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SEC Filings

10-Q
AMAZON COM INC filed this Form 10-Q on 10/25/2013
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Note 4 — Equity-Method Investments
LivingSocial’s summarized condensed financial information, as provided to us by LivingSocial, is as follows (in millions):
 
  
Nine Months Ended 
 September 30,
 
2013
 
2012
Statement of Operations:
 
 
 
Revenue
$
384

 
$
387

Operating expense
494

 
653

Impairment charge

 
501

Operating loss
(110
)
 
(767
)
Net loss (1)
$
(107
)
 
$
(516
)
___________________
(1)
The difference between the operating loss and net loss for the nine months ended September 30, 2012 is primarily due to non-operating, non-cash gains on previously held equity positions in companies that LivingSocial acquired during Q1 2012.
As of September 30, 2013, the book value of our equity-method investment in LivingSocial was $15 million. Additionally, in Q1 2013 we made a $56 million investment in LivingSocial that we have recorded as a cost method investment, bringing our total investment in LivingSocial to approximately 31% of voting stock.
Note 5 — Long-Term Debt
In November 2012, we issued $3.0 billion of unsecured senior notes in three tranches as described in the table below (collectively, the “Notes”). As of September 30, 2013, and December 31, 2012, the unamortized discount on the Notes was $24 million and $27 million. We also have other long-term debt with a carrying amount, including the current portion, of $747 million and $691 million at September 30, 2013 and December 31, 2012. The face value of our total long-term debt obligations is as follows (in millions):

 
September 30, 2013
 
December 31, 2012
0.65% Notes due on November 27, 2015
$
750

 
$
750

1.20% Notes due on November 29, 2017
1,000

 
1,000

2.50% Notes due on November 29, 2022
1,250

 
1,250

Other long-term debt
747

 
691

Total debt
3,747

 
3,691

Less current portion of long-term debt
(680
)
 
(579
)
Face value of long-term debt
$
3,067

 
$
3,112

The effective interest rates of the 2015, 2017, and 2022 Notes were 0.84%, 1.38%, and 2.66%. Interest on the Notes is payable semi-annually in arrears in May and November. 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. We used the net proceeds from the issuance of the Notes for general corporate purposes. The estimated fair value of the Notes was approximately $2.9 billion and $3.0 billion at September 30, 2013 and December 31, 2012, which is based on quoted prices for our publicly-traded debt as of that date.
The other debt, including the current portion, had a weighted average interest rate of 6.3% and 6.4% at September 30, 2013 and December 31, 2012. We used the net proceeds from the issuance of the debt to fund certain international operations. The estimated fair value of the other long-term debt, which is based on Level 2 inputs, approximated its carrying value at September 30, 2013 and December 31, 2012.

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