Amazon.com 2004 Annual Report Download

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Table of contents

  • Page 1
    4

  • Page 2

  • Page 3
    ...in Years 2 through 4. Here are the income statements for the first four years of business: Year 1 Earnings Year 2 Year 3 (in thousands) Year 4 Sales ...Units sold ...Growth ...Gross profit ...Gross margin ...Depreciation ...Labor & other costs ...Earnings ...Margin ...Growth ... $100,000 100 N/A 55...

  • Page 4
    ...term growth in free cash flow per share. Amazon.com's free cash flow is driven primarily by increasing operating profit dollars and efficiently managing both working capital and capital expenditures. We work to increase operating profit by focusing on improving all aspects of the customer experience...

  • Page 5
    ... sales in inventory plus number of days of sales in accounts receivable minus accounts payable days. Free cash flow is defined as net cash provided by operating activities less purchases of fixed assets, including capitalized internal-use software and website development, both of which are presented...

  • Page 6
    ...LETTER TO SHAREHOLDERS (Reprinted from the 1997 Annual Report) To our shareholders: Amazon.com passed many milestones in 1997: by year-end, we had served more than 1.5 million customers, yielding 838% revenue growth to $147.8 million, and extended our market leadership despite aggressive competitive...

  • Page 7
    ... improving the shopping experience, and in 1997 substantially enhanced our store. We now offer customers gift certificates, 1-ClickSM shopping, and vastly more reviews, content, browsing options, and recommendation features. We dramatically lowered prices, further increasing customer value. Word of...

  • Page 8
    Infrastructure During 1997, we worked hard to expand our business infrastructure to support these greatly increased traffic, sales, and service levels Amazon.com's employee base grew from 158 to 614, and we significantly strengthened our management team. Distribution center capacity grew from 50,...

  • Page 9
    ... (206) 266-1000 (Address and telephone number, including area code, of registrant's principal executive offices) Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $.01 per share Indicate by check mark...

  • Page 10
    ... Item 6. Item 7. PART I Business ...Properties ...Legal Proceedings ...Submission of Matters to a Vote of Security Holders ...PART II Market for the Registrant's Common Stock and Related Stockholder Matters ...Selected Consolidated Financial Data ...Management's Discussion and Analysis of Financial...

  • Page 11
    ... of Delaware. Our principal corporate offices are located in Seattle, Washington. We completed our initial public offering in May 1997 and our common stock is listed on the Nasdaq National Market under the symbol "AMZN." As used herein, "Amazon.com," "we," "our" and similar terms include Amazon.com...

  • Page 12
    ...of many of the books we offer with our "Look Inside the Book" and "Search Inside the Book" features. Our community of online customers also creates feature-rich content, including product reviews, online recommendation lists, wish lists, buying guides, and wedding and baby registries. We endeavor to...

  • Page 13
    ... provide marketing and promotional services, such as sponsored search, and have a co-branded credit card agreement. Marketing and Promotion Our marketing strategy is designed to increase customer traffic to our websites, drive awareness of our products and services, promote repeat purchases, develop...

  • Page 14
    ...applications for accepting and validating customer orders, placing and tracking orders with suppliers, managing and assigning inventory to customer orders, and ensuring proper shipment of products to customers. Our transaction-processing systems handle millions of items, a number of different status...

  • Page 15
    ...secure merchandise from vendors on more favorable terms and may be able to adopt more aggressive pricing policies. Competitors in both the retail and e-commerce services industries also may be able to devote more resources to technology development, fulfillment, and marketing than we do. Competition...

  • Page 16
    ... Subjects Us to Business and Competitive Risks We do not expect to benefit in our newer market segments, whether products, services or new geographic areas, from the first-to-market advantage that we experienced in the U.S. online book channel. Our gross profits in our newer business activities may...

  • Page 17
    ... and vendor returns; disruptions in service by shipping carriers; the extent to which we offer free shipping, continue to reduce product prices worldwide, and provide additional benefits to our customers which reduce our gross or operating profits; the extent we invest in technology and content...

  • Page 18
    ... on foreign ownership; shorter payable and longer receivable cycles and the resultant negative impact on cash flow; consumer and data protection laws and restrictions on pricing or discounts; lower levels of adoption or use of the Internet and other technologies vital to our business and the lack of...

