Amazon.com (AMZN)

SFAS 123(R) requires the reporting of tax benefits relating to excess stock-based compensation as financing cash flows. Excess tax benefit from stock-based compensation activity was $(1) million in Q4 2008 and $159 million in 2008, compared with $163 million in Q4 2007 and $257 million in 2007.

Our cash, cash equivalents and marketable securities of $3.73 billion, at fair value, primarily consist of cash, government and government agency securities, AAA-rated money market funds and other investment grade securities. Included are amounts held in foreign currencies of $1.7 billion, primarily in Euros, British Pounds and Japanese Yen.

Other assets include, among other things, marketable securities restricted for longer than one year; intangibles, net; deferred costs; certain equity investments; and intellectual property rights. The majority of marketable securities restricted for longer than one year relate to collateralization of bank guarantees and debt related to our international operations.

Accrued expenses and other current liabilities include, among other things, liabilities for gift certificates of $270 million and current unearned revenue of $191 million, which is recorded when payments are received in advance of performing our service obligations and is recognized over the service period.

Long-term debt primarily includes the following:

6.875% PEACS due 2010 (1)

4.75% Convertible Subordinated Notes

Other long-term debt

Less current portion of long-term debt

Other long-term liabilities include tax contingencies, long-term capital lease obligations, construction liability, deferred tax liabilities, unearned revenue and other long-term obligations.

In December 2007, we entered into a series of leases and other agreements for the lease of corporate office space to be developed in Seattle, Washington with initial terms of up to 16 years commencing on completion of development in 2010 and 2011 and options to extend for two five-year periods. At December 31, 2008, under the agreements we committed to occupy approximately 1,360,000 square feet of office space. In addition, we have the right to occupy up to an additional approximately 330,000 square feet subject to a termination fee, estimated to be up to approximately $10 million, if we elect not to occupy the additional space. We also have an option to lease up to an additional approximately 500,000 square feet at rates based on fair market values at the time the option is exercised, subject to certain conditions. In addition, if interest rates exceed a certain threshold, we have the option to provide financing for some of the buildings.

SFAS 123(R) requires the reporting of tax benefits relating to excess stock-based compensation as financing cash flows. Excess tax benefits from stock-based compensation were $53 million in Q3 2008 and $323 million for the trailing twelve months, compared with $34 million in Q3 2007 and $157 million for the trailing twelve months ended September 30, 2007.

Our cash, cash equivalents and marketable securities of $2.32 billion, at fair value, primarily consist of cash, government and government agency securities, AAA-rated money market funds and other investment grade securities. Included are amounts held in foreign currencies of $1.2 billion, primarily in Euros, British Pounds and Japanese Yen.

Other assets include, among other things, $248 million of marketable securities restricted for longer than one year, $247 million of certain equity investments, $143 million of intangibles, net, and $44 million of intellectual property rights. Marketable securities restricted for longer than one year relate primarily to collateralization of bank guarantees and debt for our international operations.

Accrued expenses and other current liabilities include, among other things, liabilities for gift certificates of $216 million, professional fees, marketing activities, workforce costs — including accrued payroll, vacation and other benefits — and current unearned revenue of

$158 million, which is recorded when payments are received in advance of performing our service obligations and is recognized over the service period.

Long-term debt primarily includes the following:

6.875% PEACS due February 2010 (1)

4.75% Convertible Subordinated Notes

Other long-term debt

Less current portion of long-term debt

Fair value of long-term debt (2)

(1)    

(2)    

Other long-term liabilities include tax contingencies, long-term capital lease obligations, deferred tax liabilities, non-current unearned revenue and other long-term obligations.

In December 2007, we entered into a series of leases and other agreements for the lease of corporate office space to be developed in Seattle, Washington with initial terms of up to 16 years commencing on completion of development in 2010 and 2011. Under these agreements we committed to occupy approximately 1,360,000 square feet of corporate office space. In Q3 2008, we elected to occupy an additional approximately 330,000 square feet subject to a termination fee estimated to be up to approximately $10 million. We also have options to lease up to an additional approximately 500,000 square feet at rates based on fair market values at the time the options are exercised, subject to certain conditions. The amount of space available and our financial and other obligations under the lease agreements are affected by various factors, including government approvals and permits, interest rates, development costs and other expenses and our exercise of certain rights under the lease agreements.

