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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 ____________________________________
FORM 10-K
____________________________________ 
(Mark One)
☒ ANNUAL  REPOR T PURSUANT  TO SECTION 13 OR 15(d) OF  THE SECURITIES EXCHANGE ACT  OF 1934
For the fiscal year ended December 31, 2022
or
☐ TRANSITION REPOR T PURSUANT  TO SECTION 13 OR 15(d) OF  THE SECURITIES EXCHANGE ACT  OF 1934
For the transition period from            to             .
Commission File No. 000-22513
____________________________________
AMAZON .COM, INC.
(Exact name of registrant as specified in its charter)
Delaware  91-1646860
(State or other jurisdiction of
incorporation or organization)  (I.R.S. Employer
Identification No.)
410 Terry Avenue North
Seattle, Washington 98109-5210
(206) 266-1000
(Addr ess and telephone number , including ar ea code, of r egistrant’ s principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Trading Symbol(s) Name of Each Exchange on Which Registered
Common Stock, par value $.01 per share AMZN Nasdaq Global Select Market
Securities registered pursuant to Section 12(g) of the Act:
None
 ____________________________________
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☒    No  ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.    Yes  ☐    No  ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐


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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12
months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒ Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒
Aggregate market value of voting stock held by non-affiliates of the registrant as of June 30, 2022 $ 944,744,113,598 
Number of shares of common stock outstanding as of January 25, 2023 10,247,259,757 
____________________________________ 
DOCUMENTS INCORPORATED BY REFERENCE
The information required by Part III of this Report, to the extent not set forth herein, is incorporated herein by reference from the registrant’s definitive proxy statement relating to the Annual
Meeting of Shareholders to be held in 2023, which definitive proxy statement shall be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this
Report relates.


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Table of Contents
AMAZON.COM, INC.
FORM 10-K
For the Fiscal Year Ended December 31, 2022
INDEX
 
  Page
PART I
Item 1. Business 3
Item 1A. Risk Factors 6
Item 1B. Unresolved Staff Comments 16
Item 2. Properties 17
Item 3. Legal Proceedings 17
Item 4. Mine Safety Disclosures 17
PART II
Item 5. Market for the Registrant’s Common Stock, Related Shareholder Matters, and Issuer Purchases of Equity Securities 18
Item 6. Reserved 18
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 19
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 31
Item 8. Financial Statements and Supplementary Data 33
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 69
Item 9A. Controls and Procedures 69
Item 9B. Other Information 71
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 71
PART III
Item 10. Directors, Executive Officers, and Corporate Governance 71
Item 11. Executive Compensation 71
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters 71
Item 13. Certain Relationships and Related Transactions, and Director Independence 71
Item 14. Principal Accountant Fees and Services 71
PART IV
Item 15. Exhibits, Financial Statement Schedules 72
Item 16. Form 10-K Summary 74
Signatures 75
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AMAZON.COM, INC.
PART I
Item 1. Business
This Annual Report on Form 10-K and the documents incorporated herein by reference contain forward-looking statements based on expectations,
estimates, and projections as of the date of this filing. Actual results and outcomes may differ materially from those expressed in forward-looking statements.
See Item 1A of Part I — “Risk Factors.” As used herein, “Amazon.com,” “we,” “our,” and similar terms include Amazon.com, Inc. and its subsidiaries, unless
the context indicates otherwise.
General
We seek to be Earth’s most customer-centric company. We are guided by four principles: customer obsession rather than competitor focus, passion for
invention, commitment to operational excellence, and long-term thinking. In each of our segments, we serve our primary customer sets, consisting of
consumers, sellers, developers, enterprises, content creators, advertisers, and employees.
We have organized our operations into three segments: North America, International, and Amazon Web Services (“AWS”). These segments reflect the
way the Company evaluates its business performance and manages its operations. Information on our net sales is contained in Item 8 of Part II, “Financial
Statements and Supplementary Data — Note 10 — Segment Information.”
Consumers
We serve consumers through our online and physical stores and focus on selection, price, and convenience. We design our stores to enable hundreds of
millions of unique products to be sold by us and by third parties across dozens of product categories. Customers access our offerings through our websites,
mobile apps, Alexa, devices, streaming, and physically visiting our stores. We also manufacture and sell electronic devices, including Kindle, Fire tablet, Fire
TV, Echo, Ring, Blink, and eero, and we develop and produce media content. We seek to offer our customers low prices, fast and free delivery, easy-to-use
functionality, and timely customer service. In addition, we offer subscription services such as Amazon Prime, a membership program that includes fast, free
shipping on millions of items, access to award-winning movies and series, and other benefits.
We fulfill customer orders in a number of ways, including through: North America and International fulfillment networks that we operate; co-sourced and
outsourced arrangements in certain countries; digital delivery; and through our physical stores. We operate customer service centers globally, which are


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supplemented by co-sourced arrangements. See Item 2 of Part I, “Properties.”
Sellers
We offer programs that enable sellers to grow their businesses, sell their products in our stores, and fulfill orders through us. We are not the seller of
record in these transactions. We earn fixed fees, a percentage of sales, per-unit activity fees, interest, or some combination thereof, for our seller programs.
Developers and Enterprises
We serve developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a broad
set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
Content Creators
We offer programs that allow authors, independent publishers, musicians, filmmakers, Twitch streamers, skill and app developers, and others to publish
and sell content.
Advertisers
We provide advertising services to sellers, vendors, publishers, authors, and others, through programs such as sponsored ads, display, and video
advertising.
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Competition
Our businesses encompass a large variety of product types, service offerings, and delivery channels. The worldwide marketplace in which we compete is
evolving rapidly and intensely competitive, and we face a broad array of competitors from many different industry sectors around the world. 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. We believe that the principal competitive factors in our retail
businesses include selection, price, and convenience, including fast and reliable fulfillment. Additional competitive factors for our seller and enterprise services
include the quality, speed, and reliability of our services and tools, as well as customers’ ability and willingness to change business practices. Some of our
current and potential competitors have greater resources, longer histories, more customers, greater brand recognition, and greater control over inputs critical to
our various businesses. They may secure better terms from suppliers, adopt more aggressive pricing, pursue restrictive distribution agreements that restrict our
access to supply, direct consumers to their own offerings instead of ours, lock-in potential customers with restrictive terms, and devote more resources to
technology, infrastructure, fulfillment, and marketing. The Internet facilitates competitive entry and comparison shopping, which enhances the ability of new,


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smaller, or lesser-known businesses to compete against us. Each of our businesses is also subject to rapid change and the development of new business models
and the entry of new and well-funded competitors. Other companies also may enter into business combinations or alliances that strengthen their competitive
positions.
Intellectual Property
We regard our trademarks, service marks, copyrights, patents, domain names, trade dress, trade secrets, proprietary technologies, and similar intellectual
property as critical to our success, and we rely on trademark, copyright, and patent law, trade-secret protection, and confidentiality and/or license agreements
with our employees, customers, partners, and others to protect our proprietary rights. We have registered, or applied for the registration of, a number of U.S.
and international domain names, trademarks, service marks, and copyrights. Additionally, we have filed U.S. and international patent applications covering
certain of our proprietary technology.
Seasonality
Our business is affected by seasonality, which historically has resulted in higher sales volume during our fourth quarter, which ends December 31.
Human Capital
Our employees are critical to our mission of being Earth’s most customer-centric company. As of December 31, 2022, we employed approximately
1,541,000 full-time and part-time employees. Additionally, we use independent contractors and temporary personnel to supplement our workforce. 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. 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 (funded education for hourly
employees) and the Amazon Technical Academy (software development engineer training). Over 100,000 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. In addition, safety is integral to everything we do at Amazon and we continue to invest in safety improvements such as


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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 provide mentorship and support resources to our employees, and have
deployed numerous programs that advance employee engagement, communication, and feedback.
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Available Information
Our investor relations website is amazon.com/ir and we encourage investors to use it as a way of easily finding information about us. We promptly make
available on this website, free of charge, the reports that we file or furnish with the Securities and Exchange Commission (“SEC”), corporate governance
information (including our Code of Business Conduct and Ethics), and select press releases.
Executive Officers and Directors
The following tables set forth certain information regarding our Executive Officers and Directors as of January 25, 2023:
Information About Our Executive Officers
Name Age Position
Jeffrey P. Bezos 59 Executive Chair
Andrew R. Jassy 55 President and Chief Executive Officer
Douglas J. Herrington 56 CEO Worldwide Amazon Stores
Brian T. Olsavsky 59 Senior Vice President and Chief Financial Officer
Shelley L. Reynolds 58 Vice President, Worldwide Controller, and Principal Accounting Officer
Adam N. Selipsky 56 CEO Amazon Web Services
David A. Zapolsky 59 Senior Vice President, General Counsel, and Secretary
Jeffrey P. Bezos. Mr. Bezos founded Amazon.com in 1994 and has served as Executive Chair since July 2021. He has served as Chair of the Board since
1994 and served as Chief Executive Officer from May 1996 until July 2021, and as President from 1994 until June 1999 and again from October 2000 to July
2021.
Andrew R. Jassy. 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.
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, and Senior Vice President, Consumables from May 2014 to December 2014.
Brian T. Olsavsky. Mr. Olsavsky has served as Senior Vice President and Chief Financial Officer since June 2015, Vice President, Finance for the
Global Consumer Business from December 2011 to June 2015, and numerous financial leadership roles across Amazon with global responsibility since April
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2002.
Shelley L. Reynolds. Ms. Reynolds has served as Vice President, Worldwide Controller, and Principal Accounting Officer since April 2007.
Adam 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. Zapolsky has served as Senior Vice President, General Counsel, and Secretary since May 2014, Vice President, General
Counsel, and Secretary 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.
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Board of Directors
Name Age Position
Jeffrey P. Bezos 59 Executive Chair
Andrew R. Jassy 55 President and Chief Executive Officer
Keith B. Alexander 71 CEO, President, and Chair of IronNet, Inc.
Edith W. Cooper 61 Former Executive Vice President, Goldman Sachs Group, Inc.
Jamie S. Gorelick 72 Partner, Wilmer Cutler Pickering Hale and Dorr LLP
Daniel P. Huttenlocher 64 Dean, MIT Schwarzman College of Computing
Judith A. McGrath 70 Former Chair and CEO, MTV Networks
Indra K. Nooyi 67 Former Chief Executive Officer, PepsiCo, Inc.
Jonathan J. Rubinstein 66 Former co-CEO, Bridgewater Associates, LP
Patricia Q. Stonesifer 66 Former President and Chief Executive Officer, Martha’s Table
Wendell P. Weeks 63 Chief Executive Officer, Corning Incorporated
Item 1A. Risk Factors
Please carefully consider the following discussion of significant factors, events, and uncertainties that make an investment in our securities risky. The
events and consequences discussed in these risk factors could, in circumstances we may or may not be able to accurately predict, recognize, or control, have a
material adverse effect on our business, growth, reputation, prospects, financial condition, operating results (including components of our financial results),
cash flows, liquidity, and stock price. These risk factors do not identify all risks that we face; our operations could also be affected by factors, events, or
uncertainties that are not presently known to us or that we currently do not consider to present significant risks to our operations. In addition to the factors
discussed in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview,” and in the risk factors
below, global economic and geopolitical conditions and additional or unforeseen circumstances, developments, or events may give rise to or amplify many of
the risks discussed below. Many of the risks discussed below also impact our customers, including third-party sellers, which could indirectly have a material
adverse effect on us.
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,


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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. Some of our current and potential competitors have greater
resources, longer histories, more customers, and/or greater brand recognition, particularly with our newly-launched products and services and in our newer
geographic regions. They may secure better terms from vendors, adopt more aggressive pricing, and devote more resources to technology, infrastructure,
fulfillment, and marketing.
Competition continues to intensify, including with the development of new business models and the entry of new and well-funded competitors, and as
our competitors enter into business combinations or alliances and established companies in other market segments expand to become competitive with our
business. In addition, new and enhanced technologies, including search, web and infrastructure computing services, 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. As a result of competition, our product and service offerings may not be successful, we may fail to gain or may lose
business, and we may be required to increase our spending or lower prices, any of which could materially reduce our sales and profits.
Our Expansion into New Products, Services, Technologies, and Geographic Regions Subjects Us to Additional Risks
We may have limited or no experience in our newer market segments, and our customers may not adopt our product or service offerings. These offerings,
which can present new and difficult technology challenges, may subject us to claims if customers of these offerings experience, or are otherwise impacted by,
service disruptions, delays, setbacks, or failures or quality issues. In addition, profitability, if any, in our newer activities may not meet our expectations, and we
may not be successful enough in these newer activities to recoup our investments in them, which investments are often significant. Failure to realize the
benefits of amounts we invest in new technologies, products, or services could result in the value of those investments being written down or written off. In
addition, our sustainability initiatives may be unsuccessful for a variety of
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reasons, including if we are unable to realize the expected benefits of new technologies or if we do not successfully plan or execute new strategies, which could
harm our business or damage our reputation.
Our International Operations Expose Us to a Number of Risks
Our international activities are significant to our revenues and profits, and we plan to further expand internationally. In certain international market
segments, we have relatively little operating experience and may not benefit from any first-to-market advantages or otherwise succeed. It is costly to establish,
develop, and maintain international operations and stores, and promote our brand internationally. Our international operations may not become profitable on a
sustained basis.
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); 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;


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•compliance with the U.S. Foreign Corrupt Practices Act and other applicable U.S. and foreign laws prohibiting corrupt payments to government
officials and other third parties;
•laws and policies of the U.S. and other jurisdictions affecting trade, foreign investment, loans, and taxes; and
•geopolitical events, including war and terrorism.
As international physical, e-commerce, and omnichannel retail, cloud services, and other services grow, competition will intensify, including through
adoption of evolving business models. Local companies may have a substantial competitive advantage because of their greater understanding of, and focus on,
the local customer, as well as their more established local brand names. The inability to hire, train, retain, and manage sufficient required personnel may limit
our international growth.
The People’s Republic of China (“PRC”) and India regulate Amazon’s and its affiliates’ businesses and operations in country through regulations and
license requirements that may restrict (i) foreign investment in and operation of the Internet, IT infrastructure, data centers, retail, delivery, and other sectors,
(ii) Internet content, and (iii) the sale of media and other products and services. For example, in order to meet local ownership, regulatory licensing, and
cybersecurity requirements, we provide certain technology services in China through contractual relationships with third parties that hold PRC licenses to
provide services. In India, the government restricts the ownership or control of Indian companies by foreign entities involved in online multi-brand retail
trading activities. For www.amazon.in, we provide certain marketing tools and logistics services to third-party sellers to enable them to sell online and deliver
to customers, and we hold indirect minority interests in entities that are third-party sellers on the www.amazon.in marketplace. 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 their regulatory, licensing, or other requirements that could impact these structures and activities. There are substantial uncertainties regarding the
interpretation of PRC and Indian laws and regulations, and it is possible that these governments will
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ultimately take a view contrary to ours. In addition, our Chinese and Indian businesses and operations may be unable to continue to operate if we or our
affiliates are unable to access sufficient funding or, in China, enforce contractual relationships we or our affiliates have in place. Violation of any existing or
future PRC, Indian, or other laws or regulations or changes in the interpretations of those laws and regulations could result in our businesses in those countries
being subject to fines and other financial penalties, having licenses revoked, or being forced to restructure our operations or shut down entirely.
The Variability in Our Retail Business Places Increased Strain on Our Operations
Demand for our products and services can fluctuate significantly for many reasons, including as a result of seasonality, promotions, product launches, or
unforeseeable events, such as in response to global economic conditions such as recessionary fears or rising inflation, natural or human-caused disasters
(including public health crises) or extreme weather (including as a result of climate change), or geopolitical events. For example, we expect a disproportionate
amount of our retail sales to occur during our fourth quarter. Our failure to stock or restock popular products in sufficient amounts such that we fail to meet
customer demand could significantly affect our revenue and our future growth. When we overstock products, we may be required to take significant inventory
markdowns or write-offs and incur commitment costs, which could materially reduce profitability. We regularly experience increases in our net shipping cost
due to complimentary upgrades, split-shipments, and additional long-zone shipments necessary to ensure timely delivery for the holiday season. If too many
customers access our websites within a short period of time due to increased demand, we may experience system interruptions that make our websites
unavailable or prevent us from efficiently fulfilling orders, which may reduce the volume of goods we offer or sell and the attractiveness of our products and
services. In addition, we may be unable to adequately staff our fulfillment network and customer service centers during these peak periods and delivery and
other fulfillment companies and customer service co-sourcers may be unable to meet the seasonal demand. Risks described elsewhere in this Item 1A relating
to fulfillment network optimization and inventory are magnified during periods of high demand.
As a result of holiday sales, as of December 31 of each year, our cash, cash equivalents, and marketable securities balances typically reach their highest


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level (other than as a result of cash flows provided by or used in investing and financing activities) because consumers primarily use credit cards in our stores
and the related receivables settle quickly. Typically, there is also a corresponding increase in accounts payable as of December 31 due to inventory purchases
and third-party seller sales. Our accounts payable balance generally declines during the first three months of the year as vendors and sellers are paid, resulting
in a corresponding decline in our cash, cash equivalents, and marketable securities balances.
We Are Impacted by Fraudulent or Unlawful Activities of Sellers
The law relating to the liability of online service providers is currently unsettled. In addition, governmental agencies have in the past and could in the
future require changes in the way this business is conducted. Under our seller programs, we maintain policies and processes designed to prevent sellers from
collecting payments, fraudulently or otherwise, when buyers never receive the products they ordered or when the products received are materially different
from the sellers’ descriptions, and to prevent sellers in our stores or through other stores from selling unlawful, counterfeit, pirated, or stolen goods, selling
goods in an unlawful or unethical manner, violating the proprietary rights of others, or otherwise violating our policies. When these policies and processes are
circumvented or fail to operate sufficiently, it can harm our business or damage our reputation and we could face civil or criminal liability for unlawful
activities by our sellers. Under our A-to-z Guarantee, we may reimburse customers for payments 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 Face Risks Related to Adequately Protecting Our Intellectual Property Rights and Being Accused of Infringing Intellectual Property Rights of Third
Parties
We regard our trademarks, service marks, copyrights, patents, trade dress, trade secrets, proprietary technology, and similar intellectual property as
critical to our success, and we rely on trademark, copyright, and patent law, trade secret protection, and confidentiality and/or license agreements with our
employees, customers, and others to protect our proprietary rights. Effective intellectual property protection is not available in every country in which our
products and services are made available. We also may not be able to acquire or maintain appropriate domain names in all countries in which we do business.


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Furthermore, regulations governing domain names may not protect our trademarks and similar proprietary rights. We may be unable to prevent third parties
from acquiring domain names that are similar to, infringe upon, or diminish the value of our trademarks and other proprietary rights.
We are not always able to discover or determine the extent of any unauthorized use of our proprietary rights. Actions taken by third parties that license
our proprietary rights may materially diminish the value of our proprietary rights or reputation. The protection of our intellectual property requires the
expenditure of significant financial and managerial resources. Moreover, the steps we take to protect our intellectual property do not always adequately protect
our rights or prevent third
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parties from infringing or misappropriating our proprietary rights. We also cannot be certain that others will not independently develop or otherwise acquire
equivalent or superior technology or other intellectual property rights.
We have been subject to, and expect to continue to be subject to, claims and legal proceedings regarding alleged infringement by us of the intellectual
property rights of third parties. Such claims, whether or not meritorious, have in the past, and may in the future, result in the expenditure of significant financial
and managerial resources, injunctions against us, or significant payments for damages, including to satisfy indemnification obligations or to obtain licenses
from third parties who allege that we have infringed their rights. Such licenses may not be available on terms acceptable to us or at all. These risks have been
amplified by the increase in third parties whose sole or primary business is to assert such claims.
Our digital content offerings depend in part on effective digital rights management technology to control access to digital content. Breach or
malfunctioning of the digital rights management technology that we use could subject us to claims, and content providers may be unwilling to include their
content in our service.
We Have Foreign Exchange Risk
The results of operations of, and certain of our intercompany balances associated with, our international stores and product and service offerings are
exposed to foreign exchange rate fluctuations. Due to these fluctuations, operating results may differ materially from expectations, and we may record
significant gains or losses on the remeasurement of intercompany balances. As we have expanded our international operations, our exposure to exchange rate
fluctuations has increased. We also hold cash equivalents and/or marketable securities in foreign currencies such as British Pounds, Canadian Dollars, Euros,
and Japanese Yen. When the U.S. Dollar strengthens compared to these currencies, cash equivalents, and marketable securities balances, when translated, may
be materially less than expected and vice versa.
Operating Risks
Our Expansion Places a Significant Strain on our Management, Operational, Financial, and Other Resources
We are continuing to rapidly and significantly expand our global operations, including increasing our product and service offerings and scaling our
infrastructure to support our retail and services businesses. The complexity of the current scale of our business can place significant strain on our management,
personnel, operations, systems, technical performance, financial resources, and internal financial control and reporting functions, and our expansion increases


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these factors. Failure to manage growth effectively could damage our reputation, limit our growth, and negatively affect our operating results.
We Experience Significant Fluctuations in Our Operating Results and Growth Rate
We are not always able to accurately forecast our growth rate. We base our expense levels and investment plans on sales estimates. A significant portion
of our expenses and investments is fixed, and we are not always able to adjust our spending quickly enough if our sales are less than expected.
Our revenue growth may not be sustainable, and our percentage growth rates may decrease. Our revenue and operating profit growth depends on the
continued growth of demand for the products and services offered by us or our sellers, and our business is affected by general economic, business, and
geopolitical conditions worldwide. A softening of demand, whether caused by changes in customer preferences or a weakening of the U.S. or global
economies, may result in decreased revenue or growth.
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;
•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;
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•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);
•the extent to which we invest in technology and content, fulfillment, and other expense categories;
•increases in the prices of transportation (including fuel), energy products, 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; and
•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 and armed hostilities), labor or trade disputes (including restrictive governmental
actions impacting us and our third-party sellers in China or other foreign countries), and similar events.
We Face Risks Related to Successfully Optimizing and Operating Our Fulfillment Network and Data Centers
Failures to adequately predict customer demand or otherwise optimize and operate our fulfillment network and data centers successfully from time to
time result in excess or insufficient fulfillment or data center capacity, service interruptions, increased costs, and impairment charges, any of which could
materially harm our business. As we continue to add fulfillment and data center capability or add new businesses with different requirements, our fulfillment


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and data center networks become increasingly complex and operating them becomes more challenging. There can be no assurance that we will be able to
operate our networks effectively.
In addition, failure to optimize inventory or staffing in our fulfillment network increases our net shipping cost by requiring long-zone or partial
shipments. We and our co-sourcers may be unable to adequately staff our fulfillment network and customer service centers. For example, productivity across
our fulfillment network currently is being affected by regional labor market and global supply chain constraints, which increase payroll costs and make it
difficult to hire, train, and deploy a sufficient number of people to operate our fulfillment network as efficiently as we would like.
Under some of our commercial agreements, we maintain the inventory of other companies, thereby increasing the complexity of tracking inventory and
operating our fulfillment network. Our failure to properly handle such inventory or the inability of the other businesses on whose behalf we perform inventory
fulfillment services to accurately forecast product demand may result in us being unable to secure sufficient storage space or to optimize our fulfillment
network or cause other unexpected costs and other harm to our business and reputation.
We rely on a limited number of shipping companies to deliver inventory to us and completed orders to our customers. An inability to negotiate acceptable
terms with these companies or performance problems, staffing limitations, or other difficulties experienced by these companies or by our own transportation
systems, including as a result of labor market constraints and related costs, could negatively impact our operating results and customer experience. In addition,
our ability to receive inbound inventory efficiently and ship completed orders to customers also may be negatively affected by natural or human-caused
disasters (including public health crises) or extreme weather (including as a result of climate change), geopolitical events and security issues, labor or trade
disputes, and similar events.
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We Could Be Harmed by Data Loss or Other Security Breaches
Because we collect, process, store, and transmit large amounts of data, including confidential, sensitive, proprietary, and business and personal
information, failure to prevent or mitigate data loss, theft, misuse, 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 use third-
party technology and systems for a variety of reasons, including, without limitation, encryption and authentication technology, employee email, content
delivery to customers, back-office support, and other functions. 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. 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.
We Face Risks Related to System Interruption and Lack of Redundancy
We experience occasional system interruptions and delays that make our websites and services unavailable or slow to respond and prevent us from
efficiently accepting or fulfilling orders or providing services to customers and third parties, which may reduce our net sales and the attractiveness of our
products and services. Steps we take to add software and hardware, upgrade our systems and network infrastructure, and improve the stability and efficiency of
our systems may not be sufficient to avoid system interruptions or delays that could adversely affect our operating results.
Our computer and communications systems and operations in the past have been, or in the future could be, damaged or interrupted due to events such as
natural or human-caused disasters (including public health crises) or extreme weather (including as a result of climate change), geopolitical events and security


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issues (including terrorist attacks and armed hostilities), computer viruses, physical or electronic break-ins, operational failures (including from energy
shortages), and similar events or disruptions. Any of these events could cause system interruption, delays, and loss of critical data, and could prevent us from
accepting and fulfilling customer orders and providing services, which could make our product and service offerings less attractive and subject us to liability.
Our systems are not fully redundant and our disaster recovery planning may not be sufficient. In addition, our insurance may not provide sufficient coverage to
compensate for related losses. Any of these events could damage our reputation and be expensive to remedy.
The Loss of Key Senior Management Personnel or the Failure to Hire and Retain Highly Skilled and Other Personnel Could Negatively Affect Our
Business
We depend on our senior management and other key personnel, including our President and CEO. We do not have “key person” life insurance policies.
We also rely on other highly skilled personnel. Competition for qualified personnel in the industries in which we operate, as well as senior management, has
historically been intense. For example, we experience significant competition in the technology industry, particularly for software engineers, computer
scientists, and other technical staff. In addition, changes we make to our current and future work environments may not meet the needs or expectations of our
employees or may be perceived as less favorable compared to other companies’ policies, which could negatively impact our ability to hire and retain qualified
personnel. The loss of any of our executive officers or other key employees, the failure to successfully transition key roles, or the inability to hire, train, retain,
and manage qualified personnel, could harm our business.
We also rely on a significant number of personnel to operate our stores, fulfillment network, and data centers and carry out our other operations. Failure
to successfully hire, train, manage, and retain sufficient personnel to meet our needs can strain our operations, increase payroll and other costs, and harm our
business and reputation. In addition, changes in laws and regulations applicable to employees, independent contractors, and temporary personnel could increase
our payroll costs, decrease our operational flexibility, and negatively impact how we are able to staff our operations and supplement our workforce.
We are also subject to labor union efforts to organize groups of our employees from time to time. These organizational efforts, if successful, decrease our


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operational flexibility, which could adversely affect our operating efficiency. In addition, our response to any organizational efforts could be perceived
negatively and harm our business and reputation.
Our Supplier Relationships Subject Us to a Number of Risks
We have significant suppliers, including content and technology licensors, and in some cases, limited or single-sources of supply, that are important to
our sourcing, services, manufacturing, and any related ongoing servicing of merchandise and content. We do not have long-term arrangements with most of our
suppliers to guarantee availability of merchandise, content,
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components, or services, particular payment terms, or the extension of credit limits. Decisions by our current suppliers to limit or stop selling or licensing
merchandise, content, components, or services to us on acceptable terms, or delay delivery, including as a result of one or more supplier bankruptcies due to
poor economic conditions, as a result of natural or human-caused disasters (including public health crises), or for other reasons, may result in our being unable
to procure alternatives from other suppliers in a timely and efficient manner and on acceptable terms, or at all. In addition, violations by our suppliers or other
vendors of applicable laws, regulations, contractual terms, intellectual property rights of others, or our Supply Chain Standards, as well as products or practices
regarded as unethical, unsafe, or hazardous, could expose us to claims, damage our reputation, limit our growth, and negatively affect our operating results.
Our Commercial Agreements, Strategic Alliances, and Other Business Relationships Expose Us to Risks
We provide physical, e-commerce, and omnichannel retail, cloud services, and other services to businesses through commercial agreements, strategic
alliances, and business relationships. Under these agreements, we provide web services, technology, fulfillment, computing, digital storage, and other services,
as well as enable sellers to offer products or services through our stores. These arrangements are complex and require substantial infrastructure capacity,
personnel, and other resource commitments, which may limit the amount of business we can service. We may not be able to implement, maintain, and develop
the components of these commercial relationships, which may include web services, fulfillment, customer service, inventory management, tax collection,
payment processing, hardware, content, and third-party software, and engaging third parties to perform services. The amount of compensation we receive under
certain of our commercial agreements is partially dependent on the volume of the other company’s sales. Therefore, when the other company’s offerings are not
successful, the compensation we receive may be lower than expected or the agreement may be terminated. Moreover, we may not be able to enter into
additional or alternative commercial relationships and strategic alliances on favorable terms. We also may be subject to claims from businesses to which we
provide these services if we are unsuccessful in implementing, maintaining, or developing these services.
As our agreements terminate, we may be unable to renew or replace these agreements on comparable terms, or at all. We may in the future enter into


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amendments on less favorable terms or encounter parties that have difficulty meeting their contractual obligations to us, which could adversely affect our
operating results.
Our present and future commercial agreements, strategic alliances, and business relationships create additional risks such as:
•disruption of our ongoing business, including loss of management focus on existing businesses;
•impairment of other relationships;
•variability in revenue and income from entering into, amending, or terminating such agreements or relationships; and
•difficulty integrating under the commercial agreements.
Our Business Suffers When We Are Unsuccessful in Making, Integrating, and Maintaining Acquisitions and Investments
We have acquired and invested in a number of companies, and we may in the future acquire or invest in or enter into joint ventures with additional
companies. 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;
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•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.
As a result of future acquisitions or mergers, we might need to issue additional equity securities, spend our cash, or incur debt, contingent liabilities, or
amortization expenses related to intangible assets, any of which could reduce our profitability and harm our business or only be available on unfavorable terms,
if at all. In addition, valuations supporting our acquisitions and strategic investments could change rapidly. We could determine that such valuations have
experienced impairments or other-than-temporary declines in fair value which could adversely impact our financial results.
We Face Significant Inventory Risk
In addition to risks described elsewhere in this Item 1A relating to fulfillment network and inventory optimization by us and third parties, we are exposed
to significant inventory risks that may adversely affect our operating results as a result of seasonality, new product launches, rapid changes in product cycles
and pricing, defective merchandise, changes in customer demand and consumer spending patterns, changes in consumer tastes with respect to our products,
spoilage, and other factors. We endeavor to accurately predict these trends and avoid overstocking or understocking products we manufacture and/or sell.
Demand for products, however, can change significantly between the time inventory or components are ordered and the date of sale. In addition, when we
begin selling or manufacturing a new product, it may be difficult to establish vendor relationships, determine appropriate product or component selection, and
accurately forecast demand. The acquisition of certain types of inventory or components requires significant lead-time and prepayment and they may not be


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returnable. 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 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 upon delivery. For existing and future payment options we offer
to our customers, we currently are subject to, and may become subject to additional, regulations and compliance requirements (including obligations to
implement enhanced authentication processes that could result in significant costs and reduce the ease of use of our payments products), as well as fraud. For
certain payment methods, including credit and debit cards, we pay interchange and other fees, which may increase over time and raise our operating costs and
lower profitability. We rely on third parties to provide certain Amazon-branded payment methods and payment processing services, including the processing of
credit cards, debit cards, electronic checks, and promotional financing. In each case, it could disrupt our business if these companies become unwilling or
unable to provide these services to us. We also offer co-branded credit card programs, which could adversely affect our operating results if renewed on less
favorable terms or terminated. We are also subject to payment card association operating rules, including data security rules, certification requirements, and
rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply. Failure to comply with
these rules or requirements, as well as any breach, compromise, or failure to otherwise detect or prevent fraudulent activity involving our data security systems,
could result in our being liable for card issuing banks’ costs, subject to fines and higher transaction fees, and loss of our ability to accept credit and debit card
payments from our customers, process electronic funds transfers, or facilitate other types of online payments, and our business and operating results could be
adversely affected.
In addition, we provide regulated services in certain jurisdictions because we enable customers to keep account balances with us and transfer money to
third parties, and because we provide services to third parties to facilitate payments on their behalf. Jurisdictions subject us to requirements for licensing,


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regulatory inspection, bonding and capital maintenance, the use, handling, and segregation of transferred funds, consumer disclosures, maintaining or
processing data, and authentication. We are also subject to or voluntarily comply with a number of other laws and regulations relating to payments, money
laundering, international money transfers, privacy, data use, data protection, data security, data localization, network security, consumer
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protection, and electronic fund transfers. If we were found to be in violation of applicable laws or regulations, we could be subject to additional requirements
and civil and criminal penalties, or forced to cease providing certain services.
We Have a Rapidly Evolving Business Model and Our Stock Price Is Highly Volatile
We have a rapidly evolving business model. 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.
Volatility in our stock price could adversely affect our business and financing opportunities and force us to increase our cash compensation to employees
or grant larger stock awards than we have historically, which could hurt our operating results or reduce the percentage ownership of our existing stockholders,
or both.
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. 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 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


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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. 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, and artificial intelligence
technologies and services. A large number of jurisdictions regulate our operations, and the extent, nature, and scope of such regulations is evolving and
expanding as the scope of our businesses expand. We are regularly subject to formal and informal reviews, investigations, and other proceedings by
governments and regulatory authorities under existing laws, regulations, or interpretations or pursuing new and novel approaches to regulate our operations.
For example, we face a number of open investigations based on claims that aspects of our operations violate competition rules, including aspects of Amazon’s
U.S. and European marketplace for sellers, particularly with respect to use of data, fulfillment services, and featured offers, and legislative and regulatory
initiatives in Europe and elsewhere allow authorities to restrict or prohibit certain operations or actions pre-emptively without the need to assess specific
competitive effects. Unfavorable regulations, laws, decisions, or interpretations by government or regulatory authorities applying those laws and regulations, or
inquiries, investigations, or enforcement actions threatened or initiated by them, could cause us to incur substantial costs, expose us to unanticipated civil and
criminal liability or penalties (including substantial monetary fines), diminish the demand for, or availability of, our products and services, increase our cost of
doing business, require us to change our business practices in a manner materially adverse to our business, damage our reputation, impede our growth, or
otherwise have a material effect on our operations. The media, political, and regulatory scrutiny we face, which may continue to increase, amplifies these risks.
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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, 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,
and other matters. The number and scale of these proceedings have increased over time as our businesses have expanded in scope and geographic reach, as our
products, services, and operations have become more complex and available to, and used by, more people, and as governments and regulatory authorities seek
to regulate us on a pre-emptive basis. For example, we are litigating a number of matters alleging price fixing, monopolization, and consumer protection
claims, including those brought by state attorneys general. Any of these types of proceedings can have an adverse effect on us because of legal costs, disruption
of our operations, diversion of management resources, negative publicity, and other factors. The outcomes of these matters are inherently unpredictable and
subject to significant uncertainties. Determining legal reserves or possible losses from such matters involves judgment and may not reflect the full range of
uncertainties and unpredictable outcomes. Until the final resolution of such matters, we may be exposed to losses in excess of the amount recorded, and such
amounts could be material. Should any of our estimates and assumptions change or prove to have been incorrect, it could have a material effect on our
business, consolidated financial position, results of operations, or cash flows. In addition, it is possible that a resolution of one or more such proceedings,
including as a result of a settlement, could involve licenses, sanctions, consent decrees, or orders requiring us to make substantial future payments, preventing
us from offering certain products or services, requiring us to change our business practices in a manner materially adverse to our business, requiring
development of non-infringing or otherwise altered products or technologies, damaging our reputation, or otherwise having a material effect on our operations.


