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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 ____________________________________
FORM 10-Q
____________________________________ 
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to             .
Commission File No. 000-22513
____________________________________
AMAZON.COM, INC.
(Exact name of registrant as specified in its charter)
 ____________________________________
Delaware 91-1646860
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
410 Terry Avenue North, Seattle, Washington 98109-5210
(206) 266-1000
(Address and telephone number, including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock, par value $.01 per shareAMZNNasdaq Global Select Market
____________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
508,720,481 shares of common stock, par value $0.01 per share, outstanding as of April 20, 2022


Table of Contents
AMAZON.COM, INC.
FORM 10-Q
For the Quarterly Period Ended March 31, 2022
INDEX
 
  Page
PART I. FINANCIAL INFORMATION
Item 1.
Item 2.
Item 3.
Item 4.
PART II. OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
2

Table of Contents
PART I. FINANCIAL INFORMATION
Item 1.Financial Statements
AMAZON.COM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
  Three Months Ended
March 31,
Twelve Months Ended
March 31,
2021202220212022
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD$42,377 $36,477 $27,505 $34,155 
OPERATING ACTIVITIES:
Net income (loss)8,107 (3,844)26,903 21,413 
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation and amortization of property and equipment and capitalized content costs, operating lease assets, and other7,508 8,978 27,397 35,766 
Stock-based compensation2,306 3,250 9,757 13,701 
Other operating expense (income), net30 215 (108)322 
Other expense (income), net(1,456)8,689 (4,603)(4,161)
Deferred income taxes1,703 (2,001)827 (4,014)
Changes in operating assets and liabilities:
Inventories(304)(2,614)(4,545)(11,797)
Accounts receivable, net and other(2,255)(1,516)(11,686)(17,424)
Accounts payable(8,266)(9,380)17,258 2,488 
Accrued expenses and other(4,060)(5,903)4,455 280 
Unearned revenue900 1,336 1,558 2,750 
Net cash provided by (used in) operating activities4,213 (2,790)67,213 39,324 
INVESTING ACTIVITIES:
Purchases of property and equipment(12,082)(14,951)(45,427)(63,922)
Proceeds from property and equipment sales and incentives895 1,209 4,624 5,971 
Acquisitions, net of cash acquired, and other(630)(6,341)(2,864)(7,696)
Sales and maturities of marketable securities17,826 22,753 56,437 64,311 
Purchases of marketable securities(14,675)(1,764)(72,153)(47,246)
Net cash provided by (used in) investing activities(8,666)906 (59,383)(48,582)
FINANCING ACTIVITIES:
Common stock repurchased (2,666) (2,666)
Proceeds from short-term debt, and other1,926 13,743 8,105 19,773 
Repayments of short-term debt, and other(2,001)(6,231)(7,547)(11,983)
Proceeds from long-term debt111  10,560 18,892 
Repayments of long-term debt(39) (1,556)(1,551)
Principal repayments of finance leases(3,406)(2,777)(11,448)(10,534)
Principal repayments of financing obligations(67)(79)(103)(174)
Net cash provided by (used in) financing activities(3,476)1,990 (1,989)11,757 
Foreign currency effect on cash, cash equivalents, and restricted cash(293)16 809 (55)
Net increase (decrease) in cash, cash equivalents, and restricted cash(8,222)122 6,650 2,444 
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD$34,155 $36,599 $34,155 $36,599 
See accompanying notes to consolidated financial statements.
3

Table of Contents
AMAZON.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
(unaudited)
  
Three Months Ended
March 31,
20212022
Net product sales$57,491 $56,455 
Net service sales51,027 59,989 
Total net sales108,518 116,444 
Operating expenses:
Cost of sales62,403 66,499 
Fulfillment16,530 20,271 
Technology and content12,488 14,842 
Sales and marketing6,207 8,320 
General and administrative1,987 2,594 
Other operating expense (income), net38 249 
Total operating expenses99,653 112,775 
Operating income8,865 3,669 
Interest income105 108 
Interest expense(399)(472)
Other income (expense), net1,697 (8,570)
Total non-operating income (expense)1,403 (8,934)
Income (loss) before income taxes10,268 (5,265)
Benefit (provision) for income taxes(2,156)1,422 
Equity-method investment activity, net of tax(5)(1)
Net income (loss)$8,107 $(3,844)
Basic earnings per share$16.09 $(7.56)
Diluted earnings per share$15.79 $(7.56)
Weighted-average shares used in computation of earnings per share:
Basic504 509 
Diluted513 509 
See accompanying notes to consolidated financial statements.
