Amazon.com 2004 Annual Report Download - page 74

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AMAZON.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table shows the calculation of diluted shares (in thousands):
Year Ended December 31,
2004 2003 2002
Weighted average shares outstanding ................................... 406,480 396,389 379,494
Weighted average shares of restricted stock .............................. (554) (910) (1,131)
Shares used in computation of basic earnings (loss) per share ............ 405,926 395,479 378,363
Total dilutive effect of outstanding stock awards (1) .................... 18,831 23,873 —
Shares used in computation of diluted earnings (loss) per share ........... 424,757 419,352 378,363
(1) The effect of outstanding stock awards, including restricted stock, is antidilutive for periods that we have a
net loss and, accordingly, is excluded from the calculation of diluted loss per share in those periods. The
dilutive effect of stock awards and restricted stock is included in the calculation of weighted average shares,
using the treasury stock method, for periods that we have net income.
Recent Accounting Pronouncements
We will be implementing the provisions of SFAS 123R, “Share-Based Payment,” on January 1, 2005. See
“Stock-based compensation” of this Note 1 for additional discussion, including the anticipated effect on our
financial results of adopting this standard.
Reclassifications
Certain prior year amounts have been reclassified to conform to the current year presentation.
Note 2—CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES
The following tables summarize, by major security type, our cash and marketable securities (in thousands):
December 31, 2004
Cost or
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses (1)
Estimated
Fair Value
Cash .............................................. $ 407,906 $ — $ — $ 407,906
Cash equivalents pledged as collateral (See Note 5) ......... 9,682 — — 9,682
Commercial paper and other cash equivalents ............. 882,618 2,394 — 885,012
Total cash and cash equivalents .................... 1,300,206 2,394 — 1,302,600
Asset-backed and agency securities ..................... 293,435 2,311 (908) 294,838
U.S. Treasury notes and bonds ......................... 141,858 3 (1,133) 140,728
Corporate notes and bonds ............................ 29,488 — (189) 29,299
Equity securities and other ............................ 499 11,235 — 11,734
Marketable securities ............................. 465,280 13,549 (2,230) 476,599
Total cash, cash equivalents, and marketable
securities (2) ............................. $1,765,486 $15,943 $(2,230) $1,779,199
(1) The fair value of investments with loss positions was $483 million. We evaluated the nature of these
investments, which are primarily U.S. Treasury Notes, the duration of the impairments (substantially all less
than twelve months), and concluded that such amounts were not “other-than-temporary” as defined by
SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities.
66