Amazon.com 2004 Annual Report Download - page 71

Download and view the complete annual report

Please find page 71 of the 2004 Amazon.com annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 104

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104

AMAZON.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Stock-based compensation consisted of the following:
Year Ended December 31,
2004 2003 2002
(in thousands)
Stock awards—variable accounting (1) .................................. $ 4,577 $51,875 $60,130
Fixed accounting (2):
Restricted stock units (3) ......................................... 48,625 30,691 3,913
Restricted stock (4) .............................................. 4,500 5,185 4,884
Total stock-based compensation ............................... $57,702 $87,751 $68,927
(1) Variable accounting treatment results in expense or contra-expense recognition using the cumulative
expense method, calculated based on the quoted price of our common stock and vesting schedules of
underlying awards. To the extent stock options are forfeited prior to vesting, the corresponding previously
recognized expense is reversed as an offset to “Stock-based compensation.”
(2) The fair value of awards is determined at grant date based on the number of shares granted and the quoted
price of our common stock. Such value is recognized as expense over the service period using the
accelerated method under FIN No. 28, Accounting for Stock Appreciation Rights and Other Variable Stock
Option or Award Plans.Tothe extent awards are forfeited prior to vesting, the corresponding previously
recognized expense is reversed as an offset to stock-based compensation.
(3) Since October 2002, we have awarded restricted stock units as our primary form of stock-based
compensation.
(4) Includes expense associated with matching contributions of 0.07 million and 0.03 million shares of our
common stock under our 401(k) savings plan during 2004 and 2003. No matching contributions were made
in 2002.
Outstanding stock awards were as follows:
Year Ended December 31,
2004 2003 2002
(in thousands)
Stock options (1)(2) .................................................... 18,371 24,961 42,005
Restricted stock units (3) ................................................ 6,396 4,410 2,935
Outstanding stock awards, excluded from common stock outstanding ......... 24,767 29,371 44,940
Restricted stock (4) ..................................................... 490 790 1,011
Total outstanding stock awards ....................................... 25,257 30,161 45,951
(1) The weighted average per share exercise price was $12.98, $12.46, and $11.91 in 2004, 2003, and 2002.
(2) Includes 0.9 million, 1.1 million, and 4.7 million options in 2004, 2003, and 2002 subject to variable
accounting treatment.
(3) Includes 0.3 million restricted stock units subject to variable accounting treatment in 2004, 2003, and 2002.
(4) Included in issued and outstanding common stock.
63