x
|
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
(State or other jurisdiction
of incorporation or organization) |
91-1646860
(I.R.S. Employer
Identification No.) |
|
Aggregate market value of voting stock held by non-affiliates of the registrant as of
January 10, 2002 |
$
|
2,859,000,000
|
|
Number of shares of common stock outstanding as of January 10, 2002
|
|
373,291,188
|
Page
|
||||
PART I
|
||||
Item 1.
|
1
|
|||
Item 2.
|
18
|
|||
Item 3.
|
19
|
|||
Item 4.
|
19
|
|||
PART II
|
||||
Item 5.
|
20
|
|||
Item 6.
|
21
|
|||
Item 7.
|
21
|
|||
Item 7A.
|
38
|
|||
Item 8.
|
41
|
|||
Item 9.
|
79
|
|||
PART III
|
||||
Item 10.
|
79
|
|||
Item 11.
|
79
|
|||
Item 12.
|
79
|
|||
Item 13.
|
79
|
|||
PART IV
|
||||
Item 14.
|
79
|
|||
82
|
|
|
Strong global brand recognition;
|
|
|
Web merchandising, including our patented search technologies, personalization, 1-Click ordering, editorial content and customer reviews, and data-driven automation;
|
|
|
Technology infrastructure;
|
|
|
Customer service, including a global 24-hour customer support network, customer self-service technology, and proprietary e-commerce call center technology;
|
|
|
Global fulfillment capabilities fully integrated to a Web site; and
|
|
|
Customer traffic and acquisition involving our millions of customers and our Associates Program.
|
|
|
Merchant@amazon.com Program: The third party seller offers its products for sale on our Web site, either in our online retail stores or in a co-branded store on our Web site,
or both. Its products are fully integrated on our Web site and are purchased by customers through a single checkout process. The third-party seller is the seller of record and pays us fixed fees, sales commissions, per-unit activity fees, or some
combination thereof. In this program, we offer the option of providing fulfillment-related services on behalf of the third-party. Examples include the Toysrus.com toy store and Babiesrus.com baby store at
www.amazon.com
; the Target store at
www.amazon.com
, which is part of our strategic alliance with Target; our strategic alliance with Circuit City; and our strategic alliances that support our travel stores on our U.S. and U.K.-focused Web sites.
|
|
|
Merchant Program: The third-party sellers e-commerce Web site operates at its own URL using our features and technology. In this program, we offer the option of providing
fulfillment-related services on behalf of the third-party. We believe this offering will enable third-party sellers to have a high quality e-commerce site at a controllable and competitive cost. The third-party seller is the seller of record and
pays us fixed fees, sales commissions, per-unit activity fees, or some combination thereof. An example is our features and technology that will be deployed at Target.com, which is scheduled to re-launch in the second half of 2002.
|
|
|
Syndicated Stores Program: The third-party sellers e-commerce Web site uses our e-commerce services and tools, and offers our product selection. Under these arrangements,
we are responsible for fulfillment and we provide customer service. We are the seller of record on these transactions and remit a commission to the third party. Examples include
www.borders.com
and
www.waterstones.co.uk
, both of which
were launched in 2001 as Syndicated Stores.
|
|
|
disruption of our ongoing business, including loss of management focus on existing businesses;
|
|
|
impairment of relationships with existing employees, customers and companies with which we have formed strategic alliances;
|
|
|
difficulty assimilating the operations, technology and personnel of combined companies;
|
|
|
problems retaining key technical and managerial personnel;
|
|
|
additional operating losses and expenses of acquired businesses; and
|
|
|
fluctuations in value and losses that may arise from our equity investments.
|
|
|
our ability to retain and increase sales to existing customers, attract new customers and satisfy our customers demands;
|
|
|
our ability to expand our network of third party sellers;
|
|
|
foreign currency exchange rate fluctuations;
|
|
|
our ability to acquire merchandise, manage our inventory and fulfill orders;
|
|
|
the introduction by our competitors of Web sites, products or services;
|
|
|
changes in usage of the Internet and online services and consumer acceptance of the Internet and e-commerce;
|
|
|
timing and costs of upgrades and developments in our systems and infrastructure;
|
|
|
the effects of strategic alliances, acquisitions and other business combinations, and our ability to successfully integrate them into our business;
|
|
|
technical difficulties, system downtime or Internet brownouts;
|
|
|
variations in the mix of products and services we sell;
|
|
|
variations in our level of merchandise and vendor returns;
|
|
|
disruptions in service by shipping carriers; and
|
|
|
the extent to which we offer free shipping promotions.
