Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2018	Jan. 23, 2019	Jun. 30, 2018
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Entity Registrant Name	AMAZON COM INC
Entity Central Index Key	0001018724
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
Entity Public Float			$ 693,894,417,636
Entity Common Stock, Shares Outstanding		491,202,890

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

Consolidated Statements Of Operations - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Total net sales	$ 232,887	$ 177,866	$ 135,987
Operating expenses:
Cost of sales	139,156	111,934	88,265
Fulfillment	34,027	25,249	17,619
Marketing Expense	13,814	10,069	7,233
Technology and content	28,837	22,620	16,085
General and administrative	4,336	3,674	2,432
Other operating expense, net	296	214	167
Total operating expenses	220,466	173,760	131,801
Operating income (loss)	12,421	4,106	4,186
Interest income	440	202	100
Interest expense	(1,417)	(848)	(484)
Other income (expense), net	(183)	346	90
Total non-operating income (expense)	(1,160)	(300)	(294)
Income before income taxes	11,261	3,806	3,892
Provision for income taxes	(1,197)	(769)	(1,425)
Equity-method investment activity, net of tax	9	(4)	(96)
Net income	$ 10,073	$ 3,033	$ 2,371
Basic earnings per share	$ 20.68	$ 6.32	$ 5.01
Diluted earnings per share	$ 20.14	$ 6.15	$ 4.90
Weighted-average shares used in computation of earnings per share:
Basic (in shares)	487	480	474
Diluted (in shares)	500	493	484
Net product sales
Total net sales	$ 141,915	$ 118,573	$ 94,665
Net service sales
Total net sales	$ 90,972	$ 59,293	$ 41,322

Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Statement of Comprehensive Income [Abstract]
Net income	$ 10,073	$ 3,033	$ 2,371
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax of $(49), $5, and $6	(538)	533	(279)
Net change in unrealized gains (losses) on available-for-sale debt securities:
Unrealized gains (losses), net of tax of $(12), $5, and $0	(17)	(39)	9
Reclassification adjustment for losses (gains) included in “Other income (expense), net,” net of tax of $0, $0, and $0	8	7	8
Net unrealized gains (losses) on available-for-sale debt securities	(9)	(32)	17
Total other comprehensive income (loss)	(547)	501	(262)
Comprehensive income	$ 9,526	$ 3,534	$ 2,109

Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Statement of Comprehensive Income [Abstract]
Foreign currency translation adjustments, tax	$ 6	$ 5	$ (49)
Unrealized gains (losses), tax	0	5	(12)
Reclassification adjustment for losses (gains) included in other income (expense), net, tax	$ 0	$ 0	$ 0

Consolidated Balance Sheets - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 31,750	$ 20,522
Marketable securities	9,500	10,464
Inventories	17,174	16,047
Accounts receivable, net and other	16,677	13,164
Total current assets	75,101	60,197
Property and equipment, net	61,797	48,866
Goodwill	14,548	13,350
Other assets	11,202	8,897
Total assets	162,648	131,310
Current liabilities:
Accounts payable	38,192	34,616
Accrued expenses and other	23,663	18,170
Unearned revenue	6,536	5,097
Total current liabilities	68,391	57,883
Long-term debt	23,495	24,743
Other long-term liabilities	27,213	20,975
Commitments and contingencies (Note 7)
Stockholders’ equity:
Preferred stock, $0.01 par value: Authorized shares - 500 Issued and outstanding shares - none	0	0
Common stock, $0.01 par value: Authorized shares - 5,000 Issued shares - 507 and 514 Outstanding shares - 484 and 491	5	5
Treasury stock, at cost	(1,837)	(1,837)
Additional paid-in capital	26,791	21,389
Accumulated other comprehensive loss	(1,035)	(484)
Retained earnings	19,625	8,636
Total stockholders’ equity	43,549	27,709
Total liabilities and stockholders’ equity	$ 162,648	$ 131,310

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Preferred stock, par value (in usd per share)	$ 0.01	$ 0.01
Preferred stock, authorized shares	500,000,000	500,000,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, par value (in usd per share)	$ 0.01	$ 0.01
Common stock, authorized shares	5,000,000,000	5,000,000,000
Common stock, issued shares	514,000,000	507,000,000
Common stock, outstanding shares	491,000,000	484,000,000

Consolidated Statements of Stockholders' Equity - USD ($) shares in Millions, $ in Millions	Total	Common Stock	Treasury Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Retained Earnings
Beginning Balance (in shares) at Dec. 31, 2015		471
Beginning Balance at Dec. 31, 2015	$ 13,384	$ 5	$ (1,837)	$ 13,394	$ (723)	$ 2,545
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	2,371					2,371
Other comprehensive income (loss)	(262)				(262)
Exercise of common stock options		6
Exercise of common stock options	1			1
Excess tax benefits from stock-based compensation	829			829
Stock-based compensation and issuance of employee benefit plan stock	2,962			2,962
Ending Balance (in shares) at Dec. 31, 2016		477
Ending Balance at Dec. 31, 2016	19,285	$ 5	(1,837)	17,186	(985)	4,916
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of a change in accounting principle	687					687
Net income	3,033					3,033
Other comprehensive income (loss)	501				501
Exercise of common stock options		7
Exercise of common stock options	1			1
Stock-based compensation and issuance of employee benefit plan stock	4,202			4,202
Ending Balance (in shares) at Dec. 31, 2017		484
Ending Balance at Dec. 31, 2017	27,709	$ 5	(1,837)	21,389	(484)	8,636
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of a change in accounting principle	912				(4)	916
Net income	10,073					10,073
Other comprehensive income (loss)	(547)				(547)
Exercise of common stock options		7
Exercise of common stock options	0			0
Stock-based compensation and issuance of employee benefit plan stock	5,402			5,402
Ending Balance (in shares) at Dec. 31, 2018		491
Ending Balance at Dec. 31, 2018	$ 43,549	$ 5	$ (1,837)	$ 26,791	$ (1,035)	$ 19,625

Description of Business and Accounting Policies

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Description of Business and Accounting Policies

DESCRIPTION OF BUSINESS AND ACCOUNTING POLICIES

Description of Business

We seek to be Earth’s most customer-centric company. In each of our segments, we serve our primary customer sets, consisting of consumers, sellers, developers, enterprises, and content creators. We serve consumers through our online and physical stores and focus on selection, price, and convenience. We offer programs that enable sellers to sell their products in our stores and fulfill orders through us, and programs that allow authors, musicians, filmmakers, skill and app developers, and others to publish and sell content. We serve developers and enterprises of all sizes through our AWS segment, which offers a broad set of global compute, storage, database, and other service offerings. We also manufacture and sell electronic devices. In addition, we provide services, such as advertising.

We have organized our operations into three segments: North America, International, and AWS. See “Note 10 — Segment Information.”

Prior Period Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation, including the addition of restricted cash to cash and cash equivalents on our consolidated statements of cash flows as a result of the adoption of new accounting guidance.

Principles of Consolidation

The consolidated financial statements include the accounts of Amazon.com, Inc., its wholly-owned subsidiaries, and those entities in which we have a variable interest and of which we are the primary beneficiary, including certain entities in India and China and that support our seller lending financing activities (collectively, the “Company”). Intercompany balances and transactions between consolidated entities are eliminated. The financial results of Whole Foods Market, Inc. (“Whole Foods Market”) have been included in our consolidated financial statements from the date of acquisition on August 28, 2017.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, income taxes, commitments and contingencies, valuation of acquired intangibles and goodwill, stock-based compensation forfeiture rates, vendor funding, and inventory valuation. Actual results could differ materially from those estimates.

Earnings per Share

Basic earnings per share is calculated using our weighted-average outstanding common shares. Diluted earnings per share is calculated using our weighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method. In periods when we have a net loss, stock awards are excluded from our calculation of earnings per share as their inclusion would have an antidilutive effect.

The following table shows the calculation of diluted shares (in millions):



	Year Ended December 31,
	2016	2017	2018
Shares used in computation of basic earnings per share	474	480	487
Total dilutive effect of outstanding stock awards	10	13	13
Shares used in computation of diluted earnings per share	484	493	500

Revenue

Revenue is measured based on the amount of consideration that we expect to receive, reduced by estimates for return allowances, promotional discounts, and rebates. Revenue also excludes any amounts collected on behalf of third parties, including sales and indirect taxes. In arrangements where we have multiple performance obligations, the transaction price is allocated to each performance obligation using the relative stand-alone selling price. We generally determine stand-alone selling prices based on the prices charged to customers or using expected cost plus a margin.

A description of our principal revenue generating activities is as follows:

Retail sales - We offer consumer products through our online and physical stores. Revenue is recognized when control of the goods is transferred to the customer, which generally occurs upon our delivery to a third-party carrier or, in the case of an Amazon delivery, to the customer.

Third-party seller services - We offer programs that enable sellers to sell their products in our stores, and fulfill orders through us. We are not the seller of record in these transactions. The commissions and any related fulfillment and shipping fees we earn from these arrangements are recognized when the services are rendered, which generally occurs upon delivery of the related products to a third-party carrier or, in the case of an Amazon delivery, to the customer.

Subscription services - Our subscription sales include fees associated with Amazon Prime memberships and access to content including audiobooks, digital video, e-books, digital music, and other non-AWS subscription services. Prime memberships provide our customers with access to an evolving suite of benefits that represent a single stand-ready obligation. Subscriptions are paid for at the time of or in advance of delivering the services. Revenue from such arrangements is recognized over the subscription period.

AWS - Our AWS arrangements include global sales of compute, storage, database, and other services. Revenue is allocated to services using stand-alone selling prices and is primarily recognized when the customer uses these services, based on the quantity of services rendered, such as compute or storage capacity delivered on-demand. Certain services, including compute and database, are also offered as a fixed quantity over a specified term, for which revenue is recognized ratably. Sales commissions we pay in connection with contracts that exceed one year are capitalized and amortized over the contract term.

Other - Other revenue primarily includes sales of advertising services, which are recognized as ads are delivered based on the number of clicks or impressions.

Return Allowances

Return allowances, which reduce revenue and cost of sales, are estimated using historical experience. Liabilities for return allowances are included in “Accrued expenses and other” and were $567 million, $468 million, and $623 million as of December 31, 2016, 2017, and 2018. Additions to the allowance were $1.5 billion, $1.8 billion, and $2.3 billion and deductions from the allowance were $1.5 billion, $1.9 billion, and $2.3 billion in 2016, 2017, and 2018. Included in “Inventories” on our consolidated balance sheets are assets totaling $411 million, $406 million, and $519 million as of December 31, 2016, 2017, and 2018, for the rights to recover products from customers associated with our liabilities for return allowances.

Cost of Sales

Cost of sales primarily consists of the purchase price of consumer products, digital media content costs where we record revenue gross, including video and music, packaging supplies, sortation and delivery centers and related equipment costs, and inbound and outbound shipping costs, including where we are the transportation service provider. Shipping costs to receive products from our suppliers are included in our inventory, and recognized as cost of sales upon sale of products to our customers. Payment processing and related transaction costs, including those associated with seller transactions, are classified in “Fulfillment” on our consolidated statements of operations.

Vendor Agreements

We have agreements with our vendors to receive funds primarily for cooperative marketing efforts, promotions, incentives, and volume rebates. We generally consider these amounts received from vendors to be a reduction of the prices we pay for their goods, including property and equipment, or services, and are recorded as a reduction of the cost of inventory, cost of services, or cost of property and equipment. Volume rebates typically depend on reaching minimum purchase thresholds. We evaluate the likelihood of reaching purchase thresholds using past experience and current year forecasts. When volume rebates can be reasonably estimated, we record a portion of the rebate as we make progress towards the purchase threshold.

Fulfillment

Fulfillment costs primarily consist of those costs incurred in operating and staffing our North America and International segments’ fulfillment centers, customer service centers, and physical stores, including costs attributable to buying, receiving, inspecting, and warehousing inventories; picking, packaging, and preparing customer orders for shipment; payment processing and related transaction costs, including costs associated with our guarantee for certain seller transactions; responding to inquiries from customers; and supply chain management for our manufactured electronic devices. Fulfillment costs also include amounts paid to third parties that assist us in fulfillment and customer service operations.

Marketing

Marketing costs primarily consist of targeted online advertising, payroll and related expenses for personnel engaged in marketing and selling activities, and television advertising. We pay commissions to third parties when their customer referrals result in sales. We also participate in cooperative advertising arrangements with certain of our vendors, and other third parties.

Advertising and other promotional costs to market our products and services are expensed as incurred and were $5.0 billion, $6.3 billion, and $8.2 billion in 2016, 2017, and 2018. Prepaid advertising costs were not significant as of December 31, 2017 and 2018.

Technology and Content

Technology and content costs include payroll and related expenses for employees involved in the research and development of new and existing products and services, development, design, and maintenance of our stores, curation and display of products and services made available in our online stores, and infrastructure costs. Infrastructure costs include servers, networking equipment, and data center related depreciation, rent, utilities, and other expenses necessary to support AWS and other Amazon businesses. Collectively, these costs reflect the investments we make in order to offer a wide variety of products and services to our customers. Technology and content costs are generally expensed as incurred.

General and Administrative

General and administrative expenses primarily consist of payroll and related expenses; facilities and equipment expenses, such as depreciation expense and rent; professional fees and litigation costs; and other general corporate costs for corporate functions, including accounting, finance, tax, legal, and human resources, among others.

Stock-Based Compensation

Compensation cost for all stock awards expected to vest is measured at fair value on the date of grant and recognized over the service period. The fair value of restricted stock units is determined based on the number of shares granted and the quoted price of our common stock. Such value is recognized as expense over the service period, net of estimated forfeitures, using the accelerated method. The estimated number of stock awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from our current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised. We consider many factors when estimating expected forfeitures, including historical forfeiture experience and employee level.

Other Operating Expense, Net

Other operating expense, net, consists primarily of marketing-related, contract-based, and customer-related intangible asset amortization expense, and expenses related to legal settlements.

Other Income (Expense), Net

Other income (expense), net, consists primarily of foreign currency gains (losses) of $21 million, $247 million, and $(206) million in 2016, 2017, and 2018 and equity warrant valuation gains (losses) of $67 million, $109 million, and $(131) million in 2016, 2017, and 2018 and equity securities gains of $1 million, $18 million, and $145 million in 2016, 2017, and 2018.

Income Taxes

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. We intend to invest substantially all of our foreign subsidiary earnings, as well as our capital in our foreign subsidiaries, indefinitely outside of the U.S. in those jurisdictions in which we 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 we believe they will not be realized. We consider many factors when assessing the likelihood of future realization of our deferred tax assets, including our recent cumulative loss experience and expectations of future earnings, capital gains and investment in such jurisdiction, the carry-forward periods available to us for tax reporting purposes, and other relevant factors.

We utilize 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. We consider many factors when evaluating our tax positions and estimating our tax benefits, which may require periodic adjustments and which may not accurately forecast actual outcomes. We include interest and penalties related to our tax contingencies in income tax expense.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

For our cash, cash equivalents, or marketable securities, we measure the fair value of money market funds and equity securities based on quoted prices in active markets for identical assets or liabilities. All other financial instruments were valued either based on recent trades of securities in inactive markets or based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data. We did not hold any cash, cash equivalents, or marketable securities categorized as Level 3 assets as of December 31, 2017 and 2018.

As part of entering into commercial agreements, we often obtain equity warrant assets giving us the right to acquire stock of other companies. As of December 31, 2017 and 2018, these warrants had a fair value of $441 million and $440 million, and are recorded within “Other assets” on our consolidated balance sheets. The related gain (loss) recorded in “Other income (expense), net” was $67 million, $109 million, and $(131) million in 2016, 2017, and 2018. These assets are primarily classified as Level 2 assets.

Cash and Cash Equivalents

We classify all highly liquid instruments with an original maturity of three months or less as cash equivalents.

Inventories

Inventories, consisting of products available for sale, are primarily accounted for using the first-in, first-out method, and are valued at the lower of cost and net realizable value. This valuation requires us to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers, returns to product vendors, or liquidations, and expected recoverable values of each disposition category.

We provide Fulfillment by Amazon services in connection with certain of our sellers’ programs. Third-party sellers maintain ownership of their inventory, regardless of whether fulfillment is provided by us or the third-party sellers, and therefore these products are not included in our inventories.

We also purchase electronic device components from a variety of suppliers and use several contract manufacturers to provide manufacturing services for our products. During the normal course of business, in order to manage manufacturing lead times and help ensure adequate supply, we enter into agreements with contract manufacturers and suppliers for certain electronic device components. A portion of our reported purchase commitments arising from these agreements consists of firm, non-cancellable commitments. These commitments are based on forecasted customer demand. If we reduce these commitments, we may incur additional costs. We also have firm, non-cancellable commitments for certain products offered in our Whole Foods Market stores.

Accounts Receivable, Net and Other

Included in “Accounts receivable, net and other” on our consolidated balance sheets are amounts primarily related to customers, vendors, and sellers. As of December 31, 2017 and 2018, customer receivables, net, were $6.4 billion and $9.4 billion, vendor receivables, net, were $2.6 billion and $3.2 billion, and seller receivables, net, were $692 million and $710 million. Seller receivables are amounts due from sellers related to our seller lending program, which provides funding to sellers primarily to procure inventory.

We estimate losses on receivables based on known troubled accounts and historical experience of losses incurred. Receivables are considered impaired and written-off when it is probable that all contractual payments due will not be collected in accordance with the terms of the agreement. The allowance for doubtful accounts was $237 million, $348 million, and $495 million as of December 31, 2016, 2017, and 2018. Additions to the allowance were $451 million, $626 million, and $878 million, and deductions to the allowance were $403 million, $515 million, and $731 million in 2016, 2017, and 2018.

Software Development Costs

We incur software development costs related to products to be sold, leased, or marketed to external users, internal-use software, and our websites. Software development costs capitalized were not significant for the years presented. All other costs, including those related to design or maintenance, are expensed as incurred.

Property and Equipment, Net

Property and equipment are stated at cost less accumulated depreciation. Incentives that we receive from property and equipment vendors are recorded as a reduction in our costs. Property includes buildings and land that we own, along with property we have acquired under build-to-suit, finance, and capital lease arrangements. Equipment includes assets such as servers and networking equipment, heavy equipment, and other fulfillment equipment. Depreciation is recorded on a straight-line basis over the estimated useful lives of the assets (generally the lesser of 40 years or the remaining life of the underlying building, three years for our servers, five years for networking equipment, ten years for heavy equipment, and three to seven years for other fulfillment equipment). Depreciation expense is classified within the corresponding operating expense categories on our consolidated statements of operations.

Leases and Asset Retirement Obligations

We categorize leases at their inception as either operating or capital leases. On certain of our lease agreements, we may receive rent holidays and other incentives provided by the landlord. We recognize lease costs on a straight-line basis without regard to deferred payment terms, such as rent holidays, that defer the commencement date of required payments. Additionally, incentives we receive are treated as a reduction of our costs over the term of the agreement. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the non-cancellable term of the lease.

We establish assets and liabilities for the estimated construction costs incurred under build-to-suit lease arrangements to the extent we are involved in the construction of structural improvements or take construction risk prior to commencement of a lease. Upon occupancy of facilities under build-to-suit leases, we assess whether these arrangements qualify for sales recognition under the sale-leaseback accounting guidance. If we continue to be the deemed owner, the facilities are accounted for as finance leases.

We establish assets and liabilities for the present value of estimated future costs to retire long-lived assets at the termination or expiration of a lease. Such assets are depreciated over the lease period into operating expense, and the recorded liabilities are accreted to the future value of the estimated retirement costs.

As disclosed in “Accounting Pronouncements Not Yet Adopted,” our accounting for build-to-suit and finance leases will change on January 1, 2019.

Goodwill

We evaluate goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate the carrying value may not be recoverable. In testing goodwill for impairment, we may elect to utilize a qualitative assessment to evaluate whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If our qualitative assessment indicates that goodwill impairment is more likely than not, we perform a two-step impairment test. We test goodwill for impairment under the two-step impairment test by first comparing the book value of net assets to the fair value of the reporting units. If the fair value is determined to be less than the book value or qualitative factors indicate that it is more likely than not that goodwill is impaired, a second step is performed to compute the amount of impairment as the difference between the estimated fair value of goodwill and the carrying value. We estimate the fair value of the reporting units using discounted cash flows. Forecasts of future cash flows are based on our best estimate of future net sales and operating expenses, based primarily on expected category expansion, pricing, market segment share, and general economic conditions.

We completed the required annual testing of goodwill for impairment for all reporting units as of April 1, 2018, and determined that goodwill is not impaired as the fair value of our reporting units substantially exceeded their book value. There were no events that caused us to update our annual impairment test. See “Note 4 — Acquisitions, Goodwill, and Acquired Intangible Assets.”

Other Assets

Included in “Other assets” on our consolidated balance sheets are amounts primarily related to acquired intangible assets, net of accumulated amortization; video and music content, net of accumulated amortization; long-term deferred tax assets; certain equity investments; marketable securities restricted for longer than one year, the majority of which are attributable to collateralization of bank guarantees and debt related to our international operations; and equity warrant assets.

Video and Music Content

We obtain video and music content for customers through licensing agreements that have a wide range of licensing provisions, which include both fixed and variable payment schedules. When the license fee for a specific movie, television, or music title is determinable or reasonably estimable and the content is available for streaming, we recognize an asset representing the fee and a corresponding liability for the amounts owed. We relieve the liability as payments are made and we amortize the asset to “Cost of sales” on a straight-line basis or on an accelerated basis, based on estimated usage patterns, which typically ranges from one to five years. If we are unable to reasonably estimate the cost per title, no asset or liability is recorded and licensing costs are expensed as incurred. We also develop original content. Capitalized production costs associated with our original content are limited by the amount of revenue we expect to earn, which results in a portion being expensed as incurred. These capitalized costs are amortized to “Cost of sales” on an accelerated basis that follows the viewing pattern of customer streams in the first months after availability.

Investments

We generally invest our 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 us the ability to exercise significant influence, but not control, over an investee. Equity-method investments are included within “Other assets” on our consolidated balance sheets. Our 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 our consolidated statements of operations.

Equity investments without readily determinable fair values and for which we do 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 our consolidated balance sheets.

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

We periodically evaluate whether declines in fair values of our investments indicate impairment. For debt securities and equity method investments, we also evaluate whether declines in fair value of our 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 our ability and intent to hold the investment until a forecasted recovery occurs. Additionally, we assess whether we have plans to sell the security or it is more likely than not we 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 our investments; duration and severity of the decline in value; and our strategy and intentions for holding the investment.

Long-Lived Assets

Long-lived assets, other than goodwill, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets may not be recoverable.

