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AMZN » Topics » Note 3 - Long-Term Debt and Other

This excerpt taken from the AMZN 10-Q filed Oct 26, 2006.

Note 3 — Long-Term Debt and Other

Our long-term debt and other long-term liabilities are summarized as follows:

 

    

September 30,

2006

    

December 31,

2005

  
     (in millions)  

4.75% Convertible Subordinated Notes due February 2009 (1)

    $ 900     $ 900  

6.875% PEACS due February 2010 (2)

      304       580  

Other long-term debt and capital lease obligations

      170       44  
                
     1,374       1,524  

Less current portion of other long-term debt and capital lease obligations

      (70 )     (3 )
                

Total long-term debt and other

    $ 1,304     $ 1,521  
                
(1) The 4.75% Convertible Subordinated Notes are convertible into our common stock at the holders’ option at a conversion price of $78.0275 per share. Total common stock issuable upon conversion of our outstanding 4.75% Convertible Subordinated Notes is 11.5 million shares, which is excluded from our calculation of earnings per share as its effect is anti-dilutive. We have the right to redeem the 4.75% Convertible Subordinated Notes, in whole or in part, by paying the principal and a redemption premium, plus any accrued and unpaid interest. At September 30, 2006, the redemption premium, which decreases by 47.5 basis points on February 1 of each year until maturity, was 1.425%.
(2) In Q1 2006, we redeemed an aggregate principal amount of €250 million ($300 million based on the Euro to U.S. Dollar exchange rate on the date of redemption) of our outstanding 6.875% Premium Adjustable Convertible Securities due February 2010 (“6.875% PEACS”). Under the Indenture, no redemption premium is required. We recorded a charge in Q1 2006, classified in “Remeasurements and other,” of approximately $6 million related to the redemption, consisting of $3 million in unamortized deferred issuance charges and $3 million relating to unrealized losses on our terminated currency swap that previously hedged a portion of our 6.875% PEACS. Accrued and unpaid interest of $1 million was also paid at redemption. The 6.875% PEACS are convertible into our common stock at the holders’ option at a conversion price of €84.883 per share ($107.58 per share, based on the exchange rate as of September 30, 2006). Total common stock issuable upon conversion of our outstanding 6.875% PEACS is 2.8 million shares, which is excluded from our calculation of earnings per share as its effect is anti-dilutive. The U.S. Dollar equivalent principal, interest, and conversion price fluctuate based on the Euro/U.S. Dollar exchange ratio. We have the right to redeem the 6.875% PEACS, in whole or in part, by paying the principal plus any accrued and unpaid interest.

 

10

Table of Contents

AMAZON.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(unaudited)

 

This excerpt taken from the AMZN 10-Q filed Jul 27, 2006.

Note 3 — Long-Term Debt and Other

Our long-term debt and other long-term liabilities are summarized as follows:

 

     June 30,
2006		     December 31,
2005		  
     (in millions)  

4.75% Convertible Subordinated Notes due February 2009 (1)

    $ 900     $ 900  

6.875% PEACS due February 2010 (2)

      307       580  

Other long-term debt and capital lease obligations

      160       44  
                
     1,367       1,524  

Less current portion of other long-term debt and capital lease obligations

      (43 )     (3 )
                

Total long-term debt and other

    $ 1,324     $ 1,521  
                
(1) The 4.75% Convertible Subordinated Notes are convertible into our common stock at the holders’ option at a conversion price of $78.0275 per share. Total common stock issuable upon conversion of our outstanding 4.75% Convertible Subordinated Notes is 11.5 million shares, which is excluded from our calculation of earnings per share as its effect is anti-dilutive. We have the right to redeem the 4.75% Convertible Subordinated Notes, in whole or in part, by paying the principal and a redemption premium, plus any accrued and unpaid interest. At June 30, 2006, the redemption premium, which decreases by 47.5 basis points on February 1 of each year until maturity, was 1.425%.

