View Policies Current Attempt in Progress Amazon.com, Inc.'s financial statements are presented in Appendix D. Click here to view Appendix D. Financial statements of Walmart Inc. are presented in Appendix E. Click here to view Appendix E. The complete annual reports of Amazon and Walmart, including the notes to the financial statements, are available at each company's respective website. (a) Based on information contained in these financial statements, determine the following for each company. (Enter amounts in millions. Enter decrease in account balance with a negative sign preceding the number, e.g. -45 or parentheses, e.g. (45).) (a) Increase (decrease) in interest expense LA $ Amazon From 2017 to 2018 Wal-mart From 2018 to 2019 LA $ (b) Increase (decrease) in net income to $ (c) Increase (decrease) in cash flow from operations $ +A +A 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 OPERATING ACTIVITIES: Net income $16,175 $19,934 $21,856 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 Other operating expense, net Other expense (income), net Deferred income taxes Changes in operating assets and liabilities: Inventories Accounts receivable, net and other Accounts payable Accrued expenses and other Unearned revenue Net cash provided by (used in) operating activities INVESTING ACTIVITIES: Purchases of property and equipment Proceeds from property and equipment incentives 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 FINANCING ACTIVITIES: 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, cash equivalents, and restricted cash Net increase (decrease) in cash, cash equivalents, and restricted cash CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, 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 2,975 4,215 5:418 160 202 274 (20) (292) 219 (246) (29) 441 (1,426) (3.583) (1,314) (3,436) (4,780) (4,615) 5,030 7,100 3,263 1,724 283 472 1,955 738 1,151 17,203 18,365 30,723 (7,804) (11,955) (13,427) 1,067 1,897 2,104 (116) (13,972) (2,186) 4,577 9,677 8,240 (7,240) (12,731) (7,100) (9,516) (27,084) (12,369) 618 16,228 768 (327) (1,301) (668) (3,860) (4,799) (7,449) (147) (200) (337) (3,716) 9,928 (7,686) (212) 713 (351) 3:759 $19,934 1,922 $21,856 10,317 $32,173 $ 290 $ 328 $ 854 206 319 412 957 575 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 See accompanying notes to consolidated financial statements. See accompanying notes to consolidated financial statements. Amazon.com, Inc. Consolidated Statements of Operations (in millions, except per share data) Year Ended December 31, Net product sales Net service sales Total net sales Operating expenses: Cost of sales Fulfillment Marketing 2016 $94,665 2017 2018 $118,573 $141,915 41,322 59:293 90,972 135:987 177,866 232,887 88,265 111,934 139,156 17,619 25:249 34,027 7:233 10,069 13,814 Technology and content 16,085 22,620 28,837 General and administrative 2:432 3:674 4:336 Other operating expense, net 167 214 Total operating expenses 131,801 Operating income 4:186 Interest income Interest expense Other income (expense), net Income before income taxes 100 173.760 4,106 202 296 220,466 12:421 440 (484) (848) (1,417) 90 346 (183) Total non-operating income (expense) (294) (300) (1,160) 3,892 3.806 11,261 Provision for income taxes (1:425) (769) (1,197) Equity-method investment activity, net of tax (96) (4) Net income $ 2,371 $ 3,033 $ 10,073 Basic earnings per share $ 5.01 $ 6.32 $ 20.68 Diluted earnings per share $ 4.90 $ 6.15 $ 20.14 Weighted-average shares used in computation of earnings per share: Basic Diluted 474 484 480 493 487 500 See accompanying notes to consolidated financial statements. Amazon.com, Inc. Consolidated Statements of Comprehensive Income (in millions) Net income Other comprehensive income (loss): Foreign currency translation adjustments, net of tax of $(49), $5, and $6 Net change in unrealized gains (losses) on available-for-sale debt securities: Unrealized gains (losses), net of tax of $(12), $5, and $0 Reclassification adjustment for losses (gains) included in "Other income (expense), net," net of tax of So, So, and So Net unrealized gains (losses) on available-for-sale debt securities Total other comprehensive income (loss) Comprehensive income See accompanying notes to consolidated financial statements. 