For long-lived assets used in operations, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. We measure the impairment loss based on the difference between the carrying amount and estimated fair value. Long-lived assets are considered held for sale when certain criteria are met, including when management has committed to a plan to sell the asset, the asset is available for sale in its immediate condition, and the sale is probable within one year of the reporting date. Assets held for sale are reported at the lower of cost or fair value less costs to sell. Assets held for sale were not significant as of December 31, 2017 and 2018.

Accrued Expenses and Other

Included in “Accrued expenses and other” on our consolidated balance sheets are liabilities primarily related to leases and asset retirement obligations, payroll and related expenses, unredeemed gift cards, customer liabilities, current debt, acquired digital media content, and other operating expenses.

As of December 31, 2017 and 2018, our liabilities for payroll related expenses were $2.9 billion and $3.4 billion and our liabilities for unredeemed gift cards were $3.0 billion and $2.8 billion. We reduce the liability for a gift card when redeemed by a customer. The portion of gift cards that we do not expect to be redeemed is recognized based on customer usage patterns.

Unearned Revenue

Unearned revenue is recorded when payments are received or due in advance of performing our service obligations and is recognized over the service period. Unearned revenue primarily relates to prepayments of AWS services and Amazon Prime memberships. Our total unearned revenue as of December 31, 2017 was $6.1 billion, of which $5.3 billion was recognized as revenue during the year ended December 31, 2018, including adjustments related to the new revenue recognition guidance. Included in “Other long-term liabilities” on our consolidated balance sheets was $1.0 billion and $1.4 billion of unearned revenue as of December 31, 2017 and 2018.

Additionally, we have performance obligations, primarily related to AWS, associated with commitments in customer contracts for future services that have not yet been recognized in our financial statements. For contracts with original terms that exceed one year, those commitments not yet recognized were $19.3 billion as of December 31, 2018. The weighted average remaining life of our long-term contracts is 3.3 years. However, the amount and timing of revenue recognition is largely driven by customer usage, which can extend beyond the original contractual term.

Foreign Currency

We have internationally-focused stores for which the net sales generated, as well as most of the related expenses directly incurred from those operations, are denominated in local functional currencies. The functional currency of our subsidiaries that either operate or support these stores is generally the same as the local currency. Assets and liabilities of these subsidiaries are translated into U.S. Dollars at period-end foreign exchange rates, and revenues and expenses are translated at average rates prevailing throughout the period. Translation adjustments are included in “Accumulated other comprehensive loss,” a separate component of stockholders’ equity, and in the “Foreign currency effect on cash and cash equivalents,” on our consolidated statements of cash flows. Transaction gains and losses including intercompany transactions denominated in a currency other than the functional currency of the entity involved are included in “Other income (expense), net” on our consolidated statements of operations. In connection with the settlement and remeasurement of intercompany balances, we recorded gains (losses) of $62 million, $202 million, and $(186) million in 2016, 2017, and 2018.

Accounting Pronouncements Recently Adopted

In May 2014, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) amending revenue recognition guidance and requiring more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. We adopted this ASU on January 1, 2018 for all revenue contracts with our customers using the modified retrospective approach and increased retained earnings by approximately $650 million. The adjustment primarily relates to the unredeemed portion of our gift cards, which are now recognized over the expected customer usage period rather than waiting until gift cards expire or when the likelihood of redemption becomes remote. We changed the recognition and classification of Amazon Prime memberships, which are now accounted for as a single performance obligation and recognized ratably over the membership period as service sales. Previously, Prime memberships were considered to be arrangements with multiple deliverables and were allocated among product sales and service sales. Other changes relate primarily to the presentation of revenue. Certain advertising services are now classified as revenue rather than a reduction in cost of sales, and sales of apps, in-app content, and certain digital media content are presented on a net basis. Prior year amounts have not been adjusted and continue to be reported in accordance with our historic accounting policy.

The impact of applying this ASU for the year ended December 31, 2018 primarily resulted in a decrease in product sales and an increase in service sales driven by the reclassification of Prime membership fees of approximately $3.8 billion. Service sales also increased by approximately $3.0 billion for the year ended December 31, 2018 due to the reclassification of certain advertising services.

In January 2016, the FASB issued an ASU that updates certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Under this ASU, certain equity investments are measured at fair value with changes recognized in net income. We adopted this ASU in Q1 2018 with no material impact to our consolidated financial statements.

In October 2016, the FASB issued an ASU amending the accounting for income taxes. The new guidance requires the recognition of the income tax consequences of an intercompany asset transfer, other than transfers of inventory, when the transfer occurs. For intercompany transfers of inventory, the income tax effects will continue to be deferred until the inventory has been sold to a third party. We adopted this ASU in Q1 2018 with an increase of approximately $250 million to retained earnings and deferred tax assets net of valuation allowances.

In November 2016, the FASB issued an ASU amending the presentation of restricted cash within the consolidated statements of cash flows. The new guidance requires that restricted cash be added to cash and cash equivalents on the consolidated statements of cash flows. We adopted this ASU in Q1 2018 on a retrospective basis with the following impacts to our consolidated statements of cash flows (in millions):



Year Ended December 31, 2016	Previously Reported			Adjustments			As Revised
Operating activities	$	17,272		$	(69	)	$	17,203
Investing activities	(9,876		)	360			(9,516		)
Financing activities	(3,740		)	24			(3,716		)
Net change in cash, cash equivalents, and restricted cash	$	3,656		$	315		$	3,971



Year Ended December 31, 2017	Previously Reported			Adjustments			As Revised
Operating activities	$	18,434		$	(69	)	$	18,365
Investing activities	(27,819		)	735			(27,084		)
Financing activities	9,860			68			9,928
Net change in cash, cash equivalents, and restricted cash	$	475		$	734		$	1,209

Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued an ASU amending the accounting for leases. The new guidance requires the recognition of lease assets and liabilities for operating leases with terms of more than 12 months, in addition to those currently recorded, on our consolidated balance sheets. Presentation of leases within the consolidated statements of operations and consolidated statements of cash flows will be generally consistent with the current lease accounting guidance. The ASU is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. We will adopt this ASU on January 1, 2019 with an immaterial cumulative adjustment to retained earnings rather than retrospectively adjusting prior periods. This adoption approach will result in a balance sheet presentation that will not be comparable to the prior period in the first year of adoption. The adoption of this ASU will result in the recognition of operating lease assets and liabilities of approximately $21 billion, which includes the reclassification of finance leases to operating leases of approximately $1.2 billion, and the derecognition of build-to-suit lease assets and liabilities when we do not control the building during the construction period of approximately $1.5 billion.

Cash, Cash Equivalents, and Marketable Securities

12 Months Ended

Dec. 31, 2018

Investments, Debt and Equity Securities [Abstract]

Cash, Cash Equivalents, and Marketable Securities

CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND MARKETABLE SECURITIES

As of December 31, 2017 and 2018, our cash, cash equivalents, restricted cash, and marketable securities primarily consisted of cash, AAA-rated money market funds, U.S. and foreign government and agency securities, and other investment grade securities. Cash equivalents and marketable securities are recorded at fair value. The following table summarizes, by major security type, our cash, cash equivalents, restricted cash, and marketable securities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in millions):



	December 31, 2017
	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Total Estimated Fair Value
Cash	$	9,982	$	—	$	—		$	9,982
Level 1 securities:
Money market funds	11,343		—		—			11,343
Equity securities	23		30		—			53
Level 2 securities:
Foreign government and agency securities	620		—		—			620
U.S. government and agency securities	4,841		1		(19		)	4,823
Corporate debt securities	4,265		1		(9		)	4,257
Asset-backed securities	910		—		(5		)	905
Other fixed income securities	340		—		(2		)	338
	$	32,324	$	32	$	(35	)	$	32,321
Less: Restricted cash, cash equivalents, and marketable securities (1)								(1,335		)
Total cash, cash equivalents, and marketable securities								$	30,986



	December 31, 2018
	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Total Estimated Fair Value
Cash	$	10,406	$	—	$	—		$	10,406
Level 1 securities:
Money market funds	12,515		—		—			12,515
Equity securities	29		143		(2		)	170
Level 2 securities:
Foreign government and agency securities	815		—		—			815
U.S. government and agency securities	11,686		1		(20		)	11,667
Corporate debt securities	5,008		1		(19		)	4,990
Asset-backed securities	896		—		(4		)	892
Other fixed income securities	190		—		(2		)	188
Equity securities	28		5		—			33
	$	41,573	$	150	$	(47	)	$	41,676
Less: Restricted cash, cash equivalents, and marketable securities (1)								(426		)
Total cash, cash equivalents, and marketable securities								$	41,250

___________________

(1)

We are required to pledge or otherwise restrict a portion of our cash, cash equivalents, and marketable securities as collateral for real estate leases, amounts due to third-party sellers in certain jurisdictions, debt, and standby and trade letters of credit. We classify cash, cash equivalents, and marketable securities with use restrictions of less than twelve months as “Accounts receivable, net and other” and of twelve months or longer as non-current “Other assets” on our consolidated balance sheets. See “Note 7 — Commitments and Contingencies.”

The following table summarizes gross gains and gross losses realized on sales of available-for-sale fixed income marketable securities (in millions):



	Year Ended December 31,
	2016		2017		2018
Realized gains	$	3	$	5	$	2
Realized losses	11		11		9

The following table summarizes the remaining contractual maturities of our cash equivalents and marketable fixed income securities as of December 31, 2018 (in millions):



	Amortized Cost		Estimated Fair Value
Due within one year	$	27,520	$	27,508
Due after one year through five years	2,865		2,845
Due after five years through ten years	187		185
Due after ten years	538		529
Total	$	31,110	$	31,067

Actual maturities may differ from the contractual maturities because borrowers may have certain prepayment conditions.

The following table provides a reconciliation of the amount of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets to the total of the same such amounts shown in the consolidated statements of cash flows (in millions):



	December 31, 2017		December 31, 2018
Cash and cash equivalents	$	20,522	$	31,750
Restricted cash included in accounts receivable, net and other	1,329		418
Restricted cash included in other assets	5		5
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows	$	21,856	$	32,173

Property and Equipment

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

Property and Equipment

PROPERTY AND EQUIPMENT

Property and equipment, at cost, consisted of the following (in millions):



	December 31,
	2017		2018
Gross property and equipment (1):
Land and buildings	$	23,896	$	31,741
Equipment	42,244		54,591
Other assets	2,438		2,577
Construction in progress	4,078		6,861
Gross property and equipment	72,656		95,770
Total accumulated depreciation and amortization (1)	23,790		33,973
Total property and equipment, net	$	48,866	$	61,797

___________________


(1)	We revised our prior year presentation of gross property and equipment and total accumulated depreciation and amortization to include all property and equipment in service, including equipment which is fully-depreciated, to conform to the current year presentation. Total property and equipment, net remains unchanged for the prior year.

Depreciation expense on property and equipment was $6.4 billion, $8.8 billion, and $12.1 billion which includes amortization of property and equipment acquired under capital leases of $3.8 billion, $5.4 billion, and $7.3 billion for 2016, 2017, and 2018. Gross assets recorded under capital leases were $26.4 billion and $36.1 billion as of December 31, 2017 and 2018. Accumulated amortization associated with capital leases was $13.4 billion and $19.8 billion as of December 31, 2017 and 2018.

We capitalize construction in progress and record a corresponding long-term liability for build-to-suit lease agreements where we are considered the owner, for accounting purposes, during the construction period. For buildings under build-to-suit lease arrangements where we have taken occupancy, which do not qualify for sales recognition under the sale-leaseback accounting guidance, we determined that we continue to be the deemed owner of these buildings. This is principally due to our significant investment in tenant improvements. As a result, the buildings are being depreciated over the shorter of their useful lives or the related leases’ terms. Additionally, certain build-to-suit lease arrangements and finance leases provide purchase options. Upon occupancy, the long-term construction obligations are considered long-term finance lease obligations with amounts payable during the next 12 months recorded as “Accrued expenses and other.” Gross assets remaining under finance leases were $5.4 billion and $7.5 billion as of December 31, 2017 and 2018. Accumulated amortization associated with finance leases was $635 million and $1.1 billion as of December 31, 2017 and 2018. As disclosed in “Note 1 — Description of Business and Accounting Policies,” our accounting for build-to-suit and finance leases will change on January 1, 2019.

Acquisitions, Goodwill, and Acquired Intangible Assets

12 Months Ended

Dec. 31, 2018

Business Combinations [Abstract]

Acquisitions, Goodwill, and Acquired Intangible Assets

ACQUISITIONS, GOODWILL, AND ACQUIRED INTANGIBLE ASSETS

2016 Acquisition Activity

During 2016, we acquired certain companies for an aggregate purchase price of $103 million. The primary reason for these acquisitions, none of which were individually material to our consolidated financial statements, was to acquire technologies and know-how to enable Amazon to serve customers more effectively.

2017 Acquisition Activity

On May 12, 2017, we acquired Souq Group Ltd. (“Souq”), an e-commerce company, for approximately $583 million, net of cash acquired, and on August 28, 2017, we acquired Whole Foods Market, a grocery store chain, for approximately $13.2 billion, net of cash acquired. Both acquisitions are intended to expand our retail presence. During 2017, we also acquired certain other companies for an aggregate purchase price of $204 million. The primary reason for our other 2017 acquisitions was to acquire technologies and know-how to enable Amazon to serve customers more effectively.

2018 Acquisition Activity

On April 12, 2018, we acquired Ring Inc. (“Ring”) for cash consideration of approximately $839 million, net of cash acquired, and on September 11, 2018, we acquired PillPack, Inc. (“PillPack”) for cash consideration of approximately $753 million, net of cash acquired, to expand our product and service offerings. During 2018, we also acquired certain other companies for an aggregate purchase price of $57 million. The primary reason for our other 2018 acquisitions was to acquire technologies and know-how to enable Amazon to serve customers more effectively.

Acquisition-related costs were expensed as incurred and were not significant.

Pro forma results of operations have not been presented because the effects of these acquisitions, individually and in the aggregate, were not material to our consolidated results of operations.

Purchase Price Allocation

The aggregate purchase price of these acquisitions was allocated as follows (in millions):



	December 31,
	2016			2017			2018

Purchase Price
Cash paid, net of cash acquired	$	81		$	13,859		$	1,618
Indemnification holdback	22			104			31
	$	103		$	13,963		$	1,649
Allocation
Goodwill	$	60		$	9,501		$	1,228
Intangible assets (1):
Marketing-related	2			1,987			186
Contract-based	1			440			13
Technology-based	53			166			285
Customer-related	1			54			193
	57			2,647			677
Property and equipment	3			3,810			11
Deferred tax assets	17			117			174
Other assets acquired	10			1,858			282
Long-term debt	(5		)	(1,165		)	(176		)
Deferred tax liabilities	(18		)	(961		)	(159		)
Other liabilities assumed	(21		)	(1,844		)	(388		)
	$	103		$	13,963		$	1,649

___________________


(1)	Intangible assets acquired in 2016, 2017, and 2018 have estimated useful lives of between one and seven years, one and twenty-five years, and two and seven years, with weighted-average amortization periods of five years, twenty-one years, and six years.

We determined the estimated fair value of identifiable intangible assets acquired primarily by using the income approach. These assets are included within “Other assets” on our consolidated balance sheets and are being amortized to operating expenses on a straight-line basis over their estimated useful lives.

Goodwill

The goodwill of the acquired companies is primarily related to expected improvements in technology performance and functionality, as well as sales growth from future product and service offerings and new customers, together with certain intangible assets that do not qualify for separate recognition. The goodwill of the acquired companies is generally not deductible for tax purposes. The following summarizes our goodwill activity in 2017 and 2018 by segment (in millions):



	North America			International			AWS			Consolidated
Goodwill - January 1, 2017	$	2,044		$	694		$	1,046		$	3,784
New acquisitions (1)	9,115			368			18			9,501
Other adjustments (2)	6			46			13			65
Goodwill - December 31, 2017	11,165			1,108			1,077			13,350
New acquisitions (1)	1,031			177			20			1,228
Other adjustments (2)	(5		)	(15		)	(10		)	(30		)
Goodwill - December 31, 2018	$	12,191		$	1,270		$	1,087		$	14,548

___________________


(1)	Primarily includes the acquisition of Whole Foods Market in the North America segment and Souq in the International segment in 2017 and the acquisitions of Ring and PillPack in the North America segment in 2018.


(2)	Primarily includes changes in foreign exchange rates.

Intangible Assets

Acquired intangible assets, included within “Other assets” on our consolidated balance sheets, consist of the following (in millions):



	December 31,
	2017							2018
	Acquired Intangibles, Gross (1)		Accumulated Amortization (1)			Acquired Intangibles, Net		Acquired Intangibles, Gross (1)		Accumulated Amortization (1)			Acquired Intangibles, Net		Weighted Average Life Remaining
Marketing-related	$	2,486	$	(418	)	$	2,068	$	2,542	$	(431	)	$	2,111	21.2
Contract-based	1,013		(213		)	800		1,430		(224		)	1,206		12.3
Technology- and content-based	640		(252		)	388		941		(377		)	564		4.6
Customer-related	283		(168		)	115		437		(208		)	229		4.4
Acquired intangibles (2)	$	4,422	$	(1,051	)	$	3,371	$	5,350	$	(1,240	)	$	4,110	15.4

___________________


(1)	Excludes the original cost and accumulated amortization of fully-amortized intangibles.


(2)	Intangible assets have estimated useful lives of between one and twenty-five years.

Amortization expense for acquired intangibles was $287 million, $366 million, and $475 million in 2016, 2017, and 2018. Expected future amortization expense of acquired intangible assets as of December 31, 2018 is as follows (in millions):



Year Ended December 31,
2019	$	511
2020	412
2021	355
2022	323
2023	270
Thereafter	2,217
	$	4,088

Long-Term Debt

12 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

Long-Term Debt

DEBT

As of December 31, 2018, we had $24.3 billion of unsecured senior notes outstanding (the “Notes”). As of December 31, 2017 and 2018, the net unamortized discount and debt issuance costs on the Notes was $99 million and $101 million. We also have other long-term debt with a carrying amount, including the current portion and borrowings under our credit facility, of $692 million and $715 million as of December 31, 2017 and 2018. The face value of our total long-term debt obligations is as follows (in millions):



	December 31,
	2017			2018
2.600% Notes due on December 5, 2019 (2)	1,000			1,000
1.900% Notes due on August 21, 2020 (3)	1,000			1,000
3.300% Notes due on December 5, 2021 (2)	1,000			1,000
2.500% Notes due on November 29, 2022 (1)	1,250			1,250
2.400% Notes due on February 22, 2023 (3)	1,000			1,000
2.800% Notes due on August 22, 2024 (3)	2,000			2,000
3.800% Notes due on December 5, 2024 (2)	1,250			1,250
5.200% Notes due on December 3, 2025 (4)	1,000			1,000
3.150% Notes due on August 22, 2027 (3)	3,500			3,500
4.800% Notes due on December 5, 2034 (2)	1,250			1,250
3.875% Notes due on August 22, 2037 (3)	2,750			2,750
4.950% Notes due on December 5, 2044 (2)	1,500			1,500
4.050% Notes due on August 22, 2047 (3)	3,500			3,500
4.250% Notes due on August 22, 2057 (3)	2,250			2,250
Credit Facility	592			594
Other long-term debt	100			121
Total debt	24,942			24,965
Less current portion of long-term debt	(100		)	(1,371		)
Face value of long-term debt	$	24,842		$	23,594

_____________________________


(1)	Issued in November 2012, effective interest rate of the 2022 Notes was 2.66%.


(2)	Issued in December 2014, effective interest rates of the 2019, 2021, 2024, 2034, and 2044 Notes were 2.73%, 3.43%, 3.90%, 4.92%, and 5.11%.


(3)	Issued in August 2017, effective interest rates of the 2020, 2023, 2024, 2027, 2037, 2047, and 2057 Notes were 2.16%, 2.56%, 2.95%, 3.25%, 3.94%, 4.13%, and 4.33%.


(4)	Consists of $872 million of 2025 Notes issued in December 2017 in exchange for notes assumed in connection with the acquisition of Whole Foods Market and $128 million of 2025 Notes issued by Whole Foods Market that did not participate in our December 2017 exchange offer. The effective interest rate of the 2025 Notes was 3.02%.

Interest on the Notes issued in 2012 is payable semi-annually in arrears in May and November. Interest on the Notes issued in 2014 is payable semi-annually in arrears in June and December. Interest on the Notes issued in 2017 is payable semi-annually in arrears in February and August. Interest on the 2025 Notes is payable semi-annually in arrears in June and December. We may redeem the Notes at any time in whole, or from time to time, in part at specified redemption prices. We are not subject to any financial covenants under the Notes. The proceeds from the November 2012 and the December 2014 Notes were used for general corporate purposes. The proceeds from the August 2017 Notes were used to fund the consideration for the acquisition of Whole Foods Market, to repay notes due in 2017, and for general corporate purposes. The estimated fair value of the Notes was approximately $25.7 billion and $24.3 billion as of December 31, 2017 and 2018, which is based on quoted prices for our debt as of those dates.

In October 2016, we entered into a $500 million secured revolving credit facility with a lender that is secured by certain seller receivables, which we subsequently increased to $620 million and may from time to time increase in the future subject to lender approval (the “Credit Facility”). The Credit Facility is available for a term of three years, bears interest at the London interbank offered rate (“LIBOR”) plus 1.65%, and has a commitment fee of 0.50% on the undrawn portion. There were $592 million and $594 million of borrowings outstanding under the Credit Facility as of December 31, 2017 and 2018, which had a weighted-average interest rate of 2.7% and 3.2% as of December 31, 2017 and 2018. As of December 31, 2017 and 2018, we have pledged $686 million of our cash and seller receivables as collateral for debt related to our Credit Facility. The estimated fair value of the Credit Facility, which is based on Level 2 inputs, approximated its carrying value as of December 31, 2017 and 2018.

The other debt, including the current portion, had a weighted-average interest rate of 5.8% and 6.0% as of December 31, 2017 and 2018. We used the net proceeds from the issuance of this debt primarily to fund certain business operations. The estimated fair value of the other long-term debt, which is based on Level 2 inputs, approximated its carrying value as of December 31, 2017 and 2018.

As of December 31, 2018, future principal payments for our total debt were as follows (in millions):



Year Ended December 31,
2019	$	1,371
2020	1,298
2021	1,016
2022	1,266
2023	1,014
Thereafter	19,000
	$	24,965

In April 2018, we established a commercial paper program (the “Commercial Paper Program”) under which we may from time to time issue unsecured commercial paper up to a total of $7.0 billion at any time, with individual maturities that may vary but will not exceed 397 days from the date of issue. There were no borrowings outstanding under the Commercial Paper Program as of December 31, 2018.

