AMAZON COM INC 10-K

Item 8. Financial Statements and Supplementary Data INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Ernst & Young LLP , Independent Registered Public Accounting Firm (PCAOB ID: 42 ) 34 Consolidated Statements of Cash Flows 36 Consolidated Statements of Operations 37 Consolidated Statements of Comprehensive Income (Loss) 38 Consolidated Balance Sheets 39 Consolidated Statements of Stockholders’ Equity 40 Notes to Consolidated Financial Statements 41 33 Table of Contents Report of Independent Registered Public Accounting Firm The Board of Directors and Shareholders Amazon.com, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Amazon.com, Inc. (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 6, 2025 expressed an unqualified opinion thereon. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 34 Table of Contents Uncertain Tax Positions Description of the Matter As discussed in Notes 1 and 9 of the consolidated financial statements, the Company is subject to income taxes in the U.S. and numerous foreign jurisdictions and during the ordinary course of business, there are many tax positions for which the ultimate tax determination is uncertain. As a result, significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. The Company uses significant judgment in (1) determining whether a tax position’s technical merits are more likely than not to be sustained and (2) measuring the amount of tax benefit that qualifies for recognition. As of December 31, 2024, the Company reported accrued liabilities of $6.5 billion for various tax contingencies. Auditing the recognition and measurement of the Company’s tax contingencies was challenging because the evaluation of whether a tax position is more likely than not to be sustained and the measurement of the benefit of various tax positions can be complex and involves significant auditor judgment. Management’s evaluation of tax positions is based on interpretations of tax laws and legal rulings, and may be impacted by regulatory changes and judicial and examination activity. How We Addressed the Matter in Our Audit We tested controls over the Company’s process to assess the technical merits of its tax contingencies, including controls over: the assessment as to whether a tax position is more likely than not to be sustained; the measurement of the benefit of its tax positions, both initially and on an ongoing basis; and the development of the related disclosures. We involved our international tax, transfer pricing, and research and development tax professionals in assessing the technical merits of certain of the Company’s tax positions. Depending on the nature of the specific tax position and, as applicable, developments with the relevant tax authorities relating thereto, our procedures included obtaining and examining the Company’s analysis including the Company’s correspondence with such tax authorities and evaluating the underlying facts upon which the tax positions are based. We used our knowledge of and experience with international, transfer pricing, and other income tax laws of the relevant taxing jurisdictions to evaluate the Company’s accounting for its tax contingencies. We evaluated developments in the applicable regulatory environments to assess potential effects on the Company’s positions, including recent decisions in relevant court cases. We analyzed the appropriateness of the Company’s assumptions and the accuracy of the Company’s calculations and data used to determine the amount of tax benefits to recognize. We evaluated the Company’s income tax disclosures in relation to these matters. /s/ Ernst & Young LLP We have served as the Company’s auditor since 1996. Seattle, Washington February 6, 2025 35 Table of Contents AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31, 2022 2023 2024 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD $ 36,477 $ 54,253 $ 73,890 OPERATING ACTIVITIES: Net income (loss) ( 2,722 ) 30,425 59,248 Adjustments to reconcile net income (loss) to net cash from operating activities: Depreciation and amortization of property and equipment and capitalized content costs, operating lease assets, and other 41,921 48,663 52,795 Stock-based compensation 19,621 24,023 22,011 Non-operating expense (income), net 16,966 ( 748 ) 2,012 Deferred income taxes ( 8,148 ) ( 5,876 ) ( 4,648 ) Changes in operating assets and liabilities: Inventories ( 2,592 ) 1,449 ( 1,884 ) Accounts receivable, net and other ( 8,622 ) ( 8,348 ) ( 3,249 ) Other assets ( 13,275 ) ( 12,265 ) ( 14,483 ) Accounts payable 2,945 5,473 2,972 Accrued expenses and other ( 1,558 ) ( 2,428 ) ( 2,904 ) Unearned revenue 2,216 4,578 4,007 Net cash provided by (used in) operating activities 46,752 84,946 115,877 INVESTING ACTIVITIES: Purchases of property and equipment ( 63,645 ) ( 52,729 ) ( 82,999 ) Proceeds from property and equipment sales and incentives 5,324 4,596 5,341 Acquisitions, net of cash acquired, non-marketable investments, and other ( 8,316 ) ( 5,839 ) ( 7,082 ) Sales and maturities of marketable securities 31,601 5,627 16,403 Purchases of marketable securities ( 2,565 ) ( 1,488 ) ( 26,005 ) Net cash provided by (used in) investing activities ( 37,601 ) ( 49,833 ) ( 94,342 ) FINANCING ACTIVITIES: Common stock repurchased ( 6,000 ) — — Proceeds from short-term debt, and other 41,553 18,129 5,142 Repayments of short-term debt, and other ( 37,554 ) ( 25,677 ) ( 5,060 ) Proceeds from long-term debt 21,166 — — Repayments of long-term debt ( 1,258 ) ( 3,676 ) ( 9,182 ) Principal repayments of finance leases ( 7,941 ) ( 4,384 ) ( 2,043 ) Principal repayments of financing obligations ( 248 ) ( 271 ) ( 669 ) Net cash provided by (used in) financing activities 9,718 ( 15,879 ) ( 11,812 ) Foreign currency effect on cash, cash equivalents, and restricted cash ( 1,093 ) 403 ( 1,301 ) Net increase (decrease) in cash, cash equivalents, and restricted cash 17,776 19,637 8,422 CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD $ 54,253 $ 73,890 $ 82,312 See accompanying notes to consolidated financial statements. 36 Table of Contents AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) Year Ended December 31, 2022 2023 2024 Net product sales $ 242,901 $ 255,887 $ 272,311 Net service sales 271,082 318,898 365,648 Total net sales 513,983 574,785 637,959 Operating expenses: Cost of sales 288,831 304,739 326,288 Fulfillment 84,299 90,619 98,505 Technology and infrastructure 73,213 85,622 88,544 Sales and marketing 42,238 44,370 43,907 General and administrative 11,891 11,816 11,359 Other operating expense (income), net 1,263 767 763 Total operating expenses 501,735 537,933 569,366 Operating income 12,248 36,852 68,593 Interest income 989 2,949 4,677 Interest expense ( 2,367 ) ( 3,182 ) ( 2,406 ) Other income (expense), net ( 16,806 ) 938 ( 2,250 ) Total non-operating income (expense) ( 18,184 ) 705 21 Income (loss) before income taxes ( 5,936 ) 37,557 68,614 Benefit (provision) for income taxes 3,217 ( 7,120 ) ( 9,265 ) Equity-method investment activity, net of tax ( 3 ) ( 12 ) ( 101 ) Net income (loss) $ ( 2,722 ) $ 30,425 $ 59,248 Basic earnings per share $ ( 0.27 ) $ 2.95 $ 5.66 Diluted earnings per share $ ( 0.27 ) $ 2.90 $ 5.53 Weighted-average shares used in computation of earnings per share: Basic 10,189 10,304 10,473 Diluted 10,189 10,492 10,721 See accompanying notes to consolidated financial statements. 37 Table of Contents AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in millions) Year Ended December 31, 2022 2023 2024 Net income (loss) $ ( 2,722 ) $ 30,425 $ 59,248 Other comprehensive income (loss): Foreign currency translation adjustments, net of tax of $ 100 , $( 55 ), and $ 226 ( 2,586 ) 1,027 ( 3,333 ) Available-for-sale debt securities: Change in net unrealized gains (losses), net of tax of $ 159 , $( 110 ), and $( 2,086 ) ( 823 ) 366 6,339 Less: reclassification adjustment for losses (gains) included in “Other income (expense), net,” net of tax of $ 0 , $( 15 ), and $( 2 ) 298 50 5 Net change ( 525 ) 416 6,344 Other, net of tax of $ 0 , $( 1 ), and $ 1 — 4 ( 5 ) Total other comprehensive income (loss) ( 3,111 ) 1,447 3,006 Comprehensive income (loss) $ ( 5,833 ) $ 31,872 $ 62,254 See accompanying notes to consolidated financial statements. 38 Table of Contents AMAZON.COM, INC. CONSOLIDATED BALANCE SHEETS (in millions, except per share data) December 31, 2023 2024 ASSETS Current assets: Cash and cash equivalents $ 73,387 $ 78,779 Marketable securities 13,393 22,423 Inventories 33,318 34,214 Accounts receivable, net and other 52,253 55,451 Total current assets 172,351 190,867 Property and equipment, net 204,177 252,665 Operating leases 72,513 76,141 Goodwill 22,789 23,074 Other assets 56,024 82,147 Total assets $ 527,854 $ 624,894 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 84,981 $ 94,363 Accrued expenses and other 64,709 66,965 Unearned revenue 15,227 18,103 Total current liabilities 164,917 179,431 Long-term lease liabilities 77,297 78,277 Long-term debt 58,314 52,623 Other long-term liabilities 25,451 28,593 Commitments and contingencies (Note 7) Stockholders’ equity: Preferred stock ($ 0.01 par value; 500 shares authorized; no shares issued or outstanding) — — Common stock ($ 0.01 par value; 100,000 shares authorized; 10,898 and 11,108 shares issued; 10,383 and 10,593 shares outstanding) 109 111 Treasury stock, at cost ( 7,837 ) ( 7,837 ) Additional paid-in capital 99,025 120,864 Accumulated other comprehensive income (loss) ( 3,040 ) ( 34 ) Retained earnings 113,618 172,866 Total stockholders’ equity 201,875 285,970 Total liabilities and stockholders’ equity $ 527,854 $ 624,894 See accompanying notes to consolidated financial statements. 39 Table of Contents AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in millions) Common Stock Shares Amount Treasury Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Total Stockholders’ Equity Balance as of January 1, 2022 10,175 $ 106 $ ( 1,837 ) $ 55,437 $ ( 1,376 ) $ 85,915 $ 138,245 Net loss — — — — — ( 2,722 ) ( 2,722 ) Other comprehensive income (loss) — — — — ( 3,111 ) — ( 3,111 ) Stock-based compensation and issuance of employee benefit plan stock 113 2 — 19,629 — — 19,631 Common stock repurchased ( 46 ) — ( 6,000 ) — — — ( 6,000 ) Balance as of December 31, 2022 10,242 108 ( 7,837 ) 75,066 ( 4,487 ) 83,193 146,043 Net income — — — — — 30,425 30,425 Other comprehensive income (loss) — — — — 1,447 — 1,447 Stock-based compensation and issuance of employee benefit plan stock 141 1 — 23,959 — — 23,960 Balance as of December 31, 2023 10,383 109 ( 7,837 ) 99,025 ( 3,040 ) 113,618 201,875 Net income — — — — — 59,248 59,248 Other comprehensive income (loss) — — — — 3,006 — 3,006 Stock-based compensation and issuance of employee benefit plan stock 210 2 — 21,839 — — 21,841 Balance as of December 31, 2024 10,593 $ 111 $ ( 7,837 ) $ 120,864 $ ( 34 ) $ 172,866 $ 285,970 See accompanying notes to consolidated financial statements. 40 Table of Contents AMAZON.COM, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 — DESCRIPTION OF BUSINESS, ACCOUNTING POLICIES, AND SUPPLEMENTAL DISCLOSURES Description of Business We seek to be Earth’s most customer-centric company. In each of our segments, we serve our primary customer sets, consisting of consumers, sellers, developers, enterprises, content creators, advertisers, and employees. We serve consumers through our online and physical stores and focus on selection, price, and convenience. We offer programs that enable sellers to grow their businesses, sell their products in our stores, and fulfill orders using our services, and programs that allow authors, independent publishers, musicians, filmmakers, Twitch streamers, skill and app developers, and others to publish and sell content. We serve developers and enterprises of all sizes through AWS, which offers a broad set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services. We also manufacture and sell electronic devices. In addition, we provide advertising services to sellers, vendors, publishers, authors, and others, through programs such as sponsored ads, display, and video advertising. We have organized our operations into three segments: North America, International, and AWS. See “Note 10 — Segment Information.” Common Stock Split On May 27, 2022, we effected a 20 -for-1 stock split of our common stock and proportionately increased the number of authorized shares of common stock. All share, restricted stock unit (“RSU”), and per share or per RSU information throughout this Annual Report on Form 10-K has been retroactively adjusted to reflect the stock split. The shares of common stock retain a par value of $ 0.01 per share. Accordingly, an amount equal to the par value of the increased shares resulting from the stock split was reclassified from “Additional paid-in capital” to “Common stock.” Principles of Consolidation The consolidated financial statements include the accounts of Amazon.com, Inc. and its consolidated entities (collectively, the “Company”), consisting of its wholly-owned subsidiaries and those entities in which we have a variable interest and of which we are the primary beneficiary, including certain entities in India and certain entities that support our healthcare services. Intercompany balances and transactions between consolidated entities are eliminated. Use of Estimates The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, income taxes, useful lives of equipment, commitments and contingencies, valuation of acquired intangibles and goodwill, stock-based compensation forfeiture rates, vendor funding, inventory valuation, collectability of receivables, impairment of property and equipment and operating leases, valuation and impairment of investments, self-insurance liabilities, and viewing patterns of capitalized video content. Actual results could differ materially from these estimates. We review the useful lives of equipment on an ongoing basis. In Q4 2024, we completed a useful life