Amazon.com (AMZN)

Full Year 2005

Net sales grew 23% to $8.49 billion in 2005, compared with $6.92 billion in 2004. Excluding the $73 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales grew 24% compared with 2004.

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Operating income was $432 million in 2005, compared with $440 million in 2004. Operating income for 2005 includes the $40 million negative impact of the legal settlement and an $8 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the year.

Net income was $359 million in 2005, or $0.84 per diluted share, compared with net income of $588 million, or $1.39 per diluted share, in 2004. Net income for 2005 includes a $95 million income tax expense, compared with a $233 million income tax benefit in 2004.

Amazon.com also announced today that on March 7, 2006 it will redeem €250 million ($304 million at the Euro to U.S. dollar exchange rate on January 31, 2006) in principal amount of its outstanding 6.875% Convertible Subordinated Notes due 2010, plus accrued and unpaid interest from and including February 16, 2006 to March 6, 2006, under its previously announced $500 million debt repurchase authorization. No premium payment is required to redeem these notes.