EXHIBIT 5
AMAZON.COM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
Year Ended December 31,
2014
2013
2012
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
$
8,658
$
8,084
$
5,269
OPERATING ACTIVITIES:
Net income (loss)
(241
)
274
(39
)
Adjustments to reconcile net income (loss) to net cash fromoperating activities:
Depreciation of property and equipment, including internal-usesoftware and website development, and other amortization
4,746
3,253
2,159
Stock-based compensation
1,497
1,134
833
Other operating expense (income), net
129
114
154
Losses (gains) on sales of marketable securities, net
(3
)
1
(9
)
Other expense (income), net
62
166
253
Deferred income taxes
(316
)
(156
)
(265
)
Excess tax benefits from stock-based compensation
(6
)
(78
)
(429
)
Changes in operating assets and liabilities:
Inventories
(1,193
)
(1,410
)
(999
)
Accounts receivable, net and other
(1,039
)
(846
)
(861
)
Accounts payable
1,759
1,888
2,070
Accrued expenses and other
706
736
1,038
Additions to unearned revenue
4,433
2,691
1,796
Amortization of previously unearned revenue
(3,692
)
(2,292
)
(1,521
)
Net cash provided by (used in) operating activities
6,842
5,475
4,180
INVESTING ACTIVITIES:
Purchases of property and equipment, including internal-usesoftware and website development
(4,893
)
(3,444
)
(3,785
)
Acquisitions, net of cash acquired, and other
(979
)
(312
)
(745
)
Sales and maturities of marketable securities and otherinvestments
3,349
2,306
4,237
Purchases of marketable securities and other investments
(2,542
)
(2,826
)
(3,302
)
Net cash provided by (used in) investing activities
(5,065
)
(4,276
)
(3,595
)
FINANCING ACTIVITIES:
Excess tax benefits from stock-based compensation
6
78
429
Common stock repurchased
â
â
(960
)
Proceeds from long-term debt and other
6,359
394
3,378
Repayments of long-term debt
(513
)
(231
)
(82
)
Principal repayments of capital lease obligations
(1,285
)
(775
)
(486
)
Principal repayments of finance lease obligations
(135
)
(5
)
(20
)
Net cash provided by (used in) financing activities
4,432
(539
)
2,259
Foreign-currency effect on cash and cash equivalents
(310
)
(86
)
(29
)
Net increase (decrease) in cash and cash equivalents
5,899
574
2,815
CASH AND CASH EQUIVALENTS, END OF PERIOD
$
14,557
$
8,658
$
8,084
EXHIBIT 6
AMAZON.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
Year Ended December 31,
2014
2013
2012
Net product sales
$
70,080
$
60,903
$
51,733
Net service sales
18,908
13,549
9,360
Total net sales
88,988
74,452
61,093
Operating expenses:
Cost of sales
62,752
54,181
45,971
Fulfillment
10,766
8,585
6,419
Marketing
4,332
3,133
2,408
Technology and content
9,275
6,565
4,564
General and administrative
1,552
1,129
896
Other operating expense (income), net
133
114
159
Total operating expenses
88,810
73,707
60,417
Income from operations
178
745
676
Interest income
39
38
40
Interest expense
(210
)
(141
)
(92
)
Other income (expense), net
(118
)
(136
)
(80
)
Total non-operating income (expense)
(289
)
(239
)
(132
)
Income (loss) before income taxes
(111
)
506
544
Provision for income taxes
(167
)
(161
)
(428
)
Equity-method investment activity, net of tax
37
(71
)
(155
)
Net income (loss)
$
(241
)
$
274
$
(39
)
Basic earnings per share
$
(0.52
)
$
0.60
$
(0.09
)
Diluted earnings per share
$
(0.52
)
$
0.59
$
(0.09
)
Weighted average shares used in computation of earnings pershare:
Basic
462
457
453
Diluted
462
465
453
Cash Flows at Amazon.com
Case Questions:
Graph the financial statement items in Exhibit 1. Graph revenueand COGS separate from the other items in Exhibit 1 because oftheir magnitude (i.e., make two graphs).
