to permit effective m
anagement, and the lack of\plain\intbl\cf1\f51\fs20\ql control if such integrat
ion is delayed or not implemented;\cell{
\pard\plain
20\ql for investments in which an investee\u8217?s financial performance is inco
rporated into our financial results, either in\plain\intbl\cf1\f51\fs20\ql full
or in part, the dependence on the investee\u8217?s accounting, financial report
ing, and similar systems, controls,\plain\intbl\cf1\f51\fs20\ql and processes;\
cell{
\pard\plain
20\ql the difficulty of implementing at companies we acquire the controls, proce
dures, and policies appropriate for a larger\plain\intbl\cf1\f51\fs20\ql public
company;\cell{
\pard\plain
20\ql potential unknown liabilities associated with a company we acquire or in w
hich we invest;\plain\intbl\cf1\f51\fs20\ql and\cell{
\pard\plain
20\ql for foreign transactions, additional risks related to the integration of o
perations across different cultures and languages,\plain\intbl\cf1\f51\fs20\ql
and the economic, political, and regulatory risks associated with specific count
ries.\cell{
{\trowd\cellx810\cellx10800\trrh495\row}}}\pard\plain\sb132\fi528\cf1\f51\fs20\q
l As a result of future acquisitions or mergers, we might need to issue addition
al equity securities, spend our cash, or incur\plain\cf1\f51\fs20\ql debt, cont
ingent liabilities, or amortization expenses related to intangible assets, any o

f which could reduce our profitability and\plain\cf1\f51\fs20\ql harm our busin
ess. In addition, valuations supporting our acquisitions and strategic investmen
ts could change rapidly given the\plain\cf1\f51\fs20\ql current global economic
climate. We could determine that such valuations have experienced impairments o
r\plain\cf1\f51\fs20\ql other-than-temporary declines in fair value which could
adversely impact our financial results.\par\pard\plain\sb396\fi264\cf1\f51\fs20
\b\i\ql We Have Foreign Exchange Risk\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql
The results of operations of, and certain of our intercompany balances associat
ed with, our international websites and\plain\cf1\f51\fs20\ql product and servi
ce offerings are exposed to foreign exchange rate fluctuations. Upon translation
, operating results may differ\plain\cf1\f51\fs20\ql materially from expectatio
ns, and we may record significant gains or losses on the remeasurement of interc
ompany balances. As\plain\cf1\f51\fs20\ql we have expanded our international op
erations, our exposure to exchange rate fluctuations has increased. We also hold
cash\plain\cf1\f51\fs20\ql equivalents and/or marketable securities in foreign
currencies including British Pounds, Chinese Yuan, Euros, and Japanese Yen.\pla
in\cf1\f51\fs20\ql If the U.S.\~Dollar strengthens compared to these currencies
, cash equivalents, and marketable securities balances, when translated,\plain\c
f1\f51\fs20\ql may be materially less than expected and vice versa.\par\pard\pl
ain\sb396\fi264\cf1\f51\fs20\b\i\ql The Loss of Key Senior Management Personnel
Could Negatively Affect Our Business\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql
We depend on our senior management and other key personnel, particularly Jeffrey
P. Bezos, our President, CEO, and\plain\cf1\f51\fs20\ql Chairman. We do not ha
ve \u8220?key person\u8221? life insurance policies. The loss of any of our exec
utive officers or other\plain\cf1\f51\fs20\ql key employees could harm our busi
ness.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql We Could Be Harmed by Data
Loss or Other Security Breaches\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql As a
result of our services being web-based and the fact that we process, store, and
transmit large amounts of data,\plain\cf1\f51\fs20\ql including personal inform
ation, for our customers, failure to prevent or mitigate data loss or other secu
rity breaches, including\plain\cf1\f51\fs20\ql breaches of our vendors\u8217? t
echnology and systems, could expose us or our customers to a risk of loss or mis
use of such\plain\cf1\f51\fs20\ql information, adversely affect our operating r
esults, result in litigation or potential liability for us, and otherwise harm o
ur\plain\cf1\f51\fs20\ql business. We use third party technology and systems fo
r a variety of reasons, including, without limitation, encryption and\plain\cf1\
f51\fs20\ql authentication technology, employee email, content delivery to cust
omers, back-office support, and other functions. Some\plain\cf1\f51\fs20\ql sub
sidiaries had past security breaches, and, although they did not have a material
adverse effect on our operating results, there\plain\cf1\f51\fs20\ql can be no
assurance of a similar result in the future. Although we have developed systems
and processes that are designed to\plain\cf1\f51\fs20\ql protect customer info
rmation and prevent data loss and other security breaches, including systems and
processes designed to\plain\cf1\f51\fs20\ql reduce the impact of a security br
each at a third party vendor, such measures cannot provide absolute security.\pa
r\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql We Face Risks Related to System Int
erruption and Lack of Redundancy\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql We e
xperience occasional system interruptions and delays that make our websites and
services unavailable or slow to\plain\cf1\f51\fs20\ql respond and prevent us fr
om efficiently fulfilling orders or providing services to third parties, which m
ay reduce our net sales\plain\cf1\f51\fs20\ql and the attractiveness of our pro
ducts and services. If we are unable to continually add software and hardware, e
ffectively\plain\cf1\f51\fs20\ql upgrade our systems and network infrastructure
, and take other steps to improve the efficiency of our systems, it could cause\
plain\cf1\f51\fs20\ql system interruptions or delays and adversely affect our o
perating results.
\par\pard\plain\fs16\par\pard\plain\cf1\f51\fs20\qc 10\par\pard\plain\f0\fs4\par
\pard\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par

\par\pard\plain\fs16\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Our computer and
communications systems and operations could be damaged or interrupted by fire,
flood, power loss,\plain\cf1\f51\fs20\ql telecommunications failure, earthquake
s, acts of war or terrorism, acts of God, computer viruses, physical or electron
ic break-ins,\plain\cf1\f51\fs20\ql and similar events or disruptions. Any of t
hese events could cause system interruption, delays, and loss of critical data,
and could\plain\cf1\f51\fs20\ql prevent us from accepting and fulfilling custom
er orders and providing services, which could make our product and service\plain
\cf1\f51\fs20\ql offerings less attractive and subject us to liability. Our sys
tems are not fully redundant and our disaster recovery planning may\plain\cf1\f5
1\fs20\ql not be sufficient. In addition, we may have inadequate insurance cove
rage to compensate for any related losses. Any of these\plain\cf1\f51\fs20\ql e
vents could damage our reputation and be expensive to remedy.\par\pard\plain\sb3
96\fi264\cf1\f51\fs20\b\i\ql We Face Significant Inventory Risk\par\pard\plain\s
b132\fi528\cf1\f51\fs20\ql In addition to risks described elsewhere in this Item
\~1A relating to fulfillment network and inventory optimization by us and\plain\
cf1\f51\fs20\ql third parties, we are exposed to significant inventory risks th
at may adversely affect our operating results as a result of\plain\cf1\f51\fs20\
ql seasonality, new product launches, rapid changes in product cycles and prici
ng, defective merchandise, changes in consumer\plain\cf1\f51\fs20\ql demand and
consumer spending patterns, changes in consumer tastes with respect to our prod
ucts, and other factors. We endeavor\plain\cf1\f51\fs20\ql to accurately predic
t these trends and avoid overstocking or understocking products we manufacture a
nd/or sell. Demand for\plain\cf1\f51\fs20\ql products, however, can change sign
ificantly between the time inventory or components are ordered and the date of s
ale. In\plain\cf1\f51\fs20\ql addition, when we begin selling or manufacturing
a new product, it may be difficult to establish vendor relationships, determine\
plain\cf1\f51\fs20\ql appropriate product or component selection, and accuratel
y forecast demand. The acquisition of certain types of inventory or\plain\cf1\f5
1\fs20\ql components may require significant lead-time and prepayment and they
may not be returnable. We carry a broad selection and\plain\cf1\f51\fs20\ql sig
nificant inventory levels of certain products, such as consumer electronics, and
we may be unable to sell products in sufficient\plain\cf1\f51\fs20\ql quantiti
es or during the relevant selling seasons. Any one of the inventory risk factors
set forth above may adversely affect our\plain\cf1\f51\fs20\ql operating resul
ts.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql We May Not Be Able to Adequat
ely Protect Our Intellectual Property Rights or May Be Accused of Infringing Int
ellectual\plain\cf1\f51\fs20\b\i\ql Property Rights of Third Parties\par\pard\p
lain\sb132\fi528\cf1\f51\fs20\ql We regard our trademarks, service marks, copyri
ghts, patents, trade dress, trade secrets, proprietary technology, and similar\p
lain\cf1\f51\fs20\ql intellectual property as critical to our success, and we r
ely on trademark, copyright, and patent law, trade secret protection, and\plain\
cf1\f51\fs20\ql confidentiality and/or license agreements with our employees, c
ustomers, and others to protect our proprietary rights. Effective\plain\cf1\f51\
fs20\ql intellectual property protection may not be available in every country
in which our products and services are made available. We\plain\cf1\f51\fs20\ql
also may not be able to acquire or maintain appropriate domain names in all cou
ntries in which we do business. Furthermore,\plain\cf1\f51\fs20\ql regulations
governing domain names may not protect our trademarks and similar proprietary ri
ghts. We may be unable to prevent\plain\cf1\f51\fs20\ql third parties from acqu
iring domain names that are similar to, infringe upon, or diminish the value of
our trademarks and other\plain\cf1\f51\fs20\ql proprietary rights.\par\pard\pla
in\sb132\fi528\cf1\f51\fs20\ql We may not be able to discover or determine the e
xtent of any unauthorized use of our proprietary rights. Third parties that\plai
n\cf1\f51\fs20\ql license our proprietary rights also may take actions that dim
inish the value of our proprietary rights or reputation. The protection\plain\cf
1\f51\fs20\ql of our intellectual property may require the expenditure of signi
ficant financial and managerial resources. Moreover, the steps we\plain\cf1\f51\
fs20\ql take to protect our intellectual property may not adequately protect ou
r rights or prevent third parties from infringing or\plain\cf1\f51\fs20\ql misa
ppropriating our proprietary rights. We also cannot be certain that others will
not independently develop or otherwise acquire\plain\cf1\f51\fs20\ql equivalent
or superior technology or other intellectual property rights.\par\pard\plain\sb
132\fi528\cf1\f51\fs20\ql Other parties also may claim that we infringe their pr
oprietary rights. We have been subject to, and expect to continue to\plain\cf1\f
51\fs20\ql be subject to, claims and legal proceedings regarding alleged infrin
gement by us of the intellectual property rights of third parties.\plain\cf1\f51
\fs20\ql Such claims, whether or not meritorious, may result in the expenditure
of significant financial and managerial resources,\plain\cf1\f51\fs20\ql injun
ctions against us, or the payment of damages, including to satisfy indemnificati
on obligations. We may need to obtain\plain\cf1\f51\fs20\ql licenses from third
parties who allege that we have infringed their rights, but such licenses may n
ot be available on terms\plain\cf1\f51\fs20\ql acceptable to us or at all. In a
ddition, we may not be able to obtain or utilize on terms that are favorable to
us, or at all, licenses\plain\cf1\f51\fs20\ql or other rights with respect to i
ntellectual property we do not own. These risks have been amplified by the incre
ase in third\plain\cf1\f51\fs20\ql parties whose sole or primary business is to
assert such claims.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Our digital cont
ent offerings depend in part on effective digital rights management technology t
o control access to digital\plain\cf1\f51\fs20\ql content. If the digital right
s management technology that we use is compromised or otherwise malfunctions, we
could be subject\plain\cf1\f51\fs20\ql to claims, and content providers may be
unwilling to include their content in our service.\par\pard\plain\sb396\fi264\c
f1\f51\fs20\b\i\ql We Have a Rapidly Evolving Business Model and Our Stock Price
Is Highly Volatile\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql We have a rapidly
evolving business model. The trading price of our common stock fluctuates signi
ficantly in response to,\plain\cf1\f51\fs20\ql among other risks, the risks des
cribed elsewhere in this Item\~1A, as well as:
\par\pard\plain
20\ql changes in interest\plain\intbl\cf1\f51\fs20\ql rates;\cell{
\pard\plain
20\ql conditions or trends in the Internet and the industry segments we\plain\in
tbl\cf1\f51\fs20\ql operate in;\cell{
\par\pard\plain\fs16\pard\plain\cf1\f51\fs20\qc 11\par\pard\plain\f0\fs4\par\par
d\plain\f0\fs2\brdrt\brdrs\brdrw15\brdrcf2\brdrsp0\par\pard\plain\f0\fs4\par
\pard\plain
20\ql quarterly variations in\plain\intbl\cf1\f51\fs20\ql operating results;\ce
ll{
\pard\plain
20\ql fluctuations in the stock market in general and market prices for Internet
-related companies in particular;\cell{
\pard\plain
20\ql changes in financial estimates by us or securities analysts and recommenda
tions by securities analysts;\cell{
\pard\plain
20\ql changes in our capital structure, including issuance of additional debt or
equity to the\plain\intbl\cf1\f51\fs20\ql public;\cell{
\pard\plain
20\ql changes in the valuation methodology of, or performance by, other e-commer
ce or technology companies; and\cell{
\pard\plain
20\ql transactions in our common stock by major investors and certain analyst re
ports, news, and speculation.\cell{
Volatility in our stock price could adversely affect our business and financing
opportunities and force us to increase our\plain\cf1\f51\fs20\ql cash compensa
tion to employees or grant larger stock awards than we have historically, which
could hurt our operating results or\plain\cf1\f51\fs20\ql reduce the percentage
ownership of our existing stockholders, or both.\par\pard\plain\sb396\fi264\cf1
\f51\fs20\b\i\ql Government Regulation Is Evolving and Unfavorable Changes Could
Harm Our Business\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql We are subject to
general business regulations and laws, as well as regulations and laws specifica
lly governing the Internet,\plain\cf1\f51\fs20\ql e-commerce, electronic device
s, and other services. Existing and future laws and regulations may impede our g
rowth. These\plain\cf1\f51\fs20\ql regulations and laws may cover taxation, pri
vacy, data protection, pricing, content, copyrights, distribution, mobile\plain\
cf1\f51\fs20\ql communications, electronic device certification, electronic was
te, energy consumption, environmental regulation, electronic\plain\cf1\f51\fs20\

ql contracts and other communications, competition, consumer protection, web se
rvices, the provision of online payment services,\plain\cf1\f51\fs20\ql informa
tion reporting requirements, unencumbered Internet access to our services or acc
ess to our facilities, the design and\plain\cf1\f51\fs20\ql operation of websit
es, the characteristics and quality of products and services, and the commercial
operation of unmanned aircraft\plain\cf1\f51\fs20\ql systems. It is not clear
how existing laws governing issues such as property ownership, libel, and person
al privacy apply to the\plain\cf1\f51\fs20\ql Internet, e-commerce, digital con
tent, and web services. Jurisdictions may regulate consumer-to-consumer online b
usinesses,\plain\cf1\f51\fs20\ql including certain aspects of our seller progra
ms. Unfavorable regulations and laws could diminish the demand for our products\
plain\cf1\f51\fs20\ql and services and increase our cost of doing business.\par
\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql We Could Be Subject to Additional Sa
les Tax or Other Indirect Tax Liabilities\par\pard\plain\sb132\fi528\cf1\f51\fs2
0\ql U.S. Supreme Court decisions restrict the imposition of obligations to coll
ect state and local sales taxes with respect to\plain\cf1\f51\fs20\ql remote sa
les in the U.S. However, an increasing number of states, and certain foreign jur
isdictions, have considered or adopted\plain\cf1\f51\fs20\ql laws or administra
tive practices that attempt to impose obligations on remote sellers and online m
arketplaces to collect taxes on\plain\cf1\f51\fs20\ql their behalf. We support
a Federal law that would allow states to require sales tax collection by remote
sellers under a nationwide\plain\cf1\f51\fs20\ql system. More than half of our
revenue is already earned in jurisdictions where we collect sales tax or its equ
ivalent. A successful\plain\cf1\f51\fs20\ql assertion by one or more states or
foreign countries requiring us to collect taxes where we do not do so could resu
lt in substantial\plain\cf1\f51\fs20\ql tax liabilities, including for past sal
es, as well as penalties and interest. In addition, if the tax authorities in ju
risdictions where we\plain\cf1\f51\fs20\ql already collect sales tax or other i
ndirect taxes were successfully to challenge our positions, our tax liability co
uld increase\plain\cf1\f51\fs20\ql substantially.\par\pard\plain\sb396\fi264\cf
1\f51\fs20\b\i\ql We Could Be Subject to Additional Income Tax Liabilities\par\p
ard\plain\sb132\fi528\cf1\f51\fs20\ql We are subject to income taxes in the U.S.
(federal and state) and numerous foreign jurisdictions. Tax laws, regulations,\
plain\cf1\f51\fs20\ql and administrative practices in various jurisdictions may
be subject to significant change due to economic, political, and other\plain\cf
1\f51\fs20\ql conditions, and significant judgment is required in evaluating an
d estimating our provision and accruals for these taxes. There are\plain\cf1\f51
\fs20\ql many transactions that occur during the ordinary course of business fo
r which the ultimate tax determination is uncertain. Our\plain\cf1\f51\fs20\ql
effective tax rates could be adversely affected by earnings being lower than ant
icipated in jurisdictions where we have lower\plain\cf1\f51\fs20\ql statutory r
ates and higher than anticipated in jurisdictions where we have higher statutory
rates, losses incurred in jurisdictions for\plain\cf1\f51\fs20\ql which we are
not able to realize the related tax benefit, changes in foreign currency exchan
ge rates, entry into new businesses\plain\cf1\f51\fs20\ql and geographies and c
hanges to our existing businesses, acquisitions (including integrations) and inv
estments, changes in our\plain\cf1\f51\fs20\ql deferred tax assets and liabilit
ies and their valuation, and changes in the relevant tax, accounting, and other
laws, regulations,\plain\cf1\f51\fs20\ql administrative practices, principles,
and interpretations, including fundamental changes to the tax laws applicable to
corporate\plain\cf1\f51\fs20\ql multinationals. The U.S., the European Union a
nd its member states, and a number of other countries are actively pursuing\plai
n\cf1\f51\fs20\ql changes in this regard.\par\pard\plain\sb132\fi528\cf1\f51\fs
20\ql Except as required under U.S. tax laws, we do not provide for U.S. taxes o
n our undistributed earnings of foreign\plain\cf1\f51\fs20\ql subsidiaries that
have not been previously taxed since we intend to invest such undistributed ear
nings indefinitely outside of the\plain\cf1\f51\fs20\ql U.S. If our intent chan
ges or if these funds are needed for our U.S. operations, we would be required t
o accrue or pay U.S. taxes\plain\cf1\f51\fs20\ql on some or all of these undist
ributed earnings and our effective tax rate would be adversely affected. We are
also currently\plain\cf1\f51\fs20\ql subject to audit in various jurisdictions,
and these jurisdictions may assess additional income tax liabilities against us
.\plain\cf1\f51\fs20\ql Developments in an audit, litigation, or the relevant l
aws, regulations, administrative practices, principles, and interpretations\plai
n\cf1\f51\fs20\ql could have a material effect on our operating results or cash
flows in the period or periods for which that development occurs,
\par\pard\plain\fs16\par\pard\plain\sb132\cf1\f51\fs20\ql as well as for prior a
nd subsequent periods. For instance, the IRS is seeking to increase our U.S. tax
able income related to\plain\cf1\f51\fs20\ql transfer pricing with our foreign
subsidiaries for transactions undertaken in 2005 and 2006, and we are currently
contesting the\plain\cf1\f51\fs20\ql matter in U.S. Tax Court. In addition to t
he risk of additional tax for 2005 and 2006 transactions, if this litigation is
adversely\plain\cf1\f51\fs20\ql determined or if the IRS were to seek transfer
pricing adjustments of a similar nature for transactions in subsequent years, we
\plain\cf1\f51\fs20\ql could be subject to significant additional tax liabiliti
es. In addition, in October 2014, the European Commission opened a formal\plain\
cf1\f51\fs20\ql investigation to examine whether decisions by the tax authoriti
es in Luxembourg with regard to the corporate income tax paid by\plain\cf1\f51\f
s20\ql certain of our subsidiaries comply with European Union rules on state ai
d. If this matter is adversely resolved, Luxembourg may\plain\cf1\f51\fs20\ql b
e required to assess, and we may be required to pay, additional amounts with res
pect to current and prior periods and our taxes\plain\cf1\f51\fs20\ql in the fu
ture could increase. Although we believe our tax estimates are reasonable, the f
inal outcome of tax audits, investigations,\plain\cf1\f51\fs20\ql and any relat
ed litigation could be materially different from our historical income tax provi
sions and accruals.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Our Supplier
Relationships Subject Us to a Number of Risks\par\pard\plain\sb132\fi528\cf1\f51
\fs20\ql We have significant suppliers, including licensors, and in some cases,
limited or single-sources of supply, that are\plain\cf1\f51\fs20\ql important t
o our sourcing, services, manufacturing, and any related ongoing servicing of me
rchandise and content. We do not\plain\cf1\f51\fs20\ql have long-term arrangeme
nts with most of our suppliers to guarantee availability of merchandise, content
, components, or\plain\cf1\f51\fs20\ql services, particular payment terms, or t
he extension of credit limits. If our current suppliers were to stop selling or
licensing\plain\cf1\f51\fs20\ql merchandise, content, components, or services t
o us on acceptable terms, or delay delivery, including as a result of one or mor
e\plain\cf1\f51\fs20\ql supplier bankruptcies due to poor economic conditions,
as a result of natural disasters, or for other reasons, we may be unable to\plai
n\cf1\f51\fs20\ql procure alternatives from other suppliers in a timely and eff
icient manner and on acceptable terms, or at all. In addition, if our\plain\cf1\
f51\fs20\ql suppliers or other vendors violate applicable laws, regulations, ou
r code of standards and responsibilities, or implement practices\plain\cf1\f51\f
s20\ql regarded as unethical, unsafe, or hazardous to the environment, it could
damage our reputation, limit our growth, and negatively\plain\cf1\f51\fs20\ql
affect our operating results.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql We
May Be Subject to Risks Related to Government Contracts and Related Procurement
Regulations\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Our contracts with U.S.,
as well as state, local, and foreign, government entities are subject to various
procurement\plain\cf1\f51\fs20\ql regulations and other requirements relating
to their formation, administration, and performance. We may be subject to audits
and\plain\cf1\f51\fs20\ql investigations relating to our government contracts,
and any violations could result in various civil and criminal penalties and\pla
in\cf1\f51\fs20\ql administrative sanctions, including termination of contract,
refunding or suspending of payments, forfeiture of profits, payment of\plain\cf
1\f51\fs20\ql fines, and suspension or debarment from future government busines

s. In addition, such contracts may provide for termination by\plain\cf1\f51\fs20
\ql the government at any time, without cause.\par\pard\plain\sb396\fi264\cf1\f
51\fs20\b\i\ql We May Be Subject to Product Liability Claims if People or Proper
ty Are Harmed by the Products We Sell\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql
Some of the products we sell or manufacture may expose us to product liability
claims relating to personal injury, death, or\plain\cf1\f51\fs20\ql environment
al or property damage, and may require product recalls or other actions. Certain
third parties also sell products using\plain\cf1\f51\fs20\ql our e-commerce pl
atform that may increase our exposure to product liability claims, such as if th
ese sellers do not have\plain\cf1\f51\fs20\ql sufficient protection from such c
laims. Although we maintain liability insurance, we cannot be certain that our c
overage will be\plain\cf1\f51\fs20\ql adequate for liabilities actually incurre
d or that insurance will continue to be available to us on economically reasonab
le terms, or\plain\cf1\f51\fs20\ql at all. In addition, some of our agreements
with our vendors and sellers do not indemnify us from product liability.\par\par
d\plain\sb396\fi264\cf1\f51\fs20\b\i\ql We Are Subject to Payments-Related Risks
\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql We accept payments using a variety o
f methods, including credit card, debit card, credit accounts (including promoti
onal\plain\cf1\f51\fs20\ql financing), gift cards, direct debit from a customer
\u8217?s bank account, consumer invoicing, physical bank check, and payment\plai
n\cf1\f51\fs20\ql upon delivery. For existing and future payment options we off
er to our customers, we may become subject to additional\plain\cf1\f51\fs20\ql
regulations and compliance requirements (including obligations to implement enha
nced authentication processes that could result\plain\cf1\f51\fs20\ql in signif
icant costs and reduce the ease of use of our payments products), as well as fra
ud. For certain payment methods,\plain\cf1\f51\fs20\ql including credit and deb
it cards, we pay interchange and other fees, which may increase over time and ra
ise our operating costs\plain\cf1\f51\fs20\ql and lower profitability. We rely
on third parties to provide certain Amazon-branded payment methods and payment p
rocessing\plain\cf1\f51\fs20\ql services, including the processing of credit ca
rds, debit cards, electronic checks, and promotional financing. In each case, it
could\plain\cf1\f51\fs20\ql disrupt our business if these companies become unw
illing or unable to provide these services to us. We also offer co-branded\plain
\cf1\f51\fs20\ql credit card programs, which could adversely affect our operati
ng results if terminated. We are also subject to payment card\plain\cf1\f51\fs20
\ql association operating rules, including data security rules, certification r
equirements, and rules governing electronic funds transfers,\plain\cf1\f51\fs20\
ql which could change or be reinterpreted to make it difficult or impossible fo
r us to comply. If we fail to comply with these rules\plain\cf1\f51\fs20\ql or
requirements, or if our data security systems are breached or compromised, we ma
y be liable for card issuing banks\u8217?\plain\cf1\f51\fs20\ql costs, subject
to fines and higher transaction fees, and lose our ability to accept credit and
debit card payments from our\plain\cf1\f51\fs20\ql customers, process electroni
c funds transfers, or facilitate other types of online payments, and our busines
s and operating
\par\pard\plain\fs16\par\pard\plain\sb132\cf1\f51\fs20\ql results could be adver
sely affected.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql In addition, we provid
e regulated services in certain jurisdictions because we enable customers to kee
p account balances\plain\cf1\f51\fs20\ql with us and transfer money to third pa
rties, and because we provide services to third parties to facilitate payments o
n their behalf.\plain\cf1\f51\fs20\ql In these jurisdictions, we may be subject
to requirements for licensing, regulatory inspection, bonding and capital maint
enance,\plain\cf1\f51\fs20\ql the use, handling, and segregation of transferred
funds, consumer disclosures, and authentication. We are also subject to or\plai
n\cf1\f51\fs20\ql voluntarily comply with a number of other laws and regulation

s relating to payments, money laundering, international money\plain\cf1\f51\fs20
\ql transfers, privacy and information security, and electronic fund transfers.
If we were found to be in violation of applicable laws\plain\cf1\f51\fs20\ql o
r regulations, we could be subject to additional requirements and civil and crim
inal penalties, or forced to cease providing\plain\cf1\f51\fs20\ql certain serv
ices.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql We Could Be Liable for Frau
dulent or Unlawful Activities of Sellers\par\pard\plain\sb132\fi528\cf1\f51\fs20
\ql The law relating to the liability of providers of online payment services is
currently unsettled. In addition, governmental\plain\cf1\f51\fs20\ql agencies
could require changes in the way this business is conducted. Under our seller pr
ograms, we may be unable to prevent\plain\cf1\f51\fs20\ql sellers from collecti
ng payments,\~fraudulently or otherwise, when buyers never receive the products
they ordered or when the\plain\cf1\f51\fs20\ql products received are materially
different from the sellers\u8217? descriptions. Under our A2Z Guarantee, we rei
mburse buyers\plain\cf1\f51\fs20\ql for payments up to certain limits in these
situations, and as our marketplace seller sales grow, the cost of this program w
ill\plain\cf1\f51\fs20\ql increase and could negatively affect our operating re
sults. We also may be unable to prevent sellers on our sites or through other\pl
ain\cf1\f51\fs20\ql seller sites from selling unlawful goods, selling goods in
an unlawful manner, or violating the proprietary rights of others, and\plain\cf1
\f51\fs20\ql could face civil or criminal liability for unlawful activities by
our sellers.
\par\pard\plain\fs16{\*\bkmkstart s57C75F0BDC1D56A42EA9ABB249FE120}{\*\bkmkend s
57C75F0BDC1D56A42EA9ABB249FE120}{\*\bkmkstart item_1_3_4}{\*\bkmkend item_1_3_4}
\par\pard\plain
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\ql Item\~1B.\cell\pard\plai
n\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\i\ql Unresolved Staff Comments\cell{
{\trowd\trqc\cellx1188\cellx10800\trrh281\row}}}\pard\plain\fi792\cf1\f51\fs20\q
l None.
\page{\*\bkmkstart sAF9BB4F922470BA61184ABB23360144}{\*\bkmkend sAF9BB4F922470BA
61184ABB23360144}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F
\par\pard\plain
\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\i\ql Properties\cell{
fs20\ql As of December\~31, 2015, we operated the following facilities (in thous
ands):\par\pard\plain\cf1\f51\fs18\ql \~
\par\pard\plain
llx7434\clvertalc\cellx7539\clvertalc\cellx8890\clvertalc\cellx9201\clvertalc\ce
l\f0\fs16\ql \~\cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\f0\fs1
6\ql \~\cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\f0\fs16\ql \~\
cell{
alb\cellx9201\clvertalb\cellx9306\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10797\trr
h430
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\ql Description of Use\cell\
pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li
22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Leased Square\par\pard\plain\intbl\li22\ri22
\sb22\sa22\cf1\f51\fs16\b\qc Footage\~(1)\cell\pard\plain\intbl\li22\ri22\sb22\s
a22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs16\b\qc Ow
ned Square\plain\intbl\li22\ri22\sa22\cf1\f51\fs16\b\qc Footage\cell\pard\plain
22\sa22\cf1\f51\fs16\b\qc Location\cell{
alb\cellx9201\clvertalb\cellx9306\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10797\trr
h430\row}}}
clcbpat10\cellx5689\clshdng100\clcfpat10\clcbpat10\cellx7040\clvertalb\clshdng10
0\clcfpat10\clcbpat10\cellx7434\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx75
39\clbrdrt\brdrs\brdrcf1\clshdng100\clcfpat10\clcbpat10\cellx8890\clbrdrt\brdrs\
brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9201\clvertalb\clshdng100\
clcfpat10\clcbpat10\cellx9306\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx1079
7\trrh298
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Office space\cell\pard\pla
in\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\
sa22\cf1\f51\fs20\qr 7,245\cell
\par\pard\plain\intbl\fs16\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\
li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\
f51\fs20\qr 2,601\cell
li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22
\cf1\f51\fs20\ql North\~America\cell{
39\clbrdrt\brdrs\brdrcf1\clshdng100\clcfpat10\clcbpat10\cellx8890\clbrdrt\brdrs\
7\trrh298\row}}}
{\trowd\clvertalc\cellx5584\clvertalb\cellx5689\clvertalc\cellx7040\clvertalb\ce
llx7434\clvertalb\cellx7539\clvertalc\cellx8890\clvertalb\cellx9201\clvertalb\ce
llx9306\clvertalc\cellx10797\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Office space\cell\pard\pla
f51\fs20\qr \u8212?\cell
\cf1\f51\fs20\ql International\cell{
llx7434\clvertalb\cellx7539\clvertalc\cellx8890\clvertalb\cellx9201\clvertalb\ce
llx9306\clvertalc\cellx10797\trrh281\row}}}
39\clshdng100\clcfpat10\clcbpat10\cellx8890\clvertalb\clshdng100\clcfpat10\clcbp
at10\cellx9201\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9306\clvertalb\clsh
dng100\clcfpat10\clcbpat10\cellx10797\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Fulfillment, data centers,
and other\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\par
d\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 69,890\cell
\cf1\f51\fs20\ql North America\cell{
39\clshdng100\clcfpat10\clcbpat10\cellx8890\clvertalb\clshdng100\clcfpat10\clcbp
at10\cellx9201\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9306\clvertalb\clsh
dng100\clcfpat10\clcbpat10\cellx10797\trrh281\row}}}
{\trowd\clvertalb\cellx5584\clvertalb\cellx5689\cellx7040\clvertalb\cellx7434\cl
vertalb\cellx7539\cellx8890\clvertalb\cellx9201\clvertalb\cellx9306\clvertalb\ce
llx10797\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Fulfillment, data centers,
and other\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\par
f51\fs20\qr 670\cell
\cf1\f51\fs20\ql International\cell{
{\trowd\clvertalb\cellx5584\clvertalb\cellx5689\cellx7040\clvertalb\cellx7434\cl
vertalb\cellx7539\cellx8890\clvertalb\cellx9201\clvertalb\cellx9306\clvertalb\ce
llx10797\trrh281\row}}}
clcbpat10\cellx5689\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clshdng100\clcf
pat10\clcbpat10\cellx7040\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb
10\cellx7539\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clshdng100\clcfpat10\c
lcbpat10\cellx8890\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdn
g100\clcfpat10\clcbpat10\cellx9201\clvertalb\clshdng100\clcfpat10\clcbpat10\cell
x9306\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10797\trrh298
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Total\cell\pard\plain\intb
l\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf
1\f51\fs20\qr 129,954\cell
\cf1\f51\fs20\ql \~\cell{
clcbpat10\cellx5689\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clshdng100\clcf
pat10\clcbpat10\cellx7040\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb
10\cellx7539\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clshdng100\clcfpat10\c
lcbpat10\cellx8890\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdn
x9306\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10797\trrh298\row}}}\pard\pl
ain\cf1\f51\fs20\ql \~___________________
\par\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (1)\cell\pard\plain\intbl\cf1\f51\fs20\ql For
leased properties, represents the total leased space excluding\plain\intbl\cf1\f
51\fs20\ql sub-leased space.\cell{
\par\pard\plain
llx9020\clvertalc\cellx9126\clvertalc\cellx10487\clvertalc\cellx10798\trrh-66
6\ql \~\cell{
llx9020\clvertalc\cellx9126\clvertalc\cellx10487\clvertalc\cellx10798\trrh-66\ro
w}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\ql Segment\cell\pard\plain\
intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb2
2\cf1\f51\fs16\b\qc Leased Square
\par\pard\plain\intbl\fs16\pard\plain\intbl\li22\ri22\sa22\cf1\f51\fs16\b\qc Foo
tage (1)\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\
plain\intbl\li22\ri22\sb22\cf1\f51\fs16\b\qc Owned Square\plain\intbl\li22\ri22\
sa22\cf1\f51\fs16\b\qc Footage (1)\cell{
26\clshdng100\clcfpat10\clcbpat10\cellx10487\clvertalb\clshdng100\clcfpat10\clcb
pat10\cellx10798\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql North America\cell\pard\pl
ain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22
\sa22\cf1\f51\fs20\qr 67,103\cell
pat10\cellx10798\trrh281\row}}}
llx9020\clvertalb\cellx9126\clvertalc\cellx10487\clvertalb\cellx10798\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql International\cell\pard\pl
ain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22
\sa22\cf1\f51\fs20\qr 45,950\cell
llx9020\clvertalb\cellx9126\clvertalc\cellx10487\clvertalb\cellx10798\trrh281\ro
w}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql AWS\cell\pard\plain\intbl\
pat10\cellx10798\trrh281\row}}}
{\trowd\cellx7260\clvertalb\cellx7366\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrc
f1\cellx8736\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9020\cl
vertalb\cellx9126\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\cellx10487\clbrdr
t\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10798\trrh298
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Total\cell\pard\plain\intb
1\f51\fs20\qr 117,866\cell
{\trowd\cellx7260\clvertalb\cellx7366\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrc
f1\cellx8736\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9020\cl
vertalb\cellx9126\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\cellx10487\clbrdr
t\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10798\trrh298\row}}}\pard\
plain\cf1\f51\fs20\ql \~___________________
\par\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (1)\cell\pard\plain\intbl\cf1\f51\fs20\ql Segm
ent amounts exclude corporate facilities. Shared facilities are allocated among
the segments based on usage and\plain\intbl\cf1\f51\fs20\ql primarily relate to
facilities that hold our technology infrastructure. See Item\~8 of Part II, \u8
220?Financial Statements and\plain\intbl\cf1\f51\fs20\ql Supplementary Data\u82
12?Note 11\u8212?Segment Information.\u8221?\cell{
l We own and lease our corporate headquarters in Seattle, Washington. Additional
ly, we own and lease corporate office,\plain\cf1\f51\fs20\ql fulfillment, sorta
tion, delivery, warehouse operations, data center, customer service, and other f
acilities, principally in North\plain\cf1\f51\fs20\ql America, Europe, and Asia
.
\par\pard\plain\fs16{\*\bkmkstart s4416AAAFD3D21D50D51AABB24A62CA3}{\*\bkmkend s
4416AAAFD3D21D50D51AABB24A62CA3}{\*\bkmkstart item_1_3_6}{\*\bkmkend item_1_3_6}
\par\pard\plain
\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\i\ql Legal Proceedings\cell{
fs20\ql See Item\~8 of Part II, \u8220?Financial Statements and Supplementary Da
ta\u8212?Note 7\u8212?Commitments and\plain\cf1\f51\fs20\ql Contingencies\u8212
?Legal Proceedings.\u8221?
\par\pard\plain\fs16{\*\bkmkstart s77F56DD4B75BEA21F839ABB24A6CAD3}{\*\bkmkend s
77F56DD4B75BEA21F839ABB24A6CAD3}{\*\bkmkstart item_1_3_7}{\*\bkmkend item_1_3_7}
\par\pard\plain
\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\i\ql Mine Safety Disclosures\cell{
fs20\ql Not applicable.
\page{\*\bkmkstart sCED36A6EECDB9ABC1ADFABB24AA8B46}{\*\bkmkend sCED36A6EECDB9AB
C1ADFABB24AA8B46}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F
ain\cf1\f51\fs20\b\qc PART II
\par\pard\plain\fs16{\*\bkmkstart s1434763B09F480B7DDC8ABB24AC6064}{\*\bkmkend s
1434763B09F480B7DDC8ABB24AC6064}{\*\bkmkstart item_1_3_8}{\*\bkmkend item_1_3_8}
\par\pard\plain
\intbl\li22\ri22\sb22\cf1\f51\fs20\b\i\ql Market for the Registrant\u8217?s Comm
on Stock, Related Shareholder Matters, and Issuer Purchases of\plain\intbl\li22\
ri22\sa22\cf1\f51\fs20\b\i\ql Equity Securities\cell{
fs20\b\i\ql Market Information\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Our co
mmon stock is traded on the NASDAQ Global Select Market under the symbol \u8220?
AMZN.\u8221? The\plain\cf1\f51\fs20\ql following table sets forth the high and
low per share sale prices for our common stock for the periods indicated, as rep
orted by\plain\cf1\f51\fs20\ql the NASDAQ Global Select Market.\par\pard\plain\
cf1\f51\fs18\ql \~
\par\pard\plain
cell{
cellx8847\clvertalb\cellx8954\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10797\trrh281
cf1\f51\fs16\b\qc High\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql
\~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Low\cell{
cellx8847\clvertalb\cellx8954\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10797\trrh281
\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Year ended December 31, 20
14\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\
2\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20
\ql \~\cell{
vertalb\cellx8847\clvertalb\cellx8954\clvertalb\cellx9074\clvertalb\cellx10689\c
lvertalb\cellx10796\trrh281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql First Quarter\cell\pard\p
lain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb2
2\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 408.06\
cell
f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 330.88\cell
lvertalb\cellx10796\trrh281\row}}}
10\cellx8954\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10689\clvertalb\clshd
ng100\clcfpat10\clcbpat10\cellx10796\trrh281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Second Quarter\cell\pard\
plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb
22\sa22\cf1\f51\fs20\qr 348.30\cell
f51\fs20\qr 284.38\cell
ng100\clcfpat10\clcbpat10\cellx10796\trrh281\row}}}
vertalb\cellx8954\clvertalb\cellx10689\clvertalb\cellx10796\trrh281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Third Quarter\cell\pard\p
2\sa22\cf1\f51\fs20\qr 364.85\cell
f51\fs20\qr 304.59\cell
vertalb\cellx8954\clvertalb\cellx10689\clvertalb\cellx10796\trrh281\row}}}
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Fourth Quarter\cell\pard\
22\sa22\cf1\f51\fs20\qr 341.26\cell
f51\fs20\qr 284.00\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Year ended December 31, 20
15\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\
\ql \~\cell{
10\cellx8847\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8954\clvertalb\clshdn
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql First Quarter\cell\pard\p
2\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 389.37\
cell
f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 285.25\cell

x10689\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10796\trrh281\row}}}
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Second Quarter\cell\pard\
22\sa22\cf1\f51\fs20\qr 452.65\cell
f51\fs20\qr 368.34\cell
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Third Quarter\cell\pard\p
2\sa22\cf1\f51\fs20\qr 580.57\cell
f51\fs20\qr 425.57\cell
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Fourth Quarter\cell\pard\
22\sa22\cf1\f51\fs20\qr 696.44\cell
f51\fs20\qr 506.00\cell
vertalb\cellx8954\clvertalb\cellx10689\clvertalb\cellx10796\trrh281\row}}}\pard\
plain\sb396\fi264\cf1\f51\fs20\b\i\ql Holders\par\pard\plain\sb132\fi528\cf1\f51
\fs20\ql As of January\~20, 2016, there were 2,578 shareholders of record of our
common stock, although there is a much larger\plain\cf1\f51\fs20\ql number of
beneficial owners.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Dividends\par\
pard\plain\sb132\fi528\cf1\f51\fs20\ql We have never declared or paid cash divid
ends on our common stock. See Item\~7 of Part II, \u8220?Management\u8217?s\plai
n\cf1\f51\fs20\ql Discussion and Analysis of Financial Condition and Results of
Operations\u8212?Liquidity and Capital Resources.\u8221?\par\pard\plain\sb396\f
i264\cf1\f51\fs20\b\i\ql Recent Sales of Unregistered Securities\par\pard\plain\
sb132\fi528\cf1\f51\fs20\ql None.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql
Issuer Purchases of Equity Securities\par\pard\plain\sb132\fi528\cf1\f51\fs20\q
l None.
\page{\*\bkmkstart s4B5046592ECC6DE236DFABB21E0CA2F}{\*\bkmkend s4B5046592ECC6DE
236DFABB21E0CA2F}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F
\par\pard\plain
\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\i\ql Selected Consolidated Financial D
ata\cell{
fs20\ql The following selected consolidated financial data should be read in con
junction with the consolidated financial statements\plain\cf1\f51\fs20\ql and t
he notes thereto in Item\~8 of Part II, \u8220?Financial Statements and Suppleme
ntary Data,\u8221? and the information\plain\cf1\f51\fs20\ql contained in Item\
~7 of Part II, \u8220?Management\u8217?s Discussion and Analysis of Financial Co
ndition and Results of\plain\cf1\f51\fs20\ql Operations.\u8221? Historical resu
lts are not necessarily indicative of future results.\par\pard\plain\cf1\f51\fs1
8\ql \~
\par\pard\plain
cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\f0\fs16\ql \~\cell\par
d\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\
intbl\f0\fs16\ql \~\cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\f0
\fs16\ql \~\cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\f0\fs16\ql
\~\cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\f0\fs16\ql \~\cell
cellx10799\trrh281
i22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f
51\fs16\b\qc Year Ended December 31,\cell{
{\trowd\clvertalb\cellx4270\clvertalb\cellx4377\clbrdrt\brdrs\brdrcf1\clbrdrb\br
alb\cellx6881\clvertalb\cellx6988\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8186\clve
rtalb\cellx8293\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9491\clvertalb\cellx9598\cl
brdrb\brdrs\brdrcf1\clvertalb\cellx10796\trrh281
cf1\f51\fs16\b\qc 2015\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql
\~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc 2014\cell\pard\p
lain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri2
2\sb22\sa22\cf1\f51\fs16\b\qc 2013\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1
\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc 2012
\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\in
tbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc 2011\cell{
alb\cellx6881\clvertalb\cellx6988\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8186\clve
rtalb\cellx8293\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9491\clvertalb\cellx9598\cl
brdrb\brdrs\brdrcf1\clvertalb\cellx10796\trrh281\row}}}
51\fs16\b\qc (in millions, except per share data)\cell{
}}}
x8293\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9491\clvertalb\clshdng100\cl
cfpat10\clcbpat10\cellx9598\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10796\
trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\ql Statements of Operations
:\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\i
ntbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22
\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\
ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\pla
in\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\
sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\f
s20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard
\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
trrh281\row}}}
vertalb\cellx5576\clvertalb\cellx5683\clvertalb\cellx5803\clvertalb\cellx6767\cl
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Net sales\cell\pard\plain\
intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa2
2\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 107,006\cell
f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 88,988\cell
cfpat10\clcbpat10\cellx6987\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx7107\c
lvertalb\clshdng100\clcfpat10\clcbpat10\cellx8071\clvertalb\clshdng100\clcfpat10
\clcbpat10\cellx8184\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8291\clvertal
b\clshdng100\clcfpat10\clcbpat10\cellx8411\clvertalb\clshdng100\clcfpat10\clcbpa
t10\cellx9375\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9488\clvertalb\clshd
ng100\clcfpat10\clcbpat10\cellx9595\clvertalb\clshdng100\clcfpat10\clcbpat10\cel
lx9715\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10679\clvertalb\clshdng100\
clcfpat10\clcbpat10\cellx10792\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Income from operations\cel
li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr
2,233\cell
f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 178\cell
clcfpat10\clcbpat10\cellx10792\trrh281\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Net income (loss)\cell\par
sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 596\
cell
f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr (241\cell\pard\pla
in\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\s
a22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\ce
ll\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 274\cell
f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr (39\cell\pard\plai
n\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa
22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cel
l\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 631\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Basic earnings per share (
1)\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\
intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\f
s20\qr 1.28\cell
f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr (0.52\cell\pard\pl
ain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\
sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\c
ell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 0.60\cell

\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Diluted earnings per share
(1)\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plai
n\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51
\fs20\qr 1.25\cell
trrh529
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs20\ql Weighted-average shares used in
computation of\plain\intbl\li22\ri22\sa22\cf1\f51\fs20\ql earnings per share:\
a22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql
\~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain
0\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\p
lain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
trrh529\row}}}
vertalb\cellx9488\clvertalb\cellx9595\clvertalb\cellx10679\clvertalb\cellx10792\
trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Basic\cell\pard\plain\intb
1\f51\fs20\qr 467\cell
trrh281\row}}}
b\clshdng100\clcfpat10\clcbpat10\cellx10679\clvertalb\clshdng100\clcfpat10\clcbp
at10\cellx10792\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Diluted\cell\pard\plain\in
tbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\
cf1\f51\fs20\qr 477\cell
b\clshdng100\clcfpat10\clcbpat10\cellx10679\clvertalb\clshdng100\clcfpat10\clcbp
at10\cellx10792\trrh281\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\ql Statements of Cash Flows
s20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Net cash provided by (used
in) operating activities\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20
\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\in
tbl\sb22\sa22\cf1\f51\fs20\qr 11,920\cell

llx5683\clvertalb\cellx6881\clvertalb\cellx6988\clvertalb\cellx8186\clvertalb\ce
llx8293\clvertalb\cellx9491\clvertalb\cellx9598\clvertalb\cellx10796\trrh304
cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\
22\sa22\cf1\f51\fs20\ql \~\cell{
llx5683\clvertalb\cellx6881\clvertalb\cellx6988\clvertalb\cellx8186\clvertalb\ce
llx8293\clvertalb\cellx9491\clvertalb\cellx9598\clvertalb\cellx10796\trrh304\row
}}}
cellx10799\trrh281
51\fs16\b\qc December 31,\cell{
cellx5576\clvertalb\cellx5683\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6881\clvertal
b\cellx6988\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8186\clvertalb\cellx8293\clbrdr
b\brdrs\brdrcf1\clvertalb\cellx9491\clvertalb\cellx9598\clbrdrb\brdrs\brdrcf1\cl
tbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc 2011\cell{
51\fs16\b\qc (in millions)\cell{
}}}
trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\ql Balance Sheets:\cell\par
ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\
f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell
bl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
trrh281\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Total assets\cell\pard\pla
sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 65,444\ce
ll
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Total long-term obligation
s\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\i
ntbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs
20\qr 18,161\cell
clcfpat10\clcbpat10\cellx10792\trrh281\row}}}\pard\plain\cf1\f51\fs20\ql \~_____
______________
\par\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (1)\cell\pard\plain\intbl\cf1\f51\fs20\ql For
further discussion of earnings per share, see Item\~8 of Part II, \u8220?Financi
al Statements and Supplementary\plain\intbl\cf1\f51\fs20\ql Data\u8212?Note 1\u
8212?Description of Business and Accounting Policies.\u8221?\cell{
\par\pard\plain\fs16\pard\plain\li396\cf1\f51\fs20\ql \~
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66D4AABB233605FB}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F

\par\pard\plain
\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\i\ql Management\u8217?s Discussion and
Analysis of Financial Condition and Results of Operations\cell{
{\trowd\cellx1188\cellx10800\trrh281\row}}}\pard\plain\sb396\cf1\f51\fs20\b\ql F
orward-Looking Statements\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql This Annual
Report on Form 10-K includes forward-looking statements within the meaning of t
he Private Securities\plain\cf1\f51\fs20\ql Litigation Reform Act of 1995. All
statements other than statements of historical fact, including statements regard
ing guidance,\plain\cf1\f51\fs20\ql industry prospects, or future results of op
erations or financial position, made in this Annual Report on Form 10-K are\plai
n\cf1\f51\fs20\ql forward-looking. We use words such as anticipates, believes,
expects, future, intends, and similar expressions to identify\plain\cf1\f51\fs20
\ql forward-looking statements. Forward-looking statements reflect management\u
8217?s current expectations and are inherently\plain\cf1\f51\fs20\ql uncertain.
Actual results could differ materially for a variety of reasons, including, amo
ng others, fluctuations in foreign exchange\plain\cf1\f51\fs20\ql rates, change
s in global economic conditions and customer spending, world events, the rate of
growth of the Internet and online\plain\cf1\f51\fs20\ql commerce, the amount t
hat Amazon.com invests in new business opportunities and the timing of those inv
estments, the mix of\plain\cf1\f51\fs20\ql products sold to customers, the mix
of net sales derived from products as compared with services, the extent to whic
h we owe\plain\cf1\f51\fs20\ql income taxes, competition, management of growth,
potential fluctuations in operating results, international growth and expansion
,\plain\cf1\f51\fs20\ql the outcomes of legal proceedings and claims, fulfillme
nt, sortation, delivery, and data center optimization, risks of inventory\plain\
cf1\f51\fs20\ql management, seasonality, the degree to which we enter into, mai
ntain, and develop commercial agreements, acquisitions and\plain\cf1\f51\fs20\ql
strategic transactions, payments risks, and risks of fulfillment throughput an
d productivity. In addition, the current global\plain\cf1\f51\fs20\ql economic
climate amplifies many of these risks. These risks and uncertainties, as well as
other risks and uncertainties that could\plain\cf1\f51\fs20\ql cause our actua
l results to differ significantly from management\u8217?s expectations, are desc
ribed in greater detail in Item\~1A\plain\cf1\f51\fs20\ql of Part\~I, \u8220?Ri
sk Factors.\u8221?\par\pard\plain\sb396\cf1\f51\fs20\b\ql Overview\par\pard\plai
n\sb132\fi528\cf1\f51\fs20\i\ql Our primary source of revenue is the sale of a w
ide range of products and services to customers\plain\cf1\f51\fs20\ql . The prod
ucts offered on\plain\cf1\f51\fs20\ql our consumer-facing websites primarily in
clude merchandise and content we have purchased for resale from vendors and thos
e\plain\cf1\f51\fs20\ql offered by third-party sellers, and we also manufacture
and sell electronic devices. Generally, we recognize gross revenue from\plain\c
f1\f51\fs20\ql items we sell from our inventory as product sales and recognize
our net share of revenue of items sold by third-party sellers as\plain\cf1\f51\f
s20\ql service sales. We also offer other services such as compute, storage, an
d database offerings, fulfillment, publishing, digital\plain\cf1\f51\fs20\ql co
ntent subscriptions, advertising, and co-branded credit cards.\par\pard\plain\sb
132\fi528\cf1\f51\fs20\i\ql Our financial focus is on long-term, sustainable gro
wth in free cash flows\plain\cf1\f51\fs18\i\ql\super 1\plain\cf1\f51\fs20\i\ql
per share.\plain\cf1\f51\fs20\ql Free cash flows are driven primarily\plain\cf1
\f51\fs20\ql by increasing operating income and efficiently managing working ca
pital\plain\cf1\f51\fs18\ql\super 2\plain\cf1\f51\fs20\ql and cash capital ex

penditures, including our decision\plain\cf1\f51\fs20\ql to purchase or lease p
roperty and equipment. Increases in operating income primarily result from incre
ases in sales of products\plain\cf1\f51\fs20\ql and services and efficiently ma
naging our operating costs, partially offset by investments we make in longer-te
rm strategic\plain\cf1\f51\fs20\ql initiatives. To increase sales of products a
nd services, we focus on improving all aspects of the customer experience, inclu
ding\plain\cf1\f51\fs20\ql lowering prices, improving availability, offering fa
ster delivery and performance times, increasing selection, increasing product\pl
ain\cf1\f51\fs20\ql categories and service offerings, expanding product informa
tion, improving ease of use, improving reliability, and earning\plain\cf1\f51\fs
20\ql customer trust. We also seek to efficiently manage shareholder dilution w
hile maintaining the flexibility to issue shares for\plain\cf1\f51\fs20\ql stra
tegic purposes, such as financings, acquisitions, and aligning employee compensa
tion with shareholders\u8217? interests. We\plain\cf1\f51\fs20\ql utilize restr
icted stock units as our primary vehicle for equity compensation because we beli
eve this compensation model\plain\cf1\f51\fs20\ql aligns\~the long-term interes
ts of our shareholders and employees. In measuring shareholder dilution, we incl
ude all vested and\plain\cf1\f51\fs20\ql unvested stock awards outstanding, wit
hout regard to estimated forfeitures. Total shares outstanding plus outstanding
stock awards\plain\cf1\f51\fs20\ql were 490 million and 483 million as of Decem
ber\~31, 2015 and 2014.\par\pard\plain\sb132\fi528\cf1\f51\fs20\i\ql We seek to
reduce our variable costs per unit and work to leverage our fixed costs.\plain\c
f1\f51\fs20\ql Our variable costs include product and\plain\cf1\f51\fs20\ql co
ntent costs, payment processing and related transaction costs, picking, packagin
g, and preparing orders for shipment,\plain\cf1\f51\fs20\ql transportation, cus
tomer service support, costs necessary to run AWS, and a portion of our marketin
g costs. Our fixed costs\plain\cf1\f51\fs20\ql include the costs necessary to r
un our technology infrastructure; to build, enhance, and add features to our web
sites and web\plain\cf1\f51\fs20\ql services, our electronic devices, and digit
al offerings; and to build and optimize our fulfillment centers. Variable costs
generally\plain\cf1\f51\fs20\ql change directly with sales volume, while fixed
costs generally are dependent on the timing of capacity needs, geographic\plain\
cf1\f51\fs20\ql expansion, category expansion, and other factors. To decrease o
ur variable costs on a per unit basis and enable us to lower prices\plain\cf1\f5
1\fs20\ql for customers, we seek to increase our direct sourcing, increase disc
ounts from suppliers, and reduce defects in our processes. To\plain\cf1\f51\fs20
\ql minimize growth in fixed costs, we seek to improve process efficiencies and
maintain a lean culture.
\par\pard\plain\fs16\par\pard\plain\cf1\f51\fs20\ql _______________________
\par\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (1)\cell\pard\plain\intbl\cf1\f51\fs20\ql See
\u8220?Results of Operations\u8212?Non-GAAP Financial Measures\u8221? below for
additional information on our\plain\intbl\cf1\f51\fs20\ql non-GAAP free cash fl
ows financial measures.\cell{
\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (2)\cell\pard\plain\intbl\cf1\f51\fs20\ql Work
ing capital consists of accounts receivable, inventory, and accounts\plain\intbl
\cf1\f51\fs20\ql payable.\cell{
\par\pard\plain\fs16\par\pard\plain\sb132\fi528\cf1\f51\fs20\i\ql Because of our
model we are able to turn our inventory quickly and have a cash-generating oper
ating cycle\plain\cf1\f51\fs18\i\ql\super 3\plain\cf1\f51\fs20\i\ql .\plain\cf1\
f51\fs20\ql On average,\plain\cf1\f51\fs20\ql our high inventory velocity mean
s we generally collect from consumers before our payments to suppliers come due.
Inventory\plain\cf1\f51\fs20\ql turnover\plain\cf1\f51\fs18\ql\super 4\plain\
cf1\f51\fs20\ql was 8 for 2015 and 9 for 2014 and 2013. We expect variability
in inventory turnover over time since it is affected by\plain\cf1\f51\fs20\ql s
everal factors, including our product mix, the mix of sales by us and by third-p
arty sellers, our continuing focus on in-stock\plain\cf1\f51\fs20\ql inventory
availability and selection of product offerings, our investment in new geographi
es and product lines, and the extent to\plain\cf1\f51\fs20\ql which we choose t
o utilize third-party fulfillment providers. Accounts payable days\plain\cf1\f51
\fs18\ql\super 5\plain\cf1\f51\fs20\ql were 77, 73, and 74 for 2015, 2014, an
d\plain\cf1\f51\fs20\ql 2013. We expect some variability in accounts payable da
ys over time since they are affected by several factors, including the\plain\cf1
\f51\fs20\ql mix of product sales, the mix of sales by third-party sellers, the
mix of suppliers, seasonality, and changes in payment terms\plain\cf1\f51\fs20\
ql over time, including the effect of balancing pricing and timing of payment t
erms with suppliers.\par\pard\plain\sb132\fi528\cf1\f51\fs20\i\ql We expect spen
ding in technology and content will increase over time as we add computer scient
ists, designers, software\plain\cf1\f51\fs20\i\ql and hardware engineers, and m
erchandising employees. Our technology and content investment and capital spendi
ng projects\plain\cf1\f51\fs20\i\ql often support a variety of product and serv
ice offerings due to geographic expansion and the cross-functionality of our sys
tems\plain\cf1\f51\fs20\i\ql and operations. We seek to invest efficiently in s
everal areas of technology and content, including AWS, and expansion of new\plai
n\cf1\f51\fs20\i\ql and existing product categories and service offerings, as w
ell as in technology infrastructure to enhance the customer experience\plain\cf1
\f51\fs20\i\ql and improve our process efficiencies.\plain\cf1\f51\fs20\ql We
believe that advances in technology, specifically the speed and reduced cost of
\plain\cf1\f51\fs20\ql processing power and the advances of wireless connectivi
ty, will continue to improve the consumer experience on the Internet\plain\cf1\f
51\fs20\ql and increase its ubiquity in people\u8217?s lives. To best take adva
ntage of these continued advances in technology, we are\plain\cf1\f51\fs20\ql i
nvesting in initiatives to build and deploy innovative and efficient software an
d electronic devices. We are also investing in\plain\cf1\f51\fs20\ql AWS, which
offers a broad set of global compute, storage, database, and other service offe
rings to developers and enterprises of\plain\cf1\f51\fs20\ql all sizes.\par\par
d\plain\sb132\fi528\cf1\f51\fs20\i\ql Our financial reporting currency is the U.
S.\~Dollar and changes in foreign exchange rates significantly affect our report
ed\plain\cf1\f51\fs20\i\ql results and consolidated trends\plain\cf1\f51\fs20\q
l . For example, if the U.S.\~Dollar weakens year-over-year relative to currenc
ies in our\plain\cf1\f51\fs20\ql international locations, our consolidated net
sales and operating expenses will be higher than if currencies had remained cons
tant.\plain\cf1\f51\fs20\ql Likewise, if the U.S.\~Dollar strengthens year-over
-year relative to currencies in our international locations, our consolidated ne
t\plain\cf1\f51\fs20\ql sales and operating expenses will be lower than if curr
encies had remained constant. We believe that our increasing\plain\cf1\f51\fs20\
ql diversification beyond the U.S. economy through our growing international bu
sinesses benefits our shareholders over the\plain\cf1\f51\fs20\ql long-term. We
also believe it is useful to evaluate our operating results and growth rates be
fore and after the effect of currency\plain\cf1\f51\fs20\ql changes.\par\pard\p
lain\sb132\fi528\cf1\f51\fs20\ql In addition, the remeasurement of our intercomp
any balances can result in significant gains and charges associated with the\pla
in\cf1\f51\fs20\ql effect of movements in foreign currency exchange rates. Curr
ency volatilities may continue, which may significantly impact\plain\cf1\f51\fs2

