Amazon.com Inc. (AMZN)

Income tax expense includes U.S. (federal and state) and foreign income taxes. Certain foreign subsidiary earnings are subject to U.S. taxation under the U.S. Tax Act, which also repeals U.S. taxation on the subsequent repatriation of those earnings. Amazon.com intends to invest substantially all of the foreign subsidiary earnings, as well as the capital in the foreign subsidiaries, indefinitely outside of the U.S. in those jurisdictions in which Amazon.com would incur significant, additional costs upon repatriation of such amounts.

Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered.

Deferred tax assets are evaluated for future realization and reduced by a valuation allowance to the extent Amazon.com believes they will not be realized. Amazon.com considers many factors when assessing the likelihood of future realization of the deferred tax assets, including the recent cumulative loss experience and expectations of future earnings, capital gains and investment in such jurisdiction, the carry-forward periods available to Amazon.com for tax reporting purposes, and other relevant factors.

Amazon.com utilizes a two-step approach to recognizing and measuring uncertain income tax positions (tax contingencies). The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not the position will be sustained on audit, including resolution of related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. Amazon.com considers many factors when evaluating the tax positions and estimating the tax benefits, which may require periodic adjustments and which may not accurately forecast actual outcomes. Amazon.com includes interest and penalties related to the tax contingencies in income tax expense.

Source: 10-K (filing date: 2019-02-01).

Amazon.com Inc., income tax expense (benefit), continuing operations

US$ in millions

	12 months ended	Dec 31, 2018		Dec 31, 2017		Dec 31, 2016		Dec 31, 2015		Dec 31, 2014
	U.S. Federal
	U.S. State
	International
	Current taxes
	U.S. Federal
	U.S. State
	International
	Deferred taxes
	Provision for income taxes, net

Based on: 10-K (filing date: 2019-02-01), 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-01-29), 10-K (filing date: 2015-01-30).

Amazon.com Inc., effective income tax rate (EITR) reconciliation

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Federal statutory tax rate
	Effective tax rate

Based on: 10-K (filing date: 2019-02-01), 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-01-29), 10-K (filing date: 2015-01-30).

Amazon.com Inc., components of deferred tax assets and liabilities

US$ in millions

		Dec 31, 2018		Dec 31, 2017		Dec 31, 2016		Dec 31, 2015		Dec 31, 2014
	Loss carryforwards U.S., Federal/States
	Loss carryforwards, Foreign
	Accrued liabilities, reserves, and other expenses
	Stock-based compensation
	Deferred revenue
	Assets held for investment
	Depreciation and amortization
	Other items
	Tax credits
	Gross deferred tax assets
	Valuation allowance
	Deferred tax assets, net of valuation allowance
	Depreciation and amortization
	Acquisition related intangible assets
	Other items
	Deferred tax liabilities
	Net deferred tax assets (liabilities), net of valuation allowance

Based on: 10-K (filing date: 2019-02-01), 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-01-29), 10-K (filing date: 2015-01-30).

Amazon.com Inc., adjustments to financial data

US$ in millions

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Adjustment to Total Liabilities
	Total liabilities (as reported)
	Less: Noncurrent deferred tax liabilities, net
	Total liabilities (adjusted)
	Adjustment to Stockholders’ Equity
	Stockholders’ equity (as reported)
	Less: Net deferred tax assets (liabilities)
	Stockholders’ equity (adjusted)
	Adjustment to Net Income (loss)
	Net income (loss) (as reported)
	Add: Deferred income tax expense (benefit)
	Net income (loss) (adjusted)

Based on: 10-K (filing date: 2019-02-01), 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-01-29), 10-K (filing date: 2015-01-30).

Amazon.com Inc., Financial Data: Reported vs. Adjusted

Amazon.com Inc., adjusted ratios

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Net Profit Margin
	Reported net profit margin
	Adjusted net profit margin
	Financial Leverage
	Reported financial leverage
	Adjusted financial leverage
	Return on Equity (ROE)
	Reported ROE
	Adjusted ROE
	Return on Assets (ROA)
	Reported ROA
	Adjusted ROA

Based on: 10-K (filing date: 2019-02-01), 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-01-29), 10-K (filing date: 2015-01-30).

Amazon.com Inc., Ratios: Reported vs. Adjusted

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Net income (loss)
	Net sales
	Ratio
	Net profit margin1
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted net income (loss)
	Net sales
	Ratio
	Adjusted net profit margin2

Based on: 10-K (filing date: 2019-02-01), 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-01-29), 10-K (filing date: 2015-01-30).

2018 Calculations

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Total assets
	Stockholders’ equity
	Ratio
	Financial leverage1
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Total assets
	Adjusted stockholders’ equity
	Ratio
	Adjusted financial leverage2

Based on: 10-K (filing date: 2019-02-01), 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-01-29), 10-K (filing date: 2015-01-30).

2018 Calculations

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Net income (loss)
	Stockholders’ equity
	Ratio
	ROE1
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted net income (loss)
	Adjusted stockholders’ equity
	Ratio
	Adjusted ROE2

Based on: 10-K (filing date: 2019-02-01), 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-01-29), 10-K (filing date: 2015-01-30).

2018 Calculations

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	As Reported
	Selected Financial Data (US$ in millions)
	Net income (loss)
	Total assets
	Ratio
	ROA1
	Adjusted for Deferred Taxes
	Selected Financial Data (US$ in millions)
	Adjusted net income (loss)
	Total assets
	Ratio
	Adjusted ROA2

Based on: 10-K (filing date: 2019-02-01), 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-10), 10-K (filing date: 2016-01-29), 10-K (filing date: 2015-01-30).

2018 Calculations