  • Page 19
    ...staff customer service centers. We generally have payment terms with our vendors that extend beyond the amount of time necessary to collect proceeds from our customers. As a result of holiday sales, at December 31 of each year, our cash, cash equivalents, and marketable securities balances typically...

  • Page 20
    ... agreements. If we fail to implement, maintain, and develop successfully the various components of such commercial relationships, which may include fulfillment, customer service, inventory management, tax collection, payment processing, licensing of third party software, hardware, and content...

  • Page 21
    ... our total net sales in 2004, compared to 38% in 2003 and 30% in 2002. See Item 7 of Part II, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations - Effect of Exchange Rates" for a table demonstrating the effect on our consolidated statements...

  • Page 22
    ... executive officers or other key employees could harm our business. System Interruption and the Lack of Integration and Redundancy in Our Systems May Affect Our Sales Customer access to our websites directly affects the volume of goods we sell and the services we offer and thus affects our net sales...

  • Page 23
    ... network will increase our net shipping cost by requiring us to make split shipments from one or more locations, complimentary upgrades, and additional long-zone shipments necessary to ensure timely delivery. As a result of our third-party services relationships with Toysrus.com, Babiesrus...

  • Page 24
    ...commerce industry; fluctuations in the stock market in general and market prices for Internet-related companies in particular; quarterly variations in operating results; new products, services, innovations, and strategic developments by our competitors or us, or business combinations and investments...

  • Page 25
    ..." and may regulate online auction services. Jurisdictions may also regulate other consumer-toconsumer online markets, including certain aspects of Amazon Marketplace. This could, in turn, diminish the demand for our products and services and increase our cost of doing business. Taxation Risks Could...

  • Page 26
    ... credit card transactions and other security breaches, failure to mitigate such fraud or breaches may adversely affect our operating results. We Could Be Liable for Fraudulent or Unlawful Activities of Sellers The law relating to the liability of providers of online payment services is currently...

  • Page 27
    ... Retail and Marketing Senior Vice President, Worldwide Hardlines Retail Senior Vice President, Worldwide Business Development and Services Sales Senior Vice President and Chief Financial Officer Senior Vice President, Worldwide Operations Senior Vice President, General Counsel, and Secretary...

  • Page 28
    ... Executive Officer, and Chairman of the Board Managing Director of Madrona Venture Group Chief Scientist of Xerox Corporation (retired) and Visiting Scholar at the Annenberg Center for Communication at the University of Southern California General Partner, Kleiner Perkins Caufield & Byers Executive...

  • Page 29
    ...,000 International Sub-total Other corporate office facilities, including development centers. From 2005 through 2014. Campbellsville and Lexington, Kentucky; Chambersburg, Pennsylvania; Coffeyville, Kansas; Fernley and Reno, Nevada; Grand Forks, North Dakota; New Castle, Delaware Bad Hersfeld...

  • Page 30
    ... 12, 2004, Soverain Software LLC filed a complaint against us for patent infringement in the United States District Court for the Eastern District of Texas. The complaint alleges that our website technology infringes several patents obtained by Soverain purporting to cover "Internet Server Access...

  • Page 31
    ... also awarded Amazon.com its attorneys' fees and costs. Plaintiff is appealing that judgment. In April 2004, we learned that the French authorities are investigating our DVD sales practices in France, and we are cooperating. On May 21, 2004, Toysrus.com LLC filed a complaint against us for breach of...

  • Page 32
    ...the Registrant's Common Stock and Related Shareholder Matters Market Information Our common stock is traded on the Nasdaq National Market under the symbol "AMZN." The following table sets forth the high and low closing prices for our common stock for the periods indicated, as reported by the Nasdaq...

  • Page 33
    ... (loss) per share, see Item 8 of Part II, "Financial Statements and Supplementary Data-Note 1-Description of Business and Accounting Policies." Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements This Annual Report on Form 10...

  • Page 34
    ... centers, are largely fixed in that they do not vary directly with sales. The customer experience costs that remain variable as a percentage of sales include product costs; credit-card processing fees; bad debt; picking, packaging, and preparing orders for shipment; transportation; customer service...

  • Page 35
    ...negotiating better pricing from our suppliers in exchange for shorter payment terms. Our spending in technology and content will increase as we add computer scientists and software engineers to continue to improve our process efficiency and enhance the customer experience on our websites. We believe...

  • Page 36
    ...for subscription services, including amounts received for online DVD rentals and other membership programs, are deferred and recognized as revenue over the subscription term. We periodically provide incentive offers to our customers to encourage purchases. Such offers include current discount offers...

