AMAZON COM INC (AMZN) SEC Filing 10-K Annual report for the fiscal year ending Sunday, December 31, 2017
In 2017, more than five billion items shipped with Prime worldwide.
More new paid members joined Prime in 2017 than any previous year — both worldwide and in the U.S.
Fire TV Stick and Echo Dot were the best-selling products in 2017 across all of Amazon. Customers purchased tens of millions of Echo devices last year.
The following information was filed by AMAZON COM INC on Thursday, February 1, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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- amzn_10k_2018-02-02_5_14Financial - ExpenseOur variable costs include product and content costs, payment processing and related transaction costs, picking, packaging, and preparing orders for shipment, transportation, customer service support, costs necessary to run AWS, and a portion of our marketing costs.
- amzn_10k_2018-02-02_53_166Financial - ExpenseWe expect our cost of shipping to continue to increase to the extent our customers accept and use our shipping offers at an increasing rate, we reduce shipping rates, we use more expensive shipping methods, and we offer additional services.
- amzn_10k_2018-02-02_55_171Financial - ExpenseFulfillment costs as a percentage of net sales may vary due to several factors, such as payment processing and related transaction costs, our level of productivity and accuracy, changes in volume, size, and weight of units received and fulfilled, timing of fulfillment network and physical store expansion, the extent we utilize fulfillment services provided by third parties, mix of products and services sold, and our ability to affect customer service contacts per unit by implementing improvements in our operations and enhancements to our customer self-service features.
- amzn_10k_2018-02-02_51_261Financial - ExpenseCost of sales primarily consists of the purchase price of consumer products, digital media content costs where we record revenue gross, including video and music, packaging supplies, sortation and delivery center and related equipment costs, and inbound and outbound shipping costs, including where we are the transportation service provider.
- amzn_10k_2018-02-02_60_266Financial - ExpenseWhile costs associated with Amazon Prime memberships and other shipping offers are not included in marketing expense, we view these offers as effective worldwide marketing tools, and intend to continue offering them indefinitely.
- amzn_10k_2018-02-02_11_31Revenue - ProductLikewise, if the U.S. Dollar strengthens year-over-year relative to currencies in our international locations, our consolidated net sales and operating expenses will be lower than if currencies had remained constant.
- amzn_10k_2018-02-02_57_173Revenue - ProductWe seek to expand our fulfillment network to accommodate a greater selection and in-stock inventory levels and to meet anticipated shipment volumes from sales of our own products as well as sales by third parties for which we provide the fulfillment services.
- amzn_10k_2018-02-02_42_151Revenue - ProductIncreased unit sales were driven largely by our continued efforts to reduce prices for our customers, including from our shipping offers, increased in-stock inventory availability, and increased selection.
- amzn_10k_2018-02-02_41_148Revenue - ProductIncreased unit sales were driven largely by our continued efforts to reduce prices for our customers, including from our shipping offers, increased in-stock inventory availability, and increased selection.
- amzn_10k_2018-02-02_61_178Financial - ExpenseTechnology and content costs include payroll and related expenses for employees involved in the research and development of new and existing products and services, development, design, and maintenance of our websites, curation and display of products and services made available on our websites, and infrastructure costs.
- amzn_10k_2018-02-02_29_101Other - OtherWe had no borrowings outstanding under our $3.0 billion unsecured revolving credit facility the Credit Agreement and $592 million of borrowings outstanding under our $600 million secured revolving credit facility the Credit Facility as of December 31, 2017.
- amzn_10k_2018-02-02_27_88Other - OtherCash capital expenditures were $4.6 billion, $6.7 billion, and $10.1 billion in 2015, 2016, and 2017, which primarily reflect additional capacity to support our fulfillment operations and additional investments in support of continued business growth in technology infrastructure the majority of which is to support AWS, during all three periods.
- amzn_10k_2018-02-02_56_264Financial - ExpenseThe increase in fulfillment costs in absolute dollars in 2016 and 2017, compared to the comparable prior year periods, is primarily due to variable costs corresponding with increased product and service sales volume and inventory levels, and costs from expanding our fulfillment network, which includes physical stores.
- amzn_10k_2018-02-02_65_268Financial - ExpenseOther operating expense, net was $171 million, $167 million, and $214 million during 2015, 2016, and 2017, and was primarily related to the amortization of intangible assets.
- amzn_10k_2018-02-02_9_21Other - OtherWe seek to invest efficiently in several areas of technology and content, including AWS, and expansion of new and existing product categories and service offerings, as well as in technology infrastructure to enhance the customer experience and improve our process efficiencies.
- amzn_10k_2018-02-02_64_267Financial - ExpenseThe increase in general and administrative costs in absolute dollars in 2016 and 2017, compared to the comparable prior year periods, is primarily due to increases in payroll and related expenses and professional service fees.
- amzn_10k_2018-02-02_27_86Financial - ExpenseCash provided by used in investing activities corresponds with cash capital expenditures, including leasehold improvements, internal-use software and website development costs, incentives received from property and equipment vendors, cash outlays for acquisitions, investments in other companies and intellectual property rights, and purchases, sales, and maturities of marketable securities.