In April 2018, in connection with our Commercial Paper Program, we amended and restated our unsecured revolving credit facility (the “Credit Agreement”) with a syndicate of lenders to increase our borrowing capacity thereunder to $7.0 billion. As amended and restated, the Credit Agreement has a term of three years, but it may be extended for up to three additional one-year terms if approved by the lenders. The interest rate applicable to outstanding balances under the amended and restated Credit Agreement is LIBOR plus 0.50%, with a commitment fee of 0.04% on the undrawn portion of the credit facility. There were no borrowings outstanding under the Credit Agreement as of December 31, 2017 and 2018.

Other Long-Term Liabilities

12 Months Ended

Dec. 31, 2018

Other Liabilities Disclosure [Abstract]

Other Long-Term Liabilities

OTHER LONG-TERM LIABILITIES

Our other long-term liabilities are summarized as follows (in millions):



	December 31,
	2017		2018
Long-term capital lease obligations	$	8,438	$	9,650
Long-term finance lease obligations	4,745		6,642
Construction liabilities	1,350		2,516
Tax contingencies	1,004		896
Long-term deferred tax liabilities	990		1,490
Other	4,448		6,019
Total other long-term liabilities	$	20,975	$	27,213

Capital and Finance Leases

Certain of our equipment, primarily related to technology infrastructure, and buildings have been acquired under capital leases. Long-term capital lease obligations are as follows (in millions):



	December 31, 2018
Gross capital lease obligations	$	17,952
Less imputed interest	(582		)
Present value of net minimum lease payments	17,370
Less current portion of capital lease obligations	(7,720		)
Total long-term capital lease obligations	$	9,650

We continue to be the deemed owner after occupancy of certain facilities that were constructed as build-to-suit lease arrangements and previously reflected as “Construction liabilities.” As such, these arrangements are accounted for as finance leases. Long-term finance lease obligations are as follows (in millions):



	December 31, 2018
Gross finance lease obligations	$	8,376
Less imputed interest	(1,323		)
Present value of net minimum lease payments	7,053
Less current portion of finance lease obligations	(411		)
Total long-term finance lease obligations	$	6,642

As disclosed in “Note 1 — Description of Business and Accounting Policies,” our accounting for build-to-suit and finance leases will change on January 1, 2019.

Construction Liabilities

We capitalize construction in progress and record a corresponding long-term liability for build-to-suit lease agreements where we are considered the owner during the construction period for accounting purposes. These liabilities primarily relate to our corporate buildings and fulfillment, sortation, delivery, and data centers. As disclosed in “Note 1 — Description of Business and Accounting Policies,” our accounting for build-to-suit and finance leases will change on January 1, 2019.

Tax Contingencies

We have recorded reserves for tax contingencies, inclusive of accrued interest and penalties, for U.S. and foreign income taxes. These reserves primarily relate to transfer pricing and state income taxes, and are presented net of offsetting deferred tax assets related to net operating losses and tax credits. See “Note 9 — Income Taxes” for discussion of tax contingencies.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES

Commitments

We have entered into non-cancellable operating, capital, and finance leases for equipment and office, fulfillment, sortation, delivery, data center, physical store, and renewable energy facilities. Rental expense under operating lease agreements was $1.4 billion, $2.2 billion, and $3.4 billion for 2016, 2017, and 2018.

The following summarizes our principal contractual commitments, excluding open orders for purchases that support normal operations and are generally cancellable, as of December 31, 2018 (in millions):



	Year Ended December 31,
	2019		2020		2021		2022		2023		Thereafter		Total
Debt principal and interest	$	2,277	$	2,161	$	1,861	$	2,078	$	1,781	$	30,013	$	40,171
Capital lease obligations, including interest (1)	7,807		5,742		2,725		704		473		501		17,952
Finance lease obligations, including interest (2)	628		640		652		664		675		5,117		8,376
Operating leases	3,127		3,070		2,775		2,473		2,195		13,026		26,666
Unconditional purchase obligations (3)	3,523		4,103		3,291		3,098		2,974		5,204		22,193
Other commitments (4) (5)	2,618		1,455		1,056		843		808		8,875		15,655
Total commitments	$	19,980	$	17,171	$	12,360	$	9,860	$	8,906	$	62,736	$	131,013

___________________


(1)	Excluding interest, current capital lease obligations of $5.8 billion and $7.7 billion are recorded within “Accrued expenses and other” as of December 31, 2017 and 2018, and $8.4 billion and $9.6 billion are recorded within “Other long-term liabilities” as of December 31, 2017 and 2018.


(2)	Excluding interest, current finance lease obligations of $282 million and $411 million are recorded within “Accrued expenses and other” as of December 31, 2017 and 2018, and $4.7 billion and $6.6 billion are recorded within “Other long-term liabilities” as of December 31, 2017 and 2018.

(3)

Includes unconditional purchase obligations related to certain products offered in our Whole Foods Market stores and long-term agreements to acquire and license digital media content that are not reflected on the consolidated balance sheets. For those digital media content agreements with variable terms, we do not estimate the total obligation beyond any minimum quantities and/or pricing as of the reporting date. Purchase obligations associated with renewal provisions solely at the option of the content provider are included to the extent such commitments are fixed or a minimum amount is specified.


(4)	Includes the estimated timing and amounts of payments for rent and tenant improvements associated with build-to-suit lease arrangements and equipment lease arrangements that have not been placed in service and digital media content liabilities associated with long-term digital media content assets with initial terms greater than one year.


(5)	Excludes approximately $3.4 billion of accrued tax contingencies for which we cannot make a reasonably reliable estimate of the amount and period of payment, if any.

Pledged Assets

As of December 31, 2017 and 2018, we have pledged or otherwise restricted $1.4 billion and $575 million of our cash, cash equivalents, and marketable securities, and certain property and equipment as collateral for real estate leases, amounts due to third-party sellers in certain jurisdictions, debt, and standby and trade letters of credit.

Suppliers

During 2018, no vendor accounted for 10% or more of our purchases. We generally do not have long-term contracts or arrangements with our vendors to guarantee the availability of merchandise, particular payment terms, or the extension of credit limits.

Other Contingencies

In 2016, we determined that we processed and delivered orders of consumer products for certain individuals and entities located outside Iran covered by the Iran Threat Reduction and Syria Human Rights Act or other United States sanctions and export control laws. The consumer products included books, music, other media, apparel, home and kitchen, health and beauty, jewelry, office, consumer electronics, software, lawn and patio, grocery, and automotive products. Our review is ongoing and we have voluntarily reported these orders to the United States Treasury Department’s Office of Foreign Assets Control and the United States Department of Commerce’s Bureau of Industry and Security. We intend to cooperate fully with OFAC and BIS with respect to their review, which may result in the imposition of penalties. For additional information, see Item 9B of Part II, “Other Information — Disclosure Pursuant to Section 13(r) of the Exchange Act.”

We are subject to claims related to various indirect taxes (such as sales, value added, consumption, service, and similar taxes), including in jurisdictions in which we already collect and remit such taxes. If the relevant taxing authorities were successfully to pursue these claims, we could be subject to significant additional tax liabilities. For example, in June 2017, the State of South Carolina issued an assessment for uncollected sales and use taxes for the period from January 2016 to March 2016, including interest and penalties. South Carolina is alleging that we should have collected sales and use taxes on transactions by our third-party sellers. We believe the assessment is without merit. If South Carolina or other states were successfully to seek additional adjustments of a similar nature, we could be subject to significant additional tax liabilities. We intend to defend ourselves vigorously in this matter.

Legal Proceedings

The Company is involved from time to time in claims, proceedings, and litigation, including the following:

In November 2007, an Austrian copyright collection society, Austro-Mechana, filed lawsuits against Amazon.com International Sales, Inc., Amazon EU S.à r.l., Amazon.de GmbH, Amazon.com GmbH, and Amazon Logistik in the Commercial Court of Vienna, Austria and in the District Court of Munich, Germany seeking to collect a tariff on blank digital media sold by our EU-based retail websites to customers located in Austria. In July 2008, the German court stayed the German case pending a final decision in the Austrian case. In July 2010, the Austrian court ruled in favor of Austro-Mechana and ordered us to report all sales of products to which the tariff potentially applies for a determination of damages. We contested Austro-Mechana’s claim and in September 2010 commenced an appeal in the Commercial Court of Vienna. We lost this appeal and in March 2011 commenced an appeal in the Supreme Court of Austria. In October 2011, the Austrian Supreme Court referred the case to the European Court of Justice (“ECJ”). In July 2013, the ECJ ruled that EU law does not preclude application of the tariff where certain conditions are met and directed the case back to the Austrian Supreme Court for further proceedings. In October 2013, the Austrian Supreme Court referred the case back to the Commercial Court of Vienna for further fact finding to determine whether the tariff on blank digital media meets the conditions set by the ECJ. In August 2015, the Commercial Court of Vienna ruled that the Austrian tariff regime does not meet the conditions the ECJ set and dismissed Austro-Mechana’s claims. In September 2015, Austro-Mechana appealed that judgment to the Higher Commercial Court of Vienna. In December 2015, the Higher Commercial Court of Vienna confirmed that the Austrian tariff regime does not meet the conditions the ECJ set and dismissed Austro-Mechana’s appeal. In February 2016, Austro-Mechana appealed that judgment to the Austrian Supreme Court. In March 2017, the Austrian Supreme Court ruled in favor of Austro-Mechana and referred the case back to the Commercial Court of Vienna for further proceedings. A number of additional actions have been filed making similar allegations. In December 2012, a German copyright collection society, Zentralstelle für private Überspielungsrechte (“ZPU”), filed a complaint against Amazon EU S.à r.l., Amazon Media EU S.à r.l., Amazon Services Europe S.à r.l., Amazon Payments Europe SCA, Amazon Europe Holding Technologies SCS, and Amazon Eurasia Holdings S.à r.l. in the District Court of Luxembourg seeking to collect a tariff on blank digital media sold by the Amazon.de retail website to customers located in Germany. In January 2013, a Belgian copyright collection society, AUVIBEL, filed a complaint against Amazon EU S.à r.l. in the Court of First Instance of Brussels, Belgium, seeking to collect a tariff on blank digital media sold by the Amazon.fr retail website to customers located in Belgium. In November 2013, the Belgian court ruled in favor of AUVIBEL and ordered us to report all sales of products to which the tariff potentially applies for a determination of damages. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in these matters.

Beginning in August 2013, a number of complaints were filed alleging, among other things, that Amazon.com, Inc. and several of its subsidiaries failed to compensate hourly workers for time spent waiting in security lines and otherwise violated federal and state wage and hour statutes and common law. In August 2013, Busk v. Integrity Staffing Solutions, Inc. and Amazon.com, Inc. was filed in the United States District Court for the District of Nevada, and Vance v. Amazon.com, Inc., Zappos.com Inc., another affiliate of Amazon.com, Inc., and Kelly Services, Inc. was filed in the United States District Court for the Western District of Kentucky. In September 2013, Allison v. Amazon.com, Inc. and Integrity Staffing Solutions, Inc. was filed in the United States District Court for the Western District of Washington, and Johnson v. Amazon.com, Inc. and an affiliate of Amazon.com, Inc. was filed in the United States District Court for the Western District of Kentucky. In October 2013, Davis v. Amazon.com, Inc., an affiliate of Amazon.com, Inc., and Integrity Staffing Solutions, Inc. was filed in the United States District Court for the Middle District of Tennessee. The plaintiffs variously purport to represent a nationwide class of certain current and former employees under the Fair Labor Standards Act and/or state-law-based subclasses for certain current and former employees in states including Arizona, California, Pennsylvania, South Carolina, Kentucky, Washington, and Nevada, and one complaint asserts nationwide breach of contract and unjust enrichment claims. The complaints seek an unspecified amount of damages, interest, injunctive relief, and attorneys’ fees. We have been named in several other similar cases. In December 2014, the Supreme Court ruled in Busk that time spent waiting for and undergoing security screening is not compensable working time under the federal wage and hour statute. In February 2015, the courts in those actions alleging only federal law claims entered stipulated orders dismissing those actions without prejudice. In March 2016, the United States District Court for the Western District of Kentucky dismissed the Vance case with prejudice. In April 2016, the plaintiffs appealed the district court’s judgment to the United States Court of Appeals for the Federal Circuit. In March 2017, the court of appeals affirmed the district court’s decision. In June 2017, the United States District Court for the Western District of Kentucky dismissed the Busk and Saldana cases with prejudice. We dispute any remaining allegations of wrongdoing and intend to defend ourselves vigorously in these matters.

In March 2015, Zitovault, LLC filed a complaint against Amazon.com, Inc., Amazon.com, LLC, Amazon Web Services, Inc., and Amazon Web Services, LLC for patent infringement in the United States District Court for the Eastern District of Texas. The complaint alleges that Elastic Compute Cloud, Virtual Private Cloud, Elastic Load Balancing, Auto-Scaling, and Elastic Beanstalk infringe U.S. Patent No. 6,484,257, entitled “System and Method for Maintaining N Number of Simultaneous Cryptographic Sessions Using a Distributed Computing Environment.” The complaint seeks injunctive relief, an unspecified amount of damages, enhanced damages, attorneys’ fees, costs, and interest. In January 2016, the case was transferred to the United States District Court for the Western District of Washington. In June 2016, the case was stayed pending resolution of a review petition we filed with the United States Patent and Trademark Office. In January 2019, the stay of the case was lifted following resolution of the review petition. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in this matter.

In November 2015, Eolas Technologies, Inc. filed a complaint against Amazon.com, Inc. in the United States District Court for the Eastern District of Texas. The complaint alleges, among other things, that the use of “interactive features” on www.amazon.com, including “search suggestions and search results,” infringes U.S. Patent No. 9,195,507, entitled “Distributed Hypermedia Method and System for Automatically Invoking External Application Providing Interaction and Display of Embedded Objects Within A Hypermedia Document.” The complaint sought a judgment of infringement together with costs and attorneys’ fees. In February 2016, Eolas filed an amended complaint seeking, among other things, an unspecified amount of damages. In February 2017, Eolas alleged in its damages report that in the event of a finding of liability Amazon could be subject to $130-$250 million in damages. In April 2017, the case was transferred to the United States District Court for the Northern District of California. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in this matter.

In October 2017, SRC Labs, LLC and Saint Regis Mohawk Tribe filed a complaint for patent infringement against Amazon Web Services, Inc., Amazon.com, Inc., and VADATA, Inc. in the United States District Court for the Eastern District of Virginia. The complaint alleges, among other things, that certain AWS EC2 Instances infringe U.S. Patent Nos. 6,434,687, entitled “System and method for accelerating web site access and processing utilizing a computer system incorporating reconfigurable processors operating under a single operating system image”; 7,149,867, entitled “System and method of enhancing efficiency and utilization of memory bandwidth in reconfigurable hardware”; 7,225,324 and 7,620,800, both entitled “Multi-adaptive processing systems and techniques for enhancing parallelism and performance of computational functions”; and 9,153,311, entitled “System and method for retaining DRAM data when reprogramming reconfigurable devices with DRAM memory controllers.” The complaint seeks an unspecified amount of damages, enhanced damages, interest, and a compulsory on-going royalty. In February 2018, the Virginia district court transferred the case to the United States District Court for the Western District of Washington. In November 2018, the case was stayed pending resolution of eight review petitions filed with the United States Patent and Trademark Office relating to the ‘324, ‘867, and ‘311 patents. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in this matter.

In May 2018, Rensselaer Polytechnic Institute and CF Dynamic Advances LLC filed a complaint against Amazon.com, Inc. in the United States District Court for the Northern District of New York. The complaint alleges, among other things, that “Alexa Voice Software and Alexa enabled devices” infringe U.S. Patent No. 7,177,798, entitled “Natural Language Interface Using Constrained Intermediate Dictionary of Results.” The complaint seeks an injunction, an unspecified amount of damages, enhanced damages, an ongoing royalty, pre- and post-judgment interest, attorneys’ fees, and costs. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in this matter.

In June 2018, VoIP-Pal.com, Inc. filed a complaint against Amazon Technologies, Inc. and Amazon.com, Inc. in the United States District Court for the District of Nevada. The complaint alleges, among other things, that the Alexa calling and messaging system, the Alexa app, and Echo, Tap, and Fire devices with Alexa support infringe U.S. Patent Nos. 9,537,762; 9,813,330; 9,826,002; and 9,948,549, all entitled “Producing Routing Messages For Voice Over IP Communications.” The complaint seeks an unspecified amount of damages, enhanced damages, attorneys’ fees, costs, and interest. In November 2018, the case was transferred to the United States District Court for the Northern District of California. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in this matter.

In November 2018, Dynamic Data Technologies, LLC filed a complaint for patent infringement against Amazon.com, Inc., Amazon Web Services, Inc., and Amazon Digital Services, LLC in the United States District Court for the Eastern District of Texas. The complaint alleges, among other things, that products and services with H.265 functionality, including Amazon Elastic Transcoder, AWS Elemental Media Convert, AWS Elemental MediaLive, certain EC2 instances, Amazon CloudFront, Amazon Fire TV, and Amazon Fire tablets, infringe U.S. Patent Nos. 8,135,073, entitled “Enhancing Video Images Depending On Prior Image Enhancements”; 6,774,918, entitled “Video Overlay Processor With Reduced Memory and Bus Performance Requirements”; and 7,571,450, entitled “System For And Method Of Displaying Information.” The complaint also alleges that products and services with H.265 functionality, including AWS Elemental Media Convert, AWS Elemental MediaLive, certain EC2 instances, Amazon CloudFront, and Amazon Fire TV, infringe U.S. Patent Nos. 8,073,054, entitled “Unit For And Method Of Estimating A Current Motion Vector”; 6,996,177, entitled “Motion Estimation”; 8,311,112, entitled “System And Method For Video Compression Using Predictive Coding”; and 7,894,529, entitled “Method And Device For Determining Motion Vectors.” The complaint also alleges that products and services for encoding video data, including Amazon Elastic Transcoder and Amazon Video, infringe U.S. Patent No. 8,184,689, entitled “Method Video Encoding And Decoding Preserving Cache Localities,” and that products and services with VP9 encoding functionality, including Amazon Elastic Transcoder and Amazon Fire TV, infringe U.S. Patent No. 7,519,230, entitled “Background Motion Vector Detection.” The complaint seeks an unspecified amount of damages, enhanced damages, attorneys’ fees, and interest. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in this matter.

In December 2018, Kove IO, Inc. filed a complaint against Amazon Web Services, Inc. in the United States District Court for the Northern District of Illinois. The complaint alleges, among other things, that Amazon S3 and DynamoDB infringe U.S. Patent Nos. 7,814,170 and 7,103,640, both entitled “Network Distributed Tracking Wire Transfer Protocol,” and 7,233,978, entitled “Method And Apparatus For Managing Location Information In A Network Separate From The Data To Which The Location Information Pertains.” The complaint seeks an unspecified amount of damages, enhanced damages, attorneys’ fees, costs, interest, and injunctive relief. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in this matter.

The outcomes of our legal proceedings and other contingencies are inherently unpredictable, subject to significant uncertainties, and could be material to our operating results and cash flows for a particular period. In addition, for the matters disclosed above that do not include an estimate of the amount of loss or range of losses, such an estimate is not possible or is immaterial, and we may be unable to estimate the possible loss or range of losses that could potentially result from the application of non-monetary remedies.

See also “Note 9 — Income Taxes.”

Stockholders' Equity

12 Months Ended

Dec. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stockholders' Equity

STOCKHOLDERS’ EQUITY

Preferred Stock

We have authorized 500 million shares of $0.01 par value preferred stock. No preferred stock was outstanding for any year presented.

Common Stock

Common shares outstanding plus shares underlying outstanding stock awards totaled 497 million, 504 million, and 507 million, as of December 31, 2016, 2017, and 2018. These totals include all vested and unvested stock awards outstanding, including those awards we estimate will be forfeited.

Stock Repurchase Activity

In February 2016, the Board of Directors authorized a program to repurchase up to $5.0 billion of our common stock, with no fixed expiration. There were no repurchases of common stock in 2016, 2017, or 2018.

Stock Award Plans

Employees vest in restricted stock unit awards and stock options over the corresponding service term, generally between two and five years.

Stock Award Activity

Stock-based compensation expense is as follows (in millions):



	Year Ended December 31,
	2016		2017		2018
Cost of sales	$	16	$	47	$	73
Fulfillment	657		911		1,121
Marketing	323		511		769
Technology and content	1,664		2,305		2,888
General and administrative	315		441		567
Total stock-based compensation expense (1)	$	2,975	$	4,215	$	5,418

___________________


(1)	The related tax benefits were $907 million, $860 million, and $1.1 billion for 2016, 2017, and 2018. In 2017 and 2018, the tax benefit reflects the permanent reduction in the U.S. statutory corporate tax rate from 35% to 21%.

The following table summarizes our restricted stock unit activity (in millions):



	Number of Units		Weighted Average Grant-Date Fair Value
Outstanding as of January 1, 2016	18.9		$	362
Units granted	9.3		660
Units vested	(6.1	)	321
Units forfeited	(2.3	)	440
Outstanding as of December 31, 2016	19.8		506
Units granted	8.9		946
Units vested	(6.8	)	400
Units forfeited	(1.8	)	649
Outstanding as of December 31, 2017	20.1		725
Units granted	5.0		1,522
Units vested	(7.1	)	578
Units forfeited	(2.1	)	862
Outstanding as of December 31, 2018	15.9		$	1,024

Scheduled vesting for outstanding restricted stock units as of December 31, 2018, is as follows (in millions):



	Year Ended
	2019	2020	2021	2022	2023	Thereafter	Total
Scheduled vesting — restricted stock units	6.9	5.6	2.4	0.8	0.1	0.1	15.9

As of December 31, 2018, there was $6.6 billion of net unrecognized compensation cost related to unvested stock-based compensation arrangements. This compensation is recognized on an accelerated basis with approximately half of the compensation expected to be expensed in the next twelve months, and has a weighted-average recognition period of 1.1 years. The estimated forfeiture rate as of December 31, 2016, 2017, and 2018 was 28%, 28%, and 27%. Changes in our estimates and assumptions relating to forfeitures may cause us to realize material changes in stock-based compensation expense in the future.

During 2016, 2017, and 2018, the fair value of restricted stock units that vested was $4.3 billion, $6.8 billion, and $11.4 billion.

Common Stock Available for Future Issuance

As of December 31, 2018, common stock available for future issuance to employees is 113 million shares.

Income Taxes

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

In 2016, 2017, and 2018, we recorded net tax provisions of $1.4 billion, $769 million, and $1.2 billion. We have tax benefits relating to excess stock-based compensation deductions and accelerated depreciation deductions that are being utilized to reduce our U.S. taxable income. Cash taxes paid, net of refunds, were $412 million, $957 million, and $1.2 billion for 2016, 2017, and 2018.