4

Table of Contents
AMAZON.COM, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in millions)
(unaudited) 
  
Three Months Ended
March 31,
20212022
Net income (loss)$8,107 $(3,844)
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax of $13 and $(16)
(374)(333)
Net change in unrealized gains (losses) on available-for-sale debt securities:
Unrealized gains (losses), net of tax of $30 and $1
(98)(662)
Reclassification adjustment for losses (gains) included in “Other income (expense), net,” net of tax of $4 and $0
(14)6 
Net unrealized gains (losses) on available-for-sale debt securities(112)(656)
Total other comprehensive income (loss)(486)(989)
Comprehensive income (loss)$7,621 $(4,833)
See accompanying notes to consolidated financial statements.
5

Table of Contents
AMAZON.COM, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share data) 
December 31, 2021March 31, 2022
 (unaudited)
ASSETS
Current assets:
Cash and cash equivalents$36,220 $36,393 
Marketable securities59,829 29,992 
Inventories32,640 34,987 
Accounts receivable, net and other32,891 32,504 
Total current assets161,580 133,876 
Property and equipment, net160,281 168,468 
Operating leases56,082 56,161 
Goodwill15,371 20,229 
Other assets27,235 32,033 
Total assets$420,549 $410,767 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$78,664 $68,547 
Accrued expenses and other51,775 58,141 
Unearned revenue11,827 12,820 
Total current liabilities142,266 139,508 
Long-term lease liabilities67,651 65,731 
Long-term debt48,744 47,556 
Other long-term liabilities23,643 23,971 
Commitments and contingencies (Note 4)
Stockholders’ equity:
Preferred stock, $0.01 par value:
Authorized shares — 500
Issued and outstanding shares — none
  
Common stock, $0.01 par value:
Authorized shares — 5,000
Issued shares — 532 and 533
Outstanding shares — 509 and 509
5 5 
Treasury stock, at cost(1,837)(4,503)
Additional paid-in capital55,538 58,793 
Accumulated other comprehensive income (loss)(1,376)(2,365)
Retained earnings85,915 82,071 
Total stockholders’ equity138,245 134,001 
Total liabilities and stockholders’ equity$420,549 $410,767 
See accompanying notes to consolidated financial statements.
6

Table of Contents
AMAZON.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1 — ACCOUNTING POLICIES AND SUPPLEMENTAL DISCLOSURES
Unaudited Interim Financial Information
We have prepared the accompanying consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. These consolidated financial statements are unaudited and, in our opinion, include all adjustments, consisting of normal recurring adjustments and accruals necessary for a fair presentation of our consolidated cash flows, operating results, and balance sheets for the periods presented. Operating results for the periods presented are not necessarily indicative of the results that may be expected for 2022 due to seasonal and other factors. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted in accordance with the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes in Item 8 of Part II, “Financial Statements and Supplementary Data,” of our 2021 Annual Report on Form 10-K.
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 seller lending financing activities. Intercompany balances and transactions between consolidated entities are eliminated.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, income taxes, useful lives of equipment, commitments and contingencies, valuation of acquired intangibles and goodwill, stock-based compensation forfeiture rates, vendor funding, inventory valuation, collectability of receivables, and valuation and impairment of investments. Actual results could differ materially from these estimates.
We review the useful lives of equipment on an ongoing basis, and effective January 1, 2022 we changed our estimate of the useful lives for our servers from four to five years and for our networking equipment from five to six years. The longer useful lives are due to continuous improvements in our hardware, software, and data center designs. The effect of this change in estimate for Q1 2022, based on servers and networking equipment that were included in “Property and equipment, net” as of December 31, 2021 and those acquired during the quarter ended March 31, 2022, was a reduction in depreciation and amortization expense of $973 million and a benefit to net loss of $769 million, or $1.51 per basic share and $1.51 per diluted share.