study for certain types of heavy equipment and are increasing the useful life from ten years to thirteen years for such equipment effective January 1, 2025. Based on heavy equipment included in “Property and equipment, net” as of December 31, 2024, we estimate an increase in 2025 operating income of approximately $ 0.9 billion, which will be recorded primarily in “Fulfillment” and impact our North America and International segments. We completed our most recent servers and networking equipment useful life study in Q4 2024, and are changing the useful lives of a subset of our servers and networking equipment, effective January 1, 2025, from six years to five years . For those assets included in “Property and equipment, net” as of December 31, 2024, whose useful life will change from six years to five years , we anticipate a decrease in 2025 operating income of approximately $ 0.7 billion. We expect to continue to acquire more of these server and networking assets in 2025. In 2024, we also determined, primarily in the fourth quarter, to retire early certain of our servers and networking equipment. We recorded approximately $ 920 million of accelerated depreciation and related charges for the quarter ended December 31, 2024 related to these decisions. The accelerated depreciation will continue into 2025 and decrease operating income by approximately $ 0.6 billion in 2025. These two changes above are due to an increased pace of technology development, particularly in the area of artificial intelligence and machine learning. We had previously increased the useful life of our servers from five years to six years effective January 1, 2024. The effect of this change for the year ended December 31, 2024, based on servers that were included in “Property and equipment, 41 Table of Contents net” as of December 31, 2023 and those acquired during the year ended December 31, 2024, was a reduction in depreciation and amortization expense of $ 3.2 billion and a benefit to net income of $ 2.5 billion, or $ 0.23 per basic share and $ 0.23 per diluted share. These server and networking equipment useful life changes primarily impact our AWS segment. For the year ended December 31, 2022, we recorded approximately $ 1.1 billion, of which $ 720 million was recorded in the fourth quarter, of impairments of property and equipment and operating leases primarily related to physical stores. These charges were recorded in “Other operating expense (income), net” and primarily impacted our North America segment. For the year ended December 31, 2022, we also recorded expenses of approximately $ 480 million, primarily in “Fulfillment,” primarily relating to terminating contracts for certain leases not yet commenced as well as other purchase commitments, which primarily impacted our North America segment. For the year ended December 31, 2022, we recorded approximately $ 720 million, of which $ 640 million was recorded in the fourth quarter, of estimated severance costs primarily related to planned role eliminations. These charges were recorded primarily in “Technology and infrastructure,” “Fulfillment,” and “General and administrative” and primarily impacted our North America segment. Charges for impairment, expenses for terminating contracts and other commitments, and severance costs were not material to our consolidated results of operations for the years ended December 31, 2023 and 2024. Supplemental Cash Flow Information The following table shows supplemental cash flow information (in millions): Year Ended December 31, 2022 2023 2024 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for interest on debt, net of capitalized interest $ 1,561 $ 2,608 $ 1,858 Cash paid for operating leases $ 8,633 $ 10,453 $ 12,341 Cash paid for interest on finance leases $ 374 $ 308 $ 287 Cash paid for interest on financing obligations $ 207 $ 196 $ 219 Cash paid for income taxes, net of refunds $ 6,035 $ 11,179 $ 12,308 Assets acquired under operating leases $ 18,800 $ 14,052 $ 15,424 Property and equipment acquired under finance leases, net of remeasurements and modifications $ 675 $ 642 $ 854 Property and equipment recognized during the construction period of build-to-suit lease arrangements $ 3,187 $ 357 $ 97 Property and equipment derecognized after the construction period of build-to-suit lease arrangements, with the associated leases recognized as operating $ 5,158 $ 1,374 $ — Earnings Per Share Basic earnings per share is calculated using our weighted-average outstanding common shares. Diluted earnings per share is calculated using our weighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method. In periods when we have a net loss, stock awards are excluded from our calculation of earnings per share as their inclusion would have an antidilutive effect. The following table shows the calculation of diluted shares (in millions): Year Ended December 31, 2022 2023 2024 Shares used in computation of basic earnings per share 10,189 10,304 10,473 Total dilutive effect of outstanding stock awards — 188 248 Shares used in computation of diluted earnings per share 10,189 10,492 10,721 42 Table of Contents Revenue Revenue is measured based on the amount of consideration that we expect to receive, reduced by estimates for return allowances, promotional discounts, and rebates. Revenue also excludes any amounts collected on behalf of third parties, including sales and indirect taxes. In arrangements where we have multiple performance obligations, the transaction price is allocated to each performance obligation using the relative stand-alone selling price. We generally determine stand-alone selling prices based on the prices charged to customers or using expected cost plus a margin. A description of our principal revenue generating activities is as follows: Retail sales - We offer consumer products through our online and physical stores. Revenue is recognized when control of the goods is transferred to the customer, which generally occurs upon our delivery to a third-party carrier or, in the case of an Amazon delivery, to the customer. Third-party seller services - We offer programs that enable sellers to sell their products in our stores, and fulfill orders using our services. We are not the seller of record in these transactions. The commissions and any related fulfillment and shipping fees we earn from these arrangements are recognized when the services are rendered, which generally occurs upon delivery of the related products to a third-party carrier or, in the case of an Amazon delivery, to the customer. Advertising services - We provide advertising services to sellers, vendors, publishers, authors, and others, through programs such as sponsored ads, display, and video advertising. Revenue is recognized as ads are delivered based on the number of clicks or impressions. Subscription services - Our subscription sales include fees associated with Amazon Prime memberships and access to content including digital video, audiobooks, digital music, e-books, and other non-AWS subscription services. Prime memberships provide our customers with access to an evolving suite of benefits that represent a single stand-ready obligation. Subscriptions are paid for at the time of or in advance of delivering the services. Revenue from such arrangements is recognized over the subscription period. AWS - Our AWS arrangements include global sales of compute, storage, database, and other services. Revenue is allocated to services using stand-alone selling prices and is primarily recognized when the customer uses these services, based on the quantity of services rendered, such as compute or storage capacity delivered on-demand. Certain services, including compute and database, are also offered as a fixed quantity over a specified term, for which revenue is recognized ratably. Sales commissions we pay in connection with contracts that exceed one year are capitalized and amortized over the contract term. Other - Other revenue includes sales related to various other offerings, such as healthcare services, certain licensing and distribution of video content, and shipping services, and our co-branded credit card agreements. Revenue is recognized when content is licensed or distributed and as or when services are performed. Return Allowances Return allowances, which reduce revenue and cost of sales, are estimated using historical experience. Liabilities for return allowances are included in “Accrued expenses and other” and were $ 1.3 billion, $ 1.4 billion, and $ 1.4 billion as of December 31, 2022, 2023, and 2024. Additions to the allowance were $ 5.5 billion, $ 5.2 billion, and $ 5.5 billion and deductions from the allowance were $ 5.2 billion, $ 5.1 billion, and $ 5.5 billion in 2022, 2023, and 2024. Included in “Inventories” on our consolidated balance sheets are assets totaling $ 948 million, $ 992 million, and $ 998 million as of December 31, 2022, 2023, and 2024, for the rights to recover products from customers associated with our liabilities for return allowances. Cost of Sales Cost of sales primarily consists of the purchase price of consumer products, inbound and outbound shipping costs, including costs related to sortation and delivery centers and where we are the transportation service provider, and digital media content costs where we record revenue gross, including video and music. Shipping costs to receive products from our suppliers are included in our inventory, and recognized as cost of sales upon sale of products to our customers. Payment processing and related transaction costs, including those associated with seller transactions, are classified in “Fulfillment” on our consolidated statements of operations. Vendor Agreements We have agreements with our vendors to receive consideration primarily for cooperative marketing efforts, promotions, incentives, and volume rebates. We generally consider these amounts received from vendors to be a reduction of the prices we pay for their goods, including property and equipment, or services, and are recorded as a reduction of the cost of inventory, cost of services, or cost of property and equipment. Volume rebates typically depend on reaching minimum purchase thresholds. We evaluate the likelihood of reaching purchase thresholds using past experience and current year forecasts. When volume rebates can be reasonably estimated, we record a portion of the rebate as we make progress towards the purchase threshold. 43 Table of Contents Fulfillment Fulfillment costs primarily consist of those costs incurred in operating and staffing our North America and International segments’ fulfillment centers, physical stores, and customer service centers, including facilities and equipment expenses, such as depreciation and amortization, and rent; 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. Fulfillment costs also include amounts paid to third parties that assist us in fulfillment and customer service operations. Technology and Infrastructure Technology and infrastructure costs include payroll and related expenses for employees involved in the research and development of new and existing products and services, development, design, and maintenance of our stores, curation and display of products and services made available in our online stores, and infrastructure costs. Infrastructure costs include servers, networking equipment, and data center related depreciation and amortization, rent, utilities, and other expenses necessary to support AWS and other Amazon businesses. Collectively, these costs reflect the investments we make in order to offer a wide variety of products and services to our customers, including expenditures related to initiatives to build and deploy innovative and efficient software and electronic devices and the development of a satellite network for global broadband service and autonomous vehicles for ride-hailing services. Technology and infrastructure costs are generally expensed as incurred. Sales and Marketing Sales and marketing costs include advertising and payroll and related expenses for personnel engaged in marketing and selling activities, including sales commissions related to AWS. We pay commissions to third parties when their customer referrals result in sales. We also participate in cooperative advertising arrangements with certain of our vendors, and other third parties. Advertising and other promotional costs to market our products and services are expensed as incurred and were $ 20.6 billion, $ 20.3 billion, and $ 21.4 billion in 2022, 2023, and 2024. General and Administrative General and administrative expenses primarily consist of costs for corporate functions, including payroll and related expenses; facilities and equipment expenses, such as depreciation and amortization expense and rent; and professional fees. Stock-Based Compensation Compensation cost for all equity-classified stock awards expected to vest is measured at fair value on the date of grant and recognized over the service period. The fair value of restricted stock units is determined based on the number of shares granted and the quoted price of our common stock. Such value is recognized as expense over the service period, net of estimated forfeitures, using the accelerated method. Under this method, approximately 50 % of the grant date fair value is recognized as expense in the first year of grant for the majority of our stock-based compensation awards. The accelerated method also adds a higher level of sensitivity and complexity in estimating forfeitures. If an award is forfeited early in its life, the adjustment to compensation expense is much greater under an accelerated method than under a straight-line method. The estimated number of stock awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from our current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised. We consider many factors when estimating expected forfeitures, including historical forfeiture experience. Additionally, we have stock-based compensation awards that are expected to settle in cash. These liability-classified awards are remeasured to fair value at the end of each reporting period until settlement or expiration. Other Operating Expense (Income), Net Other operating expense (income), net, consists primarily of the amortization of intangible assets and asset impairments. 