Amazon.com 2004 Annual Report Download - page 86

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AMAZON.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Note 8—OTHER OPERATING EXPENSE (INCOME)
Other operating expense (income) was $(8) million, $3 million, and $47 million for 2004, 2003, and 2002,
which includes restructuring-related expenses (credits) and amortization of other intangibles. Restructuring-
related expenses (credits) were $(9) million, $0 million, and $42 million; and amortization of other intangibles
was $1 million, $3 million, and $5 million for 2004, 2003, and 2002.
During 2004, we determined that certain of the office space previously vacated as part of our 2001
restructuring, which we had been unable to sublease due to poor real estate market conditions, was necessary for
our future needs. We reduced our restructuring-related liability resulting in a gain of $13 million for 2004. Lease
payments for this office space are expensed over the lease period and classified to the corresponding operating
expense categories on the consolidated statements of operations.
In 2004, we streamlined our organizational structure in France to reduce our operating costs. These efforts
were primarily focused on eliminating French-office positions in managerial, professional, clerical, and technical
roles. The number of employees affected totaled 52 and resulted in severance costs of $4 million classified in
“Other operating expense (income)” on the consolidated statements of operations.
Restructuring-related charges were as follows (in thousands):
Year Ended December 31,
2004 2003 2002
(in thousands)
Asset impairments ......................................... $ — $— $ 1,182
Continuing lease obligations ................................. (12,304) 140 39,563
Termination benefits ....................................... 4,225 — —
Broker commissions, professional fees, and other miscellaneous
restructuring costs ....................................... (968) — 828
Total restructuring-related charges ........................ $ (9,047) $140 $41,573
At December 31, 2004, the accrued liability associated with restructuring-related and other charges was $13
million and consisted of the following:
Balance at
December 31,
2003
Subsequent
Accruals
(Credits), net Payments
Balance at
December 31,
2004
Due Within
12 Months(1)
Due After
12 Months(1)
(in thousands)
Lease obligations, net of
estimated sublease income . . . $29,343 $(12,304) $(6,060) $10,979 $3,057 $7,922
Termination benefits ......... — 4,225 (2,464) 1,761 1,761 —
Broker commissions,
professional fees and other
miscellaneous restructuring
costs .................... 1,197 (968) (80) 149 149 —
Total restructuring-related
liability .............. $30,540 $ (9,047) $(8,604) $12,889 $4,967 $7,922
(1) Restructuring-related liabilities due within 12 months are classified in “Accrued expenses and other current
liabilities” and liabilities due after 12 months are classified in “Long-term debt and other” on our
consolidated balance sheets.
78