NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 — DESCRIPTION OF BUSINESS, ACCOUNTING POLICIES, AND SUPPLEMENTAL DISCLOSURES Description of Business We seek to be Earth’s most customer-centric company. In each of our segments, we serve our primary customer sets, consisting of consumers, sellers, developers, enterprises, content creators, advertisers, and employees. We serve consumers through our online and physical stores and focus on selection, price, and convenience. We offer programs that enable sellers to grow their businesses, sell their products in our stores, and fulfill orders using our services, and programs that allow authors, independent publishers, musicians, filmmakers, Twitch streamers, skill and app developers, and others to publish and sell content. We serve developers and enterprises of all sizes through AWS, which offers a broad set of on-demand technology services, including compute, storage, database, analytics, artificial intelligence and machine learning, and other services. We also manufacture and sell electronic devices. In addition, we provide advertising services to sellers, vendors, publishers, authors, and others, through programs such as sponsored ads, display, and video advertising. We have organized our operations into three segments: North America, International, and AWS. See “Note 10 — Segment Information.” Principles of Consolidation The consolidated financial statements include the accounts of Amazon.com, Inc. and its consolidated entities (collectively, the “Company”), consisting of its wholly-owned subsidiaries and those entities in which we have a variable interest and of which we are the primary beneficiary, including certain entities in India and certain entities that support our healthcare services and production and distribution of video content. Intercompany balances and transactions between consolidated entities are eliminated. Use of Estimates The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, collectability of receivables, commitments and contingencies, impairment of property and equipment and operating leases, income taxes, inventory valuation, self-insurance liabilities, stock-based compensation forfeiture rates, the determination of when to capitalize certain costs relating to new products or service offerings, useful lives of equipment, valuation and impairment of investments, valuation of acquired intangibles and goodwill, valuation of derivative instruments, vendor funding, and viewing patterns of capitalized video content. Actual results could differ materially from these estimates. We review the useful lives of equipment on an ongoing basis. Effective January 1, 2025 we changed our estimate of the useful lives of a subset of our servers and networking equipment from six years to five years. The shorter useful lives are due to the increased pace of technology development, particularly in the area of artificial intelligence and machine learning. The effect of this change in estimate for the year ended December 31, 2025, based on servers and networking equipment that were included in “Property and equipment, net” as of December 31, 2024 and those acquired during the year ended December 31, 2025, was an increase in depreciation and amortization expense of $1.4 billion and a reduction in net income of $1.0 billion, or $0.10 per basic share and $0.10 per diluted share, which primarily impacted our AWS segment. During Q3 2025, we recorded $2.5 billion of expense related to the settlement of a lawsuit with the FTC. This charge was recorded in “Other operating expense (income), net” and impacted our North America segment. During Q4 2025, we recorded $2.4 billion of expense related to settlements of a lawsuit and tax disputes, severance costs, and asset impairments. Of this total, $1.1 billion related to the resolution of tax disputes associated with our stores business in Italy, and the settlement of a lawsuit, recorded primarily in “Other operating expense (income), net” and “Fulfillment,” and primarily impacted our International segment. For the year ended December 31, 2025, we recorded approximately $2.7 billion of estimated severance costs primarily related to planned role eliminations, of which $1.8 billion was recorded in Q3 2025 and $730 million was recorded in the fourth quarter. These charges increased our payroll and related expenses, were recorded primarily in “Technology and infrastructure,” “Fulfillment,” and “Sales and marketing,” and impacted all of our segments. For the year ended December 31, 2025, we recorded approximately $1.3 billion of asset impairments, of which $610 million was recorded in the fourth quarter, primarily consisting of property and equipment and operating leases related to 41 --- Table of Contents physical stores. These fourth quarter charges were recorded in “Other operating expense (income), net” and primarily impacted our North America segment. Supplemental Cash Flow Information The following table shows supplemental cash flow information (in millions): > **Year Ended December 31,** > > Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, > > 2023 / 2023 / 2023 / 2024 / 2024 / 2024 / 2025 / 2025 / 2025 > SUPPLEMENTAL CASH FLOW INFORMATION: ..... SUPPLEMENTAL CASH FLOW INFORMATION: / SUPPLEMENTAL CASH FLOW INFORMATION: > Cash paid for interest on debt, net of capitalized interest ... Cash paid for interest on debt, net of capitalized interest / Cash paid for interest on debt, net of capitalized interest / $ / 2,608 / $ / 1,858 / $ / 1,458 > Cash paid for operating leases .......... Cash paid for operating leases / Cash paid for operating leases / 10,453 / 10,453 / 12,341 / 12,341 / 15,038 / 15,038 > Cash paid for interest on finance leases ... Cash paid for interest on finance leases / Cash paid for interest on finance leases / 308 / 308 / 287 / 287 / 295 / 295 > Cash paid for interest on financing obligations ... Cash paid for interest on financing obligations / Cash paid for interest on financing obligations / 196 / 196 / 219 / 219 / 196 / 196 > Cash paid for income taxes, net of refunds ... Cash paid for income taxes, net of refunds / Cash paid for income taxes, net of refunds / 11,179 / 11,179 / 12,308 / 12,308 / 8,295 / 8,295 > Assets acquired under operating leases ... Assets acquired under operating leases / Assets acquired under operating leases / 14,052 / 14,052 / 15,424 / 15,424 / 19,930 / 19,930 > Property and equipment acquired under finance leases, net of remeasurements and modifications ... Property and equipment acquired under finance leases, net of remeasurements and modifications / Property and equipment acquired under finance leases, net of remeasurements and modifications / 642 / 642 / 854 / 854 / 2,911 / 2,911 > Increase (decrease) in property and equipment acquired but not yet paid ... Increase (decrease) in property and equipment acquired but not yet paid / Increase (decrease) in property and equipment acquired but not yet paid / (1,414) / (1,414) / 7,039 / 7,039 / 10,155 / 10,155 Earnings Per Share Basic earnings per share is calculated using our weighted-average outstanding common shares. Diluted earnings per share is calculated using our weighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method. In periods when we have a net loss, stock awards are excluded from our calculation of earnings per share as their inclusion would have an antidilutive effect. The following table shows the calculation of diluted shares (in millions): > **Year Ended December 31,** > > Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, > > 2023 / 2023 / 2023 / 2024 / 2024 / 2024 / 2025 / 2025 / 2025 > Shares used in computation of basic earnings per share ... Shares used in computation of basic earnings per share / Shares used in computation of basic earnings per share / 10,304 / 10,304 / 10,473 / 10,473 / 10,656 / 10,656 > Total dilutive effect of outstanding stock awards ... Total dilutive effect of outstanding stock awards / Total dilutive effect of outstanding stock awards / 188 / 188 / 248 / 248 / 171 / 171 > Shares used in computation of diluted earnings per share ... Shares used in computation of diluted earnings per share / Shares used in computation of diluted earnings per share / 10,492 / 10,492 / 10,721 / 10,721 / 10,827 / 10,827 Revenue Revenue is measured based on the amount of consideration that we expect to receive, reduced by estimates for return allowances, promotional discounts, and rebates. Revenue also excludes any amounts collected on behalf of third parties, including sales and indirect taxes. In arrangements where we have multiple performance obligations, the transaction price is allocated to each performance obligation using the relative stand-alone selling price. We generally determine stand-alone selling prices based on the prices charged to customers or using expected cost plus a margin. A description of our principal revenue generating activities is as follows: Retail sales - We offer consumer products through our online and physical stores. Revenue is recognized when control of the goods is transferred to the customer, which generally occurs upon our delivery to a third-party carrier or, in the case of an Amazon delivery, to the customer. Third-party seller services - We offer programs that enable sellers to sell their products in our stores, and fulfill orders using our services. We are not the seller of record in these transactions. The commissions and any related fulfillment and shipping fees we earn from these arrangements are recognized when the services are rendered, which generally occurs upon delivery of the related products to a third-party carrier or, in the case of an Amazon delivery, to the customer. Advertising services - We provide advertising services to sellers, vendors, publishers, authors, and others, through programs such as sponsored ads, display, and video advertising. Revenue is recognized as ads are delivered based on the number of clicks or impressions. 42 --- Table of Contents Subscription services - Our subscription sales include fees associated with Amazon Prime memberships and access to content including digital video, audiobooks, digital music, e-books, and other non-AWS subscription services. Prime memberships provide our customers with access to an evolving suite of benefits that represent a single stand-ready obligation. Subscriptions are paid for at the time of or in advance of delivering the services. Revenue from such arrangements is recognized over the subscription period. AWS - Our AWS arrangements include global sales of compute, storage, database, and other services. Revenue is allocated to services using stand-alone selling prices and is primarily recognized when the customer uses these services, based on the quantity of services rendered, such as compute or storage capacity delivered on-demand. Certain services, including compute and database, are also offered as a fixed quantity over a specified term, for which revenue is recognized ratably. Sales commissions we pay in connection with contracts that exceed one year are capitalized and amortized over the contract term. Other - Other revenue includes sales related to various other offerings, such as healthcare services, certain licensing and distribution of video content, and shipping services, and our co-branded credit card agreements. Revenue is recognized when content is licensed or distributed and as or when services are performed. Return Allowances Return allowances, which reduce revenue and cost of sales, are estimated using historical experience. Liabilities for return allowances are included in “Accrued expenses and other” and were $1.4 billion, $1.4 billion, and $1.6 billion as of December 31, 2023, 2024, and 2025. Additions to the allowance were $5.2 billion, $5.5 billion, and $5.8 billion and deductions from the allowance were $5.1 billion, $5.5 billion, and $5.8 billion in 2023, 2024, and 2025. Included in “Inventories” on our consolidated balance sheets are assets totaling $992 million, $998 million, and $1.2 billion as of December 31, 2023, 2024, and 2025, for the rights to recover products from customers associated with our liabilities for return allowances. Cost of Sales Cost of sales primarily consists of the purchase price of consumer products, inbound and outbound shipping costs, including costs related to sortation and delivery centers and where we are the transportation service provider, and digital media content costs where we record revenue gross, including video and music. Shipping costs to receive products from our suppliers are included in our inventory, and recognized as cost of sales upon sale of products to our customers. Payment processing and related transaction costs, including those associated with seller transactions, are classified in “Fulfillment” on our consolidated statements of operations. Vendor Agreements We have agreements with our vendors to receive consideration primarily for cooperative marketing efforts, promotions, incentives, and volume rebates. We generally consider these amounts received from vendors to be a reduction of the prices we pay for their goods, including property and equipment, or services, and are recorded as a reduction of the cost of inventory, cost of services, or cost of property and equipment. Volume rebates typically depend on reaching minimum purchase thresholds. We evaluate the likelihood of reaching purchase thresholds using past experience and current year forecasts. When volume rebates can be reasonably estimated, we record a portion of the rebate as we make progress towards the purchase threshold. Fulfillment Fulfillment costs primarily consist of those costs incurred in operating and staffing our North America and International segments’ fulfillment centers, physical stores, and customer service centers, including facilities and equipment expenses, such as depreciation and amortization, and rent; costs attributable to buying, receiving, inspecting, and warehousing inventories; picking, packaging, and preparing customer orders for shipment; payment processing and related transaction costs, including costs associated with our guarantee for certain seller transactions; responding to inquiries from customers; and supply chain management for our manufactured electronic devices. Fulfillment costs also include amounts paid to third parties that assist us in fulfillment and customer service operations. 43 --- Table of Contents Technology and Infrastructure Technology and infrastructure costs include payroll and related expenses for employees involved in the research and development of new and existing products and services, development, design, and maintenance of our stores, curation and display of products and services made available in our online stores, and infrastructure costs. Infrastructure costs include servers, networking equipment, and data center related depreciation and amortization, rent, utilities, and other expenses necessary to support AWS and other Amazon businesses. Collectively, these costs reflect the investments we make in order to offer a wide variety of products and services to our customers, including expenditures related to initiatives to build and deploy innovative and efficient software and electronic devices and the development of a satellite network for global broadband service and autonomous vehicles for ride-hailing services. Technology and infrastructure costs are generally expensed as incurred. Sales and Marketing Sales and marketing costs include advertising and payroll and related expenses for personnel engaged in marketing and selling activities, including sales commissions related to AWS. We pay commissions to third parties when their customer referrals result in sales. We also participate in cooperative advertising arrangements with certain of our vendors, and other third parties. Advertising and other promotional costs to market our products and services are expensed as incurred and were $20.3 billion, $21.4 billion, and $23.5 billion in 2023, 2024, and 2025. General and Administrative General and administrative expenses primarily consist of costs for corporate functions, including payroll and related expenses; facilities and equipment expenses, such as depreciation and amortization expense and rent; and professional fees. Stock-Based Compensation Compensation cost for all equity-classified stock awards expected to vest is measured at fair value on the date of grant and recognized over the service period. The fair value of restricted stock units is determined based on the number of shares granted and the quoted price of our common stock. Such value is recognized as expense over the service period, net of estimated forfeitures, using the accelerated method. Under this method, approximately 50% of the grant date fair value is recognized as expense in the first year of grant for the majority of our stock-based compensation awards. The accelerated method also adds a higher level of sensitivity and complexity in estimating forfeitures. If an award is forfeited early in its life, the adjustment to compensation expense is much greater under an accelerated method than under a straight-line method. The estimated number of stock awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from our current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised. We consider many factors when estimating expected forfeitures, including historical forfeiture experience. Additionally, we have stock-based compensation awards that are expected to settle in cash. These liability-classified awards are remeasured to fair value at the end of each reporting period until settlement or expiration. Other Operating Expense (Income), Net Other operating expense (income), net, consists primarily of the amortization of intangible assets and asset impairments. During 2025, we also recorded the settlement of a lawsuit with the FTC and the resolution of tax disputes associated with our stores business in Italy. 