Amazon (AMZN) 10-K risk factor changes: FY2021 vs FY2020

In addition to the effects of the COVID-19 pandemic and resulting global disruptions on our business and operations discussed in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in the risk factors below, [removed: additional or unforeseen effects from] the [removed: COVID-19 pandemic and the] global economic climate [added: and additional or unforeseen circumstances, developments, or events] may give rise to or amplify many of the risks discussed below.

- restrictions on sales or distribution of certain products or services and uncertainty regarding liability for products, services, and content, including uncertainty as a result of less Internet-friendly legal systems, local laws, lack of legal [removed: precedent, and varying rules, regulations, and practices regarding the physical and digital distribution of media products and enforcement of intellectual property rights;]

- laws and regulations regarding privacy, data [added: use, data] protection, data security, network security, consumer protection, payments, advertising, and restrictions on pricing or discounts;

As international physical, e-commerce, and omnichannel [removed: retail] [added: retail, cloud services,] and other services grow, competition will intensify, including through adoption of evolving business models.

Demand for our products and services can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, or unforeseeable events, such as in response to natural or [removed: man-made disasters,] [added: human-caused disasters (including public health crises) or] extreme [removed: weather,] [added: weather (including as a result of climate change),] or geopolitical events.

[removed: In addition, we may be unable] to adequately staff our fulfillment network and customer service centers during these peak periods and delivery and other fulfillment companies and customer service co-sourcers may be unable to meet the seasonal demand.

We also hold cash equivalents and/or marketable securities in foreign currencies [removed: including Euros,] [added: such as] British Pounds, [added: Canadian Dollars, Euros,] and [removed: Japanese Yen.]

- increases in the prices of fuel and gasoline, [removed: as well as increases in the prices of other] energy [removed: products and] [added: products,] commodities like paper and packing supplies and hardware [added: products, and technology infrastructure] products;

- disruptions from natural or [removed: man-made disasters,] [added: human-caused disasters (including public health crises) or] extreme [removed: weather,] [added: weather (including as a result of climate change),] geopolitical events and security issues (including terrorist attacks and armed hostilities), labor or trade disputes, and similar events.

Failures to adequately predict customer demand or otherwise optimize and operate our fulfillment network and data centers successfully from time to time result in excess or insufficient fulfillment or data center capacity, [added: service interruptions,] increased costs, and impairment charges, any of which could materially harm our business.

In addition, failure to optimize inventory [added: or staffing] in our fulfillment network increases our net shipping cost by requiring long-zone or partial shipments.

[removed: The] [added: An] inability to negotiate acceptable terms with these companies or performance [removed: problems] [added: problems, staffing limitations,] or other difficulties experienced by these companies or by our own transportation [removed: systems] [added: systems, including as a result of labor market constraints and related costs,] could negatively impact our operating results and customer experience.

In addition, our ability to receive inbound inventory efficiently and ship completed orders to customers also may be negatively affected by natural or [removed: man-made disasters,] [added: human-caused disasters (including public health crises) or] extreme [removed: weather,] [added: weather (including as a result of climate change),] geopolitical events and security issues, labor or trade disputes, and similar events.

Because we collect, process, store, and transmit large amounts of data, including confidential, sensitive, proprietary, and business and personal information, failure to prevent or mitigate data loss, theft, misuse, or other security breaches or vulnerabilities affecting our or our vendors’ or customers’ technology, products, and systems, could: expose us or our customers to a risk of loss, disclosure, or misuse of such information; adversely affect our operating results; result in litigation, liability, or regulatory action (including under laws related to privacy, data [added: use, data] protection, data security, network security, and consumer protection); deter customers or sellers from using our [removed: stores] [added: stores, products,] and services; and otherwise harm our business and reputation.

Some of our systems have experienced past security breaches, and, although they did not have a material adverse effect on our operating results, there can be no assurance [removed: of a similar result in the future.][added: that future incidents will not have material adverse effects on our operations or financial results.]

We experience occasional system interruptions and delays that make our websites and services unavailable or slow to respond and prevent us from efficiently accepting or fulfilling orders or providing services to [added: customers and] third parties, which may reduce our net sales and the attractiveness of our products and services.

Our computer and communications systems and operations in the past have been, or in the future could be, damaged or interrupted due to events such as natural or [removed: man-made disasters,] [added: human-caused disasters (including public health crises) or] extreme [removed: weather,] [added: weather (including as a result of climate change),] geopolitical events and security issues (including terrorist attacks and armed hostilities), computer viruses, physical or electronic break-ins, [added: operational failures,] and similar events or disruptions.

We depend on our senior management and other key personnel, [removed: particularly Jeffrey P.][added: including our President and CEO.]

[removed: Competition for qualified personnel] [added: For example, we experience significant competition] in the technology [removed: industry has historically been intense,] [added: industry,] particularly for software engineers, computer scientists, and other technical staff.

The loss of any of our executive officers or other key [removed: employees] [added: employees, the failure to successfully transition key roles,] or the inability to hire, train, retain, and manage qualified personnel, could harm our business.

Decisions by our current suppliers to limit or stop selling or licensing merchandise, content, components, or services to us on acceptable terms, or delay delivery, including as a result of one or more supplier bankruptcies due to poor economic conditions, as a result of natural [removed: disasters,] or [added: human-caused disasters (including public health crises), or] for other reasons, may result in our being unable to procure alternatives from other suppliers in a timely and efficient manner and on acceptable terms, or at all.

We provide physical, e-commerce, and omnichannel [removed: retail] [added: retail, cloud services,] and other services to businesses through commercial agreements, strategic alliances, and business relationships.

Our present and future [removed: e-commerce services agreements, other] commercial agreements, [removed: and] strategic [removed: alliances] [added: alliances, and business relationships] create additional risks such as:

- for investments in which an investee’s financial performance is incorporated into our financial results, either in full or in part, [added: or investments for which we are required to file financial statements or provide financial information,] the dependence on the investee’s accounting, financial reporting, and similar systems, controls, and processes;

For existing and future payment options we offer to our customers, we currently are subject to, and may become subject to additional, regulations and compliance requirements (including obligations to implement enhanced authentication [added: processes that could result in significant costs and reduce the ease of use of our payments products), as well as fraud.]

We are also subject to or voluntarily comply with a number of other laws and regulations relating to payments, money laundering, international money transfers, privacy, data [added: use, data] protection, data security, network security, consumer protection, and electronic fund transfers.

These regulations and laws cover taxation, privacy, data [added: use, data] protection, data security, network security, consumer protection, pricing, content, copyrights, distribution, transportation, mobile communications, electronic device certification, electronic waste, energy consumption, environmental regulation, electronic contracts and other communications, competition, employment, trade and protectionist measures, web services, the provision of online payment services, registration, licensing, and information reporting [removed: requirements, unencumbered Internet access to our services or access to our facilities, the design and operation of websites, health, safety, and sanitation standards, the characteristics, legality, and quality of products and services, product labeling, the commercial operation of unmanned aircraft systems, and other matters.]

It is not clear how existing laws governing issues such as property ownership, libel, privacy, data [added: use, data] protection, data security, network security, and consumer protection apply to aspects of our operations such as the Internet, e-commerce, digital content, web services, electronic devices, advertising, and artificial [added: intelligence technologies and services.]

As an innovative company offering a wide range of consumer and business products and services around the world, we are regularly subject to actual and threatened claims, litigation, reviews, investigations, and other proceedings, including proceedings by governments and regulatory authorities, involving a wide range of issues, including patent and other intellectual property matters, taxes, labor and employment, competition and antitrust, privacy, data [added: use, data] protection, data security, network security, consumer protection, commercial disputes, goods and services offered by us and by third parties, and other matters.

[removed: These include new obligations to collect sales,] consumption, value added, or other taxes on online marketplaces and remote sellers, or other requirements that may result in liability for third party obligations.

For example, [removed: the European Union, certain member states, and other countries] [added: non-U.S. jurisdictions] have proposed or enacted taxes on online advertising and marketplace service revenues.

Our results of operations and cash flows could be adversely [removed: effected] [added: affected] by additional taxes [removed: of this nature] imposed on us prospectively or retroactively or additional taxes or penalties resulting from the failure to comply with any collection obligations or failure to provide information about our customers, suppliers, and other third parties for tax reporting purposes to various government agencies.

In addition, our sustainability initiatives may be unsuccessful for a variety of reasons, including if we are unable to realize the expected benefits of new technologies or if we do not successfully plan or execute new strategies, which could harm our business or damage our reputation.

precedent, and varying rules, regulations, and practices regarding the physical and digital distribution of media products and enforcement of intellectual property rights;

In addition, we may be unable

Japanese Yen.

- factors affecting our reputation or brand image (including any actual or perceived inability to achieve our goals or commitments, whether related to sustainability, customers, employees, or other topics);

- constrained labor markets, which increase our payroll costs;

For example, productivity across our fulfillment network currently is being affected by global supply chain constraints and constrained labor markets, which increase payroll costs and make it difficult to hire, train, and deploy a sufficient number of people to operate our fulfillment network as efficiently as we would like.

We are also subject to labor union efforts to organize groups of our employees from time to time and, if successful, those organizational efforts may decrease our operational flexibility, which could adversely affect our fulfillment network operating efficiency.

Competition for qualified personnel in the industries in which we operate, as well as senior management, has historically been intense.

In addition, changes we make to our current and future work environments may not meet the needs or expectations of our employees or may be perceived as less favorable compared to other companies’ policies, which could negatively impact our ability to hire and retain qualified personnel.

requirements, unencumbered Internet access to our services or access to our facilities, the design and operation of websites, health, safety, and sanitation standards, the characteristics, legality, and quality of products and services, product labeling, the commercial operation of unmanned aircraft systems, healthcare, and other matters.

For example, we face a number of open investigations based on claims that aspects of our operations violate competition rules, including aspects of Amazon’s European marketplace for sellers, particularly with respect to use of data, fulfillment services, and featured offers.

The media, political, and regulatory scrutiny we face, which may continue to increase, amplifies these risks.

These include new obligations to collect sales,

Proliferation of these or similar unilateral tax measures may continue unless broader international tax reform is implemented.

- factors affecting our reputation or brand image;

Bezos, our President, CEO, and Chairman.

processes that could result in significant costs and reduce the ease of use of our payments products), as well as fraud.

intelligence technologies and services.

For example, a number of regulators have opened investigations to assess whether aspects of our operations violate competition rules.

Actual results [added: and outcomes] could differ materially for a variety of reasons, including, among others, fluctuations in foreign exchange rates, changes in global economic conditions and customer spending, [added: inflation, labor market and global supply chain constraints,] world events, the rate of growth of the Internet, online commerce, and cloud services, the amount that Amazon.com invests in new business opportunities and the timing of those investments, the mix of products and services sold to customers, the mix of net sales derived from products as compared with services, the extent to which we owe income or other taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes of claims, litigation, government investigations, and other proceedings, fulfillment, sortation, delivery, and data center optimization, risks of inventory management, variability in demand, the degree to which we enter into, maintain, and develop commercial agreements, proposed and completed acquisitions and strategic transactions, payments risks, and risks of fulfillment throughput and productivity.