38 Year Ended December 31, 2017 $3,033 2018 $10,073 (538) (39) (17) (32) $3,534 1994 $ 9,526 (9) (547) Amazon.com, Inc. Consolidated Balance Sheets (in millions, except per share data) December 31, 2017 2018 ASSETS Current assets: Cash and cash equivalents $ 20,522 $ 31,750 Marketable securities 10,464 9,500 Inventories 16,047 17,174 Accounts receivable, net and other 13,164 16,677 Total current assets 60,197 75,101 Property and equipment, net 48,866 61,797 Goodwill 13,350 14,548 Other assets 8,897 11,202 Total assets $131,310 $162,648 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 34,616 $ 38,192 Accrued expenses and other 18,170 23,663 Unearned revenue 5,097 6,536 Total current liabilities 57,883 68,391 Long-term debt 24,743 23,495 Other long-term liabilities 20,975 27,213 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: Authorized shares-5,000 Issued shares-507 and 514 Outstanding shares-484 and 491 5 Treasury stock, at cost (1,837) 5 (1,837) Additional paid-in capital 21,389 26,791 Accumulated other comprehensive loss (484) (1,035) Retained earnings 8,636 19,625 Total stockholders' equity 27.709 43.549 Total liabilities and stockholders' equity $131,310 $162,648 See accompanying notes to consolidated financial statements. Amazon.com, Inc. Consolidated Statements of Stockholders' Equity Balance as of January 1, 2016 Net income Other comprehensive income (loss) Exercise of common stock options Excess tax benefits from stock-based compensation Balance as of December 31, 2016 (in millions) Common Stock Treasury Shares Amount Stock 471 $5 $(1,837) Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) $13,394 $ (723) Retained Earnings $ 2,545 Total Stockholders' Equity $13,384 2,371 2,371 (262) (262) 6 1 829 829 Stock-based compensation and issuance of employee benefit plan stock 2,962 2,962 477 5 (1,837) 17,186 (985) 4,916 19,285 Cumulative effect of a change in accounting principle related to stock-based compensation Net income 687 687 3,033 3,033 Other comprehensive income (loss) Exercise of common stock options Stock-based compensation and issuance of employee benefit plan stock Balance as of December 31, 2017 501 501 Cumulative effect of changes in accounting principles related to revenue recognition, income taxes, and financial instruments Net income Other comprehensive income (loss) Exercise of common stock options Stock-based compensation and issuance of employee benefit plan stock Balance as of December 31, 2018 7 NG IN 1 1 484 5 (1,837) 4.202 21,389 4.202 (484) 8,636 27,709 | | | | (4) 916 912 10,073 (547) 10,073 (547) 491 $5 $(1,837) See accompanying notes to consolidated financial statements. ' 5,402 $26,791 5,402 $(1,035) $19,625 $43,549 Walmart Inc. Consolidated Statements of Income Fiscal Years Ended January 31, (Amounts in millions, except per share data) Revenues: Net sales 2019 2018 2017 $510,329 $495,761 $481,317 Membership and other income 4,076 4:582 4:556 Total revenues 514:405 500,343 485,873 Costs and expenses: Cost of sales 385,301 373:396 361,256 Operating, selling, general and administrative expenses 107,147 106,510 101,853 Operating income 21,957 20:437 22,764 Interest: Debt 1,975 1,978 Capital lease and financing obligations 371 352 2,044 323 