Amazon.com (AMZN)

Net Income

Net Income

Net income was $118 million and $80 million in Q3 2008 and Q3 2007, and $420 million and $269 million for the nine months ended September 30, 2008 and 2007. Net income includes the impact of foreign currency remeasurements included in “Other income (expense), net” which fluctuate with changes in exchange rates. For Q3 2008, these remeasurements resulted in an after tax benefit of $15 million. For the nine months ended September 30, 2008, net income also includes a non-cash gain from the sale of our European DVD rental assets included in “Other operating expense (income), net,” which we do not believe is predictive of future results or trends.

Net Income

Net Income

Net income was $158 million and $78 million in Q2 2008 and Q2 2007, and $301 million and $189 million for the six months ended June 30, 2008 and 2007. Net income in Q2 2008 and the six months ended June 30, 2008 includes the recognition of the $53 million noncash gain on the sale of our European DVD rental assets. We believe that the positive impact of this gain on net income is not predictive of future results or trends.

Net Income

Net income was $19 million and $30 million for Q3 2006 and Q3 2005, and $93 million and $160 million for the nine months ended September 30, 2006 and 2005. The year-over-year changes include the effect of a patent lawsuit settlement, which resulted in a one-time payment of $40 million in Q3 2005. Additionally, a benefit of $26 million was included in net income for the nine months ended September 30, 2005, representing the cumulative effect of adopting SFAS 123(R).

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Net Income

Net income was $22 million and $52 million for Q2 2006 and Q2 2005, and $73 and $130 million for the six months ended June 30, 2006 and 2005. A benefit of $26 million was included in net income for the six months ended June 30, 2005, representing the cumulative effect of adopting SFAS 123(R).

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Net Income

Net income was $51 million and $78 million for Q1 2006 and Q1 2005. Included in net income for Q1 2005 is a benefit of $26 million representing the cumulative effect of adopting SFAS 123(R).

We believe that year-over-year changes in net income are not necessarily predictive of our future net income results for a variety of reasons. For example, the net effect of remeasurement of our 6.875% PEACS and intercompany balances can result in significant gains or losses associated with the effect of movements in currency exchange rates. Accordingly, we encourage readers of our financial statements to evaluate the effect on our operating trends of these items since changes in currency exchange rates may create significant variability in our future operating results.

Net Income

Net income was $359 million, $588 million and $35 million in 2005, 2004 and 2003. We believe that year-over-year changes in net income are not necessarily predictive of our future net income results for a variety of reasons. For example, in 2005 we recorded a provision for income taxes of $95 million and in 2004 we recorded a net income tax benefit of $233 million. Included in these amounts in 2005 and 2004 were tax benefits of $90 million and $244 million resulting from our determination that certain of our deferred tax assets were more likely than not realizable. Additionally, the remeasurement of our 6.875% PEACS and intercompany balances resulted in net gains in 2005 and net charges in 2004 and 2003 associated with the effect of movements in currency exchange rates. Accordingly, we encourage readers of our financial statements to evaluate the effect on our operating trends of these items since future income taxes and change in currency exchange rates may create significant variability in our future operating results.

Net Income

Income before income taxes was $51 million and $57 million for Q3 2005 and Q3 2004, and was $267 million and $ 248 million for the three quarters ended September 30, 2005 and 2004. The year-over-year changes include the effect of the patent lawsuit settlement, which resulted in a one-time payment of $40 million. Net income was $30 million and $54 million for Q3 2005 and Q3 2004, and was $160 million and $242 million for the three quarters ended September 30, 2005 and 2004. The year-over-year declines in net income are primarily

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related to the Q3 2005 patent lawsuit settlement, $20 million net of tax, and the increase in our effective tax rate and corresponding provision for income taxes, which increased $18 million and $128 million for Q3 2005 and the three quarters ended September 30, 2005 in comparison with the prior year periods. See “Income Taxes” above for a discussion of our tax provision.

Net Income

Net income was $52 million and $76 million for Q2 2005 and Q2 2004, and was $130 million and $188 million for the first half of 2005 and 2004. The year-over-year declines in net income are primarily related to our provision for income taxes, which increased $51 million and $109 million for Q2 2005 and the first half of 2005 in comparison with the prior year periods. Income before income taxes was $108 million and $81 million for Q2 2005 and Q2 2004, and was $216 million and $191 million for the first half of 2005 and 2004. See “Income Taxes” above for a discussion of our tax provision.

Net Income

Net income was $78 million and $111 million for Q1 2005 and Q1 2004. The change in net income compared to the prior year is primarily attributable to the decrease in operating income of $2 million, a $6 million decrease in “Remeasurements and other,” and the cumulative effect of adopting SFAS 123(R) totaling $26 million, offset by our provision for income taxes of $56 million.

We believe that our reported net income should not be viewed, on its own, as a material positive event and is not necessarily predictive of our future results for a variety of reasons. For example, the remeasurement of our 6.875% PEACS and intercompany balances can result in significant gains and charges associated with the effect of movements in currency exchange rates. Accordingly, we encourage investors to evaluate the effect on our operating trends of these items since future changes in currency exchange rates may create significant variability in our future operating results.

Net Income

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Net Income