44 Table of Contents Other Income (Expense), Net Other income (expense), net, is as follows (in millions): Year Ended December 31, 2022 2023 2024 Marketable equity securities valuation gains (losses) $ ( 13,870 ) $ 984 $ ( 1,278 ) Equity warrant valuation gains (losses) ( 2,132 ) 26 ( 192 ) Upward adjustments relating to equity investments in private companies 76 40 49 Foreign currency gains (losses) ( 340 ) 65 ( 408 ) Other, net ( 540 ) ( 177 ) ( 421 ) Total other income (expense), net $ ( 16,806 ) $ 938 $ ( 2,250 ) Included in other income (expense), net in 2022, 2023, and 2024 is a marketable equity securities valuation gain (loss) of $( 12.7 ) billion, $ 797 million, and $( 1.6 ) billion from our equity investment in Rivian Automotive, Inc. (“Rivian”). Our investment in Rivian’s preferred stock was accounted for at cost, with adjustments for observable changes in prices or impairments, prior to Rivian’s initial public offering in November 2021, which resulted in the conversion of our preferred stock to Class A common stock. As of December 31, 2024, we held 158 million shares of Rivian’s Class A common stock, representing an approximate 14 % ownership interest, and an approximate 13 % voting interest. We determined that we have the ability to exercise significant influence over Rivian through our equity investment, our commercial arrangement for the purchase of electric vehicles and jointly-owned intellectual property, and one of our employees serving on Rivian’s board of directors. We elected the fair value option to account for our equity investment in Rivian, which is included in “Marketable securities” on our consolidated balance sheets, and had a fair value of $ 3.7 billion and $ 2.1 billion as of December 31, 2023 and December 31, 2024. The investment was subject to regulatory sales restrictions resulting in a discount for lack of marketability of approximately $ 800 million as of December 31, 2021, which expired in Q1 2022. Income Taxes Income tax expense includes U.S. (federal and state) and foreign income taxes. Certain foreign subsidiary earnings and losses are subject to current U.S. taxation and the subsequent repatriation of those earnings is not subject to tax in the U.S. We intend to invest substantially all of our foreign subsidiary earnings, as well as our capital in our foreign subsidiaries, indefinitely outside of the U.S. in those jurisdictions in which we would incur significant, additional costs upon repatriation of such amounts. Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases, as well as net operating loss and tax credit carryforwards, and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. Deferred tax assets represent amounts available to reduce income taxes payable in future periods. Deferred tax assets are evaluated for future realization and reduced by a valuation allowance to the extent we believe they will not be realized. We consider many factors when assessing the likelihood of future realization of our deferred tax assets, including recent cumulative loss experience and expectations of future earnings, capital gains and investment in such jurisdiction, the carry-forward periods available to us for tax reporting purposes, and other relevant factors. We utilize a two-step approach to recognizing and measuring uncertain income tax positions (income tax contingencies). The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not the position will be sustained on audit, including resolution of related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. We consider many factors when evaluating our tax positions and estimating our tax benefits, which may require periodic adjustments and which may not accurately forecast actual outcomes. We include interest and penalties related to our income tax contingencies in income tax expense. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets. 45 Table of Contents 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. Level 3 — Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. We measure the fair value of money market funds and certain marketable equity securities based on quoted prices in active markets for identical assets or liabilities. Other marketable securities were valued either based on recent trades of securities in inactive markets or based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data. Cash and Cash Equivalents We classify all highly liquid instruments with an original maturity of three months or less as cash equivalents. Inventories Inventories, consisting of products available for sale, are primarily accounted for using the first-in, first-out method, and are valued at the lower of cost and net realizable value. 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. The inventory valuation allowance, representing a write-down of inventory, was $ 3.0 billion as of December 31, 2023 and 2024. We provide Fulfillment by Amazon services in connection with certain of our sellers’ programs. Third-party sellers maintain ownership of their inventory, regardless of whether fulfillment is provided by us or the third-party sellers, and therefore these products are not included in our inventories. We also purchase electronic device components from a variety of suppliers and use several contract manufacturers to provide manufacturing services for our products. During the normal course of business, in order to manage manufacturing lead times and help ensure adequate supply, we enter into agreements with contract manufacturers and suppliers for certain electronic device components. We have certain non-cancellable purchase commitments arising from these agreements. These commitments are based on forecasted customer demand. If we reduce these commitments, we may incur additional costs. Accounts Receivable, Net and Other Included in “Accounts receivable, net and other” on our consolidated balance sheets are receivables primarily related to customers, vendors, and prepaid expenses and other current assets. As of December 31, 2023 and 2024, customer receivables, net, were $ 34.1 billion and $ 34.3 billion, vendor receivables, net, were $ 8.5 billion and $ 11.6 billion, and other receivables, net, were $ 4.3 billion and $ 3.4 billion. Prepaid expenses and other current assets, which include amounts related to non-income taxes and satellite network launch services deposits, were $ 5.4 billion and $ 6.3 billion as of December 31, 2023 and December 31, 2024. We currently expense satellite network launch services deposits upon launch to “Technology and infrastructure.” We estimate losses on receivables based on expected losses, including our historical experience of actual losses. Receivables are considered impaired and written-off when it is probable that all contractual payments due will not be collected in accordance with the terms of the agreement. The allowance for doubtful accounts was $ 1.4 billion, $ 1.7 billion, and $ 2.0 billion as of December 31, 2022, 2023, and 2024. Additions to the allowance were $ 1.6 billion, $ 1.9 billion, and $ 1.9 billion, and deductions to the allowance were $ 1.3 billion, $ 1.6 billion, and $ 1.6 billion in 2022, 2023, and 2024. Software Development Costs We incur software development costs related to products to be sold, leased, or marketed to external users, internal-use software, and our websites. Software development costs capitalized were not significant for the years presented. All other costs, including those related to design or maintenance, are expensed as incurred. Property and Equipment, Net Property and equipment are stated at cost less accumulated depreciation and amortization. Incentives that we receive from property and equipment vendors are recorded as a reduction to our costs. Property includes buildings and land that we own, along with property we have acquired under build-to-suit lease arrangements when we have control over the building during the construction period and finance lease arrangements. Equipment includes assets such as servers and networking equipment, heavy equipment, and other fulfillment equipment. Depreciation and amortization is recorded on a straight-line basis over the estimated useful lives of the assets (generally the lesser of 40 years or the remaining life of the underlying building, five years 46 Table of Contents prior to January 1, 2024 and six years subsequent to January 1, 2024 for our servers, six years for our networking equipment, ten years for heavy equipment, and three to ten years for other fulfillment equipment). Depreciation and amortization expense is classified within the corresponding operating expense categories on our consolidated statements of operations. Leases We categorize leases with contractual terms longer than twelve months as either operating or finance. Finance leases are generally those leases that allow us to substantially utilize or pay for the entire asset over its estimated life. Assets acquired under finance leases are recorded in “Property and equipment, net.” All other leases are categorized as operating leases. Our leases generally have terms that range from one to ten years for equipment and one to twenty years for property. Certain lease contracts include obligations to pay for other services, such as operations and maintenance. For leases of property, we account for these other services as a component of the lease. For substantially all other leases, the services are accounted for separately and we allocate payments to the lease and other services components based on estimated stand-alone prices. Lease liabilities are recognized at the present value of the fixed lease payments, reduced by landlord incentives using a discount rate based on similarly secured borrowings available to us. Lease assets are recognized based on the initial present value of the fixed lease payments, reduced by landlord incentives, plus any direct costs from executing the leases or lease prepayments reclassified from “Other assets” upon lease commencement. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the lease term. When we have the option to extend the lease term, terminate the lease before the contractual expiration date, or purchase the leased asset, and it is reasonably certain that we will exercise the option, we consider the option in determining the classification and measurement of the lease. Our leases may include variable payments based on measures that include changes in price indices, market interest rates, or the level of sales at a physical store, which are expensed as incurred. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the lease. Finance lease assets are amortized within operating expenses on a straight-line basis over the shorter of the estimated useful lives of the assets or, in the instance where title does not transfer at the end of the lease term, the lease term. The interest component of a finance lease is included in interest expense and recognized using the effective interest method over the lease term. We establish assets and liabilities for the present value of estimated future costs to retire long-lived assets at the termination or expiration of a lease. Such assets are amortized over the lease period into operating expense, and the recorded liabilities are accreted to the future value of the estimated retirement costs. Financing Obligations We record assets and liabilities for estimated construction costs under build-to-suit lease arrangements when we have control over the building during the construction period. If we continue to control the building after the construction period, the arrangement is classified as a financing obligation instead of a lease. The building is depreciated over the shorter of its useful life or the term of the obligation. If we do not control the building after the construction period ends, the assets and liabilities for construction costs are derecognized, and we classify the lease as operating. Goodwill and Indefinite-Lived Intangible Assets We evaluate goodwill and indefinite-lived intangible assets for impairment annually or more frequently when an event occurs or circumstances change that indicate the carrying value may not be recoverable. We may elect to utilize a qualitative assessment to evaluate whether it is more likely than not that the fair value of a reporting unit or indefinite-lived intangible asset is less than its carrying value and if so, we perform a quantitative test. We compare the carrying value of each reporting unit and indefinite-lived intangible asset to its estimated fair value and if the fair value is determined to be less than the carrying value, we recognize an impairment loss for the difference. We estimate the fair value of the reporting units using discounted cash flows. Forecasts of future cash flows are based on our best estimate of future net sales and operating expenses, based primarily on expected category expansion, pricing, market segment share, and general economic conditions. We completed the required annual impairment test of goodwill for all reporting units and indefinite-lived intangible assets as of April 1, 2024, resulting in no impairments. The fair value of our reporting units substantially exceeded their carrying value. There were no events that caused us to update our annual impairment test. See “Note 5 — Acquisitions, Goodwill, and Acquired Intangible Assets.” 