"We are Highly Leveraged
We have significant indebtedness. As of March 31, 1999, we were indebted
under the Senior Discount Notes, the Convertible Notes, the capitalized lease
obligations and other asset financing totaling approximately $1.5 billion.
We may incur substantial additional debt in the future. Our indebtedness could:
- make it difficult to make principal and interest payments on the
Convertible Notes and the Senior Discount Notes,
- make it difficult to obtain necessary financing for working capital,
capital expenditures, debt service requirements or other purposes,
- limit our flexibility in planning for, or reacting to, changes in
our business and competition, and
- make it more difficult for us to react in the event of an economic
downturn.
We may not be able to meet our debt service obligations. If our cash flow is
inadequate to meet our obligations, we may face substantial liquidity problems.
If we are unable to generate sufficient cash flow or obtain funds for required
payments, or if
we fail to comply with other covenants in our indebtedness, we will be in
default. This would permit our creditors to accelerate the maturity of our
indebtedness. . .
Convertible Subordinated Notes
On February 3, 1999, Amazon.com completed the offering of $1.25 billion
aggregate principal amount of 4 3/4% Convertible Subordinated Notes
("Convertible Notes" or "notes") due 2009. Interest on the notes is payable in
arrears in cash semi-annually on February 1 and August 1 of each year,
commencing August 1, 1999."
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