|
|
|
currency exchange rate fluctuations,
|
|
|
local economic and political conditions,
|
|
|
restrictive governmental actions (such as trade protection measures, including export duties and quotas and custom duties and tariffs),
|
|
|
import or export licensing requirements,
|
|
|
limitations on the repatriation of funds,
|
|
|
difficulty in obtaining distribution and support,
|
|
|
nationalization,
|
|
|
longer receivable cycles,
|
|
|
consumer protection laws and restrictions on pricing or discounts,
|
|
|
lower level of adoption or use of the Internet and other technologies vital to our business, and the lack of appropriate infrastructure to support widespread Internet usage,
|
|
|
lower level of credit card usage and increased payment risk,
|
|
|
difficulty in developing employees and simultaneously managing a larger number of unique foreign operations as a result of distance, language and cultural differences,
|
|
|
laws and policies of the U.S. affecting trade, foreign investment and loans, and
|
|
|
tax and other laws.
|
|
|
general economic conditions,
|
|
|
changes in interest rates,
|
|
|
conditions or trends in the Internet and the e-commerce industry,
|
|
|
fluctuations in the stock market in general and market prices for Internet-related companies in particular,
|
|
|
quarterly variations in operating results,
|
|
|
new products, services, innovations and strategic developments by our competitors or us, or business combinations and investments by our competitors or us,
|
|
|
changes in financial estimates by us or securities analysts and recommendations by securities analysts,
|
|
|
changes in Internet regulation,
|
|
|
changes in capital structure, including issuance of additional debt or equity to the public,
|
|
|
additions or departures of key personnel,
|
|
|
corporate restructurings, including layoffs or closures of facilities,
|
|
|
changes in the valuation methodology of, or performance by, other e-commerce companies, and
|
|
|
news and securities analyst reports and speculation relating to new alliances, general business or Internet trends or our existing or future products or services.
|
Name
|
Age
|
Position
|
||
Jeffrey P. Bezos
|
38
|
President, Chief Executive Officer and Chairman of the Board
|
||
Mark J. Britto
|
37
|
Senior Vice President, Worldwide Service Sales & Business Development
|
||
Richard L. Dalzell
|
44
|
Senior Vice President, Worldwide Architecture & Platform Software, and Chief Information Officer
|
||
Warren C. Jenson
|
45
|
Senior Vice President and Chief Financial Officer
|
||
Diego Piacentini
|
41
|
Senior Vice President, Worldwide Retail & Marketing
|
||
John D. Risher
|
36
|
Senior Vice President, Worldwide Application Software
|
||
Jeffrey A. Wilke
|
35
|
Senior Vice President, Worldwide Operations & Customer Service
|
||
L. Michelle Wilson
|
38
|
Senior Vice President, Human Resources, General Counsel and Secretary
|
Name
|
Age
|
Position
|
||
Jeffrey P. Bezos
|
38
|
President, Chief Executive Officer and Chairman of the Board
|
||
Tom A. Alberg
|
61
|
Managing Director of Madrona Venture Group
|
||
Scott D. Cook
|
49
|
Chairman of the Executive Committee of Intuit, Inc.
|
||
L. John Doerr
|
50
|
General Partner, Kleiner Perkins Caufield & Byers
|
||
Mark S. Hansen
|
47
|
Chairman and CEO of Fleming Companies, Inc.
