Amazon.com 2011 Annual Report Download - page 71

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including the early stage and lack of specific damage claims in many of them, we cannot estimate the range of
possible losses from them (except as otherwise indicated).
Other Contingencies
In September 2010, the State of Texas issued an assessment of $269 million for uncollected sales taxes for
the period from December 2005 to December 2009, including interest and penalties through the date of the
assessment. The State of Texas is alleging that we should have collected sales taxes on applicable sales
transactions during those years. We believe that the State of Texas did not provide a sufficient basis for its
assessment and that the assessment is without merit. We intend to vigorously defend ourselves in this matter. In
March 2011, the SEC staff notified us of an inquiry concerning this assessment. We cooperated with the staff’s
inquiry, and in November 2011 the staff notified us that it had completed its inquiry.
In November 2011, the State of Arizona issued assessments on behalf of the State and certain cities in the
amount of approximately $53 million, including tax and interest, for uncollected tax for the periods March 1,
2006 through December 31, 2010. The State of Arizona is alleging that we should have collected a transaction
tax that is similar to a sales tax on applicable transactions during those years. We believe that the assessment is
without merit and intend to vigorously defend ourselves in this matter.
Depending on the amount and the timing, an unfavorable resolution of this matter could materially affect
our business, results of operations, financial position, or cash flows.
See also “Note 10—Income Taxes.”
Note 8—STOCKHOLDERS’ EQUITY
Preferred Stock
We have authorized 500 million shares of $0.01 par value Preferred Stock. No preferred stock was
outstanding for any period presented.
Common Stock
Common shares outstanding plus shares underlying outstanding stock awards totaled 468 million,
465 million, and 461 million, at December 31, 2011, 2010, and 2009. These totals include all vested and
unvested stock-based awards outstanding, before consideration of estimated forfeitures.
Stock Repurchase Activity
In January 2010, our Board of Directors authorized a program to repurchase up to $2 billion of our common
stock. We repurchased 1.5 million shares of common stock for $277 million in 2011 under this repurchase
program. We did not repurchase any of our common stock in 2010 or 2009.
Stock Award Plans
Employees vest in restricted stock unit awards over the corresponding service term, generally between two
and five years.
Stock Award Activity
We granted restricted stock units representing 5.4 million, 5.3 million, and 6.0 million shares of common
stock during 2011, 2010, and 2009 with a per share weighted average fair value of $192.82, $140.43, and $79.24.
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