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We Are Subject to Product Liability Claims When People or Property Are Harmed by the Products We Sell or Manufacture
Some of the products we sell or manufacture expose us to product liability or food safety claims relating to personal injury or illness, death, or
environmental or property damage, and can require product recalls or other actions. 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. Although we
maintain liability insurance, we cannot be certain that our coverage will be adequate for liabilities actually incurred or that insurance will continue to be
available to us on economically reasonable terms, or at all. 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.
We Face Additional Tax Liabilities and Collection Obligations
We are subject to a variety of taxes and tax collection obligations in the U.S. (federal and state) and numerous foreign jurisdictions. We may recognize
additional tax expense and be subject to additional tax liabilities, including other liabilities for tax collection obligations due to changes in laws, regulations,
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. Such changes could come about as a result of economic, political, and other conditions. An increasing number of
jurisdictions are considering or have adopted laws or administrative practices that impose new tax measures, including revenue-based taxes, targeting online
commerce and the remote selling of goods and services. These include new obligations to withhold or collect sales, consumption, value added, or other taxes
on online marketplaces and remote sellers, or other requirements that may result in liability for third party obligations. For example, non-U.S. jurisdictions
have proposed or enacted taxes on online advertising and marketplace service revenues. Proliferation of these or similar unilateral tax measures may continue
unless broader international tax reform is implemented. Our results of operations and cash flows could be adversely affected by additional taxes imposed on us


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prospectively or retroactively or additional taxes or penalties resulting from the failure to comply with any collection obligations or failure to provide
information about our customers, suppliers, and other third parties for tax reporting purposes to various government agencies. In some cases we also may not
have sufficient notice to enable us to build systems and adopt processes to properly comply with new reporting or collection obligations by the effective date.
Our tax expense and liabilities are also affected by other factors, such as changes in our business operations, acquisitions, investments, entry into new
businesses and geographies, intercompany transactions, the relative amount of our foreign earnings, losses incurred in jurisdictions for which we are not able to
realize related tax benefits, the applicability of special or extraterritorial tax regimes, changes in foreign currency exchange rates, changes in our stock price,
changes to our forecasts of income and loss and the mix of jurisdictions to which they relate, and changes in our tax assets and liabilities and their
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valuation. In the ordinary course of our business, there are many transactions and calculations for which the ultimate tax determination is uncertain. Significant
judgment is required in evaluating and estimating our tax expense, assets, and liabilities.
We are also subject to tax controversies in various jurisdictions that can result in tax assessments against us. Developments in an audit, investigation, or
other tax controversy can have a material effect on our operating results or cash flows in the period or periods for which that development occurs, as well as for
prior and subsequent periods. Due to the inherent complexity and uncertainty of these matters, interpretations of certain tax laws by authorities, and judicial,
administrative, and regulatory processes in certain jurisdictions, the final outcome of any such controversy may be materially different from our expectations.
For example, in February 2023, the Indian Tax Authority determined that tax applies to cloud services fees paid to the U.S. We are contesting this
determination; however, if this matter is adversely resolved, we may be required to pay additional amounts with respect to current and prior periods and our
taxes in the future could increase. We regularly assess the likelihood of an adverse outcome resulting from these proceedings to determine the adequacy of our
tax accruals. Although we believe our tax estimates are reasonable, the final outcome of audits, investigations, and any other tax controversies could be
materially different from our historical tax accruals.
We Are Subject to Risks Related to Government Contracts and Related Procurement Regulations
Our contracts with U.S., as well as state, local, and foreign, government entities are subject to various procurement regulations and other requirements
relating to their formation, administration, and performance. We are subject to audits and investigations relating to our government contracts, and any
violations could result in various civil and criminal penalties and administrative sanctions, including termination of contract, refunding or suspending of
payments, forfeiture of profits, payment of fines, and suspension or debarment from future government business. 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.
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Item 2. Properties
As of December 31, 2022, we operated the following facilities (in thousands):
Description of UseLeased Square
Footage (1) Owned Square Footage Location
Office space 30,611 6,792North America
Office space 23,956 1,802International
Physical stores (2) 22,881 662North America
Physical stores (2) 291 —International
Fulfillment, data centers, and other 391,598 22,058North America
Fulfillment, data centers, and other 148,146 12,613International
Total 617,483 43,927
 ___________________
(1)For leased properties, represents the total leased space excluding sub-leased space.
(2)This includes 611 North America and 32 International stores as of December 31, 2022.
SegmentLeased Square Footage
(1)Owned Square Footage
(1)
North America 403,984 13,595
International 140,898 6,292
AWS 18,034 15,446
Total 562,916 35,333
 ___________________
(1)Segment amounts exclude corporate facilities. Shared facilities are allocated among the segments based on usage and primarily relate to facilities that hold
our technology infrastructure. See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 10 — Segment Information.”
We own and lease our corporate headquarters in Washington’s Puget Sound region and Arlington, Virginia.
Item 3. Legal Proceedings
See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 7 — Commitments and Contingencies — Legal Proceedings.”
Item 4. Mine Safety Disclosures
Not applicable.
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PART II
Item 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 25, 2023, there were 10,845 shareholders of record of our common stock, although there is a much larger number of beneficial owners.
Recent Sales of Unregistered Securities
None.
Issuer Purchases of Equity Securities
None.
Item 6. Reserved
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This Annual Report on Form 10-K includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All
statements other than statements of historical fact, including statements regarding guidance, industry prospects, or future results of operations or financial
position, made in this Annual Report on Form 10-K are forward-looking. We use words such as anticipates, believes, expects, future, intends, and similar
expressions to identify forward-looking statements. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Actual
results and outcomes could differ materially for a variety of reasons, including, among others, fluctuations in foreign exchange rates, changes in global
economic conditions and customer demand and spending, inflation, interest rates, regional labor market and global supply chain constraints, world events, the
rate of growth of the Internet, online commerce, and cloud services, the amount that Amazon.com invests in new business opportunities and the timing of those
investments, the mix of products and services sold to customers, the mix of net sales derived from products as compared with services, the extent to which we
owe income or other taxes, competition, management of growth, potential fluctuations in operating results, international growth and expansion, the outcomes
of claims, litigation, government investigations, and other proceedings, fulfillment, sortation, delivery, and data center optimization, risks of inventory
management, variability in demand, the degree to which we enter into, maintain, and develop commercial agreements, proposed and completed acquisitions
and strategic transactions, payments risks, and risks of fulfillment throughput and productivity. In addition, global economic and geopolitical conditions and
additional or unforeseen circumstances, developments, or events may give rise to or amplify many of these risks. These risks and uncertainties, as well as other
risks and uncertainties that could cause our actual results or outcomes to differ significantly from management’s expectations, are described in greater detail in
Item 1A of Part I, “Risk Factors.”
Overview
Our primary source of revenue is the sale of a wide range of products and services to customers. The products offered through our stores include
merchandise and content we have purchased for resale and products offered by third-party sellers, and we also manufacture and sell electronic devices and


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produce media content. Generally, we recognize gross revenue from items we sell from our inventory as product sales and recognize our net share of revenue
of items sold by third-party sellers as service sales. We seek to increase unit sales across our stores, through increased product selection, across numerous
product categories. We also offer other services such as compute, storage, and database offerings, fulfillment, advertising, publishing, and digital content
subscriptions.
Our financial focus is on long-term, sustainable growth in free cash flows. Free cash flows are driven primarily by increasing operating income and
efficiently managing accounts receivable, inventory, accounts payable, and cash capital expenditures, including our decision to purchase or lease property and
equipment. Increases in operating income primarily result from increases in sales of products and services and efficiently managing our operating costs,
partially offset by investments we make in longer-term strategic initiatives, including capital expenditures focused on improving the customer experience. To
increase sales of products and services, we focus on improving all aspects of the customer experience, including lowering prices, improving availability,
offering faster delivery and performance times, increasing selection, producing original content, increasing product categories and service offerings, expanding
product information, improving ease of use, improving reliability, and earning customer trust. See “Results of Operations — Non-GAAP Financial Measures”
below for additional information on our non-GAAP free cash flows financial measures.
We seek to reduce our variable costs per unit and work to leverage our fixed costs. Our variable costs include product and content costs, payment
processing and related transaction costs, picking, packaging, and preparing orders for shipment, transportation, customer service support, costs necessary to run
AWS, and a portion of our marketing costs. Our fixed costs include the costs necessary to build and run our technology infrastructure; to build, enhance, and
add features to our online stores, web services, electronic devices, and digital offerings; and to build and optimize our fulfillment network. Variable costs
generally change directly with sales volume, while fixed costs generally are dependent on the timing of capacity needs, geographic expansion, category
expansion, and other factors. To decrease our variable costs on a per unit basis and enable us to lower prices for customers, we seek to increase our direct
sourcing, increase discounts from suppliers, and reduce defects in our processes. To minimize unnecessary growth in fixed costs, we seek to improve process
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efficiencies and maintain a lean culture.
We seek to turn inventory quickly and collect from consumers before our payments to vendors and sellers become due. Because consumers primarily use
credit cards in our stores, our receivables from consumers settle quickly. We expect variability in inventory turnover over time since it is affected by numerous
factors, including our product mix, the mix of sales by us and by third-party sellers, our continuing focus on in-stock inventory availability and selection of
product offerings, supply chain disruptions and resulting vendor lead times, our investment in new geographies and product lines, and the extent to which we
choose to utilize third-party fulfillment providers. We also expect some variability in accounts payable days over time since they are affected by several factors,
including the mix of product sales, the mix of sales by third-party sellers, the mix
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of suppliers, seasonality, and changes in payment and other terms over time, including the effect of balancing pricing and timing of payment terms with
suppliers.
We expect spending in technology and content will increase over time as we add computer scientists, designers, software and hardware engineers, and
merchandising employees. Our technology and content investment and capital spending projects often support a variety of product and service offerings due to
geographic expansion and the cross-functionality of our systems and operations. We seek to invest efficiently in several areas of technology and content,
including AWS, and expansion of new and existing product categories and service offerings, as well as in technology infrastructure to enhance the customer
experience and improve our process efficiencies. We believe that advances in technology, specifically the speed and reduced cost of processing power, data
storage and analytics, improved wireless connectivity, and the practical applications of artificial intelligence and machine learning, will continue to improve
users’ experience on the Internet and increase its ubiquity in people’s lives. To best take advantage of these continued advances in technology, we are investing
in AWS, which offers a broad set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services,
to developers and enterprises of all sizes. We are also investing in initiatives to build and deploy innovative and efficient software and electronic devices as
well as other initiatives including the development of a satellite network for global broadband service and autonomous vehicles for ride-hailing services.
We seek to efficiently manage shareholder dilution while maintaining the flexibility to issue shares for strategic purposes, such as financings,
acquisitions, and aligning employee compensation with shareholders’ interests. We utilize restricted stock units as our primary vehicle for equity compensation
because we believe this compensation model aligns the long-term interests of our shareholders and employees. 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 10.5
billion and 10.6 billion as of December 31, 2021 and 2022.
Our financial reporting currency is the U.S. Dollar and changes in foreign exchange rates significantly affect our reported results and consolidated
trends. For example, if the U.S. Dollar weakens year-over-year relative to currencies in our international locations, our consolidated net sales and operating


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expenses will be higher than if currencies had remained constant. Likewise, if the U.S. Dollar strengthens year-over-year relative to currencies in our
international locations, our consolidated net sales and operating expenses will be lower than if currencies had remained constant. We believe that our increasing
diversification beyond the U.S. economy through our growing international businesses benefits our shareholders over the long-term. We also believe it is useful
to evaluate our operating results and growth rates before and after the effect of currency changes.
In addition, the remeasurement of our intercompany balances can result in significant gains and losses associated with the effect of movements in foreign
currency exchange rates. Currency volatilities may continue, which may significantly impact (either positively or negatively) our reported results and
consolidated trends and comparisons.
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, 2021 includes a discussion and analysis of our financial condition and results of
operations for the year ended December 31, 2020 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. Critical accounting estimates are those estimates made in accordance with GAAP that involve a
significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of
the Company. Based on this definition, we have identified the critical accounting estimates addressed below. We also have other key accounting policies, which
involve the use of estimates, judgments, and assumptions that are significant to understanding our results. For additional information, see Item 8 of Part II,
“Financial Statements and Supplementary Data — Note 1 — Description of Business, Accounting Policies, and Supplemental Disclosures.” Although we
believe that our estimates, assumptions, and judgments are reasonable, they are based upon information presently available. Actual results may differ
significantly from these estimates under different assumptions, judgments, or conditions.


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significantly from these estimates under different assumptions, judgments, or conditions.
Inventories
Inventories, consisting of products available for sale, are primarily accounted for using the first-in first-out method, and are valued at the lower of cost
and net realizable value. This valuation requires us to make judgments, based on currently available information, about the likely method of disposition, such
as through sales to individual customers, returns to product
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vendors, or liquidations, and expected recoverable values of each disposition category. 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, 2022, we would have recorded an additional cost of sales of approximately $390 million.
In addition, we enter into supplier commitments for certain electronic device components and certain products. These commitments are based on
forecasted customer demand. If we reduce these commitments, we may incur additional costs.
Income Taxes
We are subject to income taxes in the U.S. (federal and state) and numerous foreign jurisdictions. Tax laws, regulations, administrative practices,
principles, and interpretations in various jurisdictions may be subject to significant change, with or without notice, due to economic, political, and other
conditions, and significant judgment is required in evaluating and estimating our provision and accruals for these taxes. There are many transactions that occur
during the ordinary course of business for which the ultimate tax determination is uncertain. In addition, our actual and forecasted earnings are subject to
change due to economic, political, and other conditions and significant judgment is required in determining our ability to use our deferred tax assets.
Our effective tax rates could be affected by numerous factors, such as changes in our business operations, acquisitions, investments, entry into new
businesses and geographies, intercompany transactions, the relative amount of our foreign earnings, including earnings being lower than anticipated in
jurisdictions where we have lower statutory rates and higher than anticipated in jurisdictions where we have higher statutory rates, losses incurred in
jurisdictions for which we are not able to realize related tax benefits, the applicability of special tax regimes, changes in foreign currency exchange rates,
changes in our stock price, changes to our forecasts of income and loss and the mix of jurisdictions to which they relate, changes in our deferred tax assets and
liabilities and their valuation, changes in the laws, regulations, 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. In addition, a number of countries have enacted or are actively
pursuing changes to their tax laws applicable to corporate multinationals.


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pursuing changes to their tax laws applicable to corporate multinationals.
We are also currently subject to tax controversies in various jurisdictions, and these jurisdictions may assess additional income tax liabilities against us.
Developments in an audit, investigation, or other tax controversy could have a material effect on our operating results or cash flows in the period or periods for
which that development occurs, as well as for prior and subsequent periods. We regularly assess the likelihood of an adverse outcome resulting from these
proceedings to determine the adequacy of our tax accruals. Although we believe our tax estimates are reasonable, the final outcome of audits, investigations,
and any other tax controversies could be materially different from our historical income tax provisions and accruals.
Liquidity and Capital Resources
Cash flow information is as follows (in millions):
  Year Ended December 31,
 2021 2022
Cash provided by (used in):
Operating activities $ 46,327 $ 46,752 
Investing activities (58,154) (37,601)
Financing activities 6,291 9,718 
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 $96.0 billion and $70.0 billion as of December 31, 2021 and 2022. Amounts held in foreign currencies were $22.7 billion and $18.3 billion as
of December 31, 2021 and 2022. Our foreign currency balances include British Pounds, Canadian Dollars, Euros, and Japanese Yen.
Cash provided by (used in) operating activities was $46.3 billion and $46.8 billion in 2021 and 2022. Our operating cash flows result primarily from cash
received from our consumer, seller, developer, enterprise, and content creator customers, and advertisers, offset by cash payments we make for products and
services, employee compensation, payment processing and related transaction costs, operating leases, and interest payments. Cash received from our customers
and other activities generally corresponds to our net sales. The increase in operating cash flow in 2022, compared to the prior year, was primarily due to the
increase in net income, excluding non-cash expenses, partially offset by changes in working capital. Working capital at any specific point in time is subject to


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many variables, including variability in demand, inventory management and category expansion, the timing of cash receipts and payments, customer and
vendor payment terms, and fluctuations in foreign exchange rates.
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Cash provided by (used in) investing activities corresponds with cash capital expenditures, including leasehold improvements, incentives received from
property and equipment vendors, proceeds from asset sales, cash outlays for acquisitions, investments in other companies and intellectual property rights, and
purchases, sales, and maturities of marketable securities. Cash provided by (used in) investing activities was $(58.2) billion and $(37.6) billion in 2021 and
2022, with the variability caused primarily by purchases, sales, and maturities of marketable securities. Cash capital expenditures were $55.4 billion, and $58.3
billion in 2021 and 2022, 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 to continue these investments over time, with increased spending on technology
infrastructure. We made cash payments, net of acquired cash, related to acquisition and other investment activity of $2.0 billion and $8.3 billion in 2021 and
2022. We funded the acquisition of MGM Holdings Inc. with cash on hand. We expect to fund the acquisitions of 1Life Healthcare, Inc. (One Medical) and
iRobot Corporation with cash on hand.
Cash provided by (used in) financing activities was $6.3 billion and $9.7 billion in 2021 and 2022. Cash inflows from financing activities resulted from
proceeds from short-term debt, and other and long-term-debt of $27.0 billion and $62.7 billion in 2021 and 2022. Cash outflows from financing activities
resulted from repurchases of common stock, payments of short-term debt, and other, long-term debt, finance leases, and financing obligations of $20.7 billion
and $53.0 billion in 2021 and 2022. Property and equipment acquired under finance leases was $7.1 billion and $675 million in 2021 and 2022.
We had no borrowings outstanding under the two unsecured revolving credit facilities, $6.8 billion of borrowings outstanding under the commercial
paper programs, and $1.0 billion of borrowings outstanding under the secured revolving credit facility as of December 31, 2022. See Item 8 of Part II,


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“Financial Statements and Supplementary Data — Note 6 — Debt” for additional information. 
As of December 31, 2022, cash, cash equivalents, and marketable securities held by foreign subsidiaries were $4.7 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.
Our U.S. taxable income is reduced by accelerated depreciation deductions and increased by the impact of capitalized research and development
expenses. U.S. tax rules provide for enhanced accelerated depreciation deductions by allowing the election of full expensing of qualified property, primarily
equipment, through 2022. Our federal tax provision included a partial election for 2020 and 2021, and a full election for 2022. 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
taxes paid (net of refunds) were $3.7 billion and $6.0 billion for 2021 and 2022.
As of December 31, 2021 and 2022, restricted cash, cash equivalents, and marketable securities were $260 million and $365 million. See Item 8 of Part
II, “Financial Statements and Supplementary Data — Note 6 — Debt” and “Financial Statements and Supplementary Data — Note 7 — Commitments and
Contingencies” for additional discussion of our principal contractual commitments, as well as our pledged assets. Additionally, we have purchase obligations
and open purchase orders, including for inventory and capital expenditures, that support normal operations and are primarily due in the next twelve months.
These purchase obligations and open purchase orders are generally cancellable in full or in part through the contractual provisions.
We believe that cash flows generated from operations and our cash, cash equivalents, and marketable securities balances, as well as our borrowing
arrangements, will be sufficient to meet our anticipated operating cash needs for at least the next twelve months. However, any projections of future cash needs
and cash flows are subject to substantial uncertainty. See Item 1A of Part I, “Risk Factors.” We continually evaluate opportunities to sell additional equity or


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debt securities, obtain credit facilities, obtain finance and operating lease arrangements, enter into financing obligations, repurchase common stock, pay
dividends, or repurchase, refinance, or otherwise restructure our debt for strategic reasons or to further strengthen our financial position.
The sale of additional equity or convertible debt securities would be dilutive to our shareholders. In addition, we will, from time to time, consider the
acquisition of, or investment in, complementary businesses, products, services, capital infrastructure, and technologies, which might affect our liquidity
requirements or cause us to secure additional financing, or issue additional equity or debt securities. There can be no assurance that additional credit lines or
financing instruments will be available in amounts or on terms acceptable to us, if at all. In addition, economic conditions and actions by policymaking bodies
are contributing to rising interest rates and significant capital market volatility, which, along with increases in our borrowing levels, could increase our future
borrowing costs.
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Results of Operations
We have organized our operations into three segments: North America, International, and AWS. These segments reflect the way the Company evaluates
its business performance and manages its operations. 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 volatility, the prolonged COVID-19 pandemic, global
supply chain constraints, and global economic and geopolitical developments, have direct and indirect impacts on our results of operations that are difficult to
isolate and quantify. These factors contributed to increases in our operating costs during 2022, particularly across our North America and International
segments, primarily due to a return to more normal, seasonal demand volumes in relation to our fulfillment network fixed costs, increased transportation and
utility costs, and increased wage rates. In addition, rising fuel, utility, and food costs, rising interest rates, and recessionary fears 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. We expect some or all of these factors to continue to impact our operations into Q1 2023.
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. 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 content subscriptions. Net sales information is as follows (in
millions):
  Year Ended December 31,
 2021 2022
Net Sales:
North America $ 279,833 $ 315,880 
International 127,787 118,007 
AWS 62,202 80,096 
Consolidated $ 469,822 $ 513,983 
Year-over-year Percentage Growth (Decline):
North America 18 % 13 %
International 22 (8)
AWS 37 29 
Consolidated 22 9 
Year-over-year Percentage Growth, excluding the effect of foreign exchange rates:
North America 18 % 13 %
International 20 4 
AWS 37 29 
Consolidated 21 13 
Net sales mix:


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Consolidated 21 13 
Net sales mix:
North America 60 % 61 %
International 27 23 
AWS 13 16 
Consolidated 100 % 100 %
Sales increased 9% in 2022, compared to the prior year. Changes in foreign currency exchange rates reduced net sales by $15.5 billion in 2022. For a
discussion of the effect of foreign exchange rates on sales growth, see “Effect of Foreign Exchange Rates” below.
North America sales increased 13% in 2022, 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 shipping offers.
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International sales decreased 8% in 2022, compared to the prior year, primarily due to the impact of changes in foreign currency exchange rates, partially
offset by 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 shipping offers. Changes in foreign currency exchange rates
reduced International net sales by $15.0 billion in 2022.
AWS sales increased 29% in 2022, 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.
Operating Income (Loss)
Operating income (loss) by segment is as follows (in millions):
Year Ended December 31,
2021 2022
Operating Income (Loss)
North America $ 7,271 $ (2,847)
International (924) (7,746)
AWS 18,532 22,841 
Consolidated $ 24,879 $ 12,248 
Operating income was $24.9 billion and $12.2 billion for 2021 and 2022. We believe that operating income is a more meaningful measure than gross
profit and gross margin due to the diversity of our product categories and services.
The North America operating loss in 2022, as compared to the operating income in the prior year, is primarily due to increased fulfillment and shipping
costs, due in part to increases in investments in our fulfillment network, transportation costs, and wage rates and incentives, increased technology and content
costs, and growth in certain operating expenses, partially offset by increased unit sales, including sales by third-party sellers, and advertising sales. Changes in
foreign currency exchange rates positively impacted operating loss by $274 million in 2022.
The increase in International operating loss in absolute dollars in 2022, compared to the prior year, is primarily due to increased fulfillment and shipping
costs, due in part to increases in investments in our fulfillment network, transportation costs, and wage rates and incentives, increased technology and content
costs, and growth in certain operating expenses, partially offset by increased advertising sales and increased unit sales, including sales by third-party sellers.
Changes in foreign currency exchange rates negatively impacted operating loss by $857 million in 2022.


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The increase in AWS operating income in absolute dollars in 2022, compared to the prior year, is primarily due to increased sales and cost structure
productivity, including a reduction in depreciation and amortization expense from our change in the estimated useful lives of our servers and networking
equipment, partially offset by increased payroll and related expenses and spending on technology infrastructure, all of which were primarily driven by
additional investments to support AWS business growth. Changes in foreign currency exchange rates positively impacted operating income by $1.4 billion in
2022.
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Operating Expenses
Information about operating expenses is as follows (in millions): 
 Year Ended December 31,
  2021 2022
Operating expenses:
Cost of sales $ 272,344 $ 288,831 
Fulfillment 75,111 84,299 
Technology and content 56,052 73,213 
Sales and marketing 32,551 42,238 
General and administrative 8,823 11,891 
Other operating expense (income), net 62 1,263 
Total operating expenses $ 444,943 $ 501,735 
Year-over-year Percentage Growth (Decline):
Cost of sales 17 % 6 %
Fulfillment 28 12 
Technology and content 31 31 
Sales and marketing 48 30 
General and administrative 32 35 
Other operating expense (income), net (183) 1,936 
Percent of Net Sales:
Cost of sales 58.0 % 56.2 %
Fulfillment 16.0 16.4 
Technology and content 11.9 14.2 
Sales and marketing 6.9 8.2 
General and administrative 1.9 2.3 
Other operating expense (income), net 0.0 0.2 
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.
The increase in cost of sales in absolute dollars in 2022, compared to the prior year, is primarily due to increased shipping and product costs resulting
from increased sales and increases in investments in our fulfillment network, transportation costs, and wage rates and incentives. Changes in foreign exchange
rates reduced cost of sales by $10.8 billion in 2022.
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, which include sortation and delivery centers and transportation costs, were $76.7 billion and $83.5 billion in 2021 and 2022. We


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expect our cost of shipping to continue to increase to the extent our customers accept and use our shipping offers at an increasing rate, we use more expensive
shipping methods, including faster delivery, and we offer additional services. We seek to mitigate costs of shipping over time in part through achieving higher
sales volumes, optimizing our fulfillment network, negotiating better terms with our suppliers, and achieving better operating efficiencies. We believe that
offering low prices to our customers is fundamental to our future success, and one way we offer lower prices is through shipping offers.
Costs to operate our AWS segment are primarily classified as “Technology and content” as we leverage a shared infrastructure that supports both our
internal technology requirements and external sales to AWS customers.
Fulfillment
Fulfillment costs primarily consist of those costs incurred in operating and staffing our North America and International fulfillment centers, physical
stores, and customer service centers and payment processing costs. While AWS payment processing and related transaction costs are included in “Fulfillment,”
AWS costs are primarily classified as “Technology and content.” Fulfillment costs as a percentage of net sales may vary due to several factors, such as payment
processing and related
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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. Additionally, sales by our sellers have higher payment processing and related transaction costs as a
percentage of net sales compared to our retail sales because payment processing costs are based on the gross purchase price of underlying transactions.
The increase in fulfillment costs in absolute dollars in 2022, compared to the prior year, is primarily due to increased investments in our fulfillment
network and variable costs corresponding with increased product and service sales volume and inventory levels, and increased wage rates and incentives.
Changes in foreign exchange rates reduced fulfillment costs by $2.5 billion in 2022.
We seek to expand our fulfillment network to accommodate a greater selection and in-stock inventory levels and to meet anticipated shipment volumes
from sales of our own products as well as sales by third parties for which we provide the fulfillment services. We regularly evaluate our facility requirements.
Technology and Content
Technology and content costs include payroll and related expenses for employees involved in the research and development of new and existing products
and services, development, design, and maintenance of our stores, curation and display of products and services made available in our online stores, and
infrastructure costs. Infrastructure costs include servers, networking equipment, and data center related depreciation and amortization, rent, utilities, and other
expenses necessary to support AWS and other Amazon businesses. Collectively, these costs reflect the investments we make in order to offer a wide variety of
products and services to our customers, including expenditures related to initiatives to build and deploy innovative and efficient software and electronic devices
and the development of a satellite network for global broadband service and autonomous vehicles for ride-hailing services.
We seek to invest efficiently in numerous areas of technology and content so we may continue to enhance the customer experience and improve our
process efficiency through rapid technology developments, while operating at an ever increasing scale. Our technology and content investment and capital
spending projects often support a variety of product and service offerings due to geographic expansion and the cross-functionality of our systems and


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operations. We expect spending in technology and content to increase over time as we continue to add employees and technology infrastructure. These costs are
allocated to segments based on usage. The increase in technology and content costs in absolute dollars in 2022, compared to the prior year, is primarily due to
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, and an increase in spending on technology infrastructure, partially offset by a reduction in depreciation and amortization
expense from our change in the estimated useful lives of our servers and networking equipment. See Item 8 of Part II, “Financial Statements and
Supplementary Data — Note 1 — Description of Business, Accounting Policies, and Supplemental Disclosures — Use of Estimates” for additional information
on the change in estimated useful lives of our servers and networking equipment.
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. 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.
The increase in sales and marketing costs in absolute dollars in 2022, compared to the prior year, is primarily due to increased payroll and related
expenses for personnel engaged in marketing and selling activities and higher marketing spend.
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.
General and Administrative
The increase in general and administrative costs in absolute dollars in 2022, compared to the prior year, is primarily due to increases in payroll and
related expenses and professional fees.
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Other Operating Expense (Income), Net
Other operating expense (income), net was $62 million and $1.3 billion during 2021 and 2022, and was primarily related to the amortization of intangible
assets and, for 2022, $1.1 billion of impairments of property and equipment and operating leases.
Interest Income and Expense
Our interest income was $448 million and $989 million during 2021 and 2022, primarily due to an increase in prevailing rates. We generally invest our
excess cash in AAA-rated money market funds and investment grade short- to intermediate-term fixed income 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.
Interest expense was $1.8 billion and $2.4 billion in 2021 and 2022 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.
Our long-term lease liabilities were $67.7 billion and $73.0 billion as of December 31, 2021 and 2022. Our long-term debt was $48.7 billion and $67.1
billion as of December 31, 2021 and 2022. See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 4 — Leases and Note 6 — Debt” for
additional information.
Other Income (Expense), Net
Other income (expense), net was $14.6 billion and $(16.8) billion during 2021 and 2022. The primary components of other income (expense), net are
related to equity securities valuations and adjustments, equity warrant valuations, and foreign currency. Included in other income (expense), net in 2021 and
2022 is a marketable equity securities valuation gain (loss) of $11.8 billion and $(12.7) billion from our equity investment in Rivian.
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,


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investments, developments in tax controversies, changes in our stock price, changes in our deferred tax assets and liabilities and their valuation, foreign
currency gains (losses), changes in statutes, regulations, case law, and administrative practices, principles, and interpretations related to tax, including changes
to the global tax framework, competition, and other laws and accounting rules in various jurisdictions, and relative changes of expenses or losses for which tax
benefits are not recognized. Our effective tax rate can be more or less volatile based on the amount of pre-tax income or loss. For example, the impact of
discrete items and non-deductible expenses on our effective tax rate is greater when our pre-tax income is lower. In addition, we record valuation allowances
against deferred tax assets when there is uncertainty about our ability to generate future income in relevant jurisdictions.
We recorded a provision (benefit) for income taxes of $4.8 billion and $(3.2) billion in 2021 and 2022. See Item 8 of Part II, “Financial Statements and
Supplementary Data — Note 9 — Income Taxes” for additional information.
Non-GAAP Financial Measures
Regulation G, Conditions for Use of Non-GAAP Financial Measures, and other SEC regulations define and prescribe the conditions for use of certain
non-GAAP financial information. Our measures of free cash flows and the effect of foreign exchange rates on our consolidated statements of operations meet
the definition of non-GAAP financial measures.
We provide multiple measures of free cash flows because we believe these measures provide additional perspective on the impact of acquiring property
and equipment with cash and through finance leases and financing obligations.
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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 2021 and 2022
(in millions):
 Year Ended December 31,
 2021 2022
Net cash provided by (used in) operating activities $ 46,327 $ 46,752 
Purchases of property and equipment, net of proceeds from sales and incentives (55,396) (58,321)
Free cash flow $ (9,069)$ (11,569)
Net cash provided by (used in) investing activities $ (58,154)$ (37,601)
Net cash provided by (used in) financing activities $ 6,291 $ 9,718 
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. 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 2021 and 2022 (in
millions):
 Year Ended December 31,
 2021 2022
Net cash provided by (used in) operating activities $ 46,327 $ 46,752 
Purchases of property and equipment, net of proceeds from sales and incentives (55,396) (58,321)
Free cash flow (9,069) (11,569)
Principal repayments of finance leases (11,163) (7,941)
Principal repayments of financing obligations (162) (248)
Free cash flow less principal repayments of finance leases and financing obligations $ (20,394)$ (19,758)
Net cash provided by (used in) investing activities $ (58,154)$ (37,601)
Net cash provided by (used in) financing activities $ 6,291 $ 9,718 
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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. In this measure, equipment acquired
under finance leases is reflected as if these assets had been purchased with cash, which is not the case as these assets have been leased. 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 2021 and 2022 (in millions):
 Year Ended December 31,
 2021 2022
Net cash provided by (used in) operating activities $ 46,327 $ 46,752 
Purchases of property and equipment, net of proceeds from sales and incentives (55,396) (58,321)
Free cash flow (9,069) (11,569)
Equipment acquired under finance leases (1) (4,422) (299)
Principal repayments of all other finance leases (2) (687) (670)
Principal repayments of financing obligations (162) (248)
Free cash flow less equipment finance leases and principal repayments of all other finance leases and financing
obligations $ (14,340)$ (12,786)
Net cash provided by (used in) investing activities $ (58,154)$ (37,601)
Net cash provided by (used in) financing activities $ 6,291 $ 9,718 
___________________
(1)For the year ended December 31, 2021 and 2022, this amount relates to equipment included in “Property and equipment acquired under finance leases, net
of remeasurements and modifications” of $7,061 million and $675 million.


