Amazon.com 2004 Annual Report Download - page 55

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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, 2003 (in thousands, except percentages):
2004 2005 2006 2007 2008 Thereafter Total
Estimated
Fair Value at
December 31,
2003
Commercial paper and short-
term obligations ........... $675,061 $ — $ — $ — $— $— $675,061 $675,061
Weighted average interest
rate ..................... 2.00% — — — — — 2.00%
Certificates of deposit ........ 27,395 — — — — — 27,395 27,395
Weighted average interest
rate ..................... 2.00% — — — — — 2.00%
Corporate notes and bonds ..... 11,280 2,000 8,520 2,330 — — 24,130 24,997
Weighted average interest
rate ..................... 1.34% 1.51% 1.96% 1.96% — — 1.68%
Asset-backed and agency
securities ................. 20,700 18,875 30,370 14,440 — — 84,385 85,692
Weighted average interest
rate ..................... 1.22% 1.88% 2.03% 2.32% — — 1.83%
Treasury notes and bonds ...... 4,000 6,751 95,770 37,600 — — 144,121 145,778
Weighted average interest
rate ..................... 1.12% 1.59% 1.50% 2.12% — — 1.96%
Cash equivalents and marketable
fixed-income securities ..... $738,436 $27,626 $134,660 $54,370 $— $— $955,092 $958,923
At December 31, 2004, we had long-term debt of $1.86 billion primarily associated with our 4.75%
Convertible Subordinated Notes and 6.875% PEACS, which are due in 2009 and 2010. The fair value of our
long-term debt will fluctuate with movements of interest rates, increasing in periods of declining rates of interest
and declining in periods of increasing rates of interest.
Based upon quoted market prices at prevailing exchange rates, the fair value of the 6.875% PEACS was 691
million Euros ($936 million) and 690 million Euros ($870 million) at December 31, 2004 and December 31,
2003, and the fair value of the 4.75% Convertible Subordinated Notes was $907 million (outstanding principal of
$900 million) and $1.06 billion (outstanding principal of $1.05 billion) at December 31, 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, as well as those relating to www.amazon.ca (which is
included in our North America segment), are denominated in the functional currencies of the corresponding
websites and include Euros, British Pounds, Yen, Canadian Dollars, and Chinese Yuan. The functional currency
of our subsidiaries that either operate or support these websites is the same as the corresponding local currency.
The results of operations of, and certain of our intercompany balances associated with, our internationally-
focused websites are exposed to foreign exchange rate fluctuations. Upon consolidation, as 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 during 2004, International segment revenues improved $271 million and our operating results
improved $20 million in comparison with the prior year.
47