2013 8,084 596 274 3,253 1,134 AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31 2015 2014 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 14,557 5 8 ,658 5 OPERATING ACTIVITIES: Net income (loss) (241) Adjustments to reconcile net income (loss) to net cash from operating activities: Depreciation of property and equipment, including intermal-use software and website development, and other amortization, including capitalized content costs 6,281 4,746 Stock-based compensation 2,119 1,497 Other operating expense (income), net 155 129 Losses (gains) on sales of marketable securities, net 5 Other expense (income), net 245 Deferred income taxes 81 Excess tax benefits from stock-based compensation (119) Changes in operating assets and liabilities: Inventories (2,187) (1,193) Accounts receivable, net and other (1,755) (1,039) Accounts payable 4.294 1,759 Accrued expenses and other 913 706 Addations to earned revenue 7,401 4,433 Amortization of previously uneamed revenue (6,109) (3,692) Net cash provided by (used in operating activities 11,920 6,842 1 166 (156) (78) (1,410) (846) 1.888 736 2.691 (2.292) 5.475 INVESTING ACTIVITIES: Purchases of property and equipment, including internal-use software and website development, net Acquisitions, net of cash acquired, and other Sales and maturities of marketable securities Purchases of marketable securities Net cash provided by (used in investing activities (4,589) (795) 3,025 (4,091) (6.450) (4.893) (979) 3,349 (2,542) (5,065) (3.444) (312) 2,306 (2.826) (4.276) AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) 2015 Year Ended December 31, 2014 2013 119 353 394 (231) (775) FINANCING ACTIVITIES: Excess tax benefits from stock-based compensation Proceeds from long-term debt and other Repayments of long-term debt and other Principal repayments of capital lease obligations Principal repayments of finance lease obligations Net cash provided by (used in) financing activities Foreign-currency effect on cash and cash equivalents Net increase (decrease) in cash and cash equivalents CASH AND CASH EQUIVALENTS, END OF PERIOD SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for interest on long-term debt Cash paid for interest on capital and finance lease obligations Cash paid for income taxes (net of refunds) Property and equipment acquired under capital leases Property and equipment acquired under build-to-suit leases 6,359 (513) (1,285) (135) 4,432 (310) (1.652) (2.462) (121) (3,763) (374) 1,333 15,890 $ 5,899 $ 14,537 $ 8,658 97 91 $ 86 325 $ 153 273 4,717 544 177 41 169 1,867 4,008 920 877 See accompanying notes to consolidated financial statements. AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) Year Ended December 31, 2015 2014 79,268 $ 70,080 $ 27,738 18,908 107,006 2013 60,903 13,549 74,452 88,988 71,651 13,410 5,254 12,540 1,747 171 104,773 62,752 10,766 4.332 9,275 1,552 54,181 8,585 3,133 6,565 1,129 133 114 88.810 73,707 Net product sales Net service sales Total net sales Operating expenses (1): Cost of sales Fulfillment Marketing Technology and content General and administrative Other operating expense (income), net Total operating expenses Income from operations Interest income Interest expense Other income (expense), net Total non-operating income (expense) Income (loss) before income taxes Provision for income taxes Equity-method investment activity, net of tax Net income (loss) Basic earnings per share Diluted eamings per share Weighted average shares used in computation of eamings per share: 2,233 178 39 (210) 38 (141) (136) (459) (256) (665) 1,568 (950) (22) 596 S 1.28 $ 1.25 $ 167 (241) $ (0.52) $ (0.52) $ SIS $ 0.59 462 Basic Diluted 467 477 462 (1) Includes stock-based compensation as follows: Fulfillment Marketing Technology and content General and administrative 482 $ 190 1,224 375 $ 125 804 193 223 D-2 See accompanying notes to consolidated financial statements. AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) in millions) 2015 Year Ended December 31, 2014 596 $ (241) S 2013 (210) (325) Net income (loss) Other comprehensive income (loss): Foreign currency translation adjustments, net of tax of $10, $(3), and $(20) Net change in unrealized gains (losses) on available-for-sale securities: Unrealized gains (losses), net of tax of $(5), $1, and $3 Reclassification adjustment for losses (gains) included in "Other income (expense), net," net of tax of $0, $(1), and $(1) Net unrealized gains (losses) on available-for-sale securities Total other comprehensive income (loss) Comprehensive income (loss) (212) (326) 384 $ (567) $ AMAZON.COM, INC. CONSOLIDATED BALANCE SHEETS (in millions, except per share data) December 31, 2015 2014 15,890 $ 3,918 