Interest income (217) (152) (100) Interest, net 2,129 2,178 2,267 Loss on extinguishment of debt Other (gains) and losses - 3:136 Income before income taxes Provision for income taxes Consolidated net income Consolidated net income attributable to noncontrolling interest Consolidated net income attributable to Walmart Net income per common share: 8,368 11,460 15,123 20:497 4,281 7:179 (509) 4.600 10:523 (661) 6,204 14:293 $ 6,670 $ 9.862 (650) $ 13,643 Basic net income per common share attributable to Walmart Diluted net income per common share attributable to Walmart $ 2.28 $ 2.26 3.29 3.28 $ 4.40 4-38 Weighted-average common shares outstanding: Basic Diluted Dividends declared per common share See accompanying notes. 2,929 2:945 2,995 3,010 3,101 3,112 $ 2.08 S 2.04 $ 2.00 Walmart Inc. Consolidated Statements of Comprehensive Income Fiscal Years Ended January 31, (Amounts in millions) 2019 2018 2017 Consolidated net income $7,179 $10,523 $14,293 Consolidated net income attributable to noncontrolling interest (509) (661) (650) Consolidated net income attributable to Walmart 6,670 9,862 13.643 Other comprehensive income (loss), net of income taxes Currency translation and other (226) 2,540 (3,027) Net investment hedges Cash flow hedges 272 (405) 413 (290) 437 21 Minimum pension liability 131 147 (397) Unrealized gain on available-for-sale securities 1,501 145 Other comprehensive income (loss), net of income taxes (113) 4,220 (2,845) Other comprehensive (income) loss attributable to noncontrolling interest 188 (169) 210 Other comprehensive income (loss) attributable to Walmart 75 4:051 (2,635) Comprehensive income, net of income taxes 7,066 14:743 11,448 Comprehensive (income) loss attributable to noncontrolling interest Comprehensive income attributable to Walmart (321) (830) (440) $6,745 $13.913 $11,008 See accompanying notes. (Amounts in millions) ASSETS Walmart Inc. Consolidated Balance Sheets As of January 31, 2019 2018 Current assets: Cash and cash equivalents Receivables, net Inventories Prepaid expenses and other $ 7,722 $ 6,756 6,283 5,614 44:269 43.783 3,623 3.511 Total current assets Property and equipment: 61,897 59,664 Property and equipment Less accumulated depreciation Property and equipment, net 185,810 185:154 (81,493) (77:479) 104:317 107,675 Property under capital lease and financing obligations: Property under capital lease and financing obligations Less accumulated amortization 12,760 12,703 (5,682) (5,560) Property under capital lease and financing obligations, net Goodwill 7:078 7:143 31,181 18,242 Other long-term assets 14.822 11,798 Total assets $219,295 $204,522 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 Total current liabilities Long-term debt Long-term capital lease and financing obligations Deferred income taxes and other Commitments and contingencies Equity: $ 5,225 $ 5:257 47,060 46,092 22:159 1,876 428 22,122 645 3:738 729 77:477 667 78,521 43:520 6,683 30,045 6,780 11,981 8,354 Common stock 288 295 Capital in excess of par value 2,965 2,648 Retained earnings 80,785 85,107 Accumulated other comprehensive loss (11,542) (10,181) Total Walmart shareholders' equity 72:496 77,869 Noncontrolling interest 7.138 2:953 Total equity 79,634 80.822 Total liabilities and equity $219,295 $204,522 See accompanying notes. Walmart Inc. Consolidated Statements of Shareholders' Equity (Amounts in millions) Shares Balances as of February 1, 2016 3,162 Common Stock Amount $317 Capital in Excess of Par Value $1,805 Retained Earnings $90,021 Accumulated Other Comprehensive Income (Loss) $(11,597) Total Walmart Shareholders' Equity $80,546 Consolidated net income 13:643 13,643 Noncontrolling Interest $3,065 650 Total Equity $83,611 14:293 Other comprehensive income (loss), net of income