AMZN » Topics » Note 10-OTHER INCOME (EXPENSE), NET

These excerpts taken from the AMZN 10-K filed Jan 29, 2010.

Other Income (Expense), Net

Other income (expense), net, consisted of the following:

 

     Year Ended December 31,  
         2009            2008            2007      
     (in millions)  

Foreign-currency gain on intercompany balances

   $ 5    $ 23    $ 32   

Foreign-currency gain (loss) on remeasurement of 6.875% PEACS

     16      15      (33

Other

     8      9      (7
                      

Other income (expense), net

   $ 29    $ 47    $ (8
                      

Other Income (Expense), Net

Other income (expense), net, consists primarily of gains and losses on sales of marketable securities, foreign currency transaction gains and losses, and other losses.

These excerpts taken from the AMZN 10-K filed Jan 30, 2009.

Other Income (Expense), Net

Other income (expense), net, consisted of the following:

 

     Year Ended December 31,  
         2008            2007             2006      
     (in millions)  

Foreign-currency gain (loss) on remeasurement of 6.875% PEACS (1)

   $ 15    $ (33 )   $ (37 )

Foreign-currency gain on intercompany balances (2)

     23      32       50  

Other

     9      (7 )     (6 )
                       

Other income (expense), net

   $ 47    $ (8 )   $ 7  
                       

 

(1) Each period the remeasurement of our 6.875% PEACS from Euros to U.S. Dollars results in gains or losses recorded to “Other income (expense), net” on our consolidated statements of operations.
(2) Represents the gains (losses) associated with the remeasurement of intercompany balances due to changes in foreign exchange rates. See Item 8 of Part II, “Financial Statements and Supplementary Data—Note 1—Description of Business and Accounting Policies—Foreign Currency.”

 

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Note 11—OTHER INCOME (EXPENSE), NET

Other income (expense), net, was $47 million, $(8) million, and $7 million in 2008, 2007 and 2006, and consisted primarily of gains and losses on sales of marketable securities, foreign currency transaction gains and losses, and other miscellaneous losses.

Foreign currency transaction gains and losses primarily relate to remeasurement of our 6.875% PEACS and remeasurement of intercompany balances.

Note 11—OTHER INCOME (EXPENSE), NET

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">Other income (expense), net, was $47 million, $(8) million, and $7 million in 2008, 2007 and 2006, and consisted primarily of gains and losses on sales of
marketable securities, foreign currency transaction gains and losses, and other miscellaneous losses.

Foreign currency transaction gains
and losses primarily relate to remeasurement of our 6.875% PEACS and remeasurement of intercompany balances.

This excerpt taken from the AMZN 8-K filed Jan 29, 2009.

Other Income (Expense), Net

 

   

Other income (expense), net, was $26 million and $3 million during Q4 2008 and Q4 2007. The amount consists primarily of gains and losses related to foreign currency remeasurement.

 

   

The remeasurement of our 6.875% PEACS and intercompany balances can result in significant gains and losses associated with the effect of movements in currency exchange rates.

 

Page 13 of 17


This excerpt taken from the AMZN 8-K filed Oct 22, 2008.

Other Income (Expense), Net

 

   

Other income (expense), net, was $24 million and ($3) million during Q3 2008 and Q3 2007. The amount consists primarily of gains and losses related to foreign currency remeasurement.

 

Page 14 of 19


   

The remeasurement of our 6.875% PEACS and intercompany balances can result in significant gains and losses associated with the effect of movements in currency exchange rates.

This excerpt taken from the AMZN 10-Q filed Oct 22, 2008.

Other Income (Expense), Net

Other expense, net, consisted of the following:

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
         2008             2007             2008            2007      
     (in millions)     (in millions)  

Foreign-currency gain (loss) on remeasurement of 6.875% PEACS

   $ 40     $ (17 )   $ 12    $ (25 )

Foreign-currency gain (loss) on intercompany balances

     (16 )     16       9      22  

Other

     —         (2 )     1      (7 )
                               

Total other income (expense), net

   $ 24     $ (3 )   $ 22    $ (10 )
                               
This excerpt taken from the AMZN 8-K filed Apr 23, 2008.