  • Page 37
    ... business. In accordance with Statement of Position ("SOP") 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use," we capitalize costs incurred during the application development stage related to the development of internal-use software and amortize these costs...

  • Page 38
    ... discounts offered by vendors, vendor payment terms, and fluctuations in foreign exchange rates. Our principal sources of liquidity are cash flows generated from operations and our cash, cash equivalents, and marketable securities balances, which were $1.8 billion and $1.4 billion at the end of 2004...

  • Page 39
    ... and new product categories, and take advantage of additional discounts offered to us by suppliers, and is also affected by foreign exchange rates. Cash provided by (used in) investing activities corresponds with purchases, sales, and maturities of marketable securities and purchases of fixed assets...

  • Page 40
    ... Dollar exchange ratio. Additionally, on March 7, 2005, we redeemed 200 million Euros of our outstanding 6.875% PEACS, which is not reflected in the table above. (2) Pursuant to SFAS No. 13, "Accounting for Leases," lease agreements are categorized at their inception as either operating or capital...

  • Page 41
    ... with fluctuations in our market capitalization, which is common shares outstanding multiplied by the closing price of our common stock; and based on our credit-rating. The change in the total amount of collateral required to be pledged under these agreements is as follows: Standby Letters of Credit...

  • Page 42
    ... information on the effect on reported revenue of changes in exchange rates. Net sales from "Other" consist of non-retail activities, such as our Merchant.com program, miscellaneous marketing and promotional activities, and our cobranded credit card program. North America revenue growth rate in 2004...

  • Page 43
    ...-round free shipping offers and lower prices for customers. Generally, our gross margins fluctuate based on several factors, including our product and geographic mix of sales during the year; sales volumes by third-party sellers; changes in vendor pricing; lowering prices for customers, including...

  • Page 44
    ... is through free-shipping offers that result in a net cost to us in delivering products. Additionally, in 2005, we continued to lower prices, including by introducing a new shipping membership program, Amazon Prime, in which members receive free two-day shipping and discounted overnight shipping. We...

  • Page 45
    ... sales is as follows: 2004 Year Ended December 31, 2003 2002 (in thousands) Net Sales: North America Media ...Electronics and other general merchandise ...Other ...Total North America ...International Media ...Electronics and other general merchandise ...Other ...Total International ...Consolidated...

  • Page 46
    ... third-party seller transactions. The mix of product sales affects fulfillment costs per shipment based on variations in shape and weight of products we sell. Additionally, since credit card fees associated with third-party seller transactions are based on the gross purchase price of underlying...

  • Page 47
    ... subsidiary focused on search technology on www.A9.com, www.amazon.com, and other Amazon sites; web services; and digital initiatives. During 2004, 2003, and 2002 we capitalized $44 million, $30 million, and $25 million of costs associated with development of internal-use software, which is offset...

  • Page 48
    ... stock options and restricted stock units totaled 434 million and 433 million at December 31, 2004 and 2003. For additional information about our stock-based compensation and awards see Item 8 of Part II, "Financial Statements and Supplementary Data-Note 1-Description of Business and Accounting...

  • Page 49
    ... Part II, "Financial Statements and Supplementary Data-Note 4-Long-Term Debt and Other." We generally invest our excess cash in "A" rated or higher short- to intermediate-term fixed income securities and money market mutual funds. Our interest income corresponds with the average balance of invested...

  • Page 50
    ... Euros, the balance of interest payable (which is paid annually in February) is subject to gains or losses resulting from changes in exchange rates between the U.S. Dollar and Euro between reporting dates and payment. Remeasurements and Other Remeasurements and other consisted of the following: 2004...

  • Page 51
    ... on our consolidated balance sheet in 2004. At December 31, 2004, our net deferred tax assets are $363 million, comprised of approximately $270 million relating to our NOLs, with the remaining portion related to temporary timing differences between tax and financial reporting. Classification of...

  • Page 52
    ... statements and publicly-filed reports in their entirety and to not rely on any single financial measure. Free cash flow, which we reconcile to "Cash provided by (used in) operating activities," is cash flow from operations reduced by "Purchases of fixed assets, including internal-use software...

  • Page 53
    ...our cash equivalent and marketable fixed income securities are designated as available-for-sale and, accordingly, are presented at fair value on our balance sheets. We generally invest our excess cash in "A" rated or higher, short- to intermediate-term fixed income securities and money market mutual...

