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AMAZON
REFERENCES
Records
Cited by Amazon in Its December 4, 2000 Response
to
Workshop
Information Requests
Below are the references cited by
Amazon in their December 4, 2000 response to the November 21, 2000
information requests of the Workshop for Analysts established by the NYSSA
Forum, “Amazon: Responsibility for Investment Information.” The references
are presented by the item numbers of the information requests, and have been
prepared by Workshop participants an exhibit to facilitate review of
Amazon’s response.
1(a)(i) Amazon response:
Refer to our Net Sales
section of
Management’s Discussion
and Analysis in
our 1999 Form 10-K and our September 30, 2000 Form 10-Q.
1999 10k
Net Sales
1999 % CHANGE 1998 %
CHANGE 1997
---------- -------- --------
-------- --------
(IN THOUSANDS)
Net
sales................... $1,639,839 169% $609,819 313%
$147,787
Net sales
include the selling price of products sold by us, net of returns
and gift
certificate discounts, and also include outbound shipping charges.
Shipping
revenue was $239 million, $94.1 million and $24.8 million in 1999, 1998
and 1997,
respectively. Net sales also include commissions from auctions and
zShops
transactions, which include sales commissions, placement fees and fees
from payment
service transactions.
Growth in
net sales in 1999 and 1998 reflects a significant increase in
units sold due
to the growth of our customer base, repeat purchases from
existing
customers, increased international sales, and the introduction of new
product
offerings. These new product offerings include music and DVD/video in
June and
November of 1998, respectively, toys and electronics in July 1999 and
home
improvement, software and video games in November 1999. We increased our
issuance of
promotional gift certificates to customers in 1999 to promote new
product lines,
however, which partially offset such growth in net sales. The
Company had
approximately 16.9 million, 6.2 million and 1.5 million cumulative
customer
accounts as of December 31, 1999, 1998 and 1997, respectively. The
percentage of
orders by repeat customers increased from 64% in the fourth
quarter of 1998
to 73% in the fourth quarter of 1999. The increase in net sales
in 1998 was
also partially due to the launch of the UK and German focused Web
sites in
October 1998.
23
Sales to
customers outside of the US represented approximately 22%, 20% and
25% of net
sales for the years ended December 31, 1999, 1998 and 1997,
respectively.
2000 10Q
Net Sales
Net sales
includes the selling price of products sold by us, less returns
and promotional
gift certificates, and also includes outbound shipping charges
charged to our
customers. Net product sales were $510.2 million and $301.3
million for the
three months ended September 30, 2000 and 1999, and $1,468.5
million and
$815.8 million for the nine months ended September 30, 2000 and
1999. Shipping
revenue was $78.1 million and $53.3 million for the three months
ended September
30, 2000 and 1999, and $226.3 million and $146.4 million for the
nine months
ended September 30, 2000 and 1999. Net sales also includes ACN
revenues of
$49.6 million and $94.8 million for the three months and nine months
ended September
30, 2000. Although the ACN program formally commenced in the
fourth quarter
of 1999, we earned advertising revenues prior to the ACN
program's
existence during the first three quarters of 1999. These advertising
revenues
totaled $1.2 million and $1.6 million for the three months and nine
months ended
September 30, 1999. For the three months ended September 30, 2000,
ACN revenue
recognized during the period consisted of consideration, either
received during
the period or amortized from previously unearned revenue, in the
form of $28.7
million of cash, $20.1 million of equity securities of public
companies and
$0.8 million of equity securities of private companies. For the
nine months
ended September 30, 2000, ACN revenue recognized during the period
consisted of
consideration, either received during the period or amortized from
14
previously
unearned revenue, in the form of $36.6 million of cash, $53.7 million
of equity
securities of public companies and $4.5 million of equity securities
of private
companies. A majority of the cash revenues recognized from the ACN
program for the
three months and nine months ended September 30, 2000,
represents
revenue associated with the sale of $19.6 million of inventory to
Toysrus.com at
our cost, which did not exceed market. Future ACN revenue will be
affected by
such factors as the health of our ACN partners, the ability to
successfully
renew agreements with ACN partners and the terms of such renewals,
and the ability
to successfully attract new ACN partners and the terms of any
such
agreements. Growth in net sales for the three months and nine months ended
September 30,
2000, as compared to the comparable periods in 1999, is primarily
related to an
increase in units sold due to the growth of our customer base,
repeat
purchases from existing customers, the introduction of new product lines,
a favorable mix
of customer discounts in our various product lines and increased
ACN and
advertising-related revenues. Subsequent to September 30, 1999, we added
the new product
lines of software, computer and video games, tools and hardware,
lawn and patio,
and kitchen products. We expect that our net sales for the
fourth quarter
of 2000 will be between $950 million and $1.05 billion and that
net sales for
2001 will be approximately $4 billion. Over the longer term, we
expect to
average a double-digit percentage share of the online retail market
segment.