Other Income (Expense), Net

 

   

Other income (expense), net, consists primarily of gains or losses on marketable securities, foreign-currency transaction gains and losses, and other miscellaneous gains and losses.

 

   

Foreign-currency transaction gains and losses primarily relate to the interest payable on our 6.875% PEACS, as well as foreign-currency gains and losses on cross-currency investments. Since interest payments on our 6.875% PEACS are settled in Euros, the balance of interest payable is subject to gains or losses resulting from changes in exchange rates between the U.S. Dollar and Euro between reporting dates and payment.

These excerpts taken from the AMZN 10-K filed Feb 11, 2008.

Other
Income (Expense), Net

Other income (expense), net, was $(1) million, $(4) million, and $2 million, in 2007, 2006 and 2005, and
consisted primarily of gains and losses on sales of marketable securities, foreign-currency transaction gains and losses, and other miscellaneous losses.

FACE="Times New Roman" SIZE="2">Foreign-currency transaction gains and losses primarily relate to the interest payable on our 6.875% PEACS, as well as foreign-currency gains and losses on cross-currency investments. Since interest payments on our
6.875% PEACS are settled in Euros, the balance of interest payable is subject to gains or losses resulting from changes in exchange rates between the U.S. Dollar and Euro between reporting dates and payment.

STYLE="margin-top:18px;margin-bottom:0px; margin-left:2%">Remeasurements and Other

SIZE="2">Remeasurements and other consisted of the following:

 









































































































































   Year Ended December 31, 
     2007      2006      2005   
   (in millions) 

Foreign-currency gain (loss) on remeasurement of 6.875% PEACS

  $(33) $(37) $90 

Loss on redemption of long-term debt

   —     (6)  (6)

Foreign-currency gain (loss) on intercompany balances

   32   50   (47)

Other

   (6)  4   5 
             

Total remeasurements and other

  $(7) $11  $42 
             

 





(1)Each period the remeasurement of our 6.875% PEACS from Euros to U.S. Dollars results in gains or losses recorded to “Remeasurements and other” on our consolidated
statements of operations.

 


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(2)Represents the gains (losses) associated with the remeasurement of intercompany balances due to changes in foreign exchange rates. See Item 8 of Part II, “Financial
Statements and Supplementary Data—Note 1—Description of Business and Accounting Policies—Foreign Currency.”

SIZE="2">Income Taxes

We recorded a provision for income taxes of $184 million, $187 million, and $95 million, in 2007, 2006
and 2005. The effective tax rate in 2007 was lower than the 35% U.S. federal statutory rate primarily due to earnings of our subsidiaries outside of the U.S. in jurisdictions where our effective tax rate is lower than in the U.S. The effective tax
rate in 2006 was higher than the 35% U.S. federal statutory rate resulting from establishment of our European headquarters in Luxembourg, which we expect will benefit our effective tax rate over time. Associated with the establishment of our
European headquarters, we transferred certain of our operating assets in 2005 and 2006 from the U.S. to international locations. These transfers resulted in taxable income and exposure to additional taxable income assertions by taxing jurisdictions.

Included in the 2005 provision and reducing the impact of the international restructure is a tax benefit of $90 million, resulting from
certain of our deferred tax assets becoming more likely than not realizable. This tax benefit represented $0.22 and $0.21 of basic and diluted earnings per share.

FACE="Times New Roman" SIZE="2">We expect our effective tax rate in 2008 to be approximately 30%. However, our effective tax rate is subject to significant variation due to several factors, including from accurately predicting our taxable income,
the taxable jurisdictions to which it relates, and business acquisitions and investments. We have current tax benefits and net operating losses relating to excess stock-based compensation deductions that are being utilized to reduce our U.S. taxable
income. As such, we expect a majority of our net tax provision to be non-cash.

Note 10—OTHER INCOME (EXPENSE), NET

Other income (expense), net, was $(1) million, $(4) million, and $2 million, in 2007, 2006 and 2005, and consisted primarily of gains and losses on sales of marketable securities, foreign-currency transaction gains and losses, and other miscellaneous losses.