Supplemental Cash Flow Information
The following table shows supplemental cash flow information (in millions):
Three Months Ended
March 31,
Twelve Months Ended
March 31,
2021202220212022
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest on debt$276 $279 $902 $1,101 
Cash paid for operating leases1,640 2,367 5,086 7,449 
Cash paid for interest on finance leases157 107 601 471 
Cash paid for interest on financing obligations33 58 113 178 
Cash paid for income taxes, net of refunds801 453 2,209 3,340 
Assets acquired under operating leases3,536 2,175 17,345 24,008 
Property and equipment acquired under finance leases2,067 166 11,489 5,160 
Property and equipment acquired under build-to-suit lease arrangements887 1,332 2,775 6,061 
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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):
  
Three Months Ended
March 31,
20212022
Shares used in computation of basic earnings per share504 509 
Total dilutive effect of outstanding stock awards9  
Shares used in computation of diluted earnings per share513 509 
Other Income (Expense), Net
Other income (expense), net, is as follows (in millions):
Three Months Ended
March 31,
20212022
Marketable equity securities valuation gains (losses)$(76)$(8,245)
Equity warrant valuation gains (losses)305 (312)
Upward adjustments relating to equity investments in private companies1,475 7 
Foreign currency gains (losses)(31)14 
Other, net24 (34)
Total other income (expense), net1,697 (8,570)
Included in other income (expense), net for the three months ended March 31, 2022 is a marketable equity securities valuation loss of $7.6 billion from our equity investment in Rivian Automotive, Inc. (“Rivian”). Our investment in Rivian’s preferred stock was accounted for at cost, with adjustments for observable changes in prices or impairments, prior to Rivian’s initial public offering in November 2021, which resulted in the conversion of our preferred stock to Class A common stock. As of March 31, 2022, we held 158 million shares of Rivian’s Class A common stock, representing an approximate 18% ownership interest, and an approximate 16% voting interest. We determined that we have the ability to exercise significant influence over Rivian through our equity investment, our commercial arrangement for the purchase of electric vehicles, and one of our employees serving on Rivian’s board of directors. We elected the fair value option to account for our equity investment in Rivian, which is included in “Marketable securities” on our consolidated balance sheets.
Required summarized financial information of Rivian as disclosed in its most recent SEC filings is as follows (in millions):
Year Ended
December 31, 2020
Year Ended
December 31, 2021
Revenues$ $55 
Gross profit (465)
Loss from operations(1,021)(4,220)
Net loss(1,018)(4,688)
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 $2.6 billion and $2.5 billion as of December 31, 2021 and March 31, 2022.
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Accounts Receivable, Net and Other
Included in “Accounts receivable, net and other” on our consolidated balance sheets are amounts primarily related to customers, vendors, and sellers. As of December 31, 2021 and March 31, 2022, customer receivables, net, were $20.2 billion and $20.9 billion, vendor receivables, net, were $5.3 billion and $4.2 billion, and seller receivables, net, were $1.0 billion and $1.1 billion. Seller receivables are amounts due from sellers related to our seller lending program, which provides funding to sellers primarily to procure inventory.
We estimate losses on receivables based on expected losses, including our historical experience of actual losses. The allowance for doubtful accounts was $1.1 billion as of December 31, 2021 and March 31, 2022.
Digital Video and Music Content
The total capitalized costs of video, which is primarily released content, and music as of December 31, 2021 and March 31, 2022 were $10.7 billion and $14.5 billion. Total video and music expense was $3.0 billion and $3.5 billion in Q1 2021 and Q1 2022.
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, 2021 was $14.0 billion, of which $5.1 billion was recognized as revenue during the three months ended March 31, 2022. Included in “Other long-term liabilities” on our consolidated balance sheets was $2.2 billion and $2.5 billion of unearned revenue as of December 31, 2021 and March 31, 2022.
Additionally, we have performance obligations, primarily related to AWS, associated with commitments in customer contracts for future services that have not yet been recognized in our consolidated financial statements. For contracts with original terms that exceed one year, those commitments not yet recognized were $88.9 billion as of March 31, 2022. The weighted-average remaining life of our long-term contracts is 3.8 years. However, the amount and timing of revenue recognition is largely driven by customer usage, which can extend beyond the original contractual term.
Acquisition Activity
On March 17, 2022, we acquired MGM Holdings Inc. (“MGM”), for cash consideration of approximately $6.1 billion, net of cash acquired, to provide more digital media content options for customers. We also assumed $2.5 billion of debt, which we repaid immediately after closing. The acquired assets primarily consist of $3.4 billion of video content and $4.9 billion of goodwill, the majority of which is allocated to our North America segment. Due to the limited amount of time since the MGM acquisition, the valuation of certain assets and liabilities is preliminary and subject to change.
Pro forma results of operations have not been presented because the effects of the MGM acquisition were not material to our consolidated results of operations. Acquisition-related costs were expensed as incurred and were not significant.
Note 2 — FINANCIAL INSTRUMENTS
Cash, Cash Equivalents, Restricted Cash, and Marketable Securities
As of December 31, 2021 and March 31, 2022, our cash, cash equivalents, restricted cash, and marketable securities primarily consisted of cash, AAA-rated money market funds, U.S. and foreign government and agency securities, other investment grade securities, and marketable equity securities. Cash equivalents and marketable securities are recorded at fair value. 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.