However, any such projections are subject to substantial uncertainty.
See "Additional
Factors That May Affect Future Results."
At
September 30, 2000, the number of customer accounts, which includes
customer
accounts for marketplace services but excludes customer accounts of our
ACN partners,
exceeded 25 million, compared with over 13 million at September
30, 1999.
Sales to
customers outside of the US, including export sales from our US
website and
sales from our internationally focused Web sites located at
www.amazon.co.uk, www.amazon.de and www.amazon.fr, represented approximately
23%
and 25% of net
sales for the three months ended September 30, 2000 and 1999, and
23% and 24% for
the nine months ended September 30, 2000 and 1999.
1(b)(i) Amazon response:
See
1.a.i. above and
Note 1 of our 1999
Form
10-K,
and Overview to
Management’s
Discussion and Analysis
and Note 6 in our
September 30, 2000 Form 10-Q.
1999 10K
NOTE 1 --
ACCOUNTING POLICIES
Description
of Business
Amazon.com,
Inc. (Amazon.com or the Company) was incorporated in July 1994
and opened its
virtual doors on the Web in July 1995. Amazon.com is an Internet
retailer
offering more than 18 million unique items in categories including
books, music,
DVD/video, toys, electronics, software, video games and home
improvement
products. Amazon.com offers a free electronic greeting card service
and also
provides a community of online shoppers with an easy and safe way to
purchase and
sell a large selection of products through Amazon.com Auctions and
zShops.
Business
Combinations and Investments
For
business combinations that have been accounted for under the purchase
method of
accounting, the Company includes the results of operations of the
acquired
business from the date of acquisition. Net assets of the companies
acquired are
recorded at their fair value at the date of acquisition. The excess
of the purchase
price over the fair value of tangible and identifiable
intangible net
assets acquired is included in goodwill in the accompanying
consolidated
balance sheets.
One
business combination in 1998 was accounted for under the pooling of
interests
method of accounting. In this case, the assets, liabilities and
stockholders'
equity of the acquired entity was combined with the Company's
respective
accounts at recorded values. The consolidated financial statements
reflect the
restatement of all periods presented to include the accounts of the
acquired entity
accounted for under the pooling of interests method of
accounting. The
historical results of the pooled entity reflect its actual
operating cost
structures and, as a result, do not necessarily reflect the cost
structure of
the newly combined entity. The historical results do not purport to
be indicative
of future results.
Investments in affiliated entities in which the Company has the ability to
exercise
significant influence, but not control, of an investee, generally an
ownership
interest of the voting stock of between 20% and 50%, are accounted for
under the
equity method of accounting. Accordingly, under the equity method of
accounting, the
Company's share of the investee's earnings or loss is included
in the
consolidated statements of operations. The Company records its
investments in
equity-method investees on the consolidated balance sheets as
"Investments in
equity-method investees" and its share of the investees'
earnings or
losses in "Equity in losses of equity-method investees." The portion
of the
Company's investment in an equity-method investee that exceeds its claim
of the net
assets of the investee, if any, is assigned to goodwill and amortized
over a period
of three years. The goodwill amount, which was $24.8 million as of
December 31,
1999, is included in "Investments in equity-method investees" in
the
accompanying consolidated balance sheets, and the amortization of the
goodwill is
included in "Equity in losses of equity-method investees" in the
accompanying
consolidated statements of operations.
