Amazon.com 2001 Annual Report Download - page 68

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AMAZON.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Activity in the Company’s equity-method investments and other equity investments for the years ended
December 31, 2000 and 2001, is as follows:
Equity-
Method
Investments
Other
Equity
Investments Total
(in thousands)
Balance, December 31, 1999 ..................................... $226,727 $ 144,735 $ 371,462
Investments — cash consideration ............................ 48,091 13,485 61,576
Fair value of equity securities received in services-related
transactions ............................................ 80,190 26,658 106,848
Equity-method losses, net ................................... (304,596) — (304,596)
Sales of investments ........................................ (41) (9,163) (9,204)
Realized gains (losses) on sales of investments ................... (2,763) 8,156 5,393
Basis adjustments for public offerings of investees ................ 76,898 — 76,898
Non-cash gain, acquisition of Homegrocer.com, Inc. by Webvan
Group, Inc. ............................................. 40,160 — 40,160
Loss resulting from Living.com bankruptcy ..................... (14,092) — (14,092)
Losses resulting from other-than-temporary declines in fair value .... — (100,726) (100,726)
Unrealized gains on available-for-sale investments, net ............ — 693 693
Investment reclassifications, net, at fair value .................... (98,501) (43,661) (142,162)
Balance, December 31, 2000 ..................................... 52,073 40,177 92,250
Investments — common stock consideration .................... 5,000 — 5,000
Fair value of equity securities received in services-related
transactions ............................................ 331 — 331
Equity-method losses, net ................................... (30,327) — (30,327)
Sales of investments ........................................ (800) (28) (828)
Realized gains (losses) on sales of investments ................... 800 — 800
Non-cash gains (losses) for acquisitions of investees by a third
party .................................................. 1,242 (458) 784
Losses resulting from other-than-temporary declines in fair value .... (16,696) (10,189) (26,885)
Unrealized gains on available-for-sale investments, net ............ — 227 227
Losses for change in fair value of warrant investments, net ......... — (5,293) (5,293)
Loss from change in accounting principle ....................... — (7,700) (7,700)
Investment reclassifications, net, at fair value .................... (1,236) 1,236 —
Balance, December 31, 2001 ..................................... $ 10,387 $ 17,972 $ 28,359
Effective January 1, 2001 the Company’s adoption of SFAS No. 133 resulted in the recording of a loss
totaling $8 million to report certain net share warrant investments at fair value. Prior to adoption such warrants
were carried at cost.
During 2000, the Company recorded unrealized gains, net of unrealized losses, as additional paid-in capital
totaling $77 million as a result of public offerings of common stock by three of the Company’s equity method
investees at the time, Homegrocer.com, Inc., Pets.com, Inc., and drugstore.com, inc. The unrealized gains, net
represent the difference between the Company’s carrying basis and the fair value of the portion of each
investment deemed to have been sold by the investee.
During 2001 and 2000, reclassifications from “Investments in equity method investees” resulted from
acquisitions of investees by unrelated third parties and the corresponding loss of significant influence over the
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