10,243 6,423 36,474 21,838 3,759 3,373 65,444 $ 14,557 2.859 8,299 5,612 31,327 16,967 3,319 2,892 54,505 ASSETS Current assets: Cash and cash equivalents Marketable securities Inventories Accounts receivable, net and other Total current assets Property and equipment, net Goodwill Other assets Total assets LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable Accrued expenses and other Uneamed revenue Total current liabilities Long-term debt Other long-term liabilities Commitments and contingencies (Note 7) Stockholders' equity: Preferred stock, $0.01 par value: Authorized shares - 500 Issued and outstanding shares - none Common stock. $0.01 par value: 20,397 $ 10,384 3,118 33,899 8,235 9,926 16,459 9,807 1,823 28,089 8,265 7,410 Authorized shares 5,000 Issued shares 494 and 488 Outstanding shares 471 and 465 Treasury stock, at cost Additional paid-in capital Accumulated other comprehensive loss Retained earnings Total stockholders' equity Total liabilities and stockholders' equity (1,837) 13,394 (723) 2,545 13,384 65,444 $ (1,837) 11,135 (511) 1,949 10,741 54,505 $ See accompanying notes to consolidated financial statements. AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (in millions) Common Stock Accumulated Additional Other Total Treasury Paid In Comprehensive Retained Stockholders Shares Amount Stock Capital Income (Loss) Earnings Equity 454 $ 5 $ (1.837) S 8,347 S (239) $ 1,916 5 8,192 274 274 Balance as of January 1, 2013 Net income Other comprehensive income (loss) Exercise of common stock options Excess tax benefits from stock-based compensation Stock-based compensation and issuance of employee benefit plan stock Balance as of December 31, 2013 1,149 9,573 1,149 9,746 459 5 (1,837) (185) 2,190 (241) ||| 1,510 1,510 44 Net loss Other comprehensive income (loss) Exercise of common stock options Excess tax benefits from stock-based compensation Stock-based compensation and issuance of employee benefit plan stock Issuance of common stock for acquisition activity Balance as of December 31, 2014 Net income Other comprehensive income (loss) Exercise of common stock options Excess tax benefits from stock-based compensation Stock-based compensation and issuance of employee benefit plan stock Issuance of common stock for acquisition activity Balance as of December 31, 2015 IIIIIIIIIIII |||| 44 10,741 596 (212) 119 2,131 2.131 471 $ 5 $ (1.837) $ 13,394 $ (723) $ 2,545 S 13,384 See accompanying notes to consolidated financial statements. Consolidated Statements of Income Fiscal Years Ended January 31, 2016 2015 2014 (Amounts in millions, except per share data) Revenues: Net sales Membership and other income $478,614 3,516 $482,229 3,422 485,651 $473,076 3,218 476,294 482,130 360,984 97,041 Total revenues Costs and expenses: Cost of sales Operating, selling, general and administrative expenses Operating income Interest: Debt Capital lease and financing obligations Interest income Interest, net 365,086 93,418 27,147 358,069 91,353 24, 105 26,872 2,027 521 (81) 2,467 21,638 2,161 300 (113) 2,348 24,799 2,072 263 (119) 2,216 24,656 7,584 Income from continuing operations before income taxes Provision for income taxes: Current Deferred Total provision for income taxes Income from continuing operations Income from discontinued operations, net of income taxes Consolidated net income Consolidated net income attributable to noncontrolling interest Consolidated net income attributable to Walmart (1,026) 6,558 15,080 8,504 (519) 7,985 16,814 285 17,099 (736) $ 16,363 8,619 (514) 8,105 16,551 144 16,695 (673) $ 16,022 15,080 (386) $ 14,694 $ 4.58 $ $ Basic net income per common share: Basic income per common share from continuing operations attributable to Walmart Basic income per common share from discontinued operations attributable to Walmart Basic net income per common share attributable to Walmart 5.01 0.06 5.07 4.87 0.03 4.90 $ 4.58 $ $ $ 4.57 $ $ Diluted net income per common share: Diluted income per common share from continuing operations attributable to Walmart Diluted income per common share from discontinued operations attributable to Walmart Diluted net income per common share attributable to Walmart 4.99 0.06 5.05 4.85 0.03 4.88 $ 4.57 $ $ Weighted average common shares outstanding: Basic Diluted Dividends declared per common share $ 1.96 $ 1.92 $ 1.88 See accompanying notes (Amounts in millions) Consolidated net income Less consolidated net income attributable to nonredeemable noncontrolling interest Less consolidated net income attributable to redeemable noncontrolling interest Consolidated net income attributable to Walmart Fiscal Years Ended January 31, 2016 2015 2014 $15,080 $17,099 $16,695 (386) (736) (606) (67) 