|
||
Patricia Q. Stonesifer
|
45
|
President and Co-Chair of the Bill & Melinda Gates Foundation
|
High
|
Low
|
|||||
Year ended December 31, 2000
|
||||||
First Quarter
|
$
|
91.50
|
$
|
58.44
|
||
Second Quarter
|
|
68.63
|
|
32.47
|
||
Third Quarter
|
|
49.63
|
|
27.88
|
||
Fourth Quarter
|
|
40.88
|
|
14.88
|
||
Year ended December 31, 2001
|
||||||
First Quarter
|
$
|
21.88
|
$
|
10.00
|
||
Second Quarter
|
|
17.56
|
|
8.37
|
||
Third Quarter
|
|
16.98
|
|
5.97
|
||
Fourth Quarter
|
|
12.24
|
|
6.01
|
As of and for the Years Ended December 31,
|
||||||||||||||||||||
2001
|
2000
|
1999
|
1998 (1)
|
1997 (1)
|
||||||||||||||||
(in thousands, except per share data)
|
||||||||||||||||||||
Statements of Operations Data:
|
||||||||||||||||||||
Net sales
|
$
|
3,122,433
|
|
$
|
2,761,983
|
|
$
|
1,639,839
|
|
$
|
609,819
|
|
$
|
147,787
|
|
|||||
Gross profit
|
|
798,558
|
|
|
655,777
|
|
|
290,645
|
|
|
133,664
|
|
|
28,818
|
|
|||||
Loss from operations
|
|
(412,257
|
)
|
|
(863,880
|
)
|
|
(605,755
|
)
|
|
(109,055
|
)
|
|
(32,595
|
)
|
|||||
Interest income
|
|
29,103
|
|
|
40,821
|
|
|
45,451
|
|
|
14,053
|
|
|
1,901
|
|
|||||
Interest expense
|
|
(139,232
|
)
|
|
(130,921
|
)
|
|
(84,566
|
)
|
|
(26,639
|
)
|
|
(326
|
)
|
|||||
Net loss
|
|
(567,277
|
)
|
|
(1,411,273
|
)
|
|
(719,968
|
)
|
|
(124,546
|
)
|
|
(31,020
|
)
|
|||||
Basic and diluted net loss per share (2)
|
$
|
(1.56
|
)
|
$
|
(4.02
|
)
|
$
|
(2.20
|
)
|
$
|
(0.42
|
)
|
$
|
(0.12
|
)
|
|||||
Shares used in computation of basic and diluted net loss per share (2)
|
|
364,211
|
|
|
350,873
|
|
|
326,753
|
|
|
296,344
|
|
|
260,682
|
|
|||||
Balance Sheet Data:
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
540,282
|
|
$
|
822,435
|
|
$
|
133,309
|
|
$
|
71,583
|
|
$
|
110,119
|
|
|||||
Marketable securities
|
|
456,303
|
|
|
278,087
|
|
|
572,879
|
|
|
301,862
|
|
|
15,256
|
|
|||||
Total assets
|
|
1,637,547
|
|
|
2,135,169
|
|
|
2,465,850
|
|
|
648,460
|
|
|
149,844
|
|
|||||
Long-term debt
|
|
2,156,133
|
|
|
2,127,464
|
|
|
1,466,338
|
|
|
348,140
|
|
|
76,702
|
|
|||||
Stockholders Equity (Deficit)
|
|
(1,440,000
|
)
|
|
(967,251
|
)
|
|
266,278
|
|
|
138,745
|
|
|
28,591
|
|
(1)
|
|
Reflects restatement for 1998 business acquisition accounted for under the pooling-of-interests method.
|
(2)
|
|
For further discussion of loss per share, see Notes 1 and 10 of Notes to Consolidated Financial Statements.
|
For the Years Ended December 31,
|
||||||||||
2001
|
2000
|
1999
|
||||||||
(in thousands)
|
||||||||||
Fulfillment
|
$
|
481
|
$
|
(1,606
|
)
|
$
|
188
|
|||
Marketing
|
|
690
|
|
(858
|
)
|
|
3,957
|
|||
Technology and content
|
|
2,723
|
|
28,253
|
|
|
25,322
|
|||
General and administrative
|
|
743
|
|
(992
|
)
|
|
1,151
|
|||
|
|
|
||||||||
$
|
4,637
|
$
|
24,797
|
|
$
|
30,618
|
||||
|
|
|
Hypothetical Increase Over $13.375
|
Hypothetical Market Price per Share
|
Hypothetical Cumulative Compensation
Expense |
||
(in thousands)
|
||||
5%
|
$14.04
|
$ 6,788
|
||
10%
|
$14.71
|
$ 12,578
|
||
15%
|
$15.38
|
$ 18,369
|
||
25%
|
$16.72
|
$ 29,950
|
||
50%
|
$20.06
|
$ 58,902
|
Asset impairments