0\ql (either positively or negatively) our reported results and consolidated tr
ends and comparisons.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql For additional
information about each line item summarized above, refer to Item\~8 of Part II,
\u8220?Financial Statements\plain\cf1\f51\fs20\ql and Supplementary Data\u8212?
Note 1\u8212?Description of Business and Accounting Policies.\u8221?\par\pard\pl
ain\sb396\cf1\f51\fs20\b\ql Critical Accounting Judgments\par\pard\plain\sb132\f
i528\cf1\f51\fs20\ql The preparation of financial statements in conformity with
generally accepted accounting principles of the United States\plain\cf1\f51\fs20
\ql (\u8220?GAAP\u8221?) requires estimates and assumptions that affect the rep
orted amounts of assets and liabilities, revenues and\plain\cf1\f51\fs20\ql exp
enses, and related disclosures of contingent assets and liabilities in the conso
lidated financial statements and accompanying\plain\cf1\f51\fs20\ql notes. The
SEC has defined a company\u8217?s critical accounting policies as the ones that
are most important to the portrayal\plain\cf1\f51\fs20\ql of the company\u8217?
s\~financial condition and results of operations, and which require the company
to make its most difficult\plain\cf1\f51\fs20\ql and subjective judgments, ofte
n as a result of the need to make estimates of matters that are inherently uncer
tain. Based on this\plain\cf1\f51\fs20\ql definition, we have identified the cr
itical accounting policies and judgments addressed below. We also have other key
accounting\plain\cf1\f51\fs20\ql policies, which involve the use of estimates,
judgments, and assumptions that are significant to understanding our results. F
or\plain\cf1\f51\fs20\ql additional information, see Item\~8 of Part II, \u8220
?Financial Statements and Supplementary Data\u8212?Note\plain\cf1\f51\fs20\ql 1
\u8212?Description of Business and Accounting Policies.\u8221? Although we belie
ve that our estimates, assumptions, and\plain\cf1\f51\fs20\ql judgments are rea
sonable, they are based upon information presently available. Actual results may
differ significantly from these\plain\cf1\f51\fs20\ql estimates under differen
t assumptions, judgments, or conditions.
\par\pard\plain\fs16\par\pard\plain\sb264\fi528\cf1\f51\fs20\ql \~\par\pard\plai
n\cf1\f51\fs20\ql _______________________
\par\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (3)\cell\pard\plain\intbl\cf1\f51\fs20\ql The
operating cycle is the number of days of sales in inventory plus the number of d
ays of sales in accounts receivable\plain\intbl\cf1\f51\fs20\ql minus accounts
payable days.\cell{
\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (4)\cell\pard\plain\intbl\cf1\f51\fs20\ql Inve
ntory turnover is the quotient of trailing twelve month cost of sales to average
inventory over five quarter ends.\cell{
\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (5)\cell\pard\plain\intbl\cf1\f51\fs20\ql Acco
unts payable days, calculated as the quotient of accounts payable to current qua
rter cost of sales, multiplied by the\plain\intbl\cf1\f51\fs20\ql number of day
s in the current quarter.\cell{
\par\pard\plain\fs16\par\pard\plain\sb396\fi264\cf1\f51\fs20\i\ql Inventories\pa
r\pard\plain\sb132\fi528\cf1\f51\fs20\ql Inventories, consisting of products ava
ilable for sale, are primarily accounted for using the first-in first-out\plain\
cf1\f51\fs20\ql (\u8220?FIFO\u8221?) method, and are valued at the lower of cos
t or market value. This valuation requires us to make\plain\cf1\f51\fs20\ql jud
gments, based on currently-available information, about the likely method of dis
position, such as through sales to individual\plain\cf1\f51\fs20\ql customers,
returns to product vendors, or liquidations, and expected recoverable values of
each disposition category. These\plain\cf1\f51\fs20\ql assumptions about future
disposition of inventory are inherently uncertain and changes in our estimates
and assumptions may\plain\cf1\f51\fs20\ql cause us to realize material write-do
wns in the future. As a measure of sensitivity, for every 1% of additional inven
tory valuation\plain\cf1\f51\fs20\ql allowance as of December\~31, 2015, we wou
ld have recorded an additional cost of sales of approximately $115 million.\par\
pard\plain\sb132\fi528\cf1\f51\fs20\ql In addition, we enter into supplier commi
tments for certain electronic device components. These commitments are based on\
plain\cf1\f51\fs20\ql forecasted customer demand. If we reduce these commitment
s, we may incur additional costs.\par\pard\plain\sb396\fi264\cf1\f51\fs20\i\ql G
oodwill\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql We evaluate goodwill for impa
irment annually or more frequently when an event occurs or circumstances change
that\plain\cf1\f51\fs20\ql indicate the carrying value may not be recoverable.
During the second quarter of 2015, we changed the measurement date of our\plain\
cf1\f51\fs20\ql annual goodwill impairment test from October 1 to April 1. In t
esting for goodwill impairment, we may elect to utilize a\plain\cf1\f51\fs20\ql
qualitative assessment to evaluate whether it is more likely than not that the
fair value of a reporting unit is less than its carrying\plain\cf1\f51\fs20\ql
amount. If our qualitative assessment indicates that goodwill impairment is more
likely than not, we perform a two-step\plain\cf1\f51\fs20\ql impairment test.
We test goodwill for impairment under the two-step impairment test by first comp
aring the book value of net\plain\cf1\f51\fs20\ql assets to the fair value of t
he reporting units. If the fair value is determined to be less than the book val
ue or qualitative factors\plain\cf1\f51\fs20\ql indicate that it is more likely
than not that goodwill is impaired, a second step is performed to compute the a
mount of\plain\cf1\f51\fs20\ql impairment as the difference between the estimat
ed fair value of goodwill and the carrying value. We estimate the fair value of\
plain\cf1\f51\fs20\ql the reporting units using discounted cash flows. Forecast
s of future cash flows are based on our best estimate of future net sales\plain\
cf1\f51\fs20\ql and operating expenses, based primarily on expected category ex
pansion, pricing, market segment share, and general economic\plain\cf1\f51\fs20\
ql conditions. Certain estimates of discounted cash flows involve businesses an
d geographies with limited financial history and\plain\cf1\f51\fs20\ql developi
ng revenue models. Changes in these forecasts could significantly change the amo
unt of impairment recorded, if any.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql D
uring the year, management monitored the actual performance of the business rela
tive to the fair value assumptions used\plain\cf1\f51\fs20\ql during our annual
goodwill impairment test. For the periods presented, no triggering events were
identified that required an\plain\cf1\f51\fs20\ql interim impairment test. As a
measure of sensitivity, a 10% decrease in the fair value of any of our reportin
g units as of April\~1,\plain\cf1\f51\fs20\ql 2015, would have had no impact on
the carrying value of our goodwill.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql
Financial and credit market volatility directly impacts the fair value measureme
nt through our weighted-average cost of\plain\cf1\f51\fs20\ql capital that we u
se to determine a discount rate and through our stock price that we use to deter
mine our market capitalization.\plain\cf1\f51\fs20\ql During times of volatilit
y, significant judgment must be applied to determine whether credit or stock pri
ce changes are short-term\plain\cf1\f51\fs20\ql in nature or a longer-term tren

d. We have not made any significant changes to the accounting methodology used t
o evaluate\plain\cf1\f51\fs20\ql goodwill for impairment. Changes in our estima
ted future cash flows and asset fair values may cause us to realize material\pla
in\cf1\f51\fs20\ql impairment charges in the future. As a measure of sensitivit
y, a prolonged 20% decrease from our December\~31, 2015 closing\plain\cf1\f51\fs
20\ql stock price would not be an indicator of possible impairment.\par\pard\pl
ain\sb396\fi264\cf1\f51\fs20\i\ql Stock-Based Compensation\par\pard\plain\sb132\
fi528\cf1\f51\fs20\ql We measure compensation cost for stock awards at fair valu
e and recognize it as compensation expense over the service\plain\cf1\f51\fs20\q
l period for awards expected to vest. The fair value of restricted stock units
is determined based on the number of shares granted\plain\cf1\f51\fs20\ql and t
he quoted price of our common stock and the fair value of stock options is estim
ated on the date of grant using a\plain\cf1\f51\fs20\ql Black-Scholes model. Th
e estimated number of stock awards that will ultimately vest requires judgment,
and to the extent actual\plain\cf1\f51\fs20\ql results or updated estimates dif
fer from our current estimates, such amounts will be recorded as a cumulative ad
justment in the\plain\cf1\f51\fs20\ql period estimates are revised. We consider
many factors when estimating expected forfeitures, including employee level, ec
onomic\plain\cf1\f51\fs20\ql conditions, time remaining to vest, and historical
forfeiture experience. We update our estimated forfeiture rate quarterly. We\pl
ain\cf1\f51\fs20\ql have not made any significant changes to the accounting met
hodology used to evaluate stock-based compensation. Changes in\plain\cf1\f51\fs2
0\ql our estimates and assumptions may cause us to realize material changes in
stock-based compensation expense in the future. As a\plain\cf1\f51\fs20\ql meas
ure of sensitivity, a 1% change to our estimated forfeiture rate would have had
an approximately $46 million impact on our\plain\cf1\f51\fs20\ql 2015 operating
income. Our estimated forfeiture rates as of December\~31, 2015 and 2014, were
28% and 27%.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql We utilize the accelerat
ed method, rather than the straight-line method, for recognizing compensation ex
pense. For\plain\cf1\f51\fs20\ql example, over 50% of the compensation cost rel
ated to an award vesting ratably over four years is expensed in the first year.
If\plain\cf1\f51\fs20\ql forfeited early in the life of an award, the compensat
ion expense adjustment is much greater under an accelerated method than\plain\cf
1\f51\fs20\ql under a straight-line method.
\par\pard\plain\fs16\par\pard\plain\sb396\fi264\cf1\f51\fs20\i\ql Income Taxes\p
ar\pard\plain\sb132\fi528\cf1\f51\fs20\ql We are subject to income taxes in the
U.S. (federal and state) and numerous foreign jurisdictions. Tax laws, regulatio
ns,\plain\cf1\f51\fs20\ql and administrative practices in various jurisdictions
may be subject to significant change due to economic, political, and other\plai
n\cf1\f51\fs20\ql conditions, and significant judgment is required in evaluatin
g and estimating our provision and accruals for these taxes. There are\plain\cf1
\f51\fs20\ql many transactions that occur during the ordinary course of busines
s for which the ultimate tax determination is uncertain. Our\plain\cf1\f51\fs20\
ql effective tax rates could be adversely affected by earnings being lower than
anticipated in jurisdictions where we have lower\plain\cf1\f51\fs20\ql statuto
ry rates and higher than anticipated in jurisdictions where we have higher statu
tory rates, losses incurred in jurisdictions for\plain\cf1\f51\fs20\ql which we
are not able to realize the related tax benefit, changes in foreign currency ex
change rates, entry into new businesses\plain\cf1\f51\fs20\ql and geographies a
nd changes to our existing businesses, acquisitions (including integrations) and
investments, changes in our\plain\cf1\f51\fs20\ql deferred tax assets and liab
ilities and their valuation, and changes in the relevant tax, accounting, and ot
her laws, regulations,\plain\cf1\f51\fs20\ql administrative practices, principl
es, and interpretations, including fundamental changes to the tax laws applicabl
e to corporate\plain\cf1\f51\fs20\ql multinationals. The U.S., the European Uni

on and its member states, and a number of other countries are actively pursuing\
plain\cf1\f51\fs20\ql changes in this regard.\par\pard\plain\sb132\fi528\cf1\f5
1\fs20\ql Except as required under U.S. tax laws, we do not provide for U.S. tax
es on our undistributed earnings of foreign\plain\cf1\f51\fs20\ql subsidiaries
that have not been previously taxed since we intend to invest such undistributed
earnings indefinitely outside of the\plain\cf1\f51\fs20\ql U.S. If our intent
changes or if these funds are needed for our U.S. operations, we would be requir
ed to accrue or pay U.S. taxes\plain\cf1\f51\fs20\ql on some or all of these un
distributed earnings and our effective tax rate would be adversely affected. We
are also currently\plain\cf1\f51\fs20\ql subject to audit in various jurisdicti
ons, and these jurisdictions may assess additional income tax liabilities agains
t us.\plain\cf1\f51\fs20\ql Developments in an audit, litigation, or the releva
nt laws, regulations, administrative practices, principles, and interpretations\
plain\cf1\f51\fs20\ql could have a material effect on our operating results or
cash flows in the period or periods for which that development occurs, as\plain\
cf1\f51\fs20\ql well as for prior and subsequent periods. For instance, the IRS
is seeking to increase our U.S. taxable income related to transfer\plain\cf1\f5
1\fs20\ql pricing with our foreign subsidiaries for transactions undertaken in
2005 and 2006, and we are currently contesting the matter in\plain\cf1\f51\fs20\
ql U.S. Tax Court. In addition to the risk of additional tax for 2005 and 2006
transactions, if this litigation is adversely determined\plain\cf1\f51\fs20\ql
or if the IRS were to seek transfer pricing adjustments of a similar nature for
transactions in subsequent years, we could be\plain\cf1\f51\fs20\ql subject to
significant additional tax liabilities. In addition, in October 2014, the Europe
an Commission opened a formal\plain\cf1\f51\fs20\ql investigation to examine wh
ether decisions by the tax authorities in Luxembourg with regard to the corporat
e income tax paid by\plain\cf1\f51\fs20\ql certain of our subsidiaries comply w
ith European Union rules on state aid. If this matter is adversely resolved, Lux
embourg may\plain\cf1\f51\fs20\ql be required to assess, and we may be required
to pay, additional amounts with respect to current and prior periods and our ta
xes\plain\cf1\f51\fs20\ql in the future could increase. Although we believe our
tax estimates are reasonable, the final outcome of tax audits, investigations,\
plain\cf1\f51\fs20\ql and any related litigation could be materially different
from our historical income tax provisions and accruals.\par\pard\plain\sb396\fi2
64\cf1\f51\fs20\i\ql Recent Accounting Pronouncements\par\pard\plain\sb132\fi528
\cf1\f51\fs20\ql See Item 8 of Part II, \u8220?Financial Statements and Suppleme
ntary Data\u8212?Note 1\u8212?Description of Business\plain\cf1\f51\fs20\ql and
Accounting Policies\u8212?Recent Accounting Pronouncements.\u8221?
\page{\*\bkmkstart sBDDFB7D0B5E8D97B3CB6ABB2409E5FB}{\*\bkmkend sBDDFB7D0B5E8D97
B3CB6ABB2409E5FB}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F
\par\pard\plain\fs16\par\pard\plain\cf1\f51\fs20\b\ql Liquidity and Capital Reso
urces\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Cash flow information is as fol
lows (in millions):\par\pard\plain\cf1\f51\fs18\ql \~
\par\pard\plain
llx9380\clvertalc\cellx9487\clvertalc\cellx9607\clvertalc\cellx10682\clvertalc\c
ellx10795\trrh-66

d\plain\intbl\f0\fs16\ql \~\cell{
{\trowd\clvertalb\cellx6656\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10799\trrh281
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs20\ql \~\plain\intbl\li22\ri22\sa22\c
f1\f51\fs16\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs16\b\qc Year En
ded December 31,\cell{
{\trowd\clvertalb\cellx6656\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10799\trrh281\r
ow}}}
{\trowd\clvertalb\cellx6656\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7965\clvertalb\
cellx8072\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9381\clvertalb\cellx9488\clbrdrb\
brdrs\brdrcf1\clvertalb\cellx10797\trrh281
i22\ri22\sb22\sa22\cf1\f51\fs16\b\qc 2015\cell\pard\plain\intbl\li22\ri22\sb22\s
a22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\
qc 2014\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\p
lain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc 2013\cell{
brdrs\brdrcf1\clvertalb\cellx10797\trrh281\row}}}
10\cellx9488\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10797\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Cash provided by (used in)
ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
10\cellx9488\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10797\trrh281\row}}}
trrh281
\pard\plain\intbl\li594\ri22\sb22\sa22\cf1\f51\fs20\ql Operating activities\cell
\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa
22\cf1\f51\fs20\qr 11,920\cell
trrh281\row}}}
\pard\plain\intbl\li594\ri22\sb22\sa22\cf1\f51\fs20\ql Investing activities\cell
\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (6,450\cell\pard\plain\intbl\ri
22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51
\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (5,065\cell\par
d\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\s
b22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr
(4,276\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
\pard\plain\intbl\li594\ri22\sb22\sa22\cf1\f51\fs20\ql Financing activities\cell
\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (3,763\cell\pard\plain\intbl\ri
\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 4,432\cell
f51\fs20\qr (539\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
lvertalb\cellx10795\trrh281\row}}}\pard\plain\sb396\fi528\cf1\f51\fs20\ql Our pr
incipal sources of liquidity are cash flows generated from operations and our ca
sh, cash equivalents, and marketable\plain\cf1\f51\fs20\ql securities balances,
which, at fair value, were $19.8 billion, $17.4 billion, and $12.4 billion as o
f December\~31, 2015, 2014, and\plain\cf1\f51\fs20\ql 2013. Amounts held in for
eign currencies were $7.3 billion, $5.4 billion, and $5.6 billion as of December
\~31, 2015, 2014, and\plain\cf1\f51\fs20\ql 2013, and were primarily Euros, Jap
anese Yen, and British Pounds.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Cash p
rovided by operating activities was $11.9 billion, $6.8 billion, and $5.5 billio
n in 2015, 2014, and 2013. Our\plain\cf1\f51\fs20\ql operating cash flows resul
t primarily from cash received from our consumer, seller, developer, enterprise,
and content creator\plain\cf1\f51\fs20\ql customers, advertising agreements, a
nd our co-branded credit card agreements, offset by cash payments we make for pr
oducts\plain\cf1\f51\fs20\ql and services, employee compensation (less amounts
capitalized related to internal-use software that are reflected as cash used in\
plain\cf1\f51\fs20\ql investing activities), payment processing and related tra
nsaction costs, operating leases, and interest payments on our long-term\plain\c
f1\f51\fs20\ql obligations. Cash received from our customers and other activiti
es generally corresponds to our net sales. Because consumers\plain\cf1\f51\fs20\
ql primarily use credit cards to buy from us, our receivables from consumers se
ttle quickly. The increase in operating cash flow in\plain\cf1\f51\fs20\ql 2015
, compared to the comparable prior year period, was primarily due to the increas
e in net income (loss), excluding non-cash\plain\cf1\f51\fs20\ql charges to net
income (loss) such as depreciation, amortization, and stock-based compensation,
and changes in working capital.\plain\cf1\f51\fs20\ql The increase in operatin
g cash flow in 2014, compared to the comparable prior year period, was primarily
due to the increase in\plain\cf1\f51\fs20\ql non-cash charges to net income (l
oss), including depreciation, amortization, and stock-based compensation, partia
lly offset by\plain\cf1\f51\fs20\ql changes in working capital.\par\pard\plain\
sb132\fi528\cf1\f51\fs20\ql Cash provided by (used in) investing activities corr
esponds with cash capital expenditures, including leasehold\plain\cf1\f51\fs20\q
l improvements, internal-use software and website development costs, cash outla
ys for acquisitions, investments in other\plain\cf1\f51\fs20\ql companies and i
ntellectual property rights, and purchases, sales, and maturities of marketable
securities. Cash provided by (used\plain\cf1\f51\fs20\ql in) investing activiti

es was $(6.5) billion, $(5.1) billion, and $(4.3) billion in 2015, 2014, and 201
3, with the variability caused\plain\cf1\f51\fs20\ql primarily by our decision
to purchase or lease property and equipment, purchases, maturities, and sales of
marketable securities,\plain\cf1\f51\fs20\ql and changes in cash paid for acqu
isitions. Cash capital expenditures were $4.6 billion, $4.9 billion, and $3.4 bi
llion in 2015,\plain\cf1\f51\fs20\ql 2014, and 2013. This primarily reflects ad
ditional investments in support of continued business growth due to investments
in\plain\cf1\f51\fs20\ql technology infrastructure (the majority of which is to
support AWS), and additional capacity to support our fulfillment operations,\pl
ain\cf1\f51\fs20\ql during all three periods. Capital expenditures included $52
8 million, $537 million, and $493 million for internal-use software and\plain\cf
1\f51\fs20\ql website development in 2015, 2014, and 2013. Stock-based compensa
tion capitalized for internal-use software and website\plain\cf1\f51\fs20\ql de
velopment costs does not affect cash flows. In 2015, 2014, and 2013, we made cas
h payments, net of acquired cash, related to\plain\cf1\f51\fs20\ql acquisition
and other investment activity of $795 million, $979 million, and $312 million.\p
ar\pard\plain\sb132\fi528\cf1\f51\fs20\ql Cash provided by (used in) financing a
ctivities was $(3.8) billion, $4.4 billion, and $(539) million in 2015, 2014, an
d\plain\cf1\f51\fs20\ql 2013. Cash outflows from financing activities result fr
om principal repayments on obligations related to capital leases and finance\pla
in\cf1\f51\fs20\ql leases and repayments of long-term debt and other. Principal
repayments on obligations related to capital leases and finance\plain\cf1\f51\f
s20\ql leases and repayments of long-term debt and other were $4.2 billion, $1.
9 billion, and $1.0 billion in 2015, 2014, and 2013.\plain\cf1\f51\fs20\ql The
increase in 2015 primarily reflects additional repayments on capital leases as w
ell as a $750 million repayment on our\plain\cf1\f51\fs20\ql unsecured senior n
otes. Property and equipment acquired under capital leases were $4.7 billion, $4
.0 billion, and $1.9 billion in\plain\cf1\f51\fs20\ql 2015, 2014, and 2013, wit
h the increases reflecting additional investments in support of continued busine
ss growth primarily due\plain\cf1\f51\fs20\ql to investments in technology infr
astructure for AWS. We expect this trend toward additional investment to continu
e over time.\plain\cf1\f51\fs20\ql Cash inflows from financing activities prima
rily result from proceeds from long-term debt and other and tax benefits relatin
g to\plain\cf1\f51\fs20\ql excess stock-based compensation deductions. Proceeds
from long-term debt and other were $353 million, $6.4 billion, and $394\plain\c
f1\f51\fs20\ql million in 2015, 2014, and 2013. During 2014, cash inflows from
financing activities consisted primarily of net proceeds from\plain\cf1\f51\fs20
\ql the issuance of $6.0 billion of senior nonconvertible unsecured debt in fiv
e tranches maturing in 2019 through 2044. See Item\~8\plain\cf1\f51\fs20\ql of
Part\~II, \u8220?Financial Statements and Supplementary Data\u8212?Note 5\u8212?
Long-Term Debt\u8221? for additional\plain\cf1\f51\fs20\ql discussion of the no
tes. Tax benefits relating to excess stock-based compensation deductions are pre
sented as financing cash\plain\cf1\f51\fs20\ql flows. Cash inflows from tax ben
efits related to stock-based compensation deductions were $119 million, $6 milli
on, and $78\plain\cf1\f51\fs20\ql million in 2015, 2014, and 2013.
\par\pard\plain\fs16\par\pard\plain\sb132\fi484\cf1\f51\fs20\ql We had no borrow
ings outstanding under our $2.0 billion Credit Agreement as of December\~31, 201
5. See Item\~8 of Part II,\plain\cf1\f51\fs20\ql \u8220?Financial Statements an
d Supplementary Data\u8212?Note 5\u8212?Long-Term Debt\u8221? for additional inf
ormation.\~\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql In 2015, 2014, and 2013,
we recorded net tax provisions of $950 million, $167 million, and $161 million.
Except as\plain\cf1\f51\fs20\ql required under U.S. tax laws, we do not provide
for U.S. taxes on our undistributed earnings of foreign subsidiaries that have
not\plain\cf1\f51\fs20\ql been previously taxed since we intend to invest such
undistributed earnings indefinitely outside of the U.S. If our intent changes\pl

ain\cf1\f51\fs20\ql or if these funds are needed for our U.S. operations, we wo
uld be required to accrue or pay U.S. taxes on some or all of these\plain\cf1\f5
1\fs20\ql undistributed earnings, and our effective tax rate would be adversely
affected. As of December\~31, 2015, cash, cash equivalents,\plain\cf1\f51\fs20\
ql and marketable securities held by foreign subsidiaries were $5.8 billion, wh
ich included undistributed earnings of foreign\plain\cf1\f51\fs20\ql subsidiari
es indefinitely invested outside of the U.S. of $1.5 billion. We have tax benefi
ts relating to excess stock-based\plain\cf1\f51\fs20\ql compensation deductions
and accelerated depreciation deductions that are being utilized to reduce our U
.S. taxable income. In\plain\cf1\f51\fs20\ql December 2015, U.S. legislation wa
s enacted that extended accelerated depreciation deductions on qualifying proper
ty through\plain\cf1\f51\fs20\ql 2019. Cash taxes paid (net of refunds) were $2
73 million, $177 million, and $169 million for 2015, 2014, and 2013. As of\plain
\cf1\f51\fs20\ql December\~31, 2015, our federal net operating loss carryforwar
d was approximately $1.1 billion and we had approximately $622\plain\cf1\f51\fs2
0\ql million of federal tax credits potentially available to offset future tax
liabilities. Our federal tax credits are primarily related to the\plain\cf1\f51\
fs20\ql U.S. federal research and development credit, which was made permanent
in 2015. As we utilize our federal net operating losses\plain\cf1\f51\fs20\ql a
nd tax credits, we expect cash paid for taxes to significantly increase. We ende
avor to manage our global taxes on a cash basis,\plain\cf1\f51\fs20\ql rather t
han on a financial reporting basis.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql O
ur liquidity is also affected by restricted cash balances that are pledged as co
llateral for standby and trade letters of credit,\plain\cf1\f51\fs20\ql guarant
ees, debt, and real estate leases. To the extent we process payments for third-p
arty sellers or offer certain types of stored\plain\cf1\f51\fs20\ql value to ou
r customers, some jurisdictions may restrict our use of those funds. These restr
ictions would result in the\plain\cf1\f51\fs20\ql reclassification of a portion
of our cash and cash equivalents from \u8220?Cash and cash equivalents\u8221? t
o restricted cash,\plain\cf1\f51\fs20\ql which is classified within \u8220?Acco
unts receivable, net and other\u8221? on our consolidated balance sheets. As of\
plain\cf1\f51\fs20\ql December\~31, 2015 and 2014, restricted cash, cash equiva
lents, and marketable securities were $285 million and $450 million.\plain\cf1\f
51\fs20\ql See Item\~8 of Part II, \u8220?Financial Statements and Supplementar
y Data\u8212?Note 7\u8212?Commitments and\plain\cf1\f51\fs20\ql Contingencies\u
8221? for additional discussion of our principal contractual commitments, as wel
l as our pledged assets. Purchase\plain\cf1\f51\fs20\ql obligations and open pu
rchase orders, consisting of inventory and significant non-inventory commitments
, were $6.2 billion as of\plain\cf1\f51\fs20\ql December\~31, 2015. Purchase ob
ligations and open purchase orders are generally cancellable in full or in part
through the\plain\cf1\f51\fs20\ql contractual provisions.\par\pard\plain\sb132\
fi528\cf1\f51\fs20\ql On average, our high inventory velocity means we generally
collect from consumers before our payments to suppliers come\plain\cf1\f51\fs20
\ql due. Inventory turnover was 8 for 2015 and 9 for 2014 and 2013. We expect v
ariability in inventory turnover over time since it\plain\cf1\f51\fs20\ql is af
fected by several factors, including our product mix, the mix of sales by us and
by third-party sellers, our continuing focus\plain\cf1\f51\fs20\ql on\~in-stoc
k inventory availability and selection of product offerings, our investment in n
ew geographies and product lines, and\plain\cf1\f51\fs20\ql the extent to which
we choose to utilize third-party fulfillment providers.\par\pard\plain\sb132\fi
528\cf1\f51\fs20\ql We believe that cash flows generated from operations and our
cash, cash equivalents, and marketable securities balances, as\plain\cf1\f51\fs
20\ql well as borrowing available under our credit agreements, will be sufficie
nt to meet our anticipated operating cash needs for at\plain\cf1\f51\fs20\ql le
ast the next 12 months. However, any projections of future cash needs and cash f
lows are subject to substantial uncertainty. See\plain\cf1\f51\fs20\ql Item\~1A
of Part I, \u8220?Risk Factors.\u8221? We continually evaluate opportunities to
sell additional equity or debt securities,\plain\cf1\f51\fs20\ql obtain credit
facilities, obtain capital, finance, and operating lease arrangements, repurcha
se common stock, pay dividends, or\plain\cf1\f51\fs20\ql repurchase, refinance,

or otherwise restructure our debt for strategic reasons or to further strengthe
n our financial position.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql The sale of
additional equity or convertible debt securities would likely be dilutive to ou
r shareholders. In addition, we will,\plain\cf1\f51\fs20\ql from time to time,
consider the acquisition of, or investment in, complementary businesses, product
s, services, capital\plain\cf1\f51\fs20\ql infrastructure, and technologies, wh
ich might affect our liquidity requirements or cause us to secure additional fin
ancing, or issue\plain\cf1\f51\fs20\ql additional equity or debt securities. Th
ere can be no assurance that additional lines-of-credit or financing instruments
will be\plain\cf1\f51\fs20\ql available in amounts or on terms acceptable to u
s, if at all.
\page{\*\bkmkstart s7A6EC56852E83B2053FBABB21A56080}{\*\bkmkend s7A6EC56852E83B2
053FBABB21A56080}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F
\par\pard\plain\fs16\par\pard\plain\cf1\f51\fs20\b\ql Results of Operations\par\
pard\plain\sb264\fi528\cf1\f51\fs20\ql Beginning in the first quarter of 2015, w
e changed our reportable segments to North America, International, and AWS.\plai
n\cf1\f51\fs20\ql These segments reflect the way the Company evaluates its busi
ness performance and manages its operations. See Item 1 of Part\plain\cf1\f51\fs
20\ql 1,\u8220?Financial Statements\u8212?Note 11\u8212?Segment Information.\u8
221?\par\pard\plain\sb396\fi264\cf1\f51\fs20\i\ql Net Sales\par\pard\plain\sb132
\fi528\cf1\f51\fs20\ql Net sales include product and service sales. Product sale
s represent revenue from the sale of products and related shipping\plain\cf1\f51
\fs20\ql fees and digital media content where we record revenue gross. Service
sales represent third-party seller fees earned (including\plain\cf1\f51\fs20\ql
commissions) and related shipping fees, AWS sales, digital content subscription
s, advertising services, and our co-branded credit\plain\cf1\f51\fs20\ql card a
greements. Amazon Prime membership fees are allocated between product sales and
service sales and amortized over the\plain\cf1\f51\fs20\ql life of the membersh
ip according to the estimated delivery of services. Net sales information is as
follows (in millions):\par\pard\plain\cf1\f51\fs18\ql \~
\par\pard\plain
ellx10784\trrh-66
ow}}}
cellx7951\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9316\clbrdrt\brdrs\brdrcf1\clvert
alb\cellx9422\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10787\trrh298
cellx7951\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9316\clbrdrt\brdrs\brdrcf1\clvert
alb\cellx9422\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10787\trrh298\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Net Sales:\cell\pard\plain
trrh281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql North America\cell\pard\p
lain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\
f51\fs20\qr 63,708\cell
trrh281\row}}}
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql International\cell\pard\p
lain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 35,418\cell
f51\fs20\qr 33,510\cell
f51\fs20\qr 29,934\cell
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql AWS\cell\pard\plain\intbl
\li22\sb22\sa22\cf1\f51\fs20\qr 7,880\cell
{\trowd\clshdng100\clcfpat10\clcbpat10\cellx6476\clbrdrt\brdrs\brdrcf1\clbrdrb\b
rdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx6596\clbrdrt\brdrs\b
rdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx7658
\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clc
bpat10\cellx7844\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx7950\clbrdrt\brdr
s\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8
070\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\
clcbpat10\cellx9128\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshd
lx9420\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat
10\clcbpat10\cellx9540\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cl
shdng100\clcfpat10\clcbpat10\cellx10598\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brd
rcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10784\trrh298
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql Total consolidated\cell\p
ard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22
\cf1\f51\fs20\qr 107,006\cell
rcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10784\trrh298\row}}}
vertalb\cellx9422\clvertalb\cellx10787\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Year-over-year Percentage
Growth:\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\p
2\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51
\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{

vertalb\cellx9422\clvertalb\cellx10787\trrh281\row}}}
lain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 25\cell\pard\plain\intbl\ri22\sb22\sa2
2\cf1\f51\fs20\ql %\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~
\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 23\cell\pard\plain\intbl\r
i22\sb22\sa22\cf1\f51\fs20\ql %\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f5
1\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 26\cell\pard\p
lain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql %\cell{
lain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 6\cell
f51\fs20\qr 12\cell
f51\fs20\qr 14\cell
\li22\sb22\sa22\cf1\f51\fs20\qr 70\cell
f51\fs20\qr 49\cell
f51\fs20\qr 69\cell
ard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 20\cell
f51\fs20\qr 20\cell
f51\fs20\qr 22\cell
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs20\ql Year-over-year Percentage Growt
h, excluding the effect of foreign\plain\intbl\li22\ri22\sa22\cf1\f51\fs20\ql e
xchange rates:\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell
cell{
f51\fs20\qr 14\cell
f51\fs20\qr 19\cell
f51\fs20\qr 49\cell
f51\fs20\qr 69\cell
f51\fs20\qr 20\cell
f51\fs20\qr 24\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Net Sales Mix:\cell\pard\p
\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pa
rd\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
f51\fs20\qr 38\cell
f51\fs20\qr 40\cell
f51\fs20\qr 5\cell
f51\fs20\qr 4\cell
{\trowd\cellx6476\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx76
58\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7844\clvertalb\ce
llx7950\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9128\clbrdrt
\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9314\clvertalb\cellx9420\cl
brdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10598\clbrdrt\brdrs\br
drcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10784\trrh298
ard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 100\cell\pard\plain\intbl\ri22\sb
22\sa22\cf1\f51\fs20\ql %\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20
\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 100\cell\pard\plain\
intbl\ri22\sb22\sa22\cf1\f51\fs20\ql %\cell\pard\plain\intbl\li22\ri22\sb22\sa22
\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 100\cel
l\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql %\cell{
58\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7844\clvertalb\ce
\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9314\clvertalb\cellx9420\cl
brdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10598\clbrdrt\brdrs\br
drcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10784\trrh298\row}}}\pard\plain\sb26
4\fi528\cf1\f51\fs20\ql Sales increased 20%, 20%, and 22% in 2015, 2014, and 201
3, compared to the comparable prior year periods. Changes in\plain\cf1\f51\fs20\
ql foreign currency exchange rates impacted net sales by $(5.2) billion, $(636)
million, and $(1.3) billion for 2015, 2014, and\plain\cf1\f51\fs20\ql 2013. Fo
r a discussion of the effect on sales growth of foreign exchange rates, see \u82
20?Effect of Foreign Exchange\plain\cf1\f51\fs20\ql Rates\u8221? below.\par\par
d\plain\sb132\fi528\cf1\f51\fs20\ql North America sales increased 25%, 23%, and
26% in 2015, 2014, and 2013, compared to the comparable prior year\plain\cf1\f51
\fs20\ql periods. The sales growth in each year primarily reflects increased un
it sales, including sales by marketplace sellers. Increased\plain\cf1\f51\fs20\q
l unit sales were driven largely by our continued efforts to reduce prices for
our customers, including from our shipping offers,\plain\cf1\f51\fs20\ql sales
in faster growing categories such as electronics and other general merchandise,
increased in-stock inventory availability,\plain\cf1\f51\fs20\ql and increased
selection of product offerings.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Inter
national sales increased 6%, 12%, and 14% in 2015, 2014, and 2013, compared to t
he comparable prior year periods.\plain\cf1\f51\fs20\ql The sales growth in eac
h year primarily reflects increased unit sales, including sales by marketplace s
ellers, offset by the\plain\cf1\f51\fs20\ql unfavorable effect of foreign excha
nge rates. Changes in foreign currency exchange rates impacted International net
sales by\plain\cf1\f51\fs20\ql $(5.0) billion, $(580) million, and $(1.3) bill
ion in 2015, 2014, and 2013. Increased unit sales were driven largely by our\pla
in\cf1\f51\fs20\ql continued efforts to reduce prices for our customers, includ
ing from our shipping offers, sales in faster growing categories such
\par\pard\plain\fs16\par\pard\plain\sb132\cf1\f51\fs20\ql as electronics and oth
er general merchandise, increased in-stock inventory availability, and increased
selection of product\plain\cf1\f51\fs20\ql offerings.\par\pard\plain\sb132\fi4
84\cf1\f51\fs20\ql AWS sales increased 70%, 49%, and 69% in 2015, 2014, and 2013
, compared to the comparable prior year periods. The\plain\cf1\f51\fs20\ql sale
s growth primarily reflects increased customer usage, partially offset by pricin
g changes. Pricing changes were driven largely\plain\cf1\f51\fs20\ql by our con
tinued efforts to reduce prices for our customers.\par\pard\plain\sb396\fi264\cf
1\f51\fs20\i\ql Segment Operating Income (Loss)\par\pard\plain\sb132\fi528\cf1\f
51\fs20\ql Segment operating income (loss) is as follows (in millions):
\par\pard\plain
{\trowd\trqc\clvertalc\cellx6650\clvertalc\cellx6770\clvertalc\cellx7844\clverta
lc\cellx7957\clvertalc\cellx8064\clvertalc\cellx8184\clvertalc\cellx9258\clverta
lc\cellx9371\clvertalc\cellx9478\clvertalc\cellx9598\clvertalc\cellx10672\clvert
alc\cellx10785\trrh-66
alc\cellx10785\trrh-66\row}}}
{\trowd\trqc\clvertalb\cellx6650\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10789\trrh
281
i22\sb22\sa22\cf1\f51\fs16\b\qc Year Ended December 31,\cell{
281\row}}}
{\trowd\trqc\clvertalb\cellx6650\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7958\clver
talb\cellx8065\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9373\clbrdrt\brdrs\brdrcf1\c
lvertalb\cellx9480\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10788\trrh298
talb\cellx8065\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9373\clbrdrt\brdrs\brdrcf1\c
lvertalb\cellx9480\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10788\trrh298\row}}}
{\trowd\trqc\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx6650\clvertalb\clshdn
trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Segment Operating Income (
Loss)\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\pla
s20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
trrh281\row}}}
{\trowd\trqc\cellx6650\clvertalb\cellx6770\clvertalb\cellx7844\clvertalb\cellx79
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0785\trrh281
0785\trrh281\row}}}
{\trowd\trqc\clshdng100\clcfpat10\clcbpat10\cellx6650\clvertalb\clshdng100\clcfp
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rtalb\clshdng100\clcfpat10\clcbpat10\cellx8064\clvertalb\clshdng100\clcfpat10\cl
cbpat10\cellx9258\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9371\clvertalb\c
lshdng100\clcfpat10\clcbpat10\cellx9478\clvertalb\clshdng100\clcfpat10\clcbpat10
\cellx10672\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10785\trrh281
lain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (91\cell\pard\plain\intbl\ri22\sb22\sa
22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \
~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (144\cell\pard\plain\intb
l\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1
\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 154\cell
\cellx10672\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10785\trrh281\row}}}
672\clvertalb\cellx10785\trrh281
672\clvertalb\cellx10785\trrh281\row}}}\pard\plain\sb396\fi528\cf1\f51\fs20\ql T
he increase in North America segment operating income in absolute dollars in 201
5, 2014, and 2013, compared to the\plain\cf1\f51\fs20\ql comparable prior year
periods, is primarily due to increased unit sales, including sales by marketplac
e sellers, partially offset by\plain\cf1\f51\fs20\ql increased levels of operat
ing expenses to expand our fulfillment capacity and spending on technology infra
structure. There was a\plain\cf1\f51\fs20\ql favorable impact from foreign exch
ange rates of $30 million, $0, and $7 million for 2015, 2014, and 2013.\par\pard
\plain\sb132\fi528\cf1\f51\fs20\ql The decrease in International segment operati
ng loss in absolute dollars in 2015, compared to the comparable prior year\plain
\cf1\f51\fs20\ql period, is primarily due to increased unit sales, including sa
les by marketplace sellers, partially offset by increased levels of\plain\cf1\f5
1\fs20\ql operating expenses to expand our fulfillment capacity, spending on te
chnology infrastructure and marketing efforts, and the\plain\cf1\f51\fs20\ql un
favorable impact from foreign exchange rates. The unfavorable impact from foreig
n exchange rates was $278 million, $27\plain\cf1\f51\fs20\ql million, and $70 m
illion for 2015, 2014, and 2013. The decrease in International segment operating
income (loss) in absolute\plain\cf1\f51\fs20\ql dollars in 2014, compared to t
he comparable prior year period, is primarily due to increased levels of operati
ng expenses to\plain\cf1\f51\fs20\ql expand our fulfillment capacity and spendi
ng on technology infrastructure and marketing efforts, partially offset by incre
ased unit\plain\cf1\f51\fs20\ql sales, including sales by marketplace sellers.\
par\pard\plain\sb132\fi528\cf1\f51\fs20\ql The increase in AWS segment operating
income in absolute dollars in 2015, compared to the comparable prior year perio
d,\plain\cf1\f51\fs20\ql is primarily due to increased customer usage and cost
structure productivity, partially offset by pricing changes and increased\plain\
cf1\f51\fs20\ql spending on technology infrastructure, which was primarily driv
en by additional investments to support the business growth. The\plain\cf1\f51\f
s20\ql decrease in AWS segment operating income in absolute dollars in 2014, co
mpared to the comparable prior year period, is\plain\cf1\f51\fs20\ql primarily
due to pricing changes and increased spending on technology infrastructure, whic
h was primarily driven by increased\plain\cf1\f51\fs20\ql usage. There was a fa
vorable impact from foreign exchange rates of $264 million, $41 million, and $38
million for 2015, 2014,\plain\cf1\f51\fs20\ql and 2013.
\par\pard\plain\fs16\par\pard\plain\sb396\fi264\cf1\f51\fs20\i\ql Supplemental I
nformation\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Supplemental information a
bout outbound shipping results for our North America and International segments
is as follows\plain\cf1\f51\fs20\ql (in millions):\par\pard\plain\cf1\f51\fs18\
ql \~
\par\pard\plain
ellx10785\trrh-66
ow}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Outbound Shipping Activity
ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
trrh281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Shipping revenue (1)(2)(3
)\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\s
b22\sa22\cf1\f51\fs20\qr 6,520\cell
trrh281\row}}}
{\trowd\clshdng100\clcfpat10\clcbpat10\cellx6313\clbrdrb\brdrs\brdrcf1\clvertalb
\clshdng100\clcfpat10\clcbpat10\cellx7497\clbrdrb\brdrs\brdrcf1\clvertalb\clshdn
x7855\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9015\c
lbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9268\clvertal
b\clshdng100\clcfpat10\clcbpat10\cellx9373\clbrdrb\brdrs\brdrcf1\clvertalb\clshd
ng100\clcfpat10\clcbpat10\cellx10533\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Shipping costs (4)\cell\p
ard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (11,539\cell\pard\plain\intbl\ri2
2\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\
fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (8,709\cell\pard
\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb
22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr
{\trowd\cellx6313\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6456\clbrdrb\brdrdb\brdr
cf1\clvertalb\cellx7496\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7749\clvertalb\cel
lx7854\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7974\clbrdrb\brdrdb\brdrcf1\clverta
lb\cellx9014\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9267\clvertalb\cellx9372\clbr
drb\brdrdb\brdrcf1\clvertalb\cellx9492\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx105
32\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10785\trrh281
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql Net shipping cost\cell\pa
rd\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\
cf1\f51\fs20\qr (5,019\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\ce
ll\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl
\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\q
r (4,223\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\
2\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr (3,538\cell\
pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
32\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10785\trrh281\row}}}
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Shipping revenue\cell\par
d\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 45\cell\pard\plain\intbl\ri22\sb22\
sa22\cf1\f51\fs20\ql \~%\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\
ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 45\cell\pard\plain\in
tbl\ri22\sb22\sa22\cf1\f51\fs20\ql \~%\cell\pard\plain\intbl\li22\ri22\sb22\sa22
\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 36\cell
\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql \~%\cell{
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Shipping costs\cell\pard\
plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 32\cell
f51\fs20\qr 31\cell
f51\fs20\qr 29\cell
rd\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 19\cell
f51\fs20\qr 19\cell
f51\fs20\qr 24\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Percent of Net Sales (5):\

\~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Shipping revenue\cell\par
d\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 6.5\cell\pard\plain\intbl\ri22\sb22
\sa22\cf1\f51\fs20\ql \~%\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20
\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 5.3\cell\pard\plain\
intbl\ri22\sb22\sa22\cf1\f51\fs20\ql \~%\cell\pard\plain\intbl\li22\ri22\sb22\sa
22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 4.3\c
ell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql \~%\cell{
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Shipping costs\cell\pard\
plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (11.6\cell\pard\plain\intbl\ri22\sb22
\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\q
l \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (10.3\cell\pard\plain\
intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22
\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (9.3\ce
ll\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
cf1\clvertalb\cellx7750\clvertalb\cellx7855\clbrdrb\brdrdb\brdrcf1\clvertalb\cel
lx9015\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9268\clvertalb\cellx9373\clbrdrb\br
drdb\brdrcf1\clvertalb\cellx10533\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10786\tr
rh281
rd\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (5.1\cell\pard\plain\intbl\ri22\sb
22\sa22\cf1\f51\fs20\ql )%\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs2
0\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (5.0\cell\pard\plai
n\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )%\cell\pard\plain\intbl\li22\ri22\sb22\s
a22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (5.0
\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )%\cell{
rh281\row}}}\pard\plain\cf1\f51\fs20\ql ___________________
\par\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (1)\cell\pard\plain\intbl\cf1\f51\fs20\ql Excl
udes amounts charged on shipping activities by third-party sellers where we do n
ot provide the fulfillment service.\cell{
\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (2)\cell\pard\plain\intbl\cf1\f51\fs20\ql Incl
udes a portion of amounts earned from Amazon Prime\plain\intbl\cf1\f51\fs20\ql
memberships.\cell{
\pard\plain
udes amounts earned from Fulfillment by Amazon programs related to shipping\plai
n\intbl\cf1\f51\fs20\ql services.\cell{
\pard\plain
udes sortation and delivery\plain\intbl\cf1\f51\fs20\ql center costs.\cell{
\pard\plain
udes North America and International segment\plain\intbl\cf1\f51\fs20\ql net sa
les.\cell{
We expect our cost of shipping to continue to increase to the extent our custom
ers accept and use our shipping offers at an\plain\cf1\f51\fs20\ql increasing r
ate, our product mix shifts to the electronics and other general merchandise cat
egory, we reduce shipping rates, we\plain\cf1\f51\fs20\ql use more expensive sh
ipping methods, and we offer additional services. We seek to mitigate costs of s
hipping over time in part\plain\cf1\f51\fs20\ql through achieving higher sales
volumes, optimizing placement of fulfillment centers, negotiating better terms w
ith our suppliers,\plain\cf1\f51\fs20\ql and achieving better operating efficie
ncies. We believe that offering low prices to our customers is fundamental to ou
r future\plain\cf1\f51\fs20\ql success, and one way we offer lower prices is th
rough shipping offers.