These risks and uncertainties, as well as other risks and uncertainties that could cause our actual results [added: or outcomes] to differ significantly from management’s expectations, are described in greater detail in Item 1A of Part I, “Risk Factors.”*

[added: *Our primary source of revenue is the sale of a wide range of products and services to customers.*] The products offered through our stores include merchandise and content we have purchased for resale and products offered by third-party sellers, and we also manufacture and sell electronic devices and produce media content.

Total shares outstanding plus outstanding stock awards were [removed: 512] [added: 518] million and [removed: 518] [added: 523] million as of December 31, [removed: 2019] [added: 2020] and [removed: 2020.][added: 2021.]

*Our financial reporting currency is the U.S. Dollar and changes in foreign exchange rates significantly affect our reported results and consolidated [removed: trends*.][added: trends.* For example, if the U.S. Dollar weakens year-over-year relative to currencies in our international locations, our consolidated net sales and operating expenses will be higher than if currencies had remained constant.]

Our Annual Report on Form 10-K for the year ended December 31, [removed: 2019] [added: 2020] includes a discussion and analysis of our financial condition and results of operations for the year ended December 31, [removed: 2018] [added: 2019] in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

As a measure of sensitivity, for every 1% of additional inventory valuation allowance as of December 31, [removed: 2020,] [added: 2021,] we would have recorded an additional cost of sales of approximately [removed: $270] [added: $370] million.

In addition, our actual and forecasted earnings are subject to change due to economic, political, and other [removed: conditions, such as the COVID-19 pandemic,] [added: conditions] and significant judgment is required in determining our ability to use our deferred tax assets.

| Operating activities | | | $ | [removed: 38,514] [added: 66,064] | | | | | $ | [removed: 66,064] [added: 46,327] | |

| Investing activities | | | [removed: (24,281)] [added: (59,611)] | | | | | | [removed: (59,611)] [added: (58,154)] | | |

| Financing activities | | | [removed: (10,066)] [added: (1,104)] | | | | | | [removed: (1,104)] [added: 6,291] | | |

Our principal sources of liquidity are cash flows generated from operations and our cash, cash equivalents, and marketable securities balances, which, at fair value, were [removed: $55.0] [added: $84.4] billion and [removed: $84.4] [added: $96.0] billion as of December 31, [removed: 2019] [added: 2020] and [removed: 2020.][added: 2021.]

Amounts held in foreign currencies were [removed: $15.3] [added: $23.5] billion and [removed: $23.5] [added: $22.7] billion as of December 31, [removed: 2019] [added: 2020] and [removed: 2020,] [added: 2021,] and were primarily [removed: Euros,] British Pounds, [removed: and] [added: Euros,] Japanese [removed: Yen.][added: Yen, and Canadian Dollars.]

Cash provided by (used in) operating activities was [removed: $38.5] [added: $66.1] billion and [removed: $66.1] [added: $46.3] billion in [removed: 2019] [added: 2020] and [removed: 2020.][added: 2021.]

[removed: The increase in operating cash flow in 2020, compared to the prior year, was] primarily due to [added: changes in working capital, partially offset by] the increase in net income, excluding non-cash [removed: expenses, and changes in working capital.][added: expenses.]

Cash provided by (used in) investing activities was [removed: $(24.3)] [added: $(59.6)] billion and [removed: $(59.6)] [added: $(58.2)] billion in [removed: 2019] [added: 2020] and [removed: 2020,] [added: 2021,] with the variability caused primarily by our decision to purchase or lease property and [removed: equipment,] [added: equipment] and purchases, [removed: maturities,] [added: sales,] and [removed: sales] [added: maturities] of marketable securities.

Cash capital expenditures were [removed: $12.7] [added: $35.0] billion, and [removed: $35.0] [added: $55.4] billion in [removed: 2019] [added: 2020] and [removed: 2020,] [added: 2021,] which primarily reflect investments in additional capacity to support our fulfillment operations and in support of continued business growth in technology infrastructure (the majority of which is to support AWS), which investments we expect to continue over time.

We made cash payments, net of acquired cash, related to acquisition and other investment activity of [removed: $2.5] [added: $2.3] billion and [removed: $2.3] [added: $2.0] billion in [removed: 2019] [added: 2020] and [removed: 2020.][added: 2021.]

Cash provided by (used in) financing activities was [removed: $(10.1)] [added: $(1.1)] billion and [removed: $(1.1)] [added: $6.3] billion in [removed: 2019] [added: 2020] and [removed: 2020.][added: 2021.]

Cash inflows from financing activities resulted from proceeds [removed: of] [added: from] short-term debt, and other and long-term-debt of [removed: $2.3] [added: $17.3] billion and [removed: $17.3] [added: $27.0] billion in [removed: 2019] [added: 2020] and [removed: 2020.][added: 2021.]

Cash outflows from financing activities resulted from payments of short-term debt, and other, long-term debt, finance leases, and financing obligations of [removed: $12.3] [added: $18.4] billion and [removed: $18.4] [added: $20.7] billion in [removed: 2019] [added: 2020] and [removed: 2020.][added: 2021.]

Property and equipment acquired under finance leases was [removed: $13.7] [added: $11.6] billion and [removed: $11.6] [added: $7.1] billion in [removed: 2019] [added: 2020] and [removed: 2020,] [added: 2021,] reflecting investments in support of continued business growth primarily due to investments in technology infrastructure for AWS.

We had no borrowings outstanding under the unsecured revolving credit [removed: facility (the “Credit Agreement”),] [added: facility,] $725 million of borrowings outstanding under the commercial paper [removed: program (the “Commercial Paper Program”),] [added: programs,] and [removed: $338] [added: $803] million of borrowings outstanding under our secured revolving credit facility (the “Credit Facility”) as of December 31, [removed: 2020.][added: 2021.]

As of December 31, [removed: 2020,] [added: 2021,] cash, cash equivalents, and marketable securities held by foreign subsidiaries were [removed: $17.2] [added: $7.6] billion.

Tax benefits relating to excess stock-based compensation deductions and accelerated depreciation deductions are reducing our U.S. taxable [removed: income, and all remaining federal tax credits, which were primarily related to the U.S. federal research and development credit, reduced our federal tax liability in 2020.][added: income.]

Our federal tax provision included the election of full expensing of qualified property for [removed: 2018 and] 2019 and a partial election for [removed: 2020.][added: 2020 and 2021.]

Cash taxes paid (net of refunds) were [removed: $881 million and] $1.7 billion [added: and $3.7 billion] for [removed: 2019] [added: 2020] and [removed: 2020.][added: 2021.]

As of December 31, [removed: 2019] [added: 2020] and [removed: 2020,] [added: 2021,] restricted cash, cash equivalents, and marketable securities were [removed: $321] [added: $257] million and [removed: $257] [added: $260] million.

See Item 8 of Part II, “Financial Statements and Supplementary Data — Note [added: 6 — Debt” and “Financial Statements and Supplementary Data — Note] 7 — Commitments and Contingencies” for additional discussion of our principal contractual commitments, as well as our pledged assets.

As reflected in the discussion below, [removed: the impact] [added: ongoing direct and indirect impacts] of the COVID-19 pandemic and actions taken in response to [removed: it] [added: them] had varying effects on our [removed: 2020] [added: 2021] results of [removed: operations.][added: operations, although some effects, including customer demand, are mitigating or becoming more difficult to isolate or quantify.]

[removed: However,] [added: Moreover,] it is not possible to determine the duration and scope of the pandemic, [removed: including any recurrence,] the [removed: actions taken in response to the pandemic, the] scale and rate of economic recovery from the pandemic, any ongoing effects on consumer demand and spending patterns, [added: supply chain disruptions, and labor availability and costs,] or [removed: other impacts] [added: the impact] of [added: other indirect factors that may be attributable to] the pandemic, and [removed: whether] [added: the extent to which] these or other currently unanticipated consequences of the pandemic are reasonably likely to materially affect our results of operations.

| North America | | | $ | [removed: 170,773] [added: 236,282] | | | | | $ | [removed: 236,282] [added: 279,833] | |

| International | | | [removed: 74,723] [added: 104,412] | | | | | | [removed: 104,412] [added: 127,787] | | |

| AWS | | | [removed: 35,026] [added: 45,370] | | | | | | [removed: 45,370] [added: 62,202] | | |

| Consolidated | | | $ | [removed: 280,522] [added: 386,064] | | | | | $ | [removed: 386,064] [added: 469,822] | |

| North America | | | [removed: 21] [added: 38] | | % | | | | [removed: 38] [added: 18] | | % |

| International | | | [removed: 13] [added: 40] | | | | | | [removed: 40] [added: 22] | | |

| AWS | | | [removed: 37] [added: 30] | | | | | | [removed: 30] [added: 37] | | |

| Consolidated | | | [removed: 20] [added: 38] | | | | | | [removed: 38] [added: 22] | | |

| International | | | [removed: 17] [added: 38] | | | | | | [removed: 38] [added: 20] | | |

| | | | 2020 | | | | | | 2021 | | |

The decrease in operating cash flow in 2021, compared to the prior year, was

Effective January 1, 2022, research and development expenses are required to be capitalized and amortized for U.S. tax purposes, which will delay the deductibility of these expenses and potentially increase the amount of cash taxes we pay.

Additionally, we have purchase obligations and open purchase orders, including for inventory and capital expenditures, that support normal operations and are primarily due in the next twelve months.

We expect to fund the acquisition of MGM Holdings Inc. with cash on hand.

*Overview*

However, we expect our net sales growth rate to decelerate in Q1 2022 compared to the increase we experienced in Q1 2021.

In addition, these direct and indirect factors can make it difficult to isolate and quantify the portion of our costs that are a direct result of the pandemic and costs arising from factors that may have been influenced by the pandemic, including increased wage rates and incentives, increased carrier rates, and fulfillment network inefficiencies resulting from constrained labor markets and global supply chain constraints.

We expect these factors and their effects on our operations to continue into Q1 2022.

| | | | 2020 | | | | | | 2021 | | |

| North America | | | 61 | | % | | | | 60 | | % |

| AWS | | | 12 | | | | | | 13 | | |

We expect our North America sales growth rate to decelerate in Q1 2022 compared to the increase we experienced in Q1 2021.

The sales growth primarily reflects increased unit sales, including sales by third-party sellers, and advertising sales.

Increased unit sales were driven largely by our continued efforts to reduce prices for our customers, including from our shipping offers, and increased demand, partially offset by fulfillment network inefficiencies and supply chain constraints.

We expect our International sales growth rate to decelerate in Q1 2022 compared to the increase we experienced in Q1 2021.

| | | | 2020 | | | | | | 2021 | | |

| | | | 2020 | | | | | | 2021 | | |

While AWS payment processing and related transaction costs are included in “Fulfillment,” AWS costs are primarily classified as “Technology and

We expect technology and content costs to grow at a slower rate in 2022 due to increases in the estimated useful lives of our servers and networking equipment, which will primarily impact our AWS segment.