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
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or corroborated by observable market data. We did not hold significant amounts of marketable securities categorized as Level 3 assets as of December 31, 2021 and March 31, 2022.
The following table summarizes, by major security type, our cash, cash equivalents, restricted cash, and marketable securities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in millions):
 December 31, 2021March 31, 2022
  
Total
Estimated
Fair Value
Cost or
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Total
Estimated
Fair Value
Cash$10,942 $10,268 $— — $10,268 
Level 1 securities:
Money market funds20,312 23,858 — — 23,858 
Equity securities (1)(3)1,646 9,121 
Level 2 securities:
Foreign government and agency securities181 50  (1)49 
U.S. government and agency securities4,300 2,610  (97)2,513 
Corporate debt securities35,764 17,097  (517)16,580 
Asset-backed securities6,738 3,841  (116)3,725 
Other fixed income securities686 409  (16)393 
Equity securities (1)(3)15,740 87 
$96,309 $58,133 $ $(747)$66,594 
Less: Restricted cash, cash equivalents, and marketable securities (2)(260)(209)
Total cash, cash equivalents, and marketable securities$96,049 $66,385 
___________________
(1)The related unrealized gain (loss) recorded in “Other income (expense), net” was $3 million and $(8.1) billion in Q1 2021 and Q1 2022.
(2)We are required to pledge or otherwise restrict a portion of our cash, cash equivalents, and marketable fixed income securities primarily as collateral for real estate, amounts due to third-party sellers in certain jurisdictions, debt, and standby and trade letters of credit. We classify cash, cash equivalents, and marketable fixed income 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 4 — Commitments and Contingencies.”
(3)Our equity investment in Rivian had a fair value of $15.6 billion and $8.0 billion as of December 31, 2021 and March 31, 2022, respectively. The investment was subject to regulatory sales restrictions resulting in a discount for lack of marketability of approximately $800 million as of December 31, 2021, which expired in Q1 2022. In addition, we are subject to contractual sales restrictions that expire in May 2022.
The following table summarizes the remaining contractual maturities of our cash equivalents and marketable fixed income securities as of March 31, 2022 (in millions):
Amortized
Cost
Estimated
Fair Value
Due within one year$29,151 $29,144 
Due after one year through five years15,512 14,873 
Due after five years through ten years822 796 
Due after ten years2,380 2,305 
Total$47,865 $47,118 
Actual maturities may differ from the contractual maturities because borrowers may have certain prepayment conditions.
Equity Warrants and Non-Marketable Equity Investments
We hold equity warrants giving us the right to acquire stock of other companies. As of December 31, 2021 and March 31, 2022, these warrants had a fair value of $3.4 billion and $3.3 billion, and are recorded within “Other assets” on our consolidated balance sheets with gains and losses recognized in “Other income (expense), net” on our consolidated statements of operations. These warrants are primarily classified as Level 2 assets.
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As of December 31, 2021 and March 31, 2022, equity investments not accounted for under the equity-method and without readily determinable fair values had a carrying value of $603 million and $657 million, and are recorded within “Other assets” on our consolidated balance sheets with adjustments recognized in “Other income (expense), net” on our consolidated statements of operations.
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, 2021March 31, 2022
Cash and cash equivalents$36,220 $36,393 
Restricted cash included in accounts receivable, net and other242 191 
Restricted cash included in other assets15 15 
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows$36,477 $36,599 
Note 3 — LEASES
We have entered into non-cancellable operating and finance leases for fulfillment, delivery, office, physical store, data center, and sortation facilities as well as server and networking equipment, vehicles, and aircraft. Gross assets acquired under finance leases, inclusive of those where title transfers at the end of the lease, are recorded in “Property and equipment, net” and were $72.2 billion and $71.0 billion as of December 31, 2021 and March 31, 2022. Accumulated amortization associated with finance leases was $43.4 billion and $43.8 billion as of December 31, 2021 and March 31, 2022.
