What changed in this filing

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Item 1. Financial Statements

2021-07-30 compared with 2021-04-30 · 106 added, 66 removed, 443 unchanged (28% of the section changed)

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Three Months Ended

March 31, Twelve Months Ended

June 30, Six Months Ended

June 30, Twelve Months Ended

2020 2021 2020 2021 2020 2021

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Three Months Ended

June 30, Six Months Ended

2020 2021 2020 2021

Net product sales $ 50,244 $ 58,004 $ 92,085 $ 115,495

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Three Months Ended

June 30, Six Months Ended

2020 2021 2020 2021

Net income $ 5,243 $ 7,778 $ 7,778 $ 15,885

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Reclassification adjustment for losses (gains) included in “Other income (expense), net,” net of tax of $ 0 , $ 4 , $ 0 and $ 8

( 6 ) ( 12 ) ( 6 ) ( 26 )

Net unrealized gains (losses) on available-for-sale debt securities 401 ( 18 ) 199 ( 130 )

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(in millions, except per share data)

December 31, 2020 March 31, 2021

December 31, 2020 June 30, 2021

Current assets:

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These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes in Item 8 of Part II, “Financial Statements and Supplementary Data,” of our 2020 Annual Report on Form 10-K.

Prior Period Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

“Proceeds from short-term debt, and other” were reclassified from “Proceeds from long-term debt and other” and “Repayments of short-term debt, and other” were reclassified from “Repayments of long-term debt and other” on our consolidated statements of cash flows.

Principles of Consolidation

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Estimates are used for, but not limited to, income taxes, useful lives of equipment, commitments and contingencies, valuation of acquired intangibles and goodwill, stock-based compensation forfeiture rates, vendor funding, inventory valuation, collectability of receivables, and valuation and impairment of investments.

Given the global economic climate and additional or unforeseen effects from the COVID-19 pandemic, these estimates may become more challenging, and actual results could differ materially from these estimates.

Actual results could differ materially from these estimates.

Supplemental Cash Flow Information

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Three Months Ended

March 31, Twelve Months Ended

June 30, Six Months Ended

June 30, Twelve Months Ended

2020 2021 2020 2021 2020 2021

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Three Months Ended

June 30, Six Months Ended

2020 2021 2020 2021

Shares used in computation of basic earnings per share 500 505 499 505

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Three Months Ended

June 30, Six Months Ended

2020 2021 2020 2021

Marketable equity securities valuation gains (losses) $ 235 $ 157 $ 204 $ 81

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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.

The inventory valuation allowance, representing a write-down of inventory, was $ 2.3 billion and $ 2.4 billion as of December 31, 2020 and March 31, 2021.

The inventory valuation allowance, representing a write-down of inventory, was $ 2.3 billion and $ 2.4 billion as of December 31, 2020 and June 30, 2021.

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, 2020 and March 31, 2021, customer receivables, net, were $ 14.8 billion and $ 15.3 billion, vendor receivables, net, were $ 4.8 billion and $ 3.6 billion, and seller receivables, net, were $ 381 million and $ 502 million.

As of December 31, 2020 and June 30, 2021, customer receivables, net, were $ 14.8 billion and $ 16.3 billion, vendor receivables, net, were $ 4.8 billion and $ 4.2 billion, and seller receivables, net, were $ 381 million and $ 646 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 expected losses, including our historical experience of actual losses.

The allowance for doubtful accounts was $ 1.1 billion and $ 920 million as of December 31, 2020 and March 31, 2021.

The allowance for doubtful accounts was $ 1.1 billion as of December 31, 2020 and June 30, 2021.

Digital Video and Music Content

The total capitalized costs of video, which is primarily released content, and music as of December 31, 2020 and March 31, 2021 were $ 6.8 billion and $ 7.8 billion.

Total video and music expense was $ 2.4 billion and $ 3.0 billion in Q1 2020 and Q1 2021.

The total capitalized costs of video, which is primarily released content, and music as of December 31, 2020 and June 30, 2021 were $ 6.8 billion and $ 8.6 billion.

