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What changed in Amazon's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Amazon's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+113 added−112 removedSource: 10-K (2025-02-07) vs 10-K (2024-02-02)

Top changes in Amazon's 2024 10-K

113 paragraphs added · 112 removed · 105 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

15 edited+1 added−1 removed23 unchanged
Biggest changeAdam N. Selipsky. Mr. Selipsky has served as CEO Amazon Web Services since July 2021, Senior Vice President, Amazon Web Services from May 2021 until July 2021, President and CEO of Tableau Software from September 2016 until May 2021, and Vice President, Marketing, Sales and Support of Amazon Web Services from May 2005 to September 2016. David A. Zapolsky. Mr.
Biggest changeGarman has served as CEO Amazon Web Services since June 2024, Senior Vice President, Amazon Web Services from February 2021 until June 2024, Vice President, Marketing, Sales and Support of Amazon Web Services from January 2020 to February 2021, Vice President, AWS Compute Services from September 2018 to January 2020, and Vice President, EC2 from December 2012 to September 2018.
In addition, we offer subscription services such as Amazon Prime, a membership program that includes fast, free shipping on tens of millions of items, access to award-winning movies and series, and other benefits.
In addition, we offer subscription services such as Amazon Prime, a membership program that includes fast, free shipping on tens of millions of items, access to award-winning movies and series, live sports, and other benefits.
Herrington has served as CEO Worldwide Amazon Stores since July 2022, Senior Vice President, North America Consumer from January 2015 to July 2022, Senior Vice President, Consumables from May 2014 to December 2014, and Vice President, Consumables from May 2005 to April 2014. Brian T. Olsavsky. Mr.
Douglas J. Herrington. Mr. Herrington has served as CEO Worldwide Amazon Stores since July 2022, Senior Vice President, North America Consumer from January 2015 to July 2022, Senior Vice President, Consumables from May 2014 to December 2014, and Vice President, Consumables from May 2005 to April 2014. Brian T. Olsavsky. Mr.
Our current and potential competitors include: (1) physical, e-commerce, and omnichannel retailers, publishers, vendors, distributors, manufacturers, and producers of the products we offer and sell to consumers and businesses; (2) publishers, producers, and distributors of physical, digital, and interactive media of all types and all distribution channels; (3) web search engines, comparison shopping websites, social networks, web portals, and other online and app-based means of discovering, using, or acquiring goods and services, either directly or in collaboration with other retailers; (4) companies that provide e-commerce services, including website development and hosting, omnichannel sales, inventory and supply chain management, advertising, fulfillment, customer service, and payment processing; (5) companies that provide fulfillment and logistics services for themselves or for third parties, whether online or offline; (6) companies that provide information technology services or products, including on-premises or cloud-based infrastructure and other services; (7) companies that design, manufacture, market, or sell consumer electronics, telecommunication, and electronic devices; (8) companies that sell grocery products online and in physical stores; and (9) companies that provide advertising services, whether in digital or other formats.
Our current and potential competitors include: (1) physical, e-commerce, and omnichannel retailers, publishers, vendors, distributors, manufacturers, and producers of the products we offer and sell to consumers and businesses; (2) publishers, producers, and distributors of physical, digital, and interactive media of all types and all distribution channels; (3) web search engines, comparison shopping websites, social networks, web portals, virtual assistants, and other online and app-based means of discovering, using, or acquiring goods and services, either directly or in collaboration with other retailers; (4) companies that provide e-commerce services, including website development and hosting, omnichannel sales, inventory and supply chain management, advertising, fulfillment, customer service, and payment processing; (5) companies that provide fulfillment and logistics services for themselves or for third parties, whether online or offline; (6) companies that provide information technology services or products, including on-premises or cloud-based infrastructure, tools and services relating to artificial intelligence, and other services; (7) companies that design, manufacture, market, or sell consumer electronics, communications, and other electronic devices and services; (8) companies that sell grocery products online and in physical stores; (9) companies that provide advertising services, whether in digital or other formats; and (10) providers of virtual or in-person healthcare services.
Human Capital Our employees are critical to our mission of being Earth’s most customer-centric company. As of December 31, 2023, we employed approximately 1,525,000 full-time and part-time employees. Additionally, we use independent contractors and temporary personnel to supplement our workforce.
Human Capital Our employees are critical to our mission of being Earth’s most customer-centric company. As of December 31, 2024, we employed approximately 1,556,000 full-time and part-time employees. Additionally, we use independent contractors and temporary personnel to supplement our workforce.
He served as Senior Vice President and General Counsel from May 2014 to May 2023, Vice President and General Counsel from September 2012 to May 2014, and as Vice President and Associate General Counsel for Litigation and Regulatory matters from April 2002 until September 2012. 5 Table of Contents Board of Directors Name Age Position Jeffrey P.
He served as our Secretary from September 2012 to January 2024, Senior Vice President and General Counsel from May 2014 to May 2023, Vice President and General Counsel from September 2012 to May 2014, and as Vice President and Associate General Counsel for Litigation and Regulatory matters from April 2002 until September 2012. 5 Table of Contents Board of Directors Name Age Position Jeffrey P.
Jassy has served as President and Chief Executive Officer since July 2021, CEO Amazon Web Services from April 2016 until July 2021, and Senior Vice President, Amazon Web Services, from April 2006 until April 2016. Douglas J. Herrington. Mr.
Jassy has served as President and Chief Executive Officer since July 2021, CEO Amazon Web Services from April 2016 until July 2021, and Senior Vice President, Amazon Web Services, from April 2006 until April 2016. Matthew S. Garman. Mr.
Olsavsky 60 Senior Vice President and Chief Financial Officer Shelley L. Reynolds 59 Vice President, Worldwide Controller, and Principal Accounting Officer Adam N. Selipsky 57 CEO Amazon Web Services David A. Zapolsky 60 Senior Vice President, Global Public Policy and General Counsel Jeffrey P. Bezos. Mr. Bezos founded Amazon.com in 1994 and has served as Executive Chair since July 2021.
Herrington 58 CEO Worldwide Amazon Stores Brian T. Olsavsky 61 Senior Vice President and Chief Financial Officer Shelley L. Reynolds 60 Vice President, Worldwide Controller, and Principal Accounting Officer David A. Zapolsky 61 Senior Vice President, Global Public Policy and General Counsel Jeffrey P. Bezos. Mr. Bezos founded Amazon.com in 1994 and has served as Executive Chair since July 2021.
Bezos 60 Executive Chair Andrew R. Jassy 56 President and Chief Executive Officer Keith B. Alexander 72 Chair of IronNet, Inc. Edith W. Cooper 62 Former Executive Vice President, Goldman Sachs Group, Inc. Jamie S. Gorelick 73 Partner, Wilmer Cutler Pickering Hale and Dorr LLP Daniel P. Huttenlocher 65 Dean, MIT Schwarzman College of Computing Judith A.
Bezos 61 Executive Chair Andrew R. Jassy 57 President and Chief Executive Officer Keith B. Alexander 73 Former Chair and CEO of IronNet, Inc. Edith W. Cooper 63 Former Executive Vice President, Goldman Sachs Group, Inc. Jamie S. Gorelick 74 Partner, Wilmer Cutler Pickering Hale and Dorr LLP Daniel P. Huttenlocher 66 Dean, MIT Schwarzman College of Computing Andrew Y.
Competition for qualified personnel is intense, particularly for software engineers, computer scientists, and other technical staff, and constrained labor markets have increased competition for personnel across other parts of our business. As we strive to be Earth’s best employer, we focus on investment and innovation, inclusion and diversity, safety, and engagement to hire and develop the best talent.
Competition for qualified personnel is intense, particularly for software engineers, computer scientists, and other technical staff, and constrained labor markets have increased competition for personnel across other parts of our business. We strive to be Earth’s best employer.
Zapolsky has served as Senior Vice President, Global Public Policy and General Counsel since May 2023 and has served as our Secretary since September 2012.
David A. Zapolsky. Mr. Zapolsky has served as Senior Vice President, Global Public Policy and General Counsel since May 2023.
We rely on numerous and evolving initiatives to implement these objectives and invent mechanisms for talent development, including competitive pay and benefits, flexible work arrangements, and skills training and educational programs such as Amazon Career Choice (education funding for eligible employees) and the Amazon Technical Academy (software development engineer training).
We rely on numerous and evolving initiatives to implement this objective and invent mechanisms for talent development, including competitive pay and benefits, flexible work arrangements, and skills training and educational programs such as Amazon Career Choice (education funding for eligible employees). Over 240,000 Amazon employees around the world have participated in Career Choice.
McGrath 71 Former Chair and CEO, MTV Networks Indra K. Nooyi 68 Former Chair and CEO, PepsiCo, Inc. Jonathan J. Rubinstein 67 Former co-CEO, Bridgewater Associates, LP Brad D. Smith 59 President, Marshall University Patricia Q. Stonesifer 67 Former President and Chief Executive Officer, Martha’s Table Wendell P. Weeks 64 Chairman and CEO, Corning Incorporated
Ng 48 Managing General Partner, AI Fund, L.P. Indra K. Nooyi 69 Former Chair and CEO, PepsiCo, Inc. Jonathan J. Rubinstein 68 Former co-CEO, Bridgewater Associates, LP Brad D. Smith 60 President, Marshall University Patricia Q. Stonesifer 68 Former President and Chief Executive Officer, Martha’s Table Wendell P. Weeks 65 Chairman and CEO, Corning Incorporated
Executive Officers and Directors The following tables set forth certain information regarding our Executive Officers and Directors as of January 24, 2024: Information About Our Executive Officers Name Age Position Jeffrey P. Bezos 60 Executive Chair Andrew R. Jassy 56 President and Chief Executive Officer Douglas J. Herrington 57 CEO Worldwide Amazon Stores Brian T.
Executive Officers and Directors The following tables set forth certain information regarding our Executive Officers and Directors as of January 29, 2025: Information About Our Executive Officers Name Age Position Jeffrey P. Bezos 61 Executive Chair Andrew R. Jassy 57 President and Chief Executive Officer Matthew S. Garman 48 CEO Amazon Web Services Douglas J.
In addition, safety is integral to everything we do at Amazon and we continue to invest in safety improvements such as capital improvements, new safety technology, vehicle safety controls, and engineering ergonomic solutions. Our safety team is dedicated to using the science of safety to solve complex problems and establish new industry best practices.
