Amazon.com 2006 Annual Report Download - page 84

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AMAZON.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Year Ended December 31, 2005
Fourth
Quarter
Third
Quarter
Second
Quarter
First
Quarter
Net sales ..................................................... $2,977 $1,858 $1,753 $1,902
Gross profit ................................................... 667 463 450 458
Income before income taxes ...................................... 161 51 108 108
Provision (benefit) for income taxes (2) ............................. (38) 21 56 56
Income before change in accounting principle ........................ 199 30 52 52
Cumulative effect of change in accounting principle ................... — — — 26
Net income ................................................... 199 30 52 78
Basic earnings per share (1):
Prior to cumulative effect of change in accounting principle ........ $ 0.48 $ 0.07 $ 0.13 $ 0.13
Cumulative effect of change in accounting principle ............... — — — 0.06
$ 0.48 $ 0.07 $ 0.13 $ 0.19
Diluted earnings per share (1):
Prior to cumulative effect of change in accounting principle ........ $ 0.47 $ 0.07 $ 0.12 $ 0.12
Cumulative effect of change in accounting principle ............... — — — 0.06
$ 0.47 $ 0.07 $ 0.12 $ 0.18
Shares used in computation of earnings per share:
Basic .................................................... 415 413 411 410
Diluted .................................................. 426 428 425 423
Year Ended December 31, 2004
Fourth
Quarter
Third
Quarter
Second
Quarter
First
Quarter
Net sales ..................................................... $2,541 $1,463 $1,387 $1,530
Gross profit ................................................... 544 356 341 361
Income before income taxes ...................................... 108 57 81 109
Provision (benefit) for income taxes (3) ............................. (239) 3 5 (2)
Net income ................................................... 347 54 76 111
Basic earnings per share (1) ...................................... $ 0.85 $ 0.13 $ 0.19 $ 0.28
Diluted earnings per share (1) .................................... $ 0.82 $ 0.13 $ 0.18 $ 0.26
Shares used in computation of earnings per share:
Basic .................................................... 408 407 405 404
Diluted .................................................. 425 425 425 425
(1) The sum of quarterly per share amounts may not equal per share amounts reported for year-to-date periods.
This is due to changes in the number of weighted-average shares outstanding and the effects of rounding for
each period.
(2) Included in the fourth quarter of our 2005 provision and reducing the impact of the international restructure
is a tax benefit of $90 million, resulting from certain of our deferred tax assets becoming more likely than
not realizable.
(3) We recorded a tax benefit of $244 million in the fourth quarter of 2004 as we determined that certain of our
deferred tax assets were more likely than not realizable.
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