Amazon.com 2015 Annual Report Download - page 44

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34
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. Our long-term debt is carried at amortized cost and fluctuations in interest rates do not impact our consolidated financial
statements. However, the fair value of our debt, which pays interest at a fixed rate, will generally fluctuate with movements of
interest rates, increasing in periods of declining rates of interest and declining in periods of increasing rates of interest. 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 income 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 equivalents and marketable fixed income
securities, including principal cash flows by expected maturity and the related weighted-average interest rates as of
December 31, 2015 (in millions, except percentages):
2016 2017 2018 2019 2020 Thereafter To tal
Estimated
Fair Value as
of December
31, 2015
Money market funds
$ 8,025 $
—
$
—
$
—
$
—
$
—
$ 8,025 $ 8,025
Weighted-average interest rate 0.21 %
—
%
—
%—%
—
%
—
%
0.21 %
Corporate debt securities 131
172 141 14 11
—
469 477
Weighted-average interest rate 1.52 % 1.85 % 1.84 % 0.57% 0.74%
—
%
1.69 %
U.S. government and agency
securities 4,487
484 147 31 6
—
5,155 5,167
Weighted-average interest rate 0.37 % 1.26 % 1.41 % 1.52% 2.23%
—
%
0.50 %
Asset backed securities 65
39 8 4
—
—
116 117
Weighted-average interest rate 1.85 % 1.87 % 1.80 % 1.83%
—
%
—
%
1.85 %
Foreign government and agency
securities 1
24 16 1 6
—
48 49
Weighted-average interest rate (0.03 )% (0.10)% (0.04)% 0.01% 0.04%
—
%
(0.06)%
Other securities 15
18 5 3
—
—
41 42
Weighted-average interest rate 0.64 % 1.33 % 1.17 % 2.23%
—
%
—
%
1.12 %
$ 12,724 $ 737 $ 317 $53$23$
—
$ 13,854
Cash equivalent and marketable
fixed income securities $ 13,877
As of December 31, 2015, we had $8.5 billion of debt, including the current portion, primarily consisting of the following
fixed rate unsecured debt (in millions):
1.20% Notes due on November 29, 2017 $1,000
2.50% Notes due on November 29, 2022 $1,250
2.60% Notes due on December 5, 2019 $1,000
3.30% Notes due on December 5, 2021 $1,000
3.80% Notes due on December 5, 2024 $1,250
4.80% Notes due on December 5, 2034 $1,250
4.95% Notes due on December 5, 2044 $1,500