 

9

Table of Contents

AMAZON.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(unaudited)

 

(2) In Q1 2006, we redeemed an aggregate principal amount of €250 million ($300 million based on the Euro to U.S. Dollar exchange rate on the date of redemption) of our outstanding 6.875% Premium Adjustable Convertible Securities due February 2010 (“6.875% PEACS”). Under the Indenture, no redemption premium is required. We recorded a charge in Q1 2006, classified in “Remeasurements and other,” of approximately $6 million related to the redemption, consisting of $3 million in unamortized deferred issuance charges and $3 million relating to unrealized losses on our terminated currency swap that previously hedged a portion of our 6.875% PEACS. Accrued and unpaid interest of $1 million was also paid at redemption. The 6.875% PEACS are convertible into our common stock at the holders’ option at a conversion price of €84.883 per share ($108.59 per share, based on the exchange rate as of June 30, 2006). Total common stock issuable upon conversion of our outstanding 6.875% PEACS is 2.8 million shares, which is excluded from our calculation of earnings per share as its effect is anti-dilutive. The U.S. Dollar equivalent principal, interest, and conversion price fluctuate based on the Euro/U.S. Dollar exchange ratio. We have the right to redeem the 6.875% PEACS, in whole or in part, by paying the principal plus any accrued and unpaid interest.
This excerpt taken from the AMZN 10-Q filed Apr 27, 2006.

Note 3 — Long-Term Debt and Other

Our long-term debt and other long-term liabilities are summarized as follows:

 

    

March 31,

2006

    

December 31,

2005

  
      
     (in millions)  

4.75% Convertible Subordinated Notes due February 2009 (1)

    $ 900     $ 900  

6.875% PEACS due February 2010 (2)

      291       580  

Other long-term debt and capital lease obligations

      70       44  
                
     1,261       1,524  

Less current portion of other long-term debt and capital lease obligations

      (2 )     (3 )
                

Total long-term debt and other

    $ 1,259     $ 1,521  
                
(1) The 4.75% Convertible Subordinated Notes are convertible into our common stock at the holders’ option at a conversion price of $78.0275 per share. Total common stock issuable upon conversion of our outstanding 4.75% Convertible Subordinated Notes is 11.5 million shares, which is excluded from our calculation of earnings per share as its effect is anti-dilutive. We have the right to redeem the 4.75% Convertible Subordinated Notes, in whole or in part, by paying the principal and a redemption premium, plus any accrued and unpaid interest. At March 31, 2006, the redemption premium, which decreases by 47.5 basis points on February 1 of each year until maturity, was 1.425%.
(2) In Q1 2006, we redeemed an aggregate principal amount of €250 million ($300 million based on the Euro to U.S. Dollar exchange rate on the date of redemption) of our outstanding 6.875% Premium Adjustable Convertible Securities due February 2010 (“6.875% PEACS”). Under the Indenture, no redemption premium was required. We recorded a charge in Q1 2006, classified in “Remeasurements and other,” of approximately $6 million related to the redemption, consisting of $3 million in unamortized deferred issuance charges and $3 million relating to unrealized losses on our terminated currency swap that previously hedged a portion of our 6.875% PEACS. Accrued and unpaid interest of $1 million was also paid at redemption. The 6.875% PEACS are convertible into our common stock at the holders’ option at a conversion price of €84.883 per share ($102.84 per share, based on the exchange rate as of March 31, 2006). Total common stock issuable upon conversion of our outstanding 6.875% PEACS is 2.8 million shares, which is excluded from our calculation of earnings per share as its effect is anti-dilutive. The U.S. Dollar equivalent principal, interest, and conversion price fluctuate based on the Euro/U.S. Dollar exchange ratio. We have the right to redeem the 6.875% PEACS, in whole or in part, by paying the principal plus any accrued and unpaid interest. No premium payment is required for early redemption.

 

9

Table of Contents

AMAZON.COM, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(unaudited)

 

This excerpt taken from the AMZN 10-Q filed Oct 27, 2005.