\par\pard\plain\fs16\par\pard\plain\sb132\fi484\cf1\f51\fs20\ql We have aggregat
ed our North America and International segments\u8217? products and services int
o groups of similar\plain\cf1\f51\fs20\ql products and services and provided th
e supplemental disclosure of net sales (in millions) below. We evaluate whether
additional\plain\cf1\f51\fs20\ql disclosure is appropriate when a product or se
rvice category begins to approach a significant level of net sales. For the peri
ods\plain\cf1\f51\fs20\ql presented, no individual product or service represent
ed more than 10% of net sales.\~\~\~\~
\par\pard\plain
ellx10783\trrh-66
ow}}}
clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10783\trrh281
\pard\plain\intbl\li1386\ri22\sb22\sa22\cf1\f51\fs20\ql Media\cell\pard\plain\in
tbl\li22\sb22\sa22\cf1\f51\fs16\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs1
6\qr 12,483\cell
clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10783\trrh281\row}}}
\pard\plain\intbl\li1386\ri22\sb22\sa22\cf1\f51\fs20\ql Electronics and other ge
neral merchandise\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs16\qr 50,401\ce
ll
f51\fs16\qr 38,517\cell
f51\fs16\qr 29,985\cell
\pard\plain\intbl\li1386\ri22\sb22\sa22\cf1\f51\fs20\ql Other (1)\cell\pard\plai
n\intbl\li22\sb22\sa22\cf1\f51\fs16\qr 824\cell
\pard\plain\intbl\li1782\ri22\sb22\sa22\cf1\f51\fs20\ql Total North America\cell
22\cf1\f51\fs16\qr 63,708\cell
trrh281
6\qr 10,026\cell
trrh281\row}}}
neral merchandise\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs16\qr 25,196\ce
ll
f51\fs16\qr 22,369\cell
f51\fs16\qr 18,817\cell
{\trowd\cellx6521\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7688\clbrdrb\brdrs\brdrcf
1\clvertalb\cellx7894\clvertalb\cellx8000\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9
167\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9360\clvertalb\cellx9466\clbrdrb\brdrs\
brdrcf1\clvertalb\cellx10633\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10786\trrh281
\pard\plain\intbl\li1386\ri22\sb22\sa22\cf1\f51\fs20\ql Other (1)\cell\pard\plai
brdrcf1\clvertalb\cellx10633\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10786\trrh281\
row}}}
{\trowd\clshdng100\clcfpat10\clcbpat10\cellx6521\clbrdrb\brdrdb\brdrcf1\clvertal
b\clshdng100\clcfpat10\clcbpat10\cellx6628\clbrdrb\brdrdb\brdrcf1\clvertalb\clsh
dng100\clcfpat10\clcbpat10\cellx7687\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100
\clcfpat10\clcbpat10\cellx7893\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx799
9\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8106\clbr
drb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9165\clbrdrb\br
drdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9358\clvertalb\clshdn
g100\clcfpat10\clcbpat10\cellx9464\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\c
lcfpat10\clcbpat10\cellx9571\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat
10\clcbpat10\cellx10630\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\cl
cbpat10\cellx10783\trrh281
\pard\plain\intbl\li1782\ri22\sb22\sa22\cf1\f51\fs20\ql Total International\cell
22\cf1\f51\fs16\qr 35,418\cell
cbpat10\cellx10783\trrh281\row}}}
tbl\li22\sb22\sa22\cf1\f51\fs16\qr 8\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f5
1\fs16\ql \~%\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\
pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs16\qr 7\cell\pard\plain\intbl\ri22\sb2
2\sa22\cf1\f51\fs16\ql \~%\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs2
0\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs16\qr 18\cell\pard\plain\
intbl\ri22\sb22\sa22\cf1\f51\fs16\ql %\cell{
neral merchandise\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs16\qr 31\cell
f51\fs16\qr 28\cell
f51\fs16\qr 29\cell
\pard\plain\intbl\li1386\ri22\sb22\sa22\cf1\f51\fs20\ql Other\cell\pard\plain\in
tbl\li22\sb22\sa22\cf1\f51\fs16\qr 10\cell
f51\fs16\qr 22\cell
f51\fs16\qr 20\cell
\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs16\qr 25\cell
f51\fs16\qr 23\cell
f51\fs16\qr 26\cell
tbl\li22\sb22\sa22\cf1\f51\fs16\qr (8\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f
51\fs16\ql )%\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\
pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs16\qr \u8212?\cell\pard\plain\intbl\ri
22\sb22\sa22\cf1\f51\fs16\ql \~%\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f
f51\fs16\qr 19\cell
f51\fs16\qr 23\cell
tbl\li22\sb22\sa22\cf1\f51\fs16\qr (3\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f
51\fs16\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\p
ard\plain\intbl\li22\sb22\sa22\cf1\f51\fs16\qr (3\cell\pard\plain\intbl\ri22\sb2
2\sa22\cf1\f51\fs16\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\
ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs16\qr 22\cell
f51\fs16\qr 12\cell
f51\fs16\qr 14\cell
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs20\ql Year-over-year Percentage Growt
h, excluding the effect of foreign exchange\plain\intbl\li22\ri22\sa22\cf1\f51\f
s20\ql rates:\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell
cell{
0\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs16\qr 18\cell\pard\plain\
intbl\ri22\sb22\sa22\cf1\f51\fs16\ql %\cell{
f51\fs16\qr 29\cell
f51\fs16\qr 29\cell
f51\fs16\qr 22\cell
f51\fs16\qr 20\cell
f51\fs16\qr 23\cell
f51\fs16\qr 26\cell
0\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs16\qr 7\cell\pard\plain\i
ntbl\ri22\sb22\sa22\cf1\f51\fs16\ql %\cell{
f51\fs16\qr 21\cell
f51\fs16\qr 27\cell
f51\fs16\qr (3\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs16\ql )\cell\pard\
22\sa22\cf1\f51\fs16\qr 26\cell
f51\fs16\qr 14\cell
f51\fs16\qr 19\cell
x10633\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10786\trrh281\row}}}\pard\p
lain\cf1\f51\fs12\ql _____________________________
\par\pard\plain
udes sales from non-retail activities, such as certain advertising services and
our\~co-branded credit card agreements.\cell{
\par\pard\plain\fs16\par\pard\plain\sb396\fi264\cf1\f51\fs20\i\ql Operating Expe
nses\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Information about operating expe
nses with and without stock-based compensation is as follows (in millions):\par\
pard\plain\cf1\f51\fs18\ql \~
\par\pard\plain
llx9986\clvertalc\cellx10074\clvertalc\cellx10172\clvertalc\cellx10641\clvertalc
\cellx10777\trrh-66
\fs16\ql \~\cell{
llx9986\clvertalc\cellx10074\clvertalc\cellx10172\clvertalc\cellx10641\clvertalc
\cellx10777\trrh-66\row}}}
i22\sb22\sa22\cf1\f51\fs14\b\qc Year Ended December 31, 2015\cell\pard\plain\int
bl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\c
f1\f51\fs14\b\qc Year Ended December 31, 2014\cell\pard\plain\intbl\li22\ri22\sb
22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs14\b\q
c Year Ended December 31, 2013\cell{
brdrs\brdrcf1\clvertalb\cellx4644\clvertalb\cellx4732\clbrdrb\brdrs\brdrcf1\clve
rtalb\cellx5587\clvertalb\cellx5675\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6922\cl
vertalb\cellx7010\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7714\clvertalb\cellx7802\
clbrdrt\brdrs\brdrcf1\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8657\clbrdrt\brdrs\br
drcf1\clvertalb\cellx8745\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrs\brdrcf1\clvertalb\
cellx9992\clbrdrt\brdrs\brdrcf1\clvertalb\cellx10080\clbrdrt\brdrs\brdrcf1\clbrd
rb\brdrs\brdrcf1\clvertalb\cellx10784\trrh397
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs12\ql \~\~\cell\pard\plain\intbl
\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc As\par\pard\plain\intbl\li22\ri22\sb22\sa
22\cf1\f51\fs14\b\qc Reported\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\
fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Stock-Bas
ed\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Compensation\cell\
22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Net\cell\pard\plain\intbl\li22\ri22\sb22\sa2
2\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc
As\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Reported\cell\par
ri22\sb22\sa22\cf1\f51\fs14\b\qc Stock-Based\par\pard\plain\intbl\li22\ri22\sb22
\sa22\cf1\f51\fs14\b\qc Compensation\cell\pard\plain\intbl\li22\ri22\sb22\sa22\c
f1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Ne
t\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\i
ntbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc As\par\pard\plain\intbl\li22\ri22\sb2
2\sa22\cf1\f51\fs14\b\qc Reported\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\
f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Stock
-Based\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Compensation\c
l\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Net\cell{
cellx9992\clbrdrt\brdrs\brdrcf1\clvertalb\cellx10080\clbrdrt\brdrs\brdrcf1\clbrd
rb\brdrs\brdrcf1\clvertalb\cellx10784\trrh397\row}}}
t10\cellx9992\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10080\clvertalb\clsh
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\ql Operating Expenses:\cell\p
2\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf
1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\ce
\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa2
2\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \
~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\i
s20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
vertalb\cellx10074\clvertalb\cellx10172\clvertalb\cellx10641\clvertalb\cellx1077
7\trrh281
\pard\plain\intbl\li198\ri22\sb22\sa22\cf1\f51\fs16\ql Cost of sales\cell\pard\p
f51\fs14\qr 71,651\cell
f51\fs14\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs14\qr \u8212?\cell
7\trrh281\row}}}
lx7799\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8461\clvertalb\clshdng100\c
lcfpat10\clcbpat10\cellx8654\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8742\
clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9694\clvertalb\clshdng100\clcfpat1
0\clcbpat10\cellx9988\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10076\clvert
alb\clshdng100\clcfpat10\clcbpat10\cellx10643\clvertalb\clshdng100\clcfpat10\clc
bpat10\cellx10779\trrh281
\pard\plain\intbl\li198\ri22\sb22\sa22\cf1\f51\fs16\ql Fulfillment\cell\pard\pla
in\intbl\li22\sb22\sa22\cf1\f51\fs14\qr 13,410\cell
f51\fs14\qr (482\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs14\ql )\cell\par
sb22\sa22\cf1\f51\fs14\qr 12,928\cell
f51\fs14\qr 10,766\cell

bpat10\cellx10779\trrh281\row}}}
\pard\plain\intbl\li198\ri22\sb22\sa22\cf1\f51\fs16\ql Marketing\cell\pard\plain
\intbl\li22\sb22\sa22\cf1\f51\fs14\qr 5,254\cell
f51\fs14\qr (88\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs14\ql )\cell\pard
\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\s
b22\sa22\cf1\f51\fs14\qr 3,045\cell
bpat10\cellx10779\trrh430
\pard\plain\intbl\li198\ri22\sb22\cf1\f51\fs16\ql Technology and\plain\intbl\li1
98\ri22\sa22\cf1\f51\fs16\ql content\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f
51\fs14\qr 12,540\cell
f51\fs14\qr (1,224\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs14\ql )\cell\p
2\sb22\sa22\cf1\f51\fs14\qr 11,316\cell
bpat10\cellx10779\trrh430\row}}}
\pard\plain\intbl\li198\ri22\sb22\cf1\f51\fs16\ql General and\plain\intbl\li198\
ri22\sa22\cf1\f51\fs16\ql administrative\cell\pard\plain\intbl\li22\sb22\sa22\c
f1\f51\fs14\qr 1,747\cell
sb22\sa22\cf1\f51\fs14\qr 980\cell
ng100\clcfpat10\clcbpat10\cellx4507\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\c
clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx5393\clbrdrb
\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx5586\clvertalb\clsh
dng100\clcfpat10\clcbpat10\cellx5674\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\
clcfpat10\clcbpat10\cellx6626\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat
10\clcbpat10\cellx6920\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx7008\clbrdr
b\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx7575\clbrdrb\brdrs
\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx7711\clvertalb\clshdng100
\clcfpat10\clcbpat10\cellx7799\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpa
t10\clcbpat10\cellx8461\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clc
bpat10\cellx8654\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8742\clbrdrb\brdr
s\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9694\clbrdrb\brdrs\brdrc
f1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9988\clvertalb\clshdng100\clcfp
at10\clcbpat10\cellx10076\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\c
lcbpat10\cellx10643\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat
\pard\plain\intbl\li198\ri22\sb22\cf1\f51\fs16\ql Other operating\plain\intbl\li
198\ri22\cf1\f51\fs16\ql expense (income),\plain\intbl\li198\ri22\sa22\cf1\f51\
fs16\ql net\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs14\qr 171\cell
t10\clcbpat10\cellx8461\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clc
s\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9694\clbrdrb\brdrs\brdrc
f1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9988\clvertalb\clshdng100\clcfp
at10\clcbpat10\cellx10076\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\c
lcbpat10\cellx10643\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat
5\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx4641\clvertalb\cellx4729\clbrdrb\brdrdb\
brdrcf1\clvertalb\cellx4922\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx5391\clbrdrb\b
rdrdb\brdrcf1\clvertalb\cellx5584\clvertalb\cellx5672\clbrdrb\brdrdb\brdrcf1\clv
ertalb\cellx5966\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx6624\clbrdrb\brdrdb\brdrc
f1\clvertalb\cellx6918\clvertalb\cellx7006\clbrdrb\brdrdb\brdrcf1\clvertalb\cell
x7104\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7573\clbrdrb\brdrdb\brdrcf1\clvertal
b\cellx7709\clvertalb\cellx7797\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7990\clbrd
rb\brdrdb\brdrcf1\clvertalb\cellx8459\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8652
\clvertalb\cellx8740\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9034\clbrdrb\brdrdb\b
rdrcf1\clvertalb\cellx9692\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9986\clvertalb\
cellx10074\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10172\clbrdrb\brdrdb\brdrcf1\cl
vertalb\cellx10641\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10777\trrh430
\pard\plain\intbl\li462\ri22\sb22\cf1\f51\fs16\ql Total operating\plain\intbl\li
462\ri22\sa22\cf1\f51\fs16\ql expenses\cell\pard\plain\intbl\li22\sb22\sa22\cf1
\f51\fs14\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs14\qr 104,773\cell
f51\fs14\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs14\qr (2,119\cell\pard\p
lain\intbl\ri22\sb22\sa22\cf1\f51\fs14\ql )\cell\pard\plain\intbl\li22\ri22\sb22
\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs14\ql $\
cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs14\qr 102,654\cell
5\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx4641\clvertalb\cellx4729\clbrdrb\brdrdb\
brdrcf1\clvertalb\cellx4922\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx5391\clbrdrb\b
rdrdb\brdrcf1\clvertalb\cellx5584\clvertalb\cellx5672\clbrdrb\brdrdb\brdrcf1\clv
f1\clvertalb\cellx6918\clvertalb\cellx7006\clbrdrb\brdrdb\brdrcf1\clvertalb\cell
b\cellx7709\clvertalb\cellx7797\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7990\clbrd
rb\brdrdb\brdrcf1\clvertalb\cellx8459\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8652
\clvertalb\cellx8740\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9034\clbrdrb\brdrdb\b
rdrcf1\clvertalb\cellx9692\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9986\clvertalb\
cellx10074\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10172\clbrdrb\brdrdb\brdrcf1\cl
vertalb\cellx10641\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10777\trrh430\row}}}
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs16\ql Year-over-year\plain\intbl\li22
\ri22\sa22\cf1\f51\fs16\ql Percentage Growth:\cell\pard\plain\intbl\li22\ri22\s
b22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs
20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\
1\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\p
~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\i
ntbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
\trrh281
in\intbl\li22\sb22\sa22\cf1\f51\fs14\qr 25\cell\pard\plain\intbl\ri22\sb22\sa22\
cf1\f51\fs14\ql %\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\c
1\f51\fs14\qr 24\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs14\ql %\cell\par
sb22\sa22\cf1\f51\fs14\qr 25\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs14\q
l %\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain
25\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs14\ql %\cell\pard\plain\intbl\
f51\fs14\qr 34\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs14\ql %\cell\pard\
\trrh281\row}}}
lcfpat10\clcbpat10\cellx9991\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10079
\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10646\clvertalb\clshdng100\clcfpa
t10\clcbpat10\cellx10782\trrh281
\intbl\li22\sb22\sa22\cf1\f51\fs14\qr 21\cell
\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~
\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs14\qr 20\cell
f51\fs14\qr 38\cell
f51\fs14\qr 30\cell
t10\clcbpat10\cellx10782\trrh281\row}}}
\trrh430
51\fs14\qr 35\cell
f51\fs14\qr 41\cell
f51\fs14\qr 44\cell
\trrh430\row}}}
f1\f51\fs14\qr 13\cell
f51\fs14\qr 37\cell
f51\fs14\qr 26\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\ql Percent of Net Sales:\cell
in\intbl\li22\sb22\sa22\cf1\f51\fs14\qr 12.5\cell\pard\plain\intbl\ri22\sb22\sa2
cf1\f51\fs14\qr 12.1\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs14\ql %\cell
i22\sb22\sa22\cf1\f51\fs14\qr 12.1\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\
fs14\ql %\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard
i22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs
14\qr 11.7\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs14\ql %\cell\pard\plai
n\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\s
a22\cf1\f51\fs14\qr 11.5\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs14\ql %\
a22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs14\qr 11.1
\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs14\ql %\cell{
\trrh281
\intbl\li22\sb22\sa22\cf1\f51\fs14\qr 4.9\cell
\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs14\qr 4.7\cell
f51\fs14\qr 4.9\cell
\trrh281\row}}}
51\fs14\qr 11.7\cell
\trrh430
f1\f51\fs14\qr 1.6\cell
\trrh430\row}}}\pard\plain\sb264\fi528\cf1\f51\fs20\ql Operating expenses withou
t stock-based compensation are non-GAAP financial measures. See \u8220?Non-GAAP\
plain\cf1\f51\fs20\ql Financial Measures\u8221? and Item\~8 of Part II, \u8220?
Financial Statements and Supplementary Data\u8212?Note\plain\cf1\f51\fs20\ql 1\
u8212?Description of Business and Accounting Policies\u8212?Stock-Based Compensa
tion.\u8221?\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql In 2014, we recorded cha
rges estimated at $170 million primarily related to Fire phone inventory valuati
on and supplier\plain\cf1\f51\fs20\ql commitment costs, the majority of which w
as included in the North America segment.\par\pard\plain\sb396\fi264\cf1\f51\fs2
0\i\ql Cost of Sales\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Cost of sales pr
imarily consists of the purchase price of consumer products, digital media conte
nt costs where we record\plain\cf1\f51\fs20\ql revenue gross, including Prime V
ideo and Prime Music, packaging supplies, sortation and delivery centers and rel
ated equipment\plain\cf1\f51\fs20\ql costs, and inbound and outbound shipping c
osts, including where we are the transportation service provider. Shipping costs
to\plain\cf1\f51\fs20\ql receive products from our suppliers are included in o
ur inventory and recognized as cost of sales upon sale of products to our\plain\
cf1\f51\fs20\ql customers.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql The incre
ase in cost of sales in absolute dollars in 2015, 2014, and 2013, compared to th
e comparable prior year periods,\plain\cf1\f51\fs20\ql is primarily due to incr
eased product and shipping costs resulting from increased sales. The increase in
2014 was also impacted\plain\cf1\f51\fs20\ql by the expansion of digital offer
ings and Fire phone inventory valuation and supplier commitment costs.\par\pard\
plain\sb132\fi528\cf1\f51\fs20\ql Costs to operate our AWS segment are primarily
classified as \u8220?Technology and content\u8221? as we leverage a\plain\cf1\f
51\fs20\ql shared infrastructure that supports both our internal technology req
uirements and external sales to AWS customers.\par\pard\plain\sb396\fi264\cf1\f5
1\fs20\i\ql Fulfillment\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Fulfillment c
osts primarily consist of those costs incurred in operating and staffing our Nor
th America and International\plain\cf1\f51\fs20\ql fulfillment and customer ser
vice centers and payment processing costs. While AWS payment processing and rela
ted transaction\plain\cf1\f51\fs20\ql costs are included in fulfillment, AWS co
sts are primarily classified as \u8220?Technology and content.\u8221? Fulfillmen
t costs\plain\cf1\f51\fs20\ql as a percentage of net sales may vary due to seve
ral factors, such as payment processing and related transaction costs, our level
\plain\cf1\f51\fs20\ql of productivity and accuracy, changes in volume, size, a
nd weight of units received and fulfilled, timing of fulfillment capacity\plain\
cf1\f51\fs20\ql expansion, the extent we utilize fulfillment services provided
by third parties, mix of products and services sold, and our ability\plain\cf1\f
51\fs20\ql to affect customer service contacts per unit by implementing improve
ments in our operations and enhancements to our customer\plain\cf1\f51\fs20\ql
self-service features. Additionally, because payment processing and fulfillment
costs associated with seller transactions are based\plain\cf1\f51\fs20\ql on th
e gross purchase price of underlying transactions, and payment processing and re
lated transaction
\par\pard\plain\fs16\par\pard\plain\sb132\cf1\f51\fs20\ql and fulfillment costs
are higher as a percentage of sales versus our retail sales, sales by our seller
s have higher fulfillment costs\plain\cf1\f51\fs20\ql as a percent of net sales
.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql The increase in fulfillment costs i
n absolute dollars in 2015, 2014, and 2013, compared to the comparable prior yea
r\plain\cf1\f51\fs20\ql periods, is primarily due to variable costs correspondi
ng with increased physical and digital product and service sales volume,\plain\c
f1\f51\fs20\ql inventory levels, and sales mix; costs from expanding fulfillmen
t capacity; and payment processing and related transaction costs.\par\pard\plain
\sb132\fi528\cf1\f51\fs20\ql We seek to expand our fulfillment capacity to accom
modate a greater selection and in-stock inventory levels and to meet\plain\cf1\f
51\fs20\ql anticipated shipment volumes from sales of our own products as well
as sales by third parties for which we provide the\plain\cf1\f51\fs20\ql fulfil
lment services. We regularly evaluate our facility requirements.\par\pard\plain\
sb396\fi264\cf1\f51\fs20\i\ql Marketing\par\pard\plain\sb132\fi528\cf1\f51\fs20\
ql We direct customers to our websites primarily through a number of targeted on
line marketing channels, such as our\plain\cf1\f51\fs20\ql Associates program,
sponsored search, portal advertising, email marketing campaigns, direct sales, a
nd other initiatives. Our\plain\cf1\f51\fs20\ql marketing expenses are largely
variable, based on growth in sales and changes in rates. To the extent there is
increased or\plain\cf1\f51\fs20\ql decreased competition for these traffic sour
ces, or to the extent our mix of these channels shifts, we would expect to see a
\plain\cf1\f51\fs20\ql corresponding change in our marketing expense.\par\pard\

plain\sb132\fi528\cf1\f51\fs20\ql The increase in marketing costs in absolute do
llars in 2015, 2014, and 2013, compared to the comparable prior year\plain\cf1\f
51\fs20\ql periods, is primarily due to increased spending on online marketing
channels, as well as payroll and related expenses.\par\pard\plain\sb132\fi528\cf
1\f51\fs20\ql While costs associated with Amazon Prime memberships and other shi
pping offers are not included in marketing expense,\plain\cf1\f51\fs20\ql we vi
ew these offers as effective worldwide marketing tools, and intend to continue o
ffering them indefinitely.\par\pard\plain\sb396\fi264\cf1\f51\fs20\i\ql Technolo
gy and Content\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Technology costs consi
st principally of research and development activities including payroll and rela
ted expenses for\plain\cf1\f51\fs20\ql employees involved in application, produ
ction, maintenance, operation, and platform development for new and existing pro
ducts\plain\cf1\f51\fs20\ql and services, as well as AWS and other technology i
nfrastructure expenses. Content costs consist principally of payroll and\plain\c
f1\f51\fs20\ql related expenses for employees involved in category expansion, e
ditorial content, buying, and merchandising selection. Digital\plain\cf1\f51\fs2
0\ql media content costs related to revenue recorded gross, including Prime Vid
eo, are included in cost of sales.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql We
seek to invest efficiently in several areas of technology and content so we may
continue to enhance the customer\plain\cf1\f51\fs20\ql experience and improve
our process efficiency through rapid technology developments while operating at
an ever increasing\plain\cf1\f51\fs20\ql scale. Our technology and content inve
stment and capital spending projects often support a variety of product and serv
ice\plain\cf1\f51\fs20\ql offerings due to geographic expansion and the cross-f
unctionality of our systems and operations. We expect spending in\plain\cf1\f51\
fs20\ql technology and content to increase over time as we continue to add empl
oyees and technology infrastructure. The increase in\plain\cf1\f51\fs20\ql tech
nology and content costs in absolute dollars in 2015, 2014, and 2013, compared t
o comparable prior year periods, is\plain\cf1\f51\fs20\ql primarily due to incr
eased spending on technology infrastructure principally allocated to our AWS seg
ment, and an increase in\plain\cf1\f51\fs20\ql payroll and related costs associ
ated with expanding our products and services.\par\pard\plain\sb132\fi528\cf1\f5
1\fs20\ql Technology infrastructure costs consist of servers, networking equipme
nt, and data center related depreciation, rent, utilities,\plain\cf1\f51\fs20\ql
and payroll expenses. These costs are allocated to segments based on usage. In
2015, 2014, and 2013, we expanded our\plain\cf1\f51\fs20\ql technology infrast
ructure principally by increasing our capacity for AWS service offerings globall
y, compared to the comparable\plain\cf1\f51\fs20\ql prior year periods. Additio
nally, the costs associated with operating and maintaining our expanded infrastr
ucture have increased\plain\cf1\f51\fs20\ql over time, corresponding with incre
ased usage. We expect these trends to continue over time as we invest in technol
ogy\plain\cf1\f51\fs20\ql infrastructure to support increased usage.\par\pard\p
lain\sb132\fi528\cf1\f51\fs20\ql The increase in payroll and related costs is pr
imarily due to the expansion of new and existing product categories and\plain\cf
1\f51\fs20\ql service offerings, including AWS, and initiatives to expand our e
cosystem of products and services.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Fo
r 2015, 2014, and 2013, we capitalized $642 million (including $114 million of s
tock-based compensation), $641\plain\cf1\f51\fs20\ql million (including $104 mi
llion of stock-based compensation), and $581 million (including $87 million of s
tock-based\plain\cf1\f51\fs20\ql compensation) of costs associated with interna
l-use software and website development. Amortization of previously capitalized\p
lain\cf1\f51\fs20\ql amounts was $635 million, $559 million, and $451 million f
or 2015, 2014, and 2013.\par\pard\plain\sb396\fi264\cf1\f51\fs20\i\ql General an
d Administrative\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql The increase in gene
ral and administrative costs in absolute dollars in 2015, compared to the compar
able prior year period,\plain\cf1\f51\fs20\ql is primarily due to increases in
payroll and related expenses. The increase in general and administrative costs i
n absolute dollars\plain\cf1\f51\fs20\ql in 2014, compared to the comparable pr
ior year period, is primarily due to increases in payroll and related expenses a
nd\plain\cf1\f51\fs20\ql professional service fees.

\par\pard\plain\fs16\par\pard\plain\sb396\fi264\cf1\f51\fs20\i\ql Stock-Based Co
mpensation\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Stock-based compensation w
as $2.1 billion, $1.5 billion, and $1.1 billion during 2015, 2014, and 2013. The
increase in\plain\cf1\f51\fs20\ql 2015, 2014, and 2013, compared to the compar
able prior year periods, is primarily due to an increase in the number of\plain\
cf1\f51\fs20\ql stock-based compensation awards granted to existing and new emp
loyees.\par\pard\plain\sb396\fi264\cf1\f51\fs20\i\ql Other Operating Expense (In
come), Net\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Other operating expense (i
ncome), net was $171 million, $133 million, and $114 million during 2015, 2014,
and 2013,\plain\cf1\f51\fs20\ql and was primarily related to the amortization o
f intangible assets.\par\pard\plain\sb396\fi264\cf1\f51\fs20\i\ql Income from Op
erations\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql For the reasons discussed ab
ove, income from operations increased to $2.2 billion in 2015, from $178 million
in 2014 and\plain\cf1\f51\fs20\ql $745 million in 2013.\par\pard\plain\sb132\f
i528\cf1\f51\fs20\ql We believe that income from operations is a more meaningful
measure than gross profit and gross margin due to the\plain\cf1\f51\fs20\ql di
versity of our product categories and services.\par\pard\plain\sb396\fi264\cf1\f
51\fs20\i\ql Interest Income and Expense\par\pard\plain\sb132\fi528\cf1\f51\fs20
\ql Our interest income was $50 million, $39 million, and $38 million during 201
5, 2014, and 2013. We generally invest our\plain\cf1\f51\fs20\ql excess cash in
investment grade short- to intermediate-term fixed income securities and AAA-ra
ted money market funds. Our\plain\cf1\f51\fs20\ql interest income corresponds w
ith the average balance of invested funds based on the prevailing rates, which v
ary depending on\plain\cf1\f51\fs20\ql the geographies and currencies in which
they are invested.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Interest expense w
as $459 million, $210 million, and $141 million in 2015, 2014, and 2013. The inc
rease is primarily due\plain\cf1\f51\fs20\ql to increases in our long-term debt
, and capital and finance lease arrangements.\par\pard\plain\sb132\fi528\cf1\f51
\fs20\ql Our long-term debt was $8.2 billion and $8.3 billion as of December\~31
, 2015 and 2014. Our other long-term liabilities\plain\cf1\f51\fs20\ql were $9.
9 billion and $7.4 billion as of December\~31, 2015 and 2014. See Item\~8 of Par
t\~II, \u8220?Financial Statements and\plain\cf1\f51\fs20\ql Supplementary Data
\u8212?Note 5\u8212?Long-Term Debt and Note 6\u8212?Other Long-Term Liabilities\
u8221? for additional\plain\cf1\f51\fs20\ql information.\par\pard\plain\sb396\f
i264\cf1\f51\fs20\i\ql Other Income (Expense), Net\par\pard\plain\sb132\fi528\cf
1\f51\fs20\ql Other income (expense), net was $(256) million, $(118) million, an
d $(136) million during 2015, 2014, and 2013. The\plain\cf1\f51\fs20\ql primary
component of other income (expense), net is related to foreign-currency gains (
losses).\par\pard\plain\sb396\fi264\cf1\f51\fs20\i\ql Income Taxes\par\pard\plai
n\sb132\fi484\cf1\f51\fs20\ql Our effective tax rate is subject to significant v
ariation due to several factors, including variability in our pre-tax and\plain\
cf1\f51\fs20\ql taxable income and loss and the mix of jurisdictions to which t
hey relate, changes in how we do business, acquisitions (including\plain\cf1\f51
\fs20\ql integrations) and investments, audit-related developments, foreign cur
rency gains (losses), changes in law, regulations, and\plain\cf1\f51\fs20\ql ad
ministrative practices, and relative changes of expenses or losses for which tax
benefits are not recognized. Additionally, our\plain\cf1\f51\fs20\ql 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\plain\cf1\f51\fs20\ql items and non-d
eductible expenses on our effective tax rate is greater when our pre-tax income
is lower.\par\pard\plain\sb132\fi484\cf1\f51\fs20\ql We recorded a provision for
income taxes of $950 million, $167 million, and $161 million in 2015, 2014, and
2013. Our\plain\cf1\f51\fs20\ql provision for income taxes in 2015 was higher
than in 2014 primarily due to an increase in U.S. pre-tax income and increased\p
lain\cf1\f51\fs20\ql losses in certain foreign subsidiaries for which we may no

t realize a tax benefit. Losses for which we may not realize a related\plain\cf1
\f51\fs20\ql tax benefit, primarily due to losses of foreign subsidiaries, redu
ce our pre-tax income without a corresponding reduction in our\plain\cf1\f51\fs2
0\ql tax expense, and therefore increase our effective tax rate. We have record
ed valuation allowances against the deferred tax assets\plain\cf1\f51\fs20\ql a
ssociated with losses for which we may not realize a related tax benefit. We gen
erated income in lower tax jurisdictions\plain\cf1\f51\fs20\ql primarily relate
d to our European operations, which are headquartered in Luxembourg.\par\pard\pl
ain\sb132\fi484\cf1\f51\fs20\ql Our provision for income taxes in 2014 was highe
r than in 2013 primarily due to the increased losses in certain foreign\plain\cf
1\f51\fs20\ql subsidiaries for which we may not realize a tax benefit and audit
-related developments, partially offset by the favorable impact\plain\cf1\f51\fs
20\ql of earnings in lower tax rate jurisdictions. Losses for which we may not
realize a related tax benefit were primarily generated by\plain\cf1\f51\fs20\ql
our foreign subsidiaries. Income earned in lower tax jurisdictions was primaril
y related to our European operations.\par\pard\plain\sb132\fi484\cf1\f51\fs20\ql
We have tax benefits relating to excess stock-based compensation deductions and
accelerated depreciation deductions that\plain\cf1\f51\fs20\ql are being utili
zed to reduce our U.S. taxable income. In December 2015, U.S. legislation was en
acted that extended accelerated\plain\cf1\f51\fs20\ql depreciation deductions o
n qualifying property through 2019 and made permanent the U.S. federal research
and development\plain\cf1\f51\fs20\ql credit. As of December\~31, 2015, our fed
eral net operating loss carryforward was approximately $1.1 billion and we had
\par\pard\plain\fs16\par\pard\plain\sb132\cf1\f51\fs20\ql approximately $622 mil
lion of federal tax credits potentially available to offset future tax liabiliti
es. Our federal tax credits are\plain\cf1\f51\fs20\ql primarily related to the
U.S. federal research and development credit, which was made permanent in 2015.\
par\pard\plain\sb132\fi484\cf1\f51\fs20\ql See Item 8 of Part II, \u8220?Financi
al Statements and Supplementary Data\u8212?Note 10\u8212?Income Taxes\u8221? for
\plain\cf1\f51\fs20\ql additional information.\par\pard\plain\sb396\fi264\cf1\f
51\fs20\i\ql Equity-Method Investment Activity, Net of Tax\par\pard\plain\sb132\
fi528\cf1\f51\fs20\ql Equity-method investment activity, net of tax, was $(22) m
illion, $37 million, and $(71) million in 2015, 2014, and 2013,\plain\cf1\f51\fs
20\ql and is primarily related to our investment in LivingSocial. The primary c
omponent of this activity during 2014 was our share of\plain\cf1\f51\fs20\ql a
gain recorded by LivingSocial related to the sale of its Korean operations. This
gain was partially offset by operating losses\plain\cf1\f51\fs20\ql incurred b
y LivingSocial during the period.\par\pard\plain\sb396\fi264\cf1\f51\fs20\i\ql E
ffect of Foreign Exchange Rates\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql The e
ffect on our income from operations from changes in foreign exchange rates versu
s the U.S.\~Dollar is as follows (in\plain\cf1\f51\fs20\ql millions):
\par\pard\plain
llx9813\clvertalc\cellx9903\clvertalc\cellx10096\clvertalc\cellx10598\clvertalc\
cellx10791\trrh-66
\fs16\ql \~\cell{
llx9813\clvertalc\cellx9903\clvertalc\cellx10096\clvertalc\cellx10598\clvertalc\
cellx10791\trrh-66\row}}}
i22\sb22\sa22\cf1\f51\fs14\b\qc Year Ended December 31, 2015\cell\pard\plain\int
f1\f51\fs14\b\qc Year Ended December 31, 2014\cell\pard\plain\intbl\li22\ri22\sb
22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs14\b\q
c Year Ended December 31, 2013\cell{
cellx9816\clbrdrt\brdrs\brdrcf1\clvertalb\cellx9906\clbrdrt\brdrs\brdrcf1\clbrdr
b\brdrs\brdrcf1\clvertalb\cellx10795\trrh570
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs12\ql \~\~\cell\pard\plain\intbl
\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc At\~Prior\par\pard\plain\intbl\li22\ri22\
sb22\sa22\cf1\f51\fs14\b\qc Year\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f5
1\fs14\b\qc Rates\~(1)\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql
\~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Exchange\par\par
d\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Rate\par\pard\plain\intbl\li
22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Effect (2)\cell\pard\plain\intbl\li22\ri22\s
14\b\qc As\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Reported\c
l\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc At\~Prior\par\pard\plain\intbl\li22\ri22
\sb22\sa22\cf1\f51\fs14\b\qc Year\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f
51\fs14\b\qc Rates\~(1)\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\q
l \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Exchange\par\pa
rd\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Rate\par\pard\plain\intbl\l
i22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Effect (2)\cell\pard\plain\intbl\li22\ri22\
s14\b\qc As\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Reported\
bl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc At\~Prior\par\pard\plain\intbl\li22\ri2
2\sb22\sa22\cf1\f51\fs14\b\qc Year\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\
f51\fs14\b\qc Rates\~(1)\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\
ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Exchange\par\p
ard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Rate\par\pard\plain\intbl\
li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Effect (2)\cell\pard\plain\intbl\li22\ri22
fs14\b\qc As\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Reported
\cell{
cellx9816\clbrdrt\brdrs\brdrcf1\clvertalb\cellx9906\clbrdrt\brdrs\brdrcf1\clbrdr
b\brdrs\brdrcf1\clvertalb\cellx10795\trrh570\row}}}
0\clcbpat10\cellx7871\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx7961\clbrdrt
\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8145\clbrdrt\brdrs\
brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8647\clbrdrt\brdrs\brdrcf1
\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8831\clvertalb\clshdng100\clcfpat
10\clcbpat10\cellx8921\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcb
pat10\cellx9122\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\c
ellx9612\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx981
3\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9903\clbrdrt\brdrs\brdrcf1\clver
talb\clshdng100\clcfpat10\clcbpat10\cellx10096\clbrdrt\brdrs\brdrcf1\clvertalb\c
lshdng100\clcfpat10\clcbpat10\cellx10598\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng
100\clcfpat10\clcbpat10\cellx10791\trrh281
s16\qr 112,173\cell
ll\pard\plain\intbl\sb22\sa22\cf1\f51\fs16\qr 88,988\cell
\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8831\clvertalb\clshdng100\clcfpat
talb\clshdng100\clcfpat10\clcbpat10\cellx10096\clbrdrt\brdrs\brdrcf1\clvertalb\c
lshdng100\clcfpat10\clcbpat10\cellx10598\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng
100\clcfpat10\clcbpat10\cellx10791\trrh281\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Operating expenses\cell\pa
rd\plain\intbl\li22\sb22\sa22\cf1\f51\fs16\qr 109,956\cell
f51\fs16\qr 89,466\cell
f51\fs16\qr 74,962\cell
0\clcbpat10\cellx9813\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9903\clverta
lb\clshdng100\clcfpat10\clcbpat10\cellx10598\clvertalb\clshdng100\clcfpat10\clcb
l\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs16\qr 2,217\cell
f51\fs16\qr 16\cell
f51\fs16\qr 20\cell
b22\sa22\cf1\f51\fs16\qr 745\cell
lb\clshdng100\clcfpat10\clcbpat10\cellx10598\clvertalb\clshdng100\clcfpat10\clcb
pat10\cellx10791\trrh281\row}}}\pard\plain\cf1\f51\fs18\ql ___\plain\cf1\f51\fs2
0\ql ________________
\par\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (1)\cell\pard\plain\intbl\cf1\f51\fs20\ql Repr
esents the outcome that would have resulted had foreign exchange rates in the re
ported period been the same as those in\plain\intbl\cf1\f51\fs20\ql effect in t
he comparable prior year period for operating results.\cell{
\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (2)\cell\pard\plain\intbl\cf1\f51\fs20\ql Repr
esents the increase or decrease in reported amounts resulting from changes in fo
reign exchange rates from those in effect\plain\intbl\cf1\f51\fs20\ql in the co
mparable prior year period for operating results.\cell{
{\trowd\cellx360\cellx10800\trrh495\row}}}\pard\plain\sb396\fi264\cf1\f51\fs20\b
\i\ql Non-GAAP Financial Measures\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Reg
ulation G, Conditions for Use of Non-GAAP Financial Measures, and other SEC regu
lations define and prescribe the\plain\cf1\f51\fs20\ql conditions for use of ce
rtain non-GAAP financial information. Our measures of free cash flows, operating
expenses with and\plain\cf1\f51\fs20\ql without stock-based compensation, and
the effect of foreign exchange rates on our consolidated statements of operation
s, meet\plain\cf1\f51\fs20\ql the definition of non-GAAP financial measures.\pa
r\pard\plain\sb132\fi528\cf1\f51\fs20\ql We provide multiple measures of free ca
sh flows because we believe these measures provide additional perspective on the
\plain\cf1\f51\fs20\ql impact of acquiring property and equipment with cash and
through capital and finance leases.\par\pard\plain\sb396\fi286\cf1\f51\fs20\i\q
l Free Cash Flow\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Free cash flow is ca
sh flow from operations reduced by \u8220?Purchases of property and equipment, i
ncluding\plain\cf1\f51\fs20\ql internal-use software and website development, n

et\u8221? which is included in cash flow from investing activities. The\plain\cf
1\f51\fs20\ql following is a reconciliation of free cash flow to the most compa
rable GAAP cash flow measure, \u8220?Net cash provided by\plain\cf1\f51\fs20\ql
(used in) operating activities,\u8221? for 2015, 2014, and 2013 (in millions):
\par\pard\plain
ellx10785\trrh-66
ow}}}
in) operating activities\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $
\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 11,920\cell
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs20\ql Purchases of property and equip
ment, including internal-use software and website\plain\intbl\li22\ri22\sa22\cf1
\f51\fs20\ql development, net\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20
\qr (4,589\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plai
a22\cf1\f51\fs20\qr (4,893\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql
)\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\i
ntbl\li22\sb22\sa22\cf1\f51\fs20\qr (3,444\cell\pard\plain\intbl\ri22\sb22\sa22\
cf1\f51\fs20\ql )\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Free cash flow\cell\pard\p

in) investing activities\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $
\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr (6,450\cell\pard\plain\intbl\ri
\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\pla
in\intbl\sb22\sa22\cf1\f51\fs20\qr (5,065\cell\pard\plain\intbl\ri22\sb22\sa22\c
f1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\ce
ll\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\
sa22\cf1\f51\fs20\qr (4,276\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql
)\cell{
trrh281
in) financing activities\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $
in\intbl\sb22\sa22\cf1\f51\fs20\qr 4,432\cell
in\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
trrh281\row}}}
\par\pard\plain\fs16\par\pard\plain\sb396\fi286\cf1\f51\fs20\i\ql Free Cash Flow
Less Lease Principal Repayments\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Free
cash flow less lease principal repayments is free cash flow reduced by \u8220?P
rincipal repayments of capital lease\plain\cf1\f51\fs20\ql obligations,\u8221?
and \u8220?Principal repayments of finance lease obligations,\u8221? which are i
ncluded in cash flow from\plain\cf1\f51\fs20\ql financing activities. Free cash
flow less lease principal repayments approximates the actual payments of cash f
or our capital and\plain\cf1\f51\fs20\ql finance leases. The following is a rec
onciliation of free cash flow less lease principal repayments to the most compar
able GAAP\plain\cf1\f51\fs20\ql cash flow measure, \u8220?Net cash provided by
(used in) operating activities,\u8221? for 2015, 2014, and 2013 (in millions):
\par\pard\plain
ellx10785\trrh-66
ow}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Principal repayments of ca
pital lease obligations\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (2,
462\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl
\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1
\f51\fs20\qr (1,285\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\
22\sb22\sa22\cf1\f51\fs20\qr (775\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\f
s20\ql )\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Principal repayments of fi
nance lease obligations\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (12
1\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\l
51\fs20\qr (135\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard
b22\sa22\cf1\f51\fs20\qr (5\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql
)\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Free cash flow less lease
principal repayments\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell
\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 4,748\cell
)\cell{
trrh281
trrh281\row}}}\pard\plain\sb396\fi286\cf1\f51\fs20\i\ql Free Cash Flow Less Fina
nce Lease Principal Repayments and Assets Acquired Under Capital Leases\par\pard
\plain\sb132\fi528\cf1\f51\fs20\ql Free cash flow less finance lease principal r
epayments and assets acquired under capital leases is free cash flow reduced by\
plain\cf1\f51\fs20\ql \u8220?Principal repayments of finance lease obligations,
\u8221? which are included in cash flow from financing activities, and\plain\cf1
\f51\fs20\ql property and equipment acquired under capital leases.\~In this mea
sure, property and equipment acquired under capital leases is\plain\cf1\f51\fs20
\ql reflected as if these assets had been purchased with cash, which is not the
case as these assets have been leased. The following is\plain\cf1\f51\fs20\ql
a reconciliation of free cash flow less finance lease principal repayments and a
ssets acquired under capital leases to the most\plain\cf1\f51\fs20\ql comparabl
e GAAP cash flow measure, \u8220?Net cash provided by (used in) operating activi
ties,\u8221? for 2015, 2014, and\plain\cf1\f51\fs20\ql 2013 (in millions):
\par\pard\plain
ellx10785\trrh-66
ow}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Property and equipment acq
uired under capital leases\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr
(4,717\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\in
\li22\sb22\sa22\cf1\f51\fs20\qr (1,867\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\
f51\fs20\ql )\cell{
)\cell{
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs20\ql Free cash flow less finance lea
se principal repayments and assets acquired under\plain\intbl\li22\ri22\sa22\cf1
\f51\fs20\ql capital leases\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\q
l $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 2,493\cell
cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 159\cell
)\cell{
trrh281
trrh281\row}}}\pard\plain\sb264\fi484\cf1\f51\fs20\ql All of these free cash flo
ws measures have limitations as they omit certain components of the overall cash
flow statement\plain\cf1\f51\fs20\ql and do not represent the residual cash fl
ow available for discretionary expenditures. For example, these measures of free
cash\plain\cf1\f51\fs20\ql flows do not incorporate the portion of payments re
presenting principal reductions of debt or cash payments for business\plain\cf1\
f51\fs20\ql acquisitions. Additionally, our mix of property and equipment acqui

sitions with cash or other financing options may change over\plain\cf1\f51\fs20\
ql time. Therefore, we believe it is important to view free cash flows measures
only as a complement to our entire consolidated\plain\cf1\f51\fs20\ql statemen
ts of cash flows.\par\pard\plain\sb396\fi286\cf1\f51\fs20\i\ql Operating Expense
s, Excluding Stock-Based Compensation\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql
Operating expenses with and without stock-based compensation is provided to sho
w the impact of stock-based\plain\cf1\f51\fs20\ql compensation, which is non-ca
sh and excluded from our internal operating plans and measurement of financial p
erformance\plain\cf1\f51\fs20\ql (although we consider the dilutive impact to o
ur shareholders when awarding stock-based compensation and value such awards\pla
in\cf1\f51\fs20\ql accordingly). In addition, unlike other centrally-incurred o
perating costs, stock-based compensation is not allocated to segment
\par\pard\plain\fs16\par\pard\plain\sb132\cf1\f51\fs20\ql results, and therefore
, excluding it from operating expenses is consistent with our segment presentati
on in our footnotes to the\plain\cf1\f51\fs20\ql consolidated financial stateme
nts.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Operating expenses without stock
-based compensation has limitations since it does not include all expenses prima
rily\plain\cf1\f51\fs20\ql related to our workforce. More specifically, if we d
id not pay out a portion of our compensation in the form of stock-based\plain\cf
1\f51\fs20\ql compensation, our cash salary expense included in the \u8220?Fulf
illment,\u8221? \u8220?Marketing,\u8221? \u8220?Technology\plain\cf1\f51\fs20\ql
and content,\u8221? and \u8220?General and administrative\u8221? line items wo
uld be higher.\par\pard\plain\sb396\fi286\cf1\f51\fs20\i\ql Effect of Foreign Ex
change Rates\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Information regarding th
e effect of foreign exchange rates, versus the U.S.\~Dollar, on our consolidated
statements of\plain\cf1\f51\fs20\ql operations is provided to show reported pe
riod operating results had the foreign exchange rates remained the same as those
in\plain\cf1\f51\fs20\ql effect in the comparable prior year period.\par\pard\
plain\sb396\fi264\cf1\f51\fs20\b\i\ql Guidance\par\pard\plain\sb132\fi528\cf1\f5
1\fs20\ql We provided guidance on January\~28, 2016, in our earnings release fur
nished on Form\~8-K as set forth below. These\plain\cf1\f51\fs20\ql forward-loo
king statements reflect Amazon.com\u8217?s expectations as of January\~28, 2016,
and are subject to substantial\plain\cf1\f51\fs20\ql uncertainty. Our results
are inherently unpredictable and may be materially affected by many factors, suc
h as fluctuations in\plain\cf1\f51\fs20\ql foreign exchange rates, changes in g
lobal economic conditions and customer spending, world events, the rate of growt
h of the\plain\cf1\f51\fs20\ql Internet and online commerce, as well as those o
utlined in Item\~1A of Part I, \u8220?Risk Factors.\u8221?\par\pard\plain\sb132\
fi528\cf1\f51\fs20\ql First Quarter 2016 Guidance
\par\pard\plain
20\ql Net sales are expected to be between $26.5 billion and $29.0 billion, or t
o grow between 17% and 28% compared\plain\intbl\cf1\f51\fs20\ql with first quar
ter 2015. \cell{
\pard\plain
20\ql Operating income is expected to be between $100 million and $700 million,
compared with $255 million in first\plain\intbl\cf1\f51\fs20\ql quarter 2015. \
cell{
\pard\plain
20\ql This guidance includes approximately $600 million for stock-based compensa
tion and other operating expense\plain\intbl\cf1\f51\fs20\ql (income), net. It
assumes, among other things, that no additional business acquisitions, investmen
ts, restructurings,\plain\intbl\cf1\f51\fs20\ql or legal settlements are conclu
ded and that there are no further revisions to stock-based compensation estimate
s.\cell{
\page{\*\bkmkstart s829CB85ED2A7829F4F03ABB22C9EFC5}{\*\bkmkend s829CB85ED2A7829
F4F03ABB22C9EFC5}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F
\par\pard\plain
n\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\i\ql Quantitative and Qualitative Dis
closures About Market Risk\cell{
{\trowd\cellx1188\cellx10800\trrh281\row}}}\pard\plain\sb132\fi528\cf1\f51\fs20\
ql We are exposed to market risk for the effect of interest rate changes, foreig
n currency fluctuations, and changes in the\plain\cf1\f51\fs20\ql market values
of our investments. Information relating to quantitative and qualitative disclo
sures about market risk is set forth\plain\cf1\f51\fs20\ql below and in Item\~7
of Part II, \u8220?Management\u8217?s Discussion and Analysis of Financial Cond
ition and Results of\plain\cf1\f51\fs20\ql Operations\u8212?Liquidity and Capit
al Resources.\u8221?\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Interest Rat
e Risk\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Our exposure to market risk fo
r changes in interest rates relates primarily to our investment portfolio and ou
r long-term\plain\cf1\f51\fs20\ql debt. Our long-term debt is carried at amorti
zed cost and fluctuations in interest rates do not impact our consolidated finan
cial\plain\cf1\f51\fs20\ql statements. However, the fair value of our debt, whi
ch pays interest at a fixed rate, will generally fluctuate with movements of\pla
in\cf1\f51\fs20\ql interest rates, increasing in periods of declining rates of
interest and declining in periods of increasing rates of interest. All of our\pl
ain\cf1\f51\fs20\ql cash equivalent and marketable fixed income securities are
designated as available-for-sale and, accordingly, are presented at fair\plain\c
f1\f51\fs20\ql value on our consolidated balance sheets. We generally invest ou
r excess cash in investment grade short- to intermediate-term\plain\cf1\f51\fs20
\ql fixed income securities and AAA-rated money market funds. Fixed income secu
rities may have their fair market value adversely\plain\cf1\f51\fs20\ql affecte
d due to a rise in interest rates, and we may suffer losses in principal if forc
ed to sell securities that have declined in\plain\cf1\f51\fs20\ql market value
due to changes in interest rates.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql The

following table provides information about our current and long-term cash equiv
alents and marketable fixed income\plain\cf1\f51\fs20\ql securities, including
principal cash flows by expected maturity and the related weighted-average inter
est rates as of December\~31,\plain\cf1\f51\fs20\ql 2015 (in millions, except p
ercentages):\par\pard\plain\cf1\f51\fs18\ql \~
\par\pard\plain
d\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\f0\fs16\ql \~\cell{
vertalb\cellx7197\clvertalb\cellx7286\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8469\
clvertalb\cellx8558\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9498\clvertalb\cellx958
7\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10794\trrh826
tbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc 2020\cell\pard\plain\intbl\li22\ri22\s
16\b\qc Thereafter\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\

cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Total\cell\pard\plai
n\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\s
b22\cf1\f51\fs16\b\qc Estimated Fair\plain\intbl\li22\ri22\cf1\f51\fs16\b\qc Va
lue as of\plain\intbl\li22\ri22\cf1\f51\fs16\b\qc December 31,\plain\intbl\li22
\ri22\sa22\cf1\f51\fs16\b\qc 2015\cell{
vertalb\cellx7197\clvertalb\cellx7286\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8469\
7\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10794\trrh826\row}}}
clcbpat10\cellx2137\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat
10\cellx2250\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cell
x2887\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx3116\c
lvertalb\clshdng100\clcfpat10\clcbpat10\cellx3205\clbrdrt\brdrs\brdrcf1\clvertal
b\clshdng100\clcfpat10\clcbpat10\cellx3318\clbrdrt\brdrs\brdrcf1\clvertalb\clshd
ng100\clcfpat10\clcbpat10\cellx3942\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\c
clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx4373\clbrdrt
clcfpat10\clcbpat10\cellx5315\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat
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ellx6221\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx6310\clbrdrt\brdrs\brdrcf
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\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr \u8212?\cell\pard\plain\in
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cf1\f51\fs18\qr 1.85\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs18\ql \~%\ce
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\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs18\ql Asset backed securities\ce
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f51\fs18\qr 8\cell
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brdrb\brdrdb\brdrcf1\clvertalb\cellx9844\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx1
\pard\plain\intbl\li462\ri22\sb22\cf1\f51\fs18\ql Cash equivalent and\plain\intb
l\li462\ri22\cf1\f51\fs18\ql marketable fixed\plain\intbl\li462\ri22\sa22\cf1\f
51\fs18\ql income securities\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\
fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\par
f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell
\intbl\li22\sb22\sa22\cf1\f51\fs18\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\
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\fi528\cf1\f51\fs20\ql As of December\~31, 2015, we had $8.5 billion of debt, in
cluding the current portion, primarily consisting of the following\plain\cf1\f51
\fs20\ql fixed rate unsecured debt (in millions):
\par\pard\plain
ellx10799\trrh-66
clcbpat10\cellx9505\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10692\clvertal
b\clshdng100\clcfpat10\clcbpat10\cellx10799\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql 1.20% Notes due on Novembe
r\~29, 2017\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\pla
b\clshdng100\clcfpat10\clcbpat10\cellx10799\trrh281\row}}}
trrh281

trrh281\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql 2.60% Notes due on Decembe
r 5, 2019\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain
\intbl\sb22\sa22\cf1\f51\fs20\qr 1,000\cell
trrh281
trrh281\row}}}
trrh281
trrh281\row}}}
\par\pard\plain\fs16\par\pard\plain\sb264\fi528\cf1\f51\fs20\ql The fair value o
f our debt will fluctuate with movements of interest rates, increasing in period
s of declining rates of interest\plain\cf1\f51\fs20\ql and declining in periods
of increasing rates of interest. Based upon quoted market prices and Level 2 in
puts, the fair value of our\plain\cf1\f51\fs20\ql total debt was $8.8 billion a
s of December\~31, 2015.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Foreign
Exchange Risk\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql During 2015, net sales
from our International segment accounted for 33% of our consolidated revenues. N
et sales and\plain\cf1\f51\fs20\ql related expenses generated from our internat
ionally-focused websites, and from www.amazon.ca\plain\cf1\f51\fs20\ql and www.
amazon.com.mx\plain\cf1\f51\fs20\ql (which are included in our North America se
gment), are primarily denominated in the functional currencies of the correspond
ing\plain\cf1\f51\fs20\ql websites and primarily include Euros, Japanese Yen, a
nd British Pounds. The results of operations of, and certain of our\plain\cf1\f5
1\fs20\ql intercompany balances associated with, our internationally-focused we
bsites and AWS are exposed to foreign exchange rate\plain\cf1\f51\fs20\ql fluct
uations. Upon consolidation, as foreign exchange rates vary, net sales and other
operating results may differ materially from\plain\cf1\f51\fs20\ql expectation
s, and we may record significant gains or losses on the remeasurement of interco
mpany balances. For example, as a\plain\cf1\f51\fs20\ql result of fluctuations
in foreign exchange rates during 2015, International segment revenues decreased
by $5.0 billion in\plain\cf1\f51\fs20\ql comparison with the prior year.\par\pa
rd\plain\sb132\fi528\cf1\f51\fs20\ql We have foreign exchange risk related to fo
reign-denominated cash, cash equivalents, and marketable securities\plain\cf1\f5
1\fs20\ql (\u8220?foreign funds\u8221?). Based on the balance of foreign funds
as of December\~31, 2015, of $7.3 billion, an assumed 5%,\plain\cf1\f51\fs20\ql
10%, and 20% adverse change to foreign exchange would result in fair value decl
ines of $365 million, $730 million, and $1.5\plain\cf1\f51\fs20\ql billion. All
investments are classified as \u8220?available-for-sale.\u8221? Fluctuations in
fair value are recorded in\plain\cf1\f51\fs20\ql \u8220?Accumulated other comp
rehensive loss,\u8221? a separate component of stockholders\u8217? equity.\par\p
ard\plain\sb132\fi528\cf1\f51\fs20\ql We have foreign exchange risk related to o
ur intercompany balances denominated in various foreign currencies. Based on\pla
in\cf1\f51\fs20\ql the intercompany balances as of December\~31, 2015, an assum
ed 5%, 10%, and 20% adverse change to foreign exchange would\plain\cf1\f51\fs20\
ql result in losses of $190 million, $405 million, and $905 million, recorded t
o \u8220?Other income (expense), net.\u8221?\par\pard\plain\sb132\fi528\cf1\f51\
fs20\ql See Item\~7 of Part II, \u8220?Management\u8217?s Discussion and Analysi
s of Financial Condition and Results of\plain\cf1\f51\fs20\ql Operations\u8212?
Results of Operations\u8212?Effect of Foreign Exchange Rates\u8221? for addition
al information on the effect\plain\cf1\f51\fs20\ql on reported results of chang
es in foreign exchange rates.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Inv
estment Risk\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql As of December\~31, 2015
, our recorded basis in equity investments was $280 million. These investments p
rimarily relate to\plain\cf1\f51\fs20\ql equity-method and cost-method investme
nts in private companies. We review our investments for impairment when events a
nd\plain\cf1\f51\fs20\ql circumstances indicate that the decline in fair value
of such assets below the carrying value is other-than-temporary. Our\plain\cf1\f
51\fs20\ql analysis includes a review of recent operating results and trends, r
ecent sales/acquisitions of the investee securities, and other\plain\cf1\f51\fs2
0\ql publicly available data. The current global economic climate provides addi
tional uncertainty. Valuations of private companies are\plain\cf1\f51\fs20\ql i
nherently more complex due to the lack of readily available market data. As such
, we believe that market sensitivities are not\plain\cf1\f51\fs20\ql practicabl
e.
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3427A9A3A9A1FE0ABB25034467" }{\*\fldrslt\cf3\f51\fs20\ql Notes to Consolidated F
inancial Statements}}\cell\pard\plain\intbl\li22\ri22\sb22\sa22\ul{\field{\*\fld
inst HYPERLINK \\l "s68A883427A9A3A9A1FE0ABB25034467" }{\*\fldrslt\cf3\f51\fs20\
qr 43}}\cell{
\page{\*\bkmkstart s1EC4835064F4F84EE604ABB24E36327}{\*\bkmkend s1EC4835064F4F84
EE604ABB24E36327}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F
\par\pard\plain\fs16\par\pard\plain\cf1\f51\fs20\b\qc Report of Independent Regi
stered Public Accounting Firm\par\pard\plain\sb264\cf1\f51\fs20\ql The Board of
Directors and Shareholders\par\pard\plain\cf1\f51\fs20\ql Amazon.com, Inc.\par\p
ard\plain\sb132\fi528\cf1\f51\fs20\ql We have audited the accompanying consolida
ted balance sheets of Amazon.com, Inc. as of December\~31, 2015 and 2014,\plain\
cf1\f51\fs20\ql and the related consolidated statements of operations, comprehe
nsive income (loss), stockholders\u8217? equity, and cash flows\plain\cf1\f51\fs
20\ql for each of the three years in the period ended December\~31, 2015. These
financial statements are the responsibility of the\plain\cf1\f51\fs20\ql compa
ny\u8217?s management. Our responsibility is to express an opinion on these fina
ncial statements based on our audits.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United\plain\cf1\f51\fs20\ql States). Those standar
ds require that we plan and perform the audit to obtain reasonable assurance abo
ut whether the financial\plain\cf1\f51\fs20\ql statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and\plain\cf1\f51\fs20\ql disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant
estimates\plain\cf1\f51\fs20\ql made by management, as well as evaluating the o
verall financial statement presentation. We believe that our audits provide a\pl
ain\cf1\f51\fs20\ql reasonable basis for our opinion.\par\pard\plain\sb132\fi52
8\cf1\f51\fs20\ql In our opinion, the financial statements referred to above pre
sent fairly, in all material respects, the consolidated financial\plain\cf1\f51\
fs20\ql position of Amazon.com, Inc. at December\~31, 2015 and 2014, and the co
nsolidated results of its operations and its cash flows\plain\cf1\f51\fs20\ql f
or each of the three years in the period ended December\~31, 2015, in conformity
with U.S. generally accepted accounting\plain\cf1\f51\fs20\ql principles.\par\
pard\plain\sb132\fi528\cf1\f51\fs20\ql We also have audited, in accordance with
the standards of the Public Company Accounting Oversight Board (United\plain\cf1
\f51\fs20\ql States), Amazon.com, Inc.\u8217?s internal control over financial
reporting as of December\~31, 2015, based on criteria\plain\cf1\f51\fs20\ql est
ablished in Internal Control\u8212?Integrated Framework issued by the Committee
of Sponsoring Organizations of the\plain\cf1\f51\fs20\ql Treadway Commission (2
013 framework) and our report dated January\~28, 2016 expressed an unqualified o
pinion thereon.\par\pard\plain\sb264\cf1\f51\fs20\qc /s/ Ernst & Young LLP\par\p
ard\plain\sb264\cf1\f51\fs20\ql Seattle, Washington\par\pard\plain\cf1\f51\fs20\
ql January\~28, 2016
\page{\*\bkmkstart s3AEEDED19187D11AC542ABB20E896DC}{\*\bkmkend s3AEEDED19187D11
AC542ABB20E896DC}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F
\par\pard\plain\fs16\par\pard\plain\sb176\cf1\f51\fs20\b\qc AMAZON.COM, INC.\par
\pard\plain\sb132\cf1\f51\fs20\b\qc CONSOLIDATED STATEMENTS OF CASH FLOWS\par\pa
rd\plain\cf1\f51\fs20\b\qc (in millions)
\par\pard\plain
281
281\row}}}
talb\cellx8083\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9387\clvertalb\cellx9494\clb
rdrb\brdrs\brdrcf1\clvertalb\cellx10797\trrh281
rdrb\brdrs\brdrcf1\clvertalb\cellx10797\trrh281\row}}}
0682\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10795\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs18\ql CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\ql $\cell
0682\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10795\trrh281\row}}}
87\clvertalb\cellx9494\clvertalb\cellx10797\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs18\ql OPERATING ACTIVITIES:\cell
cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
87\clvertalb\cellx9494\clvertalb\cellx10797\trrh281\row}}}
d\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr 596\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs18\ql Adjustments to reconcile n
et income (loss) to net cash from operating activities:\cell\pard\plain\intbl\li
22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\c
f1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\c
l\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
\pard\plain\intbl\li462\ri22\sb22\cf1\f51\fs18\ql Depreciation of property and e
quipment, including internal-use software and\plain\intbl\li462\ri22\sa22\cf1\f5
1\fs18\ql website development, and other amortization, including capitalized co
ntent costs\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr 6,281\cell
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs18\ql Stock-based compensation\
cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr 2,119\cell
682\clvertalb\cellx10795\trrh281\row}}}
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs18\ql Other operating expense (
income), net\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr 155\cell
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs18\ql Losses (gains) on sales o
f marketable securities, net\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\q
r 5\cell
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs18\ql Other expense (income), n
et\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr 245\cell
f51\fs18\qr 62\cell
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs18\ql Deferred income taxes\cel
l\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr 81\cell
sb22\sa22\cf1\f51\fs18\qr (156\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs18
\ql )\cell{
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs18\ql Excess tax benefits from
stock-based compensation\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr (1
19\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs18\ql )\cell\pard\plain\intbl\
22\sa22\cf1\f51\fs18\qr (78\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs18\ql
)\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs18\ql Changes in operating asset
s and liabilities:\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\
\~\cell{
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs18\ql Inventories\cell\pard\pla
in\intbl\li22\sb22\sa22\cf1\f51\fs18\qr (2,187\cell\pard\plain\intbl\ri22\sb22\s
a22\cf1\f51\fs18\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql
\~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr (1,193\cell\pard\plain\i
ntbl\ri22\sb22\sa22\cf1\f51\fs18\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\
cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr (1,410\c
ell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs18\ql )\cell{
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs18\ql Accounts receivable, net
and other\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr (1,755\cell\pard\
plain\intbl\ri22\sb22\sa22\cf1\f51\fs18\ql )\cell\pard\plain\intbl\li22\ri22\sb2
2\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr (
1,039\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs18\ql )\cell\pard\plain\int
f1\f51\fs18\qr (846\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs18\ql )\cell{
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs18\ql Accounts payable\cell\par
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs18\ql Accrued expenses and othe