Included in other income (expense), net in 2021 is a valuation gain of $11.8 billion from our equity securities of Rivian Automotive, Inc., which completed an initial public offering in November 2021.

| | | | 2020 | | | | | | 2021 | | |

| | | | 2020 | | | | | | 2021 | | |

| Net cash provided by (used in) operating activities | | | $ | 66,064 | | | | | $ | 46,327 | |

| Purchases of property and equipment, net of proceeds from sales and incentives | | | (35,044) | | | | | | (55,396) | | |

| Net cash provided by (used in) investing activities | | | $ | (59,611) | | | | | $ | (58,154) | |

| Net cash provided by (used in) financing activities | | | $ | (1,104) | | | | | $ | 6,291 | |

| | | | 2020 | | | | | | 2021 | | |

| Net cash provided by (used in) operating activities | | | $ | 66,064 | | | | | $ | 46,327 | |

| Purchases of property and equipment, net of proceeds from sales and incentives | | | (35,044) | | | | | | (55,396) | | |

| Free cash flow | | | 31,020 | | | | | | (9,069) | | |

| Principal repayments of financing obligations | | | (53) | | | | | | (162) | | |

| Net cash provided by (used in) investing activities | | | $ | (59,611) | | | | | $ | (58,154) | |

| Net cash provided by (used in) financing activities | | | $ | (1,104) | | | | | $ | 6,291 | |

This guidance includes approximately $1.0 billion lower depreciation expense due to increases in the estimated useful lives of our servers and networking equipment beginning on January 1, 2022.

*Our primary source of revenue is the sale of a wide range of products and services to customers*.

For example, if the U.S. Dollar weakens year-over-year relative to currencies in our international locations, our consolidated net sales and operating expenses will be higher than if currencies had remained constant.

Effects of COVID-19

The COVID-19 pandemic and resulting global disruptions have affected our businesses, as well as those of our customers, suppliers, and third-party sellers.

To serve our customers while also providing for the safety of our employees and service providers, we have modified numerous aspects of our logistics, transportation, supply chain, purchasing, and third-party seller processes.

Beginning in Q1 2020, we made numerous process updates across our operations worldwide, and adapted our fulfillment network, to implement employee and customer safety measures, such as enhanced cleaning and physical distancing, personal protective gear, disinfectant spraying, and temperature checks.

Since February 2020, we have hired over 400,000 full-time and part-time employees to increase our fulfillment network capacity.

We incurred approximately $4.0 billion in COVID-19 related costs in Q4 2020, for a total of more than $11.5 billion during 2020.

We will continue to prioritize employee and customer safety and comply with evolving federal, state, and local standards as well as to implement standards or processes that we determine to be in the best interests of our employees, customers, and communities.

| | | | 2019 | | | | | | 2020 | | |

We endeavor to manage our global taxes on a cash basis, rather than on a financial reporting basis.

In connection with the European Commission’s October 2017 decision against us on state aid, Luxembourg tax authorities computed an initial recovery amount, consistent with the

European Commission’s decision, of approximately €250 million, that we deposited into escrow in March 2018, subject to adjustment pending conclusion of all appeals.

Additionally, purchase obligations and open purchase orders, consisting of inventory and significant non-inventory commitments, were $26.6 billion as of December 31, 2020.

The COVID-19 pandemic and resulting global disruptions have caused significant market volatility.

These disruptions can contribute to defaults in our accounts receivable, affect asset valuations resulting in impairment charges, and affect the availability of lease and financing credit as well as other segments of the credit markets.

We have utilized a range of financing methods to fund our operations and capital expenditures and expect to continue to maintain financing flexibility in the current market conditions.

However, due to the rapidly evolving global situation, it is not possible to predict whether unanticipated consequences of the pandemic are reasonably likely to materially affect our liquidity and capital resources in the future.

*Effects of COVID-19*

Higher net sales in the North America and International segments reflect increased demand, particularly as people are staying at home, including for household staples and other essential and home products, partially offset by fulfillment network capacity and supply chain constraints.

Other effects in the North America and International segments include increased fulfillment costs and cost of sales as a percentage of net sales, primarily due to the impact of lower productivity, increased employee hiring and benefits, and costs to maintain safe workplaces.

We expect the effects of fulfillment network capacity and supply chain constraints, elevated collection risk in our accounts receivable, and increased fulfillment costs and cost of sales as a percentage of net sales to continue into all or portions of Q1 2021.

We expect North America operating income to continue to be negatively impacted through at least Q1 2021 by COVID-19 related costs.

We expect International operating income to continue to be negatively impacted through at least Q1 2021 by COVID-19 related costs.

We expect cost of sales as a percentage of net sales to continue to be negatively impacted through at least Q1 2021 by COVID-19 related costs.

We expect fulfillment costs as a percentage of net sales to continue to be negatively impacted through at least Q1 2021 by COVID-19 related costs.

Our effective tax rate can be more or less volatile based on the amount of pre-tax income or loss.

For example, the impact of discrete items and non-deductible expenses on our effective tax rate is greater when our pre-tax income is lower.

This guidance also assumes the impacts on consumer demand and spending patterns, including impacts due to concerns over the current economic outlook, will be in line with those experienced during the first quarter of 2021 to date, and the additional assumptions set forth below.

However, it is not possible to determine the ultimate impact on our operations for the first quarter of 2021, or whether other currently unanticipated direct or indirect consequences of the pandemic are reasonably likely to materially affect our operations.

This guidance assumes approximately $2.0 billion of costs related to COVID-19.

The following table provides information about our cash equivalents and marketable fixed income securities, including principal cash flows by expected maturity and the related weighted-average interest rates as of December 31, [removed: 2020] [added: 2021] (in millions, except percentages):

| | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2024] [added: 2025] | | | | | | [removed: 2025] [added: 2026] | | | | | | Thereafter | | | | | | Total | | | | | | Estimated Fair Value as of December 31, [removed: 2020] [added: 2021] | | |

| Money market funds | | | | | | $ | [removed: 27,430] [added: 20,312] | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | [removed: 27,430] [added: 20,312] | | | | | $ | [removed: 27,430] [added: 20,312] | |

| Weighted average interest rate | | | | | | [removed: (0.16)] [added: (0.02)] | | % | | | | — | | % | | | | — | | % | | | | — | | % | | | | — | | % | | | | — | | % | | | | [removed: (0.16)] [added: (0.02)] | | % | | | | | | |

| Foreign government and agency securities | | | | | | [removed: 4,932] [added: 105] | | | | | | [removed: 147] [added: 52] | | | | | | [removed: 45] [added: 22] | | | | | | [removed: 3] [added: —] | | | | | | — | | | | | | — | | | | | | [removed: 5,127] [added: 179] | | | | | | [removed: 5,131] [added: 181] | | |

| Weighted average interest rate | | | | | | [removed: 0.25] [added: 0.97] | | % | | | | [removed: 0.74] [added: 1.12] | | % | | | | [removed: 1.28] [added: 0.74] | | % | | | | [removed: 1.76] [added: —] | | % | | | | — | | % | | | | — | | % | | | | [removed: 0.28] [added: 0.98] | | % | | | | | | |

| Cash equivalents and marketable fixed income securities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | $ | [removed: 73,933] [added: 67,981] | |

As of December 31, [removed: 2020,] [added: 2021,] we had long-term debt with a face value of [removed: $33.2] [added: $50.6] billion, including the current portion, primarily consisting of fixed rate unsecured senior notes.

During [removed: 2020,] [added: 2021,] net sales from our International segment accounted for 27% of our consolidated revenues.

For example, as a result of fluctuations in foreign exchange rates throughout the year compared to rates in effect the prior year, International segment net sales increased by [removed: $1.7] [added: $3.0] billion in comparison with the prior year.

Based on the balance of foreign funds as of December 31, [removed: 2020,] [added: 2021,] of [removed: $23.5] [added: $22.7] billion, an assumed 5%, 10%, and 20% adverse change to foreign exchange would result in fair value declines of [removed: $1.2] [added: $1.1] billion, [removed: $2.4] [added: $2.3] billion, and [removed: $4.7] [added: $4.5] billion.

Based on the intercompany balances as of December 31, [removed: 2020,] [added: 2021,] an assumed 5%, 10%, and 20% adverse change to foreign exchange rates would result in losses of [removed: $245] [added: $285] million, [removed: $485] [added: $575] million, and [removed: $970 million,] [added: $1.1 billion,] recorded to “Other income (expense), net.”

As of December 31, [removed: 2020,] [added: 2021,] our recorded value in equity and equity warrant investments in public and private companies was [removed: $6.9] [added: $22.3] billion.

Our equity and equity warrant investments in publicly traded [removed: companies] [added: companies, which primarily relate to Rivian Automotive, Inc.,] represent [removed: $3.2] [added: $20.3] billion of our investments as of December 31, [removed: 2020,] [added: 2021,] and are recorded at fair value, which is subject to market price volatility.

| Corporate debt securities | | | | | | 18,063 | | | | | | 6,253 | | | | | | 8,231 | | | | | | 2,044 | | | | | | 921 | | | | | | — | | | | | | 35,512 | | | | | | 35,764 | | |

| Weighted average interest rate | | | | | | 0.34 | | % | | | | 1.02 | | % | | | | 1.02 | | % | | | | 1.35 | | % | | | | 1.22 | | % | | | | — | | % | | | | 0.70 | | % | | | | | | |

| U.S. government and agency securities | | | | | | 1,584 | | | | | | 837 | | | | | | 561 | | | | | | 672 | | | | | | 558 | | | | | | 61 | | | | | | 4,273 | | | | | | 4,300 | | |

| Weighted average interest rate | | | | | | 0.30 | | % | | | | 0.39 | | % | | | | 1.00 | | % | | | | 1.14 | | % | | | | 0.99 | | % | | | | 1.01 | | % | | | | 0.65 | | % | | | | | | |

| Asset-backed securities | | | | | | 1,237 | | | | | | 1,966 | | | | | | 1,722 | | | | | | 959 | | | | | | 312 | | | | | | 500 | | | | | | 6,696 | | | | | | 6,738 | | |

| Weighted average interest rate | | | | | | 1.19 | | % | | | | 0.93 | | % | | | | 1.28 | | % | | | | 1.27 | | % | | | | 0.99 | | % | | | | 1.14 | | % | | | | 1.14 | | % | | | | | | |

| Other fixed income securities | | | | | | 142 | | | | | | 264 | | | | | | 222 | | | | | | 57 | | | | | | — | | | | | | — | | | | | | 685 | | | | | | 686 | | |

| Weighted average interest rate | | | | | | 0.65 | | % | | | | 0.93 | | % | | | | 0.68 | | % | | | | 1.35 | | % | | | | — | | % | | | | — | | % | | | | 0.83 | | % | | | | | | |

| | | | | | | $ | 41,443 | | | | | $ | 9,372 | | | | | $ | 10,758 | | | | | $ | 3,732 | | | | | $ | 1,791 | | | | | $ | 561 | | | | | $ | 67,657 | | | | | | | |

We record our equity warrant investments in private companies at fair value and adjust our equity investments in private companies for observable price changes or impairments.

