We have prepared the accompanying consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. These consolidated financial statements are unaudited and, in our opinion, include all adjustments, consisting of normal recurring adjustments and accruals necessary for a fair presentation of our consolidated cash flows, operating results, and balance sheets for the periods presented. Operating results for the periods presented are not necessarily indicative of the results that may be expected for 2023 due to seasonal and other factors. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted in accordance with the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes in Item 8 of Part II, “Financial Statements and Supplementary Data,” of our 2022 Annual Report on Form 10-K.

Certain prior period amounts have been reclassified to conform to the current period presentation. “Other operating expense (income), net” was reclassified into “Depreciation and amortization of property and equipment and capitalized content costs, operating lease assets, and other” on our consolidated statements of cash flows.

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 health care services and seller lending financing activities. Intercompany balances and transactions between consolidated entities are eliminated.

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.

For the nine months ended September 30, 2023, we recorded approximately $500 million of estimated severance costs primarily related to planned role eliminations. These charges were recorded primarily in “Technology and infrastructure,” “Sales and marketing,” and “General and administrative” on our consolidated statements of operations and included approximately $280 million recorded within our AWS segment.

For the nine months ended September 30, 2022 and 2023, we recorded approximately $350 million and $420 million of impairments of property and equipment and operating leases primarily related to physical stores in 2022 and fulfillment network facilities and physical stores in 2023. These charges were recorded in “Other operating expense (income), net” on our consolidated statements of operations and primarily impacted our North America segment. For the nine months ended September 30, 2022 and 2023, we also recorded expenses of approximately $300 million and $200 million primarily in “Fulfillment” in 2022 and “Cost of sales” and “Fulfillment” in 2023, on our consolidated statements of operations primarily relating to terminating contracts for certain leases not yet commenced as well as other purchase commitments, which primarily impacted our North America segment.


	Three Months Ended September 30,				Nine Months Ended September 30,				Twelve Months Ended September 30,
	2022		2023		2022		2023		2022		2023
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest on debt, net of capitalized interest	$	304	$	465	$	932	$	1,821	$	1,299	$	2,450
Cash paid for operating leases	1,813		2,692		6,268		7,687		7,961		10,052
Cash paid for interest on finance leases	88		76		290		234		404		318
Cash paid for interest on financing obligations	39		50		152		150		189		205
Cash paid for income taxes, net of refunds	742		2,628		4,340		6,982		4,674		8,677
Assets acquired under operating leases	6,755		3,345		14,031		11,075		19,839		15,844
Property and equipment acquired under finance leases, net of remeasurements and modifications	131		183		358		431		1,966		748
Property and equipment recognized during the construction period of build-to-suit lease arrangements	526		93		2,877		308		4,847		618
Property and equipment derecognized after the construction period of build-to-suit lease arrangements, with the associated leases recognized as operating	2,195		492		3,307		1,212		3,363		3,063

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.


	Three Months Ended September 30,		Nine Months Ended September 30,
	2022	2023	2022	2023
Shares used in computation of basic earnings per share	10,191	10,322	10,178	10,286
Total dilutive effect of outstanding stock awards	140	236	—	166
Shares used in computation of diluted earnings per share	10,331	10,558	10,178	10,452


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2023		2022		2023
Marketable equity securities valuation gains (losses)	$	1,039	$	1,196	$	(11,528)	$	1,015
Equity warrant valuation gains (losses)	(170)		(27)		(1,606)		(188)
Upward adjustments relating to equity investments in private companies	11		7		76		33
Foreign currency gains (losses)	(103)		(94)		(206)		(15)
Other, net	(18)		(51)		(92)		(196)
Total other income (expense), net	759		1,031		(13,356)		649

Included in other income (expense), net is a marketable equity securities valuation gain (loss) of $1.1 billion and $1.2 billion in Q3 2022 and Q3 2023, and $(10.4) billion and $926 million for the nine months ended September 30, 2022 and 2023, 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 September 30, 2023, we held 158 million shares of Rivian’s Class A common stock, representing an approximate 17% ownership interest, and an approximate 15% 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 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 $2.9 billion and $3.8 billion as of December 31, 2022 and September 30, 2023. 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.

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 $2.8 billion and $2.6 billion as of December 31, 2022 and September 30, 2023.

Included in “Accounts receivable, net and other” on our consolidated balance sheets are receivables primarily related to customers, vendors, and sellers, as well as prepaid expenses and other current assets. As of December 31, 2022 and September 30, 2023, customer receivables, net, were $26.6 billion and $28.1 billion, vendor receivables, net, were $6.9 billion and $6.3 billion, seller receivables, net, were $1.3 billion and $1.2 billion, and other receivables, net, were $3.1 billion and $2.5 billion. Seller receivables are amounts due from sellers related to our seller lending program, which provides funding to sellers primarily to procure inventory. Prepaid expenses and other current assets were $4.5 billion and $5.3 billion as of December 31, 2022 and September 30, 2023.

The total capitalized costs of video, which is primarily released content, and music as of December 31, 2022 and September 30, 2023 were $16.7 billion and $18.0 billion. The weighted average remaining life of our capitalized video content is 3.6 years. Total video and music expense was $4.2 billion and $4.6 billion in Q3 2022 and Q3 2023, and $11.4 billion and $13.0 billion for the nine months ended September 30, 2022 and 2023.

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, 2022 was $16.1 billion, of which $10.9 billion was recognized as revenue during the nine months ended September 30, 2023. Included in “Other long-term liabilities” on our consolidated balance sheets was $2.9 billion and $2.7 billion of unearned revenue as of December 31, 2022 and September 30, 2023.

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 consolidated financial statements. For contracts with original terms that exceed one year, those commitments not yet recognized were $133.0 billion as of September 30, 2023. The weighted-average remaining life of our long-term contracts is 3.5 years. However, the amount and timing of revenue recognition is largely driven by customer usage, which can extend beyond the original contractual term.

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 health care 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.

Pro forma results of operations have not been presented because the effects of the One Medical acquisition were not material to our consolidated results of operations. Acquisition-related costs were expensed as incurred and were not significant.

In August 2022, we entered into an agreement to acquire iRobot Corporation, as amended in July 2023, for approximately $1.7 billion, including its debt, subject to customary closing conditions. We expect to fund this acquisition with cash on hand.