r\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr 913\cell
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs18\ql Additions to unearned rev
enue\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr 7,401\cell
{\trowd\trqc\cellx6672\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7862\clbrdrb\brdrs\b
rdrcf1\clvertalb\cellx7975\clvertalb\cellx8082\clbrdrb\brdrs\brdrcf1\clvertalb\c
ellx9272\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9385\clvertalb\cellx9492\clbrdrb\b
rdrs\brdrcf1\clvertalb\cellx10682\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10795\trr
h281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs18\ql Amortization of previousl
y unearned revenue\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr (6,109\c
ell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs18\ql )\cell\pard\plain\intbl\li22
fs18\qr (3,692\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs18\ql )\cell\pard\
22\sa22\cf1\f51\fs18\qr (2,292\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs18
\ql )\cell{
h281\row}}}
lshdng100\clcfpat10\clcbpat10\cellx9492\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng1
00\clcfpat10\clcbpat10\cellx10682\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clc
fpat10\clcbpat10\cellx10795\trrh281
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs18\ql Net cash provided by (use
d in) operating activities\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr
11,920\cell
fpat10\clcbpat10\cellx10795\trrh281\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs18\ql INVESTING ACTIVITIES:\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs18\ql Acquisitions, net of cash
acquired, and other\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr (795\ce
ll\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs18\ql )\cell\pard\plain\intbl\li22\
ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\f
s18\qr (979\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs18\ql )\cell\pard\pla
sa22\cf1\f51\fs18\qr (312\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs18\ql )
\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs18\ql Sales and maturities of ma
rketable securities\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr 3,025\c
ell
h281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs18\ql Purchases of marketable se
curities\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr (4,091\cell\pard\p
\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr (2
,542\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs18\ql )\cell\pard\plain\intb
1\f51\fs18\qr (2,826\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs18\ql )\cell
{
h281\row}}}
fpat10\clcbpat10\cellx10795\trrh281
d in) investing activities\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr
\li22\sb22\sa22\cf1\f51\fs18\qr (4,276\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\
f51\fs18\ql )\cell{
fpat10\clcbpat10\cellx10795\trrh281\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs18\ql FINANCING ACTIVITIES:\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs18\ql Excess tax benefits from s
tock-based compensation\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr 119
\cell
f51\fs18\qr 6\cell
f51\fs18\qr 78\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs18\ql Proceeds from long-term de
bt and other\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr 353\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs18\ql Repayments of long-term de
bt and other\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr (1,652\cell\pa
rd\plain\intbl\ri22\sb22\sa22\cf1\f51\fs18\ql )\cell\pard\plain\intbl\li22\ri22\
sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\q
r (513\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs18\ql )\cell\pard\plain\in
cf1\f51\fs18\qr (231\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs18\ql )\cell
{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs18\ql Principal repayments of ca
\f51\fs18\qr (1,285\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs18\ql )\cell\
22\sb22\sa22\cf1\f51\fs18\qr (775\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\f
s18\ql )\cell{
{\trowd\trqc\clshdng100\clcfpat10\clcbpat10\cellx6672\clbrdrb\brdrs\brdrcf1\clve
rtalb\clshdng100\clcfpat10\clcbpat10\cellx7862\clbrdrb\brdrs\brdrcf1\clvertalb\c
\cellx8082\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9
272\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9385\clv
ertalb\clshdng100\clcfpat10\clcbpat10\cellx9492\clbrdrb\brdrs\brdrcf1\clvertalb\
clshdng100\clcfpat10\clcbpat10\cellx10682\clbrdrb\brdrs\brdrcf1\clvertalb\clshdn
g100\clcfpat10\clcbpat10\cellx10795\trrh281
)\cell{
g100\clcfpat10\clcbpat10\cellx10795\trrh281\row}}}
82\clvertalb\cellx9272\clvertalb\cellx9385\clvertalb\cellx9492\clbrdrt\brdrs\brd
rcf1\clvertalb\cellx10682\clbrdrt\brdrs\brdrcf1\clvertalb\cellx10795\trrh281
d in) financing activities\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr
cf1\f51\fs18\qr 4,432\cell
82\clvertalb\cellx9272\clvertalb\cellx9385\clvertalb\cellx9492\clbrdrt\brdrs\brd
rcf1\clvertalb\cellx10682\clbrdrt\brdrs\brdrcf1\clvertalb\cellx10795\trrh281\row
}}}
g100\clcfpat10\clcbpat10\cellx10795\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs18\ql Foreign-currency effect on
cash and cash equivalents\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr
(374\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs18\ql )\cell\pard\plain\intb
1\f51\fs18\qr (310\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs18\ql )\cell\p
2\sb22\sa22\cf1\f51\fs18\qr (86\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs1
8\ql )\cell{
g100\clcfpat10\clcbpat10\cellx10795\trrh281\row}}}
ellx9272\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9385\clvertalb\cellx9492\clbrdrt\b
rdrs\brdrcf1\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10682\clbrdrt\brdrs\brdrcf1\cl
brdrb\brdrs\brdrcf1\clvertalb\cellx10795\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs18\ql Net increase (decrease) in
cash and cash equivalents\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr
1,333\cell
ellx9272\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9385\clvertalb\cellx9492\clbrdrt\b
rdrs\brdrcf1\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10682\clbrdrt\brdrs\brdrcf1\cl
brdrb\brdrs\brdrcf1\clvertalb\cellx10795\trrh281\row}}}
{\trowd\trqc\clshdng100\clcfpat10\clcbpat10\cellx6672\clbrdrb\brdrdb\brdrcf1\clv
ertalb\clshdng100\clcfpat10\clcbpat10\cellx6785\clbrdrb\brdrdb\brdrcf1\clvertalb
\clshdng100\clcfpat10\clcbpat10\cellx7862\clbrdrb\brdrdb\brdrcf1\clvertalb\clshd
lx8082\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8195
\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9272\clbrd
rb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9385\clvertalb\c
lshdng100\clcfpat10\clcbpat10\cellx9492\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng
100\clcfpat10\clcbpat10\cellx9605\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\cl
cfpat10\clcbpat10\cellx10682\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat
10\clcbpat10\cellx10795\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs18\ql CASH AND CASH EQUIVALENTS,
END OF PERIOD\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\ql $\cell\pard\
plain\intbl\sb22\sa22\cf1\f51\fs18\qr 15,890\cell

{\trowd\trqc\clshdng100\clcfpat10\clcbpat10\cellx6672\clbrdrb\brdrdb\brdrcf1\clv
rb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9385\clvertalb\c
lshdng100\clcfpat10\clcbpat10\cellx9492\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng
100\clcfpat10\clcbpat10\cellx9605\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\cl
cfpat10\clcbpat10\cellx10682\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat
10\clcbpat10\cellx10795\trrh281\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs18\ql SUPPLEMENTAL CASH FLOW INF
ORMATION:\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard
i22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f
51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs18\ql Cash paid for interest on
long-term debt\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\ql $\cell\pard\
plain\intbl\sb22\sa22\cf1\f51\fs18\qr 325\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs18\ql Cash paid for interest on
capital and finance lease obligations\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f
51\fs18\qr 153\cell
f51\fs18\qr 86\cell
f51\fs18\qr 41\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs18\ql Cash paid for income taxes
(net of refunds)\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr 273\cell
uired under capital leases\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs18\qr
4,717\cell
uired under build-to-suit leases\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs
18\qr 544\cell
\cellx10682\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10795\trrh281\row}}}\p
ard\plain\sb264\cf1\f51\fs20\qc See accompanying notes to consolidated financial
statements.
\page{\*\bkmkstart s72E3776A647627199433ABB21290C04}{\*\bkmkend s72E3776A6476271
99433ABB21290C04}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F
\par\pard\plain\fs16\par\pard\plain\cf1\f51\fs20\b\qc AMAZON.COM, INC.\par\pard\
plain\sb132\cf1\f51\fs20\b\qc CONSOLIDATED STATEMENTS OF OPERATIONS\par\pard\pla
in\cf1\f51\fs20\b\qc (in millions, except per share data)\par\pard\plain\cf1\f51
\fs18\ql \~
\par\pard\plain
ellx10796\trrh-66
ow}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Net product sales\cell\par
d\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\c
f1\f51\fs20\qr 79,268\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Net service sales\cell\par
f51\fs20\qr 18,908\cell
f51\fs20\qr 13,549\cell
row}}}
g100\clcfpat10\clcbpat10\cellx9273\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\cl
cfpat10\clcbpat10\cellx10683\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat1
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Total net sales\cell\pard
\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 107,006\cell
f51\fs20\qr 88,988\cell
f51\fs20\qr 74,452\cell
cfpat10\clcbpat10\cellx10683\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat1
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Operating expenses (1):\ce
~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Cost of sales\cell\pard\p
f51\fs20\qr 62,752\cell
f51\fs20\qr 54,181\cell
f51\fs20\qr 10,766\cell
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Technology and content\ce
ll\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 12,540\cell
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql General and administrativ
e\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 1,747\cell
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Other operating expense (
income), net\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 171\cell
row}}}
b\clshdng100\clcfpat10\clcbpat10\cellx9273\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrs\b
rdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10683\clbrdrt\brdrs\brdrcf1
\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10796\trrh2
98
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql Total operating expenses\
f51\fs20\qr 88,810\cell
f51\fs20\qr 73,707\cell
98\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Interest income\cell\pard\
f51\fs20\qr 39\cell
f51\fs20\qr 38\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Interest expense\cell\pard
\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (459\cell\pard\plain\intbl\ri22\sb22
l \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (210\cell\pard\plain\i
ntbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\
cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (141\cel
l\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Other income (expense), ne
t\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (256\cell\pard\plain\intb
\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (118\cell\p
ard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22
\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\
qr (136\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
053\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9166\clvertalb\cellx9273\clbrdrt\brdrs\
brdrcf1\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10683\clbrdrt\brdrs\brdrcf1\clbrdrb
\brdrs\brdrcf1\clvertalb\cellx10796\trrh298
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Total non-operating incom
e (expense)\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (665\cell\pard\
\f51\fs20\qr (239\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
053\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9166\clvertalb\cellx9273\clbrdrt\brdrs\
brdrcf1\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10683\clbrdrt\brdrs\brdrcf1\clbrdrb
\brdrs\brdrcf1\clvertalb\cellx10796\trrh298\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Income (loss) before incom
e taxes\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 1,568\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Provision for income taxes
\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (950\cell\pard\plain\intbl
\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\
f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (167\cell\pa
r (161\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Equity-method investment a
ctivity, net of tax\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (22\cel
l\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\r
20\qr 37\cell
drt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9393\clbrdrt\brdrs\brdrc
f1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10683\clbrdrt\brdrs\brdrcf1\clbrdrb\brd
rdb\brdrcf1\clvertalb\cellx10796\trrh298

f1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10683\clbrdrt\brdrs\brdrcf1\clbrdrb\brd
rdb\brdrcf1\clvertalb\cellx10796\trrh298\row}}}
{\trowd\clshdng100\clcfpat10\clcbpat10\cellx6013\clbrdrt\brdrdb\brdrcf1\clbrdrb\
brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx6133\clbrdrt\brdrdb
\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx74
23\clbrdrt\brdrdb\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\
clcbpat10\cellx7536\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx7643\clbrdrt\b
rdrdb\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\ce
llx7763\clbrdrt\brdrdb\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfp
at10\clcbpat10\cellx9053\clbrdrt\brdrdb\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb
10\cellx9273\clbrdrt\brdrdb\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\
clcfpat10\clcbpat10\cellx9393\clbrdrt\brdrdb\brdrcf1\clbrdrb\brdrdb\brdrcf1\clve
rtalb\clshdng100\clcfpat10\clcbpat10\cellx10683\clbrdrt\brdrdb\brdrcf1\clbrdrb\b
rdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10796\trrh332
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Basic earnings per share\c
ell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22
\sa22\cf1\f51\fs20\qr 1.28\cell
{\trowd\clshdng100\clcfpat10\clcbpat10\cellx6013\clbrdrt\brdrdb\brdrcf1\clbrdrb\
brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx6133\clbrdrt\brdrdb
\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx74
23\clbrdrt\brdrdb\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\
clcbpat10\cellx7536\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx7643\clbrdrt\b
rdrdb\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\ce
llx7763\clbrdrt\brdrdb\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfp
at10\clcbpat10\cellx9053\clbrdrt\brdrdb\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb
10\cellx9273\clbrdrt\brdrdb\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\
clcfpat10\clcbpat10\cellx9393\clbrdrt\brdrdb\brdrcf1\clbrdrb\brdrdb\brdrcf1\clve
rtalb\clshdng100\clcfpat10\clcbpat10\cellx10683\clbrdrt\brdrdb\brdrcf1\clbrdrb\b
rdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10796\trrh332\row}}}
\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb
22\sa22\cf1\f51\fs20\qr 1.25\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Weighted-average shares us
ed in computation of earnings per share:\cell\pard\plain\intbl\li22\ri22\sb22\sa
\~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\
2\sa22\cf1\f51\fs20\ql \~\cell{
rh281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Basic\cell\pard\plain\int
rh281\row}}}
dng100\clcfpat10\clcbpat10\cellx7536\clvertalb\clshdng100\clcfpat10\clcbpat10\ce
llx7643\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx905
3\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9166\clve
rtalb\clshdng100\clcfpat10\clcbpat10\cellx9273\clbrdrb\brdrdb\brdrcf1\clvertalb\
clshdng100\clcfpat10\clcbpat10\cellx10683\clbrdrb\brdrdb\brdrcf1\clvertalb\clshd
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Diluted\cell\pard\plain\i
ntbl\li22\sb22\sa22\cf1\f51\fs20\qr 477\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql _____________\cell\pard\pl
d\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql (1)\~\~\~\~Includes stockbased compensation as follows:\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51
\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1
\f51\fs20\ql \~\cell{
trrh281
in\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f5
1\fs20\qr 482\cell
trrh281\row}}}
f51\fs20\qr 88\cell
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql Technology and content\ce
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql General and administrativ
e\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 223\cell
x10683\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10796\trrh281\row}}}\pard\p
lain\sb264\cf1\f51\fs20\qc See accompanying notes to consolidated financial stat
ements.
\page{\*\bkmkstart sF605A78E1CC41DD2B1DAABB20E6B1BE}{\*\bkmkend sF605A78E1CC41DD
2B1DAABB20E6B1BE}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F

plain\sb132\cf1\f51\fs20\b\qc CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (L
OSS)\par\pard\plain\cf1\f51\fs20\b\qc (in millions)
\par\pard\plain
ellx10795\trrh-66
ow}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Other comprehensive income
(loss):\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\
\pard\plain\intbl\li462\ri22\sb22\cf1\f51\fs20\ql Foreign currency translation a
djustments, net of tax of $10, $(3), and\plain\intbl\li462\ri22\sa22\cf1\f51\fs2
0\ql $(20)\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (210\cell\pard\
\f51\fs20\qr 63\cell
\pard\plain\intbl\li462\ri22\sb22\cf1\f51\fs20\ql Net change in unrealized gains
(losses) on available-for-sale\plain\intbl\li462\ri22\sa22\cf1\f51\fs20\ql sec
urities:\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql Unrealized gains (losses)
, net of tax of $(5), $1, and $3\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs
20\qr (7\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\
2\cf1\f51\fs20\qr 2\cell
\pard\plain\intbl\li858\ri22\sb22\cf1\f51\fs20\ql Reclassification adjustment fo
r losses (gains) included in\plain\intbl\li858\ri22\cf1\f51\fs20\ql \u8220?Othe
r income (expense), net,\u8221? net of tax of $0,\plain\intbl\li858\ri22\sa22\cf
1\f51\fs20\ql $(1), and $(1)\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\
qr 5\cell
row}}}
98
\pard\plain\intbl\li1386\ri22\sb22\sa22\cf1\f51\fs20\ql Net unrealized gains (lo
sses) on available-for-sale securities\cell\pard\plain\intbl\li22\sb22\sa22\cf1\
ntbl\li22\sb22\sa22\cf1\f51\fs20\qr (9\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\
f51\fs20\ql )\cell{
98\row}}}
\pard\plain\intbl\li1782\ri22\sb22\sa22\cf1\f51\fs20\ql Total other comprehensiv
e income (loss)\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (212\cell\p
qr (326\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\i
ntbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22
\cf1\f51\fs20\qr 54\cell
row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Comprehensive income (loss
)\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\s
cbpat10\cellx10795\trrh281\row}}}\pard\plain\sb264\cf1\f51\fs20\qc See accompany
ing notes to consolidated financial statements.
\page{\*\bkmkstart sBBA2585445624EC7F128ABB211D2FD8}{\*\bkmkend sBBA2585445624EC
7F128ABB211D2FD8}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F
plain\sb132\cf1\f51\fs20\b\qc CONSOLIDATED BALANCE SHEETS\par\pard\plain\cf1\f51
\fs20\b\qc (in millions, except per share data)\par\pard\plain\cf1\f51\fs18\ql \
~
\par\pard\plain
ellx10797\trrh-66

6\ql \~\cell\pard\plain\intbl\f0\fs16\ql \~\cell{
i22\sb22\sa22\cf1\f51\fs16\b\qc December 31,\cell{
ow}}}
cellx9487\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10797\trrh2
81
qc 2014\cell{
cellx9487\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10797\trrh2
81\row}}}
\clshdng100\clcfpat10\clcbpat10\cellx10797\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\qc ASSETS\cell\pard\plain\i
ql \~\cell{
\clshdng100\clcfpat10\clcbpat10\cellx10797\trrh281\row}}}
{\trowd\cellx8070\clvertalb\cellx9380\clvertalb\cellx9487\clvertalb\cellx10797\t
rrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Current assets:\cell\pard\
1\fs20\ql \~\cell{
rrh281\row}}}
g100\clcfpat10\clcbpat10\cellx10684\clvertalb\clshdng100\clcfpat10\clcbpat10\cel
lx10797\trrh281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Cash and cash equivalents
22\sa22\cf1\f51\fs20\qr 15,890\cell
lx10797\trrh281\row}}}
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Marketable securities\cel

\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Inventories\cell\pard\pla
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Accounts receivable, net
and other\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 6,423\cell
\pard\plain\intbl\li1386\ri22\sb22\sa22\cf1\f51\fs20\ql Total current assets\cel
f51\fs20\qr 31,327\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Property and equipment, ne
t\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 21,838\cell
f51\fs20\qr 16,967\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Goodwill\cell\pard\plain\i
ntbl\li22\sb22\sa22\cf1\f51\fs20\qr 3,759\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Other assets\cell\pard\pla
drb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10684\clbrdrb\b
\pard\plain\intbl\li1782\ri22\sb22\sa22\cf1\f51\fs20\ql Total assets\cell\pard\p
f51\fs20\qr 65,444\cell
rrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\qc LIABILITIES AND STOCKHOL
DERS\u8217? EQUITY\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\
rrh281\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Current liabilities:\cell\
f1\f51\fs20\ql \~\cell{
trrh281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Accounts payable\cell\par
f1\f51\fs20\qr 20,397\cell
trrh281\row}}}
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Accrued expenses and othe
r\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 10,384\cell
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Unearned revenue\cell\par
\pard\plain\intbl\li1386\ri22\sb22\sa22\cf1\f51\fs20\ql Total current liabilitie
s\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 33,899\cell
f51\fs20\qr 28,089\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Long-term debt\cell\pard\p
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Other long-term liabilitie
s\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 9,926\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Commitments and contingenc
ies (Note 7)\cell
\par\pard\plain\intbl\fs16\pard\plain\intbl\f0\fs16\ql \~\cell
li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell
\par\pard\plain\intbl\fs16\pard\plain\intbl\f0\fs16\ql \~\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Stockholders\u8217? equity
\sa22\cf1\f51\fs20\ql \~\cell{
rrh281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Preferred stock, $0.01 pa
r value:\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\
22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
rrh281\row}}}
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql Authorized shares \u8212?
500\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plai
b22\sa22\cf1\f51\fs20\ql \~\cell{
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql Issued and outstanding sh
ares \u8212? none\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr \u8212?\c
ell
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Common stock, $0.01 par v
alue:\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\pla
sb22\sa22\cf1\f51\fs20\ql \~\cell{
rrh281
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql Authorized shares \u8212?
5,000\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\pl
\sb22\sa22\cf1\f51\fs20\ql \~\cell{
rrh281\row}}}
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql Issued shares \u8212? 494
and 488\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql Outstanding shares \u8212
? 471 and 465\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 5\cell
f51\fs20\qr 5\cell
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Treasury stock, at cost\c
ell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (1,837\cell\pard\plain\intbl
f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (1,837\cell\
pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Additional paid-in capita
l\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 13,394\cell
f51\fs20\qr 11,135\cell
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Accumulated other compreh
ensive loss\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (723\cell\pard\
511\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Retained earnings\cell\pa
rd\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 2,545\cell
x9487\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10684\
clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10797\trrh28
1
\pard\plain\intbl\li1386\ri22\sb22\sa22\cf1\f51\fs20\ql Total stockholders\u8217
? equity\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 13,384\cell
f51\fs20\qr 10,741\cell
1\row}}}
lb\cellx10684\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10797\trrh281
\pard\plain\intbl\li1782\ri22\sb22\sa22\cf1\f51\fs20\ql Total liabilities and st
ockholders\u8217? equity\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\
lb\cellx10684\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10797\trrh281\row}}}\pard\pl
ain\sb264\cf1\f51\fs20\qc See accompanying notes to consolidated financial state
ments.
\page{\*\bkmkstart s008DF71E98640DCCD114ABB20EE3FFB}{\*\bkmkend s008DF71E98640DC
CD114ABB20EE3FFB}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F
plain\sb132\cf1\f51\fs20\b\qc CONSOLIDATED STATEMENTS OF STOCKHOLDERS\u8217? EQU
ITY\par\pard\plain\cf1\f51\fs20\b\qc (in millions)
\par\pard\plain\fs16\par\pard\plain\cf1\f51\fs18\ql \~
\par\pard\plain
6\ql \~\cell{
w}}}
cellx5543\clvertalb\cellx6649\clvertalb\cellx6738\clvertalb\cellx8047\clvertalb\
cellx8136\clvertalb\cellx9137\clvertalb\cellx9226\clvertalb\cellx10793\trrh281
i22\sb22\sa22\cf1\f51\fs14\b\qc Common Stock\cell\pard\plain\intbl\li22\ri22\sb2
\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\pl

d\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\ql \~\cell{
cellx5543\clvertalb\cellx6649\clvertalb\cellx6738\clvertalb\cellx8047\clvertalb\
cellx8136\clvertalb\cellx9137\clvertalb\cellx9226\clvertalb\cellx10793\trrh281\r
ow}}}
clbrdrb\brdrs\brdrcf1\clvertalb\cellx10791\trrh554
i22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Shares\cell\pard\plain\intbl\li22\ri22\sb22
b\qc Amount\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pa
rd\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Treasury\par\pard\plain\int
bl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Stock\cell\pard\plain\intbl\li22\ri22\s
14\b\qc Additional\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Pa
id-In\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Capital\cell\pa
\ri22\sb22\cf1\f51\fs14\b\qc Accumulated Other\plain\intbl\li22\ri22\cf1\f51\fs1
4\b\qc Comprehensive\plain\intbl\li22\ri22\sa22\cf1\f51\fs14\b\qc Income (Loss
ntbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Retained\par\pard\plain\intbl\li22\ri
22\sb22\sa22\cf1\f51\fs14\b\qc Earnings\cell\pard\plain\intbl\li22\ri22\sb22\sa2
2\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc
Total\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Stockholders\u
8217?\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Equity\cell{
clbrdrb\brdrs\brdrcf1\clvertalb\cellx10791\trrh554\row}}}
{\trowd\clshdng100\clcfpat10\clcbpat10\cellx2203\clbrdrt\brdrs\brdrcf1\clvertalb
\clshdng100\clcfpat10\clcbpat10\cellx2972\clbrdrt\brdrs\brdrcf1\clvertalb\clshdn
lbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx4159\clbrdrt\
brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx4329\clvertalb\clshd
lcfpat10\clcbpat10\cellx4608\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat1
0\clcbpat10\cellx5259\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbp
at10\cellx5449\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx5538\clbrdrt\brdrs\
\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx6424\clbrdrt\brdrs\brdrcf1\clvert
5\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8041\clver
shdng100\clcfpat10\clcbpat10\cellx8321\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng10
0\clcfpat10\clcbpat10\cellx8942\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfp
cbpat10\cellx10364\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10785\trrh479
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs18\ql Balance as of January 1,\plain\
intbl\li22\ri22\sa22\cf1\f51\fs18\ql 2013\cell\pard\plain\intbl\li22\sb22\sa22\
brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx4329\clvertalb\clshd
at10\cellx5449\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx5538\clbrdrt\brdrs\
5\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8041\clver
shdng100\clcfpat10\clcbpat10\cellx8321\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng10
0\clcfpat10\clcbpat10\cellx8942\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfp
cbpat10\cellx10364\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10785\trrh479\r
ow}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs18\ql Net income\cell\pard\plain
\intbl\li22\sb22\sa22\cf1\f51\fs20\qr \u8212?\cell
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs18\ql Other comprehensive\plain\intbl
\li22\ri22\sa22\cf1\f51\fs18\ql income (loss)\cell\pard\plain\intbl\li22\sb22\s
a22\cf1\f51\fs20\qr \u8212?\cell
f51\fs20\qr 54\cell
f51\fs20\qr 54\cell
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs18\ql Exercise of common stock\plain\
intbl\li22\ri22\sa22\cf1\f51\fs18\ql options\cell\pard\plain\intbl\li22\sb22\sa
f51\fs20\qr 4\cell
f51\fs20\qr 4\cell
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs18\ql Excess tax benefits from\plain\
intbl\li22\ri22\sa22\cf1\f51\fs18\ql stock-based compensation\cell\pard\plain\i
ntbl\li22\sb22\sa22\cf1\f51\fs20\qr \u8212?\cell
f51\fs20\qr 73\cell
f51\fs20\qr 73\cell
brdrcf1\clvertalb\cellx5261\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5451\clvertalb\
cellx5540\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6427\clbrdrb\brdrs\brdrcf1\clvert
alb\cellx6646\clvertalb\cellx6735\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7708\clbr
drb\brdrs\brdrcf1\clvertalb\cellx8044\clvertalb\cellx8133\clbrdrb\brdrs\brdrcf1\
3\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10369\clbrdrb\brdrs\brdrcf1\clvertalb\cel
lx10790\trrh702
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs18\ql Stock-based compensation\plain\
intbl\li22\ri22\cf1\f51\fs18\ql and issuance of employee\plain\intbl\li22\ri22\
sa22\cf1\f51\fs18\ql benefit plan stock\cell\pard\plain\intbl\li22\sb22\sa22\cf
1\f51\fs20\qr \u8212?\cell
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs18\ql Balance as of December 31,\plai
n\intbl\li22\ri22\sa22\cf1\f51\fs18\ql 2013\cell\pard\plain\intbl\li22\sb22\sa2
f51\fs20\qr 5\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs18\ql Net loss\cell\pard\plain\i
\ql )\cell{
sb22\sa22\cf1\f51\fs20\qr \u8212?\cell
f51\fs20\qr 2\cell
f51\fs20\qr 2\cell
f51\fs20\qr 6\cell
f51\fs20\qr 6\cell
1\f51\fs20\qr \u8212?\cell
t10\clcbpat10\cellx10369\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\cl
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs18\ql Issuance of common stock\plain\
intbl\li22\ri22\sa22\cf1\f51\fs18\ql for acquisition activity\cell\pard\plain\i
f51\fs20\qr 44\cell
f51\fs20\qr 44\cell
t10\clcbpat10\cellx10369\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\cl
f51\fs20\qr 5\cell
f51\fs20\qr 10,741\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs18\ql Net income\cell\pard\plain
\intbl\li22\sb22\sa22\cf1\f51\fs20\qr \u8212?\cell
sb22\sa22\cf1\f51\fs20\qr \u8212?\cell
f51\fs20\qr 4\cell
f51\fs20\qr 4\cell
1\f51\fs20\qr \u8212?\cell
lx10790\trrh479
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs18\ql Issuance of common stock\plain\
intbl\li22\ri22\sa22\cf1\f51\fs18\ql for acquisition activity\cell\pard\plain\i
f51\fs20\qr 5\cell
f51\fs20\qr 5\cell
drb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx4329\clvertalb\
clshdng100\clcfpat10\clcbpat10\cellx4418\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdn
b\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx5757\clbrdrb\brdr
rcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx6643\clvertalb\clshdng100\clc
fpat10\clcbpat10\cellx6732\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10
\clcbpat10\cellx7068\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbp
at10\cellx7705\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\c
ellx8041\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8130\clbrdrb\brdrdb\brdrc
f1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8321\clbrdrb\brdrdb\brdrcf1\clv
10\cellx9219\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cel
4\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10785\trr
h479
drb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx4329\clvertalb\
b\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx5757\clbrdrb\brdr
rcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx6643\clvertalb\clshdng100\clc
fpat10\clcbpat10\cellx6732\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10
ellx8041\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8130\clbrdrb\brdrdb\brdrc
f1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8321\clbrdrb\brdrdb\brdrcf1\clv
10\cellx9219\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cel
4\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10785\trr
h479\row}}}\pard\plain\sb264\cf1\f51\fs20\qc See accompanying notes to consolida
ted financial statements.
\page{\*\bkmkstart s68A883427A9A3A9A1FE0ABB25034467}{\*\bkmkend s68A883427A9A3A9
A1FE0ABB25034467}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F
plain\sb132\cf1\f51\fs20\b\qc NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
\par\pard\plain\fs16{\*\bkmkstart s1CC67DFC7A4874A6CF19ABB20F65023}{\*\bkmkend s
1CC67DFC7A4874A6CF19ABB20F65023}\par\pard\plain\sb396\cf1\f51\fs20\b\ql Note 1\u
8212?DESCRIPTION OF BUSINESS AND ACCOUNTING POLICIES\par\pard\plain\sb132\fi264\
cf1\f51\fs20\b\i\ql Description of Business\par\pard\plain\sb132\fi528\cf1\f51\f
s20\ql Amazon.com opened its virtual doors on the World Wide Web in July 1995. W
e seek to be Earth\u8217?s most\plain\cf1\f51\fs20\ql customer-centric company.
In each of our segments, we serve our primary customer sets, consisting of cons
umers, sellers,\plain\cf1\f51\fs20\ql developers, enterprises, and content crea
tors. We serve consumers through our retail websites and focus on selection, pri
ce, and\plain\cf1\f51\fs20\ql convenience. We also manufacture and sell electro
nic devices. We offer programs that enable sellers to sell their products on our
\plain\cf1\f51\fs20\ql websites and their own branded websites and to fulfill o
rders through us, and programs that allow authors, musicians, filmmakers,\plain\
cf1\f51\fs20\ql app developers, and others to publish and sell content. We serv
e developers and enterprises of all sizes through our AWS\plain\cf1\f51\fs20\ql
segment, which provides access to technology infrastructure that enables virtua
lly any type of business. In addition, we provide\plain\cf1\f51\fs20\ql service
s, such as advertising services and co-branded credit card agreements.\par\pard\
plain\sb132\fi528\cf1\f51\fs20\ql We have organized our operations into three se
gments: North America, International, and AWS. See\plain\cf1\f51\fs20\ql \u8220
?Note\~11\u8212?Segment Information.\u8221?\par\pard\plain\sb396\fi264\cf1\f51\f
s20\b\i\ql Prior Period Reclassifications\par\pard\plain\sb132\fi528\cf1\f51\fs2
0\ql Certain prior period amounts have been reclassified to conform to the curre
nt period presentation, including recasting the\plain\cf1\f51\fs20\ql segment f
inancial information within \u8220?Note 11\u8212?Segment Information\u8221? as a
result of changing our reportable\plain\cf1\f51\fs20\ql segments to include an
AWS segment.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Principles of Conso
lidation\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql The consolidated financial s
tatements include the accounts of Amazon.com, Inc., its wholly-owned subsidiarie
s, and those\plain\cf1\f51\fs20\ql entities in which we have a variable interes

t and of which we are the primary beneficiary, including certain entities in Ind
ia and\plain\cf1\f51\fs20\ql China (collectively, the \u8220?Company\u8221?). I
ntercompany balances and transactions between consolidated entities are\plain\cf
1\f51\fs20\ql eliminated.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Use of
Estimates\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql The preparation of financi
al statements in conformity with GAAP requires estimates and assumptions that af
fect the\plain\cf1\f51\fs20\ql reported amounts of assets and liabilities, reve
nues and expenses, and related disclosures of contingent liabilities in the\plai
n\cf1\f51\fs20\ql consolidated financial statements and accompanying notes. Est
imates are used for, but not limited to, determining the selling price\plain\cf1
\f51\fs20\ql of products and services in multiple element revenue arrangements
and determining the amortization period of these elements,\plain\cf1\f51\fs20\ql
incentive discount offers, sales returns, vendor funding, stock-based compensa
tion forfeiture rates, income taxes, valuation and\plain\cf1\f51\fs20\ql impair
ment of investments, inventory valuation and inventory purchase commitments, col
lectability of receivables, valuation of\plain\cf1\f51\fs20\ql acquired intangi
bles and goodwill, depreciable lives of property and equipment, internal-use sof
tware and website development\plain\cf1\f51\fs20\ql costs, acquisition purchase
price allocations, investments in equity interests, and contingencies. Actual r
esults could differ\plain\cf1\f51\fs20\ql materially from those estimates.\par\
pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Earnings per Share\par\pard\plain\sb1
32\fi528\cf1\f51\fs20\ql Basic earnings per share is calculated using our weight
ed-average outstanding common shares. Diluted earnings per share\plain\cf1\f51\f
s20\ql is calculated using our weighted-average outstanding common shares inclu
ding the dilutive effect of stock awards as determined\plain\cf1\f51\fs20\ql un
der the treasury stock method. In periods when we have a net loss, stock awards
are excluded from our calculation of earnings\plain\cf1\f51\fs20\ql per share a
s their inclusion would have an antidilutive effect. In 2014, we excluded stock
awards of 17 million.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql The following t
able shows the calculation of diluted shares (in millions):
\par\pard\plain
cell{
ow}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Shares used in computation
of basic earnings per share\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\q
r 467\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Total dilutive effect of o
utstanding stock awards\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 10\
cell
f51\fs20\qr 8\cell
row}}}
of diluted earnings per share\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20
\qr 477\cell
\par\pard\plain\fs16\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Revenue\par\
pard\plain\sb132\fi528\cf1\f51\fs20\ql We recognize revenue from product sales o
r services rendered when the following four criteria are met: persuasive evidenc
e\plain\cf1\f51\fs20\ql of an arrangement exists, delivery has occurred or serv
ice has been rendered, the selling price is fixed or determinable, and\plain\cf1
\f51\fs20\ql collectability is reasonably assured. Revenue arrangements with mu
ltiple deliverables are divided into separate units and revenue\plain\cf1\f51\fs
20\ql is allocated using estimated selling prices if we do not have vendor-spec
ific objective evidence or third-party evidence of the\plain\cf1\f51\fs20\ql se
lling prices of the deliverables. We allocate the arrangement price to each of t
he elements based on the relative selling prices of\plain\cf1\f51\fs20\ql each
element. Estimated selling prices are management\u8217?s best estimates of the p
rices that we would charge our customers\plain\cf1\f51\fs20\ql if we were to se
ll the standalone elements separately and include considerations of customer dem
and, prices charged by us and\plain\cf1\f51\fs20\ql others for similar delivera
bles, and the price if largely based on the cost of producing the product or ser
vice.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Sales of our digital devices, i
ncluding Kindle e-readers, Fire tablets, Fire TVs, and Echo, are considered arra
ngements with\plain\cf1\f51\fs20\ql multiple deliverables, consisting of the de
vice, undelivered software upgrades and/or undelivered non-software services suc
h as\plain\cf1\f51\fs20\ql cloud storage and free trial memberships to other se
rvices. The revenue allocated to the device, which is the substantial portion of
\plain\cf1\f51\fs20\ql the total sale price, and related costs are generally re
cognized upon delivery. Revenue related to undelivered software upgrades\plain\c
f1\f51\fs20\ql and/or undelivered non-software services is deferred and recogni
zed generally on a straight-line basis over the estimated period\plain\cf1\f51\f
s20\ql the software upgrades and non-software services are expected to be provi
ded for each of these devices.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Sales
of Amazon Prime memberships are also considered arrangements with multiple deliv
erables, including shipping\plain\cf1\f51\fs20\ql benefits, Prime Video, Prime
Music, Prime Photos, and access to the Kindle Owners\u8217? Lending Library. The
revenue\plain\cf1\f51\fs20\ql related to the deliverables is amortized over th
e life of the membership based on the estimated delivery of services. Amazon\pla
in\cf1\f51\fs20\ql Prime membership fees are allocated between product sales an
d service sales. Costs to deliver Amazon Prime benefits are\plain\cf1\f51\fs20\q
l recognized as cost of sales as incurred. As we add more benefits to the Prime
membership, we will update the method of\plain\cf1\f51\fs20\ql determining the
estimated selling prices of each element as well as the allocation of Prime mem
bership fees.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql We evaluate whether it
is appropriate to record the gross amount of product sales and related costs or
the net amount\plain\cf1\f51\fs20\ql earned as commissions. Generally, when we
are primarily obligated in a transaction, are subject to inventory risk, have la
titude in\plain\cf1\f51\fs20\ql establishing prices and selecting suppliers, or
have several but not all of these indicators, revenue is recorded at the gross
sale\plain\cf1\f51\fs20\ql price. We generally record the net amounts as commis
sions earned if we are not primarily obligated and do not have latitude in\plain
\cf1\f51\fs20\ql establishing prices. Such amounts earned are determined using
fixed fees, a percentage of seller revenues, per-unit activity fees,\plain\cf1\f
51\fs20\ql or some combination thereof.\par\pard\plain\sb132\fi528\cf1\f51\fs20
\ql Product sales represent revenue from the sale of products and related shippi
ng fees and digital media content where we\plain\cf1\f51\fs20\ql record revenue
gross. Product sales and shipping revenues, net of promotional discounts, rebat
es, and return allowances, are\plain\cf1\f51\fs20\ql recorded when the products
are shipped and title passes to customers. Retail sales to customers are made p
ursuant to a sales\plain\cf1\f51\fs20\ql contract that provides for transfer of
both title and risk of loss upon our delivery to the carrier. Amazon\u8217?s el
ectronic\plain\cf1\f51\fs20\ql devices sold through retailers are recognized at
the point of sale to consumers.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Serv
ice sales represent third-party seller fees earned (including commissions) and r
elated shipping fees, AWS sales, digital\plain\cf1\f51\fs20\ql content subscrip
tions, advertising services, and our co-branded credit card agreements. Service
sales, net of promotional discounts\plain\cf1\f51\fs20\ql and return allowances
, are recognized when service has been rendered.\par\pard\plain\sb132\fi528\cf1\
f51\fs20\ql Return allowances, which reduce revenue, are estimated using histori
cal experience. Allowance for returns was $153\plain\cf1\f51\fs20\ql million, $
147 million, and $167 million as of December\~31, 2015, 2014, and 2013. Addition
s to the allowance were $1.3 billion,\plain\cf1\f51\fs20\ql $1.1 billion, and $
907 million, and deductions to the allowance were $1.3 billion, $1.1 billion, an
d $938 million in 2015, 2014,\plain\cf1\f51\fs20\ql and 2013. Revenue from prod
uct sales and services rendered is recorded net of sales and consumption taxes.
Additionally, we\plain\cf1\f51\fs20\ql periodically provide incentive offers to
our customers to encourage purchases. Such offers include current discount offe
rs, such as\plain\cf1\f51\fs20\ql percentage discounts off current purchases, i
nducement offers, such as offers for future discounts subject to a minimum curre
nt\plain\cf1\f51\fs20\ql purchase, and other similar offers. Current discount o
ffers, when accepted by our customers, are treated as a reduction to the\plain\c
f1\f51\fs20\ql purchase price of the related transaction, while inducement offe
rs, when accepted by our customers, are treated as a reduction to\plain\cf1\f51\
fs20\ql purchase price based on estimated future redemption rates. Redemption r
ates are estimated using our historical experience for\plain\cf1\f51\fs20\ql si
milar inducement offers. Current discount offers and inducement offers are prese
nted as a net amount in \u8220?Total net\plain\cf1\f51\fs20\ql sales.\u8221?\pa
r\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Cost of Sales\par\pard\plain\sb132\
fi484\cf1\f51\fs20\ql Cost of sales primarily consists of the purchase price of
consumer products, digital media content costs where we record\plain\cf1\f51\fs2
0\ql revenue gross, including Prime Video and Prime Music, packaging supplies,
sortation and delivery centers and related equipment\plain\cf1\f51\fs20\ql cost
s, and inbound and outbound shipping costs, including where we are the transport
ation service provider. Shipping costs to\plain\cf1\f51\fs20\ql receive product
s from our suppliers are included in our inventory, and recognized as cost of sa
les upon sale of products to our\plain\cf1\f51\fs20\ql customers. Payment proce
ssing and related transaction costs, including those associated with seller tran
sactions, are classified in\plain\cf1\f51\fs20\ql \u8220?Fulfillment\u8221? on
our consolidated statements of operations.
\par\pard\plain\fs16\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Vendor Agree
ments\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql We have agreements with our ven
dors to receive funds for advertising services, cooperative marketing efforts, p
romotions,\plain\cf1\f51\fs20\ql and volume rebates.\~We generally consider amo
unts received from vendors to be a reduction of the prices we pay for their good
s,\plain\cf1\f51\fs20\ql including property and equipment, or services, and the
refore record those amounts as a reduction of the cost of inventory, cost of\pla
in\cf1\f51\fs20\ql services, or cost of property and equipment.\~Vendor rebates
are typically dependent upon reaching minimum purchase thresholds.\plain\cf1\f5
1\fs20\ql We evaluate the likelihood of reaching purchase thresholds using past
experience and current year forecasts. When volume\plain\cf1\f51\fs20\ql rebat
es can be reasonably estimated, we record a portion of the rebate as we make pro
gress towards the purchase threshold.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql
When we receive direct reimbursements for costs incurred by us in advertising t
he vendor\u8217?s product or service, the\plain\cf1\f51\fs20\ql amount we recei
ve is recorded as an offset to \u8220?Marketing\u8221? on our consolidated state
ments of operations.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Fulfillment\
par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Fulfillment costs primarily consist o
f those costs incurred in operating and staffing our North America and Internati
onal\plain\cf1\f51\fs20\ql segments\u8217? fulfillment and customer service cen
ters, including costs attributable to buying, receiving, inspecting, and\plain\c
f1\f51\fs20\ql warehousing inventories; picking, packaging, and preparing custo
mer orders for shipment; payment processing and related\plain\cf1\f51\fs20\ql t
ransaction costs, including costs associated with our guarantee for certain sell
er transactions; responding to inquiries from\plain\cf1\f51\fs20\ql customers;
and supply chain management for our manufactured electronic devices. Fulfillment
costs also include amounts paid to\plain\cf1\f51\fs20\ql third parties that as
sist us in fulfillment and customer service operations.\par\pard\plain\sb396\fi2
64\cf1\f51\fs20\b\i\ql Marketing\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Mark
eting costs primarily consist of targeted online advertising, television adverti
sing, public relations expenditures, and\plain\cf1\f51\fs20\ql payroll and rela
ted expenses for personnel engaged in marketing and selling activities. We pay c
ommissions to participants in our\plain\cf1\f51\fs20\ql Associates program when
their customer referrals result in product sales and classify such costs as \u8
220?Marketing\u8221? on\plain\cf1\f51\fs20\ql our consolidated statements of op
erations. We also participate in cooperative advertising arrangements with certa
in of our\plain\cf1\f51\fs20\ql vendors, and other third parties.\par\pard\plai
n\sb132\fi528\cf1\f51\fs20\ql Advertising and other promotional costs are expens
ed as incurred and were $3.8 billion, $3.3 billion, and $2.4 billion in\plain\cf
1\f51\fs20\ql 2015, 2014, and 2013. Prepaid advertising costs were not signific
ant as of December\~31, 2015 and 2014.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b
\i\ql Technology and Content\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Technolo
gy costs consist principally of research and development activities including pa
yroll and related expenses for\plain\cf1\f51\fs20\ql employees involved in appl
ication, production, maintenance, operation, and platform development for new an
d existing products\plain\cf1\f51\fs20\ql and services, as well as AWS and othe
r technology infrastructure expenses.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql
Content costs consist principally of payroll and related expenses for employees
involved in category expansion, editorial\plain\cf1\f51\fs20\ql content, buyin
g, and merchandising selection.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Techn
ology and content costs are expensed as incurred, except for certain costs relat
ing to the development of internal-use\plain\cf1\f51\fs20\ql software and websi
te development, including software used to upgrade and enhance our websites and
applications supporting our\plain\cf1\f51\fs20\ql business, which are capitaliz
ed and amortized over two years.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql
General and Administrative\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql General an
d administrative expenses primarily consist of payroll and related expenses; fac
ilities and equipment, such as\plain\cf1\f51\fs20\ql depreciation expense and r
ent; professional fees and litigation costs; and other general corporate costs f
or corporate functions,\plain\cf1\f51\fs20\ql including accounting, finance, ta
x, legal, and human resources, among others.\par\pard\plain\sb396\fi264\cf1\f51\
fs20\b\i\ql Stock-Based Compensation\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql
Compensation cost for all stock awards expected to vest is measured at fair valu
e on the date of grant and recognized over\plain\cf1\f51\fs20\ql the service pe
riod. The fair value of restricted stock units is determined based on the number
of shares granted and the quoted\plain\cf1\f51\fs20\ql price of our common sto
ck, and the fair value of stock options is estimated on the date of grant using
a Black-Scholes model.\plain\cf1\f51\fs20\ql Such value is recognized as expens
e over the service period, net of estimated forfeitures, using the accelerated m
ethod. The\plain\cf1\f51\fs20\ql estimated number of stock awards that will ult
imately vest requires judgment, and to the extent actual results or updated esti
mates\plain\cf1\f51\fs20\ql differ from our current estimates, such amounts wil
l be recorded as a cumulative adjustment in the period estimates are revised.\pl
ain\cf1\f51\fs20\ql We consider many factors when estimating expected forfeitur
es, including employee level, economic conditions, time remaining\plain\cf1\f51\
fs20\ql to vest, and historical forfeiture experience.
\par\pard\plain\fs16\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Other Operat
ing Expense (Income), Net\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Other opera
ting expense (income), net, consists primarily of marketing-related, contract-ba
sed, and customer-related\plain\cf1\f51\fs20\ql intangible asset amortization e
xpense and expenses related to legal settlements.\par\pard\plain\sb396\fi264\cf1
\f51\fs20\b\i\ql Other Income (Expense), Net\par\pard\plain\sb132\fi528\cf1\f51\
fs20\ql Other income (expense), net, consists primarily of foreign currency loss
es of $(266) million, $(127) million, and $(137)\plain\cf1\f51\fs20\ql million
in 2015, 2014, and 2013, and realized gains (losses) on marketable securities sa
les of $(5) million, $3 million, and $(1)\plain\cf1\f51\fs20\ql million in 2015
, 2014, and 2013.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Income Taxes\pa
r\pard\plain\sb132\fi528\cf1\f51\fs20\ql Income tax expense includes U.S. (feder
al and state) and foreign income taxes. Except as required under U.S. tax laws,
we\plain\cf1\f51\fs20\ql do not provide for U.S. taxes on our undistributed ear
nings of foreign subsidiaries that have not been previously taxed since we\plain
\cf1\f51\fs20\ql intend to invest such undistributed earnings indefinitely outs
ide of the U.S. If our intent changes or if these funds are needed for\plain\cf1
\f51\fs20\ql our U.S. operations, we would be required to accrue or pay U.S. ta
xes on some or all of these undistributed earnings and our\plain\cf1\f51\fs20\ql
effective tax rate would be adversely affected. Undistributed earnings of fore
ign subsidiaries that are indefinitely invested outside\plain\cf1\f51\fs20\ql o
f the U.S were $1.5 billion as of December\~31, 2015. Determination of the unrec
ognized deferred tax liability that would be\plain\cf1\f51\fs20\ql incurred if
such amounts were repatriated is not practicable.\par\pard\plain\sb132\fi528\cf1
\f51\fs20\ql Deferred income tax balances reflect the effects of temporary diffe
rences between the carrying amounts of assets and\plain\cf1\f51\fs20\ql liabili
ties and their tax bases and are stated at enacted tax rates expected to be in e
ffect when taxes are actually paid or\plain\cf1\f51\fs20\ql recovered.\par\pard
\plain\sb132\fi528\cf1\f51\fs20\ql Deferred tax assets are evaluated for future
realization and reduced by a valuation allowance to the extent we believe they\p
lain\cf1\f51\fs20\ql will not be realized. We consider many factors when assess
ing the likelihood of future realization of our deferred tax assets,\plain\cf1\f
51\fs20\ql including our recent cumulative earnings experience and expectations
of future taxable income and capital gains by taxing\plain\cf1\f51\fs20\ql jur
isdiction, the carry-forward periods available to us for tax reporting purposes,
and other relevant factors. We allocate our\plain\cf1\f51\fs20\ql valuation al
lowance to current and long-term deferred tax assets on a pro-rata basis.\par\pa
rd\plain\sb132\fi528\cf1\f51\fs20\ql We utilize a two-step approach to recognizi
ng and measuring uncertain income tax positions (tax contingencies). The first\p
lain\cf1\f51\fs20\ql step is to evaluate the tax position for recognition by de
termining if the weight of available evidence indicates it is more likely\plain\
cf1\f51\fs20\ql than not that the position will be sustained on audit, includin
g resolution of related appeals or litigation processes. The second\plain\cf1\f5
1\fs20\ql step is to measure the tax benefit as the largest amount which is mor
e than 50% likely of being realized upon ultimate\plain\cf1\f51\fs20\ql settlem
ent.\~We consider many factors when evaluating our tax positions and estimating
our tax benefits, which may require\plain\cf1\f51\fs20\ql periodic adjustments
and which may not accurately forecast actual outcomes. We include interest and p
enalties related to our tax\plain\cf1\f51\fs20\ql contingencies in income tax e
xpense.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Fair Value of Financial I
nstruments\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Fair value is defined as t
he price that would be received to sell an asset or paid to transfer a liability
in an orderly\plain\cf1\f51\fs20\ql transaction between market participants at
the measurement date. To increase the comparability of fair value measures, the
\plain\cf1\f51\fs20\ql following hierarchy prioritizes the inputs to valuation
methodologies used to measure fair value:\par\pard\plain\li594\sb132\fi484\cf1\f
51\fs20\b\ql Level\~1\plain\li594\cf1\f51\fs20\ql \u8212?Valuations based on quo
ted prices for identical assets and liabilities in active markets.\par\pard\plai
n\li1078\sb132\cf1\f51\fs20\b\ql Level\~2\plain\li1078\cf1\f51\fs20\ql \u8212?Va
luations based on observable inputs other than quoted prices included in Level 1
, such as quoted\plain\li1078\cf1\f51\fs20\ql prices for similar assets and lia
bilities in active markets, quoted prices for identical or similar assets and li
abilities in\plain\li1078\cf1\f51\fs20\ql markets that are not active, or other
inputs that are observable or can be corroborated by observable market data.\pa
r\pard\plain\li1078\sb132\cf1\f51\fs20\b\ql Level\~3\plain\li1078\cf1\f51\fs20\q
l \u8212?Valuations based on unobservable inputs reflecting our own assumptions,
consistent with reasonably\plain\li1078\cf1\f51\fs20\ql available assumptions
made by other market participants. These valuations require significant judgment
.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql For our cash, cash equivalents, or
marketable securities, we measure the fair value of money market funds and equit
y\plain\cf1\f51\fs20\ql securities based on quoted prices in active markets for
identical assets or liabilities. All other financial instruments were valued\pl
ain\cf1\f51\fs20\ql either based on recent trades of securities in inactive mar
kets or based on quoted market prices of similar instruments and other\plain\cf1
\f51\fs20\ql significant inputs derived from or corroborated by observable mark
et data. We did not hold any cash, cash equivalents, or\plain\cf1\f51\fs20\ql m
arketable securities categorized as Level 3 assets as of December\~31, 2015, or
December\~31, 2014.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql As part of enteri
ng into commercial agreements, we often obtain equity warrant assets giving us t
he right to acquire stock\plain\cf1\f51\fs20\ql primarily in private companies.
We record these assets in \u8220?Other assets\u8221? on the accompanying consol
idated balance\plain\cf1\f51\fs20\ql sheets. Equity warrant assets are classifi
ed as Level 3 assets, and the balances and related activity for our equity warra
nt assets\plain\cf1\f51\fs20\ql were not significant for the periods ended Dece
mber\~31, 2015, 2014, and 2013.
\par\pard\plain\fs16\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Cash and Cas
h Equivalents\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql We classify all highly
liquid instruments with an original maturity of three months or less as cash equ
ivalents.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Inventories\par\pard\pl
ain\sb132\fi528\cf1\f51\fs20\ql Inventories, consisting of products available fo
r sale, are primarily accounted for using the first-in, first-out\plain\cf1\f51\
fs20\ql (\u8220?FIFO\u8221?) method, and are valued at the lower of cost or mar
ket value. This valuation requires us to make\plain\cf1\f51\fs20\ql judgments,
based on currently-available information, about the likely method of disposition
, such as through sales to individual\plain\cf1\f51\fs20\ql customers, returns
to product vendors, or liquidations, and expected recoverable values of each dis
position category.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql We provide Fulfill
ment by Amazon services in connection with certain of our sellers\u8217? program
s. Third-party sellers\plain\cf1\f51\fs20\ql maintain ownership of their invent