The U.S. Tax Act was signed into law on December 22, 2017. The U.S. Tax Act significantly revised the U.S. corporate income tax by, among other things, lowering the statutory corporate tax rate from 35% to 21%, eliminating certain deductions, imposing a mandatory one-time tax on accumulated earnings of foreign subsidiaries, introducing new tax regimes, and changing how foreign earnings are subject to U.S. tax. The U.S. Tax Act also enhanced and extended the option to claim accelerated depreciation deductions by allowing full expensing of qualified property, primarily equipment, through 2022. We reasonably estimated the effects of the U.S. Tax Act and recorded provisional amounts in our financial statements as of December 31, 2017. We recorded a provisional tax benefit for the impact of the U.S. Tax Act of approximately $789 million. This amount was primarily comprised of the remeasurement of federal net deferred tax liabilities resulting from the permanent reduction in the U.S. statutory corporate tax rate to 21% from 35%, after taking into account the mandatory one-time tax on the accumulated earnings of our foreign subsidiaries. The amount of this one-time tax was not material. In 2018, we completed our determination of the accounting implications of the U.S. Tax Act.

The components of the provision for income taxes, net are as follows (in millions):



	Year Ended December 31,
	2016			2017			2018
Current taxes:
U.S. Federal	$	1,136		$	(137	)	$	(129	)
U.S. State	208			211			322
International	327			724			563
Current taxes	1,671			798			756
Deferred taxes:
U.S. Federal	116			(202		)	565
U.S. State	(31		)	(26		)	5
International	(331		)	199			(129		)
Deferred taxes	(246		)	(29		)	441
Provision for income taxes, net	$	1,425		$	769		$	1,197

U.S. and international components of income before income taxes are as follows (in millions):



	Year Ended December 31,
	2016			2017			2018
U.S.	$	4,551		$	5,630		$	11,157
International	(659		)	(1,824		)	104
Income before income taxes	$	3,892		$	3,806		$	11,261

The items accounting for differences between income taxes computed at the federal statutory rate and the provision recorded for income taxes are as follows (in millions):



	Year Ended December 31,
	2016			2017			2018
Income taxes computed at the federal statutory rate (1)	$	1,362		$	1,332		$	2,365
Effect of:
Tax impact of foreign earnings	(69		)	1,178			119
State taxes, net of federal benefits	110			114			263
Tax credits	(119		)	(220		)	(419		)
Stock-based compensation (2)	189			(917		)	(1,086		)
Domestic production activities deduction	(94		)	—			—
2017 Impact of U.S. Tax Act	—			(789		)	(157		)
Other, net	46			71			112
Total	$	1,425		$	769		$	1,197

___________________


(1)	The U.S. Tax Act reduced the U.S. federal statutory rate from 35% to 21% beginning in 2018.


(2)	Includes non-deductible stock-based compensation and beginning in 2017, excess tax benefits from stock-based compensation. For 2017 and 2018, our tax provision includes $1.3 billion and $1.6 billion of excess tax benefits from stock-based compensation.

Our provision for income taxes in 2017 was lower than in 2016 primarily due to excess tax benefits from stock-based compensation and the one-time favorable effect of the U.S. Tax Act, partially offset by an increase in the proportion of foreign losses for which we may not realize a tax benefit and audit-related developments.

We regularly assess whether it is more likely than not that we will realize our deferred tax assets in each taxing jurisdiction in which we operate. In performing this assessment with respect to each jurisdiction, we review all available evidence, including recent cumulative loss experience and expectations of future earnings, capital gains, and investment in such jurisdiction, the carry-forward periods available to us for tax reporting purposes, and other relevant factors. In Q2 2017, we recognized an estimated charge to tax expense of $600 million to record a valuation allowance against the net deferred tax assets in Luxembourg.

Our provision for income taxes in 2018 was higher than in 2017 primarily due to an increase in U.S. pre-tax income and the one-time provisional tax benefit of the U.S. Tax Act recognized in 2017. This was partially offset by the reduction to the U.S. federal statutory tax rate in 2018, a decline in the proportion of foreign losses for which we may not realize a tax benefit and an increase in excess tax benefits from stock-based compensation.

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. We intend to invest substantially all of our foreign subsidiary earnings, as well as our capital in our foreign subsidiaries, indefinitely outside of the U.S. in those jurisdictions in which we would incur significant, additional costs upon repatriation of such amounts.

Deferred income tax assets and liabilities are as follows (in millions):



	December 31,
	2017			2018
Deferred tax assets (1):
Loss carryforwards U.S. - Federal/States	$	211		$	222
Loss carryforwards - Foreign	2,149			2,551
Accrued liabilities, reserves, and other expenses	901			1,064
Stock-based compensation	1,026			1,293
Deferred revenue	349			321
Assets held for investment	35			69
Depreciation and amortization	279			2,386
Other items	167			94
Tax credits	381			734
Total gross deferred tax assets	5,498			8,734
Less valuation allowance (2)	(2,538		)	(4,950		)
Deferred tax assets, net of valuation allowance	2,960			3,784
Deferred tax liabilities:
Depreciation and amortization	(2,568		)	(3,579		)
Acquisition related intangible assets	(531		)	(682		)
Other items	(58		)	(67		)
Net deferred tax assets (liabilities), net of valuation allowance	$	(197	)	$	(544	)

___________________


(1)	Deferred tax assets are presented net of tax contingencies.


(2)	Relates primarily to deferred tax assets that would only be realizable upon the generation of net income in certain foreign taxing jurisdictions and future capital gains.

As of December 31, 2018, our federal, foreign, and state net operating loss carryforwards for income tax purposes were approximately $627 million, $7.8 billion, and $919 million. The federal, foreign, and state net operating loss carryforwards are subject to limitations under Section 382 of the Internal Revenue Code and applicable foreign and state tax law. If not utilized, a portion of the federal, foreign, and state net operating loss carryforwards will begin to expire in 2029, 2019, and 2019, respectively. As of December 31, 2018, our tax credit carryforwards for income tax purposes were approximately $1.7 billion. If not utilized, a portion of the tax credit carryforwards will begin to expire in 2022. As of December 31, 2018, our federal capital loss carryforwards for income tax purposes was approximately $261 million. If not utilized, a portion of the capital loss carryforwards will begin to expire in 2022.

Tax Contingencies

We are subject to income taxes in the U.S. (federal and state) and numerous foreign jurisdictions. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. We establish reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when we believe that certain positions might be challenged despite our belief that our tax return positions are fully supportable. We adjust these reserves in light of changing facts and circumstances, such as the outcome of tax audits. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate.

The reconciliation of our tax contingencies is as follows (in millions):



	December 31,
	2016			2017			2018
Gross tax contingencies – January 1	$	1,181		$	1,710		$	2,309
Gross increases to tax positions in prior periods	355			223			164
Gross decreases to tax positions in prior periods	(133		)	(139		)	(90		)
Gross increases to current period tax positions	308			518			1,088
Settlements with tax authorities	—			—			(36		)
Lapse of statute of limitations	(1		)	(3		)	(21		)
Gross tax contingencies – December 31 (1)	$	1,710		$	2,309		$	3,414

___________________


(1)	As of December 31, 2018, we had approximately $3.4 billion of accrued tax contingencies, of which $1.7 billion, if fully recognized, would decrease our effective tax rate.

As of December 31, 2017 and 2018, we had accrued interest and penalties, net of federal income tax benefit, related to tax contingencies of $107 million and $127 million. Interest and penalties, net of federal income tax benefit, recognized for the years ended December 31, 2016, 2017, and 2018 was $9 million, $40 million, and $20 million.

We are under examination, or may be subject to examination, by the Internal Revenue Service (“IRS”) for the calendar year 2005 and thereafter. These examinations may lead to ordinary course adjustments or proposed adjustments to our taxes or our net operating losses with respect to years under examination as well as subsequent periods. As previously disclosed, we have received Notices of Proposed Adjustment (“NOPAs”) from the IRS for transactions undertaken in the 2005 and 2006 calendar years relating to transfer pricing with our foreign subsidiaries. The IRS is seeking to increase our U.S. taxable income by an amount that would result in additional federal tax of approximately $1.5 billion, subject to interest. On March 23, 2017, the U.S. Tax Court issued its decision regarding the issues raised in the IRS NOPAs. The Tax Court rejected the approach from the IRS NOPAs in determining transfer pricing adjustments in 2005 and 2006 for the transactions undertaken with our foreign subsidiaries and adopted, with adjustments, our suggested approach. In September 2017, the IRS appealed the decision to the U.S. Court of Appeals for the Ninth Circuit. We will continue to defend ourselves vigorously in this matter. If the Tax Court decision were reversed on appeal or if the IRS were to successfully assert transfer pricing adjustments of a similar nature to the NOPAs for transactions in subsequent years, we could be subject to significant additional tax liabilities.

In October 2014, the European Commission opened a formal investigation to examine whether decisions by the tax authorities in Luxembourg with regard to the corporate income tax paid by certain of our subsidiaries comply with European Union rules on state aid. On October 4, 2017, the European Commission announced its decision that determinations by the tax authorities in Luxembourg did not comply with European Union rules on state aid. Based on that decision the European Commission announced an estimated recovery amount of approximately €250 million, plus interest, for the period May 2006 through June 2014, and ordered Luxembourg tax authorities to calculate the actual amount of additional taxes subject to recovery. Luxembourg computed an initial recovery amount, consistent with the European Commission’s decision, that we deposited into escrow in March 2018, subject to adjustment pending conclusion of all appeals. In December 2017, Luxembourg appealed the European Commission’s decision. In May 2018, we appealed. We believe the European Commission’s decision to be without merit and will continue to defend ourselves vigorously in this matter. We are also subject to taxation in various states and other foreign jurisdictions including China, Germany, India, Japan, Luxembourg, and the United Kingdom. We are under, or may be subject to, audit or examination and additional assessments by the relevant authorities in respect of these particular jurisdictions primarily for 2008 and thereafter.

We expect the total amount of tax contingencies will grow in 2019. In addition, changes in state, federal, and foreign tax laws may increase our tax contingencies. The timing of the resolution of income tax examinations is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ from the amounts accrued. It is reasonably possible that within the next 12 months we will receive additional assessments by various tax authorities or possibly reach resolution of income tax examinations in one or more jurisdictions. These assessments or settlements could result in changes to our contingencies related to positions on tax filings in years through 2018. The actual amount of any change could vary significantly depending on the ultimate timing and nature of any settlements. We cannot currently provide an estimate of the range of possible outcomes.

Segment Information

12 Months Ended

Dec. 31, 2018

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

We have organized our operations into three segments: North America, International, and AWS. We allocate to segment results the operating expenses “Fulfillment,” “Marketing,” “Technology and content,” and “General and administrative” based on usage, which is generally reflected in the segment in which the costs are incurred. The majority of technology infrastructure costs are allocated to the AWS segment based on usage. The majority of the remaining non-infrastructure technology costs are incurred in the U.S. and are allocated to our North America segment. There are no internal revenue transactions between our reportable segments. These segments reflect the way our chief operating decision maker evaluates the Company’s business performance and manages its operations.

North America

The North America segment primarily consists of amounts earned from retail sales of consumer products (including from sellers) and subscriptions through North America-focused online and physical stores. This segment includes export sales from these online stores.

International

The International segment primarily consists of amounts earned from retail sales of consumer products (including from sellers) and subscriptions through internationally-focused online stores. This segment includes export sales from these internationally-focused online stores (including export sales from these online stores to customers in the U.S., Mexico, and Canada), but excludes export sales from our North America-focused online stores.

AWS

The AWS segment consists of amounts earned from global sales of compute, storage, database, and other service offerings for start-ups, enterprises, government agencies, and academic institutions.

Information on reportable segments and reconciliation to consolidated net income (loss) is as follows (in millions):



	Year Ended December 31,
	2016			2017			2018
North America
Net sales	$	79,785		$	106,110		$	141,366
Operating expenses	77,424			103,273			134,099
Operating income	$	2,361		$	2,837		$	7,267
International
Net sales	$	43,983		$	54,297		$	65,866
Operating expenses	45,266			57,359			68,008
Operating income (loss)	$	(1,283	)	$	(3,062	)	$	(2,142	)
AWS
Net sales	$	12,219		$	17,459		$	25,655
Operating expenses	9,111			13,128			18,359
Operating income	$	3,108		$	4,331		$	7,296
Consolidated
Net sales	$	135,987		$	177,866		$	232,887
Operating expenses	131,801			173,760			220,466
Operating income	4,186			4,106			12,421
Total non-operating income (expense)	(294		)	(300		)	(1,160		)
Provision for income taxes	(1,425		)	(769		)	(1,197		)
Equity-method investment activity, net of tax	(96		)	(4		)	9
Net income	$	2,371		$	3,033		$	10,073

Net sales by groups of similar products and services, which also have similar economic characteristics, is as follows (in millions):



	Year Ended December 31,
	2016		2017		2018
Net Sales:
Online stores (1)	$	91,431	$	108,354	$	122,987
Physical stores (2)	—		5,798		17,224
Third-party seller services (3)	22,993		31,881		42,745
Subscription services (4)	6,394		9,721		14,168
AWS	12,219		17,459		25,655
Other (5)	2,950		4,653		10,108
Consolidated	$	135,987	$	177,866	$	232,887

___________________

(1)

Includes product sales and digital media content where we record revenue gross. We leverage our retail infrastructure to offer a wide selection of consumable and durable goods that includes media products available in both a physical and digital format, such as books, music, videos, games, and software. These product sales include digital products sold on a transactional basis. Digital product subscriptions that provide unlimited viewing or usage rights are included in Subscription services.


(2)	Includes product sales where our customers physically select items in a store.


(3)	Includes commissions and any related fulfillment and shipping fees, and other third-party seller services.


(4)	Includes annual and monthly fees associated with Amazon Prime memberships, as well as audiobook, digital video, e-book, digital music, and other non-AWS subscription services.


(5)	Primarily includes sales of advertising services, as well as sales related to our other service offerings.

Net sales generated from our internationally-focused online stores are denominated in local functional currencies. Revenues are translated at average rates prevailing throughout the period. Net sales attributed to countries that represent a significant portion of consolidated net sales are as follows (in millions):



	Year Ended December 31,
	2016		2017		2018
United States	$	90,349	$	120,486	$	160,146
Germany	14,148		16,951		19,881
United Kingdom	9,547		11,372		14,524
Japan	10,797		11,907		13,829
Rest of world	11,146		17,150		24,507
Consolidated	$	135,987	$	177,866	$	232,887

Total segment assets exclude corporate assets, such as cash and cash equivalents, marketable securities, other long-term investments, corporate facilities, goodwill and other acquired intangible assets, and tax assets. Technology infrastructure assets are allocated among the segments based on usage, with the majority allocated to the AWS segment. Total segment assets reconciled to consolidated amounts are as follows (in millions):



	December 31,
	2016		2017		2018
North America (1)	$	22,225	$	35,844	$	47,251
International (1)	10,429		18,014		19,923
AWS (2)	12,698		18,660		26,340
Corporate	38,050		58,792		69,134
Consolidated	$	83,402	$	131,310	$	162,648

___________________


(1)	North America and International segment assets primarily consist of property and equipment, inventory, and accounts receivable.


(2)	AWS segment assets primarily consist of property and equipment and accounts receivable.

Property and equipment, net by segment is as follows (in millions):



	December 31,
	2016		2017		2018
North America	$	10,143	$	20,401	$	27,052
International	3,448		7,425		8,552
AWS	10,300		14,885		18,851
Corporate	5,223		6,155		7,342
Consolidated	$	29,114	$	48,866	$	61,797

Total net additions to property and equipment by segment are as follows (in millions):



	Year Ended December 31,
	2016		2017		2018
North America (1)	$	5,132	$	13,200	$	10,749
International (1)	1,680		5,196		2,476
AWS (2)	5,193		9,190		9,783
Corporate	1,580		2,197		2,060
Consolidated	$	13,585	$	29,783	$	25,068

___________________


(1)	Includes property and equipment added under capital leases of $1.5 billion, $2.9 billion, and $2.0 billion in 2016, 2017, and 2018, and under other financing arrangements of $849 million, $2.9 billion, and $3.0 billion in 2016, 2017, and 2018.


(2)	Includes property and equipment added under capital leases of $4.0 billion, $7.3 billion, and $8.4 billion in 2016, 2017, and 2018, and under finance leases of $75 million, $134 million, and $245 million in 2016, 2017, and 2018.

U.S. property and equipment, net was $22.0 billion, $35.5 billion, and $45.1 billion, in 2016, 2017, and 2018, and rest of world property and equipment, net was $7.1 billion, $13.4 billion, and $16.7 billion in 2016, 2017, and 2018. Except for the U.S., property and equipment, net, in any single country was less than 10% of consolidated property and equipment, net.

Depreciation expense, including other corporate property and equipment depreciation expense, are allocated to all segments based on usage. Total depreciation expense, by segment, is as follows (in millions):



	Year Ended December 31,
	2016		2017		2018
North America	$	1,971	$	3,029	$	4,415
International	930		1,278		1,628
AWS	3,461		4,524		6,095
Consolidated	$	6,362	$	8,831	$	12,138

Quarterly Results (Unaudited)

12 Months Ended

Dec. 31, 2018

Quarterly Financial Information Disclosure [Abstract]

Quarterly Results (Unaudited)

QUARTERLY RESULTS (UNAUDITED)

The following tables contain selected unaudited statement of operations information for each quarter of 2017 and 2018. The following information reflects all normal recurring adjustments necessary for a fair presentation of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period. Our business is affected by seasonality, which historically has resulted in higher sales volume during our fourth quarter. Unaudited quarterly results are as follows (in millions, except per share data):



	Year Ended December 31, 2017 (1)
	First Quarter			Second Quarter			Third Quarter (2)			Fourth Quarter (2)
Net sales	$	35,714		$	37,955		$	43,744		$	60,453
Operating income	1,005			628			347			2,127
Income before income taxes	953			666			316			1,872
Provision for income taxes	(229		)	(467		)	(58		)	(16		)
Net income	724			197			256			1,856
Basic earnings per share	1.52			0.41			0.53			3.85
Diluted earnings per share	1.48			0.40			0.52			3.75
Shares used in computation of earnings per share:
Basic	477			479			481			483
Diluted	490			492			494			496



	Year Ended December 31, 2018 (1)
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
Net sales	$	51,042		$	52,886		$	56,576		$	72,383
Operating income	1,927			2,983			3,724			3,786
Income before income taxes	1,916			2,605			3,390			3,350
Provision for income taxes	(287		)	(74		)	(508		)	(327		)
Net income	1,629			2,534			2,883			3,027
Basic earnings per share	3.36			5.21			5.91			6.18
Diluted earnings per share	3.27			5.07			5.75			6.04
Shares used in computation of earnings per share:
Basic	484			486			488			490
Diluted	498			500			501			501

___________________


(1)	The sum of quarterly amounts, including per share amounts, may not equal amounts reported for year-to-date periods. This is due to the effects of rounding and changes in the number of weighted-average shares outstanding for each period.


(2)	We acquired Whole Foods Market on August 28, 2017. The results of Whole Foods Market have been included in our results of operation from the date of acquisition. See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 4 — Acquisitions, Goodwill, and Acquired Intangible Assets” for additional information regarding this transaction.

Description of Business and Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Segment Information

We have organized our operations into three segments: North America, International, and AWS.

Prior Period Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation, including the addition of restricted cash to cash and cash equivalents on our consolidated statements of cash flows as a result of the adoption of new accounting guidance.

Principles of Consolidation

The consolidated financial statements include the accounts of Amazon.com, Inc., its wholly-owned subsidiaries, and those entities in which we have a variable interest and of which we are the primary beneficiary, including certain entities in India and China and that support our seller lending financing activities (collectively, the “Company”). Intercompany balances and transactions between consolidated entities are eliminated. The financial results of Whole Foods Market, Inc. (“Whole Foods Market”) have been included in our consolidated financial statements from the date of acquisition on August 28, 2017.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, income taxes, commitments and contingencies, valuation of acquired intangibles and goodwill, stock-based compensation forfeiture rates, vendor funding, and inventory valuation. Actual results could differ materially from those estimates.

Earnings per Share

Basic earnings per share is calculated using our weighted-average outstanding common shares. Diluted earnings per share is calculated using our weighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method. In periods when we have a net loss, stock awards are excluded from our calculation of earnings per share as their inclusion would have an antidilutive effect.

Revenue

Revenue is measured based on the amount of consideration that we expect to receive, reduced by estimates for return allowances, promotional discounts, and rebates. Revenue also excludes any amounts collected on behalf of third parties, including sales and indirect taxes. In arrangements where we have multiple performance obligations, the transaction price is allocated to each performance obligation using the relative stand-alone selling price. We generally determine stand-alone selling prices based on the prices charged to customers or using expected cost plus a margin.

A description of our principal revenue generating activities is as follows:

Retail sales - We offer consumer products through our online and physical stores. Revenue is recognized when control of the goods is transferred to the customer, which generally occurs upon our delivery to a third-party carrier or, in the case of an Amazon delivery, to the customer.

Third-party seller services - We offer programs that enable sellers to sell their products in our stores, and fulfill orders through us. We are not the seller of record in these transactions. The commissions and any related fulfillment and shipping fees we earn from these arrangements are recognized when the services are rendered, which generally occurs upon delivery of the related products to a third-party carrier or, in the case of an Amazon delivery, to the customer.

Subscription services - Our subscription sales include fees associated with Amazon Prime memberships and access to content including audiobooks, digital video, e-books, digital music, and other non-AWS subscription services. Prime memberships provide our customers with access to an evolving suite of benefits that represent a single stand-ready obligation. Subscriptions are paid for at the time of or in advance of delivering the services. Revenue from such arrangements is recognized over the subscription period.

AWS - Our AWS arrangements include global sales of compute, storage, database, and other services. Revenue is allocated to services using stand-alone selling prices and is primarily recognized when the customer uses these services, based on the quantity of services rendered, such as compute or storage capacity delivered on-demand. Certain services, including compute and database, are also offered as a fixed quantity over a specified term, for which revenue is recognized ratably. Sales commissions we pay in connection with contracts that exceed one year are capitalized and amortized over the contract term.

Other - Other revenue primarily includes sales of advertising services, which are recognized as ads are delivered based on the number of clicks or impressions.

Return Allowances

Return allowances, which reduce revenue and cost of sales, are estimated using historical experience. Liabilities for return allowances are included in “Accrued expenses and other” and were $567 million, $468 million, and $623 million as of December 31, 2016, 2017, and 2018. Additions to the allowance were $1.5 billion, $1.8 billion, and $2.3 billion and deductions from the allowance were $1.5 billion, $1.9 billion, and $2.3 billion in 2016, 2017, and 2018. Included in “Inventories” on our consolidated balance sheets are assets totaling $411 million, $406 million, and $519 million as of December 31, 2016, 2017, and 2018, for the rights to recover products from customers associated with our liabilities for return allowances.