Note 3 — Long-Term Debt and Other

 

Our long-term debt and other long-term liabilities are summarized as follows:

 

     September 30,
2005
     December 31,
2004
  
     (in millions)  

4.75% Convertible Subordinated Notes due February 2009 (1)

    $ 900     $ 900  

6.875% PEACS due February 2010 (2)

      589       935  

Other long-term debt and capital lease obligations

      41       22  
    
 
       1,530       1,857  

Less current portion of other long-term debt and capital lease obligations

      (17 )     (2 )
    
 

Total long-term debt and other

    $ 1,513     $ 1,855  
    
 

 

11

Table of Contents

AMAZON.COM, INC.

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(unaudited)

 

(1) The 4.75% Convertible Subordinated Notes are convertible into our common stock at the holders’ option at a conversion price of $78.0275 per share. Total common stock issuable upon conversion of our outstanding 4.75% Convertible Subordinated Notes is 11.5 million shares, which is excluded from our calculation of earnings per share as its effect is anti-dilutive. We have the right to redeem the 4.75% Convertible Subordinated Notes, in whole or in part, by paying the principal and a redemption premium, plus any accrued and unpaid interest. At September 30, 2005, the redemption premium, which decreases by 47.5 basis points on February 1 of each year until maturity, was 1.9%.
(2) In Q1 2005, we redeemed an aggregate principal amount of €200 million ($265 million based on the Euro to U.S. Dollar exchange rate on the date of redemption) of our outstanding 6.875% Premium Adjustable Convertible Securities due February 2010 (“6.875% PEACS”). Under the Indenture, no redemption premium was required. We recorded a charge in Q1 2005, classified in “Remeasurements and other,” of approximately $4 million related to the redemption, consisting of $2 million in unamortized deferred issuance charges and $2 million relating to unrealized losses on our terminated currency swap that previously hedged a portion of our 6.875% PEACS. Accrued and unpaid interest of $0.9 million was also paid at redemption and recorded to “Interest expense.” The 6.875% PEACS are convertible into our common stock at the holders’ option at a conversion price of €84.883 per share ($102.08, based on the exchange rate as of September 30, 2005). Total common stock issuable upon conversion of our outstanding 6.875% PEACS is 5.8 million shares, which is excluded from our calculation of earnings per share as its effect is anti-dilutive. The U.S. Dollar equivalent principal, interest, and conversion price fluctuate based on the Euro/U.S. Dollar exchange ratio. We have the right to redeem the 6.875% PEACS, in whole or in part, by paying the principal plus any accrued and unpaid interest. No premium payment is required for early redemption.

 

This excerpt taken from the AMZN 10-Q filed Jul 28, 2005.

Note 3 — Long-Term Debt and Other

 

Our long-term debt and other long-term liabilities are summarized as follows:

 

     June 30,
2005
     December 31,
2004
  
     (in millions)  

4.75% Convertible Subordinated Notes due February 2009 (1)

    $ 900     $ 900  

6.875% PEACS due February 2010 (2)

      593       935  

Other long-term debt and capital lease obligations

      36       23  
    
 
       1,529       1,858  

Less current portion of other long-term debt and capital lease obligations

      (8 )     (3 )
    
 

Total long-term debt and other

    $ 1,521     $ 1,855  
    
 
(1)

The 4.75% Convertible Subordinated Notes are convertible into our common stock at the holders’ option at a conversion price of $78.0275 per share. Total common stock issuable upon conversion of our outstanding 4.75% Convertible Subordinated Notes is 11.5 million shares, which is excluded from our calculation of earnings per share as its effect is anti-dilutive. We have the right to redeem the 4.75% Convertible Subordinated Notes, in whole or in part, by paying the principal and a redemption premium, plus any

 

11

Table of Contents

AMAZON.COM, INC.

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(unaudited)

 

 

accrued and unpaid interest. At June 30, 2005, the redemption premium, which decreases by 47.5 basis points on February 1 of each year until maturity, was 1.9%.