  • Page 54
    ... due to changes in interest rates. The following table provides information about our cash equivalent and marketable fixed income securities, including principal cash flows by expected maturity and the related weighted average interest rates at December 31, 2004 (in thousands, except percentages...

  • Page 55
    ..., 2004 and 2003. Foreign Exchange Risk During 2004, net sales from our International segment (consisting of www.amazon.co.uk, www.amazon.de, www.amazon.fr, www.amazon.co.jp, and www.joyo.com) accounted for 44% of our consolidated revenues. Net sales and related expenses generated from these websites...

  • Page 56
    ... Equity Securities. We have foreign exchange risk related to our 6.875% PEACS, which have an outstanding principal balance at December 31, 2004 of 690 million Euros ($935 million, based on the exchange rate as of December 31, 2004). Due to fluctuations in the Euro/U.S. Dollar exchange ratio, which...

  • Page 57
    ... Data INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Ernst & Young LLP, Independent Registered Public Accounting Firm ...Consolidated Statements of Cash Flows ...Consolidated Statements of Operations ...Consolidated Balance Sheets ...Consolidated Statements of Stockholders' Deficit...

  • Page 58
    REPORT OF ERNST & YOUNG LLP INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Stockholders Amazon.com, Inc. We have audited the accompanying consolidated balance sheets of Amazon.com, Inc. as of December 31, 2004 and 2003, and the related consolidated statements of operations,...

  • Page 59
    ...289 Purchases of marketable securities ...(1,584,089) (535,642) (635,810) Purchases of fixed assets, including internal-use software and website development ...(89,133) (45,963) (39,163) Proceeds from sale of subsidiary ...- 5,072 - Acquisition, net of cash acquired ...(71,195) - - Net cash (used in...

  • Page 60
    AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) 2004 Year Ended December 31, 2003 2002 Net sales ...Cost of sales ...Gross profit ...Operating expenses: Fulfillment ...Marketing ...Technology and content ...General and administrative ...Stock-based ...

  • Page 61
    AMAZON.COM, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) December 31, 2004 2003 ASSETS Current assets: Cash and cash equivalents ...Marketable securities ...Cash, cash equivalents, and marketable securities ...Inventories ...Current deferred tax assets ...Accounts ...

  • Page 62
    ... stock - employee benefit plan ...Stock compensation - restricted stock units ...Stock compensation - variable accounting ... Balance at December 31, 2003 ... Net income ...Foreign currency translation gains, net ...Decline of unrealized gains on available-for-sale securities, net of tax effect...

  • Page 63
    ... an Internet retail website in the People's Republic of China ("PRC") in cooperation with a PRC subsidiary and PRC affiliates, at a purchase price of $75 million, including a cash payment of $71 million (net of cash acquired), the assumption of employee stock options, and transaction-related costs...

  • Page 64
    ... consolidated statements of operations. We received a letter of preferability for this change in inventory costing from our independent auditors. Inventories Inventories, consisting of products available for sale, are accounted for using the FIFO method, and are valued at the lower of cost or market...

  • Page 65
    ... the consolidated statements of operations. Included in fixed assets is the capitalized cost of internal-use software and website development, including software used to upgrade and enhance our websites and processes supporting our business. In accordance with SOP 98-1, "Accounting for the Costs of...

  • Page 66
    .... We generally invest our excess cash in "A" rated or higher short- to intermediate-term fixed income securities and money market mutual funds. Such investments are included in "Cash and cash equivalents," or "Marketable securities" on the accompanying consolidated balance sheets and are reported at...

  • Page 67
    ... costs to sell. Assets held for sale were not significant at December 31, 2004 or 2003. Unearned Revenue Unearned revenue is recorded when payments are received in advance of performing our service obligations and is amortized ratably over the service period. An example of unearned revenue is cash...

  • Page 68
    ... online DVD rentals and other membership programs, are deferred and recognized as revenue on a straight-line basis over the subscription term. We periodically provide incentive offers to our customers to encourage purchases. Such offers include current discount offers, such as percentage discounts...

  • Page 69
    ... of "Cost of sales" on our consolidated statements of operations, or, if the product inventory is still on hand at the reporting date, it is reflected as a reduction of "Inventories" on our consolidated balance sheets. Vendor rebates are typically dependent upon reaching minimum purchase thresholds...