|
$
|
68,528
|
|
Continuing lease obligations
|
|
87,049
|
|
Termination benefits
|
|
14,970
|
|
Broker commissions, professional fees and other miscellaneous restructuring costs
|
|
11,038
|
|
|
|||
$
|
181,585
|
||
|
Balance at March 31, 2001
|
Subsequent Accruals, net
|
Non-Cash Settlements and Other Adjustments
|
Payments
|
Balance at December 31, 2001
|
Due Within 12 Months
|
Due After 12 Months
|
|||||||||||||||||
Lease obligations
|
$
|
34,667
|
$
|
52,738
|
$
|
(2,675
|
)
|
$
|
(31,543
|
)
|
$
|
53,187
|
$
|
35,578
|
$
|
17,609
|
|||||||
Termination benefits
|
|
8,445
|
|
113
|
|
(2,354
|
)
|
|
(6,143
|
)
|
|
61
|
|
61
|
|
|
|||||||
Broker commissions, professional fees and other miscellaneous restructuring costs
|
|
4,121
|
|
5,052
|
|
1,559
|
|
|
(2,542
|
)
|
|
8,190
|
|
5,159
|
|
3,031
|
|||||||
|
|
|
|
|
|
|
|||||||||||||||||
$
|
47,233
|
$
|
57,903
|
$
|
(3,470
|
)
|
$
|
(40,228
|
)
|
$
|
61,438
|
$
|
40,798
|
$
|
20,640
|
||||||||
|
|
|
|
|
|
|
Leases
|
Termination Benefits
|
Other
|
Total
|
|||||||||
Year Ending December 31,
|
||||||||||||
2002
|
$
|
35,578
|
$
|
61
|
$
|
5,159
|
$
|
40,798
|
||||
2003
|
|
5,476
|
|
|
|
3,031
|
|
8,507
|
||||
2004
|
|
2,016
|
|
|
|
|
|
2,016
|
||||
2005
|
|
1,983
|
|
|
|
|
|
1,983
|
||||
2006
|
|
2,068
|
|
|
|
|
|
2,068
|
||||
Thereafter
|
|
6,066
|
|
|
|
|
|
6,066
|
||||
|
|
|
|
|||||||||
Total estimated cash outflows
|
$
|
53,187
|
$
|
61
|
$
|
8,190
|
$
|
61,438
|
||||
|
|
|
|
Years Ended December 31,
|
||||||||
2001
|
2000
|
|||||||
(in thousands)
|
||||||||
Foreign-currency gains on 6.875% PEACS
|
$
|
46,613
|
|
$
|
|
|
||
Losses on sales of Euro-denominated investments, net
|
|
(22,548
|
)
|
|
|
|
||
Other-than-temporary impairment losses, equity investments
|
|
(43,588
|
)
|
|
(188,832
|
)
|
||
Contract termination by third parties
|
|
22,400
|
|
|
6,033
|
|
||
Net gains from acquisition of investments by third parties
|
|
784
|
|
|
40,160
|
|
||
Warrant fair-value remeasurements and other
|
|
(5,802
|
)
|
|
|
|
||
|
|
|||||||
$
|
(2,141
|
)
|
$
|
(142,639
|
)
|
|||
|
|
|
|
stock-based compensation,
|
|
|
amortization of goodwill and other intangibles, and
|
|
|
restructuring-related and other charges.
|
|
|
other gains (losses), net;
|
|
|
equity in losses of equity-method investees, net; and
|
|
|
cumulative effect of change in accounting principle.
|
Year Ended December 31, 2001
|
||||||||||||||||||||
Full Year
|
Fourth
Quarter
|
Third
Quarter
|
Second
Quarter
|
First
Quarter
|
||||||||||||||||
Pro forma income (loss) from operations
|
$
|
(45,002
|
)
|
$
|
58,680
|
|
$
|
(27,072
|
)
|
$
|
(28,009
|
)
|
$
|
(48,601
|
)
|
|||||
Pro forma net income (loss)
|
$
|
(157,031
|
)
|
$
|
34,785
|
|
$
|
(58,005
|
)
|
$
|
(57,528
|
)
|
$
|
(76,283
|
)
|
|||||
Pro forma income (loss) from operations as a percentage of net sales
|
|
(1
|
%)
|
|
5
|
%
|
|
(4
|
%)
|
|
(4
|
%)
|
|
(7
|
%)
|
|||||
Pro forma basic income (loss) per share
|
$
|
(0.43
|
)
|
$
|
0.09
|
|
$
|
(0.16
|
)
|
$
|
(0.16
|
)
|
$
|
(0.21
|
)
|
|||||
Pro forma diluted income (loss) per share
|
$
|
(0.43
|
)
|
$
|
0.09
|
|
$
|
(0.16
|
)
|
$
|
(0.16
|
)
|
$
|