Cost of Sales

Cost of sales primarily consists of the purchase price of consumer products, digital media content costs where we record revenue gross, including video and music, packaging supplies, sortation and delivery centers and related equipment costs, and inbound and outbound shipping costs, including where we are the transportation service provider. Shipping costs to receive products from our suppliers are included in our inventory, and recognized as cost of sales upon sale of products to our customers. Payment processing and related transaction costs, including those associated with seller transactions, are classified in “Fulfillment” on our consolidated statements of operations.

Vendor Agreements

We have agreements with our vendors to receive funds primarily for cooperative marketing efforts, promotions, incentives, and volume rebates. We generally consider these amounts received from vendors to be a reduction of the prices we pay for their goods, including property and equipment, or services, and are recorded as a reduction of the cost of inventory, cost of services, or cost of property and equipment. Volume rebates typically depend on reaching minimum purchase thresholds. We evaluate the likelihood of reaching purchase thresholds using past experience and current year forecasts. When volume rebates can be reasonably estimated, we record a portion of the rebate as we make progress towards the purchase threshold.

Fulfillment

Fulfillment costs primarily consist of those costs incurred in operating and staffing our North America and International segments’ fulfillment centers, customer service centers, and physical stores, including costs attributable to buying, receiving, inspecting, and warehousing inventories; picking, packaging, and preparing customer orders for shipment; payment processing and related transaction costs, including costs associated with our guarantee for certain seller transactions; responding to inquiries from customers; and supply chain management for our manufactured electronic devices. Fulfillment costs also include amounts paid to third parties that assist us in fulfillment and customer service operations.

Marketing

Marketing costs primarily consist of targeted online advertising, payroll and related expenses for personnel engaged in marketing and selling activities, and television advertising. We pay commissions to third parties when their customer referrals result in sales. We also participate in cooperative advertising arrangements with certain of our vendors, and other third parties.

Advertising and other promotional costs to market our products and services are expensed as incurred

Technology and Content

Technology and content costs include payroll and related expenses for employees involved in the research and development of new and existing products and services, development, design, and maintenance of our stores, curation and display of products and services made available in our online stores, and infrastructure costs. Infrastructure costs include servers, networking equipment, and data center related depreciation, rent, utilities, and other expenses necessary to support AWS and other Amazon businesses. Collectively, these costs reflect the investments we make in order to offer a wide variety of products and services to our customers. Technology and content costs are generally expensed as incurred.

General and Administrative

General and administrative expenses primarily consist of payroll and related expenses; facilities and equipment expenses, such as depreciation expense and rent; professional fees and litigation costs; and other general corporate costs for corporate functions, including accounting, finance, tax, legal, and human resources, among others.

Stock-Based Compensation

Compensation cost for all stock awards expected to vest is measured at fair value on the date of grant and recognized over the service period. The fair value of restricted stock units is determined based on the number of shares granted and the quoted price of our common stock. Such value is recognized as expense over the service period, net of estimated forfeitures, using the accelerated method. The estimated number of stock awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from our current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised. We consider many factors when estimating expected forfeitures, including historical forfeiture experience and employee level.

Other Operating Expense, Net

Other operating expense, net, consists primarily of marketing-related, contract-based, and customer-related intangible asset amortization expense, and expenses related to legal settlements.

Other Income (Expense), Net

Other income (expense), net, consists primarily of foreign currency gains (losses) of $21 million, $247 million, and $(206) million in 2016, 2017, and 2018 and equity warrant valuation gains (losses) of $67 million, $109 million, and $(131) million in 2016, 2017, and 2018

Income Taxes

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. We intend to invest substantially all of our foreign subsidiary earnings, as well as our capital in our foreign subsidiaries, indefinitely outside of the U.S. in those jurisdictions in which we 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 we believe they will not be realized. We consider many factors when assessing the likelihood of future realization of our deferred tax assets, including our recent cumulative loss experience and expectations of future earnings, capital gains and investment in such jurisdiction, the carry-forward periods available to us for tax reporting purposes, and other relevant factors.

We utilize 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. We consider many factors when evaluating our tax positions and estimating our tax benefits, which may require periodic adjustments and which may not accurately forecast actual outcomes. We include interest and penalties related to our tax contingencies in income tax expense.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

For our cash, cash equivalents, or marketable securities, we measure the fair value of money market funds and equity securities based on quoted prices in active markets for identical assets or liabilities. All other financial instruments were valued either based on recent trades of securities in inactive markets or based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data. We did not hold any cash, cash equivalents, or marketable securities categorized as Level 3 assets as of December 31, 2017 and 2018.

As part of entering into commercial agreements, we often obtain equity warrant assets giving us the right to acquire stock of other companies. As of December 31, 2017 and 2018, these warrants had a fair value of $441 million and $440 million, and are recorded within “Other assets” on our consolidated balance sheets. The related gain (loss) recorded in “Other income (expense), net” was $67 million, $109 million, and $(131) million in 2016, 2017, and 2018. These assets are primarily classified as Level 2 assets.

Cash and Cash Equivalents

We classify all highly liquid instruments with an original maturity of three months or less as cash equivalents.

Inventories

Inventories, consisting of products available for sale, are primarily accounted for using the first-in, first-out method, and are valued at the lower of cost and net realizable value. This valuation requires us to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers, returns to product vendors, or liquidations, and expected recoverable values of each disposition category.

We provide Fulfillment by Amazon services in connection with certain of our sellers’ programs. Third-party sellers maintain ownership of their inventory, regardless of whether fulfillment is provided by us or the third-party sellers, and therefore these products are not included in our inventories.

We also purchase electronic device components from a variety of suppliers and use several contract manufacturers to provide manufacturing services for our products. During the normal course of business, in order to manage manufacturing lead times and help ensure adequate supply, we enter into agreements with contract manufacturers and suppliers for certain electronic device components. A portion of our reported purchase commitments arising from these agreements consists of firm, non-cancellable commitments. These commitments are based on forecasted customer demand. If we reduce these commitments, we may incur additional costs. We also have firm, non-cancellable commitments for certain products offered in our Whole Foods Market stores.

Accounts Receivable, Net and Other

Included in “Accounts receivable, net and other” on our consolidated balance sheets are amounts primarily related to customers, vendors, and sellers. As of December 31, 2017 and 2018, customer receivables, net, were $6.4 billion and $9.4 billion, vendor receivables, net, were $2.6 billion and $3.2 billion, and seller receivables, net, were $692 million and $710 million. Seller receivables are amounts due from sellers related to our seller lending program, which provides funding to sellers primarily to procure inventory.

We estimate losses on receivables based on known troubled accounts and historical experience of losses incurred. Receivables are considered impaired and written-off when it is probable that all contractual payments due will not be collected in accordance with the terms of the agreement.

Software Development Costs

We incur software development costs related to products to be sold, leased, or marketed to external users, internal-use software, and our websites. Software development costs capitalized were not significant for the years presented. All other costs, including those related to design or maintenance, are expensed as incurred.

Property and Equipment, Net

Property and equipment are stated at cost less accumulated depreciation. Incentives that we receive from property and equipment vendors are recorded as a reduction in our costs. Property includes buildings and land that we own, along with property we have acquired under build-to-suit, finance, and capital lease arrangements. Equipment includes assets such as servers and networking equipment, heavy equipment, and other fulfillment equipment. Depreciation is recorded on a straight-line basis over the estimated useful lives of the assets (generally the lesser of 40 years or the remaining life of the underlying building, three years for our servers, five years for networking equipment, ten years for heavy equipment, and three to seven years for other fulfillment equipment). Depreciation expense is classified within the corresponding operating expense categories on our consolidated statements of operations.

Leases

Leases and Asset Retirement Obligations

We categorize leases at their inception as either operating or capital leases. On certain of our lease agreements, we may receive rent holidays and other incentives provided by the landlord. We recognize lease costs on a straight-line basis without regard to deferred payment terms, such as rent holidays, that defer the commencement date of required payments. Additionally, incentives we receive are treated as a reduction of our costs over the term of the agreement. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the non-cancellable term of the lease.

We establish assets and liabilities for the estimated construction costs incurred under build-to-suit lease arrangements to the extent we are involved in the construction of structural improvements or take construction risk prior to commencement of a lease. Upon occupancy of facilities under build-to-suit leases, we assess whether these arrangements qualify for sales recognition under the sale-leaseback accounting guidance. If we continue to be the deemed owner, the facilities are accounted for as finance leases.

We establish assets and liabilities for the present value of estimated future costs to retire long-lived assets at the termination or expiration of a lease. Such assets are depreciated over the lease period into operating expense, and the recorded liabilities are accreted to the future value of the estimated retirement costs.

As disclosed in “Accounting Pronouncements Not Yet Adopted,” our accounting for build-to-suit and finance leases will change on January 1, 2019.

Asset Retirement Obligations

Leases and Asset Retirement Obligations

We categorize leases at their inception as either operating or capital leases. On certain of our lease agreements, we may receive rent holidays and other incentives provided by the landlord. We recognize lease costs on a straight-line basis without regard to deferred payment terms, such as rent holidays, that defer the commencement date of required payments. Additionally, incentives we receive are treated as a reduction of our costs over the term of the agreement. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the non-cancellable term of the lease.

We establish assets and liabilities for the estimated construction costs incurred under build-to-suit lease arrangements to the extent we are involved in the construction of structural improvements or take construction risk prior to commencement of a lease. Upon occupancy of facilities under build-to-suit leases, we assess whether these arrangements qualify for sales recognition under the sale-leaseback accounting guidance. If we continue to be the deemed owner, the facilities are accounted for as finance leases.

We establish assets and liabilities for the present value of estimated future costs to retire long-lived assets at the termination or expiration of a lease. Such assets are depreciated over the lease period into operating expense, and the recorded liabilities are accreted to the future value of the estimated retirement costs.

As disclosed in “Accounting Pronouncements Not Yet Adopted,” our accounting for build-to-suit and finance leases will change on January 1, 2019.

Goodwill

We evaluate goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate the carrying value may not be recoverable. In testing goodwill for impairment, we may elect to utilize a qualitative assessment to evaluate whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If our qualitative assessment indicates that goodwill impairment is more likely than not, we perform a two-step impairment test. We test goodwill for impairment under the two-step impairment test by first comparing the book value of net assets to the fair value of the reporting units. If the fair value is determined to be less than the book value or qualitative factors indicate that it is more likely than not that goodwill is impaired, a second step is performed to compute the amount of impairment as the difference between the estimated fair value of goodwill and the carrying value. We estimate the fair value of the reporting units using discounted cash flows. Forecasts of future cash flows are based on our best estimate of future net sales and operating expenses, based primarily on expected category expansion, pricing, market segment share, and general economic conditions.

We completed the required annual testing of goodwill for impairment for all reporting units as of April 1, 2018, and determined that goodwill is not impaired as the fair value of our reporting units substantially exceeded their book value. There were no events that caused us to update our annual impairment test.

Other Assets

Included in “Other assets” on our consolidated balance sheets are amounts primarily related to acquired intangible assets, net of accumulated amortization; video and music content, net of accumulated amortization; long-term deferred tax assets; certain equity investments; marketable securities restricted for longer than one year, the majority of which are attributable to collateralization of bank guarantees and debt related to our international operations; and equity warrant assets.

Video and Music Content

We obtain video and music content for customers through licensing agreements that have a wide range of licensing provisions, which include both fixed and variable payment schedules. When the license fee for a specific movie, television, or music title is determinable or reasonably estimable and the content is available for streaming, we recognize an asset representing the fee and a corresponding liability for the amounts owed. We relieve the liability as payments are made and we amortize the asset to “Cost of sales” on a straight-line basis or on an accelerated basis, based on estimated usage patterns, which typically ranges from one to five years. If we are unable to reasonably estimate the cost per title, no asset or liability is recorded and licensing costs are expensed as incurred. We also develop original content. Capitalized production costs associated with our original content are limited by the amount of revenue we expect to earn, which results in a portion being expensed as incurred. These capitalized costs are amortized to “Cost of sales” on an accelerated basis that follows the viewing pattern of customer streams in the first months after availability.

Investments

We generally invest our 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 us the ability to exercise significant influence, but not control, over an investee. Equity-method investments are included within “Other assets” on our consolidated balance sheets. Our 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 our consolidated statements of operations.

Equity investments without readily determinable fair values and for which we do 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 our consolidated balance sheets.

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

We periodically evaluate whether declines in fair values of our investments indicate impairment. For debt securities and equity method investments, we also evaluate whether declines in fair value of our 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 our ability and intent to hold the investment until a forecasted recovery occurs. Additionally, we assess whether we have plans to sell the security or it is more likely than not we 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 our investments; duration and severity of the decline in value; and our strategy and intentions for holding the investment.

Long-Lived Assets

Long-lived assets, other than goodwill, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets may not be recoverable.

For long-lived assets used in operations, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. We measure the impairment loss based on the difference between the carrying amount and estimated fair value. Long-lived assets are considered held for sale when certain criteria are met, including when management has committed to a plan to sell the asset, the asset is available for sale in its immediate condition, and the sale is probable within one year of the reporting date. Assets held for sale are reported at the lower of cost or fair value less costs to sell.

Accrued Expenses and Other

Included in “Accrued expenses and other” on our consolidated balance sheets are liabilities primarily related to leases and asset retirement obligations, payroll and related expenses, unredeemed gift cards, customer liabilities, current debt, acquired digital media content, and other operating expenses.

As of December 31, 2017 and 2018, our liabilities for payroll related expenses were $2.9 billion and $3.4 billion and our liabilities for unredeemed gift cards were $3.0 billion and $2.8 billion. We reduce the liability for a gift card when redeemed by a customer. The portion of gift cards that we do not expect to be redeemed is recognized based on customer usage patterns.

Unearned Revenue

Unearned revenue is recorded when payments are received or due in advance of performing our service obligations and is recognized over the service period. Unearned revenue primarily relates to prepayments of AWS services and Amazon Prime memberships. Our total unearned revenue as of December 31, 2017 was $6.1 billion, of which $5.3 billion was recognized as revenue during the year ended December 31, 2018, including adjustments related to the new revenue recognition guidance. Included in “Other long-term liabilities” on our consolidated balance sheets was $1.0 billion and $1.4 billion of unearned revenue as of December 31, 2017 and 2018.

Additionally, we have performance obligations, primarily related to AWS, associated with commitments in customer contracts for future services that have not yet been recognized in our financial statements. For contracts with original terms that exceed one year, those commitments not yet recognized were $19.3 billion as of December 31, 2018. The weighted average remaining life of our long-term contracts is 3.3 years. However, the amount and timing of revenue recognition is largely driven by customer usage, which can extend beyond the original contractual term.

Foreign Currency

We have internationally-focused stores for which the net sales generated, as well as most of the related expenses directly incurred from those operations, are denominated in local functional currencies. The functional currency of our subsidiaries that either operate or support these stores is generally the same as the local currency. Assets and liabilities of these subsidiaries are translated into U.S. Dollars at period-end foreign exchange rates, and revenues and expenses are translated at average rates prevailing throughout the period. Translation adjustments are included in “Accumulated other comprehensive loss,” a separate component of stockholders’ equity, and in the “Foreign currency effect on cash and cash equivalents,” on our consolidated statements of cash flows. Transaction gains and losses including intercompany transactions denominated in a currency other than the functional currency of the entity involved are included in “Other income (expense), net” on our consolidated statements of operations.

Accounting Pronouncements Recently Adopted and Accounting Pronouncements Not Yet Adopted

Accounting Pronouncements Recently Adopted

In May 2014, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) amending revenue recognition guidance and requiring more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. We adopted this ASU on January 1, 2018 for all revenue contracts with our customers using the modified retrospective approach and increased retained earnings by approximately $650 million. The adjustment primarily relates to the unredeemed portion of our gift cards, which are now recognized over the expected customer usage period rather than waiting until gift cards expire or when the likelihood of redemption becomes remote. We changed the recognition and classification of Amazon Prime memberships, which are now accounted for as a single performance obligation and recognized ratably over the membership period as service sales. Previously, Prime memberships were considered to be arrangements with multiple deliverables and were allocated among product sales and service sales. Other changes relate primarily to the presentation of revenue. Certain advertising services are now classified as revenue rather than a reduction in cost of sales, and sales of apps, in-app content, and certain digital media content are presented on a net basis. Prior year amounts have not been adjusted and continue to be reported in accordance with our historic accounting policy.

The impact of applying this ASU for the year ended December 31, 2018 primarily resulted in a decrease in product sales and an increase in service sales driven by the reclassification of Prime membership fees of approximately $3.8 billion. Service sales also increased by approximately $3.0 billion for the year ended December 31, 2018 due to the reclassification of certain advertising services.

In January 2016, the FASB issued an ASU that updates certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Under this ASU, certain equity investments are measured at fair value with changes recognized in net income. We adopted this ASU in Q1 2018 with no material impact to our consolidated financial statements.

In October 2016, the FASB issued an ASU amending the accounting for income taxes. The new guidance requires the recognition of the income tax consequences of an intercompany asset transfer, other than transfers of inventory, when the transfer occurs. For intercompany transfers of inventory, the income tax effects will continue to be deferred until the inventory has been sold to a third party. We adopted this ASU in Q1 2018 with an increase of approximately $250 million to retained earnings and deferred tax assets net of valuation allowances.

In November 2016, the FASB issued an ASU amending the presentation of restricted cash within the consolidated statements of cash flows. The new guidance requires that restricted cash be added to cash and cash equivalents on the consolidated statements of cash flows. We adopted this ASU in Q1 2018 on a retrospective basis with the following impacts to our consolidated statements of cash flows (in millions):



Year Ended December 31, 2016	Previously Reported			Adjustments			As Revised
Operating activities	$	17,272		$	(69	)	$	17,203
Investing activities	(9,876		)	360			(9,516		)
Financing activities	(3,740		)	24			(3,716		)
Net change in cash, cash equivalents, and restricted cash	$	3,656		$	315		$	3,971



Year Ended December 31, 2017	Previously Reported			Adjustments			As Revised
Operating activities	$	18,434		$	(69	)	$	18,365
Investing activities	(27,819		)	735			(27,084		)
Financing activities	9,860			68			9,928
Net change in cash, cash equivalents, and restricted cash	$	475		$	734		$	1,209

Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued an ASU amending the accounting for leases. The new guidance requires the recognition of lease assets and liabilities for operating leases with terms of more than 12 months, in addition to those currently recorded, on our consolidated balance sheets. Presentation of leases within the consolidated statements of operations and consolidated statements of cash flows will be generally consistent with the current lease accounting guidance. The ASU is effective for reporting periods beginning after December 15, 2018, with early adoption permitted. We will adopt this ASU on January 1, 2019 with an immaterial cumulative adjustment to retained earnings rather than retrospectively adjusting prior periods. This adoption approach will result in a balance sheet presentation that will not be comparable to the prior period in the first year of adoption. The adoption of this ASU will result in the recognition of operating lease assets and liabilities of approximately $21 billion, which includes the reclassification of finance leases to operating leases of approximately $1.2 billion, and the derecognition of build-to-suit lease assets and liabilities when we do not control the building during the construction period of approximately $1.5 billion.

Description of Business and Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Schedule of Calculation of Diluted Shares

The following table shows the calculation of diluted shares (in millions):



	Year Ended December 31,
	2016	2017	2018
Shares used in computation of basic earnings per share	474	480	487
Total dilutive effect of outstanding stock awards	10	13	13
Shares used in computation of diluted earnings per share	484	493	500

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

We adopted this ASU in Q1 2018 on a retrospective basis with the following impacts to our consolidated statements of cash flows (in millions):



Year Ended December 31, 2016	Previously Reported			Adjustments			As Revised
Operating activities	$	17,272		$	(69	)	$	17,203
Investing activities	(9,876		)	360			(9,516		)
Financing activities	(3,740		)	24			(3,716		)
Net change in cash, cash equivalents, and restricted cash	$	3,656		$	315		$	3,971



Year Ended December 31, 2017	Previously Reported			Adjustments			As Revised
Operating activities	$	18,434		$	(69	)	$	18,365
Investing activities	(27,819		)	735			(27,084		)
Financing activities	9,860			68			9,928
Net change in cash, cash equivalents, and restricted cash	$	475		$	734		$	1,209

Cash, Cash Equivalents, and Marketable Securities (Tables)

12 Months Ended

Dec. 31, 2018

Investments, Debt and Equity Securities [Abstract]

Summary of Fair Value by Major Security Type

The following table summarizes, by major security type, our cash, cash equivalents, restricted cash, and marketable securities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in millions):



	December 31, 2017
	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Total Estimated Fair Value
Cash	$	9,982	$	—	$	—		$	9,982
Level 1 securities:
Money market funds	11,343		—		—			11,343
Equity securities	23		30		—			53
Level 2 securities:
Foreign government and agency securities	620		—		—			620
U.S. government and agency securities	4,841		1		(19		)	4,823
Corporate debt securities	4,265		1		(9		)	4,257
Asset-backed securities	910		—		(5		)	905
Other fixed income securities	340		—		(2		)	338
	$	32,324	$	32	$	(35	)	$	32,321
Less: Restricted cash, cash equivalents, and marketable securities (1)								(1,335		)
Total cash, cash equivalents, and marketable securities								$	30,986



	December 31, 2018
	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Total Estimated Fair Value
Cash	$	10,406	$	—	$	—		$	10,406
Level 1 securities:
Money market funds	12,515		—		—			12,515
Equity securities	29		143		(2		)	170
Level 2 securities:
Foreign government and agency securities	815		—		—			815
U.S. government and agency securities	11,686		1		(20		)	11,667
Corporate debt securities	5,008		1		(19		)	4,990
Asset-backed securities	896		—		(4		)	892
Other fixed income securities	190		—		(2		)	188
Equity securities	28		5		—			33
	$	41,573	$	150	$	(47	)	$	41,676
Less: Restricted cash, cash equivalents, and marketable securities (1)								(426		)
Total cash, cash equivalents, and marketable securities								$	41,250

___________________

(1)

We are required to pledge or otherwise restrict a portion of our cash, cash equivalents, and marketable securities as collateral for real estate leases, amounts due to third-party sellers in certain jurisdictions, debt, and standby and trade letters of credit. We classify cash, cash equivalents, and marketable securities with use restrictions of less than twelve months as “Accounts receivable, net and other” and of twelve months or longer as non-current “Other assets” on our consolidated balance sheets. See “Note 7 — Commitments and Contingencies.”