47 Table of Contents Other Assets Included in “Other assets” on our consolidated balance sheets are amounts primarily related to video and music content, net of accumulated amortization; long-term deferred tax assets; acquired intangible assets, net of accumulated amortization; convertible notes and certain equity investments; satellite network launch services deposits; and affordable housing loans. We recognize certain transactions with governments when there is reasonable assurance that incentives included in the agreements, such as cash or certain tax credits, will be received and we are able to comply with any related conditions. These incentives are recorded as reductions to the cost of related assets or expenses. Digital Video and Music Content We obtain video content, inclusive of episodic television and movies, and music content for customers through licensing agreements that have a wide range of licensing provisions including both fixed and variable payment schedules. When the license fee for a specific video or music title is determinable or reasonably estimable and the content is available to us, we recognize an asset and a corresponding liability for the amounts owed. We reduce the liability as payments are made and we amortize the asset to “Cost of sales” on an accelerated basis, based on estimated usage or viewing patterns, or on a straight-line basis. If the licensing fee is not determinable or reasonably estimable, no asset or liability is recorded and licensing costs are expensed as incurred. We also develop original video content for which the production costs are capitalized and amortized to “Cost of sales” predominantly on an accelerated basis that follows the estimated viewing patterns associated with the content. The weighted average remaining life of our capitalized video content is 3.1 years. We review usage and viewing patterns impacting the amortization of capitalized video content on an ongoing basis and reflect any changes prospectively. Our produced and licensed video content is primarily monetized together as a unit, referred to as a film group, in each major geography where we offer Amazon Prime memberships. These film groups are evaluated for impairment whenever an event occurs or circumstances change indicating the fair value is less than the carrying value. The total capitalized costs of video, which is primarily released content, and music as of December 31, 2023 and 2024 were $ 17.4 billion and $ 19.6 billion. Total video and music expense was $ 18.9 billion and $ 20.4 billion for the year ended December 31, 2023 and 2024. Total video and music expense includes licensing and production costs associated with content offered within Amazon Prime memberships, and costs associated with digital subscriptions and sold or rented content. Cash Equivalents and Marketable Securities We generally invest our excess cash in investment grade short- to intermediate-term marketable debt securities and AAA-rated money market funds. Such investments are included in “Cash and cash equivalents” or “Marketable securities” on the accompanying consolidated balance sheets. Marketable debt securities are classified as available-for-sale and reported at fair value with unrealized gains and losses included in “Accumulated other comprehensive income (loss).” Each reporting period, we evaluate whether declines in fair value below carrying value are due to expected credit losses, as well as our ability and intent to hold the investment until a forecasted recovery occurs. Expected credit losses are recorded as an allowance through “Other income (expense), net” on our consolidated statements of operations. Equity investments that have readily determinable fair values, including investments for which we have elected the fair value option, are included in “Marketable securities” on our consolidated balance sheets and measured at fair value with changes recognized in “Other income (expense), net” on our consolidated statements of operations. Non-Marketable Investments Notes that are convertible to equity classified as available-for-sale are reported at fair value with unrealized gains and losses included in “Accumulated other comprehensive income (loss).” Credit losses, if any, are recorded as an allowance through “Other income (expense), net” on our consolidated statements of operations. Upon conversion, the amount of the notes reported at fair value are reclassified generally from available-for-sale to equity investments accounted for at cost, with any associated unrealized gain or loss reclassified from “Accumulated other comprehensive income (loss)” to “Other income (expense), net” on our consolidated statements of operations. In Q3 2023, we invested in a $ 1.25 billion note from Anthropic, PBC, which is convertible to equity. In Q1 2024, we invested $ 2.75 billion in a second convertible note. In Q4 2024, we entered into an agreement and invested $ 1.3 billion in a third convertible note, and will invest an additional $ 2.7 billion by Q4 2025. The notes are classified as available-for-sale and are classified as Level 3 assets, and as of December 31, 2024 had an estimated fair value of approximately $ 13.8 billion. In making these estimates, we utilized valuation methods based on information available, including the rights and obligations of the convertible notes, other outstanding classes of securities, observable transactions such as new securities offerings, estimates of expected time to and type of liquidity events and anticipated securities offerings, and discounts for lack of marketability. Subsequent to December 31, 2024, a portion of the notes were converted to nonvoting preferred stock. As a result of this conversion, a significant portion of the unrealized gain associated with the notes as of December 31, 2024 was reclassified and 48 Table of Contents a gain will be recorded in “Other income (expense), net” in our Q1 2025 consolidated statement of operations. We also have a commercial arrangement primarily for the provision of AWS cloud services, which includes the use of AWS chips. Equity investments in private companies for which we do not have the ability to exercise significant influence are accounted for at cost, with adjustments for observable changes in prices or impairments recognized in “Other income (expense), net” on our consolidated statements of operations. Each reporting period, we perform a qualitative assessment to evaluate whether the investment is impaired. Our assessment includes a review of recent operating results and trends, recent sales/acquisitions of the investee securities, and other publicly available data. If the investment is impaired, we write it down to its estimated fair value. As of December 31, 2023 and 2024, these investments had a carrying value of $ 754 million and $ 989 million. Equity investments where we can exercise significant influence, but not control, over an investee are accounted for using the equity method of accounting, or at fair value if we elect the fair value option. Our share of the earnings or losses as reported by equity-method investees, amortization of basis differences, related gains or losses, and impairments, if any, are recognized in “Equity-method investment activity, net of tax” on our consolidated statements of operations. Each reporting period, we evaluate whether declines in fair value below carrying value are other-than-temporary and if so, we write down the investment to its estimated fair value. As of December 31, 2023 and 2024, these investments had a carrying value of $ 614 million and $ 1.2 billion. As of December 31, 2023 and 2024, equity warrants measured at fair value were $ 2.2 billion and $ 2.7 billion, with changes recognized in “Other income (expense), net” on our consolidated statements of operations. These warrants are classified as Level 2 and 3 assets. These non-marketable investments are included within “Other assets” on our consolidated balance sheets. Certain of our investments represent a variable interest in an entity. We do not consolidate the entities in which we hold these investments because we are not the primary beneficiary. Long-Lived Assets Long-lived assets, other than goodwill and indefinite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. 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. For long-lived assets used in operations, including lease assets, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. We measure the impairment loss based on the difference between the carrying amount and estimated fair value. Long-lived assets are considered held for sale when certain criteria are met, including when management has committed to a plan to sell the asset, the asset is available for sale in its immediate condition, and the sale is probable within one year of the reporting date. Assets held for sale are reported at the lower of cost or fair value less costs to sell. Assets held for sale were not significant as of December 31, 2023 and 2024. Accrued Expenses and Other Included in “Accrued expenses and other” on our consolidated balance sheets are liabilities primarily related to tax-related liabilities, leases and asset retirement obligations, self-insurance liabilities, payroll and related expenses, current debt, unredeemed gift cards, customer liabilities, marketing liabilities, acquired digital media content, and other operating expenses. As of December 31, 2023 and 2024, our liabilities for payroll related expenses were $ 7.7 billion and $ 7.5 billion and our liabilities for unredeemed gift cards were $ 5.3 billion and $ 5.4 billion. We reduce the liability for a gift card when redeemed by a customer. The portion of gift cards that we do not expect to be redeemed is recognized based on customer usage patterns. Self-Insurance Liabilities Although we maintain certain high-deductible, third-party insurance coverage for catastrophic losses, we effectively self-insure for exposure primarily related to workers’ compensation, employee healthcare benefits, general and product liability, and automobile liability, including liability resulting from third-party transportation service providers. We estimate self-insurance liabilities by considering historical claims experience, frequency and costs of claims, projected claims development, inflation, and other actuarial assumptions. Changes in the number or costs of claims, healthcare costs, judgment and settlement amounts, associated legal expenses, and other factors could cause actual results to differ materially from these estimates. In the fourth quarter of 2022, we increased our reserves for general, product, and automobile liabilities by $ 1.3 billion primarily driven by changes in our estimates about the costs of asserted and unasserted claims, which was primarily recorded in “Cost of sales” on our consolidated statements of operations and impacted our North America segment. Increases to our reserves driven by 49 Table of Contents changes in estimates were not material to our consolidated results of operations for the years ended December 31, 2023 and 2024. As of December 31, 2023 and 2024, our total self-insurance liabilities were $ 6.3 billion and $ 8.5 billion and are included in “Accrued expenses and other” on our consolidated balance sheets. Unearned Revenue Unearned revenue is recorded when payments are received or due in advance of performing our service obligations and is recognized over the service period. Unearned revenue primarily relates to prepayments of AWS services and Amazon Prime memberships. Our total unearned revenue as of December 31, 2023 was $ 20.9 billion, of which $ 14.2 billion was recognized as revenue during the year ended December 31, 2024 and our total unearned revenue as of December 31, 2024 was $ 24.6 billion. Included in “Other long-term liabilities” on our consolidated balance sheets was $ 5.7 billion and $ 6.5 billion of unearned revenue as of December 31, 2023 and 2024. Additionally, we have performance obligations, primarily related to AWS, associated with commitments in customer contracts for future services that have not yet been recognized in our financial statements. For contracts with original terms that exceed one year, those commitments not yet recognized were approximately $ 177 billion as of December 31, 2024. The weighted average remaining life of our long-term contracts is 4.1 years. However, the amount and timing of revenue recognition is largely driven by customer usage, which can extend beyond the original contractual term. Other Long-Term Liabilities Included in “Other long-term liabilities” on our consolidated balance sheets are liabilities primarily related to financing obligations, unearned revenue, asset retirement obligations, tax contingencies, deferred tax liabilities, and digital video and music content. Foreign Currency We have internationally-focused stores for which the net sales generated, as well as most of the related expenses directly incurred from those operations, are denominated in local functional currencies. The functional currency of our subsidiaries that either operate or support these stores is generally the same as the local currency. Assets and liabilities of these subsidiaries are translated into U.S. Dollars at period-end foreign exchange rates, and revenues and expenses are translated at average rates prevailing throughout the period. Translation adjustments are included in “Accumulated other comprehensive income (loss),” a separate component of stockholders’ equity. Transaction gains and losses including intercompany transactions denominated in a currency other than the functional currency of the entity involved are included in “Other income (expense), net” on our consolidated statements of operations. In connection with the settlement and remeasurement of intercompany balances, we recorded gains (losses) of $ 386 million, $( 329 ) million, and $ 413 million in 2022, 2023, and 2024. Accounting Pronouncements Not Yet Adopted In December 2023, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) amending existing income tax disclosure guidance, primarily requiring more detailed disclosure for income taxes paid and the effective tax rate reconciliation. The ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis. We expect to adopt the ASU on a retroactive basis. In November 2024, the FASB issued an ASU amending existing income statement disclosure guidance, primarily requiring more detailed disclosure for expenses. The ASU is effective for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The amendments can be applied on either a prospective or retroactive basis. We are currently evaluating the ASU to determine its impact on our disclosures. 