Lease cost recognized in our consolidated statements of operations is summarized as follows (in millions):
Three Months Ended March 31,
20212022
Operating lease cost$1,556 $2,103 
Finance lease cost:
Amortization of lease assets2,456 1,560 
Interest on lease liabilities132 103 
Finance lease cost2,588 1,663 
Variable lease cost348 469 
Total lease cost$4,492 $4,235 
Other information about lease amounts recognized in our consolidated financial statements is as follows:
 December 31, 2021March 31, 2022
Weighted-average remaining lease term – operating leases11.3 years11.1 years
Weighted-average remaining lease term – finance leases8.1 years8.6 years
Weighted-average discount rate – operating leases2.2 %2.3 %
Weighted-average discount rate – finance leases2.0 %2.1 %
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Our lease liabilities were as follows (in millions):
December 31, 2021
 Operating LeasesFinance LeasesTotal
Gross lease liabilities$66,269 $25,866 $92,135 
Less: imputed interest(7,939)(2,113)(10,052)
Present value of lease liabilities58,330 23,753 82,083 
Less: current portion of lease liabilities(6,349)(8,083)(14,432)
Total long-term lease liabilities$51,981 $15,670 $67,651 
March 31, 2022
 Operating LeasesFinance LeasesTotal
Gross lease liabilities$66,144 $23,094 $89,238 
Less: imputed interest(7,858)(2,167)(10,025)
Present value of lease liabilities58,286 20,927 79,213 
Less: current portion of lease liabilities(6,640)(6,842)(13,482)
Total long-term lease liabilities$51,646 $14,085 $65,731 
Note 4 — 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 March 31, 2022 (in millions): 
 Nine Months Ended December 31,Year Ended December 31,  
 20222023202420252026ThereafterTotal
Long-term debt principal and interest$2,572 $4,862 $7,017 $3,400 $3,829 $52,784 $74,464 
Operating lease liabilities5,883 7,429 6,890 6,364 5,798 33,780 66,144 
Finance lease liabilities, including interest5,459 4,748 2,266 1,357 1,224 8,040 23,094 
Financing obligations, including interest (1)340 466 465 456 464 7,181 9,372 
Leases not yet commenced959 2,006 2,412 2,378 2,422 23,593 33,770 
Unconditional purchase obligations (2)4,390 5,838 5,153 4,712 4,166 9,394 33,653 
Other commitments (3)(4)2,642 1,842 1,319 973 1,093 10,938 18,807 
Total commitments$22,245 $27,191 $25,522 $19,640 $18,996 $145,710 $259,304 
___________________
(1)Includes non-cancellable financing obligations for fulfillment, sortation, and data center facilities. Excluding interest, current financing obligations of $196 million and $217 million are recorded within “Accrued expenses and other” and $6.2 billion and $6.8 billion are recorded within “Other long-term liabilities” as of December 31, 2021 and March 31, 2022. The weighted-average remaining term of the financing obligations was 18.8 years and the weighted-average imputed interest rate was 3.2% and 3.3% as of December 31, 2021 and March 31, 2022.
(2)Includes unconditional purchase obligations related to long-term agreements to acquire and license digital media content that are not reflected on the consolidated balance sheets and certain products offered in our Whole Foods Market stores. For those digital media content agreements with variable terms, we do not estimate the total obligation beyond any minimum quantities and/or pricing as of the reporting date. Purchase obligations associated with renewal provisions solely at the option of the content provider are included to the extent such commitments are fixed or a minimum amount is specified.
(3)Includes the estimated timing and amounts of payments for rent and tenant improvements associated with build-to-suit lease arrangements that are under construction, asset retirement obligations, and liabilities associated with digital media content agreements with initial terms greater than one year.
(4)Excludes approximately $3.3 billion of accrued tax contingencies for which we cannot make a reasonably reliable estimate of the amount and period of payment, if any.
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In addition, we expect to pay the previously disclosed €1.13 billion fine imposed by the Italian Competition Authority in December 2021, which we will seek to recover pending conclusion of all appeals.
Other Contingencies
We are disputing claims and denials of refunds or credits 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 relate to (i) the taxability of products and services, including cross-border intercompany transactions, (ii) collection and withholding on transactions with third parties, 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 matters described in Item 8 of Part II, “Financial Statements and Supplementary Data — Note 7 — Commitments and Contingencies — Legal Proceedings” of our 2021 Annual Report on Form 10-K as supplemented by the following:
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 alleges, among other things, that Amazon S3 and DynamoDB infringe U.S. Patent Nos. 7,814,170 and 7,103,640, both entitled “Network Distributed Tracking Wire Transfer Protocol,” and 7,233,978, entitled “Method And Apparatus For Managing Location Information In A Network Separate From The Data To Which The Location Information Pertains.” The complaint seeks an unspecified amount of damages, enhanced damages, attorneys’ fees, costs, interest, and injunctive relief. In March 2022, the case was stayed pending resolution of review petitions we filed with the United States Patent and Trademark Office. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in this matter.