Total video and music expense was $ 2.8 billion and $ 3.1 billion in Q2 2020 and Q2 2021, and $ 5.2 billion and $ 6.2 billion for the six months ended June 30, 2020 and 2021.

Unearned Revenue

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Unearned revenue primarily relates to prepayments of AWS services and Amazon Prime memberships.

Our total unearned revenue as of December 31, 2020 was $ 11.6 billion, of which $ 4.2 billion was recognized as revenue during the three months ended March 31, 2021.

Included in “Other long-term liabilities” on our consolidated balance sheets was $ 1.9 billion of unearned revenue as of December 31, 2020 and March 31, 2021.

Our total unearned revenue as of December 31, 2020 was $ 11.6 billion, of which $ 6.7 billion was recognized as revenue during the six months ended June 30, 2021.

Included in “Other long-term liabilities” on our consolidated balance sheets was $ 1.9 billion of unearned revenue as of December 31, 2020 and June 30, 2021.

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 consolidated financial statements.

For contracts with original terms that exceed one year, those commitments not yet recognized were $ 52.9 billion as of March 31, 2021.

For contracts with original terms that exceed one year, those commitments not yet recognized were $ 60.7 billion as of June 30, 2021.

The weighted-average remaining life of our long-term contracts is 3.6 years.

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Cash, Cash Equivalents, Restricted Cash, and Marketable Securities

As of December 31, 2020 and March 31, 2021, 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.

As of December 31, 2020 and June 30, 2021, 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, other investment grade securities, and marketable equity securities.

Cash equivalents and marketable securities are recorded at fair value.

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Other marketable securities 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 significant amounts of marketable securities categorized as Level 3 assets as of December 31, 2020 and March 31, 2021.

We did not hold significant amounts of marketable securities categorized as Level 3 assets as of December 31, 2020 and June 30, 2021.

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, 2020 March 31, 2021

December 31, 2020 June 30, 2021

Fair Value Cost or

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(1) The related unrealized gain (loss) recorded in “Other income (expense), net” was $( 31 ) million and $ 3 million in Q1 2020 and Q1 2021.

(1) The related unrealized gain (loss) recorded in “Other income (expense), net” was $ 235 million and $ 119 million in Q2 2020 and Q2 2021, and $ 204 million and $ 122 million for the six months ended June 30, 2020 and 2021.

(2) We are required to pledge or otherwise restrict a portion of our cash, cash equivalents, and marketable securities primarily as collateral for real estate, amounts due to third-party sellers in certain jurisdictions, debt, and standby and trade letters of credit.

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See “Note 4 — Commitments and Contingencies.”

The following table summarizes the remaining contractual maturities of our cash equivalents and marketable fixed income securities as of March 31, 2021 (in millions):

The following table summarizes the remaining contractual maturities of our cash equivalents and marketable fixed income securities as of June 30, 2021 (in millions):

Cost Estimated

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We hold equity warrants giving us the right to acquire stock of other companies.

As of December 31, 2020 and March 31, 2021, these warrants had a fair value of $ 3.0 billion and $ 2.8 billion, and are recorded within “Other assets” on our consolidated balance sheets with gains and losses recognized in “Other income (expense), net” on our consolidated statements of operations.

As of December 31, 2020 and June 30, 2021, these warrants had a fair value of $ 3.0 billion and $ 3.6 billion, and are recorded within “Other assets” on our consolidated balance sheets with gains and losses recognized in “Other income (expense), net” on our consolidated statements of operations.

These warrants are primarily classified as Level 2 assets.

As of December 31, 2020 and March 31, 2021, equity investments not accounted for under the equity-method and without readily determinable fair values, had a carrying value of $ 2.7 billion and $ 4.3 billion, and are recorded within “Other assets” on our consolidated balance sheets with adjustments recognized in “Other income (expense), net” on our consolidated statements of operations.