44 --- Table of Contents Other Income (Expense), Net Other income (expense), net, is as follows (in millions): > **Year Ended December 31,** > > Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, > > 2023 / 2023 / 2023 / 2024 / 2024 / 2024 / 2025 / 2025 / 2025 > Marketable equity securities valuation gains (losses), net ... Marketable equity securities valuation gains (losses), net / Marketable equity securities valuation gains (losses), net / $ / 984 / $ / (1,278) / $ / 1,439 > Equity warrant valuation gains (losses), net ... Equity warrant valuation gains (losses), net / Equity warrant valuation gains (losses), net / 26 / 26 / (192) / (192) / 553 / 553 > Reclassification adjustments for gains (losses) on available-for-sale debt securities, net ... Reclassification adjustments for gains (losses) on available-for-sale debt securities, net / Reclassification adjustments for gains (losses) on available-for-sale debt securities, net / (65) / (65) / (7) / (7) / 5,600 / 5,600 > Upward adjustments relating to equity investments in private companies ... Upward adjustments relating to equity investments in private companies / Upward adjustments relating to equity investments in private companies / 40 / 40 / 49 / 49 / 7,709 / 7,709 > Foreign currency gains (losses), net .... Foreign currency gains (losses), net / Foreign currency gains (losses), net / 65 / 65 / (408) / (408) / 19 / 19 > Other, net .............................. Other, net / Other, net / (112) / (112) / (414) / (414) / (91) / (91) > Total other income (expense), net ....... Total other income (expense), net / Total other income (expense), net / $ / 938 / $ / (2,250) / $ / 15,229 The marketable equity securities valuation gain (loss) of $984 million, $(1.3) billion, and $1.4 billion in 2023, 2024, and 2025 is primarily from our equity investment in Rivian. The reclassification adjustments for the gains on available-for-sale debt securities of $5.6 billion for the year ended December 31, 2025 is primarily from the portions of our convertible notes investments in Anthropic that were converted to nonvoting preferred stock during the year ended December 31, 2025. The upward adjustments relating to equity investments in private companies of $7.7 billion for the year ended December 31, 2025 reflect observable changes in prices, primarily from our nonvoting preferred stock in Anthropic. Income Taxes Income tax expense includes U.S. (federal and state) and foreign income taxes. Certain foreign subsidiary earnings and losses are subject to current U.S. taxation and the subsequent repatriation of those earnings is not subject to tax in the U.S. We intend to invest substantially all of our foreign subsidiary earnings, as well as our capital in our foreign subsidiaries, indefinitely outside of the U.S. in those jurisdictions in which we would incur significant, additional costs upon repatriation of such amounts. Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases, as well as net operating loss and tax credit carryforwards, and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. Deferred tax assets represent amounts available to reduce income taxes payable in future periods. Deferred tax assets are evaluated for future realization and reduced by a valuation allowance to the extent we believe they will not be realized. We consider many factors when assessing the likelihood of future realization of our deferred tax assets, including recent cumulative loss experience and expectations of future earnings, capital gains and investment in such jurisdiction, the carry-forward periods available to us for tax reporting purposes, and other relevant factors. We utilize a two-step approach to recognizing and measuring uncertain income tax positions (income tax contingencies). The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not the position will be sustained on audit, including resolution of related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. We consider many factors when evaluating our tax positions and estimating our tax benefits, which may require periodic adjustments and which may not accurately forecast actual outcomes. We include interest and penalties related to our income tax contingencies in income tax expense. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3 — Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. 45 --- Table of Contents We measure the fair value of money market funds and certain marketable equity securities based on quoted prices in active markets for identical assets or liabilities. Other marketable securities were valued either based on recent trades of securities in inactive markets or based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data. Derivative Instruments We enter into energy contracts to secure electricity supply for our existing and future operations, some of which extend 20 years. We may make or receive net cash payments, rather than take delivery of electricity, when our consumption is less than committed quantities due to operational variability. Because we may make or receive net cash payments, these contracts are derivative instruments. These contracts are not traded on exchanges or transacted in secondary markets and are not used for trading or speculative purposes. Derivative instruments are measured at fair value each reporting period. Fair value measurements are based on valuation methods using both common factors like electricity futures prices where there are more liquid trading volumes generally for remaining contractual periods up to four to five years, forward capacity auctions and risk-free interest rates, and a number of management assumptions for remaining contractual periods greater than four to five years where there is significantly less or no trading data such as long-dated forward commodity prices and implied volatility curves, and credit adjustments. The extent of management judgment is significant (Level 3). Fair value measurements will not impact cash flows but may be material to our statements of operations and balance sheet due to the duration of these contracts and volatility inherent in valuation methods. Generally, we can terminate our contracts by paying cash in the form of fixed penalties, such as reimbursing the counterparty for the costs of new construction incurred. Termination penalties are generally not based on fair value measurements. As of December 31, 2025, the energy contract quantities subject to derivative accounting fair value measurements were approximately 200 million megawatt-hours and the weighted-average remaining duration of these contracts is approximately 16 years, with the majority of these megawatt-hours to be delivered beyond the next nine years. The impact of these fair value measurements on our consolidated statement of operations for the year ended December 31, 2025 was not significant. Changes in fair value measurements will create unrealized gains and losses recorded within operating expenses on our statements of operations with corresponding assets (unrealized gains) and liabilities (unrealized losses) recorded on our balance sheet. Certain of our energy contracts are subject to regulatory approval and are exempt from derivative guidance until the approval is obtained. If possible, we may elect the normal purchases and normal sales (NPNS) scope exemption from derivative guidance for energy contracts where we expect to consume substantially all committed quantities. A contract that no longer meets the NPNS exemption must be measured at fair value with immediate recognition in our financial statements. Cash and Cash Equivalents We classify all highly liquid instruments with an original maturity of three months or less as cash equivalents. Inventories Inventories, consisting of products available for sale, are primarily accounted for using the first-in, first-out method, and are valued at the lower of cost and net realizable value. This valuation requires us to make judgments, based on currently available information, about the likely method of disposition, such as through sales to individual customers, returns to product vendors, or liquidations, and expected recoverable values of each disposition category. The inventory valuation allowance, representing a write-down of inventory, was $3.0 billion and $3.3 billion as of December 31, 2024 and 2025. We provide Fulfillment by Amazon services in connection with certain of our sellers’ programs. Third-party sellers maintain ownership of their inventory, regardless of whether fulfillment is provided by us or the third-party sellers, and therefore these products are not included in our inventories. We also purchase electronic device components from a variety of suppliers and use several contract manufacturers to provide manufacturing services for our products. During the normal course of business, in order to manage manufacturing lead times and help ensure adequate supply, we enter into agreements with contract manufacturers and suppliers for certain electronic device components. We have certain non-cancellable purchase commitments arising from these agreements. These commitments are based on forecasted customer demand. If we reduce these commitments, we may incur additional costs. 46 --- Table of Contents Accounts Receivable, Net and Other Included in “Accounts receivable, net and other” on our consolidated balance sheets are receivables primarily related to customers, vendors, and prepaid expenses and other current assets. As of December 31, 2024 and 2025, customer receivables, net, were $34.3 billion and $40.4 billion, vendor receivables, net, were $11.6 billion and $15.9 billion, and other receivables, net, were $3.4 billion and $4.5 billion. Prepaid expenses and other current assets, which include amounts related to non-income taxes and satellite network launch services deposits, were $6.3 billion and $6.9 billion as of December 31, 2024 and December 31, 2025. We currently expense satellite network launch services deposits upon launch to “Technology and infrastructure.” We estimate losses on receivables based on expected losses, including our historical experience of actual losses. Receivables are considered impaired and written-off when it is probable that all contractual payments due will not be collected in accordance with the terms of the agreement. The allowance for doubtful accounts was $1.7 billion, $2.0 billion, and $2.4 billion as of December 31, 2023, 2024, and 2025. Additions to the allowance were $1.9 billion, $1.9 billion, and $1.6 billion, and deductions to the allowance were $1.6 billion, $1.6 billion, and $1.2 billion in 2023, 2024, and 2025. Software Development Costs We incur software development costs related to products to be sold, leased, or marketed to external users, internal-use software, and our websites. Software development costs capitalized were not significant for the years presented. All other costs, including those related to design or maintenance, are expensed as incurred. Property and Equipment, Net Property and equipment are stated at cost less accumulated depreciation and amortization. Incentives that we receive from property and equipment vendors are recorded as a reduction to our costs. Property includes buildings and land that we own, along with property we have acquired under build-to-suit lease arrangements when we have control over the building during the construction period and finance lease arrangements. Heavy equipment consists primarily of assets that support the infrastructure of our fulfillment network and data centers. Other equipment consists primarily of fulfillment equipment. Depreciation and amortization is recorded on a straight-line basis over the estimated useful lives of the assets and classified within the corresponding operating expense categories on our consolidated statements of operations. The estimated useful lives as of December 31, 2025, are as follows: > **Property and equipment** > > Property and equipment / Property and equipment / Estimated useful life / Estimated useful life / Estimated useful life > > Buildings ............................... Buildings / Buildings / Lesser of forty years or the remaining life of the underlying building / Lesser of forty years or the remaining life of the underlying building / Lesser of forty years or the remaining life of the underlying building > Servers and networking equipment ........ Servers and networking equipment / Servers and networking equipment / Five to six years (1) / Five to six years (1) / Five to six years (1) > Heavy equipment ......................... Heavy equipment / Heavy equipment / Ten to thirteen years (2) / Ten to thirteen years (2) / Ten to thirteen years (2) > Other equipment ......................... Other equipment / Other equipment / Three to ten years / Three to ten years / Three to ten years ___________________ (1) Effective January 1, 2024, we changed our estimate of the useful lives for our servers from five to six years, and effective January 1, 2025, we changed our estimate of the useful lives of a subset of our servers and networking equipment from six to five years. (2) Ten years prior to January 1, 2025. Leases We categorize leases with contractual terms longer than twelve months as either operating or finance. Finance leases are generally those leases that allow us to substantially utilize or pay for the entire asset over its estimated life. Assets acquired under finance leases are recorded in “Property and equipment, net.” All other leases are categorized as operating leases. Our leases generally have terms that range from one to ten years for equipment and one to twenty years for property. Certain lease contracts include obligations to pay for other services, such as operations and maintenance. For leases of property, we account for these other services as a component of the lease. For substantially all other leases, the services are accounted for separately and we allocate payments to the lease and other services components based on estimated stand-alone prices. Lease liabilities are recognized at the present value of the fixed lease payments, reduced by landlord incentives using a discount rate based on similarly secured borrowings available to us. Lease assets are recognized based on the initial present value of the fixed lease payments, reduced by landlord incentives, plus any direct costs from executing the leases or lease prepayments reclassified from “Other assets” upon lease commencement. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the lease term. 47 --- Table of Contents When we have the option to extend the lease term, terminate the lease before the contractual expiration date, or purchase the leased asset, and it is reasonably certain that we will exercise the option, we consider the option in determining the classification and measurement of the lease. Our leases may include variable payments based on measures that include changes in price indices, market interest rates, or the level of sales at a physical store, which are expensed as incurred. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the lease. Finance lease assets are amortized within operating expenses on a straight-line basis over the shorter of the estimated useful lives of the assets or, in the instance where title does not transfer at the end of the lease term, the lease term. The interest component of a finance lease is included in interest expense and recognized using the effective interest method over the lease term. We establish assets and liabilities for the present value of estimated future costs to retire long-lived assets at the termination or expiration of a lease. Such assets are amortized over the lease period into operating expense, and the recorded liabilities are accreted to the future value of the estimated retirement costs. Financing Obligations We record assets and liabilities for estimated construction costs under build-to-suit lease arrangements when we have control over the building during the construction period. If we continue to control the building after the construction period, the arrangement is classified as a financing obligation instead of a lease. The building is depreciated over the shorter of its useful life or the term of the obligation. If we do not control the building after the construction period ends, the assets and liabilities for construction costs are derecognized, and we classify the lease as operating. Goodwill and Indefinite-Lived Intangible Assets We evaluate goodwill and indefinite-lived intangible assets for impairment annually or more frequently when an event occurs or circumstances change that indicate the carrying value may not be recoverable. We may elect to utilize a qualitative assessment to evaluate whether it is more likely than not that the fair value of a reporting unit or indefinite-lived intangible asset is less than its carrying value and if so, we perform a quantitative test. We compare the carrying value of each reporting unit and indefinite-lived intangible asset to its estimated fair value and if the fair value is determined to be less than the carrying value, we recognize an impairment loss for the difference. We estimate the fair value of the reporting units using discounted cash flows. Forecasts of future cash flows are based on our best estimate of future net sales and operating expenses, based primarily on expected category expansion, pricing, market segment share, and general economic conditions. We completed the required annual impairment test of goodwill for all reporting units and indefinite-lived intangible assets as of April 1, 2025, resulting in no impairments. The fair value of our reporting units substantially exceeded their carrying value. There were no events that caused us to update our annual impairment test. See “Note 5 — Acquisitions, Goodwill, and Acquired Intangible Assets.” Other Assets Included in “Other assets” on our consolidated balance sheets are amounts primarily related to convertible notes and certain equity investments; video and music content, net of accumulated amortization; long-term deferred tax assets; acquired intangible assets, net of accumulated amortization; satellite network launch services deposits; and affordable housing loans. We will reclassify the satellite network launch service deposits to construction-in-progress included within “Property and equipment, net” on our consolidated balance sheet once the service achieves commercial viability, including sales to customers. We recognize certain transactions with governments when it is probable that incentives included in the agreements, such as cash or certain tax credits, will be received and we are able to comply with any related conditions. These incentives are recorded as reductions to the cost of related assets or expenses. Digital Video and Music Content We obtain video content, inclusive of episodic television and movies, and music content for customers through licensing agreements that have a wide range of licensing provisions including both fixed and variable payment schedules. When the license fee for a specific video or music title is determinable or reasonably estimable and the content is available to us, we recognize an asset and a corresponding liability for the amounts owed. We reduce the liability as payments are made and we amortize the asset to “Cost of sales” on an accelerated basis, based on estimated usage or viewing patterns, or on a straight-line basis. If the licensing fee is not determinable or reasonably estimable, no asset or liability is recorded and licensing costs are expensed as incurred. We also develop original video content for which the production costs are capitalized and amortized to “Cost of sales” predominantly on an accelerated basis that follows the estimated viewing patterns associated with the content. 48 --- Table of Contents The weighted average remaining life of our capitalized video content is 3.2 years. We review usage and viewing patterns impacting the amortization of capitalized video content on an ongoing basis and reflect any changes prospectively. Our produced and licensed video content is primarily monetized together as a unit, referred to as a film group, in each major geography where we offer Amazon Prime memberships. These film groups are evaluated for impairment whenever an event occurs or circumstances change indicating the fair value is less than the carrying value. The total capitalized costs of video, which is primarily released content, and music as of December 31, 2024 and 2025 were $19.6 billion and $21.3 billion. Total video and music expense was $20.4 billion and $22.4 billion for the year ended December 31, 2024 and 2025. Total video and music expense includes licensing and production costs associated with content offered within Amazon Prime memberships, and costs associated with digital subscriptions and sold or rented content. Cash Equivalents and Marketable Securities We generally invest our excess cash in investment grade short- to intermediate-term marketable debt securities and AAA-rated money market funds. Such investments are included in “Cash and cash equivalents” or “Marketable securities” on the accompanying consolidated balance sheets. Marketable debt securities are classified as available-for-sale and reported at fair value with unrealized gains and losses included in “Accumulated other comprehensive income (loss).” Each reporting period, we evaluate whether declines in fair value below carrying value are due to expected credit losses, as well as our ability and intent to hold the investment until a forecasted recovery occurs. Expected credit losses are recorded as an allowance through “Other income (expense), net” on our consolidated statements of operations. Equity investments that have readily determinable fair values, including investments for which we have elected the fair value option, are included in “Marketable securities” on our consolidated balance sheets and measured at fair value with changes recognized in “Other income (expense), net” on our consolidated statements of operations. Non-Marketable Investments Notes that are convertible to equity classified as available-for-sale are reported at fair value with unrealized gains and losses included in “Accumulated other comprehensive income (loss),” a separate component of stockholders’ equity. Credit losses, if any, are recorded as an allowance through “Other income (expense), net” on our consolidated statements of operations. Upon conversion, the amount of the notes reported at fair value are reclassified generally from available-for-sale to equity investments accounted for at cost, with any associated unrealized gain or loss reclassified from “Accumulated other comprehensive income (loss)” to “Other income (expense), net” on our consolidated statements of operations. From Q3 2023 to Q4 2024, we invested $5.3 billion in convertible notes from Anthropic, which are classified as available-for-sale and as Level 3 assets, and as of December 31, 2024 had an estimated fair value of approximately $13.8 billion. In making these estimates, we utilized valuation methods based on information available, including the rights and obligations of the convertible notes, other outstanding classes of securities, observable transactions such as new securities offerings, estimates of expected time to and type of liquidity events and anticipated securities offerings, and discounts for lack of marketability. Some of these notes converted to nonvoting preferred stock in Q1 2025. As a result of conversions, a significant portion of the unrealized gain associated with the notes as of December 31, 2024 was reclassified and a gain of approximately $3.3 billion was recorded in “Other income (expense), net” in our consolidated statement of operations. The investment in nonvoting preferred stock was initially recorded at its estimated fair value at the time of the conversion and is accounted for as a component of our equity investments in private companies not accounted for under the equity-method, with future adjustments for observable changes in prices or impairments representing Level 3 fair value measurements recognized in “Other income (expense), net” on our consolidated statements of operations. In Q2 2025, we invested $1.3 billion in a new convertible note from Anthropic. In Q3 2025, an additional portion of our notes was converted to nonvoting preferred stock, and as a result of the conversion a portion of the unrealized gain associated with the notes was reclassified and a gain of approximately $2.3 billion was recorded in “Other income (expense), net.” We also recorded an upward adjustment of $7.2 billion to our nonvoting preferred stock in “Other income (expense), net” to reflect observable changes in price. In Q4 2025, we invested $1.4 billion in a new convertible note from Anthropic. As of December 31, 2025, the amount recorded on our consolidated balance sheet for nonvoting preferred stock was approximately $14.8 billion. As of December 31, 2025, the estimated fair value of our convertible notes recorded on our consolidated balance sheet was approximately $45.8 billion, and the associated pre-tax unrealized gain included in “Accumulated other comprehensive income (loss)” was $39.5 billion. We also have a commercial arrangement primarily for the provision of AWS cloud services, which includes the use of AWS chips. Subsequent to December 31, 2025, an additional portion of our notes was converted to nonvoting preferred stock. As a result of this conversion, in our Q1 2026 financial statements, we will reclassify a portion of the unrealized gain associated with the notes as of December 31, 2025 and record a gain of approximately $3 billion in “Other income (expense), net.” In our Q1 49 --- Table of Contents 2026 financial statements, we will also record an upward adjustment of approximately $12 billion to our nonvoting preferred stock as of December 31, 2025 in “Other income (expense), net” to reflect observable changes in price. Equity investments in private companies not accounted for under the equity-method, which primarily relate to nonvoting preferred stock in Anthropic, are accounted for at cost, with adjustments for observable changes in prices or impairments representing Level 3 fair value measurements recognized in “Other income (expense), net” on our consolidated statements of operations. Each reporting period, we perform a qualitative assessment to evaluate whether the investment is impaired. Our assessment includes a review of recent operating results and trends, recent sales/acquisitions of the investee securities, and other publicly available data. If the investment is impaired, we write it down to its estimated fair value. As of December 31, 2024 and 2025, these investments had a carrying value of $989 million and $16.2 billion. Equity investments where we can exercise significant influence, but not control, over an investee are accounted for using the equity-method of accounting, or at fair value if we elect the fair value option. Our share of the earnings or losses as reported by equity-method investees, amortization of basis differences, related gains or losses, and impairments, if any, are recognized in “Equity-method investment activity, net of tax” on our consolidated statements of operations. Each reporting period, we evaluate whether declines in fair value below carrying value are other-than-temporary and if so, we write down the investment to its estimated fair value. As of December 31, 2024 and 2025, these investments had a carrying value of $1.2 billion and $659 million. As of December 31, 2024 and 2025, equity warrants measured at fair value were $2.7 billion, with changes recognized in “Other income (expense), net” on our consolidated statements of operations. These warrants are classified as Level 2 and 3 assets. These non-marketable investments are included within “Other assets” on our consolidated balance sheets. Certain of our investments represent a variable interest in an entity for which we do not consolidate because we are not the primary beneficiary. Long-Lived Assets Long-lived assets, other than goodwill and indefinite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets may not be recoverable. For long-lived assets used in operations, including lease assets, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. We measure the impairment loss based on the difference between the carrying amount and estimated fair value. Long-lived assets are considered held for sale when certain criteria are met, including when management has committed to a plan to sell the asset, the asset is available for sale in its immediate condition, and the sale is probable within one year of the reporting date. Assets held for sale are reported at the lower of cost or fair value less costs to sell. Assets held for sale were not significant as of December 31, 2024 and 2025. Accrued Expenses and Other Included in “Accrued expenses and other” on our consolidated balance sheets are liabilities primarily related to tax-related liabilities, leases and asset retirement obligations, payroll and related expenses, self-insurance liabilities, unredeemed gift cards, other operating expenses, customer liabilities, marketing liabilities, current debt, and acquired digital media content. As of December 31, 2024 and 2025, our liabilities for payroll related expenses were $7.5 billion and $10.5 billion and our liabilities for unredeemed gift cards were $5.4 billion and $5.6 billion. We reduce the liability for a gift card when redeemed by a customer. The portion of gift cards that we do not expect to be redeemed is recognized based on customer usage patterns. Self-Insurance Liabilities Although we maintain certain high-deductible, third-party insurance coverage for catastrophic losses, we effectively self-insure for exposure primarily related to workers’ compensation, employee healthcare benefits, general and product liability, and automobile liability, including liability resulting from third-party transportation service providers. We estimate self-insurance liabilities by considering historical claims experience, frequency and costs of claims, projected claims development, inflation, and other actuarial assumptions. Changes in the number or costs of claims, healthcare costs, judgment and settlement amounts, associated legal expenses, and other factors could cause actual results to differ materially from these estimates. As of December 31, 2024 and 2025, our total self-insurance liabilities, which primarily relate to automobile liability, were $8.5 billion and $10.4 billion and are included in “Accrued expenses and other” on our consolidated balance sheets. 50 --- Table of Contents Unearned Revenue Unearned revenue is recorded when payments are received or due in advance of performing our service obligations and is recognized over the service period. Unearned revenue primarily relates to prepayments of AWS services and Amazon Prime memberships. Our total unearned revenue as of December 31, 2024 was $24.6 billion, of which $17.4 billion was recognized as revenue during the year ended December 31, 2025 and our total unearned revenue as of December 31, 2025 was $25.0 billion. Included in “Other long-term liabilities” on our consolidated balance sheets was $6.5 billion and $4.4 billion of unearned revenue as of December 31, 2024 and 2025. Additionally, we have performance obligations, primarily related to AWS, associated with commitments in customer contracts for future services that we expect to fulfill but have not yet been recognized in our financial statements. For contracts with original terms that exceed one year, those commitments not yet recognized were approximately $244 billion as of December 31, 2025. The weighted average remaining life of our long-term contracts is 4.1 years. The amount and timing of revenue recognition will be driven by customer usage and our performance in accordance with contractual obligations, which can extend beyond the original contractual duration and commitment. Other Long-Term Liabilities Included in “Other long-term liabilities” on our consolidated balance sheets are liabilities primarily related to deferred tax liabilities, financing obligations, asset retirement obligations, unearned revenue, tax contingencies, and digital video and music content. Foreign Currency We have internationally-focused stores for which the net sales generated, as well as most of the related expenses directly incurred from those operations, are denominated in local functional currencies. The functional currency of our subsidiaries that either operate or support these stores is generally the same as the local currency. Assets and liabilities of these subsidiaries are translated into U.S. Dollars at period-end foreign exchange rates, and revenues and expenses are translated at average rates prevailing throughout the period. Translation adjustments are included in “Accumulated other comprehensive income (loss),” a separate component of stockholders’ equity. Transaction gains and losses including intercompany transactions denominated in a currency other than the functional currency of the entity involved are included in “Other income (expense), net” on our consolidated statements of operations. In connection with the settlement and remeasurement of intercompany balances, we recorded gains (losses) of $(329) million, $413 million, and $(863) million in 2023, 2024, and 2025. Accounting Pronouncements Recently Adopted In December 2023, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Update (“ASU”) amending existing income tax disclosure guidance, primarily requiring more detailed disclosure for income taxes paid and the effective tax rate reconciliation. We adopted this ASU for the year ended December 31, 2025 on a retroactive basis. See “Note 9 — Income Taxes.” Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued an ASU amending existing income statement disclosure guidance, primarily requiring more detailed disclosure for expenses. The ASU is effective for annual reporting periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The amendments can be applied on either a prospective or retroactive basis. We are currently evaluating the ASU to determine its impact on our disclosures. 