Amazon.com (AMZN)

Full Year 2004

Net sales were $6.92 billion in 2004, compared with $5.26 billion in 2003, an increase of 31%. Net sales, excluding the $276 benefit from foreign exchange rates, grew 26% compared with 2003.

Operating income was $440 million in 2004, compared with $271 million in 2003. Consolidated segment operating income grew 36% to $490 million in 2004, compared with $361 million in 2003. Excluding the $20 million benefit from foreign exchange rates, consolidated segment operating income grew 30% in 2004 compared with 2003.

Net income was $588 million in 2004, or $1.39 per diluted share, compared with net income of $35 million, or $0.08 per diluted share, in 2003. Pro forma net income for 2004 was $639 million, or $1.50 per diluted share, compared with $256 million, or $0.61 per diluted share, in 2003. Excluding the benefit from realizing a $244 million deferred tax asset related primarily to net operating loss carryforwards attributable to continuing operations, 2004 pro forma net income would have been $395 million, or $0.93 per diluted share.

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Amazon.com also announced today that on March 7, 2005 it will redeem €200 million ($261 million at the Euro to U.S. dollar exchange rate on January 31, 2005) in principal amount of its outstanding 6.875% Convertible Subordinated Notes due 2010, plus accrued and unpaid interest from and including February 16, 2005 to March 6, 2005, under its previously announced $500 million debt repurchase authorization. No premium payment is required to redeem these notes.