As of December 31, 2020 and June 30, 2021, equity investments not accounted for under the equity-method and without readily determinable fair values, had a carrying value of $ 2.7 billion and $ 3.7 billion, and are recorded within “Other assets” on our consolidated balance sheets with adjustments recognized in “Other income (expense), net” on our consolidated statements of operations.

Consolidated Statements of Cash Flows Reconciliation

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, 2020 March 31, 2021

December 31, 2020 June 30, 2021

Cash and cash equivalents $ 42,122 $ 40,380

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Note 3 — LEASES

Gross assets acquired under finance leases, inclusive of those where title transfers at the end of the lease, are recorded in “ Property and equipment, net ” and were $ 68.1 billion and $ 69.3 billion as of December 31, 2020 and March 31, 2021.

Accumulated amortization associated with finance leases was $ 36.5 billion and $ 38.3 billion as of December 31, 2020 and March 31, 2021.

We have entered into non-cancellable operating and finance leases for fulfillment, delivery, office, physical store, data center, and sortation facilities as well as server and networking equipment, vehicles, and aircraft.

Gross assets acquired under finance leases, inclusive of those where title transfers at the end of the lease, are recorded in “ Property and equipment, net ” and were $ 68.1 billion and $ 70.2 billion as of December 31, 2020 and June 30, 2021.

Accumulated amortization associated with finance leases was $ 36.5 billion and $ 39.9 billion as of December 31, 2020 and June 30, 2021.

Lease cost recognized in our consolidated statements of operations is summarized as follows (in millions):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2020 2021 2020 2021

Operating lease cost $ 1,149 $ 1,662 $ 2,217 $ 3,218

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Other information about lease amounts recognized in our consolidated financial statements is as follows:

December 31, 2020 March 31, 2021

December 31, 2020 June 30, 2021

Weighted-average remaining lease term – operating leases 10.7 years 10.7 years

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Total long-term lease liabilities $ 34,513 $ 18,060 $ 52,573

March 31, 2021

June 30, 2021

Operating Leases Finance Leases Total

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Note 4 — COMMITMENTS AND CONTINGENCIES

We have entered into non-cancellable operating and finance leases and financing obligations for equipment and office, fulfillment, sortation, delivery, data center, physical store, and renewable energy facilities.

The following summarizes our principal contractual commitments, excluding open orders for purchases that support normal operations and are generally cancellable, as of March 31, 2021 (in millions):

Nine Months Ended December 31, Year Ended December 31,

The following summarizes our principal contractual commitments, excluding open orders for purchases that support normal operations and are generally cancellable, as of June 30, 2021 (in millions):

Six Months Ended December 31, Year Ended December 31,

2021 2022 2023 2024 2025 Thereafter Total

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(1) Includes non-cancellable financing obligations for fulfillment, sortation, and data center facilities.

Excluding interest, current financing obligations of $ 111 million and $ 132 million are recorded within “Accrued expenses and other” and $ 3.4 billion and $ 3.8 billion are recorded within “Other long-term liabilities” as of December 31, 2020 and June 30, 2021.

The weighted-average remaining term of the financing obligations was 19.0 and 18.8 years and the weighted-average imputed interest rate was 3.8 % and 3.7 % as of December 31, 2020 and June 30, 2021.

(2) 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.

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(4) Excludes approximately $ 2.8 billion of accrued tax contingencies for which we cannot make a reasonably reliable estimate of the amount and period of payment, if any.

In addition, in May 2021, we entered into an agreement to acquire MGM Holdings Inc.

(“MGM”) for approximately $ 8.5 billion, including MGM’s debt, subject to customary closing conditions.

We expect to fund this acquisition with cash on hand.

Pledged Assets

As of December 31, 2020 and March 31, 2021, we have pledged or otherwise restricted $ 875 million and $ 932 million of our cash, cash equivalents, and marketable securities, and certain property and equipment primarily as collateral for real estate, amounts due to third-party sellers in certain jurisdictions, debt, and standby and trade letters of credit.

