8-KMaterial AgreementsFinancial EventsShareholder Matters

AMAZON COM INC 8-K Report, Material Agreement (May 20, 2016)

Filed May 20, 2016For Securities:AMZN

Summary

Amazon.com Inc. (AMZN) filed an 8-K on May 20, 2016, primarily detailing the entry into a new $3.0 billion unsecured revolving credit facility. This facility replaces a previous agreement and has a three-year term, extendable for up to three additional one-year periods. It provides financial flexibility for working capital, capital expenditures, acquisitions, and other corporate needs. The initial interest rate is LIBOR plus 0.60%, with a 0.05% commitment fee on undrawn amounts, subject to adjustments based on credit ratings. Additionally, the filing reports the outcomes of Amazon's Annual Meeting of Shareholders held on May 17, 2016. All director nominees were elected, and Ernst & Young LLP was ratified as the independent auditor. Notably, shareholder proposals concerning sustainability reporting, human rights, and corporate political contributions did not receive majority approval.

Key Highlights

  • 1Entered into a new $3.0 billion unsecured revolving credit facility, replacing a prior agreement.
  • 2The new credit facility has an initial term of three years, with potential extensions for up to three additional one-year periods.
  • 3Funds from the credit facility can be used for working capital, capital expenditures, acquisitions, and general corporate purposes.
  • 4Initial interest rate is set at LIBOR + 0.60%, with a commitment fee of 0.05% on undrawn amounts, subject to credit rating changes.
  • 5The credit agreement does not contain financial covenants, offering flexibility in its usage.
  • 6All nominated directors were elected at the Annual Meeting of Shareholders.
  • 7Ernst & Young LLP was ratified as the independent auditor for the fiscal year ending December 31, 2016.

Frequently Asked Questions

The new $3.0 billion unsecured revolving credit facility provides Amazon with significant financial flexibility. It ensures access to capital for various corporate needs, including working capital, strategic acquisitions, and capital expenditures, supporting ongoing business operations and growth initiatives without immediate financial covenants.

The facility has a three-year term, potentially extendable by one year up to three times, subject to lender approval. The interest rate is based on LIBOR plus a margin (initially 0.60%) and includes a commitment fee on unused portions (initially 0.05%), with these rates potentially increasing if Amazon's credit rating declines. It's an unsecured facility and does not include financial covenants.

At the Annual Meeting on May 17, 2016, all director nominees, including Jeff Bezos, were elected to serve until the next annual meeting. Additionally, shareholders ratified the appointment of Ernst & Young LLP as the company's independent auditor for fiscal year 2016. Several shareholder proposals related to sustainability, human rights, and political contributions were voted down.

No, the filing explicitly states that Amazon currently has no borrowings outstanding under the new Credit Agreement. The company expects to borrow under it from time to time in the ordinary course of business.