Summary of Gross Realized Gains (Losses) on Investments

The following table summarizes gross gains and gross losses realized on sales of available-for-sale fixed income marketable securities (in millions):



	Year Ended December 31,
	2016		2017		2018
Realized gains	$	3	$	5	$	2
Realized losses	11		11		9

Summary of Contractual Maturities of Investments

The following table summarizes the remaining contractual maturities of our cash equivalents and marketable fixed income securities as of December 31, 2018 (in millions):



	Amortized Cost		Estimated Fair Value
Due within one year	$	27,520	$	27,508
Due after one year through five years	2,865		2,845
Due after five years through ten years	187		185
Due after ten years	538		529
Total	$	31,110	$	31,067

Actual maturities may differ from the contractual maturities because borrowers may have certain prepayment conditions.

Cash, Cash Equivalents, and Marketable Securities Reconciliation to Cash Flow (Tables)

12 Months Ended

Dec. 31, 2018

Cash and Cash Equivalents [Abstract]

Reconciliation of cash, cash equivalents, and restricted cash [Table Text Block]

The following table provides a reconciliation of the amount of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets to the total of the same such amounts shown in the consolidated statements of cash flows (in millions):



	December 31, 2017		December 31, 2018
Cash and cash equivalents	$	20,522	$	31,750
Restricted cash included in accounts receivable, net and other	1,329		418
Restricted cash included in other assets	5		5
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows	$	21,856	$	32,173

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

Property and Equipment, at Cost

Property and equipment, at cost, consisted of the following (in millions):



	December 31,
	2017		2018
Gross property and equipment (1):
Land and buildings	$	23,896	$	31,741
Equipment	42,244		54,591
Other assets	2,438		2,577
Construction in progress	4,078		6,861
Gross property and equipment	72,656		95,770
Total accumulated depreciation and amortization (1)	23,790		33,973
Total property and equipment, net	$	48,866	$	61,797

___________________


(1)	We revised our prior year presentation of gross property and equipment and total accumulated depreciation and amortization to include all property and equipment in service, including equipment which is fully-depreciated, to conform to the current year presentation. Total property and equipment, net remains unchanged for the prior year.

Acquisitions, Goodwill, and Acquired Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2018

Business Combinations [Abstract]

Allocation of Aggregate Purchase Price of Acquisitions

The aggregate purchase price of these acquisitions was allocated as follows (in millions):



	December 31,
	2016			2017			2018

Purchase Price
Cash paid, net of cash acquired	$	81		$	13,859		$	1,618
Indemnification holdback	22			104			31
	$	103		$	13,963		$	1,649
Allocation
Goodwill	$	60		$	9,501		$	1,228
Intangible assets (1):
Marketing-related	2			1,987			186
Contract-based	1			440			13
Technology-based	53			166			285
Customer-related	1			54			193
	57			2,647			677
Property and equipment	3			3,810			11
Deferred tax assets	17			117			174
Other assets acquired	10			1,858			282
Long-term debt	(5		)	(1,165		)	(176		)
Deferred tax liabilities	(18		)	(961		)	(159		)
Other liabilities assumed	(21		)	(1,844		)	(388		)
	$	103		$	13,963		$	1,649

___________________


(1)	Intangible assets acquired in 2016, 2017, and 2018 have estimated useful lives of between one and seven years, one and twenty-five years, and two and seven years, with weighted-average amortization periods of five years, twenty-one years, and six years.

Summary of Goodwill Activity

The following summarizes our goodwill activity in 2017 and 2018 by segment (in millions):



	North America			International			AWS			Consolidated
Goodwill - January 1, 2017	$	2,044		$	694		$	1,046		$	3,784
New acquisitions (1)	9,115			368			18			9,501
Other adjustments (2)	6			46			13			65
Goodwill - December 31, 2017	11,165			1,108			1,077			13,350
New acquisitions (1)	1,031			177			20			1,228
Other adjustments (2)	(5		)	(15		)	(10		)	(30		)
Goodwill - December 31, 2018	$	12,191		$	1,270		$	1,087		$	14,548

___________________


(1)	Primarily includes the acquisition of Whole Foods Market in the North America segment and Souq in the International segment in 2017 and the acquisitions of Ring and PillPack in the North America segment in 2018.


(2)	Primarily includes changes in foreign exchange rates.

Schedule of Acquired Finite-Lived Intangible Assets by Major Class

Acquired intangible assets, included within “Other assets” on our consolidated balance sheets, consist of the following (in millions):



	December 31,
	2017							2018
	Acquired Intangibles, Gross (1)		Accumulated Amortization (1)			Acquired Intangibles, Net		Acquired Intangibles, Gross (1)		Accumulated Amortization (1)			Acquired Intangibles, Net		Weighted Average Life Remaining
Marketing-related	$	2,486	$	(418	)	$	2,068	$	2,542	$	(431	)	$	2,111	21.2
Contract-based	1,013		(213		)	800		1,430		(224		)	1,206		12.3
Technology- and content-based	640		(252		)	388		941		(377		)	564		4.6
Customer-related	283		(168		)	115		437		(208		)	229		4.4
Acquired intangibles (2)	$	4,422	$	(1,051	)	$	3,371	$	5,350	$	(1,240	)	$	4,110	15.4

___________________


(1)	Excludes the original cost and accumulated amortization of fully-amortized intangibles.


(2)	Intangible assets have estimated useful lives of between one and twenty-five years.

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

Expected future amortization expense of acquired intangible assets as of December 31, 2018 is as follows (in millions):



Year Ended December 31,
2019	$	511
2020	412
2021	355
2022	323
2023	270
Thereafter	2,217
	$	4,088

Long-Term Debt (Tables)

12 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

Long-Term Debt Obligations

The face value of our total long-term debt obligations is as follows (in millions):



	December 31,
	2017			2018
2.600% Notes due on December 5, 2019 (2)	1,000			1,000
1.900% Notes due on August 21, 2020 (3)	1,000			1,000
3.300% Notes due on December 5, 2021 (2)	1,000			1,000
2.500% Notes due on November 29, 2022 (1)	1,250			1,250
2.400% Notes due on February 22, 2023 (3)	1,000			1,000
2.800% Notes due on August 22, 2024 (3)	2,000			2,000
3.800% Notes due on December 5, 2024 (2)	1,250			1,250
5.200% Notes due on December 3, 2025 (4)	1,000			1,000
3.150% Notes due on August 22, 2027 (3)	3,500			3,500
4.800% Notes due on December 5, 2034 (2)	1,250			1,250
3.875% Notes due on August 22, 2037 (3)	2,750			2,750
4.950% Notes due on December 5, 2044 (2)	1,500			1,500
4.050% Notes due on August 22, 2047 (3)	3,500			3,500
4.250% Notes due on August 22, 2057 (3)	2,250			2,250
Credit Facility	592			594
Other long-term debt	100			121
Total debt	24,942			24,965
Less current portion of long-term debt	(100		)	(1,371		)
Face value of long-term debt	$	24,842		$	23,594

_____________________________


(1)	Issued in November 2012, effective interest rate of the 2022 Notes was 2.66%.


(2)	Issued in December 2014, effective interest rates of the 2019, 2021, 2024, 2034, and 2044 Notes were 2.73%, 3.43%, 3.90%, 4.92%, and 5.11%.


(3)	Issued in August 2017, effective interest rates of the 2020, 2023, 2024, 2027, 2037, 2047, and 2057 Notes were 2.16%, 2.56%, 2.95%, 3.25%, 3.94%, 4.13%, and 4.33%.


(4)	Consists of $872 million of 2025 Notes issued in December 2017 in exchange for notes assumed in connection with the acquisition of Whole Foods Market and $128 million of 2025 Notes issued by Whole Foods Market that did not participate in our December 2017 exchange offer. The effective interest rate of the 2025 Notes was 3.02%.

Future Principal Payments for Debt

As of December 31, 2018, future principal payments for our total debt were as follows (in millions):



Year Ended December 31,
2019	$	1,371
2020	1,298
2021	1,016
2022	1,266
2023	1,014
Thereafter	19,000
	$	24,965

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

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+ Details

Other Long-Term Liabilities (Tables)

12 Months Ended

Dec. 31, 2018

Other Liabilities Disclosure [Abstract]

Summary of Other Long-term Liabilities

Our other long-term liabilities are summarized as follows (in millions):



	December 31,
	2017		2018
Long-term capital lease obligations	$	8,438	$	9,650
Long-term finance lease obligations	4,745		6,642
Construction liabilities	1,350		2,516
Tax contingencies	1,004		896
Long-term deferred tax liabilities	990		1,490
Other	4,448		6,019
Total other long-term liabilities	$	20,975	$	27,213

Schedule of Long-term Capital Lease Obligations

Long-term capital lease obligations are as follows (in millions):



	December 31, 2018
Gross capital lease obligations	$	17,952
Less imputed interest	(582		)
Present value of net minimum lease payments	17,370
Less current portion of capital lease obligations	(7,720		)
Total long-term capital lease obligations	$	9,650

Schedule of Long-term Finance Lease Obligations

Long-term finance lease obligations are as follows (in millions):



	December 31, 2018
Gross finance lease obligations	$	8,376
Less imputed interest	(1,323		)
Present value of net minimum lease payments	7,053
Less current portion of finance lease obligations	(411		)
Total long-term finance lease obligations	$	6,642

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Principal Contractual Commitments, Excluding Open Orders for Purchases

The following summarizes our principal contractual commitments, excluding open orders for purchases that support normal operations and are generally cancellable, as of December 31, 2018 (in millions):



	Year Ended December 31,
	2019		2020		2021		2022		2023		Thereafter		Total
Debt principal and interest	$	2,277	$	2,161	$	1,861	$	2,078	$	1,781	$	30,013	$	40,171
Capital lease obligations, including interest (1)	7,807		5,742		2,725		704		473		501		17,952
Finance lease obligations, including interest (2)	628		640		652		664		675		5,117		8,376
Operating leases	3,127		3,070		2,775		2,473		2,195		13,026		26,666
Unconditional purchase obligations (3)	3,523		4,103		3,291		3,098		2,974		5,204		22,193
Other commitments (4) (5)	2,618		1,455		1,056		843		808		8,875		15,655
Total commitments	$	19,980	$	17,171	$	12,360	$	9,860	$	8,906	$	62,736	$	131,013

___________________


(1)	Excluding interest, current capital lease obligations of $5.8 billion and $7.7 billion are recorded within “Accrued expenses and other” as of December 31, 2017 and 2018, and $8.4 billion and $9.6 billion are recorded within “Other long-term liabilities” as of December 31, 2017 and 2018.


(2)	Excluding interest, current finance lease obligations of $282 million and $411 million are recorded within “Accrued expenses and other” as of December 31, 2017 and 2018, and $4.7 billion and $6.6 billion are recorded within “Other long-term liabilities” as of December 31, 2017 and 2018.

(3)

Includes unconditional purchase obligations related to certain products offered in our Whole Foods Market stores and long-term agreements to acquire and license digital media content that are not reflected on the consolidated balance sheets. For those digital media content agreements with variable terms, we do not estimate the total obligation beyond any minimum quantities and/or pricing as of the reporting date. Purchase obligations associated with renewal provisions solely at the option of the content provider are included to the extent such commitments are fixed or a minimum amount is specified.


(4)	Includes the estimated timing and amounts of payments for rent and tenant improvements associated with build-to-suit lease arrangements and equipment lease arrangements that have not been placed in service and digital media content liabilities associated with long-term digital media content assets with initial terms greater than one year.


(5)	Excludes approximately $3.4 billion of accrued tax contingencies for which we cannot make a reasonably reliable estimate of the amount and period of payment, if any.

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation Expense

Stock-based compensation expense is as follows (in millions):



	Year Ended December 31,
	2016		2017		2018
Cost of sales	$	16	$	47	$	73
Fulfillment	657		911		1,121
Marketing	323		511		769
Technology and content	1,664		2,305		2,888
General and administrative	315		441		567
Total stock-based compensation expense (1)	$	2,975	$	4,215	$	5,418

___________________


(1)	The related tax benefits were $907 million, $860 million, and $1.1 billion for 2016, 2017, and 2018. In 2017 and 2018, the tax benefit reflects the permanent reduction in the U.S. statutory corporate tax rate from 35% to 21%.

Summary of Restricted Stock Unit Activity

The following table summarizes our restricted stock unit activity (in millions):



	Number of Units		Weighted Average Grant-Date Fair Value
Outstanding as of January 1, 2016	18.9		$	362
Units granted	9.3		660
Units vested	(6.1	)	321
Units forfeited	(2.3	)	440
Outstanding as of December 31, 2016	19.8		506
Units granted	8.9		946
Units vested	(6.8	)	400
Units forfeited	(1.8	)	649
Outstanding as of December 31, 2017	20.1		725
Units granted	5.0		1,522
Units vested	(7.1	)	578
Units forfeited	(2.1	)	862
Outstanding as of December 31, 2018	15.9		$	1,024

Scheduled Vesting of Outstanding Restricted Stock Units

Scheduled vesting for outstanding restricted stock units as of December 31, 2018, is as follows (in millions):



	Year Ended
	2019	2020	2021	2022	2023	Thereafter	Total
Scheduled vesting — restricted stock units	6.9	5.6	2.4	0.8	0.1	0.1	15.9

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Components of Provision for Income Taxes, Net

The components of the provision for income taxes, net are as follows (in millions):



	Year Ended December 31,
	2016			2017			2018
Current taxes:
U.S. Federal	$	1,136		$	(137	)	$	(129	)
U.S. State	208			211			322
International	327			724			563
Current taxes	1,671			798			756
Deferred taxes:
U.S. Federal	116			(202		)	565
U.S. State	(31		)	(26		)	5
International	(331		)	199			(129		)
Deferred taxes	(246		)	(29		)	441
Provision for income taxes, net	$	1,425		$	769		$	1,197

Components of Income Before Income Taxes, Domestic and Foreign

U.S. and international components of income before income taxes are as follows (in millions):



	Year Ended December 31,
	2016			2017			2018
U.S.	$	4,551		$	5,630		$	11,157
International	(659		)	(1,824		)	104
Income before income taxes	$	3,892		$	3,806		$	11,261

Effective Income Tax Rate Reconciliation

The items accounting for differences between income taxes computed at the federal statutory rate and the provision recorded for income taxes are as follows (in millions):



	Year Ended December 31,
	2016			2017			2018
Income taxes computed at the federal statutory rate (1)	$	1,362		$	1,332		$	2,365
Effect of:
Tax impact of foreign earnings	(69		)	1,178			119
State taxes, net of federal benefits	110			114			263
Tax credits	(119		)	(220		)	(419		)
Stock-based compensation (2)	189			(917		)	(1,086		)
Domestic production activities deduction	(94		)	—			—
2017 Impact of U.S. Tax Act	—			(789		)	(157		)
Other, net	46			71			112
Total	$	1,425		$	769		$	1,197

___________________


(1)	The U.S. Tax Act reduced the U.S. federal statutory rate from 35% to 21% beginning in 2018.


(2)	Includes non-deductible stock-based compensation and beginning in 2017, excess tax benefits from stock-based compensation. For 2017 and 2018, our tax provision includes $1.3 billion and $1.6 billion of excess tax benefits from stock-based compensation.

Deferred Tax Assets and Liabilities

Deferred income tax assets and liabilities are as follows (in millions):



	December 31,
	2017			2018
Deferred tax assets (1):
Loss carryforwards U.S. - Federal/States	$	211		$	222
Loss carryforwards - Foreign	2,149			2,551
Accrued liabilities, reserves, and other expenses	901			1,064
Stock-based compensation	1,026			1,293
Deferred revenue	349			321
Assets held for investment	35			69
Depreciation and amortization	279			2,386
Other items	167			94
Tax credits	381			734
Total gross deferred tax assets	5,498			8,734
Less valuation allowance (2)	(2,538		)	(4,950		)
Deferred tax assets, net of valuation allowance	2,960			3,784
Deferred tax liabilities:
Depreciation and amortization	(2,568		)	(3,579		)
Acquisition related intangible assets	(531		)	(682		)
Other items	(58		)	(67		)
Net deferred tax assets (liabilities), net of valuation allowance	$	(197	)	$	(544	)

___________________


(1)	Deferred tax assets are presented net of tax contingencies.


(2)	Relates primarily to deferred tax assets that would only be realizable upon the generation of net income in certain foreign taxing jurisdictions and future capital gains.

Reconciliation of Tax Contingencies

The reconciliation of our tax contingencies is as follows (in millions):



	December 31,
	2016			2017			2018
Gross tax contingencies – January 1	$	1,181		$	1,710		$	2,309
Gross increases to tax positions in prior periods	355			223			164
Gross decreases to tax positions in prior periods	(133		)	(139		)	(90		)
Gross increases to current period tax positions	308			518			1,088
Settlements with tax authorities	—			—			(36		)
Lapse of statute of limitations	(1		)	(3		)	(21		)
Gross tax contingencies – December 31 (1)	$	1,710		$	2,309		$	3,414

___________________


(1)	As of December 31, 2018, we had approximately $3.4 billion of accrued tax contingencies, of which $1.7 billion, if fully recognized, would decrease our effective tax rate.

Segment Information (Tables)

12 Months Ended

Dec. 31, 2018

Segment Reporting [Abstract]

Information on Reportable Segments and Reconciliation to Consolidated Net Income (Loss)

Information on reportable segments and reconciliation to consolidated net income (loss) is as follows (in millions):



	Year Ended December 31,
	2016			2017			2018
North America
Net sales	$	79,785		$	106,110		$	141,366
Operating expenses	77,424			103,273			134,099
Operating income	$	2,361		$	2,837		$	7,267
International
Net sales	$	43,983		$	54,297		$	65,866
Operating expenses	45,266			57,359			68,008
Operating income (loss)	$	(1,283	)	$	(3,062	)	$	(2,142	)
AWS
Net sales	$	12,219		$	17,459		$	25,655
Operating expenses	9,111			13,128			18,359
Operating income	$	3,108		$	4,331		$	7,296
Consolidated
Net sales	$	135,987		$	177,866		$	232,887
Operating expenses	131,801			173,760			220,466
Operating income	4,186			4,106			12,421
Total non-operating income (expense)	(294		)	(300		)	(1,160		)
Provision for income taxes	(1,425		)	(769		)	(1,197		)
Equity-method investment activity, net of tax	(96		)	(4		)	9
Net income	$	2,371		$	3,033		$	10,073

Disaggregation of Revenue

Net sales by groups of similar products and services, which also have similar economic characteristics, is as follows (in millions):



	Year Ended December 31,
	2016		2017		2018
Net Sales:
Online stores (1)	$	91,431	$	108,354	$	122,987
Physical stores (2)	—		5,798		17,224
Third-party seller services (3)	22,993		31,881		42,745
Subscription services (4)	6,394		9,721		14,168
AWS	12,219		17,459		25,655
Other (5)	2,950		4,653		10,108
Consolidated	$	135,987	$	177,866	$	232,887

___________________

(1)

Includes product sales and digital media content where we record revenue gross. We leverage our retail infrastructure to offer a wide selection of consumable and durable goods that includes media products available in both a physical and digital format, such as books, music, videos, games, and software. These product sales include digital products sold on a transactional basis. Digital product subscriptions that provide unlimited viewing or usage rights are included in Subscription services.


(2)	Includes product sales where our customers physically select items in a store.


(3)	Includes commissions and any related fulfillment and shipping fees, and other third-party seller services.


(4)	Includes annual and monthly fees associated with Amazon Prime memberships, as well as audiobook, digital video, e-book, digital music, and other non-AWS subscription services.


(5)	Primarily includes sales of advertising services, as well as sales related to our other service offerings.

Net Sales Attributed to Countries that Represent a Significant Portion of Consolidated Net Sales

Net sales attributed to countries that represent a significant portion of consolidated net sales are as follows (in millions):



	Year Ended December 31,
	2016		2017		2018
United States	$	90,349	$	120,486	$	160,146
Germany	14,148		16,951		19,881
United Kingdom	9,547		11,372		14,524
Japan	10,797		11,907		13,829
Rest of world	11,146		17,150		24,507
Consolidated	$	135,987	$	177,866	$	232,887

Reconciliation of Assets from Segment to Consolidated

Total segment assets reconciled to consolidated amounts are as follows (in millions):



	December 31,
	2016		2017		2018
North America (1)	$	22,225	$	35,844	$	47,251
International (1)	10,429		18,014		19,923
AWS (2)	12,698		18,660		26,340
Corporate	38,050		58,792		69,134
Consolidated	$	83,402	$	131,310	$	162,648

___________________


(1)	North America and International segment assets primarily consist of property and equipment, inventory, and accounts receivable.


(2)	AWS segment assets primarily consist of property and equipment and accounts receivable.

Reconciliation of Property and Equipment from Segments to Consolidated

Property and equipment, net by segment is as follows (in millions):



	December 31,
	2016		2017		2018
North America	$	10,143	$	20,401	$	27,052
International	3,448		7,425		8,552
AWS	10,300		14,885		18,851
Corporate	5,223		6,155		7,342
Consolidated	$	29,114	$	48,866	$	61,797

Reconciliation of Property and Equipment Additions and Depreciation from Segments to Consolidated

Total net additions to property and equipment by segment are as follows (in millions):



	Year Ended December 31,
	2016		2017		2018
North America (1)	$	5,132	$	13,200	$	10,749
International (1)	1,680		5,196		2,476
AWS (2)	5,193		9,190		9,783
Corporate	1,580		2,197		2,060
Consolidated	$	13,585	$	29,783	$	25,068

___________________


(1)	Includes property and equipment added under capital leases of $1.5 billion, $2.9 billion, and $2.0 billion in 2016, 2017, and 2018, and under other financing arrangements of $849 million, $2.9 billion, and $3.0 billion in 2016, 2017, and 2018.


(2)	Includes property and equipment added under capital leases of $4.0 billion, $7.3 billion, and $8.4 billion in 2016, 2017, and 2018, and under finance leases of $75 million, $134 million, and $245 million in 2016, 2017, and 2018.