(0.21
|
)
|
|||||
Shares used in computation of pro forma basic income (loss) per share
|
|
364,211
|
|
|
371,420
|
|
|
368,052
|
|
|
359,752
|
|
|
357,424
|
|
|||||
Shares used in computation of pro forma diluted income (loss) per share
|
|
364,211
|
|
|
384,045
|
|
|
368,052
|
|
|
359,752
|
|
|
357,424
|
|
|||||
Net cash provided by (used in) operating activities
|
$
|
(119,782
|
)
|
$
|
349,120
|
|
$
|
(64,403
|
)
|
$
|
2,485
|
|
$
|
(406,984
|
)
|
|||||
Year Ended December 31, 2000
|
||||||||||||||||||||
Full Year
|
Fourth
Quarter
|
Third
Quarter
|
Second
Quarter
|
First
Quarter
|
||||||||||||||||
Pro forma loss from operations
|
$
|
(317,000
|
)
|
$
|
(59,946
|
)
|
$
|
(68,439
|
)
|
$
|
(89,349
|
)
|
$
|
(99,266
|
)
|
|||||
Pro forma net loss
|
$
|
(417,158
|
)
|
$
|
(90,426
|
)
|
$
|
(89,493
|
)
|
$
|
(115,704
|
)
|
$
|
(121,535
|
)
|
|||||
Pro forma loss from operations as a percentage of net sales
|
|
(11
|
%)
|
|
(6
|
%)
|
|
(11
|
%)
|
|
(15
|
%)
|
|
(17
|
%)
|
|||||
Pro forma basic and diluted loss per share
|
$
|
(1.19
|
)
|
$
|
(0.25
|
)
|
$
|
(0.25
|
)
|
$
|
(0.33
|
)
|
$
|
(0.35
|
)
|
|||||
Shares used in computation of pro forma basic and diluted loss per share
|
|
350,873
|
|
|
355,681
|
|
|
353,954
|
|
|
349,886
|
|
|
343,884
|
|
|||||
Net cash provided by (used in) operating activities
|
$
|
(130,442
|
)
|
$
|
247,653
|
|
$
|
(3,688
|
)
|
$
|
(54,029
|
)
|
$
|
(320,378
|
)
|
|||||
Year Ended December 31, 1999
|
||||||||||||||||||||
Full Year
|
Fourth Quarter
|
Third Quarter
|
Second Quarter
|
First Quarter
|
||||||||||||||||
Pro forma loss from operations
|
$
|
(352,371
|
)
|
$
|
(175,349
|
)
|
$
|
(79,198
|
)
|
$
|
(67,253
|
)
|
$
|
(30,571
|
)
|
|||||
Pro forma net loss
|
$
|
(389,815
|
)
|
$
|
(184,885
|
)
|
$
|
(85,810
|
)
|
$
|
(82,786
|
)
|
$
|
(36,334
|
)
|
|||||
Pro forma loss from operations as a percentage of net sales
|
|
(21
|
%)
|
|
(26
|
%)
|
|
(22
|
%)
|
|
(21
|
%)
|
|
(10
|
%)
|
|||||
Pro forma basic and diluted loss per share
|
$
|
(1.19
|
)
|
$
|
(0.55
|
)
|
$
|
(0.26
|
)
|
$
|
(0.26
|
)
|
$
|
(0.12
|
)
|
|||||
Shares used in computation of pro forma basic and diluted loss per share
|
|
326,753
|
|
|
338,389
|
|
|
332,488
|
|
|
322,340
|
|
|
313,794
|
|
|||||
Net cash provided by (used in) operating activities
|
$
|
(90,875
|
)
|
$
|
31,506
|
|
$
|
(75,573
|
)
|
$
|
(29,614
|
)
|
$
|
(17,194
|
)
|
Year Ended December 31, 2001
|
Year Ended December 31, 2000
|
Year Ended December 31, 1999
|
|||||||||||||||||||||||||||||||||
As Reported(1)
|
Pro Forma Adjustments
|
Pro Forma
|
As Reported(1)
|
Pro Forma Adjustments
|
Pro Forma
|
As Reported(1)
|
Pro Forma Adjustments
|
Pro Forma
|
|||||||||||||||||||||||||||
(in thousands)
|
(in thousands)
|
(in thousands)
|
|||||||||||||||||||||||||||||||||
Net sales
|
$
|
3,122,433
|
|
$
|
|
|
$
|
3,122,433
|
|
$
|
2,761,983
|
|
$
|
|
|
$
|
2,761,983
|
|
$
|
1,639,839
|
|
|
|
$
|
1,639,839
|
|
|||||||||
Cost of sales
|
|
2,323,875
|
|
|
|
|
|
2,323,875
|
|
|
2,106,206
|
|
|
|
|
|
2,106,206
|
|
|
1,349,194
|
|
|
|
|
1,349,194
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Gross profit
|
|
798,558