We also continue to inspect and refine the mechanisms we use to hire, develop, evaluate, and retain our employees. In addition, safety is integral to everything we do at Amazon and we continue to invest in safety improvements such as capital improvements, new safety technology, vehicle safety controls, and engineering ergonomic solutions.
Removed
Over 175,000 Amazon employees around the world have participated in Career Choice. We also continue to inspect and refine the mechanisms we use to hire, develop, evaluate, and retain our employees to promote equity for all candidates and employees.
Added
Our safety team is dedicated to using the science of safety to solve complex problems and establish new industry best practices.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

22 edited+1 added−0 removed130 unchanged
Biggest changeWe Are Subject to Payments-Related Risks We accept payments using a variety of methods, including credit card, debit card, credit accounts (including promotional financing), gift cards, direct debit from a customer’s bank account, consumer invoicing, physical bank check, and payment 13 Table of Contents upon delivery.
Biggest changeAny one of the inventory risk factors set forth above may adversely affect our operating results. 13 Table of Contents We Are Subject to Payments-Related Risks We accept payments using a variety of methods, including credit card, debit card, credit accounts (including promotional financing), gift cards, direct debit from a customer’s bank account, consumer invoicing, checks, and payment upon delivery.
Although we believe these structures and activities comply with existing laws, they involve unique risks, and the PRC and India may from time to time consider and implement additional changes in 7 Table of Contents their regulatory, licensing, or other requirements that could impact these structures and activities.
Although we believe these structures and activities comply with existing 7 Table of Contents laws, they involve unique risks, and the PRC and India may from time to time consider and implement additional changes in their regulatory, licensing, or other requirements that could impact these structures and activities.
In addition to risks described elsewhere in this section, our international sales and operations are subject to a number of risks, including: • local economic and political conditions; • government regulation (such as regulation of our product and service offerings and of competition); restrictive governmental actions (such as trade protection measures, including export duties and quotas and custom duties and tariffs, and restrictions around the import and export of certain products, technologies, and components); nationalization; and restrictions on foreign ownership; • restrictions on sales or distribution of certain products or services and uncertainty regarding liability for products, services, and content, including uncertainty as a result of less internet-friendly legal systems, local laws, lack of legal precedent, and varying rules, regulations, and practices regarding the physical and digital distribution of media products and enforcement of intellectual property rights; • business licensing or certification requirements, such as for imports, exports, web services, and electronic devices; • limitations on the repatriation and investment of funds and foreign currency exchange restrictions; • limited fulfillment and technology infrastructure; • shorter payable and longer receivable cycles and the resultant negative impact on cash flow; • laws and regulations regarding privacy, data use, data protection, data security, data localization, network security, consumer protection, payments, advertising, and restrictions on pricing or discounts; • lower levels of use of the internet; • lower levels of consumer spending and fewer opportunities for growth compared to the U.S.; • lower levels of credit card usage and increased payment risk; • difficulty in staffing, developing, and managing foreign operations as a result of distance, language, and cultural differences; • different employee/employer relationships and the existence of works councils and labor unions; • compliance with the U.S.
In addition to risks described elsewhere in this section, our international sales and operations are subject to a number of risks, including: • local economic and political conditions; • government regulation (such as regulation of our product and service offerings and of competition); restrictive governmental actions (such as trade protection measures, including export duties and quotas and custom duties and tariffs, and restrictions around the import and export of certain products, technologies, and components); nationalization; and restrictions on foreign ownership; • restrictions on sales or distribution of certain products or services and uncertainty regarding liability for products, services, and content, including uncertainty as a result of less internet-friendly legal systems, local laws, lack of legal precedent, and varying rules, regulations, and practices regarding the physical and digital distribution of media products and enforcement of intellectual property rights; • business licensing or certification requirements, such as for imports, exports, web services, electronic devices, and communications services; • limitations on the repatriation and investment of funds and foreign currency exchange restrictions; • limited fulfillment and technology infrastructure; • shorter payable and longer receivable cycles and the resultant negative impact on cash flow; • laws and regulations regarding privacy, data use, data protection, data security, data localization, network security, consumer protection, payments, advertising, and restrictions on pricing or discounts; • lower levels of use of the internet; • lower levels of consumer spending and fewer opportunities for growth compared to the U.S.; • lower levels of credit card usage and increased payment risk; • difficulty in staffing, developing, and managing foreign operations as a result of distance, language, and cultural differences; • different employee/employer relationships and the existence of works councils and labor unions; • compliance with the U.S.
These transactions involve risks such as: • disruption of our ongoing business, including loss of management focus on existing businesses; • problems retaining key personnel; • additional operating losses and expenses of the businesses we acquired or in which we invested; • the potential impairment of tangible and intangible assets and goodwill, including as a result of acquisitions; • the potential impairment of customer and other relationships of the company we acquired or in which we invested or our own customers as a result of any integration of operations; • the difficulty of completing such transactions, including obtaining regulatory approvals or satisfying other closing conditions, and achieving anticipated benefits within expected timeframes, or at all; • the difficulty of incorporating acquired operations, technology, and rights into our offerings, and unanticipated expenses related to such integration; • the difficulty of integrating a new company’s accounting, financial reporting, management, information and data security, human resource, and other administrative systems to permit effective management, and the lack of control if such integration is delayed or not successfully implemented; • losses we may incur as a result of declines in the value of an investment or as a result of incorporating an investee’s financial performance into our financial results; • for investments in which an investee’s financial performance is incorporated into our financial results, either in full or in part, or investments for which we are required to file financial statements or provide financial information, the dependence on the investee’s accounting, financial reporting, and similar systems, controls, and processes; • the difficulty of implementing at companies we acquire the controls, procedures, and policies appropriate for a larger public company; • the risks associated with businesses we acquire or invest in, which may differ from or be more significant than the risks our other businesses face; • potential unknown liabilities associated with a company we acquire or in which we invest; and • for foreign transactions, additional risks related to the integration of operations across different cultures and languages, and the economic, political, and regulatory risks associated with specific countries.
These transactions involve risks such as: • disruption of our ongoing business, including loss of management focus on existing businesses; • problems retaining key personnel; • additional operating losses and expenses of the businesses we acquired or in which we invested; • the potential impairment of tangible and intangible assets and goodwill, including as a result of acquisitions; • the potential impairment of customer and other relationships of the company we acquired or in which we invested or our own customers as a result of any integration of operations; • the difficulty of completing such transactions, including obtaining regulatory approvals or satisfying other closing conditions, and achieving anticipated benefits within expected timeframes, or at all; • the difficulty of incorporating acquired operations, technology, and rights into our offerings, and unanticipated expenses related to such integration; • the difficulty of integrating a new company’s accounting, financial and sustainability reporting, management, information and data security, human resource, and other administrative systems to permit effective management, and the lack of control if such integration is delayed or not successfully implemented; • losses we may incur as a result of declines in the value of an investment or as a result of incorporating an investee’s financial performance into our financial results; • for investments in which an investee’s financial performance is incorporated into our financial results, either in full or in part, or investments for which we are required to file financial statements or provide financial information, the dependence on the investee’s accounting, financial and sustainability reporting, and similar systems, controls, and processes; • the difficulty of implementing at companies we acquire the controls, procedures, and policies appropriate for a larger public company; • the risks associated with businesses we acquire or invest in, which may differ from or be more significant than the risks our other businesses face; • potential unknown liabilities associated with a company we acquire or in which we invest; and • for foreign transactions, additional risks related to the integration of operations across different cultures and languages, and the economic, political, and regulatory risks associated with specific countries.
Claims, Litigation, Government Investigations, and Other Proceedings May Adversely Affect Our Business and Results of Operations As an innovative company offering a wide range of consumer and business products and services around the world, we are regularly subject to actual and threatened claims, litigation, reviews, investigations, and other proceedings, including proceedings by governments and regulatory authorities, involving a wide range of issues, including patent and other intellectual property matters, taxes, labor and employment (including the characterization of delivery drivers), competition and antitrust, privacy, data use, data protection, data security, data localization, network security, consumer protection, commercial disputes, goods and services offered by us and by third parties (including artificial intelligence technologies and services), and other matters.
Claims, Litigation, Government Investigations, and Other Proceedings May Adversely Affect Our Business and Results of Operations As an innovative company offering a wide range of consumer and business products and services around the world, we are regularly subject to actual and threatened claims, litigation, reviews, investigations, and other proceedings, including proceedings by governments and regulatory authorities, involving a wide range of issues, including patent and other intellectual property matters, taxes, labor and employment (including the characterization of delivery drivers), competition and antitrust, privacy, data use, data protection, data security, data localization, network security, consumer protection, commercial disputes, goods and services offered by us and by third parties (including artificial intelligence technologies and services), healthcare, and other matters.
Our sales and operating results will also fluctuate for many other reasons, including due to factors described elsewhere in this section and the following: • our ability to retain and increase sales to existing customers, attract new customers, and satisfy our customers’ demands; • our ability to retain and expand our network of sellers; • our ability to offer products on favorable terms, manage inventory, and fulfill orders; • the introduction of competitive stores, websites, products, services, price decreases, or improvements; 9 Table of Contents • changes in usage or adoption rates of the internet, e-commerce, electronic devices, and web services, including outside the U.S.; • timing, effectiveness, and costs of expansion and upgrades of our systems and infrastructure; • the success of our geographic, service, and product line expansions; • the extent to which we finance, and the terms of any such financing for, our current operations and future growth; • the outcomes of legal proceedings and claims, which may include significant monetary damages or injunctive relief and could have a material adverse impact on our operating results; • variations in the mix of products and services we sell; • variations in our level of merchandise and vendor returns; • the extent to which we offer fast and free delivery, continue to reduce prices worldwide, and provide additional benefits to our customers; • factors affecting our reputation or brand image (including any actual or perceived inability to achieve our goals or commitments, whether related to sustainability, customers, employees, or other topics), and public perceptions regarding social or ethical issues related to our development and use of artificial intelligence and machine learning technologies, products, and services; • the extent to which we invest in technology and infrastructure, fulfillment, and other expense categories; • availability of and increases in the prices of transportation (including fuel), resources such as land, water, and energy, commodities like paper and packing supplies and hardware products, and technology infrastructure products, including as a result of inflationary pressures; • constrained labor markets, which increase our payroll costs; • the extent to which operators of the networks between our customers and our stores successfully charge fees to grant our customers unimpaired and unconstrained access to our online services; • our ability to collect amounts owed to us when they become due; • the extent to which new and existing technologies, or industry trends, restrict online advertising or affect our ability to customize advertising or otherwise tailor our product and service offerings; • the extent to which use of our services is affected by spyware, viruses, phishing and other spam emails, denial of service attacks, data theft, computer intrusions, outages, and similar events; • the extent to which we fail to maintain our unique culture of innovation, customer obsession, and long-term thinking, which has been critical to our growth and success; • disruptions from natural or human-caused disasters (including public health crises) or extreme weather (including as a result of climate change), geopolitical events and security issues (including terrorist attacks, armed hostilities, and political conflicts, including those involving China), labor or trade disputes (including restrictive governmental actions impacting us, our customers, and our third-party sellers and suppliers in China or other foreign countries), and similar events; and • potential negative impacts of climate change, including: increased operating costs due to more frequent extreme weather events or climate-related changes, such as rising temperatures and water scarcity; increased investment requirements associated with the transition to a low-carbon economy; decreased demand for our products and services as a result of changes in customer behavior; increased compliance costs due to more extensive and global regulations and third-party requirements; and reputational damage resulting from perceptions of our environmental impact.
