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 2024 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 2023 Annual Report on Form 10-K.

The consolidated financial statements include the accounts of Amazon.com, Inc. and its consolidated entities (collectively, the “Company”), consisting of its wholly-owned subsidiaries and those entities in which we have a variable interest and of which we are the primary beneficiary, including certain entities in India and certain entities that support our health care services and seller lending financing activities. Intercompany balances and transactions between consolidated entities are eliminated.

The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent liabilities in the consolidated financial statements and accompanying notes. Estimates are used for, but not limited to, income taxes, useful lives of equipment, commitments and contingencies, valuation of acquired intangibles and goodwill, stock-based compensation forfeiture rates, vendor funding, inventory valuation, collectability of receivables, impairment of property and equipment and operating leases, valuation and impairment of investments, self-insurance liabilities, and viewing patterns of capitalized video content. Actual results could differ materially from these estimates.

We review the useful lives of equipment on an ongoing basis, and effective January 1, 2024 we changed our estimate of the useful lives for our servers 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 2024, based on servers that were included in “Property and equipment, net” as of December 31, 2023 and those acquired during the three months ended March 31, 2024, was a reduction in depreciation and amortization expense of $897 million and a benefit to net income of $695 million, or $0.07 per basic share and $0.07 per diluted share.


	Three Months Ended March 31,				Twelve Months Ended March 31,
	2023		2024			2023		2024
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest on debt, net of capitalized interest	$	402	$	269		$	1,684	$	2,475
Cash paid for operating leases	2,467		3,332			8,733		11,318
Cash paid for interest on finance leases	81		74			348		301
Cash paid for interest on financing obligations	59		64			208		201
Cash paid for income taxes, net of refunds	619		458			6,201		11,018
Assets acquired under operating leases	3,626		3,753			20,251		14,179
Property and equipment acquired under finance leases, net of remeasurements and modifications	8		42			517		676
Property and equipment recognized during the construction period of build-to-suit lease arrangements	131		37			1,953		263
Property and equipment derecognized after the construction period of build-to-suit lease arrangements, with the associated leases recognized as operating	720		—			5,845		654

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 March 31,
	2023	2024
Shares used in computation of basic earnings per share	10,250	10,393
Total dilutive effect of outstanding stock awards	97	277
Shares used in computation of diluted earnings per share	10,347	10,670


	Three Months Ended March 31,
	2023		2024
Marketable equity securities valuation gains (losses)	$	(480)	$	(2,126)
Equity warrant valuation gains (losses)	59		(230)
Upward adjustments relating to equity investments in private companies	16		5
Foreign currency gains (losses)	70		(74)
Other, net	(108)		(248)
Total other income (expense), net	(443)		(2,673)

Included in “Other income (expense), net” is a marketable equity securities valuation gain (loss) of $(467) million and $(2.0) billion in Q1 2023 and Q1 2024, from our equity investment in Rivian Automotive, Inc. (“Rivian”). As of March 31, 2024, we held 158 million shares of Rivian’s Class A common stock, representing an approximate 16% ownership interest, and an approximate 15% voting interest. We determined that we have the ability to exercise significant influence over Rivian through our equity investment, our commercial arrangement for the purchase of electric vehicles and jointly-owned intellectual property, and one of our employees serving on Rivian’s board of directors. We elected the fair value option to account for our equity investment in Rivian, which is included in “Marketable securities” on our consolidated balance sheets, and had a fair value of $3.7 billion and $1.7 billion as of December 31, 2023 and March 31, 2024.

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 $2.6 billion as of December 31, 2023 and March 31, 2024.

Included in “Accounts receivable, net and other” on our consolidated balance sheets are receivables primarily related to customers, vendors, and sellers, as well as prepaid expenses and other current assets. As of December 31, 2023 and March 31, 2024, customer receivables, net, were $34.1 billion and $31.8 billion, vendor receivables, net, were $8.5 billion and $6.7 billion, seller receivables, net, were $1.0 billion and $0.6 billion, and other receivables, net, were $3.3 billion and $3.1 billion. Seller receivables are amounts due from sellers related to our seller lending program, which provides funding to sellers primarily to procure inventory. Prepaid expenses and other current assets were $5.4 billion and $5.6 billion as of December 31, 2023 and March 31, 2024.

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, 2023 was $20.9 billion, of which $6.1 billion was recognized as revenue during the three months ended March 31, 2024. Included in “Other long-term liabilities” on our consolidated balance sheets was $5.7 billion and $6.4 billion of unearned revenue as of December 31, 2023 and March 31, 2024.

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 $157.7 billion as of March 31, 2024. The weighted-average remaining life of our long-term contracts is 4.1 years. However, the amount and timing of revenue recognition is largely driven by customer usage, which can extend beyond the original contractual term.