Foreign-currency transaction gains and losses primarily relate to the interest payable on our 6.875% PEACS, as well as foreign-currency gains and losses on cross-currency investments. Since interest payments on our 6.875% PEACS are settled in Euros, the balance of interest payable is subject to gains or losses resulting from changes in exchange rates between the U.S. Dollar and Euro between reporting dates and payment.

This excerpt taken from the AMZN 8-K filed Jan 30, 2008.

Other Income (Expense), Net

 

   

Other income (expense), net, consists primarily of gains or losses on marketable securities, foreign-currency transaction gains and losses, and other miscellaneous gains and losses.

 

   

Foreign-currency transaction gains (losses) primarily relate to the interest payable on our 6.875% PEACS, as well as foreign-currency gains and losses on cross-currency investments. Since interest payments on our 6.875% PEACS are settled in Euros, the balance of interest payable is subject to gains or losses resulting from changes in exchange rates between the U.S. Dollar and Euro between reporting dates and payment.

This excerpt taken from the AMZN 10-K filed Feb 16, 2007.

Note 10—OTHER INCOME (EXPENSE), NET

Other income (expense), net, was $(4) million, $2 million, and $(5) million, in 2006, 2005 and 2004, and consisted primarily of gains and losses on sales of marketable securities, foreign-currency transaction gains and losses, and other miscellaneous losses.

Foreign-currency transaction gains and losses primarily relate to the interest payable on our 6.875% PEACS, as well as foreign-currency gains and losses on cross-currency investments. Since interest payments on our 6.875% PEACS are settled in Euros, the balance of interest payable is subject to gains or losses resulting from changes in exchange rates between the U.S. Dollar and Euro between reporting dates and payment.

This excerpt taken from the AMZN 10-K filed Feb 17, 2006.

Note 9—OTHER INCOME (EXPENSE), NET

 

Other income (expense), net, was $2 million, $(5) million, and $7 million, in 2005, 2004 and 2003, and consisted primarily of gains (losses) on sales of marketable securities, foreign-currency transaction gains (losses), and other miscellaneous losses, net.

 

Foreign-currency transaction gains (losses) primarily relate to the interest payable on our 6.875% PEACS. Since these payments are settled in Euros, the balance of interest payable (which is paid annually in February) is subject to gains or losses resulting from changes in exchange rates between the U.S. Dollar and Euro between reporting dates and payment

 

This excerpt taken from the AMZN 8-K filed Jul 26, 2005.

Other Income (Expense), Net

 

    Other expense of $1 million includes gains and losses on sales of marketable securities and foreign-currency transaction gains and losses, including the currency effect on the interest payable for our 6.875% PEACS.

 

This excerpt taken from the AMZN 8-K filed Apr 26, 2005.

Other Income (Expense), Net

 

    Other income of $3 million was primarily a foreign-currency gain on interest payable for our 6.875% PEACS.

 

This excerpt taken from the AMZN 10-K filed Mar 11, 2005.

Note 9—OTHER INCOME (EXPENSE), NET

 

Other income (expense), net consisted of the following:

 

     Year Ended December 31,

 
     2004

    2003

    2002

 
     (in thousands)  

Gains on sales of marketable securities, net

   $ 586     $ 9,598     $ 5,700  

Foreign-currency transaction losses, net

     (5,214 )     (3,043 )     (1,086 )

Other miscellaneous gains (losses), net

     (73 )     (41 )     309  
    


 


 


Total other income (expense), net

   $ (4,701 )   $ 6,514     $ 4,923  
    


 


 


 

Foreign-currency transaction losses primarily relate to the interest payable on our 6.875% PEACS. Since these payments are settled in Euros, the balance of interest payable (which is paid annually in February) is subject to gains or losses resulting from changes in exchange rates between the U.S. Dollar and Euro between reporting dates and payment.

 

This excerpt taken from the AMZN 8-K filed Feb 2, 2005.

Other Income (Expense), Net

 

    Other expense of $5 million was primarily foreign-currency losses on interest payable for our 6.875% PEACS.

 

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