Our sales and operating results will also fluctuate for many other reasons, including due to factors described elsewhere in this section and the following: • our ability to retain and increase sales to existing customers, attract new customers, and satisfy our customers’ demands; • our ability to retain and expand our network of sellers; • our ability to offer products on favorable terms, manage inventory, and fulfill orders; • the introduction of competitive stores, websites, products, services, price decreases, or improvements; 9 Table of Contents • changes in usage or adoption rates of the internet, e-commerce, electronic devices, web services, satellite communications services, and artificial intelligence and machine learning technologies, products, and services, including outside the U.S.; • timing, effectiveness, and costs of expansion and upgrades of our systems and infrastructure; • the success of our geographic, service, and product line expansions; • the extent to which we finance, and the terms of any such financing for, our current operations and future growth; • the outcomes of legal proceedings and claims, which may include significant monetary damages or injunctive relief and could have a material adverse impact on our operating results; • variations in the mix of products and services we sell; • variations in our level of merchandise and vendor returns; • the extent to which we offer fast and free delivery, continue to reduce prices worldwide, and provide additional benefits to our customers; • factors affecting our reputation or brand image (including any actual or perceived inability to achieve our goals or commitments, whether related to sustainability, customers, employees, or other topics), and public perceptions regarding our positions on social or ethical issues and our development and use of artificial intelligence, machine learning, and automation technologies, products, and services; • the extent to which we invest in technology and infrastructure, fulfillment, and other expense categories; • availability of and increases in the prices of transportation (including fuel), resources such as land, water, and energy, commodities like paper and packing supplies and hardware products, and technology infrastructure products, including as a result of inflationary pressures; • constrained labor markets, which increase our payroll costs; • the extent to which operators of the networks between our customers and our stores successfully charge fees to grant our customers unimpaired and unconstrained access to our online services; • our ability to collect amounts owed to us when they become due; • the extent to which new and existing technologies, or industry trends, restrict online advertising or affect our ability to customize advertising or otherwise tailor our product and service offerings; • the extent to which use of our services is affected by spyware, viruses, phishing and other spam emails, denial of service attacks, data theft, computer intrusions, outages, and similar events; • the extent to which we fail to maintain our unique culture of innovation, customer obsession, and long-term thinking, which has been critical to our growth and success; • disruptions from natural or human-caused disasters (including public health crises) or extreme weather (including as a result of climate change), geopolitical events and security issues (including terrorist attacks, armed hostilities, and political conflicts, including those involving China), labor or trade disputes (including restrictive governmental actions impacting us, our customers, and our third-party sellers and suppliers in China or other foreign countries), tariff policy changes, and similar events; and • potential negative impacts of climate change, including: increased operating costs due to more frequent extreme weather events or climate-related changes, such as rising temperatures and water scarcity; increased investment requirements associated with the transition to a low-carbon economy; decreased demand for our products and services as a result of changes in customer behavior; increased compliance costs due to more extensive and global regulations and third-party requirements; and reputational damage resulting from perceptions of our environmental impact.
In addition, new and enhanced technologies, including search, web and infrastructure computing services, practical applications of artificial intelligence and machine learning, digital content, and electronic devices continue to increase our competition. The internet facilitates competitive entry and comparison shopping, which enhances the ability of new, smaller, or lesser known businesses to compete against us.
In addition, new and enhanced technologies, including search, web and infrastructure computing services, practical applications of artificial intelligence and machine learning, digital content, satellites, and electronic devices continue to increase our competition. The internet facilitates competitive entry and comparison shopping, which enhances the ability of new, smaller, or lesser known businesses to compete against us.
In addition, our and our customers’ use of artificial intelligence may result in increased claims of infringement or other claims, including those based on unauthorized use of third-party technology or content. Our digital content offerings depend in part on effective digital rights management technology to control access to digital content.
In addition, our and our customers’ development and use of artificial intelligence may result in increased claims of infringement or other claims, including those based on unauthorized use of third-party technology or content. Our digital content offerings depend in part on effective digital rights management technology to control access to digital content.
Some of our systems have experienced past security breaches, and, although they did not have a material adverse effect on our operating results, there can be no assurance that future incidents will not have material adverse effects on our operations or financial results.
Some of our systems have experienced past security incidents, and, although they did not have a material adverse effect on our operating results, there can be no assurance that future incidents will not have material adverse effects on our operations or financial results.
The trading price of our common stock fluctuates significantly in response to, among other risks, the risks described elsewhere in this Item 1A, as well as: • changes in interest rates; • conditions or trends in the internet and the industry segments we operate in; • quarterly variations in operating results; • fluctuations in the stock market in general and market prices for internet-related companies in particular; • changes in financial estimates by us or decisions to increase or decrease future spending or investment levels; • changes in financial estimates and recommendations by securities analysts; • changes in our capital structure, including issuance of additional debt or equity to the public; • changes in the valuation methodology of, or performance by, other e-commerce or technology companies; and • transactions in our common stock by major investors and certain analyst reports, news, and speculation.
The trading price of our common stock fluctuates significantly in response to, among other risks, the risks described elsewhere in this Item 1A, as well as: • changes in interest rates; • conditions or trends in the internet and the industry segments we operate in; • quarterly variations in operating results; • fluctuations in the stock market in general and market prices for internet-related companies in particular; • changes in financial estimates by us or decisions to increase or decrease future spending or investment levels; • changes in financial estimates and recommendations by securities analysts; • changes in our capital structure, including issuance of additional debt or equity to the public; • changes in the valuation methodology of, or performance by, other e-commerce or technology companies; and • transactions in our common stock by major investors and certain analyst reports, news, social media activity, and speculation.
We Could Be Harmed by Data Loss or Other Security Breaches Because we collect, process, store, and transmit large amounts of data, including confidential, classified, sensitive, proprietary, and business and personal information, failure to prevent or mitigate data loss, theft, misuse, unauthorized access, or other security breaches or vulnerabilities affecting our or our vendors’ or customers’ technology, products, and systems, could: expose us or our customers to a risk of loss, disclosure, or misuse of such information; adversely affect our operating results; result in litigation, liability, or regulatory action (including under laws related to privacy, data use, data protection, data security, network security, and consumer protection); deter customers or sellers from using our stores, products, and services; and otherwise harm our business and reputation.
We Could Be Harmed by Data Loss or Other Security Incidents Because we collect, process, store, and transmit large amounts of data, including confidential, classified, sensitive, proprietary, and business and personal information, failure to prevent, detect, or mitigate data loss, theft, misuse, unauthorized access, or other security incidents or vulnerabilities affecting our or our vendors’ or customers’ technology, products, and systems, could: expose us or our customers to a risk of loss, disclosure, or misuse of such information; adversely affect our operating results; result in litigation, liability, or regulatory action (including under laws related to privacy, data use, data protection, data security, network security, and consumer protection); deter customers or sellers from using our stores, products, and services; and otherwise harm our business and reputation.
Business and Industry Risks We Face Intense Competition Our businesses are rapidly evolving and intensely competitive, and we have many competitors across geographies, including cross-border competition, and in different industries, including physical, e-commerce, and omnichannel retail, e-commerce services, web and infrastructure computing services, electronic devices, digital content, advertising, grocery, and transportation and logistics services.
Business and Industry Risks We Face Intense Competition Our businesses are rapidly evolving and intensely competitive, and we have many competitors across geographies, including cross-border competition, and in different industries, including physical, e-commerce, and omnichannel retail, e-commerce services, web and infrastructure computing services, electronic devices, digital content, advertising, grocery, healthcare, communications, and transportation and logistics services.
Proliferation of these or similar unilateral tax measures may continue unless broader international tax reform is implemented. In addition, the European Union and other countries (including those in which we operate) have enacted or have committed to enact global minimum taxes, which may increase our tax expense in future years.
Proliferation of these or similar unilateral tax measures may continue unless broader international tax reform is implemented. In addition, the European Union and other countries (including those in which we operate) have enacted or have committed to enact global minimum taxes, which may increase our tax expense.
These regulations and laws cover taxation, privacy, data use, data protection, data security, data localization, network security, consumer protection, pricing, content, copyrights, distribution, transportation, mobile communications, electronic device certification, electronic waste, energy consumption, environmental and climate-related regulation, electronic contracts and other communications, competition, employment, trade and protectionist measures, web services, the provision of online payment services, registration, licensing, and information reporting requirements, unencumbered internet access to our services or access to our facilities, the design and operation of websites, health, safety, and sanitation standards, the characteristics, legality, and quality of products and services, product labeling, the commercial operation of unmanned aircraft systems, healthcare, and other matters.
These regulations and laws cover taxation, privacy, data use, data protection, data security, data localization, network security, consumer protection, pricing, content, copyrights, distribution, transportation, communications, electronic device certification, electronic waste, energy consumption, environmental and climate-related regulation, electronic contracts 14 Table of Contents and other communications, competition, employment, trade and protectionist measures, web services, the provision of online payment services, registration, licensing, and information reporting requirements, unencumbered internet access to our services or access to our facilities, the design and operation of websites, health, safety, and sanitation standards, the characteristics, legality, and quality of products and services, product labeling, the commercial operation of unmanned aircraft systems, healthcare, and other matters.
Legal and Regulatory Risks Government Regulation Is Evolving and Unfavorable Changes Could Harm Our Business We are subject to general business regulations and laws, as well as regulations and laws specifically governing the internet, physical, e-commerce, and omnichannel retail, digital content, web services, electronic devices, advertising, artificial intelligence technologies and services, and other products and services that we offer or sell.
