Amazon.com 2001 Annual Report Download - page 77

AMAZON.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
with restricted Company stock issued to key employees. The amount recorded represents the fair value of the
Company’s common stock issued on the date of grant. In 1999, deferred compensation was recorded in
connection with acquisitions made by the Company in which restricted Company common stock was issued to
employees of acquired companies. The Company’s common stock issued in 2001 and 1999 is considered
compensation for services to be provided by employees, and the related expense will be recognized over the term
of the services provided, which is generally five years. In 2001 and 2000, the company recorded an adjustment to
reduce previously recorded deferred stock-based compensation of $4 million and $3 million, respectively. The
adjustments related to the termination of employment prior to vesting of certain employees acquired from
business combinations. Total amortization expense recognized in 2001, 2000 and 1999 related to deferred stock-
based compensation was $8 million, $32 million and $26 million, respectively.
Comprehensive Loss
The changes in the components of comprehensive loss were as follows:
Year Ended December 31,
2001 2000 1999
(in thousands)
Net loss .................................................... $(567,277) $(1,411,273) $(719,968)
Other comprehensive loss:
Foreign-currency translations gains (losses), net ................ (1,257) (364) 490
Net unrealized gains (losses) on available-for-sale securities:
Unrealized losses arising during year ......................... (33,479) (178,815) (12,698)
Less reclassification of net realized losses included in net loss ..... 40,484 178,512 8,693
Net unrealized gains (losses) on available-for-sale securities . . 7,005 (303) (4,005)
Net unrealized losses on Euro-based currency swap:
Unrealized losses on remeasurement to fair value ............... (21,867) — —
Reclassification of losses to offset currency gains on hedged portion
of 6.875% PEACS included in net loss ...................... 4,530 — —
Net unrealized losses on Euro-based currency swap ......... (17,337) — —
Reclassification of currency gains on 6.875% PEACS ................ (9,811) — —
Cumulative effect of accounting change to adopt SFAS No. 133 ....... (12,294) — —
Other comprehensive loss ...................................... $ (33,694) (667) (3,515)
Comprehensive loss ........................................... $(600,971) $(1,411,940) $(723,483)
SFAS No. 123 Pro Forma Disclosure
The Company uses the intrinsic value method in accounting for its stock options. If compensation cost had
been recognized based on the fair value at the date of grant for options granted in 2001, 2000 and 1999, under
SFAS No. 123, “Accounting for Stock-Based Compensation,” pro forma amounts of the Company’s net loss and
net loss per share, which may not necessarily be indicative of effects on reported results for future years, for the
years ended December 31, 2001, 2000 and 1999 would have been as follows:
For the Years Ended December 31,
2001 2000 1999
(in thousands, except per share data)
Net loss — as reported ................................... $(567,277) $(1,411,273) $ (719,968)
Net loss — SFAS No. 123 pro forma ........................ (963,085) (1,720,312) (1,031,925)
Basic and diluted loss per share — as reported ................ $ (1.56) $ (4.02) $ (2.20)
Basic and diluted loss per share — SFAS No. 123 pro forma ..... (2.64) (4.90) (3.16)
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