See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 1 — Description of Business, Accounting Policies, and Supplemental Disclosures” for additional information.

| Corporate debt securities | | | | | | 16,505 | | | | | | 4,459 | | | | | | 5,531 | | | | | | 1,990 | | | | | | 886 | | | | | | — | | | | | | 29,371 | | | | | | 29,988 | | |

| Weighted average interest rate | | | | | | 0.42 | | % | | | | 1.65 | | % | | | | 1.32 | | % | | | | 1.86 | | % | | | | 1.84 | | % | | | | | | | | | | 0.92 | | % | | | | | | |

| U.S. government and agency securities | | | | | | 5,439 | | | | | | 587 | | | | | | 899 | | | | | | 298 | | | | | | 67 | | | | | | 71 | | | | | | 7,361 | | | | | | 7,439 | | |

| Weighted average interest rate | | | | | | 0.30 | | % | | | | 1.38 | | % | | | | 1.12 | | % | | | | 1.74 | | % | | | | 1.13 | | % | | | | 2.97 | | % | | | | 0.58 | | % | | | | | | |

| Asset-backed securities | | | | | | 870 | | | | | | 773 | | | | | | 472 | | | | | | 763 | | | | | | 243 | | | | | | 46 | | | | | | 3,167 | | | | | | 3,235 | | |

| Weighted average interest rate | | | | | | 2.08 | | % | | | | 2.00 | | % | | | | 1.53 | | % | | | | 2.13 | | % | | | | 1.57 | | % | | | | 1.25 | | % | | | | 1.94 | | % | | | | | | |

| Other fixed income securities | | | | | | 109 | | | | | | 156 | | | | | | 230 | | | | | | 160 | | | | | | 43 | | | | | | — | | | | | | 698 | | | | | | 710 | | |

| Weighted average interest rate | | | | | | 2.10 | | % | | | | 1.85 | | % | | | | 1.10 | | % | | | | 0.84 | | % | | | | 1.31 | | % | | | | — | | % | | | | 1.38 | | % | | | | | | |

| | | | | | | $ | 55,285 | | | | | $ | 6,122 | | | | | $ | 7,177 | | | | | $ | 3,214 | | | | | $ | 1,239 | | | | | $ | 117 | | | | | $ | 73,154 | | | | | | | |

We assess our equity investments in private companies for impairment.

Actual results [added: and outcomes] may differ materially from those expressed in forward-looking statements.

[added: See Item 1A of Part I — “Risk Factors.”] As used herein, “Amazon.com,” “we,” “our,” and similar terms include Amazon.com, Inc. and its subsidiaries, unless the context indicates [removed: otherwise.][added: otherwise.*]

In each of our segments, we serve our primary customer sets, consisting of consumers, sellers, developers, enterprises, [removed: and] content [removed: creators.][added: creators, advertisers, and employees.]

[removed: In addition, we] [added: We] provide [removed: services, such as] advertising [added: services] to sellers, vendors, publishers, authors, and others, through programs such as sponsored ads, display, and video advertising.

We also manufacture and sell electronic devices, including Kindle, Fire tablet, Fire TV, Echo, [removed: Ring,] and [removed: other devices,] [added: Ring,] and we develop and produce media content.

In addition, we offer [added: subscription services such as] Amazon Prime, a membership program that includes [removed: unlimited] [added: fast,] free shipping on [removed: over 100 million] [added: millions of] items, access to [removed: unlimited streaming of tens of thousands of] [added: award-winning] movies and [removed: TV episodes, including Amazon Original content,] [added: series,] and other benefits.

We also offer programs that allow authors, musicians, filmmakers, [added: Twitch streamers,] skill and app developers, and others to publish and sell content.

As of December 31, [removed: 2020,] [added: 2021,] we employed approximately [removed: 1,298,000] [added: 1,608,000] full-time and part-time employees.

Additionally, we [removed: utilize] [added: use] independent contractors and temporary personnel to supplement our workforce.

Competition for qualified personnel [removed: has historically been] [added: is] intense, particularly for software engineers, computer scientists, and other technical [removed: staff.][added: staff, and constrained labor markets have increased competition for personnel across other parts of our business.]

[removed: We] [added: As we strive to be Earth’s best employer, we] focus on investment and innovation, inclusion and diversity, safety, and engagement to hire and develop the best talent.

We rely on numerous and evolving initiatives to implement these objectives and invent mechanisms for talent development, including [removed: industry-leading] [added: competitive] pay and benefits, [added: flexible work arrangements, and] skills training [added: and educational] programs such as Amazon Career Choice [added: (funded education for hourly employees)] and the Amazon Technical [removed: Academy, mentorship and support resources, and programs that advance engagement, communication, and feedback.][added: Academy (software development engineer training).]

The following tables set forth certain information regarding our Executive Officers and Directors as of January [removed: 20, 2021:][added: 26, 2022:]

| [removed: Jeffrey P. Bezos] [added: Andrew R. Jassy] | | | | | | [removed: 57] [added: 54] | | | | | | [removed: President,] [added: President and] Chief Executive [removed: Officer, and Chairman of the Board] [added: Officer] | | |

| David H. Clark | | | | | | [removed: 48] [added: 49] | | | | | | [removed: CEO,] [added: CEO] Worldwide Consumer | | |

| [removed: Andrew R. Jassy] [added: Adam N. Selipsky] | | | | | | [removed: 53] [added: 55] | | | | | | CEO Amazon Web Services | | |

| Brian T. Olsavsky | | | | | | [removed: 57] [added: 58] | | | | | | Senior Vice President and Chief Financial Officer | | |

| Shelley L. Reynolds | | | | | | [removed: 56] [added: 57] | | | | | | Vice President, Worldwide Controller, and Principal Accounting Officer | | |

| David A. Zapolsky | | | | | | [removed: 57] [added: 58] | | | | | | Senior Vice President, General Counsel, and Secretary | | |

Jassy. Mr. Jassy has served as [added: President and Chief Executive Officer since July 2021,] CEO Amazon Web Services [removed: since] [added: from] April [removed: 2016,] [added: 2016 until July 2021,] and Senior Vice President, Amazon Web Services, from April 2006 until April 2016.

| Keith B. Alexander | | | | | | [removed: 69] [added: 70] | | | | | | Co-CEO, President, and Chair of IronNet Cybersecurity, Inc. | | |

| Jamie S. Gorelick | | | | | | [removed: 70] [added: 71] | | | | | | Partner, Wilmer Cutler Pickering Hale and Dorr LLP | | |

| Daniel P. Huttenlocher | | | | | | [removed: 62] [added: 63] | | | | | | Dean, MIT Schwarzman College of Computing | | |

| Judith A. McGrath | | | | | | [removed: 68] [added: 69] | | | | | | Former Chair and CEO, MTV Networks | | |

| Indra K. Nooyi | | | | | | [removed: 65] [added: 66] | | | | | | Former Chief Executive Officer, PepsiCo, Inc. | | |

| Jonathan J. Rubinstein | | | | | | [removed: 64] [added: 65] | | | | | | Former co-CEO, Bridgewater Associates, LP | | |

| Patricia Q. Stonesifer | | | | | | [removed: 64] [added: 65] | | | | | | Former President and Chief Executive Officer, Martha’s Table | | |

| Wendell P. Weeks | | | | | | [removed: 61] [added: 62] | | | | | | Chief Executive Officer, Corning Incorporated | | |

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We also provide mentorship and support resources to our employees, and have deployed numerous programs that advance employee engagement, communication, and feedback.

| Jeffrey P. Bezos | | | | | | 58 | | | | | | Executive Chair | | |

Bezos. Mr. Bezos founded Amazon.com in 1994 and has served as Executive Chair since July 2021.

He has served as Chair of the Board since 1994 and served as Chief Executive Officer from May 1996 until July 2021, and as President from 1994 until June 1999 and again from October 2000 to July 2021.

Adam N.

Selipsky. Mr. Selipsky has served as CEO Amazon Web Services since July 2021, Senior Vice President, Amazon Web Services from May 2021 until July 2021, President and CEO of Tableau Software from September 2016 until May 2021, and Vice President, Marketing, Sales and Support of Amazon Web Services from May 2005 to September 2016.

| Jeffrey P. Bezos | | | | | | 58 | | | | | | Executive Chair | | |

| Andrew R. Jassy | | | | | | 54 | | | | | | President and Chief Executive Officer | | |

| Edith W. Cooper | | | | | | 60 | | | | | | Former Executive Vice President, Goldman Sachs Group, Inc. | | |

See Item 1A of Part I — “Risk Factors.”*

Amazon.com, Inc.’s principal corporate offices are located in Seattle, Washington.

We completed our initial public offering in May 1997 and our common stock is listed on the Nasdaq Global Select Market under the symbol “AMZN.”

Bezos. Mr. Bezos has been Chairman of the Board of Amazon.com since founding it in 1994 and Chief Executive Officer since May 1996.

Mr. Bezos served as President of the Company from founding until June 1999 and again from October 2000 to the present.

| Rosalind G. Brewer | | | | | | 58 | | | | | | Group President, Americas and Chief Operating Officer, Starbucks Corporation | | |

| Thomas O. Ryder | | | | | | 76 | | | | | | Retired, Former Chair, Reader’s Digest Association, Inc. | | |

For the fiscal year ended December 31, [removed: 2020][added: 2021]

| Aggregate market value of voting stock held by non-affiliates of the registrant as of June 30, [removed: 2020] [added: 2021] | | | $ | [removed: 1,174,367,787,295] [added: 1,507,362,696,975] | |

| Number of shares of common stock outstanding as of January [removed: 20, 2021] [added: 26, 2022] | | | [removed: 503,564,743] [added: 508,844,410] | | |

The information required by Part III of this Report, to the extent not set forth herein, is incorporated herein by reference from the registrant’s definitive proxy statement relating to the Annual Meeting of Shareholders to be held in [removed: 2021,] [added: 2022,] which definitive proxy statement shall be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this Report relates.