Legal and Regulatory Risks Government Regulation Is Evolving and Unfavorable Changes Could Harm Our Business We are subject to general business regulations and laws, as well as regulations and laws specifically governing the internet, physical, e-commerce, and omnichannel retail, digital content, web services, electronic devices, advertising, artificial intelligence technologies and services, satellite communications services, healthcare, and other products and services that we offer or sell.
Although we impose contractual terms on sellers that are intended to prohibit sales of certain type of products, we may not be able to detect, enforce, or collect sufficient damages for 15 Table of Contents breaches of such agreements. In addition, some of our agreements with our vendors and sellers do not indemnify us from product liability.
Although we impose contractual terms on sellers that are intended to prohibit sales of certain type of products, we may not be able to detect, enforce, or collect sufficient damages for breaches of such agreements. In addition, some of our agreements with our vendors and sellers do not indemnify us from product liability.
Although we have developed systems and processes that are designed to protect customer data and prevent such incidents, including systems and processes designed to reduce the impact of a security breach at a third-party vendor or customer, such measures cannot provide absolute security and may fail to operate as intended or be circumvented.
Although we have developed systems and processes that are designed to protect customer data and prevent, detect, or mitigate such incidents, including systems and processes designed to reduce the impact of a security incident at a third-party vendor or customer, such measures cannot provide absolute security and may fail to operate as intended or be circumvented.
For example, we face a number of open investigations based on claims that aspects of our operations infringe competition rules, including aspects of Amazon’s operation of its stores including its fulfillment network, Amazon’s acquisitions, and certain aspects of AWS’s offering of cloud services. We strongly dispute these claims and intend to defend ourselves vigorously in these investigations.
For example, we face a number of open investigations based on claims that aspects of our operations infringe competition or consumer protection rules, including aspects of Amazon’s operation of its stores, including its fulfillment network and Prime, and certain aspects of AWS’s offering of cloud services. We strongly dispute these claims and intend to defend ourselves vigorously in these investigations.
It is not clear how 14 Table of Contents existing laws governing issues such as property ownership, libel, privacy, data use, data protection, data security, data localization, network security, and consumer protection apply to aspects of our operations such as the internet, e-commerce, digital content, web services, electronic devices, advertising, and artificial intelligence technologies and services.
It is not clear how existing laws governing issues such as property ownership, libel, privacy, data use, data protection, data security, data localization, network security, and consumer protection apply to aspects of our operations such as the internet, e-commerce, digital content, web services, electronic devices, advertising, artificial intelligence technologies and services, satellite communications services, and healthcare.
In addition, some of these contracts are subject to periodic funding approval and/or provide for termination by the government at any time, without cause. Item 1B. Unresolved Staff Comments None.
In addition, some of these contracts are subject to periodic funding approval and/or provide for termination by the government at any time, without cause.
Third parties who sell products using our services and stores also expose us to product liability claims. Additionally, under our A-to-z Guarantee, we may reimburse customers for certain product liability claims up to certain limits in these situations, and as our third-party seller sales grow, the cost of this program will increase and could negatively affect our operating results.
Additionally, under our A-to-z Guarantee, 15 Table of Contents we may reimburse customers for certain product liability claims up to certain limits in these situations, and as our third-party seller sales grow, the cost of this program will increase and could negatively affect our operating results.
We carry a broad selection and significant inventory levels of certain products, such as consumer electronics, and at times we are unable to sell products in sufficient quantities or to meet demand during the relevant selling seasons. Any one of the inventory risk factors set forth above may adversely affect our operating results.
We carry a broad selection and significant inventory levels of certain products, such as consumer electronics, and at times we are unable to sell products in sufficient quantities or to meet demand during the relevant selling seasons.
Added
Third parties who sell products using our services and stores also expose us to product liability claims.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThese include a wide variety of 16 Table of Contents mechanisms, controls, technologies, methods, systems, and other processes that are designed to prevent, detect, or mitigate data loss, theft, misuse, unauthorized access, or other security incidents or vulnerabilities affecting the data.
Biggest changeThese include a wide variety of mechanisms, controls, technologies, methods, systems, and other processes that are designed to prevent, detect, or mitigate data loss, theft, misuse, unauthorized access, or other security incidents or vulnerabilities affecting the data.
Such risks and mitigations are also subject to oversight by the Security Committee of our Board of Directors. Additional information about cybersecurity risks we face is discussed in Item 1A of Part I, “Risk Factors,” under the heading “We Could Be Harmed by Data Loss or Other Security Breaches,” which should be read in conjunction with the information above.
Such risks and mitigations are also subject to oversight by the Security Committee of our Board of Directors. Additional information about cybersecurity risks we face is discussed in Item 1A of Part I, “Risk Factors,” under the heading “We Could Be Harmed by Data Loss or Other Security Incidents,” which should be read in conjunction with the information above.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperties As of December 31, 2023, we operated the following facilities (in thousands): Description of Use Leased Square Footage (1) Owned Square Footage Location Office space 29,655 9,222 North America Office space 24,528 1,802 International Physical stores (2) 22,871 707 North America Physical stores (2) 255 — International Fulfillment, data centers, and other 413,017 25,630 North America Fulfillment, data centers, and other 173,765 14,802 International Total 664,091 52,163 ___________________ (1) For leased properties, represents the total leased space excluding sub-leased space.
Biggest changeProperties As of December 31, 2024, we operated the following facilities (in thousands): Description of Use Leased Square Footage (1) Owned Square Footage Location Office space 29,551 9,104 North America Office space 23,771 1,802 International Physical stores (2) 23,975 707 North America Physical stores (2) 222 — International Fulfillment, data centers, and other 448,168 36,869 North America Fulfillment, data centers, and other 176,287 18,958 International Total 701,974 67,440 ___________________ (1) For leased properties, represents the total leased space excluding sub-leased space.
(2) This includes 600 North America and 28 International stores as of December 31, 2023. Segment Leased Square Footage (1) Owned Square Footage (1) North America 424,145 15,438 International 165,329 7,931 AWS 20,434 17,770 Total 609,908 41,139 ___________________ (1) Segment amounts exclude corporate facilities.
(2) This includes 618 North America and 27 International stores as of December 31, 2024. Segment Leased Square Footage (1) Owned Square Footage (1) North America 457,104 20,741 International 166,673 11,741 AWS 24,875 24,052 Total 648,652 56,534 ___________________ (1) Segment amounts exclude corporate facilities.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for the Registrant’s Common Stock, Related Shareholder Matters, and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the Nasdaq Global Select Market under the symbol “AMZN.” Holders As of January 24, 2024, there were 11,656 shareholders of record of our common stock, although there is a much larger number of beneficial owners.
Biggest changeItem 5. Market for the Registrant’s Common Stock, Related Shareholder Matters, and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the Nasdaq Global Select Market under the symbol “AMZN.” Holders As of January 29, 2025, there were 12,135 shareholders of record of our common stock, although there is a much larger number of beneficial owners.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeChanges in foreign exchange rates positively impacted operating income by $220 million in 2023. 25 Table of Contents Operating Expenses Information about operating expenses is as follows (in millions): Year Ended December 31, 2022 2023 Operating Expenses: Cost of sales $ 288,831 $ 304,739 Fulfillment 84,299 90,619 Technology and infrastructure 73,213 85,622 Sales and marketing 42,238 44,370 General and administrative 11,891 11,816 Other operating expense (income), net 1,263 767 Total operating expenses $ 501,735 $ 537,933 Year-over-year Percentage Growth (Decline): Cost of sales 6 % 6 % Fulfillment 12 7 Technology and infrastructure 31 17 Sales and marketing 30 5 General and administrative 35 (1) Other operating expense (income), net 1,936 (39) Percent of Net Sales: Cost of sales 56.2 % 53.0 % Fulfillment 16.4 15.8 Technology and infrastructure 14.2 14.9 Sales and marketing 8.2 7.7 General and administrative 2.3 2.1 Other operating expense (income), net 0.2 0.1 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.
Biggest changeOperating Expenses Information about operating expenses is as follows (in millions): Year Ended December 31, 2023 2024 Operating Expenses: Cost of sales $ 304,739 $ 326,288 Fulfillment 90,619 98,505 Technology and infrastructure 85,622 88,544 Sales and marketing 44,370 43,907 General and administrative 11,816 11,359 Other operating expense (income), net 767 763 Total operating expenses $ 537,933 $ 569,366 Year-over-year Percentage Growth (Decline): Cost of sales 6 % 7 % Fulfillment 7 9 Technology and infrastructure 17 3 Sales and marketing 5 (1) General and administrative (1) (4) Other operating expense (income), net (39) (1) Percent of Net Sales: Cost of sales 53.0 % 51.1 % Fulfillment 15.8 15.4 Technology and infrastructure 14.9 13.9 Sales and marketing 7.7 6.9 General and administrative 2.1 1.8 Other operating expense (income), net 0.1 0.1 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.
We generally invest our excess cash in AAA-rated money market funds and investment grade short- to intermediate-term marketable debt securities. Our interest income corresponds with the average balance of invested funds based on the prevailing rates, which vary depending on the geographies and currencies in which they are invested.
We generally invest our excess cash in investment grade short- to intermediate-term marketable debt securities and AAA-rated money market funds. Our interest income corresponds with the average balance of invested funds based on the prevailing rates, which vary depending on the geographies and currencies in which they are invested.
For additional information about each line item addressed above, refer to Item 8 of Part II, “Financial Statements and Supplementary Data — Note 1 — Description of Business, Accounting Policies, and Supplemental Disclosures.” Our Annual Report on Form 10-K for the year ended December 31, 2022 includes a discussion and analysis of our financial condition and results of operations for the year ended December 31, 2021 in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Critical Accounting Estimates The preparation of financial statements in conformity with generally accepted accounting principles of the United States (“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.
For additional information about each line item addressed above, refer to Item 8 of Part II, “Financial Statements and Supplementary Data — Note 1 — Description of Business, Accounting Policies, and Supplemental Disclosures.” Our Annual Report on Form 10-K for the year ended December 31, 2023 includes a discussion and analysis of our financial condition and results of operations for the year ended December 31, 2022 in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Critical Accounting Estimates The preparation of financial statements in conformity with generally accepted accounting principles of the United States (“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.
While AWS payment processing and related transaction costs are included in “Fulfillment,” AWS costs are primarily classified as “Technology and infrastructure.” Fulfillment costs as a percentage of net sales may vary due to several factors, such as payment processing and related transaction costs, our level of productivity and accuracy, changes in volume, size, and weight of units received and 26 Table of Contents fulfilled, the extent to which third-party sellers utilize Fulfillment by Amazon services, timing of fulfillment network and physical store expansion, the extent we utilize fulfillment services provided by third parties, mix of products and services sold, and our ability to affect customer service contacts per unit by implementing improvements in our operations and enhancements to our customer self-service features.
While AWS payment 25 Table of Contents processing and related transaction costs are included in “Fulfillment,” AWS costs are primarily classified as “Technology and infrastructure.” Fulfillment costs as a percentage of net sales may vary due to several factors, such as payment processing and related transaction costs, our level of productivity and accuracy, changes in volume, size, and weight of units received and fulfilled, the extent to which third-party sellers utilize Fulfillment by Amazon services, timing of fulfillment network and physical store expansion, the extent we utilize fulfillment services provided by third parties, mix of products and services sold, and our ability to affect customer service contacts per unit by implementing improvements in our operations and enhancements to our customer self-service features.
Interest expense was $2.4 billion and $3.2 billion in 2022 and 2023 and was primarily related to debt and finance leases. See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 4 — Leases and Note 6 — Debt” for additional information.
Interest expense was $3.2 billion and $2.4 billion in 2023 and 2024 and was primarily related to debt and finance leases. See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 4 — Leases and Note 6 — Debt” for additional information.
In measuring shareholder dilution, we include all vested and unvested stock awards outstanding, without regard to estimated forfeitures. Total shares outstanding plus outstanding stock awards were 10.6 billion and 10.8 billion as of December 31, 2022 and 2023. Our financial reporting currency is the U.S. Dollar and changes in foreign exchange rates significantly affect our reported results and consolidated trends.
In measuring shareholder dilution, we include all vested and unvested stock awards outstanding, without regard to estimated forfeitures. Total shares outstanding plus outstanding stock awards were 10.8 billion and 10.9 billion as of December 31, 2023 and 2024. Our financial reporting currency is the U.S. Dollar and changes in foreign exchange rates significantly affect our reported results and consolidated trends.
The increase in operating cash flow in 2023, compared to the prior year, was due to an increase in net income (loss), excluding non-cash expenses, and changes in working capital.
The increase in operating cash flow in 2024, compared to the prior year, was due to an increase in net income (loss), excluding non-cash expenses, and changes in working capital.
These assumptions about future disposition of inventory are inherently uncertain and changes in our estimates and assumptions may cause us to realize material write-downs in the future. As a measure of sensitivity, for every 1% of additional inventory valuation allowance as of December 31, 2023, we would have recorded an additional cost of sales of approximately $355 million.
These assumptions about future disposition of inventory are inherently uncertain and changes in our estimates and assumptions may cause us to realize material write-downs in the future. As a measure of sensitivity, for every 1% of additional inventory valuation allowance as of December 31, 2024, we would have recorded an additional cost of sales of approximately $365 million.
In addition, we record valuation allowances against deferred tax assets when there is uncertainty about our ability to generate future income in relevant jurisdictions. We recorded a provision (benefit) for income taxes of $(3.2) billion and $7.1 billion in 2022 and 2023.
In addition, we record valuation allowances against deferred tax assets when there is uncertainty about our ability to generate future income in relevant jurisdictions. We recorded a provision (benefit) for income taxes of $7.1 billion and $9.3 billion in 2023 and 2024.
Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic and geopolitical conditions and customer demand and spending (including the impact of recessionary fears), inflation, interest rates, regional labor market constraints, world events, the rate of growth of the internet, online commerce, cloud services, and new and emerging technologies, as well as those outlined in Item 1A of Part I, “Risk Factors.” First Quarter 2024 Guidance • Net sales are expected to be between $138.0 billion and $143.5 billion, or to grow between 8% and 13% compared with first quarter 2023.
Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic and geopolitical conditions and customer demand and spending (including the impact of recessionary fears), inflation, interest rates, regional labor market constraints, world events, the rate of growth of the internet, online commerce, cloud services, and new and emerging technologies, as well as those outlined in Item 1A of Part I, “Risk Factors.” First Quarter 2025 Guidance • Net sales are expected to be between $151.0 billion and $155.5 billion, or to grow between 5% and 9% compared with first quarter 2024.
The sales growth primarily reflects increased unit sales, primarily by third-party sellers, advertising sales, and subscription services. Increased unit sales were driven largely by our continued focus on price, selection, and convenience for our customers, including from our shipping offers. International sales increased 11% in 2023, compared to the prior year.
International sales increased 9% in 2024, compared to the prior year. The sales growth primarily reflects increased unit sales, including sales by third-party sellers, advertising sales, and subscription services. Increased unit sales were driven largely by our continued focus on price, selection, and convenience for our customers, including from our fast shipping offers.
(2) Represents the outcome that would have resulted had foreign exchange rates in the reported period been the same as those in effect in the comparable prior year period for operating results. 30 Table of Contents Guidance We provided guidance on February 1, 2024, in our earnings release furnished on Form 8-K as set forth below.
(2) Represents the outcome that would have resulted had foreign exchange rates in the reported period been the same as those in effect in the comparable prior year period for operating results. 29 Table of Contents Guidance We provided guidance on February 6, 2025, in our earnings release furnished on Form 8-K as set forth below.
(2) For the year ended December 31, 2022 and 2023, this amount relates to property included in “Principal repayments of finance leases” of $7,941 million and $4,384 million. 29 Table of Contents All of these free cash flows measures have limitations as they omit certain components of the overall cash flow statement and do not represent the residual cash flow available for discretionary expenditures.
(2) For the year ended December 31, 2023 and 2024, this amount relates to property included in “Principal repayments of finance leases” of $4,384 million and $2,043 million. All of these free cash flows measures have limitations as they omit certain components of the overall cash flow statement and do not represent the residual cash flow available for discretionary expenditures.
Shipping costs were $83.5 billion and $89.5 billion in 2022 and 2023. 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.
Shipping costs were $89.5 billion and $95.8 billion in 2023 and 2024. 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.
Amounts held in foreign currencies were $18.3 billion and $23.5 billion as of December 31, 2022 and 2023. Our foreign currency balances include British Pounds, Canadian Dollars, Euros, Indian Rupees, and Japanese Yen. Cash provided by (used in) operating activities was $46.8 billion and $84.9 billion in 2022 and 2023.
Amounts held in foreign currencies were $23.5 billion and $25.5 billion as of December 31, 2023 and 2024. Our foreign currency balances include British Pounds, Canadian Dollars, Euros, Indian Rupees, and Japanese Yen. Cash provided by (used in) operating activities was $84.9 billion and $115.9 billion in 2023 and 2024.
Our federal tax provision included a partial accelerated depreciation deduction election for 2021, and a full election for 2022 and 2023. Additionally, effective January 1, 2022, research and development expenses are required to be capitalized and amortized for U.S. tax purposes, which delays the deductibility of these expenses. Cash paid for U.S.
Our federal tax provision included accelerated depreciation deductions for 2022, 2023, and 2024. Additionally, effective January 1, 2022, research and development expenses are required to be capitalized and amortized for U.S. tax purposes, which delays the deductibility of these expenses. Cash paid for U.S.
Our long-term lease liabilities were $73.0 billion and $77.3 billion as of December 31, 2022 and 2023. Our long-term debt was $67.1 billion and $58.3 billion as of December 31, 2022 and 2023. See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 4 — Leases and Note 6 — Debt” for additional information.
Our long-term lease liabilities were $77.3 billion and $78.3 billion as of December 31, 2023 and 2024. Our long-term debt was $58.3 billion and $52.6 billion as of December 31, 2023 and 2024. See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 4 — Leases and Note 6 — Debt” for additional information.
Cash provided by (used in) investing activities was $(37.6) billion and $(49.8) billion in 2022 and 2023, with the variability caused primarily by purchases, sales, and maturities of marketable securities and cash capital expenditures.
Cash provided by (used in) investing activities was $(49.8) billion and $(94.3) billion in 2023 and 2024, with the variability caused primarily by purchases, sales, and maturities of marketable securities and cash capital expenditures.
Cash capital expenditures were $58.3 billion, and $48.1 billion in 2022 and 2023, which primarily reflect investments in technology infrastructure (the majority of which is to support AWS business growth) and in additional capacity to support our fulfillment network, which investments we expect to increase in 2024.
Cash capital expenditures were $48.1 billion, and $77.7 billion in 2023 and 2024, which primarily reflect investments in technology infrastructure (the majority of which is to support AWS business growth) and in additional capacity to support our fulfillment network. We expect cash capital expenditures to increase in 2025, primarily driven by investments in technology infrastructure.
These forward-looking statements reflect Amazon.com’s expectations as of February 1, 2024, and are subject to substantial uncertainty.
These forward-looking statements reflect Amazon.com’s expectations as of February 6, 2025, and are subject to substantial uncertainty.
Other Income (Expense), Net Other income (expense), net was $(16.8) billion and $938 million during 2022 and 2023. The primary components of other income (expense), net are related to equity securities valuations and adjustments, equity warrant valuations, and foreign currency.
Other Income (Expense), Net Other income (expense), net was $938 million and $(2.3) billion during 2023 and 2024. The primary components of other income (expense), net are related to equity securities valuations and adjustments, equity warrant valuations, and foreign currency.
The increase in fulfillment costs in absolute dollars in 2023, compared to the prior year, is primarily due to increased sales and investments in our fulfillment network, partially offset by fulfillment network efficiencies. Changes in foreign exchange rates increased fulfillment costs by $52 million in 2023.
The increase in fulfillment costs in 2024, compared to the prior year, is primarily due to increased sales and investments in our fulfillment network, partially offset by fulfillment network efficiencies. Changes in foreign exchange rates reduced fulfillment costs by $223 million in 2024.
Income Taxes Our effective tax rate is subject to significant variation due to several factors, including variability in 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.
Included in other income (expense), net in 2023 and 2024 is a marketable equity securities valuation gain (loss) of $797 million and $(1.6) billion from our equity investment in Rivian. 27 Table of Contents Income Taxes Our effective tax rate is subject to significant variation due to several factors, including variability in 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.