14,694 16,363 16,022 (3,221) (5,220) 366 (202) 86 (4,970) 541 (4,558) 379 (470) (69) (4,718) 546 207 153 Other comprehensive income (loss), net of income taxes Currency translation and other Net investment hedges Cash flow hedges Minimum pension liability Other comprehensive income (loss), net of income taxes Less other comprehensive income (loss) attributable to nonredeemable noncontrolling interest Less other comprehensive income (loss) attributable to redeemable noncontrolling interest Other comprehensive income (loss) attributable to Walmart Comprehensive income, net of income taxes Less comprehensive income (loss) attributable to nonredeemable noncontrolling interest Less comprehensive income (loss) attributable to redeemable noncontrolling interest Comprehensive income attributable to Walmart (4,429) 10,110 155 (4,172) 12,381 (190) (2,786) 311 66 (2,409) 13,909 (295) $10,265 $12,191 $13,613 See accompanying notes Consolidated Balance Sheets Fiscal Years Ended January 31, 2016 2015 (Amounts in millions) $ 8,705 5,624 44,469 1,441 $ 9,135 6,778 45,141 2,224 63,278 60,239 ASSETS Current assets: Cash and cash equivalents Receivables, net Inventories Prepaid expenses and other Total current assets Property and equipment: Property and equipment Less accumulated depreciation Property and equipment, net Property under capital lease and financing obligations: Property under capital lease and financing obligations Less accumulated amortization Property under capital lease and financing obligations, net Goodwill Other assets and deferred charges Total assets 176,958 (66,787) 110,171 177,395 (63,115) 114,280 11,096 (4,751) 6,345 16,695 6,131 $199,581 5,239 (2,864) 2,375 18,102 5,455 $203,490 $ $ LIABILITIES AND EQUITY Current liabilities: Short-term borrowings Accounts payable Accrued liabilities Accrued income taxes Long-term debt due within one year Capital lease and financing obligations due within one year 2,708 38,487 19,607 521 2,745 551 1,592 38,410 19,152 1,021 4,791 287 Total current liabilities 64,619 65,253 Long-term debt Long-term capital lease and financing obligations Deferred income taxes and other 38,214 5,816 7,321 40,889 2,606 8,805 Commitments and contingencies Equity: Common stock Capital in excess of par value Retained earnings Accumulated other comprehensive income (loss) Total Walmart shareholders' equity Nonredeemable noncontrolling interest Total equity Total liabilities and equity 317 1,805 90,021 (11,597) 80,546 3,065 83,611 $199,581 323 2,462 85,777 (7,168) 81,394 4,543 8 5,937 $203,490 See accompanying notes Consolidated Statements of Shareholders' Equity and Redeemable Noncontrolling Interest Common Stock Shares Amount 3,314 $332 Capital in Excess of Par Value $3,620 Accumulated Other Comprehensive Income (Loss) $ (587) (Amounts in millions) Nonredeemable Noncontrolling interest Total Walmart Shareholders' Equity $ 76,343 16,022 Retained E arnings $72,978 16,022 Total Equity Redeemable Noncontrolling Interest $ 519 78 $5,395 595 $81,738 16,617 Balances as of February 1, 2013 Consolidated net income Other comprehensive income, net of income taxes Cash dividends declared ($1.88 per share) - - - (2,409) (2,409) (311) (2,720) (6,139) (6,139) (6139) Total current liabilities 64,619 65,253 Long-term debt Long-term capital lease and financing obligations Deferred income taxes and other 38,214 5,816 7,321 40,889 2,606 8,805 Commitments and contingencies Equity: Common stock Capital in excess of par value Retained earnings Accumulated other comprehensive income (loss) Total Walmart shareholders' equity Nonredeemable noncontrolling interest Total equity Total liabilities and equity 317 1,805 90,021 (11,597) 80,546 3,065 83,611 $199,581 323 2,462 85,777 (7,168) 81,394 4,543 8 5,937 $203,490 See accompanying notes Consolidated Statements of Shareholders' Equity and Redeemable Noncontrolling Interest Common Stock Shares Amount 3,314 $332 Capital in Excess of Par Value $3,620 Accumulated Other Comprehensive Income (Loss) $ (587) (Amounts in millions) Nonredeemable Noncontrolling interest Total Walmart Shareholders' Equity $ 76,343 16,022 Retained E arnings $72,978 16,022 Total Equity Redeemable Noncontrolling Interest $ 519 78 $5,395 595 $81,738 16,617 Balances as of February 1, 2013 Consolidated net income Other comprehensive income, net of income taxes Cash dividends declared ($1.88 per share) - - - (2,409) (2,409) (311) (2,720) (6,139) (6,139) (6139) (9) (294) (6,254) (6,557) (6,557) - (1,019) (1,019) (1,019) 55 2,362 1,019 (59) 14 (581) 323 (41) 76,566 16,363 (2,996) 76,255 16,363 (595) 5,084 736 81,339 17,099 (4,172) (4,172) (546) (4,718) (29) (6,185) (950) (6,185) (980) (6,185) (980) Purchase of Company stock (87) Redemption value adjustment of redeemable noncontrolling interest - Other Balances as of January 31, 2014 3,233 Consolidated net income Other comprehensive loss, net of income taxes Cash dividends declared ($1.92 per share) Purchase of Company stock Purchase of redeemable noncontrolling interest Other Balances as of January 31, 2015 3,228 Consolidated net income Other comprehensive income, net of income taxes Cash dividends declared ($1.96 per share) Purchase of Company stock (65) Cash dividend declared to noncontrolling interest Other Balances as of January 31, 2016 3,162 129 113 323 2,462 (17) 85,777 14,694 (7,168) 81,394 14,694 (731) 4,543 386 (618) 85,937 15,080 - (4,429) (4,429) (541) (4,970) (6) (102) (6,294) (4,148) (6,294) (4,256) (6,294) (4,256) - (555) $317 $1,805 (563) $80,546 (691) (632) $3,065 (691) (1,195) $83,611 $90,021 $(11,597) $ - Consolidated Statements of Cash Flows Fiscal Years Ended January 31, 2016 2015 2014 (Amounts in millions) $ 15,080 $ 17,099 (285) 16,814 $ 16,695 (144) 16,551 15,080 9,454 (672) Cash flows from operating activities: Consolidated net income Income from discontinued operations, net of income taxes Income from continuing operations Adjustments to reconcile income from continuing operations to net cash provided by operating activities: Depreciation and amortization Deferred income taxes Other operating activities Changes in certain assets and liabilities, net of effects of acquisitions: Receivables, net Inventories Accounts payable Accrued liabilities Accrued income taxes Net cash provided by operating activities 9,173 (503) 785 8,870 (279) 1,410 938 (566) (1,667) (19) (703) 2,008 1,303 (472) 27,389 (569) (1,229) 2,678 1,249 166 531 103 (1,224) 23,257 28,564 Cash flows from investing activities: Payments for property and equipment Proceeds from disposal of property and equipment Proceeds from disposal of certain operations Other investing activities Net cash used in investing activities (13,115) 727 (11,477) 635 246 (79) (10,675) (12,174) 570 671 (192) (138) (12,526) (11,125) 1,235 Cash flows from financing activities: Net change in short-term borrowings Proceeds from issuance of long-term debt Payments of long-term debt Dividends paid 39 (6,288) 5,174 (3,904) (6,185) 911 7,072 (4,968) (6,139) (4,432) (6,294) (6,294) (4,112) (719) Dividends paid Purchase of Company stock Dividends paid to noncontrolling interest Purchase of noncontrolling interest Other financing activities Net cash used in financing activities (1,326) (513) (16,122) (6,185) (1,015) (600) (1,844) (409) (15,071) (6,139) (6,683) (426) (296) (260) (10,789) Effect of exchange rates on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of period (430) (1,022) (514) 1,854 9,1357 ,281 $ 8,705 $ 9,135 (442) (500) 7,781 $ 7,281 Supplemental disclosure of cash flow information: Income taxes paid Interest paid 8,111 2,540 8,169 2,433 8,641 2,362 Expand Your Critical Thinking 13-3 The financial statements of Amazon.com, Inc.'s are presented in Appendix D. Click here to view Appendix D. Financial statements of Wal-Mart Stores, Inc. are presented in Appendix E. Click here to view Appendix E. Based on the information contained in these financial statements, determine each of the following for each company: (a1) The percentage increase (decrease) in () net sales and (ii) net income from 2014 to 2015. (Round answers to 1 decimal places, e.g. 15.2%. Enter negative amounts using either a negative sign preceding the number e.g.-15.2% or parentheses e.g. (15.2)%.) Amazon.com Wal-Mart Stores % Percentage increase (decrease) in net sales Percentage increase (decrease) in net income The percentage increase in () total assets and (ii) total stockholders' (shareholders') equity from 2014 to 2015. (Round answers to 1 decimal place, e.g. 15.2%. Enter negative amounts using either a negative sign preceding the number e.g.-15.2% or parentheses e.g. (15.2) Amazon.com Wal-Mart Stores Percentage increase (decrease) in total assets Percentage increase (decrease) in total stockholders' equity % (a3) The basic earnings per share and price-earnings ratio for 2015. (For both Amazon and Wal-Mart, use the basic earnings per share.) Amazon's common stock had a market price of $398.79 at the end of fiscal year 2015, and Wal-Mart's common stock had a market price of $74.68. (Round basic earnings per share to 2 decimal places, e.g. 15.25 and price-earning ratio to 1 decimal place, e.g. 15.2. Enter negative amounts using either a negative sign preceding the number e.g.-15.2% or parentheses e.g. (15.2)%.) Amazon.com Wal-Mart Stores Basic earnings per share Price-earnings ratio times times Click if you would like to Show Work for this question: Open Show Work