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.

On May 27, 2022, we effected a 20-for-1 stock split of our common stock and proportionately increased the number of authorized shares of common stock. All share, restricted stock unit (“RSU”), and per share or per RSU information throughout this Quarterly Report on Form 10-Q has been retroactively adjusted to reflect the stock split. The shares of common stock retain a par value of $0.01 per share. Accordingly, an amount equal to the par value of the increased shares resulting from the stock split was reclassified from “Additional paid-in capital” to “Common stock.”

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.

The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, income taxes, useful lives of equipment, commitments and contingencies, valuation of acquired intangibles and goodwill, stock-based compensation forfeiture rates, vendor funding, inventory valuation, collectability of receivables, impairment of property and equipment and operating leases, 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 Q2 2022, based on servers and networking equipment that were included in “Property and equipment, net” as of March 31, 2022 and those acquired during the three months ended June 30, 2022, was a reduction in depreciation and amortization expense of $928 million and a benefit to net loss of $728 million, or $0.07 per basic share and $0.07 per diluted share. The effect of this change in estimate for the six months ended June 30, 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 six months ended June 30, 2022, was a reduction in depreciation and amortization expense of $1.9 billion and a benefit to net loss of $1.5 billion, or $0.15 per basic share and $0.15 per diluted share.


	Three Months Ended June 30,				Six Months Ended June 30,				Twelve Months Ended June 30,
	2021		2022		2021		2022		2021		2022
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest on debt	$	179	$	349	$	455	$	628	$	942	$	1,271
Cash paid for operating leases	1,577		2,088		3,217		4,455		5,577		7,960
Cash paid for interest on finance leases	129		95		286		202		569		437
Cash paid for interest on financing obligations	35		55		68		113		127		198
Cash paid for income taxes, net of refunds	1,803		3,145		2,604		3,598		3,526		4,682
Assets acquired under operating leases	5,578		5,101		9,114		7,276		19,576		23,531
Property and equipment acquired under finance leases, net of remeasurements and modifications	1,642		61		3,709		227		9,976		3,579
Property and equipment recognized during the construction period of build-to-suit lease arrangements	1,193		986		2,080		2,351		3,486		6,117
Property and equipment derecognized after the construction period of build-to-suit lease arrangements, with the associated leases recognized as operating	99		1,079		99		1,112		99		1,243

Basic earnings per share is calculated using our weighted-average outstanding common shares. Diluted earnings per share is calculated using our weighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method. In periods when we have a net loss, stock awards are excluded from our calculation of earnings per share as their inclusion would have an antidilutive effect.


	Three Months Ended June 30,		Six Months Ended June 30,
	2021	2022	2021	2022
Shares used in computation of basic earnings per share	10,103	10,175	10,089	10,173
Total dilutive effect of outstanding stock awards	183	—	187	—
Shares used in computation of diluted earnings per share	10,286	10,175	10,276	10,173


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2022		2021		2022
Marketable equity securities valuation gains (losses)	$	157	$	(4,322)	$	81	$	(12,567)
Equity warrant valuation gains (losses)	939		(1,124)		1,244		(1,436)
Upward adjustments relating to equity investments in private companies	31		58		1,506		65
Foreign currency gains (losses)	110		(117)		79		(103)
Other, net	24		(40)		48		(74)
Total other income (expense), net	1,261		(5,545)		2,958		(14,115)

Included in other income (expense), net is a marketable equity securities valuation loss of $3.9 billion in Q2 2022, and $11.5 billion for the six months ended June 30, 2022, 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 June 30, 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.

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 $2.4 billion as of December 31, 2021 and June 30, 2022.

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 June 30, 2022, customer receivables, net, were $20.2 billion and $21.6 billion, vendor receivables, net, were $5.3 billion and $4.9 billion, and seller receivables, net, were $1.0 billion and $1.3 billion. Seller receivables are amounts due from sellers related to our seller lending program, which provides funding to sellers primarily to procure inventory.

The total capitalized costs of video, which is primarily released content, and music as of December 31, 2021 and June 30, 2022 were $10.7 billion and $15.2 billion. Total video and music expense was $3.1 billion and $3.7 billion in Q2 2021 and Q2 2022, and $6.2 billion and $7.3 billion for the six months ended June 30, 2021 and 2022.

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 $8.1 billion was recognized as revenue during the six months ended June 30, 2022. Included in “Other long-term liabilities” on our consolidated balance sheets was $2.2 billion and $2.6 billion of unearned revenue as of December 31, 2021 and June 30, 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 $100.1 billion as of June 30, 2022. The weighted-average remaining life of our long-term contracts is 3.9 years. However, the amount and timing of revenue recognition is largely driven by customer usage, which can extend beyond the original contractual term.

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. The valuation of certain assets and liabilities is preliminary and subject to change.