ory, regardless of whether fulfillment is provided by us or the third-party sell
ers, and therefore\plain\cf1\f51\fs20\ql these products are not included in our
inventories.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql We also purchase electr
onic device components from a variety of suppliers and use several contract manu
facturers to\plain\cf1\f51\fs20\ql provide manufacturing services for our produ
cts. During the normal course of business, in order to manage manufacturing lead
\plain\cf1\f51\fs20\ql times and help ensure adequate component supply, we ente
r into agreements with contract manufacturers and suppliers. A portion\plain\cf1
\f51\fs20\ql of our reported purchase commitments arising from these agreements
consists of firm, non-cancellable commitments. These\plain\cf1\f51\fs20\ql com
mitments are based on forecasted customer demand. If we reduce these commitments
, we may incur additional costs.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql
Accounts Receivable, Net and Other\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql In
cluded in \u8220?Accounts receivable, net and other\u8221? on our consolidated b
alance sheets are amounts primarily\plain\cf1\f51\fs20\ql related to customer a
nd seller receivables and vendor receivables. As of December\~31, 2015 and 2014,
customer and seller\plain\cf1\f51\fs20\ql receivables, net, were $2.6 billion
and $1.9 billion, and vendor receivables, net, were $1.8 billion and $1.4 billio
n.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql We estimate losses on receivables
based on known troubled accounts and historical experience of losses incurred.\p
lain\cf1\f51\fs20\ql Receivables are considered impaired and written-off when i
t is probable that all contractual payments due will not be collected in\plain\c
f1\f51\fs20\ql accordance with the terms of the agreement. The allowance for do
ubtful accounts was $189 million, $190 million, and $153\plain\cf1\f51\fs20\ql
million as of December\~31, 2015, 2014, and 2013. Additions to the allowance wer
e $289 million, $225 million, and $172\plain\cf1\f51\fs20\ql million, and deduc
tions to the allowance were $290 million, $188 million, and $135 million in 2015
, 2014, and 2013.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Internal-Use So
ftware and Website Development\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Costs
incurred to develop software for internal use and our websites are capitalized a
nd amortized over the estimated useful\plain\cf1\f51\fs20\ql life of the softwa
re\plain\cf1\f51\fs20\i\ql .\plain\cf1\f51\fs20\ql Costs related to design or
maintenance of internal-use software and website development are expensed as\pl
ain\cf1\f51\fs20\ql incurred. For the years ended 2015, 2014, and 2013, we capi
talized $642 million (including $114 million of stock-based\plain\cf1\f51\fs20\q
l compensation), $641 million (including $104 million of stock-based compensati
on), and $581 million (including $87 million of\plain\cf1\f51\fs20\ql stock-bas
ed compensation) of costs associated with internal-use software and website deve
lopment. Amortization of previously\plain\cf1\f51\fs20\ql capitalized amounts w
as $635 million, $559 million, and $451 million for 2015, 2014, and 2013.\par\pa
rd\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Property and Equipment, Net\par\pard\pl
ain\sb132\fi528\cf1\f51\fs20\ql Property and equipment are stated at cost less a
ccumulated depreciation. Property includes buildings and land that we own,\plain
\cf1\f51\fs20\ql along with property we have acquired under build-to-suit, fina
ncing, and capital lease arrangements. Equipment includes assets\plain\cf1\f51\f
s20\ql such as furniture and fixtures, heavy equipment, servers and networking
equipment, and internal-use software and website\plain\cf1\f51\fs20\ql developm
ent. Depreciation is recorded on a straight-line basis over the estimated useful
lives of the assets (generally the lesser of\plain\cf1\f51\fs20\ql 40 years or
the remaining life of the underlying building, two years for assets such as int
ernal-use software, three years for our\plain\cf1\f51\fs20\ql servers, five yea
rs for networking equipment, five years for furniture and fixtures, and ten year
s for heavy equipment).\plain\cf1\f51\fs20\ql Depreciation expense is classifie
d within the corresponding operating expense categories on our consolidated stat
ements of\plain\cf1\f51\fs20\ql operations.\par\pard\plain\sb396\fi264\cf1\f51\
fs20\b\i\ql Leases and Asset Retirement Obligations\par\pard\plain\sb132\fi528\c
f1\f51\fs20\ql We categorize leases at their inception as either operating or ca
pital leases. On certain of our lease agreements, we may\plain\cf1\f51\fs20\ql
receive rent holidays and other incentives. We recognize lease costs on a straig
ht-line basis without regard to deferred payment\plain\cf1\f51\fs20\ql terms, s

uch as rent holidays, that defer the commencement date of required payments. Add
itionally, incentives we receive are\plain\cf1\f51\fs20\ql treated as a reducti
on of our costs over the term of the agreement. Leasehold improvements are capit
alized at cost and amortized\plain\cf1\f51\fs20\ql over the lesser of their exp
ected useful life or the non-cancellable term of the lease.\par\pard\plain\sb132
\fi528\cf1\f51\fs20\ql We establish assets and liabilities for the estimated con
struction costs incurred under build-to-suit lease arrangements to\plain\cf1\f51
\fs20\ql the extent we are involved in the construction of structural improveme
nts or take construction risk prior to commencement of a
\par\pard\plain\fs16\par\pard\plain\sb132\cf1\f51\fs20\ql lease. Upon occupancy
of facilities under build-to-suit leases, we assess whether these arrangements q
ualify for sales recognition\plain\cf1\f51\fs20\ql under the sale-leaseback acc
ounting guidance. If we continue to be the deemed owner, the facilities are acco
unted for as finance\plain\cf1\f51\fs20\ql leases.\par\pard\plain\sb132\fi528\c
f1\f51\fs20\ql We establish assets and liabilities for the present value of esti
mated future costs to retire long-lived assets at the\plain\cf1\f51\fs20\ql ter
mination or expiration of a lease. Such assets are depreciated over the lease pe
riod into operating expense, and the recorded\plain\cf1\f51\fs20\ql liabilities
are accreted to the future value of the estimated retirement costs.\par\pard\pl
ain\sb396\fi264\cf1\f51\fs20\b\i\ql Goodwill\par\pard\plain\sb132\fi528\cf1\f51\
fs20\ql We evaluate goodwill for impairment annually or more frequently when an
event occurs or circumstances change that\plain\cf1\f51\fs20\ql indicate the ca
rrying value may not be recoverable. In testing for goodwill impairment, we may
elect to utilize a qualitative\plain\cf1\f51\fs20\ql assessment to evaluate whe
ther it is more likely than not that the fair value of a reporting unit is less
than its carrying amount. If\plain\cf1\f51\fs20\ql our qualitative assessment i
ndicates that goodwill impairment is more likely than not, we perform a two-step
impairment test.\plain\cf1\f51\fs20\ql We test goodwill for impairment under t
he two-step impairment test by first comparing the book value of net assets to t
he fair\plain\cf1\f51\fs20\ql value of the reporting units. If the fair value i
s determined to be less than the book value or qualitative factors indicate that
it is\plain\cf1\f51\fs20\ql more likely than not that goodwill is impaired, a
second step is performed to compute the amount of impairment as the difference\p
lain\cf1\f51\fs20\ql between the estimated fair value of goodwill and the carry
ing value. We estimate the fair value of the reporting units using\plain\cf1\f51
\fs20\ql discounted cash flows. Forecasts of future cash flows are based on our
best estimate of future net sales and operating expenses,\plain\cf1\f51\fs20\ql
based primarily on expected category expansion, pricing, market segment share,
and general economic conditions.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Dur
ing the second quarter of 2015, we changed the measurement date of our annual go
odwill impairment test from October\plain\cf1\f51\fs20\ql 1 to April 1. This ch
ange was not material to our consolidated financial statements as it did not res
ult in the delay, acceleration,\plain\cf1\f51\fs20\ql or avoidance of an impair
ment charge. We believe this timing better aligns the goodwill impairment test w
ith our strategic\plain\cf1\f51\fs20\ql business planning process, which is a k
ey component of the goodwill impairment test. We completed the required annual t
esting\plain\cf1\f51\fs20\ql of goodwill for impairment for all reporting units
as of April 1, 2015, and determined that goodwill is not impaired. There were\p
lain\cf1\f51\fs20\ql no triggering events identified from the date of our asses
sment through December\~31, 2015 that would require an update to our\plain\cf1\f
51\fs20\ql annual impairment test. See \u8220?Note\~4\u8212?Acquisitions, Goodw
ill, and Acquired Intangible Assets.\u8221?\par\pard\plain\sb396\fi264\cf1\f51\f
s20\b\i\ql Other Assets\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Included in \
u8220?Other assets\u8221? on our consolidated balance sheets are amounts primari
ly related to acquired\plain\cf1\f51\fs20\ql intangible assets, net of amortiza

tion; video and music content, net of amortization; long-term deferred tax asset
s; certain equity\plain\cf1\f51\fs20\ql investments; marketable securities rest
ricted for longer than one year, the majority of which are attributable to colla
teralization of\plain\cf1\f51\fs20\ql bank guarantees and debt related to our i
nternational operations; intellectual property rights, net of amortization; and
equity\plain\cf1\f51\fs20\ql warrant assets.\par\pard\plain\sb396\fi264\cf1\f51
\fs20\b\i\ql Video and Music Content\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql
We obtain video and music content to be made available to Prime members through
licensing agreements that have a wide\plain\cf1\f51\fs20\ql range of licensing
provisions and generally have terms from one to five years with fixed payment sc
hedules. When the license\plain\cf1\f51\fs20\ql fee for a specific movie, telev
ision, or music title is determinable or reasonably estimable and available for
streaming, we\plain\cf1\f51\fs20\ql recognize an asset representing the fee per
title and a corresponding liability for the amounts owed. We relieve the liabil
ity as\plain\cf1\f51\fs20\ql payments are made and we amortize the asset to \u8
220?Cost of sales\u8221? on a straight-line basis or on an accelerated basis,\pl
ain\cf1\f51\fs20\ql based on estimated viewing patterns over each title\u8217?s
contractual window of availability, which typically ranges from six\plain\cf1\f
51\fs20\ql months to five years. If we are unable to reasonably estimate the co
st per title, no asset or liability is recorded and licensing costs\plain\cf1\f5
1\fs20\ql are expensed as incurred. We also develop original content. The produ
ction costs of internally developed content are capitalized\plain\cf1\f51\fs20\q
l only if persuasive evidence exists that the production will generate revenue.
Prior to 2015, because we had limited history to\plain\cf1\f51\fs20\ql support
the economic benefits of our content, we generally expensed such costs as incur
red. In 2015, we began capitalizing a\plain\cf1\f51\fs20\ql portion of producti
on costs as we have developed more experience to support that future revenue wil
l be earned. Capitalized\plain\cf1\f51\fs20\ql internally developed costs are g
enerally amortized to \u8220?Cost of sales\u8221? on an accelerated basis that f
ollows the\plain\cf1\f51\fs20\ql viewing pattern of customer streams in the fir
st months after availability.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Inv
estments\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql We generally invest our exce
ss cash in investment grade short- to intermediate-term fixed income securities
and\plain\cf1\f51\fs20\ql AAA-rated money market funds. Such investments are in
cluded in \u8220?Cash and cash equivalents\u8221? or\plain\cf1\f51\fs20\ql \u82
20?Marketable securities\u8221? on the accompanying consolidated balance sheets,
classified as available-for-sale, and\plain\cf1\f51\fs20\ql reported at fair v
alue with unrealized gains and losses included in \u8220?Accumulated other compr
ehensive loss.\u8221?\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Equity investme
nts are accounted for using the equity method of accounting if the investment gi
ves us the ability to\plain\cf1\f51\fs20\ql exercise significant influence, but
not control, over an investee. Equity-method investments are included within \u
8220?Other\plain\cf1\f51\fs20\ql assets\u8221?
\par\pard\plain\fs16\par\pard\plain\sb132\cf1\f51\fs20\ql on our consolidated ba
lance sheets. Our share of the earnings or losses as reported by equity-method i
nvestees, amortization of\plain\cf1\f51\fs20\ql basis differences, and related
gains or losses, if any, are classified as \u8220?Equity\plain\cf1\f51\fs20\i\ql
-\plain\cf1\f51\fs20\ql method investment activity, net of\plain\cf1\f51\fs20
\ql tax\u8221? on our consolidated statements of operations.\par\pard\plain\sb1
32\fi528\cf1\f51\fs20\ql Equity investments without readily determinable fair va
lues and for which we do not have the ability to exercise significant\plain\cf1\
f51\fs20\ql influence are accounted for using the cost method of accounting and
classified as \u8220?Other assets\u8221? on our consolidated\plain\cf1\f51\fs20
\ql balance sheets. Under the cost method, investments are carried at cost and
are adjusted only for other-than-temporary declines in\plain\cf1\f51\fs20\ql fa

ir value, certain distributions, and additional investments.\par\pard\plain\sb13
2\fi528\cf1\f51\fs20\ql Equity investments that have readily determinable fair v
alues are classified as available-for-sale and are included in\plain\cf1\f51\fs2
0\ql \u8220?Marketable securities\u8221? on our consolidated balance sheets and
are recorded at fair value with unrealized gains and\plain\cf1\f51\fs20\ql los
ses, net of tax, included in \u8220?Accumulated other comprehensive loss.\u8221?
\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql We periodically evaluate whether dec
lines in fair values of our investments below their book value are\plain\cf1\f51
\fs20\ql other-than-temporary. This evaluation consists of several qualitative
and quantitative factors regarding the severity and duration\plain\cf1\f51\fs20\
ql of the unrealized loss as well as our ability and intent to hold the investm
ent until a forecasted recovery occurs. Additionally, we\plain\cf1\f51\fs20\ql
assess whether we have plans to sell the security or it is more likely than not
we will be required to sell any investment before\plain\cf1\f51\fs20\ql recover
y of its amortized cost basis. Factors considered include quoted market prices;
recent financial results and operating\plain\cf1\f51\fs20\ql trends; implied va
lues from any recent transactions or offers of investee securities; credit quali
ty of debt instrument issuers; other\plain\cf1\f51\fs20\ql publicly available i
nformation that may affect the value of our investments; duration and severity o
f the decline in value; and our\plain\cf1\f51\fs20\ql strategy and intentions f
or holding the investment.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Long-L
ived Assets\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Long-lived assets, other
than goodwill, are reviewed for impairment whenever events or changes in circums
tances indicate\plain\cf1\f51\fs20\ql that the carrying amount of the assets mi
ght not be recoverable. Conditions that would necessitate an impairment assessme
nt\plain\cf1\f51\fs20\ql include a significant decline in the observable market
value of an asset, a significant change in the extent or manner in which an\pla
in\cf1\f51\fs20\ql asset is used, or any other significant adverse change that
would indicate that the carrying amount of an asset or group of assets\plain\cf1
\f51\fs20\ql may not be recoverable.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql
For long-lived assets used in operations, impairment losses are only recorded i
f the asset\u8217?s carrying amount is not\plain\cf1\f51\fs20\ql recoverable th
rough its undiscounted, probability-weighted future cash flows. We measure the i
mpairment loss based on the\plain\cf1\f51\fs20\ql difference between the carryi
ng amount and estimated fair value. Long-lived assets are considered held for sa
le when certain\plain\cf1\f51\fs20\ql criteria are met, including when manageme
nt has committed to a plan to sell the asset, the asset is available for sale in
its\plain\cf1\f51\fs20\ql immediate condition, and the sale is probable within
one year of the reporting date. Assets held for sale are reported at the lower\
plain\cf1\f51\fs20\ql of cost or fair value less costs to sell. Assets held for
sale were not significant as of December\~31, 2015 or 2014.\par\pard\plain\sb39
6\fi264\cf1\f51\fs20\b\i\ql Accrued Expenses and Other\par\pard\plain\sb132\fi52
8\cf1\f51\fs20\ql Included in \u8220?Accrued expenses and other\u8221? on our co
nsolidated balance sheets are liabilities primarily related\plain\cf1\f51\fs20\q
l to unredeemed gift cards, leases and asset retirement obligations, current de
bt, acquired digital media content, and other operating\plain\cf1\f51\fs20\ql e
xpenses.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql As of December\~31, 2015 and
2014, our liabilities for unredeemed gift cards was $2.0 billion and $1.7 billi
on. We reduce\plain\cf1\f51\fs20\ql the liability for a gift card when redeemed
by a customer. If a gift card is not redeemed, we recognize revenue when it exp
ires or\plain\cf1\f51\fs20\ql when the likelihood of its redemption becomes rem
ote, generally two years from the date of issuance.\par\pard\plain\sb396\fi264\c
f1\f51\fs20\b\i\ql Unearned Revenue\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql U
nearned revenue is recorded when payments are received in advance of performing
our service obligations and is\plain\cf1\f51\fs20\ql recognized over the servic
e period. Unearned revenue primarily relates to prepayments of Amazon Prime memb
erships and AWS\plain\cf1\f51\fs20\ql services.

\par\pard\plain\fs16\par\pard\plain\sb396\fi286\cf1\f51\fs20\b\i\ql Foreign Curr
ency\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql We have internationally-focused
websites for Australia, Brazil, Canada, China, France, Germany, India, Italy, Ja
pan,\plain\cf1\f51\fs20\ql Mexico, the Netherlands, Spain, and the United Kingd
om\plain\cf1\f51\fs20\i\ql .\plain\cf1\f51\fs20\ql Net sales generated from t
hese websites, as well as most of the related\plain\cf1\f51\fs20\ql expenses di
rectly incurred from those operations, are denominated in local functional curre
ncies. The functional currency of our\plain\cf1\f51\fs20\ql subsidiaries that e
ither operate or support these websites is generally the same as the local curre
ncy. Assets and liabilities of these\plain\cf1\f51\fs20\ql subsidiaries are tra
nslated into U.S. Dollars at period-end foreign exchange rates, and revenues and
expenses are translated at\plain\cf1\f51\fs20\ql average rates prevailing thro
ughout the period. Translation adjustments are included in \u8220?Accumulated ot
her comprehensive\plain\cf1\f51\fs20\ql loss,\u8221? a separate component of st
ockholders\u8217? equity, and in the \u8220?Foreign-currency effect on cash and
cash\plain\cf1\f51\fs20\ql equivalents,\u8221? on our consolidated statements o
f cash flows. Transaction gains and losses including intercompany\plain\cf1\f51\
fs20\ql transactions denominated in a currency other than the functional curren
cy of the entity involved are included in \u8220?Other\plain\cf1\f51\fs20\ql in
come (expense), net\u8221? on our consolidated statements of operations. In conn
ection with the settlement and remeasurement\plain\cf1\f51\fs20\ql of intercomp
any balances, we recorded losses of $215 million, $98 million, and $84 million i
n 2015, 2014, and 2013.\par\pard\plain\sb396\fi286\cf1\f51\fs20\b\i\ql Recent Ac
counting Pronouncements\par\pard\plain\sb132\fi462\cf1\f51\fs20\ql In May 2014,
the Financial Accounting Standards Board (\u8220?FASB\u8221?) issued an Accounti
ng Standards Update\plain\cf1\f51\fs20\ql (\u8220?ASU\u8221?) amending revenue
recognition guidance and requiring more detailed disclosures to enable users of
financial\plain\cf1\f51\fs20\ql statements to understand the nature, amount, ti
ming, and uncertainty of revenue and cash flows arising from contracts with\plai
n\cf1\f51\fs20\ql customers. In August 2015, the FASB deferred the effective da
te of the revenue recognition guidance to reporting periods\plain\cf1\f51\fs20\q
l beginning after December 15, 2017. Early adoption is permitted for reporting
periods beginning after December 15, 2016. We are\plain\cf1\f51\fs20\ql continu
ing to evaluate our method of adoption and the impact this ASU, and related amen
dments and interpretations, will have\plain\cf1\f51\fs20\ql on our consolidated
financial statements.\par\pard\plain\sb132\fi462\cf1\f51\fs20\ql In July 2015,
the FASB issued an ASU modifying the accounting for inventory. Under this ASU, t
he measurement principle\plain\cf1\f51\fs20\ql for inventory will change from l
ower of cost or market value to lower of cost and net realizable value. The ASU
defines net\plain\cf1\f51\fs20\ql realizable value as the estimated selling pri
ce in the ordinary course of business, less reasonably predictable costs of comp
letion,\plain\cf1\f51\fs20\ql disposal, and transportation. The ASU is applicab
le to inventory that is accounted for under the first-in, first-out method and i
s\plain\cf1\f51\fs20\ql effective for reporting periods after December 15, 2016
, with early adoption permitted. We do not expect adoption to have a\plain\cf1\f
51\fs20\ql material impact on our consolidated financial statements.\par\pard\p
lain\sb132\fi462\cf1\f51\fs20\ql In November 2015, the FASB issued an ASU amendi
ng the accounting for income taxes and requiring all deferred tax\plain\cf1\f51\
fs20\ql assets and liabilities to be classified as non-current on the consolida
ted balance sheet. The ASU is effective for reporting periods\plain\cf1\f51\fs20
\ql beginning after December 15, 2016, with early adoption permitted. The ASU m
ay be adopted either prospectively or\plain\cf1\f51\fs20\ql retrospectively. We
are currently evaluating the method of adoption and expect this ASU will have a
n impact on our consolidated\plain\cf1\f51\fs20\ql balance sheets as our curren
t deferred tax assets were $769 million and current deferred tax liabilities wer
e $13 million as of\plain\cf1\f51\fs20\ql December 31, 2015.
\page{\*\bkmkstart s4291DF084F440500400CABB20E9DBD3}{\*\bkmkend s4291DF084F44050
0400CABB20E9DBD3}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F
\par\pard\plain\fs16\par\pard\plain\sb396\cf1\f51\fs20\b\ql Note 2\u8212?CASH, C
ASH EQUIVALENTS, AND MARKETABLE SECURITIES\par\pard\plain\sb132\fi528\cf1\f51\fs
20\ql As of December\~31, 2015 and 2014, our cash, cash equivalents, and marketa
ble securities primarily consisted of cash, U.S.\plain\cf1\f51\fs20\ql and fore
ign government and agency securities, AAA-rated money market funds, and other in
vestment grade securities. Cash\plain\cf1\f51\fs20\ql equivalents and marketabl
e securities are recorded at fair value. The following table summarizes, by majo
r security type, our\plain\cf1\f51\fs20\ql cash, cash equivalents, and marketab
le securities that are measured at fair value on a recurring basis and are categ
orized using the\plain\cf1\f51\fs20\ql fair value hierarchy (in millions):\par\
\par\pard\plain
ellx10793\trrh-66
\fs16\ql \~\cell{
i22\sb22\sa22\cf1\f51\fs16\b\qc December\~31, 2015\cell{
ow}}}
rtalb\cellx10796\trrh628
f1\f51\fs16\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Co
st or\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Amortized\par\p
ard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Cost\cell\pard\plain\intbl
2\cf1\f51\fs16\b\qc Gross\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\
b\qc Unrealized\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Gains
tbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Gross\par\pard\plain\intbl\li22\ri22\s
b22\sa22\cf1\f51\fs16\b\qc Unrealized\par\pard\plain\intbl\li22\ri22\sb22\sa22\c
f1\f51\fs16\b\qc Losses\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\q
l \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Total\par\pard\
plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Estimated\par\pard\plain\intbl
\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Fair\~Value\cell{
rtalb\cellx10796\trrh628\row}}}
brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx7342\clbrdrt\brdrs\b
rdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx7597\clvertalb\clshdng100\c
at10\cellx8953\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\ce
llx9208\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9308\clbrdrt\brdrs\brdrcf1
alb\clshdng100\clcfpat10\clcbpat10\cellx10542\clbrdrt\brdrs\brdrcf1\clvertalb\cl
shdng100\clcfpat10\clcbpat10\cellx10793\trrh298
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Cash\cell\pard\plain\intb
l\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\
qr 6,201\cell
at10\cellx8953\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\ce
llx9208\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9308\clbrdrt\brdrs\brdrcf1
alb\clshdng100\clcfpat10\clcbpat10\cellx10542\clbrdrt\brdrs\brdrcf1\clvertalb\cl
shdng100\clcfpat10\clcbpat10\cellx10793\trrh298\row}}}
rrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Level 1 securities:\cell\p
2\cf1\f51\fs20\ql \~\cell{
rrh281\row}}}
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Money market funds\cell\p
ard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 8,025\cell
trrh281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Equity securities\cell\pa
f51\fs20\qr 11\cell
f51\fs20\qr 15\cell
trrh281\row}}}
x10796\trrh281
x10796\trrh281\row}}}
trrh281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Foreign government and ag
ency securities\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 49\cell
f51\fs20\qr 49\cell
trrh281\row}}}
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql U.S. government and agenc
y securities\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 5,171\cell
f51\fs20\qr 1\cell
22\sa22\cf1\f51\fs20\qr 5,167\cell
trrh281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Corporate debt securities
trrh281\row}}}
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Asset-backed securities\c
ell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 118\cell
cellx9308\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10542\clbrdrb\brdrs\brdrcf1\clver
talb\cellx10793\trrh281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Other fixed income securi
ties\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 42\cell
f51\fs20\qr 42\cell
cellx9308\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10542\clbrdrb\brdrs\brdrcf1\clver
talb\cellx10793\trrh281\row}}}
{\trowd\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx4505\clbrdrb\brdrdb\brdrcf
1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx4754\clbrdrb\brdrdb\brdrcf1\clve
clshdng100\clcfpat10\clcbpat10\cellx5986\clvertalb\clshdng100\clcfpat10\clcbpat1
0\cellx6086\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\cl
cfpat10\clcbpat10\cellx6341\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clverta
lb\clshdng100\clcfpat10\clcbpat10\cellx7342\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb
\clcfpat10\clcbpat10\cellx7697\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clve
rtalb\clshdng100\clcfpat10\clcbpat10\cellx7952\clbrdrt\brdrs\brdrcf1\clbrdrb\brd
rdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8953\clbrdrt\brdrs\brd
rcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9208\c
lvertalb\clshdng100\clcfpat10\clcbpat10\cellx9308\clbrdrt\brdrs\brdrcf1\clbrdrb\
brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9559\clbrdrt\brdrs\
brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx105
42\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\c
lcbpat10\cellx10793\trrh298
i22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr
20,089\cell
f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr (8\cell\pard\plain
\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa2
2\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell
{\trowd\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx4505\clbrdrb\brdrdb\brdrcf
lb\clshdng100\clcfpat10\clcbpat10\cellx7342\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb
\clcfpat10\clcbpat10\cellx7697\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clve
rtalb\clshdng100\clcfpat10\clcbpat10\cellx7952\clbrdrt\brdrs\brdrcf1\clbrdrb\brd
rdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8953\clbrdrt\brdrs\brd
rcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9208\c
brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9559\clbrdrt\brdrs\
brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx105
42\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\c
lcbpat10\cellx10793\trrh298\row}}}
vertalb\cellx7699\clvertalb\cellx9211\clvertalb\cellx9311\clbrdrb\brdrs\brdrcf1\
clvertalb\cellx10545\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10796\trrh529
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs20\ql Less: Restricted cash, cash equ
ivalents, and\plain\intbl\li22\ri22\sa22\cf1\f51\fs20\ql marketable securities
(1)\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain
)\cell{
vertalb\cellx7699\clvertalb\cellx9211\clvertalb\cellx9311\clbrdrb\brdrs\brdrcf1\
clvertalb\cellx10545\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10796\trrh529\row}}}
clcbpat10\cellx9313\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpa
t10\cellx9564\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\ce
798\trrh281
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql Total cash, cash equivale
nts, and marketable securities\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51
798\trrh281\row}}}
\par\pard\plain
\fs16\ql \~\cell{
232
i22\sb22\sa22\cf1\f51\fs16\b\qc December\~31, 2014\cell{
232\row}}}
rdrb\brdrs\brdrcf1\clvertalb\cellx9211\clvertalb\cellx9311\clbrdrb\brdrs\brdrcf1
\clvertalb\cellx10796\trrh628
f1\f51\fs16\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Co
st or\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Amortized\par\p
ard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Cost\cell\pard\plain\intbl
2\cf1\f51\fs16\b\qc Gross\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\
b\qc Unrealized\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Gains
tbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Gross\par\pard\plain\intbl\li22\ri22\s
b22\sa22\cf1\f51\fs16\b\qc Unrealized\par\pard\plain\intbl\li22\ri22\sb22\sa22\c
f1\f51\fs16\b\qc Losses\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\q
l \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Total\par\pard\
plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Estimated\par\pard\plain\intbl
\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Fair\~Value\cell{
rdrb\brdrs\brdrcf1\clvertalb\cellx9211\clvertalb\cellx9311\clbrdrb\brdrs\brdrcf1
\clvertalb\cellx10796\trrh628\row}}}
{\trowd\trqc\clshdng100\clcfpat10\clcbpat10\cellx4505\clbrdrt\brdrs\brdrcf1\clve
rtalb\clshdng100\clcfpat10\clcbpat10\cellx4754\clbrdrt\brdrs\brdrcf1\clvertalb\c
086\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx6341\clb
rdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx7342\clbrdrt\br
drs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx7597\clvertalb\clshdng
fpat10\clcbpat10\cellx7952\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\
10\cellx9208\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9308\clbrdrt\brdrs\br
drcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9559\clbrdrt\brdrs\brdrcf1\c
lvertalb\clshdng100\clcfpat10\clcbpat10\cellx10542\clbrdrt\brdrs\brdrcf1\clverta
lb\clshdng100\clcfpat10\clcbpat10\cellx10793\trrh298
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Cash\cell\pard\plain\intb
qr 4,155\cell
10\cellx9208\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9308\clbrdrt\brdrs\br
lvertalb\clshdng100\clcfpat10\clcbpat10\cellx10542\clbrdrt\brdrs\brdrcf1\clverta
lb\clshdng100\clcfpat10\clcbpat10\cellx10793\trrh298\row}}}
796\trrh281
796\trrh281\row}}}
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Money market funds\cell\p
ard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 10,718\cell
f51\fs20\qr 10,718\cell
0793\trrh281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Equity securities\cell\pa
f51\fs20\qr 2\cell
f51\fs20\qr 4\cell
0793\trrh281\row}}}
\cellx10796\trrh281
\cellx10796\trrh281\row}}}
0793\trrh281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Foreign government and ag
ency securities\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 80\cell
f51\fs20\qr 80\cell
0793\trrh281\row}}}
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql U.S. government and agenc
y securities\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 2,407\cell
f51\fs20\qr 1\cell
22\sa22\cf1\f51\fs20\qr 2,406\cell
0793\trrh281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Corporate debt securities
f51\fs20\qr 1\cell
0793\trrh281\row}}}
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Asset-backed securities\c
f51\fs20\qr 69\cell
rdrs\brdrcf1\clvertalb\cellx8953\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9208\clver
talb\cellx9308\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10542\clbrdrb\brdrs\brdrcf1\
clvertalb\cellx10793\trrh281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Other fixed income securi
ties\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 33\cell
f51\fs20\qr 33\cell
rdrs\brdrcf1\clvertalb\cellx8953\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9208\clver
talb\cellx9308\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10542\clbrdrb\brdrs\brdrcf1\
clvertalb\cellx10793\trrh281\row}}}
{\trowd\trqc\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx4505\clbrdrb\brdrdb\b
rdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx4754\clbrdrb\brdrdb\brdrcf1
\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx5737\clbrdrb\brdrdb\brdrcf1\clver
talb\clshdng100\clcfpat10\clcbpat10\cellx5986\clvertalb\clshdng100\clcfpat10\clc
bpat10\cellx6086\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng1
00\clcfpat10\clcbpat10\cellx6341\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\cl
vertalb\clshdng100\clcfpat10\clcbpat10\cellx7342\clbrdrt\brdrs\brdrcf1\clbrdrb\b
rdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx7597\clvertalb\clshd
ng100\clcfpat10\clcbpat10\cellx7697\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1
\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx7952\clbrdrt\brdrs\brdrcf1\clbrdr
b\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8953\clbrdrt\brdr
208\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9308\clbrdrt\brdrs\brdrcf1\clb
rdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9559\clbrdrt\b
rdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cel
lx10542\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpa
17,865\cell
f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr (3\cell\pard\plain
2\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell
{\trowd\trqc\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx4505\clbrdrb\brdrdb\b
rdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx4754\clbrdrb\brdrdb\brdrcf1
\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx5737\clbrdrb\brdrdb\brdrcf1\clver
talb\clshdng100\clcfpat10\clcbpat10\cellx5986\clvertalb\clshdng100\clcfpat10\clc
bpat10\cellx6086\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng1
00\clcfpat10\clcbpat10\cellx6341\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\cl
vertalb\clshdng100\clcfpat10\clcbpat10\cellx7342\clbrdrt\brdrs\brdrcf1\clbrdrb\b
rdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx7597\clvertalb\clshd
208\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9308\clbrdrt\brdrs\brdrcf1\clb
rdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9559\clbrdrt\b
rdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cel
lx10542\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpa
99\clvertalb\cellx7699\clvertalb\cellx9211\clvertalb\cellx9311\clbrdrb\brdrs\brd
rcf1\clvertalb\cellx10545\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10796\trrh529
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs20\ql Less: Restricted cash, cash equ
ivalents, and\plain\intbl\li22\ri22\sa22\cf1\f51\fs20\ql marketable securities

(1)\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain
)\cell{
99\clvertalb\cellx7699\clvertalb\cellx9211\clvertalb\cellx9311\clbrdrb\brdrs\brd
rcf1\clvertalb\cellx10545\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10796\trrh529\row
}}}
at10\clcbpat10\cellx9313\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\c
lcbpat10\cellx9564\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat
10\cellx10547\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\ce
llx10798\trrh281
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql Total cash, cash equivale
nts, and marketable securities\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51
at10\clcbpat10\cellx9313\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\c
lcbpat10\cellx9564\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat
10\cellx10547\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\ce
llx10798\trrh281\row}}}\pard\plain\cf1\f51\fs20\ql ___________________
\par\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (1)\cell\pard\plain\intbl\cf1\f51\fs20\ql We a
re required to pledge or otherwise restrict a portion of our cash, cash equivale
nts, and marketable securities as collateral\plain\intbl\cf1\f51\fs20\ql for st
andby and trade letters of credit, guarantees, debt, real estate leases, and amo
unts due to third-party sellers in certain\plain\intbl\cf1\f51\fs20\ql jurisdic
tions. We classify cash, cash equivalents, and marketable securities with use re
strictions of less than twelve months as\plain\intbl\cf1\f51\fs20\ql \u8220?Acc
ounts receivable, net and other\u8221? and of twelve months or longer as non-cur
rent \u8220?Other\plain\intbl\cf1\f51\fs20\ql assets\u8221? on our consolidated
balance sheets. See \u8220?Note 7\u8212?Commitments and Contingencies.\u8221?\c
ell{
\par\pard\plain\fs16\par\pard\plain\sb264\fi528\cf1\f51\fs20\ql The following ta
ble summarizes gross gains and gross losses realized on sales of available-for-s
ale marketable securities\plain\cf1\f51\fs20\ql (in millions):
\par\pard\plain
ellx10795\trrh-66
ow}}}
{\trowd\clvertalb\cellx7305\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8398\clbrdrt\br
drs\brdrcf1\clvertalb\cellx8505\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9598\clvert
alb\cellx9705\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10798\trrh298
{\trowd\clvertalb\cellx7305\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8398\clbrdrt\br
drs\brdrcf1\clvertalb\cellx8505\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9598\clvert
alb\cellx9705\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10798\trrh298\row}}}
at10\cellx10682\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\c
ellx10795\trrh298
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Realized gains\cell\pard\p
f51\fs20\qr 2\cell
ellx10795\trrh298\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Realized losses\cell\pard\
f51\fs20\qr 5\cell
f51\fs20\qr 7\cell
lvertalb\cellx10795\trrh281\row}}}\pard\plain\sb264\fi528\cf1\f51\fs20\ql The fo
llowing table summarizes the contractual maturities of our cash equivalents and
marketable fixed-income securities\plain\cf1\f51\fs20\ql as of December\~31, 20
15 (in millions):
\par\pard\plain
ellx10797\trrh-66
cellx9251\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10798\trrh430
i22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Amortized\par\pard\plain\intbl\li22\ri22\sb
22\sa22\cf1\f51\fs16\b\qc Cost\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51
\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Estimate
d\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Fair\~Value\cell{
cellx9251\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10798\trrh430\row}}}
brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10546\clbrdrt\brdrs\
brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10797\trrh298
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Due within one year\cell\p
\cf1\f51\fs20\qr 12,533\cell
brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10797\trrh298\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Due after one year through
five years\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 1,086\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Due after five years throu
gh ten years\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 96\cell
f51\fs20\qr 95\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Due after ten years\cell\p
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Total\cell\pard\plain\int
bl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20
\qr 13,884\cell
\pard\plain\sb264\fi528\cf1\f51\fs20\ql Actual maturities may differ from the co
ntractual maturities because borrowers may have certain prepayment conditions.{\
*\bkmkstart s5E61E00F1542A850AD88ABB20E57709}{\*\bkmkend s5E61E00F1542A850AD88AB

B20E57709}\par\pard\plain\sb396\cf1\f51\fs20\b\ql Note 3\u8212?PROPERTY AND EQUI
PMENT\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Property and equipment, at cost
, consisted of the following (in millions):\par\pard\plain\cf1\f51\fs18\ql \~
\par\pard\plain
ellx10796\trrh-66
ow}}}
qc 2014\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Gross property and equipme
nt (1):\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\p
trrh281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Land and buildings\cell\p
\cf1\f51\fs20\qr 9,770\cell
trrh281\row}}}
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Equipment and internal-us
e software (2)\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 18,417\cell
f51\fs20\qr 14,213\cell
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Other corporate assets\ce
ll\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 334\cell
1
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Construction in progress\
1\row}}}
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql Gross property and equipm
ent\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 30,053\cell
f51\fs20\qr 22,730\cell
1
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Total accumulated deprecia
tion (1)\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 8,215\cell
1\row}}}
\pard\plain\intbl\li1386\ri22\sb22\sa22\cf1\f51\fs20\ql Total property and equip
ment, net\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain
ain\cf1\f51\fs20\ql \~___________________
\par\pard\plain
udes the original cost and accumulated depreciation of fully-depreciated\plain\i
ntbl\cf1\f51\fs20\ql assets.\cell{
\pard\plain
udes internal-use software of $1.4 billion and $1.3 billion as of December\~31,
2015 and\plain\intbl\cf1\f51\fs20\ql 2014.\cell{
Depreciation expense on property and equipment was $4.9 billion, $3.6 billion,
and $2.5 billion, which includes\plain\cf1\f51\fs20\ql amortization of property
and equipment acquired under capital leases of $2.7 billion, $1.5 billion, and
$826 million for 2015,\plain\cf1\f51\fs20\ql 2014, and 2013. Gross assets recor
ded under capital leases were $12.0 billion and $7.9 billion as of December\~31,
2015 and\plain\cf1\f51\fs20\ql 2014. Accumulated depreciation associated with
capital leases was $5.4 billion and $3.3 billion as of December\~31, 2015 and\pl
ain\cf1\f51\fs20\ql 2014.\par\pard\plain\sb132\fi484\cf1\f51\fs20\ql We capital
ize construction in progress and record a corresponding long-term liability for
build-to-suit lease agreements\plain\cf1\f51\fs20\ql where we are considered th
e owner, for accounting purposes, during the construction period. For buildings
under build-to-suit\plain\cf1\f51\fs20\ql lease arrangements where we have take
n occupancy, which do not qualify for sales recognition under the sale-leaseback
\plain\cf1\f51\fs20\ql accounting guidance, we determined that we continue to b
e the deemed owner of these buildings. This is principally due to our\plain\cf1\
f51\fs20\ql significant investment in tenant improvements. As a result, the bui
ldings are being depreciated over the shorter of their useful\plain\cf1\f51\fs20
\ql lives or the related leases\u8217? terms. Additionally, certain build-to-su
it lease arrangements and finance leases provide\plain\cf1\f51\fs20\ql purchase
options. Upon occupancy, the long-term construction obligations are considered
long-term finance lease obligations\plain\cf1\f51\fs20\ql with amounts payable

during the next 12 months recorded as \u8220?Accrued expenses and other.\u8221?
Gross assets remaining\plain\cf1\f51\fs20\ql under finance leases were $2.0 bil
lion and $1.4 billion as of December\~31, 2015 and 2014. Accumulated depreciatio
n associated\plain\cf1\f51\fs20\ql with finance leases was $199 million and $87
million as of December\~31, 2015 and 2014.
\page{\*\bkmkstart sF9B48CB29BC8C4C678AFABB20E2F63F}{\*\bkmkend sF9B48CB29BC8C4C
678AFABB20E2F63F}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F
\par\pard\plain\fs16\par\pard\plain\sb396\cf1\f51\fs20\b\ql Note 4\u8212?ACQUISI
TIONS, GOODWILL, AND ACQUIRED INTANGIBLE ASSETS\par\pard\plain\sb132\fi264\cf1\f
51\fs20\b\i\ql 2015 Acquisition Activity\par\pard\plain\sb132\fi484\cf1\f51\fs20
\ql During 2015, we acquired certain companies for an aggregate purchase price o
f $690 million. The primary reasons for\plain\cf1\f51\fs20\ql these acquisition
s, none of which was individually material to our consolidated financial stateme
nts, were to acquire technologies\plain\cf1\f51\fs20\ql and know-how to enable
Amazon to serve customers more effectively.\par\pard\plain\sb132\fi484\cf1\f51\f
s20\ql Acquisition-related costs were expensed as incurred and not significant.
The aggregate purchase price of these acquisitions\plain\cf1\f51\fs20\ql was al
located as follows (in millions):
\par\pard\plain
ellx10798\trrh-66
clcbpat10\cellx10799\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\ql Purchase Price\cell\pard
clcbpat10\cellx10799\trrh281\row}}}
trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Cash paid, net of cash acq
uired\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\int
bl\sb22\sa22\cf1\f51\fs20\qr 599\cell
trrh281\row}}}
clcbpat10\cellx10691\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10798\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Stock options and restrict
ed stock units assumed\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 5\ce
ll
\row}}}
{\trowd\cellx8953\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10691\clbrdrb\brdrs\brdrc
f1\clvertalb\cellx10798\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Indemnification holdback\c
f1\clvertalb\cellx10798\trrh281\row}}}
{\trowd\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8953\clbrdrt\brdrs\brdrcf1
rt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10
\cellx10691\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\cl
cfpat10\clcbpat10\cellx10798\trrh298
690\cell
cfpat10\clcbpat10\cellx10798\trrh298\row}}}
{\trowd\cellx8953\clvertalb\cellx10799\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\ql Allocation\cell\pard\pla
in\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
{\trowd\cellx8953\clvertalb\cellx10799\trrh281\row}}}
20\qr 482\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Intangible assets (1):\cel
l\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
\pard\plain\intbl\li198\ri22\sb22\sa22\cf1\f51\fs20\ql Marketing-related\cell\pa
\row}}}
\pard\plain\intbl\li198\ri22\sb22\sa22\cf1\f51\fs20\ql Contract-based\cell\pard\
\pard\plain\intbl\li198\ri22\sb22\sa22\cf1\f51\fs20\ql Technology-based\cell\par
\row}}}
\pard\plain\intbl\li198\ri22\sb22\sa22\cf1\f51\fs20\ql Customer-related\cell\par
98\trrh281
i22\sb22\sa22\cf1\f51\fs20\qr 230\cell
98\trrh281\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Property and equipment\cel
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Deferred tax assets\cell\p
\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Other assets acquired\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Deferred tax liabilities\c
ell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (85\cell\pard\plain\intbl\ri
22\sb22\sa22\cf1\f51\fs20\ql )\cell{
\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Other liabilities assumed\
cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (49\cell\pard\plain\intbl\r
i22\sb22\sa22\cf1\f51\fs20\ql )\cell{
690\cell
cfpat10\clcbpat10\cellx10798\trrh298\row}}}\pard\plain\sb154\cf1\f51\fs20\ql \~_
__________________
\par\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (1)\cell\pard\plain\intbl\cf1\f51\fs20\ql Acqu
ired intangible assets have estimated useful lives of between one and six years,
with a weighted-average amortization\plain\intbl\cf1\f51\fs20\ql period of fiv
e years.\cell{
l The fair value of assumed stock options, estimated using the Black-Scholes mod
el, and restricted stock units of $9 million\plain\cf1\f51\fs20\ql will be expe
nsed over the remaining service period. We determined the estimated fair value o
f identifiable intangible assets\plain\cf1\f51\fs20\ql acquired primarily by us
ing the income approach. These assets are included within \u8220?Other assets\u8
221? on our\plain\cf1\f51\fs20\ql consolidated balance sheets and are being amo
rtized to operating expenses on a straight-line basis over their estimated usefu
l\plain\cf1\f51\fs20\ql lives.\par\pard\plain\sb396\fi286\cf1\f51\fs20\i\ql Pro
Forma Financial Information \u8211? 2015 Acquisition Activity (unaudited)\par\p
ard\plain\sb132\fi484\cf1\f51\fs20\ql The acquired companies were consolidated i
nto our financial statements starting on their respective acquisition dates. The
\plain\cf1\f51\fs20\ql aggregate net sales and operating income (loss) of the c
ompanies acquired was $23 million and $(112) million for 2015. The\plain\cf1\f51
\fs20\ql following financial information, which excludes certain acquired compa
nies for which the pro forma impact is not meaningful,\plain\cf1\f51\fs20\ql pr
esents our results as if the acquisitions during 2015 had occurred at the beginn
ing of 2014 (in millions):
\par\pard\plain
ellx10798\trrh-66
f1\f51\fs16\ql \~\cell\pard\plain\intbl\li198\sb22\sa22\cf1\f51\fs16\b\qc Year E
nded December 31,\cell{
ow}}}
{\trowd\clvertalb\cellx8067\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrs\brdrcf1\clvertal
b\cellx9378\clbrdrt\brdrs\brdrcf1\clvertalb\cellx9488\clbrdrt\brdrs\brdrcf1\clbr
drb\brdrs\brdrcf1\clvertalb\cellx10799\trrh298
qc 2014\cell{
b\cellx9378\clbrdrt\brdrs\brdrcf1\clvertalb\cellx9488\clbrdrt\brdrs\brdrcf1\clbr
drb\brdrs\brdrcf1\clvertalb\cellx10799\trrh298\row}}}
s20\qr 107,054\cell
brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10798\trrh298\row}}}
trrh281
trrh281\row}}}
\par\pard\plain\fs16\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql 2014 Acquisi
tion Activity\par\pard\plain\sb132\fi484\cf1\f51\fs20\ql On September\~25, 2014,
we acquired Twitch Interactive, Inc. (\u8220?Twitch\u8221?) for approximately $
842 million in\plain\cf1\f51\fs20\ql cash, as adjusted for the assumption of op
tions and other items. During 2014, we acquired certain other companies for an\p
lain\cf1\f51\fs20\ql aggregate purchase price of $20 million. We acquired Twitc
h because of its user community and the live streaming experience it\plain\cf1\f
51\fs20\ql provides.\~The primary reasons for our other 2014 acquisitions were
to acquire technologies and know-how to enable Amazon to\plain\cf1\f51\fs20\ql
serve customers more effectively.\par\pard\plain\sb132\fi484\cf1\f51\fs20\ql Acq
uisition-related costs were expensed as incurred and not significant. The aggreg
ate purchase price of these acquisitions\plain\cf1\f51\fs20\ql was allocated as
follows (in millions):
\par\pard\plain
ellx10798\trrh-66
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\ql Purchase Price\cell\pard
trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Cash paid, net of cash acq
uired\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\int
bl\sb22\sa22\cf1\f51\fs20\qr 813\cell
trrh281\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Stock options assumed\cell
\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Indemnification holdback\c
862\cell
cfpat10\clcbpat10\cellx10798\trrh298\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\ql Allocation\cell\pard\pla
in\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
20\qr 707\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Intangible assets (1):\cel
\pard\plain\intbl\li198\ri22\sb22\sa22\cf1\f51\fs20\ql Marketing-related\cell\pa
\row}}}
\pard\plain\intbl\li198\ri22\sb22\sa22\cf1\f51\fs20\ql Contract-based\cell\pard\
\pard\plain\intbl\li198\ri22\sb22\sa22\cf1\f51\fs20\ql Technology-based\cell\par
\row}}}
\pard\plain\intbl\li198\ri22\sb22\sa22\cf1\f51\fs20\ql Customer-related\cell\par
98\trrh281
i22\sb22\sa22\cf1\f51\fs20\qr 230\cell
98\trrh281\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Property and equipment\cel
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Deferred tax assets\cell\p
\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Other assets acquired\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Deferred tax liabilities\c
ell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (88\cell\pard\plain\intbl\ri
22\sb22\sa22\cf1\f51\fs20\ql )\cell{
\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Other liabilities assumed\
cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (101\cell\pard\plain\intbl\
ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
862\cell
cfpat10\clcbpat10\cellx10798\trrh298\row}}}\pard\plain\cf1\f51\fs20\ql \~_______
____________
\par\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (1)\cell\pard\plain\intbl\cf1\f51\fs20\ql Acqu
ired intangible assets have estimated useful lives of between one and five years
, with a weighted-average amortization\plain\intbl\cf1\f51\fs20\ql period of fi
ve years.\cell{
l The fair value of assumed stock options of $39 million, estimated using the Bl
ack-Scholes model, will be expensed over\plain\cf1\f51\fs20\ql the remaining se
rvice period. We determined the estimated fair value of identifiable intangible
assets acquired primarily by using\plain\cf1\f51\fs20\ql the income approach. T
hese assets are included within \u8220?Other assets\u8221? on our consolidated b
alance sheets and are\plain\cf1\f51\fs20\ql being amortized to operating expens
es on a straight-line or accelerated basis over their estimated useful lives.\pa
r\pard\plain\sb264\fi484\cf1\f51\fs20\ql Pro forma results of operations have no
t been presented because the effects of these acquisitions, individually and in
the\plain\cf1\f51\fs20\ql aggregate, were not material to our consolidated resu
lts of operations.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql 2013 Acquisiti
on Activity\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql In 2013, we acquired seve
ral companies in cash transactions for an aggregate purchase price of $195 milli
on, resulting in\plain\cf1\f51\fs20\ql goodwill of $103 million and acquired in
tangible assets of $83 million. The primary reasons for these acquisitions were
to\plain\cf1\f51\fs20\ql expand our customer base and sales channels and to obt
ain certain technologies to be used in product development. We\plain\cf1\f51\fs2
0\ql determined the estimated fair value of identifiable intangible assets acqu
ired primarily by using the income and cost approaches.\plain\cf1\f51\fs20\ql T
hese assets are included within \u8220?Other assets\u8221? on our consolidated b
alance sheets and are being amortized to\plain\cf1\f51\fs20\ql operating expens
es on a straight-line or accelerated basis over their estimated useful lives. Ac
quisition-related costs were\plain\cf1\f51\fs20\ql expensed as incurred and wer
e not significant.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Pro forma results
of operations have not been presented because the effects of these acquisitions,
individually and in the\plain\cf1\f51\fs20\ql aggregate, were not material to
our consolidated results of operations.
\par\pard\plain\fs16\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Goodwill\par
\pard\plain\sb132\fi528\cf1\f51\fs20\ql The goodwill of the acquired companies i
s generally not deductible for tax purposes and is primarily related to expected
\plain\cf1\f51\fs20\ql improvements in technology performance and functionality
, as well as sales growth from future product and service offerings and\plain\cf
1\f51\fs20\ql new customers, together with certain intangible assets that do no
t qualify for separate recognition. The following summarizes our\plain\cf1\f51\f
s20\ql goodwill activity in 2015 and 2014 by segment (in millions):\par\pard\pl
ain\cf1\f51\fs18\ql \~
\par\pard\plain
ellx10790\trrh-66
\fs16\ql \~\cell{
rtalb\cellx10794\trrh430
i22\ri22\sb22\sa22\cf1\f51\fs16\b\qc North\par\pard\plain\intbl\li22\ri22\sb22\s
a22\cf1\f51\fs16\b\qc America\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\
fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Internati
onal\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plai
n\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc AWS\cell\pard\plain\intbl\li22\ri2
\fs16\b\qc Consolidated\cell{
rtalb\cellx10794\trrh430\row}}}
x7061\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx7161\clbrdrt\brdrs\brdrcf1\c
lx8867\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9172\
clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10485\clbrdr
t\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10790\trrh298
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Goodwill - January 1, 2014
22\sa22\cf1\f51\fs20\qr 2,033\cell
x7061\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx7161\clbrdrt\brdrs\brdrcf1\c
lx8867\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9172\
clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10485\clbrdr
t\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10790\trrh298\row}
}}
trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql New acquisitions (1)\cell\
pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 553\cell
trrh281\row}}}
clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10487\clbrdr
b\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10792\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Other adjustments (2)\cell