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(2)For the year ended December 31, 2021 and 2022, this amount relates to property included in “Principal repayments of finance leases” of $11,163 million
and $7,941 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. For example, these measures of free cash flows do not incorporate the portion of payments
representing principal reductions of debt or cash payments for business acquisitions. Additionally, our mix of property and equipment acquisitions with cash or
other financing options may change over time. Therefore, we believe it is important to view free cash flows measures only as a complement to our entire
consolidated statements of cash flows.
Effect of Foreign Exchange Rates
Information regarding the effect of foreign exchange rates, versus the U.S. Dollar, on our net sales, operating expenses, and operating income is provided
to show reported period operating results had the foreign exchange rates remained the same as those in effect in the comparable prior year period. The effect on
our net sales, operating expenses, and operating income from changes in our foreign exchange rates versus the U.S. Dollar is as follows (in millions):
 Year Ended December 31, 2021 Year Ended December 31, 2022
  As
ReportedExchange
Rate
Effect (1)At Prior
Year
Rates (2)As
ReportedExchange
Rate
Effect (1)At Prior
Year
Rates (2)
Net sales $469,822 $ (3,804)$466,018 $513,983 $ 15,495 $529,478 
Operating expenses 444,943 (3,653) 441,290 501,735 16,356 518,091 
Operating income 24,879 (151) 24,728 12,248 (861) 11,387 
___________________
(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.
(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.
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Guidance
We provided guidance on February 2, 2023, in our earnings release furnished on Form 8-K as set forth below. These forward-looking statements reflect
Amazon.com’s expectations as of February 2, 2023, and are subject to substantial uncertainty. Our results are inherently unpredictable and may be materially
affected by many factors, such as uncertainty regarding the impacts of the COVID-19 pandemic, 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 and global supply chain constraints, world events, the rate of growth of the Internet, online commerce, and cloud services, as well as those outlined in
Item 1A of Part I, “Risk Factors.”
First Quarter 2023 Guidance
•Net sales are expected to be between $121.0 billion and $126.0 billion, or to grow between 4% and 8% compared with first quarter 2022. This
guidance anticipates an unfavorable impact of approximately 210 basis points from foreign exchange rates.
•Operating income is expected to be between $0 and $4.0 billion, compared with $3.7 billion in first quarter 2022.
•This guidance assumes, among other things, that no additional business acquisitions, restructurings, or legal settlements are concluded.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risk for the effect of interest rate changes, foreign currency fluctuations, and changes in the market values of our investments.
Information relating to quantitative and qualitative disclosures about market risk is set forth below and in Item 7 of Part II, “Management’s Discussion and
Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.”
Interest Rate Risk
Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio and our debt. Our long-term debt is carried at
amortized cost and fluctuations in interest rates do not impact our consolidated financial statements. However, the fair value of our long-term debt, which pays
interest at a fixed rate, will generally fluctuate with movements of interest rates, increasing in periods of declining rates of interest and declining in periods of
increasing rates of interest.
We generally invest our excess cash in AAA-rated money market funds and investment grade short- to intermediate-term fixed income securities. Fixed
income securities may have their fair market value adversely affected due to a rise in interest rates, and we may suffer losses in principal if forced to sell
securities that have declined in market value due to changes in interest rates. The following table provides information about our cash equivalents and
marketable fixed income securities, including principal cash flows by expected maturity and the related weighted-average interest rates as of December 31,
2022 (in millions, except percentages):
2023 2024 2025 2026 2027 Thereafter TotalEstimated Fair
Value as of
December 31,
2022
Money market funds $ 27,899 $ — $ — $ — $ — $ — $ 27,899 $ 27,899 
Weighted average interest rate 4.18 % — % — % — % — % — % 4.18 %
Corporate debt securities 17,500 2,486 2,332 748 9 — 23,075 22,627 
Weighted average interest rate 4.06 % 0.97 % 1.23 % 1.45 % 2.33 % — % 3.35 %
U.S. government and agency securities 819 358 554 396 80 75 2,282 2,146


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Weighted average interest rate 1.05 % 0.98 % 0.81 % 0.83 % 1.24 % 1.83 % 0.98 %
Asset-backed securities 1,059 872 413 146 128 72 2,690 2,572 
Weighted average interest rate 0.99 % 1.30 % 1.37 % 1.39 % 1.41 % 1.06 % 1.19 %
Foreign government and agency
securities 519 19 — — — — 538 535 
Weighted average interest rate 4.24 % 0.60 % — % — % — % — % 4.11 %
Other fixed income securities 138 61 48 — — — 247 237 
Weighted average interest rate 0.40 % 0.56 % 1.15 % — % — % — % 0.58 %
$ 47,934 $ 3,796 $ 3,347 $ 1,290 $ 217 $ 147 $ 56,731 
Cash equivalents and marketable
fixed income securities $ 56,016 
As of December 31, 2022, we had long-term debt with a face value of $70.5 billion, including the current portion, primarily consisting of fixed rate
unsecured senior notes. See Item 8 of Part II, “Financial Statements and Supplementary Data — Note 6 — Debt” for additional information.
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Foreign Exchange Risk
During 2022, net sales from our International segment accounted for 23% of our consolidated revenues. Net sales and related expenses generated from
our internationally-focused stores, including within Canada and Mexico (which are included in our North America segment), are primarily denominated in the
functional currencies of the corresponding stores and primarily include Euros, British Pounds, and Japanese Yen. The results of operations of, and certain of our
intercompany balances associated with, our internationally-focused stores and AWS are exposed to foreign exchange rate fluctuations. Upon consolidation, as
foreign exchange rates vary, net sales and other operating results may differ materially from expectations, and we may record significant gains or losses on the
remeasurement of intercompany balances. 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 $15.0 billion in comparison with the prior year.
We have foreign exchange risk related to foreign-denominated cash, cash equivalents, and marketable securities (“foreign funds”). Based on the balance
of foreign funds as of December 31, 2022, of $18.3 billion, an assumed 5%, 10%, and 20% adverse change to foreign exchange would result in declines of
$915 million, $1.8 billion, and $3.7 billion.
We also have foreign exchange risk related to our intercompany balances denominated in various foreign currencies. Based on the intercompany balances
as of December 31, 2022, an assumed 5%, 10%, and 20% adverse change to foreign exchange rates would result in losses of $275 million, $555 million, and
$1.1 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.
Equity Investment Risk
As of December 31, 2022, our recorded value in equity and equity warrant investments in public and private companies was $7.2 billion. Our equity and
equity warrant investments in publicly traded companies, which primarily relate to Rivian, represent $5.0 billion of our investments as of December 31, 2022,


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and are recorded at fair value, which is subject to market price volatility. 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. 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.
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Item 8. Financial Statements and Supplementary Data
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 Page
Report of Ernst & Young LLP, Independent Registered Public Accounting Firm (PCAOB ID: 42) 34
Consolidated Statements of Cash Flows 36
Consolidated Statements of Operations 37
Consolidated Statements of Comprehensive Income (Loss) 38
Consolidated Balance Sheets 39
Consolidated Statements of Stockholders’ Equity 40
Notes to Consolidated Financial Statements 41
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Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders
Amazon.com, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Amazon.com, Inc. (the Company) as of December 31, 2022 and 2021, and the related
consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years in the period ended
December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial
statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its
cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s
internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 2, 2023 expressed an unqualified
opinion thereon.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the
Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included
performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated


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financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was
communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated
financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not
alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,
providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
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Uncertain Tax Positions
Description of
the MatterAs discussed in Notes 1 and 9 of the consolidated financial statements, the Company is subject to income taxes in the U.S. and
numerous foreign jurisdictions and during the ordinary course of business, there are many tax positions for which the ultimate tax
determination is uncertain. As a result, significant judgment is required in evaluating the Company’s tax positions and determining its
provision for income taxes. The Company uses significant judgment in (1) determining whether a tax position’s technical merits are
more likely than not to be sustained and (2) measuring the amount of tax benefit that qualifies for recognition. As of December 31,
2022, the Company reported accrued liabilities of $4.0 billion for various tax contingencies.
Auditing the recognition and measurement of the Company’s tax contingencies was challenging because the evaluation of whether a
tax position is more likely than not to be sustained and the measurement of the benefit of various tax positions can be complex and
involves significant auditor judgment. Management’s evaluation of tax positions is based on interpretations of tax laws and legal
rulings, and may be impacted by regulatory changes and judicial and examination activity.
How We Addressed the
Matter in Our AuditWe tested controls over the Company’s process to assess the technical merits of its tax contingencies, including controls over: the
assessment as to whether a tax position is more likely than not to be sustained; the measurement of the benefit of its tax positions,
both initially and on an ongoing basis; and the development of the related disclosures.
We involved our international tax, transfer pricing, and research and development tax professionals in assessing the technical merits
of certain of the Company’s tax positions. Depending on the nature of the specific tax position and, as applicable, developments with
the relevant tax authorities relating thereto, our procedures included obtaining and examining the Company’s analysis including the
Company’s correspondence with such tax authorities and evaluating the underlying facts upon which the tax positions are based. We
used our knowledge of and experience with international, transfer pricing, and other income tax laws of the relevant taxing
jurisdictions to evaluate the Company’s accounting for its tax contingencies. We evaluated developments in the applicable regulatory
environments to assess potential effects on the Company’s positions, including recent decisions in relevant court cases. We analyzed
the appropriateness of the Company’s assumptions and the accuracy of the Company’s calculations and data used to determine the


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amount of tax benefits to recognize. We evaluated the Company’s income tax disclosures in relation to these matters.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 1996.
Seattle, Washington
February 2, 2023
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AMAZON.COM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
  Year Ended December 31,
 2020 2021 2022
CASH, CASH EQUIV ALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD $ 36,410 $ 42,377 $ 36,477 
OPERA TING ACTIVITIES:
Net income (loss) 21,331 33,364 (2,722)
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation and amortization of property and equipment and capitalized content costs, operating lease
assets, and other 25,180 34,433 41,921 
Stock-based compensation 9,208 12,757 19,621 
Other expense (income), net (2,582) (14,306) 16,966 
Deferred income taxes (554) (310) (8,148)
Changes in operating assets and liabilities:
Inventories (2,849) (9,487) (2,592)
Accounts receivable, net and other (8,169) (18,163) (21,897)
Accounts payable 17,480 3,602 2,945 
Accrued expenses and other 5,754 2,123 (1,558)
Unearned revenue 1,265 2,314 2,216 
Net cash provided by (used in) operating activities 66,064 46,327 46,752 
INVESTING ACTIVITIES:
Purchases of property and equipment (40,140) (61,053) (63,645)
Proceeds from property and equipment sales and incentives 5,096 5,657 5,324 
Acquisitions, net of cash acquired, and other (2,325) (1,985) (8,316)
Sales and maturities of marketable securities 50,237 59,384 31,601 
Purchases of marketable securities (72,479) (60,157) (2,565)
Net cash provided by (used in) investing activities (59,61 1) (58,154) (37,601)
FINANCING ACTIVITIES:


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FINANCING ACTIVITIES:
Common stock repurchased — — (6,000)
Proceeds from short-term debt, and other 6,796 7,956 41,553 
Repayments of short-term debt, and other (6,177) (7,753) (37,554)
Proceeds from long-term debt 10,525 19,003 21,166 
Repayments of long-term debt (1,553) (1,590) (1,258)
Principal repayments of finance leases (10,642) (11,163) (7,941)
Principal repayments of financing obligations (53) (162) (248)
Net cash provided by (used in) financing activities (1,104) 6,291 9,718 
Foreign currency ef fect on cash, cash equivalents, and restricted cash 618 (364) (1,093)
Net increase (decrease) in cash, cash equivalents, and restricted cash 5,967 (5,900) 17,776 
CASH, CASH EQUIV ALENTS, AND RESTRICTED CASH, END OF PERIOD $ 42,377 $ 36,477 $ 54,253 
See accompanying notes to consolidated financial statements.
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AMAZON.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
  Year Ended December 31,
 2020 2021 2022
Net product sales $ 215,915 $ 241,787 $ 242,901 
Net service sales 170,149 228,035 271,082 
Total net sales 386,064 469,822 513,983 
Operating expenses:
Cost of sales 233,307 272,344 288,831 
Fulfillment 58,517 75,111 84,299 
Technology and content 42,740 56,052 73,213 
Sales and marketing 22,008 32,551 42,238 
General and administrative 6,668 8,823 11,891 
Other operating expense (income), net (75) 62 1,263 
Total operating expenses 363,165 444,943 501,735 
Operating income 22,899 24,879 12,248 
Interest income 555 448 989 
Interest expense (1,647) (1,809) (2,367)
Other income (expense), net 2,371 14,633 (16,806)
Total non-operating income (expense) 1,279 13,272 (18,184)
Income (loss) before income taxes 24,178 38,151 (5,936)
Benefit (provision) for income taxes (2,863) (4,791) 3,217 
Equity-method investment activity, net of tax 16 4 (3)
Net income (loss) $ 21,331 $ 33,364 $ (2,722)
Basic earnings per share $ 2.13 $ 3.30 $ (0.27)
Diluted earnings per share $ 2.09 $ 3.24 $ (0.27)
Weighted-average shares used in computation of earnings per share:
Basic 10,005 10,117 10,189 
Diluted 10,198 10,296 10,189 
See accompanying notes to consolidated financial statements.
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AMAZON.COM, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in millions)
  Year Ended December 31,
 2020 2021 2022
Net income (loss) $ 21,331 $ 33,364 $ (2,722)
Other comprehensive income (loss):
Foreign currency translation adjustments, net of tax of $(36), $47, and $100 561 (819) (2,586)
Net change in unrealized gains (losses) on available-for-sale debt securities:
Unrealized gains (losses), net of tax of $(83), $72, and $159 273 (343) (823)
Reclassification adjustment for losses (gains) included in “Other income (expense),
net,” net of tax of $8, $13, and $0 (28) (34) 298 
Net unrealized gains (losses) on available-for-sale debt securities 245 (377) (525)
Total other comprehensive income (loss) 806 (1,196) (3,111)
Comprehensive income (loss) $ 22,137 $ 32,168 $ (5,833)
See accompanying notes to consolidated financial statements.
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AMAZON.COM, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except per share data)
December 31,
 2021 2022
ASSETS
Current assets:
Cash and cash equivalents $ 36,220 $ 53,888 
Marketable securities 59,829 16,138 
Inventories 32,640 34,405 
Accounts receivable, net and other 32,891 42,360 
Total current assets 161,580 146,791 
Property and equipment, net 160,281 186,715 
Operating leases 56,082 66,123 
Goodwill 15,371 20,288 
Other assets 27,235 42,758 
Total assets $ 420,549 $ 462,675 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 78,664 $ 79,600 
Accrued expenses and other 51,775 62,566 
Unearned revenue 11,827 13,227 
Total current liabilities 142,266 155,393 
Long-term lease liabilities 67,651 72,968 
Long-term debt 48,744 67,150 
Other long-term liabilities 23,643 21,121 
Commitments and contingencies (Note 7)
Stockholders’ equity:
Preferred stock ($0.01 par value; 500 shares authorized; no shares issued or outstanding) — — 
Common stock ($0.01 par value; 100,000 shares authorized; 10,644 and 10,757 shares issued; 10,175 and
10,242 shares outstanding) 106 108 
Treasury stock, at cost (1,837) (7,837)
Additional paid-in capital 55,437 75,066 
Accumulated other comprehensive income (loss) (1,376) (4,487)
Retained earnings 85,915 83,193 
Total stockholders’ equity 138,245 146,043 
Total liabilities and stockholders’ equity $ 420,549 $ 462,675 
See accompanying notes to consolidated financial statements.
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AMAZON.COM, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in millions)
 Common Stock     
 Shares AmountTreasury
StockAdditional
Paid-In
CapitalAccumulated Other
Comprehensive
Income (Loss)Retained
EarningsTotal
Stockholders’
Equity
Balance as of January 1, 2020 9,950 $ 104 $ (1,837) $ 33,559 $ (986) $ 31,220 $ 62,060 
Net income — — — — — 21,331 21,331 
Other comprehensive income (loss) — — — — 806 — 806 
Stock-based compensation and issuance of employee
benefit plan stock 116 1 — 9,206 — — 9,207 
Balance as of December 31, 2020 10,066 105 (1,837) 42,765 (180) 52,551 93,404 
Net income — — — — — 33,364 33,364 
Other comprehensive income (loss) — — — — (1,196) — (1,196)
Stock-based compensation and issuance of employee
benefit plan stock 109 1 — 12,672 — — 12,673 
Balance as of December 31, 2021 10,175 106 (1,837) 55,437 (1,376) 85,915 138,245 
Net loss — — — — — (2,722) (2,722)
Other comprehensive income (loss) — — — — (3,111) — (3,111)
Stock-based compensation and issuance of employee
benefit plan stock 113 2 — 19,629 — — 19,631 
Common stock repurchased (46) — (6,000) — — — (6,000)
Balance as of December 31, 2022 10,242 $ 108 $ (7,837) $ 75,066 $ (4,487) $ 83,193 $ 146,043 
See accompanying notes to consolidated financial statements.
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AMAZON.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 — DESCRIPTION OF BUSINESS, ACCOUNTING POLICIES, AND SUPPLEMENTAL DISCLOSURES
Description of Business
We seek to be Earth’s most customer-centric company. In each of our segments, we serve our primary customer sets, consisting of consumers, sellers,
developers, enterprises, content creators, advertisers, and employees. We serve consumers through our online and physical stores and focus on selection, price,
and convenience. We offer programs that enable sellers to grow their businesses, sell their products in our stores, and fulfill orders through us, and programs
that allow authors, independent publishers, musicians, filmmakers, Twitch streamers, skill and app developers, and others to publish and sell content. We serve
developers and enterprises of all sizes through AWS, which offers a broad set of on-demand technology services, including compute, storage, database,
analytics, and machine learning, and other services. We also manufacture and sell electronic devices. In addition, we provide advertising services to sellers,
vendors, publishers, authors, and others, through programs such as sponsored ads, display, and video advertising.
We have organized our operations into three segments: North America, International, and AWS. See “Note 10 — Segment Information.”
Common Stock Split
On May 27, 2022, we effected a 20-for-1 stock split of our common stock and proportionately increased the number of authorized shares of common
stock. All share, restricted stock unit (“RSU”), and per share or per RSU information throughout this Annual Report on Form 10-K has been retroactively
adjusted to reflect the stock split. The shares of common stock retain a par value of $0.01 per share. Accordingly, an amount equal to the par value of the
increased shares resulting from the stock split was reclassified from “Additional paid-in capital” to “Common stock.”
Prior Period Reclassifications
Certain prior period amounts have been reclassified to conform to the current period presentation. “Other operating expense (income), net” was
reclassified into “Depreciation and amortization of property and equipment and capitalized content costs, operating lease assets, and other” on our consolidated
statements of cash flows.
Principles of Consolidation


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statements of cash flows.
Principles of Consolidation
The consolidated financial statements include the accounts of Amazon.com, Inc. and its consolidated entities (collectively, the “Company”), consisting of
its wholly-owned subsidiaries and those entities in which we have a variable interest and of which we are the primary beneficiary, including certain entities in
India and certain entities that support our seller lending financing activities. Intercompany balances and transactions between consolidated entities are
eliminated.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires estimates and assumptions that affect the reported amounts of assets and
liabilities, revenues and expenses, and related disclosures of contingent liabilities in the consolidated financial statements and accompanying notes. Estimates
are used for, but not limited to, income taxes, useful lives of equipment, commitments and contingencies, valuation of acquired intangibles and goodwill, stock-
based compensation forfeiture rates, vendor funding, inventory valuation, collectability of receivables, impairment of property and equipment and operating
leases, valuation and impairment of investments, self-insurance liabilities, and viewing patterns of capitalized video content. Actual results could differ
materially from these estimates. We review the useful lives of equipment on an ongoing basis, and effective January 1, 2022 we changed our estimate of the
useful lives for our servers from four years to five years and for our networking equipment from five years to six years. The longer useful lives are due to
continuous improvements in our hardware, software, and data center designs. The effect of this change in estimate for the year ended December 31, 2022,
based on servers and networking equipment that were included in “Property and equipment, net” as of December 31, 2021 and those acquired during the year
ended December 31, 2022, was a reduction in depreciation and amortization expense of $3.6 billion and a benefit to net loss of $2.8 billion, or $0.28 per basic
share and $0.28 per diluted share.
For the year ended December 31, 2022, we recorded approximately $1.1 billion, of which $720 million was recorded in the fourth quarter, of
impairments of property and equipment and operating leases primarily related to physical stores. These charges were recorded in “Other operating expense


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(income), net” on our consolidated statements of operations and primarily impacted our North America segment. For the year ended December 31, 2022, we
also recorded expenses of approximately
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$480 million primarily in “Fulfillment” on our consolidated statements of operations relating to terminating contracts for certain leases not yet commenced as
well as other purchase commitments, which primarily impacted our North America segment.
For the year ended December 31, 2022, we recorded approximately $720 million, of which $640 million was recorded in the fourth quarter, of estimated
severance costs primarily related to planned role eliminations. These charges were recorded primarily in “Technology and content,” “Fulfillment,” and
“General and administrative” on our consolidated statements of operations and primarily impacted our North America segment.
Supplemental Cash Flow Information
The following table shows supplemental cash flow information (in millions):
Year Ended December 31,
2020 2021 2022
SUPPLEMENT AL CASH FLOW  INFORMA TION:
Cash paid for interest on debt $ 916 $ 1,098 $ 1,561 
Cash paid for operating leases $ 4,475 $ 6,722 $ 8,633 
Cash paid for interest on finance leases $ 612 $ 521 $ 374 
Cash paid for interest on financing obligations $ 102 $ 153 $ 207 
Cash paid for income taxes, net of refunds $ 1,713 $ 3,688 $ 6,035 
Assets acquired under operating leases $ 16,217 $ 25,369 $ 18,800 
Property and equipment acquired under finance leases, net of remeasurements and modifications $ 11,588 $ 7,061 $ 675 
Property and equipment recognized during the construction period of build-to-suit lease arrangements $ 2,267 $ 5,846 $ 3,187 
Property and equipment derecognized after the construction period of build-to-suit lease arrangements, with
the associated leases recognized as operating $ — $ 230 $ 5,158 
Earnings Per Share
Basic earnings per share is calculated using our weighted-average outstanding common shares. Diluted earnings per share is calculated using our
weighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method. In periods when we
have a net loss, stock awards are excluded from our calculation of earnings per share as their inclusion would have an antidilutive effect.
The following table shows the calculation of diluted shares (in millions):


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The following table shows the calculation of diluted shares (in millions):
  Year Ended December 31,
 2020 2021 2022
Shares used in computation of basic earnings per share 10,005 10,117 10,189 
Total dilutive effect of outstanding stock awards 193 179 — 
Shares used in computation of diluted earnings per share 10,198 10,296 10,189 
Revenue
Revenue is measured based on the amount of consideration that we expect to receive, reduced by estimates for return allowances, promotional discounts,
and rebates. Revenue also excludes any amounts collected on behalf of third parties, including sales and indirect taxes. In arrangements where we have
multiple performance obligations, the transaction price is allocated to each performance obligation using the relative stand-alone selling price. We generally
determine stand-alone selling prices based on the prices charged to customers or using expected cost plus a margin.
A description of our principal revenue generating activities is as follows:
Retail sales - We offer consumer products through our online and physical stores. Revenue is recognized when control of the goods is transferred to the
customer, which generally occurs upon our delivery to a third-party carrier or, in the case of an Amazon delivery, to the customer.
Third-party seller services - We offer programs that enable sellers to sell their products in our stores, and fulfill orders through us. We are not the seller of
record in these transactions. The commissions and any related fulfillment and shipping fees we earn from these arrangements are recognized when the services
are rendered, which generally occurs upon delivery of the related products to a third-party carrier or, in the case of an Amazon delivery, to the customer.
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Subscription services - Our subscription sales include fees associated with Amazon Prime memberships and access to content including digital video,
audiobooks, digital music, e-books, and other non-AWS subscription services. Prime memberships provide our customers with access to an evolving suite of
benefits that represent a single stand-ready obligation. Subscriptions are paid for at the time of or in advance of delivering the services. Revenue from such
arrangements is recognized over the subscription period.
Advertising services - We provide advertising services to sellers, vendors, publishers, authors, and others, through programs such as sponsored ads,
display, and video advertising. Revenue is recognized as ads are delivered based on the number of clicks or impressions.
AWS - Our AWS arrangements include global sales of compute, storage, database, and other services. Revenue is allocated to services using stand-alone
selling prices and is primarily recognized when the customer uses these services, based on the quantity of services rendered, such as compute or storage
capacity delivered on-demand. Certain services, including compute and database, are also offered as a fixed quantity over a specified term, for which revenue is
recognized ratably. Sales commissions we pay in connection with contracts that exceed one year are capitalized and amortized over the contract term.
Other - Other revenue includes sales related to various other offerings, such as certain licensing and distribution of video content and shipping services,
and our co-branded credit card agreements. Revenue is recognized when content is licensed or distributed and as or when services are performed.
Return Allowances
Return allowances, which reduce revenue and cost of sales, are estimated using historical experience. Liabilities for return allowances are included in
“Accrued expenses and other” and were $859 million, $1.0 billion, and $1.3 billion as of December 31, 2020, 2021, and 2022. Additions to the allowance were
$3.5 billion, $5.1 billion, and $5.5 billion and deductions from the allowance were $3.6 billion, $4.9 billion, and $5.2 billion in 2020, 2021, and 2022. Included
in “Inventories” on our consolidated balance sheets are assets totaling $852 million, $882 million, and $948 million as of December 31, 2020, 2021, and 2022,


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for the rights to recover products from customers associated with our liabilities for return allowances.
Cost of Sales
Cost of sales primarily consists of the purchase price of consumer products, inbound and outbound shipping costs, including costs related to sortation and
delivery centers and where we are the transportation service provider, and digital media content costs where we record revenue gross, including video and
music. Shipping costs to receive products from our suppliers are included in our inventory, and recognized as cost of sales upon sale of products to our
customers. Payment processing and related transaction costs, including those associated with seller transactions, are classified in “Fulfillment” on our
consolidated statements of operations.
Vendor Agreements
We have agreements with our vendors to receive consideration primarily for cooperative marketing efforts, promotions, incentives, and volume
rebates. We generally consider these amounts received from vendors to be a reduction of the prices we pay for their goods, including property and equipment,
or services, and are recorded as a reduction of the cost of inventory, cost of services, or cost of property and equipment. Volume rebates typically depend on
reaching minimum purchase thresholds. We evaluate the likelihood of reaching purchase thresholds using past experience and current year forecasts. When
volume rebates can be reasonably estimated, we record a portion of the rebate as we make progress towards the purchase threshold.
Fulfillment
Fulfillment costs primarily consist of those costs incurred in operating and staffing our North America and International segments’ fulfillment centers,
physical stores, and customer service centers, including facilities and equipment expenses, such as depreciation and amortization, and rent; costs attributable to
buying, receiving, inspecting, and warehousing inventories; picking, packaging, and preparing customer orders for shipment; payment processing and related
transaction costs, including costs associated with our guarantee for certain seller transactions; responding to inquiries from customers; and supply chain
management for our manufactured electronic devices. Fulfillment costs also include amounts paid to third parties that assist us in fulfillment and customer
service operations.
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Technology and Content
Technology and content costs include payroll and related expenses for employees involved in the research and development of new and existing products
and services, development, design, and maintenance of our stores, curation and display of products and services made available in our online stores, and
infrastructure costs. Infrastructure costs include servers, networking equipment, and data center related depreciation and amortization, rent, utilities, and other
expenses necessary to support AWS and other Amazon businesses. Collectively, these costs reflect the investments we make in order to offer a wide variety of
products and services to our customers, including expenditures related to initiatives to build and deploy innovative and efficient software and electronic devices
and the development of a satellite network for global broadband service and autonomous vehicles for ride-hailing services. Technology and content costs are
generally expensed as incurred.
Sales and Marketing
Sales and marketing costs include advertising and payroll and related expenses for personnel engaged in marketing and selling activities, including sales
commissions related to AWS. We pay commissions to third parties when their customer referrals result in sales. We also participate in cooperative advertising
arrangements with certain of our vendors, and other third parties.
Advertising and other promotional costs to market our products and services are expensed as incurred and were $10.9 billion, $16.9 billion, and $20.6
billion in 2020, 2021, and 2022.
General and Administrative
General and administrative expenses primarily consist of costs for corporate functions, including payroll and related expenses; facilities and equipment
expenses, such as depreciation and amortization expense and rent; and professional fees.
Stock-Based Compensation
Compensation cost for all equity-classified stock awards expected to vest is measured at fair value on the date of grant and recognized over the service
period. The fair value of restricted stock units is determined based on the number of shares granted and the quoted price of our common stock. Such value is
recognized as expense over the service period, net of estimated forfeitures, using the accelerated method. The estimated number of stock awards that will
ultimately vest requires judgment, and to the extent actual results or updated estimates differ from our current estimates, such amounts will be recorded as a
cumulative adjustment in the period estimates are revised. We consider many factors when estimating expected forfeitures, including historical forfeiture
experience by grant year and employee level. Additionally, stock-based compensation includes stock appreciation rights that are expected to settle in cash.


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These liability-classified awards are remeasured to fair value at the end of each reporting period until settlement or expiration.
Other Operating Expense (Income), Net
Other operating expense (income), net, consists primarily of the amortization of intangible assets and, for 2020, a benefit from accelerated vesting of
warrants to acquire equity of a vendor partially offset by a lease impairment and, for 2022, $1.1 billion of impairments of property and equipment and
operating leases.
Other Income (Expense), Net
Other income (expense), net, is as follows (in millions):
Year Ended December 31,
2020 2021 2022
Marketable equity securities valuation gains (losses) $ 525 $ 11,526 $ (13,870)
Equity warrant valuation gains (losses) 1,527 1,315 (2,132)
Upward adjustments relating to equity investments in private companies 342 1,866 76 
Foreign currency gains (losses) 35 (55) (340)
Other, net (58) (19) (540)
Total other income (expense), net 2,371 14,633 (16,806)
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Included in other income (expense), net in 2021 and 2022 is a marketable equity securities valuation gain (loss) of $11.8 billion and $(12.7) billion from
our equity investment in Rivian Automotive, Inc. (“Rivian”). Our investment in Rivian’s preferred stock was accounted for at cost, with adjustments for
observable changes in prices or impairments, prior to Rivian’s initial public offering in November 2021, which resulted in the conversion of our preferred stock
to Class A common stock. As of December 31, 2022, we held 158 million shares of Rivian’s Class A common stock, representing an approximate 17%
ownership interest, and an approximate 16% voting interest. We determined that we have the ability to exercise significant influence over Rivian through our
equity investment, our commercial arrangement for the purchase of electric vehicles, and one of our employees serving on Rivian’s board of directors. We
elected the fair value option to account for our equity investment in Rivian, which is included in “Marketable securities” on our consolidated balance sheets.
Required summarized financial information of Rivian as disclosed in its most recent SEC filings is as follows (in millions):
Year Ended
December 31, 2020Year Ended
December 31, 2021Nine Months Ended
September 30, 2022
Revenues $ — $ 55 $ 995 
Gross profit — (465) (2,123)
Loss from operations (1,021) (4,220) (5,061)
Net loss (1,018) (4,688) (5,029)
December 31, 2021 September 30, 2022
Total current assets $ 18,559 $ 14,424 
Total assets 22,294 19,023 
Total current liabilities 1,313 2,109 
Total liabilities 2,780 3,686 
Income Taxes
Income tax expense includes U.S. (federal and state) and foreign income taxes. Certain foreign subsidiary earnings and losses are subject to current U.S.
taxation and the subsequent repatriation of those earnings is not subject to tax in the U.S. We intend to invest substantially all of our foreign subsidiary


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earnings, as well as our capital in our foreign subsidiaries, indefinitely outside of the U.S. in those jurisdictions in which we would incur significant, additional
costs upon repatriation of such amounts.
Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax bases, as
well as net operating loss and tax credit carryforwards, and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered.
Deferred tax assets represent amounts available to reduce income taxes payable in future periods. Deferred tax assets are evaluated for future realization
and reduced by a valuation allowance to the extent we believe they will not be realized. We consider many factors when assessing the likelihood of future
realization of our deferred tax assets, including recent cumulative loss experience and expectations of future earnings, capital gains and investment in such
jurisdiction, the carry-forward periods available to us for tax reporting purposes, and other relevant factors.
We utilize a two-step approach to recognizing and measuring uncertain income tax positions (tax contingencies). The first step is to evaluate the tax
position for recognition by determining if the weight of available evidence indicates it is more likely than not the position will be sustained on audit, including
resolution of related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being
realized upon ultimate settlement. We consider many factors when evaluating our tax positions and estimating our tax benefits, which may require periodic
adjustments and which may not accurately forecast actual outcomes. We include interest and penalties related to our tax contingencies in income tax expense.
Fair Value of Financial Instruments
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to
measure fair value:
Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets.
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Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and
liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are
observable or can be corroborated by observable market data.
Level 3 — Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by
other market participants. These valuations require significant judgment.
We measure the fair value of money market funds and certain marketable equity securities based on quoted prices in active markets for identical assets or
liabilities. Other marketable securities were valued either based on recent trades of securities in inactive markets or based on quoted market prices of similar
instruments and other significant inputs derived from or corroborated by observable market data. We did not hold significant amounts of marketable securities
categorized as Level 3 assets as of December 31, 2021 and 2022.
We hold equity warrants giving us the right to acquire stock of other companies. As of December 31, 2021 and 2022, these warrants had a fair value of
$3.4 billion and $2.1 billion, and are recorded within “Other assets” on our consolidated balance sheets with gains and losses recognized in “Other income
(expense), net” on our consolidated statements of operations. These warrants are primarily classified as Level 2 assets.
Cash and Cash Equivalents
We classify all highly liquid instruments with an original maturity of three months or less as cash equivalents.
Inventories
Inventories, consisting of products available for sale, are primarily accounted for using the first-in, first-out method, and are valued at the lower of cost
and net realizable value. This valuation requires us to make judgments, based on currently available information, about the likely method of disposition, such
as through sales to individual customers, returns to product vendors, or liquidations, and expected recoverable values of each disposition category. The
inventory valuation allowance, representing a write-down of inventory, was $2.6 billion and $2.8 billion as of December 31, 2021 and 2022.
We provide Fulfillment by Amazon services in connection with certain of our sellers’ programs. Third-party sellers maintain ownership of their


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inventory, regardless of whether fulfillment is provided by us or the third-party sellers, and therefore these products are not included in our inventories.
We also purchase electronic device components from a variety of suppliers and use several contract manufacturers to provide manufacturing services for
our products. During the normal course of business, in order to manage manufacturing lead times and help ensure adequate supply, we enter into agreements
with contract manufacturers and suppliers for certain electronic device components. We have certain non-cancellable purchase commitments arising from these
agreements. These commitments are based on forecasted customer demand. If we reduce these commitments, we may incur additional costs. We also have
firm, non-cancellable commitments for certain products offered in our Whole Foods Market stores.
Accounts Receivable, Net and Other
Included in “Accounts receivable, net and other” on our consolidated balance sheets are amounts primarily related to customers, vendors, and sellers. As
of December 31, 2021 and 2022, customer receivables, net, were $20.2 billion and $26.6 billion, vendor receivables, net, were $5.3 billion and $6.9 billion, and
seller receivables, net, were $1.0 billion and $1.3 billion. Seller receivables are amounts due from sellers related to our seller lending program, which provides
funding to sellers primarily to procure inventory.
We estimate losses on receivables based on expected losses, including our historical experience of actual losses. Receivables are considered impaired and
written-off when it is probable that all contractual payments due will not be collected in accordance with the terms of the agreement. The allowance for
doubtful accounts was $1.1 billion, $1.1 billion, and $1.4 billion as of December 31, 2020, 2021, and 2022. Additions to the allowance were $1.4 billion, $1.0
billion, and $1.6 billion, and deductions to the allowance were $1.0 billion, $1.1 billion, and $1.3 billion in 2020, 2021, and 2022.
Software Development Costs
We incur software development costs related to products to be sold, leased, or marketed to external users, internal-use software, and our websites.


