Amazon.com 2013 Annual Report Download - page 42

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31
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risk for the effect of interest rate changes, foreign currency fluctuations, and changes in the
market values of our investments. Information relating to quantitative and qualitative disclosures about market risk is set forth
below and in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—
Liquidity and Capital Resources.”
Interest Rate Risk
Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio and our long-term
debt. All of our cash equivalent and marketable fixed income securities are designated as available-for-sale and, accordingly,
are presented at fair value on our consolidated balance sheets. We generally invest our excess cash in investment grade short- to
intermediate-term fixed income securities and AAA-rated money market funds. Fixed rate securities may have their fair market
value adversely affected due to a rise in interest rates, and we may suffer losses in principal if forced to sell securities that have
declined in market value due to changes in interest rates.
The following table provides information about our current and long-term cash equivalent and marketable fixed income
securities, including principal cash flows by expected maturity and the related weighted average interest rates as of
December 31, 2013 (in millions, except percentages):
2014 2015 2016 2017 2018 Thereafter Total
Estimated
Fair Value as
of December
31, 2013
Money market funds $ 5,914 $ — $ — $ — $ — $ — $ 5,914 $ 5,914
Weighted average interest rate 0.12% —% —% —% —% —% 0.12%
Corporate debt securities 158 267 247 27 19 — 718 741
Weighted average interest rate 0.56% 0.70% 1.02% 1.65% 1.62% —% 0.84%
U.S. government and agency
securities 1,141 544 348 151 25 — 2,209 2,222
Weighted average interest rate 0.20% 0.47% 0.98% 1.30% 2.40% —% 0.49%
Asset backed securities 25 20 19 — — — 64 65
Weighted average interest rate 0.57% 0.72% 1.01% —% —% —% 0.75%
Foreign government and agency
securities 62 289 351 24 3 — 729 758
Weighted average interest rate 0.19% 0.22% 0.35% 0.64% 1.49% —% 0.30%
Other securities 7 14 13 2 — — 36 36
Weighted average interest rate 0.68% 0.79% 1.10% 1.57% —% —% 0.91%
$ 7,307 $ 1,134 $ 978 $ 204 $ 47 $ — $ 9,670
Cash equivalent and marketable
fixed income securities $ 9,736
As of December 31, 2013, we had $3.9 billion of debt, including the current portion, primarily consisting of fixed rate
unsecured debt in three tranches: $750 million of 0.65% notes due in 2015; $1.0 billion of 1.20% notes due in 2017; and $1.3
billion of 2.50% notes due in 2022. The fair value of our debt will fluctuate with movements of interest rates, increasing in
periods of declining rates of interest and declining in periods of increasing rates of interest. Based upon quoted market prices
and Level 2 inputs, the fair value of our debt was $3.9 billion as of December 31, 2013.