50 Table of Contents Note 2 — FINANCIAL INSTRUMENTS Cash, Cash Equivalents, Restricted Cash, and Marketable Securities As of December 31, 2023 and 2024, our cash, cash equivalents, restricted cash, and marketable securities primarily consisted of cash, AAA-rated money market funds, U.S. and foreign government and agency securities, other investment grade securities, and marketable equity securities. Cash equivalents and marketable securities are recorded at fair value. The following table summarizes, by major security type, our cash, cash equivalents, restricted cash, and marketable securities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in millions): December 31, 2023 Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Total Estimated Fair Value Cash $ 11,706 $ — $ — $ 11,706 Level 1 securities: Money market funds 39,160 — — 39,160 Equity securities (1) 4,658 Level 2 securities: Foreign government and agency securities 505 — — 505 U.S. government and agency securities 1,789 1 ( 91 ) 1,699 Corporate debt securities 27,996 — ( 191 ) 27,805 Asset-backed securities 1,707 — ( 61 ) 1,646 Other debt securities 108 — ( 4 ) 104 $ 82,971 $ 1 $ ( 347 ) $ 87,283 Less: Restricted cash, cash equivalents, and marketable securities (2) ( 503 ) Total cash, cash equivalents, and marketable securities $ 86,780 51 Table of Contents December 31, 2024 Cost or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Total Estimated Fair Value Cash $ 17,055 $ — $ — $ 17,055 Level 1 securities: Money market funds 28,282 — — 28,282 Equity securities (1) 3,318 Level 2 securities: Foreign government and agency securities 177 — — 177 U.S. government and agency securities 3,452 1 ( 52 ) 3,401 Corporate debt securities 50,959 3 ( 50 ) 50,912 Asset-backed securities 1,539 2 ( 18 ) 1,523 Other debt securities 68 — ( 1 ) 67 $ 101,532 $ 6 $ ( 121 ) $ 104,735 Less: Restricted cash, cash equivalents, and marketable securities (2) ( 3,533 ) Total cash, cash equivalents, and marketable securities $ 101,202 ___________________ (1) The related unrealized gain (loss) recorded in “Other income (expense), net” was $( 13.6 ) billion, $ 1.0 billion, and $( 1.3 ) billion for the years ended December 31, 2022, 2023, and 2024. (2) We are required to pledge or otherwise restrict a portion of our cash, cash equivalents, and marketable debt securities primarily as collateral for real estate, amounts due to third-party sellers in certain jurisdictions, debt, standby and trade letters of credit, and licenses of digital media content. We classify cash, cash equivalents, and marketable debt securities with use restrictions of less than twelve months as “Accounts receivable, net and other” and of twelve months or longer as non-current “Other assets” on our consolidated balance sheets. See “Note 7 — Commitments and Contingencies.” The following table summarizes gross gains and gross losses realized on sales of marketable debt securities (in millions): Year Ended December 31, 2022 2023 2024 Realized gains $ 43 $ 2 $ 3 Realized losses 341 67 10 The following table summarizes the remaining contractual maturities of our cash equivalents and marketable debt securities as of December 31, 2024 (in millions): Amortized Cost Estimated Fair Value Due within one year $ 78,065 $ 78,046 Due after one year through five years 5,023 4,969 Due after five years through ten years 560 553 Due after ten years 829 794 Total $ 84,477 $ 84,362 Actual maturities may differ from the contractual maturities because borrowers may have certain prepayment conditions. 52 Table of Contents Consolidated Statements of Cash Flows Reconciliation The following table provides a reconciliation of the amount of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets to the total of the same such amounts shown in the consolidated statements of cash flows (in millions): December 31, 2023 December 31, 2024 Cash and cash equivalents $ 73,387 $ 78,779 Restricted cash included in accounts receivable, net and other 497 247 Restricted cash included in other assets 6 3,286 Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 73,890 $ 82,312 Note 3 — PROPERTY AND EQUIPMENT Property and equipment, at cost, consisted of the following (in millions): December 31, 2023 2024 Gross property and equipment (1): Land and buildings $ 105,293 $ 123,039 Equipment 185,039 218,893 Other assets 5,116 5,487 Construction in progress 28,840 46,636 Gross property and equipment 324,288 394,055 Total accumulated depreciation and amortization (1) 120,111 141,390 Total property and equipment, net $ 204,177 $ 252,665 __________________ (1) Includes the original cost and accumulated depreciation of fully-depreciated assets. Depreciation and amortization expense on property and equipment was $ 24.9 billion, $ 30.2 billion, and $ 32.1 billion which includes amortization of property and equipment acquired under finance leases of $ 6.1 billion, $ 5.9 billion, and $ 3.9 billion for 2022, 2023, and 2024. 53 Table of Contents Note 4 — LEASES We have entered into non-cancellable operating and finance leases for fulfillment network, data center, office, and physical store facilities as well as server and networking equipment, aircraft, and vehicles. Gross assets acquired under finance leases, including those where title transfers at the end of the lease, are recorded in “ Property and equipment, net ” and were $ 62.5 billion and $ 56.5 billion as of December 31, 2023 and 2024. Accumulated amortization associated with finance leases was $ 44.7 billion and $ 41.8 billion as of December 31, 2023 and 2024. Lease cost recognized in our consolidated statements of operations is summarized as follows (in millions): Year Ended December 31, 2022 2023 2024 Operating lease cost $ 8,847 $ 10,550 $ 11,961 Finance lease cost: Amortization of lease assets 6,097 5,899 3,866 Interest on lease liabilities 361 304 285 Finance lease cost 6,458 6,203 4,151 Variable lease cost 1,852 2,165 2,465 Total lease cost $ 17,157 $ 18,918 $ 18,577 Other information about lease amounts recognized in our consolidated financial statements is as follows: December 31, 2023 December 31, 2024 Weighted-average remaining lease term – operating leases 11.3 years 10.6 years Weighted-average remaining lease term – finance leases 11.9 years 11.9 years Weighted-average discount rate – operating leases 3.3 % 3.5 % Weighted-average discount rate – finance leases 2.7 % 3.0 % Our lease liabilities were as follows (in millions): December 31, 2023 Operating Leases Finance Leases Total Gross lease liabilities $ 90,777 $ 14,106 $ 104,883 Less: imputed interest ( 15,138 ) ( 1,997 ) ( 17,135 ) Present value of lease liabilities 75,639 12,109 87,748 Less: current portion of lease liabilities ( 8,419 ) ( 2,032 ) ( 10,451 ) Total long-term lease liabilities $ 67,220 $ 10,077 $ 77,297 December 31, 2024 Operating Leases Finance Leases Total Gross lease liabilities $ 95,294 $ 12,520 $ 107,814 Less: imputed interest ( 15,698 ) ( 1,918 ) ( 17,616 ) Present value of lease liabilities 79,596 10,602 90,198 Less: current portion of lease liabilities ( 10,546 ) ( 1,375 ) ( 11,921 ) Total long-term lease liabilities $ 69,050 $ 9,227 $ 78,277 54 Table of Contents Note 5 — ACQUISITIONS, GOODWILL, AND ACQUIRED INTANGIBLE ASSETS 2022 Acquisition Activity On March 17, 2022, we acquired MGM Holdings Inc., for cash consideration of approximately $ 6.1 billion, net of cash acquired, to provide more digital media content options for customers. We also assumed $ 2.5 billion of debt, which we repaid immediately after closing. The acquired assets primarily consist of $ 3.4 billion of video content and $ 4.9 billion of goodwill. During 2022, we also completed acquisition activity for aggregate cash consideration of $ 141 million, net of cash acquired. 2023 Acquisition Activity On February 22, 2023, we acquired 1Life Healthcare, Inc. (One Medical), for cash consideration of approximately $ 3.5 billion, net of cash acquired, to provide healthcare options for customers. The acquired assets primarily consist of $ 1.3 billion of intangible assets and $ 2.5 billion of goodwill, which is allocated to our North America segment. During 2023, we also completed acquisition activity for immaterial aggregate cash consideration, net of cash acquired. 2024 Acquisition Activity During 2024, we completed acquisition activity for aggregate cash consideration of $ 780 million, net of cash acquired. The primary reasons for these transactions were to acquire technologies and know-how to enable Amazon to serve customers more effectively or to expand our customer base. Pro forma results of operations have not been presented because the effects of the 2024 transactions, individually and in the aggregate, were not material to our consolidated results of operations. Transaction-related costs were expensed as incurred and were not significant. Goodwill The goodwill resulting from the acquisition activity is primarily related to expected improvements in technology performance and functionality, as well as sales growth from future product and service offerings and new customers, together with certain intangible assets that do not qualify for separate recognition. The goodwill resulting from the acquisition activity is generally not deductible for tax purposes. The following summarizes our goodwill activity in 2023 and 2024 by segment (in millions): North America International AWS Consolidated Goodwill - January 1, 2023 $ 16,621 $ 2,411 $ 1,256 $ 20,288 Acquisition activity 2,494 — — 2,494 Other adjustments (1) 11 1 ( 5 ) 7 Goodwill - December 31, 2023 19,126 2,412 1,251 22,789 Acquisition activity 191 77 52 320 Other adjustments (1) ( 28 ) ( 4 ) ( 3 ) ( 35 ) Goodwill - December 31, 2024 $ 19,289 $ 2,485 $ 1,300 $ 23,074 ___________________ (1) Primarily includes changes in foreign exchange rates. 55 Table of Contents Intangible Assets Acquired identifiable intangible assets are valued primarily by using discounted cash flows. These assets are included within “Other assets” on our consolidated balance sheets and consist of the following (in millions): December 31, 2023 2024 Acquired Intangibles, Gross (1) Accumulated Amortization (1) Acquired Intangibles, Net Acquired Intangibles, Gross (1) Accumulated Amortization (1) Acquired Intangibles, Net Weighted Average Life Remaining Finite-lived intangible assets (2): Marketing-related $ 2,643 $ ( 738 ) $ 1,905 $ 2,629 $ ( 860 ) $ 1,769 16.8 Contract-based 4,800 ( 1,129 ) 3,671 5,767 ( 1,541 ) 4,226 10.9 Technology- and content-based 743 ( 340 ) 403 1,246 ( 284 ) 962 3.2 Customer-related 749 ( 188 ) 561 764 ( 282 ) 482 5.7 Total finite-lived intangible assets $ 8,935 $ ( 2,395 ) $ 6,540 $ 10,406 $ ( 2,967 ) $ 7,439 11.0 IPR&D and other (3) $ 1,147 $ 1,147 $ 1,163 $ 1,163 Total acquired intangibles $ 10,082 $ ( 2,395 ) $ 7,687 $ 11,569 $ ( 2,967 ) $ 8,602 ___________________ (1) Excludes the original cost and accumulated amortization of fully-amortized intangibles. (2) Finite-lived intangible assets, excluding acquired video content, have estimated useful lives of between one and twenty-five years , and are being amortized to operating expenses on a straight-line basis. (3) Intangible assets acquired in a business combination that are in-process and used in research and development activities are considered indefinite-lived until the completion or abandonment of the research and development efforts. Once the research and development efforts are completed, we determine the useful life and begin amortizing the assets. Amortization expense for acquired finite-lived intangibles was $ 604 million, $ 706 million, and $ 838 million in 2022, 2023, and 2024. Expected future amortization expense of acquired finite-lived intangible assets as of December 31, 2024 is as follows (in millions): Year Ended December 31, 2025 $ 994 2026 918 2027 796 2028 632 2029 615 Thereafter 3,484 $ 7,439 56 Table of Contents Note 6 — DEBT As of December 31, 2024, we had $ 58.0 billion of unsecured senior notes outstanding (the “Notes”). Our total long-term debt obligations are as follows (in millions): Maturities (1) Stated Interest Rates Effective Interest Rates December 31, 2023 December 31, 2024 2014 Notes issuance of $ 6.0 billion 2034 - 2044 4.80 % - 4.95 % 4.93 % - 5.12 % 4,000 2,750 2017 Notes issuance of $ 17.0 billion 2025 - 2057 3.15 % - 5.20 % 3.02 % - 4.33 % 15,000 13,000 2020 Notes issuance of $ 10.0 billion 2025 - 2060 0.80 % - 2.70 % 0.88 % - 2.77 % 9,000 9,000 2021 Notes issuance of $ 18.5 billion 2026 - 2061 1.00 % - 3.25 % 1.14 % - 3.31 % 17,500 15,000 April 2022 Notes issuance of $ 12.8 billion 2025 - 2062 3.00 % - 4.10 % 3.13 % - 4.15 % 12,750 11,250 December 2022 Notes issuance of $ 8.3 billion 2025 - 2032 4.55 % - 4.70 % 4.61 % - 4.74 % 8,250 7,000 Credit Facility 682 — Total face value of long-term debt 67,182 58,000 Unamortized discount and issuance costs, net ( 374 ) ( 360 ) Less: current portion of long-term debt ( 8,494 ) ( 5,017 ) Long-term debt $ 58,314 $ 52,623 ___________________ (1) The weighted-average remaining lives of the 2014, 2017, 2020, 2021, April 2022, and December 2022 Notes were 15.4 , 15.2 , 16.5 , 14.2 , 12.8 , and 4.6 years as of December 31, 2024. The combined weighted-average remaining life of the Notes was 13.4 years as of December 31, 2024. Interest on the Notes is payable semi-annually in arrears. 