The North America operating income in 2023, as compared to the operating loss in the prior year, is primarily due to increased unit sales and increased advertising sales, partially offset by increased shipping and fulfillment costs and increased technology and infrastructure costs.
The increase in North America operating income in 2024, compared to the prior year, is primarily due to increased unit sales and increased advertising sales, partially offset by increased fulfillment and shipping costs.
The increase in cost of sales in absolute dollars in 2023, compared to the prior year, is primarily due to increased product and shipping costs resulting from increased sales, partially offset by fulfillment network efficiencies and lower transportation rates. Changes in foreign exchange rates reduced cost of sales by $254 million in 2023.
The increase in cost of sales in 2024, compared to the prior year, is primarily due to increased product and shipping costs resulting from increased sales, partially offset by fulfillment network efficiencies, including lower transportation costs. Changes in foreign exchange rates reduced cost of sales by $1.7 billion in 2024.
(federal and state) and foreign income taxes (net of refunds) totaled $6.0 billion and $11.2 billion for 2022 and 2023. As of December 31, 2022 and 2023, restricted cash, cash equivalents, and marketable securities were $365 million and $503 million.
(federal and state) and foreign income taxes (net of refunds) totaled $11.2 billion and $12.3 billion for 2023 and 2024. As of December 31, 2023 and 2024, restricted cash, cash equivalents, and marketable securities were $503 million and $3.5 billion.
Changes in foreign exchange rates increased International net sales by $88 million in 2023. 24 Table of Contents AWS sales increased 13% in 2023, compared to the prior year. The sales growth primarily reflects increased customer usage, partially offset by pricing changes, primarily driven by long-term customer contracts.
Changes in foreign exchange rates reduced International net sales by $1.8 billion in 2024. 24 Table of Contents AWS sales increased 19% in 2024, compared to the prior year. The sales growth primarily reflects increased customer usage, partially offset by pricing changes primarily driven by long-term customer contracts.
Changes in foreign exchange rates reduced net sales by $71 million in 2023. For a discussion of the effect of foreign exchange rates on sales growth, see “Effect of Foreign Exchange Rates” below. North America sales increased 12% in 2023, compared to the prior year.
Changes in foreign exchange rates reduced net sales by $2.3 billion in 2024. For a discussion of the effect of foreign exchange rates on sales growth, see “Effect of Foreign Exchange Rates” below. North America sales increased 10% in 2024, compared to the prior year.
Free Cash Flow Free cash flow is cash flow from operations reduced by “Purchases of property and equipment, net of proceeds from sales and incentives.” The following is a reconciliation of free cash flow to the most comparable GAAP cash flow measure, “Net cash provided by (used in) operating activities,” for 2022 and 2023 (in millions): Year Ended December 31, 2022 2023 Net cash provided by (used in) operating activities $ 46,752 $ 84,946 Purchases of property and equipment, net of proceeds from sales and incentives (58,321) (48,133) Free cash flow $ (11,569) $ 36,813 Net cash provided by (used in) investing activities $ (37,601) $ (49,833) Net cash provided by (used in) financing activities $ 9,718 $ (15,879) 28 Table of Contents Free Cash Flow Less Principal Repayments of Finance Leases and Financing Obligations Free cash flow less principal repayments of finance leases and financing obligations is free cash flow reduced by “Principal repayments of finance leases” and “Principal repayments of financing obligations.” Principal repayments of finance leases and financing obligations approximates the actual payments of cash for our finance leases and financing obligations.
Free Cash Flow Free cash flow is cash flow from operations reduced by “Purchases of property and equipment, net of proceeds from sales and incentives.” The following is a reconciliation of free cash flow to the most comparable GAAP cash flow measure, “Net cash provided by (used in) operating activities,” for 2023 and 2024 (in millions): Year Ended December 31, 2023 2024 Net cash provided by (used in) operating activities $ 84,946 $ 115,877 Purchases of property and equipment, net of proceeds from sales and incentives (48,133) (77,658) Free cash flow $ 36,813 $ 38,219 Net cash provided by (used in) investing activities $ (49,833) $ (94,342) Net cash provided by (used in) financing activities $ (15,879) $ (11,812) Free Cash Flow Less Principal Repayments of Finance Leases and Financing Obligations Free cash flow less principal repayments of finance leases and financing obligations is free cash flow reduced by “Principal repayments of finance leases” and “Principal repayments of financing obligations.” Principal repayments of finance leases and financing obligations approximates the actual payments of cash for our finance leases and financing obligations.
Liquidity and Capital Resources Cash flow information is as follows (in millions): Year Ended December 31, 2022 2023 Cash provided by (used in): Operating activities $ 46,752 $ 84,946 Investing activities (37,601) (49,833) Financing activities 9,718 (15,879) Our principal sources of liquidity are cash flows generated from operations and our cash, cash equivalents, and marketable securities balances, which, at fair value, were $70.0 billion and $86.8 billion as of December 31, 2022 and 2023.
Liquidity and Capital Resources Cash flow information is as follows (in millions): Year Ended December 31, 2023 2024 Cash provided by (used in): Operating activities $ 84,946 $ 115,877 Investing activities (49,833) (94,342) Financing activities (15,879) (11,812) Our principal sources of liquidity are cash flows generated from operations and our cash, cash equivalents, and marketable securities balances, which, at fair value, were $86.8 billion and $101.2 billion as of December 31, 2023 and 2024.
Our marketing costs are largely variable, based on growth in sales and changes in rates. To the extent there is increased or decreased competition for these traffic sources, or to the extent our mix of these channels shifts, we would expect to see a corresponding change in our marketing costs.
To the extent there is increased or decreased competition for these traffic sources, or to the extent our mix of these channels shifts, we would expect to see a corresponding change in our marketing costs.
See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 10 — Segment Information.” Overview Macroeconomic factors, including inflation, increased interest rates, significant capital market and supply chain volatility, and global economic and geopolitical developments, have direct and indirect impacts on our results of operations that are difficult to isolate and quantify.
See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 10 — Segment Information.” Overview Macroeconomic factors, including changes in inflation and interest rates, global economic and geopolitical developments, and the development and adoption of technologies and services, including artificial intelligence, have direct and indirect impacts on our results of operations that are difficult to isolate and quantify.
The following is a reconciliation of free cash flow less equipment finance leases and principal repayments of all other finance leases and financing obligations to the most comparable GAAP cash flow measure, “Net cash provided by (used in) operating activities,” for 2022 and 2023 (in millions): Year Ended December 31, 2022 2023 Net cash provided by (used in) operating activities $ 46,752 $ 84,946 Purchases of property and equipment, net of proceeds from sales and incentives (58,321) (48,133) Free cash flow (11,569) 36,813 Equipment acquired under finance leases (1) (299) (310) Principal repayments of all other finance leases (2) (670) (683) Principal repayments of financing obligations (248) (271) Free cash flow less equipment finance leases and principal repayments of all other finance leases and financing obligations $ (12,786) $ 35,549 Net cash provided by (used in) investing activities $ (37,601) $ (49,833) Net cash provided by (used in) financing activities $ 9,718 $ (15,879) ___________________ (1) For the year ended December 31, 2022 and 2023, this amount relates to equipment included in “Property and equipment acquired under finance leases, net of remeasurements and modifications” of $675 million and $642 million.
The following is a reconciliation of free cash flow less equipment finance leases and principal repayments of all other finance leases and financing obligations to the most comparable GAAP cash flow measure, “Net cash provided by (used in) operating activities,” for 2023 and 2024 (in millions): Year Ended December 31, 2023 2024 Net cash provided by (used in) operating activities $ 84,946 $ 115,877 Purchases of property and equipment, net of proceeds from sales and incentives (48,133) (77,658) Free cash flow 36,813 38,219 Equipment acquired under finance leases (1) (310) (572) Principal repayments of all other finance leases (2) (683) (767) Principal repayments of financing obligations (271) (669) Free cash flow less equipment finance leases and principal repayments of all other finance leases and financing obligations $ 35,549 $ 36,211 Net cash provided by (used in) investing activities $ (49,833) $ (94,342) Net cash provided by (used in) financing activities $ (15,879) $ (11,812) ___________________ (1) For the year ended December 31, 2023 and 2024, this amount relates to equipment included in “Property and equipment acquired under finance leases, net of remeasurements and modifications” of $642 million and $854 million.
Service sales primarily represent third-party seller fees, which includes commissions and any related fulfillment and shipping fees, AWS sales, advertising services, Amazon Prime membership fees, and certain digital media content subscriptions.
Product sales represent revenue from the sale of products and related shipping fees and digital media content where we record revenue gross. Service sales primarily represent third-party seller fees, which includes commissions and any related fulfillment and shipping fees, AWS sales, advertising services, Amazon Prime membership fees, and certain digital media content subscriptions.
The sales growth primarily reflects increased unit sales, primarily by third-party sellers, advertising sales, and subscription services. Increased unit sales were driven largely by our continued focus on price, selection, and convenience for our customers, including from our shipping offers.
The sales growth primarily reflects increased unit sales, including sales by third-party sellers, advertising sales, and subscription services. Increased unit sales were driven largely by our continued focus on price, selection, and convenience for our customers, including from our fast shipping offers. Changes in foreign exchange rates reduced North America net sales by $462 million in 2024.
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.
As of December 31, 2024, cash, cash equivalents, and marketable securities held by foreign subsidiaries were $6.3 billion. 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.
The following is a reconciliation of free cash flow less principal repayments of finance leases and financing obligations to the most comparable GAAP cash flow measure, “Net cash provided by (used in) operating activities,” for 2022 and 2023 (in millions): Year Ended December 31, 2022 2023 Net cash provided by (used in) operating activities $ 46,752 $ 84,946 Purchases of property and equipment, net of proceeds from sales and incentives (58,321) (48,133) Free cash flow (11,569) 36,813 Principal repayments of finance leases (7,941) (4,384) Principal repayments of financing obligations (248) (271) Free cash flow less principal repayments of finance leases and financing obligations $ (19,758) $ 32,158 Net cash provided by (used in) investing activities $ (37,601) $ (49,833) Net cash provided by (used in) financing activities $ 9,718 $ (15,879) Free Cash Flow Less Equipment Finance Leases and Principal Repayments of All Other Finance Leases and Financing Obligations Free cash flow less equipment finance leases and principal repayments of all other finance leases and financing obligations is free cash flow reduced by equipment acquired under finance leases, which is included in “Property and equipment acquired under finance leases, net of remeasurements and modifications,” principal repayments of all other finance lease liabilities, which is included in “Principal repayments of finance leases,” and “Principal repayments of financing obligations.” All other finance lease liabilities and financing obligations consists of property.