\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (2\cell\pard\plain\intbl\ri22\s
b22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs2
0\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (49\cell\pard\plain
2\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr \u8212
?\cell
b\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10792\trrh281\row}
}}
trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Goodwill - December 31, 20
14\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 2,584\cell
trrh281\row}}}
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs20\ql Segment reallocation\u8212?Janu
ary 1,\plain\intbl\li22\ri22\sa22\cf1\f51\fs20\ql 2015 (3)\cell\pard\plain\intb
l\li22\sb22\sa22\cf1\f51\fs20\qr (606\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f
51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\p
ard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr \u8212?\cell
trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql New acquisitions\cell\pard
\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 41\cell
f51\fs20\qr 18\cell
trrh281\row}}}
b\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10792\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Other adjustments (2)\cell
\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (7\cell\pard\plain\intbl\ri22\s
b22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs2
0\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (34\cell\pard\plain
2\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (1\cel
l\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\r
20\qr (42\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
b\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10792\trrh281\row}
}}
f1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8639\clbrdrt\brdrs\brdrcf1\clbrdrb\brdr
db\brdrcf1\clvertalb\cellx8767\clvertalb\cellx8867\clbrdrb\brdrdb\brdrcf1\clvert
alb\cellx9172\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10485\clbrdrb\brdrdb\brdrcf1
\clvertalb\cellx10790\trrh298
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Goodwill - December 31, 20
15\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\
f1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8639\clbrdrt\brdrs\brdrcf1\clbrdrb\brdr
db\brdrcf1\clvertalb\cellx8767\clvertalb\cellx8867\clbrdrb\brdrdb\brdrcf1\clvert
alb\cellx9172\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10485\clbrdrb\brdrdb\brdrcf1
\clvertalb\cellx10790\trrh298\row}}}\pard\plain\cf1\f51\fs20\ql \~______________
_____
\par\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (1)\cell\pard\plain\intbl\cf1\f51\fs20\ql Prim
arily includes the goodwill\plain\intbl\cf1\f51\fs20\ql of Twitch.\cell{
\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (2)\cell\pard\plain\intbl\cf1\f51\fs20\ql Prim
arily includes changes in foreign\plain\intbl\cf1\f51\fs20\ql exchange rates.\c
ell{
\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (3)\cell\pard\plain\intbl\cf1\f51\fs20\ql In c
onjunction with the change in reportable segments, we reallocated goodwill on a
relative fair value basis.\cell{
i\ql Intangible Assets\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Acquired intan
gible assets, included within \u8220?Other assets\u8221? on our consolidated bal
ance sheets, consist of the\plain\cf1\f51\fs20\ql following (in millions):\par\
\par\pard\plain
llx9909\clvertalc\cellx10510\clvertalc\cellx10784\trrh-66
llx9909\clvertalc\cellx10510\clvertalc\cellx10784\trrh-66\row}}}
{\trowd\clvertalb\cellx1650\clvertalb\cellx2676\clvertalb\cellx2762\clbrdrb\brdr
s\brdrcf1\clvertalb\cellx10798\trrh281
cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs16\b\qc Decemb
er 31,\cell{
s\brdrcf1\clvertalb\cellx10798\trrh281\row}}}
s\brdrcf1\clvertalb\cellx6736\clvertalb\cellx6822\clbrdrb\brdrs\brdrcf1\clvertal
b\cellx10796\trrh281
cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs16\b\qc 2015\c
l\li22\sb22\sa22\cf1\f51\fs16\b\qc 2014\cell{
s\brdrcf1\clvertalb\cellx6736\clvertalb\cellx6822\clbrdrb\brdrs\brdrcf1\clvertal
b\cellx10796\trrh281\row}}}
f1\f51\fs16\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc We
ighted\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Average\~Life\
par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Remaining\cell\pard\p
2\sb22\sa22\cf1\f51\fs16\b\qc Acquired\par\pard\plain\intbl\li22\ri22\sb22\sa22\
cf1\f51\fs16\b\qc Intangibles,\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\
fs16\b\qc Gross (1)\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~
\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Accumulated\par\par
d\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Amortization\~(1)\cell\pard\
22\sb22\sa22\cf1\f51\fs16\b\qc Acquired\par\pard\plain\intbl\li22\ri22\sb22\sa22
\cf1\f51\fs16\b\qc Intangibles,\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51
\fs16\b\qc Net\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Acquired\par\pard\plain\
intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Intangibles,\par\pard\plain\intbl\li
22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Gross (1)\cell\pard\plain\intbl\li22\ri22\sb
6\b\qc Accumulated\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Am
ortization\~(1)\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cel
l\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Acquired\par\pard\plain
\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Intangibles,\par\pard\plain\intbl\l
i22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Net\cell{
lb\clshdng100\clcfpat10\clcbpat10\cellx9909\clvertalb\clshdng100\clcfpat10\clcbp
at10\cellx10510\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10784\trrh298
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Marketing-related\cell\par
d\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\qr 4.4\cell\pard\plain\intbl\li22
fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 457\cell
at10\cellx10510\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10784\trrh298\row}
}}
trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Contract-based\cell\pard\p
lain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\qr 2.1\cell\pard\plain\intbl\li22\ri
0\qr 130\cell
trrh281\row}}}
lx10516\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10790\trrh529
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs20\ql Technology- and\plain\intbl\li2
2\ri22\sa22\cf1\f51\fs20\ql content-based\cell\pard\plain\intbl\li22\ri22\sb22\
sa22\cf1\f51\fs20\qr 3.9\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\
lx10516\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10790\trrh529\row}}}
{\trowd\cellx1650\clbrdrb\brdrs\brdrcf1\clvertalb\cellx2676\clvertalb\cellx2762\
clbrdrb\brdrs\brdrcf1\clvertalb\cellx3723\clbrdrb\brdrs\brdrcf1\clvertalb\cellx3
997\clvertalb\cellx4083\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5110\clbrdrb\brdrs\
brdrcf1\clvertalb\cellx5497\clvertalb\cellx5583\clbrdrb\brdrs\brdrcf1\clvertalb\
brdrs\brdrcf1\clvertalb\cellx7780\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8054\clve
rtalb\cellx8140\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9167\clbrdrb\brdrs\brdrcf1\
clvertalb\cellx9554\clvertalb\cellx9640\clbrdrb\brdrs\brdrcf1\clvertalb\cellx105
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Customer-related\cell\pard
\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\qr 3.6\cell\pard\plain\intbl\li22\
s20\qr 331\cell
{\trowd\cellx1650\clbrdrb\brdrs\brdrcf1\clvertalb\cellx2676\clvertalb\cellx2762\
clbrdrb\brdrs\brdrcf1\clvertalb\cellx3723\clbrdrb\brdrs\brdrcf1\clvertalb\cellx3
997\clvertalb\cellx4083\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5110\clbrdrb\brdrs\
brdrcf1\clvertalb\cellx5497\clvertalb\cellx5583\clbrdrb\brdrs\brdrcf1\clvertalb\
brdrs\brdrcf1\clvertalb\cellx7780\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8054\clve
rtalb\cellx8140\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9167\clbrdrb\brdrs\brdrcf1\
clvertalb\cellx9554\clvertalb\cellx9640\clbrdrb\brdrs\brdrcf1\clvertalb\cellx105
clcbpat10\cellx2676\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx2762\clbrdrb\b
rdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx3036\clbrdrb\brdrdb\
brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx3722\clbrdrb\brdrdb\brdrcf
1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx3996\clvertalb\clshdng100\clcfpa
0\cellx5108\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cell
x5495\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx5581\clbrdrb\brdrdb\brdrcf1\
alb\clshdng100\clcfpat10\clcbpat10\cellx6456\clbrdrb\brdrdb\brdrcf1\clvertalb\cl
brdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8050\clvertal
\clcfpat10\clcbpat10\cellx9162\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfp
at10\clcbpat10\cellx9549\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9635\clbr
drdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10510\clbrdrb\brdrdb\
\pard\plain\intbl\li462\ri22\sb22\cf1\f51\fs20\ql Acquired\plain\intbl\li462\ri2
2\sa22\cf1\f51\fs20\ql intangibles\~(2)\cell\pard\plain\intbl\li22\ri22\sb22\sa
22\cf1\f51\fs20\qr 3.9\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql
\~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl
\sb22\sa22\cf1\f51\fs20\qr 1,477\cell
clcbpat10\cellx2676\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx2762\clbrdrb\b
rdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx3036\clbrdrb\brdrdb\
brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx3722\clbrdrb\brdrdb\brdrcf
1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx3996\clvertalb\clshdng100\clcfpa
0\cellx5108\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cell
x5495\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx5581\clbrdrb\brdrdb\brdrcf1\
alb\clshdng100\clcfpat10\clcbpat10\cellx6456\clbrdrb\brdrdb\brdrcf1\clvertalb\cl
brdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8050\clvertal
at10\clcbpat10\cellx9549\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9635\clbr
drdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10510\clbrdrb\brdrdb\
brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10784\trrh529\row}}}\pard\
plain\cf1\f51\fs20\ql \~___________________
\par\pard\plain
udes the original cost and accumulated amortization of fully-amortized\plain\int
bl\cf1\f51\fs20\ql intangibles.\cell{
\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (2)\cell\pard\plain\intbl\cf1\f51\fs20\ql Inta
ngible assets have estimated useful lives of between one and\plain\intbl\cf1\f51
\fs20\ql ten years.\cell{
Amortization expense for acquired intangibles was $228 million, $181 million, a
nd $168 million in 2015, 2014, and 2013.\plain\cf1\f51\fs20\ql Expected future
amortization expense of acquired intangible assets as of December\~31, 2015 is a
s follows (in millions):\par\pard\plain\cf1\f51\fs18\ql \~
\par\pard\plain
ellx10797\trrh-66
{\trowd\clshdng100\clcfpat10\clcbpat10\cellx10800\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Year Ended December 31,\ce
ll{
{\trowd\clshdng100\clcfpat10\clcbpat10\cellx10800\trrh281\row}}}
trrh281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql 2016\cell\pard\plain\intb
qr 218\cell
trrh281\row}}}
l\li22\sb22\sa22\cf1\f51\fs20\qr 191\cell
\row}}}
\row}}}
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Thereafter\cell\pard\plai
\row}}}
{\trowd\clvertalb\cellx8651\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clverta
lb\cellx8878\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10570\c
lbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10797\trrh298
762\cell
lbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10797\trrh298\row}}}
\page{\*\bkmkstart s9799BE8E99F59A43F689ABB20F2954F}{\*\bkmkend s9799BE8E99F59A4
3F689ABB20F2954F}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F
\par\pard\plain\fs16\par\pard\plain\sb396\cf1\f51\fs20\b\ql Note 5\u8212?LONG-TE
RM DEBT\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql In December 2014 and November
2012, we issued $6.0 billion and $3.0 billion of unsecured senior notes as desc
ribed in\plain\cf1\f51\fs20\ql the table below (collectively, the \u8220?Notes\
u8221?). As of December\~31, 2015 and 2014, the unamortized discount on the\plai
n\cf1\f51\fs20\ql Notes was $89 million and $96 million. We also have other lon
g-term debt with a carrying amount, including the current\plain\cf1\f51\fs20\ql
portion, of $312 million and $881 million as of December\~31, 2015 and 2014. Th
e face value of our total long-term debt\plain\cf1\f51\fs20\ql obligations is a
s follows (in millions):
\par\pard\plain
ellx10797\trrh-66
ow}}}
qc 2014\cell{
lx10797\trrh281
in\intbl\sb22\sa22\cf1\f51\fs20\qr \u8212?\cell
r\~29, 2017 (1)\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 1,000\cell

r\~29, 2022 (1)\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 1,250\cell
r 5, 2019 (2)\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 1,000\cell

1
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Other long-term debt\cell\
pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 312\cell
1\row}}}
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Total debt\cell\pard\plai
n\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 8,562\cell
1
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Less current portion of lo
ng-term debt\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (238\cell\pard
1\row}}}
34\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9116\clbrdrt\brdr
s\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9229\clvertalb\cellx9336\clbrdrb
\brdrdb\brdrcf1\clvertalb\cellx9504\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10684\
clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10797\trrh298
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Face value of long-term d
ebt\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl
\sb22\sa22\cf1\f51\fs20\qr 8,324\cell
s\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9229\clvertalb\cellx9336\clbrdrb
\brdrdb\brdrcf1\clvertalb\cellx9504\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10684\
clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10797\trrh298\row}}}\pard\plain\cf1\f51\fs
12\ql _____________________________
\par\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (1)\cell\pard\plain\intbl\cf1\f51\fs20\ql Issu
ed in November 2012, effective interest rates of the 2017 and 2022 Notes were 1.
38% and 2.66%.\cell{
\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (2)\cell\pard\plain\intbl\cf1\f51\fs20\ql Issu
ed in December 2014, effective interest rates of the 2019, 2021, 2024, 2034, and
2044 Notes were 2.73%, 3.43%,\plain\intbl\cf1\f51\fs20\ql 3.90%, 4.92%, and 5.
11%.\cell{
l Interest on the Notes issued in 2014 is payable semi-annually in arrears in Ju
ne and December. Interest on the Notes\plain\cf1\f51\fs20\ql issued in 2012 is
payable semi-annually in arrears in May and November. We may redeem the Notes at
any time in whole, or\plain\cf1\f51\fs20\ql from time to time, in part at spec
ified redemption prices. We are not subject to any financial covenants under the
Notes. The\plain\cf1\f51\fs20\ql proceeds from the Notes are used for general
corporate purposes. The estimated fair value of the Notes was approximately $8.5
\plain\cf1\f51\fs20\ql billion and $9.1 billion as of December\~31, 2015 and 20
14, which is based on quoted prices for our publicly-traded debt as of\plain\cf1
\f51\fs20\ql those dates.\par\pard\plain\sb264\fi528\cf1\f51\fs20\ql The other
debt, including the current portion, had a weighted-average interest rate of 3.7
% and 5.5% as of December\~31,\plain\cf1\f51\fs20\ql 2015 and 2014. We used the
net proceeds from the issuance of this debt primarily to fund certain internati
onal operations. The\plain\cf1\f51\fs20\ql estimated fair value of the other lo
ng-term debt, which is based on Level 2 inputs, approximated its carrying value
as of\plain\cf1\f51\fs20\ql December\~31, 2015 and 2014.\par\pard\plain\sb264\f
i528\cf1\f51\fs20\ql As of December\~31, 2015, future principal payments for our
total debt were as follows (in millions):\par\pard\plain\cf1\f51\fs18\ql \~
\par\pard\plain
ellx10798\trrh-66
{\trowd\clshdng100\clcfpat10\clcbpat10\cellx10800\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Year Ended December 31,\ce
ll{
{\trowd\clshdng100\clcfpat10\clcbpat10\cellx10800\trrh281\row}}}
trrh281
qr 238\cell
trrh281\row}}}
l\li22\sb22\sa22\cf1\f51\fs20\qr 1,037\cell
\row}}}
\row}}}
l\li22\sb22\sa22\cf1\f51\fs20\qr \u8212?\cell
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Thereafter\cell\pard\plai
n\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 6,250\cell
\row}}}
lbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10798\trrh298
8,562\cell
lbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10798\trrh298\row}}}\
pard\plain\sb264\fi528\cf1\f51\fs20\ql On September\~5, 2014, we entered into an
unsecured revolving credit facility (the \u8220?Credit Agreement\u8221?) with a
\plain\cf1\f51\fs20\ql syndicate of lenders that provides us with a borrowing c
apacity of up to $2.0 billion. The Credit Agreement has a term of two\plain\cf1\
f51\fs20\ql years, but it may be extended for up to three additional one-year t
erms if approved by the lenders. The initial interest rate\plain\cf1\f51\fs20\ql
applicable to outstanding balances under the Credit Agreement is the London in

terbank offered rate (\u8220?LIBOR\u8221?) plus\plain\cf1\f51\fs20\ql 0.625%, u
nder our current credit ratings. If our credit ratings are downgraded this rate
could increase to as much as LIBOR plus\plain\sa88\cf1\f51\fs20\ql 1.00%. There
were no borrowings outstanding under the Credit Agreement as of December\~31, 2
015 and 2014.
\page{\*\bkmkstart s5728551FEE8C7FDBBD26ABB20F1FABD}{\*\bkmkend s5728551FEE8C7FD
BBD26ABB20F1FABD}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F
\par\pard\plain\fs16\par\pard\plain\cf1\f51\fs20\b\ql Note 6\u8212?OTHER LONG-TE
RM LIABILITIES\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Our other long-term li
abilities are summarized as follows (in millions):
\par\pard\plain
ellx10797\trrh-66
ow}}}
qc 2014\cell{
lx10797\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Long-term capital lease ob
ligations\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Long-term finance lease ob
ligations\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 1,736\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Construction liabilities\c
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Tax contingencies\cell\par
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Long-term deferred tax lia
bilities\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 1,084\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Other\cell\pard\plain\intb
clcbpat10\cellx10684\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clsh
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Total other long-term liab
ilities\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\i
ntbl\sb22\sa22\cf1\f51\fs20\qr 9,926\cell
clcbpat10\cellx10684\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clsh
dng100\clcfpat10\clcbpat10\cellx10797\trrh298\row}}}\pard\plain\sb396\fi264\cf1\
f51\fs20\b\i\ql Capital and Finance Leases\par\pard\plain\sb132\fi528\cf1\f51\fs
20\ql Certain of our equipment, primarily related to technology infrastructure,
and buildings have been acquired under capital\plain\cf1\f51\fs20\ql leases. Lo
ng-term capital lease obligations are as follows (in millions):
\par\pard\plain
ellx10798\trrh-66
i22\ri22\sb22\sa22\cf1\f51\fs16\b\qc December 31, 2015\cell{
ow}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Gross capital lease obliga
tions\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\int
bl\sb22\sa22\cf1\f51\fs20\qr 7,452\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Less imputed interest\cell
\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (213\cell\pard\plain\intbl\ri22
\sb22\sa22\cf1\f51\fs20\ql )\cell{
\clshdng100\clcfpat10\clcbpat10\cellx10561\clbrdrt\brdrs\brdrcf1\clvertalb\clshd
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Present value of net minim
um lease payments\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 7,239\cel
l
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Less current portion of ca
027\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
1\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\cl
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Total long-term capital le
ase obligations\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard
\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 4,212\cell
1\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\cl
cbpat10\cellx10798\trrh298\row}}}\pard\plain\sb264\fi484\cf1\f51\fs20\ql We cont
inue to be the deemed owner after occupancy of certain facilities that were cons
tructed as build-to-suit lease\plain\cf1\f51\fs20\ql arrangements and previousl
y reflected as \u8220?Construction liabilities.\u8221? As such, these arrangemen
ts are accounted for as\plain\cf1\f51\fs20\ql finance leases. Long-term finance
lease obligations are as follows (in millions):
\par\pard\plain
{\trowd\trqc\clvertalc\cellx8527\clvertalc\cellx8764\clvertalc\cellx10561\clvert
{\trowd\trqc\clvertalc\cellx8527\clvertalc\cellx8764\clvertalc\cellx10561\clvert
281
i22\ri22\sb22\sa22\cf1\f51\fs16\b\qc December 31, 2015\cell{
281\row}}}
at10\clcbpat10\cellx8764\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10561\clv
ertalb\clshdng100\clcfpat10\clcbpat10\cellx10798\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Gross finance lease obliga
tions\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\int
bl\sb22\sa22\cf1\f51\fs20\qr 2,390\cell
at10\clcbpat10\cellx8764\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10561\clv
ertalb\clshdng100\clcfpat10\clcbpat10\cellx10798\trrh281\row}}}
{\trowd\trqc\cellx8527\clvertalb\cellx10561\clvertalb\cellx10798\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Less imputed interest\cell
\sb22\sa22\cf1\f51\fs20\ql )\cell{
{\trowd\trqc\cellx8527\clvertalb\cellx10561\clvertalb\cellx10798\trrh281\row}}}
rtalb\clshdng100\clcfpat10\clcbpat10\cellx10561\clbrdrt\brdrs\brdrcf1\clvertalb\
clshdng100\clcfpat10\clcbpat10\cellx10798\trrh298
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Present value of net minim
um lease payments\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 1,835\cel
l
rtalb\clshdng100\clcfpat10\clcbpat10\cellx10561\clbrdrt\brdrs\brdrcf1\clvertalb\
clshdng100\clcfpat10\clcbpat10\cellx10798\trrh298\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Less current portion of fi
\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
{\trowd\trqc\clshdng100\clcfpat10\clcbpat10\cellx8527\clbrdrt\brdrs\brdrcf1\clbr
drb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8764\clbrdrt\br
drs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cell
x10561\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Total long-term finance le
ase obligations\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard
\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 1,736\cell
x10561\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat
10\clcbpat10\cellx10798\trrh298\row}}}\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\q
l Construction Liabilities\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql We capital
ize construction in progress and record a corresponding long-term liability for
build-to-suit lease agreements\plain\cf1\f51\fs20\ql where we are considered th
e owner during the construction period for accounting purposes. These liabilitie
s primarily relate to\plain\cf1\f51\fs20\ql our corporate buildings and fulfill
ment, sortation, delivery, and data centers.\par\pard\plain\sb396\fi264\cf1\f51\
fs20\b\i\ql Tax Contingencies\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql We have
recorded tax reserves for tax contingencies, inclusive of accrued interest and
penalties, for U.S. and foreign\plain\cf1\f51\fs20\ql income taxes. These conti
ngencies primarily relate to transfer pricing, state income taxes, and research
and development credits.\plain\cf1\f51\fs20\ql See \u8220?Note 10\u8212?Income
Taxes\u8221? for discussion of tax contingencies.
\page{\*\bkmkstart sB6135EB9D812A116A638ABB20F4736D}{\*\bkmkend sB6135EB9D812A11
6A638ABB20F4736D}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F
\par\pard\plain\fs16\par\pard\plain\sb396\cf1\f51\fs20\b\ql Note 7\u8212?COMMITM
ENTS AND CONTINGENCIES\par\pard\plain\sb132\fi264\cf1\f51\fs20\b\i\ql Commitment
s\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql We have entered into non-cancellabl
e operating, capital, and finance leases for equipment and office, fulfillment,
sortation,\plain\cf1\f51\fs20\ql delivery, data center, and renewable energy fa
cilities. Rental expense under operating lease agreements was $1.1 billion, $961
\plain\cf1\f51\fs20\ql million, and $759 million for 2015, 2014, and 2013.\par\
pard\plain\sb132\fi528\cf1\f51\fs20\ql The following summarizes our principal co
ntractual commitments, excluding open orders for purchases that support normal\p
lain\cf1\f51\fs20\ql operations, as of December\~31, 2015 (in millions):
\par\pard\plain
ellx10790\trrh-66
cellx8461\clvertalb\cellx9702\clvertalb\cellx9805\clvertalb\cellx10797\trrh281
i22\sb22\sa22\cf1\f51\fs16\b\qc Year Ended December 31,\cell\pard\plain\intbl\li
f1\f51\fs16\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\c
ell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\ql \~\cell{
cellx8461\clvertalb\cellx9702\clvertalb\cellx9805\clvertalb\cellx10797\trrh281\r
ow}}}
lain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\li22
\f51\fs16\b\qc 2019\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~
\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc 2020\cell\pard\plai
b22\sa22\cf1\f51\fs16\b\qc Thereafter\cell\pard\plain\intbl\li22\ri22\sb22\sa22\
cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc T
otal\cell{
at10\cellx10662\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10790\trrh281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Debt principal and intere
st\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\
at10\cellx10662\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10790\trrh281\row}
}}
\pard\plain\intbl\li462\ri22\sb22\cf1\f51\fs20\ql Capital lease obligations, inc
luding\plain\intbl\li462\ri22\sa22\cf1\f51\fs20\ql interest\cell\pard\plain\int
bl\li22\sb22\sa22\cf1\f51\fs20\qr 3,128\cell
f51\fs20\qr 83\cell
\pard\plain\intbl\li462\ri22\sb22\cf1\f51\fs20\ql Finance lease obligations, inc
luding\plain\intbl\li462\ri22\sa22\cf1\f51\fs20\ql interest\cell\pard\plain\int
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Operating leases\cell\par
\pard\plain\intbl\li462\ri22\sb22\cf1\f51\fs20\ql Unconditional purchase obligat
ions\plain\intbl\li462\ri22\sa22\cf1\f51\fs20\ql (1)\cell\pard\plain\intbl\li22
\sb22\sa22\cf1\f51\fs20\qr 614\cell
f51\fs20\qr 43\cell
f51\fs20\qr 13\cell
lx10790\trrh281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Other commitments (2)\~(3
)\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 851\cell
f51\fs20\qr 86\cell
ellx8239\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx83
52\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8455\clbrdrb\brdrdb\brdrcf1\clv
\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10662\clbr
drb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10790\trrh281
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql Total commitments\cell\pa
cf1\f51\fs20\qr 6,466\cell
ellx8239\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx83
52\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8455\clbrdrb\brdrdb\brdrcf1\clv
\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10662\clbr
drb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10790\trrh281\r
ow}}}\pard\plain\cf1\f51\fs20\ql ___________________
\par\pard\plain
udes unconditional purchase obligations related to long-term agreements to acqui
re and license digital media content that\plain\intbl\cf1\f51\fs20\ql are not r
eflected on the consolidated balance sheets. For those agreements with variable
terms, we do not estimate the total\plain\intbl\cf1\f51\fs20\ql obligation beyo
nd any minimum quantities and/or pricing as of the reporting date. Purchase obli
gations associated with\plain\intbl\cf1\f51\fs20\ql renewal provisions solely a
t the option of the content provider are included to the extent such commitments
are fixed or a\plain\intbl\cf1\f51\fs20\ql minimum amount is specified.\cell{
\pard\plain
udes the estimated timing and amounts of payments for rent and tenant improvemen
ts associated with build-to-suit lease\plain\intbl\cf1\f51\fs20\ql arrangements
that have not been placed in service and digital media content liabilities asso
ciated with long-term digital\plain\intbl\cf1\f51\fs20\ql media content assets
with initial terms greater than one year.\cell{
\pard\plain
udes $1.2 billion of tax contingencies for which we cannot make a reasonably rel
iable estimate of the amount and period\plain\intbl\cf1\f51\fs20\ql of payment,
if any.\cell{
{\trowd\cellx360\cellx10800\trrh495\row}}}\pard\plain\sb396\fi264\cf1\f51\fs20\b
\i\ql Pledged Assets\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql As of December\~
31, 2015 and 2014, we have pledged or otherwise restricted $418 million and $602
million of our cash,\plain\cf1\f51\fs20\ql cash equivalents, and marketable se
curities, and certain property and equipment as collateral for standby and trade
letters of\plain\cf1\f51\fs20\ql credit, guarantees, debt relating to certain
international operations, real estate leases, and amounts due to third-party sel
lers in\plain\cf1\f51\fs20\ql certain jurisdictions.\par\pard\plain\sb396\fi264
\cf1\f51\fs20\b\i\ql Suppliers\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql During
2015, no vendor accounted for 10% or more of our purchases. We generally do not
have long-term contracts or\plain\cf1\f51\fs20\ql arrangements with our vendor
s to guarantee the availability of merchandise, particular payment terms, or the
extension of credit\plain\cf1\f51\fs20\ql limits.\par\pard\plain\sb396\fi264\c
f1\f51\fs20\b\i\ql Legal Proceedings\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql
The Company is involved from time to time in claims, proceedings, and litigation
, including the following:\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql In Novembe
r 2007, an Austrian copyright collection society, Austro-Mechana, filed lawsuits
against Amazon.com\plain\cf1\f51\fs20\ql International Sales, Inc., Amazon EU
S.\u224? r.l., Amazon.de GmbH, Amazon.com GmbH, and Amazon Logistik in the\plain
\cf1\f51\fs20\ql Commercial Court of Vienna, Austria and in the District Court
of Munich, Germany seeking to collect a tariff on blank digital\plain\cf1\f51\fs
20\ql media sold by our EU-based retail websites to customers located in Austri
a. In July 2008, the German court stayed the German\plain\cf1\f51\fs20\ql case
pending a final decision in the Austrian case. In July 2010, the Austrian court
ruled in favor of Austro-Mechana and\plain\cf1\f51\fs20\ql ordered us to report
all sales of products to which the tariff potentially applies for a determinati
on of damages. We contested\plain\cf1\f51\fs20\ql Austro-Mechana\u8217?s claim
and in September 2010 commenced an appeal in the Commercial Court of Vienna. We
lost this\plain\cf1\f51\fs20\ql appeal and in March 2011 commenced an appeal in
the Supreme Court of Austria. In October 2011, the Austrian Supreme Court\plain
\cf1\f51\fs20\ql referred the case to the European Court of Justice (\u8220?ECJ
\u8221?). In July 2013, the ECJ ruled that EU law does not\plain\cf1\f51\fs20\ql
preclude application of the tariff where certain conditions are met and direct
ed the case back to the Austrian Supreme Court for\plain\cf1\f51\fs20\ql furthe
r
\par\pard\plain\fs16\par\pard\plain\sb132\cf1\f51\fs20\ql proceedings. In Octobe
r 2013, the Austrian Supreme Court referred the case back to the Commercial Cour
t of Vienna for further\plain\cf1\f51\fs20\ql fact finding to determine whether
the tariff on blank digital media meets the conditions set by the ECJ. In Augus
t 2015, the\plain\cf1\f51\fs20\ql Commercial Court of Vienna ruled that the Aus
trian tariff regime does not meet the conditions the ECJ set and dismissed\plain
\cf1\f51\fs20\ql Austro-Mechana\u8217?s claims. In September 2015, Austro-Mecha
na appealed that judgment to the Higher Commercial Court\plain\cf1\f51\fs20\ql
of Vienna. In December 2015, the Higher Commercial Court of Vienna confirmed tha
t the Austrian tariff regime does not meet\plain\cf1\f51\fs20\ql the conditions
the ECJ set and dismissed Austro-Mechana\u8217?s appeal. A number of additional
actions have been filed\plain\cf1\f51\fs20\ql making similar allegations. In D
ecember 2012, a German copyright collection society, Zentralstelle f\u252?r priv
ate\plain\cf1\f51\fs20\ql \u220?berspielungsrechte (\u8220?ZPU\u8221?), filed a
complaint against Amazon EU S.\u224? r.l., Amazon Media EU S.\u224?\plain\cf1\f
51\fs20\ql r.l., Amazon Services Europe S.\u224? r.l., Amazon Payments Europe S
CA, Amazon Europe Holding Technologies SCS, and\plain\cf1\f51\fs20\ql Amazon Eu
rasia Holdings S.\u224? r.l. in the District Court of Luxembourg seeking to coll
ect a tariff on blank digital media sold\plain\cf1\f51\fs20\ql by the Amazon.de
retail website to customers located in Germany. In January 2013, a Belgian copy
right collection society,\plain\cf1\f51\fs20\ql AUVIBEL, filed a complaint agai
nst Amazon EU S.\u224? r.l. in the Court of First Instance of Brussels, Belgium,
seeking to\plain\cf1\f51\fs20\ql collect a tariff on blank digital media sold
by the Amazon.fr retail website to customers located in Belgium. In November 201
3,\plain\cf1\f51\fs20\ql the Belgian court ruled in favor of AUVIBEL and ordere
d us to report all sales of products to which the tariff potentially applies\pla
in\cf1\f51\fs20\ql for a determination of damages. We dispute the allegations o
f wrongdoing and intend to defend ourselves vigorously in these\plain\cf1\f51\fs
20\ql matters.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql In May 2009, Big Babo
on, Inc. filed a complaint against Amazon.com, Inc. and Amazon Payments, Inc. fo
r patent\plain\cf1\f51\fs20\ql infringement in the United States District Court
for the Central District of California. The complaint alleges, among other thin
gs,\plain\cf1\f51\fs20\ql that our third-party selling and payments technology
infringes patents owned by Big Baboon, Inc. purporting to cover an\plain\cf1\f51
\fs20\ql \u8220?Integrated Business-to-Business Web Commerce And Business Autom
ation System\u8221? (U.S. Patent Nos.\~6,115,690\plain\cf1\f51\fs20\ql and 6,34
3,275) and seeks injunctive relief, monetary damages, treble damages, costs, and
attorneys\u8217? fees. In February\plain\cf1\f51\fs20\ql 2011, the court enter
ed an order staying the lawsuit pending the outcome of the Patent and Trademark
Office\u8217?s\plain\cf1\f51\fs20\ql re-examination of the patent. We dispute t
he allegations of wrongdoing and intend to defend ourselves vigorously in this m
atter.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql In June 2012, Hand Held Produc
ts, Inc., a subsidiary of Honeywell, filed a complaint against Amazon.com, Inc.,
AMZN\plain\cf1\f51\fs20\ql Mobile, LLC, AmazonFresh, LLC, A9.com, Inc., A9 Inn
ovations, LLC, and Quidsi, Inc. in the United States District Court for\plain\cf
1\f51\fs20\ql the District of Delaware. The complaint alleges, among other thin
gs, that the use of mobile barcode reader applications, including\plain\cf1\f51\
fs20\ql Amazon Mobile, Amazon Price Check, Flow, and AmazonFresh, infringes U.S
. Patent No.\~6,015,088, entitled \u8220?Decoding\plain\cf1\f51\fs20\ql Of Real
Time Video Imaging.\u8221? The complaint seeks an unspecified amount of damages
, interest, and an injunction. We\plain\cf1\f51\fs20\ql dispute the allegations
of wrongdoing and intend to defend ourselves vigorously in this matter.\par\par
d\plain\sb132\fi528\cf1\f51\fs20\ql In July 2012, Norman Blagman filed a purport
ed class-action complaint against Amazon.com, Inc. for copyright\plain\cf1\f51\f
s20\ql infringement in the United States District Court for the Southern Distri
ct of New York. The complaint alleges, among other\plain\cf1\f51\fs20\ql things
, that Amazon.com, Inc. sells digital music in our Amazon MP3 Store obtained fro
m defendant Orchard Enterprises and\plain\cf1\f51\fs20\ql other unnamed \u8220?
digital music aggregators\u8221? without obtaining mechanical licenses for the c
ompositions embodied in\plain\cf1\f51\fs20\ql that music.\~The complaint seeks

certification as a class action, statutory damages, attorneys\u8217? fees, and i
nterest.\~We dispute\plain\cf1\f51\fs20\ql the allegations of wrongdoing and in
tend to defend ourselves vigorously in this matter.\par\pard\plain\sb132\fi528\c
f1\f51\fs20\ql In November 2012, Lexington Luminance LLC filed a complaint again
st Amazon.com, Inc. and Amazon Digital Services,\plain\cf1\f51\fs20\ql Inc. in
the United States District Court for the District of Massachusetts. The complain
t alleges, among other things, that certain\plain\cf1\f51\fs20\ql light-emittin
g diodes in certain Kindle devices infringe U.S. Patent No.\~6,936,851, entitled
\u8220?Semiconductor Light-Emitting\plain\cf1\f51\fs20\ql Device And Method Fo
r Manufacturing Same.\u8221? The complaint seeks an unspecified amount of damage
s and an injunction\plain\cf1\f51\fs20\ql or, in the absence of an injunction,
a compulsory ongoing royalty. In March 2014, the court invalidated the plaintiff
\u8217?s\plain\cf1\f51\fs20\ql patent and dismissed the case with prejudice, an
d the plaintiff appealed the judgment to the United States Court of Appeals for\
plain\cf1\f51\fs20\ql the Federal Circuit. In February 2015, the Federal Circui
t reversed the judgment of the district court. We dispute the allegations\plain\
cf1\f51\fs20\ql of wrongdoing and intend to defend ourselves vigorously in this
matter.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Beginning in August 2013, a
number of complaints were filed alleging, among other things, that Amazon.com, I
nc. and\plain\cf1\f51\fs20\ql several of its subsidiaries failed to compensate
hourly workers for time spent waiting in security lines and otherwise violated\p
lain\cf1\f51\fs20\ql federal and state wage and hour statutes and common law.\~
In August 2013, Busk v. Integrity Staffing Solutions, Inc. and\plain\cf1\f51\fs2
0\ql Amazon.com, Inc. was filed in the United States District Court for the Dis
trict of Nevada, and Vance v. Amazon.com, Inc.,\plain\cf1\f51\fs20\ql Zappos.co
m Inc., another affiliate of Amazon.com, Inc., and Kelly Services, Inc. was file
d in the United States District Court for\plain\cf1\f51\fs20\ql the Western Dis
trict of Kentucky.\~In September 2013, Allison v. Amazon.com, Inc. and Integrity
Staffing Solutions, Inc. was\plain\cf1\f51\fs20\ql filed in the United States
District Court for the Western District of Washington, and Johnson v. Amazon.com
, Inc. and an\plain\cf1\f51\fs20\ql affiliate of Amazon.com, Inc. was filed in
the United States District Court for the Western District of Kentucky.\~In Octob
er 2013,\plain\cf1\f51\fs20\ql Davis v. Amazon.com, Inc., an affiliate of Amazo
n.com, Inc., and Integrity Staffing Solutions, Inc. was filed in the United Stat
es\plain\cf1\f51\fs20\ql District Court for the Middle District of Tennessee.\~
The plaintiffs variously purport to represent a nationwide class of certain\plai
n\cf1\f51\fs20\ql current and former employees under the Fair Labor Standards A
ct and/or state-law-based subclasses for certain current and\plain\cf1\f51\fs20\
ql former employees in states including Arizona, California, Pennsylvania, Sout
h Carolina, Kentucky, Washington, and Nevada, and\plain\cf1\f51\fs20\ql one com
plaint asserts nationwide breach of contract and unjust enrichment claims.\~The
complaints seek an unspecified amount of\plain\cf1\f51\fs20\ql damages, interes
t, injunctive relief, and attorneys\u8217? fees. We have been named in several o
ther similar cases. In December\plain\cf1\f51\fs20\ql 2014, the Supreme Court r
uled in Busk that time spent waiting for and undergoing security screening is no
t
\par\pard\plain\fs16\par\pard\plain\sb132\cf1\f51\fs20\ql compensable working ti
me under the federal wage and hour statute. In February 2015, the courts in thos
e actions alleging only\plain\cf1\f51\fs20\ql federal law claims entered stipul
ated orders dismissing those actions without prejudice. We dispute any remaining
allegations of\plain\cf1\f51\fs20\ql wrongdoing and intend to defend ourselves
vigorously in these matters.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql In Sept
ember 2013, Personalized Media Communications, LLC filed a complaint against Ama
zon.com, Inc. and Amazon\plain\cf1\f51\fs20\ql Web Services, LLC in the United
States District Court for the District of Delaware.\~The complaint alleges, amon
g other things,\plain\cf1\f51\fs20\ql that the use of certain Kindle devices, K
indle apps and/or Amazon.com, Inc.\u8217?s website to purchase and receive elect
ronic\plain\cf1\f51\fs20\ql media infringes nine U.S. Patents: Nos. 5,887,243,
7,801,304, 7,805,749, 7,940,931, 7,769,170, 7,864,956, 7,827,587, 8,046,791,\pla
in\cf1\f51\fs20\ql and 7,883,252, all entitled \u8220?Signal Processing Apparat
us And Methods.\u8221? The complaint also alleges, among other\plain\cf1\f51\fs2
0\ql things, that CloudFront, S3, and EC2 web services infringe three of those
patents,\~Nos. 7,801,304, 7,864,956, and 7,827,587.\~The\plain\cf1\f51\fs20\ql
complaint seeks an unspecified amount of damages, interest, and injunctive relie
f.\~In August 2015, the court invalidated all\plain\cf1\f51\fs20\ql asserted cl
aims of all asserted patents and dismissed the case with prejudice. In September
2015, Personalized Media appealed\plain\cf1\f51\fs20\ql that judgment to the U
nited States Court of Appeals for the Federal Circuit. We dispute the allegation
s of wrongdoing and intend\plain\cf1\f51\fs20\ql to defend ourselves vigorously
in this matter.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql In November 2013, Me
mory Integrity, LLC filed a complaint against Amazon.com, Inc. for patent infrin
gement in the\plain\cf1\f51\fs20\ql United States District Court for the Distri
ct of Delaware. The complaint alleges, among other things, that certain Kindle d
evices\plain\cf1\f51\fs20\ql infringe U.S. Patent No. 7,296,121, entitled \u822
0?Reducing Probe Traffic In Multiprocessor Systems.\u8221? The complaint\plain\c
f1\f51\fs20\ql seeks an unspecified amount of damages, costs, expenses, and int
erest. In December 2014, the case was stayed pending resolution\plain\cf1\f51\fs
20\ql of review petitions filed with the United States Patent and Trademark Off
ice. We dispute the allegations of wrongdoing and\plain\cf1\f51\fs20\ql intend
to defend ourselves vigorously in this matter.\par\pard\plain\sb132\fi528\cf1\f5
1\fs20\ql In December 2013, Appistry, Inc. filed a complaint against Amazon.com,
Inc. and Amazon Web Services, Inc. for patent\plain\cf1\f51\fs20\ql infringeme
nt in the United States District Court for the Eastern District of Missouri. The
complaint alleges, among other things,\plain\cf1\f51\fs20\ql that Amazon\u8217
?s Elastic Compute Cloud infringes U.S. Patent Nos. 8,200,746, entitled \u8220?S
ystem And Method For\plain\cf1\f51\fs20\ql Territory-Based Processing Of Inform
ation,\u8221? and 8,341,209, entitled \u8220?System And Method For Processing\pl
ain\cf1\f51\fs20\ql Information Via Networked Computers Including Request Handl
ers, Process Handlers, And Task Handlers.\u8221? The complaint\plain\cf1\f51\fs2
0\ql seeks injunctive relief, an unspecified amount of damages, treble damages,
costs, and interest. In March 2015, the case was\plain\cf1\f51\fs20\ql transfe
rred to the United States District Court for the Western District of Washington.
In July 2015, the court granted our motion\plain\cf1\f51\fs20\ql for judgment
on the pleadings and invalidated the patents-in-suit. In August 2015, the court
entered judgment in our favor. In\plain\cf1\f51\fs20\ql September 2015, the pla
intiff appealed that judgment to the United States Court of Appeals for the Fede
ral Circuit, and filed a\plain\cf1\f51\fs20\ql new complaint against Amazon.com
, Inc. and Amazon Web Services, Inc. in the United States District Court for the
Western\plain\cf1\f51\fs20\ql District of Washington. The 2015 complaint alleg
es, among other things, that Amazon\u8217?s Elastic Compute Cloud, Simple\plain\
cf1\f51\fs20\ql Workflow, and Herd infringe U.S. Patent Nos. 8,682,959, entitle
d \u8220?System And Method For Fault Tolerant Processing Of\plain\cf1\f51\fs20\q
l Information Via Networked Computers Including Request Handlers, Process Handl
ers, And Task Handlers,\u8221? and 9,049,267,\plain\cf1\f51\fs20\ql entitled \u
8220?System And Method For Processing Information Via Networked Computers Includ
ing Request Handlers, Process\plain\cf1\f51\fs20\ql Handlers, And Task Handlers
.\u8221? The 2015 complaint seeks injunctive relief, an unspecified amount of da
mages, treble\plain\cf1\f51\fs20\ql damages, costs, and interest. We dispute th
e allegations of wrongdoing and intend to defend ourselves vigorously in these\p
lain\cf1\f51\fs20\ql matters.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql In Mar
ch 2014, Kaavo, Inc. filed a complaint against\~Amazon.com, Inc. and Amazon Web
Services, Inc. for patent\plain\cf1\f51\fs20\ql infringement in the United Stat
es District Court for the District of Delaware. The complaint alleges, among oth
er things, that\plain\cf1\f51\fs20\ql Amazon Web Services\u8217? Elastic Beanst
alk and CloudFormation infringe U.S. Patent No. 8,271,974, entitled \u8220?Cloud
\plain\cf1\f51\fs20\ql Computing Lifecycle Management For N-Tier Applications.\
u8221? The complaint seeks injunctive relief, an unspecified amount\plain\cf1\f5
1\fs20\ql of damages, costs, and interest. In June 2015, the case was stayed pe
nding resolution of a motion for judgment on the pleadings\plain\cf1\f51\fs20\ql
in a related case. In July 2015, Kaavo Inc. filed another complaint against Am
azon.com, Inc. and Amazon Web Services, Inc. in\plain\cf1\f51\fs20\ql the Unite
d States District Court for the District of Delaware. The 2015 complaint alleges
, among other things, that\plain\cf1\f51\fs20\ql CloudFormation infringes U.S.
Patent No. 9,043,751, entitled \u8220?Methods And Devices For Managing A Cloud C
omputing\plain\cf1\f51\fs20\ql Environment.\u8221? The 2015 complaint seeks inj
unctive relief, an unspecified amount of damages, enhanced damages,\plain\cf1\f5
1\fs20\ql attorneys\u8217? fees, costs, and interest. In January 2016, the 2015
case was stayed pending resolution of a motion for judgment\plain\cf1\f51\fs20\
ql on the pleadings. We dispute the allegations of wrongdoing and intend to def
end ourselves vigorously in these matters.\par\pard\plain\sb132\fi484\cf1\f51\fs
20\ql In December 2014, Smartflash LLC and Smartflash Technologies Limited filed
a complaint against Amazon.com, Inc.,\plain\cf1\f51\fs20\ql Amazon.com, LLC, A
MZN Mobile, LLC, Amazon Web Services, Inc. and Audible, Inc. for patent infringe
ment in the United\plain\cf1\f51\fs20\ql States District Court for the Eastern
District of Texas. The complaint alleges, among other things, that Amazon Appsto
re,\plain\cf1\f51\fs20\ql Amazon Instant Video, Amazon Music, Audible Audiobook
s, the Amazon Mobile Ad Network, certain Kindle and Fire devices,\plain\cf1\f51\
fs20\ql Kindle e-bookstore, Amazon\u8217?s proprietary Android operating system
, and the servers involved in operating Amazon\plain\cf1\f51\fs20\ql Appstore,
Amazon Instant Video, Amazon Music, the Fire TV app, Audible Audiobooks, Cloud D
rive, Cloud Player, Amazon\plain\cf1\f51\fs20\ql Web Services, and Amazon Mobil
e Ad Network infringe seven related U.S. Patents:\~Nos. 7,334,720; 7,942,317; 8,
033,458;\plain\cf1\f51\fs20\ql 8,061,598; 8,118,221; 8,336,772; and 8,794,516,
all entitled \u8220?Data Storage and Access Systems.\u8221?\~In May 2015, the\pl
ain\cf1\f51\fs20\ql case was stayed until further notice. The complaint seeks a
n unspecified amount of damages, an injunction, enhanced damages,\plain\cf1\f51\
fs20\ql attorneys\u8217? fees, costs, and interest. We dispute the allegations
of wrongdoing and intend to defend ourselves vigorously in\plain\cf1\f51\fs20\ql
this matter.
\par\pard\plain\fs16\par\pard\plain\sb132\fi484\cf1\f51\fs20\ql In March 2015, Z
itovault, LLC filed a complaint against Amazon.com, Inc., Amazon.com, LLC, Amazo
n Web Services,\plain\cf1\f51\fs20\ql Inc., and Amazon Web Services, LLC for pa
tent infringement in the United States District Court for the Eastern District o
f\plain\cf1\f51\fs20\ql Texas. The complaint alleges that Elastic Compute Cloud
, Virtual Private Cloud, Elastic Load Balancing, Auto-Scaling, and\plain\cf1\f51
\fs20\ql Elastic Beanstalk infringe U.S. Patent No. 6,484,257, entitled \u8220?
System and Method for Maintaining N Number of\plain\cf1\f51\fs20\ql Simultaneou
s Cryptographic Sessions Using a Distributed Computing Environment.\u8221? The c
omplaint seeks injunctive relief,\plain\cf1\f51\fs20\ql an unspecified amount o
f damages, enhanced damages, attorneys\u8217? fees, costs, and interest. In Janu
ary 2016, the case was\plain\cf1\f51\fs20\ql transferred to the United States D
istrict Court for the Western District of Washington. We dispute the allegations
of wrongdoing\plain\cf1\f51\fs20\ql and intend to defend ourselves vigorously
in this matter.\par\pard\plain\sb132\fi484\cf1\f51\fs20\ql In June 2015, the Eur
opean Commission opened a proceeding against Amazon.com, Inc. and Amazon EU S.\u
224? r.l. to\plain\cf1\f51\fs20\ql investigate whether provisions in Amazon\u82
17?s contracts with European publishers violate European competition rules. We\p
lain\cf1\f51\fs20\ql believe we comply with European competition rules and are
cooperating with the Commission.\par\pard\plain\sb132\fi484\cf1\f51\fs20\ql In N
ovember 2015, Eolas Technologies, Inc. filed a complaint against Amazon.com, Inc
. in the United States District Court\plain\cf1\f51\fs20\ql for the Eastern Dis
trict of Texas. The complaint alleges, among other things, that the use of \u822
0?interactive features\u8221?\plain\cf1\f51\fs20\ql on www.amazon.com, includin
g \u8220?search suggestions and search results,\u8221? infringes U.S. Patent No.
9,195,507,\plain\cf1\f51\fs20\ql entitled \u8220?Distributed Hypermedia Method
and System for Automatically Invoking External Application Providing\plain\cf1\
f51\fs20\ql Interaction and Display of Embedded Objects Within A Hypermedia Doc
ument.\u8221? The complaint seeks a judgment of\plain\cf1\f51\fs20\ql infringem
ent together with costs and attorneys\u8217? fees. We dispute the allegations of
wrongdoing and intend to defend\plain\cf1\f51\fs20\ql ourselves vigorously in
this matter.\par\pard\plain\sb132\fi484\cf1\f51\fs20\ql The outcomes of our lega
l proceedings are inherently unpredictable, subject to significant uncertainties
, and could be\plain\cf1\f51\fs20\ql material to our operating results and cash
flows for a particular period.\~In addition, for some matters for which a loss
is probable\plain\cf1\f51\fs20\ql or reasonably possible, an estimate of the am
ount of loss or range of losses is not possible and we may be unable to estimate
the\plain\cf1\f51\fs20\ql possible loss or range of losses that could potentia
lly result from the application of non-monetary remedies.\par\pard\plain\sb132\f
i528\cf1\f51\fs20\ql See also \u8220?Note 10\u8212?Income Taxes.\u8221?
\page{\*\bkmkstart s0EB81E7E44C65D099E0FABB20E4DBDF}{\*\bkmkend s0EB81E7E44C65D0
99E0FABB20E4DBDF}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F
\par\pard\plain\fs16\par\pard\plain\sb396\cf1\f51\fs20\b\ql Note 8\u8212?STOCKHO
LDERS\u8217? EQUITY\par\pard\plain\sb132\fi264\cf1\f51\fs20\b\i\ql Preferred Sto
ck\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql We have authorized 500 million sha
res of $0.01 par value preferred stock. No preferred stock was outstanding for a
ny\plain\cf1\f51\fs20\ql period presented.\par\pard\plain\sb396\fi264\cf1\f51\f
s20\b\i\ql Common Stock\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Common shares
outstanding plus shares underlying outstanding stock awards totaled 490 million
, 483 million, and 476\plain\cf1\f51\fs20\ql million, as of December\~31, 2015,
2014, and 2013. These totals include all vested and unvested stock awards outst
anding,\plain\cf1\f51\fs20\ql including those awards we estimate will be forfei
ted.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Stock Repurchase Activity\pa
r\pard\plain\sb132\fi528\cf1\f51\fs20\ql In January 2010, our Board of Directors
authorized the Company to repurchase up to $2.0 billion of our common stock\pla
in\cf1\f51\fs20\ql with no fixed expiration. We have $763 million remaining und
er the $2.0 billion repurchase program.\par\pard\plain\sb396\fi264\cf1\f51\fs20\
b\i\ql Stock Award Plans\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Employees ve
st in restricted stock unit awards and stock options over the corresponding serv
ice term, generally between\plain\cf1\f51\fs20\ql two and five years.\par\pard\
plain\sb396\fi264\cf1\f51\fs20\b\i\ql Stock Award Activity\par\pard\plain\sb132\
fi528\cf1\f51\fs20\ql Stock options outstanding, which were primarily obtained t
hrough acquisitions, totaled 0.2 million, 0.4 million and 0.2\plain\cf1\f51\fs20
\ql million, as of December\~31, 2015, 2014, and 2013. The compensation expense
for stock options, the total intrinsic value for\plain\cf1\f51\fs20\ql stock o
ptions outstanding, the amount of cash received from the exercise of stock optio
ns, and the related tax benefits were not\plain\cf1\f51\fs20\ql material for 20
15, 2014, and 2013.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql The following tab
le summarizes our restricted stock unit activity (in\~millions):\par\pard\plain\
cf1\f51\fs18\ql \~
\par\pard\plain

6\ql \~\cell{
w}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\s
b22\sa22\cf1\f51\fs16\b\qc Number\~of\~Units\cell\pard\plain\intbl\li22\ri22\sb2
\b\qc Weighted\~Average\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\
qc Grant-Date\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Fair Va
lue\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Outstanding as of January
1, 2013\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 15.4\cell
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Units granted\cell\pard\p
lain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 7.2\cell
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Units vested\cell\pard\pl
ain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (4.5\cell\pard\plain\intbl\ri22\sb22\sa
~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 160\cell
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Units forfeited\cell\pard
\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (1.8\cell\pard\plain\intbl\ri22\sb22
l \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 209\cell
rdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx7888\clbrdrt\brdrs\br
drcf1\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx8471\c
brdrcf1\clbrdrb\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx1079
7\trrh298
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Outstanding as of December
7\trrh298\row}}}
7\trrh298
7\trrh298\row}}}
llx8573\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpa
t10\clcbpat10\cellx9001\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\c
lshdng100\clcfpat10\clcbpat10\cellx10368\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\br
drcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10796\trrh298
llx8573\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpa
t10\clcbpat10\cellx9001\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\c
lshdng100\clcfpat10\clcbpat10\cellx10368\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\br
drcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10796\trrh298\row}}}\pard\pl
ain\sb264\fi528\cf1\f51\fs20\ql Scheduled vesting for outstanding restricted sto
ck units as of December\~31, 2015, is as follows (in millions):
\par\pard\plain
s\brdrcf1\clvertalb\cellx8411\clvertalb\cellx8514\clvertalb\cellx9697\clvertalb\
cellx9800\clvertalb\cellx10796\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\ql \~\cell
f51\fs16\b\qc Year Ended December 31,\cell\pard\plain\intbl\li22\ri22\sb22\sa22\
s\brdrcf1\clvertalb\cellx8411\clvertalb\cellx8514\clvertalb\cellx9697\clvertalb\
cellx9800\clvertalb\cellx10796\trrh281\row}}}
lain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc 2018\cell\pard\plain\intbl\li22
\f51\fs16\b\qc 2019\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~
\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc 2020\cell\pard\plai
b22\sa22\cf1\f51\fs16\b\qc Thereafter\cell\pard\plain\intbl\li22\ri22\sb22\sa22\
cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc T
otal\cell{
at10\clcbpat10\cellx10598\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs20\ql Scheduled vesting\u8212?restric
ted stock\plain\intbl\li22\ri22\sa22\cf1\f51\fs20\ql units\cell\pard\plain\intb
l\li22\sb22\sa22\cf1\f51\fs20\qr 6.4\cell
at10\clcbpat10\cellx10598\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\
clcbpat10\cellx10790\trrh529\row}}}\pard\plain\sb264\fi528\cf1\f51\fs20\ql As of
December\~31, 2015, there was $3.1 billion of net unrecognized compensation cos
t related to unvested stock-based\plain\cf1\f51\fs20\ql compensation arrangemen
ts. This compensation is recognized on an accelerated basis with approximately h
alf of the\plain\cf1\f51\fs20\ql compensation expected to be expensed in the ne
xt twelve months, and has a weighted-average recognition period of 1.1 years.
\par\pard\plain\fs16\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql During 2015, 201
4, and 2013, the fair value of restricted stock units that vested was $2.7 billi
on, $1.7 billion, and $1.4\plain\cf1\f51\fs20\ql billion.\par\pard\plain\sb132\
fi528\cf1\f51\fs20\ql As matching contributions under our 401(k) savings plan, w
e granted 0.2 million shares of common stock in 2015 and\plain\cf1\f51\fs20\ql
2014. Shares granted as matching contributions under our 401(k) plan are include
d in outstanding common stock when issued,\plain\cf1\f51\fs20\ql and recorded a
s stock-based compensation expense.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\
ql Common Stock Available for Future Issuance\par\pard\plain\sb132\fi528\cf1\f51
\fs20\ql As of December\~31, 2015, common stock available for future issuance to
employees is 130 million shares.{\*\bkmkstart s7B2F9226F991B89C0FCAABB20E2FFB2}
{\*\bkmkend s7B2F9226F991B89C0FCAABB20E2FFB2}\par\pard\plain\sb396\cf1\f51\fs20\
b\ql Note 9\u8212?ACCUMULATED OTHER COMPREHENSIVE LOSS\par\pard\plain\sb132\fi52
8\cf1\f51\fs20\ql Changes in the composition of accumulated other comprehensive
loss for 2015, 2014, and 2013 are as follows (in\plain\cf1\f51\fs20\ql millions
):
\par\pard\plain
d\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\f0\fs16\ql \~\cell{
b\cellx9143\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10798\trrh628
cf1\f51\fs16\b\qc Foreign\~currency\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1
\f51\fs16\b\qc translation\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16
\b\qc adjustments\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\c
ell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Unrealized\~gains\~on
\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc available-for-sale\p
ar\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc securities\cell\pard\p
2\sb22\sa22\cf1\f51\fs16\b\qc Total\cell{
b\cellx9143\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10798\trrh628\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Balances as of January 1,
2013\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plai
\fs20\qr (250\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\p
2\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 11\cell
{\trowd\cellx4310\clvertalb\cellx4411\clbrdrb\brdrs\brdrcf1\clvertalb\cellx6214\
clbrdrb\brdrs\brdrcf1\clvertalb\cellx6616\clvertalb\cellx6717\clbrdrb\brdrs\brdr
cf1\clvertalb\cellx8585\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9042\clvertalb\cell
x9143\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10669\clbrdrb\brdrs\brdrcf1\clvertalb
\cellx10797\trrh281
(loss)\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\p
x9143\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10669\clvertalb\clshdng100\c
lcfpat10\clcbpat10\cellx10797\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Balances as of December 31
, 2013\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\pl
ain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (187\cell\pard\plain\intbl\ri22\sb22\sa
lcfpat10\clcbpat10\cellx10797\trrh281\row}}}
\cellx10797\trrh281
lain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (325\cell\pard\plain\intbl\ri22\sb22\s
\~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (1\cell\pard\plain\intbl
rd\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
lcfpat10\clcbpat10\cellx10797\trrh281
lcfpat10\clcbpat10\cellx10797\trrh281\row}}}
\cellx10797\trrh281
\~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (2\cell\pard\plain\intbl
rd\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
x9143\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9271\
clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10669\clbrd
rb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10797\trrh281
ain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f
b22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr (1\ce
s20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr (723\cell\pard\plain\in
tbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
x9143\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9271\
clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10669\clbrd
rb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10797\trrh281\ro
w}}}\pard\plain\sb264\fi528\cf1\f51\fs20\ql Amounts included in accumulated othe
r comprehensive loss are recorded net of their related income tax effects.{\*\bk
mkstart s4DE598A44772B22EB401ABB20E25822}{\*\bkmkend s4DE598A44772B22EB401ABB20E
25822}\par\pard\plain\sb396\cf1\f51\fs20\b\ql Note 10\u8212?INCOME TAXES\par\par
d\plain\sb132\fi528\cf1\f51\fs20\ql In 2015, 2014, and 2013, we recorded net tax
provisions of $950 million, $167 million, and $161 million. We have tax\plain\c
f1\f51\fs20\ql benefits relating to excess stock-based compensation deductions
and accelerated depreciation deductions that are being utilized to\plain\cf1\f51