Beginning in March 2020, with Frame-Wilson v. Amazon.com, Inc. filed in the United States District Court for the Western District of Washington, a number of cases have been filed in the U.S. and Canada alleging, among other things, price fixing arrangements between Amazon.com, Inc. and third-party sellers in Amazon’s stores, monopolization and attempted monopolization, and consumer protection and unjust enrichment claims. Some of the cases include allegations of several distinct purported classes, including consumers who purchased a product through Amazon’s stores and consumers who purchased a product offered by Amazon through another e-commerce retailer. The complaints seek billions of dollars of alleged actual damages, treble damages, punitive damages, and injunctive relief. Individuals have also initiated arbitrations based on substantially similar allegations. In March 2022, the court in the Frame-Wilson case granted Amazon’s motion to dismiss claims alleging that Amazon’s pricing policies are inherently illegal under federal law and claims alleging competition and consumer protection violations under state law, and denied Amazon’s motion to dismiss claims alleging that Amazon’s pricing policies are an unlawful restraint of trade under federal law. We dispute the remaining allegations of wrongdoing and intend to defend ourselves vigorously in these matters.
In November 2021, Jawbone Innovations, LLC filed a complaint against Amazon.com, Inc. and Amazon.com Services, Inc. in the United States District Court for the Eastern District of Texas. The complaint alleges, among other things, that Amazon Echo smart speakers and displays, Fire TV Cube, and Echo Buds infringe U.S. Patent Nos. 7,246,058, entitled “Detecting Voiced and Unvoiced Speech Using Both Acoustic and Nonacoustic Sensors”; 8,019,091, entitled “Voice Activity Detector (VAD)-Based Multiple-Microphone Acoustic Noise Suppression”; 8,280,072, entitled “Microphone Array with Rear Venting”; 8,321,213 and 8,326,611, both entitled “Acoustic Voice Activity Detection (AVAD) for Electronic Systems”; 8,467,543, entitled “Microphone and Voice Activity Detection (VAD) Configurations for Use with Communications Systems”; 8,503,691, entitled “Virtual Microphone Arrays Using Dual Omnidirectional Microphone Array (DOMA)”; 10,779,080, entitled “Dual Omnidirectional Microphone Array (DOMA)”; and 11,122,357, entitled “Forming Virtual Microphone Arrays Using Dual Omnidirectional Microphone Array (DOMA).” The complaint seeks 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 this matter.
In addition, we are regularly subject to claims, litigation, 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
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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 7 — Income Taxes.”
Note 5 — DEBT
As of March 31, 2022, we had $49.7 billion of unsecured senior notes outstanding (the “Notes”) and $803 million of borrowings under our credit facility. Our total long-term debt obligations are as follows (in millions):
Maturities (1)Stated Interest RatesEffective Interest RatesDecember 31, 2021March 31, 2022
2012 Notes issuance of $3.0 billion
20222.50%2.66%1,250 1,250 
2014 Notes issuance of $6.0 billion
2024 - 2044
3.80% - 4.95%
3.90% - 5.11%
4,000 4,000 
2017 Notes issuance of $17.0 billion
2023 - 2057
2.40% - 5.20%
2.56% - 4.33%
16,000 16,000 
2020 Notes issuance of $10.0 billion
2023 - 2060
0.40% - 2.70%
0.56% - 2.77%
10,000 10,000 
2021 Notes issuance of $18.5 billion
2023 - 2061
0.25% - 3.25%
0.35% - 3.31%
18,500 18,500 
Credit Facility803 803 
Total face value of long-term debt50,553 50,553 
Unamortized discount and issuance costs, net(318)(316)
Less current portion of long-term debt(1,491)(2,681)
Long-term debt$48,744 $47,556 
___________________
(1) The weighted-average remaining lives of the 2012, 2014, 2017, 2020, and 2021 Notes were 0.7, 13.3, 15.0, 17.5, and 14.1 years as of March 31, 2022. The combined weighted-average remaining life of the Notes was 14.6 years as of March 31, 2022.
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 $53.3 billion and $49.0 billion as of December 31, 2021 and March 31, 2022, which is based on quoted prices for our debt as of those dates. We issued $12.8 billion of notes in April 2022 for general corporate purposes with maturities between 2024 and 2062, stated interest rates between 2.73% and 4.10%, and effective interest rates between 2.83% and 4.15%.
We have a $1.0 billion secured revolving credit facility with a lender that is secured by certain seller receivables, which we may from time to time increase in the future subject to lender approval (the “Credit Facility”). The Credit Facility is available until October 2022, bears interest at the London interbank offered rate (“LIBOR”) plus 1.40%, and has a commitment fee of 0.50% on the undrawn portion. There were $803 million of borrowings outstanding under the Credit Facility as of December 31, 2021 and March 31, 2022, which had a weighted-average interest rate of 2.7%. As of December 31, 2021 and March 31, 2022, we have pledged $918 million of our cash and seller receivables as collateral for debt related to our Credit Facility. The estimated fair value of the Credit Facility, which is based on Level 2 inputs, approximated its carrying value as of December 31, 2021 and March 31, 2022.