| Item 1. | | | [removed: [Business](#i75de98b9097f40f3b5884e541f532421_13)] [added: [Business](#i10ffcc0db5d74ac5a2de7ca2ad731f50_13)] | | | [removed: [3](#i75de98b9097f40f3b5884e541f532421_13)] [added: [3](#i10ffcc0db5d74ac5a2de7ca2ad731f50_13)] | | |

| Item 1A. | | | [Risk [removed: Factors](#i75de98b9097f40f3b5884e541f532421_16)] [added: Factors](#i10ffcc0db5d74ac5a2de7ca2ad731f50_16)] | | | [removed: [6](#i75de98b9097f40f3b5884e541f532421_16)] [added: [6](#i10ffcc0db5d74ac5a2de7ca2ad731f50_16)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#i75de98b9097f40f3b5884e541f532421_19)] [added: Comments](#i10ffcc0db5d74ac5a2de7ca2ad731f50_19)] | | | [removed: [15](#i75de98b9097f40f3b5884e541f532421_19)] [added: [15](#i10ffcc0db5d74ac5a2de7ca2ad731f50_19)] | | |

| Item 2. | | | [removed: [Properties](#i75de98b9097f40f3b5884e541f532421_22)] [added: [Properties](#i10ffcc0db5d74ac5a2de7ca2ad731f50_22)] | | | [removed: [16](#i75de98b9097f40f3b5884e541f532421_22)] [added: [16](#i10ffcc0db5d74ac5a2de7ca2ad731f50_22)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#i75de98b9097f40f3b5884e541f532421_25)] [added: Proceedings](#i10ffcc0db5d74ac5a2de7ca2ad731f50_25)] | | | [removed: [16](#i75de98b9097f40f3b5884e541f532421_25)] [added: [16](#i10ffcc0db5d74ac5a2de7ca2ad731f50_25)] | | |

| Item 4. | | | [Mine Safety [removed: Disclosures](#i75de98b9097f40f3b5884e541f532421_28)] [added: Disclosures](#i10ffcc0db5d74ac5a2de7ca2ad731f50_28)] | | | [removed: [16](#i75de98b9097f40f3b5884e541f532421_28)] [added: [16](#i10ffcc0db5d74ac5a2de7ca2ad731f50_28)] | | |

| Item 5. | | | [Market for the Registrant’s Common Stock, Related Shareholder Matters, and Issuer Purchases of Equity [removed: Securities](#i75de98b9097f40f3b5884e541f532421_34)] [added: Securities](#i10ffcc0db5d74ac5a2de7ca2ad731f50_34)] | | | [removed: [17](#i75de98b9097f40f3b5884e541f532421_34)] [added: [17](#i10ffcc0db5d74ac5a2de7ca2ad731f50_34)] | | |

| Item 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i75de98b9097f40f3b5884e541f532421_40)] [added: Operations](#i10ffcc0db5d74ac5a2de7ca2ad731f50_40)] | | | [removed: [19](#i75de98b9097f40f3b5884e541f532421_40)] [added: [18](#i10ffcc0db5d74ac5a2de7ca2ad731f50_40)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i75de98b9097f40f3b5884e541f532421_52)] [added: Risk](#i10ffcc0db5d74ac5a2de7ca2ad731f50_76)] | | | [removed: [33](#i75de98b9097f40f3b5884e541f532421_52)] [added: [31](#i10ffcc0db5d74ac5a2de7ca2ad731f50_76)] | | |

| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#i75de98b9097f40f3b5884e541f532421_55)] [added: Data](#i10ffcc0db5d74ac5a2de7ca2ad731f50_85)] | | | [removed: [35](#i75de98b9097f40f3b5884e541f532421_55)] [added: [33](#i10ffcc0db5d74ac5a2de7ca2ad731f50_85)] | | |

| Item 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i75de98b9097f40f3b5884e541f532421_130)] [added: Disclosure](#i10ffcc0db5d74ac5a2de7ca2ad731f50_286)] | | | [removed: [69](#i75de98b9097f40f3b5884e541f532421_130)] [added: [68](#i10ffcc0db5d74ac5a2de7ca2ad731f50_286)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#i75de98b9097f40f3b5884e541f532421_133)] [added: Procedures](#i10ffcc0db5d74ac5a2de7ca2ad731f50_289)] | | | [removed: [69](#i75de98b9097f40f3b5884e541f532421_133)] [added: [68](#i10ffcc0db5d74ac5a2de7ca2ad731f50_289)] | | |

| Item 9B. | | | [Other [removed: Information](#i75de98b9097f40f3b5884e541f532421_136)] [added: Information](#i10ffcc0db5d74ac5a2de7ca2ad731f50_295)] | | | [removed: [71](#i75de98b9097f40f3b5884e541f532421_136)] [added: [70](#i10ffcc0db5d74ac5a2de7ca2ad731f50_295)] | | |

| Item 10. | | | [Directors, Executive Officers, and Corporate [removed: Governance](#i75de98b9097f40f3b5884e541f532421_142)] [added: Governance](#i10ffcc0db5d74ac5a2de7ca2ad731f50_301)] | | | [removed: [71](#i75de98b9097f40f3b5884e541f532421_142)] [added: [70](#i10ffcc0db5d74ac5a2de7ca2ad731f50_301)] | | |

| Item 11. | | | [Executive [removed: Compensation](#i75de98b9097f40f3b5884e541f532421_145)] [added: Compensation](#i10ffcc0db5d74ac5a2de7ca2ad731f50_304)] | | | [removed: [71](#i75de98b9097f40f3b5884e541f532421_145)] [added: [70](#i10ffcc0db5d74ac5a2de7ca2ad731f50_304)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Shareholder [removed: Matters](#i75de98b9097f40f3b5884e541f532421_148)] [added: Matters](#i10ffcc0db5d74ac5a2de7ca2ad731f50_307)] | | | [removed: [71](#i75de98b9097f40f3b5884e541f532421_148)] [added: [70](#i10ffcc0db5d74ac5a2de7ca2ad731f50_307)] | | |

| Item 13. | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i75de98b9097f40f3b5884e541f532421_151)] [added: Independence](#i10ffcc0db5d74ac5a2de7ca2ad731f50_310)] | | | [removed: [71](#i75de98b9097f40f3b5884e541f532421_151)] [added: [70](#i10ffcc0db5d74ac5a2de7ca2ad731f50_310)] | | |

| Item 14. | | | [Principal Accountant Fees and [removed: Services](#i75de98b9097f40f3b5884e541f532421_154)] [added: Services](#i10ffcc0db5d74ac5a2de7ca2ad731f50_313)] | | | [removed: [71](#i75de98b9097f40f3b5884e541f532421_154)] [added: [70](#i10ffcc0db5d74ac5a2de7ca2ad731f50_313)] | | |

| Item 15. | | | [Exhibits, Financial Statement [removed: Schedules](#i75de98b9097f40f3b5884e541f532421_160)] [added: Schedules](#i10ffcc0db5d74ac5a2de7ca2ad731f50_319)] | | | [removed: [72](#i75de98b9097f40f3b5884e541f532421_160)] [added: [71](#i10ffcc0db5d74ac5a2de7ca2ad731f50_319)] | | |

| Item 16. | | | [Form 10-K [removed: Summary](#i75de98b9097f40f3b5884e541f532421_163)] [added: Summary](#i10ffcc0db5d74ac5a2de7ca2ad731f50_322)] | | | [removed: [73](#i75de98b9097f40f3b5884e541f532421_163)] [added: [73](#i10ffcc0db5d74ac5a2de7ca2ad731f50_322)] | | |

For the Fiscal Year Ended December 31, 2021

| Item 6. | | | [Reserved](#i10ffcc0db5d74ac5a2de7ca2ad731f50_2540) | | | [17](#i10ffcc0db5d74ac5a2de7ca2ad731f50_2540) | | |

| Item 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#i10ffcc0db5d74ac5a2de7ca2ad731f50_2568) | | | [70](#i10ffcc0db5d74ac5a2de7ca2ad731f50_2568) | | |

| [Signatures](#i10ffcc0db5d74ac5a2de7ca2ad731f50_325) | | | | | | [74](#i10ffcc0db5d74ac5a2de7ca2ad731f50_325) | | |

| Item 6. | | | [Selected Consolidated Financial Data](#i75de98b9097f40f3b5884e541f532421_37) | | | [18](#i75de98b9097f40f3b5884e541f532421_37) | | |

| [Signatures](#i75de98b9097f40f3b5884e541f532421_166) | | | | | | [74](#i75de98b9097f40f3b5884e541f532421_166) | | |

As of December 31, [removed: 2020,] [added: 2021,] we operated the following facilities (in thousands):

| Office space | | | | | | [removed: 23,731] [added: 27,519] | | | | | | [removed: 5,696] [added: 6,138] | | | | | | North America | | |

| Office space | | | | | | [removed: 19,023] [added: 20,983] | | | | | | [removed: 1,823] [added: 1,802] | | | | | | International | | |

| Physical stores (2) | | | | | | [removed: 21,157] [added: 22,396] | | | | | | 662 | | | | | | North America | | |

| Physical stores (2) | | | | | | [removed: 169] [added: 235] | | | | | | — | | | | | | International | | |

| Fulfillment, data centers, and other | | | | | | [removed: 285,677] [added: 370,392] | | | | | | [removed: 8,461] [added: 16,663] | | | | | | North America | | |

| Fulfillment, data centers, and other | | | | | | [removed: 104,668] [added: 129,035] | | | | | | [removed: 3,449] [added: 9,601] | | | | | | International | | |

(2)This includes [removed: 611] [added: 672] North America and 7 International stores as of December 31, [removed: 2020.][added: 2021.]

We own and lease our corporate headquarters in [removed: Seattle, Washington] [added: Washington’s Puget Sound region] and Arlington, Virginia.

| Total | | | | | | 570,560 | | | | | | 34,866 | | | | | | | | |

| North America | | | | | | 383,660 | | | | | | 9,863 | | |

| International | | | | | | 124,246 | | | | | | 5,103 | | |

| AWS | | | | | | 14,152 | | | | | | 11,960 | | |

| Total | | | | | | 522,058 | | | | | | 26,926 | | |

| Total | | | | | | 454,425 | | | | | | 20,091 | | | | | | | | |

| North America | | | | | | 298,879 | | | | | | 3,813 | | |

| International | | | | | | 102,192 | | | | | | 1,294 | | |

| AWS | | | | | | 10,599 | | | | | | 7,465 | | |

| Total | | | | | | 411,670 | | | | | | 12,572 | | |

As of January [removed: 20, 2021,] [added: 26, 2022,] there were [removed: 6,330] [added: 7,282] shareholders of record of our common stock, although there is a much larger number of beneficial owners.

The following selected consolidated financial data should be read in conjunction with the consolidated financial statements and the notes thereto in Item 8 of Part II, “Financial Statements and Supplementary Data,” and the information contained in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Historical results are not necessarily indicative of future results.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | Year Ended December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | 2016 | | | | | | 2017 (1) | | | | | | 2018 | | | | | | 2019 | | | | | | 2020 | | |

| | | | | | | (in millions, except per share data) | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Statements of Operations: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net sales | | | | | | $ | 135,987 | | | | | $ | 177,866 | | | | | $ | 232,887 | | | | | $ | 280,522 | | | | | $ | 386,064 | |

| Operating income | | | | | | $ | 4,186 | | | | | $ | 4,106 | | | | | $ | 12,421 | | | | | $ | 14,541 | | | | | $ | 22,899 | |

| Net income (loss) | | | | | | $ | 2,371 | | | | | $ | 3,033 | | | | | $ | 10,073 | | | | | $ | 11,588 | | | | | $ | 21,331 | |

| Basic earnings per share (2) | | | | | | $ | 5.01 | | | | | $ | 6.32 | | | | | $ | 20.68 | | | | | $ | 23.46 | | | | | $ | 42.64 | |

| Diluted earnings per share (2) | | | | | | $ | 4.90 | | | | | $ | 6.15 | | | | | $ | 20.14 | | | | | $ | 23.01 | | | | | $ | 41.83 | |

| Weighted-average shares used in computation of earnings per share: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Basic | | | | | | 474 | | | | | | 480 | | | | | | 487 | | | | | | 494 | | | | | | 500 | | |

| Diluted | | | | | | 484 | | | | | | 493 | | | | | | 500 | | | | | | 504 | | | | | | 510 | | |

| Statements of Cash Flows: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net cash provided by (used in) operating activities (3) | | | | | | $ | 17,203 | | | | | $ | 18,365 | | | | | $ | 30,723 | | | | | $ | 38,514 | | | | | $ | 66,064 | |

| | | | | | | December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | 2016 | | | | | | 2017 | | | | | | 2018 | | | | | | 2019 (4) | | | | | | 2020 | | |

| | | | | | | (in millions) | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Balance Sheets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total assets | | | | | | $ | 83,402 | | | | | $ | 131,310 | | | | | $ | 162,648 | | | | | $ | 225,248 | | | | | $ | 321,195 | |

| Total long-term obligations | | | | | | $ | 20,301 | | | | | $ | 45,718 | | | | | $ | 50,708 | | | | | $ | 75,376 | | | | | $ | 101,406 | |

___________________

(1)We acquired Whole Foods Market on August 28, 2017.