51 --- Table of Contents Note 2 — FINANCIAL INSTRUMENTS Cash, Cash Equivalents, Restricted Cash, and Marketable Securities As of December 31, 2024 and 2025, our cash, cash equivalents, restricted cash, and marketable securities primarily consisted of cash, AAA-rated money market funds, U.S. government and agency securities, other investment grade securities, and marketable equity securities. Cash equivalents and marketable securities are recorded at fair value. The following table summarizes, by major investment type, our cash, cash equivalents, restricted cash, and marketable securities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in millions): > **December 31, 2024** > > December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 > > Cost orAmortizedCost / Cost orAmortizedCost / Cost orAmortizedCost / GrossUnrealizedGains / GrossUnrealizedGains / GrossUnrealizedGains / GrossUnrealizedLosses / GrossUnrealizedLosses / GrossUnrealizedLosses / TotalEstimatedFair Value / TotalEstimatedFair Value / TotalEstimatedFair Value > Cash and time deposits .................. Cash and time deposits / Cash and time deposits / $ / 17,055 / $ / — / $ / — / $ / 17,055 > Level 1: ................................ Level 1: / Level 1: > Money market funds ...................... Money market funds / Money market funds / 28,282 / 28,282 / — / — / — / — / 28,282 / 28,282 > Equity securities (1) ................... Equity securities (1) / Equity securities (1) / 3,318 / 3,318 > Level 2: ................................ Level 2: / Level 2: > U.S. government and agency securities ... U.S. government and agency securities / U.S. government and agency securities / 3,452 / 3,452 / 1 / 1 / (52) / (52) / 3,401 / 3,401 > Corporate debt securities ............... Corporate debt securities / Corporate debt securities / 50,959 / 50,959 / 3 / 3 / (50) / (50) / 50,912 / 50,912 > Asset-backed securities ................. Asset-backed securities / Asset-backed securities / 1,539 / 1,539 / 2 / 2 / (18) / (18) / 1,523 / 1,523 > Other financial instruments ............. Other financial instruments / Other financial instruments / 245 / 245 / — / — / (1) / (1) / 244 / 244 > $ / 101,532 / $ / 6 / $ / (121) / $ / 104,735 > Less: Restricted cash, cash equivalents, and marketable securities (2) ... Less: Restricted cash, cash equivalents, and marketable securities (2) / Less: Restricted cash, cash equivalents, and marketable securities (2) / (3,533) / (3,533) > Total cash, cash equivalents, and marketable securities ... Total cash, cash equivalents, and marketable securities / Total cash, cash equivalents, and marketable securities / $ / 101,202 52 --- Table of Contents > **December 31, 2025** > > December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 > > Cost orAmortizedCost / Cost orAmortizedCost / Cost orAmortizedCost / GrossUnrealizedGains / GrossUnrealizedGains / GrossUnrealizedGains / GrossUnrealizedLosses / GrossUnrealizedLosses / GrossUnrealizedLosses / TotalEstimatedFair Value / TotalEstimatedFair Value / TotalEstimatedFair Value > Cash and time deposits .................. Cash and time deposits / Cash and time deposits / $ / 16,145 / $ / — / $ / — / $ / 16,145 > Level 1: ................................ Level 1: / Level 1: > Money market funds ...................... Money market funds / Money market funds / 29,777 / 29,777 / — / — / — / — / 29,777 / 29,777 > Equity securities (1) ................... Equity securities (1) / Equity securities (1) / 3,687 / 3,687 > Level 2: ................................ Level 2: / Level 2: > U.S. government and agency securities ... U.S. government and agency securities / U.S. government and agency securities / 5,231 / 5,231 / 8 / 8 / (17) / (17) / 5,222 / 5,222 > Corporate debt securities ............... Corporate debt securities / Corporate debt securities / 69,542 / 69,542 / 50 / 50 / (7) / (7) / 69,585 / 69,585 > Asset-backed securities ................. Asset-backed securities / Asset-backed securities / 1,781 / 1,781 / 8 / 8 / (9) / (9) / 1,780 / 1,780 > Other financial instruments ............. Other financial instruments / Other financial instruments / 129 / 129 / — / — / — / — / 129 / 129 > $ / 122,605 / $ / 66 / $ / (33) / $ / 126,325 > Less: Restricted cash, cash equivalents, and marketable securities (2) ... Less: Restricted cash, cash equivalents, and marketable securities (2) / Less: Restricted cash, cash equivalents, and marketable securities (2) / (3,296) / (3,296) > Total cash, cash equivalents, and marketable securities ... Total cash, cash equivalents, and marketable securities / Total cash, cash equivalents, and marketable securities / $ / 123,029 ___________________ (1) The related unrealized gain (loss) recorded in “Other income (expense), net” was $1.0 billion, $(1.3) billion, and $1.2 billion for the years ended December 31, 2023, 2024 , and 2025. (2) We are required to pledge or otherwise restrict a portion of our cash, cash equivalents, and marketable debt securities primarily as collateral for real estate, amounts due to third-party sellers in certain jurisdictions, debt, standby and trade letters of credit, and licenses of digital media content. We classify cash, cash equivalents, and marketable debt securities with use restrictions of less than twelve months as “Accounts receivable, net and other” and of twelve months or longer as non-current “Other assets” on our consolidated balance sheets. See “Note 7 — Commitments and Contingencies.” The following table summarizes gross gains and gross losses realized on sales of marketable debt securities (in millions): > **Year Ended December 31,** > > Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, > > 2023 / 2023 / 2023 / 2024 / 2024 / 2024 / 2025 / 2025 / 2025 > Realized gains .......................... Realized gains / Realized gains / $ / 2 / $ / 3 / $ / 18 > Realized losses ......................... Realized losses / Realized losses / 67 / 67 / 10 / 10 / 7 / 7 The following table summarizes the remaining contractual maturities of our cash equivalents and marketable debt securities as of December 31, 2025 (in millions): > **AmortizedCost** > > AmortizedCost / AmortizedCost / EstimatedFair Value / EstimatedFair Value / EstimatedFair Value > > Due within one year ..................... Due within one year / Due within one year / $ / 96,776 / $ / 96,778 > Due after one year through five years ... Due after one year through five years / Due after one year through five years / 8,217 / 8,217 / 8,264 / 8,264 > Due after five years through ten years ... Due after five years through ten years / Due after five years through ten years / 501 / 501 / 501 / 501 > Due after ten years ..................... Due after ten years / Due after ten years / 966 / 966 / 950 / 950 > Total ................................... Total / Total / $ / 106,460 / $ / 106,493 Actual maturities may differ from the contractual maturities because borrowers may have certain prepayment conditions. 53 --- Table of Contents Consolidated Statements of Cash Flows Reconciliation The following table provides a reconciliation of the amount of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets to the total of the same such amounts shown in the consolidated statements of cash flows (in millions): > **December 31, 2024** > > December 31, 2024 / December 31, 2024 / December 31, 2025 / December 31, 2025 / December 31, 2025 > > Cash and cash equivalents ............... Cash and cash equivalents / Cash and cash equivalents / $ / 78,779 / $ / 86,810 > Restricted cash included in accounts receivable, net and other ... Restricted cash included in accounts receivable, net and other / Restricted cash included in accounts receivable, net and other / 247 / 247 / 300 / 300 > Restricted cash included in other assets ... Restricted cash included in other assets / Restricted cash included in other assets / 3,286 / 3,286 / 2,996 / 2,996 > Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows ... Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows / Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows / $ / 82,312 / $ / 90,106 Note 3 — PROPERTY AND EQUIPMENT Property and equipment, at cost, consisted of the following (in millions): > **December 31,** > > December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, > > 2024 / 2024 / 2024 / 2025 / 2025 / 2025 > Gross property and equipment (1): ....... Gross property and equipment (1): / Gross property and equipment (1): > Land and buildings ...................... Land and buildings / Land and buildings / $ / 123,039 / $ / 155,121 > Servers and networking equipment ........ Servers and networking equipment / Servers and networking equipment / 113,156 / 113,156 / 172,492 / 172,492 > Heavy equipment ......................... Heavy equipment / Heavy equipment / 52,228 / 52,228 / 65,545 / 65,545 > Other equipment ......................... Other equipment / Other equipment / 53,509 / 53,509 / 63,376 / 63,376 > Other assets ............................ Other assets / Other assets / 5,487 / 5,487 / 5,819 / 5,819 > Construction in progress ................ Construction in progress / Construction in progress / 46,636 / 46,636 / 71,745 / 71,745 > Gross property and equipment ............ Gross property and equipment / Gross property and equipment / 394,055 / 394,055 / 534,098 / 534,098 > Total accumulated depreciation and amortization (1) ... Total accumulated depreciation and amortization (1) / Total accumulated depreciation and amortization (1) / 141,390 / 141,390 / 177,073 / 177,073 > Total property and equipment, net ....... Total property and equipment, net / Total property and equipment, net / $ / 252,665 / $ / 357,025 __________________ (1) Includes the original cost and accumulated depreciation of fully-depreciated assets. Property and equipment acquired but not yet paid are included within “Accounts payable” and were $16.8 billion and $27.0 billion as of December 31, 2024 and 2025. Depreciation and amortization expense on property and equipment was $30.2 billion, $32.1 billion, and $41.9 billion which includes amortization of property and equipment acquired under finance leases of $5.9 billion, $3.9 billion, and $3.3 billion for 2023, 2024, and 2025. 54 --- Table of Contents Note 4 — LEASES We have entered into non-cancellable operating and finance leases for fulfillment network, data center, office, and physical store facilities as well as server and networking equipment, aircraft, and vehicles. Gross assets acquired under finance leases, including those where title transfers at the end of the lease, are recorded in “ Property and equipment, net ” and were $56.5 billion and $55.6 billion as of December 31, 2024 and 2025. Accumulated amortization associated with finance leases was $41.8 billion and $40.4 billion as of December 31, 2024 and 2025. Lease cost recognized in our consolidated statements of operations is summarized as follows (in millions): > **Year Ended December 31,** > > Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, > > 2023 / 2023 / 2023 / 2024 / 2024 / 2024 / 2025 / 2025 / 2025 > Operating lease cost .................... Operating lease cost / Operating lease cost / $ / 10,550 / $ / 11,961 / $ / 14,006 > Finance lease cost: ..................... Finance lease cost: / Finance lease cost: > Amortization of lease assets ............ Amortization of lease assets / Amortization of lease assets / 5,899 / 5,899 / 3,866 / 3,866 / 3,284 / 3,284 > Interest on lease liabilities ........... Interest on lease liabilities / Interest on lease liabilities / 304 / 304 / 285 / 285 / 312 / 312 > Finance lease cost ...................... Finance lease cost / Finance lease cost / 6,203 / 6,203 / 4,151 / 4,151 / 3,596 / 3,596 > Variable lease cost ..................... Variable lease cost / Variable lease cost / 2,165 / 2,165 / 2,465 / 2,465 / 2,694 / 2,694 > Total lease cost ........................ Total lease cost / Total lease cost / $ / 18,918 / $ / 18,577 / $ / 20,296 Other information about lease amounts recognized in our consolidated financial statements is as follows: > **December 31, 2024** > > December 31, 2024 / December 31, 2024 / December 31, 2025 / December 31, 2025 / December 31, 2025 > > Weighted-average remaining lease term – operating leases ... Weighted-average remaining lease term – operating leases / Weighted-average remaining lease term – operating leases / 10.6 years / 10.6 years / 10.6 years / 10.0 years / 10.0 years / 10.0 years > Weighted-average remaining lease term – finance leases ... Weighted-average remaining lease term – finance leases / Weighted-average remaining lease term – finance leases / 11.9 years / 11.9 years / 11.9 years / 12.6 years / 12.6 years / 12.6 years > Weighted-average discount rate – operating leases ... Weighted-average discount rate – operating leases / Weighted-average discount rate – operating leases / 3.5 / 3.5 / % / 3.7 / 3.7 / % > Weighted-average discount rate – finance leases ... Weighted-average discount rate – finance leases / Weighted-average discount rate – finance leases / 3.0 / 3.0 / % / 3.4 / 3.4 / % Our lease liabilities were as follows (in millions): > **December 31, 2024** > > December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2024 > > Operating Leases / Operating Leases / Operating Leases / Finance Leases / Finance Leases / Finance Leases / Total / Total / Total > Gross lease liabilities ................. Gross lease liabilities / Gross lease liabilities / $ / 95,294 / $ / 12,520 / $ / 107,814 > Less: imputed interest .................. Less: imputed interest / Less: imputed interest / (15,698) / (15,698) / (1,918) / (1,918) / (17,616) / (17,616) > Present value of lease liabilities ...... Present value of lease liabilities / Present value of lease liabilities / 79,596 / 79,596 / 10,602 / 10,602 / 90,198 / 90,198 > Less: current portion of lease liabilities ... Less: current portion of lease liabilities / Less: current portion of lease liabilities / (10,546) / (10,546) / (1,375) / (1,375) / (11,921) / (11,921) > Total long-term lease liabilities ....... Total long-term lease liabilities / Total long-term lease liabilities / $ / 69,050 / $ / 9,227 / $ / 78,277 > **December 31, 2025** > > December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 / December 31, 2025 > > Operating Leases / Operating Leases / Operating Leases / Finance Leases / Finance Leases / Finance Leases / Total / Total / Total > Gross lease liabilities ................. Gross lease liabilities / Gross lease liabilities / $ / 106,914 / $ / 14,917 / $ / 121,831 > Less: imputed interest .................. Less: imputed interest / Less: imputed interest / (17,662) / (17,662) / (2,631) / (2,631) / (20,293) / (20,293) > Present value of lease liabilities ...... Present value of lease liabilities / Present value of lease liabilities / 89,252 / 89,252 / 12,286 / 12,286 / 101,538 / 101,538 > Less: current portion of lease liabilities ... Less: current portion of lease liabilities / Less: current portion of lease liabilities / (12,655) / (12,655) / (1,544) / (1,544) / (14,199) / (14,199) > Total long-term lease liabilities ....... Total long-term lease liabilities / Total long-term lease liabilities / $ / 76,597 / $ / 10,742 / $ / 87,339 55 --- Table of Contents Note 5 — ACQUISITIONS, GOODWILL, AND ACQUIRED INTANGIBLE ASSETS 2023 Acquisition Activity On February 22, 2023, we acquired 1Life Healthcare, Inc. (One Medical), for cash consideration of approximately $3.5 billion, net of cash acquired, to provide healthcare options for customers. The acquired assets primarily consist of $1.3 billion of intangible assets and $2.5 billion of goodwill, which is allocated to our North America segment. During 2023, we also completed acquisition activity for immaterial aggregate cash consideration, net of cash acquired. 2024 Acquisition Activity During 2024, we completed acquisition activity for aggregate cash consideration of $780 million, net of cash acquired. 2025 Acquisition Activity During 2025, we completed acquisition activity for immaterial aggregate cash consideration, net of cash acquired. The primary reasons for these transactions were to acquire technologies and know-how to enable Amazon to serve customers more effectively or to expand our customer base. Pro forma results of operations have not been presented because the effects of the 2025 transactions, individually and in the aggregate, were not material to our consolidated results of operations. Transaction-related costs were expensed as incurred and were not significant. Goodwill The goodwill resulting from the acquisition activity is primarily related to expected improvements in technology performance and functionality, as well as sales growth from future product and service offerings and new customers, together with certain intangible assets that do not qualify for separate recognition. The goodwill resulting from the acquisition activity is generally not deductible for tax purposes. The following summarizes our goodwill activity in 2024 and 2025 by segment (in millions): > **NorthAmerica** > > NorthAmerica / NorthAmerica / International / International / International / AWS / AWS / AWS / Consolidated / Consolidated / Consolidated > > Goodwill - January 1, 2024 .............. Goodwill - January 1, 2024 / Goodwill - January 1, 2024 / $ / 19,126 / $ / 2,412 / $ / 1,251 / $ / 22,789 > Acquisition activity .................... Acquisition activity / Acquisition activity / 191 / 191 / 77 / 77 / 52 / 52 / 320 / 320 > Other adjustments (1) ................... Other adjustments (1) / Other adjustments (1) / (28) / (28) / (4) / (4) / (3) / (3) / (35) / (35) > Goodwill - December 31, 2024 ............ Goodwill - December 31, 2024 / Goodwill - December 31, 2024 / 19,289 / 19,289 / 2,485 / 2,485 / 1,300 / 1,300 / 23,074 / 23,074 > Acquisition activity .................... Acquisition activity / Acquisition activity / 25 / 25 / 85 / 85 / 2 / 2 / 112 / 112 > Other adjustments (1) ................... Other adjustments (1) / Other adjustments (1) / 49 / 49 / 8 / 8 / 30 / 30 / 87 / 87 > Goodwill - December 31, 2025 ............ Goodwill - December 31, 2025 / Goodwill - December 31, 2025 / $ / 19,363 / $ / 2,578 / $ / 1,332 / $ / 23,273  ___________________ (1) Primarily includes changes in foreign exchange rates. 56 --- Table of Contents Intangible Assets Acquired identifiable intangible assets are valued primarily by using discounted cash flows. These assets are included within “Other assets” on our consolidated balance sheets and consist of the following (in millions): > **December 31,** > > December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, > > 2024 / 2024 / 2024 / 2024 / 2024 / 2024 / 2024 / 2024 / 2024 / 2024 / 2024 / 2024 / 2024 / 2024 / 2024 / 2025 / 2025 / 2025 / 2025 / 2025 / 2025 / 2025 / 2025 / 2025 / 2025 / 2025 / 2025 / 2025 / 2025 / 2025 > AcquiredIntangibles,Gross (1) / AcquiredIntangibles,Gross (1) / AcquiredIntangibles,Gross (1) / AccumulatedAmortization (1) / AccumulatedAmortization (1) / AccumulatedAmortization (1) / AcquiredIntangibles,Net / AcquiredIntangibles,Net / AcquiredIntangibles,Net / AcquiredIntangibles,Gross (1) / AcquiredIntangibles,Gross (1) / AcquiredIntangibles,Gross (1) / AccumulatedAmortization (1) / AccumulatedAmortization (1) / AccumulatedAmortization (1) / AcquiredIntangibles,Net / AcquiredIntangibles,Net / AcquiredIntangibles,Net / WeightedAverage LifeRemaining / WeightedAverage LifeRemaining / WeightedAverage LifeRemaining > Finite-lived intangible assets (2): ..... Finite-lived intangible assets (2): / Finite-lived intangible assets (2): > Marketing-related ....................... Marketing-related / Marketing-related / $ / 2,629 / $ / (860) / $ / 1,769 / $ / 2,402 / $ / (754) / $ / 1,648 / 16.5 / 16.5 / 16.5 > Contract-based .......................... Contract-based / Contract-based / 5,767 / 5,767 / (1,541) / (1,541) / 4,226 / 4,226 / 7,068 / 7,068 / (1,957) / (1,957) / 5,111 / 5,111 / 16.6 / 16.6 / 16.6 > Technology- and content-based ........... Technology- and content-based / Technology- and content-based / 1,246 / 1,246 / (284) / (284) / 962 / 962 / 1,463 / 1,463 / (605) / (605) / 858 / 858 / 3.1 / 3.1 / 3.1 > Customer-related ........................ Customer-related / Customer-related / 764 / 764 / (282) / (282) / 482 / 482 / 654 / 654 / (237) / (237) / 417 / 417 / 5.2 / 5.2 / 5.2 > Total finite-lived intangible assets .... Total finite-lived intangible assets / Total finite-lived intangible assets / $ / 10,406 / $ / (2,967) / $ / 7,439 / $ / 11,587 / $ / (3,553) / $ / 8,034 / 14.5 / 14.5 / 14.5 > IPR&D and other (3) ..................... IPR&D and other (3) / IPR&D and other (3) / $ / 1,163 / $ / 1,163 / $ / 1,163 / $ / 1,163 > Total acquired intangibles .............. Total acquired intangibles / Total acquired intangibles / $ / 11,569 / $ / (2,967) / $ / 8,602 / $ / 12,750 / $ / (3,553) / $ / 9,197  ___________________ (1) Excludes the original cost and accumulated amortization of fully-amortized intangibles. (2) Finite-lived intangible assets, excluding acquired video content, have estimated useful lives of between one and forty years, and are being amortized to operating expenses on a straight-line basis. (3) Intangible assets acquired in a business combination that are in-process and used in research and development activities (“IPR&D”) are considered indefinite-lived until the completion or abandonment of the research and development efforts. Once the research and development efforts are completed, we reclassify the cost of the IPR&D assets to finite-lived intangible assets, determine the useful life, and begin amortization. Amortization expense for acquired finite-lived intangibles was $706 million, $838 million, and $817 million in 2023, 2024, and 2025. Expected future amortization expense of acquired finite-lived intangible assets as of December 31, 2025, is as follows (in millions): > **Year Ended December 31,** > > Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, > > 2026 .................................... 2026 / 2026 / $ / 1,085 > 2027 .................................... 2027 / 2027 / 962 / 962 > 2028 .................................... 2028 / 2028 / 764 / 764 > 2029 .................................... 2029 / 2029 / 690 / 690 > 2030 .................................... 2030 / 2030 / 593 / 593 > Thereafter .............................. Thereafter / Thereafter / 3,940 / 3,940 > $ / 8,034 57 --- Table of Contents Note 6 — DEBT As of December 31, 2025, we had $68.0 billion of unsecured senior notes outstanding (the “Notes”), including $15.0 billion issued in November 2025 for general corporate purposes. Our total long-term debt obligations are as follows (in millions): > **Maturities (1)** > > Maturities (1) / Maturities (1) / Stated Interest Rates / Stated Interest Rates / Stated Interest Rates / Effective Interest Rates / Effective Interest Rates / Effective Interest Rates / December 31, 2024 / December 31, 2024 / December 31, 2024 / December 31, 2025 / December 31, 2025 / December 31, 2025 > > 2014 Notes issuance of $6.0 billion ..... 2014 Notes issuance of $6.0 billion / 2014 Notes issuance of $6.0 billion / 2034 - 2044 / 2034 - 2044 / 2034 - 2044 / 4.80% - 4.95% / 4.80% - 4.95% / 4.80% - 4.95% / 4.93% - 5.12% / 4.93% - 5.12% / 4.93% - 5.12% / $ / 2,750 / $ / 2,750 > 2017 Notes issuance of $17.0 billion .... 2017 Notes issuance of $17.0 billion / 2017 Notes issuance of $17.0 billion / 2027 - 2057 / 2027 - 2057 / 2027 - 2057 / 3.15% - 4.25% / 3.15% - 4.25% / 3.15% - 4.25% / 3.25% - 4.33% / 3.25% - 4.33% / 3.25% - 4.33% / 13,000 / 13,000 / 12,000 / 12,000 > 2020 Notes issuance of $10.0 billion .... 2020 Notes issuance of $10.0 billion / 2020 Notes issuance of $10.0 billion / 2027 - 2060 / 2027 - 2060 / 2027 - 2060 / 1.20% - 2.70% / 1.20% - 2.70% / 1.20% - 2.70% / 1.26% - 2.77% / 1.26% - 2.77% / 1.26% - 2.77% / 9,000 / 9,000 / 7,750 / 7,750 > 2021 Notes issuance of $18.5 billion .... 2021 Notes issuance of $18.5 billion / 2021 Notes issuance of $18.5 billion / 2026 - 2061 / 2026 - 2061 / 2026 - 2061 / 1.00% - 3.25% / 1.00% - 3.25% / 1.00% - 3.25% / 1.14% - 3.31% / 1.14% - 3.31% / 1.14% - 3.31% / 15,000 / 15,000 / 15,000 / 15,000 > April 2022 Notes issuance of $12.8 billion ... April 2022 Notes issuance of $12.8 billion / April 2022 Notes issuance of $12.8 billion / 2027 - 2062 / 2027 - 2062 / 2027 - 2062 / 3.30% - 4.10% / 3.30% - 4.10% / 3.30% - 4.10% / 3.40% - 4.15% / 3.40% - 4.15% / 3.40% - 4.15% / 11,250 / 11,250 / 9,750 / 9,750 > December 2022 Notes issuance of $8.3 billion ... December 2022 Notes issuance of $8.3 billion / December 2022 Notes issuance of $8.3 billion / 2027 - 2032 / 2027 - 2032 / 2027 - 2032 / 4.55% - 4.70% / 4.55% - 4.70% / 4.55% - 4.70% / 4.61% - 4.74% / 4.61% - 4.74% / 4.61% - 4.74% / 7,000 / 7,000 / 5,750 / 5,750 > 2025 Notes issuance of $15.0 billion .... 2025 Notes issuance of $15.0 billion / 2025 Notes issuance of $15.0 billion / 2028 - 2065 / 2028 - 2065 / 2028 - 2065 / 3.90% - 5.55% / 3.90% - 5.55% / 3.90% - 5.55% / 3.99% - 5.62% / 3.99% - 5.62% / 3.99% - 5.62% / — / — / 15,000 / 15,000 > Other long-term debt .................... Other long-term debt / Other long-term debt / — / — / 836 / 836 > Total face value of long-term debt ...... Total face value of long-term debt / Total face value of long-term debt / 58,000 / 58,000 / 68,836 / 68,836 > Unamortized discount and issuance costs, net ... Unamortized discount and issuance costs, net / Unamortized discount and issuance costs, net / (360) / (360) / (440) / (440) > Less: current portion of long-term debt ... Less: current portion of long-term debt / Less: current portion of long-term debt / (5,017) / (5,017) / (2,748) / (2,748) > Long-term debt .......................... Long-term debt / Long-term debt / $ / 52,623 / $ / 65,648 ___________________ (1) The weighted-average remaining lives of the 2014, 2017, 2020, 2021, April 2022, December 2022, and 2025 Notes were 14.4, 15.4, 18.1, 13.2, 13.8, 4.4, and 15.6 years as of December 31, 2025. The combined weighted-average remaining life of the Notes was 14.1 years as of December 31, 2025. Interest on the Notes is payable semi-annually in arrears. We may redeem the Notes at any time in whole, or from time to time, in part at specified redemption prices. We are not subject to any financial covenants under the Notes. The estimated fair value of the Notes was approximately $50.2 billion and $61.1 billion as of December 31, 2024 and 2025, which is based on quoted prices for our debt as of those dates. As of September 30, 2024, we had repaid outstanding borrowings and terminated the secured revolving credit facility with a lender that was secured by certain seller receivables (the “Credit Facility”). The Credit Facility bore interest based on the daily Secured Overnight Financing Rate plus 1.25%, and had a commitment fee of up to 0.45% on the undrawn portion. There were $682 million of borrowings outstanding under the Credit Facility as of December 31, 2023, which had an interest rate of 6.6%. As of December 31, 2025, future principal payments for our total long-term debt were as follows (in millions): > **Year Ended December 31,** > > Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, > > 2026 .................................... 2026 / 2026 / $ / 2,752 > 2027 .................................... 2027 / 2027 / 8,832 / 8,832 > 2028 .................................... 2028 / 2028 / 4,752 / 4,752 > 2029 .................................... 2029 / 2029 / 3,000 / 3,000 > 2030 .................................... 2030 / 2030 / 4,500 / 4,500 > Thereafter .............................. Thereafter / Thereafter / 45,000 / 45,000 > $ / 68,836 In January 2023, we entered into an $8.0 billion unsecured 364-day term loan with a syndicate of lenders (the “Term Loan”), maturing in January 2024 and bearing interest at the Secured Overnight Financing Rate specified in the Term Loan plus 0.75%. The Term Loan was classified as short-term debt and included within “Accrued expenses and other” on our consolidated balance sheets. As of December 31, 2023, the entire amount of the Term Loan had been repaid. We have U.S. Dollar and Euro commercial paper programs (the “Commercial Paper Programs”) under which we may from time to time issue unsecured commercial paper up to a total of $30.0 billion (including up to €3.0 billion) at the date of issue, with individual maturities that may vary but will not exceed 397 days from the date of issue. In April 2025, we increased the size of the Commercial Paper Programs from $20.0 billion to $30.0 billion. There were no borrowings outstanding under the 58 --- Table of Contents Commercial Paper Programs as of December 31, 2024 and 2025. We use the net proceeds from the issuance of commercial paper for general corporate purposes. We have a $15.0 billion unsecured revolving credit facility with a syndicate of lenders (the “Credit Agreement”), with a term that extends to November 2028 and may be extended for one or more additional one-year terms subject to approval by the lenders. The interest rate applicable to outstanding balances under the Credit Agreement is the applicable benchmark rate specified in the Credit Agreement plus 0.45%, with a commitment fee of 0.03% on the undrawn portion of the credit facility. There were no borrowings outstanding under the Credit Agreement as of December 31, 2024 and 2025. In October 2025, we entered into a $5.0 billion unsecured 364-day revolving credit facility with a syndicate of lenders (the “Short-Term Credit Agreement”), which replaced the prior 364-day revolving credit agreement entered into in October 2024. The Short-Term Credit Agreement matures in October 2026 and may be extended for one additional period of 364 days subject to approval by the lenders. The interest rate applicable to outstanding balances under the Short-Term Credit Agreement is the Secured Overnight Financing Rate specified in the Short-Term Credit Agreement plus 0.45%, with a commitment fee of 0.03% on the undrawn portion. There were no borrowings outstanding under the Short-Term Credit Agreement or the prior 364-day revolving credit agreement as of December 31, 2024 and 2025. We also utilize other short-term credit facilities for working capital purposes. There were $151 million and $455 million of borrowings outstanding under these facilities as of December 31, 2024 and 2025, which were included in “Accrued expenses and other” on our consolidated balance sheets. In addition, we had $9.5 billion of unused letters of credit as of December 31, 2025. Note 7 — COMMITMENTS AND CONTINGENCIES Commitments The following summarizes our principal contractual commitments, excluding open orders for purchases that support normal operations and are generally cancellable, as of December 31, 2025 (in millions): > **Year Ended December 31,** > > Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, > > 2026 / 2026 / 2026 / 2027 / 2027 / 2027 / 2028 / 2028 / 2028 / 2029 / 2029 / 2029 / 2030 / 2030 / 2030 / Thereafter / Thereafter / Thereafter / Total / Total / Total > Long-term debt principal and interest ... Long-term debt principal and interest / Long-term debt principal and interest / $ / 5,201 / $ / 11,250 / $ / 6,891 / $ / 4,993 / $ / 6,381 / $ / 73,486 / $ / 108,202 > Operating lease liabilities ............. Operating lease liabilities / Operating lease liabilities / 15,380 / 15,380 / 13,186 / 13,186 / 12,140 / 12,140 / 10,911 / 10,911 / 9,710 / 9,710 / 45,587 / 45,587 / 106,914 / 106,914 > Finance lease liabilities, including interest ... Finance lease liabilities, including interest / Finance lease liabilities, including interest / 1,838 / 1,838 / 1,626 / 1,626 / 1,726 / 1,726 / 1,285 / 1,285 / 1,122 / 1,122 / 7,320 / 7,320 / 14,917 / 14,917 > Financing obligations, including interest (1) ... Financing obligations, including interest (1) / Financing obligations, including interest (1) / 577 / 577 / 582 / 582 / 592 / 592 / 601 / 601 / 612 / 612 / 6,651 / 6,651 / 9,615 / 9,615 > Leases not yet commenced ................ Leases not yet commenced / Leases not yet commenced / 5,808 / 5,808 / 9,103 / 9,103 / 6,420 / 6,420 / 6,571 / 6,571 / 6,738 / 6,738 / 61,733 / 61,733 / 96,373 / 96,373 > Unconditional purchase obligations (2) ... Unconditional purchase obligations (2) / Unconditional purchase obligations (2) / 19,906 / 19,906 / 8,934 / 8,934 / 7,195 / 7,195 / 6,658 / 6,658 / 6,602 / 6,602 / 35,477 / 35,477 / 84,772 / 84,772 > Other commitments (3) ................... Other commitments (3) / Other commitments (3) / 2,956 / 2,956 / 1,578 / 1,578 / 1,120 / 1,120 / 1,000 / 1,000 / 988 / 988 / 11,226 / 11,226 / 18,868 / 18,868 > Total commitments ....................... Total commitments / Total commitments / $ / 51,666 / $ / 46,259 / $ / 36,084 / $ / 32,019 / $ / 32,153 / $ / 241,480 / $ / 439,661 ___________________ (1) Includes non-cancellable financing obligations for fulfillment network and data center facilities. Excluding interest, current financing obligations of $312 million and $358 million are recorded within “Accrued expenses and other” and $7.1 billion and $7.8 billion are recorded within “Other long-term liabilities” as of December 31, 2024 and 2025. The weighted-average remaining term of the financing obligations was 16.1 years and 15.0 years and the weighted-average imputed interest rate was 3.1% and 2.9% as of December 31, 2024 and 2025. (2) Includes unconditional purchase obligations related to long-term agreements to acquire and license digital media content, procure energy, acquire property and equipment, and license software that are not reflected on the consolidated balance sheets. For those agreements with variable terms or subject to certain regulatory approvals, we do not estimate the total obligation beyond any minimum quantities and/or pricing, or termination penalties, as of the reporting date. Purchase obligations associated with renewal provisions solely at the option of the content provider are included to the extent such commitments are fixed or a minimum amount is specified. Energy agreements based on actual generation without a fixed or minimum volume commitment are not included. Certain of our energy agreements also provide the right to receive energy certificates. (3) Includes asset retirement obligations, the estimated timing and amounts of payments for rent and tenant improvements associated with build-to-suit lease arrangements that are under construction, and liabilities associated with digital media content agreements with initial terms greater than one year. Excludes approximately $6.6 billion of income tax contingencies for which we cannot make a reasonably reliable estimate of the amount and period of payment, if any. 59 --- Table of Contents Suppliers During 2025, no vendor accounted for 10% or more of our purchases. We generally do not have long-term contracts or arrangements with our vendors to guarantee the availability of merchandise, particular payment terms, or the extension of credit limits. Other Contingencies We are disputing claims and denials of refunds or credits, and monitoring or evaluating potential claims, related to various non-income taxes (such as sales, value added, consumption, service, and similar taxes), including in jurisdictions in which we already collect and remit these taxes. These non-income tax controversies typically include (i) the taxability of products and services, including cross-border intercompany transactions, (ii) collection and withholding on transactions with third parties, including as a result of evolving requirements imposed on marketplaces with respect to third-party