We have U.S. Dollar and Euro commercial paper programs (the “Commercial Paper Programs”) under which we may from time to time issue unsecured commercial paper up to a total of $20.0 billion (including up to €3.0 billion) at the date of issue, with individual maturities that may vary but will not exceed 397 days from the date of issue. In March 2022, we increased the size of the Commercial Paper Programs from $10.0 billion to $20.0 billion. There were $725 million and $10.8 billion of borrowings outstanding under the Commercial Paper Programs as of December 31, 2021 and March 31, 2022, which were included in “Accrued expenses and other” on our consolidated balance sheets and had a weighted-average effective interest rate, including issuance costs, of 0.08% and 0.56%, respectively. We use the net proceeds from the issuance of commercial paper for general corporate purposes.
We also have a $10.0 billion unsecured revolving credit facility with a syndicate of lenders (the “Credit Agreement”), which was amended and restated in March 2022 to increase the borrowing capacity from $7.0 billion to $10.0 billion and to
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extend the term to March 2025. It may be extended for up to three additional one year terms if approved 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, 2021 and March 31, 2022.
We also utilize other short-term credit facilities for working capital purposes. These amounts are included in “Accrued expenses and other” on our consolidated balance sheets. In addition, we had $10.2 billion of unused letters of credit as of March 31, 2022.
Note 6 — STOCKHOLDERS’ EQUITY
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, which replaced the previous $5.0 billion stock repurchase authorization, approved by the Board of Directors in February 2016. We repurchased 0.9 million shares of our common stock for $2.7 billion during the three months ended March 31, 2022 under these programs. As of March 31, 2022, we have $9.5 billion remaining under the repurchase program.
Stock Award Activity
Common shares outstanding plus shares underlying outstanding stock awards totaled 523 million as of December 31, 2021 and March 31, 2022. These totals include all vested and unvested stock awards outstanding, including those awards we estimate will be forfeited. Stock-based compensation expense is as follows (in millions):
  
Three Months Ended
March 31,
20212022
Cost of sales$90 $146 
Fulfillment342 498 
Technology and content1,228 1,645 
Sales and marketing456 665 
General and administrative190 296 
Total stock-based compensation expense$2,306 $3,250 
The following table summarizes our restricted stock unit activity for the three months ended March 31, 2022 (in millions):
Number of UnitsWeighted-Average
Grant-Date
Fair Value
Outstanding as of December 31, 202114.0 $2,684 
Units granted1.4 3,104 
Units vested(0.7)1,874 
Units forfeited(0.6)2,670 
Outstanding as of March 31, 202214.1 2,768 
Scheduled vesting for outstanding restricted stock units as of March 31, 2022, is as follows (in millions):
 Nine Months Ended December 31,Year Ended December 31,  
 20222023202420252026ThereafterTotal
Scheduled vesting — restricted stock units4.7 5.2 2.6 1.3 0.2 0.1 14.1 
As of March 31, 2022, there was $16.4 billion of net unrecognized compensation cost related to unvested stock-based compensation arrangements. This compensation is recognized on an accelerated basis with approximately half of the compensation expected to be expensed in the next twelve months, and has a remaining weighted-average recognition period of 1.1 years. The estimated forfeiture rate as of December 31, 2021 and March 31, 2022 was 27%. Changes in our estimates and assumptions relating to forfeitures may cause us to realize material changes in stock-based compensation expense in the future.
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Changes in Stockholders’ Equity
The following table shows changes in stockholders’ equity (in millions):
Three Months Ended
March 31,
20212022
Total beginning stockholders’ equity$93,404 $138,245 
Beginning and ending common stock5 5 
Beginning treasury stock(1,837)(1,837)
Common stock repurchased (2,666)
Ending treasury stock(1,837)(4,503)
Beginning additional paid-in capital42,865 55,538 
Stock-based compensation and issuance of employee benefit plan stock2,295 3,255 
Ending additional paid-in capital45,160 58,793 
Beginning accumulated other comprehensive income (loss)(180)(1,376)
Other comprehensive income (loss)(486)(989)
Ending accumulated other comprehensive income (loss)(666)(2,365)
Beginning retained earnings52,551 85,915 
Net income (loss)8,107 (3,844)
Ending retained earnings60,658 82,071 
Total ending stockholders’ equity$103,320 $134,001 
Note 7 — INCOME TAXES
Our tax provision or benefit from income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter we update our estimate of the annual effective tax rate, and if our estimated tax rate changes, we make a cumulative adjustment.
