For certain payment methods, including credit and debit cards, we pay interchange and other fees, which may increase over time and raise our operating costs and lower profitability. We use words such as anticipates, believes, expects, future, intends, and similar expressions to identify forward-looking statements. Hsieh said: Anecdotally I would guess that about half of them, the reason they took the offer was because it actually had nothing to do with Holacracy or self-management. The year was 1999, and our founder Nick Swinmurn was walking around a mall in San Francisco looking for a pair of shoes. Currency volatilities may continue, which may significantly impact either positively or negatively our reported results and consolidated trends and comparisons.
Under some of our commercial agreements, we maintain the inventory of other companies, thereby increasing the complexity of tracking inventory and operating our fulfillment centers. If our intent changes or if these funds are needed for our U. Our fixed costs include the costs necessary to run our technology infrastructure; to build, enhance, and add features to our websites and web services, our electronic devices, and digital offerings; and to build and optimize our fulfillment centers. 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. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets may not be recoverable.
We are subject to income taxes in the United States and numerous foreign jurisdictions. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our effective tax rate in 2013 was lower than the 35% U. We have registered, or applied for the registration of, a number of U. And they also knew that they could, 12 months later, come back to Zappos. To minimize growth in fixed costs, we seek to improve process efficiencies and maintain a lean culture. Additionally, because payment processing and fulfillment costs associated with seller transactions are based on the gross purchase price of underlying transactions, and payment processing and related transaction and fulfillment costs are higher as a percentage of sales versus our retail sales, sales by our sellers have higher fulfillment costs as a percent of net sales.
After selling LinkExchange, Tony founded an incubator and investment firm with his friend Alfred Lin called Venture Frogs , where one of the first investment bets made was on a little online shoe selling company you might have heard of. Local companies may have a substantial competitive advantage because of their greater understanding of, and focus on, the local customer, as well as their more established local brand names. Yahoo is part of Oath. And now with a year's severance, for example, they had the funds to try it out. Shipping charges to receive products from our suppliers are included in our inventory, and recognized as cost of sales upon sale of products to our customers. We believe that cash flows generated from operations and our cash, cash equivalents, and marketable securities balances will be sufficient to meet our anticipated operating cash needs for at least the next 12 months.
If a gift card is not redeemed, we recognize revenue when it expires or when the likelihood of its redemption becomes remote, generally two years from the date of issuance. We have foreign exchange risk related to our intercompany balances denominated in various foreign currencies. In addition, profitability, if any, in our newer activities may be lower than in our older activities, and we may not be successful enough in these newer activities to recoup our investments in them. Operating expenses without stock-based compensation has limitations since it does not include all expenses primarily related to our workforce. 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. Amazon Income Statement Quarterly for June 2015 to.
In measuring shareholder dilution, we include all vested and unvested stock awards outstanding, without regard to estimated forfeitures. A failure to optimize inventory will increase our net shipping cost by requiring long-zone or partial shipments. Inventory turnover 4 was 9 , 9, and 10 for 2013 , 2012 , and 2011. He also noted that he'd expected about half of the team would quit, rather than the one-third that did. Oath and our partners need your consent to access your device and use your data including location to understand your interests, and provide and measure personalised ads. As a measure of sensitivity, a prolonged 20% decrease from our December 31, 2013 closing stock price would not be an indicator of possible impairment. The results of operations of, and certain of our intercompany balances associated with, our international websites and product and service offerings are exposed to foreign exchange rate fluctuations.
When I was on my tour at Zappos earlier in 2015, I brought up Holacracy on several occasions with various employees I came into contact with. Property and equipment are stated at cost less accumulated depreciation. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Level 2 —Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Supreme Court decisions restrict the imposition of obligations to collect state and local sales taxes with respect to remote sales. We may be unable to prevent third parties from acquiring domain names that are similar to, infringe upon, or diminish the value of our trademarks and other proprietary rights. A softening of demand, whether caused by changes in customer preferences or a weakening of the U. As our agreements terminate, we may be unable to renew or replace these agreements on comparable terms, or at all.
Another store had the right color, but not the right size. 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. We also offer co-branded credit card programs, which could adversely affect our operating results if terminated. In addition, valuations supporting our acquisitions and strategic investments could change rapidly given the current global economic climate. Additionally, our effective tax rate in 2012 was more volatile as compared to 2011 due to the lower level of pre-tax income generated during the year, relative to our tax expense.
Oath and our partners need your consent to access your device and use your data including location to understand your interests, and provide and measure personalised ads. Dollar strengthens year-over-year relative to currencies in our international locations, our consolidated net sales and operating expenses will be lower than if currencies had remained constant. Fulfillment costs represent those costs incurred in operating and staffing our fulfillment and customer service centers, including costs attributable to buying, receiving, inspecting, and warehousing inventories; picking, packaging, and preparing customer orders for shipment; payment processing and related transaction costs, including costs associated with our guarantee for certain seller transactions; responding to inquiries from customers; and supply chain management for our manufactured electronic devices. How Oath and our partners bring you better ad experiences To give you a better overall experience, we want to provide relevant ads that are more useful to you. We may not be able to hire, train, retain, and manage required personnel, which may limit our international growth.
If we are not able to negotiate acceptable terms with these companies or they experience performance problems or other difficulties, it could negatively impact our operating results and customer experience. We expect our net cost of shipping to continue to increase to the extent our customers accept and use our shipping offers at an increasing rate, our product mix shifts to the electronics and other general merchandise category, we reduce shipping rates, we use more expensive shipping methods, and we offer additional services. Why does Zappos seem as though it has a stranglehold on press hits and mentions? Check out the he and his two teammates had to solve, and you get an acute understanding of just how smart he is. We estimate the fair value of the reporting units using discounted cash flows. Consolidated statements of income, financial position and cash flows and other financial data follow.