All other
investments, which consist of investments for which the Company
does not have
the ability to exercise significant influence, are accounted for
under the cost
method of accounting. Dividends and other distributions of
earnings from
other investees, if any, are included in income when declared. The
Company
periodically evaluates the carrying value of its investments accounted
for under the
cost method of accounting and as of December 31, 1999 and 1998,
such
investments were recorded at the lower of cost or estimated net realizable
value.
2000 10Q
NOTE 6 --
UNEARNED REVENUE AND RELATED PARTY TRANSACTIONS
Unearned
revenue is recorded for the fair value of services to be performed
in future
periods for Amazon Commerce Network (ACN) partners. ACN partners are
companies with
which the Company has entered into strategic relationships. These
relationships
have consisted of the Company entering into commercial agreements
that involve
the sale of products and services by these companies on co-branded
sections of the
Amazon Web site and other promotional services, such as
advertising
placements and customer referrals. The Company has also made
minority
investments in some of the companies with which it has entered into
such
agreements. The fair value of services provided by the Company to these
partners is
measured by the consideration paid to the Company by these ACN
partners, and
has consisted of cash, equity securities of ACN partners or a
combination of
the two. The Company holds equity securities of several of its
ACN partners,
some of which are accounted for under the equity method. Fair
value of
securities is generally determined at the date the agreement is
consummated.
For securities of ACN partners that are public companies, the
Company
generally determines fair value based on the quoted market price at
the time the
Company enters into the underlying agreement, and adjusts such
market price
appropriately if significant restrictions on marketability exist.
As an
observable market price does not exist for equity securities of private
companies,
estimates of fair value of such securities are more subjective than
for securities
of public companies. For significant transactions involving
equity
securities in private companies, the Company obtains and considers
independent,
third-party valuations where appropriate. Such valuations use a
variety of
methodologies to estimate fair value, including comparing the
security with
securities of publicly traded companies in similar lines of
business,
applying price multiples to estimated future operating results for the
private
company, and then also estimating discounted cash flows for that
company. These
valuations also reduce the fair value to account for restrictions
on control and
marketability where appropriate. Using these valuations and other
information
available to the Company, such as the Company's knowledge of the
industry and
knowledge of specific information about the investee, the Company
determines the
estimated fair value of the securities received. As required by
EITF 00-8, to
the extent that equity securities received or modified after March
16, 2000 are
subject to forfeiture or
8
vesting
provisions and no significant performance commitment exists upon signing
of the
agreements, the fair value of the securities is determined as of the date
the respective
forfeiture or vesting provisions lapse.
Revenue is
recognized over the period in which the service for
which
consideration has been received is performed (generally one to three
years). During
the three months and nine months ended September 30, 2000, the
Company
recorded $49.6 million and $94.8 million, respectively, of revenue from
ACN partners.
For the three months ended September 30, 2000, ACN revenue
recognized
during the period consisted of consideration, either received during
the period or
amortized from previously unearned revenue, in the form of $28.7
million of
cash, $20.1 million of equity securities of public companies and $0.8
million of
equity securities of private companies. For the nine months ended
September 30,
2000, ACN revenue recognized during the period consisted of
consideration,
either received during the period or amortized from previously
unearned
revenue, in the form of $36.6 million of cash, $53.7 million of equity
securities of
public companies and $4.5 million of equity securities of private
companies.
The Company
accounts for several of its investments in ACN partners using
the equity
method. During the three months and nine months ended September 30,
2000, the
Company recorded $69.1 million and $266.9 million of equity-method
losses for
investments in ACN partners.