Using the graphs above, identify time periods of similarcharacteristics and classify them using the following life cycleterms: introduction, growth, maturity, or decline (see Exhibit 4for definitions). For each period labeled, provide support for yourclassification. Specifically, briefly discuss the patterns observed(e.g., in revenue, income, operating cash flow, investing cashflow, and financing cash flow) and how they indicate whereAmazon.com is in the life cycle.
What is the general trend in cash flows from investingactivities in Exhibit 3 from 1995 to 2010? Discuss both the netcash flows from investing activities (CFI) and the components ofCFI.
Why did Amazon.com invest in marketable securities (Exhibit 3,net change in securities)?
Analyze Amazon.comâs performance for fiscal year ended December31, 2014 using its Consolidated Statements of Cash Flows (Exhibit5) and Consolidated Statement of Operations (Exhibit 6).Specifically, answer the following questions:
(a) What are Amazon.comâs net incomeor loss over the three years? Comment on the companyâsprofitability.
(b) Comment on Amazon.comâsperformance using cash flows from operating, investing andfinancing activities over the three-year period.
(c) How do you reconcile the largediscrepancy between a net loss of $241 million and net cash fromoperating activities of $6,842 million for fiscal year endedDecember 31, 2014?
I need all of these answeredthouroughly!!! Like as best as possible with as much explanation! Icould not fit intoi one post so the others 2 post before this arerelated!!! Thank you!
EXHIBIT 5
AMAZON.COM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
| Year Ended December 31, | ||||||||||
2014 | 2013 | 2012 | |||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | $ | 8,658 | $ | 8,084 | $ | 5,269 | |||||
OPERATING ACTIVITIES: | |||||||||||
Net income (loss) | (241 | ) | 274 | (39 | ) | ||||||
Adjustments to reconcile net income (loss) to net cash fromoperating activities: | |||||||||||
Depreciation of property and equipment, including internal-usesoftware and website development, and other amortization | 4,746 | 3,253 | 2,159 | ||||||||
Stock-based compensation | 1,497 | 1,134 | 833 | ||||||||
Other operating expense (income), net | 129 | 114 | 154 | ||||||||
Losses (gains) on sales of marketable securities, net | (3 | ) | 1 | (9 | ) | ||||||
Other expense (income), net | 62 | 166 | 253 | ||||||||
Deferred income taxes | (316 | ) | (156 | ) | (265 | ) | |||||
Excess tax benefits from stock-based compensation | (6 | ) | (78 | ) | (429 | ) | |||||
Changes in operating assets and liabilities: | |||||||||||
Inventories | (1,193 | ) | (1,410 | ) | (999 | ) | |||||
Accounts receivable, net and other | (1,039 | ) | (846 | ) | (861 | ) | |||||
Accounts payable | 1,759 | 1,888 | 2,070 | ||||||||
Accrued expenses and other | 706 | 736 | 1,038 | ||||||||
Additions to unearned revenue | 4,433 | 2,691 | 1,796 | ||||||||
Amortization of previously unearned revenue | (3,692 | ) | (2,292 | ) | (1,521 | ) | |||||
Net cash provided by (used in) operating activities | 6,842 | 5,475 | 4,180 | ||||||||
INVESTING ACTIVITIES: | |||||||||||
Purchases of property and equipment, including internal-usesoftware and website development | (4,893 | ) | (3,444 | ) | (3,785 | ) | |||||
Acquisitions, net of cash acquired, and other | (979 | ) | (312 | ) | (745 | ) | |||||
Sales and maturities of marketable securities and otherinvestments | 3,349 | 2,306 | 4,237 | ||||||||
Purchases of marketable securities and other investments | (2,542 | ) | (2,826 | ) | (3,302 | ) | |||||
Net cash provided by (used in) investing activities | (5,065 | ) | (4,276 | ) | (3,595 | ) | |||||
FINANCING ACTIVITIES: | |||||||||||
Excess tax benefits from stock-based compensation | 6 | 78 | 429 | ||||||||
Common stock repurchased | â | â | (960 | ) | |||||||
Proceeds from long-term debt and other | 6,359 | 394 | 3,378 | ||||||||
Repayments of long-term debt | (513 | ) | (231 | ) | (82 | ) | |||||