|
|
|
|
|
|
798,558
|
|
|
655,777
|
|
|
|
|
|
655,777
|
|
|
290,645
|
|
|
|
|
290,645
|
|
|||||||||
Operating expenses:
|
|||||||||||||||||||||||||||||||||||
Fulfillment
|
|
374,250
|
|
|
|
|
|
374,250
|
|
|
414,509
|
|
|
|
|
|
414,509
|
|
|
237,312
|
|
|
|
|
237,312
|
|
|||||||||
Marketing
|
|
138,283
|
|
|
|
|
|
138,283
|
|
|
179,980
|
|
|
|
|
|
179,980
|
|
|
175,838
|
|
|
|
|
175,838
|
|
|||||||||
Technology and content
|
|
241,165
|
|
|
|
|
|
241,165
|
|
|
269,326
|
|
|
|
|
|
269,326
|
|
|
159,722
|
|
|
|
|
159,722
|
|
|||||||||
General and administrative
|
|
89,862
|
|
|
|
|
|
89,862
|
|
|
108,962
|
|
|
|
|
|
108,962
|
|
|
70,144
|
|
|
|
|
70,144
|
|
|||||||||
Stock-based compensation
|
|
4,637
|
|
|
(4,637
|
)
|
|
|
|
|
24,797
|
|
|
(24,797
|
)
|
|
|
|
|
30,618
|
|
(30,618
|
)
|
|
|
|
|||||||||
Amortization of goodwill and intangibles
|
|
181,033
|
|
|
(181,033
|
)
|
|
|
|
|
321,772
|
|
|
(321,772
|
)
|
|
|
|
|
214,694
|
|
(214,694
|
)
|
|
|
|
|||||||||
Restructuring-related and other
|
|
181,585
|
|
|
(181,585
|
)
|
|
|
|
|
200,311
|
|
|
(200,311
|
)
|
|
|
|
|
8,072
|
|
(8,072
|
)
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Total operating expenses
|
|
1,210,815
|
|
|
(367,255
|
)
|
|
843,560
|
|
|
1,519,657
|
|
|
(546,880
|
)
|
|
972,777
|
|
|
896,400
|
|
(253,384
|
)
|
|
643,016
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Loss from operations
|
|
(412,257
|
)
|
|
367,255
|
|
|
(45,002
|
)
|
|
(863,880
|
)
|
|
546,880
|
|
|
(317,000
|
)
|
|
(605,755
|
)
|
253,384
|
|
|
(352,371
|
)
|
|||||||||
Interest income
|
|
29,103
|
|
|
|
|
|
29,103
|
|
|
40,821
|
|
|
|
|
|
40,821
|
|
|
45,451
|
|
|
|
|
45,451
|
|
|||||||||
Interest expense
|
|
(139,232
|
)
|
|
|
|
|
(139,232
|
)
|
|
(130,921
|
)
|
|
|
|
|
(130,921
|
)
|
|
(84,566
|
)
|
|
|
|
(84,566
|
)
|
|||||||||
Other expense, net
|
|
(1,900
|
)
|
|
|
|
|
(1,900
|
)
|
|
(10,058
|
)
|
|
|
|
|
(10,058
|
)
|
|
1,671
|
|
|
|
|
1,671
|
|
|||||||||
Other gains (losses), net
|
|
(2,141
|
)
|
|
2,141
|
|
|
|
|
|
(142,639
|
)
|
|
142,639
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net interest expense and other
|
|
(114,170
|
)
|
|
2,141
|
|
|
(112,029
|
)
|
|
(242,797
|
)
|
|
142,639
|
|
|
(100,158
|
)
|
|
(37,444
|
)
|
|
|
|
(37,444
|
)
|
|||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Loss before equity in losses of equity-method investees
|
|
(526,427
|
)
|
|
369,396
|
|
|
(157,031
|
)
|
|
(1,106,677
|
)
|
|
689,519
|
|
|
(417,158
|
)
|
|
(643,199
|
)
|
253,384
|
|
|
(389,815
|
)
|
|||||||||
Equity in losses of equity-method investees, net
|
|
(30,327
|
)
|
|
30,327
|
|
|
|
|
|
(304,596
|
)
|
|
304,596
|
|
|
|
|
|
(76,769
|
)
|
76,769
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Loss before cumulative effect of change in accounting principle
|
|
(556,754
|
)
|
|
399,723
|
|
|
(157,031
|
)
|
|
(1,411,273
|
)
|
|
994,115
|
|
|
(417,158
|
)
|
|
(719,968
|
)
|
330,153
|
|
|
(389,815
|
)
|
|||||||||
Cumulative effect of change in accounting principle
|
|
(10,523
|
)
|
|
10,523
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net loss
|
$
|
(567,277
|
)
|
$
|
410,246
|
|
$
|
(157,031