The following is a reconciliation of free cash flow less principal repayments of finance leases and financing obligations to the most comparable GAAP cash flow measure, “Net cash provided by (used in) operating activities,” for 2023 and 2024 (in millions): Year Ended December 31, 2023 2024 Net cash provided by (used in) operating activities $ 84,946 $ 115,877 Purchases of property and equipment, net of proceeds from sales and incentives (48,133) (77,658) Free cash flow 36,813 38,219 Principal repayments of finance leases (4,384) (2,043) Principal repayments of financing obligations (271) (669) Free cash flow less principal repayments of finance leases and financing obligations $ 32,158 $ 35,507 Net cash provided by (used in) investing activities $ (49,833) $ (94,342) Net cash provided by (used in) financing activities $ (15,879) $ (11,812) 28 Table of Contents Free Cash Flow Less Equipment Finance Leases and Principal Repayments of All Other Finance Leases and Financing Obligations Free cash flow less equipment finance leases and principal repayments of all other finance leases and financing obligations is free cash flow reduced by equipment acquired under finance leases, which is included in “Property and equipment acquired under finance leases, net of remeasurements and modifications,” principal repayments of all other finance lease liabilities, which is included in “Principal repayments of finance leases,” and “Principal repayments of financing obligations.” All other finance lease liabilities and financing obligations consists of property.
Operating Income (Loss) Operating income (loss) by segment is as follows (in millions): Year Ended December 31, 2022 2023 Operating Income (Loss) North America $ (2,847) $ 14,877 International (7,746) (2,656) AWS 22,841 24,631 Consolidated $ 12,248 $ 36,852 Operating income was $12.2 billion and $36.9 billion for 2022 and 2023.
Operating Income (Loss) Operating income (loss) by segment is as follows (in millions): Year Ended December 31, 2023 2024 Operating Income (Loss) North America $ 14,877 $ 24,967 International (2,656) 3,792 AWS 24,631 39,834 Consolidated $ 36,852 $ 68,593 Operating income was $36.9 billion and $68.6 billion for 2023 and 2024.
Net sales information is as follows (in millions): Year Ended December 31, 2022 2023 Net Sales: North America $ 315,880 $ 352,828 International 118,007 131,200 AWS 80,096 90,757 Consolidated $ 513,983 $ 574,785 Year-over-year Percentage Growth (Decline): North America 13 % 12 % International (8) 11 AWS 29 13 Consolidated 9 12 Year-over-year Percentage Growth, excluding the effect of foreign exchange rates: North America 13 % 12 % International 4 11 AWS 29 13 Consolidated 13 12 Net Sales Mix: North America 61 % 61 % International 23 23 AWS 16 16 Consolidated 100 % 100 % Sales increased 12% in 2023, compared to the prior year.
Net sales information is as follows (in millions): Year Ended December 31, 2023 2024 Net Sales: North America $ 352,828 $ 387,497 International 131,200 142,906 AWS 90,757 107,556 Consolidated $ 574,785 $ 637,959 Year-over-year Percentage Growth: North America 12 % 10 % International 11 9 AWS 13 19 Consolidated 12 11 Year-over-year Percentage Growth, excluding the effect of foreign exchange rates: North America 12 % 10 % International 11 10 AWS 13 19 Consolidated 12 11 Net Sales Mix: North America 61 % 61 % International 23 22 AWS 16 17 Consolidated 100 % 100 % Sales increased 11% in 2024, compared to the prior year.
We made cash payments, net of acquired cash, related to acquisition and other investment activity of $8.3 billion and $5.8 billion in 2022 and 2023. We funded the acquisitions of MGM Holdings Inc. in 2022 and 1Life Healthcare, Inc. (One Medical) in 2023 with cash on hand.
We made cash payments, net of acquired cash, related to acquisition and other investment activity of $5.8 billion and $7.1 billion in 2023 and 2024. We funded the acquisition of 1Life Healthcare, Inc. (One Medical) in 2023 with cash on hand. In Q3 2023, we invested $1.25 billion in a convertible note from Anthropic, PBC.
While costs associated with Amazon Prime membership benefits and other shipping offers are not included in sales and marketing expense, we view these offers as effective worldwide marketing tools, and intend to continue offering them indefinitely.
While costs associated with Amazon Prime membership benefits and other shipping offers are not included in sales and marketing expense, we view these offers as effective worldwide marketing tools, and intend to continue offering them indefinitely. 26 Table of Contents General and Administrative The decrease in general and administrative costs in 2024, compared to the prior year, is primarily due to a decrease in payroll and related expenses.
The increase in technology and infrastructure costs in absolute dollars in 2023, compared to the prior year, is primarily due to an increase in spending on infrastructure and increased payroll and related costs associated with technical teams responsible for expanding our existing products and services and initiatives to introduce new products and service offerings.
The increase in technology and infrastructure costs in 2024, compared to the prior year, is primarily due to an increase in spending on infrastructure, partially offset by decreased payroll and related costs associated with technical teams responsible for expanding our existing products and services and initiatives to introduce new products and service offerings and a reduction in depreciation and amortization expense from our change in the estimated useful life of our servers.
The decrease in International operating loss in absolute dollars in 2023, compared to the prior year, is primarily due to increased unit sales and increased advertising sales, partially offset by increased fulfillment and shipping costs and increased technology and infrastructure costs. Changes in foreign exchange rates positively impacted operating loss by $246 million in 2023.
The International operating income in 2024, as compared to the operating loss in the prior year, is primarily due to increased unit sales and increased advertising sales, partially offset by increased shipping and fulfillment costs. Changes in foreign exchange rates did not significantly impact operating income in 2024.
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 direct customers to our stores primarily through a number of marketing channels, such as our sponsored search, social and online advertising, third-party customer referrals, television advertising, and other initiatives.
We direct customers to our stores primarily through a number of marketing channels, such as our sponsored search, third-party customer referrals, social and online advertising, television advertising, and other initiatives. Our marketing costs are largely variable, based on growth in sales and changes in rates.
Dollar is as follows (in millions): Year Ended December 31, 2022 Year Ended December 31, 2023 As Reported Exchange Rate Effect (1) At Prior Year Rates (2) As Reported Exchange Rate Effect (1) At Prior Year Rates (2) Net sales $ 513,983 $ 15,495 $ 529,478 $ 574,785 $ 71 $ 574,856 Operating expenses 501,735 16,356 518,091 537,933 531 538,464 Operating income 12,248 (861) 11,387 36,852 (460) 36,392 ___________________ (1) Represents the change in reported amounts resulting from changes in foreign exchange rates from those in effect in the comparable prior year period for operating results.
Dollar is as follows (in millions): Year Ended December 31, 2023 Year Ended December 31, 2024 As Reported Exchange Rate Effect (1) At Prior Year Rates (2) As Reported Exchange Rate Effect (1) At Prior Year Rates (2) Net sales $ 574,785 $ 71 $ 574,856 $ 637,959 $ 2,335 $ 640,294 Operating expenses 537,933 531 538,464 569,366 2,466 571,832 Operating income 36,852 (460) 36,392 68,593 (131) 68,462 ___________________ (1) Represents the change in reported amounts resulting from changes in foreign exchange rates from those in effect in the comparable prior year period for operating results.
The increase in AWS operating income in absolute dollars in 2023, compared to the prior year, is primarily due to increased sales, partially offset by increased payroll and related expenses and spending on technology infrastructure, both of which were primarily driven by additional investments to support AWS business growth.
The increase in AWS operating income in 2024, compared to the prior year, is primarily due to increased sales, decreased payroll and related expenses, and a reduction in depreciation and amortization expense from our change in the estimated useful lives of our servers, partially offset by spending on technology infrastructure that was primarily driven by additional investments to support AWS business growth.
Cash inflows from financing activities resulted from proceeds from short-term debt, and other and long-term-debt of $62.7 billion and $18.1 billion in 2022 and 2023.
Cash inflows from financing activities resulted from proceeds from short-term debt, and other and long-term-debt of $18.1 billion and $5.1 billion in 2023 and 2024. Cash outflows from financing activities resulted from payments of short-term debt, and other, long-term debt, finance leases, and financing obligations of $34.0 billion and $17.0 billion in 2023 and 2024.
In 2023, we invested $1.25 billion in a note from Anthropic, PBC, which is convertible into equity. We have an agreement that expires in Q1 2024 to invest up to an additional $2.75 billion in a second convertible note. Cash provided by (used in) financing activities was $9.7 billion and $(15.9) billion in 2022 and 2023.
In Q1 2024, we invested $2.75 billion in a second convertible note. In Q4 2024, we entered into an agreement and invested $1.3 billion in a third convertible note, and will invest an additional $2.7 billion by Q4 2025. Cash provided by (used in) financing activities was $(15.9) billion and $(11.8) billion in 2023 and 2024.
The increase in sales and marketing costs in absolute dollars in 2023, compared to the prior year, is primarily due to increased payroll and related expenses for personnel engaged in marketing and selling activities.
The decrease in sales and marketing costs in 2024, compared to the prior year, is primarily due to decreased payroll and related expenses for personnel engaged in marketing and selling activities, partially offset by increased advertising expenses. Changes in foreign exchange rates reduced sales and marketing costs by $263 million in 2024.
Other Operating Expense (Income), Net Other operating expense (income), net was $1.3 billion and $767 million during 2022 and 2023, and was primarily related to asset impairments for physical store closures in 2022 and for fulfillment network facilities and physical store closures in 2023, and the amortization of intangible assets. 27 Table of Contents Interest Income and Expense Our interest income was $989 million and $2.9 billion during 2022 and 2023, primarily due to an increase in prevailing rates.
Other Operating Expense (Income), Net Other operating expense (income), net was $767 million and $763 million during 2023 and 2024, and was primarily related to asset impairments and the amortization of intangible assets.
We expect some or all of these factors to continue to impact our operations into Q1 2024. Net Sales Net sales include product and service sales. Product sales represent revenue from the sale of products and related shipping fees and digital media content where we record revenue gross.
These could affect customer demand for our products and services, our ability to predict growth needs, expenses, and the benefits we gain from new technologies. We expect some or all of them to continue to impact our operations into Q1 2025. Net Sales Net sales include product and service sales.