As of December 31, 2020 and June 30, 2021, we have pledged or otherwise restricted $ 875 million and $ 882 million of our cash, cash equivalents, and marketable securities, and certain property and equipment primarily as collateral for real estate, amounts due to third-party sellers in certain jurisdictions, debt, and standby and trade letters of credit.

Additionally, we have pledged our cash and seller receivables for debt related to our Credit Facility.

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Other Contingencies

We are subject to claims and denials of refunds and credits 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 or denials, we could be subject to significant additional tax costs.

We are disputing claims and denials of refunds or credits 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 these taxes.

If the relevant taxing authorities were to prevail, we could be subject to significant additional tax costs.

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.

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We believe the assessment is without merit and intend to defend ourselves vigorously in this matter.

If other tax authorities were successfully to seek additional adjustments of a similar nature, we could be subject to significant additional tax costs.

Legal Proceedings

The Company is involved from time to time in claims, proceedings, and litigation, including the matters described in Item 8 of Part II, “Financial Statements and Supplementary Data — Note 7 — Commitments and Contingencies — Legal Proceedings” of our 2020 Annual Report on Form 10-K.

On July 16, 2021, the Luxembourg National Commission for Data Protection (the “CNPD”) issued a decision against Amazon Europe Core S.à r.l.

claiming that Amazon’s processing of personal data did not comply with the EU General Data Protection Regulation.

The decision imposes a fine of € 746 million and corresponding practice revisions.

We believe the CNPD’s decision to be without merit and intend to defend ourselves vigorously in this matter.

Beginning in March 2020, with Frame-Wilson v.

Amazon.com, Inc.

filed in the United States District Court for the Western District of Washington, a number of cases have been filed in the U.S.

and Canada alleging, among other things, price fixing arrangements between Amazon.com, Inc.

and third-party sellers in Amazon’s stores, monopolization and attempted monopolization, and consumer protection and unjust enrichment claims.

Some of the cases include allegations of several distinct purported classes, including consumers who purchased a product through Amazon’s stores and consumers who purchased a product offered by Amazon through another e-commerce retailer.

The complaints seek billions of dollars of alleged actual damages, treble damages, punitive damages, and injunctive relief.

Individuals have also initiated arbitrations based on substantially similar allegations.

We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in these matters.

In addition, we are regularly subject to claims, litigation, and other proceedings, including potential regulatory proceedings, involving patent and other intellectual property matters, taxes, labor and employment, competition and antitrust, privacy and data protection, consumer protection, commercial disputes, goods and services offered by us and by third parties, and other matters.

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Note 5 — DEBT

As of March 31, 2021, we had $ 32.2 billion of unsecured senior notes outstanding (the “Notes”).

We also had other long-term debt and borrowings under our credit facility of $ 924 million and $ 977 million as of December 31, 2020 and March 31, 2021.

As of June 30, 2021, we had $ 50.7 billion of unsecured senior notes outstanding (the “Notes”).

We issued $ 18.5 billion of Notes in May 2021, of which $ 1.0 billion was issued for green or social projects, such as projects related to clean transportation, renewable energy, sustainable buildings, affordable housing, or socioeconomic advancement and empowerment, and the remainder for general corporate purposes.

We also had other long-term debt and borrowings under our credit facility of $ 924 million and $ 1.0 billion as of December 31, 2020 and June 30, 2021.

Our total long-term debt obligations are as follows (in millions):

Maturities (1) Stated Interest Rates Effective Interest Rates December 31, 2020 March 31, 2021

Maturities (1) Stated Interest Rates Effective Interest Rates December 31, 2020 June 30, 2021

2012 Notes issuance of $ 3.0 billion

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10,000 10,000

2021 Notes issuance of $ 18.5 billion

2023 - 2061 0.25 % - 3.25 %

0.35 % - 3.31 %

Credit Facility 338 503

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(1) The weighted-average remaining lives of the 2012, 2014, 2017, and 2020 Notes were 1.7 , 11.6 , 16.0 , and 18.5 years as of March 31, 2021.