  • Page 70
    ... our 401(k) program. We record the employer portion of payroll tax expense, a cash tax, resulting from exercises of stock options and vesting of restricted stock in "Fulfillment," "Marketing," "Technology and content," and "General and administrative" on our consolidated statements of operations and...

  • Page 71
    .... NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Stock-based compensation consisted of the following: Year Ended December 31, 2004 2003 2002 (in thousands) Stock awards-variable accounting (1) ...Fixed accounting (2): Restricted stock units (3) ...Restricted stock (4) ...Total stock-based...

  • Page 72
    ...amazon.co.uk, www.amazon.de, www.amazon.fr, www.amazon.co.jp, www.amazon.ca, and www.joyo.com is the same as the local currency of the United Kingdom, Germany, France, Japan, Canada, and China. Assets and liabilities of these subsidiaries are translated into U.S. Dollars at period-end exchange rates...

  • Page 73
    ...designated as a cash flow hedge of a portion of the 6.875% PEACS principal and interest. See "Note 4-Long-Term Debt and Other." We hold warrants to purchase equity securities of other companies that are derivative financial instruments, classified in "Other assets" on the consolidated balance sheets...

  • Page 74
    ... STATEMENTS-(Continued) The following table shows the calculation of diluted shares (in thousands): Year Ended December 31, 2004 2003 2002 Weighted average shares outstanding ...Weighted average shares of restricted stock ...Shares used in computation of basic earnings (loss) per share ...Total...

  • Page 75
    ... Cost December 31, 2003 Gross Gross Unrealized Unrealized Gains Losses (1) Estimated Fair Value Cash ...Commercial paper and other cash equivalents ...Total cash and cash equivalents ...U.S. Treasury notes and bonds ...Asset-backed and agency securities ...Certificates of deposit ...Corporate...

  • Page 76
    ... STATEMENTS-(Continued) Note 3-FIXED ASSETS Fixed assets, at cost, consist of the following (in thousands): December 31, 2004 2003 Gross Fixed Assets (1): Fulfillment and customer service (2) ...Technology infrastructure ...Internal-use software, content, and website development ...Other corporate...

  • Page 77
    ... maintaining our corporate existence and properties, and paying taxes and other claims in a timely manner. We were in compliance with these covenants through December 31, 2004. During the second quarter of 2003, we terminated our Euro Currency Swap that previously was designated as a cash flow hedge...

  • Page 78
    ...including making principal and interest payments when due, maintaining our corporate existence and properties, and paying taxes and other claims in a timely manner. We were in compliance with these covenants through December 31, 2004. In 2004 and 2003, we redeemed aggregate principal amounts of $150...

  • Page 79
    ... TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) The following summarizes our principal contractual commitments, excluding open orders for inventory purchases that support normal operations, as of December 31, 2004: 2005 2006 2007 2008 2009 (in thousands) Thereafter Total Operating and capital...

  • Page 80
    ... with fluctuations in our market capitalization, which is common shares outstanding multiplied by the closing price of our common stock; and based on our credit-rating. The change in the total amount of collateral required to be pledged under these agreements is as follows: Standby Letters of Credit...

  • Page 81
    ... 12, 2004, Soverain Software LLC filed a complaint against us for patent infringement in the United States District Court for the Eastern District of Texas. The complaint alleges that our website technology infringes several patents obtained by Soverain purporting to cover "Internet Server Access...

  • Page 82
    ... value Preferred Stock. No preferred stock shares were outstanding during 2004, 2003, or 2002. Stock Award Plans Employees vest in restricted stock unit awards and stock options ratably over the corresponding service term, generally three to six years. Outstanding stock options generally have a term...

  • Page 83
    ... Total Scheduled annual vesting-restricted stock units ... 1,118 1,925 1,779 1,032 389 183 6,426 The following table summarizes our stock option activity: Number of Shares (In thousands) Weighted Average Exercise Price Balance December 31, 2001 ...Options granted ...Options terminated...

  • Page 84
    AMAZON.COM, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Additionally, we granted 0.33 million shares and terminated 0.35 million shares of restricted stock in 2002. No shares of restricted stock were granted or terminated in 2004 or 2003. As matching contributions under our 401(k) ...

  • Page 85
    ... 31, 2004 2003 (in thousands) $ 5,097 (10,394) (5,297) 4,072 $ (1,225) Net unrealized gains on foreign currency translation ...$29,948 $ 30,450 Net unrealized gains on available-for-sale securities, net of tax ...9,341 20,327 Net unrealized losses on terminated Euro Currency Swap, net of tax...