- amzn_10k_2018-02-02_113_243Revenue - GeographyOur results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and customer spending, world events, the rate of growth of the Internet, online commerce, and cloud services, as well as those outlined in Item 1A of Part I, Risk Factors.
- amzn_10k_2018-02-02_70_200Financial - ExpenseFor example, the impact of discrete items and non-deductible expenses on our effective tax rate is greater when our pre-tax income is lower.
- amzn_10k_2018-02-02_40_145Revenue - ProductFor a discussion of the effect on sales growth of foreign exchange rates, see Effect of Foreign Exchange Rates below.
- amzn_10k_2018-02-02_18_55Revenue - GeographyFinally, foreign governments may enact tax laws in response to the 2017 Tax Act that could result in further changes to global taxation and materially affect our financial position and results of operations.
- amzn_10k_2018-02-02_5_15Financial - ExpenseOur fixed costs include the costs necessary to build and run our technology infrastructure to build, enhance, and add features to our websites and web services, our electronic devices, and digital offerings and to build and optimize our fulfillment centers and physical stores.
- amzn_10k_2018-02-02_55_172Financial - ExpenseAdditionally, because payment processing and fulfillment costs associated with seller transactions are based on the gross purchase price of underlying transactions, and payment processing and related transaction and fulfillment costs are higher as a percentage of sales versus our retail sales, sales by our sellers have higher fulfillment costs as a percent of net sales.
- amzn_10k_2018-02-02_42_150Revenue - ProductThe sales growth in each year primarily reflects increased unit sales, including sales by third-party sellers.
- amzn_10k_2018-02-02_41_147Revenue - ProductThe sales growth in each year primarily reflects increased unit sales, including sales by third-party sellers, and, in 2017, the impact of the acquisition of Whole Foods Market.
- amzn_10k_2018-02-02_20_61Legal - OtherDevelopments in an audit, litigation, or the relevant laws, regulations, administrative practices, principles, and interpretations could have a material effect on our operating results or cash flows in the period or periods for which that development occurs, as well as for prior and subsequent periods.
- amzn_10k_2018-02-02_5_13Financial - ExpenseWe seek to reduce our variable costs per unit and work to leverage our fixed costs.
- amzn_10k_2018-02-02_59_265Financial - ExpenseThe increase in marketing costs in absolute dollars in 2016 and 2017, compared to the comparable prior year periods, is primarily due to payroll and related expenses, as well as increased spending on online marketing channels.
- amzn_10k_2018-02-02_18_53Revenue - GeographyOur effective tax rates could be affected by numerous factors, such as intercompany transactions, the relative amount of our foreign earnings, including earnings being lower than anticipated in jurisdictions where we have lower statutory rates and higher than anticipated in jurisdictions where we have higher statutory rates, the applicability of special tax regimes, losses incurred in jurisdictions for which we are not able to realize the related tax benefit, changes in foreign currency exchange rates, entry into new businesses and geographies, changes to our existing businesses and operations, acquisitions including integrations and investments and how they are financed, changes in our stock price, changes in our deferred tax assets and liabilities and their valuation, and changes in the relevant tax, accounting, and other laws, regulations, administrative practices, principles, and interpretations.
- amzn_10k_2018-02-02_43_154Revenue - ProductThe sales growth primarily reflects increased customer usage, partially offset by pricing changes.
- amzn_10k_2018-02-02_6_248Financial - Cash FlowSee Results of Operations Non-GAAP Financial Measures below for additional information on our non-GAAP free cash flows financial measures.
- amzn_10k_2018-02-02_66_190Financial - IncomeOur interest income corresponds with the average balance of invested funds based on the prevailing rates, which vary depending on the geographies and currencies in which they are invested.
- amzn_10k_2018-02-02_26_79Financial - Cash FlowOur operating cash flows result primarily from cash received from our consumer, seller, developer, enterprise, and content creator customers, advertising agreements, and our co-branded credit card agreements, offset by cash payments we make for products and services, employee compensation less amounts capitalized related to internal-use software that are reflected as cash used in investing activities, payment processing and related transaction costs, operating leases, and interest payments on our long-term obligations.
- amzn_10k_2018-02-02_48_162Financial - IncomeThe increase in AWS operating income in absolute dollars in 2016 and 2017, compared to the comparable prior year periods, is primarily due to increased customer usage and cost structure productivity, partially offset by pricing changes and increased spending on technology infrastructure and sales and marketing expenses and related payroll, which was primarily driven by additional investments to support the business growth.
- amzn_10k_2018-02-02_9_22Financial - ExpenseWe believe that advances in technology, specifically the speed and reduced cost of processing power and the advances of wireless connectivity, will continue to improve the consumer experience on the Internet and increase its ubiquity in peoples lives.
- amzn_10k_2018-02-02_5_16Financial - ExpenseVariable costs generally change directly with sales volume, while fixed costs generally are dependent on the timing of capacity needs, geographic expansion, category expansion, and other factors.