SFAS 123(R) requires tax benefits relating to excess stock-based compensation to be presented as financing cash flows. Excess tax benefits from stock-based compensation were $43 million in Q2 2008 and $304 million for the trailing twelve months, compared with $35 million in Q2 2007 and $133 million for the trailing twelve months ended June 30, 2007.

Our cash, cash equivalents and marketable securities of $2.38 billion, at fair value, primarily consist of cash, investment grade securities and AAA-rated money market mutual funds. Included are amounts held in foreign currencies of $1.14 billion, primarily in Euros, British Pounds and Japanese Yen.

Other assets include, among other things, $245 million of marketable securities restricted for longer than one year, $250 million of certain equity investments, $149 million of other intangibles, net, and $42 million of intellectual property rights. Marketable securities restricted for longer than one year relate primarily to collateralization of bank guarantees and debt for our international operations.

Accrued expenses and other current liabilities include, among other things, liabilities for gift certificates of $206 million, professional fees, marketing activities, workforce costs - including accrued payroll, vacation and other benefits - and unearned revenue of $138 million, which is recorded when payments are received in advance of performing our service obligations and is recognized over the service period.

Long-term debt primarily includes the following:

4.75% Convertible Subordinated Notes due February 2009 (1)

6.875% PEACS due February 2010 (2)

Other long-term debt

Less current portion of long-term debt

Other long-term liabilities include tax contingencies, long-term capital lease obligations, deferred tax liabilities, non-current unearned revenue and other long-term obligations.

In December 2007, we entered into a series of leases and other agreements for the lease of corporate office space to be developed in Seattle, Washington with initial terms of up to 16 years commencing on completion of development in 2010 and 2012 and options to extend for two five year periods. Under the agreements we committed to occupy approximately 820,000 square feet of office space. We recently committed to occupy an additional approximately 540,000 square feet. Due to that commitment, and the receipt of certain zoning approvals, we are no longer subject to the initial termination fees. We also have an option to lease approximately 330,000 square feet at pre-negotiated rates as well as options to lease up to an additional approximately 500,000 square feet at rates based on fair market values at the time the options are exercised, subject to certain conditions. In addition, if interest rates exceed a certain threshold, we have the option to provide financing for some of the buildings.

SFAS 123(R) requires tax benefits relating to excess stock-based compensation to be presented as financing cash flows. Excess tax benefits from stock-based compensation were $64 million in Q1 2008 and $297 million for the trailing twelve months, compared with $24 million in Q1 2007 and $119 million for the trailing twelve months ended March 31, 2007.

Our cash, cash equivalents and marketable securities of $2.15 billion, at fair value, primarily consist of cash, investment grade securities and AAA-rated money market mutual funds. Included are amounts held in foreign currencies of $1.05 billion, primarily in Euros, British Pounds and Japanese Yen.

Other assets include, among other things, $245 million of marketable securities restricted for longer than one year, $171 million of certain equity investments, $154 million of other intangibles, net, and $39 million of intellectual property rights. Marketable securities restricted for longer than one year relate primarily to collateralization of bank guarantees and debt for our international operations.

We acquired certain companies during Q1 2008 for an aggregate purchase price of $319 million. Acquired intangibles totaled $134 million and have estimated useful lives of between two and ten years. The excess of purchase price over the fair value of the net assets acquired was $167 million and is classified as “Goodwill” on our consolidated balance sheets. The purchase price allocation for each acquisition is preliminary and subject to revision, and any change to the fair value of net assets acquired will lead to a corresponding change to the

purchase price allocable to goodwill. The results of operations of the acquired companies have been included in our consolidated results from each closing date forward. The effect of these acquisitions on consolidated net sales and operating income for Q1 2008 was not significant.

Accrued expenses and other current liabilities include, among other things, liabilities for gift certificates of $205 million, professional fees, marketing activities, workforce costs—including accrued payroll, vacation and other benefits—and unearned revenue of $120 million, which is recorded when payments are received in advance of performing our service obligations and is recognized over the service period.

Long-term debt primarily includes the following:

4.75% Convertible Subordinated Notes due February 2009 (1)

6.875% PEACS due February 2010 (2)

Other long-term debt

Less current portion of long-term debt

In February 2008, our Board of Directors authorized a debt repurchase program pursuant to which the Company may from time to time repurchase (through open market repurchases or private transactions), redeem or otherwise retire, up to all of its outstanding 4.75% Convertible Subordinated Notes due 2009 (of which $899 million in principal is outstanding) and 6.875% PEACS due 2010 (of which EUR 240 million in principal is outstanding).

