Amazon.com 2001 Annual Report Download - page 66

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AMAZON.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 4—GOODWILL AND OTHER INTANGIBLES
Goodwill and other intangibles were as follows:
December 31,
2001 2000
(in thousands)
Goodwill, net of adjustments ...................................... $617,827 $ 776,208
Accumulated amortization ........................................ (572,460) (454,433)
Impairment adjustments .......................................... — (162,785)
Goodwill, net .................................................. $ 45,367 $ 158,990
Other intangibles, net of adjustments ................................ $221,879 $ 241,357
Accumulated amortization ........................................ (187,497) (123,848)
Impairment adjustments .......................................... — (21,174)
Other intangibles, net ............................................ $ 34,382 $ 96,335
During the fourth quarter of 2000, the Company identified indicators of possible impairment of its recorded
goodwill and other intangibles. Such indicators included the general slowdown in the retail economy evidenced
by general declines in consumer spending, the Company’s decline in market capitalization as determined by the
quoted market price for its common stock, the pervasive and significant declines in e-commerce valuations in
comparison with the market valuations at the time the Company invested in its acquisitions, and changes in the
Company’s strategic plans for certain of the acquired businesses. Based on the results of its discounted cash flow
analyses, the Company identified certain levels of impairment corresponding with the business-unit goodwill and
other intangibles initially recorded in connection with the following acquisitions: Alexa Internet, Back to Basics
Toys, Inc., Livebid, Inc., and the catalog and internet assets of Acme Electric Motor Co. (“Tool Crib”).
Accordingly, the Company recorded an impairment loss of $184 million during the fourth quarter of 2000
included in “Restructuring-related and other” on the consolidated statements of operations.
Note 5—INVESTMENTS
At December 31, 2001, the Company’s equity-method investees and the Company’s approximate ownership
interest in each investee, based on outstanding shares, were as follows:
Company
Percentage
Ownership
Altura International ........................................................ 20%
Basis Technology ......................................................... 9
Daksh.com .............................................................. 11
drugstore.com ............................................................ 20
Eziba.com ............................................................... 20
The Company’s voting interest in each investee, its representation on the investees’ Boards of Directors and
the effect of commercial arrangements result in the Company having significant influence over the operations of
each investee.
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