taxes (2,635) (2,635) (210) (2,845) Cash dividends declared ($2.00 per share) (6,216) (6,216) (6,216) Purchase of Company stock (120) (12) (174) (8,090) (8.276) (8,276) Cash dividend declared to noncontrolling interest (519) (519) Other 740 (4) 736 (249) 487 Balances as of January 31, 2017 3,048 305 2:371 89:354 (14,232) 77:798 2:737 80,535 Consolidated net income 9,862 9,862 661 10:523 Other comprehensive income (loss), net of income taxes 4:051 4:051 169 4:220 Cash dividends declared ($2.04 per share) (6,124) (6,124) (6,124) Purchase of Company stock (103) (10) (219) (7:975) (8,204) (8,204) Cash dividend declared to noncontrolling interest (687) (687) Other 496 (10) 486 73 559 Balances as of January 31, 2018 2,952 $295 $2,648 $85,107 $(10,181) $77,869 Adoption of new accounting standards on February 1, 2018, net of income taxes Consolidated net income 2,361 (1,436) 6,670 925 6,670 $2,953 (1) $80,822 924 509 7:179 Other comprehensive income (loss), net of income taxes 75 75 (188) (113) Cash dividends declared ($2.08 per share) (6,102) (6,102) (6,102) Purchase of Company stock (80) (245) (7:234) (7:487) (7:487) Cash dividend declared to noncontrolling interest (488) (488) Noncontrolling interest of acquired entity Other Balances as of January 31, 2019 See accompanying notes. 4:345 4:345 562 2,878 $288 $2,965 (17) 546 8 554 $80,785 $(11,542) $72,496 $7:138 $79,634 Walmart Inc. Consolidated Statements of Cash Flows Fiscal Years Ended January 31, (Amounts in millions) 2019 2018 2017 Cash flows from operating activities: Consolidated net income $7,179 $10,523 $14,293 Adjustments to reconcile consolidated net income to net cash provided by operating activities: Depreciation and amortization 10,678 10,529 10,080 Unrealized (gains) and losses 3:516 (Gains) and losses for disposal of business operations 4,850 Deferred income taxes (499) (304) 761 Loss on extinguishment of debt - 3,136 Other operating activities 1:734 1.210 206 Changes in certain assets and liabilities, net of effects of acquisitions: Receivables, net (368) (1,074) (402) Inventories (1:311) (140) 1,021 Accounts payable 1,831 4,086 3:942 Accrued liabilities 183 928 1,280 Accrued income taxes (40) (557) 492 Net cash provided by operating activities 27:753 28:337 31,673 Cash flows from investing activities: Payments for property and equipment (10,344) (10,051) (10,619) Proceeds from the disposal of property and equipment 519 378 456 Proceeds from the disposal of certain operations 876 1,046 662 Purchase of available for sale securities (1,901) Payments for business acquisitions, net of cash acquired (14,656) (375) (2:463) Other investing activities (431) (77) (31) Net cash used in investing activities (24,036) (9:079) (13,896) Cash flows from financing activities: Net change in short-term borrowings Proceeds from issuance of long-term debt Repayments of long-term debt Premiums paid to extinguish debt Dividends paid Purchase of Company stock Dividends paid to noncontrolling interest Purchase of noncontrolling interest Other financing activities Net cash used in financing activities (53) 4:148 (1,673) 15,872 7:476 137 (3.784) (13,061) (2,055) - (3,059) (6,102) (6,124) (6,216) (7:410) (8,296) (8,298) (431) (690) (479) (8) (90) (629) (261) (398) (2:537) (19,875) (19,072) Effect of exchange rates on cash, cash equivalents and restricted cash (438) 487 (452) Net increase (decrease) in cash, cash equivalents and restricted cash 742 (130) (1,747) Cash, cash equivalents and restricted cash at beginning of year Cash, cash equivalents and restricted cash at end of period 7,014 7:144 8,891 $7:756 $ 7,104 $ 7,144 Supplemental disclosure of cash flow information: Income taxes paid Interest paid See accompanying notes. 3:982 6,179 4:507 2:348 2:450 2:351