The results of Whole Foods Market have been included in our results of operation from the date of acquisition.

(2)For further discussion of earnings per share, see Item 8 of Part II, “Financial Statements and Supplementary Data — Note 1 — Description of Business, Accounting Policies, and Supplemental Disclosures”

(3)As a result of the adoption of new accounting guidance, we retrospectively adjusted our consolidated statements of cash flows to add restricted cash to cash and cash equivalents, which restated cash provided by operating activities by $(69) million in 2016 and 2017.

(4)As a result of the adoption of new accounting guidance on January 1, 2019, we recognized lease assets and liabilities for operating leases with terms of more than twelve months.

Prior period amounts were not adjusted and continue to be reported in accordance with our historic accounting policies.

| [Report [removed: of] [added: of](#i10ffcc0db5d74ac5a2de7ca2ad731f50_88)] Ernst & Young [removed: LLP,] [added: LLP[,] Independent Registered Public Accounting [removed: Firm](#i75de98b9097f40f3b5884e541f532421_58)] [added: Firm (](#i10ffcc0db5d74ac5a2de7ca2ad731f50_88)[PCAOB ID:](#i10ffcc0db5d74ac5a2de7ca2ad731f50_88) 42[)](#i10ffcc0db5d74ac5a2de7ca2ad731f50_88)] | | | [removed: [36](#i75de98b9097f40f3b5884e541f532421_58)] [added: [34](#i10ffcc0db5d74ac5a2de7ca2ad731f50_88)] | | |

| [Consolidated Statements of Cash [removed: Flows](#i75de98b9097f40f3b5884e541f532421_61)] [added: Flows](#i10ffcc0db5d74ac5a2de7ca2ad731f50_91)] | | | [removed: [38](#i75de98b9097f40f3b5884e541f532421_61)] [added: [36](#i10ffcc0db5d74ac5a2de7ca2ad731f50_91)] | | |

| [Consolidated Statements of [removed: Operations](#i75de98b9097f40f3b5884e541f532421_64)] [added: Operations](#i10ffcc0db5d74ac5a2de7ca2ad731f50_94)] | | | [removed: [39](#i75de98b9097f40f3b5884e541f532421_64)] [added: [37](#i10ffcc0db5d74ac5a2de7ca2ad731f50_94)] | | |

| [Consolidated Statements of Comprehensive [removed: Income](#i75de98b9097f40f3b5884e541f532421_67)] [added: Income](#i10ffcc0db5d74ac5a2de7ca2ad731f50_97)] | | | [removed: [40](#i75de98b9097f40f3b5884e541f532421_67)] [added: [38](#i10ffcc0db5d74ac5a2de7ca2ad731f50_97)] | | |

| [Consolidated Balance [removed: Sheets](#i75de98b9097f40f3b5884e541f532421_73)] [added: Sheets](#i10ffcc0db5d74ac5a2de7ca2ad731f50_100)] | | | [removed: [41](#i75de98b9097f40f3b5884e541f532421_73)] [added: [39](#i10ffcc0db5d74ac5a2de7ca2ad731f50_100)] | | |

| [Consolidated Statements of Stockholders’ [removed: Equity](#i75de98b9097f40f3b5884e541f532421_79)] [added: Equity](#i10ffcc0db5d74ac5a2de7ca2ad731f50_103)] | | | [removed: [42](#i75de98b9097f40f3b5884e541f532421_79)] [added: [40](#i10ffcc0db5d74ac5a2de7ca2ad731f50_103)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i75de98b9097f40f3b5884e541f532421_82)] [added: Statements](#i10ffcc0db5d74ac5a2de7ca2ad731f50_106)] | | | [removed: [43](#i75de98b9097f40f3b5884e541f532421_82)] [added: [41](#i10ffcc0db5d74ac5a2de7ca2ad731f50_106)] | | |

We have audited the accompanying consolidated balance sheets of Amazon.com, Inc. (the Company) as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, [removed: 2020] [added: 2021,] 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, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2020,] [added: 2021,] 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, [removed: 2020,] [added: 2021,] 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 [removed: 2, 2021] [added: 3, 2022] expressed an unqualified opinion thereon.

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, [removed: subjective,] [added: subjective] or complex judgments.

| *Description of the Matter* | | | [removed: The] [added: 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 [removed: and, as discussed in Note 9 of the consolidated financial statements,] [added: 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. [removed: As of December 31, 2020, the Company accrued liabilities of $2.8 billion for various tax contingencies.] Auditing the [added: 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 [removed: complex,] [added: complex and] involves significant [removed: judgment,] [added: auditor judgment. Management’s evaluation of tax positions may involve the use of valuation methodologies] and [added: assumptions, including forecasts of income or loss, and] is based on interpretations of tax laws and legal rulings. | | |

| *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 [removed: sustained, management’s process to measure] [added: sustained; measurement of] the benefit of its tax positions, [removed: and] [added: including] the [added: selection of valuation methodologies and assumptions; determination of forecasts of income or loss; and] 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 [removed: of,] [added: of] and experience [removed: with,] [added: with] international, transfer pricing, and other income tax laws by the relevant income tax authorities 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 [added: appropriateness of the] Company’s [removed: assumptions] [added: valuation methodologies] and [added: assumptions, including the determination of forecasts of income or loss, and the accuracy of the Company’s calculations and] data used to determine the amount of tax benefits to [removed: recognize and tested the accuracy of the Company’s calculations.] [added: recognize.] We have also evaluated the Company’s income tax disclosures [removed: included] in [removed: Note 9 in] relation to these matters. | | |

| | | | [removed: 2018] [added: 2019] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2020] [added: 2021] | | |

| CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD | | | $ | [removed: 21,856] [added: 32,173] | | | | | $ | [removed: 32,173] [added: 36,410] | | | | | $ | [removed: 36,410] [added: 42,377] | |

| Net income | | | [removed: 10,073] [added: 11,588] | | | | | | [removed: 11,588] [added: 21,331] | | | | | | [removed: 21,331] [added: 33,364] | | |

| Depreciation and amortization of property and equipment and capitalized content costs, operating lease assets, and other | | | [removed: 15,341] [added: 21,789] | | | | | | [removed: 21,789] [added: 25,251] | | | | | | [removed: 25,251] [added: 34,296] | | |

| Stock-based compensation | | | [removed: 5,418] [added: 6,864] | | | | | | [removed: 6,864] [added: 9,208] | | | | | | [removed: 9,208] [added: 12,757] | | |

| Other operating expense (income), net | | | [removed: 274] [added: 164] | | | | | | [removed: 164] [added: (71)] | | | | | | [removed: (71)] [added: 137] | | |

| Other expense (income), net | | | [removed: 219] [added: (249)] | | | | | | [removed: (249)] [added: (2,582)] | | | | | | [removed: (2,582)] [added: (14,306)] | | |

| Deferred income taxes | | | [removed: 441] [added: 796] | | | | | | [removed: 796] [added: (554)] | | | | | | [removed: (554)] [added: (310)] | | |

| Inventories | | | [removed: (1,314)] [added: (3,278)] | | | | | | [removed: (3,278)] [added: (2,849)] | | | | | | [removed: (2,849)] [added: (9,487)] | | |

| Accounts receivable, net and other | | | [removed: (4,615)] [added: (7,681)] | | | | | | [removed: (7,681)] [added: (8,169)] | | | | | | [removed: (8,169)] [added: (18,163)] | | |

| Accounts payable | | | [removed: 3,263] [added: 8,193] | | | | | | [removed: 8,193] [added: 17,480] | | | | | | [removed: 17,480] [added: 3,602] | | |

| Accrued expenses and other | | | [removed: 472] [added: (1,383)] | | | | | | [removed: (1,383)] [added: 5,754] | | | | | | [removed: 5,754] [added: 2,123] | | |

| Unearned revenue | | | [removed: 1,151] [added: 1,711] | | | | | | [removed: 1,711] [added: 1,265] | | | | | | [removed: 1,265] [added: 2,314] | | |

| Net cash provided by (used in) operating activities | | | [removed: 30,723] [added: 38,514] | | | | | | [removed: 38,514] [added: 66,064] | | | | | | [removed: 66,064] [added: 46,327] | | |

| Purchases of property and equipment | | | [removed: (13,427)] [added: (16,861)] | | | | | | [removed: (16,861)] [added: (40,140)] | | | | | | [removed: (40,140)] [added: (61,053)] | | |

| Proceeds from property and equipment sales and incentives | | | [removed: 2,104] [added: 4,172] | | | | | | [removed: 4,172] [added: 5,096] | | | | | | [removed: 5,096] [added: 5,657] | | |

| Acquisitions, net of cash acquired, and other | | | [removed: (2,186)] [added: (2,461)] | | | | | | [removed: (2,461)] [added: (2,325)] | | | | | | [removed: (2,325)] [added: (1,985)] | | |

| Sales and maturities of marketable securities | | | [removed: 8,240] [added: 22,681] | | | | | | [removed: 22,681] [added: 50,237] | | | | | | [removed: 50,237] [added: 59,384] | | |

| Purchases of marketable securities | | | [removed: (7,100)] [added: (31,812)] | | | | | | [removed: (31,812)] [added: (72,479)] | | | | | | [removed: (72,479)] [added: (60,157)] | | |

| Net cash provided by (used in) investing activities | | | [removed: (12,369)] [added: (24,281)] | | | | | | [removed: (24,281)] [added: (59,611)] | | | | | | [removed: (59,611)] [added: (58,154)] | | |

| Proceeds from short-term debt, and other | | | [removed: 886] [added: 1,402] | | | | | | [removed: 1,402] [added: 6,796] | | | | | | [removed: 6,796] [added: 7,956] | | |

| Repayments of short-term debt, and other | | | [removed: (813)] [added: (1,518)] | | | | | | [removed: (1,518)] [added: (6,177)] | | | | | | [removed: (6,177)] [added: (7,753)] | | |

| Proceeds from long-term debt | | | [removed: 182] [added: 871] | | | | | | [removed: 871] [added: 10,525] | | | | | | [removed: 10,525] [added: 19,003] | | |

| Repayments of long-term debt | | | [removed: (155)] [added: (1,166)] | | | | | | [removed: (1,166)] [added: (1,553)] | | | | | | [removed: (1,553)] [added: (1,590)] | | |

| Principal repayments of finance leases | | | [removed: (7,449)] [added: (9,628)] | | | | | | [removed: (9,628)] [added: (10,642)] | | | | | | [removed: (10,642)] [added: (11,163)] | | |

| Principal repayments of financing obligations | | | [removed: (337)] [added: (27)] | | | | | | [removed: (27)] [added: (53)] | | | | | | [removed: (53)] [added: (162)] | | |

| Net cash provided by (used in) financing activities | | | [removed: (7,686)] [added: (10,066)] | | | | | | [removed: (10,066)] [added: (1,104)] | | | | | | [removed: (1,104)] [added: 6,291] | | |

| | | | Income Taxes | | |

February 3, 2022

| Net income | | | $ | 11,588 | | | | | $ | 21,331 | | | | | $ | 33,364 | |

| | | | 2020 | | | | | | 2021 | | |

| Balance as of December 31, 2021 | | | 509 | | | | | | $ | 5 | | | | | $ | (1,837) | | | | | $ | 55,538 | | | | | $ | (1,376) | | | | | $ | 85,915 | | | | | $ | 138,245 | |

Actual results could differ materially from these estimates.