\fs20\ql reduce our U.S. taxable income. In December 2015, U.S. legislation was
enacted that extended accelerated depreciation\plain\cf1\f51\fs20\ql deduction
s on qualifying property through 2019 and made permanent the U.S. federal resear
ch and development credit. As such,\plain\cf1\f51\fs20\ql cash taxes paid, net
of refunds, were $273 million, $177 million, and $169 million for 2015, 2014, an
d 2013.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql The components of the provisi
on for income taxes, net are as follows (in millions):
\par\pard\plain
ellx10794\trrh-66
ow}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Current taxes:\cell\pard\p
trrh281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql U.S. Federal\cell\pard\pl
51\fs20\qr 215\cell
trrh281\row}}}
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql U.S. State\cell\pard\plai
f51\fs20\qr 65\cell
f51\fs20\qr 45\cell
row}}}
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql Current taxes\cell\pard\p
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Deferred taxes:\cell\pard\
ard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql U.S. Federal\cell\pard\pl
ain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 473\cell
\ql )\cell{
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql U.S. State\cell\pard\plai
n\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (171\cell\pard\plain\intbl\ri22\sb22\sa22
\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\
i22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f5
1\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (19\cell\pard\
plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
\~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (180\cell\pard\plain\int
bl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf
1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (23\cell\p
ard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql Deferred taxes\cell\pard\
\ql )\cell{
row}}}
\pard\plain\intbl\li1386\ri22\sb22\sa22\cf1\f51\fs20\ql Provision for income tax
es, net\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\i
ntbl\sb22\sa22\cf1\f51\fs20\qr 950\cell
\par\pard\plain\fs16\par\pard\plain\sb264\fi528\cf1\f51\fs20\ql U.S. and interna
tional components of income before income taxes are as follows (in millions):
\par\pard\plain
ellx10795\trrh-66
ow}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql U.S.\cell\pard\plain\intbl
\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\q
r 2,186\cell
~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (403\cell\pard\plain\intb
ard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
row}}}
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Income (loss) before inco
me taxes\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\
intbl\sb22\sa22\cf1\f51\fs20\qr 1,568\cell
cbpat10\cellx10795\trrh281\row}}}\pard\plain\sb264\fi528\cf1\f51\fs20\ql The ite
ms accounting for differences between income taxes computed at the federal statu
tory rate and the provision\plain\cf1\f51\fs20\ql recorded for income taxes are
as follows (in millions):
\par\pard\plain
ellx10795\trrh-66
ow}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Income taxes computed at t
he federal statutory rate\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $
\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 549\cell
f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr (39\cell\pard\plai
n\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa
22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cel
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Effect of:\cell\pard\plai
plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql Impact of foreign tax dif
ferential\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 350\cell
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql State taxes, net of feder
al benefits\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 37\cell
f51\fs20\qr 29\cell
f51\fs20\qr 14\cell
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql Tax credits\cell\pard\pla
in\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (99\cell\pard\plain\intbl\ri22\sb22\sa22
i22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f5
1\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (84\cell\pard\

plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql Nondeductible compensatio
n\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 149\cell
f51\fs20\qr 86\cell
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql Domestic production activ
ities deduction\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (44\cell\pa
r (20\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\int
f1\f51\fs20\qr (11\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql Other, net\cell\pard\plai
f51\fs20\qr 29\cell
f51\fs20\qr 20\cell
\pard\plain\intbl\li1386\ri22\sb22\sa22\cf1\f51\fs20\ql Total\cell\pard\plain\in
0\qr 950\cell
rcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10795\trrh298\row}}}\pard\pla
in\sb132\fi484\cf1\f51\fs20\ql Our provision for income taxes in 2015 was higher
than in 2014 primarily due to an increase in U.S. pre-tax income and\plain\cf1\
f51\fs20\ql increased losses in certain foreign subsidiaries for which we may n
ot realize a tax benefit. Losses for which we may not realize a\plain\cf1\f51\fs
20\ql related tax benefit, primarily due to losses of foreign subsidiaries, red
uce our pre-tax income without a corresponding reduction\plain\cf1\f51\fs20\ql
in our tax expense, and therefore increase our effective tax rate. We have recor
ded valuation allowances against the deferred tax\plain\cf1\f51\fs20\ql assets
associated with losses for which we may not realize a related tax benefit. We ge
nerated income in lower tax jurisdictions\plain\cf1\f51\fs20\ql primarily relat
ed to our European operations, which are headquartered in Luxembourg.\par\pard\p
lain\sb132\fi484\cf1\f51\fs20\ql Our provision for income taxes in 2014 was high
er than in 2013 primarily due to the increased losses in certain foreign\plain\c
f1\f51\fs20\ql subsidiaries for which we may not realize a tax benefit and audi
t-related developments, partially offset by the favorable impact\plain\cf1\f51\f
s20\ql of earnings in lower tax rate jurisdictions. Losses for which we may not
realize a related tax benefit were primarily generated by\plain\cf1\f51\fs20\ql
our foreign subsidiaries. Income earned in lower tax jurisdictions was primari
ly related to our European operations.\par\pard\plain\sb132\fi528\cf1\f51\fs20\q
l Except as required under U.S. tax laws, we do not provide for U.S. taxes on ou
r undistributed earnings of foreign\plain\cf1\f51\fs20\ql subsidiaries that hav
e not been previously taxed since we intend to invest such undistributed earning
s indefinitely outside of the\plain\cf1\f51\fs20\ql U.S. If our intent changes
or if these funds are needed for our U.S. operations, we would be required to ac
crue or pay U.S. taxes\plain\cf1\f51\fs20\ql on some or all of these undistribu
ted earnings and our effective tax rate would be adversely affected. Undistribut
ed earnings of\plain\cf1\f51\fs20\ql foreign subsidiaries that are indefinitely
invested outside of the U.S were $1.5 billion as of December\~31, 2015. Determi
nation of\plain\cf1\f51\fs20\ql the unrecognized deferred tax liability that wo
uld be incurred if such amounts were repatriated is not practicable.
\par\pard\plain\fs16\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Deferred income
tax assets and liabilities are as follows (in millions):
\par\pard\plain
ellx10796\trrh-66
ow}}}
b\cellx8916\clvertalb\cellx9023\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10798\trrh2
81
qc 2014\cell{
b\cellx8916\clvertalb\cellx9023\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10798\trrh2
81\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Deferred tax assets (1):\c
l\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa
trrh281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Net operating losses U.S.
- Federal/States (2)\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cel

trrh281\row}}}
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Net operating losses fore
ign (3)\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 856\cell
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Accrued liabilities, rese
rves,\~& other expenses\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 854
\cell
cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 727\cell
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Deferred revenue\cell\par
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Assets held for investmen
t\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 148\cell
{\trowd\clshdng100\clcfpat7\clcbpat7\cellx7141\clvertalb\clshdng100\clcfpat7\clc
bpat7\cellx8803\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8916\clvertalb\clshd
ng100\clcfpat7\clcbpat7\cellx9023\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Depreciation\~& amortizat
ion\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 222\cell
{\trowd\clshdng100\clcfpat7\clcbpat7\cellx7141\clvertalb\clshdng100\clcfpat7\clc
bpat7\cellx8803\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx8916\clvertalb\clshd
ng100\clcfpat7\clcbpat7\cellx9023\clvertalb\clshdng100\clcfpat7\clcbpat7\cellx10
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Other items\cell\pard\pla
in\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 268\cell
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Tax credits (4)\cell\pard
\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 41\cell
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql Total gross deferred tax
assets\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 3,412\cell
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql Less valuation allowance
(5)\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (1,069\cell\pard\plain\
\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (901\ce
ll\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
\pard\plain\intbl\li1386\ri22\sb22\sa22\cf1\f51\fs20\ql Deferred tax assets, net
of valuation allowance\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 2,3
43\cell
rrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Deferred tax liabilities:\
a22\cf1\f51\fs20\ql \~\cell{
rrh281\row}}}
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Depreciation\~& amortizat
ion\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (1,970\cell\pard\plain\
\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (1,609\
cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Acquisition related intan
gible assets\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (203\cell\pard
(195\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
1
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Other items\cell\pard\pla
in\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (88\cell\pard\plain\intbl\ri22\sb22\sa22
i22\sb22\sa22\cf1\f51\fs20\ql )\cell{
1\row}}}
\pard\plain\intbl\li858\ri22\sb22\sa22\cf1\f51\fs20\ql Net deferred tax assets,
net of valuation allowance\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql
$\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 82\cell
ain\cf1\f51\fs20\ql \~___________________
\par\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (1)\cell\pard\plain\intbl\cf1\f51\fs20\ql Defe
rred tax assets related to net operating losses and tax credits are presented ne
t of tax contingencies.\cell{
\pard\plain
uding $380 million and $261 million of deferred tax assets as of December\~31, 2
015 and 2014, related to net operating\plain\intbl\cf1\f51\fs20\ql losses that
result from excess stock-based compensation and for which any benefit realized w
ill be recorded to\plain\intbl\cf1\f51\fs20\ql stockholders\u8217? equity.\cell
{
\pard\plain
uding $2 million of deferred tax assets as of December\~31, 2015 and 2014, relat
ed to net operating losses that result\plain\intbl\cf1\f51\fs20\ql from excess
stock-based compensation and for which any benefit realized will be recorded to
stockholders\u8217? equity.\cell{
\pard\plain
uding $447 million and $268 million of deferred tax assets as of December\~31, 2
015 and 2014, related to tax credits that\plain\intbl\cf1\f51\fs20\ql result fr
om excess stock-based compensation and for which any benefit realized will be re
corded to stockholders\u8217?\plain\intbl\cf1\f51\fs20\ql equity.\cell{
\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (5)\cell\pard\plain\intbl\cf1\f51\fs20\ql Rela
tes primarily to deferred tax assets that would only be realizable upon the gene
ration of net income in certain foreign\plain\intbl\cf1\f51\fs20\ql taxing juri
sdictions and future capital gains.\cell{
l As of December\~31, 2015, our federal, foreign, and state net operating loss c
arryforwards for income tax purposes were\plain\cf1\f51\fs20\ql approximately $
1.1 billion, $3.4 billion, and $2.0 billion. The federal and state net operating
loss carryforwards are subject to\plain\cf1\f51\fs20\ql limitations under Sect
ion\~382 of the Internal Revenue Code and applicable state tax law. If not utili
zed, a portion of the federal,\plain\cf1\f51\fs20\ql foreign, and state net ope
rating loss carryforwards will begin to expire in 2020, 2016, and 2016, respecti
vely. As of\plain\cf1\f51\fs20\ql December\~31, 2015, our tax credit carryforwa
rds for income tax purposes were approximately $725 million. If not utilized, a\
plain\cf1\f51\fs20\ql portion of the tax credit carryforwards will begin to exp
ire in 2017.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql The Company\u8217?s cons
olidated balance sheets reflect deferred tax assets related to net operating los
ses and tax credit\plain\cf1\f51\fs20\ql carryforwards excluding amounts result
ing from excess stock-based compensation. Amounts related to excess stock-based\
plain\cf1\f51\fs20\ql compensation are accounted for as an increase to addition
al paid-in capital if and when realized through a reduction in income\plain\cf1\
f51\fs20\ql taxes payable.\par\pard\plain\sb396\fi264\cf1\f51\fs20\b\i\ql Tax C
ontingencies\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql We are subject to income
taxes in the U.S. (federal and state) and numerous foreign jurisdictions. Signi
ficant judgment is\plain\cf1\f51\fs20\ql required in evaluating our tax positio
ns and determining our provision for income taxes. During the ordinary course of
business,\plain\cf1\f51\fs20\ql there are many transactions and calculations f
or which the ultimate tax determination is uncertain. We establish reserves for\
plain\cf1\f51\fs20\ql tax-related uncertainties based on estimates of whether,
and the extent to which, additional taxes will be due. These reserves are\plain\
cf1\f51\fs20\ql established when we believe that certain positions might be cha
llenged despite our belief that our tax return positions are fully\plain\cf1\f51
\fs20\ql supportable. We adjust these reserves in light of changing facts and c
ircumstances, such as the outcome of tax audits. The\plain\cf1\f51\fs20\ql prov
ision for income taxes includes the impact of reserve provisions and changes to
reserves that are considered appropriate.
\par\pard\plain\fs16\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql The reconciliati

on of our tax contingencies is as follows (in millions):
\par\pard\plain
ellx10795\trrh-66
ow}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Gross tax contingencies \u
8211? January\~1\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\par
d\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 710\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Gross increases to tax pos
itions in prior periods\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 254
\cell
f51\fs20\qr 78\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Gross decreases to tax pos
itions in prior periods\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (22
\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li
22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f5
1\fs20\qr (50\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\p
)\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Gross increases to current
period tax positions\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 242\c
ell
f51\fs20\qr 20\cell
f51\fs20\qr 54\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Audit settlements paid\cel

l\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr \u8212?\cell
)\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Lapse of statute of limita
tions\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (3\cell\pard\plain\in
tbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\c
f1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (2\cell\p
qr \u8212?\cell
row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Gross tax contingencies \u
8211? December\~31 (1)\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\ce
cbpat10\cellx10795\trrh281\row}}}\pard\plain\cf1\f51\fs20\ql \~_________________
__
\par\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (1)\cell\pard\plain\intbl\cf1\f51\fs20\ql As o
f December\~31, 2015, we had $1.2 billion of tax contingencies, of which $882 mi
llion, if fully recognized, would\plain\intbl\cf1\f51\fs20\ql decrease our effe
ctive tax rate.\cell{
l As of December\~31, 2015 and 2014, we had accrued interest and penalties, net
of federal income tax benefit, related to tax\plain\cf1\f51\fs20\ql contingenci
es of $59 million and $41 million. Interest and penalties, net of federal income
tax benefit, recognized for the years\plain\cf1\f51\fs20\ql ended December\~31
, 2015, 2014, and 2013 was $18 million, $8 million, and $8 million.\par\pard\pla
in\sb132\fi528\cf1\f51\fs20\ql We are under examination, or may be subject to ex
amination, by the Internal Revenue Service (\u8220?IRS\u8221?) for the\plain\cf1
\f51\fs20\ql calendar year 2005 and thereafter. These examinations may lead to
ordinary course adjustments or proposed adjustments to our\plain\cf1\f51\fs20\ql
taxes or our net operating losses with respect to years under examination as w
ell as subsequent periods. As previously disclosed,\plain\cf1\f51\fs20\ql we ha
ve received Notices of Proposed Adjustment from the IRS for transactions underta
ken in the 2005 and 2006 calendar years\plain\cf1\f51\fs20\ql relating to trans
fer pricing with our foreign subsidiaries. The IRS is seeking to increase our U.
S. taxable income by an amount\plain\cf1\f51\fs20\ql that would result in addit
ional federal tax of approximately $1.5 billion, subject to interest. To date, w
e have not resolved this\plain\cf1\f51\fs20\ql matter administratively and are
currently contesting it in U.S. Tax Court. We continue to disagree with these IR
S positions and\plain\cf1\f51\fs20\ql intend to defend ourselves vigorously in
this matter. In addition to the risk of additional tax for 2005 and 2006 transac
tions, if\plain\cf1\f51\fs20\ql this litigation is adversely determined or if t
he IRS were to seek transfer pricing adjustments of a similar nature for transac
tions\plain\cf1\f51\fs20\ql in subsequent years, we could be subject to signifi
cant additional tax liabilities.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Cert
ain of our subsidiaries are under examination or investigation or may be subject
to examination or investigation by the\plain\cf1\f51\fs20\ql French Tax Admini
stration (\u8220?FTA\u8221?) for calendar year 2006 and thereafter. These examin
ations may lead to ordinary\plain\cf1\f51\fs20\ql course adjustments or propose
d adjustments to our taxes. In September 2012, we received proposed tax assessme
nt notices for\plain\cf1\f51\fs20\ql calendar years 2006 through 2010 relating
to the allocation of income between foreign jurisdictions. In June 2015, we rece
ived\plain\cf1\f51\fs20\ql final tax collection notices for these years assessi
ng additional French tax of \u8364?196 million, including interest and penalties
\plain\cf1\f51\fs20\ql through September 2012. We disagree with the assessment
and intend to contest it vigorously. We plan to pursue all available\plain\cf1\f
51\fs20\ql administrative remedies at the FTA, and if we are not able to resolv
e this matter with the FTA, we plan to pursue judicial\plain\cf1\f51\fs20\ql re
medies. In addition to the risk of additional tax for years 2006 through 2010, i
f this litigation is adversely determined or if the\plain\cf1\f51\fs20\ql FTA w
ere to seek adjustments of a similar nature for subsequent years, we could be su
bject to significant additional tax\plain\cf1\f51\fs20\ql liabilities. In addit
ion, in October 2014, the European Commission opened a formal investigation to e
xamine whether decisions\plain\cf1\f51\fs20\ql by the tax authorities in Luxemb
ourg with regard to the corporate income tax paid by certain of our subsidiaries
comply with\plain\cf1\f51\fs20\ql European Union rules on state aid. If this m
atter is adversely resolved, Luxembourg may be required to assess, and we may be
\plain\cf1\f51\fs20\ql required to pay, additional amounts with respect to curr

ent and prior periods and our taxes in the future could increase. We are\plain\c
f1\f51\fs20\ql also subject to taxation in various states and other foreign jur
isdictions including Canada, China, Germany, India, Japan,\plain\cf1\f51\fs20\ql
Luxembourg, and the United Kingdom.\~We are under, or may be subject to, audit
or examination and additional assessments in\plain\cf1\f51\fs20\ql respect of
these particular jurisdictions for 2003 and thereafter.\par\pard\plain\sb132\fi5
28\cf1\f51\fs20\ql We expect the total amount of tax contingencies will grow in
2016. In addition, changes in state, federal, and foreign tax\plain\cf1\f51\fs20
\ql laws may increase our tax contingencies. The timing of the resolution of in
come tax examinations is highly uncertain, and the\plain\cf1\f51\fs20\ql amount
s ultimately paid, if any, upon resolution of the issues raised by the taxing au
thorities may differ from the amounts\plain\cf1\f51\fs20\ql accrued. It is reas
onably possible that within the next 12 months we will receive additional assess
ments by various tax authorities\plain\cf1\f51\fs20\ql or possibly reach resolu
tion of income tax examinations in one or more jurisdictions. These assessments
or settlements may or\plain\cf1\f51\fs20\ql may not result in changes to our co
ntingencies related to positions on tax filings in years through 2015. The actua
l amount of\plain\cf1\f51\fs20\ql any change could vary significantly depending
on the ultimate timing and nature of any settlements. We cannot currently provi
de\plain\cf1\f51\fs20\ql an estimate of the range of possible outcomes.
\page{\*\bkmkstart s6818F78D86C80F6C3FB7ABB20E11088}{\*\bkmkend s6818F78D86C80F6
C3FB7ABB20E11088}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F
\par\pard\plain\fs16\par\pard\plain\sb396\cf1\f51\fs20\b\ql Note 11\u8212?SEGMEN
T INFORMATION\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Beginning in the first
quarter of 2015, we changed our reportable segments to North America, Internatio
nal, and AWS.\plain\cf1\f51\fs20\ql These segments reflect the way the Company
evaluates its business performance and manages its operations.\par\pard\plain\sb
132\fi528\cf1\f51\fs20\ql We allocate to segment results the operating expenses
\u8220?Fulfillment,\u8221? \u8220?Marketing,\u8221?\plain\cf1\f51\fs20\ql \u822
0?Technology and content,\u8221? and \u8220?General and administrative\u8221? ba
sed on usage, which is generally\plain\cf1\f51\fs20\ql reflected in the segment
in which the costs are incurred. The majority of technology infrastructure cost
s are allocated to the AWS\plain\cf1\f51\fs20\ql segment based on usage. The ma
jority of the remaining non-infrastructure technology costs are incurred in the
U.S. and are\plain\cf1\f51\fs20\ql allocated to our North America segment. We e
xclude from our allocations the portions of these operating expense lines\plain\
cf1\f51\fs20\ql attributable to stock-based compensation. We do not allocate th
e line item \u8220?Other operating expense (income), net\u8221?\plain\cf1\f51\fs
20\ql to our segment operating results. There are no internal revenue transacti
ons between our reportable segments.\par\pard\plain\sb396\fi264\cf1\f51\fs20\i\q
l North America\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql The North America seg
ment consists primarily of amounts earned from retail sales of consumer products
(including from\plain\cf1\f51\fs20\ql sellers) and subscriptions through North
America-focused websites such as www.amazon.com, www.amazon.ca, and\plain\cf1\f
51\fs20\ql www.amazon.com.mx. This segment includes export sales from these web
sites.\par\pard\plain\sb396\fi264\cf1\f51\fs20\i\ql International\par\pard\plain
\sb132\fi528\cf1\f51\fs20\ql The International segment consists primarily of amo
unts earned from retail sales of consumer products (including from\plain\cf1\f51
\fs20\ql sellers) and subscriptions through internationally-focused websites su
ch as www.amazon.com.au, www.amazon.com.br,\plain\cf1\f51\fs20\ql www.amazon.cn
, www.amazon.fr, www.amazon.de, www.amazon.in, www.amazon.it, www.amazon.co.jp,
www.amazon.nl,\plain\cf1\f51\fs20\ql www.amazon.es, and www.amazon.co.uk. This
segment includes export sales from these internationally-focused websites\plain\
cf1\f51\fs20\ql (including export sales from these sites to customers in the U.
S., Mexico, and Canada), but excludes export sales from our North\plain\cf1\f51\
fs20\ql American websites.\par\pard\plain\sb396\fi264\cf1\f51\fs20\i\ql AWS\par

\pard\plain\sb132\fi528\cf1\f51\fs20\ql The AWS segment consists of amounts earn
ed from global sales of compute, storage, database, and other AWS service\plain\
cf1\f51\fs20\ql offerings for start-ups, enterprises, government agencies, and
academic institutions.
\par\pard\plain\fs16\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Information on r
eportable segments and reconciliation to consolidated net income (loss) is as fo
llows (in millions):
\par\pard\plain
ellx10796\trrh-66
ow}}}
b\cellx7965\clvertalb\cellx8072\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrs\brdrcf1\clve
rtalb\cellx9381\clbrdrt\brdrs\brdrcf1\clvertalb\cellx9488\clbrdrt\brdrs\brdrcf1\
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\ql North America\cell\pard\
trrh281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Net sales\cell\pard\plain
fs20\qr 63,708\cell
trrh281\row}}}
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Segment operating expense
s (1)\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 60,957\cell
f51\fs20\qr 49,542\cell
f51\fs20\qr 40,244\cell
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Segment operating income
(loss)\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\in
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\ql International\cell\pard\
trrh281
fs20\qr 35,418\cell
trrh281\row}}}
f51\fs20\qr 33,654\cell
f51\fs20\qr 29,780\cell
tbl\sb22\sa22\cf1\f51\fs20\qr (91\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\f
s20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\
plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1
\f51\fs20\qr (144\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pa
\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 154
\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\ql AWS\cell\pard\plain\intb
\~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\
intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
trrh281
fs20\qr 7,880\cell
trrh281\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\ql Consolidated\cell\pard\p
trrh281
fs20\qr 107,006\cell
trrh281\row}}}
f51\fs20\qr 87,180\cell
f51\fs20\qr 72,459\cell
(loss)\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 4,523\cell
cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (2,119\cell\pard\plain\intb
\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (1,497\cell
\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri
0\qr (1,134\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Other operating income (e
xpense), net\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (171\cell\pard
(133\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intb
1\f51\fs20\qr (114\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
row}}}
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Income from operations\ce
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Total non-operating incom
e (expense)\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (665\cell\pard\
\f51\fs20\qr (239\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Provision for income taxe
s\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (950\cell\pard\plain\intb
qr (161\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Equity-method investment
activity, net of tax\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (22\ce
s20\qr 37\cell
row}}}
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Net income (loss)\cell\pa
cbpat10\cellx10796\trrh281\row}}}\pard\plain\cf1\f51\fs20\ql ___________________
\par\pard\plain
udes stock-based compensation and \u8220?Other operating expense (income), net,\
u8221? which are not allocated to\plain\intbl\cf1\f51\fs20\ql segments.\cell{
l We have aggregated our products and services into groups of similar products a
nd services and provided the supplemental\plain\cf1\f51\fs20\ql disclosure of n
et sales (in millions) below. We evaluate whether additional disclosure is appro
priate when a product or service\plain\cf1\f51\fs20\ql category begins to appro
ach a significant level of net sales. For the periods presented, no individual p
roduct or service\plain\cf1\f51\fs20\ql represented more than 10% of net sales.
\par\pard\plain
ellx10796\trrh-66
ow}}}
\intbl\li22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
trrh281
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Media\cell\pard\plain\int
bl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20
\qr 22,509\cell
trrh281\row}}}
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Electronics and other gen
eral merchandise\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 75,597\cel
l
f51\fs20\qr 60,886\cell
f51\fs20\qr 48,802\cell
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Other (1)\cell\pard\plain
{\trowd\clvertalb\cellx6976\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7096\clbrdrb\b
rdrdb\brdrcf1\clvertalb\cellx8065\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8178\clv
f1\clvertalb\cellx9374\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9487\clvertalb\cell
b\cellx10683\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10796\trrh281
107,006\cell
{\trowd\clvertalb\cellx6976\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7096\clbrdrb\b
rdrdb\brdrcf1\clvertalb\cellx8065\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8178\clv
f1\clvertalb\cellx9374\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9487\clvertalb\cell
b\cellx10683\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10796\trrh281\row}}}\pard\pla
in\cf1\f51\fs20\ql ___________________
\par\pard\plain
udes sales from non-retail activities, such as certain advertising services, and
our co-branded credit card agreements.\cell{
\par\pard\plain\fs16\par\pard\plain\li66\sb264\fi484\cf1\f51\fs20\ql Net sales g
enerated from our internationally-focused websites are denominated in local func
tional currencies. Revenues are\plain\li66\cf1\f51\fs20\ql translated at averag
e rates prevailing throughout the period. Net sales attributed to countries that
represent a significant portion of\plain\li66\cf1\f51\fs20\ql consolidated net
sales are as follows (in millions):
\par\pard\plain
ellx10795\trrh-66
ow}}}
ellx10795\trrh298
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql United States\cell\pard\pl

51\fs20\qr 70,537\cell
ellx10795\trrh298\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Germany\cell\pard\plain\in
tbl\li22\sb22\sa22\cf1\f51\fs20\qr 11,816\cell
f51\fs20\qr 11,919\cell
f51\fs20\qr 10,535\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql United Kingdom\cell\pard\p
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Japan\cell\pard\plain\intb
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Rest of world\cell\pard\pl
ain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 7,356\cell
s\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7321\clvertalb\cellx7428\clbrdrt
\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7548\clbrdrt\brdrs\brdrcf1\
clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8945\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\
brdrcf1\clvertalb\cellx9058\clvertalb\cellx9165\clbrdrt\brdrs\brdrcf1\clbrdrb\br
drdb\brdrcf1\clvertalb\cellx9285\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\cl
vertalb\cellx10682\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx1
0795\trrh298
\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Consolidated\cell\pard\pl
51\fs20\qr 107,006\cell
s\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx7321\clvertalb\cellx7428\clbrdrt
brdrcf1\clvertalb\cellx9058\clvertalb\cellx9165\clbrdrt\brdrs\brdrcf1\clbrdrb\br
0795\trrh298\row}}}\pard\plain\sb264\fi528\cf1\f51\fs20\ql Total segment assets

exclude corporate assets, such as cash and cash equivalents, marketable securiti
es, other long-term\plain\cf1\f51\fs20\ql investments, corporate facilities, go
odwill and other acquired intangible assets, capitalized internal-use software a
nd website\plain\cf1\f51\fs20\ql development costs, and tax assets. Technology
infrastructure assets are allocated among the segments based on usage, with the\
plain\cf1\f51\fs20\ql majority allocated to the AWS segment. Total segment asse
ts reconciled to consolidated amounts are as follows (in millions):
\par\pard\plain
ellx10795\trrh-66
ow}}}
alb\cellx9379\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10795\t
rrh281
alb\cellx9379\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10795\t
rrh281\row}}}
rdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9272\clbrdrt\brdrs\brdrcf1\
clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9379\clbrdrt\brdrs\brdrcf1\clverta
lb\clshdng100\clcfpat10\clcbpat10\cellx9499\clbrdrt\brdrs\brdrcf1\clvertalb\clsh
dng100\clcfpat10\clcbpat10\cellx10682\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100
\clcfpat10\clcbpat10\cellx10795\trrh298
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql North America (1)\cell\par
f1\f51\fs20\qr 16,772\cell

rdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9272\clbrdrt\brdrs\brdrcf1\
clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9379\clbrdrt\brdrs\brdrcf1\clverta
lb\clshdng100\clcfpat10\clcbpat10\cellx9499\clbrdrt\brdrs\brdrcf1\clvertalb\clsh
dng100\clcfpat10\clcbpat10\cellx10682\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100
\clcfpat10\clcbpat10\cellx10795\trrh298\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql International (1)\cell\par
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql AWS (2)\cell\pard\plain\in
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Corporate\cell\pard\plain\
intbl\li22\sb22\sa22\cf1\f51\fs20\qr 31,131\cell
f51\fs20\qr 27,520\cell
f51\fs20\qr 20,129\cell
0682\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10
\clcbpat10\cellx10795\trrh298
51\fs20\qr 65,444\cell
0682\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10
\clcbpat10\cellx10795\trrh298\row}}}\pard\plain\sb154\cf1\f51\fs20\ql __________
_________
\par\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (1)\cell\pard\plain\intbl\cf1\f51\fs20\ql Nort
h America and International segment assets primarily consist of inventory, accou
nts receivable, and property and\plain\intbl\cf1\f51\fs20\ql equipment.\cell{
\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (2)\cell\pard\plain\intbl\cf1\f51\fs20\ql AWS

segment assets primarily consist of property and equipment and accounts\plain\in
tbl\cf1\f51\fs20\ql receivable.\cell{
\par\pard\plain\fs16\par\pard\plain\li66\sb264\fi484\cf1\f51\fs20\ql Property an
d equipment, net by segment is as follows (in millions):
\par\pard\plain
232
232\row}}}
talb\cellx7811\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9220\clbrdrb\brdrs\brdrcf1\c
lvertalb\cellx9327\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10
736\trrh281
talb\cellx7811\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9220\clbrdrb\brdrs\brdrcf1\c
lvertalb\cellx9327\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10
736\trrh281\row}}}
drs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9220\clbrdrt\brdrs\brd
rcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9327\clbrdrt\brdrs\brdrcf1\cl
vertalb\clshdng100\clcfpat10\clcbpat10\cellx9447\clbrdrt\brdrs\brdrcf1\clvertalb

51\fs20\qr 6,707\cell
drs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9220\clbrdrt\brdrs\brd
rcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9327\clbrdrt\brdrs\brdrcf1\cl
vertalb\clshdng100\clcfpat10\clcbpat10\cellx9447\clbrdrt\brdrs\brdrcf1\clvertalb
ain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 2,266\cell
li22\sb22\sa22\cf1\f51\fs20\qr 8,356\cell
ellx9107\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9220\clbrdrb\brdrs\brdrcf1\clverta
lb\cellx9327\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10623\clbrdrb\brdrs\brdrcf1\cl
ellx9107\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9220\clbrdrb\brdrs\brdrcf1\clverta
lb\cellx9327\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10623\clbrdrb\brdrs\brdrcf1\cl
x7591\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat1
\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\c
ellx7931\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfp
at10\clcbpat10\cellx9107\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\
clshdng100\clcfpat10\clcbpat10\cellx9220\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\br
lbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9447\clbrdrt
ellx10623\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcf
pat10\clcbpat10\cellx10736\trrh298
51\fs20\qr 21,838\cell
clshdng100\clcfpat10\clcbpat10\cellx9220\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\br
lbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx9447\clbrdrt
ellx10623\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\clshdng100\clcf
pat10\clcbpat10\cellx10736\trrh298\row}}}\pard\plain\li66\sb264\fi484\cf1\f51\fs
20\ql Total property and equipment additions by segment are as follows (in milli
ons):
\par\pard\plain
232
232\row}}}
rdrt\brdrs\brdrcf1\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10694\trrh281
rdrt\brdrs\brdrcf1\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10694\trrh281\row}}}
clcbpat10\cellx10581\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpa
t10\cellx10694\trrh298
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql North America (1)\cell\par
f1\f51\fs20\qr 2,485\cell
clcbpat10\cellx10581\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpa
t10\cellx10694\trrh298\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql International (1)\cell\par
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql AWS (2)\cell\pard\plain\in
h281
h281\row}}}
lb\clshdng100\clcfpat10\clcbpat10\cellx10581\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrd
b\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10694\trrh298
51\fs20\qr 9,625\cell
lb\clshdng100\clcfpat10\clcbpat10\cellx10581\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrd
b\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10694\trrh298\row}}}\par
d\plain\sb110\cf1\f51\fs20\ql ___________________
\par\pard\plain
udes property and equipment added under capital leases of $938 million, $887 mil
lion, and $555 million in 2015, 2014,\plain\intbl\cf1\f51\fs20\ql and 2013, and
under other financing arrangements of $219 million, $599 million, and $715 mill
ion in 2015, 2014, and\plain\intbl\cf1\f51\fs20\ql 2013.\cell{
\pard\plain
udes property and equipment added under capital leases of $3.7 billion, $3.0 bil
lion, and $1.3 billion in 2015, 2014, and\plain\intbl\cf1\f51\fs20\ql 2013 and
under finance leases of $81 million, $62 million, and $67 million in 2015, 2014,
and 2013.\cell{
l U.S. property and equipment, net was $16.8 billion, $13.1 billion, and $8.4 bi
llion, in 2015, 2014, and 2013, and rest of\plain\cf1\f51\fs20\ql world propert
y and equipment, net was $5.0 billion, $3.8 billion, and $2.5 billion in 2015, 2
014, and 2013. Except for the U.S.,\plain\cf1\f51\fs20\ql property and equipmen
t, net, in any single country was less than 10% of consolidated property and equ
ipment, net.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Depreciation expense, in
cluding amortization of capitalized internal-use software and website developmen
t costs and other\plain\cf1\f51\fs20\ql corporate property and equipment deprec
iation expense, are allocated to all segments based on usage. Total depreciation
expense,\plain\cf1\f51\fs20\ql by segment, is as follows (in millions):
\par\pard\plain
ellx10796\trrh-66
ow}}}
51\fs20\qr 1,551\cell
ain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 822\cell
li22\sb22\sa22\cf1\f51\fs20\qr 2,576\cell
51\fs20\qr 4,949\cell
\page{\*\bkmkstart s61D70D3396017CE400D5ABB20F5BFA7}{\*\bkmkend s61D70D3396017CE
400D5ABB20F5BFA7}
\par\pard\plain\fs16\par\pard\plain\sb264\cf1\f51\fs20\b\ql Note 12\u8212?QUARTE
RLY RESULTS (UNAUDITED)\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql The following
tables contain selected unaudited statement of operations information for each
quarter of 2015 and 2014. The\plain\cf1\f51\fs20\ql following information refle
cts all normal recurring adjustments necessary for a fair presentation of the in
formation for the periods\plain\cf1\f51\fs20\ql presented. The operating result
s for any quarter are not necessarily indicative of results for any future perio
d. Our business is\plain\cf1\f51\fs20\ql affected by seasonality, which histori
cally has resulted in higher sales volume during our fourth quarter. Unaudited q
uarterly\plain\cf1\f51\fs20\ql results are as follows (in millions, except per
share data):
\par\pard\plain
\fs16\ql \~\cell\pard\plain\intbl\f0\fs16\ql \~\cell{
cellx10798\trrh281
51\fs16\b\qc Year Ended December 31, 2015 (1)\cell{
b\brdrs\brdrcf1\clvertalb\cellx10794\trrh430
cf1\f51\fs16\b\qc Fourth\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b
\qc Quarter\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pa

rd\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Third\par\pard\plain\intbl\
li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Quarter\cell\pard\plain\intbl\li22\ri22\sb
6\b\qc Second\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Quarter
tbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc First\par\pard\plain\intbl\li22\ri22\s
b22\sa22\cf1\f51\fs16\b\qc Quarter\cell{
b\brdrs\brdrcf1\clvertalb\cellx10794\trrh430\row}}}
t10\cellx10598\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10791\trrh281
t10\cellx10598\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10791\trrh281\row}}
}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Income (loss) from operati
ons\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain
e taxes\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\p
f51\fs20\qr 21\cell
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Provision for income taxes
tbl\li22\sb22\sa22\cf1\f51\fs20\qr (453\cell\pard\plain\intbl\ri22\sb22\sa22\cf1
\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell
\sb22\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\f
s20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (266\cell\pard\pl
sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (71
\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
f51\fs20\qr 79\cell
f51\fs20\qr 92\cell
f51\fs20\qr (0.12\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
tbl\li22\sb22\sa22\cf1\f51\fs20\qr 1.00\cell
f51\fs20\qr (0.12\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell{
of earnings per share:\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\q
l \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plai
\par\pard\plain
\fs16\ql \~\cell\pard\plain\intbl\f0\fs16\ql \~\cell{
cellx10798\trrh281
51\fs16\b\qc Year Ended December 31, 2014 (1)\cell{
drs\brdrcf1\clvertalb\cellx5964\clbrdrt\brdrs\brdrcf1\clvertalb\cellx6067\clbrdr
t\brdrs\brdrcf1\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7574\clbrdrt\brdrs\brdrcf1\
clvertalb\cellx7677\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9
184\clbrdrt\brdrs\brdrcf1\clvertalb\cellx9287\clbrdrt\brdrs\brdrcf1\clbrdrb\brdr
s\brdrcf1\clvertalb\cellx10794\trrh447
cf1\f51\fs16\b\qc Fourth\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b
\qc Quarter\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pa
rd\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Third\par\pard\plain\intbl\
li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Quarter\cell\pard\plain\intbl\li22\ri22\sb
6\b\qc Second\par\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc Quarter
tbl\li22\ri22\sb22\sa22\cf1\f51\fs16\b\qc First\par\pard\plain\intbl\li22\ri22\s
b22\sa22\cf1\f51\fs16\b\qc Quarter\cell{
drs\brdrcf1\clvertalb\cellx5964\clbrdrt\brdrs\brdrcf1\clvertalb\cellx6067\clbrdr
t\brdrs\brdrcf1\clbrdrb\brdrs\brdrcf1\clvertalb\cellx7574\clbrdrt\brdrs\brdrcf1\
clvertalb\cellx7677\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9
184\clbrdrt\brdrs\brdrcf1\clvertalb\cellx9287\clbrdrt\brdrs\brdrcf1\clbrdrb\brdr
s\brdrcf1\clvertalb\cellx10794\trrh447\row}}}
pat10\cellx10597\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\
cellx10790\trrh298
pat10\cellx10597\clbrdrt\brdrs\brdrcf1\clvertalb\clshdng100\clcfpat10\clcbpat10\
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Income (loss) from operati
ons\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain
sb22\sa22\cf1\f51\fs20\qr (15\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\
ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plai
e taxes\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\p
sb22\sa22\cf1\f51\fs20\qr (27\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\
ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plai
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Benefit (provision) for in
come taxes\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\par
d\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr (205\cell\pard\plain\intbl\ri22\sb2
2\sa22\cf1\f51\fs20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\
b22\sa22\cf1\f51\fs20\qr (73\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\q
l )\cell{
\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\pla
in\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 108\cell
f51\fs20\qr (0.95\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pa
\sb22\sa22\cf1\f51\fs20\qr (0.27\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs
20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\p
tbl\li22\sb22\sa22\cf1\f51\fs20\qr 0.45\cell
f51\fs20\qr (0.95\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql )\cell\pa
\sb22\sa22\cf1\f51\fs20\qr (0.27\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs
20\ql )\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\p
of earnings per share:\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\q
l \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plai
lvertalb\cellx10794\trrh281\row}}}\pard\plain\cf1\f51\fs20\ql \~________________
___
\par\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (1)\cell\pard\plain\intbl\cf1\f51\fs20\ql The
sum of quarterly amounts, including per share amounts, may not equal amounts rep
orted for year-to-date periods. This\plain\intbl\cf1\f51\fs20\ql is due to the
effects of rounding and changes in the number of weighted-average shares outstan
ding for each period.\cell{
\page{\*\bkmkstart s600AD20FD52A937E6DC2ABB2552A6AB}{\*\bkmkend s600AD20FD52A937
E6DC2ABB2552A6AB}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F
\par\pard\plain
\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\i\ql Changes in and Disagreements with
Accountants On Accounting and Financial Disclosure\cell{
fs20\ql None.{\*\bkmkstart s23CDB8E915E71EEED3AAABB25534E67}{\*\bkmkend s23CDB8E
915E71EEED3AAABB25534E67}
\par\pard\plain
n\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\i\ql Controls and Procedures\cell{
{\trowd\cellx1188\cellx10800\trrh281\row}}}\pard\plain\li264\sb132\cf1\f51\fs20\
b\i\ql Evaluation of Disclosure Controls and Procedures\par\pard\plain\sb132\fi5
28\cf1\f51\fs20\ql We carried out an evaluation required by the Securities Excha
nge Act of 1934 (the \u8220?1934 Act\u8221?), under the\plain\cf1\f51\fs20\ql s
upervision and with the participation of our principal executive officer and pri
ncipal financial officer, of the effectiveness of the\plain\cf1\f51\fs20\ql des
ign and operation of our disclosure controls and procedures, as defined in Rule
13a-15(e) of the 1934 Act, as of\plain\cf1\f51\fs20\ql December\~31, 2015. Base
d on this evaluation, our principal executive officer and principal financial of
ficer concluded that, as of\plain\cf1\f51\fs20\ql December\~31, 2015, our discl
osure controls and procedures were effective to provide reasonable assurance tha
t information\plain\cf1\f51\fs20\ql required to be disclosed by us in the repor
ts that we file or submit under the 1934 Act is recorded, processed, summarized,
and\plain\cf1\f51\fs20\ql reported within the time periods specified in the SE
C\u8217?s rules and forms and to provide reasonable assurance that such\plain\cf
1\f51\fs20\ql information is accumulated and communicated to our management, in
cluding our principal executive officer and principal\plain\cf1\f51\fs20\ql fin
ancial officer, as appropriate to allow timely decisions regarding required disc
losure.\par\pard\plain\li264\sb396\cf1\f51\fs20\b\i\ql Management\u8217?s Report
on Internal Control over Financial Reporting\par\pard\plain\sb132\fi528\cf1\f51
\fs20\ql Management is responsible for establishing and maintaining adequate int
ernal control over financial reporting, as defined in\plain\cf1\f51\fs20\ql Rul
e 13a-15(f) of the 1934 Act. Management has assessed the effectiveness of our in
ternal control over financial reporting as of\plain\cf1\f51\fs20\ql December\~3
1, 2015 based on criteria established in Internal Control\u8212?Integrated Frame
work (2013) issued by the Committee\plain\cf1\f51\fs20\ql of Sponsoring Organiz
ations of the Treadway Commission. As a result of this assessment, management co
ncluded that, as of\plain\cf1\f51\fs20\ql December\~31, 2015, our internal cont
rol over financial reporting was effective in providing reasonable assurance reg
arding the\plain\cf1\f51\fs20\ql reliability of financial reporting and the pre
paration of financial statements for external purposes in accordance with genera
lly\plain\cf1\f51\fs20\ql accepted accounting principles. Ernst\~& Young has in
dependently assessed the effectiveness of our internal control over financial\pl
ain\cf1\f51\fs20\ql reporting and its report is included below.\par\pard\plain\
li264\sb396\cf1\f51\fs20\b\i\ql Changes in Internal Control Over Financial Repor
ting\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql There were no changes in our int
ernal control over financial reporting during the quarter ended December\~31, 20
15 that\plain\cf1\f51\fs20\ql materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.\par\pard\plain
\li264\sb396\cf1\f51\fs20\b\i\ql Limitations on Controls\par\pard\plain\sb132\fi
528\cf1\f51\fs20\ql Our disclosure controls and procedures and internal control
over financial reporting are designed to provide reasonable\plain\cf1\f51\fs20\q
l assurance of achieving their objectives as specified above. Management does n
ot expect, however, that our disclosure controls\plain\cf1\f51\fs20\ql and proc
edures or our internal control over financial reporting will prevent or detect a
ll error and fraud. Any control system, no\plain\cf1\f51\fs20\ql matter how wel
l designed and operated, is based upon certain assumptions and can provide only
reasonable, not absolute,\plain\cf1\f51\fs20\ql assurance that its objectives w
ill be met. Further, no evaluation of controls can provide absolute assurance th
at misstatements due\plain\cf1\f51\fs20\ql to error or fraud will not occur or
that all control issues and instances of fraud, if any, within the Company have
been detected.
\par\pard\plain\fs16\par\pard\plain\cf1\f51\fs20\b\qc Report of Independent Regi
stered Public Accounting Firm\par\pard\plain\sb132\cf1\f51\fs20\ql The Board of
Directors and Shareholders\par\pard\plain\cf1\f51\fs20\ql Amazon.com, Inc.\par\p
ard\plain\sb132\fi528\cf1\f51\fs20\ql We have audited Amazon.com, Inc.\u8217?s i
nternal control over financial reporting as of December\~31, 2015, based on\plai
n\cf1\f51\fs20\ql criteria established in Internal Control\u8212?Integrated Fra
mework issued by the Committee of Sponsoring Organizations of the\plain\cf1\f51\
fs20\ql Treadway Commission (2013 framework) (the COSO criteria). Amazon.com, I
nc.\u8217?s management is responsible for\plain\cf1\f51\fs20\ql maintaining eff
ective internal control over financial reporting, and for its assessment of the
effectiveness of internal control over\plain\cf1\f51\fs20\ql financial reportin
g included in the accompanying Management\u8217?s Report on Internal Control ove
r Financial Reporting. Our\plain\cf1\f51\fs20\ql responsibility is to express a
n opinion on the Company\u8217?s internal control over financial reporting based
on our audit.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql We conducted our audit
in accordance with the standards of the Public Company Accounting Oversight Boa
rd (United\plain\cf1\f51\fs20\ql States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether effective\pla
in\cf1\f51\fs20\ql internal control over financial reporting was maintained in
all material respects. Our audit included obtaining an understanding of\plain\cf
1\f51\fs20\ql internal control over financial reporting, assessing the risk tha
t a material weakness exists, testing and evaluating the design and\plain\cf1\f5
1\fs20\ql operating effectiveness of internal control based on the assessed ris
k, and performing such other procedures as we considered\plain\cf1\f51\fs20\ql
necessary in the circumstances. We believe that our audit provides a reasonable
basis for our opinion.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql A company\u821
7?s internal control over financial reporting is a process designed to provide r
easonable assurance\plain\cf1\f51\fs20\ql regarding the reliability of financia
l reporting and the preparation of financial statements for external purposes in
accordance with\plain\cf1\f51\fs20\ql generally accepted accounting principles
. A company\u8217?s internal control over financial reporting includes those pol
icies and\plain\cf1\f51\fs20\ql procedures that (1)\~pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the transa
ctions\plain\cf1\f51\fs20\ql and dispositions of the assets of the company; (2)
\~provide reasonable assurance that transactions are recorded as necessary to\pl
ain\cf1\f51\fs20\ql permit preparation of financial statements in accordance wi
th generally accepted accounting principles, and that receipts and\plain\cf1\f51
\fs20\ql expenditures of the company are being made only in accordance with aut
horizations of management and directors of the\plain\cf1\f51\fs20\ql company; a
nd (3)\~provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or\plain\cf1\f51\fs20\ql disposition of the com
pany\u8217?s assets that could have a material effect on the financial statement
s.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Because of its inherent limitation
s, internal control over financial reporting may not prevent or detect misstatem
ents. Also,\plain\cf1\f51\fs20\ql projections of any evaluation of effectivenes
s to future periods are subject to the risk that controls may become inadequate\
plain\cf1\f51\fs20\ql because of changes in conditions, or that the degree of c
ompliance with the policies or procedures may deteriorate.\par\pard\plain\sb132\
fi528\cf1\f51\fs20\ql In our opinion, Amazon.com, Inc. maintained, in all materi

al respects, effective internal control over financial reporting as\plain\cf1\f5
1\fs20\ql of December\~31, 2015, based on the COSO criteria.\par\pard\plain\sb1
32\fi528\cf1\f51\fs20\ql We also have audited, in accordance with the standards
of the Public Company Accounting Oversight Board (United\plain\cf1\f51\fs20\ql
States), the consolidated balance sheets of Amazon.com, Inc. as of December\~31,
2015 and 2014, and the related consolidated\plain\cf1\f51\fs20\ql statements o
f operations, comprehensive income (loss), stockholders\u8217? equity, and cash
flows for each of the three years in\plain\cf1\f51\fs20\ql the period ended Dec
ember\~31, 2015 of Amazon.com, Inc. and our report dated January\~28, 2016 expre
ssed an unqualified\plain\cf1\f51\fs20\ql opinion thereon.\par\pard\plain\sb264
\cf1\f51\fs20\qc /s/ Ernst & Young LLP\par\pard\plain\sb264\cf1\f51\fs20\ql Seat
tle, Washington\par\pard\plain\cf1\f51\fs20\ql January\~28, 2016
\page{\*\bkmkstart sF3D4B289399AAB1D3792ABB255669AD}{\*\bkmkend sF3D4B289399AAB1
D3792ABB255669AD}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F
\pard\plain
\pard\plain\intbl\cf1\f51\fs20\b\ql Item\~9B.\cell\pard\plain\intbl\cf1\f51\fs20
\b\i\ql Other\plain\intbl\cf1\f51\fs20\b\i\ql Information\cell{
None.
\par\pard\plain\fs16{\*\bkmkstart s49AD8F9A8EE9DCA3A8ACABB25584F2E}{\*\bkmkend s
49AD8F9A8EE9DCA3A8ACABB25584F2E}{\*\bkmkstart part_1_2_4}{\*\bkmkend part_1_2_4}
\par\pard\plain\sb528\cf1\f51\fs20\b\qc PART III
\par\pard\plain\fs16{\*\bkmkstart s111C237855632C9A9AB2ABB255B612D}{\*\bkmkend s
111C237855632C9A9AB2ABB255B612D}{\*\bkmkstart item_1_3_16}{\*\bkmkend item_1_3_1
6}
\pard\plain
\pard\plain\intbl\cf1\f51\fs20\b\ql Item\~10.\cell\pard\plain\intbl\cf1\f51\fs20
\b\i\ql Directors, Executive Officers, and Corporate\plain\intbl\cf1\f51\fs20\b\
i\ql Governance\cell{
Information regarding our Executive Officers required by Item\~10 of Part III i
s set forth in Item\~1 of Part I\plain\cf1\f51\fs20\ql \u8220?Business\u8212?Ex
ecutive Officers of the Registrant.\u8221? Information required by Item\~10 of P
art III regarding our\plain\cf1\f51\fs20\ql Directors and any material changes
to the process by which security holders may recommend nominees to the Board of
Directors\plain\cf1\f51\fs20\ql is included in our Proxy Statement relating to
our 2016 Annual Meeting of Shareholders, and is incorporated herein by reference
.\plain\cf1\f51\fs20\ql Information relating to our Code of Business Conduct an
d Ethics and to compliance with Section\~16(a) of the 1934 Act is set\plain\cf1\
f51\fs20\ql forth in our Proxy Statement relating to our 2016 Annual Meeting of
Shareholders and is incorporated herein by reference. To\plain\cf1\f51\fs20\ql
the extent permissible under NASDAQ rules, we intend to disclose amendments to
our Code of Business Conduct and Ethics, as\plain\cf1\f51\fs20\ql well as waive
rs of the provisions thereof, on our investor relations website under the headin
g \u8220?Corporate\plain\cf1\f51\fs20\ql Governance\u8221? at www.amazon.com/ir
.
\par\pard\plain\fs16{\*\bkmkstart sA28BA9705968510B5146ABB255D4BA1}{\*\bkmkend s
A28BA9705968510B5146ABB255D4BA1}{\*\bkmkstart item_1_3_17}{\*\bkmkend item_1_3_1
7}
\pard\plain
\b\i\ql Executive\plain\intbl\cf1\f51\fs20\b\i\ql Compensation\cell{
Information required by Item\~11 of Part III is included in our Proxy Statement
relating to our 2016 Annual Meeting of\plain\cf1\f51\fs20\ql Shareholders and
is incorporated herein by reference.
\par\pard\plain\fs16{\*\bkmkstart s0DC300DA8F6FC876DEA6ABB25606C07}{\*\bkmkend s
0DC300DA8F6FC876DEA6ABB25606C07}{\*\bkmkstart item_1_3_18}{\*\bkmkend item_1_3_1
8}
\pard\plain
\b\i\ql Security Ownership of Certain Beneficial Owners and Management and Relat
ed Shareholder\plain\intbl\cf1\f51\fs20\b\i\ql Matters\cell{
l Information required by Item\~12 of Part III is included in our Proxy Statemen
t relating to our 2016 Annual Meeting of\plain\cf1\f51\fs20\ql Shareholders and
\par\pard\plain\fs16{\*\bkmkstart s3C2D352B053E09836B5DABB2562E58F}{\*\bkmkend s
3C2D352B053E09836B5DABB2562E58F}{\*\bkmkstart item_1_3_19}{\*\bkmkend item_1_3_1
9}
\pard\plain
\b\i\ql Certain Relationships and Related Transactions, and Director\plain\intbl
\cf1\f51\fs20\b\i\ql Independence\cell{
relating to our 2016 Annual Meeting of\plain\cf1\f51\fs20\ql Shareholders and
\par\pard\plain\fs16{\*\bkmkstart s2C8D3A4F8C8EDC9F0E88ABB25660B12}{\*\bkmkend s
2C8D3A4F8C8EDC9F0E88ABB25660B12}{\*\bkmkstart item_1_3_20}{\*\bkmkend item_1_3_2
0}
\pard\plain
\b\i\ql Principal Accountant Fees and\plain\intbl\cf1\f51\fs20\b\i\ql Services\
cell{
relating our 2016 Annual Meeting of\plain\cf1\f51\fs20\ql Shareholders and is
incorporated herein by reference.
\page{\*\bkmkstart s8B7132002AFAB90BE659ABB2567EF5F}{\*\bkmkend s8B7132002AFAB90
BE659ABB2567EF5F}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F
ain\cf1\f51\fs20\b\qc PART IV\par\pard\plain\cf1\f51\fs28\ql \~{\*\bkmkstart s44
B4443D0EAA564E146CABB256B0E7A}{\*\bkmkend s44B4443D0EAA564E146CABB256B0E7A}{\*\b
kmkstart item_1_3_21}{\*\bkmkend item_1_3_21}
\par\pard\plain
\b\i\ql Exhibits, Financial Statement\plain\intbl\cf1\f51\fs20\b\i\ql Schedules
\cell{
{\trowd\cellx831\cellx3506\trrh495\row}}}\pard\plain\li528\sb132\cf1\f51\fs20\ql
(a)\plain\li528\cf1\f51\fs20\i\ql List of Documents Filed as a Part of This Re
port:\par\pard\plain\li1056\sb132\cf1\f51\fs20\ql (1)\plain\li1056\cf1\f51\fs20\
i\ql Index to Consolidated Financial Statements:\par\pard\plain\li1056\sb132\fi
528\cf1\f51\fs20\ql Report of Ernst\~& Young LLP, Independent Registered Public
Accounting Firm\par\pard\plain\li1056\sb132\fi528\cf1\f51\fs20\ql Consolidated S
tatements of Cash Flows for each of the three years ended December\~31, 2015 \pa
r\pard\plain\li1056\sb132\fi528\cf1\f51\fs20\ql Consolidated Statements of Opera
tions for each of the three years ended December\~31, 2015 \par\pard\plain\li158
4\sb132\cf1\f51\fs20\ql Consolidated Statements of Comprehensive Income (Loss) f
or each of the three years ended\par\pard\plain\li1584\sb132\cf1\f51\fs20\ql Dec
ember\~31, 2015 \par\pard\plain\li1056\sb132\fi528\cf1\f51\fs20\ql Consolidated
Balance Sheets as of December\~31, 2015 and 2014 \par\pard\plain\li1056\sb132\fi
528\cf1\f51\fs20\ql Consolidated Statements of Stockholders\u8217? Equity for ea
ch of the three years ended December\~31, 2015 \par\pard\plain\li1056\sb132\fi52
8\cf1\f51\fs20\ql Notes to Consolidated Financial Statements\par\pard\plain\li10
56\sb132\fi528\cf1\f51\fs20\ql Report of Ernst\~& Young LLP, Independent Registe
red Public Accounting Firm\par\pard\plain\li1056\sb132\cf1\f51\fs20\ql (2)\plain
\li1056\cf1\f51\fs20\i\ql Index to Financial Statement Schedules:\par\pard\plai
n\li1056\sb132\fi528\cf1\f51\fs20\ql All schedules have been omitted because the
required information is included in the consolidated financial\plain\li1056\cf1
\f51\fs20\ql statements or the notes thereto, or because it is not required.\pa
r\pard\plain\li1056\sb132\cf1\f51\fs20\ql (3)\plain\li1056\cf1\f51\fs20\i\ql In
dex to Exhibits\par\pard\plain\li1056\sb132\fi528\cf1\f51\fs20\ql See exhibits l
isted under the Exhibit Index below.
\page{\*\bkmkstart s69ACA19ED54018389DBCABB23266EFD}{\*\bkmkend s69ACA19ED540183
89DBCABB23266EFD}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F
ain\cf1\f51\fs20\b\qc SIGNATURES\par\pard\plain\sb264\fi528\cf1\f51\fs20\ql Purs
uant to the requirements of Section\~13 or 15(d) of the Securities Exchange Act
of 1934, the registrant has duly caused\plain\cf1\f51\fs20\ql this Report to be
signed on its behalf by the undersigned, thereunto duly authorized, as of Janua
ry\~28, 2016.\par\pard\plain\cf1\f51\fs18\ql \~
\par\pard\plain