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Software development costs capitalized were not significant for the years presented. All other costs, including those related to design or maintenance, are
expensed as incurred.
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Property and Equipment, Net
Property and equipment are stated at cost less accumulated depreciation and amortization. Incentives that we receive from property and equipment
vendors are recorded as a reduction to our costs. Property includes buildings and land that we own, along with property we have acquired under build-to-suit
lease arrangements when we have control over the building during the construction period and finance lease arrangements. Equipment includes assets such as
servers and networking equipment, heavy equipment, and other fulfillment equipment. Depreciation and amortization is recorded on a straight-line basis over
the estimated useful lives of the assets (generally the lesser of 40 years or the remaining life of the underlying building, four years prior to January 1, 2022 and
five years subsequent to January 1, 2022 for our servers, five years prior to January 1, 2022 and six years subsequent to January 1, 2022 for our networking
equipment, ten years for heavy equipment, and three to ten years for other fulfillment equipment). Depreciation and amortization expense is classified within
the corresponding operating expense categories on our consolidated statements of operations.
Leases
We categorize leases with contractual terms longer than twelve months as either operating or finance. Finance leases are generally those leases that allow
us to substantially utilize or pay for the entire asset over its estimated life. Assets acquired under finance leases are recorded in “Property and equipment, net.”
All other leases are categorized as operating leases. Our leases generally have terms that range from one to ten years for equipment and one to twenty years for
property.
Certain lease contracts include obligations to pay for other services, such as operations and maintenance. For leases of property, we account for these
other services as a component of the lease. For substantially all other leases, the services are accounted for separately and we allocate payments to the lease and
other services components based on estimated stand-alone prices.
Lease liabilities are recognized at the present value of the fixed lease payments, reduced by landlord incentives using a discount rate based on similarly
secured borrowings available to us. Lease assets are recognized based on the initial present value of the fixed lease payments, reduced by landlord incentives,
plus any direct costs from executing the leases or lease prepayments reclassified from “Other assets” upon lease commencement. Leasehold improvements are
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When we have the option to extend the lease term, terminate the lease before the contractual expiration date, or purchase the leased asset, and it is
reasonably certain that we will exercise the option, we consider the option in determining the classification and measurement of the lease. Our leases may
include variable payments based on measures that include changes in price indices, market interest rates, or the level of sales at a physical store, which are
expensed as incurred.
Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the lease. Finance lease
assets are amortized within operating expenses on a straight-line basis over the shorter of the estimated useful lives of the assets or, in the instance where title
does not transfer at the end of the lease term, the lease term. The interest component of a finance lease is included in interest expense and recognized using the
effective interest method over the lease term.
We establish assets and liabilities for the present value of estimated future costs to retire long-lived assets at the termination or expiration of a lease. Such
assets are amortized over the lease period into operating expense, and the recorded liabilities are accreted to the future value of the estimated retirement costs.
Financing Obligations
We record assets and liabilities for estimated construction costs under build-to-suit lease arrangements when we have control over the building during the
construction period. If we continue to control the building after the construction period, the arrangement is classified as a financing obligation instead of a
lease. The building is depreciated over the shorter of its useful life or the term of the obligation.
If we do not control the building after the construction period ends, the assets and liabilities for construction costs are derecognized, and we classify the
lease as operating.
Goodwill and Indefinite-Lived Intangible Assets
We evaluate goodwill and indefinite-lived intangible assets for impairment annually or more frequently when an event occurs or circumstances change
that indicate the carrying value may not be recoverable. We may elect to utilize a qualitative assessment to evaluate whether it is more likely than not that the
fair value of a reporting unit or indefinite-lived intangible asset is less than its carrying value and if so, we perform a quantitative test. We compare the carrying
value of each reporting unit and indefinite-lived intangible asset to its estimated fair value and if the fair value is determined to be less than the carrying value,


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we recognize an impairment loss for the difference. We estimate the fair value of the reporting units using discounted cash
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flows. Forecasts of future cash flows are based on our best estimate of future net sales and operating expenses, based primarily on expected category
expansion, pricing, market segment share, and general economic conditions.
We completed the required annual impairment test of goodwill for all reporting units and indefinite-lived intangible assets as of April 1, 2022, resulting
in no impairments. The fair value of our reporting units substantially exceeded their carrying value. There were no events that caused us to update our annual
impairment test. See “Note 5 — Acquisitions, Goodwill, and Acquired Intangible Assets.”
Other Assets
Included in “Other assets” on our consolidated balance sheets are amounts primarily related to video and music content, net of accumulated amortization;
long-term deferred tax assets; acquired intangible assets, net of accumulated amortization; equity warrant assets and certain equity investments; and satellite
network launch services deposits. We recognize certain transactions with governments when there is reasonable assurance that incentives included in the
agreements, such as cash or certain tax credits, will be received and we are able to comply with any related conditions. These incentives are recorded as
reductions to the cost of related assets or expenses.
Digital Video and Music Content
We obtain video content, inclusive of episodic television and movies, and music content for customers through licensing agreements that have a wide
range of licensing provisions including both fixed and variable payment schedules. When the license fee for a specific video or music title is determinable or
reasonably estimable and the content is available to us, we recognize an asset and a corresponding liability for the amounts owed. We reduce the liability as
payments are made and we amortize the asset to “Cost of sales” on an accelerated basis, based on estimated usage or viewing patterns, or on a straight-line
basis. If the licensing fee is not determinable or reasonably estimable, no asset or liability is recorded and licensing costs are expensed as incurred. We also
develop original video content for which the production costs are capitalized and amortized to “Cost of sales” predominantly on an accelerated basis that
follows the estimated viewing patterns associated with the content. The weighted average remaining life of our capitalized video content is 2.6 years. We
review usage and viewing patterns impacting the amortization of capitalized video content on an ongoing basis and reflect any changes prospectively. Changes


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in historical and anticipated viewing patterns are lengthening the weighted average life of our capitalized video content. We anticipate the changes in viewing
patterns will positively impact 2023 operating income by approximately $1.0 billion, generally ratably throughout the year.
Our produced and licensed video content is primarily monetized together as a unit, referred to as a film group, in each major geography where we offer
Amazon Prime memberships. These film groups are evaluated for impairment whenever an event occurs or circumstances change indicating the fair value is
less than the carrying value. The total capitalized costs of video, which is primarily released content, and music as of December 31, 2021 and 2022 were $10.7
billion and $16.7 billion. Total video and music expense was $13.0 billion and $16.6 billion for the year ended December 31, 2021 and 2022. Total video and
music expense includes licensing and production costs associated with content offered within Amazon Prime memberships, and costs associated with digital
subscriptions and sold or rented content.
Investments
We generally invest our excess cash in AAA-rated money market funds and investment grade short- to intermediate-term fixed income securities. Such
investments are included in “Cash and cash equivalents” or “Marketable securities” on the accompanying consolidated balance sheets.
Marketable fixed income securities are classified as available-for-sale and reported at fair value with unrealized gains and losses included in
“Accumulated other comprehensive income (loss).” Each reporting period, we evaluate whether declines in fair value below carrying value are due to expected
credit losses, as well as our ability and intent to hold the investment until a forecasted recovery occurs. Expected credit losses are recorded as an allowance
through “Other income (expense), net” on our consolidated statements of operations.
Equity investments in private companies for which we do not have the ability to exercise significant influence are accounted for at cost, with adjustments
for observable changes in prices or impairments, and are classified as “Other assets” on our consolidated balance sheets with adjustments recognized in “Other
income (expense), net” on our consolidated statements of operations. Each reporting period, we perform a qualitative assessment to evaluate whether the
investment is impaired. Our assessment includes a review of recent operating results and trends, recent sales/acquisitions of the investee securities, and other


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publicly available data. If the investment is impaired, we write it down to its estimated fair value. As of December 31, 2021 and 2022, these investments had a
carrying value of $603 million and $715 million.
Equity investments are accounted for using the equity method of accounting, or at fair value if we elect the fair value option, if the investment gives us
the ability to exercise significant influence, but not control, over an investee. Equity-method
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investments are included within “Other assets” on our consolidated balance sheets. Our share of the earnings or losses as reported by equity-method investees,
amortization of basis differences, related gains or losses, and impairments, if any, are recognized in “Equity-method investment activity, net of tax” on our
consolidated statements of operations. Each reporting period, we evaluate whether declines in fair value below carrying value are other-than-temporary and if
so, we write down the investment to its estimated fair value.
Equity investments that have readily determinable fair values, including investments for which we have elected the fair value option, are included in
“Marketable securities” on our consolidated balance sheets and measured at fair value with changes recognized in “Other income (expense), net” on our
consolidated statements of operations.
Long-Lived Assets
Long-lived assets, other than goodwill and indefinite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of the assets might not be recoverable. Conditions that would necessitate an impairment assessment include a significant
decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or any other significant adverse
change that would indicate that the carrying amount of an asset or group of assets may not be recoverable.
For long-lived assets used in operations, including lease assets, impairment losses are only recorded if the asset’s carrying amount is not recoverable
through its undiscounted, probability-weighted future cash flows. We measure the impairment loss based on the difference between the carrying amount and
estimated fair value. Long-lived assets are considered held for sale when certain criteria are met, including when management has committed to a plan to sell
the asset, the asset is available for sale in its immediate condition, and the sale is probable within one year of the reporting date. Assets held for sale are
reported at the lower of cost or fair value less costs to sell. Assets held for sale were not significant as of December 31, 2021 and 2022.
Accrued Expenses and Other
Included in “Accrued expenses and other” on our consolidated balance sheets are liabilities primarily related to leases and asset retirement obligations,
tax-related liabilities, current debt, payroll and related expenses, unredeemed gift cards, self-insurance liabilities, customer liabilities, marketing liabilities,


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acquired digital media content, and other operating expenses.
As of December 31, 2021 and 2022, our liabilities for payroll related expenses were $7.4 billion and $7.7 billion and our liabilities for unredeemed gift
cards were $5.2 billion and $5.4 billion. We reduce the liability for a gift card when redeemed by a customer. The portion of gift cards that we do not expect to
be redeemed is recognized based on customer usage patterns.
Self-Insurance Liabilities
Although we maintain certain high-deductible, third-party insurance coverage for catastrophic losses, we effectively self-insure for exposure primarily
related to workers’ compensation, employee health care benefits, general and product liability, and automobile liability, including liability resulting from third-
party transportation service providers. We estimate self-insurance liabilities by considering historical claims experience, frequency and costs of claims,
projected claims development, inflation, and other actuarial assumptions. Changes in the number or costs of claims, healthcare costs, judgment and settlement
amounts, associated legal expenses, and other factors could cause actual results to differ materially from these estimates. As of December 31, 2021 and 2022,
our total self-insurance liabilities were $2.2 billion and $4.0 billion and are included in “Accrued expenses and other” on our consolidated balance sheets. In
the fourth quarter of 2022, we increased our reserves for general, product, and automobile liabilities by $1.3 billion primarily driven by changes in our
estimates about the costs of asserted and unasserted claims, which was primarily recorded in “Cost of sales” on our consolidated statements of operations and
impacted our North America segment.
Unearned Revenue
Unearned revenue is recorded when payments are received or due in advance of performing our service obligations and is recognized over the service
period. Unearned revenue primarily relates to prepayments of AWS services and Amazon Prime memberships. Our total unearned revenue as of December 31,
2021 was $14.0 billion, of which $11.3 billion was recognized as revenue during the year ended December 31, 2022 and our total unearned revenue as of
December 31, 2022 was $16.1 billion. Included in “Other long-term liabilities” on our consolidated balance sheets was $2.2 billion and $2.9 billion of unearned


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revenue as of December 31, 2021 and 2022.
Additionally, we have performance obligations, primarily related to AWS, associated with commitments in customer contracts for future services that
have not yet been recognized in our financial statements. For contracts with original terms that exceed one year, those commitments not yet recognized were
$110.4 billion as of December 31, 2022. The weighted average remaining life of our long-term contracts is 3.7 years. However, the amount and timing of
revenue recognition is largely driven by customer usage, which can extend beyond the original contractual term.
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Other Long-Term Liabilities
Included in “Other long-term liabilities” on our consolidated balance sheets are liabilities primarily related to financing obligations, asset retirement
obligations, unearned revenue, tax contingencies, digital video and music content, and deferred tax liabilities.
Foreign Currency
We have internationally-focused stores for which the net sales generated, as well as most of the related expenses directly incurred from those operations,
are denominated in local functional currencies. The functional currency of our subsidiaries that either operate or support these stores is generally the same as
the local currency. Assets and liabilities of these subsidiaries are translated into U.S. Dollars at period-end foreign exchange rates, and revenues and expenses
are translated at average rates prevailing throughout the period. Translation adjustments are included in “Accumulated other comprehensive income (loss),” a
separate component of stockholders’ equity. Transaction gains and losses including intercompany transactions denominated in a currency other than the
functional currency of the entity involved are included in “Other income (expense), net” on our consolidated statements of operations. In connection with the
settlement and remeasurement of intercompany balances, we recorded gains (losses) of $(118) million, $19 million, and $386 million in 2020, 2021, and 2022.
Note 2 — FINANCIAL INSTRUMENTS
Cash, Cash Equivalents, Restricted Cash, and Marketable Securities
As of December 31, 2021 and 2022, our cash, cash equivalents, restricted cash, and marketable securities primarily consisted of cash, AAA-rated money
market funds, U.S. and foreign government and agency securities, other investment grade securities, and marketable equity securities. Cash equivalents and
marketable securities are recorded at fair value. The following table summarizes, by major security type, our cash, cash equivalents, restricted cash, and
marketable securities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in millions):
 December 31, 2021
  Cost or
Amortized
CostGross
Unrealized
GainsGross
Unrealized
LossesTotal
Estimated
Fair Value
Cash $ 10,942 $ — $ — $ 10,942 
Level 1 securities:
Money market funds 20,312 — — 20,312 
Equity securities (1) 1,646


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Equity securities (1) 1,646 
Level 2 securities:
Foreign government and agency securities 181 — — 181 
U.S. government and agency securities 4,316 9 (25) 4,300 
Corporate debt securities 35,810 75 (121) 35,764 
Asset-backed securities 6,763 7 (32) 6,738 
Other fixed income securities 688 2 (4) 686 
Equity securities (1)(3) 15,740 
$ 79,012 $ 93 $ (182)$ 96,309 
Less: Restricted cash, cash equivalents, and marketable securities (2) (260)
Total cash, cash equivalents, and marketable securities $ 96,049 
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 December 31, 2022
  Cost or
Amortized
CostGross
Unrealized
GainsGross
Unrealized
LossesTotal
Estimated
Fair Value
Cash $ 10,666 $ — $ — $ 10,666 
Level 1 securities:
Money market funds 27,899 — — 27,899 
Equity securities (1)(3) 3,709 
Level 2 securities:
Foreign government and agency securities 537 — (2) 535 
U.S. government and agency securities 2,301 — (155) 2,146 
Corporate debt securities 23,111 — (484) 22,627 
Asset-backed securities 2,721 — (149) 2,572 
Other fixed income securities 249 — (12) 237 
$ 67,484 $ — $ (802)$ 70,391 
Less: Restricted cash, cash equivalents, and marketable securities (2) (365)
Total cash, cash equivalents, and marketable securities $ 70,026 
___________________
(1)The related unrealized gain (loss) recorded in “Other income (expense), net” was $448 million, $11.6 billion, and $(13.6) billion for the years ended
December 31, 2020, 2021, and 2022.
(2)We are required to pledge or otherwise restrict a portion of our cash, cash equivalents, and marketable fixed income securities primarily as collateral for
real estate, amounts due to third-party sellers in certain jurisdictions, debt, and standby and trade letters of credit. We classify cash, cash equivalents, and
marketable fixed income securities with use restrictions of less than twelve months as “Accounts receivable, net and other” and of twelve months or longer
as non-current “Other assets” on our consolidated balance sheets. See “Note 7 — Commitments and Contingencies.”
(3)Our equity investment in Rivian had a fair value of $15.6 billion and $2.9 billion as of December 31, 2021 and December 31, 2022, respectively. The
investment was subject to regulatory sales restrictions resulting in a discount for lack of marketability of approximately $800 million as of December 31,


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2021, which expired in Q1 2022.
The following table summarizes gross gains and gross losses realized on sales of marketable fixed income securities (in millions):
Year Ended December 31,
2020 2021 2022
Realized gains $ 92 $ 85 $ 43 
Realized losses 56 38 341 
The following table summarizes the remaining contractual maturities of our cash equivalents and marketable fixed income securities as of December 31,
2022 (in millions):
Amortized
CostEstimated
Fair Value
Due within one year $ 46,854 $ 46,782 
Due after one year through five years 7,622 7,047 
Due after five years through ten years 602 565 
Due after ten years 1,740 1,622 
Total $ 56,818 $ 56,016 
Actual maturities may differ from the contractual maturities because borrowers may have certain prepayment conditions.
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Consolidated Statements of Cash Flows Reconciliation
The following table provides a reconciliation of the amount of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets
to the total of the same such amounts shown in the consolidated statements of cash flows (in millions):
December 31, 2021 December 31, 2022
Cash and cash equivalents $ 36,220 $ 53,888 
Restricted cash included in accounts receivable, net and other 242 358 
Restricted cash included in other assets 15 7 
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 36,477 $ 54,253 
Note 3 — PROPERTY AND EQUIPMENT
Property and equipment, at cost, consisted of the following (in millions): 
 December 31,
 2021 2022
Gross property and equipment (1):
Land and buildings $ 81,104 $ 91,650 
Equipment 128,683 157,458 
Other assets 4,118 4,602 
Construction in progress 24,895 30,020 
Gross property and equipment 238,800 283,730 
Total accumulated depreciation and amortization (1) 78,519 97,015 
Total property and equipment, net $ 160,281 $ 186,715 
__________________
(1)Includes the original cost and accumulated depreciation of fully-depreciated assets.
Depreciation and amortization expense on property and equipment was $16.2 billion, $22.9 billion, and $24.9 billion which includes amortization of
property and equipment acquired under finance leases of $8.5 billion, $9.9 billion, and $6.1 billion for 2020, 2021, and 2022.
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Note 4 — LEASES
We have entered into non-cancellable operating and finance leases for fulfillment, delivery, office, data center, physical store, and sortation facilities as
well as server and networking equipment, vehicles, and aircraft. Gross assets acquired under finance leases, inclusive of those where title transfers at the end of
the lease, are recorded in “Property and equipment, net” and were $72.2 billion and $68.0 billion as of December 31, 2021 and 2022. Accumulated
amortization associated with finance leases was $43.4 billion and $45.2 billion as of December 31, 2021 and 2022.
Lease cost recognized in our consolidated statements of operations is summarized as follows (in millions):
 Year Ended December 31,
2020 2021 2022
Operating lease cost $ 5,019 $ 7,199 $ 8,847 
Finance lease cost:
Amortization of lease assets 8,452 9,857 6,097 
Interest on lease liabilities 617 473 361 
Finance lease cost 9,069 10,330 6,458 
Variable lease cost 1,238 1,556 1,852 
Total lease cost $ 15,326 $ 19,085 $ 17,157 
Other information about lease amounts recognized in our consolidated financial statements is as follows:
 December 31, 2021 December 31, 2022
 
Weighted-average remaining lease term – operating leases 11.3 years 11.6 years
Weighted-average remaining lease term – finance leases 8.1 years 10.3 years
Weighted-average discount rate – operating leases 2.2 % 2.8 %
Weighted-average discount rate – finance leases 2.0 % 2.3 %
Our lease liabilities were as follows (in millions):
December 31, 2021
 Operating Leases Finance Leases Total
Gross lease liabilities $ 66,269 $ 25,866 $ 92,135 
Less: imputed interest (7,939) (2,113) (10,052)
Present value of lease liabilities 58,330 23,753 82,083


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Less: current portion of lease liabilities (6,349) (8,083) (14,432)
Total long-term lease liabilities $ 51,981 $ 15,670 $ 67,651 
December 31, 2022
 Operating Leases Finance Leases Total
Gross lease liabilities $ 81,273 $ 18,019 $ 99,292 
Less: imputed interest (12,233) (2,236) (14,469)
Present value of lease liabilities 69,040 15,783 84,823 
Less: current portion of lease liabilities (7,458) (4,397) (11,855)
Total long-term lease liabilities $ 61,582 $ 11,386 $ 72,968 
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Note 5 — ACQUISITIONS, GOODWILL, AND ACQUIRED INTANGIBLE ASSETS
2020 Acquisition Activity
During 2020, we acquired certain companies for an aggregate purchase price of $1.2 billion, net of cash acquired, of which $1.1 billion was capitalized to
in-process research and development intangible assets (“IPR&D”).
2021 Acquisition Activity
During 2021, we acquired certain companies for an aggregate purchase price of $496 million, net of cash acquired.
2022 Acquisition Activity
On March 17, 2022, we acquired MGM Holdings Inc., for cash consideration of approximately $6.1 billion, net of cash acquired, to provide more digital
media content options for customers. We also assumed $2.5 billion of debt, which we repaid immediately after closing. The acquired assets primarily consist of
$3.4 billion of video content and $4.9 billion of goodwill.
During 2022, we also acquired certain other companies for an aggregate purchase price of $141 million, net of cash acquired.
Pro forma results of operations have not been presented because the effects of the 2022 acquisitions, individually and in the aggregate, were not material
to our consolidated results of operations. Acquisition-related costs were expensed as incurred and were not significant.
Goodwill
The goodwill of the acquired companies is primarily related to expected improvements in technology performance and functionality, as well as sales
growth from future product and service offerings and new customers, together with certain intangible assets that do not qualify for separate recognition. The
goodwill of the acquired companies is generally not deductible for tax purposes. The following summarizes our goodwill activity in 2021 and 2022 by segment
(in millions):
North
America International AWS Consolidated
Goodwill - January 1, 2021 $ 12,527 $ 1,288 $ 1,202 $ 15,017 
New acquisitions 230 60 76 366 
Other adjustments (1) 1 (21) 8 (12)
Goodwill - December 31, 2021 12,758 1,327 1,286 15,371 
New acquisitions 3,943 1,054 — 4,997 
Other adjustments (1) (80) 30 (30) (80)


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Goodwill - December 31, 2022 $ 16,621 $ 2,411 $ 1,256 $ 20,288 
 ___________________
(1)Primarily includes changes in foreign exchange rates.
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Intangible Assets
Acquired identifiable intangible assets are valued primarily by using discounted cash flows. These assets are included within “Other assets” on our
consolidated balance sheets and consist of the following (in millions):
 
 December 31,
 2021 2022
  Acquired
Intangibles,
Gross (1)Accumulated
Amortization (1)Acquired
Intangibles,
NetAcquired
Intangibles,
Gross (1)Accumulated
Amortization (1)Acquired
Intangibles,
NetWeighted
Average Life
Remaining
Finite-lived intangible assets (2):
Marketing-related $ 2,286 $ (548)$ 1,738 $ 2,407 $ (601)$ 1,806 18.6
Contract-based 2,327 (565) 1,762 3,661 (813) 2,848 12.8
Technology- and content-
based 976 (610) 366 883 (643) 240 3.2
Customer-related 197 (103) 94 184 (128) 56 2.2
Total finite-lived
intangible assets $ 5,786 $ (1,826)$ 3,960 $ 7,135 $ (2,185)$ 4,950 14.4
IPR&D and other (3) $ 1,147  $ 1,147 $ 1,147  $ 1,147 
Total acquired intangibles$ 6,933 $ (1,826)$ 5,107 $ 8,282 $ (2,185)$ 6,097 
 ___________________
(1)Excludes the original cost and accumulated amortization of fully-amortized intangibles.
(2)Finite-lived intangible assets, excluding acquired video content, have estimated useful lives of between one and twenty-five years, and are being amortized
to operating expenses on a straight-line basis.
(3)Intangible assets acquired in a business combination that are in-process and used in research and development activities are considered indefinite-lived
until the completion or abandonment of the research and development efforts. Once the research and development efforts are completed, we determine the
useful life and begin amortizing the assets.


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useful life and begin amortizing the assets.
Amortization expense for acquired finite-lived intangibles was $509 million, $512 million, and $604 million in 2020, 2021, and 2022. Expected future
amortization expense of acquired finite-lived intangible assets as of December 31, 2022 is as follows (in millions):
 
Year Ended December 31,
2023 $ 530 
2024 456 
2025 371 
2026 324 
2027 314 
Thereafter 2,955 
$ 4,950 
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Note 6 — DEBT
As of December 31, 2022, we had $69.5 billion of unsecured senior notes outstanding (the “Notes”), including $12.8 billion issued in April 2022 and
$8.3 billion issued in December 2022 for general corporate purposes, and $1.0 billion of borrowings under our secured revolving credit facility. Our total long-
term debt obligations are as follows (in millions):
Maturities (1) Stated Interest Rates Effective Interest Rates December 31, 2021 December 31, 2022
2012 Notes issuance of $3.0 billion 2022 2.50% 2.66% 1,250 — 
2014 Notes issuance of $6.0 billion 2024 - 2044 3.80% - 4.95% 3.90% - 5.12% 4,000 4,000 
2017 Notes issuance of $17.0 billion 2023 - 2057 2.40% - 5.20% 2.56% - 4.33% 16,000 16,000 
2020 Notes issuance of $10.0 billion 2023 - 2060 0.40% - 2.70% 0.56% - 2.77% 10,000 10,000 
2021 Notes issuance of $18.5 billion 2023 - 2061 0.25% - 3.25% 0.35% - 3.31% 18,500 18,500 
April 2022 Notes issuance of $12.8 billion 2024 - 2062 2.73% - 4.10% 2.83% - 4.15% — 12,750 
December 2022 Notes issuance of $8.3 billion 2024 - 2032 4.55% - 4.70% 4.61% - 4.83% — 8,250 
Credit Facility 803 1,042 
Total face value of long-term debt 50,553 70,542 
Unamortized discount and issuance costs, net (318) (393)


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Less: current portion of long-term debt (1,491) (2,999)
Long-term debt $ 48,744 $ 67,150 
___________________
(1)The weighted-average remaining lives of the 2014, 2017, 2020, 2021, April 2022, and December 2022 Notes were 12.6, 14.2, 16.7, 13.3, 13.3, and 5.9
years as of December 31, 2022. The combined weighted-average remaining life of the Notes was 13.1 years as of December 31, 2022.
Interest on the Notes is payable semi-annually in arrears. We may redeem the Notes at any time in whole, or from time to time, in part at specified
redemption prices. We are not subject to any financial covenants under the Notes. The estimated fair value of the Notes was approximately $53.3 billion and
$61.4 billion as of December 31, 2021 and 2022, which is based on quoted prices for our debt as of those dates.
We have a $1.5 billion secured revolving credit facility with a lender that is secured by certain seller receivables, which we increased from $1.0 billion to
$1.5 billion in August 2022 and we may from time to time increase in the future subject to lender approval (the “Credit Facility”). The Credit Facility is
available until August 2025, bears interest based on the daily Secured Overnight Financing Rate plus 1.25%, and has a commitment fee of up to 0.45% on the
undrawn portion. There were $803 million and $1.0 billion of borrowings outstanding under the Credit Facility as of December 31, 2021 and 2022, which had
an interest rate of 1.5% and 5.6%, respectively. As of December 31, 2021 and 2022, we have pledged $918 million and $1.2 billion of our cash and seller
receivables as collateral for debt related to our Credit Facility. The estimated fair value of the Credit Facility, which is based on Level 2 inputs, approximated
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As of December 31, 2022, future principal payments for our total long-term debt were as follows (in millions):
Year Ended December 31,
2023 $ 3,000 
2024 8,500 
2025 5,249 
2026 3,543 
2027 8,750 
Thereafter 41,500 
$ 70,542 
We have U.S. Dollar and Euro commercial paper programs (the “Commercial Paper Programs”) under which we may from time to time issue unsecured
commercial paper up to a total of $20.0 billion (including up to €3.0 billion) at the date of issue, with individual maturities that may vary but will not exceed
397 days from the date of issue. In March 2022, we increased the size of the Commercial Paper Programs from $10.0 billion to $20.0 billion. There were $725
million and $6.8 billion of borrowings outstanding under the Commercial Paper Programs as of December 31, 2021 and 2022, which were
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included in “Accrued expenses and other” on our consolidated balance sheets and had a weighted-average effective interest rate, including issuance costs, of
0.08% and 4.47%, respectively. We use the net proceeds from the issuance of commercial paper for general corporate purposes.
We have a $10.0 billion unsecured revolving credit facility with a syndicate of lenders (the “Credit Agreement”), which was amended and restated in
March 2022 to increase the borrowing capacity from $7.0 billion to $10.0 billion and to extend the term to March 2025. It may be extended for up to three
additional one-year terms if approved by the lenders. The interest rate applicable to outstanding balances under the Credit Agreement is the applicable
benchmark rate specified in the Credit Agreement plus 0.45%, with a commitment fee of 0.03% on the undrawn portion of the credit facility. There were no
borrowings outstanding under the Credit Agreement as of December 31, 2021 and 2022.
In November 2022, we entered into a $10.0 billion unsecured 364-day revolving credit facility with a syndicate of lenders (the “Short-Term Credit
Agreement”), which matures in November 2023 and may be extended for one additional period of 364 days if approved by the lenders. The interest rate
applicable to outstanding balances under the Short-Term Credit Agreement is the Secured Overnight Financing Rate specified in the Short-Term Credit
Agreement plus 0.45%, with a commitment fee of 0.05% on the undrawn portion. There were no borrowings outstanding under the Short-Term Credit
Agreement as of December 31, 2022.
We also utilize other short-term credit facilities for working capital purposes. There were $318 million and $1.2 billion of borrowings outstanding under
these facilities as of December 31, 2021 and 2022, which were included in “Accrued expenses and other” on our consolidated balance sheets. In addition, we
had $6.9 billion of unused letters of credit as of December 31, 2022.
In January 2023, we entered into an $8.0 billion unsecured 364-day term loan with a syndicate of lenders (the “Term Loan”), which matures in January


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2024 and bears interest at the Secured Overnight Financing Rate specified in the Term Loan plus 0.75%. If we exercise our option to extend the Term Loan’s
maturity to January 2025, the interest rate spread will increase from 0.75% to 1.05%. As of the date of this filing, the entire Term Loan is outstanding.
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Note 7 — COMMITMENTS AND CONTINGENCIES
Commitments
The following summarizes our principal contractual commitments, excluding open orders for purchases that support normal operations and are generally
cancellable, as of December 31, 2022 (in millions):
 Year Ended December 31,   
 2023 2024 2025 2026 2027 Thereafter Total
Long-term debt principal and interest $ 5,165 $10,618 $ 7,146 $ 5,253 $10,399 $ 63,815 $102,396 
Operating lease liabilities 9,574 8,658 8,024 7,393 6,675 40,949 81,273 
Finance lease liabilities, including interest 4,575 2,248 1,422 1,279 1,088 7,407 18,019 
Financing obligations, including interest (1) 465 464 456 464 471 6,712 9,032 
Leases not yet commenced 1,252 2,043 2,185 2,160 2,152 17,237 27,029 
Unconditional purchase obligations (2) 8,156 7,217 5,366 4,525 3,419 6,093 34,776 
Other commitments (3)(4) 3,173 1,608 1,027 982 622 8,652 16,064 
Total commitments $32,360 $32,856 $25,626 $22,056 $24,826 $150,865 $288,589 
___________________
(1)Includes non-cancellable financing obligations for fulfillment, sortation, and data center facilities. Excluding interest, current financing obligations of $196
million and $266 million are recorded within “Accrued expenses and other” and $6.2 billion and $6.7 billion are recorded within “Other long-term
liabilities” as of December 31, 2021 and 2022. The weighted-average remaining term of the financing obligations was 18.8 years and 17.9 years and the
weighted-average imputed interest rate was 3.2% and 3.1% as of December 31, 2021 and 2022.


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(2)Includes unconditional purchase obligations related to long-term agreements to acquire and license digital media content that are not reflected on the
consolidated balance sheets and certain products offered in our Whole Foods Market stores. For those digital media content agreements with variable
terms, we do not estimate the total obligation beyond any minimum quantities and/or pricing as of the reporting date. Purchase obligations associated with
renewal provisions solely at the option of the content provider are included to the extent such commitments are fixed or a minimum amount is specified.
(3)Includes asset retirement obligations, liabilities associated with digital media content agreements with initial terms greater than one year, and the estimated
timing and amounts of payments for rent and tenant improvements associated with build-to-suit lease arrangements that are under construction.
(4)Excludes approximately $4.0 billion of accrued tax contingencies for which we cannot make a reasonably reliable estimate of the amount and period of
payment, if any.
In July 2022, we entered into an agreement to acquire 1Life Healthcare, Inc. (One Medical) for approximately $3.9 billion, including its debt, subject to
customary closing conditions. In August 2022, we entered into an agreement to acquire iRobot Corporation for approximately $1.7 billion, including its debt,
subject to customary closing conditions. We expect to fund these acquisitions with cash on hand.
Suppliers
During 2022, no vendor accounted for 10% or more of our purchases. We generally do not have long-term contracts or arrangements with our vendors to
guarantee the availability of merchandise, particular payment terms, or the extension of credit limits.
Other Contingencies
We are disputing claims and denials of refunds or credits related to various non-income taxes (such as sales, value added, consumption, service, and
similar taxes), including in jurisdictions in which we already collect and remit these taxes. These non-income tax controversies typically relate to (i) the
taxability of products and services, including cross-border intercompany transactions, (ii) collection and withholding on transactions with third parties, and (iii)
the adequacy of compliance with reporting obligations, including evolving documentation requirements. Due to the inherent complexity and uncertainty of
these matters and the judicial and regulatory processes in certain jurisdictions, the final outcome of any such controversies may be materially different from our
expectations.
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Legal Proceedings
The Company is involved from time to time in claims, proceedings, and litigation, including the following:
In November 2015, Eolas Technologies, Inc. filed a complaint against Amazon.com, Inc. in the United States District Court for the Eastern District of
Texas. The complaint alleges, among other things, that the use of “interactive features” on www.amazon.com, including “search suggestions and search
results,” infringes U.S. Patent No. 9,195,507, entitled “Distributed Hypermedia Method and System for Automatically Invoking External Application Providing
Interaction and Display of Embedded Objects Within a Hypermedia Document.” The complaint sought a judgment of infringement together with costs and
attorneys’ fees. In February 2016, Eolas filed an amended complaint seeking, among other things, an unspecified amount of damages. In February 2017, Eolas
alleged in its damages report that in the event of a finding of liability Amazon could be subject to $130 to $250 million in damages. In April 2017, the case was
transferred to the United States District Court for the Northern District of California. In May 2022, the district court granted summary judgment holding that
the patent is invalid. In June 2022, Eolas filed a notice of appeal. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in this
matter.
In May 2018, Rensselaer Polytechnic Institute and CF Dynamic Advances LLC filed a complaint against Amazon.com, Inc. in the United States District
Court for the Northern District of New York. The complaint alleges, among other things, that “Alexa Voice Software and Alexa enabled devices” infringe U.S.
Patent No. 7,177,798, entitled “Natural Language Interface Using Constrained Intermediate Dictionary of Results.” The complaint seeks an injunction, an
unspecified amount of damages, enhanced damages, an ongoing royalty, interest, attorneys’ fees, and costs. We dispute the allegations of wrongdoing and
intend to defend ourselves vigorously in this matter.
In December 2018, Kove IO, Inc. filed a complaint against Amazon Web Services, Inc. in the United States District Court for the Northern District of
Illinois. The complaint alleges, among other things, that Amazon S3 and DynamoDB infringe U.S. Patent Nos. 7,814,170 and 7,103,640, both entitled


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“Network Distributed Tracking Wire Transfer Protocol”; and 7,233,978, entitled “Method and Apparatus for Managing Location Information in a Network
Separate from the Data to Which the Location Information Pertains.” The complaint seeks an unspecified amount of damages, enhanced damages, attorneys’
fees, costs, interest, and injunctive relief. In March 2022, the case was stayed pending resolution of review petitions we filed with the United States Patent and
Trademark Office. In November 2022, the stay was lifted. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in this matter.
Beginning in March 2020, with Frame-Wilson v. Amazon.com, Inc. filed in the United States District Court for the Western District of Washington,
private litigants have filed a number of cases in the U.S. and Canada alleging, among other things, price fixing arrangements between Amazon.com, Inc. and
vendors and third-party sellers in Amazon’s stores, monopolization and attempted monopolization, and consumer protection and unjust enrichment claims.
Attorneys General for the District of Columbia and California brought similar suits in May 2021 and September 2022 in the Superior Court of the District of
Columbia and the California Superior Court for the County of San Francisco, respectively. Some of the private cases include allegations of several distinct
purported classes, including consumers who purchased a product through Amazon’s stores and consumers who purchased a product offered by Amazon
through another e-commerce retailer. The complaints seek billions of dollars of alleged actual damages, treble damages, punitive damages, injunctive relief,
civil penalties, attorneys’ fees, and costs. In March 2022 and January 2023, Amazon’s motions to dismiss were granted in part and denied in part in Frame-
Wilson and De Coster v. Amazon.com, Inc. (WD Wash), respectively; both courts dismissed claims alleging that Amazon’s pricing policies are inherently
illegal and denied dismissal of claims alleging that Amazon’s pricing policies are an unlawful restraint of trade. In March 2022, the DC Superior Court
dismissed the DC Attorney General’s lawsuit in its entirety; the dismissal is under appeal as of January 2023. We dispute the allegations of wrongdoing and
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intend to defend ourselves vigorously in these matters.
In October 2020, BroadbandiTV, Inc. filed a complaint against Amazon.com, Inc., Amazon.com Services LLC, and Amazon Web Services, Inc. in the
United States District Court for the Western District of Texas. The complaint alleges, among other things, that certain Amazon Prime Video features and
services infringe U.S. Patent Nos. 9,648,388, 10,546,750, and 10,536,751, each entitled “Video-On-Demand Content Delivery System for Providing Video-On-
Demand Services to TV Services Subscribers”; 10,028,026, entitled “System for Addressing On-Demand TV Program Content on TV Services Platform of a
Digital TV Services Provider”; and 9,973,825, entitled “Dynamic Adjustment of Electronic Program Guide Displays Based on Viewer Preferences for
Minimizing Navigation in VOD Program Selection.” The complaint seeks an unspecified amount of damages. In April 2022, BroadbandiTV alleged in its
damages report that, in the event of a finding of liability, Amazon could be subject to $166 to $986 million in damages. In September 2022, the court granted
summary judgment, holding that the patents are invalid. In October 2022, BroadbandiTV filed a notice of appeal. We dispute the allegations of wrongdoing and
will continue to defend ourselves vigorously in this matter.
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In November 2020, the European Commission issued a Statement of Objections alleging that Amazon uses data relating to our marketplace sellers in a
manner that infringes EU competition rules. The Statement of Objections sought to impose unspecified fines and remedial actions. In December 2022, the
European Commission adopted formal commitments without fines, fully resolving the investigation.
In July 2021, the Luxembourg National Commission for Data Protection (the “CNPD”) issued a decision against Amazon Europe Core S.à r.l. claiming
that Amazon’s processing of personal data did not comply with the EU General Data Protection Regulation. The decision imposes a fine of €746 million and
corresponding practice revisions. We believe the CNPD’s decision to be without merit and intend to defend ourselves vigorously in this matter.
In November 2021, Jawbone Innovations, LLC filed a complaint against Amazon.com, Inc. and Amazon.com Services, Inc. in the United States District
Court for the Eastern District of Texas. The complaint alleges, among other things, that Amazon Echo smart speakers and displays, Fire TV Cube, and Echo
Buds infringe U.S. Patent Nos. 7,246,058, entitled “Detecting Voiced and Unvoiced Speech Using Both Acoustic and Nonacoustic Sensors”; 8,019,091,
entitled “Voice Activity Detector (VAD)-Based Multiple-Microphone Acoustic Noise Suppression”; 8,280,072, entitled “Microphone Array with Rear
Venting”; 8,321,213 and 8,326,611, both entitled “Acoustic Voice Activity Detection (AVAD) for Electronic Systems”; 8,467,543, entitled “Microphone and
Voice Activity Detection (VAD) Configurations for Use with Communications Systems”; 8,503,691, entitled “Virtual Microphone Arrays Using Dual
Omnidirectional Microphone Array (DOMA)”; 10,779,080, entitled “Dual Omnidirectional Microphone Array (DOMA)”; and 11,122,357, entitled “Forming
Virtual Microphone Arrays Using Dual Omnidirectional Microphone Array (DOMA).” The complaint seeks an unspecified amount of damages, enhanced
damages, attorneys’ fees, costs, interest, and injunctive relief. In November 2022, the case was transferred to the United States District Court for the Northern


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District of California. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in this matter.
In December 2021, the Italian Competition Authority (the “ICA”) issued a decision against Amazon Services Europe S.à r.l., Amazon Europe Core S.à
r.l., Amazon EU S.à r.l., Amazon Italia Services S.r.l., and Amazon Italia Logistica S.r.l. claiming that certain of our marketplace and logistics practices in Italy
infringe EU competition rules. The decision imposes remedial actions and a fine of €1.13 billion, which we are paying and will seek to recover pending
conclusion of all appeals. We believe the ICA’s decision to be without merit and intend to defend ourselves vigorously in this matter.
In July 2022, Acceleration Bay, LLC filed a complaint against Amazon Web Services, Inc. in the United States District Court for the District of
Delaware. The complaint alleges, among other things, that Amazon EC2, Amazon CloudFront, AWS Lambda, Amazon Lumberyard, Luna, Amazon Prime
Video, Twitch, Amazon GameLift, GridMate, Amazon EKS, AWS App Mesh, and Amazon VPC infringe U.S. Patent Nos. 6,701,344, entitled “Distributed
Game Environment”; 6,714,966, entitled “Information Delivery Service”; 6,732,147, entitled “Leaving a Broadcast Channel”; 6,829,634, entitled
“Broadcasting Network”; and 6,910,069, entitled “Joining a Broadcast Channel.” The complaint seeks injunctive relief, an unspecified amount of damages,
enhanced damages, interest, attorneys’ fees, and costs. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in this matter.
In November 2022, LightGuide, Inc. filed a complaint against Amazon.com, Inc. and Amazon.com Services LLC in the United States District Court for
the Eastern District of Texas. The complaint alleges, among other things, that Amazon’s Nike Intent Detection System used in certain fulfillment centers
infringes U.S. Patent Nos. 7,515,981, entitled “Light Guided Assembly System”; and 9,658,614 and 10,528,036, each entitled “Light Guided Assembly System


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and Method.” The complaint seeks an unspecified amount of damages, enhanced damages, attorneys’ fees, costs, interest, and injunctive relief. We dispute the
allegations of wrongdoing and intend to defend ourselves vigorously in this matter.
In addition, we are regularly subject to claims, litigation, and other proceedings, including potential regulatory proceedings, involving patent and other
intellectual property matters, taxes, labor and employment, competition and antitrust, privacy and data protection, consumer protection, commercial disputes,
goods and services offered by us and by third parties, and other matters.
The outcomes of our legal proceedings and other contingencies are inherently unpredictable, subject to significant uncertainties, and could be material to
our operating results and cash flows for a particular period. We evaluate, on a regular basis, developments in our legal proceedings and other contingencies that
could affect the amount of liability, including amounts in excess of any previous accruals and reasonably possible losses disclosed, and make adjustments and
changes to our accruals and disclosures as appropriate. For the matters we disclose that do not include an estimate of the amount of loss or range of losses, such
an estimate is not possible or is immaterial, and we may be unable to estimate the possible loss or range of losses that could potentially result from the
application of non-monetary remedies. Until the final resolution of such matters, if any of our estimates and assumptions change or prove to have been
incorrect, we may experience losses in excess of the amounts recorded, which could have a material effect on our business, consolidated financial position,
results of operations, or cash flows.
See also “Note 9 — Income Taxes.”
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Note 8 — STOCKHOLDERS’ EQUITY
Preferred Stock
We have authorized 500 million shares of $0.01 par value preferred stock. No preferred stock was outstanding for any year presented.
Common Stock
Common shares outstanding plus shares underlying outstanding stock awards totaled 10.4 billion, 10.5 billion, and 10.6 billion, as of December 31,
2020, 2021, and 2022. These totals include all vested and unvested stock awards outstanding, including those awards we estimate will be forfeited.
Stock Repurchase Activity
In March 2022, the Board of Directors authorized a program to repurchase up to $10.0 billion of our common stock, with no fixed expiration, which
replaced the previous $5.0 billion stock repurchase authorization, approved by the Board of Directors in February 2016. We repurchased 46.2 million shares of
our common stock for $6.0 billion in 2022 under these programs. There were no repurchases of common stock in 2020 or 2021. As of December 31, 2022, we
have $6.1 billion remaining under the repurchase program.
Stock Award Plans
Employees vest in restricted stock unit awards over the corresponding service term, generally between two and five years.
Stock Award Activity
Stock-based compensation expense is as follows (in millions):
Year Ended December 31,
2020 2021 2022
Cost of sales $ 283 $ 540 $ 757 
Fulfillment 1,357 1,946 2,745 
Technology and content 5,061 6,645 10,621 
Sales and marketing 1,710 2,530 3,875 
General and administrative 797 1,096 1,623 
Total stock-based compensation expense (1) $ 9,208 $ 12,757 $ 19,621 
___________________
(1)The related tax benefits were $1.9 billion, $2.7 billion, and $4.3 billion for 2020, 2021, and 2022.
The following table summarizes our restricted stock unit activity (in millions):
Number of UnitsWeighted Average
Grant-Date
Fair Value


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Number of UnitsWeighted Average
Grant-Date
Fair Value
Outstanding as of January 1, 2020 286.7 $ 73 
Units granted 158.6 119 
Units vested (115.5) 62 
Units forfeited (26.5) 82 
Outstanding as of December 31, 2020 303.3 100 
Units granted 127.3 167 
Units vested (108.4) 85 
Units forfeited (42.3) 116 
Outstanding as of December 31, 2021 279.9 134 
Units granted 262.8 142 
Units vested (113.3) 114 
Units forfeited (45.0) 143 
Outstanding as of December 31, 2022 384.4 144 
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Scheduled vesting for outstanding restricted stock units as of December 31, 2022, is as follows (in millions):
 Year Ended    
 2023 2024 2025 2026 2027 Thereafter Total
Scheduled vesting — restricted stock units 140.8 136.6 67.3 35.8 1.7 2.2 384.4 
As of December 31, 2022, there was $23.8 billion of net unrecognized compensation cost related to unvested stock-based compensation arrangements.
This compensation is recognized on an accelerated basis with more than half of the compensation expected to be expensed in the next twelve months, and has a
remaining weighted-average recognition period of 1.1 years. The estimated forfeiture rate as of December 31, 2020, 2021, and 2022 was 26.7%, 26.5%, and
26.5%. Changes in our estimates and assumptions relating to forfeitures may cause us to realize material changes in stock-based compensation expense in the
future.
During 2020, 2021, and 2022, the fair value of restricted stock units that vested was $15.5 billion, $18.2 billion, and $12.8 billion.
Common Stock Available for Future Issuance
As of December 31, 2022, common stock available for future issuance to employees is 1.7 billion shares.
Note 9 — INCOME TAXES
In 2020, 2021, and 2022, we recorded net tax provision (benefit) of $2.9 billion, $4.8 billion, and $(3.2) billion. Our U.S. taxable income is reduced by
accelerated depreciation deductions and increased by the impact of capitalized research and development expenses. Cash taxes paid, net of refunds, were
$1.7 billion, $3.7 billion, and $6.0 billion for 2020, 2021, and 2022.
Certain foreign subsidiary earnings and losses are subject to current U.S. taxation and the subsequent repatriation of those earnings is not subject to tax in
the U.S. The U.S. tax rules also provide for enhanced accelerated depreciation deductions by allowing the election of full expensing of qualified property,


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primarily equipment, through 2022. Our federal tax provision included a partial election for 2020 and 2021, and a full election for 2022. Effective January 1,
2022, research and development expenses are required to be capitalized and amortized for U.S. tax purposes.
The components of the provision (benefit) for income taxes, net are as follows (in millions):
 Year Ended December 31,
2020 2021 2022
U.S. Federal:
Current $ 1,835 $ 2,129 $ 2,175 
Deferred (151) 155 (6,686)
Total 1,684 2,284 (4,511)
U.S. State:
Current 626 763 1,074 
Deferred (190) (178) (1,302)
Total 436 585 (228)
International:
Current 956 2,209 1,682 
Deferred (213) (287) (160)
Total 743 1,922 1,522 
Provision (benefit) for income taxes, net $ 2,863 $ 4,791 $ (3,217)
U.S. and international components of income (loss) before income taxes are as follows (in millions):
 Year Ended December 31,
 2020 2021 2022
U.S. $ 20,219 $ 35,879 $ (8,225)
International 3,959 2,272 2,289 
Income (loss) before income taxes $ 24,178 $ 38,151 $ (5,936)
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The items accounting for differences between income taxes computed at the federal statutory rate and the provision recorded for income taxes are as
follows (in millions):
 Year Ended December 31,
 2020 2021 2022
Income taxes computed at the federal statutory rate $ 5,078 $ 8,012 $ (1,246)
Effect of:
Tax impact of foreign earnings and losses (538) (1,349) (370)
State taxes, net of federal benefits 343 465 (173)
Tax credits (639) (1,136) (1,006)
Stock-based compensation (1) (1,107) (1,094) 612 
Foreign income deduction (2) (372) (301) (1,258)
Other, net 98 194 224 
Total $ 2,863 $ 4,791 $ (3,217)
___________________
(1)Includes non-deductible stock-based compensation and excess tax benefits or shortfalls from stock-based compensation. Our tax provision includes $1.8
billion and $1.9 billion of excess tax benefits from stock-based compensation for 2020 and 2021, and a $33 million tax shortfall from stock-based
compensation for 2022.
(2)U.S. companies are eligible for a deduction that lowers the effective tax rate on certain foreign income. This regime is referred to as the Foreign-Derived
Intangible Income deduction.
Our provision for income taxes in 2021 was higher than in 2020 primarily due to an increase in pretax income. This was partially offset by an increase in
U.S. federal research and development credits and the impact of the distribution of certain intangible assets from Luxembourg to the U.S. in Q4 2021, resulting
in the utilization of $2.6 billion of Luxembourg deferred tax assets previously subject to a valuation allowance.
We generated an income tax benefit in 2022 as compared to a provision for income taxes in 2021 primarily due to a decrease in pretax income and an
increase in the foreign income deduction. This was partially offset by a reduction in excess tax benefits from stock-based compensation and a decrease in the
tax impact of foreign earnings and losses driven by a decline in the favorable effects of corporate restructuring transactions. The foreign income deduction


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benefit recognized in 2022 reflects a change in our application of tax regulations related to the computation of qualifying foreign income and includes an
income tax benefit of approximately $655 million related to years prior to 2022.
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.
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Deferred income tax assets and liabilities are as follows (in millions):
 December 31,
 2021 2022
Deferred tax assets (1):
Loss carryforwards U.S. - Federal/States 228 386 
Loss carryforwards - Foreign 2,417 2,831 
Accrued liabilities, reserves, and other expenses 2,821 3,280 
Stock-based compensation 2,738 4,295 
Depreciation and amortization 941 1,009 
Operating lease liabilities 15,399 18,285 
Capitalized research and development — 6,824 
Other items 603 1,023 
Tax credits 626 950 
Total gross deferred tax assets 25,773 38,883 
Less valuation allowances (2) (3,596) (4,374)
Deferred tax assets, net of valuation allowances 22,177 34,509 
Deferred tax liabilities:
Depreciation and amortization (3,562) (9,039)
Operating lease assets (14,422) (17,140)
Assets held for investment (4,019) — 
Other items (668) (817)
Net deferred tax assets (liabilities), net of valuation allowances $ (494)$ 7,513 
 ___________________
(1)Deferred tax assets are presented after tax effects and net of tax contingencies.
(2)Relates primarily to deferred tax assets that would only be realizable upon the generation of net income in certain foreign taxing jurisdictions or future
capital gains, as well as tax credits.
Our valuation allowances primarily relate to foreign deferred tax assets, including substantially all of our foreign net operating loss carryforwards as of
December 31, 2022. Our foreign net operating loss carryforwards for income tax purposes as of December 31, 2022 were approximately $10.4 billion before
tax effects and certain of these amounts are subject to annual limitations under applicable tax law. If not utilized, a portion of these losses will begin to expire in
2023.
Tax Contingencies
We are subject to income taxes in the U.S. (federal and state) and numerous foreign jurisdictions. Significant judgment is required in evaluating our tax
positions and determining our provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the


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ultimate tax determination is uncertain. We establish reserves for tax-related uncertainties based on estimates of whether, and the extent to which, additional
taxes will be due. These reserves are established when we believe that certain positions might be challenged despite our belief that our tax return positions are
fully supportable. We adjust these reserves in light of changing facts and circumstances, such as the outcome of tax audits. The provision for income taxes
includes the impact of reserve provisions and changes to reserves that are considered appropriate.
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The reconciliation of our tax contingencies is as follows (in millions):
 December 31,
 2020 2021 2022
Gross tax contingencies – January 1 $ 3,923 $ 2,820 $ 3,242 
Gross increases to tax positions in prior periods 88 403 274 
Gross decreases to tax positions in prior periods (465) (354) (172)
Gross increases to current period tax positions 507 507 706 
Settlements with tax authorities (1,207) (60) (20)
Lapse of statute of limitations (26) (74) (28)
Gross tax contingencies – December 31 (1) $ 2,820 $ 3,242 $ 4,002 
 ___________________
(1)As of December 31, 2022, we had approximately $4.0 billion of accrued tax contingencies of which $2.2 billion, if fully recognized, would decrease our
effective tax rate.
As of December 31, 2021 and 2022, we had accrued interest and penalties, net of federal income tax benefit, related to tax contingencies of $110 million
and $103 million. Interest and penalties, net of federal income tax benefit, recognized for the years ended December 31, 2020, 2021, and 2022 were $(48)
million, $28 million, and $(7) million.
We are under examination, or may be subject to examination, by the Internal Revenue Service for the calendar year 2016 and thereafter. These
examinations may lead to ordinary course adjustments or proposed adjustments to our taxes or our net operating losses with respect to years under examination
as well as subsequent periods.
We are also subject to taxation in various states and other foreign jurisdictions including China, France, Germany, India, Japan, Luxembourg, and the
United Kingdom. We are under, or may be subject to, audit or examination and additional assessments by the relevant authorities in respect of these particular
jurisdictions primarily for 2011 and thereafter. We are currently disputing tax assessments in multiple jurisdictions, including with respect to the allocation and
characterization of income.
In September 2022, the Luxembourg Tax Authority (“LTA”) denied the tax basis of certain intangible assets that we distributed from Luxembourg to the


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U.S. in 2021. We believe the LTA’s position is without merit and intend to defend ourselves vigorously in this matter.
In February 2023, we received a decision by the Indian Tax Authority (“ITA”) that tax applies to cloud services fees paid to the U.S. We will need to
remit taxes on the services in question, including for a portion of prior years, until this matter is resolved, which payments could be significant in the aggregate.
We believe the ITA’s decision is without merit, we intend to defend our position vigorously, and we expect to recoup taxes paid. If this matter is adversely
resolved, we would reflect significant additional tax expense, including for taxes previously paid.
In October 2014, the European Commission opened a formal investigation to examine whether decisions by the tax authorities in Luxembourg with
regard to the corporate income tax paid by certain of our subsidiaries comply with European Union rules on state aid. On October 4, 2017, the European
Commission announced its decision that determinations by the tax authorities in Luxembourg did not comply with European Union rules on state aid. Based on
that decision the European Commission announced an estimated recovery amount of approximately €250 million, plus interest, for the period May 2006
through June 2014, and ordered Luxembourg tax authorities to calculate the actual amount of additional taxes subject to recovery. Luxembourg computed an
initial recovery amount, consistent with the European Commission’s decision, which we deposited into escrow in March 2018, subject to adjustment pending
conclusion of all appeals. In December 2017, Luxembourg appealed the European Commission’s decision. In May 2018, we appealed. On May 12, 2021, the
European Union General Court annulled the European Commission’s state aid decision. In July 2021, the European Commission appealed the decision to the
European Court of Justice. We will continue to defend ourselves vigorously in this matter.
Changes in tax laws, regulations, administrative practices, principles, and interpretations may impact our tax contingencies. Due to various factors,
including the inherent complexities and uncertainties of the judicial, administrative, and regulatory processes in certain jurisdictions, the timing of the
resolution of income tax controversies is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities
may differ from the amounts accrued. It is reasonably possible that within the next twelve months we will receive additional assessments by various tax


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authorities or possibly reach resolution of income tax controversies in one or more jurisdictions. These assessments or settlements could result in changes to
our contingencies related to positions on prior years’ tax filings. The actual amount of any change could vary significantly depending on the ultimate timing
and nature of any settlements. We cannot currently provide an estimate of the range of possible outcomes.
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Note 10 — SEGMENT INFORMATION
We have organized our operations into three segments: North America, International, and AWS. We allocate to segment results the operating expenses
“Fulfillment,” “Technology and content,” “Sales and marketing,” and “General and administrative” based on usage, which is generally reflected in the segment
in which the costs are incurred. The majority of technology infrastructure costs are allocated to the AWS segment based on usage. The majority of the
remaining non-infrastructure technology costs are incurred in the U.S. and are allocated to our North America segment. There are no internal revenue
transactions between our reportable segments. These segments reflect the way our chief operating decision maker evaluates the Company’s business
performance and manages its operations.
North America
The North America segment primarily consists of amounts earned from retail sales of consumer products (including from sellers) and subscriptions
through North America-focused online and physical stores. This segment includes export sales from these online stores.
International
The International segment primarily consists of amounts earned from retail sales of consumer products (including from sellers) and subscriptions through
internationally-focused online stores. This segment includes export sales from these internationally-focused online stores (including export sales from these
online stores to customers in the U.S., Mexico, and Canada), but excludes export sales from our North America-focused online stores.
AWS
The AWS segment consists of amounts earned from global sales of compute, storage, database, and other services for start-ups, enterprises, government
agencies, and academic institutions.
Information on reportable segments and reconciliation to consolidated net income (loss) is as follows (in millions):
  Year Ended December 31,
 2020 2021 2022
North America
Net sales $ 236,282 $ 279,833 $ 315,880 
Operating expenses 227,631 272,562 318,727 
Operating income (loss) $ 8,651 $ 7,271 $ (2,847)
International
Net sales $ 104,412 $ 127,787 $ 118,007 
Operating expenses 103,695 128,711 125,753 
Operating income (loss) $ 717 $ (924)$ (7,746)
AWS
Net sales $ 45,370 $ 62,202 $ 80,096 
Operating expenses 31,839 43,670 57,255


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Operating expenses 31,839 43,670 57,255 
Operating income $ 13,531 $ 18,532 $ 22,841 
Consolidated
Net sales $ 386,064 $ 469,822 $ 513,983 
Operating expenses 363,165 444,943 501,735 
Operating income 22,899 24,879 12,248 
Total non-operating income (expense) 1,279 13,272 (18,184)
Benefit (provision) for income taxes (2,863) (4,791) 3,217 
Equity-method investment activity, net of tax 16 4 (3)
Net income (loss) $ 21,331 $ 33,364 $ (2,722)
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Net sales by groups of similar products and services, which also have similar economic characteristics, is as follows (in millions):
  Year Ended December 31,
 2020 2021 2022
Net Sales:
Online stores (1) $ 197,346 $ 222,075 $ 220,004 
Physical stores (2) 16,227 17,075 18,963 
Third-party seller services (3) 80,461 103,366 117,716 
Subscription services (4) 25,207 31,768 35,218 
Advertising services (5) 19,773 31,160 37,739 
AWS 45,370 62,202 80,096 
Other (6) 1,680 2,176 4,247 
Consolidated $ 386,064 $ 469,822 $ 513,983 
___________________
(1)Includes product sales and digital media content where we record revenue gross. We leverage our retail infrastructure to offer a wide selection of
consumable and durable goods that includes media products available in both a physical and digital format, such as books, videos, games, music, and
software. These product sales include digital products sold on a transactional basis. Digital product subscriptions that provide unlimited viewing or usage
rights are included in “Subscription services.”
(2)Includes product sales where our customers physically select items in a store. Sales to customers who order goods online for delivery or pickup at our
physical stores are included in “Online stores.”
(3)Includes commissions and any related fulfillment and shipping fees, and other third-party seller services.
(4)Includes annual and monthly fees associated with Amazon Prime memberships, as well as digital video, audiobook, digital music, e-book, and other non-
AWS subscription services.
(5)Includes sales of advertising services to sellers, vendors, publishers, authors, and others, through programs such as sponsored ads, display, and video
advertising.
(6)Includes sales related to various other offerings, such as certain licensing and distribution of video content and shipping services, and our co-branded credit
card agreements.
Net sales are attributed to countries primarily based on country-focused online and physical stores or, for AWS purposes, the selling entity. Net sales


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attributed to countries that represent a significant portion of consolidated net sales are as follows (in millions):
 Year Ended December 31,
 2020 2021 2022
United States $ 263,520 $ 314,006 $ 356,113 
Germany 29,565 37,326 33,598 
United Kingdom 26,483 31,914 30,074 
Japan 20,461 23,071 24,396 
Rest of world 46,035 63,505 69,802 
Consolidated $ 386,064 $ 469,822 $ 513,983 
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Total segment assets exclude corporate assets, such as cash and cash equivalents, marketable securities, other long-term investments, corporate facilities,
goodwill and other acquired intangible assets, and tax assets. Technology infrastructure assets are allocated among the segments based on usage, with the
majority allocated to the AWS segment. Total segment assets reconciled to consolidated amounts are as follows (in millions):
 December 31,
 2020 2021 2022
North America (1) $ 108,405 $ 161,255 $ 185,268 
International (1) 42,212 57,983 64,666 
AWS (2) 47,574 63,835 88,491 
Corporate 123,004 137,476 124,250 
Consolidated $ 321,195 $ 420,549 $ 462,675 
___________________
(1)North America and International segment assets primarily consist of property and equipment, operating leases, inventory, and accounts receivable.
(2)AWS segment assets primarily consist of property and equipment and accounts receivable.
Property and equipment, net by segment is as follows (in millions):
 December 31,
 2020 2021 2022
North America $ 54,912 $ 83,640 $ 90,076 
International 15,375 21,718 23,347 
AWS 32,151 43,245 60,324 
Corporate 10,676 11,678 12,968 
Consolidated $ 113,114 $ 160,281 $ 186,715 
Total net additions to property and equipment by segment are as follows (in millions):
 Year Ended December 31,
 2020 2021 2022
North America (1) $ 29,889 $ 37,397 $ 23,682 
International (1) 8,072 10,259 6,711 
AWS (2) 16,530 22,047 27,755 
Corporate 3,485 2,622 2,688 
Consolidated $ 57,976 $ 72,325 $ 60,836 
___________________


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___________________
(1)Includes property and equipment added under finance leases of $5.6 billion, $3.6 billion, and $422 million in 2020, 2021, and 2022, and under build-to-
suit lease arrangements of $2.7 billion, $5.6 billion, and $3.2 billion in 2020, 2021, and 2022.
(2)Includes property and equipment added under finance leases of $7.7 billion, $3.5 billion, and $253 million in 2020, 2021, and 2022, and under build-to-
suit lease arrangements of $130 million, $51 million, and $20 million in 2020, 2021, and 2022.
U.S. property and equipment, net and operating leases were $109.5 billion, $155.0 billion, and $180.0 billion, as of December 31, 2020, 2021, and 2022,
and non-U.S. property and equipment, net and operating leases were $41.2 billion, $61.3 billion, and $72.9 billion as of December 31, 2020, 2021, and 2022.
Except for the U.S., property and equipment, net and operating leases in any single country were less than 10% of consolidated property and equipment, net
and operating leases.
Depreciation and amortization expense on property and equipment, including corporate property and equipment, are allocated to all segments based on
usage. Total depreciation and amortization expense, by segment, is as follows (in millions):
 Year Ended December 31,
 2020 2021 2022
North America $ 6,421 $ 9,234 $ 11,565 
International 2,215 3,022 3,483 
AWS 7,603 10,653 9,876 
Consolidated $ 16,239 $ 22,909 $ 24,924 
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Item 9. Changes in and Disagreements with Accountants On Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation required by the Securities Exchange Act of 1934 (the “1934 Act”), under the supervision and with the participation of our
principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined
in Rule 13a-15(e) of the 1934 Act, as of December 31, 2022. Based on this evaluation, our principal executive officer and principal financial officer concluded
that, as of December 31, 2022, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed
by us in the reports that we file or submit under the 1934 Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s
rules and forms and to provide reasonable assurance that such information is accumulated and communicated to our management, including our principal
executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) of the 1934
Act. Management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2022 based on criteria established in
Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of this
assessment, management concluded that, as of December 31, 2022, our internal control over financial reporting was effective in providing reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. Ernst & Young has independently assessed the effectiveness of our internal control over financial reporting and its report is included
below.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended December 31, 2022 that materially affected, or are
reasonably likely to materially affect, our internal control over financial reporting.
Limitations on Controls
Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their


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objectives as specified above. Management does not expect, however, that our disclosure controls and procedures or our internal control over financial
reporting will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can
provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that
misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.
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Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders
Amazon.com, Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Amazon.com, Inc.’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control
— Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our
opinion, Amazon.com, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022,
based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated
balance sheets of the Company as of December 31, 2022 and 2021, and the related consolidated statements of operations, comprehensive income (loss),
stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2022 and the related notes and our report dated February 2,
2023 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness
of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our
responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered
with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and
evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting


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Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control
over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being
made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Seattle, Washington
February 2, 2023
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Item 9B. Other Information
Not applicable.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
PART III
Item 10. Directors, Executive Officers, and Corporate Governance
Information regarding our Executive Officers required by Item 10 of Part III is set forth in Item 1 of Part I “Business — Information About Our
Executive Officers.” Information required by Item 10 of Part III regarding our Directors and any material changes to the process by which security holders may
recommend nominees to the Board of Directors is included in our Proxy Statement relating to our 2023 Annual Meeting of Shareholders, and is incorporated
herein by reference. Information relating to our Code of Business Conduct and Ethics and, to the extent applicable, compliance with Section 16(a) of the 1934
Act is set forth in our Proxy Statement relating to our 2023 Annual Meeting of Shareholders and is incorporated herein by reference. To the extent permissible
under Nasdaq rules, we intend to disclose amendments to our Code of Business Conduct and Ethics, as well as waivers of the provisions thereof, on our
investor relations website under the heading “Corporate Governance” at amazon.com/ir.
Item 11. Executive Compensation
Information required by Item 11 of Part III is included in our Proxy Statement relating to our 2023 Annual Meeting of Shareholders and is incorporated
herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
Information required by Item 12 of Part III is included in our Proxy Statement relating to our 2023 Annual Meeting of Shareholders and is incorporated
herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Information required by Item 13 of Part III is included in our Proxy Statement relating to our 2023 Annual Meeting of Shareholders and is incorporated
herein by reference.
Item 14. Principal Accountant Fees and Services
Information required by Item 14 of Part III is included in our Proxy Statement relating to our 2023 Annual Meeting of Shareholders and is incorporated
herein by reference.
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PART IV
Item 15. Exhibits, Financial Statement Schedules
(a) List of Documents Filed as a Part of This Report:
(1) Index to Consolidated Financial Statements:
Report of Ernst & Young LLP, Independent Registered Public Accounting Firm
Consolidated Statements of Cash Flows for each of the three years ended December 31, 2022
Consolidated Statements of Operations for each of the three years ended December 31, 2022
Consolidated Statements of Comprehensive Income (Loss) for each of the three years ended December 31, 2022
Consolidated Balance Sheets as of December 31, 2021 and 2022
Consolidated Statements of Stockholders’ Equity for each of the three years ended December 31, 2022
Notes to Consolidated Financial Statements
Report of Ernst & Young LLP, Independent Registered Public Accounting Firm
(2) Index to Financial Statement Schedules:
All schedules have been omitted because the required information is included in the consolidated financial statements or the notes thereto, or
because it is not required.
(3) Index to Exhibits
See exhibits listed under Part (b) below.
(b) Exhibits:
Exhibit
Number Description
3.1 Amended and Restated Certificate of Incorporation of Amazon.com, Inc. (incorporated by reference to the Company’s Current Report on Form
8-K, filed May 27, 2022).
3.2 Amended and Restated Bylaws of Amazon.com, Inc. (incorporated by reference to the Company’s Current Report on Form 8-K, filed January 6,
2023).
4.1 Indenture, dated as of November 29, 2012, between Amazon.com, Inc. and Wells Fargo Bank, National Association, as trustee (incorporated by
reference to the Company’s Current Report on Form 8-K, filed November 29, 2012).
4.2 Supplemental Indenture, dated as of April 13, 2022, among Amazon.com, Inc., Wells Fargo Bank, National Association, as prior trustee, and
Computershare Trust Company, National Association, as successor trustee, containing Form of 2.730% Note due 2024, Form of 3.000% Note


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due 2025, Form of 3.300% Note due 2027, Form of 3.450% Note due 2029, Form of 3.600% Note due 2032, Form of 3.950% Note due 2052,
and Form of 4.100% Note due 2062 (incorporated by reference to the Company’s Current Report on Form 8-K, filed April 13, 2022).
4.3 Officers’ Certificate of Amazon.com, Inc., dated as of December 5, 2014, containing Form of 2.600% Note due 2019, Form of 3.300% Note due
2021, Form of 3.800% Note due 2024, Form of 4.800% Note due 2034, and Form of 4.950% Note due 2044 (incorporated by reference to the
Company’s Current Report on Form 8-K, filed December 5, 2014).
4.4 Officers’ Certificate of Amazon.com, Inc., dated as of August 22, 2017, containing Form of 1.900% Note due 2020, Form of 2.400% Note due
2023, Form of 2.800% Note due 2024, Form of 3.150% Note due 2027, Form of 3.875% Note due 2037, Form of 4.050% Note due 2047, and
Form of 4.250% Note due 2057 (incorporated by reference to the Company’s Current Report on Form 8-K, filed August 22, 2017).
4.5 Officers’ Certificate of Amazon.com, Inc., dated as of December 20, 2017, containing Form of 5.200% Note due 2025 (incorporated by
reference to the Company’s Current Report on Form 8-K, filed December 20, 2017).
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4.6 Officers’ Certificate of Amazon.com, Inc., dated as of June 3, 2020, containing Form of 0.400% Note due 2023, Form of 0.800% Note due
2025, Form of 1.200% Note due 2027, Form of 1.500% Note due 2030, Form of 2.500% Note due 2050, and Form of 2.700% Note due 2060
(incorporated by reference to the Company’s Current Report on Form 8-K, filed June 3, 2020).
4.7 Officers’ Certificate of Amazon.com, Inc., dated as of May 12, 2021, containing Form of 0.250% Note due 2023, Form of 0.450% Note due
2024, Form of 1.000% Note due 2026, Form of 1.650% Note due 2028, Form of 2.100% Note due 2031, Form of 2.875% Note due 2041, Form
of 3.100% Note due 2051, and Form of 3.250% Note due 2061 (incorporated by reference to the Company’s Current Report on Form 8-K, filed
May 12, 2021).
4.8 Officers’ Certificate of Amazon.com, Inc., dated as of December 1, 2022, containing Form of 4.700% Note due 2024, Form of 4.600% Note due
2025, Form of 4.550% Note due 2027, Form of 4.650% Note due 2029, and Form of 4.700% Note due 2032 (incorporated by reference to the
Company’s Current Report on Form 8-K, filed December 1, 2022).
4.9 Description of Securities (incorporated by reference to the Company’s Annual Report on Form 10-K for the Year ended December 31, 2019).
10.1† 1997 Stock Incentive Plan (amended and restated) (incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the Quarter
ended June 30, 2022).


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ended June 30, 2022).
10.2† 1999 Nonofficer Employee Stock Option Plan (amended and restated) (incorporated by reference to the Company’s Quarterly Report on Form
10-Q for the Quarter ended June 30, 2022).
10.3† Form of Indemnification Agreement between Amazon.com, Inc. and each of its Directors (incorporated by reference to Exhibit 10.1 to the
Company’s Registration Statement on Form S-1 (Registration No. 333-23795) filed March 24, 1997, as amended on April 21, 1997).
10.4† Form of Restricted Stock Unit Agreement for Officers and Employees (incorporated by reference to the Company’s Annual Report on Form 10-
K for the Year ended December 31, 2002).
10.5† Form of Restricted Stock Unit Agreement for Directors (incorporated by reference to the Company’s Annual Report on Form 10-K for the Year
ended December 31, 2002).
10.6† Form of Restricted Stock Agreement (incorporated by reference to the Company’s Annual Report on Form 10-K for the Year ended December
31, 2001).
10.7† Form of Global Restricted Stock Unit Award Agreement for Executive Officers (incorporated by reference to the Company’s Annual Report on
Form 10-K for the Year ended December 31, 2021).
10.8 Amended and Restated Credit Agreement, dated as of March 29, 2022, among Amazon.com, Inc., JPMorgan Chase Bank, N.A., as
administrative agent, and the other lenders party thereto (incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the
Quarter ended March 31, 2022).
10.9 364-Day Revolving Credit Agreement, dated as of November 18, 2022, among Amazon.com, Inc., JPMorgan Chase Bank, N.A., as
administrative agent, and the other lenders party thereto (incorporated by reference to the Company’s Current Report on Form 8-K, filed
November 18, 2022).
10.10 Term Loan Agreement, dated as of January 3, 2023, among Amazon.com, Inc., Toronto Dominion (Texas) LLC, as administrative agent, and the


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other lenders party thereto (incorporated by reference to the Company’s Current Report on Form 8-K, filed January 3, 2023).
21.1 List of Significant Subsidiaries.
23.1 Consent of Independent Registered Public Accounting Firm.
31.1 Certification of Andrew R. Jassy, President and Chief Executive Officer of Amazon.com, Inc., pursuant to Rule 13a-14(a) under the Securities
Exchange Act of 1934.
31.2 Certification of Brian T. Olsavsky, Senior Vice President and Chief Financial Officer of Amazon.com, Inc., pursuant to Rule 13a-14(a) under the
Securities Exchange Act of 1934.
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32.1 Certification of Andrew R. Jassy, President and Chief Executive Officer of Amazon.com, Inc., pursuant to 18 U.S.C. Section 1350.
32.2 Certification of Brian T. Olsavsky, Senior Vice President and Chief Financial Officer of Amazon.com, Inc., pursuant to 18 U.S.C. Section 1350.
101 The following financial statements from the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, formatted in
Inline XBRL: (i) Consolidated Statements of Cash Flows, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of
Comprehensive Income (Loss), (iv) Consolidated Balance Sheets, (v) Consolidated Statements of Stockholders’ Equity, and (vi) Notes to
Consolidated Financial Statements, tagged as blocks of text and including detailed tags.
As permitted by Item 601(b)(4)(iii)(A) of Regulation S-K, the Company has not filed with this Annual Report on Form 10-K certain instruments
defining the rights of holders of long-term debt of the Company and its subsidiaries because the total amount of securities authorized thereunder
does not exceed 10 percent of the total assets of the Company and its subsidiaries on a consolidated basis. The Company agrees to furnish a
copy of such agreements to the Commission upon request.
104 The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, formatted in Inline XBRL (included
as Exhibit 101).
__________________
†    Executive Compensation Plan or Agreement.
Item 16. Form 10-K Summary
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized, as of February 2, 2023.
 
AMAZON.COM, INC.
By: /s/ Andrew R. Jassy
Andrew R. Jassy
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated as of February 2, 2023.  
Signature Title
/s/ Andrew R. Jassy
Andrew R. Jassy President and Chief Executive Officer (Principal Executive Officer) and Director
/s/ Brian T. Olsavsky
Brian T. Olsavsky Senior Vice President and Chief Financial Officer (Principal Financial Officer)
/s/ Shelley L. Reynolds
Shelley L. Reynolds Vice President, Worldwide Controller (Principal Accounting Officer)
/s/ Jeffrey P. Bezos
Jeffrey P. Bezos Executive Chair
/s/ Keith B. Alexander
Keith B. Alexander Director
/s/ Edith W. Cooper
Edith W. Cooper Director
/s/ Jamie S. Gorelick
Jamie S. Gorelick Director
/s/ Daniel P. Huttenlocher
Daniel P. Huttenlocher Director
/s/ Judith A. McGrath
Judith A. McGrath Director
/s/ Indra K. Nooyi
Indra K. Nooyi Director
/s/ Jonathan J. Rubinstein
Jonathan J. Rubinstein Director
/s/ Patricia Q. Stonesifer
Patricia Q. Stonesifer Director
/s/ Wendell P. Weeks
Wendell P. Weeks Director
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Exhibit 21.1
AMAZON.COM, INC.
LIST OF SIGNIFICANT SUBSIDIARIES
Legal Name Jurisdiction Percent Owned
Amazon.com Services LLC Delaware 100 %
Amazon.com Sales, Inc. Delaware 100 %
Amazon Data Services, Inc. Delaware 100 %
Amazon Web Services, Inc. Delaware 100 %
Amazon Technologies, Inc. Nevada 100 %
Amazon.com NV Investment Holdings LLC Nevada 100 %
Amazon US Services LLC Delaware 100 %
A100 ROW, Inc. Delaware 100 %


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Exhibit 23.1
 
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the following Registration Statements:
(a)    Registration Statement (Form S-4 No. 333-55943), as amended, pertaining to the acquisition shelf-registration of Amazon.com, Inc. common stock,
(b)    Registration Statement (Form S-8 No. 333-28763), as amended, pertaining to the Amazon.com, Inc. 1997 Stock Incentive Plan (formerly the “1997
Stock Option Plan”) and the Amended and Restated 1994 Stock Option Plan of Amazon.com, Inc.,
(c)    Registration Statement (Form S-8 No. 333-74419) pertaining to the Amazon.com, Inc. 1999 Nonofficer Employee Stock Option Plan,
(d)    Registration Statement (Form S-8 POS No. 333-160831) pertaining to the Zappos.com, Inc. 2009 Stock Plan,
(e)    Registration Statement (Form S-8 No. 333-169470) pertaining to the Amazon.com, Inc. 1997 Stock Incentive Plan,
(f)    Registration Statement (Form S-8 No. 333-173054), pertaining to the Quidsi, Inc. (fka1800Diapers, Inc.) 2006 Stock Option/Stock Issuance Plan,
(g)    Registration Statement (Form S-8 No. 333-181073) pertaining to the Kiva Systems, Inc. 2003 Stock Plan, as amended,
(h)    Registration Statement (Form S-8 No. 333-199572) pertaining to the Twitch Interactive, Inc. Amended and Restated 2007 Stock Plan,
(i)    Registration Statement (Form S-8 No. 333-207591) pertaining to the Elemental Technologies, Inc. 2006 Stock Incentive Plan, as amended and
restated,
(j)    Registration Statement (Form S-3 No. 333-238831) pertaining to the shelf-registration of Amazon.com, Inc. securities, and
(k)    Registration Statement (Form S-8 No. 333-249847) pertaining to the Amazon.com, Inc. 1997 Stock Incentive Plan (as Amended and Restated).


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of our reports dated February 2, 2023, with respect to the consolidated financial statements of Amazon.com, Inc. and the effectiveness of internal control over
financial reporting of Amazon.com, Inc. included in this Annual Report (Form 10-K) of Amazon.com, Inc. for the year ended December 31, 2022.
/s/ Ernst & Young LLP
Seattle, Washington
February 2, 2023


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Exhibit 31.1
CERTIFICATIONS
I, Andrew R. Jassy, certify that:
1. I have reviewed this Form 10-K of Amazon.com, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect,
the registrant’s internal control over financial reporting; and


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the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control
over financial reporting.
 
/s/ Andrew R. Jassy
Andrew R. Jassy
President and Chief Executive Officer
(Principal Executive Officer)
Date: February 2, 2023


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Exhibit 31.2
CERTIFICATIONS
I, Brian T. Olsavsky, certify that:
1. I have reviewed this Form 10-K of Amazon.com, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect,
the registrant’s internal control over financial reporting; and


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the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control
over financial reporting.
 
/s/ Brian T. Olsavsky
Brian T. Olsavsky
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
Date: February 2, 2023


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Exhibit 32.1
Certification Pursuant to 18 U.S.C. Section 1350
In connection with the Annual Report of Amazon.com, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2022, as filed with the
Securities and Exchange Commission (the “SEC”) on or about the date hereof (the “Report”), I, Andrew R. Jassy, President and Chief Executive Officer of the
Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
Company.
A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff
upon request.
/s/ Andrew R. Jassy
Andrew R. Jassy
President and Chief Executive Officer
(Principal Executive Officer)
Date: February 2, 2023


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Exhibit 32.2
Certification Pursuant to 18 U.S.C. Section 1350
In connection with the Annual Report of Amazon.com, Inc. (the “Company”) on Form 10-K for the year ended December 31, 2022, as filed with the
Securities and Exchange Commission (the “SEC”) on or about the date hereof (the “Report”), I, Brian T. Olsavsky, Senior Vice President and Chief Financial
Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
Company.
A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff
upon request.
 
/s/ Brian T. Olsavsky
Brian T. Olsavsky
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
Date: February 2, 2023


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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT
pursuant to Section 13  or 15 (d) of the
Securities Exchange Act of 1934
FOR THE YEAR ENDED DECEMBER 31, 2023
1-2360
(Commission file number)
INTERNATIONAL BUSINESS MACHINES CORPORATION
(Exact name of registrant as specified in its charter)
New York  
(State of Incorporation) 13-0871985
(IRS Employer Identification Number)
One New Orchard Road
Armonk , New York
(Address of principal executive offices)10504  
(Zip Code)
914-499-1900
(Registrant’s telephone number)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol Name of each exchange on which registered
Capital stock, par value $.20 per share IBM New York Stock Exchange
NYSE Chicago
1.125% Notes due 2024 IBM 24A New York Stock Exchange
2.875% Notes due 2025 IBM 25A New York Stock Exchange
0.950% Notes due 2025 IBM 25B New York Stock Exchange
0.875% Notes due 2025 IBM 25C New York Stock Exchange
0.300% Notes due 2026 IBM 26B New York Stock Exchange
1.250% Notes due 2027 IBM 27B New York Stock Exchange
3.375% Notes due 2027 IBM 27F New York Stock Exchange
0.300% Notes due 2028 IBM 28B New York Stock Exchange
1.750% Notes due 2028 IBM 28A New York Stock Exchange
1.500% Notes due 2029 IBM 29 New York Stock Exchange
0.875% Notes due 2030 IBM 30A New York Stock Exchange
1.750% Notes due 2031 IBM 31 New York Stock Exchange
3.625% Notes due 2031 IBM 31B New York Stock Exchange
0.650% Notes due 2032 IBM 32A New York Stock Exchange
1.250% Notes due 2034 IBM 34 New York Stock Exchange
3.750% Notes due 2035 IBM 35 New York Stock Exchange


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4.875% Notes due 2038 IBM 38 New York Stock Exchange
1.200% Notes due 2040 IBM 40 New York Stock Exchange
4.000% Notes due 2043 IBM 43 New York Stock Exchange
7.00% Debentures due 2025 IBM 25 New York Stock Exchange
6.22% Debentures due 2027 IBM 27 New York Stock Exchange
6.50% Debentures due 2028 IBM 28 New York Stock Exchange
5.875% Debentures due 2032 IBM 32D New York Stock Exchange
7.00% Debentures due 2045 IBM 45 New York Stock Exchange
7.125% Debentures due 2096 IBM 96 New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☒  N o  ☐
I n d i c a t e  b y  c h e c k  m a r k  i f  t h e  r e g i s t r a n t  i s  n o t  r e q u i r e d  t o  f i l e  r e p o r t s  p u r s u a n t  t o  S e c t i o n  1 3  o r  S e c t i o n  1 5 ( d )  o f  t h e  A c t .  Y e s  ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 
months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  N o  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T


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(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒  N o  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth 
company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  ☒ Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☐ 
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial 
a c c o u n t i n g  s t a n d a r d s  p r o v i d e d  p u r s u a n t  t o  S e c t i o n  1 3 ( a )  o f  t h e  E x c h a n g e  A c t .  ☐
I n d i c a t e  b y  c h e c k  m a r k  w h e t h e r  t h e  r e g i s t r a n t  h a s  ﬁ l e d  a  r e p o r t  o n  a n d  a t t e s t a t i o n  t o  i t s  m a n a g e m e n t ’ s  a s s e s s m e n t  o f  t h e  e ﬀ e c t i v e n e s s  o f  i t s  i n t e r n a l  c o n t r o l  o v e r  ﬁ n a n c i a l  
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting ﬁrm that prepared or issued its audit report. ☒


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If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements  of the registrant included in the filing reflect the 
correction of an error to previously issued  financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the 
registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes ☐ N o  ☒
The aggregate market value of the voting stock held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter 
was $121.9 billion .
The registrant had 916,744,848  shares of common stock outstanding at  February 9, 2024 .
Documents incorporated by reference:
Portions of IBM’s Annual Report to Stockholders for the year ended  December 31, 2023  are incorporated by reference into Parts I, II and IV of this Form 10-K.
Portions of IBM’s definitive Proxy Statement to be filed with the Securities and Exchange Commission and delivered to stockholders in connection with the Annual Meeting of 
Stockholders to be held April 30, 2024  are incorporated by reference into Part III of this Form 10-K.


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Table of Contents
PART I 1
Item 1. Business 1
Item 1A. Risk Factors 3
Item 1B. Unresolved Staff Comments 9
Item 1C. Cybersecurity 9
Item 2. Properties 11
Item 3. Legal Proceedings 11
Item 4. Mine Safety Disclosures 11
PART II 12
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer 
Purchases of Equity Securities12
Item 6. [Reserved] 12
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 12
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 12
Item 8. Financial Statements and Supplementary Data 12
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 12
Item 9A. Controls and Procedures 12
Item 9B. Other Information 13
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 13
PART III 14
Item 10. Directors, Executive Officers and Corporate Governance 14
Item 11. Executive Compensation 14
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related 
Stockholder Matters14
Item 13. Certain Relationships and Related Transactions, and Director Independence 16
Item 14. Principal Accounting Fees and Services 16
PART IV 17
Item 15. Exhibits, Financial Statement Schedules 17
Item 16. Form 10-K Summary 23
SIGNATURES
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON FINANCIAL 
STATEMENT SCHEDULE
SCHEDULE II S-1
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PART I
Item 1. Business:
International Business Machines Corporation (IBM or the company) was incorporated in the State of New York on 
June 16, 1911, as the Computing-Tabulating-Recording Co. (C-T-R), a consolidation of the Computing Scale Co. of 
America, the Tabulating Machine Co. and The International Time Recording Co. of New York. Since that time, IBM has 
focused on the intersection of business insight and technological innovation, and its operations and aims have been 
international in nature. This was signaled 100 years ago, in 1924, when C-T-R changed its name to International Business 
Machines Corporation. And it continues today—we create sustained value for clients by helping them leverage the power 
of hybrid cloud and artificial intelligence (AI). Our hybrid cloud platform and AI technology support clients’ digital 
transformations and helps them reimagine critical workflows, at scale, and modernize applications to increase agility, drive 
innovation and create operational efficiencies. Our offerings draw from leading IBM capabilities in software, consulting 
services capability to deliver business outcomes, and deep incumbency in mission-critical infrastructure, all bolstered by 
one of the world’s leading research organizations.
The following information is included in IBM’s 2023  Annual Report to Stockholders and is incorporated by reference:
IBM Strategy —pages 11 to 13.
Business Segments and Capabilities—pages 13 to 15.
Human Capital—pages 15 to 16.  
Strategic Partnerships
We proactively partner with a broad variety of companies including hyperscalers, service providers, global system 
integrators, and software and hardware vendors. We work alongside our partners to deliver end-to-end solutions that 
address our clients’ complex business challenges while accelerating growth. Our strategic partners include: Adobe, 
Amazon Web Services (AWS) , Microsoft, Oracle, Salesforce, Samsung Electronics and SAP, among others. 
Companies with which we have strategic partnerships in some areas may be competitors in other areas.
Competition
IBM is a globally integrated enterprise that participates in a highly competitive environment. Our competitors vary by 
industry segment, and range from large multinational enterprises to smaller, more narrowly focused entities. Across our 
business segments, we recognize hundreds of competitors worldwide and as we execute our hybrid cloud and AI strategy, 
we are regularly exposed to new competitors.


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we are regularly exposed to new competitors.
Our principal methods of competition are: technology innovation; performance; price; quality; brand; our breadth of 
capabilities, products and services; talent; client relationships and trust; the ability to deliver business value to clients; and 
service and support. In order to maintain leadership, we optimize our portfolio with organic and inorganic innovations and 
effective resource allocation. These investments not only drive current performance but will extend our innovation 
leadership into the future. 
Our breadth and depth of expertise enables us to take different technologies and bring them together to solve the most 
pressing business issues of our clients. We differentiate from other providers by bringing together incumbency with 
enterprises, deep expertise in technology, industries and business processes, a broad go-to-market reach including an 
ecosystem of partners and alliances, and a strong focus on innovation . All of these attributes position IBM for accelerated 
growth now and prepare us for the next set of business opportunities, such as quantum computing .
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Overall, the company is the leader or among the leaders in each of our business segments. A summary of the 
competitive environment for each business segment is included below:
Software:
The depth, breadth, and innovation of our software offerings, coupled with our global reach, deep industry expertise 
and research capabilities help differentiate our offerings from our competitors. Our hybrid cloud and AI platforms  allow 
clients to realize their digital and AI transformations across the applications, data, and environments in which they operate. 
The principal competitors in this segment include: Alphabet (Google), Amazon, BMC , Broadcom , Informatica, Microsoft,  
Oracle, Palo Alto Networks, Salesforce, SAP and Splunk. We also compete with smaller, niche competitors in specific 
geographic regions or product segments.
Consulting:
Consulting focuses on integrating skills on strategy, experience, technology and operations by domain and industry. 
Consulting competes in a dynamic market including consulting, systems integration, application development, application 
management and business process outsourcing services. Our broad-based competitors include: Accenture, Capgemini, 
India-based service providers, management consulting firms, the consulting practices of public accounting firms, 
engineering service providers, and many companies that primarily focus on local markets or niche service areas.
Infrastructure:
IBM is well positioned in the growing hybrid cloud infrastructure market , providing on-premises and cloud-based 
server and storage solutions.  We gain advantage and differentiation through investments in higher-value capabilities, 
including security, scalability, and reliability, designed especially for mission-critical and regulated workloads. In addition, 
we offer a portfolio of life-cycle services for hybrid cloud infrastructure  deployment. Our principal competitors include: 
Dell Technologies, Hewlett-Packard Enterprise (HPE), Intel, NetApp and Pure Storage as well as original device 
manufacturers (ODMs) who provide systems that are re-branded. Further, cloud service providers are leveraging 
innovation in technology and service delivery to compete with traditional providers and to offer additional routes  to market 
for server and storage systems. 
Financing:
Financing provides client and commercial financing, facilitating IBM clients’ acquisition of hardware, software and 
services. Financing’s ability to manage credit and residual value risk generates a competitive advantage for the company. 
The key competitive factors include: interest rates charged, IT product experience, client service, contract flexibility, ease


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of doing business, global capabilities and residual values. In client and commercial financing, Financing primarily 
competes with non-captive financing entities and financial institutions.
Forward-looking and Cautionary Statements
Certain statements contained in this Form 10-K may constitute “forward-looking statements” within the meaning of 
the Private Securities Litigation Reform Act of 1995 (“Reform Act”). Forward-looking statements are based on the 
company’s current assumptions regarding future business and financial performance. These statements by their nature 
address matters that are uncertain to different degrees. The company may also make forward-looking statements in other 
reports filed with the Securities and Exchange Commission (“SEC”), in materials delivered to stockholders and in press 
releases. In addition, the company’s representatives may from time to time make oral forward-looking statements. 
Forward-looking statements provide current expectations of future events based on certain assumptions and include any 
statement that does not directly relate to any historical or current fact. Words such as “anticipates,” “believes,” “expects,” 
“estimates,” “intends,” “plans,” “projects,” and similar expressions, may identify such forward-looking statements. Any 
forward-looking statement in this Form 10-K speaks only as of the date on which it is made. Except as required by law, the 
company assumes no obligation to update or revise any forward-looking statements. In accordance with the Reform Act, 
set forth under Item 1A. “Risk Factors” on pages 3 to 9 are cautionary statements that accompany those forward-looking 
statements. Readers should carefully review such cautionary statements as they identify certain  important factors that 
could cause actual results to differ materially from those in the forward-looking statements and from historical trends. 
Those cautionary statements are not exclusive and are in addition to other factors discussed elsewhere in this Form 10-K, in 
the company’s filings with the SEC or in materials incorporated therein by reference.
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The following information is included in IBM’s 2023  Annual Report to Stockholders and is incorporated herein by 
reference:
Segment information and revenue by classes of similar products or services—pages 66 to 70.
Financial information regarding environmental activities—page 94.
The number of persons employed by the registrant—page 15.
The management discussion overview—pages 8 to 10.
Website information and company reporting—page 123.
Information About Our Executive Officers (at February 26, 2024 ):
Age Officer since
Arvind Krishna, Chairman of the Board and Chief Executive Officer (1)61 2020
Michelle H. Browdy, Senior Vice President, Legal and Regulatory Affairs, and General Counsel 59 2015
Gary D. Cohn, Vice Chairman 63 2021
Nicolas A. Fehring, Vice President and Controller 45 2023
James J. Kavanaugh, Senior Vice President and Chief Financial Officer, Finance and Operations 57 2008
Nickle J. LaMoreaux, Senior Vice President and Chief Human Resources Officer 44 2020
Robert D. Thomas, Senior Vice President, Software and Chief Commercial Officer 49 2023
(1) Member of the Board of Directors.
All executive officers are elected by the Board of Directors annually as provided in the Company’s By-laws. Each 
executive officer named above, with the exception of Gary D. Cohn, has been an executive of IBM or its subsidiaries 
during the past five years. Mr. Cohn previously served as Assistant to the President for Economic Policy and Director of 
the National Economic Council from January 2017 until April 2018. Before serving in the White House, Mr. Cohn was 
President and Chief Operating Officer of The Goldman Sachs Group, Inc. from 2006-2016.
Item 1A. Risk Factors:
Risks Related to Our Business
Downturn in Economic Environment and Client Spending Budgets Could Impact the Company’s Business:  If overall 
demand for IBM’s products and solutions decreases, whether due to general economic conditions, or a shift in client 
buying patterns, the company’s revenue and profit could be impacted.
Failure of Innovation Initiatives Could Impact the Long-Term Success of the Company: IBM has moved into areas,


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including those that incorporate or utilize hybrid cloud, AI (including generative AI), quantum and other disruptive 
technologies, in which it can differentiate itself through responsible innovation, by leveraging its investments in R&D and 
attracting a successful developer ecosystem. If IBM is unable to continue its cutting-edge innovation in a highly 
competitive and rapidly evolving environment or is unable to commercialize such innovations, expand and scale them with 
sufficient speed and versatility or is unable to attract a successful developer ecosystem, the company could fail in its 
ongoing efforts to maintain and increase its market share and its profit margins.
Damage to IBM’s Reputation Could Impact the Company’s Business:  IBM has one of the strongest brand names in the 
world, and its brand and overall reputation could be negatively impacted by many factors, including if the company does 
not continue to be recognized for its industry leading technology and solutions and as a hybrid cloud and AI leader. IBM’s 
reputation is potentially susceptible to damage by events such as significant disputes with clients, product defects, internal 
control deficiencies, delivery failures, cybersecurity incidents, government investigations or legal proceedings or actions of 
current or former clients, directors, employees, competitors, vendors, alliance partners or joint venture partners. If the 
company’s brand image is tarnished by negative perceptions, its ability to attract and retain customers, talent and 
ecosystem partners could be impacted.
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Risks from Investing in Growth Opportunities Could Impact the Company’s Business: The company continues to 
invest significantly in key strategic areas to drive revenue growth and market share gains. Client adoption rates and viable 
economic models are less certain in the high-value, highly competitive, and rapidly-growing segments. Additionally, 
emerging business and delivery models may unfavorably impact demand and profitability for our other products or 
services. If the company does not adequately and timely anticipate and respond to changes in customer and market 
preferences, competitive actions, disruptive technologies, emerging business models and ecosystems, the client demand for 
our products or services may decline or IBM’s costs may increase.
IBM’s Intellectual Property Portfolio May Not Prevent Competitive Offerings, and IBM May Not Be Able to Obtain 
Necessary Licenses: The company’s patents and other intellectual property may not prevent competitors from 
independently developing products and services similar to or duplicative to the company’s, nor can there be any assurance 
that the resources invested by the company to protect its intellectual property will be sufficient or that the company’s 
intellectual property portfolio will adequately deter misappropriation or improper use of the company’s technology. In 
addition, the company may be the target of aggressive and opportunistic enforcement of patents by third parties, including 
non-practicing entities. Also, there can be no assurances that IBM will be able to obtain from third parties the licenses it 
needs in the future. The company’s ability to protect its intellectual property could also be impacted by a lack of effective 
legal protections as well as changes to existing laws, legal principles and regulations governing intellectual property, 
including the ownership and protection of patents.
Certain of the company’s offerings incorporate or utilize open source and other third-party software licensed with 
limited or no warranties, indemnification , or other contractual protections for IBM. Further, if open source code that IBM 
utilizes is no longer maintained, developed or enhanced by the relevant community of independent open source software 
programmers, most of whom we do not employ, we may be unable to develop new technologies, adequately enhance our 
existing technologies or meet customer requirements for innovation, quality and price. 
Risks to the Company from Acquisitions, Alliances and Dispositions Include Integration Challenges, Failure to 
Achieve Objectives, the Assumption of Liabilities and Higher Debt Levels:  The company has made and expects to continue


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to make acquisitions, alliances and dispositions. Such transactions present significant challenges and risks and there can be 
no assurances that the company will manage such transactions successfully or that strategic opportunities will be available 
to the company on acceptable terms or at all. The related risks include the company failing to achieve strategic objectives, 
anticipated revenue improvements and cost savings, the failure to retain key strategic relationships of acquired companies, 
the failure to retain key personnel and the assumption of liabilities related to litigation or other legal proceedings involving 
the businesses in such transactions, as well as the failure to close planned transactions. Such transactions may require the 
company to secure financing and any significant disruption or turmoil in the capital markets could have an adverse effect 
on IBM’s ability to access the capital markets at favorable terms. From time to time, the company disposes or attempts to 
dispose of assets that are no longer central to its strategic objectives. Any such disposition or attempted disposition is 
subject to risks, including risks related to the terms and timing of such disposition, risks related to obtaining necessary 
governmental or regulatory approvals and risks related to retained liabilities not subject to the company’s control.
The Company’s Financial Results for Particular Periods Are Difficult to Predict:  IBM’s revenues and profitability are 
affected by such factors as the introduction of new products and services, the ability to compete effectively in increasingly 
competitive marketplaces, the length of the sales cycles and the seasonality of technology purchases. In addition, certain of 
the company’s growth areas involve new products, new customers, new and evolving competitors, and new markets, all of 
which contribute to the difficulty of predicting the company’s financial results. The company’s  financial results may also 
be impacted by the structure of products and services contracts and the nature of its customers’ businesses; for example, 
certain of the company’s services contracts with commercial customers in regulated industries are subject to periodic 
review by regulators with respect to controls and processes. Further, general economic conditions, including sudden shifts 
in regional or global economic activity may impact the company’s financial results in any particular period. As a result of 
the above-mentioned factors, the company’s financial results are difficult to predict. Historically, the company has had 
lower revenue in the first quarter than in the immediately preceding fourth quarter. In addition, the high volume of products


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typically ordered at the end of each quarter, especially at the end of the fourth quarter, make financial results for a given 
period difficult to predict.
Due to the Company’s Global Presence, Its Business and Operations Could Be Impacted by Local Legal, Economic, 
Political, Health and Other Conditions:  The company is a globally integrated entity, operating in over 175 countries  
worldwide and deriving about sixty percent  of its revenues from sales outside the United States. Changes in the laws or 
policies of the countries in which the company operates, or inadequate development or enforcement of such laws or 
policies, could affect the company’s business and the company’s overall results of operations. Further, the company may 
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be impacted directly or indirectly by the development and enforcement of laws and regulations in the U.S. and globally that 
are specifically targeted at the technology industry. The company’s results of operations also could be affected by 
economic and political changes  in those countries and by macroeconomic changes, including recessions, inflation, currency 
fluctuations between the U.S. dollar and non-U.S. currencies and adverse changes in trade relationships amongst those 
countries. Further, as the company expands its customer base and the scope of its offerings, both within the U.S. and 
globally, it may be impacted by additional regulatory or other risks, including, compliance with U.S. and foreign data 
privacy requirements, AI regulations, data localization requirements, labor relations laws, enforcement of IP protection 
laws, laws relating to anti-corruption, anti-competition regulations, and import, export and trade restrictions. Further, 
international trade disputes could create uncertainty. Tariffs and international trade sanctions resulting from these disputes 
could affect the company’s ability to move goods and services across borders, or could impose added costs to those 
activities. Measures taken to date by the company to mitigate these impacts could be made less effective should trade 
sanctions or tariffs change. In addition, any widespread outbreak of an illness, pandemic or other local or global health 
issue, natural disasters, climate change impacts, or uncertain political climates, international hostilities, or any terrorist 
activities, could adversely affect customer demand, the company’s operations and supply chain, and its ability to source 
and deliver products and services to its customers. 
The Company May Not Meet Its Growth and Productivity Objectives:  On an ongoing basis, IBM seeks to drive greater 
agility, productivity, flexibility and cost savings by continuously transforming with the use of automation, AI, agile 
processes and changes to the ways of working, while also enabling the scaling of resources, offerings and investments 
through the company’s globally integrated model across both emerging and more established markets. These various 
initiatives may not yield their intended gains in speed, quality, productivity and enablement of rapid scaling, which may 
impact the company’s competitiveness and its ability to meet its growth and productivity objectives.
Ineffective Internal Controls Could Impact the Company’s Business and Operating Results:  The company’s internal


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control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the 
possibility of human error, failure or interruption of information technology systems, the circumvention or overriding of 
controls, or fraud. Even effective internal controls can provide only reasonable assurance with respect to the preparation 
and fair presentation of financial statements. If the company fails to maintain the adequacy of its internal controls, 
including any failure to implement required new or improved controls, or if the company experiences difficulties in their 
implementation, the company’s business and operating results could be harmed and the company could fail to meet its 
financial reporting obligations.
The Company’s Use of Accounting Estimates Involves Judgment and Could Impact the Company’s Financial Results:  
The application of accounting principles generally accepted in the U.S. (GAAP) requires the company to make estimates 
and assumptions about certain items and future events that directly affect its reported financial condition. The company’s 
most critical accounting estimates are described in the Management Discussion in IBM’s 2023 Annual Report to 
Stockholders, under “Critical Accounting Estimates.” In addition, as discussed in note R, “Commitments & 
Contingencies,” in IBM’s 2023 Annual Report to Stockholders, the company makes certain estimates including decisions 
related to legal proceedings and reserves. These estimates and assumptions involve the use of judgment. As a result, actual 
financial results may differ.
The Company’s Goodwill or Amortizable Intangible Assets May Become Impaired: The company acquires other 
companies, including the intangible assets of those companies. The company may not realize all the economic benefit from 
those acquisitions, which could cause an impairment of goodwill or intangible assets. If our goodwill or net intangible 
assets become impaired, we may be required to record a charge to the Consolidated Income Statement.
The Company Depends on Skilled Employees and Could Be Impacted by a Shortage of Critical Skills: Much of the 
future success of the company depends on the continued service, availability and integrity of skilled employees, including 
technical, marketing and staff resources. Skilled and experienced personnel in the areas where the company competes are 
in high demand, and competition for their talents is intense. Changing demographics and labor work force trends may 
result in a shortage of or insufficient knowledge and skills. In addition, as global opportunities and industry demand shifts,


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realignment, training and scaling of skilled resources may not be sufficiently rapid or successful. Further, many of IBM’s 
key employees receive a total compensation package that includes equity awards. Any new regulations, volatility in the 
stock market and other factors could diminish the company’s use or the value of the company’s equity awards, putting the 
company at a competitive disadvantage.
The Company’s Business Could Be Impacted by Its Relationships with Critical Suppliers:  IBM’s business employs a 
wide variety of components (hardware and software), supplies, services and raw materials from a substantial number of 
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suppliers around the world. Certain of the company’s businesses rely on a single or a limited number of suppliers, 
including for server processor technology for certain semiconductors. Changes in the business condition (financial or 
otherwise) of these suppliers  could subject the company to losses and affect its ability to bring products to market. Further, 
the failure of the company’s suppliers to deliver components, supplies, services and raw materials in sufficient quantities, 
in a timely or secure manner, and in compliance with all applicable laws and regulations could adversely affect the 
company’s business. In addition, any defective components, supplies or materials, or inadequate services received from 
suppliers could reduce the reliability of the company’s products and services and harm the company’s reputation.
Product and Service Quality Issues Could Impact the Company’s Business and Operating Results: The company has 
rigorous quality control standards and processes intended to prevent, detect and correct errors, malfunctions and other 
defects in its products and services. If errors, malfunctions, defects or disruptions in service are experienced by customers 
or in the company’s operations there could be negative consequences that could impact customers’ business operations and 
harm the company’s business’s operating results.
The Company Could Be Impacted by Its Business with Government Clients: The company’s customers include 
numerous governmental entities within and outside the U.S., including the U.S. Federal Government and state and local 
entities. Some of the company’s agreements with these customers may be subject to periodic funding approval. Funding 
reductions or delays could adversely impact public sector demand for our products and services. Also, some agreements 
may contain provisions allowing the customer to terminate without cause and providing for higher liability limits for 
certain losses. In addition, the company could be suspended or debarred as a governmental contractor and could incur civil 
and criminal fines and penalties, which could negatively impact the company’s results of operations, financial results and 
reputation.
The Company’s Reliance on Third-Party Distribution Channels and Ecosystems Could Impact Its Business:  The 
company offers its products directly and through a variety of third -party distributors, resellers, independent software 
vendors, independent service providers, and other ecosystem partners . Changes in the business condition (financial or 
otherwise) of these ecosystem partners could subject the company to losses and affect its ability to bring its products to


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market. As the company moves into new areas, ecosystem partners may be unable to keep up with changes in technology 
and offerings, and the company may be unable to recruit and enable appropriate partners to achieve anticipated ecosystem 
growth objectives. In addition, the failure of ecosystem partners to comply with all applicable laws and regulations may 
prevent the company from working with them and could subject the company to losses and affect its ability to bring 
products to market.
Risks Related to Cybersecurity and Data Privacy
Cybersecurity and Privacy Considerations Could Impact the Company’s Business:  There are numerous and evolving 
risks to cybersecurity and privacy, including risks originating from intentional acts of criminal hackers, hacktivists, nation 
states and competitors; from intentional and unintentional acts or omissions of customers, contractors, business partners, 
vendors, employees and other third parties; and from errors in processes or technologies, as well as the risks associated 
with an increase in the number of customers, contractors, business partners, vendors, employees and other third parties 
working remotely. Computer hackers and others routinely attack the security of technology products, services, systems and 
networks using a wide variety of methods, including ransomware or other malicious software and attempts to exploit 
vulnerabilities in hardware, software, and infrastructure. Attacks also include social engineering and cyber extortion to 
induce customers, contractors, business partners, vendors, employees and other third parties to disclose information, 
transfer funds, or unwittingly provide access to systems or data. The company is at risk of security breaches not only of our 
own products, services, systems and networks, but also those of customers, contractors, business partners, vendors, 
employees and other third parties, particularly as all parties increasingly digitize their operations. Cyber threats are 
continually evolving, including with the increased use of AI, making it difficult to defend against such threats and 
vulnerabilities that can persist undetected over extended periods of time. 
The company’s products, services, systems and networks, including cloud-based systems and systems and 
technologies that the company maintains on behalf of its customers, are used in critical company, customer or third-party 
operations, and involve the storage, processing and transmission of sensitive data, including valuable intellectual property, 
other proprietary or confidential data, regulated data, and personal information of employees, customers and others. These


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products, services, systems and networks are also used by customers in heavily regulated industries, including those in the 
financial services, healthcare, critical infrastructure and government sectors.
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While the company continues to monitor for, identify, investigate, respond to and remediate a wide range of 
cybersecurity events, there have not been cybersecurity incidents or vulnerabilities that have had a material adverse effect 
on the company, though there is no assurance that there will not be cybersecurity incidents or vulnerabilities that will have 
a material adverse effect in the future.
 The company regularly addresses cybersecurity attacks and vulnerabilities. Cybersecurity attacks or other security 
incidents, including industry-wide incidents such as MOVEit , have or could result in, for example, one or more of the 
following: unauthorized access to, disclosure, modification, misuse, loss, or destruction of company, customer, or other 
third-party data or systems; theft or import or export of sensitive, regulated, or confidential data including personal 
information and intellectual property, including key innovations in AI, quantum, or other disruptive technologies; the loss 
of access to critical data or systems through ransomware, crypto mining, destructive attacks or other means; and business 
delays, service or system disruptions or denials of service. 
In the event of such actions, the company, its customers and other third parties could be exposed to liability, litigation, 
and regulatory or other government action, including debarment, as well as the loss of existing or potential customers, 
damage to brand and reputation, damage to our competitive position, and other financial loss. In addition, the cost and 
operational consequences of responding to cybersecurity incidents and implementing remediation measures could be 
significant. In the company’s industry, security vulnerabilities are increasingly discovered, publicized and exploited across 
a broad range of hardware, software or other infrastructure, elevating the risk of attacks and the potential cost of response 
and remediation for the company and its customers. In addition, the fast-paced, evolving, pervasive, and sophisticated 
nature of certain cyber threats and vulnerabilities, as well as the scale and complexity of the business and infrastructure, 
make it possible that certain threats or vulnerabilities will be undetected or unmitigated in time to prevent or minimize the 
impact of an attack on the company or its customers. 
Cybersecurity risk to the company and its customers also depends on factors such as the actions, practices and 
investments of customers, contractors, business partners, vendors, the open source community and other third parties,


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including, for example, providing and implementing patches to address vulnerabilities. Cybersecurity attacks or other 
catastrophic events resulting in disruptions to or failures in power, information technology, communication systems or 
other critical infrastructure could result in interruptions or delays to company, customer, or other third-party operations or 
services, financial loss, injury or death to persons or property, potential liability, and damage to brand and reputation. 
Although the company continuously takes significant steps to mitigate cybersecurity risk across a range of functions, such 
measures can never eliminate the risk entirely or provide absolute security. 
As a global enterprise, the regulatory environment with regard to cybersecurity, privacy, AI and data protection issues 
is increasingly complex and will continue to impact the company’s business, including through increased risk, increased 
costs, and expanded or otherwise altered compliance obligations, including with respect to the increased regulatory activity 
around the security of critical infrastructure, IoT devices, customer industries (e.g., financial services) and various customer 
and government supply chain security programs. As the reliance on data grows for the company and our clients, the 
potential impact of regulations on the company’s business, risks, and reputation will grow accordingly. The enactment and 
expansion of cybersecurity, AI, data protection and privacy laws, regulations and standards around the globe will continue 
to result in increased compliance costs, including due to an increased focus on international data transfer mechanisms and 
data location; increased cybersecurity requirements and reporting obligations; the lack of harmonization of such laws and 
regulations; the increase in associated litigation and enforcement activity by governments and private parties; the potential 
for damages, fines and penalties and debarment; and the potential regulation of new and emerging technologies. Any 
additional costs and penalties associated with increased compliance, enforcement, and risk reduction could make certain 
offerings less profitable or increase the difficulty of bringing certain offerings to market or maintaining certain offerings.
Risks Related to Laws and Regulations
The Company Could Incur Substantial Costs Related to Climate Change and Other Environmental Matters:  IBM, like 
other companies, is subject to potential climate-related risks and costs such as those resulting from increased severe 
weather events, prolonged changes in temperature, new regulations affecting hardware products and data centers, carbon 
taxes, and increased environmental disclosures requested or required by clients, regulators and others. The company is also


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subject to various federal, state, local and foreign laws and regulations concerning the discharge of materials into the 
environment or otherwise related to environmental protection, including the U.S. Superfund law. The company could incur 
substantial costs, including cleanup costs, fines and civil or criminal sanctions, as well as third-party claims for property 
damage or personal injury, if it were to violate or become liable under environmental laws and regulations. We do not 
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expect climate change or compliance with environmental laws and regulations focused on climate change to have a 
disproportionate effect on the company or its financial position, results of operations and competitive position.
Tax Matters Could Impact the Company’s Results of Operations and Financial Condition:  The company is subject to 
income taxes in both the United States and numerous foreign jurisdictions. IBM’s provision for income taxes and cash tax 
liability in the future could be adversely affected by numerous factors including, but not limited to, income before taxes 
being lower than anticipated in countries with lower statutory tax rates and higher than anticipated in countries with higher 
statutory tax rates, changes in the valuation of deferred tax assets and liabilities, and changes in tax laws, regulations, 
accounting principles or interpretations thereof, which could adversely impact the company’s results of operations and 
financial condition in future periods. The Organization for Economic Cooperation and Development (OECD) is issuing 
guidelines that are different, in some respects, than long-standing international tax principles. As countries unilaterally 
amend their tax laws to adopt certain parts of the OECD guidelines, this may increase tax uncertainty and may adversely 
impact the company’s income taxes. Local country, state, provincial or municipal taxation may also be subject to review 
and potential override by regional, federal, national or similar forms of government. In addition, IBM is subject to the 
continuous examination of its income tax returns by the United States Internal Revenue Service (IRS) and other tax 
authorities around the world. The company regularly assesses the likelihood of adverse outcomes resulting from these 
examinations to determine the adequacy of its provision for income taxes. There can be no assurance that the outcomes 
from these examinations will not have an adverse effect on the company’s provision for income taxes and cash tax liability.
The Company Is Subject to Legal Proceedings and Investigatory Risks: As a company with a substantial employee 
population and with clients in more than 175 countries , IBM is or may become involved as a party and/or may be subject to 
a variety of claims, demands, suits, investigations, tax matters and other proceedings that arise from time to time in the 
ordinary course of its business. The risks associated with such legal proceedings are described in more detail in note R, 
“Commitments & Contingencies,” in IBM’s 2023 Annual Report to Stockholders. The company believes it has adopted


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appropriate risk management and compliance programs. Legal and compliance risks, however, will continue to exist and 
additional legal proceedings and other contingencies, the outcome of which cannot be predicted with certainty, may arise 
from time to time.
Risks Related to Financing and Capital Markets Activities
The Company’s Results of Operations and Financial Condition Could Be Negatively Impacted by Its U.S. and non-
U.S. Pension Plans:  Adverse financial market conditions and volatility in the credit markets may have an unfavorable 
impact on the value of the company’s pension trust assets and its future estimated pension liabilities . As a result, the 
company’s financial results in any period could be negatively impacted. In addition, in a period of an extended financial 
market downturn, the company could be required to provide incremental pension plan funding with resulting liquidity risk 
which could negatively impact the company’s financial flexibility. Further, the company’s results could be negatively 
impacted by premiums for mandatory pension insolvency insurance coverage outside the United States. Premium increases 
could be significant due to the level of insolvencies of unrelated companies in the country at issue. IBM’s 2023 Annual 
Report to Stockholders includes information about potential impacts from pension funding and the use of certain 
assumptions regarding pension matters.
The Company Is Exposed to Currency and Financing Risks That Could Impact Its Revenue and Business: The 
company derives a significant percentage of its revenues and costs from its affiliates operating in local currency 
environments, and those results are affected by changes in the relative values of non-U.S. currencies and the U.S. dollar, as 
well as sudden shifts in regional or global economic activity. Further, inherent in the company’s financing business are 
risks related to the concentration of credit, client creditworthiness, interest rate and currency fluctuations on the associated 
debt and liabilities  and the determination of residual values . The company employs a number of strategies to manage these 
risks, including the use of derivative financial instruments, which involve the risk of non-performance by the counterparty. 
In addition, there can be no assurance that the company’s efforts to manage its currency and financing risks will be 
successful.
The Company’s Financial Performance Could Be Impacted by Changes in Market Liquidity Conditions and by 
Customer Credit Risk on Receivables:  The company’s financial performance is exposed to a wide variety of industry sector


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dynamics worldwide, including sudden shifts in regional or global economic activity. The company’s earnings and cash 
flows, as well as its access to funding, could be negatively impacted by changes in market liquidity conditions. IBM’s 2023 
Annual Report to Stockholders includes information about the company’s liquidity position. The company’s client base 
includes many enterprises worldwide, from small and medium businesses to the world’s largest organizations and 
governments, with a significant portion of the company’s revenue coming from global clients across many sectors. Most of 
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the company’s sales are on an open credit basis, and the company performs ongoing credit evaluations of its clients’ 
financial conditions. If the company becomes aware of information related to the creditworthiness of a major customer, or 
if future actual default rates on receivables in general differ from those currently anticipated, the company may have to 
adjust its allowance for credit losses, which could affect the company’s consolidated net income in the period the 
adjustments are made.
Risks Related to the Spin-Off of Kyndryl Holdings, Inc.
If the Kyndryl Holdings, Inc. Spin-off Fails to Qualify for Tax-free Treatment, It Could Result in Substantial Tax 
Liability for the Company and Its Stockholders:  In connection with the spin-off of Kyndryl Holdings, Inc. , the company 
obtained a private letter ruling from the IRS and an opinion from its tax advisor, in each case to the effect that, for U.S. 
federal income tax purposes, the spin-off will qualify as a tax-free reorganization under sections 368(a)(1)(D) and 355 of 
the Internal Revenue Code of 1986, as amended. The IRS private letter ruling and the opinion rely on certain facts, 
assumptions, representations and undertakings from Kyndryl Holdings, Inc. and the company regarding the past and future 
conduct of the companies’ respective businesses and other matters. If any of these facts, assumptions, representations, or 
undertakings are incorrect or not satisfied, the conclusions reached in the IRS private letter ruling and/or the opinion could 
be jeopardized. If the spin-off is determined to be taxable for U.S. federal income tax purposes, the company’s 
stockholders that are subject to U.S. federal income tax and the company could incur significant U.S. federal income tax 
liabilities.
Risks Related to Ownership of IBM Securities
Risk Factors Related to IBM Securities:  The company and its subsidiaries issue debt securities in the worldwide capital 
markets from time to time, with a variety of different maturities and in different currencies. The value of the company’s 
debt securities fluctuates based on many factors, including the methods employed for calculating principal and interest, the 
maturity of the securities, the aggregate principal amount of securities outstanding, the redemption features for the


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securities, the level, direction and volatility of interest rates, changes in exchange rates, exchange controls, governmental 
and stock exchange regulations and other factors over which the company has little or no control. The company’s ability to 
pay interest and repay the principal for its debt securities is dependent upon its ability to manage its business operations, as 
well as the other risks described under this Item 1A. entitled “Risk Factors.” There can be no assurance that the company 
will be able to manage any of these risks successfully.
The company also issues its common stock from time to time in connection with various compensation plans, 
contributions to its pension plan and certain acquisitions. The market price of IBM common stock is subject to significant 
volatility, due to other factors described under this Item 1A. entitled “Risk Factors,” as well as economic and geopolitical 
conditions generally, trading volumes, speculation by the press or investment community about the company’s financial 
condition, and other factors, many of which are beyond the company’s control. Since the market price of IBM’s common 
stock fluctuates significantly, stockholders may not be able to sell the company’s stock at attractive prices.
In addition, changes by any rating agency to the company’s outlook or credit ratings can negatively impact the value 
and liquidity of both the company’s debt and equity securities. The company does not make a market in either its debt or 
equity securities and cannot provide any assurances with respect to the liquidity or value of such securities.  
Item 1B. Unresolved Staff Comments:
Not applicable.
Item 1 C. Cybersecurity :
Risk Management and Strategy
Cybersecurity is a critical part of risk management at IBM and is integrated with the company’s overall enterprise risk 
management framework. The Board of Directors and the Audit Committee of the Board are responsible for overseeing 
management’s execution of cybersecurity risk management and for assessing IBM’s approach to risk management. Senior 
management is responsible for assessing and managing IBM’s exposure to cybersecurity risks on an ongoing basis.
From an enterprise perspective, we implement a multi-faceted risk management approach based on the National 
Institute of Standards and Technology Cybersecurity Framework. We have established policies and procedures that provide 
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the foundation upon which IBM’s infrastructure and data are managed. We regularly assess and adjust our technical 
controls and methods to identify and mitigate emerging cybersecurity risks. We use a layered approach with overlapping 
controls to defend against cybersecurity attacks and threats on IBM networks, end-user devices, servers, applications, data, 
and cloud solutions. 
We draw heavily on our own commercial security solutions and services to manage and mitigate cybersecurity risks. 
IBM maintains a Security Operations Center (“SOC”) that monitors for threats to IBM’s networks and systems, utilizing 
threat intelligence provided by a range of sources, including the IBM Security X-Force Exchange platform, which 
maintains one of the largest compilations of threat intelligence in the world. We also rely on tools licensed from third party 
security vendors to monitor and manage cybersecurity risks. We periodically engage third parties to supplement and review 
our cybersecurity practices and provide relevant certifications.
We have a global incident response process, managed by IBM’s Computer Security Incident Response Team 
(“CSIRT”), that relies primarily on internal expertise to respond to cybersecurity threats and attacks. We utilize a 
combination of online training, educational tools, videos and other awareness initiatives to foster a culture of security 
awareness and responsibility among our workforce, including responsibility for reporting suspicious activity.
IBM has a third party supplier risk management program to oversee and identify risks from cybersecurity threats 
associated with its use of third party service providers and vendors. Risks are assessed and prioritized based, among other 
things, on the type of offering/engagement, supplier assessments, threat intelligence, and industry practices. 
As discussed in greater detail in Item 1A., "Risk Factors," the company faces numerous and evolving cybersecurity 
threats, including risks originating from intentional acts of criminal hackers, hacktivists, nation states and competitors; 
from  intentional and unintentional acts or omissions of customers , contractors, business partners, vendors, employees and 
other third parties; and from errors in processes or technologies, as well as the risks associated with an increase in the 
number of customers, contractors, business partners, vendors, employees and other third parties working remotely. While 
the company continues to monitor for, identify, investigate, respond to and remediate cybersecurity risks, including 
incidents and vulnerabilities, there have not been any that have had a material adverse effect on the company, though there


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is no assurance that there will not be cybersecurity risks that will have a material adverse effect in the future.
Governance
IBM’s Enterprise & Technology Security (“E&TS”)  organization has oversight responsibility for the security of both 
IBM’s internal systems and external offerings and works across all of the organizations within the company to protect 
IBM, its brand, and its clients against cybersecurity risks. E&TS also addresses cybersecurity risks associated with third 
party suppliers. For these purposes, E&TS includes a dedicated Chief Information Security Officer (“CISO”) whose team 
is responsible for leading enterprise-wide information security strategy, policy, standards, architecture, and processes for 
IBM’s internal systems. The CISO manages the CSIRT. The CISO also manages the Product Security Incident Response 
Team (“PSIRT”), which focuses on product vulnerabilities potentially affecting the security of offerings sold to customers. 
IBM also has Business Information Security Officers (“BISO”) who coordinate with the Office of the CISO on security 
issues specific to particular business segments.
The CSIRT team, together with the Office of the Chief Information Officer (“CIO”), Cyber Legal, Corporate Security, 
and BISOs, engages in on-going reviews of incidents, threat intelligence, detections, and vulnerabilities, including to assess 
client and regulatory impact. Events of interest are promptly reported to the Senior Vice President (“SVP”) for Legal & 
Regulatory Affairs and General Counsel (“GC”) and the SVP overseeing cybersecurity (“SVP Sponsor”).
Incidents are delegated to an appropriate incident response team for assessment, investigation, and remediation. 
Depending on the nature of the matter, the incident response team may include individuals from E&TS, the Office of the 
CISO, the Office of the CIO, Cyber Legal, Business Units, the Chief Privacy Office, Human Resources, Procurement, 
Finance and Operations, and Corporate Security. The incident response teams advise and consult with the GC and the SVP 
Sponsor, as appropriate. 
The Cybersecurity Advisory Committee (“CAC”) meets regularly and is responsible for overseeing management of the 
Company’s cybersecurity risk. The CAC is composed of, among others, SVPs from the major business units, the SVP 
Sponsor, and the GC. The CAC is responsible for, among other things, setting the Company’s governance structure for


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managing cybersecurity risk and reviewing noteworthy cybersecurity incidents and strategies to prevent recurrence. IBM 
management responsible for managing cybersecurity risk reflects a cross-section of functions from across the organization 
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with significant experience in managing such risk as well as the technologies underlying these risks. They also hold 
leadership positions outside of IBM in the field of cybersecurity, serving on governing and advisory boards of public and 
private institutions at the forefront of issues related to cybersecurity, including technology development, cybersecurity 
policy, and national security.
The Board of Directors  and the Audit Committee oversees the cyber governance process. Leadership from E&TS, 
including the CISO, make regular presentations to the Audit Committee and the full Board on identification, management, 
and remediation of cybersecurity risks, both internal and external, as well as threat intelligence, emerging global policies 
and regulations, cybersecurity technologies, and best practices. In addition, senior management provides briefings as 
needed to the Audit Committee Chair, the Audit Committee, and, as appropriate, the full Board, on cybersecurity issues 
and incidents of potential interest. 
Item 2. Properties :
IBM ’s corporate headquarters are located at an owned site in Armonk, New York. As of December 31, 2023 , in 
aggregate, we owned or leased facilities for current use consisting of approximat ely 44 million square feet worldwide. 
At December 31, 2023 , IBM’s facilities in the U.S. had aggregate floor space of approximately 18 million square feet, 
of which approximately 9 million was owned and 9 million was leased. Outside the U.S., facilities totaled approximately 
26 million square feet, of which 4 million was owned and 22 million was leased. This space is primarily used for sales and 
distribution, manufacturing and development, data processing services including the company’s cloud centers, research and 
other administrative and general support purposes. Our facilities are utilized for current operations of all business segments.
Continuous optimization, maintenance and upgrading of facilities are essential to maintain  our technological 
leadership,  improve productivity and meet customer demand. We believe that in all material respects our properties have 
been satisfactorily maintained, are in good condition and are suitable for our operations. 
Item 3. Legal Proceedings:
Refer to note R, “Commitments & Contingencies,” on pages  95 to 97  of IBM’s 2023  Annual Report to Stockholders, 
which is incorporated herein by reference.
Item 4. Mine Safety Disclosures:
Not applicable.
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PART II
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity 
Securities:
Refer to page  123 of IBM’s 2023  Annual Report to Stockholders, which is incorporated herein by reference solely as it 
relates to this item.
IBM common stock is listed on the New York Stock Exchange and the NYSE Chicago under the symbol “IBM.” 
There were 378,481 common stockholders of record at February 9, 2024 .
The following table provides information relating to the company’s repurchase of common stock for the fourth quarter 
of 2023 .
Total Number
of Shares
PurchasedAverage
Price Paid
per ShareTotal Number
of Shares
Purchased
as Part of Publicly
Announced
ProgramApproximate 
Dollar Value
of Shares that 
May Yet Be 
Purchased 
Under 
the Program (1)
October 1, 2023 —October 31, 2023 —$ — —$ 2,007,611,768 
November 1, 2023 —November 30, 2023 —$ — —$ 2,007,611,768 
December 1, 2023 —December 31, 2023 —$ — —$ 2,007,611,768 
Total —$ — —
(1)On October 30, 2018, the Board of Directors authorized $4.0 billion in funds for use in the company’s common stock repurchase program. The 
company stated that it would repurchase shares on the open market or in private transactions depending on market conditions. The common stock 
repurchase program does not have an expiration date. This table does not include shares tendered to satisfy the exercise price in connection with 
cashless exercises of employee stock options or shares tendered to satisfy tax withholding obligations in connection with employee equity awards. 
The company suspended its share repurchase program at the time of the Red Hat closing in 2019.
Item 6. [Reserved]
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations:
Refer to pages 6 through 40 of IBM’s 2023  Annual Report to Stockholders, which are incorporated herein by 
reference.


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reference.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk:
Refer to the section titled “Market Risk” on pages 36 and 37 of IBM’s 2023  Annual Report to Stockholders, which is 
incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data:
Refer to pages  44 through 121  of IBM’s 2023  Annual Report to Stockholders, which are incorporated herein by 
reference. Also refer to the Financial Statement Schedule on page S-1 of this Form 10-K. 
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure:
Not applicable.
Item 9A. Controls and Procedures:
The company’s management evaluated, with the participation of the Chief Executive Officer and Chief Financial 
Officer, the effectiveness of the company’s disclosure controls and procedures as of the end of the period covered by this 
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report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the 
company’s disclosure controls and procedures were effective as of the end of the period covered by this report.
Refer to “Report of Management” and “Report of Independent Registered Public Accounting Firm”  on pages 41 
through 44  of IBM’s 2023  Annual Report to Stockholders, which are incorporated herein by reference. There has been no 
change in the company’s internal control over financial reporting that occurred during the fourth fiscal quarter that has 
materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting.
Item 9B. Other Information:
Not applicable.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections:
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance:
Refer to the information under the captions “Election of Directors for a Term of One Year,” “Governance and the 
Board—Committees of the Board,” “Governance and the Board—Delinquent Section 16(a) Reports: None,” “Governance 
and the Board—Corporate Governance” and “Frequently Asked Questions—How do I submit an item of business for the 
2025 Annual Meeting?” in IBM’s definitive Proxy Statement to be filed with the SEC and delivered to stockholders in 
connection with the Annual Meeting of Stockholders to be held April 30, 2024 , all of which information is incorporated 
herein by reference. Also refer to Item 1 of this Form 10-K under the caption “Information About Our Executive Officers 
(at February 26, 2024 )” on page 3 for additional information on the company’s executive officers.
Item 11. Executive Compensation:
Refer to the information under the captions “ 2023  Summary Compensation Table and Related Narrative,” “2023  
Summary Compensation Table,”  “2023  Compensation Discussion and Analysis,” “ 2023  Grants of Plan-Based Awards 
Table,” “ 2023  Outstanding Equity Awards at Fiscal Year-End Table,” “ 2023  Option Exercises and Stock Vested Table,” 
“2023  Retention Plan Table,” “ 2023  Pension Benefits Narrative,” “ 2023  Pension Benefits Table,” “ 2023  Nonqualified 
Deferred Compensation Narrative,” “ 2023  Nonqualified Deferred Compensation Table,” “ 2023  Potential Payments Upon 
Termination Narrative,” “ 2023  Potential Payments Upon Termination Table,” “Governance and the Board—Compensation 
Committee Interlocks and Insider Participation: None,” “Compensation Program as It Relates to Risk,” “ 2023  Executive 
Compensation—Report of the Executive Compensation and Management Resources Committee of the Board of Directors,”  
“Pay Ratio, ” and "Pay Versus Performance" in IBM’s definitive Proxy Statement to be filed with the SEC and delivered to 
stockholders in connection with the Annual Meeting of Stockholders to be held April 30, 2024 , all of which information is 
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incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters:
Refer to the information under the captions “Ownership of Securities—Security Ownership of Certain Beneficial 
Owners” and “Ownership of Securities—Common Stock and Stock-based Holdings of Directors and Executive Officers” 
in IBM’s definitive Proxy Statement to be filed with the SEC and delivered to stockholders in connection with the Annual 
Meeting of Stockholders to be held April 30, 2024 , all of which information is incorporated herein by  reference.
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EQUITY COMPENSATION PLAN  INFORMATION
Plan CategoryNumber of securities
to be issued upon
exercise of
outstanding options,
warrants and rights (1)
(a)  Weighted-average
exercise price of
outstanding options,
warrants and rights (1)
(b)Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column (a))
(c)
Equity compensation plans approved by security 
holders
Options 9,259,638 $ 130.23 —
RSUs 21,624,285 N/A —
PSUs (2)5,239,655 N/A —
Subtotal 36,123,578 $ 130.23 36,957,129
Equity compensation plans not approved by security 
holders
Options 596,924 $ 130.17 —
RSUs 1,433,358 N/A —
PSUs (2)689,528 N/A —
DCEAP shares 198,263 N/A —
Subtotal 2,918,073 $ 130.17 13,374,503
Total 39,041,651 $ 130.23 50,331,632
N/A is not applicable
RSUs = Restricted Stock Units, including Retention Restricted Stock Units
PSUs = Performance Share Units
DCEAP Shares = Promised Fee Shares under the DCEAP (refer to plan description below)
(1)In connection with 15 acquisition transactions, 356,373  additional share based awards, consisting of stock options, were outstanding at December 31, 
2023  as a result of the Company’s assumption of awards granted by the acquired entities. The weighted-average exercise price of these awards was 
$24.43 . The Company has not made, and will not make, any further grants or awards of equity securities under the plans of these acquired companies.
(2)The numbers included for PSUs in column (a) above reflect the maximum number payout. Assuming target number payout, the number of securities 
to be issued upon exercise of PSUs for equity compensation plans approved by security holders is 3,082,150  and for equity compensation plans not 
approved by security holders is 390,889 . For additional information about PSUs, including payout calculations, refer to the information under “2023


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Summary Compensation Table and Related Narrative ” in IBM’s definitive Proxy Statement to be filed with the SEC and delivered to stockholders in 
connection with the Annual Meeting of Stockholders to be held April 30, 2024 .
The material features of each equity compensation plan under which equity securities are authorized for issuance that 
was adopted without stockholder approval are described below:
2001 Long-Term Performance Plan (the “2001 Plan”)
The 2001 Plan has been used to fund awards for employees other than senior executives of the Company. Awards for 
senior executives of the Company have been and will continue to be funded from the stockholder-approved 1999 Long-
Term Performance Plan (the “1999 Plan”); the 1999 Plan is also used to fund awards for employees other than senior 
executives, otherwise, the provisions of the 2001 Plan are identical to the 1999 Plan, including the type of awards that may 
be granted under the plan (stock options, restricted stock and unit awards and long-term performance incentive awards).
The 2001 Plan is administered by the Executive Compensation and Management Resources Committee of the Board of 
Directors (the “Committee”), and that Committee may delegate to officers of the company certain of its duties, powers and 
authority. Payment of awards may be made in the form of cash, stock or combinations thereof and may be deferred with 
Committee approval. Awards are not transferable or assignable except (i) by law, will or the laws of descent and 
distribution, (ii) as a result of the disability of the recipient, or (iii) with the approval of the Committee.
If the employment of a participant terminates, other than as a result of the death or disability of a participant, all 
unexercised, deferred and unpaid awards shall be canceled immediately, unless the award agreement provides otherwise. In 
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the event of the death of a participant or in the event a participant is deemed by the company to be disabled and eligible for 
benefits under the terms of the IBM Long-Term Disability Plan (or any successor plan or similar plan of another 
employer), the participant’s estate, beneficiaries or representative, as the case may be, shall have the rights and duties of the 
participant under the applicable award agreement. In addition, unless the award agreement specifies otherwise, the 
Committee may cancel, rescind, suspend, withhold or otherwise limit or restrict any unexpired, unpaid, or deferred award 
at any time if the participant is not in compliance with all applicable provisions of the awards agreement and the 2001 Plan. 
In addition, awards may be cancelled if the participant engages in any conduct or act determined to be injurious, 
detrimental or prejudicial to any interest of the company.
PWCC Acquisition Long-Term Performance Plan (the “PWCC Plan”)
The PWCC Plan was adopted by the Board of Directors in connection with the company’s acquisition of 
PricewaterhouseCoopers Consulting (“PwCC”) from PricewaterhouseCoopers LLP, as announced on October 1, 2002. The 
PWCC Plan has been and will continue to be used solely to fund awards for employees of PwCC who have become 
employed by the company as a result of the acquisition. Awards for senior executives of the company will not be funded 
from the PWCC Plan. The terms and conditions of the PWCC Plan are substantively identical to the terms and conditions 
of the 2001 Plan, described above.
IBM Red Hat Acquisition Long-Term Performance Plan (the “Red Hat Plan”)
The Red Hat Plan was adopted by the Board of Directors in connection with the company’s acquisition of Red Hat, 
Inc. on July 9, 2019. The Red Hat Plan was used solely to fund awards for employees who were not employed by IBM 
immediately prior to the closing of the acquisition. Awards for senior executives of the company will not be funded from 
the Red Hat Plan. The terms and conditions of the Red Hat Plan are substantively identical to the terms and conditions of 
the 2001 Plan, described above.
Amended and Restated Deferred Compensation and Equity Award Plan (the “DCEAP”)


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The DCEAP was adopted in 1993 and amended and restated effective January 1, 2014. Under the Amended and 
Restated DCEAP, non-management directors receive Promised Fee Shares in connection with deferred annual retainer 
payments. Each Promised Fee Share is equal in value to one share of the company’s common stock. Upon a director’s 
retirement or other completion of service as a director, amounts deferred into Promised Fee Shares are payable in either 
cash and/or shares of the company’s stock either as lump sum or installments pursuant to the director’s distribution 
election. For additional information about the DCEAP, refer to “ Director Compensation ” in IBM’s definitive Proxy 
Statement to be filed with the SEC and delivered to stockholders in connection with the Annual Meeting of Stockholders to 
be held April 30, 2024 .
Item 13.  Certain Relationships and Related Transactions, and Director Independence:
Refer to the information under the captions “IBM Board of Directors,” “Governance and the Board—Committees of 
the Board,” “Governance and the Board—Certain Transactions and Relationships” and “Governance and the Board—
Corporate Governance—Independent Board” in IBM’s definitive Proxy Statement to be filed with the SEC and delivered 
to stockholders in connection with the Annual Meeting of Stockholders to be held April 30, 2024 , all of which information 
is incorporated herein by reference.
Item 14. Principal Accounting Fees and Services:
Refer  to the information under the captions “Report of the Audit Committee of the Board of Directors” and “Audit and 
Non-Audit Fees” in IBM’s definitive Proxy Statement to be filed with the SEC and delivered to stockholders in connection 
with the Annual Meeting of Stockholders to be held April 30, 2024 , all of which information is incorporated herein by 
reference.
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PART IV
Item 15. Exhibits, Financial Statement Schedules:
(a)The following documents are filed as part of this report:
1.Financial statements from IBM’s 2023  Annual Report to Stockholders, which are incorporated herein by 
reference:
Report of Independent Registered Public Accounting Firm ‒ PCAOB Firm ID 238 (pages 42 through 43). 
Consolidated Income Statement for the years ended December 31, 2023 , 2022  and 2021  (page 44).
Consolidated Statement of Comprehensive Income for the years ended December 31, 2023 , 2022  and 2021  
(page 45).
Consolidated Balance Sheet at December 31, 2023  and 2022  (page 46).
Consolidated Statement of Cash Flows for the years ended December 31, 2023 , 2022  and 2021  (page 47).
Consolidated Statement of Equity at December 31, 2023 , 2022  and 2021  (pages 48 and 49).
Notes to Consolidated Financial Statements (pages 50 through 121).
2.Financial statement schedule required to be filed by Item 8 of this Form:
PageSchedule
Number
Report of Independent Registered Public Accounting Firm on Financial Statement Schedule.
S-1 II Valuation and Qualifying Accounts and Reserves for the years ended December 31, 2023, 2022, and 
2021.
All other schedules are omitted as the required matter is not present, the amounts are not significant or the information 
is shown in the Consolidated Financial Statements or the notes thereto.
3.Exhibits:
Reference
Number per
Item 601 of
Regulation S-K Description of ExhibitsExhibit Number 
in this 
Form 10-K
(3) Certificate of Incorporation and By-laws
The Certificate of Incorporation of IBM, is Exhibit 3.1 to Form 10-K, filed February 
22, 2022, and is hereby incorporated by reference.
The By-Laws of IBM, as amended through December 12, 2023, is Exhibit 3.2 to 
Form 8-K, filed December 12, 2023, and is hereby incorporated by reference.


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(4) Instruments defining the rights of security holders
The instruments defining the rights of the holders of the 7.00% Debentures due 2025 
and the 7.00% Debentures due 2045 are Exhibits 2 and 3, respectively, to Form 8-K, 
filed on October 30, 1995, and are hereby incorporated by reference.
The instrument defining the rights of the holders of the 7.125% Debentures due 2096 
is Exhibit 4.2 to Form 8-K/A, filed on December 6, 1996, and is hereby incorporated 
by reference.
The instrument defining the rights of the holders of the 6.22% Debentures due 2027 
is Exhibit 3 to Form 8-K, filed on August 1, 1997, and is hereby incorporated by 
reference.
The instrument defining the rights of the holders of the 6.50% Debentures due 2028 
is Exhibit 2 to Form 8-K, filed on January 8, 1998, and is hereby incorporated by 
reference.
The instrument defining the rights of the holders of the 5.875% Debentures due 2032 
is Exhibit 3 to Form 8 K, filed on November 26, 2002, and is hereby incorporated by 
reference.
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The instrument defining the rights of the holders of the 2.875% Notes due 2025 is 
Exhibit 3 to Form 8-K, filed November 6, 2013, and are hereby incorporated by 
reference.
The instruments defining the rights of the holders of the 3.450% Notes due 2026 and 
the 4.700% Notes due 2046 are Exhibits 4.4 and 4.5 to Form 8-K, filed February 18, 
2016, and are hereby incorporated by reference.
The instruments defining the rights of the holders of the 1.125% Notes due 2024 and 
the 1.750% Notes due 2028 are Exhibits 4.2 and 4.3 to Form 8-K, filed March 4, 
2016, and are hereby incorporated by reference.
The instrument defining the rights of the holders of the 0.300% Notes due 2026 is 
Exhibit 4 to Form 8-K, filed November 1, 2016, and is hereby incorporated by 
reference.
The instruments defining the rights of the holders of the 3.300% Notes due 2027 is 
Exhibit 4.4 to Form 8-K, filed January 26, 2017, and are hereby incorporated by 
reference.
The instruments defining the rights of the holders of the 0.950% Notes due 2025, and 
the 1.500% Notes due 2029 are Exhibits 4.1 and 4.2 to Form 8-K, filed May 22, 
2017, and are hereby incorporated by reference.
The instruments defining the rights of the holders of the 0.875% Notes due 2025, the 
1.250% Notes due 2027 and the 1.750% Notes due 2031 are Exhibits 4.2, 4.3 and 4.4 
to Form 8-K, filed January 30, 2019, and are hereby incorporated by reference.
The instruments defining the rights of the holders of the 3.000% Notes due 2024, the


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3.300% Notes due 2026, the 3.500% Notes due 2029, the 4.150% Notes due 2039 
and the 4.250% Notes due 2049 are Exhibits 4.4, 4.5, 4.6, 4.7 and 4.8 to Form 8-K, 
filed May 14, 2019, and are hereby incorporated by reference.
The instruments defining the rights of the holders of the 0.300% Notes due 2028, the 
0.650% Notes due 2032 and the 1.200% Notes due 2040 are Exhibits 4.1, 4.2 and 4.3 
to Form 8-K, filed February 10, 2020, and are hereby incorporated by reference.
The instruments defining the rights of the holders of the 1.700% Notes due 2027, the 
1.950% Notes due 2030, the 2.850% Notes due 2040 and the 2.950% Notes due 2050 
are Exhibits 4.1, 4.2, 4.3 and 4.4 to Form 8-K, filed May 6, 2020, and are hereby 
incorporated by reference.
The instruments defining the rights of the holders of the 0.875% Notes due 2030, the 
1.250% Notes due 2034, the 2.200% Notes due 2027, the 2.720% Notes due 2032 
and the 3.430% Notes due 2052 are Exhibits 4.1, 4.2, 4.3, 4.4 and 4.5 to Form 8-K, 
filed February 8, 2022, and are hereby incorporated by reference .
The instruments defining the rights of the holders of the 4.000% Notes due 2025, the 
4.150% Notes due 2027, the 4.400% Notes due 2032 and the 4.900% Notes due 2052


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are Exhibits 4.1, 4.2, 4.3 and 4.4 to Form 8-K, filed July 26, 2022, and are hereby 
incorporated by reference.
The instruments defining the rights of the holders of the 3.375% Notes due 2027, the 
3.625% Notes due 2031, the 3.750% Notes due 2035, the 4.000% Notes due 2043, 
the 4.875% Notes due 2038, the 4.500% Notes due 2026, the 4.500% Notes due 
2028, the 4.750% Notes due 2033 and the 5.100% Notes due 2053 are Exhibits 4.1, 
4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8 and 4.9 to Form 8-K, filed February 3, 2023, and are 
hereby incorporated by reference.
The instruments defining the rights of the holders of the 4.700% Notes due 2026, the 
4.600% Notes due 2027, the 4.600% Notes due 2029, the 4.750% Notes due 2031, 
the 4.900% Notes due 2034, the 5.250% Notes due 2044 and the 5.300% Notes due 
2054 are Exhibits 4.2, 4.3, 4.4, 4.5, 4.6, 4.7 and 4.8 to Form 8-K, filed February 2, 
2024, and are hereby incorporated by reference.
Indenture dated as of October 1, 1993 between IBM and The Bank of New York 
Mellon, (as successor to The Chase Manhattan Bank (National Association)) as 
Trustee, is Exhibit 4.1 to Form 10-Q for the quarter ended September 30, 2017, and 
is hereby incorporated by reference.
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First Supplemental Indenture to Indenture dated as of October 1, 1993 between IBM 
and The Bank of New York Mellon, (as successor to The Chase Manhattan Bank 
(National Association)) as Trustee, dated as of December 15, 1995, is Exhibit 4.2 to 
Form 10-Q for the quarter ended September 30, 2017, and is hereby incorporated by 
reference.
Indenture dated as of February 2, 2024, between IBM International Capital Pte. Ltd., 
International Business Machines Corporation, as guarantor, and The Band of New 
York Mellon, as trustee, is Exhibit 4.1 to Form 8-K, filed February 2, 2024, and is 
hereby incorporated by reference.
Description of Securities Registered under Section 12 of the Exchange Act. 4.1
Material contracts
The IBM 2001 Long-Term Performance Plan, a compensatory plan, contained in 
Registration Statement No. 333-87708 on Form S-8, as such amended plan was filed 
as Exhibit 10.1 to Form 10-Q for the quarter ended September 30, 2007, is hereby 
incorporated by reference.  (1)
The IBM PWCC Acquisition Long-Term Performance Plan, a compensatory plan, 
contained in Registration Statement No. 333-102872 on Form S-8, as such amended 
plan was filed as Exhibit 10.2 to Form 10-Q for the quarter ended September 30, 
2007, is hereby incorporated by reference.  (1)
The IBM Red Hat Acquisition Long-Term Performance Plan, a compensatory plan, 
contained in Registration Statement No. 333-232585 of Form S-8, as such amended 
plan was filed as Exhibit 4.8 to Form S-8 POS, filed on December 18, 2020, is 
hereby incorporated by reference.  (1)
The IBM 1999 Long-Term Performance Plan, a compensatory plan, contained in 
Registration Statement No. 333-30424 on Form S-8, as such amended plan was filed 
as Exhibit 10.3 to Form 10-Q for the quarter ended September 30, 2007, is hereby


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incorporated by reference.  (1)
The IBM 1997 Long-Term Performance Plan, a compensatory plan, contained in 
Registration Statement No. 333-31305 on Form S-8, as such amended plan was filed 
as Exhibit 10.4 to Form 10-Q for the quarter ended September 30, 2007, is hereby 
incorporated by reference.  (1)
The VMTurbo, Inc. Amended and Restated 2008 Stock Plan, a compensatory plan, 
contained in Registration Statement No. 333-259965 on Form S-8, as such amended 
and restated plan was filed as Exhibit 4.3 to Form S-8, filed on October 1, 2021, is 
hereby incorporated by reference.  (1)
Forms of equity award agreements for (i) stock options, restricted stock, restricted 
stock units, cash-settled restricted stock units, SARS, (ii) performance share units 
and (iii) retention restricted stock unit awards as well as the Terms and Conditions of 
LTPP Equity Awards, effective October 1, 2018, in connection with the foregoing 
award agreements, filed as Exhibit 10.1 to Form 10-Q for the quarter ended 
September 30, 2018 are hereby incorporated by reference.  (1)
Terms and Conditions of LTPP equity award agreements was filed as Exhibit 10.2 to 
Form 10-Q for the quarter ended March 31, 2019, and is hereby incorporated by 
reference.  (1)
Forms of equity award agreements for stock options, restricted stock, restricted stock 
units, cash-settled restricted stock units and SARS, as well as the Terms and 
Conditions of LTPP Equity Awards, effective July 15, 2019, in connection with the 
foregoing award agreements, filed as Exhibit 10.1 to Form 10-Q for the quarter 
ended June 30, 2019, are hereby incorporated by reference.  (1)
Forms of LTPP equity award agreements for (i) stock options, restricted stock, 
restricted stock units, cash-settled restricted stock units, SARS, and (ii) performance


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share units, as well as the Terms and Conditions of LTPP Equity Awards, effective 
October 1, 2019, in connection with the foregoing award agreements, filed as Exhibit 
10.1 to Form 10-Q for the quarter ended September 30, 2019, are hereby 
incorporated by reference.  (1)
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Form of LTPP equity award agreement for performance share units and the terms and 
conditions of LTPP Equity Awards, effective December 17, 2019, in connection with 
the foregoing award agreements, filed as Exhibit 10.1 to Form 10-K for the year 
ended December 31, 2019, are hereby incorporated by reference.  (1)
Form of LTPP equity award agreement for performance share units and the terms and 
conditions of LTPP Equity Awards, effective March 2, 2020, in connection with the 
foregoing award agreements, filed as Exhibit 10.1 to Form 10-Q for the quarter 
ended March 31, 2020, are hereby incorporated by reference.  (1)
Terms and Conditions of IBM LTPP Equity Awards, effective June 1, 2020, filed as 
Exhibit 10.1 to Form 10-Q for the quarter ended June 30, 2020, are hereby 
incorporated by reference.  (1)
Terms and Conditions of IBM LTPP Equity Awards, effective June 1, 2023, filed as 
Exhibit 10.1 to Form 10-Q for the quarter ended June 30, 2023, are hereby 
incorporated by reference.  (1)
Form of LTPP equity award agreement for performance share unites, effective, 
January 1, 2021, filed as Exhibit 10.1 to Form 10-Q for the quarter ended March 1, 
2021, is hereby incorporated by reference.  (1)
Forms of LTPP equity award agreements for (i) stock options, restricted stock, 
restricted stock units, cash-settled restricted stock units, SARS, (ii) performance 
share units and (iii) retention restricted stock unit awards, effective June 1, 2021, 
filed as Exhibit 10.1 to the Form 10-Q for the quarter ended June 30, 2021, are 
hereby incorporated by reference.  (1)
Forms of LTPP equity award agreements for (i) stock options, restricted stock, 
restricted stock units, cash-settled restricted stock units, SARS, and (ii) performance


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share units, as well as the Terms and Conditions of LTPP Equity Awards, effective 
January 1, 2022, in connection with the foregoing award agreements, filed as Exhibit 
10.1 to Form 10-K for the year ended December 31, 2021, are hereby incorporated 
by reference.  (1)
Forms of LTPP equity award agreements for (i) stock options, restricted stock, 
restricted stock units, cash-settled restricted stock units, SARS, and (ii) performance 
share units, as well as the Terms and Conditions of LTPP Equity Awards, effective 
February 1, 2023, in connection with the foregoing award agreements, filed as 
Exhibit 10.1 to Form 10-K for the year ended December 31, 2022, are hereby 
incorporated by reference.  (1)
Forms of LTPP equity award agreements for (i) stock options, restricted stock units, 
cash-settled restricted stock units, SARS, (ii) retention restricted stock units, cash-
settled retention restricted stock units, and (iii) performance share units, as well as 
the Terms and Conditions of LTPP Equity Awards, effective July 1, 2023, in 
connection with the foregoing award agreements, filed as Exhibit 10.2 to Form 10-Q 
for the quarter ended June 30, 2023, are hereby incorporated by reference.  (1)
Annual Incentive Program, effective January 1, 2023, filed as Exhibit 10.3 for the 
quarter ended June 30, 2023, are hereby incorporated by reference.  (1)
Board of Directors compensatory plans, as described under the caption “Governance 
of the Board—Director Compensation” in IBM’s definitive Proxy Statement to be 
filed with the Securities and Exchange Commission and delivered to stockholders in 
connection with the Annual Meeting of Stockholders to be held April 30, 2024, are 
hereby incorporated by reference. (1)
The IBM Non-Employee Directors Stock Option Plan, contained in Registration 
Statement 33-60227 on Form S-8, is hereby incorporated by reference.  (1)
The IBM Board of Directors Amended and Restated Deferred Compensation and


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The IBM Board of Directors Amended and Restated Deferred Compensation and 
Equity Award Plan, a compensatory plan, as amended and restated effective January 
1, 2014, which was filed as Exhibit 10.1 to Form 10-K for the year ended December 
31, 2013, and is hereby incorporated by reference.  (1)
Amendment No. 1 to the Amended and Restated Deferred Compensation and Equity 
Award Plan, effective January 30, 2018, which was filed as Exhibit 10.1 to Form 10-
K for the year ended December 31, 2017, is hereby incorporated by reference.  (1)
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Amendment No. 2 to the Amended and Restated Deferred Compensation and Equity 
Award Plan, effective December 13, 2022, filed as Exhibit 10.2 to Form 10-K for the 
year ended December 31, 2022, are hereby incorporated by reference.  (1)
The IBM Supplemental Executive Retention Plan, a compensatory plan, as amended 
and restated through December 31, 2008, which was filed as Exhibit 10.2 to Form 
10-K for the year ended December 31, 2008, is hereby incorporated by reference.  (1)
Amendment No. 1 to the IBM Supplemental Executive Retention Plan, a 
compensatory plan, effective December 9, 2014, which was filed as Exhibit 10.1 to 
Form 10-K for the year ended December 31, 2014, and is hereby incorporated by 
reference.  (1)
Amendment No. 2 to the IBM Supplemental Executive Retention Plan, a 
compensatory plan, effective December 31, 2023.  (1)10.1
The IBM Excess Savings Plan, a compensatory plan (formerly the IBM Excess 
401(k) Plus Plan), as amended and restated through January 1, 2024. (1)10.2
The IBM 2003 Employees Stock Purchase Plan, contained in Registration Statement 
333-104806 on Form S-8, as amended through April 1, 2005, which was filed as 
Exhibit 10.3 to Form 10-Q for the quarter ended March 31, 2005, is hereby 
incorporated by reference.  (1)
Form of Noncompetition Agreement, filed as Exhibit 10.2 to Form 10-Q for the 
quarter ended March 31, 2009, is hereby incorporated by reference.  (1)
Form of Noncompetition Agreement, filed as Exhibit 10.1 to Form 10-Q for the 
quarter ended March 31, 2012, is hereby incorporated by reference.  (1)
Form of Noncompetition Agreement, filed as Exhibit 10.2 to Form 10-K for the year 
ended December 31, 2015, is hereby incorporated by reference.  (1)


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Form of Noncompetition Agreement, filed as Exhibit 10.3 to Form 10-Q for the 
quarter ended June 30, 2016, is hereby incorporated by reference.  (1)
Form of Noncompetition Agreement, filed as Exhibit 10.1 to Form 10-K for the year 
ended December 31, 2016, is hereby incorporated by reference.  (1)
Form of Noncompetition Agreement, filed as Exhibit 10.3 to Form 10-K for the year 
ended December 31, 2017, is hereby incorporated by reference.  (1)
Form of Noncompetition Agreement, filed as Exhibit 10.2 to Form 10-Q for the 
quarter ended September 30, 2018, is hereby incorporated by reference.  (1)
Form of Noncompetition Agreement, filed as Exhibit 10.2 to Form 10-K for the year 
ended December 31, 2019, is hereby incorporated by reference.  (1)
Form of Noncompetition Agreement, filed as Exhibit 10.2 to Form 10-K for the year 
ended December 31, 2020, is hereby incorporated by reference.  (1)
Form of Noncompetition Agreement, filed as Exhibit 10.2 to Form 10-K for the year 
ended December 31, 2021, is hereby incorporated by reference.  (1)
Form of Noncompetition Agreement, filed as Exhibit 10.4 to Form 10-K for the year 
ended December 31, 2022, is hereby incorporate by reference. (1)
Letter Agreement, signed by Gary Cohn and IBM, dated December 24, 2020, filed as 
Exhibit 10.3 to Form 10-K for the year ended December 31, 2021, is hereby 
incorporated by reference.  (1)
Letter Agreement, signed by Gary Cohn, dated December 24, 2020, filed as Exhibit 
10.4 to Form 10-K for the year ended December 31, 2021, is hereby incorporated by 
reference.  (1)
$2,500,000,000 Three-Year Credit Agreement, dated as of June 22, 2021, among 
International Business Machines Corporation, the Subsidiary Borrowers parties


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International Business Machines Corporation, the Subsidiary Borrowers parties 
thereto, the several banks and other financial institutions from time to time parties to 
such agreement, JPMorgan Chase Bank, N.A., as Administrative Agent, BNP 
Paribas, Citibank N.A. and Royal Bank of Canada, as Syndication Agents, and the 
Documentation Agents named therein, filed as Exhibit 10.1 to Form 8-K, filed June 
25, 2021, is hereby incorporated by reference.
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Amendment No. 1 to Three-Year Credit Agreement dated as of June 30, 2022, 
among International Business Machines Corporation, the several banks and other 
financial institutions from time to time parties to such agreement and JPMorgan 
Chase Bank, N.A., as Administrative Agent, filed as Exhibit 10.1 to Form 8-K, filed 
July 1, 2022, is hereby incorporated by reference.
Confirmation of Termination Date Extension dated June 15, 2023 to $2,500,000,000 
Three-Year Credit Agreement dated as of June 22, 2021 (as amended by Amendment 
No. 1 to Three-Year Credit Agreement, dated as of June 30, 2022), among IBM, the 
several banks and other financial institutions from time to time parties thereto, 
JPMorgan Chase Bank, N.A., as Administrative Agent, BNP Paribas, Citibank N.A. 
and Royal Bank of Canada, as Syndication Agents, and the Documentation Agents 
named therein, filed as Exhibit 10.1 to Form 8-K, filed June 16, 2023, is hereby 
incorporated by reference.
$7,500,000,000 Five-Year Credit Agreement, dated as of June 22, 2021, among 
International Business Machines Corporation, the Subsidiary Borrowers parties 
thereto, the several banks and other financial institutions from time to time parties to 
such agreement, JPMorgan Chase Bank, N.A., as Administrative Agent, BNP 
Paribas, Citibank, N.A. and Royal Bank of Canada, as Syndication Agents, and the 
Documentation Agents named therein, filed as Exhibit 10.2 to Form 8-K, filed June 
25, 2021, is hereby incorporated by reference.
Amendment No. 1 to Five-Year Credit Agreement dated as of June 30, 2022, among 
International Business Machiness Corporation, the several banks and other financial 
institutions from time to time parties to such agreement and JPMorgan Chase Bank, 
N.A., as Administrative Agent, filed as Exhibit 10.2 to Form 8-K, filed July 1, 2022, 
is hereby incorporated by reference.


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is hereby incorporated by reference.
Confirmation of Termination Date Extension dated June 15, 2023 to $7,500,000,000 
Five-Year Credit Agreement dated as of June 22, 2021 (as amended by Amendment 
No. 1 to Five-Year Credit Agreement, dated as of June 30, 2022), among IBM, the 
several banks and other financial institutions from time to time parties thereto, 
JPMorgan Chase Bank, N.A., as Administrative Agent, BNP Paribas, Citibank N.A. 
and Royal Bank of Canada, as Syndication Agents, and the Documentation Agents 
named therein, filed as Exhibit 10.2 to Form 8-K, filed June 16, 2023, is hereby 
incorporated by reference.
(13) Annual Report to Security Holders  (2)13
(21) Subsidiaries of the registrant 21
(23) Consent of Independent Registered Public Accounting Firm 23.1
(24) Powers of attorney 24.1
Resolution of the IBM Board of Directors authorizing execution of this Annual 
Report on Form 10-K by Powers of Attorney 24.2
(31) Certification by CEO pursuant to Rule 13A-14(a) or 15D-14(a) of the Securities 
Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley 
Act of 2002 . 31.1
Certification by CFO pursuant to Rule 13A-14(a) or 15D-14(a) of the Securities 
Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley 
Act of 2002 . 31.2
(32) Certification by CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to 
Section 906 of the Sarbanes-Oxley Act of 2002 . 32.1
Certification by CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to 
Section 906 of the Sarbanes-Oxley Act of 2002 . 32.2
(97) International Business Machines Corporation  Executive Officer Compensation 
Recovery Policy 97


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Recovery Policy 97
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(1) Management contract or compensatory plan or arrangement.
(2) The Performance Graphs, set forth on  page 12 2 of IBM’s 2023  Annual Report to Stockholders, are deemed to be furnished but not filed.
Item 16. Form 10-K Summary:
None.
23


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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly 
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
INTERNATIONAL BUSINESS MACHINES
CORPORATION
(Registrant)
By: /s/ NICOLÁS A. FEHRING
Nicolás A. Fehring
Vice President and Controller
(Chief Accounting Officer)
Date: February 26, 2024
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the 
following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ ARVIND KRISHNA Chairman of the Board
and Chief Executive OfficerFebruary 26, 2024Arvind Krishna
/s/ JAMES J. KAVANAUGH Senior Vice President and Chief
Financial Officer, Finance and OperationsFebruary 26, 2024James J. Kavanaugh
/s/ NICOLÁS A. FEHRING Vice President and Controller
(Chief Accounting Officer)February 26, 2024Nicolás A. Fehring


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2 of 2
Board of Directors
By: /s/ FRANK SEDLARCIK
Frank Sedlarcik
Marianne C. Brown DirectorAttorney-in-fact
February 26, 2024
Thomas Buberl Director
David N. Farr Director
Alex Gorsky Director
Michelle J. Howard Director
Andrew N. Liveris Director
F. William McNabb III Director
Michael Miebach Director
Martha E. Pollack Director
Joseph R. Swedish Director
Peter R. Voser Director
Frederick H. Waddell Director
Alfred W. Zollar Director


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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors and Stockholders of
International Business Machines Corporation:
Our audits of the consolidated financial statements referred to in our report dated February 26, 2024  appearing in the 2023  
Annual Report to Stockholders of International Business Machines Corporation (which report and consolidated financial 
statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the financial 
statement schedule listed in Item 15(a)(2) of this Form 10-K. In our opinion, this financial statement schedule presents 
fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated 
financial statements.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
New York, New York
February 26, 2024


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SCHEDULE I I
INTERNATIONAL BUSINESS MACHINES CORPORATION AND SUBSIDIARY COMPANIES
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
For the Years Ended December 31:
(Dollars in Millions)
DescriptionBalance at 
Beginning of 
PeriodAdditions/ 
(Deductions) Write-offsForeign 
Currency 
and OtherBalance at 
End of 
Period
Allowance For Credit Losses
2023
–Current (1)$ 467  $ 13   $ (97) $ 48 $ 431  
–Noncurrent $ 28  $ (2) $ —  $ 0 $ 27  
2022
–Current (1)$ 418  $ 59  $ (55) $ 45 $ 467  
–Noncurrent $ 25  $ 6  $ 0  $ (2) $ 28  
2021
–Current $ 503  $ (35) $ (46) $ (4) $ 418  
–Noncurrent $ 47  $ (21) $ 0 $ (2) $ 25  
Allowance For Inventory Losses
2023 $ 631  $ 201  $ (183) $ 9  $ 658  
2022 $ 633  $ 162  $ (148) $ (15) $ 631  
2021 $ 514  $ 240  $ (118) $ (3) $ 633  
Revenue Based Provisions
2023 $ 424  $ 500  $ (456) $ 12   $ 480  
2022 $ 435  $ 620  $ (629) $ (2) $ 424  
2021 $ 372  $ 627  $ (574) $ 10   $ 435  
(1) Other i ncludes reserves related to discontinued operations.
 Additions/(Deductions) to the allowances represent changes in estimates of unrecoverable amounts in receivables and 
inventory and are recorded to expense and cost accounts, respectively. Amounts are written-off when they are deemed 
unrecoverable by the company. Additions/(Deductions) to Revenue Based Provisions represent changes in estimated 
reductions to revenue, primarily as a result of revenue-related programs, including customer and business partner rebates.


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Write-offs for Revenue Based Provisions represent reductions in the provision due to amounts remitted to customers and 
business partners.
S-1


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EXHIBIT 21
INTERNATIONAL BUSINESS MACHINES CORPORATION SUBSIDIARIES
Subsidiaries—as of December 31, 2023
IBM Argentina Sociedad de Responsabilidad Limitada Argentina  100 
IBM Australia Limited Australia  100 
IBM Global Financing Australia Limited Australia  100 
IBM Oesterreich Internationale Bueromaschinen Gesellschaft m.b.H. Austria  100 
Red Hat Austria GmbH Austria  100 
IBM Bahamas Limited Bahamas  100 
IBM Belgium Financial Services Company BV/SRL Belgium  100 
International Business Machines of Belgium BV/SRL Belgium  100 
WTC Insurance Corporation, Ltd. Bermuda  100 
IBM Brasil—Industria, Maquinas e Servicos Limitada Brazil  100 
Banco IBM S.A. Brazil  100 
IBM Bulgaria Ltd. Bulgaria  100 
IBM Canada Limited—IBM Canada Limitee Canada  100 
IBM Global Financing Canada Corporation Canada  100 
IBM de Chile S.A.C. Chile  100 
IBM Global Financing de Chile SpA Chile  100 
IBM (China) Investment Company Limited China (P.R.C.)  100 
IBM (China) Co., Ltd. China (P.R.C.)  100 
IBM de Colombia S.A.S. Colombia  100 
IBM Business Transformation Center, S.r.l. Costa Rica  100 
IBM Croatia Ltd./IBM Hrvatska d.o.o. Croatia  100 
IBM Ceska Republika spol. s.r.o. Czech Republic  100 
IBM Danmark ApS Denmark  100 
IBM Global Financing Danmark ApS Denmark  100 
Red Hat APS Denmark  100 
IBM del Ecuador, C.A. Ecuador  100 
IBM Egypt Business Support Services Egypt  100 
IBM Eesti Osauhing (IBM Estonia Ou) Estonia  100 
IBM Global Financing Finland Oy Finland  100 
Oy IBM Finland AB Finland  100 
Compagnie IBM France, S.A.S. France  100 
IBM France Financement, SAS France  100 
RED HAT FRANCE France  100 
IBM Deutschland GmbH Germany  100 
IBM Deutschland Kreditbank GmbH Germany  100


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IBM Deutschland Kreditbank GmbH Germany  100 
IBM Global Financing Deutschland GmbH Germany  100 
Red Hat GmbH Germany  100 
IBM Hellas Information Handling Systems S.A. Greece  100 
IBM China/Hong Kong Limited Hong Kong  100 
IBM Magyarorszagi Kft. Hungary  100 
IBM India Private Limited India  100 Company NameState or country of 
incorporation or 
organizationVoting
percent
owned
directly or 
indirectly by
registrant


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PT IBM Indonesia Indonesia  100 
IBM Ireland Limited Ireland  100 
IBM Ireland Product Distribution Limited Ireland  100 
RED HAT LIMITED Ireland  100 
IBM Israel Ltd. Israel  100 
IBM Capital Italia S.r.l. Italy  100 
IBM Italia Servizi Finanziari S.r.l. Italy  100 
IBM Italia S.p.A. Italy  100 
IBM Japan Credit LLC Japan  100 
IBM Japan, Ltd. Japan  100 
IBM East Africa Limited Kenya  100 
IBM Korea, Inc. Korea (South)  100 
IBM Kuwait SPC Kuwait  100 
"IBM Latvija" SIA Latvia  100 
UAB “IBM Lietuva” Lithuania  100 
IBM Luxembourg Sarl Luxembourg  100 
IBM CAPITAL MALAYSIA SDN. BHD. Malaysia  100 
IBM Malaysia Sdn. Bhd. Malaysia  100 
IBM Malta Limited Malta  100 
International Business Machines (Mauritius) Limited Mauritius  100 
IBM de Mexico, Comercializacion y Servicios S. de R.L. de C.V. Mexico  100 
IBM Maroc Morocco  100 
IBM International Group B.V. Netherlands  100 
IBM Nederland B.V. Netherlands  100 
IBM New Zealand Limited New Zealand  100 
RED HAT NEW ZEALAND LIMITED New Zealand  100 
International Business Machines West Africa Limited Nigeria  100 
IBM Finans Norge AS Norway  100 
International Business Machines AS Norway  100 
IBM Capital Peru S.A.C. Peru  100 
IBM del Peru, S.A.C. Peru  100 
IBM Philippines, Incorporated Philippines  100 
IBM Global Financing Polska Sp. z.o.o. Poland  100 
IBM Polska Sp. z.o.o. Poland  100 
Companhia IBM Portuguesa, S.A. Portugal  100 
IBM Qatar LLC Qatar  100 
IBM Romania Srl Romania  100 
IBM Middle East and North Africa RHQ LLC Saudi Arabia  100 
IBM—International Business Machines d.o.o., Belgrade Serbia  100


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IBM International Capital Pte. Ltd. Singapore  100 
IBM Singapore Pte. Ltd. Singapore  100 
RED HAT ASIA PACIFIC PTE. LTD. Singapore  100 
IBM Slovensko spol s.r.o. Slovak Republic  100 
IBM Slovenija d.o.o. Slovenia  100 Company NameState or country of 
incorporation or 
organizationVoting
percent
owned
directly or 
indirectly by
registrant


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IBM Global Financing South Africa (Pty) Ltd South Africa  100 
IBM South Africa (Pty) Ltd. South Africa  100 
IBM Global Financing España, S.L.U. Spain  100 
IBM Global Services España, S.A. Spain  100 
International Business Machines, S.A. Spain  100 
IBM Global Financing Sweden AB Sweden  100 
IBM Svenska Aktiebolag Sweden  100 
IBM Global Financing Schweiz GmbH Switzerland  100 
IBM Schweiz AG—IBM Suisse SA—IBM Svizzera SA—IBM Switzerland Ltd Switzerland  100 
IBM Taiwan Corporation Taiwan  100 
IBM Tanzania Limited Tanzania  100 
IBM Capital (Thailand) Company Limited Thailand  100 
IBM Thailand Company Limited Thailand  100 
IBM Tunisie Tunisia  100 
IBM (International Business Machines) Turk Limited Sirketi Türkiye  100 
IBM Ukraine Ukraine  100 
IBM Middle East FZ—LLC United Arab Emirates  100 
IBM United Kingdom Limited United Kingdom  100 
IBM United Kingdom Asset Leasing Limited United Kingdom  100 
IBM United Kingdom Financial Services Limited United Kingdom  100 
IBM del Uruguay, S.A. Uruguay  100 
IBM Credit LLC USA (Delaware)  100 
IBM International Group Capital LLC USA (Delaware)  100 
IBM International Foundation USA (Delaware)  100 
IBM World Trade Corporation USA (Delaware)  100 
Red Hat, Inc. USA (Delaware)  100 
Softlayer Technologies, Inc. USA (Delaware)  100 
IBM de Venezuela, S.C.A. Venezuela  100 
IBM Vietnam Company Limited Vietnam  100 Company NameState or country of 
incorporation or 
organizationVoting
percent
owned
directly or 
indirectly by
registrant


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Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 002-77235, 
033-29022, 033-33458, 033-34406, 033-53777, 033-60225, 033-60227, 033-60237, 033-60815, 333-01411, 033-52931, 
033-33590, 333-76914, 333-87708, 333-09055, 333-23315, 333-31305, 333-41813, 333-44981, 333-48435, 333-81157, 
333-87751, 333-87859, 333-87925, 333-30424, 333-33692, 333-36510, 333-102872, 333-102870, 333-103471, 
333-104806, 333-114190, 333-131934, 333-138326, 333-138327, 333-148964, 333-170559, 333-171968, 333-196722, 
333-232585(1), 333-232585(2) and 333-259965) and Form S-3 (Nos. 033-49475(1), 033-31732, 333-03763, 333-27669, 
333-32690, 333-101034, 333-276739) of International Business Machines Corporation of our report dated February 26, 
2024  relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in 
the 2023  Annual Report to Stockholders, which is incorporated by reference in this Annual Report on Form 10-K. We also 
consent to the incorporation by reference of our report dated February 26, 2024  relating to the financial statement schedule 
which appears in this Form 10-K.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
New York, New York
February 26, 2024


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Exhibit 31.1
CERTIFICATION PURSUANT TO RULE 13A-14(a)/15D-14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934, AS
ADOPTED PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002
I, Arvind Krishna, certify that:
1. I have reviewed this annual report on Form 10-K of International Business Machines Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a 
material fact necessary to make the statements made, in light of the circumstances under which such statements 
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly 
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, 
and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure 
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over 
financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a. designed such disclosure controls and procedures, or caused such disclosure controls and procedures to 
be designed under our supervision, to ensure that material information relating to the registrant, including 
its consolidated subsidiaries, is made known to us by others within those entities, particularly during the 
period in which this report is being prepared;
b. designed such internal control over financial reporting, or caused such internal control over financial 
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability 
of financial reporting and the preparation of financial statements for external purposes in accordance with 
generally accepted accounting principles;
c. evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this 
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of 
the period covered by this report based on such evaluation; and
d. disclosed in this report any change in the registrant’s internal control over financial reporting that