We had no borrowings outstanding under the two unsecured revolving credit facilities or the commercial paper programs, we had $682 million of borrowings outstanding under the secured revolving credit facility, and the entire amount of the term loan has been repaid as of December 31, 2023.
Property and equipment acquired under finance leases was $642 million and $854 million in 2023 and 2024. We had no borrowings outstanding under the two unsecured revolving credit facilities or the commercial paper programs as of December 31, 2024. See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 6 — Debt” for additional information.
This guidance includes approximately $0.9 billion lower depreciation expense due to an increase in the estimated useful life of our servers beginning on January 1, 2024. • This guidance assumes, among other things, that no additional business acquisitions, restructurings, or legal settlements are concluded. 31 Table of Contents
Also, as a reminder, in first quarter 2024 the impact from Leap Year added approximately $1.5 billion in net sales. • Operating income is expected to be between $14.0 billion and $18.0 billion, compared with $15.3 billion in first quarter 2024. • This guidance assumes, among other things, that no additional business acquisitions, restructurings, or legal settlements are concluded. 30 Table of Contents
Removed
Cash outflows from financing activities resulted from repurchases of common stock in 2022, payments of short-term debt, and other, long-term debt, finance leases, and financing obligations of $53.0 billion and $34.0 billion in 2022 and 2023. Property and equipment acquired under finance leases was $675 million and $642 million in 2022 and 2023.
Added
Changes in foreign exchange rates reduced technology and infrastructure costs by $244 million in 2024. We currently expense the majority of the costs associated with the development of our satellite network for global broadband service (including production, launch, and payroll costs, and launch services deposits upon launch).
Removed
See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 6 — Debt” for additional information. As of December 31, 2023, cash, cash equivalents, and marketable securities held by foreign subsidiaries were $4.7 billion.
Added
We will capitalize certain of these costs once the service achieves commercial viability, including sales to customers. 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.
Removed
In addition, changes in fuel, utility, and food costs, interest rates, and economic outlook may impact customer demand and our ability to forecast consumer spending patterns. We also expect the current macroeconomic environment and enterprise customer cost optimization efforts to impact our AWS revenue growth rates.
Added
For more information on the operating expenses that impact segment operating income, see “Operating Expenses” and the descriptions of operating expense line item changes on pages 25 to 27, and “Note 10 — Segment Information” on page 65.
Removed
General and Administrative General and administrative costs were $11.9 billion and $11.8 billion during 2022 and 2023, and were primarily related to payroll and related expenses and professional fees.
Added
Changes in foreign exchange rates positively impacted operating income by $240 million in 2024. Interest Income and Expense Our interest income was $2.9 billion and $4.7 billion during 2023 and 2024, primarily due to a higher average balance of invested funds at prevailing rates.
Removed
Included in other income (expense), net in 2022 and 2023 is a marketable equity securities valuation gain (loss) of $(12.7) billion and $797 million from our equity investment in Rivian.
Added
This guidance anticipates an unusually large, unfavorable impact of approximately $2.1 billion, or 150 basis points, from foreign exchange rates.
Removed
This guidance anticipates a favorable impact of approximately 40 basis points from foreign exchange rates. • Operating income is expected to be between $8.0 billion and $12.0 billion, compared with $4.8 billion in first quarter 2023.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

10 edited+1 added−0 removed6 unchanged
Biggest changeThe following table provides information about our cash equivalents and marketable debt securities, including principal cash flows by expected maturity and the related weighted-average interest rates as of December 31, 2023 (in millions, except percentages): 2024 2025 2026 2027 2028 Thereafter Total Estimated Fair Value as of December 31, 2023 Money market funds $ 39,160 $ — $ — $ — $ — $ — $ 39,160 $ 39,160 Weighted average interest rate 5.32 % — % — % — % — % — % 5.32 % Corporate debt securities 25,075 2,227 715 9 — — 28,026 27,805 Weighted average interest rate 5.13 % 1.30 % 1.51 % 2.33 % — % — % 4.74 % U.S. government and agency securities 552 501 398 50 43 230 1,774 1,699 Weighted average interest rate 3.24 % 1.49 % 1.12 % 0.97 % 0.67 % 1.31 % 1.89 % Asset-backed securities 789 349 115 143 13 291 1,700 1,646 Weighted average interest rate 1.34 % 2.09 % 1.20 % 1.67 % 1.66 % 1.33 % 1.51 % Foreign government and agency securities 506 — — — — — 506 505 Weighted average interest rate 5.28 % — % — % — % — % — % 5.28 % Other debt securities 62 46 — — — — 108 104 Weighted average interest rate 0.55 % 1.07 % — % — % — % — % 0.78 % $ 66,144 $ 3,123 $ 1,228 $ 202 $ 56 $ 521 $ 71,274 Cash equivalents and marketable debt securities $ 70,919 As of December 31, 2023, we had long-term debt with a face value of $67.2 billion, including the current portion, primarily consisting of fixed rate unsecured senior notes.
Biggest changeThe following table provides information about our cash equivalents and marketable debt securities, including principal cash flows by expected maturity and the related weighted-average interest rates as of December 31, 2024 (in millions, except percentages): 2025 2026 2027 2028 2029 Thereafter Total Estimated Fair Value as of December 31, 2024 Money market funds $ 28,282 $ — $ — $ — $ — $ — $ 28,282 $ 28,282 Weighted average interest rate 4.42 % — % — % — % — % — % 4.42 % Corporate debt securities 47,908 1,779 1,086 311 55 — 51,139 50,912 Weighted average interest rate 4.65 % 3.48 % 4.49 % 4.65 % 4.83 % — % 4.60 % U.S. government and agency securities 1,986 928 215 65 50 213 3,457 3,401 Weighted average interest rate 3.95 % 2.92 % 3.83 % 2.72 % 2.57 % 2.04 % 3.51 % Asset-backed securities 450 262 195 226 188 220 1,541 1,523 Weighted average interest rate 3.19 % 4.74 % 4.59 % 4.84 % 3.29 % 3.40 % 3.92 % Foreign government and agency securities 151 2 27 — — — 180 177 Weighted average interest rate 4.50 % 4.60 % 4.31 % — % — % — % 4.48 % Other debt securities 44 8 8 8 — — 68 67 Weighted average interest rate 0.99 % 4.49 % 4.11 % 4.29 % — % — % 2.13 % $ 78,821 $ 2,979 $ 1,531 $ 610 $ 293 $ 433 $ 84,667 Cash equivalents and marketable debt securities $ 84,362 As of December 31, 2024, we had long-term debt with a face value of $58.0 billion, including the current portion, primarily consisting of fixed rate unsecured senior notes.
We generally invest our excess cash in AAA-rated money market funds and investment grade short- to intermediate-term marketable debt securities.
We generally invest our excess cash in investment grade short- to intermediate-term marketable debt securities and AAA-rated money market funds.
Based on the intercompany balances as of December 31, 2023, an assumed 5%, 10%, and 20% adverse change to foreign exchange rates would result in losses of $320 million, $640 million, and $1.3 billion, recorded to “Other income (expense), net.” See Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations — Effect of Foreign Exchange Rates” for additional information on the effect on reported results of changes in foreign exchange rates.
Based on the intercompany balances as of December 31, 2024, an assumed 5%, 10%, and 20% adverse change to foreign exchange rates would result in losses of $305 million, $605 million, and $1.2 billion, recorded to “Other income (expense), net.” See Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations — Effect of Foreign Exchange Rates” for additional information on the effect on reported results of changes in foreign exchange rates.
Based on the balance of foreign funds as of December 31, 2023, of $23.5 billion, an assumed 5%, 10%, and 20% adverse change to foreign exchange would result in declines of $1.2 billion, $2.3 billion, and $4.7 billion. We also have foreign exchange risk related to our intercompany balances denominated in various currencies.
Based on the balance of foreign funds as of December 31, 2024, of $25.5 billion, an assumed 5%, 10%, and 20% adverse change to foreign exchange would result in declines of $1.3 billion, $2.6 billion, and $5.1 billion. We also have foreign exchange risk related to our intercompany balances denominated in various currencies.
See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 6 — Debt” for additional information. 32 Table of Contents Foreign Exchange Risk During 2023, net sales from our International segment accounted for 23% of our consolidated revenues.
See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 6 — Debt” for additional information. 31 Table of Contents Foreign Exchange Risk During 2024, net sales from our International segment accounted for 22% of our consolidated revenues.
For example, as a result of fluctuations in foreign exchange rates throughout the year compared to rates in effect the prior year, International segment net sales increased by $88 million in comparison with the prior year. We have foreign exchange risk related to foreign-denominated cash, cash equivalents, and marketable securities (“foreign funds”).
For example, as a result of fluctuations in foreign exchange rates throughout the year compared to rates in effect the prior year, International segment net sales decreased by $1.8 billion in comparison with the prior year. We have foreign exchange risk related to foreign-denominated cash, cash equivalents, and marketable securities (“foreign funds”).
Our equity and equity warrant investments in publicly traded companies, which include our equity investment in Rivian, represent $5.7 billion of our investments as of December 31, 2023, and are recorded at fair value, which is subject to market price volatility.
Our equity and equity warrant investments in publicly traded companies, which include our equity investment in Rivian, represent $4.6 billion of our investments as of December 31, 2024, and are recorded at fair value, which is subject to market price volatility.
Equity Investment Risk As of December 31, 2023, our recorded value in equity, equity warrant, and convertible debt investments in public and private companies was $9.6 billion.
Equity Investment Risk As of December 31, 2024, our recorded value in equity, equity warrant, and convertible debt investments in public and private companies was $22.1 billion.
As such, we believe that market sensitivities are not practicable. See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 1 — Description of Business, Accounting Policies, and Supplemental Disclosures” for additional information. 33 Table of Contents
See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 1 — Description of Business, Accounting Policies, and Supplemental Disclosures” for additional information. 32 Table of Contents
We record our equity warrant investments in private companies at fair value and adjust our equity investments in private companies for observable price changes or impairments. Valuations of private companies are inherently more complex due to the lack of readily available market data. The current global economic conditions provide additional uncertainty.
Valuations of private companies are inherently more complex due to the lack of readily available market data. The current global economic conditions provide additional uncertainty. As such, we believe that market sensitivities are not practicable.
Added
We record our equity warrant investments in private companies at fair value and adjust our equity investments in private companies for observable price changes or impairments. We record our available-for-sale convertible debt investments in private companies at fair value, which primarily relate to Anthropic, PBC.

Other AMZN 10-K year-over-year comparisons