  • Page 86
    ... statements of operations. In 2004, we streamlined our organizational structure in France to reduce our operating costs. These efforts were primarily focused on eliminating French-office positions in managerial, professional, clerical, and technical roles. The number of employees affected totaled...

  • Page 87
    ...the balance of interest payable (which is paid annually in February) is subject to gains or losses resulting from changes in exchange rates between the U.S. Dollar and Euro between reporting dates and payment. Note 10-REMEASUREMENTS AND OTHER Remeasurements and other consisted of the following: 2004...

  • Page 88
    AMAZON.COM, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Note 11-INCOME TAXES Cash taxes paid were $4 million, $2 million, and $1 million for 2004, 2003, and 2002. The components of the provision for income taxes, net are as follows: 2004 December 31, 2003 2002 Current taxes: U.S. ...

  • Page 89
    ... valuation assessment of deferred tax assets during 2004. In connection with this assessment we also recorded a net credit to "Stockholders' Deficit" of $106 million on our consolidated balance sheet for 2004. At December 31, 2004, our gross deferred tax assets related to our NOLs were approximately...

  • Page 90
    ...from retail sales of consumer products (including from third-party sellers) through www.amazon.com and www.amazon.ca, from North America focused Syndicated Stores and mail-order catalogs, and from non-retail activities such as North America focused Merchant.com, marketing, and promotional agreements...

  • Page 91
    AMAZON.COM, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Information on reportable segments and reconciliation to consolidated net income (loss) is as follows (in thousands): Year Ended December 31, 2004: North America International Consolidated Net sales ...Cost of sales ...Gross ...

  • Page 92
    ...2002. Net sales from www.amazon.co.uk, www.amazon.de, and www.amazon.co.jp each represented 10% or more of consolidated net sales in 2004, and net sales from www.amazon.co.uk and www.amazon.de each represented 10% or more of consolidated net sales in 2003 and 2002. Net fixed assets held in locations...

  • Page 93
    ... and estimated fair values of our financial instruments were as follows (in thousands): December 31, 2004 Carrying Amount Fair Value Carrying Amount 2003 Fair Value Cash and cash equivalents ...Marketable securities (1) ...Other equity investments (2) ...Long-term debt (3) ... $1,302,600 476,599 15...

  • Page 94
    ... NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued) Fourth Quarter Year Ended December 31, 2003 Third Second Quarter Quarter First Quarter Net sales ...Gross profit ...Net income (loss) ...Basic earnings (loss) per share (1) ...Diluted earnings (loss) per share (1) ...Shares used in computation...

  • Page 95
    ...preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Ernst & Young LLP has issued an attestation report on management's assessment of internal control over financial reporting, a copy of which is included in this annual report on Form...

  • Page 96
    ...), the consolidated balance sheets of Amazon.com, Inc. as of December 31, 2004 and 2003, and the related consolidated statements of operations, shareholders' deficit, and cash flows for each of the three years in the period ended December 31, 2004 of Amazon.com, Inc. and our report dated February...

  • Page 97
    ...: Report of Ernst & Young LLP, Independent Auditors Consolidated Statements of Cash Flows for each of the three years ended December 31, 2004 Consolidated Statements of Operations for each of the three years ended December 31, 2004 Consolidated Balance Sheets as of December 31, 2004 and 2003...

  • Page 98
    ... 14A, filed with the Securities and Exchange Commission on March 29, 2000). 1999 Non-Officer Employee Stock Option Plan (incorporated by reference to the Company's Registration Statement on Form S-8 (Registration No. 333-74419) filed March 15, 1999). Form of Indemnification Agreement between the...

  • Page 99
    ... of Restricted Stock Agreement (incorporated by reference to the Company's Annual Report on Form 10-K for the Year Ended December 31, 2001). Computation of Ratio of Earnings to Fixed Charges. Preferability Letter of Ernst & Young LLP, Independent Auditors, regarding change in accounting principle...

  • Page 100
    ... thereunto duly authorized, as of March 9, 2005. AMAZON.COM, INC. By: JEFFREY P. BEZOS Jeffrey P. Bezos President, Chief Executive Officer and Chairman of the Board /s/ Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on...

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    amazon.com amazon.co.uk amazon.co.jp amazon.de amazon.ca amazon.fr joyo.com