AMAZON.COM, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

	Year Ended December 31,
	2016				2017				2018
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD	$	16,175			$	19,934			$	21,856
OPERATING ACTIVITIES:
Net income	2,371				3,033				10,073
Adjustments to reconcile net income to net cash from operating activities:
Depreciation of property and equipment and other amortization, including capitalized content costs	8,116				11,478				15,341
Stock-based compensation	2,975				4,215				5,418
Other operating expense, net	160				202				274
Other expense (income), net	(20		)		(292		)		219
Deferred income taxes	(246		)		(29		)		441
Changes in operating assets and liabilities:
Inventories	(1,426		)		(3,583		)		(1,314		)
Accounts receivable, net and other	(3,436		)		(4,780		)		(4,615		)
Accounts payable	5,030				7,100				3,263
Accrued expenses and other	1,724				283				472
Unearned revenue	1,955				738				1,151
Net cash provided by (used in) operating activities	17,203				18,365				30,723
INVESTING ACTIVITIES:
Purchases of property and equipment	(7,804		)		(11,955		)		(13,427		)
Proceeds from property and equipment incentives	1,067				1,897				2,104
Acquisitions, net of cash acquired, and other	(116		)		(13,972		)		(2,186		)
Sales and maturities of marketable securities	4,577				9,677				8,240
Purchases of marketable securities	(7,240		)		(12,731		)		(7,100		)
Net cash provided by (used in) investing activities	(9,516		)		(27,084		)		(12,369		)
FINANCING ACTIVITIES:
Proceeds from long-term debt and other	618				16,228				768
Repayments of long-term debt and other	(327		)		(1,301		)		(668		)
Principal repayments of capital lease obligations	(3,860		)		(4,799		)		(7,449		)
Principal repayments of finance lease obligations	(147		)		(200		)		(337		)
Net cash provided by (used in) financing activities	(3,716		)		9,928				(7,686		)
Foreign currency effect on cash, cash equivalents, and restricted cash	(212		)		713				(351		)
Net increase (decrease) in cash, cash equivalents, and restricted cash	3,759				1,922				10,317
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD	$	19,934			$	21,856			$	32,173
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest on long-term debt	$	290			$	328			$	854
Cash paid for interest on capital and finance lease obligations	206				319				575
Cash paid for income taxes, net of refunds	412				957				1,184
Property and equipment acquired under capital leases	5,704				9,637				10,615
Property and equipment acquired under build-to-suit leases	1,209				3,541				3,641

1. What was the ending balance of cash and cash equivalents in 2018?

Does this agree with the ending balance of cash and cash equivalents reported on the balance sheet? _________ Explain any discrepancy.

2. What was the net cash flow from investing activities of Amazon in 2018? _________________

Was it an inflow or an outflow of cash?___________________________________

What activity accounted for the largest cash flow from investing activities?

Was it an inflow or an outflow of cash? ___________________________________

3. What was the net cash flow from financing activities of Amazon in 2018? ____________________

Was it an inflow or an outflow of cash? ___________________________________

What activity accounted for the largest cash flow from financing activities?

Was it an inflow or outflow of cash? ______________________________________

4. What was the net cash flow from operating activities of Amazon in 2018? ______________________

Was it an inflow or an outflow of cash? ____________________________________

5. Did Amazon use the direct or indirect method in reporting net cash flows from operating activities? __________________________ How can you tell?