Principal repayments of capital lease obligations | (1,285 | ) | (775 | ) | (486 | ) | |||||
Principal repayments of finance lease obligations | (135 | ) | (5 | ) | (20 | ) | |||||
Net cash provided by (used in) financing activities | 4,432 | (539 | ) | 2,259 | |||||||
Foreign-currency effect on cash and cash equivalents | (310 | ) | (86 | ) | (29 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 5,899 | 574 | 2,815 | ||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 14,557 | $ | 8,658 | $ | 8,084 | |||||
EXHIBIT 6
AMAZON.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
| Year Ended December 31, | ||||||||||
2014 | 2013 | 2012 | |||||||||
Net product sales | $ | 70,080 | $ | 60,903 | $ | 51,733 | |||||
Net service sales | 18,908 | 13,549 | 9,360 | ||||||||
Total net sales | 88,988 | 74,452 | 61,093 | ||||||||
Operating expenses: | |||||||||||
Cost of sales | 62,752 | 54,181 | 45,971 | ||||||||
Fulfillment | 10,766 | 8,585 | 6,419 | ||||||||
Marketing | 4,332 | 3,133 | 2,408 | ||||||||
Technology and content | 9,275 | 6,565 | 4,564 | ||||||||
General and administrative | 1,552 | 1,129 | 896 | ||||||||
Other operating expense (income), net | 133 | 114 | 159 | ||||||||
Total operating expenses | 88,810 | 73,707 | 60,417 | ||||||||
Income from operations | 178 | 745 | 676 | ||||||||
Interest income | 39 | 38 | 40 | ||||||||
Interest expense | (210 | ) | (141 | ) | (92 | ) | |||||
Other income (expense), net | (118 | ) | (136 | ) | (80 | ) | |||||
Total non-operating income (expense) | (289 | ) | (239 | ) | (132 | ) | |||||
Income (loss) before income taxes | (111 | ) | 506 | 544 | |||||||
Provision for income taxes | (167 | ) | (161 | ) | (428 | ) | |||||
Equity-method investment activity, net of tax | 37 | (71 | ) | (155 | ) | ||||||
Net income (loss) | $ | (241 | ) | $ | 274 | $ | (39 | ) | |||
Basic earnings per share | $ | (0.52 | ) | $ | 0.60 | $ | (0.09 | ) | |||
Diluted earnings per share | $ | (0.52 | ) | $ | 0.59 | $ | (0.09 | ) | |||
Weighted average shares used in computation of earnings pershare: | |||||||||||
Basic | 462 | 457 | 453 | ||||||||
Diluted | 462 | 465 | 453 | ||||||||
Cash Flows at Amazon.com
Case Questions:
Graph the financial statement items in Exhibit 1. Graph revenueand COGS separate from the other items in Exhibit 1 because oftheir magnitude (i.e., make two graphs).
Using the graphs above, identify time periods of similarcharacteristics and classify them using the following life cycleterms: introduction, growth, maturity, or decline (see Exhibit 4for definitions). For each period labeled, provide support for yourclassification. Specifically, briefly discuss the patterns observed(e.g., in revenue, income, operating cash flow, investing cashflow, and financing cash flow) and how they indicate whereAmazon.com is in the life cycle.
What is the general trend in cash flows from investingactivities in Exhibit 3 from 1995 to 2010? Discuss both the netcash flows from investing activities (CFI) and the components ofCFI.
Why did Amazon.com invest in marketable securities (Exhibit 3,net change in securities)?
Analyze Amazon.comâs performance for fiscal year ended December31, 2014 using its Consolidated Statements of Cash Flows (Exhibit5) and Consolidated Statement of Operations (Exhibit 6).Specifically, answer the following questions:
(a) What are Amazon.comâs net incomeor loss over the three years? Comment on the companyâsprofitability.
(b) Comment on Amazon.comâsperformance using cash flows from operating, investing andfinancing activities over the three-year period.
(c) How do you reconcile the largediscrepancy between a net loss of $241 million and net cash fromoperating activities of $6,842 million for fiscal year endedDecember 31, 2014?
I need all of these answeredthouroughly!!! Like as best as possible with as much explanation! Icould not fit intoi one post so the others 2 post before this arerelated!!! Thank you!