(2) In Q1 2005, we redeemed an aggregate principal amount of €200 million ($265 million based on the Euro to U.S. Dollar exchange rate on the date of redemption) of our outstanding 6.875% Premium Adjustable Convertible Securities due February 2010 (“6.875% PEACS”). Under the Indenture, no redemption premium was required. We recorded a charge in Q1 2005, classified in “Remeasurements and other,” of approximately $4 million related to the redemption, consisting of $2 million in unamortized deferred issuance charges and $2 million relating to unrealized losses from our currency swap to hedge a portion of our 6.875% PEACS (“Euro Currency Swap”) terminated in Q2 2003. Accrued and unpaid interest of $0.9 million was also paid at redemption and recorded to “Interest expense.” The 6.875% PEACS are convertible into our common stock at the holders’ option at a conversion price of €84.883 per share ($102.76, based on the exchange rate as of June 30, 2005). Total common stock issuable upon conversion of our outstanding 6.875% PEACS is 5.8 million shares, which is excluded from our calculation of earnings per share as its effect is anti-dilutive. The U.S. Dollar equivalent principal, interest, and conversion price fluctuate based on the Euro/U.S. Dollar exchange ratio. We have the right to redeem the 6.875% PEACS, in whole or in part, by paying the principal plus any accrued and unpaid interest. No premium payment is required for early redemption.

 

This excerpt taken from the AMZN 10-Q filed Apr 28, 2005.

Note 3 — Long-Term Debt and Other

 

Our long-term debt and other long-term liabilities are summarized as follows:

 

    

March 31,

2005

    

December 31,

2004

  
     (in millions)  

4.75% Convertible Subordinated Notes due February 2009 (1)

    $ 899.8     $ 899.8  

6.875% PEACS due February 2010 (2)(3)

      635.3       935.1  

Other long-term debt and capital lease obligations

      27.8       22.8  
    
 
       1,562.9       1,857.7  

Less current portion of other long-term debt and capital lease obligations

      (2.3 )     (2.4 )
    
 

Total long-term debt and other

    $ 1,560.6     $ 1,855.3  
    
 
(1) The 4.75% Convertible Subordinated Notes are convertible into our common stock at the holders’ option at a conversion price of $78.0275 per share. Total common stock issuable upon conversion of our outstanding 4.75% Convertible Subordinated Notes is 11.5 million shares, which is excluded from our calculation of earnings per share as its effect is anti-dilutive. We have the right to redeem the 4.75% Convertible Subordinated Notes, in whole or in part, by paying the principal and a redemption premium, plus any accrued and unpaid interest. At March 31, 2005, the redemption premium, which decreases by 47.5 basis points on February 1 of each year until maturity, was 1.9%.
(2) In Q1 2005, we redeemed an aggregate principal amount of €200 million ($265 million based on the Euro to U.S. Dollar exchange rate on the date of redemption) of our outstanding 6.875% Premium Adjustable Convertible Securities due February 2010 (“6.875% PEACS”). Under the Indenture, no redemption premium was required. We recorded a charge in Q1 2005, classified in “Remeasurements and other,” of approximately $4 million related to the redemption, consisting of $2 million in unamortized deferred issuance charges and $2 million relating to unrealized losses from our currency swap to hedge a portion of our 6.875% PEACS (“Euro Currency Swap”) terminated in Q2 2003. Accrued and unpaid interest of $0.9 million was also paid at redemption and recorded to “Interest expense.”
(3) The 6.875% PEACS are convertible into our common stock at the holders’ option at a conversion price of €84.883 per share ($110.05, based on the exchange rate as of March 31, 2005). Total common stock issuable upon conversion of our outstanding 6.875% PEACS is 5.8 million shares, which is excluded from our calculation of earnings per share as its effect is anti-dilutive. The U.S. Dollar equivalent principal, interest, and conversion price fluctuate based on the Euro/U.S. Dollar exchange ratio. We have the right to redeem the 6.875% PEACS, in whole or in part, by paying the principal plus any accrued and unpaid interest. No premium payment is required for early redemption.

 

11

Table of Contents

AMAZON.COM, INC.

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(unaudited)

 

EXCERPTS ON THIS PAGE:

10-Q
Oct 26, 2006
10-Q
Jul 27, 2006
10-Q
Apr 27, 2006
10-Q
Oct 27, 2005
10-Q
Jul 28, 2005
10-Q
Apr 28, 2005

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