Total depreciation expense, by segment, is as follows (in millions):



	Year Ended December 31,
	2016		2017		2018
North America	$	1,971	$	3,029	$	4,415
International	930		1,278		1,628
AWS	3,461		4,524		6,095
Consolidated	$	6,362	$	8,831	$	12,138

Quarterly Results (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2018

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Information

Unaudited quarterly results are as follows (in millions, except per share data):



	Year Ended December 31, 2017 (1)
	First Quarter			Second Quarter			Third Quarter (2)			Fourth Quarter (2)
Net sales	$	35,714		$	37,955		$	43,744		$	60,453
Operating income	1,005			628			347			2,127
Income before income taxes	953			666			316			1,872
Provision for income taxes	(229		)	(467		)	(58		)	(16		)
Net income	724			197			256			1,856
Basic earnings per share	1.52			0.41			0.53			3.85
Diluted earnings per share	1.48			0.40			0.52			3.75
Shares used in computation of earnings per share:
Basic	477			479			481			483
Diluted	490			492			494			496



	Year Ended December 31, 2018 (1)
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
Net sales	$	51,042		$	52,886		$	56,576		$	72,383
Operating income	1,927			2,983			3,724			3,786
Income before income taxes	1,916			2,605			3,390			3,350
Provision for income taxes	(287		)	(74		)	(508		)	(327		)
Net income	1,629			2,534			2,883			3,027
Basic earnings per share	3.36			5.21			5.91			6.18
Diluted earnings per share	3.27			5.07			5.75			6.04
Shares used in computation of earnings per share:
Basic	484			486			488			490
Diluted	498			500			501			501

___________________


(1)	The sum of quarterly amounts, including per share amounts, may not equal amounts reported for year-to-date periods. This is due to the effects of rounding and changes in the number of weighted-average shares outstanding for each period.


(2)	We acquired Whole Foods Market on August 28, 2017. The results of Whole Foods Market have been included in our results of operation from the date of acquisition. See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 4 — Acquisitions, Goodwill, and Acquired Intangible Assets” for additional information regarding this transaction.

Description of Business and Accounting Policies - Description of Business (Details)	12 Months Ended
	Dec. 31, 2018 segment
Accounting Policies [Abstract]
Number of operating segments	3

Description of Business and Accounting Policies - Calculation of Diluted Shares (Details) - shares shares in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Accounting Policies [Abstract]
Shares used in computation of basic earnings per share	490	488	486	484	483	481	479	477	487	480	474
Total dilutive effect of outstanding stock awards									13	13	10
Shares used in computation of diluted earnings per share	501	501	500	498	496	494	492	490	500	493	484

Description of Business and Accounting Policies - Revenue (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Accounting Policies [Abstract]
Contract with Customer, Refund Liability	$ 623	$ 468	$ 567
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]
Contract with Customer, Right to Recover Product	519	406	411
Sales Returns and Allowances [Member]
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]
Additions to allowance for returns	2,300	1,800	1,500
Deductions to allowance for returns	$ 2,300	$ 1,900	$ 1,500

Description of Business and Accounting Policies - Marketing (Details) - USD ($) $ in Billions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Accounting Policies [Abstract]
Advertising Expense	$ 8.2	$ 6.3	$ 5.0

Description of Business and Accounting Policies - Other Income (Expense), Net (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Accounting Policies [Abstract]
Foreign currency gains (losses)	$ (206)	$ 247	$ 21
Derivative [Line Items]
Equity Securities Gains	145	18	1
Equity Warrant
Derivative [Line Items]
Derivative gains (losses)	$ (131)	$ 109	$ 67

Description of Business and Accounting Policies - Fair Value of Financial Instruments (Details) - Equity Warrant - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative gains (losses)	$ (131)	$ 109	$ 67
Fair Value, Inputs, Level 2 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of warrants	$ 440	$ 441

Description of Business and Accounting Policies - Accounts Receivable, Net and Other (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, net and other	$ 16,677	$ 13,164
Allowance for doubtful accounts	495	348	$ 237
Additions to allowance for doubtful accounts	878	626	451
Deductions to allowance for doubtful accounts	731	515	$ 403
Customer receivables
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, net and other	9,400	6,400
Vendor receivables
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, net and other	3,200	2,600
Loans Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, net and other	$ 710	$ 692

Description of Business and Accounting Policies - Property and Equipment, Net (Details)	12 Months Ended
	Dec. 31, 2018
Building
Property, Plant and Equipment [Line Items]
Estimated useful lives of assets	40 years
Servers
Property, Plant and Equipment [Line Items]
Estimated useful lives of assets	3 years
Networking Equipment
Property, Plant and Equipment [Line Items]
Estimated useful lives of assets	5 years
Heavy Equipment
Property, Plant and Equipment [Line Items]
Estimated useful lives of assets	10 years
Minimum \| Other Fulfillment Equipment
Property, Plant and Equipment [Line Items]
Estimated useful lives of assets	3 years
Maximum \| Other Fulfillment Equipment
Property, Plant and Equipment [Line Items]
Estimated useful lives of assets	7 years

Description of Business and Accounting Policies - Goodwill (Details)	Apr. 01, 2018 USD ($)
Accounting Policies [Abstract]
Goodwill impairment	$ 0

Description of Business and Accounting Policies - Video and Music Content (Details) - Digital Video and Music Content	12 Months Ended
	Dec. 31, 2018
Minimum
Other Assets [Line Items]
Video and music content amortization period	1 year
Maximum
Other Assets [Line Items]
Video and music content amortization period	5 years

Description of Business and Accounting Policies - Accrued Expenses and Other (Details) - USD ($) $ in Billions	Dec. 31, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
Payroll-related liabilities	$ 3.4	$ 2.9
Unredeemed gift certificates	$ 2.8	$ 3.0

Description of Business and Accounting Policies - Unearned Revenue (Details) - USD ($) $ in Billions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
Contract with Customer, Liability		$ 6.1
Contract with Customer, Liability, Revenue Recognized	$ 5.3
Contract with Customer, Liability, Noncurrent	1.4	$ 1.0
Revenue, Remaining Performance Obligation, Amount	$ 19.3
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	3 years 4 months

Description of Business and Accounting Policies - Foreign Currency (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Accounting Policies [Abstract]
Transaction gain (loss) arising from intercompany foreign currency transactions	$ (186)	$ 202	$ 62

Description of Business and Accounting Policies - Accounting Pronouncements Recently Adopted (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Mar. 31, 2018	Jan. 01, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Net cash provided by (used in) operating activities	$ 30,723	$ 18,365	$ 17,203
Net Cash Provided by (Used in) Investing Activities	(12,369)	(27,084)	(9,516)
Net cash provided by (used in) financing activities	(7,686)	9,928	(3,716)
Net change in cash, cash equivalents, and restricted cash		1,209	3,971
Accounting Standards Update 2014-09
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets					$ 650
Accounting Standards Update 2016-16
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
New Accounting Pronouncement or Change in Accounting Principle, Cumulative Effect of Change on Equity or Net Assets				$ 250
Previously Reported [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Net cash provided by (used in) operating activities		18,434	17,272
Net Cash Provided by (Used in) Investing Activities		(27,819)	(9,876)
Net cash provided by (used in) financing activities		9,860	(3,740)
Net change in cash, cash equivalents, and restricted cash		475	3,656
Restatement Adjustment [Member] \| Accounting Standards Update 2016-18
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Net cash provided by (used in) operating activities		(69)	(69)
Net Cash Provided by (Used in) Investing Activities		735	360
Net cash provided by (used in) financing activities		68	24
Net change in cash, cash equivalents, and restricted cash		$ 734	$ 315
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] \| Service, Subscription [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Net Sales	3,800
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] \| Product, Subscription [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Net Sales	(3,800)
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] \| Service, Other [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Net Sales	$ 3,000

Description of Business and Accounting Policies - Accounting Pronouncements Not Yet Adopted (Details) - USD ($) $ in Billions	Jan. 01, 2019	Dec. 31, 2018	Dec. 31, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Finance Lease Reclassification		$ 7.5	$ 5.4
Accounting Standards Update 2016-02 [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating Lease, Right-of-Use Asset	$ 21.0
Finance Lease Reclassification	1.2
Operating Lease, Liability	(21.0)
Derecognition of Build-to-suit assets	1.5
Derecognition of Build-to-suit liabilities	$ 1.5

Cash, Cash Equivalents, and Marketable Securities - Fair Values on Recurring Basis (Details) - Recurring - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Schedule of Investments [Line Items]
Cash	$ 10,406	$ 9,982
Cost or Amortized Cost
Cash, cash equivalents and short-term investments	41,573	32,324
Gross Unrealized Gains
Short-term investments	150	32
Gross Unrealized Losses
Cash equivalents and marketable securities	(47)	(35)
Total Estimated Fair Value
Cash, cash equivalents and short-term investments	41,676	32,321
Less: Restricted cash, cash equivalents, and marketable securities	(426)	(1,335)
Total cash, cash equivalents, and marketable securities	41,250	30,986
Level 1 securities
Cost or Amortized Cost
Equity securities	29	23
Gross Unrealized Gains
Equity securities	143	30
Gross Unrealized Losses
Equity securities	(2)	0
Total Estimated Fair Value
Equity securities	170	53
Level 1 securities \| Money market funds
Schedule of Investments [Line Items]
Money market funds	12,515	11,343
Level 2 securities
Cost or Amortized Cost
Equity securities	28
Gross Unrealized Gains
Equity securities	5
Gross Unrealized Losses
Equity securities	0
Total Estimated Fair Value
Equity securities	33
Level 2 securities \| Foreign government and agency securities
Cost or Amortized Cost
Cash equivalents and marketable securities	815	620
Gross Unrealized Gains
Cash equivalents and marketable securities	0	0
Gross Unrealized Losses
Cash equivalents and marketable securities	0	0
Total Estimated Fair Value
Cash equivalents and marketable securities	815	620
Level 2 securities \| U.S. government and agency securities
Cost or Amortized Cost
Cash equivalents and marketable securities	11,686	4,841
Gross Unrealized Gains
Cash equivalents and marketable securities	1	1
Gross Unrealized Losses
Cash equivalents and marketable securities	(20)	(19)
Total Estimated Fair Value
Cash equivalents and marketable securities	11,667	4,823
Level 2 securities \| Corporate debt securities
Cost or Amortized Cost
Cash equivalents and marketable securities	5,008	4,265
Gross Unrealized Gains
Cash equivalents and marketable securities	1	1
Gross Unrealized Losses
Cash equivalents and marketable securities	(19)	(9)
Total Estimated Fair Value
Cash equivalents and marketable securities	4,990	4,257
Level 2 securities \| Asset-backed securities
Cost or Amortized Cost
Cash equivalents and marketable securities	896	910
Gross Unrealized Gains
Cash equivalents and marketable securities	0	0
Gross Unrealized Losses
Cash equivalents and marketable securities	(4)	(5)
Total Estimated Fair Value
Cash equivalents and marketable securities	892	905
Level 2 securities \| Other fixed income securities
Cost or Amortized Cost
Cash equivalents and marketable securities	190	340
Gross Unrealized Gains
Cash equivalents and marketable securities	0	0
Gross Unrealized Losses
Cash equivalents and marketable securities	(2)	(2)
Total Estimated Fair Value
Cash equivalents and marketable securities	$ 188	$ 338

Cash, Cash Equivalents, and Marketable Securities - Gross Gains and Gross Losses Realized on Sales of Available-For-Sale Marketable Securities (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Debt Securities, Available-for-sale, Realized Gain (Loss) [Abstract]
Realized gains	$ 2	$ 5	$ 3
Realized losses	$ 9	$ 11	$ 11

Cash, Cash Equivalents, and Marketable Securities - Contractual Maturities (Details) $ in Millions	Dec. 31, 2018 USD ($)
Amortized Cost
Due within one year	$ 27,520
Due after one year through five years	2,865
Due after five years through ten years	187
Due after ten years	538
Cash Equivalents and Marketable Fixed Income Securities, Cost	31,110
Estimated Fair Value
Due within one year	27,508
Due after one year through five years	2,845
Due after five years through ten years	185
Due after ten years	529
Cash Equivalents and Marketable Fixed Income Securities, Fair Value	$ 31,067

Cash, Cash Equivalents, and Marketable Securities - Reconciliation to Cash Flow (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Reconciliation to Cash Flow [Abstract]
Cash and Cash Equivalents	$ 31,750	$ 20,522
Restricted cash included in accounts receivable, net and other	418	1,329
Restricted cash included in other assets	5	5
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows	$ 32,173	$ 21,856	$ 19,934	$ 16,175

Property and Equipment - Components (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Gross property and equipment	$ 95,770	$ 72,656
Total accumulated depreciation	33,973	23,790
Total property and equipment, net	61,797	48,866	$ 29,114
Land and buildings
Property, Plant and Equipment [Line Items]
Gross property and equipment	31,741	23,896
Equipment
Property, Plant and Equipment [Line Items]
Gross property and equipment	54,591	42,244
Other assets
Property, Plant and Equipment [Line Items]
Gross property and equipment	2,577	2,438
Construction in progress
Property, Plant and Equipment [Line Items]
Gross property and equipment	$ 6,861	$ 4,078

Property and Equipment - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 12,138	$ 8,831	$ 6,362
Amortization of property and equipment acquired under capital leases	7,300	5,400	$ 3,800
Gross assets under capital leases	36,100	26,400
Accumulated depreciation associated with capital leases	19,800	13,400
Gross assets under finance leases	7,500	5,400
Accumulated depreciation associated with finance leases	$ 1,100	$ 635

Acquisitions, Goodwill, and Acquired Intangible Assets - Additional Information (Details) - USD ($) $ in Millions					12 Months Ended
	Sep. 11, 2018	Apr. 12, 2018	Aug. 28, 2017	May 12, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Business Acquisition [Line Items]
Acquisitions, net of cash acquired					$ 2,186	$ 13,972	$ 116
Other Acquisitions
Business Acquisition [Line Items]
Aggregate purchase price					$ 57	$ 204	$ 103
Souq
Business Acquisition [Line Items]
Acquisitions, net of cash acquired				$ 583
Whole Foods Market
Business Acquisition [Line Items]
Acquisitions, net of cash acquired			$ 13,200
Ring Inc.
Business Acquisition [Line Items]
Acquisitions, net of cash acquired		$ 839
PillPack, Inc.
Business Acquisition [Line Items]
Acquisitions, net of cash acquired	$ 753

Acquisitions, Goodwill, and Acquired Intangible Assets - Allocation of Aggregate Purchase Price of Acquisitions (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Purchase Price
Cash paid, net of cash acquired	$ 2,186	$ 13,972	$ 116
Allocation
Goodwill	$ 14,548	13,350	3,784
Acquired intangibles weighted average amortization period	15 years 5 months
Minimum
Allocation
Intangible assets, estimated useful life	1 year
Maximum
Allocation
Intangible assets, estimated useful life	25 years
Marketing-related
Allocation
Acquired intangibles weighted average amortization period	21 years 2 months
Contract-based
Allocation
Acquired intangibles weighted average amortization period	12 years 4 months
Technology-based
Allocation
Acquired intangibles weighted average amortization period	4 years 7 months
Customer-related
Allocation
Acquired intangibles weighted average amortization period	4 years 5 months
2016 Acquisitions
Purchase Price
Cash paid, net of cash acquired			81
Indemnification holdback			22
Aggregate purchase price			103
Allocation
Goodwill			60
Intangible assets			57
Property and equipment			3
Deferred tax assets			17
Other assets acquired			10
Long-term debt			(5)
Deferred tax liabilities			(18)
Other liabilities assumed			(21)
Allocated purchase price			$ 103
Acquired intangibles weighted average amortization period			5 years
2016 Acquisitions \| Minimum
Allocation
Intangible assets, estimated useful life			1 year
2016 Acquisitions \| Maximum
Allocation
Intangible assets, estimated useful life			7 years
2016 Acquisitions \| Marketing-related
Allocation
Intangible assets			$ 2
2016 Acquisitions \| Contract-based
Allocation
Intangible assets			1
2016 Acquisitions \| Technology-based
Allocation
Intangible assets			53
2016 Acquisitions \| Customer-related
Allocation
Intangible assets			$ 1
2017 Acquisitions
Purchase Price
Cash paid, net of cash acquired		13,859
Indemnification holdback		104
Aggregate purchase price		13,963
Allocation
Goodwill		9,501
Intangible assets		2,647
Property and equipment		3,810
Deferred tax assets		117
Other assets acquired		1,858
Long-term debt		(1,165)
Deferred tax liabilities		(961)
Other liabilities assumed		(1,844)
Allocated purchase price		$ 13,963
Acquired intangibles weighted average amortization period		21 years
2017 Acquisitions \| Minimum
Allocation
Intangible assets, estimated useful life		1 year
2017 Acquisitions \| Maximum
Allocation
Intangible assets, estimated useful life		25 years
2017 Acquisitions \| Marketing-related
Allocation
Intangible assets		$ 1,987
2017 Acquisitions \| Contract-based
Allocation
Intangible assets		440
2017 Acquisitions \| Technology-based
Allocation
Intangible assets		166
2017 Acquisitions \| Customer-related
Allocation
Intangible assets		$ 54
2018 Acquisitions
Purchase Price
Cash paid, net of cash acquired	$ 1,618
Indemnification holdback	31
Aggregate purchase price	1,649
Allocation
Goodwill	1,228
Intangible assets	677
Property and equipment	11
Deferred tax assets	174
Other assets acquired	282
Long-term debt	(176)
Deferred tax liabilities	(159)
Other liabilities assumed	(388)
Allocated purchase price	$ 1,649
Acquired intangibles weighted average amortization period	6 years
2018 Acquisitions \| Minimum
Allocation
Intangible assets, estimated useful life	2 years
2018 Acquisitions \| Maximum
Allocation
Intangible assets, estimated useful life	7 years
2018 Acquisitions \| Marketing-related
Allocation
Intangible assets	$ 186
2018 Acquisitions \| Contract-based
Allocation
Intangible assets	13
2018 Acquisitions \| Technology-based
Allocation
Intangible assets	285
2018 Acquisitions \| Customer-related
Allocation
Intangible assets	$ 193

Acquisitions, Goodwill, and Acquired Intangible Assets - Summary of Goodwill Activity by Segment (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Goodwill [Roll Forward]
Goodwill, balance at beginning of period	$ 13,350	$ 3,784
New acquisitions	1,228	9,501
Other adjustments	(30)	65
Goodwill, balance at end of period	14,548	13,350
North America
Goodwill [Roll Forward]
Goodwill, balance at beginning of period	11,165	2,044
New acquisitions	1,031	9,115
Other adjustments	(5)	6
Goodwill, balance at end of period	12,191	11,165
International
Goodwill [Roll Forward]
Goodwill, balance at beginning of period	1,108	694
New acquisitions	177	368
Other adjustments	(15)	46
Goodwill, balance at end of period	1,270	1,108
AWS
Goodwill [Roll Forward]
Goodwill, balance at beginning of period	1,077	1,046
New acquisitions	20	18
Other adjustments	(10)	13
Goodwill, balance at end of period	$ 1,087	$ 1,077

Acquisitions, Goodwill, and Acquired Intangible Assets - Acquired Intangible Assets (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Intangibles, Gross	$ 5,350	$ 4,422
Accumulated Amortization	(1,240)	(1,051)
Acquired Intangibles, Net	$ 4,110	3,371
Weighted Average Life Remaining	15 years 5 months
Amortization expense for acquired intangibles	$ 475	366	$ 287
Minimum
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets, estimated useful life	1 year
Maximum
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets, estimated useful life	25 years
Marketing-related
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Intangibles, Gross	$ 2,542	2,486
Accumulated Amortization	(431)	(418)
Acquired Intangibles, Net	$ 2,111	2,068
Weighted Average Life Remaining	21 years 2 months
Contract-based
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Intangibles, Gross	$ 1,430	1,013
Accumulated Amortization	(224)	(213)
Acquired Intangibles, Net	$ 1,206	800
Weighted Average Life Remaining	12 years 4 months
Technology- and content-based
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Intangibles, Gross	$ 941	640
Accumulated Amortization	(377)	(252)
Acquired Intangibles, Net	$ 564	388
Weighted Average Life Remaining	4 years 7 months
Customer-related
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired Intangibles, Gross	$ 437	283
Accumulated Amortization	(208)	(168)
Acquired Intangibles, Net	$ 229	$ 115
Weighted Average Life Remaining	4 years 5 months

Acquisitions, Goodwill, and Acquired Intangible Assets - Expected Future Amortization Expense of Acquired Intangible Assets (Details) $ in Millions	Dec. 31, 2018 USD ($)
Year Ended December 31,
2019	$ 511
2020	412
2021	355
2022	323
2023	270
Thereafter	2,217
Acquired intangibles	$ 4,088

Long-Term Debt - Additional Information (Details)	1 Months Ended
Long-Term Debt - Additional Information (Details)	Apr. 30, 2018 USD ($) extension	Oct. 31, 2016 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Debt Instrument [Line Items]
Borrowings outstanding			$ 24,965,000,000	$ 24,942,000,000
Commercial Paper [Member]
Debt Instrument [Line Items]
Credit term	397 days
Commercial Paper, Maximum Borrowing Capacity	$ 7,000,000,000
Commercial Paper Borrowings			0
Senior Notes
Debt Instrument [Line Items]
Borrowings outstanding			24,300,000,000
Unamortized discount			101,000,000	99,000,000
Estimated fair value of notes			24,300,000,000	25,700,000,000
Senior Notes \| 5.200% Notes due on December 3, 2025
Debt Instrument [Line Items]
Borrowings outstanding			1,000,000,000	1,000,000,000
Line of Credit and Other Long-term Debt
Debt Instrument [Line Items]
Borrowings outstanding			715,000,000	692,000,000
Credit Facility \| Revolving Credit Facility
Debt Instrument [Line Items]
Borrowings outstanding			594,000,000	592,000,000
Credit Facility \| October 2016 Revolving Credit Facility \| Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 500,000,000	620,000,000
Credit term		3 years
Commitment fee percentage		0.50%
Borrowings outstanding			$ 594,000,000	$ 592,000,000
Weighted average interest rate			3.20%	2.70%
Collateral amount				$ 686,000,000
Credit Facility \| October 2016 Revolving Credit Facility \| Revolving Credit Facility \| LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate (as a percent)		1.65%
Credit Facility \| April 2018 Revolving Credit Facility \| Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 7,000,000,000
Credit term	3 years
Commitment fee percentage	0.04%
Borrowings outstanding			$ 0	0
Credit Agreement, number of extensions \| extension	3
Credit Agreement, additional term	1 year
Credit Facility \| April 2018 Revolving Credit Facility \| Revolving Credit Facility \| LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate (as a percent)	0.50%
Other Long-term Debt
Debt Instrument [Line Items]
Borrowings outstanding			$ 121,000,000	$ 100,000,000
Weighted average interest rate			6.00%	5.80%
Amazon.com, Inc. [Member] \| 5.200% Notes due on December 3, 2025
Debt Instrument [Line Items]
Borrowings outstanding				$ 872,000,000
Whole Foods Market, Inc. [Member] \| 5.200% Notes due on December 3, 2025
Debt Instrument [Line Items]
Borrowings outstanding				$ 128,000,000