During the
three months ended September 30, 2000, one of the Company's
equity-method
investees, living.com, Inc. (living.com) declared bankruptcy. In
February 2000,
the Company closed the purchase of shares of preferred stock of
living.com for
$10 million in cash in connection with a commercial agreement
with living.com.
The Company received additional living.com preferred stock with
an estimated
fair value of $21 million in consideration for services to be
provided under
the commercial agreement and recorded a total investment of $31
million and
unearned revenue of $21 million. Through the date of living.com's
bankruptcy, the
Company had recorded $16.9 million of equity-method losses and
had earned $0.9
million of revenue under the commercial agreement, resulting in
an investment
balance at the date of living.com's bankruptcy of $14.1 million
(the difference
between the $31 million initial total investment and the $16.9
million in
equity-method losses) and an unearned revenue balance relating to the
commercial
agreement of $20.1 million (the difference between the initial $21
million
unearned revenue balance and the $0.9 million of revenue recognized). As
a result of the
bankruptcy, the Company incurred a loss of $14.1 million, the
amount of its
remaining investment balance in living.com at the time of the
bankruptcy. The
Company also recorded a gain as a result of the termination of
the commercial
agreement in the amount of $20.1 million, the amount of the
unearned
revenue balance at the time of the bankruptcy. Both the gain and the
loss are
included in "Non-cash investment gains and losses" in the accompanying
statement of
operations.
2(a)(i) Amazon response:In
our October 24, 2000 press release
and conference call,
we did not provide any guidance on operating
cash flow as defined
above.
Webcast of the conference call,
including management discussions of cash flow and analyst questions seeking
clarification, is available on the Amazon web site at the following address:
<http://www.iredge.com/IREdge/IREdge.asp?c=002239&f=2009>
2(d) Amazon response:
Refer to the
Non-Cash Investment Gains and Losses, Net section of
Management’s Discussion
and Analysis in
our September 30,
2000 Form 10-Q.
2000 10Q
Non-Cash
Investment Gains and Losses, Net
Non-cash
investment gains and losses, net for the three months and nine
months ended
September 30, 2000 includes net realized gains and losses on
investments
described below during the three months ended September 30, 2000. We
had no
comparable gains or losses on non-cash investments during the same
periods in
1999. We recorded a gain of $40.2 million upon the September 2000
acquisition of
one of our equity-method investees, HomeGrocer, by Webvan Group,
Inc. (Webvan),
representing the difference between our book value in the common
stock in
HomeGrocer we held prior to the acquisition and the fair value of the
Webvan common
stock we received upon closing of the transaction. Substantially
all of our
investment in Webvan is now included in marketable securities. We
have recorded a
net unrealized loss of $15.0 million as of September 30, 2000,
in accordance
with Statement of Financial Accounting Standards No. 115,
representing
the decline in the market value of the Webvan stock following the
close of the
transaction. This unrealized loss is included in accumulated other
comprehensive
loss.
In February
2000, we closed the purchase of shares of preferred stock in
living.com for
$10 million in cash in connection with a commercial agreement
with living.com.
We received additional living.com preferred stock in
consideration
for services to be provided under the commercial agreement, as
well as the
right to nominate a member of the Board of Directors of living.com,
a right we
never exercised. The balance sheet included with our press release
for the three
months ended March 31, 2000 recorded the value of our equity
securities from
living.com at approximately $93 million, and unearned revenue of
approximately
$83 million based on an initial independent third party valuation.