|
)
|
$
|
(1,411,273
|
)
|
|
994,115
|
|
$
|
(417,158
|
)
|
$
|
(719,968
|
)
|
330,153
|
|
|
(389,815
|
)
|
|||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Net cash used in operating activities
|
$
|
(119,782
|
)
|
$
|
(119,782
|
)
|
$
|
(130,442
|
)
|
$
|
(130,442
|
)
|
$
|
(90,875
|
)
|
$
|
(90,875
|
)
|
|||||||||||||||||
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Basic and diluted loss per share:
|
|||||||||||||||||||||||||||||||||||
Prior to cumulative effect of change in accounting principle
|
$
|
(1.53
|
)
|
$
|
(0.43
|
)
|
$
|
(4.02
|
)
|
$
|
(1.19
|
)
|
$
|
(2.20
|
)
|
$
|
(1.19
|
)
|
|||||||||||||||||
Cumulative effect of change in accounting principle
|
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
|
|
|
|
|
||||||||||||||||||||||||||||||
$
|
(1.56
|
)
|
$
|
(0.43
|
)
|
$
|
(4.02
|
)
|
$
|
(1.19
|
)
|
$
|
(2.20
|
)
|
$
|
(1.19
|
)
|
||||||||||||||||||
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Shares used in computation of basic and diluted loss per share
|
|
364,211
|
|
|
364,211
|
|
|
350,873
|
|
|
350,873
|
|
|
326,753
|
|
|
326,753
|
|
|||||||||||||||||
|
|
|
|
|
|
(1)
|
|
In accordance with accounting principles generally accepted in the United States.
|
Stand-by letters of credit
|
$
|
77,635
|
|
Swap agreement
|
|
48,498
|
|
Real estate leases
|
|
40,657
|
|
|
|||
$
|
166,790
|
||
|
Year Ending December 31,
|
|||||||||||||||||||||
2002
|
2003
|
2004
|
2005
|
2006
|
Thereafter
|
Total
|
|||||||||||||||
Restructuring-related commitments:
|
|||||||||||||||||||||
Leases
|
$
|
35,578
|
$
|
5,476
|
$
|
2,016
|
$
|
1,983
|
$
|
2,068
|
$
|
6,066
|
$
|
53,187
|
|||||||
Other
|
|
5,220
|
|
3,031
|
|
|
|
|
|
|
|
|
|
8,251
|
|||||||
|
|
|
|
|
|
|
|||||||||||||||
Restructuring-related commitments
|
|
40,798
|
|
8,507
|
|
2,016
|
|
1,983
|
|
2,068
|
|
6,066
|
|
61,438
|
|||||||
|
|
|
|
|
|
|
|||||||||||||||
Other Commitments:
|
|||||||||||||||||||||
Debt principal and other
|
|
4,775
|
|
4,462
|
|
2,004
|
|
74
|
|
|
|
2,123,593
|
|
2,134,908
|
|||||||
Debt interest
|
|
109,501
|
|
122,704
|
|
135,906
|
|
135,906
|
|
135,906
|
|
388,563
|
|
1,028,486
|
|||||||
Capital leases
|
|
11,339
|
|
6,573
|
|
41
|
|
|
|
|
|
|
|
17,953
|
|||||||
Operating leases
|
|
60,837
|
|
57,501
|
|
48,729
|
|
41,953
|
|
42,400
|
|
206,373
|
|
457,793
|
|||||||
Marketing agreements
|
|
16,411
|
|
217
|
|
|
|
|
|
|
|
|
|
16,628
|
|||||||
|
|
|
|
|
|
|
|||||||||||||||
Other commitments
|
|
202,863
|
|
191,457
|
|
186,680
|
|
177,933
|
|
178,306
|
|
2,718,529
|
|
3,655,768
|
|||||||
|
|
|
|
|
|
|
|||||||||||||||
Total commitments
|
$
|
243,661
|
$
|
199,964
|
$
|
188,696
|
$
|
179,916
|
$
|
180,374
|
$
|
2,724,595
|
$
|
3,717,206
|
|||||||
|
|
|
|
|
|
|
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
|
|
|
Cash received or cash receivable
|
|
114,738
|
|
|
Fair value of equity securities received
|
|
331
|
|
|
Amortization to revenue
|
|
(135,808
|
)
|
|
Contract termination
|
|
(22,400
|
)
|
|
|
||||
Balance, December 31, 2001
|
$
|
87,978
|
|
|
|
2002
|
2003
|
2004
|
2005
|
2006
|
Thereafter
|
Total
|
Estimated Fair Value at December 31, 2001
|