The combined weighted-average remaining life of the Notes was 15.5 years as of March 31, 2021.

(1) The weighted-average remaining lives of the 2012, 2014, 2017, 2020, and 2021 Notes were 1.4 , 11.3 , 15.7 , 18.2 , and 14.8 years as of June 30, 2021.

The combined weighted-average remaining life of the Notes was 15.1 years as of June 30, 2021.

Interest on the Notes is payable semi-annually in arrears.

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We are not subject to any financial covenants under the Notes.

The estimated fair value of the Notes was approximately $ 37.7 billion and $ 34.8 billion as of December 31, 2020 and March 31, 2021, which is based on quoted prices for our debt as of those dates.

The estimated fair value of the Notes was approximately $ 37.7 billion and $ 54.6 billion as of December 31, 2020 and June 30, 2021, which is based on quoted prices for our debt as of those dates.

We have a $ 740 million secured revolving credit facility with a lender that is secured by certain seller receivables, which we may from time to time increase in the future subject to lender approval (the “Credit Facility”).

The Credit Facility is available until October 2022, bears interest at the London interbank offered rate (“LIBOR”) plus 1.40 %, and has a commitment fee of 0.50 % on the undrawn portion.

There were $ 338 million and $ 429 million of borrowings outstanding under the Credit Facility as of December 31, 2020 and March 31, 2021, which both had a weighted-average interest rate of 3.0 %, respectively.

As of December 31, 2020 and March 31, 2021, we have pledged $ 398 million and $ 497 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, 2020 and March 31, 2021.

Other long-term debt, including the current portion, had a weighted-average interest rate of 2.9 % as of December 31, 2020 and March 31, 2021.

There were $ 338 million and $ 503 million of borrowings outstanding under the Credit Facility as of December 31, 2020 and June 30, 2021, which had a weighted-average interest rate of 3.0 % and 2.9 %, respectively.

As of December 31, 2020 and June 30, 2021, we have pledged $ 398 million and $ 580 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, 2020 and June 30, 2021.

Other long-term debt, including the current portion, had a weighted-average interest rate of 2.9 % as of December 31, 2020 and June 30, 2021.

We used the net proceeds from the issuance of this debt primarily to fund certain business operations.

The estimated fair value of other long-term debt, which is based on Level 2 inputs, approximated its carrying value as of December 31, 2020 and March 31, 2021.

The estimated fair value of other long-term debt, which is based on Level 2 inputs, approximated its carrying value as of December 31, 2020 and June 30, 2021.

We have 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 $ 10.0 billion at any time, with individual maturities that may vary but will not exceed 397 days from the date of issue.

There were $ 725 million of borrowings outstanding under the Commercial Paper Program as of December 31, 2020 and March 31, 2021, which were included in “Accrued expenses and other” on our consolidated balance sheets and had a weighted-average effective interest rate, including issuance costs, of 0.11 % and 0.09 %, respectively.

There were $ 725 million of borrowings outstanding under the Commercial Paper Program as of December 31, 2020 and June 30, 2021, which were included in “Accrued expenses and other” on our consolidated balance sheets and had a weighted-average effective interest rate, including issuance costs, of 0.11 % and 0.08 %, respectively.

We use the net proceeds from the issuance of commercial paper for general corporate purposes.

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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, 2020 and March 31, 2021.

There were no borrowings outstanding under the Credit Agreement as of December 31, 2020 and June 30, 2021.

We also utilize other short-term credit facilities for working capital purposes.

These amounts are included in “Accrued expenses and other” on our consolidated balance sheets.

In addition, we had $ 4.3 billion of unused letters of credit as of March 31, 2021.

In addition, we had $ 5.8 billion of unused letters of credit as of June 30, 2021.

Note 6 — STOCKHOLDERS’ EQUITY

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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 during the three months ended March 31, 2020 or 2021.

There were no repurchases of common stock during the six months ended June 30, 2020 or 2021.

Stock Award Activity

Common shares outstanding plus shares underlying outstanding stock awards totaled 518 million and 519 million as of December 31, 2020 and March 31, 2021.