}}}
i22\ri22\sb22\sa22\cf1\f51\fs21\ql AMAZON.COM, INC.\cell{
}}}
{\trowd\clvertalb\cellx5940\cellx6702\clbrdrb\brdrs\brdrcf1\cellx10799\trrh281
i22\ri22\sb22\sa22\cf1\f51\fs20\ql By:\cell\pard\plain\intbl\li22\ri22\sb22\sa22
\cf1\f51\fs20\qc /s/ Jeffrey P. Bezos\cell{
{\trowd\clvertalb\cellx5940\cellx6702\clbrdrb\brdrs\brdrcf1\cellx10799\trrh281\r
ow}}}
{\trowd\clvertalb\cellx5940\clvertalb\cellx6702\cellx10799\trrh281
cf1\f51\fs20\b\qc Jeffrey P. Bezos\cell{
{\trowd\clvertalb\cellx5940\clvertalb\cellx6702\cellx10799\trrh281\row}}}
cf1\f51\fs20\b\qc President, Chief Executive Officer,\par\pard\plain\intbl\li22\
ri22\sb22\sa22\cf1\f51\fs20\b\qc and Chairman of the Board\cell{
}}}\pard\plain\sb264\fi528\cf1\f51\fs20\ql Pursuant to the requirements of the S
ecurities Exchange Act of 1934, this Report has been signed below by the followi
ng persons\plain\cf1\f51\fs20\ql on behalf of the registrant and in the capacit
ies indicated as of January\~28, 2016.\plain\cf1\f51\fs18\ql \~
\par\pard\plain
}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Signature\cell\pard\plai
b22\sa22\cf1\f51\fs14\b\qc Title\cell{
}}}
}}}
{\trowd\clbrdrb\brdrs\brdrcf1\clvertalb\cellx4220\clvertalb\cellx4425\clvertalb\
cellx10292\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\qc /s/ Jeffrey P. Bezos\cell\
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs20\b\qc Jeffrey P. Bezos\cell\pard\pl
\sb22\cf1\f51\fs20\ql Chairman of the Board, President, and Chief Executive Offi
cer\plain\intbl\li22\ri22\sa22\cf1\f51\fs20\ql (Principal Executive Officer)\ce
ll{
}}}
cellx10292\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\qc /s/ Brian T. Olsavsky\cell
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs20\b\qc Brian T. Olsavsky\cell\pard\p
2\sb22\cf1\f51\fs20\ql Senior Vice President and Chief Financial Officer (Princi
pal\plain\intbl\li22\ri22\sa22\cf1\f51\fs20\ql Financial Officer)\cell{
}}}
cellx10292\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\qc /s/ Shelley Reynolds\cell\
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs20\b\qc Shelley Reynolds\cell\pard\pl
\sb22\sa22\cf1\f51\fs20\ql Vice President, Worldwide Controller (Principal Accou
nting Officer)\cell{
}}}
cellx10292\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\qc /s/ Tom A. Alberg\cell\par
ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs20\b\qc Tom A. Alberg\cell\pard\plain
22\sa22\cf1\f51\fs20\ql Director\cell{
}}}
}}}
cellx10292\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\qc /s/ John Seely Brown\cell\
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs20\b\qc John Seely Brown\cell\pard\pl
\sb22\sa22\cf1\f51\fs20\ql Director\cell{
}}}
}}}
cellx10292\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\qc /s/ William B. Gordon\cell
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs20\b\qc William B. Gordon\cell\pard\p
2\sb22\sa22\cf1\f51\fs20\ql Director\cell{
}}}
}}}
cellx10292\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\qc /s/ Jamie S. Gorelick\cell
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs20\b\qc Jamie S. Gorelick\cell\pard\p
}}}
}}}
cellx10292\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\qc /s/ Judith A. McGrath\cell
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs20\b\qc Judith A. McGrath\cell\pard\p
}}}
}}}
cellx10292\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\qc /s/ Alain Moni\u233?\cell\
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs20\b\qc Alain Moni\u233?\cell\pard\pl
\sb22\sa22\cf1\f51\fs20\ql Director\cell{
}}}
}}}
cellx10292\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\qc /s/ Jonathan J. Rubinstein
tbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs20\b\qc Jonathan J. Rubinstein\cell\p
2\ri22\sb22\sa22\cf1\f51\fs20\ql Director\cell{
}}}
}}}
cellx10292\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\qc /s/ Thomas O. Ryder\cell\p
\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs20\b\qc Thomas O. Ryder\cell\pard\pla
sb22\sa22\cf1\f51\fs20\ql Director\cell{
}}}
}}}
cellx10292\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\qc /s/ Patricia Q. Stonesifer
tbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\qc Patricia Q. Stonesifer\c
l\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Director\cell{
}}}
\page{\*\bkmkstart sF4A3CAC8C6A38EAEBCAAABB21C0424B}{\*\bkmkend sF4A3CAC8C6A38EA
EBCAAABB21C0424B}\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251F
ain\cf1\f51\fs20\b\qc EXHIBIT INDEX\par\pard\plain\cf1\f51\fs18\ql \~
\par\pard\plain
6
6\row}}}
{\trowd\trqc\clbrdrb\brdrs\brdrcf1\clvertalb\cellx1014\clbrdrb\brdrs\brdrcf1\clv
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\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs14\b\ql Exhibit\plain\intbl\li22\ri22
\sa22\cf1\f51\fs14\b\ql Number\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f5
1\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\qc Descrip
tion\cell{
ertalb\cellx1121\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10799\trrh380\row}}}
1
1\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql 2.1\cell\pard\plain\intbl\
li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\cf1\
f51\fs20\ql Form of Purchase and Sale Agreement dated as of October 1, 2012, bet
ween Acorn Development LLC, a wholly\plain\intbl\li22\ri22\cf1\f51\fs20\ql owne
d subsidiary of the Company, and Lake Union III LLC, Lake Union IV LLC,\~City Pl
ace V LLC, City Place II\plain\intbl\li22\ri22\cf1\f51\fs20\ql LLC, City Place
III LLC, City Place IV LLC, and City Place V LLC, respectively (incorporated by
reference to\plain\intbl\li22\ri22\sa22\cf1\f51\fs20\ql the Company\u8217?s Ann
ual Report on Form 10-K for the Year ended December 31, 2012).\cell{
1
1\row}}}
f51\fs20\ql Restated Certificate of Incorporation of the Company (incorporated b
y reference to the Company\u8217?s Quarterly\plain\intbl\li22\ri22\sa22\cf1\f51\
fs20\ql Report on Form 10-Q for the Quarter ended March 31, 2000).\cell{
1
1\row}}}
f51\fs20\ql Amended and Restated Bylaws of the Company (incorporated by referenc
e to the Company\u8217?s Current\plain\intbl\li22\ri22\sa22\cf1\f51\fs20\ql Rep
ort on Form\~8-K, filed February\~18, 2009).\cell{
1
1\row}}}
f51\fs20\ql Indenture, dated as of November 29, 2012, between Amazon.com, Inc. a
nd Wells Fargo Bank, National\plain\intbl\li22\ri22\cf1\f51\fs20\ql Association
, as trustee, and Form of 0.650% Note due 2015, Form of 1.200% Note due 2017, an
d Form of 2.500%\plain\intbl\li22\ri22\cf1\f51\fs20\ql Note due 2022 (incorpora
ted by reference to the Company\u8217?s Current Report on Form\~8-K, filed Novem
ber\plain\intbl\li22\ri22\sa22\cf1\f51\fs20\ql 29, 2012).\cell{
1
1\row}}}
f51\fs20\ql Officers\u8217? Certificate Establishing the Terms of Notes, dated a
s of December 5, 2014, containing Form of\plain\intbl\li22\ri22\cf1\f51\fs20\ql
2.600% Note due 2019, Form of 3.300% Note due 2021, Form of 3.800% Note due 202
4, Form of 4.800% Note\plain\intbl\li22\ri22\cf1\f51\fs20\ql due 2034, and Form
of 4.950% Note due 2044 (incorporated by reference to the Company\u8217?s Curre
nt Report\plain\intbl\li22\ri22\sa22\cf1\f51\fs20\ql on Form 8-K, filed Decembe
r 5, 2014).\cell{
1
1\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql 10.1\u8224?\cell\pard\plai
b22\cf1\f51\fs20\ql 1997 Stock Incentive Plan (amended and restated) (incorporat
ed by reference to the Company\u8217?s Quarterly\plain\intbl\li22\ri22\sa22\cf1\
f51\fs20\ql Report on Form 10-Q for the Quarter ended March 31, 2013).\cell{
1
1\row}}}
b22\cf1\f51\fs20\ql 1999 Nonofficer Employee Stock Option Plan (amended and rest
ated) (incorporated by reference to the\plain\intbl\li22\ri22\sa22\cf1\f51\fs20\
ql Company\u8217?s Quarterly Report on Form 10-Q for the Quarter ended March 31
, 2013).\cell{
1
1\row}}}
b22\cf1\f51\fs20\ql Offer Letter of Employment to Diego Piacentini, dated Januar
y 17, 2000 (incorporated by reference to the\plain\intbl\li22\ri22\sa22\cf1\f51\
fs20\ql Company\u8217?s Annual Report on Form 10-K for the Year ended December
31, 2000).\cell{
1
1\row}}}
b22\cf1\f51\fs20\ql Form of Indemnification Agreement between the Company and ea
ch of its Directors (incorporated by reference to\plain\intbl\li22\ri22\sa22\cf1
\f51\fs20\ql the Company\u8217?s Registration Statement on Form S-1 (Registrati
on No. 333-23795) filed March\~24, 1997).\cell{
1
1\row}}}
b22\cf1\f51\fs20\ql Form of Restricted Stock Unit Agreement for Officers and Emp
loyees (incorporated by reference to the\plain\intbl\li22\ri22\sa22\cf1\f51\fs20
\ql Company\u8217?s Annual Report on Form 10-K for the Year ended December\~31,
2002).\cell{
1
1\row}}}
b22\cf1\f51\fs20\ql Form of Restricted Stock Unit Agreement for Directors (incor
porated by reference to the Company\u8217?s Annual\plain\intbl\li22\ri22\sa22\cf
1\f51\fs20\ql Report on Form 10-K for the Year ended December 31, 2002).\cell{
1
1\row}}}
b22\cf1\f51\fs20\ql Form of Restricted Stock Agreement (incorporated by referenc
e to the Company\u8217?s Annual Report on Form\plain\intbl\li22\ri22\sa22\cf1\f5
1\fs20\ql 10-K for the Year ended December\~31, 2001).\cell{
1
1\row}}}
b22\cf1\f51\fs20\ql Form of Global Restricted Stock Unit Award Agreement for Exe
cutive Officers (incorporated by reference to the\plain\intbl\li22\ri22\sa22\cf1
\f51\fs20\ql Company\u8217?s Quarterly Report on Form 10-Q for the Quarter ende
d March 31, 2014).\cell{
1
1\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql 10.9\cell\pard\plain\intbl
\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\cf1
\f51\fs20\ql Credit Agreement, dated as of September 5, 2014, among Amazon.com,
Inc., Bank of America, N.A., as\plain\intbl\li22\ri22\cf1\f51\fs20\ql administr
ative agent, and the other lenders party thereto, and conformed page thereto (in
corporated by reference to\plain\intbl\li22\ri22\cf1\f51\fs20\ql the Company\u8
217?s Current Report on Form 8-K, filed September 5, 2014, and Quarterly Report
on Form 10-Q\plain\intbl\li22\ri22\cf1\f51\fs20\ql for the Quarter ended Septem
ber 30, 2014, respectively).
\par\pard\plain\intbl\fs16\cell{
1
1\row}}}
2\cf1\f51\fs20\ql Computation of Ratio of Earnings to Fixed Charges.\cell{
1
1\row}}}
2\cf1\f51\fs20\ql List of Significant Subsidiaries.\cell{
1
1\row}}}
2\cf1\f51\fs20\ql Consent of Independent Registered Public Accounting Firm.\cell
{
1
1\row}}}
\f51\fs20\ql Certification of Jeffrey P. Bezos, Chairman and Chief Executive Off
icer of Amazon.com, Inc., pursuant to Rule\plain\intbl\li22\ri22\sa22\cf1\f51\fs
20\ql 13a-14(a) under the Securities Exchange Act of 1934.\cell{
1
1\row}}}
\f51\fs20\ql Certification of Brian T. Olsavsky, Senior Vice President and Chief
Financial Officer of Amazon.com, Inc.,\plain\intbl\li22\ri22\sa22\cf1\f51\fs20\
ql pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.\cell{
1
1\row}}}
\par\pard\plain
{\trowd\trqc\clvertalc\cellx864\clvertalc\cellx972\clvertalc\cellx10800\trrh-66\
row}}}
\f51\fs20\ql Certification of Jeffrey P. Bezos, Chairman and Chief Executive Off
icer of Amazon.com, Inc., pursuant to 18 U.S.C.\plain\intbl\li22\ri22\sa22\cf1\f
51\fs20\ql Section 1350.\cell{
{\trowd\trqc\clvertalb\cellx864\clvertalb\cellx972\clvertalb\cellx10800\trrh281\
row}}}
\f51\fs20\ql Certification of Brian T. Olsavsky, Senior Vice President and Chief
Financial Officer of Amazon.com, Inc., pursuant\plain\intbl\li22\ri22\sa22\cf1\
f51\fs20\ql to 18 U.S.C. Section 1350.\cell{
{\trowd\trqc\clvertalb\cellx864\clvertalb\cellx972\clvertalb\cellx10800\trrh281\
row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql 101\cell\pard\plain\intbl\
f51\fs20\ql The following financial statements from the Company\u8217?s Annual R
eport on Form 10-K for the year ended\plain\intbl\li22\ri22\cf1\f51\fs20\ql Dec
ember 31, 2015, formatted in XBRL: (i) Consolidated Statements of Cash Flows, (i
i) Consolidated Statements of\plain\intbl\li22\ri22\cf1\f51\fs20\ql Operations,
(iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated
Balance Sheets, (v)\plain\intbl\li22\ri22\cf1\f51\fs20\ql Consolidated Stateme
nts of Stockholders\u8217? Equity, and (vi) Notes to Consolidated Financial Stat
ements, tagged\plain\intbl\li22\ri22\sa22\cf1\f51\fs20\ql as blocks of text and
including detailed tags.\cell{
{\trowd\trqc\cellx864\clvertalb\cellx972\clvertalb\cellx10800\trrh1271\row}}}\pa
rd\plain\cf1\f51\fs20\ql ___________________\par\pard\plain\sa66\cf1\f51\fs12\ql
\~
\par\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql \u8224?\cell\pard\plain\intbl\cf1\f51\fs20\ql
Executive Compensation Plan or\plain\intbl\cf1\f51\fs20\ql Agreement\cell{
\par\pard\plain\fs16\pard\plain\cf1\f51\fs20\qc 78
\page{\*\bkmkstart doc_1_2}{\*\bkmkend doc_1_2}{\*\bkmkstart sB6C1DFBDED39B3361A
D6ABB22F78A3E}{\*\bkmkend sB6C1DFBDED39B3361AD6ABB22F78A3E}
\par\pard\plain\fs16\par\pard\plain\cf1\f51\fs20\b\qr Exhibit 12.1\par\pard\plai
n\sb132\cf1\f51\fs20\b\qc Ratio of Earnings to Fixed Charges\par\pard\plain\sb13
2\cf1\f51\fs20\b\qc (in millions)\par\pard\plain\cf1\f51\fs18\ql \~
\par\pard\plain
lc\cellx10685\clvertalc\cellx10792\trrh-66
lc\cellx10685\clvertalc\cellx10792\trrh-66\row}}}
{\trowd\trqc\clvertalb\cellx4247\clvertalb\cellx4354\clbrdrb\brdrs\brdrcf1\clver
talb\cellx10799\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs8\ql \~\cell\pard\plain\intbl\li
1\fs14\b\qc Year Ended December\~31,\cell{
{\trowd\trqc\clvertalb\cellx4247\clvertalb\cellx4354\clbrdrb\brdrs\brdrcf1\clver
talb\cellx10799\trrh281\row}}}
{\trowd\trqc\clvertalb\cellx4247\clbrdrb\brdrs\brdrcf1\clvertalb\cellx4354\clbrd
rb\brdrs\brdrcf1\clvertalb\cellx5542\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5649\c
lbrdrb\brdrs\brdrcf1\clvertalb\cellx6916\clbrdrb\brdrs\brdrcf1\clvertalb\cellx70
lx8315\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9500\clbrdrb\brdrs\brdrcf1\clvertalb
\cellx9607\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10795\trrh281
22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li132\ri22\sb22\sa22\
\~\cell\pard\plain\intbl\li132\ri22\sb22\sa22\cf1\f51\fs14\b\qc 2014\cell\pard\
plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li132\r
i22\sb22\sa22\cf1\f51\fs14\b\qc 2013\cell\pard\plain\intbl\li22\ri22\sb22\sa22\c
f1\f51\fs20\ql \~\cell\pard\plain\intbl\li132\ri22\sb22\sa22\cf1\f51\fs14\b\qc 2
012\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain
\intbl\li132\ri22\sb22\sa22\cf1\f51\fs14\b\qc 2011\cell{
{\trowd\trqc\clvertalb\cellx4247\clbrdrb\brdrs\brdrcf1\clvertalb\cellx4354\clbrd
rb\brdrs\brdrcf1\clvertalb\cellx5542\clbrdrb\brdrs\brdrcf1\clvertalb\cellx5649\c
lbrdrb\brdrs\brdrcf1\clvertalb\cellx6916\clbrdrb\brdrs\brdrcf1\clvertalb\cellx70
lx8315\clbrdrb\brdrs\brdrcf1\clvertalb\cellx9500\clbrdrb\brdrs\brdrcf1\clvertalb
\cellx9607\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10795\trrh281\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Earnings available for fix
ed charges:\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pa
rd\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs8\ql \~\cell\pard\plain\intbl\li22\
f51\fs8\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\
pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs8\ql \~\cell\pard\plain\intbl\li2
1\f51\fs8\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cel
{\trowd\trqc\clvertalb\cellx4247\clvertalb\cellx4354\clvertalb\cellx4474\clverta
lb\cellx5435\clvertalb\cellx5542\clvertalb\cellx5649\clvertalb\cellx5847\clverta
lb\cellx10685\clvertalb\cellx10792\trrh281
\pard\plain\intbl\li330\ri22\sb22\sa22\cf1\f51\fs20\ql Income (loss) before inco
me taxes\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\
plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1
\f51\fs20\qr 1,568\cell
lb\cellx10685\clvertalb\cellx10792\trrh281\row}}}
\pard\plain\intbl\li330\ri22\sb22\sa22\cf1\f51\fs20\ql Fixed charges, excluding
capitalized interest\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \
{\trowd\trqc\clvertalb\cellx4247\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\cl
s\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx5542\clbrdrt\brdrs\brdrcf1\clbrd
rb\brdrdb\brdrcf1\clvertalb\cellx5649\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrc
f1\clvertalb\cellx5847\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\ce
brdrcf1\clvertalb\cellx8099\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clverta
lb\cellx8206\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8313\cl
brdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx8433\clbrdrt\brdrs\brd
rcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx9390\clbrdrt\brdrs\brdrcf1\clbrdrb\br
24\clbrdrt\brdrs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10685\clbrdrt\brd
rs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10792\trrh298
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Total earnings available f
or fixed charges\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\ce

rs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10792\trrh298\row}}}
lb\cellx9390\clvertalb\cellx9497\clvertalb\cellx9604\clvertalb\cellx10685\clvert
1\fs2\qr \~\cell
f51\fs2\qr \~\cell
f51\fs2\qr \~\cell
f51\fs2\qr \~\cell
f51\fs2\qr \~\cell
lb\cellx9390\clvertalb\cellx9497\clvertalb\cellx9604\clvertalb\cellx10685\clvert
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Fixed charges:\cell\pard\p
2\sb22\sa22\cf1\f51\fs8\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\
fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs8\ql \~\cell\pard
i22\sb22\sa22\cf1\f51\fs8\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f5
1\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs8\ql \~\cell\pa
\ri22\sb22\sa22\cf1\f51\fs8\ql \~\cell{
lb\cellx10685\clvertalb\cellx10792\trrh281
\pard\plain\intbl\li330\ri22\sb22\sa22\cf1\f51\fs20\ql Interest and debt expense
(1)\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plai
\fs20\qr 484\cell
lb\cellx10685\clvertalb\cellx10792\trrh281\row}}}
\pard\plain\intbl\li330\ri22\sb22\cf1\f51\fs20\ql Assumed interest element inclu
ded in rent\plain\intbl\li330\ri22\sa22\cf1\f51\fs20\ql expense\cell\pard\plain
\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa
f51\fs20\qr 74\cell
f51\fs20\qr 57\cell
f51\fs20\qr 41\cell
f51\fs20\qr 43\cell
rs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10792\trrh298
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Total fixed charges\cell\p
2\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 57
2\cell
rs\brdrcf1\clbrdrb\brdrdb\brdrcf1\clvertalb\cellx10792\trrh298\row}}}
lb\cellx8315\clvertalb\cellx9500\clvertalb\cellx9607\clvertalb\cellx10795\trrh28
1
f1\f51\fs2\qc \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\ce
ll\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs2\qc \~\cell\pard\plain\intbl\
\cf1\f51\fs2\qc \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\
cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs2\qc \~\cell\pard\plain\intb
22\cf1\f51\fs2\qc \~\cell{
lb\cellx8315\clvertalb\cellx9500\clvertalb\cellx9607\clvertalb\cellx10795\trrh28
1\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Ratio of earnings to fixed
charges (2)\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\p
ard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 3.70\cell
clcfpat10\clcbpat10\cellx10792\trrh281\row}}}\pard\plain\cf1\f51\fs20\ql _______
____________\par\pard\plain\sa66\cf1\f51\fs12\ql \~
\par\pard\plain
udes amortization of debt-related expenses plus interest capitalized during the\
plain\intbl\cf1\f51\fs20\ql period.\cell{
\pard\plain
\pard\plain\intbl\cf1\f51\fs20\ql (2)\cell
\page\pard\plain\intbl\cf1\f51\fs20\ql In 2014, our earnings were insufficient t
o cover fixed charges by $117\plain\intbl\cf1\f51\fs20\ql million.\cell{
\par\pard\plain\fs16\pard\plain\sb264\cf1\f51\fs2\ql \~
\page{\*\bkmkstart doc_1_3}{\*\bkmkend doc_1_3}{\*\bkmkstart sAD20E1286BCAECBCDE
2EABB280AEABC}{\*\bkmkend sAD20E1286BCAECBCDE2EABB280AEABC}
n\sb264\cf1\f51\fs20\b\qc AMAZON.COM, INC.\par\pard\plain\cf1\f51\fs20\b\qc LIST
OF SIGNIFICANT SUBSIDIARIES\par\pard\plain\cf1\f51\fs18\ql \~
\par\pard\plain
lc\cellx9070\clvertalc\cellx10327\clvertalc\cellx10797\trrh-66
lc\cellx9070\clvertalc\cellx10327\clvertalc\cellx10797\trrh-66\row}}}
ertalb\cellx7268\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8964\clbrdrb\brdrs\brdrcf1
\clvertalb\cellx9070\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10798\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\ql Legal Name\cell\pard\pla
sb22\sa22\cf1\f51\fs14\b\qc Jurisdiction\cell\pard\plain\intbl\li22\ri22\sb22\sa
22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs14\b\q
c Percent\~Owned\cell{
ertalb\cellx7268\clbrdrb\brdrs\brdrcf1\clvertalb\cellx8964\clbrdrb\brdrs\brdrcf1
\clvertalb\cellx9070\clbrdrb\brdrs\brdrcf1\clvertalb\cellx10798\trrh281\row}}}
cfpat10\clcbpat10\cellx10327\clvertalb\clshdng100\clcfpat10\clcbpat10\cellx10797
\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Amazon Services LLC\cell\p
2\ri22\sb22\sa22\cf1\f51\fs20\qc Nevada\cell\pard\plain\intbl\li22\ri22\sb22\sa2
2\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 100\ce
ll\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql %\cell{
\trrh281\row}}}
lb\cellx9070\clvertalb\cellx10327\clvertalb\cellx10797\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Amazon Digital Services LL
C\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\plain\i
ntbl\li22\ri22\sb22\sa22\cf1\f51\fs20\qc Delaware\cell\pard\plain\intbl\li22\ri2
\qr 100\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql %\cell{
lb\cellx9070\clvertalb\cellx10327\clvertalb\cellx10797\trrh281\row}}}
\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Amazon Web Services, Inc.\
bl\li22\ri22\sb22\sa22\cf1\f51\fs20\qc Delaware\cell\pard\plain\intbl\li22\ri22\
r 100\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql %\cell{
\trrh281\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Amazon EU S.\u224? r.l.\ce
\li22\ri22\sb22\sa22\cf1\f51\fs20\qc Luxembourg\cell\pard\plain\intbl\li22\ri22\
r 100\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql %\cell{
\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Amazon Europe Holding Tech
nologies SCS\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\p
ard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\qc Luxembourg\cell\pard\plain\i
\cf1\f51\fs20\qr 100\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql %\cell
{
\trrh281\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Amazon Fulfillment Service
s, Inc.\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\p
lain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\qc Delaware\cell\pard\plain\intbl\li
1\fs20\qr 100\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql %\cell{
\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Amazon Services Internatio
nal, Inc.\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard
\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\qc Delaware\cell\pard\plain\intbl\
f51\fs20\qr 100\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql %\cell{
\trrh281\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Amazon Corporate LLC\cell\
22\ri22\sb22\sa22\cf1\f51\fs20\qc Delaware\cell\pard\plain\intbl\li22\ri22\sb22\
sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 100
\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql %\cell{
\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Amazon Technologies, Inc.\
bl\li22\ri22\sb22\sa22\cf1\f51\fs20\qc Nevada\cell\pard\plain\intbl\li22\ri22\sb
100\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql %\cell{
\trrh281\row}}}
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Amazon.com Int\u8217?l Sal
es, Inc.\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\
plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\qc Delaware\cell\pard\plain\intbl\l
51\fs20\qr 100\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql %\cell{
\trrh281
\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Amazon.com LLC\cell\pard\p
2\sb22\sa22\cf1\f51\fs20\qc Delaware\cell\pard\plain\intbl\li22\ri22\sb22\sa22\c
f1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\qr 100\cell\
pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs20\ql %\cell{
\trrh281\row}}}\pard\plain\sb264\cf1\f51\fs2\ql \~
\page{\*\bkmkstart doc_1_4}{\*\bkmkend doc_1_4}{\*\bkmkstart s563F51352F5CD72283
6EABB271D6E4D}{\*\bkmkend s563F51352F5CD722836EABB271D6E4D}
n\cf1\f51\fs12\ql \~\par\pard\plain\cf1\f51\fs20\b\qc Consent of Independent Reg
istered Public Accounting Firm\par\pard\plain\sb264\cf1\f51\fs20\ql We consent t
o the incorporation by reference in the following Registration Statements:
\par\pard\plain
\pard\plain\intbl\li484\cf1\f51\fs20\ql (a)\cell\pard\plain\intbl\cf1\f51\fs20\q
l Registration Statement (Form S-4 No.\~333-55943), as amended, pertaining to th
e acquisition shelf-registration of up\plain\intbl\cf1\f51\fs20\ql to 30\~milli
on shares of common stock,\cell{
\pard\plain
\pard\plain\intbl\li484\cf1\f51\fs20\ql (b)\cell\pard\plain\intbl\cf1\f51\fs20\q
e Amazon.com, Inc. 1997 Stock\plain\intbl\cf1\f51\fs20\ql Incentive Plan (forme
rly the \u8220?1997 Stock Option Plan\u8221?) and the Amended and Restated 1994
Stock\plain\intbl\cf1\f51\fs20\ql Option Plan of Amazon.com, Inc.,\cell{
\pard\plain
\pard\plain\intbl\li484\cf1\f51\fs20\ql (c)\cell\pard\plain\intbl\cf1\f51\fs20\q
l Registration Statement (Form S-8 No.\~333-88825) pertaining to the Convergence
Corporation Stock Option\plain\intbl\cf1\f51\fs20\ql Plan,\cell{
\pard\plain
\pard\plain\intbl\li484\cf1\f51\fs20\ql (d)\cell\pard\plain\intbl\cf1\f51\fs20\q
l Registration Statement (Form S-8 No.\~333-80491) pertaining to the Alexa Inter

net Amended and Restated 1997\plain\intbl\cf1\f51\fs20\ql Stock Option Plan,\ce
ll{
\pard\plain
\pard\plain\intbl\li484\cf1\f51\fs20\ql (e)\cell\pard\plain\intbl\cf1\f51\fs20\q
l Registration Statement (Form S-8 No.\~333-80495) pertaining to the Accept.com
Financial Services Corporation 1998\plain\intbl\cf1\f51\fs20\ql Stock Plan,\cel
l{
\pard\plain
\pard\plain\intbl\li484\cf1\f51\fs20\ql (f)\cell\pard\plain\intbl\cf1\f51\fs20\q
l Registration Statement (Form S-8 No.\~333-78651) pertaining to the Innerlinx T
echnologies, Incorporated 1997 Stock\plain\intbl\cf1\f51\fs20\ql Option Plan,\c
ell{
\pard\plain
\pard\plain\intbl\li484\cf1\f51\fs20\ql (g)\cell\pard\plain\intbl\cf1\f51\fs20\q
l Registration Statement (Form S-8 No.\~333-78653) pertaining to the e-Niche Inc
orporated Amended and Restated\plain\intbl\cf1\f51\fs20\ql 1998 Stock Option an
d Grant Plan,\cell{
\pard\plain
\pard\plain\intbl\li484\cf1\f51\fs20\ql (h)\cell\pard\plain\intbl\cf1\f51\fs20\q
l Registration Statement (Form S-8 No.\~333-74419) pertaining to the Amazon.com,
Inc. 1999 Nonofficer Employee\plain\intbl\cf1\f51\fs20\ql Stock Option Plan,\c
ell{
\pard\plain
\pard\plain\intbl\li484\cf1\f51\fs20\ql (i)\cell\pard\plain\intbl\cf1\f51\fs20\q
e Junglee Corp. 1996 Stock Plan, the\plain\intbl\cf1\f51\fs20\ql Junglee Corp.
1998 Equity Incentive Plan, the Sage Enterprises, Inc. 1997 Amended Stock Option
Plan, and the Sage\plain\intbl\cf1\f51\fs20\ql Enterprises, Inc. MVP Stock Opt
ion Plan,\cell{
\pard\plain
\pard\plain\intbl\li484\cf1\f51\fs20\ql (j)\cell\pard\plain\intbl\cf1\f51\fs20\q
l Registration Statement (Form S-8 No.\~333-118818) pertaining to the Joyo.com L
imited 2004 Share Option\plain\intbl\cf1\f51\fs20\ql Plan,\cell{
\pard\plain
\pard\plain\intbl\li484\cf1\f51\fs20\ql (k)\cell\pard\plain\intbl\cf1\f51\fs20\q
l Registration Statement (Form S-8 No.\~333-149845) pertaining to the Audible, I
nc. 1999 Stock Incentive\plain\intbl\cf1\f51\fs20\ql Plan,\cell{
\pard\plain
\pard\plain\intbl\li484\cf1\f51\fs20\ql (l)\cell\pard\plain\intbl\cf1\f51\fs20\q
l Registration Statement (Form S-8 POS No.\~333-160831) pertaining to the Zappos
.com, Inc. 2009 Stock\plain\intbl\cf1\f51\fs20\ql Plan,\cell{
\pard\plain
\pard\plain\intbl\li484\cf1\f51\fs20\ql (m)\cell\pard\plain\intbl\cf1\f51\fs20\q
l Registration Statement (Form S-8 No.\~333-169470) pertaining to 25,000,000 sha
res of Common Stock, par value\plain\intbl\cf1\f51\fs20\ql $0.01\~per\~share, t
o be issued pursuant to the Company\u8217?s 1997 Stock Incentive Plan,\cell{
\pard\plain
\pard\plain\intbl\li484\cf1\f51\fs20\ql (n)\cell\pard\plain\intbl\cf1\f51\fs20\q
l Registration Statement (Form S-8 No.\~333-173054), pertaining to the Quidsi, I
nc. (fka1800Diapers, Inc.) 2006 Stock\plain\intbl\cf1\f51\fs20\ql Option/Stock
Issuance Plan,\cell{
\pard\plain
\pard\plain\intbl\li484\cf1\f51\fs20\ql (o)\cell\pard\plain\intbl\cf1\f51\fs20\q
l Registration Statement (Form S-8 No.\~333-181073) pertaining to the Kiva Syste
ms, Inc. 2003 Stock Plan, as\plain\intbl\cf1\f51\fs20\ql amended,\cell{
\pard\plain
\pard\plain\intbl\li484\cf1\f51\fs20\ql (p)\cell\pard\plain\intbl\cf1\f51\fs20\q
l Registration Statement (Form S-3 No.\~333-185137) pertaining to the shelf-regi
stration of Amazon.com, Inc.\plain\intbl\cf1\f51\fs20\ql securities,\cell{
\pard\plain
\pard\plain\intbl\li484\cf1\f51\fs20\ql (q)\cell\pard\plain\intbl\cf1\f51\fs20\q
l Registration Statement (Form S-8 No. 333-199572) pertaining to the Twitch Inte
ractive, Inc. Amended and Restated\plain\intbl\cf1\f51\fs20\ql 2007 Stock Plan,
and\cell{
\pard\plain
\pard\plain\intbl\li484\cf1\f51\fs20\ql (r)\cell\pard\plain\intbl\cf1\f51\fs20\q
l Registration Statement (Form S-8 No. 333-207591) pertaining to the Elemental T
echnologies, Inc. 2006 Stock\plain\intbl\cf1\f51\fs20\ql Incentive Plan, as ame
nded and restated.\cell{
{\trowd\cellx960\cellx10800\trrh495\row}}}\pard\plain\sb264\cf1\f51\fs20\ql of o
ur reports dated January\~28, 2016, with respect to the consolidated financial s
tatements of Amazon.com, Inc. and the\plain\cf1\f51\fs20\ql effectiveness of in
ternal control over financial reporting of Amazon.com, Inc. included in this Ann
ual Report (Form 10-K) of\plain\cf1\f51\fs20\ql Amazon.com, Inc. for the year e
nded December\~31, 2015.\par\pard\plain\sb264\cf1\f51\fs20\qc /s/ Ernst & Young
LLP\par\pard\plain\sb264\cf1\f51\fs20\ql Seattle, Washington\par\pard\plain\cf1\
f51\fs20\ql January\~28, 2016 \par\pard\plain\sb264\cf1\f51\fs2\ql \~
\page{\*\bkmkstart doc_1_5}{\*\bkmkend doc_1_5}{\*\bkmkstart s9FCD5D594DFB580EAF
89ABB27C94D70}{\*\bkmkend s9FCD5D594DFB580EAF89ABB27C94D70}
n\sb264\cf1\f51\fs20\b\qc CERTIFICATIONS\par\pard\plain\sb264\cf1\f51\fs20\ql I,
Jeffrey P. Bezos, certify that:\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql 1. I
have reviewed this Form 10-K of Amazon.com, Inc.;\par\pard\plain\sb132\fi528\cf
1\f51\fs20\ql 2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material\plain\cf1\f51\fs20\ql
fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not\plain\cf1\f51\fs20\ql misleading with resp
ect to the period covered by this report;\par\pard\plain\sb264\fi528\cf1\f51\fs2
0\ql 3. Based on my knowledge, the financial statements, and other financial inf
ormation included in this report, fairly present in\plain\cf1\f51\fs20\ql all m
aterial respects the financial condition, results of operations and cash flows o
f the registrant as of, and for, the periods\plain\cf1\f51\fs20\ql presented in
this report;\par\pard\plain\sb264\fi528\cf1\f51\fs20\ql 4. The registrant\u8217
?s other certifying officer(s) and I are responsible for establishing and mainta
ining disclosure\plain\cf1\f51\fs20\ql controls and procedures (as defined in E
xchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial\p
lain\cf1\f51\fs20\ql reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:\par\pard\plain\li528\sb132\fi528\cf1\f51
\fs20\ql (a) Designed such disclosure controls and procedures, or caused such di
sclosure controls and procedures to be\plain\li528\cf1\f51\fs20\ql designed und
er our supervision, to ensure that material information relating to the registra
nt, including its consolidated\plain\li528\cf1\f51\fs20\ql subsidiaries, is mad
e known to us by others within those entities, particularly during the period in
which this report is being\plain\li528\cf1\f51\fs20\ql prepared;\par\pard\plai
n\li528\sb132\fi528\cf1\f51\fs20\ql (b) Designed such internal control over fina
ncial reporting, or caused such internal control over financial reporting to\pla
in\li528\cf1\f51\fs20\ql be designed under our supervision, to provide reasonab
le assurance regarding the reliability of financial reporting and the\plain\li52
8\cf1\f51\fs20\ql preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;\par\pard\plain\li528\s
b132\fi528\cf1\f51\fs20\ql (c) Evaluated the effectiveness of the registrant\u82
17?s disclosure controls and procedures and presented in this\plain\li528\cf1\f5
1\fs20\ql report our conclusions about the effectiveness of the disclosure cont
rols and procedures, as of the end of the period covered\plain\li528\cf1\f51\fs2
0\ql by this report based on such evaluation; and\par\pard\plain\li528\sb132\fi
528\cf1\f51\fs20\ql (d) Disclosed in this report any change in the registrant\u8
217?s internal control over financial reporting that occurred\plain\li528\cf1\f5
1\fs20\ql during the registrant\u8217?s most recent fiscal quarter (the registr
ant\u8217?s fourth fiscal quarter in the case of an annual\plain\li528\cf1\f51\f
s20\ql report) that has materially affected, or is reasonably likely to materia
lly affect, the registrant\u8217?s internal control over\plain\li528\cf1\f51\fs2
0\ql financial reporting; and\par\pard\plain\sb264\fi528\cf1\f51\fs20\ql 5. The
registrant\u8217?s other certifying officer(s) and I have disclosed, based on o
ur most recent evaluation of internal\plain\cf1\f51\fs20\ql control over financ
ial reporting, to the registrant\u8217?s auditors and the audit committee of the
registrant\u8217?s board of\plain\cf1\f51\fs20\ql directors (or persons perfor
ming the equivalent functions):\par\pard\plain\li528\sb132\fi528\cf1\f51\fs20\ql
(a) All significant deficiencies and material weaknesses in the design or opera
tion of internal control over financial\plain\li528\cf1\f51\fs20\ql reporting w
hich are reasonably likely to adversely affect the registrant\u8217?s ability to
record, process, summarize and\plain\li528\cf1\f51\fs20\ql report financial in
formation; and\par\pard\plain\li528\sb132\fi528\cf1\f51\fs20\ql (b) Any fraud, w
hether or not material, that involves management or other employees who have a s
ignificant role in\plain\li528\cf1\f51\fs20\ql the registrant\u8217?s internal
control over financial reporting.\par\pard\plain\cf1\f51\fs18\ql \~
\par\pard\plain
{\trowd\clvertalb\cellx4536\clbrdrb\brdrs\brdrcf1\cellx10800\trrh281
i22\ri22\sb22\sa22\cf1\f51\fs20\qc /s/ Jeffrey P. Bezos\cell{
{\trowd\clvertalb\cellx4536\clbrdrb\brdrs\brdrcf1\cellx10800\trrh281\row}}}
i22\ri22\sb22\sa22\cf1\f51\fs20\b\qc Jeffrey P. Bezos\cell{
i22\ri22\sb22\sa22\cf1\f51\fs20\b\qc Chairman and Chief Executive Officer\par\pa
rd\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\qc (Principal Executive Office
r)\cell{
{\trowd\clvertalb\cellx4536\clvertalb\cellx10800\trrh529\row}}}\pard\plain\sb264
\cf1\f51\fs20\ql Date: January\~28, 2016
\page{\*\bkmkstart doc_1_6}{\*\bkmkend doc_1_6}{\*\bkmkstart s15A3B2143401844FBF
6BABB27BF4BE7}{\*\bkmkend s15A3B2143401844FBF6BABB27BF4BE7}
n\sb264\cf1\f51\fs20\b\qc CERTIFICATIONS\par\pard\plain\sb396\cf1\f51\fs20\ql I,
Brian T. Olsavsky, certify that:\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql 1.
I have reviewed this Form 10-K of Amazon.com, Inc.;\par\pard\plain\sb132\fi528\c

f1\f51\fs20\ql 2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material\plain\cf1\f51\fs20\ql
fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not\plain\cf1\f51\fs20\ql misleading with res
pect to the period covered by this report;\par\pard\plain\sb264\fi528\cf1\f51\fs
20\ql 3. Based on my knowledge, the financial statements, and other financial in
formation included in this report, fairly present in\plain\cf1\f51\fs20\ql all
material respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods\plain\cf1\f51\fs20\ql presented i
n this report;\par\pard\plain\sb264\fi528\cf1\f51\fs20\ql 4. The registrant\u821
7?s other certifying officer(s) and I are responsible for establishing and maint
aining disclosure\plain\cf1\f51\fs20\ql controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial\
plain\cf1\f51\fs20\ql reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) for the registrant and have:\par\pard\plain\li528\sb132\fi528\cf1\f5
1\fs20\ql (a) Designed such disclosure controls and procedures, or caused such d
isclosure controls and procedures to be\plain\li528\cf1\f51\fs20\ql designed un
der our supervision, to ensure that material information relating to the registr
ant, including its consolidated\plain\li528\cf1\f51\fs20\ql subsidiaries, is ma
de known to us by others within those entities, particularly during the period i
n which this report is being\plain\li528\cf1\f51\fs20\ql prepared;\par\pard\pla
in\li528\sb132\fi528\cf1\f51\fs20\ql (b) Designed such internal control over fin
ancial reporting, or caused such internal control over financial reporting to\pl
ain\li528\cf1\f51\fs20\ql be designed under our supervision, to provide reasona
ble assurance regarding the reliability of financial reporting and the\plain\li5
28\cf1\f51\fs20\ql preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;\par\pard\plain\li528\
sb132\fi528\cf1\f51\fs20\ql (c) Evaluated the effectiveness of the registrant\u8
217?s disclosure controls and procedures and presented in this\plain\li528\cf1\f
51\fs20\ql report our conclusions about the effectiveness of the disclosure con
trols and procedures, as of the end of the period covered\plain\li528\cf1\f51\fs
20\ql by this report based on such evaluation; and\par\pard\plain\li528\sb132\f
i528\cf1\f51\fs20\ql (d) Disclosed in this report any change in the registrant\u
8217?s internal control over financial reporting that occurred\plain\li528\cf1\f
51\fs20\ql during the registrant\u8217?s most recent fiscal quarter (the regist
rant\u8217?s fourth fiscal quarter in the case of an annual\plain\li528\cf1\f51\
fs20\ql report) that has materially affected, or is reasonably likely to materi
ally affect, the registrant\u8217?s internal control over\plain\li528\cf1\f51\fs
20\ql financial reporting; and\par\pard\plain\sb264\fi528\cf1\f51\fs20\ql 5. Th
e registrant\u8217?s other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal\plain\cf1\f51\fs20\ql control over finan
cial reporting, to the registrant\u8217?s auditors and the audit committee of th
e registrant\u8217?s board of\plain\cf1\f51\fs20\ql directors (or persons perfo
rming the equivalent functions):\par\pard\plain\li528\sb132\fi528\cf1\f51\fs20\q
l (a) All significant deficiencies and material weaknesses in the design or oper
ation of internal control over financial\plain\li528\cf1\f51\fs20\ql reporting
which are reasonably likely to adversely affect the registrant\u8217?s ability t
o record, process, summarize and\plain\li528\cf1\f51\fs20\ql report financial i
nformation; and\par\pard\plain\li528\sb132\fi528\cf1\f51\fs20\ql (b) Any fraud,
whether or not material, that involves management or other employees who have a
significant role in\plain\li528\cf1\f51\fs20\ql the registrant\u8217?s internal
control over financial reporting.\par\pard\plain\cf1\f51\fs18\ql \~
\par\pard\plain
i22\ri22\sb22\sa22\cf1\f51\fs20\qc /s/ Brian T. Olsavsky\cell{
i22\ri22\sb22\sa22\cf1\f51\fs20\b\qc Brian T. Olsavsky\cell{
i22\ri22\sb22\sa22\cf1\f51\fs20\b\qc Senior Vice President and\par\pard\plain\in
tbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\qc Chief Financial Officer\par\pard\plain
\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\qc (Principal Financial Officer)\cell{
\page{\*\bkmkstart doc_1_7}{\*\bkmkend doc_1_7}{\*\bkmkstart s06C4169596DEA4B2EB
F4ABB27F64CDF}{\*\bkmkend s06C4169596DEA4B2EBF4ABB27F64CDF}
n\sb264\cf1\f51\fs20\b\qc Certification Pursuant to 18 U.S.C. Section\~1350\par\
pard\plain\sb264\fi528\cf1\f51\fs20\ql In connection with the Annual Report of A
mazon.com, Inc. (the \u8220?Company\u8221?) on Form 10-K for the year\plain\cf1\
f51\fs20\ql ended December\~31, 2015, as filed with the Securities and Exchange
Commission (the \u8220?SEC\u8221?) on or about the date\plain\cf1\f51\fs20\ql
hereof (the \u8220?Report\u8221?), I, Jeffrey\~P.\~Bezos, Chairman and Chief Exe
cutive Officer of the Company, certify, pursuant\plain\cf1\f51\fs20\ql to 18 U.
S.C. Section\~1350, as adopted pursuant to Section\~906 of the Sarbanes-Oxley Ac
t of 2002, that:\par\pard\plain\li528\sb132\fi528\cf1\f51\fs20\ql (1) The Report
fully complies with the requirements of Section\~13(a) or 15(d) of the Securiti
es Exchange Act of\plain\li528\cf1\f51\fs20\ql 1934; and\par\pard\plain\li528\s
b132\fi528\cf1\f51\fs20\ql (2) The information contained in the Report fairly pr
esents, in all material respects, the financial condition and results\plain\li52
8\cf1\f51\fs20\ql of operations of the Company.\par\pard\plain\sb264\fi528\cf1\
f51\fs20\ql A signed original of this written statement has been provided to the
Company and will be retained by the Company and\plain\cf1\f51\fs20\ql furnishe
d to the SEC or its staff upon request.\par\pard\plain\cf1\f51\fs36\ql \~
\par\pard\plain
i22\ri22\sb22\sa22\cf1\f51\fs20\qc /s/ Jeffrey P. Bezos\cell{
i22\ri22\sb22\sa22\cf1\f51\fs20\b\qc Jeffrey P. Bezos\cell{
i22\ri22\sb22\sa22\cf1\f51\fs20\b\qc Chairman and Chief Executive Officer\cell{
i22\ri22\sb22\sa22\cf1\f51\fs20\b\qc (Principal Executive Officer)\cell{

\page{\*\bkmkstart doc_1_8}{\*\bkmkend doc_1_8}{\*\bkmkstart s83F299561234A29BDD
D0ABB2800429D}{\*\bkmkend s83F299561234A29BDDD0ABB2800429D}
n\sb264\cf1\f51\fs20\b\qc Certification Pursuant to 18 U.S.C. Section\~1350\par\
pard\plain\sb264\fi528\cf1\f51\fs20\ql In connection with the Annual Report of A
mazon.com, Inc. (the \u8220?Company\u8221?) on Form 10-K for the year\plain\cf1\
f51\fs20\ql ended December\~31, 2015 as filed with the Securities and Exchange
Commission (the \u8220?SEC\u8221?) on or about the date\plain\cf1\f51\fs20\ql h
ereof (the \u8220?Report\u8221?), I, Brian T. Olsavsky, Senior Vice President an
d Chief Financial Officer of the Company,\plain\cf1\f51\fs20\ql certify, pursua
nt to 18 U.S.C. Section\~1350, as adopted pursuant to Section\~906 of the Sarban
es-Oxley Act of 2002, that:\par\pard\plain\li528\sb132\fi528\cf1\f51\fs20\ql (1)
The Report fully complies with the requirements of Section\~13(a) or 15(d) of t
he Securities Exchange Act of\plain\li528\cf1\f51\fs20\ql 1934; and\par\pard\pl
ain\li528\sb132\fi528\cf1\f51\fs20\ql (2) The information contained in the Repor
t fairly presents, in all material respects, the financial condition and results
\plain\li528\cf1\f51\fs20\ql of operations of the Company.\par\pard\plain\sb264
\fi528\cf1\f51\fs20\ql A signed original of this written statement has been prov
ided to the Company and will be retained by the Company and\plain\cf1\f51\fs20\q
l furnished to the SEC or its staff upon request.\par\pard\plain\cf1\f51\fs18\q
l \~
\par\pard\plain
i22\ri22\sb22\sa22\cf1\f51\fs20\qc /s/ Brian T. Olsavsky\cell{
ow}}}
i22\ri22\sb22\sa22\cf1\f51\fs20\b\qc Brian T. Olsavsky\cell{
i22\ri22\sb22\sa22\cf1\f51\fs20\b\qc Senior Vice President and\par\pard\plain\in
tbl\li22\ri22\sb22\sa22\cf1\f51\fs20\b\qc Chief Financial Officer\cell{
i22\ri22\sb22\sa22\cf1\f51\fs20\b\qc (Principal Financial Officer)\cell{
\page}

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sure About Market Risk}}\cell\pard\plain\intbl\li22\ri22\sb22\sa22\ul{\field{\*\

plain\intbl\li22\ri22\sb22\sa22\ul{\field{\*\fldinst HYPERLINK \\l "sA28BA970596

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rew R. Jassy.\plain\cf1\f51\fs20\ql \~Mr.\~Jassy has served as Senior Vice Presi

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petition\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql Our businesses are rapidly e

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te, energy consumption, environmental regulation, electronic\plain\cf1\f51\fs20\

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f51\fs20\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs20\qr 285.25\cell

sa22\cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\c

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pital\plain\cf1\f51\fs18\ql\super 2\plain\cf1\f51\fs20\ql and cash capital ex

ency volatilities may continue, which may significantly impact\plain\cf1\f51\fs2

ce changes are short-term\plain\cf1\f51\fs20\ql in nature or a longer-term tren

e to corporate\plain\cf1\f51\fs20\ql multinationals. The U.S., the European Uni

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securities. Cash provided by (used\plain\cf1\f51\fs20\ql in) investing activiti

undistributed earnings indefinitely outside of the U.S. If our intent changes\pl

se common stock, pay dividends, or\plain\cf1\f51\fs20\ql repurchase, refinance,

\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell{

\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Percent of Net Sales (5):\

5413F" }{\*\fldrslt\cf3\f51\fs20\ql Table of Contents}}

f51\fs14\qr (294\cell\pard\plain\intbl\ri22\sb22\sa22\cf1\f51\fs14\ql )\cell\par

\plain\cf1\f51\fs20\ql corresponding change in our marketing expense.\par\pard\

nd\plain\cf1\f51\fs20\ql professional service fees.

lain\cf1\f51\fs20\ql losses in certain foreign subsidiaries for which we may no

ncluding\plain\cf1\f51\fs20\ql internal-use software and website development, n

cf1\f51\fs20\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\

f51\fs20\ql acquisitions. Additionally, our mix of property and equipment acqui

due to changes in interest rates.\par\pard\plain\sb132\fi528\cf1\f51\fs20\ql The

16\b\qc Thereafter\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\

\pard\plain\intbl\li22\ri22\sb22\cf1\f51\fs18\ql Foreign government and\plain\in

r\~29, 2022\cell\pard\plain\intbl\li22\sb22\sa22\cf1\f51\fs20\ql $\cell\pard\pla

\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs18\ql Accrued expenses and othe

f51\fs18\ql $\cell\pard\plain\intbl\sb22\sa22\cf1\f51\fs18\qr 14,557\cell

\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Net income (loss)\cell\par

\par\pard\plain\fs16\par\pard\plain\cf1\f51\fs20\b\qc AMAZON.COM, INC.\par\pard\

ain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intb

\pard\plain\intbl\li462\ri22\sb22\sa22\cf1\f51\fs20\ql Marketable securities\cel

\ql \~\cell\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql \~\cell\pard\pl

s, and those\plain\cf1\f51\fs20\ql entities in which we have a variable interes

s. Third-party sellers\plain\cf1\f51\fs20\ql maintain ownership of their invent

ht-line basis without regard to deferred payment\plain\cf1\f51\fs20\ql terms, s

ly related to acquired\plain\cf1\f51\fs20\ql intangible assets, net of amortiza

are adjusted only for other-than-temporary declines in\plain\cf1\f51\fs20\ql fa

\page\pard\plain\ul{\field{\*\fldinst HYPERLINK \\l "sD94ADF4FB5251FD6C2CAABB249

ivalents, and\plain\intbl\li22\ri22\sa22\cf1\f51\fs20\ql marketable securities

*\bkmkstart s5E61E00F1542A850AD88ABB20E57709}{\*\bkmkend s5E61E00F1542A850AD88AB

long-term finance lease obligations\plain\cf1\f51\fs20\ql with amounts payable

\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql Other adjustments (2)\cell

\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql 2.50% Notes due on Novembe

\pard\plain\intbl\li22\ri22\sb22\sa22\cf1\f51\fs20\ql 4.95% Notes due on Decembe

applicable to outstanding balances under the Credit Agreement is the London in

ompositions embodied in\plain\cf1\f51\fs20\ql that music.\~The complaint seeks

\pard\plain\intbl\f0\fs16\ql \~\cell\pard\plain\intbl\f0\fs16\ql \~\cell\pard\pl

\par\pard\plain\fs16{\\bkmkstart part_1_2_2}{\\bkmkend part_1_2_2}\par\pard\pl

\bkmkstart s5E61E00F1542A850AD88ABB20E57709}{\\bkmkend s5E61E00F1542A850AD88AB