Other long-term liabilities include tax contingencies, long-term capital lease obligations, deferred tax liabilities, non-current unearned revenue and other long-term obligations.

We capitalized construction in progress of $4 million and recorded a corresponding long-term liability related to our Seattle corporate office space subject to leases scheduled to begin in 2010 and 2011. Where we are involved in the construction of structural improvements prior to the commencement of the lease or take some level of construction risk, we are considered the owner of the assets during the construction period under generally accepted accounting principles. Accordingly, as the landlord incurs the construction project costs, the assets and corresponding financial obligation are recorded in “Fixed assets, net” and “Other long-term liabilities” on our consolidated balance sheet. Once the construction is completed, if the lease meets certain “sale-leaseback” criteria, we will remove the asset and related

SFAS 123(R) requires tax benefits relating to excess stock-based compensation to be presented as financing cash flows. Excess tax benefits from stock-based compensation were $257 million in 2007, compared with $102 million in 2006.

Our cash, cash equivalents and marketable securities of $3.11 billion, at fair value, primarily consist of cash, investment grade securities and AAA-rated money market mutual funds. Included are amounts held in foreign currencies of $1.20 billion, primarily in Euros, British Pounds and Japanese Yen.

Other assets include, among other things, $197 million of marketable securities restricted for longer than one year, $28 million of intellectual property rights, $26 million of other intangibles, net, and $17 million of certain equity investments. Marketable securities restricted for longer than one year relate to collateralization of bank guarantees and debt for our international operations.

We acquired certain companies during 2007 for an aggregate purchase price of $33 million, including cash payments of $24 million and future cash payments of $9 million. We also made principal payments of $13 million on acquired debt in connection with one of these acquisitions. Additional cash consideration for these acquisitions is contingent upon continued employment. This amount is expensed as compensation over the employment period and not included in the purchase price. Acquired intangibles totaled $18 million and have estimated useful lives of between one and ten years. The excess of purchase price over the fair value of the net assets acquired was $21 million and is classified as “Goodwill” on

our consolidated balance sheets. The results of operations of the acquired companies have been included in our consolidated results from each closing date forward. The effect of these acquisitions on consolidated net sales and operating income was not significant.

Accrued expenses and other current liabilities include, among other things, liabilities for gift certificates of $240 million, professional fees, marketing activities, workforce costs—including accrued payroll, vacation and other benefits—and unearned revenue of $91 million, which is recorded when payments are received in advance of performing our service obligations and is recognized over the service period. At December 31, 2006, accrued expenses and other current liabilities included liabilities for gift certificates of $183 million and unearned revenue of $78 million.

Long-term debt primarily includes the following:

4.75% Convertible Subordinated Notes due February 2009 (1)

6.875% PEACS due February 2010 (2)

Other long-term debt

Less current portion of long-term debt

Other long-term liabilities include tax contingencies, long-term capital lease obligations, deferred tax liabilities, non-current unearned revenue and other long-term obligations.

We capitalized construction in progress of $15 million and recorded a corresponding long-term liability related to our Seattle corporate office space subject to leases scheduled to begin in 2010 and 2011. Where we are involved in the construction of structural improvements prior to the commencement of the lease or take some level of construction risk, we are considered the owner of the assets during the construction period under generally accepted accounting principles. Accordingly, as the landlord incurs the construction project costs, the assets and corresponding financial obligation are recorded in “Fixed assets, net” and “Other long-term liabilities” on our consolidated balance sheet. Once the construction is completed, if the lease meets certain “sale-leaseback” criteria, we will remove the asset and related financial obligation from the balance sheet and treat the building lease as an operating lease. If upon completion of construction, the project does not meet the “sale-leaseback” criteria, the leased property will be treated as a capital lease for financial reporting purposes.

Tax benefits resulting from stock-based compensation deductions in excess of amounts reported for financial reporting purposes were $34 million in Q3 2007 and $157 million for the trailing twelve months ended September 30, 2007, compared to $9 million in Q3 2006 and $43 million for the trailing twelve months ended September 30, 2006.