For example, in Q4 2021 we completed a useful life study for our servers and networking equipment and are increasing the useful lives from four years to five years for servers and from five years to six years for networking equipment in January 2022, which, based on servers and networking equipment that are included in “Property and equipment, net” as of December 31, 2021, will have an anticipated impact to our 2022 operating income of $3.1 billion.

We had previously increased the useful life of our servers from three years to four years in January 2020.

| | | | 2019 | | | | | | 2020 | | | | | | 2021 | | |

| | | | 2019 | | | | | | 2020 | | | | | | 2021 | | |

*Advertising services* - We provide advertising services to sellers, vendors, publishers, authors, and others, through programs such as sponsored ads, display, and video advertising.

*Other* - Other revenue includes sales related to various other service offerings, which are recognized as or when those services are performed.

Additionally, stock-based compensation includes stock

Other income (expense), net, is as follows (in millions):

| | | | 2019 | | | | | | 2020 | | | | | | 2021 | | |

| Marketable equity securities valuation gains (losses) | | | $ | 7 | | | | | $ | 525 | | | | | $ | 11,526 | |

| Equity warrant valuation gains (losses) | | | 11 | | | | | | 1,527 | | | | | | 1,315 | | |

| Upward adjustments relating to equity investments in private companies | | | 328 | | | | | | 342 | | | | | | 1,866 | | |

| Foreign currency gains (losses) | | | (20) | | | | | | 35 | | | | | | (55) | | |

| Other, net | | | (123) | | | | | | (58) | | | | | | (19) | | |

| Total other income (expense), net | | | 203 | | | | | | 2,371 | | | | | | 14,633 | | |

Included in other income (expense), net in 2021 is a marketable equity securities valuation gain of $11.8 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, 2021, we held 158 million shares of Rivian’s Class A common stock, representing an approximate 18% ownership interest, and an approximate 16% 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, and the 2021 valuation gain is primarily comprised of the gain recognized upon the initial public offering, and also includes subsequent changes in fair value through December 31, 2021.

As of December 31, 2021, our equity investment in Rivian had a fair value of $15.6 billion, which reflects a discount for lack of marketability until Q1 2022 of approximately $800 million due to regulatory sales restrictions, and is included in “Marketable securities” on our consolidated balance sheets.

Summarized financial information of Rivian as disclosed in its SEC filings is as follows (in millions):

| Revenues | | | $ | — | | | | | $ | — | | | | | $ | 1 | |

| Gross profit | | | — | | | | | | — | | | | | | (82) | | |

| Loss from operations | | | (409) | | | | | | (1,021) | | | | | | (1,766) | | |

| Net loss | | | (426) | | | | | | (1,018) | | | | | | (2,227) | | |

| | | | December 31, 2020 | | | | | | September 30, 2021 | | |

| Total current assets | | | $ | 3,016 | | | | | $ | 5,345 | |

| Total assets | | | 4,602 | | | | | | 8,488 | | |

| Total current liabilities | | | 611 | | | | | | 1,047 | | |

| Total liabilities | | | 742 | | | | | | 4,201 | | |

| Contingently redeemable convertible preferred stock | | | 5,244 | | | | | | 7,894 | | |

| | | | December 31, 2021 | | | | | | | | | | | | | | | | | | | | |

| Cash | | | $ | 10,942 | | | | | $ | — | | | | | $ | — | | | | | $ | 10,942 | |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| Uncertain Tax Positions | | | | | |

February 2, 2021

| Balance as of January 1, 2018 | | | 484 | | | | | | $ | 5 | | | | | $ | (1,837) | | | | | $ | 21,389 | | | | | $ | (484) | | | | | $ | 8,636 | | | | | $ | 27,709 | |

| Cumulative effect of change in accounting principles related to revenue recognition, income taxes, and financial instruments | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (4) | | | | | | 916 | | | | | | 912 | | |

| Exercise of common stock options | | | 7 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |

| Exercise of common stock options | | | 5 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |

Prior Period Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

“Proceeds from short-term debt, and other” were reclassified from “Proceeds from long-term debt and other” and “Repayments of short-term debt, and other” were reclassified from “Repayments of long-term debt and other” on our consolidated statements of cash flows.

Given the global economic climate and additional or unforeseen effects from the COVID-19 pandemic, these estimates have become more challenging, and actual results could differ materially from these estimates.

We review the useful lives of equipment on an ongoing basis, and effective January 1, 2020 we changed our estimate of the useful life for our servers from three years to four years.

The longer useful life is due to continuous improvements in our hardware, software, and data center designs.

The effect of this change in estimate for the year ended December 31, 2020, based on servers that were included in “Property and equipment, net” as of December 31, 2019 and those acquired during the year ended December 31, 2020, was a reduction in depreciation and amortization expense of $2.7 billion and an increase in net income of $2.0 billion, or $4.06 per basic share and $3.98 per diluted share.

Other income (expense), net, consists primarily of valuations and adjustments of equity securities of $145 million, $231 million, and $833 million in 2018, 2019, and 2020, equity warrant valuation gains (losses) of $(131) million, $11 million, and $1.5 billion in 2018, 2019, and 2020, and foreign currency gains (losses) of $(206) million, $(20) million, and $35 million in 2018, 2019, and 2020.

During the period from January 1, 2021 to February 2, 2021, we expect to record upward adjustments relating to equity investments in private companies of approximately $1.5 billion.

In addition, for this same period, our equity and equity warrant investments in public companies, which are subject to volatility based on changes in market prices, have experienced gains of approximately $1.5 billion based on available trading prices.

The effects of the COVID-19 pandemic on our business make estimates of future earnings in relevant jurisdictions more challenging.

prevailing throughout the period.

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| | | | December 31, 2019 | | | | | | | | | | | | | | | | | | | | |

| Cash | | | $ | 9,776 | | | | | $ | — | | | | | $ | — | | | | | $ | 9,776 | |

| Corporate debt securities | | | 11,845 | | | | | | 37 | | | | | | (1) | | | | | | 11,881 | | |

| | | | $ | 55,083 | | | | | $ | 55 | | | | | $ | (3) | | | | | $ | 55,342 | |

___________________

| Total | | | $ | 73,561 | | | | | $ | 73,933 | |

| | | | December 31, 2019 | | | | | | | | | | | | | | |

| Gross lease liabilities | | | $ | 31,963 | | | | | $ | 28,875 | | | | | $ | 60,838 | |

| Less: imputed interest | | | (6,128) | | | | | | (1,896) | | | | | | (8,024) | | |

On April 12, 2018, we acquired Ring Inc. for cash consideration of approximately $839 million, net of cash acquired, and on September 11, 2018, we acquired PillPack, Inc. for cash consideration of approximately $753 million, net of cash acquired, to expand our product and service offerings.

| Goodwill - January 1, 2019 | | | $ | 12,191 | | | | | $ | 1,270 | | | | | $ | 1,087 | | | | | $ | 14,548 | |

| Marketing-related | | | $ | 2,303 | | | | | $ | (340) | | | | | $ | 1,963 | | | | | $ | 2,289 | | | | | $ | (445) | | | | | $ | 1,844 | | | | | 20.0 | | |

| Contract-based | | | 1,680 | | | | | | (302) | | | | | | 1,378 | | | | | | 1,917 | | | | | | (418) | | | | | | 1,499 | | | | | | 11.0 | | |

| Customer-related | | | 282 | | | | | | (130) | | | | | | 152 | | | | | | 179 | | | | | | (77) | | | | | | 102 | | | | | | 4.0 | | |

| 2021 | | | $ | 464 | |

| 2022 | | | 430 | | |

| 2023 | | | 368 | | |

| 2024 | | | 303 | | |

We carried out an evaluation required by the Securities Exchange Act of 1934 (the “1934 Act”), under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a-15(e) of the 1934 Act, as of December 31, [removed: 2020.][added: 2021.]

Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of December 31, [removed: 2020,] [added: 2021,] our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the 1934 Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to provide reasonable assurance that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Management has assessed the effectiveness of our internal control over financial reporting as of December 31, [removed: 2020] [added: 2021] based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

As a result of this assessment, management concluded that, as of December 31, [removed: 2020,] [added: 2021,] our internal control over financial reporting was effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

There were no changes in our internal control over financial reporting during the quarter ended December 31, [removed: 2020] [added: 2021] that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We have audited Amazon.com, Inc.’s internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Amazon.com, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, [removed: 2020] [added: 2021] and the related notes and our report dated February [removed: 2, 2021] [added: 3, 2022] expressed an unqualified opinion thereon.

February 3, 2022

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February 2, 2021

Not applicable.

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*Disclosure Pursuant to Section 13(r) of the Exchange Act*

As previously disclosed, we determined that, between January 2012 and June 2020, we processed and delivered orders of consumer products for certain individuals and entities located outside Iran covered by the Iran Threat Reduction and Syria Human Rights Act.

The information provided pursuant to Section 13(r) of the Exchange Act in Item 5 of Part II of the Company’s Quarterly Reports on 10-Q for the quarters ended [March 31, 2020](https://www.sec.gov/Archives/edgar/data/1018724/000101872420000010/amzn-20200331x10q.htm#sEEF6BF506EF75F529CCCE4FEA4AFE718) and [June 30, 2020](https://www.sec.gov/Archives/edgar/data/1018724/000101872420000021/amzn-20200630.htm#i4e01ae04cb2e45ecb483b1d74e035358_109) is hereby incorporated by reference to such reports.

PART III

Not applicable.

PART III

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Information regarding our Executive Officers required by Item 10 of Part III is set forth in Item 1 of Part I “Business — Information About Our Executive Officers.” Information required by Item 10 of Part III regarding our Directors and any material changes to the process by which security holders may recommend nominees to the Board of Directors is included in our Proxy Statement relating to our [removed: 2021] [added: 2022] Annual Meeting of Shareholders, and is incorporated herein by reference.

Information relating to our Code of Business Conduct and Ethics and, to the extent applicable, compliance with Section 16(a) of the 1934 Act is set forth in our Proxy Statement relating to our [removed: 2021] [added: 2022] Annual Meeting of Shareholders and is incorporated herein by reference.

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Information required by Item 11 of Part III is included in our Proxy Statement relating to our [removed: 2021] [added: 2022] Annual Meeting of Shareholders and is incorporated herein by reference.

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Information required by Item 12 of Part III is included in our Proxy Statement relating to our [removed: 2021] [added: 2022] Annual Meeting of Shareholders and is incorporated herein by reference.