sellers, and (iii) the adequacy of compliance with reporting obligations, including evolving documentation requirements. Due to the inherent complexity and uncertainty of these matters and the judicial and regulatory processes in certain jurisdictions, the final outcome of any such controversies may be materially different from our expectations. Legal Proceedings The Company is involved from time to time in claims, proceedings, and litigation, including the following: In May 2018, Rensselaer Polytechnic Institute and CF Dynamic Advances LLC filed a complaint against Amazon.com, Inc. in the United States District Court for the Northern District of New York. The complaint alleged, among other things, that “Alexa Voice Software and Alexa enabled devices” infringe U.S. Patent No. 7,177,798. The complaint sought an injunction, an unspecified amount of damages, enhanced damages , an ongoing royalty, interest, attorneys’ fees, and costs. In March 2023, the plaintiffs alleged in their damages report that in the event of a finding of liability Amazon could be subject to $140 million to $267 million in damages. In March 2024, the district court granted summary judgment ruling that the patent is invalid and dismissed the case. In April 2024, the plaintiffs filed a notice of appeal. We dispute the allegations of wrongdoing and will continue to defend ourselves vigorously in this matter. In December 2018, Kove IO, Inc. filed a complaint against Amazon Web Services, Inc. in the United States District Court for the Northern District of Illinois. The complaint alleged, among other things, that Amazon S3 and DynamoDB infringe U.S. Patent Nos. 7,814,170; 7,103,640; and 7,233,978. The complaint sought an unspecified amount of damages, enhanced damages, attorneys’ fees, costs, interest, and injunctive relief. In April 2024, a jury found that Amazon infringed the asserted patents and awarded Kove $525 million in damages. In August 2024, the court awarded Kove $148 million in pre-judgment interest. In September 2024, we filed a notice of appeal. We disagree with the jury’s findings and will continue to defend ourselves vigorously in this matter. Beginning in June 2019 with Wilcosky v. Amazon.com, Inc., now pending in the United States District Court for the Northern District of Illinois (“N.D. Ill.”), private litigants have filed a number of cases in U.S. federal and state courts, including Hogan v. Amazon.com, Inc. (N.D. Ill.), alleging, among other things, that Amazon’s collection, storage, use, retention, and protection of biometric identifiers violated the Illinois Biometric Information Privacy Act. The complaints allege purported classes of Illinois residents who had biometric identifiers collected through Amazon products or services, including Amazon Photos, Alexa, AWS cloud services, Amazon Connect, Amazon’s virtual try-on technology, and Amazon’s Just Walk Out technology. The complaints seek certification as class actions, unspecified amounts of damages, injunctive relief, attorneys’ fees, costs, and interest. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in these matters. Since March 2020, private litigants, state Attorneys General, and the Federal Trade Commission have filed cases in the U.S., Canada, and the United Kingdom alleging, among other things: price fixing arrangements between each of Amazon and its vendors and Amazon and its third-party sellers; abuse of dominance, monopolization, and attempted monopolization; and consumer protection and unjust enrichment claims, in violation of federal and state antitrust, state consumer protection, and Canadian and U.K. antitrust laws. The first of these complaints was Frame-Wilson v. Amazon.com, Inc., which was filed in the United States District Court for the Western District of Washington (“W.D. Wash.”). These complaints seek billions of dollars of alleged damages, treble damages, punitive damages, injunctive relief, structural relief, civil penalties, attorneys’ fees, and costs. Some of the private plaintiff cases include allegations of distinct purported classes, including consumers who purchased a product through Amazon’s stores and consumers who purchased a product offered by Amazon through another e-commerce retailer. Some of the cases include allegations that Amazon has a monopoly in markets for online superstores, marketplace services, or intermediation services and that we unlawfully engage in anticompetitive practices relating to our pricing policies, selection of the Featured Offers, use of seller data, advertising practices, the structure of Prime, and promotion of our own products on our website. In the U.S., most of Amazon’s motions to dismiss were granted in part, but in each case, at least some of the claims survived. In Canada, class certification was denied in a case before the Federal Court of Canada, finding that plaintiffs had not stated a viable claim, and plaintiffs’ appeal of that ruling is pending. Two Canadian class actions before other 60 --- Table of Contents courts are pre-certification. In the United Kingdom, two class actions have been certified and a third is pre-certification. In the U.S., one class action has been certified, and three others are pre-certification. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in these matters. In July 2021, the Luxembourg National Commission for Data Protection (the “CNPD”) issued a decision against Amazon Europe Core S.à r.l. claiming that Amazon’s processing of personal data did not comply with the EU General Data Protection Regulation. The decision imposes a fine of €746 million and corresponding practice revisions. In March 2025, the Luxembourg Administrative Court dismissed our appeal of the CNPD’s decision. In April 2025, we appealed the court’s decision to the Luxembourg Administrative Court of Appeal. We believe the CNPD’s decision to be without merit and will continue to defend ourselves vigorously in this matter. In December 2021, the Italian Competition Authority (the “ICA”) issued a decision against Amazon Services Europe S.à r.l., Amazon Europe Core S.à r.l., Amazon EU S.à r.l., Amazon Italia Services S.r.l., and Amazon Italia Logistica S.r.l. claiming that certain of our marketplace and logistics practices in Italy infringe EU competition rules. The decision imposes remedial actions and a fine of €1.13 billion, which we have paid and will seek to recover pending conclusion of all appeals. In September 2025, the Italian Administrative Tribunal (the “TAR”) affirmed the ICA’s decision but reduced the fine to €752 million . In December 2025, we appealed the TAR’s ruling. We disagree with the TAR’s decision and will continue to defend ourselves vigorously in this matter. In June 2025, Xockets, Inc. filed two complaints against Amazon.com, Inc. and Amazon Web Services, Inc. in the United States District Court for the Western District of Texas. The complaints allege, among other things, that certain versions of the AWS Nitro System infringe U.S. Patent Nos. 11,080,209; 10,649,924; 11,082,350; 10,223,297; 9,378,161; 9,436,640; and 10,212,092. The complaints seek an unspecified amount of damages, enhanced damages, attorneys’ fees, costs, interest, and injunctive relief. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in these matters. Beginning in November 2025, InterDigital, Inc. and related entities filed complaints alleging infringement of patents on video-related technologies against Amazon.com, Inc. and related entities in multiple courts in the United States, Germany, and Brazil, the Unified Patent Court of the European Union, and the United States International Trade Commission. The complaints were filed after Amazon’s August 2025 rate-setting complaint on video-related technologies was filed against InterDigital and related entities in the United Kingdom. InterDigital’s complaints allege, among other things, that certain Amazon Prime Video services and features of Amazon devices carrying the Prime Video app infringe InterDigital’s patents. The complaints seek, among other things, injunctive relief and, in some cases, unspecified money damages, enhanced damages, attorneys’ fees, costs, interest, and declaratory relief. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in these matters. In December 2025, Primos Storage Technology LLC filed a complaint against Amazon.com, Inc. and Amazon Web Services, Inc. in the United States District Court for the District of Delaware. The complaint alleges, among other things, that Amazon S3, Amazon EMR, Amazon EC2 instances using Amazon EBS, and Amazon FSx for Lustre infringe U.S. Patent Nos. 7,386,663; 7,937,528; and 10,599,344, and that Amazon S3 and Amazon EMR infringe U.S. Patent Nos. 8,078,944 and 8,312,356. The complaint seeks injunctive relief, an ongoing royalty, an unspecified amount of damages, enhanced damages, attorneys’ fees, costs, and interest. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in this matter. In addition, we are regularly subject to claims, li tigation, and other proceedings, including potential regulatory proceedings, involving patent and other intellectual property matters, taxes, labor and employment, competition and antitrust, privacy and data protection, consumer protection, commercial disputes, goods and services offered by us and by third parties, and other matters. The outcomes of our legal proceedings and other contingencies are inherently unpredictable, subject to significant uncertainties, and could be material to our operating results and cash flows for a particular period. We evaluate, on a regular basis, developments in our legal proceedings and other contingencies that could affect the amount of liability, including amounts in excess of any previous accruals and reasonably possible losses disclosed, and make adjustments and changes to our accruals and disclosures as appropriate. For the matters we disclose that do not include an estimate of the amount of loss or range of losses, such an estimate is not possible or is immaterial, and we may be unable to estimate the possible loss or range of losses that could potentially result from the application of non-monetary remedies. Until the final resolution of such matters, if any of our estimates and assumptions change or prove to have been incorrect, we may experience losses in excess of the amounts recorded, which could have a material effect on our business, consolidated financial position, results of operations, or cash flows. See also “Note 9 — Income Taxes.” 61 --- Table of Contents Note 8 — STOCKHOLDERS’ EQUITY Preferred Stock We have authorized 500 million shares of $0.01 par value preferred stock. No preferred stock was outstanding for any year presented. Common Stock Common shares outstanding plus shares underlying outstanding stock awards totaled 10.8 billion, 10.9 billion, and 11.0 billion, as of December 31, 2023, 2024, and 2025. These totals include all vested and unvested stock awards outstanding, including those awards we estimate will be forfeited. Stock Repurchase Activity In March 2022, the Board of Directors authorized a program to repurchase up to $10.0 billion of our common stock, with no fixed expiration. There were no repurchases of our common stock in 2023, 2024, or 2025. As of December 31, 2025, we have $6.1 billion remaining under the repurchase program. Stock Award Plans Employees vest in restricted stock unit awards over the corresponding service term, generally between two and five years. The majority of outstanding restricted stock unit awards are granted at the date of hire or in Q2 as part of the annual compensation review and primarily vest quarterly in the relevant compensation year. Stock Award Activity Stock-based compensation expense is as follows (in millions): > **Year Ended December 31,** > > Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, > > 2023 / 2023 / 2023 / 2024 / 2024 / 2024 / 2025 / 2025 / 2025 > Cost of sales ........................... Cost of sales / Cost of sales / $ / 836 / $ / 838 / $ / 777 > Fulfillment ............................. Fulfillment / Fulfillment / 3,090 / 3,090 / 2,973 / 2,973 / 2,703 / 2,703 > Technology and infrastructure ........... Technology and infrastructure / Technology and infrastructure / 13,434 / 13,434 / 12,150 / 12,150 / 10,871 / 10,871 > Sales and marketing ..................... Sales and marketing / Sales and marketing / 4,623 / 4,623 / 4,084 / 4,084 / 3,445 / 3,445 > General and administrative .............. General and administrative / General and administrative / 2,040 / 2,040 / 1,966 / 1,966 / 1,671 / 1,671 > Total stock-based compensation expense (1) ... Total stock-based compensation expense (1) / Total stock-based compensation expense (1) / $ / 24,023 / $ / 22,011 / $ / 19,467 ___________________ (1) The related tax benefits were $5.4 billion, $5.0 billion, and $4.4 billion for 2023, 2024, and 2025. The following table summarizes our restricted stock unit activity (in millions): > **Number of Units** > > Number of Units / Number of Units / Weighted AverageGrant-DateFair Value / Weighted AverageGrant-DateFair Value / Weighted AverageGrant-DateFair Value > > Outstanding as of January 1, 2023 ....... Outstanding as of January 1, 2023 / Outstanding as of January 1, 2023 / 384.4 / 384.4 / $ / 144 > Units granted ........................... Units granted / Units granted / 218.1 / 218.1 / 106 / 106 > Units vested ............................ Units vested / Units vested / (139.9) / (139.9) / 143 / 143 > Units forfeited ......................... Units forfeited / Units forfeited / (56.8) / (56.8) / 135 / 135 > Outstanding as of December 31, 2023 ..... Outstanding as of December 31, 2023 / Outstanding as of December 31, 2023 / 405.8 / 405.8 / 125 / 125 > Units granted ........................... Units granted / Units granted / 126.9 / 126.9 / 183 / 183 > Units vested ............................ Units vested / Units vested / (209.7) / (209.7) / 132 / 132 > Units forfeited ......................... Units forfeited / Units forfeited / (39.9) / (39.9) / 133 / 133 > Outstanding as of December 31, 2024 ..... Outstanding as of December 31, 2024 / Outstanding as of December 31, 2024 / 283.1 / 283.1 / 145 / 145 > Units granted ........................... Units granted / Units granted / 112.9 / 112.9 / 200 / 200 > Units vested ............................ Units vested / Units vested / (138.1) / (138.1) / 135 / 135 > Units forfeited ......................... Units forfeited / Units forfeited / (35.4) / (35.4) / 157 / 157 > Outstanding as of December 31, 2025 ..... Outstanding as of December 31, 2025 / Outstanding as of December 31, 2025 / 222.5 / 222.5 / 178 / 178 62 --- Table of Contents Scheduled vesting for outstanding restricted stock units as of December 31, 2025, is as follows (in millions): > **Year Ended** > > Year Ended / Year Ended / Year Ended / Year Ended / Year Ended / Year Ended / Year Ended / Year Ended / Year Ended / Year Ended / Year Ended / Year Ended / Year Ended / Year Ended / Year Ended / Year Ended / Year Ended / Year Ended / Year Ended / Year Ended / Year Ended / Year Ended / Year Ended / Year Ended / Year Ended / Year Ended > > 2026 / 2026 / 2026 / 2027 / 2027 / 2027 / 2028 / 2028 / 2028 / 2029 / 2029 / 2029 / 2030 / 2030 / 2030 / Thereafter / Thereafter / Thereafter / Total / Total / Total > Scheduled vesting — restricted stock units ... Scheduled vesting — restricted stock units / Scheduled vesting — restricted stock units / 110.4 / 110.4 / 69.9 / 69.9 / 30.7 / 30.7 / 9.8 / 9.8 / 0.8 / 0.8 / 0.9 / 0.9 / 222.5 / 222.5 As of December 31, 2025, there was $16.9 billion of net unrecognized compensation cost related to unvested stock-based compensation arrangements. This compensation is recognized on an accelerated basis with more than half of the compensation expected to be expensed in the next twelve months, and has a remaining weighted-average recognition period of 1.0 year. During 2023, 2024, and 2025, the fair value of restricted stock units that vested was $17.6 billion, $39.6 billion, and $30.0 billion. Common Stock Available for Future Issuance As of December 31, 2025, common stock available for future issuance to employees is 1.4 billion shares. Accumulated Other Comprehensive Income (Loss) The following table summarizes the changes in “Accumulated other comprehensive income (loss)” by separate components (in millions): > **December 31,** > > December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, > > 2024 / 2024 / 2024 / 2025 / 2025 / 2025 > Total beginning accumulated other comprehensive income (loss), net of tax of $99 and $(1,762) ... Total beginning accumulated other comprehensive income (loss), net of tax of $99 and $(1,762) / Total beginning accumulated other comprehensive income (loss), net of tax of $99 and $(1,762) / $ / (3,040) / $ / (34) > Foreign currency translation adjustments: ... Foreign currency translation adjustments: / Foreign currency translation adjustments: > Beginning of year balance, net of tax of $66 and $292 ... Beginning of year balance, net of tax of $66 and $292 / Beginning of year balance, net of tax of $66 and $292 / (2,841) / (2,841) / (6,174) / (6,174) > Foreign currency translation adjustments, net of tax of $226 and $(194) ... Foreign currency translation adjustments, net of tax of $226 and $(194) / Foreign currency translation adjustments, net of tax of $226 and $(194) / (3,333) / (3,333) / 4,226 / 4,226 / 4,226 > End of year balance, net of tax of $292 and $98 ... End of year balance, net of tax of $292 and $98 / End of year balance, net of tax of $292 and $98 / (6,174) / (6,174) / (1,948) / (1,948) > Unrealized gains (losses) on available-for-sale debt securities: ... Unrealized gains (losses) on available-for-sale debt securities: / Unrealized gains (losses) on available-for-sale debt securities: > Beginning of year balance, net of tax of $34 and $(2,054) ... Beginning of year balance, net of tax of $34 and $(2,054) / Beginning of year balance, net of tax of $34 and $(2,054) / (205) / (205) / 6,139 / 6,139 / 6,139 > Change in net unrealized gains (losses), net of tax of $(2,086) and $(8,754) ... Change in net unrealized gains (losses), net of tax of $(2,086) and $(8,754) / Change in net unrealized gains (losses), net of tax of $(2,086) and $(8,754) / 6,339 / 6,339 / 28,304 / 28,304 / 28,304 > Reclassification adjustment for net losses (gains) included in “Other income (expense), net,” net of tax of $(2) and $1,327 ... Reclassification adjustment for net losses (gains) included in “Other income (expense), net,” net of tax of $(2) and $1,327 / Reclassification adjustment for net losses (gains) included in “Other income (expense), net,” net of tax of $(2) and $1,327 / 5 / 5 / (4,273) / (4,273) > End of year balance, net of tax of $(2,054) and $(9,481) ... End of year balance, net of tax of $(2,054) and $(9,481) / End of year balance, net of tax of $(2,054) and $(9,481) / 6,139 / 6,139 / 30,170 / 30,170 / 30,170 > Other: .................................. Other: / Other: > Beginning of year balance, net of tax of $(1) and $0 ... Beginning of year balance, net of tax of $(1) and $0 / Beginning of year balance, net of tax of $(1) and $0 / 6 / 6 / 6 / 1 / 1 / 1 > Other, net of tax of $1 and $(1) ........ Other, net of tax of $1 and $(1) / Other, net of tax of $1 and $(1) / (5) / (5) / 7 / 7 / 7 > End of year balance, net of tax of $0 and $(1) ... End of year balance, net of tax of $0 and $(1) / End of year balance, net of tax of $0 and $(1) / 1 / 1 / 8 / 8 / 8 > Total ending accumulated other comprehensive income (loss), net of tax of $(1,762) and $(9,384) ... Total ending accumulated other comprehensive income (loss), net of tax of $(1,762) and $(9,384) / Total ending accumulated other comprehensive income (loss), net of tax of $(1,762) and $(9,384) / $ / (34) / $ / 28,230 Note 9 — INCOME TAXES In 2023, 2024, and 2025, we recorded a net tax provision of $7.1 billion, $9.3 billion, and $19.1 billion. Our U.S. taxable income is reduced by accelerated depreciation deductions and the resulting U.S. tax liability is reduced by tax credits, primarily related to the U.S. federal research and development credit. Cash paid for income taxes, net of refunds, was $11.2 billion, $12.3 billion, and $8.3 billion for 2023, 2024, and 2025. 63 --- Table of Contents The 2025 Tax Act was signed into law on July 4, 2025. The 2025 Tax Act makes changes to the U.S. corporate income tax, including reinstating the option to claim 100% accelerated depreciation deductions on qualified property, with retroactive application beginning January 20, 2025, and immediate expensing of domestic research and development costs, with retroactive application beginning January 1, 2025. For 2025, the 2025 Tax Act increased our income tax provision, primarily due to a decrease in the foreign income deduction, and significantly decreased our cash taxes. The components of cash paid for income taxes, net of refunds, are as follows (in millions): > **Year Ended December 31,** > > Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, > > 2023 / 2023 / 2023 / 2024 / 2024 / 2024 / 2025 / 2025 / 2025 > U.S. Federal ............................ U.S. Federal / U.S. Federal / $ / 7,435 / $ / 7,630 / $ / 2,751 > U.S. State .............................. U.S. State / U.S. State / 2,070 / 2,070 / 2,450 / 2,450 / 2,125 / 2,125 > International ........................... International / International / 1,674 / 1,674 / 2,228 / 2,228 / 3,419 / 3,419 > Total cash taxes paid, net of refunds ... Total cash taxes paid, net of refunds / Total cash taxes paid, net of refunds / $ / 11,179 / $ / 12,308 / $ / 8,295 Certain foreign subsidiary earnings and losses are subject to current U.S. taxation and the subsequent repatriation of those earnings is not subject to tax in the U.S. The components of the provision for income taxes, net are as follows (in millions): > **Year Ended December 31,** > > Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, > > 2023 / 2023 / 2023 / 2024 / 2024 / 2024 / 2025 / 2025 / 2025 > U.S. Federal: ........................... U.S. Federal: / U.S. Federal: > Current ................................. Current / Current / $ / 8,652 / $ / 9,039 / $ / 1,220 > Deferred ................................ Deferred / Deferred / (5,505) / (5,505) / (4,101) / (4,101) / 11,134 / 11,134 > Total ................................... Total / Total / 3,147 / 3,147 / 4,938 / 4,938 / 12,354 / 12,354 > U.S. State: ............................. U.S. State: / U.S. State: > Current ................................. Current / Current / 2,158 / 2,158 / 2,109 / 2,109 / 2,067 / 2,067 > Deferred ................................ Deferred / Deferred / (498) / (498) / (453) / (453) / 984 / 984 > Total ................................... Total / Total / 1,660 / 1,660 / 1,656 / 1,656 / 3,051 / 3,051 > International: .......................... International: / International: > Current ................................. Current / Current / 2,186 / 2,186 / 2,765 / 2,765 / 4,330 / 4,330 > Deferred ................................ Deferred / Deferred / 127 / 127 / (94) / (94) / (648) / (648) > Total ................................... Total / Total / 2,313 / 2,313 / 2,671 / 2,671 / 3,682 / 3,682 > Provision for income taxes, net ......... Provision for income taxes, net / Provision for income taxes, net / $ / 7,120 / $ / 9,265 / $ / 19,087 U.S. and international components of income before income taxes are as follows (in millions): > **Year Ended December 31,** > > Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, > > 2023 / 2023 / 2023 / 2024 / 2024 / 2024 / 2025 / 2025 / 2025 > U.S. .................................... U.S. / U.S. / $ / 32,328 / $ / 61,947 / $ / 89,537 > International ........................... International / International / 5,229 / 5,229 / 6,667 / 6,667 / 7,774 / 7,774 > Income before income taxes .............. Income before income taxes / Income before income taxes / $ / 37,557 / $ / 68,614 / $ / 97,311 64 --- Table of Contents The items accounting for differences between income taxes computed at the federal statutory rate and the provision recorded for income taxes are as follows (in millions, except percentages): > **Year Ended December 31,** > > Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, > > 2023 / 2023 / 2023 / 2023 / 2023 / 2023 / 2023 / 2023 / 2023 / 2024 / 2024 / 2024 / 2024 / 2024 / 2024 / 2024 / 2024 / 2024 / 2025 / 2025 / 2025 / 2025 / 2025 / 2025 / 2025 / 2025 / 2025 > Income taxes computed at the federal statutory rate ... Income taxes computed at the federal statutory rate / Income taxes computed at the federal statutory rate / $ / 7,887 / 21.0 / 21.0 / % / $ / 14,409 / 21.0 / 21.0 / % / $ / 20,435 / 21.0 / 21.0 / % > Federal: ................................ Federal: / Federal: > Tax credits: ............................ Tax credits: / Tax credits: > Research and development tax credits .... Research and development tax credits / Research and development tax credits / (2,196) / (2,196) / (5.8) / (5.8) / (2,644) / (2,644) / (3.9) / (3.9) / (2,403) / (2,403) / (2.5) / (2.5) > Foreign tax credits ..................... Foreign tax credits / Foreign tax credits / (558) / (558) / (1.5) / (1.5) / (440) / (440) / (0.6) / (0.6) / (642) / (642) / (0.7) / (0.7) > Other credits ........................... Other credits / Other credits / (185) / (185) / (0.5) / (0.5) / (176) / (176) / (0.3) / (0.3) / (139) / (139) / (0.1) / (0.1) > Effect of cross-border tax laws: ........ Effect of cross-border tax laws: / Effect of cross-border tax laws: > Foreign income deduction (1) ............ Foreign income deduction (1) / Foreign income deduction (1) / (1,429) / (1,429) / (3.8) / (3.8) / (2,379) / (2,379) / (3.5) / (3.5) / (522) / (522) / (0.5) / (0.5) > Other effects of cross-border tax laws ... Other effects of cross-border tax laws / Other effects of cross-border tax laws / (18) / (18) / — / — / (33) / (33) / — / — / (271) / (271) / (0.3) / (0.3) > Nontaxable and nondeductible items: ..... Nontaxable and nondeductible items: / Nontaxable and nondeductible items: > Stock-based compensation (2) ............ Stock-based compensation (2) / Stock-based compensation (2) / 784 / 784 / 2.1 / 2.1 / (2,236) / (2,236) / (3.3) / (3.3) / (2,029) / (2,029) / (2.1) / (2.1) > Other nontaxable and nondeductible items ... Other nontaxable and nondeductible items / Other nontaxable and nondeductible items / 162 / 162 / 0.4 / 0.4 / 158 / 158 / 0.3 / 0.3 / 372 / 372 / 0.4 / 0.4 > Other ................................... Other / Other / 186 / 186 / 0.5 / 0.5 / 33 / 33 / — / — / 486 / 486 / 0.5 / 0.5 > State and local income taxes, net of federal effect (3) ... State and local income taxes, net of federal effect (3) / State and local income taxes, net of federal effect (3) / 1,292 / 1,292 / 3.4 / 3.4 / 1,321 / 1,321 / 1.9 / 1.9 / 2,455 / 2,455 / 2.5 / 2.5 > Foreign tax effects ..................... Foreign tax effects / Foreign tax effects / 1,117 / 1,117 / 3.0 / 3.0 / 1,150 / 1,150 / 1.7 / 1.7 / 1,517 / 1,517 / 1.6 / 1.6 > Worldwide changes in prior period unrecognized tax benefits ... Worldwide changes in prior period unrecognized tax benefits / Worldwide changes in prior period unrecognized tax benefits / 78 / 78 / 0.2 / 0.2 / 102 / 102 / 0.2 / 0.2 / (172) / (172) / (0.2) / (0.2) > Total ................................... Total / Total / $ / 7,120 / 19.0 / 19.0 / % / $ / 9,265 / 13.5 / 13.5 / % / $ / 19,087 / 19.6 / 19.6 / % ___________________ (1) U.S. companies are eligible for a deduction that lowers the effective tax rate on certain foreign income. This regime is referred to as the Foreign-Derived Intangible Income deduction and is dependent on the amount of our U.S. taxable income. (2) Includes amounts related to non-taxable and non-deductible stock-based compensation, in addition to excess tax benefits or shortfalls from stock-based compensation. Our tax provision includes $519 million of tax shortfalls from stock-based compensation for 2023, and $2.8 billion and $2.6 billion of excess tax benefits from stock-based compensation for 2024 and 2025. (3) The jurisdictions that contribute to the majority of the tax effect in this category are Illinois, Maryland, New Jersey, New York, Pennsylvania, and Virginia. Our provision for income taxes in 2024 was higher than in 2023 primarily due to an increase in pretax income, partially offset by an increase in excess tax benefits from stock-based compensation and an increase in our foreign income deduction. Our provision for income taxes in 2025 was higher than in 2024 primarily due to an increase in pretax income and a decrease in foreign income deduction resulting from the effects of the 2025 Tax Act. We intend to invest substantially all of our foreign subsidiary earnings, as well as our capital in our foreign subsidiaries, indefinitely outside of the U.S. in those jurisdictions in which we would incur significant, additional costs upon repatriation of such amounts. 65 --- Table of Contents Deferred income tax assets and liabilities are as follows (in millions): > **December 31,** > > December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, > > 2024 / 2024 / 2024 / 2025 / 2025 / 2025 > Deferred tax assets (1): ................ Deferred tax assets (1): / Deferred tax assets (1): > Loss carryforwards U.S. - Federal/States ... Loss carryforwards U.S. - Federal/States / Loss carryforwards U.S. - Federal/States / $ / 692 / $ / 632 > Loss carryforwards - Foreign ............ Loss carryforwards - Foreign / Loss carryforwards - Foreign / 2,687 / 2,687 / 2,936 / 2,936 > Accrued liabilities, reserves, and other expenses ... Accrued liabilities, reserves, and other expenses / Accrued liabilities, reserves, and other expenses / 4,254 / 4,254 / 5,545 / 5,545 > Stock-based compensation ................ Stock-based compensation / Stock-based compensation / 4,089 / 4,089 / 4,295 / 4,295 > Depreciation and amortization ........... Depreciation and amortization / Depreciation and amortization / 1,133 / 1,133 / 1,503 / 1,503 > Operating lease liabilities ............. Operating lease liabilities / Operating lease liabilities / 20,921 / 20,921 / 23,596 / 23,596 > Capitalized research and development .... Capitalized research and development / Capitalized research and development / 22,701 / 22,701 / 18,725 / 18,725 > Other items ............................. Other items / Other items / 1,688 / 1,688 / 2,166 / 2,166 > Tax credits ............................. Tax credits / Tax credits / 1,773 / 1,773 / 2,812 / 2,812 > Total gross deferred tax assets ......... Total gross deferred tax assets / Total gross deferred tax assets / 59,938 / 59,938 / 62,210 / 62,210 > Less valuation allowances (2) ........... Less valuation allowances (2) / Less valuation allowances (2) / (4,893) / (4,893) / (5,560) / (5,560) > Deferred tax assets, net of valuation allowances ... Deferred tax assets, net of valuation allowances / Deferred tax assets, net of valuation allowances / 55,045 / 55,045 / 56,650 / 56,650 > Deferred tax liabilities: ............... Deferred tax liabilities: / Deferred tax liabilities: > Depreciation and amortization ........... Depreciation and amortization / Depreciation and amortization / (16,240) / (16,240) / (23,159) / (23,159) > Operating lease assets .................. Operating lease assets / Operating lease assets / (19,517) / (19,517) / (22,177) / (22,177) > Assets held for investment .............. Assets held for investment / Assets held for investment / (2,133) / (2,133) / (13,149) / (13,149) > Other items ............................. Other items / Other items / (1,190) / (1,190) / (1,159) / (1,159) > Net deferred tax assets (liabilities), net of valuation allowances ... Net deferred tax assets (liabilities), net of valuation allowances / Net deferred tax assets (liabilities), net of valuation allowances / $ / 15,965 / $ / (2,994)  ___________________ (1) Deferred tax assets are presented after tax effects and net of tax contingencies. (2) Relates primarily to deferred tax assets that would only be realizable upon the generation of net income in certain foreign taxing jurisdictions or future capital gains, as well as tax credits. Our valuation allowances primarily relate to foreign deferred tax assets, including substantially all of our foreign net operating loss carryforwards as of December 31, 2025. Our foreign net operating loss carryforwards for income tax purposes as of December 31, 2025 were approximately $10.6 billion before tax effects and certain of these amounts are subject to annual limitations under applicable tax law. If not utilized, a portion of these losses will begin to expire in 2026. Income Tax Contingencies We are subject to income taxes in the U.S. (federal and state) and numerous foreign jurisdictions. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. We establish reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These reserves are established when we believe that certain positions might be challenged despite our belief that our tax return positions are fully supportable. We adjust these reserves in light of changing facts and circumstances, such as the outcome of tax audits. The provision for income taxes includes the impact of reserve provisions and changes to reserves that are considered appropriate. 66 --- Table of Contents The reconciliation of our income tax contingencies is as follows (in millions): > **December 31,** > > December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, > > 2023 / 2023 / 2023 / 2024 / 2024 / 2024 / 2025 / 2025 / 2025 > Gross tax contingencies – January 1 ..... Gross tax contingencies – January 1 / Gross tax contingencies – January 1 / $ / 4,002 / $ / 5,228 / $ / 6,485 > Gross increases to tax positions in prior periods ... Gross increases to tax positions in prior periods / Gross increases to tax positions in prior periods / 440 / 440 / 154 / 154 / 310 / 310 > Gross decreases to tax positions in prior periods ... Gross decreases to tax positions in prior periods / Gross decreases to tax positions in prior periods / (38) / (38) / (129) / (129) / (1,180) / (1,180) > Gross increases to current period tax positions ... Gross increases to current period tax positions / Gross increases to current period tax positions / 1,009 / 1,009 / 1,392 / 1,392 / 1,292 / 1,292 > Settlements with tax authorities ........ Settlements with tax authorities / Settlements with tax authorities / (106) / (106) / (9) / (9) / (312) / (312) > Lapse of statute of limitations ......... Lapse of statute of limitations / Lapse of statute of limitations / (79) / (79) / (151) / (151) / (29) / (29) > Gross tax contingencies – December 31 (1) ... Gross tax contingencies – December 31 (1) / Gross tax contingencies – December 31 (1) / $ / 5,228 / $ / 6,485 / $ / 6,566  ___________________ (1) As of December 31, 2025, we had approximately $6.6 billion of income tax contingencies of which $5.0 billion, if fully recognized, would decrease our effective tax rate. As of December 31, 2024 and 2025, we had accrued interest and penalties, net of federal income tax benefit, related to tax contingencies of $316 million and $400 million. Interest and penalties, net of federal income tax benefit, recognized for the years ended December 31, 2023, 2024, and 2025 were $91 million, $121 million, and $84 million. We are under examination, or may be subject to examination, by the Internal Revenue Service for the calendar year 2016 and thereafter. These examinations may lead to ordinary course adjustments or proposed adjustments to our taxes or our net operating losses with respect to years under examination as well as subsequent periods. We are also subject to taxation in various states and foreign jurisdictions including Germany, India, Japan, Luxembourg, and the United Kingdom. We are under, or may be subject to, audit or examination and additional assessments by the relevant authorities in respect of these particular jurisdictions primarily for 2011 and thereafter. We are currently disputing tax assessments in multiple jurisdictions, including with respect to the allocation and characterization of income. In September 2022, the Luxembourg tax authority (“LTA”) denied the tax basis of certain intangible assets that we distributed from Luxembourg to the U.S. in 2021. When we are assessed by the LTA, we will need to remit taxes related to this matter. We believe the LTA’s position is without merit, we intend to defend ourselves vigorously in this matter, and we expect to recoup taxes paid. The Indian tax authority (“ITA”) has asserted that tax applies to cloud services fees paid to Amazon in the U.S. We will need to remit taxes related to this matter until it is resolved, which payments could be significant in the aggregate. We believe the ITA’s position is without merit, we are defending our position vigorously, and we expect to recoup taxes paid. If this matter is adversely resolved, we could recognize significant additional tax expense, including for taxes previously paid. Changes in tax laws, regulations, administrative practices, principles, and interpretations may impact our tax contingencies. Due to various factors, including the inherent complexities and uncertainties of the judicial, administrative, and regulatory processes in certain jurisdictions, the timing of the resolution of income tax controversies is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ from the amounts accrued. Note 10 — SEGMENT INFORMATION We have organized our operations into three segments: North America, International, and AWS. We allocate to segment results the operating expenses “Fulfillment,” “Technology and infrastructure,” “Sales and marketing,” and “General and administrative” based on usage, which is generally reflected in the segment in which the costs are incurred. The majority of technology costs recorded in “Technology and infrastructure” are incurred in the U.S. and are included in our North America and AWS segments. The majority of infrastructure costs recorded in “Technology and infrastructure” are allocated to the AWS segment based on usage. There are no internal revenue transactions between our reportable segments. Our chief operating decision maker (“CODM”) is our President and Chief Executive Officer. Our CODM regularly reviews consolidated net sales, consolidated operating expenses, and consolidated operating income (loss) by segment. Amounts included in consolidated operating expenses include “Cost of sales,” “Fulfillment,” “Technology and infrastructure,” “Sales and marketing,” “General and administrative,” and “Other operating expense (income), net.” Our CODM manages our business primarily by reviewing consolidated results by segment on a quarterly basis, and using those results along with forecasts and other non-financial information in our annual budgeting process. 67 --- Table of Contents North America The North America segment primarily consists of amounts earned from retail sales of consumer products (including from sellers) and advertising and subscription services through North America-focused online and physical stores. This segment includes export sales from these online stores. International The International segment primarily consists of amounts earned from retail sales of consumer products (including from sellers) and advertising and subscription services through internationally-focused online stores. This segment includes export sales from these internationally-focused online stores (including export sales from these online stores to customers in the U.S., Mexico, and Canada), but excludes export sales from our North America-focused online stores. AWS The AWS segment consists of amounts earned from global sales of compute, storage, database, and other services for start-ups, enterprises, government agencies, and academic institutions. Information on reportable segments and reconciliation to consolidated net income is as follows (in millions): > **Year Ended December 31,** > > Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, > > 2023 / 2023 / 2023 / 2024 / 2024 / 2024 / 2025 / 2025 / 2025 > North America ........................... North America / North America > Net sales ............................... Net sales / Net sales / $ / 352,828 / $ / 387,497 / $ / 426,305 > Operating expenses ...................... Operating expenses / Operating expenses / 337,951 / 337,951 / 362,530 / 362,530 / 396,686 / 396,686 > Operating income ........................ Operating income / Operating income / $ / 14,877 / $ / 24,967 / $ / 29,619 > International ........................... International / International > Net sales ............................... Net sales / Net sales / $ / 131,200 / $ / 142,906 / $ / 161,894 > Operating expenses ...................... Operating expenses / Operating expenses / 133,856 / 133,856 / 139,114 / 139,114 / 157,144 / 157,144 > Operating income (loss) ................. Operating income (loss) / Operating income (loss) / $ / (2,656) / $ / 3,792 / $ / 4,750 > AWS ..................................... AWS / AWS > Net sales ............................... Net sales / Net sales / $ / 90,757 / $ / 107,556 / $ / 128,725 > Operating expenses ...................... Operating expenses / Operating expenses / 66,126 / 66,126 / 67,722 / 67,722 / 83,119 / 83,119 > Operating income ........................ Operating income / Operating income / $ / 24,631 / $ / 39,834 / $ / 45,606 > Consolidated ............................ Consolidated / Consolidated > Net sales ............................... Net sales / Net sales / $ / 574,785 / $ / 637,959 / $ / 716,924 > Operating expenses ...................... Operating expenses / Operating expenses / 537,933 / 537,933 / 569,366 / 569,366 / 636,949 / 636,949 > Operating income ........................ Operating income / Operating income / 36,852 / 36,852 / 68,593 / 68,593 / 79,975 / 79,975 > Total non-operating income .............. Total non-operating income / Total non-operating income / 705 / 705 / 21 / 21 / 17,336 / 17,336 > Provision for income taxes .............. Provision for income taxes / Provision for income taxes / (7,120) / (7,120) / (9,265) / (9,265) / (19,087) / (19,087) > Equity-method investment activity, net of tax ... Equity-method investment activity, net of tax / Equity-method investment activity, net of tax / (12) / (12) / (101) / (101) / (554) / (554) > Net income .............................. Net income / Net income / $ / 30,425 / $ / 59,248 / $ / 77,670 68 --- Table of Contents Net sales by groups of similar products and services, which also have similar economic characteristics, is as follows (in millions): > **Year Ended December 31,** > > Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, > > 2023 / 2023 / 2023 / 2024 / 2024 / 2024 / 2025 / 2025 / 2025 > Net Sales: .............................. Net Sales: / Net Sales: > Online stores (1) ....................... Online stores (1) / Online stores (1) / $ / 231,872 / $ / 247,029 / $ / 269,287 > Physical stores (2) ..................... Physical stores (2) / Physical stores (2) / 20,030 / 20,030 / 21,215 / 21,215 / 22,561 / 22,561 > Third-party seller services (3) ......... Third-party seller services (3) / Third-party seller services (3) / 140,053 / 140,053 / 156,146 / 156,146 / 172,162 / 172,162 > Advertising services (4) ................ Advertising services (4) / Advertising services (4) / 46,906 / 46,906 / 56,214 / 56,214 / 68,635 / 68,635 > Subscription services (5) ............... Subscription services (5) / Subscription services (5) / 40,209 / 40,209 / 44,374 / 44,374 / 49,619 / 49,619 > AWS ..................................... AWS / AWS / 90,757 / 90,757 / 107,556 / 107,556 / 128,725 / 128,725 > Other (6) ............................... Other (6) / Other (6) / 4,958 / 4,958 / 5,425 / 5,425 / 5,935 / 5,935 > Consolidated ............................ Consolidated / Consolidated / $ / 574,785 / $ / 637,959 / $ / 716,924 ___________________ (1) Includes product sales and digital media content where we record revenue gross. We leverage our retail infrastructure to offer a wide selection of consumable and durable goods that includes media products available in both a physical and digital format, such as books, videos, games, music, and software. These product sales include digital products sold on a transactional basis. Digital media content subscriptions that provide unlimited viewing or usage rights are included in “Subscription services.” (2) Includes product sales where our customers physically select items in a store. Sales to customers who order goods online for delivery or pickup at our physical stores are included in “Online stores.” (3) Includes commissions and any related fulfillment and shipping fees, and other third-party seller services. (4) Includes sales of advertising services to sellers, vendors, publishers, authors, and others, through programs such as sponsored ads, display, and video advertising. (5) Includes annual and monthly fees associated with Amazon Prime memberships, as well as digital video, audiobook, digital music, e-book, and other non-AWS subscription services. (6) Includes sales related to various other offerings (such as shipping services, healthcare services, and certain licensing and distribution of video content) and our co-branded credit card agreements. Net sales are attributed to countries primarily based on country-focused online and physical stores or, for AWS purposes, the selling entity. Net sales attributed to countries that represent a significant portion of consolidated net sales are as follows (in millions): > **Year Ended December 31,** > > Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, > > 2023 / 2023 / 2023 / 2024 / 2024 / 2024 / 2025 / 2025 / 2025 > United States ........................... United States / United States / $ / 395,637 / $ / 438,015 / $ / 489,657 > Germany ................................. Germany / Germany / 37,588 / 37,588 / 40,856 / 40,856 / 45,900 / 45,900 > United Kingdom .......................... United Kingdom / United Kingdom / 33,591 / 33,591 / 37,855 / 37,855 / 43,212 / 43,212 > Japan ................................... Japan / Japan / 26,002 / 26,002 / 27,401 / 27,401 / 30,688 / 30,688 > Rest of world ........................... Rest of world / Rest of world / 81,967 / 81,967 / 93,832 / 93,832 / 107,467 / 107,467 > Consolidated ............................ Consolidated / Consolidated / $ / 574,785 / $ / 637,959 / $ / 716,924 69 --- Table of Contents Total segment assets exclude corporate assets, such as cash and cash equivalents, marketable securities, other long-term investments, corporate facilities, goodwill and other acquired intangible assets, and tax assets. Technology infrastructure assets, which are included in property and equipment, net, net additions, and the depreciation and amortization expense on these assets, are allocated among the segments based on usage, with the majority allocated to the AWS segment. Usage of technology infrastructure assets by the North America and International segments, and the related allocation of total net additions, can fluctuate on a quarter-to-quarter basis, and is affected by seasonality, peak periods, new product or service offerings, and other factors. Total segment assets reconciled to consolidated amounts are as follows (in millions): > **December 31,** > > December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, > > 2023 / 2023 / 2023 / 2024 / 2024 / 2024 / 2025 / 2025 / 2025 > North America (1) ....................... North America (1) / North America (1) / $ / 196,029 / $ / 210,120 / $ / 235,652 > International (1) ....................... International (1) / International (1) / 69,718 / 69,718 / 69,487 / 69,487 / 81,984 / 81,984 > AWS (2) ................................. AWS (2) / AWS (2) / 108,533 / 108,533 / 155,953 / 155,953 / 252,588 / 252,588 > Corporate ............................... Corporate / Corporate / 153,574 / 153,574 / 189,334 / 189,334 / 247,818 / 247,818 > Consolidated ............................ Consolidated / Consolidated / $ / 527,854 / $ / 624,894 / $ / 818,042 ___________________ (1) North America and International segment assets primarily consist of property and equipment, operating leases, inventory, accounts receivable, and digital video and music content. (2) AWS segment assets primarily consist of property and equipment, accounts receivable, and operating leases. Property and equipment, net by segment is as follows (in millions): > **December 31,** > > December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, / December 31, > > 2023 / 2023 / 2023 / 2024 / 2024 / 2024 / 2025 / 2025 / 2025 > North America ........................... North America / North America / $ / 93,632 / $ / 103,041 / $ / 122,043 > International ........................... International / International / 24,357 / 24,357 / 25,618 / 25,618 / 30,632 / 30,632 > AWS ..................................... AWS / AWS / 72,701 / 72,701 / 110,683 / 110,683 / 190,055 / 190,055 > Corporate ............................... Corporate / Corporate / 13,487 / 13,487 / 13,323 / 13,323 / 14,295 / 14,295 > Consolidated ............................ Consolidated / Consolidated / $ / 204,177 / $ / 252,665 / $ / 357,025 Total net additions to property and equipment include technology infrastructure assets and the effect of non-cash activity such as property and equipment acquired but not yet paid. Total net additions to property and equipment are as follows (in millions): > **Year Ended December 31,** > > Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, > > 2023 / 2023 / 2023 / 2024 / 2024 / 2024 / 2025 / 2025 / 2025 > North America (1) ....................... North America (1) / North America (1) / $ / 17,529 / $ / 24,348 / $ / 35,919 > International (1) ....................... International (1) / International (1) / 4,144 / 4,144 / 6,643 / 6,643 / 7,617 / 7,617 > AWS (2) ................................. AWS (2) / AWS (2) / 24,843 / 24,843 / 53,267 / 53,267 / 96,496 / 96,496 > Corporate ............................... Corporate / Corporate / 1,828 / 1,828 / 1,494 / 1,494 / 2,320 / 2,320 > Consolidated ............................ Consolidated / Consolidated / $ / 48,344 / $ / 85,752 / $ / 142,352 ___________________ (1) Includes property and equipment added under finance leases of $525 million, $616 million, and $1.0 billion in 2023, 2024, and 2025, and under build-to-suit lease arrangements of $356 million, $89 million, and $20 million in 2023, 2024, and 2025. (2) Includes property and equipment added under finance leases of $117 million, $238 million, and $1.9 billion in 2023, 2024, and 2025, and under build-to-suit lease arrangements of $1 million, $8 million, and $421 million in 2023, 2024, and 2025. U.S. property and equipment, net and operating leases were $196.0 billion, $241.6 billion, and $321.9 billion, as of December 31, 2023, 2024, and 2025, and non-U.S. property and equipment, net and operating leases were $80.7 billion, $87.2 billion, and $121.2 billion as of December 31, 2023, 2024, and 2025. Except for the U.S., property and equipment, net and operating leases in any single country were less than 10% of consolidated property and equipment, net and operating leases. 70 --- Table of Contents Depreciation and amortization expense on property and equipment, including corporate property and equipment, are allocated to all segments based on usage. Total depreciation and amortization expense, by segment, is as follows (in millions): > **Year Ended December 31,** > > Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, / Year Ended December 31, > > 2023 / 2023 / 2023 / 2024 / 2024 / 2024 / 2025 / 2025 / 2025 > North America ........................... North America / North America / $ / 13,678 / $ / 14,285 / $ / 15,503 > International ........................... International / International / 4,016 / 4,016 / 4,462 / 4,462 / 4,907 / 4,907 > AWS ..................................... AWS / AWS / 12,531 / 12,531 / 13,320 / 13,320 / 21,450 / 21,450 > Consolidated ............................ Consolidated / Consolidated / $ / 30,225 / $ / 32,067 / $ / 41,860 71 --- Table of Contents > **Item 9.** > > Item 9. / Item 9. / Changes in and Disagreements with Accountants On Accounting and Financial Disclosure / Changes in and Disagreements with Accountants On Accounting and Financial Disclosure / Changes in and Disagreements with Accountants On Accounting and Financial Disclosure > > Item 9. ................................. Item 9. / Item 9. / Changes in and Disagreements with Accountants On Accounting and Financial Disclosure / Changes in and Disagreements with Accountants On Accounting and Financial Disclosure / Changes in and Disagreements with Accountants On Accounting and Financial Disclosure None. | | | | | | | | --- | --- | --- | --- | --- | --- |