- amzn_10k_2018-02-02_61_179Financial - ExpenseInfrastructure costs include servers, networking equipment, and data center related depreciation, rent, utilities, and other expenses necessary to support AWS, as well as these and other efforts.
- amzn_10k_2018-02-02_114_245Revenue - GeographyThis guidance anticipates a favorable impact of approximately $1.2 billion or 330 basis points from foreign exchange rates.
- amzn_10k_2018-02-02_53_164Financial - ExpenseShipping costs to receive products from our suppliers are included in our inventory and recognized as cost of sales upon sale of products to our customers.
- amzn_10k_2018-02-02_81_225Financial - Cash FlowWe provide multiple measures of free cash flows because we believe these measures provide additional perspective on the impact of acquiring property and equipment with cash and through capital and finance leases.
- amzn_10k_2018-02-02_28_98Other - OtherDuring 2017, cash inflows from financing activities consisted primarily of net proceeds from the issuance of $16.0 billion of senior unsecured notes in seven tranches maturing in 2020 through 2057.
- amzn_10k_2018-02-02_43_153Revenue - ProductAWS sales increased 55% and 43% in 2016 and 2017, compared to the comparable prior year periods.
- amzn_10k_2018-02-02_42_149Revenue - ProductInternational sales increased 24% and 23% in 2016, and 2017, compared to the comparable prior year periods.
- amzn_10k_2018-02-02_41_146Revenue - GeographyNorth America sales increased 25% and 33% in 2016 and 2017, compared to the comparable prior year periods.
- amzn_10k_2018-02-02_40_143Revenue - ProductSales increased 27% and 31% in 2016 and 2017, compared to the comparable prior year periods.
- amzn_10k_2018-02-02_70_198Financial - IncomeOur effective tax rate is subject to significant variation due to several factors, including variability in our pre-tax and taxable income and loss and the mix of jurisdictions to which they relate, changes in how we do business, acquisitions including integrations and investments, audit-related developments, changes in our stock price, foreign currency gains losses, tax law developments including changes in statutes, regulations, case law, and administrative practices, and relative changes of expenses or losses for which tax benefits are not recognized.
- amzn_10k_2018-02-02_3_11Revenue - ProductWe seek to increase unit sales across our businesses, through increased product selection, across numerous product categories.
- amzn_10k_2018-02-02_4_247Financial - Cash FlowOur financial focus is on long-term, sustainable growth in free cash flows
- amzn_10k_2018-02-02_80_224Financial - Cash FlowOur measures of free cash flows and the effect of foreign exchange rates on our consolidated statements of operations, meet the definition of non-GAAP financial measures.
- amzn_10k_2018-02-02_2_7Other - OtherThese risks and uncertainties, as well as other risks and uncertainties that could cause our actual results to differ significantly from managements expectations, are described in greater detail in Item 1A of Part I, Risk Factors.
- amzn_10k_2018-02-02_71_202Financial - IncomeThe 2017 Tax Act significantly revises the U.S. corporate income tax by, among other things, lowering the statutory corporate tax rate from 35% to 21%, eliminating certain deductions, imposing a mandatory one-time tax on accumulated earnings of foreign subsidiaries as of 2017, introducing new tax regimes, and changing how foreign earnings are subject to U.S. tax.
- amzn_10k_2018-02-02_62_185Financial - ExpenseThe increase in technology and content costs in absolute dollars in 2016 and 2017, compared to the comparable prior year periods, is primarily due to increased payroll and related costs associated with technical teams responsible for expanding our existing products and services and initiatives to introduce new products and service offerings, and an increase in spending on technology infrastructure.
- amzn_10k_2018-02-02_114_244Revenue - ProductNet sales are expected to be between $47.75 billion and $50.75 billion, or to grow between 34% and 42% compared with first quarter 2017.
- amzn_10k_2018-02-02_39_257Revenue - GeographyYear-over-year Percentage Growth, excluding the effect of foreign exchange rates:
- amzn_10k_2018-02-02_53_167Financial - ExpenseWe seek to mitigate costs of shipping over time in part through achieving higher sales volumes, optimizing our fulfillment network, negotiating better terms with our suppliers, and achieving better operating efficiencies.
- amzn_10k_2018-02-02_11_30Revenue - ProductFor example, if the U.S. Dollar weakens year-over-year relative to currencies in our international locations, our consolidated net sales and operating expenses will be higher than if currencies had remained constant.
- amzn_10k_2018-02-02_11_32Financial - Shares / EquityWe believe that our increasing diversification beyond the U.S. economy through our growing international businesses benefits our shareholders over the long-term.
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- Form Type: Annual
- Number of times amended: 0
- Accession Number: 0001018724-18-000005
- Filing Date: Friday, February 2, 2018
- Accepted by the SEC: Thursday, February 1, 2018 8:41:15 PM EST
- Period Ending: December 2017
Positive and negative sentiment analysis is available in these filings:
AMAZON COM INC
Intrinsic Value, Financial Stability and Ratios