Amazon.com Inc. (AMZN)

Amazon.com generally invests the excess cash in AAA-rated money market funds and investment grade short- to intermediate-term fixed income securities. Such investments are included in “Cash and cash equivalents” or “Marketable securities” on the accompanying consolidated balance sheets. Marketable debt securities are classified as available-for-sale and reported at fair value with unrealized gains and losses included in “Accumulated other comprehensive loss.”

Equity investments are accounted for using the equity method of accounting if the investment gives Amazon.com the ability to exercise significant influence, but not control, over an investee. Equity-method investments are included within “Other assets” on Amazon.com’s consolidated balance sheets. Amazon.com’s share of the earnings or losses as reported by equity-method investees, amortization of basis differences, and related gains or losses, if any, are classified as “Equity-method investment activity, net of tax” on the consolidated statements of operations.

Equity investments without readily determinable fair values and for which Amazon.com does not have the ability to exercise significant influence are accounted for at cost with adjustments for observable changes in prices or impairments and are classified as “Other assets” on the consolidated balance sheets.

Equity investments that have readily determinable fair values are included in “Marketable securities” on Amazon.com’s consolidated balance sheets and measured at fair value with changes recognized in “Other income (expense), net” on the consolidated statement of operations.

Amazon.com periodically evaluates whether declines in fair values of the investments indicate impairment. For debt securities and equity method investments, Amazon.com also evaluates whether declines in fair value of the investments below their book value are other-than-temporary. This evaluation consists of several qualitative and quantitative factors regarding the severity and duration of the unrealized loss as well as Amazon.com’s ability and intent to hold the investment until a forecasted recovery occurs. Additionally, Amazon.com assesses whether Amazon.com has plans to sell the security or it is more likely than not Amazon.com will be required to sell any investment before recovery of its amortized cost basis. Factors considered include: quoted market prices; recent financial results and operating trends; implied values from any recent transactions or offers of investee securities; credit quality of debt instrument issuers; other publicly available information that may affect the value of Amazon.com’s investments; duration and severity of the decline in value; and Amazon.com’s strategy and intentions for holding the investment.

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

Amazon.com Inc., adjustment to Net Income (loss)

US$ in millions

	12 months ended	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Net income (loss) (as reported)
	Add: Net change in unrealized gains (losses) on available-for-sale debt securities
	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., 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
	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: Mark to Market Available-for-sale Securities
	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)
	Net income (loss)
	Stockholders’ equity
	Ratio
	ROE1
	Adjusted: Mark to Market Available-for-sale Securities
	Selected Financial Data (US$ in millions)
	Adjusted net income (loss)
	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: Mark to Market Available-for-sale Securities
	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