Our quarterly tax provision, and our quarterly estimate of our annual effective tax rate, is subject to significant variation due to several factors, including variability in accurately predicting our pre-tax and taxable income and loss and the mix of jurisdictions to which they relate, intercompany transactions, the applicability of special tax regimes, changes in how we do business, acquisitions, investments, developments in tax controversies, changes in our stock price, changes in our deferred tax assets and liabilities and their valuation, foreign currency gains (losses), changes in statutes, regulations, case law, and administrative practices, principles, and interpretations related to tax, including changes to the global tax framework, competition, and other laws and accounting rules in various jurisdictions, and relative changes of expenses or losses for which tax benefits are not recognized. Our effective tax rate can be more or less volatile based on the amount of pre-tax income or loss. For example, the impact of discrete items and non-deductible expenses on our effective tax rate is greater when our pre-tax income is lower. In addition, we record valuation allowances against deferred tax assets when there is uncertainty about our ability to generate future income in relevant jurisdictions.
For 2022, we estimate that our effective tax rate will be favorably affected by the impact of excess tax benefits from stock-based compensation and the U.S. federal research and development credit and adversely affected by state income taxes. In addition, valuation gains and losses from our equity investment in Rivian impact our pre-tax income and may cause variability in our effective tax rate.
Our income tax provision for the three months ended March 31, 2021 was $2.2 billion, which included $349 million of net discrete tax benefits primarily attributable to excess tax benefits from stock-based compensation. Our income tax benefit for the three months ended March 31, 2022 was $1.4 billion, which included $2.1 billion of net discrete tax benefits primarily attributable to a valuation loss related to our equity investment in Rivian.
Cash paid for income taxes, net of refunds was $801 million and $453 million in Q1 2021 and Q1 2022.
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As of December 31, 2021 and March 31, 2022, tax contingencies were approximately $3.2 billion and $3.3 billion. Changes in tax laws, regulations, administrative practices, principles, and interpretations may impact our tax contingencies. Due to various factors, including the inherent complexities and uncertainties of the judicial, administrative, and regulatory processes in certain jurisdictions, the timing of the resolution of income tax controversies is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ from the amounts accrued. It is reasonably possible that within the next twelve months we will receive additional assessments by various tax authorities or possibly reach resolution of income tax controversies in one or more jurisdictions. These assessments or settlements could result in changes to our contingencies related to positions on prior years’ tax filings.
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 other foreign jurisdictions including China, France, Germany, India, Japan, Luxembourg, and the United Kingdom. We are under, or may be subject to, audit or examination and additional assessments by the relevant authorities in respect of these particular jurisdictions primarily for 2009 and thereafter. We are currently disputing tax assessments in multiple jurisdictions, including with respect to the allocation and characterization of income.
In October 2014, the European Commission opened a formal investigation to examine whether decisions by the tax authorities in Luxembourg with regard to the corporate income tax paid by certain of our subsidiaries comply with European Union rules on state aid. On October 4, 2017, the European Commission announced its decision that determinations by the tax authorities in Luxembourg did not comply with European Union rules on state aid. Based on that decision, the European Commission announced an estimated recovery amount of approximately €250 million, plus interest, for the period May 2006 through June 2014, and ordered Luxembourg tax authorities to calculate the actual amount of additional taxes subject to recovery. Luxembourg computed an initial recovery amount, consistent with the European Commission’s decision, which we deposited into escrow in March 2018, subject to adjustment pending conclusion of all appeals. In December 2017, Luxembourg appealed the European Commission’s decision. In May 2018, we appealed. On May 12, 2021, the European Union General Court annulled the European Commission’s state aid decision. In July 2021, the European Commission appealed the decision to the European Court of Justice. We will continue to defend ourselves vigorously in this matter. 
Note 8 — 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 content,” “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 infrastructure costs are allocated to the AWS segment based on usage. The majority of the remaining non-infrastructure technology costs are incurred in the U.S. and are allocated to our North America segment. There are no internal revenue transactions between our reportable segments. These segments reflect the way our chief operating decision maker evaluates the Company’s business performance and manages its operations.
North America
The North America segment primarily consists of amounts earned from retail sales of consumer products (including from sellers) and subscriptions 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 subscriptions 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.
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Information on reportable segments and reconciliation to consolidated net income (loss) is as follows (in millions):
Three Months Ended
March 31,
20212022
North America
Net sales$64,366 $69,244 
Operating expenses60,916 70,812 
Operating income (loss)$3,450 $(1,568)
International
Net sales$