After issuing
our earnings release but prior to publishing our financial
statements in
our Quarterly Report on Form 10-Q filing for the three months
ended March 31,
2000, and after learning of the pricing in a subsequent private
equity offering
by living.com, we requested additional valuation work by the
independent
third party which considered that pricing as well as revised and
updated
forecasts from living.com management and other relevant information. Our
financial
statements for the three months ended March 31, 2000, published in our
Quarterly
Report on Form 10-Q, reflected our estimate of fair value of our
investment in
living.com at $31 million and unearned revenue at $21 million. No
revenue was
recognized from our commercial arrangement with living.com until
after the
launch of the "Home living tab" on our Web site in May 2000. Through
the date of
living.com's bankruptcy, we had recorded $16.9 million of
equity-method
losses and had earned $0.9 million of revenue under the commercial
agreement,
resulting in an investment balance at the date of living.com's
bankruptcy of
$14.1 million (the difference between the $31 million initial
total
investment and the $16.9 million in equity-method losses) and an unearned
revenue balance
relating to the commercial agreement of $20.1 million (the
difference
between the initial $21 million unearned revenue balance and the $0.9
million of
revenue recognized). As a result of the bankruptcy, we incurred a
loss of $14.1
million, the amount of our remaining investment balance in
living.com at
the time of the bankruptcy. We also recorded a gain as a result of
the termination
of the commercial agreement in the amount of $20.1 million, the
amount of the
unearned revenue balance at the time of the bankruptcy.
During the
three months ended September 30, 2000, we determined that the
declines in
value from our accounting basis for two of our other investments
were other than
temporary. We recognized non-cash losses totaling $33.8 million
to record our
investments in Audible, Inc. and Nextcard at their current fair
values as of
September 30, 2000. This amount is included in "Non-cash investment
gains and
losses, net" in our statements of operations. In addition, at
September 30,
2000, "accumulated other comprehensive loss" on our balance sheet
includes
approximately $66 million in unrealized losses on investments in public
companies. See
Note 9 to the financial statements. We periodically evaluate
whether the
declines in fair value of these investments are other than
temporary. This
evaluation consists of a review by members of senior management
in finance,
treasury, corporate development and our ACN group. For investments
with publicly
quoted market prices, we compare the market price to our
accounting
basis and, if the quoted market price is less than our accounting
basis for an
extended period of time, we then consider additional factors to
determine
whether the
18
decline in fair
value is other than temporary, such as the financial condition,
results of
operations and operating trends for the company. We also review
publicly
available information regarding the investee companies, including
reports from
investment analysts. We also evaluate whether: 1) we have both the
intent and
ability to hold the investment for a period of time sufficient to
allow for any
anticipated recovery in fair value; 2) the decline in fair value
is attributable
to specific adverse conditions affecting a particular
investment; 3)
the decline is attributable to more general conditions, such as
conditions in
an industry or geographic area; 4) the decline in fair value is
attributable to
seasonal factors; 5) a debt security has been downgraded by a
rating agency;
6) the financial condition of the issuer has deteriorated; and 7)
if applicable,
dividends have been reduced or eliminated, or scheduled interest
payments on
debt securities have not been made. For investments in private
companies with
no quoted market price, we consider similar qualitative factors
and also
consider the implied value from any recent rounds of financing
completed by
the investee as well as market prices of comparable public
companies. We
require our private investees to deliver annual, quarterly and
monthly
financial statements to assist us in reviewing relevant financial data
and to assist
us in determining whether such data may indicate
other-than-temporary declines in fair value below our accounting basis.
3. Amazon response:
Refer to our
statement of cash flows,
and Notes
3
and 6 in our 1999
Form 10-K Also
refer to our statement of cash flows
included in our Form
10-Q for each
quarter of 2000,
our balance sheet as of September 30, 2000 and Notes 2, 4, 5 and 9 in our
September 30, 2000
Form 10-Q.
