Amazon.com 2006 Annual Report Download - page 27

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Marketplace and certain other of our programs, we may be unable 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. Under our A2Z Guarantee, we reimburse buyers for payments
up to certain limits in these situations and as our third party sales grow, the cost of this program will increase and
could negatively affect our operating results. In addition, the functionality of our payments program depends on
certain third-party vendors delivering services. If these vendors are unable or unwilling to provide services, our
payments program and our businesses that use it may not be viable. Finally, we may be unable to prevent sellers
in our Merchants@, Marketplace, Amazon Enterprise Solutions, and certain other programs from selling
unlawful goods, from selling goods in an unlawful manner, or violating the proprietary rights of others, and could
face civil or criminal liability for unlawful activities by our sellers.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
We do not own any real estate. As of December 31, 2006, we operated the following facilities:
Description of Use
Square
Footage (1)
Operating
Segments
Lease
Expirations (2)
(in thousands)
Corporate office facilities 1,207 North America
From 2007
through 2016
Corporate office facilities 319 International
From 2007
through 2025
Sub-total 1,526
Fulfillment and warehouse operations (3) 8,434 North America
From 2007
through 2014
Fulfillment and warehouse operations 3,419 International
From 2007
through 2025
Sub-total 11,853
Customer service and other 416 North America
From 2008
through 2021
Customer service and other 93 International
From 2007
through 2016
Sub-total 509
Total 13,888
(1) Represents the total leased space excluding sub-leased space.
(2) Most leases expiring in 2007 have renewal features at our option.
(3) Excludes a facility operated under an outsourced arrangement in Canada.
We lease our corporate headquarters in Seattle, Washington. We also lease additional corporate office,
fulfillment and warehouse operations, customer service, and other facilities throughout the United States,
principally in California, Delaware, Florida, Kansas, Kentucky, Nevada, North Dakota, Pennsylvania, South
Carolina, Texas, Virginia, Washington, West Virginia, and Wisconsin. Outside of the United States, we also
lease corporate office, fulfillment and warehouse operations, customer service, and other facilities, principally in
China, France, Germany, India, Ireland, Japan, Luxembourg, and the United Kingdom.
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