Amazon.com 2000 Annual Report Download - page 65

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deferred stock-based compensation of $72 million and $2 million, respectively. In 1999, deferred stock-based
compensation was recorded in connection with acquisitions made by the Company in which restricted
Company stock was issued to employees of acquired companies. Such stock 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 four years. The amount recorded in 1998 represents the difference between the
grant price and the deemed fair value of the Company’s common stock for shares subject to options granted in
1998. Shares underlying options granted below fair market value and the associated weighted average exercise
price were 1,072,000 and $2.048 during the year ended December 31, 1998. The amortization of deferred
stock-based compensation is charged to operations over the vesting period of the options, which is typically
five years. Total amortization expense recognized in 2000, 1999 and 1998 related to deferred stock-based
compensation was $35 million, $26 million and $2 million, respectively.
Accumulated Other Comprehensive Loss
Activity in unrealized gains (losses) on available-for-sale securities included in ‘‘Accumulated other
comprehensive loss’’ on the consolidated balance sheets was as follows:
For the Years Ended December 31,
2000 1999 1998
(in thousands)
Unrealized gains (losses) arising during year ................ $(178,815) $(12,698) $1,841
Less reclassification of net realized losses included
in net loss ........................................ 178,512 8,693 —
Net unrealized gains (losses) on available-for-sale
Securities ........................................ $ (303) $ (4,005) $1,841
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 2000, 1999 and 1998, the 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, 2000, 1999 and 1998 would have
been as follows:
For the Years Ended December 31,
2000 1999 1998
(in thousands, except per share data)
Net loss — as reported ........................ $(1,411,273) $ (719,968) $(124,546)
Net loss — pro forma ......................... (1,720,312) (1,031,925) (194,269)
Basic and diluted loss per share — as reported ....... $ (4.02) $ (2.20) $ (0.42)
Basic and diluted loss per share — pro forma ....... (4.90) (3.16) (0.66)
AMAZON.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
57