Our cash, cash equivalents and marketable securities of $1.91 billion, at fair value, primarily consist of cash, investment grade securities and AAA-rated money market mutual funds. Included are amounts held in foreign currencies of $585 million, primarily in Euros, British Pounds and Japanese Yen.

Other assets include, among other things, $179 million of marketable securities restricted for longer than one year, $35 million of intangible assets, net, $19 million of certain equity investments, and $5 million of deferred issuance costs on long-term debt. Marketable securities restricted for longer than one year relate to amounts pledged or otherwise restricted as collateral for standby letters of credit, guarantees, debt, and real estate leases.

Accrued expenses and other current liabilities include, among other things, liabilities for gift certificates of $178 million, professional fees, marketing activities, workforce costs – including accrued payroll, vacation and other benefits—and unearned revenue of $86 million, which is recorded when payments are received in advance of performing our service obligations and is recognized over the service period. Non-current unearned revenue was $15 million.

4.75% Convertible Subordinated Notes due February 2009 (1)

6.875% PEACS due February 2010 (2)

Other long-term debt

Less current portion of long-term debt

Other long-term liabilities include tax contingencies, long-term capital lease obligations, and other long-term obligations.

We acquired certain companies during the nine months ended September 30, 2007, for an aggregate purchase price of $33 million, including cash payments of $24 million and future cash payments of $9 million. We also made principal payments of $13 million on acquired debt in connection with one of these acquisitions. Additional consideration for these

acquisitions is contingent upon continued employment. This amount is expensed as compensation over the employment period and not included in the purchase price. Acquired intangibles totaled $24 million and have estimated useful lives of between two and ten years. The excess of purchase price over the fair value of the net assets acquired was $20 million and is classified as “Goodwill” on our consolidated balance sheets. The purchase price allocation for each acquisition is preliminary and subject to revision, and any change to the fair value of net assets acquired will lead to a corresponding change to the purchase price allocable to goodwill. The results of operations of the acquired companies have been included in our consolidated results from each closing date forward. The effect of these acquisitions on consolidated net sales and operating income for the nine months ended September 30, 2007, was not significant.

Tax benefits resulting from stock-based compensation deductions in excess of amounts reported for financial reporting purposes were $35 million in Q2 2007 and $133 million for the trailing twelve months, compared to $21 million in Q2 2006 and $34 million for the trailing twelve months ended June 30, 2006.

Our cash, cash equivalents and marketable securities of $1.66 billion, at fair value, primarily consist of cash, investment grade securities and AAA-rated money market mutual funds. Included are amounts held in foreign currencies of $530 million, primarily in Euros, British Pounds and Japanese Yen.

Other assets include, among other things, $171 million of marketable securities restricted for longer than one year, $39 million of intangible assets net, $19 million of certain equity investments, and $6 million of deferred issuance costs on long-term debt. Marketable securities restricted for longer than one year primarily relate to amounts pledged or otherwise restricted as collateral for standby letters of credit, guarantees, debt, and real estate leases.

Accrued expenses and other current liabilities include, among other things, liabilities for gift certificates of $173 million, professional fees, marketing activities, workforce costs – including accrued payroll, vacation and other benefits—and unearned revenue of $77 million, which is recorded when payments are received in advance of performing our service obligations and is recognized ratably over the service period.

Convertible Subordinated Notes

Premium Adjustable Convertible Securities

Other long-term liabilities include tax contingencies, long-term capital lease obligations, and other long-term obligations. For further discussion of long-term tax contingencies, see our discussion of “Income Taxes” above.

We acquired certain companies during Q2 2007 for an aggregate purchase price of $33 million, including cash payments of $24 million in the three months ended June 30, 2007 and future cash payments of $9 million. We also made principal payments of $13 million on acquired debt in connection with one of these acquisitions. Additional consideration for these acquisitions is contingent upon continued employment. This amount is expensed as compensation over the employment period and not included in the purchase price. Acquired intangibles totaled $24 million and have estimated useful lives of between two and ten years. The excess of purchase price over the fair value of the net assets acquired was $17 million and is classified as “Goodwill” on our consolidated balance sheets. The purchase price allocation for each acquisition is preliminary and subject to revision, and any change to the fair value of net assets acquired will lead to a corresponding change to the purchase price allocable to goodwill. The results of operations of the acquired companies have been included in our consolidated results from each closing date forward. The effect of these acquisitions on consolidated net sales and operating income for Q2 2007 was not significant.