Delaware		91-1646860
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

				Page
PART I.    FINANCIAL INFORMATION
Item 1.		Consolidated Financial Statements (Unaudited)
		Consolidated Balance Sheets—June 30, 2002 and December 31, 2001		1
		Consolidated Statements of Operations—Three months and six months ended June 30, 2002 and 2001		2
		Consolidated Statements of Cash Flows—Three months and six months ended June 30, 2002 and 2001		3
		Notes to Consolidated Financial Statements—June 30, 2002		4
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
Item 3.		Quantitative and Qualitative Disclosure of Market Risk		45
PART II.    OTHER INFORMATION
Item 1.		Legal Proceedings		47
Item 2.		Changes in Securities and Use of Proceeds		47
Item 3.		Defaults Upon Senior Securities		47
Item 4.		Submission of Matters to a Vote of Security Holders		47
Item 5.		Other Information		48
Item 6.		Exhibits and Reports on Form 8-K		48
Signatures				49

		June 30, 2002				December 31, 2001
ASSETS
Current assets:
Cash and cash equivalents		$	270,438			$	540,282
Marketable securities			553,141				456,303
Inventories			126,794				143,722
Prepaid expenses and other current assets			93,204				67,613
Total current assets			1,043,577				1,207,920
Fixed assets, net			249,452				271,751
Goodwill, net			70,811				45,367
Other intangibles, net			5,585				34,382
Investments in equity-method investees			3,188				10,387
Other equity investments			15,288				17,972
Other assets			47,146				49,768
Total assets		$	1,435,047			$	1,637,547
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable		$	296,368			$	444,748
Accrued expenses and other current liabilities			236,234				305,064
Unearned revenue			69,128				87,978
Interest payable			44,396				68,632
Current portion of long-term debt and other			14,406				14,992
Total current liabilities			660,532				921,414
Long-term debt and other			2,218,426				2,156,133
Commitments and contingencies
Stockholders’ deficit:
Preferred stock, $0.01 par value:
Authorized shares—500,000
Issued and outstanding shares—none			—				—
Common stock, $0.01 par value:
Authorized shares—5,000,000
Issued and outstanding shares—380,304 and 373,218 shares, respectively			3,803				3,732
Additional paid-in capital			1,546,941				1,462,769
Deferred stock-based compensation			(9,778	)			(9,853	)
Accumulated other comprehensive loss			(7,596	)			(36,070	)
Accumulated deficit			(2,977,281	)			(2,860,578	)
Total stockholders’ deficit			(1,443,911	)			(1,440,000	)
Total liabilities and stockholders’ deficit		$	1,435,047			$	1,637,547

		Three Months Ended June 30,								Six Months Ended June 30,
		2002				2001				2002				2001
Net sales		$	805,605			$	667,625			$	1,653,027			$	1,367,981
Cost of sales			587,438				487,905				1,211,735				1,005,664
Gross profit			218,167				179,720				441,292				362,317
Operating expenses:
Fulfillment			85,751				85,583				175,566				183,831
Marketing			28,832				34,658				61,076				71,296
Technology and content			58,165				64,710				113,662				134,994
General and administrative			19,425				22,778				40,336				48,806
Stock-based compensation			23,148				2,351				34,079				5,267
Amortization of goodwill and other intangibles			1,374				50,830				3,353				101,661
Restructuring-related and other			—				58,650				9,974				172,910
Total operating expenses			216,695				319,560				438,046				718,765
Income (loss) from operations			1,472				(139,840	)			3,246				(356,448	)
Interest income			5,650				6,807				11,302				16,757
Interest expense			(35,651	)			(35,148	)			(70,895	)			(68,896	)
Other income (expense), net			(402	)			(1,178	)			(307	)			(5,062	)
Other gains (losses), net			(63,454	)			11,315				(57,938	)			45,172
Total non-operating expenses, net			(93,857	)			(18,204	)			(117,838	)			(12,029	)
Loss before equity in losses of equity-method investees			(92,385	)			(158,044	)			(114,592	)			(368,477	)
Equity in losses of equity-method investees, net			(1,168	)			(10,315	)			(2,912	)			(23,490	)
Loss before change in accounting principle			(93,553	)			(168,359	)			(117,504	)			(391,967	)
Cumulative effect of change in accounting principle			—				—				801				(10,523	)
Net loss		$	(93,553	)		$	(168,359	)		$	(116,703	)		$	(402,490	)
Basic and diluted loss per share:
Prior to cumulative effect of change in accounting principle		$	(0.25	)		$	(0.47	)		$	(0.31	)		$	(1.09	)
Cumulative effect of change in accounting principle			—				—				—				(0.03	)
		$	(0.25	)		$	(0.47	)		$	(0.31	)		$	(1.12	)
Shares used in computation of basic and diluted loss per share			376,937				359,752				374,995				358,595

Three Months Ended June 30,

Six Months Ended June 30,

2002