Amazon.com 2000 Annual Report Download - page 58

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The Company also reclassified certain of its equity investments amounting to $60 million from ‘‘Other
equity investments’’ to ‘‘Marketable securities’’ as it no longer had the intent to hold these investments for
over one year from the date of reclassification. Additionally, the Company reclassified $15 million of equity
investments from ‘‘Investments in equity-method investees’’ to ‘‘Other equity investments’’ upon the
acquisition of an investee, Della and James, Inc., by an unrelated third party, WeddingChannel.com, Inc., which
resulted in the loss of significant influence over the investee. As of December 31, 2000, the fair value of all
equity securities classified in ‘‘Marketable securities’’ on the accompanying consolidated balance sheet was
$36 million. No equity securities were classified in ‘‘Marketable securities’’ as of December 31, 1999.
At December 31, 2000 and 1999, ‘‘Other equity investments’’ included $7 million and $57 million of
equity securities recorded at fair value and $33 million and $88 million of equity securities accounted for under
the cost-method, respectively. Gross unrealized gains were $0 and $15 million and gross unrealized losses were
$3 million and $5 million at December 31, 2000 and 1999, respectively.
At December 31, 2000 and 1999, the Company’s investments in the common stock of publicly held
equity-method investees, at fair value, was $12 million and $409 million, respectively.
Note 7—UNEARNED REVENUE
Activity in unearned revenue was as follows (in thousands):
Balance, January 1, 1999 ............................................... $ —
Cash received or cash receivable ...................................... 6,225
Fair value of equity securities received .................................. 54,402
Amortization to revenue ............................................ (5,837)
Balance, December 31, 1999 ............................................. 54,790
Cash received or cash receivable ...................................... 97,818
Fair value of equity securities received .................................. 106,848
Amortization to revenue ............................................ (108,211)
Contract termination ............................................... (20,128)
Balance, December 31, 2000 ............................................. $131,117
During 2000, living.com, Inc. (living.com) declared bankruptcy and terminated its commercial agreement
with the Company. As a result, the Company recorded a net gain of $6 million, comprised of a $14 million loss
representing the Company’s remaining investment balance in living.com and a $20 million gain relating to the
unamortized portion of unearned revenue associated with the living.com commercial agreement. The gain and
the loss are recorded net and included in ‘‘Non-cash investment gains and losses’’ on the accompanying
consolidated statements of operations.
AMAZON.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
50