Long-Term Debt - Long-Term Debt Obligations (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Total debt	$ 24,965	$ 24,942
Less current portion of long-term debt	(1,371)	(100)
Face value of long-term debt	23,594	24,842
Senior Notes
Debt Instrument [Line Items]
Total debt	$ 24,300
Senior Notes \| 2.600% Notes due on December 5, 2019
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	2.60%
Total debt	$ 1,000	1,000
Effective interest rate	2.73%
Senior Notes \| 1.900% Notes due on August 21, 2020
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	1.90%
Total debt	$ 1,000	1,000
Effective interest rate	2.16%
Senior Notes \| 3.300% Notes due on December 5, 2021
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	3.30%
Total debt	$ 1,000	1,000
Effective interest rate	3.43%
Senior Notes \| 2.500% Notes due on November 29, 2022
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	2.50%
Total debt	$ 1,250	1,250
Effective interest rate	2.66%
Senior Notes \| 2.400% Notes due on February 22, 2023
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	2.40%
Total debt	$ 1,000	1,000
Effective interest rate	2.56%
Senior Notes \| 2.800% Notes due on August 22, 2024
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	2.80%
Total debt	$ 2,000	2,000
Effective interest rate	2.95%
Senior Notes \| 3.800% Notes due on December 5, 2024
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	3.80%
Total debt	$ 1,250	1,250
Effective interest rate	3.90%
Senior Notes \| 5.200% Notes due on December 3, 2025
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	5.20%
Total debt	$ 1,000	1,000
Effective interest rate	3.02%
Senior Notes \| 3.150% Notes due on August 22, 2027
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	3.15%
Total debt	$ 3,500	3,500
Effective interest rate	3.25%
Senior Notes \| 4.800% Notes due on December 5, 2034
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.80%
Total debt	$ 1,250	1,250
Effective interest rate	4.92%
Senior Notes \| 3.875% Notes due on August 22, 2037
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	3.875%
Total debt	$ 2,750	2,750
Effective interest rate	3.94%
Senior Notes \| 4.950% Notes due on December 5, 2044
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.95%
Total debt	$ 1,500	1,500
Effective interest rate	5.11%
Senior Notes \| 4.050% Notes due on August 22, 2047
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.05%
Total debt	$ 3,500	3,500
Effective interest rate	4.13%
Senior Notes \| 4.250% Notes due on August 22, 2057
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.25%
Total debt	$ 2,250	2,250
Effective interest rate	4.33%
Credit Facility \| Revolving Credit Facility
Debt Instrument [Line Items]
Total debt	$ 594	592
Other long-term debt
Debt Instrument [Line Items]
Total debt	$ 121	100
Amazon.com, Inc. [Member] \| 5.200% Notes due on December 3, 2025
Debt Instrument [Line Items]
Total debt		872
Whole Foods Market, Inc. [Member] \| 5.200% Notes due on December 3, 2025
Debt Instrument [Line Items]
Total debt		$ 128

Long-Term Debt - Future Principal Payment for Debt (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Year Ended December 31,
2019	$ 1,371
2020	1,298
2021	1,016
2022	1,266
2023	1,014
Thereafter	19,000
Total debt	$ 24,965	$ 24,942

Other Long-Term Liabilities - Other Long Term Liabilities Summary (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Other Liabilities Disclosure [Abstract]
Long-term capital lease obligations	$ 9,650	$ 8,438
Long-term finance lease obligations	6,642	4,745
Construction liabilities	2,516	1,350
Tax contingencies	896	1,004
Long-term deferred tax liabilities	1,490	990
Other	6,019	4,448
Total other long-term liabilities	$ 27,213	$ 20,975

Other Long-Term Liabilities - Long Term Capital Lease Obligation (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Other Liabilities Disclosure [Abstract]
Gross capital lease obligations	$ 17,952
Less imputed interest	(582)
Present value of net minimum lease payments	17,370
Less current portion of capital lease obligations	(7,720)	$ (5,800)
Total long-term capital lease obligations	$ 9,650	$ 8,438

Other Long-Term Liabilities - Long Term Finance Lease Obligation (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Other Liabilities Disclosure [Abstract]
Gross finance lease obligations	$ 8,376
Less imputed interest	(1,323)
Present value of net minimum lease payments	7,053
Less current portion of finance lease obligations	(411)	$ (282)
Total long-term finance lease obligations	$ 6,642	$ 4,745

Commitments and Contingencies - Commitments (Details) - USD ($) $ in Billions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
Rental expense under operating lease agreements	$ 3.4	$ 2.2	$ 1.4

Commitments and Contingencies - Principal Contractual Commitments Excluding Open Orders (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Debt principal and interest
Year Ended December 31, 2019	$ 2,277
Year Ended December 31, 2020	2,161
Year Ended December 31, 2021	1,861
Year Ended December 31, 2022	2,078
Year Ended December 31, 2023	1,781
Thereafter	30,013
Total	40,171
Capital lease obligations, including interest
Year Ended December 31, 2019	7,807
Year Ended December 31, 2020	5,742
Year Ended December 31, 2021	2,725
Year Ended December 31, 2022	704
Year Ended December 31, 2023	473
Thereafter	501
Total	17,952
Current capital lease obligations	7,720	$ 5,800
Noncurrent capital lease obligations	9,650	8,438
Finance lease obligations, including interest
Year Ended December 31, 2019	628
Year Ended December 31, 2020	640
Year Ended December 31, 2021	652
Year Ended December 31, 2022	664
Year Ended December 31, 2023	675
Thereafter	5,117
Total	8,376
Current finance lease obligations	411	282
Noncurrent finance lease obligations	6,642	4,745
Operating leases
Year Ended December 31, 2019	3,127
Year Ended December 31, 2020	3,070
Year Ended December 31, 2021	2,775
Year Ended December 31, 2022	2,473
Year Ended December 31, 2023	2,195
Thereafter	13,026
Total	26,666
Unconditional purchase obligations
Year Ended December 31, 2019	3,523
Year Ended December 31, 2020	4,103
Year Ended December 31, 2021	3,291
Year Ended December 31, 2022	3,098
Year Ended December 31, 2023	2,974
Thereafter	5,204
Total	22,193
Other commitments
Year Ended December 31, 2019	2,618
Year Ended December 31, 2020	1,455
Year Ended December 31, 2021	1,056
Year Ended December 31, 2022	843
Year Ended December 31, 2023	808
Thereafter	8,875
Total	15,655
Accrued tax contingencies	3,414	$ 2,309	$ 1,710	$ 1,181
Total commitments
Year Ended December 31, 2019	19,980
Year Ended December 31, 2020	17,171
Year Ended December 31, 2021	12,360
Year Ended December 31, 2022	9,860
Year Ended December 31, 2023	8,906
Thereafter	62,736
Total	$ 131,013

Commitments and Contingencies - Pledged Assets (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Pledged or restricted cash, cash equivalents, marketable securities, and other assets	$ 575	$ 1,400

Commitments and Contingencies - Legal Proceedings (Details) - Pending Litigation $ in Millions	1 Months Ended
	Oct. 31, 2013 claim	Feb. 28, 2017 USD ($)
Nationwide Breach of Contract and Unjust Enrichment Claims
Loss Contingencies [Line Items]
Number of claims filed \| claim	1
Legal Proceedings with Eolas Technologies, Inc. \| Minimum
Loss Contingencies [Line Items]
Estimate of possible loss		$ 130
Legal Proceedings with Eolas Technologies, Inc. \| Maximum
Loss Contingencies [Line Items]
Estimate of possible loss		$ 250

Stockholders' Equity - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Feb. 29, 2016
Class of Stock [Line Items]
Preferred stock, authorized shares	500,000,000	500,000,000
Preferred stock, par value (in usd per share)	$ 0.01	$ 0.01
Preferred stock, outstanding shares	0	0
Common shares outstanding plus underlying outstanding stock awards	507,000,000	504,000,000	497,000,000
Stock Repurchased During Period, Value	$ 0	$ 0	$ 0
Net unrecognized compensation cost related to unvested stock-based compensation arrangements	$ 6,600,000,000
Compensation cost expected to be expensed in next twelve months, percentage	50.00%
Net unrecognized compensation cost related to unvested stock-based compensation arrangements, weighted average recognition period (in years)	1 year 1 month
Estimated forfeiture rate	27.00%	28.00%	28.00%
Common stock available for future issuance to employees (in shares)	113,000,000
Restricted Stock Units
Class of Stock [Line Items]
Fair value of units vested	$ 11,400,000,000	$ 6,800,000,000	$ 4,300,000,000
Minimum
Class of Stock [Line Items]
Award vesting period	2 years
Maximum
Class of Stock [Line Items]
Award vesting period	5 years
February 2016 Program
Class of Stock [Line Items]
Stock repurchase, authorized amount				$ 5,000,000,000

Stockholders' Equity - Stock-based Compensation Expense (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 5,418	$ 4,215	$ 2,975
Tax benefits from stock-based compensation expense	1,100	860	907
Cost of sales
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	73	47	16
Fulfillment
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	1,121	911	657
Marketing
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	769	511	323
Technology and content
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	2,888	2,305	1,664
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 567	$ 441	$ 315

Stockholders' Equity - Restricted Stock Unit Activity (Details) - Restricted Stock Units - $ / shares shares in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Number of Units
Beginning balance (in shares)	20.1	19.8	18.9
Units granted (in shares)	5.0	8.9	9.3
Units vested (in shares)	(7.1)	(6.8)	(6.1)
Units forfeited (in shares)	(2.1)	(1.8)	(2.3)
Ending balance (in shares)	15.9	20.1	19.8
Weighted Average Grant-Date Fair Value
Beginning Balance	$ 725	$ 506	$ 362
Units granted	1,522	946	660
Units vested	578	400	321
Units forfeited	862	649	440
Ending Balance	$ 1,024	$ 725	$ 506

Stockholders' Equity - Scheduled Vesting for Outstanding Restricted Stock Units (Details) - Restricted Stock Units - shares shares in Millions	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Scheduled vesting — restricted stock units
Year Ended December 31, 2019	6.9
Year Ended December 31, 2020	5.6
Year Ended December 31, 2021	2.4
Year Ended December 31, 2022	0.8
Year Ended December 31, 2023	0.1
Thereafter	0.1
Total	15.9	20.1	19.8	18.9

Income Taxes - Additional Information (Details) € in Millions, $ in Millions		3 Months Ended								6 Months Ended	12 Months Ended
	Oct. 04, 2017 EUR (€)	Dec. 31, 2018 USD ($)	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Income Tax Disclosure [Abstract]
Provision for income taxes, net		$ 327	$ 508	$ 74	$ 287	$ 16	$ 58	$ 467	$ 229		$ 1,197	$ 769	$ 1,425
Cash taxes paid, net of refunds											1,184	957	412
Provisional tax benefit for impact of the Act												789
Income Taxes [Line Items]
Valuation allowance against the net deferred tax assets										$ 600
Tax credit carryforwards		1,700									1,700
Accrued interest and penalties, net of federal income tax benefit, related to tax contingencies		127				$ 107					127	107
Interest and penalties, net of federal income tax benefit											20	$ 40	$ 9
Federal
Income Taxes [Line Items]
Net operating loss carryforwards		627									627
Federal \| IRS
Income Taxes [Line Items]
Tax examination, estimate of additional tax expense											1,500
Federal \| Capital Loss Carryforward
Income Taxes [Line Items]
Tax credit carryforwards		261									261
Foreign
Income Taxes [Line Items]
Net operating loss carryforwards		7,800									7,800
Foreign \| Luxembourg Tax Administration
Income Taxes [Line Items]
Tax examination, estimate of additional tax expense \| €	€ 250
State
Income Taxes [Line Items]
Net operating loss carryforwards		$ 919									$ 919

Income Taxes - Components of Provision for Income Taxes, Net (Details) - USD ($) $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Current taxes:
U.S. Federal									$ (129)	$ (137)	$ 1,136
U.S. State									322	211	208
International									563	724	327
Current taxes									756	798	1,671
Deferred taxes:
U.S. Federal									565	(202)	116
U.S. State									5	(26)	(31)
International									(129)	199	(331)
Deferred taxes									441	(29)	(246)
Provision for income taxes, net	$ 327	$ 508	$ 74	$ 287	$ 16	$ 58	$ 467	$ 229	$ 1,197	$ 769	$ 1,425

Income Taxes - U.S. and International Components of Income Before Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Tax Disclosure [Abstract]
U.S.									$ 11,157	$ 5,630	$ 4,551
International									104	(1,824)	(659)
Income before income taxes	$ 3,350	$ 3,390	$ 2,605	$ 1,916	$ 1,872	$ 316	$ 666	$ 953	$ 11,261	$ 3,806	$ 3,892

Income Taxes - Items Accounting for Differences Between Income Taxes Computed at Federal Statutory Rate and Provision Recorded for Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Income taxes computed at the federal statutory rate (1)									$ 2,365	$ 1,332	$ 1,362
Effect of:
Tax impact of foreign earnings									119	1,178	(69)
State taxes, net of federal benefits									263	114	110
Tax credits									(419)	(220)	(119)
Stock-based compensation									(1,086)	(917)	189
Domestic production activities deduction									0	0	(94)
2017 Impact of U.S. Tax Act									(157)	(789)	0
Other, net									112	71	46
Provision for income taxes, net	$ 327	$ 508	$ 74	$ 287	$ 16	$ 58	$ 467	$ 229	1,197	769	$ 1,425
Excess tax benefits from stock-based compensation									$ 1,600	$ 1,300

Income Taxes - Deferred Income Tax Assets and Liabilities (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Deferred tax assets:
Loss carryforwards U.S. - Federal/States	$ 222	$ 211
Loss carryforwards - Foreign	2,551	2,149
Accrued liabilities, reserves, and other expenses	1,064	901
Stock-based compensation	1,293	1,026
Deferred revenue	321	349
Assets held for investment	69	35
Depreciation and amortization	2,386	279
Other items	94	167
Tax credits	734	381
Total gross deferred tax assets	8,734	5,498
Less valuation allowance	(4,950)	(2,538)
Deferred tax assets, net of valuation allowance	3,784	2,960
Deferred tax liabilities:
Depreciation and amortization	(3,579)	(2,568)
Acquisition related intangible assets	(682)	(531)
Other items	(67)	(58)
Net deferred tax liabilities, net of valuation allowance	$ (544)	$ (197)

Income Taxes - Reconciliation of Tax Contingencies (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Gross tax contingencies – beginning of period	$ 2,309	$ 1,710	$ 1,181
Gross increases to tax positions in prior periods	164	223	355
Gross decreases to tax positions in prior periods	(90)	(139)	(133)
Gross increases to current period tax positions	1,088	518	308
Settlements with tax authorities	(36)	0	0
Lapse of statute of limitations	(21)	(3)	(1)
Gross tax contingencies - end of period	3,414	$ 2,309	$ 1,710
Tax contingencies, that if fully recognized, would decrease our effective tax rate	$ 1,700

Segment Information - Additional Information (Details) $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($) segment	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Segment Reporting [Abstract]
Number of operating segments \| segment	3
Segment Reporting Information [Line Items]
Property and equipment, net	$ 61,797	$ 48,866	$ 29,114
United States
Segment Reporting Information [Line Items]
Property and equipment, net	45,100	35,500	22,000
Rest of world
Segment Reporting Information [Line Items]
Property and equipment, net	$ 16,700	$ 13,400	$ 7,100

Segment Information - Reportable Segments and Reconciliation to Consolidated Net Income (Details) - USD ($) $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Segment Reporting Information [Line Items]
Total net sales	$ 72,383	$ 56,576	$ 52,886	$ 51,042	$ 60,453	$ 43,744	$ 37,955	$ 35,714	$ 232,887	$ 177,866	$ 135,987
Operating expenses									220,466	173,760	131,801
Operating income (loss)	3,786	3,724	2,983	1,927	2,127	347	628	1,005	12,421	4,106	4,186
Total non-operating income (expense)									(1,160)	(300)	(294)
Provision for income taxes	(327)	(508)	(74)	(287)	(16)	(58)	(467)	(229)	(1,197)	(769)	(1,425)
Equity-method investment activity, net of tax									9	(4)	(96)
Net income	$ 3,027	$ 2,883	$ 2,534	$ 1,629	$ 1,856	$ 256	$ 197	$ 724	10,073	3,033	2,371
North America
Segment Reporting Information [Line Items]
Total net sales									141,366	106,110	79,785
Operating expenses									134,099	103,273	77,424
Operating income (loss)									7,267	2,837	2,361
International
Segment Reporting Information [Line Items]
Total net sales									65,866	54,297	43,983
Operating expenses									68,008	57,359	45,266
Operating income (loss)									(2,142)	(3,062)	(1,283)
AWS
Segment Reporting Information [Line Items]
Total net sales									25,655	17,459	12,219
Operating expenses									18,359	13,128	9,111
Operating income (loss)									$ 7,296	$ 4,331	$ 3,108

Segment Information - Disaggregation of Revenue (Details) - USD ($) $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Disaggregation of Revenue [Line Items]
Total net sales	$ 72,383	$ 56,576	$ 52,886	$ 51,042	$ 60,453	$ 43,744	$ 37,955	$ 35,714	$ 232,887	$ 177,866	$ 135,987
Online stores
Disaggregation of Revenue [Line Items]
Total net sales									122,987	108,354	91,431
Physical stores
Disaggregation of Revenue [Line Items]
Total net sales									17,224	5,798	0
Third-party seller services
Disaggregation of Revenue [Line Items]
Total net sales									42,745	31,881	22,993
Subscription services
Disaggregation of Revenue [Line Items]
Total net sales									14,168	9,721	6,394
AWS
Disaggregation of Revenue [Line Items]
Total net sales									25,655	17,459	12,219
Other
Disaggregation of Revenue [Line Items]
Total net sales									$ 10,108	$ 4,653	$ 2,950

Segment Information Net Sales Attributed to Countries Representing Portion of Consolidated Net Sales (Details) - USD ($) $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Segment Reporting, Revenue Reconciling Item
Total net sales	$ 72,383	$ 56,576	$ 52,886	$ 51,042	$ 60,453	$ 43,744	$ 37,955	$ 35,714	$ 232,887	$ 177,866	$ 135,987
United States
Segment Reporting, Revenue Reconciling Item
Total net sales									160,146	120,486	90,349
Germany
Segment Reporting, Revenue Reconciling Item
Total net sales									19,881	16,951	14,148
United Kingdom
Segment Reporting, Revenue Reconciling Item
Total net sales									14,524	11,372	9,547
Japan
Segment Reporting, Revenue Reconciling Item
Total net sales									13,829	11,907	10,797
Rest of world
Segment Reporting, Revenue Reconciling Item
Total net sales									$ 24,507	$ 17,150	$ 11,146

Segment Information - Reconciliation of Assets from Segment to Consolidated (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	$ 162,648	$ 131,310	$ 83,402
Operating Segments \| North America
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	47,251	35,844	22,225
Operating Segments \| International
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	19,923	18,014	10,429
Operating Segments \| AWS
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	26,340	18,660	12,698
Corporate
Segment Reporting, Asset Reconciling Item [Line Items]
Total assets	$ 69,134	$ 58,792	$ 38,050

Segment Information - Reconciliation of Property and Equipment from Segments to Consolidated (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Segment Reporting, Other Significant Reconciling Item [Line Items]
Property and equipment, net	$ 61,797	$ 48,866	$ 29,114
Operating Segments \| North America
Segment Reporting, Other Significant Reconciling Item [Line Items]
Property and equipment, net	27,052	20,401	10,143
Operating Segments \| International
Segment Reporting, Other Significant Reconciling Item [Line Items]
Property and equipment, net	8,552	7,425	3,448
Operating Segments \| AWS
Segment Reporting, Other Significant Reconciling Item [Line Items]
Property and equipment, net	18,851	14,885	10,300
Corporate
Segment Reporting, Other Significant Reconciling Item [Line Items]
Property and equipment, net	$ 7,342	$ 6,155	$ 5,223

Segment Information - Reconciliation of Property and Equipment Additions from Segments to Consolidated (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Segment Reporting Information [Line Items]
Property and equipment additions	$ 25,068	$ 29,783	$ 13,585
Operating Segments \| North America
Segment Reporting Information [Line Items]
Property and equipment additions	10,749	13,200	5,132
Operating Segments \| International
Segment Reporting Information [Line Items]
Property and equipment additions	2,476	5,196	1,680
Operating Segments \| AWS
Segment Reporting Information [Line Items]
Property and equipment additions	9,783	9,190	5,193
Operating Segments \| AWS \| Assets held under capital leases
Segment Reporting Information [Line Items]
Property and equipment additions	8,400	7,300	4,000
Operating Segments \| AWS \| Assets under finance leases
Segment Reporting Information [Line Items]
Property and equipment additions	245	134	75
Operating Segments \| North America and International \| Assets held under capital leases
Segment Reporting Information [Line Items]
Property and equipment additions	2,000	2,900	1,500
Operating Segments \| North America and International \| Assets under finance leases
Segment Reporting Information [Line Items]
Property and equipment additions	3,000	2,900	849
Corporate
Segment Reporting Information [Line Items]
Property and equipment additions	$ 2,060	$ 2,197	$ 1,580

Segment Information - Depreciation Expense, by Segment (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Segment Reporting Information [Line Items]
Depreciation expense	$ 12,138	$ 8,831	$ 6,362
North America
Segment Reporting Information [Line Items]
Depreciation expense	4,415	3,029	1,971
International
Segment Reporting Information [Line Items]
Depreciation expense	1,628	1,278	930
AWS
Segment Reporting Information [Line Items]
Depreciation expense	$ 6,095	$ 4,524	$ 3,461

Quarterly Results (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Quarterly Financial Information Disclosure [Abstract]
Total net sales	$ 72,383	$ 56,576	$ 52,886	$ 51,042	$ 60,453	$ 43,744	$ 37,955	$ 35,714	$ 232,887	$ 177,866	$ 135,987
Operating income	3,786	3,724	2,983	1,927	2,127	347	628	1,005	12,421	4,106	4,186
Income before income taxes	3,350	3,390	2,605	1,916	1,872	316	666	953	11,261	3,806	3,892
Provision for income taxes	(327)	(508)	(74)	(287)	(16)	(58)	(467)	(229)	(1,197)	(769)	(1,425)
Net income	$ 3,027	$ 2,883	$ 2,534	$ 1,629	$ 1,856	$ 256	$ 197	$ 724	$ 10,073	$ 3,033	$ 2,371
Basic earnings per share	$ 6.18	$ 5.91	$ 5.21	$ 3.36	$ 3.85	$ 0.53	$ 0.41	$ 1.52	$ 20.68	$ 6.32	$ 5.01
Diluted earnings per share	$ 6.04	$ 5.75	$ 5.07	$ 3.27	$ 3.75	$ 0.52	$ 0.40	$ 1.48	$ 20.14	$ 6.15	$ 4.90
Shares used in computation of earnings per share:
Basic (in shares)	490	488	486	484	483	481	479	477	487	480	474
Diluted (in shares)	501	501	500	498	496	494	492	490	500	493	484