1999 10K
NOTE 3 --
MARKETABLE SECURITIES
The
following tables summarize, by major security type, the Company's
marketable
securities:
DECEMBER 31, 1999
---------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED
UNREALIZED ESTIMATED
COST GAINS LOSSES FAIR
VALUE
--------- ----------
---------- ----------
(IN THOUSANDS)
Commercial
paper and short-term
obligations........................... $ 74,203 $ 8 $
(654) $ 73,557
Corporate notes
and bonds............... 105,282 -- (1,438) 103,844
Asset-backed
and agency securities...... 252,874 136 (5,343)
247,667
Treasury notes
and bonds................ 169,021 32 (4,895)
164,158
-------- ----
-------- --------
$601,380 $176
$(12,330) $589,226
======== ====
======== ========
DECEMBER 31, 1998
---------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED
UNREALIZED ESTIMATED
COST GAINS
LOSSES FAIR VALUE
--------- ----------
---------- ----------
(IN THOUSANDS)
Commercial
paper and short-term
obligations........................... $114,158 $ 22 $
-- $114,180
Corporate notes
and bonds............... 51,242 112 (3) 51,351
Asset-backed
and agency securities...... 83,611 98 (140)
83,569
Treasury notes
and bonds................ 88,952 230 (169)
89,013
Equity
securities....................... 8,080 1,691
-- 9,771
-------- ------ -----
--------
$346,043 $2,153
$(312) $347,884
======== ======
===== ========
At
December 31, 1999, the Company also had investments in noncurrent
available-for-sale equity securities included in "Other investments" (Note
6).
The
following table summarizes contractual maturities of the Company's
marketable
securities as of December 31, 1999:
AMORTIZED
ESTIMATED
COST FAIR
VALUE
---------
----------
(IN THOUSANDS)
Due within one
year.................................... $ 52,331 $ 51,943
Due after one
year through five years.................. 296,175 289,616
Asset-backed
and agency securities with various
maturities........................................... 252,874
247,667
--------
--------
$601,380
$589,226
========
========
The gross
realized gains and losses on sales of available-for-sale
securities were
$6.7 million and $15.4 million, respectively, for the year ended
December 31,
1999. Gross realized gains and losses on sales of
available-for-sale securities were not significant for the years ended
December
31, 1998 or
1997.
Activity
in unrealized gains (losses) on available-for-sale securities was
as follows:
FOR THE YEARS
ENDED DECEMBER 31,
----------------------------------
1999 1998
1997
----------
-------- ------
(IN
THOUSANDS)
Unrealized
holding gains (losses) arising during
period............................................... $(12,698)
$1,841 $--
Less:
reclassification adjustment for losses included
in net
loss.......................................... 8,693
-- --
--------
------ ---
Net unrealized
gains (losses) on available-for-sale
securities........................................... $ (4,005)
$1,841 $--
========
====== ===
1999 10K
NOTE 6 --
INVESTMENTS
The
Company has several equity-method investments included in "Investments
in
equity-method investees" in the accompanying consolidated balance sheets. At
December 31,
1998, the Company's only equity-method investment was a 46%
ownership
interest in drugstore.com, inc. (drugstore.com). In no cases does the
Company have
the ability to control these investees. At December 31, 1999, the
Company's
equity-method investees and the Company's approximate ownership
interest in
each investee, based on outstanding shares, were as follows:
PERCENTAGE
COMPANY OWNERSHIP
------- ----------
Della.com.................................................
21.9%
drugstore.com.............................................
26.7%
Gear.com..................................................
49.0%
HomeGrocer.com............................................
28.0%
Kozmo.com.................................................
21.7%
Naxon
Corporation......................................... 61.0%
Pets.com..................................................
48.4%
45
AMAZON.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Summarized
balance sheet information of the Company's equity-method
investees is as
follows:
2000 10Q
NOTE 2 --
MARKETABLE SECURITIES
Marketable
securities available for sale, at fair value, consist of the
following:
SEPTEMBER 30, DECEMBER 31,
2000 1999
------------- -------------
(IN
THOUSANDS)
Asset-backed and agency securities ................
$ 59,317 $ 247,667
Commercial paper and short-term obligations
....... 9,213 57,210
Treasury notes and bonds
.......................... 73,886 164,158
Corporate notes and bonds
......................... 12,653 103,844
Equity securities
................................. 97,907 --
------------- -------------
Total marketable securities .............