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. The estimated fair value of the Notes was approximately $ 60.6 billion and $ 50.2 billion as of December 31, 2023 and 2024, which is based on quoted prices for our debt as of those dates. As of September 30, 2024, we had repaid outstanding borrowings and terminated the secured revolving credit facility with a lender that was secured by certain seller receivables (the “Credit Facility”). The Credit Facility bore interest based on the daily Secured Overnight Financing Rate plus 1.25 %, and had a commitment fee of up to 0.45 % on the undrawn portion. There were $ 682 million of borrowings outstanding under the Credit Facility as of December 31, 2023, which had an interest rate of 6.6 %. As of December 31, 2023, we had pledged $ 806 million of our cash and seller receivables as collateral for debt related to our Credit Facility. The estimated fair value of the Credit Facility, which was based on Level 2 inputs, approximated its carrying value as of December 31, 2023. As of December 31, 2024, future principal payments for our total long-term debt were as follows (in millions): Year Ended December 31, 2025 $ 5,000 2026 2,750 2027 8,750 2028 2,250 2029 3,000 Thereafter 36,250 $ 58,000 In January 2023, we entered into an $ 8.0 billion unsecured 364-day term loan with a syndicate of lenders (the “Term Loan”), maturing in January 2024 and bearing interest at the Secured Overnight Financing Rate specified in the Term Loan plus 0.75 %. The Term Loan was classified as short-term debt and included within “Accrued expenses and other” on our consolidated balance sheets. As of December 31, 2023, the entire amount of the Term Loan had been repaid. We have U.S. Dollar and Euro commercial paper programs (the “Commercial Paper Programs”) under which we may from time to time issue unsecured commercial paper up to a total of $ 20.0 billion (including up to € 3.0 billion) at the date of issue, with individual maturities that may vary but will not exceed 397 days from the date of issue. There were no borrowings 57 Table of Contents outstanding under the Commercial Paper Programs as of December 31, 2023 and 2024. We use the net proceeds from the issuance of commercial paper for general corporate purposes. We have a $ 15.0 billion unsecured revolving credit facility with a syndicate of lenders (the “Credit Agreement”), with a term that extends to November 2028 and may be extended for one or more additional one-year terms subject to approval by the lenders. The interest rate applicable to outstanding balances under the Credit Agreement is the applicable benchmark rate specified in the Credit Agreement plus 0.45 %, with a commitment fee of 0.03 % on the undrawn portion of the credit facility. There were no borrowings outstanding under the Credit Agreement as of December 31, 2023 and 2024. In October 2024, we entered into a $ 5.0 billion unsecured 364-day revolving credit facility with a syndicate of lenders (the “Short-Term Credit Agreement”), which replaced the prior 364-day revolving credit agreement entered into in November 2023. The Short-Term Credit Agreement matures in October 2025 and may be extended for one additional period of 364 days subject to approval by the lenders. The interest rate applicable to outstanding balances under the Short-Term Credit Agreement is the Secured Overnight Financing Rate specified in the Short-Term Credit Agreement plus 0.45 %, with a commitment fee of 0.03 % on the undrawn portion. There were no borrowings outstanding under the Short-Term Credit Agreement or the prior 364-day revolving credit agreement as of December 31, 2023 and 2024. We also utilize other short-term credit facilities for working capital purposes. There were $ 147 million and $ 151 million of borrowings outstanding under these facilities as of December 31, 2023 and 2024, which were included in “Accrued expenses and other” on our consolidated balance sheets. In addition, we had $ 8.3 billion of unused letters of credit as of December 31, 2024. Note 7 — COMMITMENTS AND CONTINGENCIES Commitments The following summarizes our principal contractual commitments, excluding open orders for purchases that support normal operations and are generally cancellable, as of December 31, 2024 (in millions): Year Ended December 31, 2025 2026 2027 2028 2029 Thereafter Total Long-term debt principal and interest $ 6,858 $ 4,458 $ 10,404 $ 3,644 $ 4,344 $ 55,831 $ 85,539 Operating lease liabilities 12,002 11,023 10,087 9,205 8,534 44,443 95,294 Finance lease liabilities, including interest 1,491 1,495 1,317 1,114 1,022 6,081 12,520 Financing obligations, including interest (1) 511 515 523 531 540 6,397 9,017 Leases not yet commenced 2,695 3,691 5,011 4,253 4,286 41,691 61,627 Unconditional purchase obligations (2) 8,536 7,941 5,413 4,321 3,868 20,296 50,375 Other commitments (3) 2,739 1,470 1,016 923 1,025 11,456 18,629 Total commitments $ 34,832 $ 30,593 $ 33,771 $ 23,991 $ 23,619 $ 186,195 $ 333,001 ___________________ (1) Includes non-cancellable financing obligations for fulfillment network and data center facilities. Excluding interest, current financing obligations of $ 271 million and $ 312 million are recorded within “Accrued expenses and other” and $ 6.6 billion and $ 7.1 billion are recorded within “Other long-term liabilities” as of December 31, 2023 and 2024. The weighted-average remaining term of the financing obligations was 17.0 years and 16.1 years and the weighted-average imputed interest rate was 3.1 % as of December 31, 2023 and 2024. (2) Includes unconditional purchase obligations related to long-term agreements to acquire and license digital media content, procure energy, and license software that are not reflected on the consolidated balance sheets. For those agreements with variable terms, we do not estimate the total obligation beyond any minimum quantities and/or pricing as of the reporting date. Purchase obligations associated with renewal provisions solely at the option of the content provider are included to the extent such commitments are fixed or a minimum amount is specified. Energy agreements based on actual generation without a fixed or minimum volume commitment are not included. Our energy agreements generally provide the right to receive energy certificates for no additional consideration. (3) Includes asset retirement obligations, the estimated timing and amounts of payments for rent and tenant improvements associated with build-to-suit lease arrangements that are under construction, and liabilities associated with digital media content agreements with initial terms greater than one year. Excludes approximately $ 6.5 billion of income tax contingencies for which we cannot make a reasonably reliable estimate of the amount and period of payment, if any. 58 Table of Contents Suppliers During 2024, no vendor accounted for 10% or more of our purchases. We generally do not have long-term contracts or arrangements with our vendors to guarantee the availability of merchandise, particular payment terms, or the extension of credit limits. Other Contingencies We are disputing claims and denials of refunds or credits, and monitoring or evaluating potential claims, related to various non-income taxes (such as sales, value added, consumption, service, and similar taxes), including in jurisdictions in which we already collect and remit these taxes. These non-income tax controversies typically include (i) the taxability of products and services, including cross-border intercompany transactions, (ii) collection and withholding on transactions with third parties, including as a result of evolving requirements imposed on marketplaces with respect to third-party sellers, and (iii) the adequacy of compliance with reporting obligations, including evolving documentation requirements. Due to the inherent complexity and uncertainty of these matters and the judicial and regulatory processes in certain jurisdictions, the final outcome of any such controversies may be materially different from our expectations. Legal Proceedings The Company is involved from time to time in claims, proceedings, and litigation, including the following: In May 2018, Rensselaer Polytechnic Institute and CF Dynamic Advances LLC filed a complaint against Amazon.com, Inc. in the United States District Court for the Northern District of New York. The complaint alleged, among other things, that “Alexa Voice Software and Alexa enabled devices” infringe U.S. Patent No. 7,177,798, entitled “Natural Language Interface Using Constrained Intermediate Dictionary of Results.” The complaint sought an injunction, an unspecified amount of damages, enhanced damages , an ongoing royalty, interest, attorneys’ fees, and costs. In March 2023, the plaintiffs alleged in their damages report that in the event of a finding of liability Amazon could be subject to $ 140 million to $ 267 million in damages. In March 2024, the district court granted summary judgment ruling that the patent is invalid and dismissed the case. In April 2024, the plaintiffs filed a notice of appeal. We dispute the allegations of wrongdoing and will continue to defend ourselves vigorously in this matter. In December 2018, Kove IO, Inc. filed a complaint against Amazon Web Services, Inc. in the United States District Court for the Northern District of Illinois. The complaint alleged, among other things, that Amazon S3 and DynamoDB infringe U.S. Patent Nos. 7,814,170 and 7,103,640, each entitled “Network Distributed Tracking Wire Transfer Protocol”; and 7,233,978, entitled “Method and Apparatus for Managing Location Information in a Network Separate from the Data to Which the Location Information Pertains.” The complaint sought an unspecified amount of damages, enhanced damages, attorneys’ fees, costs, interest, and injunctive relief. In April 2024, a jury found that Amazon infringed the asserted patents and awarded Kove $ 525 million in damages. In August 2024, the court awarded Kove $ 148 million in pre-judgment interest. In September 2024, we filed a notice of appeal. We disagree with the jury’s findings and will continue to defend ourselves vigorously in this matter. Beginning in June 2019 with Wilcosky v. Amazon.com, Inc., now pending in the United States District Court for the Northern District of Illinois (“N.D. Ill.”), private litigants have filed a number of cases in U.S. federal and state courts, including Hogan v. Amazon.com, Inc. (N.D. Ill.), alleging, among other things, that Amazon’s collection, storage, use, retention, and protection of biometric identifiers violated the Illinois Biometric Information Privacy Act. The complaints allege purported classes of Illinois residents who had biometric identifiers collected through Amazon products or services, including Amazon Photos, Alexa, AWS cloud services, Ring, Amazon Connect, Amazon’s Flex driver app, and Amazon’s virtual try-on technology. The complaints seek certification as class actions, unspecified amounts of damages, injunctive relief, attorneys’ fees, costs, and interest. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in these matters. Beginning in March 2020 with Frame-Wilson v. Amazon.com, Inc. filed in the United States District Court for the Western District of Washington (“W.D. Wash.”), private litigants have filed a number of cases in the U.S. and Canada alleging, among other things, price fixing arrangements between Amazon.com, Inc. and vendors and third-party sellers in Amazon’s stores, monopolization and attempted monopolization, and consumer protection and unjust enrichment claims. Attorneys General for the District of Columbia and California brought similar suits in May 2021 and September 2022 in the Superior Court of the District of Columbia and the California Superior Court for the County of San Francisco, respectively. Some of the private cases include allegations of several distinct purported classes, including consumers who purchased a product through Amazon’s stores and consumers who purchased a product offered by Amazon through another e-commerce retailer. The complaints seek billions of dollars of alleged damages, treble damages, punitive damages, injunctive relief, civil penalties, attorneys’ fees, and costs. The Federal Trade Commission and a number of state Attorneys General filed a similar lawsuit in September 2023 in the W.D. Wash. alleging violations of federal antitrust and state antitrust and consumer protection laws. That complaint alleges, among other things, that Amazon has a monopoly in markets for online superstores and marketplace 59 Table of Contents services, and unlawfully maintains those monopolies through anticompetitive practices relating to our pricing policies, advertising practices, the structure of Prime, and promotion of our own products on our website. The complaint seeks injunctive and structural relief, an unspecified amount of damages, and costs. In May 2024, the Attorney General of Arizona filed a complaint in the Superior Court of Arizona in Maricopa County alleging that Amazon’s practices related to pricing and the Featured Offers in its stores violate state antitrust and consumer protection laws. That complaint also seeks injunctive relief, an unspecified amount of damages, civil penalties, and costs. Amazon’s motions to dismiss were granted in part and denied in part in Frame-Wilson in March 2022 and March 2023, De Coster v. Amazon.com, Inc. (W.D. Wash.) in January 2023, and the California Attorney General’s lawsuit in March 2023. All three courts dismissed claims alleging that Amazon’s pricing policies are inherently illegal and denied dismissal of claims alleging that Amazon’s pricing policies are an unlawful restraint of trade. In August 2024, the DC Court of Appeals overturned a prior decision by the DC Superior Court dismissing the DC Attorney General’s lawsuit and that case is now proceeding. In September 2024, the United States District Court for the W.D. Wash. granted in part Amazon’s motion to dismiss the suit brought by the FTC and certain state Attorneys General with respect to five state law claims and denied the motion with respect to the remaining claims. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in these matters. In October 2020, Broadband iTV, Inc. filed a complaint against Amazon.com, Inc., Amazon.com Services LLC, and Amazon Web Services, Inc. in the United States District Court for the Western District of Texas. The complaint alleges, among other things, that certain Amazon Prime Video features and services infringe U.S. Patent Nos. 9,648,388, 10,546,750, and 10,536,751, each entitled “Video-On-Demand Content Delivery System for Providing Video-On-Demand Services to TV Services Subscribers”; 10,028,026, entitled “System for Addressing On-Demand TV Program Content on TV Services Platform of a Digital TV Services Provider”; and 9,973,825, entitled “Dynamic Adjustment of Electronic Program Guide Displays Based on Viewer Preferences for Minimizing Navigation in VOD Program Selection.” The complaint seeks an unspecified amount of damages. In April 2022, Broadband iTV alleged in its damages report that in the event of a finding of liability Amazon could be subject to $ 166 million to $ 986 million in damages. In September 2022, the district court granted summary judgment, holding that the patents are invalid. In October 2022, Broadband iTV filed a notice of appeal. In September 2024, the United States Court of Appeals for the Federal Circuit affirmed the district court’s judgment. This decision is subject to appeal. We dispute the allegations of wrongdoing and will continue to defend ourselves vigorously in this matter. In July 2021, the Luxembourg National Commission for Data Protection (the “CNPD”) issued a decision against Amazon Europe Core S.à r.l. claiming that Amazon’s processing of personal data did not comply with the EU General Data Protection Regulation. The decision imposes a fine of € 746 million and corresponding practice revisions. We believe the CNPD’s decision to be without merit and intend to defend ourselves vigorously in this matter. In December 2021, the Italian Competition Authority (the “ICA”) issued a decision against Amazon Services Europe S.à r.l., Amazon Europe Core S.à r.l., Amazon EU S.à r.l., Amazon Italia Services S.r.l., and Amazon Italia Logistica S.r.l. claiming that certain of our marketplace and logistics practices in Italy infringe EU competition rules. The decision imposes remedial actions and a fine of € 1.13 billion, which we have paid and will seek to recover pending conclusion of all appeals. We believe the ICA’s decision to be without merit and intend to defend ourselves vigorously in this matter. Beginning in October 2023, Nokia Technologies Oy and related entities filed complaints alleging infringement of patents related to video-related technologies against Amazon.com, Inc. and related entities in multiple courts in the United States, India, the United Kingdom, Germany, and Brazil, the Unified Patent Court of the European Union, and the United States International Trade Commission. The complaints allege, among other things, that certain Amazon Prime Video services and features of Amazon devices carrying the Prime Video app infringe Nokia’s patents; some of the complaints additionally allege infringement by Freevee, Twitch, and Amazon voice assistants. The complaints seek, among other things, injunctive relief and, in some cases, unspecified money damages, enhanced damages, attorneys’ fees, costs, interest, and declaratory relief. These matters are at various procedural stages, with preliminary and final injunctions issued in certain instances. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in these matters. In addition, we are regularly subject to claims, li tigation, and other proceedings, including potential regulatory proceedings, involving patent and other intellectual property matters, taxes, labor and employment, competition and antitrust, privacy and data protection, consumer protection, commercial disputes, goods and services offered by us and by third parties, and other matters. The outcomes of our legal proceedings and other contingencies are inherently unpredictable, subject to significant uncertainties, and could be material to our operating results and cash flows for a particular period. We evaluate, on a regular basis, developments in our legal proceedings and other contingencies that could affect the amount of liability, including amounts in excess of any previous accruals and reasonably possible losses disclosed, and make adjustments and changes to our accruals and disclosures as appropriate. For the matters we disclose that do not include an estimate of the amount of loss or range of losses, such an estimate is not possible or is immaterial, and we may be unable to estimate the possible loss or range of losses that could potentially result from the application of non-monetary remedies. Until the final resolution of such matters, if any of our estimates and assumptions change or prove to have been incorrect, we may experience losses in excess of the 60 Table of Contents amounts recorded, which could have a material effect on our business, consolidated financial position, results of operations, or cash flows. See also “Note 9 — Income Taxes.” Note 8 — STOCKHOLDERS’ EQUITY Preferred Stock We have authorized 500 million shares of $ 0.01 par value preferred stock. No preferred stock was outstanding for any year presented. Common Stock Common shares outstanding plus shares underlying outstanding stock awards totaled 10.6 billion, 10.8 billion, and 10.9 billion, as of December 31, 2022, 2023, and 2024. These totals include all vested and unvested stock awards outstanding, including those awards we estimate will be forfeited. Stock Repurchase Activity In March 2022, the Board of Directors authorized a program to repurchase up to $ 10.0 billion of our common stock, with no fixed expiration. We repurchased 46.2 million shares of our common stock for $ 6.0 billion in 2022. There were no repurchases of common stock in 2023 or 2024. As of December 31, 2024, we have $ 6.1 billion remaining under the repurchase program. Stock Award Plans Employees vest in restricted stock unit awards over the corresponding service term, generally between two and five years . The majority of restricted stock unit awards are granted at the date of hire or in Q2 as part of the annual compensation review and primarily vest semi-annually in Q2 and Q4 of the relevant compensation year. Stock Award Activity Stock-based compensation expense is as follows (in millions): Year Ended December 31, 2022 2023 2024 Cost of sales $ 757 $ 836 $ 838 Fulfillment 2,745 3,090 2,973 Technology and infrastructure 10,621 13,434 12,150 Sales and marketing 3,875 4,623 4,084 General and administrative 1,623 2,040 1,966 Total stock-based compensation expense (1) $ 19,621 $ 24,023 $ 22,011 ___________________ (1) The related tax benefits were $ 4.3 billion, $ 5.4 billion, and $ 5.0 billion for 2022, 2023, and 2024. 61 Table of Contents The following table summarizes our restricted stock unit activity (in millions): Number of Units Weighted Average Grant-Date Fair Value Outstanding as of January 1, 2022 279.9 $ 134 Units granted 262.8 142 Units vested ( 113.3 ) 114 Units forfeited ( 45.0 ) 143 Outstanding as of December 31, 2022 384.4 144 Units granted 218.1 106 Units vested ( 139.9 ) 143 Units forfeited ( 56.8 ) 135 Outstanding as of December 31, 2023 405.8 125 Units granted 126.9 183 Units vested ( 209.7 ) 132 Units forfeited ( 39.9 ) 133 Outstanding as of December 31, 2024 283.1 145 Scheduled vesting for outstanding restricted stock units as of December 31, 2024, is as follows (in millions): Year Ended 2025 2026 2027 2028 2029 Thereafter Total Scheduled vesting — restricted stock units 146.0 88.5 34.3 11.5 1.4 1.4 283.1 As of December 31, 2024, there was $ 16.2 billion of net unrecognized compensation cost related to unvested stock-based compensation arrangements. This compensation is recognized on an accelerated basis with more than half of the compensation expected to be expensed in the next twelve months, and has a remaining weighted-average recognition period of 1.0 year. The estimated forfeiture rate as of December 31, 2022, 2023, and 2024 was 26.5 %, 26.1 %, and 25.6 %. During 2022, 2023, and 2024, the fair value of restricted stock units that vested was $ 12.8 billion, $ 17.6 billion, and $ 39.6 billion. Common Stock Available for Future Issuance As of December 31, 2024, common stock available for future issuance to employees is 1.5 billion shares. Note 9 — INCOME TAXES In 2022, 2023, and 2024, we recorded a net tax provision (benefit) of $( 3.2 ) billion, $ 7.1 billion, and $ 9.3 billion. Our U.S. taxable income is reduced by accelerated depreciation deductions and increased by the impact of capitalized research and development expenses. Cash paid for income taxes, net of refunds, was $ 6.0 billion, $ 11.2 billion, and $ 12.3 billion for 2022, 2023, and 2024. Certain foreign subsidiary earnings and losses are subject to current U.S. taxation and the subsequent repatriation of those earnings is not subject to tax in the U.S. The U.S. tax rules also provide for enhanced accelerated depreciation deductions by allowing us to expense a portion of qualified property, primarily equipment. These enhanced deductions are scheduled to phase out annually from 2023 through 2026. Our federal tax provision included accelerated depreciation deductions for 2022, 2023, and 2024. Effective January 1, 2022, research and development expenses are required to be capitalized and amortized for U.S. tax purposes. 62 Table of Contents The components of the provision (benefit) for income taxes, net are as follows (in millions): Year Ended December 31, 2022 2023 2024 U.S. Federal: Current $ 2,175 $ 8,652 $ 9,039 Deferred ( 6,686 ) ( 5,505 ) ( 4,101 ) Total ( 4,511 ) 3,147 4,938 U.S. State: Current 1,074 2,158 2,109 Deferred ( 1,302 ) ( 498 ) ( 453 ) Total ( 228 ) 1,660 1,656 International: Current 1,682 2,186 2,765 Deferred ( 160 ) 127 ( 94 ) Total 1,522 2,313 2,671 Provision (benefit) for income taxes, net $ ( 3,217 ) $ 7,120 $ 9,265 U.S. and international components of income (loss) before income taxes are as follows (in millions): Year Ended December 31, 2022 2023 2024 U.S. $ ( 8,225 ) $ 32,328 $ 61,947 International 2,289 5,229 6,667 Income (loss) before income taxes $ ( 5,936 ) $ 37,557 $ 68,614 The items accounting for differences between income taxes computed at the federal statutory rate and the provision (benefit) recorded for income taxes are as follows (in millions): Year Ended December 31, 2022 2023 2024 Income taxes computed at the federal statutory rate $ ( 1,246 ) $ 7,887 $ 14,409 Effect of: Tax impact of foreign earnings and losses ( 370 ) 594 199 State taxes, net of federal benefits ( 173 ) 1,307 1,306 Tax credits ( 1,006 ) ( 2,362 ) ( 2,805 ) Stock-based compensation (1) 612 1,047 ( 1,688 ) Foreign income deduction (2) ( 1,258 ) ( 1,429 ) ( 2,379 ) Other, net 224 76 223 Total $ ( 3,217 ) $ 7,120 $ 9,265 ___________________ (1) Includes non-deductible stock-based compensation and excess tax benefits or shortfalls from stock-based compensation. Our tax provision includes $ 33 million and $ 519 million of tax shortfalls from stock-based compensation for 2022 and 2023, and $ 2.8 billion of excess tax benefits from stock-based compensation for 2024. (2) U.S. companies are eligible for a deduction that lowers the effective tax rate on certain foreign income. This regime is referred to as the Foreign-Derived Intangible Income deduction and is dependent on the amount of our U.S. taxable income. We recorded a provision for income taxes in 2023 as compared to an income tax benefit in 2022 primarily due to an increase in pretax income, a decrease in the tax impact of foreign earnings and losses driven by a decline in the favorable effects of corporate restructuring transactions, and an increase in tax shortfalls from stock-based compensation. This was partially offset by an increase in federal research and development credits, which included approximately $ 600 million of tax benefit recorded in 2023 related to a change in the estimated qualifying expenditures associated with our 2022 U.S. federal R&D credit. Our provision for income taxes in 2024 was higher than in 2023 primarily due to an increase in pretax income, partially offset by an increase in excess tax benefits from stock-based compensation and an increase in our foreign income deduction. 63 Table of Contents We intend to invest substantially all of our foreign subsidiary earnings, as well as our capital in our foreign subsidiaries, indefinitely outside of the U.S. in those jurisdictions in which we would incur significant, additional costs upon repatriation of such amounts. Deferred income tax assets and liabilities are as follows (in millions): December 31, 2023 2024 Deferred tax assets (1): Loss carryforwards U.S. - Federal/States $ 610 $ 692 Loss carryforwards - Foreign 2,796 2,687 Accrued liabilities, reserves, and other expenses 3,751 4,254 Stock-based compensation 5,279 4,089 Depreciation and amortization 1,114 1,133 Operating lease liabilities 19,922 20,921 Capitalized research and development 14,800 22,701 Other items 745 1,688 Tax credits 1,582 1,773 Total gross deferred tax assets 50,599 59,938 Less valuation allowances (2) ( 4,811 ) ( 4,893 ) Deferred tax assets, net of valuation allowances 45,788 55,045 Deferred tax liabilities: Depreciation and amortization ( 12,454 ) ( 16,240 ) Operating lease assets ( 18,648 ) ( 19,517 ) Other items ( 1,489 ) ( 3,323 ) Net deferred tax assets (liabilities), net of valuation allowances $ 13,197 $ 15,965 ___________________ (1) Deferred tax assets are presented after tax effects and net of tax contingencies. (2) Relates primarily to deferred tax assets that would only be realizable upon the generation of net income in certain foreign taxing jurisdictions or future capital gains, as well as tax credits. Our valuation allowances primarily relate to foreign deferred tax assets, including substantially all of our foreign net operating loss carryforwards as of December 31, 2024. Our foreign net operating loss carryforwards for income tax purposes as of December 31, 2024 were approximately $ 9.9 billion before tax effects and certain of these amounts are subject to annual limitations under applicable tax law. If not utilized, a portion of these losses will begin to expire in 2025. Income Tax Contingencies We are subject to income taxes in the U.S. (federal and state) and numerous foreign jurisdictions. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. We establish reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when we believe that certain positions might be challenged despite our belief that our tax return positions are fully supportable. We adjust these reserves in light of changing facts and circumstances, such as the outcome of tax audits. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. 64 Table of Contents The reconciliation of our income tax contingencies is as follows (in millions): December 31, 2022 2023 2024 Gross tax contingencies – January 1 $ 3,242 $ 4,002 $ 5,228 Gross increases to tax positions in prior periods 274 440 154 Gross decreases to tax positions in prior periods ( 172 ) ( 38 ) ( 129 ) Gross increases to current period tax positions 706 1,009 1,392 Settlements with tax authorities ( 20 ) ( 106 ) ( 9 ) Lapse of statute of limitations ( 28 ) ( 79 ) ( 151 ) Gross tax contingencies – December 31 (1) $ 4,002 $ 5,228 $ 6,485 ___________________ (1) As of December 31, 2024, we had approximately $ 6.5 billion of income tax contingencies of which $ 4.4 billion, if fully recognized, would decrease our effective tax rate. As of December 31, 2023 and 2024, we had accrued interest and penalties, net of federal income tax benefit, related to tax contingencies of $ 194 million and $ 316 million. Interest and penalties, net of federal income tax benefit, recognized for the years ended December 31, 2022, 2023, and 2024 were $( 7 ) million, $ 91 million, and $ 121 million. We are under examination, or may be subject to examination, by the Internal Revenue Service for the calendar year 2016 and thereafter. These examinations may lead to ordinary course adjustments or proposed adjustments to our taxes or our net operating losses with respect to years under examination as well as subsequent periods. We are also subject to taxation in various states and foreign jurisdictions including China, France, Germany, India, Japan, Luxembourg, and the United Kingdom. We are under, or may be subject to, audit or examination and additional assessments by the relevant authorities in respect of these particular jurisdictions primarily for 2011 and thereafter. We are currently disputing tax assessments in multiple jurisdictions, including with respect to the allocation and characterization of income. In September 2022, the Luxembourg tax authority (“LTA”) denied the tax basis of certain intangible assets that we distributed from Luxembourg to the U.S. in 2021. When we are assessed by the LTA, we will need to remit taxes related to this matter. We believe the LTA’s position is without merit, we intend to defend ourselves vigorously in this matter, and we expect to recoup taxes paid. The Indian tax authority (“ITA”) has asserted that tax applies to cloud services fees paid to Amazon in the U.S. We will need to remit taxes related to this matter until it is resolved, which payments could be significant in the aggregate. We believe the ITA’s position is without merit, we are defending our position vigorously, and we expect to recoup taxes paid. If this matter is adversely resolved, we could recognize significant additional tax expense, including for taxes previously paid. Changes in tax laws, regulations, administrative practices, principles, and interpretations may impact our tax contingencies. Due to various factors, including the inherent complexities and uncertainties of the judicial, administrative, and regulatory processes in certain jurisdictions, the timing of the resolution of income tax controversies is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ from the amounts accrued. It is reasonably possible that within the next twelve months we will receive additional assessments by various tax authorities or possibly reach resolution of income tax controversies in one or more jurisdictions. These assessments or settlements could result in changes to our contingencies related to positions on prior years’ tax filings. The actual amount of any change could vary significantly depending on the ultimate timing and nature of any settlements. We cannot currently provide an estimate of the range of possible outcomes. Note 10 — SEGMENT INFORMATION We have organized our operations into three segments: North America, International, and AWS. We allocate to segment results the operating expenses “Fulfillment,” “Technology and infrastructure,” “Sales and marketing,” and “General and administrative” based on usage, which is generally reflected in the segment in which the costs are incurred. The majority of technology costs recorded in “Technology and infrastructure” are incurred in the U.S. and are included in our North America and AWS segments. The majority of infrastructure costs recorded in “Technology and infrastructure” are allocated to the AWS segment based on usage. There are no internal revenue transactions between our reportable segments. Our chief operating decision maker (“CODM”) is our President and Chief Executive Officer. Our CODM regularly reviews consolidated net sales, consolidated operating expenses, and consolidated operating income (loss) by segment. Amounts included in consolidated operating expenses include “Cost of sales,” “Fulfillment,” “Technology and infrastructure,” “Sales and marketing,” “General and administrative,” and “Other operating expense (income), net.” Our CODM manages our business primarily by reviewing consolidated results by segment on a quarterly basis, and using those results along with forecasts and other non-financial information in our annual budgeting process. 65 Table of Contents North America The North America segment primarily consists of amounts earned from retail sales of consumer products (including from sellers) and advertising and subscription services through North America-focused online and physical stores. This segment includes export sales from these online stores. International The International segment primarily consists of amounts earned from retail sales of consumer products (including from sellers) and advertising and subscription services through internationally-focused online stores. This segment includes export sales from these internationally-focused online stores (including export sales from these online stores to customers in the U.S., Mexico, and Canada), but excludes export sales from our North America-focused online stores. AWS The AWS segment consists of amounts earned from global sales of compute, storage, database, and other services for start-ups, enterprises, government agencies, and academic institutions. Information on reportable segments and reconciliation to consolidated net income (loss) is as follows (in millions): Year Ended December 31, 2022 2023 2024 North America Net sales $ 315,880 $ 352,828 $ 387,497 Operating expenses 318,727 337,951 362,530 Operating income (loss) $ ( 2,847 ) $ 14,877 $ 24,967 International Net sales $ 118,007 $ 131,200 $ 142,906 Operating expenses 125,753 133,856 139,114 Operating income (loss) $ ( 7,746 ) $ ( 2,656 ) $ 3,792 AWS Net sales $ 80,096 $ 90,757 $ 107,556 Operating expenses 57,255 66,126 67,722 Operating income $ 22,841 $ 24,631 $ 39,834 Consolidated Net sales $ 513,983 $ 574,785 $ 637,959 Operating expenses 501,735 537,933 569,366 Operating income 12,248 36,852 68,593 Total non-operating income (expense) ( 18,184 ) 705 21 Benefit (provision) for income taxes 3,217 ( 7,120 ) ( 9,265 ) Equity-method investment activity, net of tax ( 3 ) ( 12 ) ( 101 ) Net income (loss) $ ( 2,722 ) $ 30,425 $ 59,248 66 Table of Contents Net sales by groups of similar products and services, which also have similar economic characteristics, is as follows (in millions): Year Ended December 31, 2022 2023 2024 Net Sales: Online stores (1) $ 220,004 $ 231,872 $ 247,029 Physical stores (2) 18,963 20,030 21,215 Third-party seller services (3) 117,716 140,053 156,146 Advertising services (4) 37,739 46,906 56,214 Subscription services (5) 35,218 40,209 44,374 AWS 80,096 90,757 107,556 Other (6) 4,247 4,958 5,425 Consolidated $ 513,983 $ 574,785 $ 637,959 ___________________ (1) Includes product sales and digital media content where we record revenue gross. We leverage our retail infrastructure to offer a wide selection of consumable and durable goods that includes media products available in both a physical and digital format, such as books, videos, games, music, and software. These product sales include digital products sold on a transactional basis. Digital media content subscriptions that provide unlimited viewing or usage rights are included in “Subscription services.” (2) Includes product sales where our customers physically select items in a store. Sales to customers who order goods online for delivery or pickup at our physical stores are included in “Online stores.” (3) Includes commissions and any related fulfillment and shipping fees, and other third-party seller services. (4) Includes sales of advertising services to sellers, vendors, publishers, authors, and others, through programs such as sponsored ads, display, and video advertising. (5) Includes annual and monthly fees associated with Amazon Prime memberships, as well as digital video, audiobook, digital music, e-book, and other non-AWS subscription services. (6) Includes sales related to various other offerings, such as healthcare services, certain licensing and distribution of video content, and shipping services, and our co-branded credit card agreements. Net sales are attributed to countries primarily based on country-focused online and physical stores or, for AWS purposes, the selling entity. Net sales attributed to countries that represent a significant portion of consolidated net sales are as follows (in millions): Year Ended December 31, 2022 2023 2024 United States $ 356,113 $ 395,637 $ 438,015 Germany 33,598 37,588 40,856 United Kingdom 30,074 33,591 37,855 Japan 24,396 26,002 27,401 Rest of world 69,802 81,967 93,832 Consolidated $ 513,983 $ 574,785 $ 637,959 67 Table of Contents Total segment assets exclude corporate assets, such as cash and cash equivalents, marketable securities, other long-term investments, corporate facilities, goodwill and other acquired intangible assets, and tax assets. Technology infrastructure assets are allocated among the segments based on usage, with the majority allocated to the AWS segment. Total segment assets reconciled to consolidated amounts are as follows (in millions): December 31, 2022 2023 2024 North America (1) $ 185,268 $ 196,029 $ 210,120 International (1) 64,666 69,718 69,487 AWS (2) 88,491 108,533 155,953 Corporate 124,250 153,574 189,334 Consolidated $ 462,675 $ 527,854 $ 624,894 ___________________ (1) North America and International segment assets primarily consist of property and equipment, operating leases, inventory, accounts receivable, and digital video and music content. (2) AWS segment assets primarily consist of property and equipment, accounts receivable, and operating leases. Property and equipment, net by segment is as follows (in millions): December 31, 2022 2023 2024 North America $ 90,076 $ 93,632 $ 103,041 International 23,347 24,357 25,618 AWS 60,324 72,701 110,683 Corporate 12,968 13,487 13,323 Consolidated $ 186,715 $ 204,177 $ 252,665 Total net additions to property and equipment include technology infrastructure assets, which are allocated among the segments based on usage, with the majority allocated to the AWS segment. Total net additions to property and equipment include the effect of non-cash activity such as property and equipment acquired but not yet paid for. Total net additions to property and equipment are as follows (in millions): Year Ended December 31, 2022 2023 2024 North America (1) $ 23,682 $ 17,529 $ 24,348 International (1) 6,711 4,144 6,643 AWS (2) 27,755 24,843 53,267 Corporate 2,688 1,828 1,494 Consolidated $ 60,836 $ 48,344 $ 85,752 ___________________ (1) Includes property and equipment added under finance leases of $ 422 million, $ 525 million, and $ 616 million in 2022, 2023, and 2024, and under build-to-suit lease arrangements of $ 3.2 billion, $ 356 million, and $ 89 million in 2022, 2023, and 2024. (2) Includes property and equipment added under finance leases of $ 253 million, $ 117 million, and $ 238 million in 2022, 2023, and 2024, and under build-to-suit lease arrangements of $ 20 million, $ 1 million, and $ 8 million in 2022, 2023, and 2024. U.S. property and equipment, net and operating leases were $ 180.0 billion, $ 196.0 billion, and $ 241.6 billion, as of December 31, 2022, 2023, and 2024, and non-U.S. property and equipment, net and operating leases were $ 72.9 billion, $ 80.7 billion, and $ 87.2 billion as of December 31, 2022, 2023, and 2024. Except for the U.S., property and equipment, net and operating leases in any single country were less than 10% of consolidated property and equipment, net and operating leases. 68 Table of Contents Depreciation and amortization expense on property and equipment, including corporate property and equipment, are allocated to all segments based on usage. Total depreciation and amortization expense, by segment, is as follows (in millions): Year Ended December 31, 2022 2023 2024 North America $ 11,565 $ 13,678 $ 14,285 International 3,483 4,016 4,462 AWS 9,876 12,531 13,320 Consolidated $ 24,924 $ 30,225 $ 32,067 69 Table of Contents Item 9. Changes in and Disagreements with Accountants On Accounting and Financial Disclosure None.