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Information required by Item 13 of Part III is included in our Proxy Statement relating to our [removed: 2021] [added: 2022] Annual Meeting of Shareholders and is incorporated herein by reference.

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Information required by Item 14 of Part III is included in our Proxy Statement relating to our [removed: 2021] [added: 2022] Annual Meeting of Shareholders and is incorporated herein by reference.

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Consolidated Statements of Cash Flows for each of the three years ended December 31, [removed: 2020][added: 2021]

Consolidated Statements of Operations for each of the three years ended December 31, [removed: 2020][added: 2021]

Consolidated Statements of Comprehensive Income for each of the three years ended December 31, [removed: 2020][added: 2021]

Consolidated Balance Sheets as of December 31, [removed: 2019 and] 2020 [added: and 2021]

Consolidated Statements of Stockholders’ Equity for each of the three years ended December 31, [removed: 2020][added: 2021]

| 3.1 | | | | | | [Restated Certificate of Incorporation of the Company (incorporated by reference [removed: to](https://www.sec.gov/Archives/edgar/data/1018724/000101872420000015/amzn-20200529xex31.htm) [the Company’s](https://www.sec.gov/Archives/edgar/data/1018724/000101872420000015/amzn-20200529xex31.htm) [Current](https://www.sec.gov/Archives/edgar/data/1018724/000101872420000015/amzn-20200529xex31.htm) [Report] [added: to the Company’s Current Report] on [removed: Form](https://www.sec.gov/Archives/edgar/data/1018724/000101872420000015/amzn-20200529xex31.htm) [8K,] [added: Form 8](https://www.sec.gov/Archives/edgar/data/1018724/000101872420000015/amzn-20200529xex31.htm)[\-](https://www.sec.gov/Archives/edgar/data/1018724/000101872420000015/amzn-20200529xex31.htm)[K,] filed May 29, [removed: 2020](https://www.sec.gov/Archives/edgar/data/1018724/000101872420000015/amzn-20200529xex31.htm)[).](https://www.sec.gov/Archives/edgar/data/1018724/000101872420000015/amzn-20200529xex31.htm)] [added: 2020).](https://www.sec.gov/Archives/edgar/data/1018724/000101872420000015/amzn-20200529xex31.htm)] | | |

| 3.2 | | | | | | [Amended and Restated Bylaws of the Company (incorporated by reference to the Company’s Current Report on Form 8-K, [removed: filed](https://www.sec.gov/Archives/edgar/data/1018724/000101872420000015/amzn-20200529xex32.htm) [May](https://www.sec.gov/Archives/edgar/data/1018724/000101872420000015/amzn-20200529xex32.htm) [](https://www.sec.gov/Archives/edgar/data/1018724/000101872420000015/amzn-20200529xex32.htm)[29, 2020](https://www.sec.gov/Archives/edgar/data/1018724/000101872420000015/amzn-20200529xex32.htm)[).](https://www.sec.gov/Archives/edgar/data/1018724/000101872420000015/amzn-20200529xex32.htm)] [added: filed May 29, 2020).](https://www.sec.gov/Archives/edgar/data/1018724/000101872420000015/amzn-20200529xex32.htm)] | | |

| [removed: 4.6] [added: 4.7] | | | | | | [Description of [removed: Securities](https://www.sec.gov/Archives/edgar/data/1018724/000101872420000004/amzn-20191231xex46.htm) [](https://www.sec.gov/Archives/edgar/data/1018724/000101872420000004/amzn-20191231xex46.htm)[(incorporated] [added: Securities (incorporated] by reference to the Company’s Annual Report on Form 10-K for the Year ended December 31, [removed: 2019)](https://www.sec.gov/Archives/edgar/data/1018724/000101872420000004/amzn-20191231xex46.htm)[.](https://www.sec.gov/Archives/edgar/data/1018724/000101872420000004/amzn-20191231xex46.htm)] [added: 2019).](https://www.sec.gov/Archives/edgar/data/1018724/000101872420000004/amzn-20191231xex46.htm)] | | |

| 10.7† | | | | | | [Form of Global Restricted Stock Unit Award Agreement for Executive [removed: Officers (incorporated by reference to the Company’s Annual Report on Form 10-K for the Year ended December 31, 2018).](http://www.sec.gov/Archives/edgar/data/1018724/000101872419000004/amzn-20181231xex107.htm)] [added: Officers](https://www.sec.gov/Archives/edgar/data/1018724/000101872422000005/amzn-20211231xex107.htm).] | | |

| 10.8 | | | | | | [Amended and Restated Credit Agreement, dated as of June 23, [removed: 2020, among] [added: 2020,](https://www.sec.gov/Archives/edgar/data/1018724/000101872422000005/amzn-20211231xex108.htm) [as amended by the First Amendment thereto, dated as of November 24, 2021,](https://www.sec.gov/Archives/edgar/data/1018724/000101872422000005/amzn-20211231xex108.htm) [among] Amazon.com, Inc., JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party [removed: thereto (incorporated by reference to the Company’s Current Report on Form 8-K, filed June 23, 2020).](https://www.sec.gov/Archives/edgar/data/1018724/000119312520176528/d948849dex101.htm)] [added: thereto](https://www.sec.gov/Archives/edgar/data/1018724/000101872422000005/amzn-20211231xex108.htm)[.](https://www.sec.gov/Archives/edgar/data/1018724/000101872422000005/amzn-20211231xex108.htm)] | | |

| 21.1 | | | | | | [List of Significant [removed: Subsidiaries.](https://www.sec.gov/Archives/edgar/data/1018724/000101872421000004/amzn-20201231xex211.htm)] [added: Subsidiaries.](https://www.sec.gov/Archives/edgar/data/1018724/000101872422000005/amzn-20211231xex211.htm)] | | |

| 23.1 | | | | | | [Consent of Independent Registered Public Accounting [removed: Firm.](https://www.sec.gov/Archives/edgar/data/1018724/000101872421000004/amzn-20201231xex231.htm)] [added: Firm.](https://www.sec.gov/Archives/edgar/data/1018724/000101872422000005/amzn-20211231xex231.htm)] | | |

| 31.1 | | | | | | [Certification [removed: of Jeffrey P. Bezos, Chairman and] [added: of](https://www.sec.gov/Archives/edgar/data/1018724/000101872422000005/amzn-20211231xex311.htm) [Andrew R. Jassy](https://www.sec.gov/Archives/edgar/data/1018724/000101872422000005/amzn-20211231xex311.htm)[,](https://www.sec.gov/Archives/edgar/data/1018724/000101872422000005/amzn-20211231xex311.htm) [President](https://www.sec.gov/Archives/edgar/data/1018724/000101872422000005/amzn-20211231xex311.htm) [and] Chief Executive Officer of Amazon.com, Inc., pursuant to Rule 13a-14(a) under the Securities Exchange Act of [removed: 1934.](https://www.sec.gov/Archives/edgar/data/1018724/000101872421000004/amzn-20201231xex311.htm)] [added: 1934.](https://www.sec.gov/Archives/edgar/data/1018724/000101872422000005/amzn-20211231xex311.htm)] | | |

| 31.2 | | | | | | [Certification of Brian T. Olsavsky, Senior Vice President and Chief Financial Officer of Amazon.com, Inc., pursuant to Rule 13a-14(a) under the Securities Exchange Act of [removed: 1934.](https://www.sec.gov/Archives/edgar/data/1018724/000101872421000004/amzn-20201231xex312.htm)] [added: 1934.](https://www.sec.gov/Archives/edgar/data/1018724/000101872422000005/amzn-20211231xex312.htm)] | | |

| 32.1 | | | | | | [Certification [removed: of Jeffrey P. Bezos, Chairman and] [added: of](https://www.sec.gov/Archives/edgar/data/1018724/000101872422000005/amzn-20211231xex321.htm) [Andrew R. Jassy](https://www.sec.gov/Archives/edgar/data/1018724/000101872422000005/amzn-20211231xex321.htm)[,](https://www.sec.gov/Archives/edgar/data/1018724/000101872422000005/amzn-20211231xex321.htm) [President](https://www.sec.gov/Archives/edgar/data/1018724/000101872422000005/amzn-20211231xex321.htm) [and] Chief Executive Officer of Amazon.com, Inc., pursuant to 18 U.S.C. Section [removed: 1350.](https://www.sec.gov/Archives/edgar/data/1018724/000101872421000004/amzn-20201231xex321.htm)] [added: 1350.](https://www.sec.gov/Archives/edgar/data/1018724/000101872422000005/amzn-20211231xex321.htm)] | | |

| 32.2 | | | | | | [Certification of Brian T. Olsavsky, Senior Vice President and Chief Financial Officer of Amazon.com, Inc., pursuant to 18 U.S.C. Section [removed: 1350.](https://www.sec.gov/Archives/edgar/data/1018724/000101872421000004/amzn-20201231xex322.htm)] [added: 1350.](https://www.sec.gov/Archives/edgar/data/1018724/000101872422000005/amzn-20211231xex322.htm)] | | |

| 101 | | | | | | The following financial statements from the Company’s Annual Report on Form 10-K for the year ended December 31, [removed: 2020,] [added: 2021,] formatted in XBRL: (i) Consolidated Statements of Cash Flows, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Balance Sheets, (v) Consolidated Statements of Stockholders’ Equity, and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags. | | |

| 104 | | | | | | The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, [removed: 2020,] [added: 2021,] formatted in iXBRL (included as Exhibit 101). | | |

| 4.6 | | | | | | [Officers’ Certificate of Amazon.com, Inc., dated as of May 12, 2021, containing Form of 0.250% Note due 2023, Form of 0.450% Note due 2024, Form of 1.000% Note due 2026, Form of 1.650% Note due 2028, Form of 2.100% Note due 2031, Form of 2.875% Note due 2041, Form of 3.100% Note due 2051, and Form of 3.250% Note due 2061 (incorporated by reference to the Company’s Current Report on Form 8-K, filed May 12, 2021).](https://www.sec.gov/Archives/edgar/data/1018724/000119312521159084/d508532dex41.htm) | | |

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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized, as of February [removed: 2, 2021.][added: 3, 2022.]

| [added: Jeffrey P. Bezos] | | | [removed: By:] | | | [removed: /s/ Jeffrey P. Bezos] [added: Executive Chair] | | |

| | | | | | | [removed: President,] [added: President and] Chief Executive [removed: Officer, and Chairman of the Board] [added: Officer] | | |

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities indicated as of February [removed: 2, 2021.][added: 3, 2022.]

| [removed: Jeffrey P. Bezos] [added: Andrew R. Jassy] | | | | | | [removed: Chairman of the Board, President,] [added: President] and Chief Executive Officer (Principal Executive Officer) | | |

| | | | By: | | | /s/ Andrew R. Jassy | | |

| | | | | | | Andrew R. Jassy | | |

| /s/ Andrew R. Jassy | | | | | | | | |

| /s/ Edith W. Cooper | | | | | | | | |

| Edith W. Cooper | | | | | | Director | | |

| | | | | | | Jeffrey P. Bezos | | |

| /s/ Rosalind G. Brewer | | | | | | | | |

| Rosalind G. Brewer | | | | | | Director | | |

| /s/ Thomas O. Ryder | | | | | | | | |

| Thomas O. Ryder | | | | | | Director | | |