$ 252,976 $ 572,879
============= =============
The
Company's marketable securities consist primarily of A-rated or higher
short- to
intermediate-term fixed income securities, as well as equity
securities.
2000 10Q
NOTE 4 --
INVESTMENTS IN EQUITY-METHOD INVESTEES
The Company
holds certain investments accounted for under the equity method.
The Company
accounts for an investment under the equity method if the investment
gives the
Company the ability to exercise significant influence, but not
control, over
an investee. Significant influence is generally deemed to exist if
the Company has
an ownership interest in the voting stock of the investee of
between 20% and
50%, although other factors, such as representation on the
investee's
Board of Directors and the impact of commercial arrangements, are
considered in
determining whether the equity method of accounting is
appropriate.
The Company records its equity in the income or losses of these
investees
generally one month in arrears for private companies and three months
in arrears for
public companies.
In
September 2000, Webvan Group, Inc. (Webvan) completed the acquisition of
all of the
outstanding common stock of one of the Company's equity-method
investees,
HomeGrocer.com, Inc. (HomeGrocer), in exchange for common stock of
Webvan. The
Company does not account for its resulting investment in Webvan
under the
equity method because it does not have the ability to exercise
significant
influence over Webvan. During the three months ended September 30,
2000, the
Company recorded its Webvan common stock investment at its estimated
fair value at
the date of closing of the transaction of $84.0 million, which was
determined by
management after considering an independent estimate of value, and
recorded a gain
of $40.2 million on its common stock investment in HomeGrocer
based on this
estimated fair value. This gain is included in "Non-cash
investment
gains and losses, net" in the accompanying statements of operations.
As of September
30, 2000, the Company still holds all of the Webvan common stock
it received in
the transaction. Substantially all of the Company's investment in
Webvan is
classified as an available-for-sale investment, is accounted for at
its quoted
market price and is included in "Marketable securities" at September
30, 2000.
2000 10Q
NOTE 5 -- OTHER
INVESTMENTS
At
September 30, 2000, "Other investments" included $41.2 million of
investments
accounted for at cost and $32.1 million of investments in equity
securities with
ready markets that are recorded at fair value and classified as
available-for-sale securities pursuant to SFAS No. 115. The cost of such
available-for-sale equity securities included in "Other investments" at
September 30,
2000 was $68.4 million, resulting in unrealized losses included in
"Accumulated
other comprehensive loss" of $36.3 million.
During the
three months ended September 30, 2000, the Company determined
that the
declines in value from the Company's accounting basis for two of its
investments
were other than temporary. The Company recognized losses totaling
$33.8 million
to record its investments in Audible, Inc. and Nextcard, Inc. at
their estimated
current fair values as of September 30, 2000. This amount is
included in
"Non-cash investment gains and losses, net" in the accompanying
statements of
operations. Prior to September 30, 2000, unrealized losses from
these
investments had been recorded in "Accumulated other comprehensive loss."
2000 10Q
NOTE 9 --
ACCUMULATED OTHER COMPREHENSIVE LOSS
Accumulated
other comprehensive loss consists of the following:
SEPTEMBER 30, DECEMBER 31,
2000 1999
-------------
-------------
(IN THOUSANDS)
Unrealized loss on Ashford.com, Inc. common stock
........... $ (36,329) $ --
Unrealized loss on Webvan common stock
...................... (14,989) --
Unrealized loss on Sotheby's Holdings, Inc. common stock
.... (10,563) (5,437)
Unrealized gains (losses) on other marketable
securities, net
.............................................
(3,984) 3,273
Foreign currency related gains, net
......................... 228 455
------------- -------------
$
(65,637) $ (1,709)
============= =============
4.
Amazon
response:
Refer to Note 11
of our June 30,
2000 Form 10-Q.
Amazon’s June 30, 2000 Form 10-Q
has notes only up to #10, and no reference could be found in any of those
notes to the information requested.
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