Common shares outstanding plus shares underlying outstanding stock awards totaled 518 million and 522 million as of December 31, 2020 and June 30, 2021.

These totals include all vested and unvested stock awards outstanding, including those awards we estimate will be forfeited.

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Three Months Ended

June 30, Six Months Ended

2020 2021 2020 2021

Cost of sales $ 76 $ 145 $ 118 $ 235

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Total stock-based compensation expense $ 2,601 $ 3,591 $ 4,358 $ 5,897

The following table summarizes our restricted stock unit activity for the three months ended March 31, 2021 (in millions):

The following table summarizes our restricted stock unit activity for the six months ended June 30, 2021 (in millions):

Number of Units Weighted-Average

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Units forfeited ( 1.0 ) 2,115

Outstanding as of March 31, 2021 14.5 2,096

Scheduled vesting for outstanding restricted stock units as of March 31, 2021, is as follows (in millions):

Nine Months Ended December 31, Year Ended December 31,

Outstanding as of June 30, 2021 15.7 2,430

Scheduled vesting for outstanding restricted stock units as of June 30, 2021, is as follows (in millions):

Six Months Ended December 31, Year Ended December 31,

2021 2022 2023 2024 2025 Thereafter Total

Scheduled vesting — restricted stock units 2.6 5.6 5.1 1.8 0.4 0.2 15.7

As of March 31, 2021, there was $ 12.4 billion of net unrecognized compensation cost related to unvested stock-based compensation arrangements.

As of June 30, 2021, there was $ 18.3 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 remaining weighted-average recognition period of 1.2 years.

The estimated forfeiture rate as of December 31, 2020 and March 31, 2021 was 27 %.

The estimated forfeiture rate as of December 31, 2020 and June 30, 2021 was 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.

Changes in Stockholders’ Equity

The following table shows the changes in stockholders’ equity (in millions):

The following table shows changes in stockholders’ equity (in millions):

Three Months Ended

June 30, Six Months Ended

2020 2021 2020 2021

Total beginning stockholders’ equity $ 65,272 $ 103,320 $ 62,060 $ 93,404

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federal research and development credit and adversely affected by state income taxes.

Our income tax provisions for the three months ended March 31, 2020 and 2021 were $ 744 million and $ 2.2 billion, which included $ 273 million and $ 349 million of net discrete tax benefits primarily attributable to excess tax benefits from stock-based compensation.

Cash paid for income taxes, net of refunds was $ 305 million and $ 801 million in Q1 2020 and Q1 2021.

As of December 31, 2020 and March 31, 2021, tax contingencies were approximately $ 2.8 billion and $ 3.0 billion.

Changes in tax laws, regulations, administrative practices, principles, and interpretations may impact our tax

contingencies.

Our income tax provisions for the six months ended June 30, 2020 and 2021 were $ 1.7 billion and $ 3.0 billion, which included $ 831 million and $ 1.4 billion of net discrete tax benefits primarily attributable to excess tax benefits from stock-based compensation and, in 2021, audit-related developments.

Cash paid for income taxes, net of refunds was $ 486 million and $ 1.8 billion in Q2 2020 and Q2 2021, and $ 791 million and $ 2.6 billion for the six months ended June 30, 2020 and 2021.

As of December 31, 2020 and June 30, 2021, tax contingencies were approximately $ 2.8 billion.

Changes in tax laws, regulations, administrative practices, principles, and interpretations may impact our tax contingencies.

The timing of the resolution of income tax controversies 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.

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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.

On May 12, 2021, the European Union General Court annulled the European Commission’s state aid decision.

In July 2021, the European Commission appealed the decision to the European Court of Justice.

We 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.

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Three Months Ended

June 30, Six Months Ended

2020 2021 2020 2021

North America

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Three Months Ended

June 30, Six Months Ended

2020 2021 2020 2021

Online stores (1) $ 45,896 $ 53,157 $ 82,549 $ 106,058

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements