• Alexa – Customer embrace of Alexa continues, with Alexa-enabled devices among the best-selling items across all of Amazon. We’re seeing extremely strong adoption by other companies and developers that want to create their own experiences with Alexa. There are now more than 30,000 skills for Alexa from outside developers, and customers can control more than 4,000 smart home devices from 1,200 unique brands with Alexa. The foundations of Alexa continue to get smarter every day too. We’ve developed and implemented an on-device fingerprinting technique, which keeps your device from waking up when it hears an Alexa commercial on TV. (This technology ensured that our Alexa Super Bowl commercial didn’t wake up millions of devices.) Far-field speech recognition (already very good) has improved by 15% over the last year; and in the U.S., U.K., and Germany, we’ve improved Alexa’s spoken language understanding by more than 25% over the last 12 months through enhancements in Alexa’s machine learning components and the use of semi-supervised learning techniques. (These semi-supervised learning techniques reduced the amount of labeled data needed to achieve the same accuracy improvement by 40 times!) Finally, we’ve dramatically reduced the amount of time required to teach Alexa new languages by using machine translation and transfer learning techniques, which allows us to serve customers in more countries (like India and Japan). • Amazondevices – 2017 was our best year yet for hardware sales. Customers bought tens of millions of Echodevices, and Echo Dot and Fire TV Stick with Alexa were the best-selling products across all of Amazon–acrossall categories and all manufacturers. Customers bought twice as many Fire TV Sticks and Kids Edition Fire Tablets this holiday season versus last year. 2017 marked the release of our all-new Echo with an improved design, better sound, and a lower price; Echo Plus with a built-in smart homehub;andEchoSpot,whichiscompactandbeautiful with a circular screen. We released our next generation Fire TV, featuring 4K Ultra HD and HDR; and the Fire HD 10 Tablet, with 1080p Full HD display. And we celebrated the 10th anniversary of Kindle by releasing the all-new Kindle Oasis, our most advanced reader ever. It’s waterproof – take it in the bathtub – with a bigger 7” high-resolution 300 ppi display and has built-in audio so you can also listen to your books with Audible. • Prime Video – Prime Video continues to drive Prime member adoption and retention. In the last year we madePrimeVideoevenbetterforcustomersbyaddingnew,award-winningPrimeOriginalstothe service, like The Marvelous Mrs. Maisel,winneroftwoCritics’ChoiceAwardsandtwoGoldenGlobes, and the Oscar-nominated movie The Big Sick.We’veexpandedourslateofprogrammingacrossthe globe, launching new seasons of Bosch and Sneaky Pete from the U.S., The Grand Tour from the U.K., and You Are Wanted from Germany, while adding new Sentosha shows from Japan, along with Breathe and the award-winning Inside Edge from India. Also this year, we expanded our Prime Channels offerings, adding CBS All Access in the U.S. and launching Channels in the U.K. and Germany. WedebutedNFLThursdayNightFootballonPrimeVideo,withmorethan18milliontotalviewersover 11games.In2017,PrimeVideoDirectsecuredsubscription video rights for more than 3,000 feature films and committed over $18 million in royalties to independent filmmakers and other rights holders. Looking forward, we’re also excited about our upcoming Prime Original series pipeline, which includes Tom Clancy’s Jack Ryan starring John Krasinski; King Lear, starring Anthony Hopkins and EmmaThompson;TheRomanoffs,executiveproducedbyMattWeiner;CarnivalRowstarringOrlando BloomandCaraDelevingne;GoodOmensstarringJonHamm;andHomecoming,executiveproducedby SamEsmailandstarringJulia Roberts in her first television series. We acquired the global television rights for a multi-season production of The Lord of the Rings,aswellasCortés,aminiseriesbasedonthe epic saga of Hernán Cortés from executive producer Steven Spielberg, starring Javier Bardem, and we look forward to beginning work on those shows this year. • AmazonMusic–AmazonMusiccontinuestogrowfastandnowhastensofmillionsofpaid customers. Amazon Music Unlimited, our on-demand, ad-free offering, expanded to more than 30 new countries in 2017, and membership has more than doubled over the past six months. • Fashion – Amazon has become the destination for tens of millions of customers to shop for fashion. In 2017, we introduced our first fashion-oriented Prime benefit, Prime Wardrobe – a new service that brings the fitting room directly to the homes of Prime members so they can try on the latest styles before they buy. We introduced Nike and UGG on Amazon along with new celebrity collections by DrewBarrymoreandDwyaneWade,aswellasdozensofnewprivatebrands,likeGoodthreadsand