||||||||||||||||||||||
Commercial paper and short-term obligations
|
$
|
419,098
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
|
$
|
419,098
|
|
$
|
418,936
|
||||||||
Weighted average interest rate
|
|
2.33
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.33
|
%
|
||||||||||
Certificates of deposit
|
|
18,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,159
|
|
|
18,159
|
||||||||
Weighted average interest rate
|
|
3.48
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.48
|
%
|
||||||||||
Corporate notes and bonds
|
|
|
|
|
26,520
|
|
|
7,800
|
|
|
|
|
|
|
|
|
|
34,320
|
|
|
37,602
|
||||||||
Weighted average interest rate
|
|
|
|
|
2.98
|
%
|
|
4.00
|
%
|
|
|
|
|
|
|
|
|
3.21
|
%
|
||||||||||
Asset-backed and agency securities
|
|
6,209
|
|
|
73,070
|
|
|
149,765
|
|
|
|
|
|
|
1,767
|
|
|
230,811
|
|
|
232,821
|
||||||||
Weighted average interest rate
|
|
2.55
|
%
|
|
3.42
|
%
|
|
3.63
|
%
|
|
|
|
|
|
7.64
|
%
|
|
3.56
|
%
|
||||||||||
Treasury notes and bonds
|
|
11,900
|
|
|
72,100
|
|
|
36,700
|
|
|
|
|
|
|
|
|
|
120,700
|
|
|
125,947
|
||||||||
Weighted average interest rate
|
|
2.05
|
%
|
|
2.44
|
%
|
|
3.42
|
%
|
|
|
|
|
|
|
|
|
2.70
|
%
|
||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Cash equivalents and marketable fixed- income securities
|
$
|
455,366
|
|
$
|
171,690
|
|
$
|
194,265
|
|
$
|
|
$
|
|
$
|
1,767
|
|
$
|
823,088
|
|
$
|
833,465
|
||||||||
|
|
|
|
|
|
|
|
2001
|
2002
|
2003
|
2004
|
2005
|
Thereafter
|
Total
|
Estimated Fair Value at December 31, 2000
|
|||||||||||||||||||||||
Commercial paper and short-term obligations
|
$
|
677,895
|
|
$
|
|
|
$
|
|
|
$
|
|
$
|
|
|
$
|
|
|
$
|
677,895
|
|
$
|
677,895
|
||||||||
Weighted average interest rate
|
|
5.40
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.40
|
%
|
||||||||||
Corporate notes and bonds
|
|
950
|
|
|
7,937
|
|
|
8,560
|
|
|
|
|
|
|
|
|
|
|
17,447
|
|
|
17,447
|
||||||||
Weighted average interest rate
|
|
4.45
|
%
|
|
4.95
|
%
|
|
4.95
|
%
|
|
|
|
|
|
|
|
|
|
4.92
|
%
|
||||||||||
Asset-backed and agency securities
|
|
21,507
|
|
|
11,718
|
|
|
11,114
|
|
|
|
|
19,635
|
|
|
20,747
|
|
|
84,721
|
|
|
85,189
|
||||||||
Weighted average interest rate
|
|
5.68
|
%
|
|
5.96
|
%
|
|
4.71
|
%
|
|
|
|
6.87
|
%
|
|
7.39
|
%
|
|
6.30
|
%
|
||||||||||
Treasury notes and bonds
|
|
42,535
|
|
|
74,021
|
|
|
25,595
|
|
|
|
|
|
|
|
|
|
|
142,151
|
|
|
142,085
|
||||||||
Weighted average interest rate
|
|
5.05
|
%
|
|
5.22
|
%
|
|
4.52
|
%
|
|
|
|
|
|
|
|
|
|
5.04
|
%
|
||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Cash equivalents and marketable fixed- income securities
|
$
|
742,887
|
|
$
|
93,676
|
|
$
|
45,269
|
|
$
|
|
$
|
19,635
|
|
$
|
20,747
|
|
$
|
922,214
|
|
$
|
922,616
|
||||||||
|
|
|
|
|
|
|
|
Page
|
||
Report of Ernst & Young LLP, Independent Auditors
|
42
|
|
Consolidated Balance Sheets
|
43
|
|
Consolidated Statements of Operations
|
44
|
|
Consolidated Statements of Cash Flows
|
45
|
|
Consolidated Statements of Stockholders Equity (Deficit)
|
46
|
|
Notes to Consolidated Financial Statements
|
47
|
/
S
/
|
E
RNST
& Y
OUNG
LLP
|
December 31,
|
||||||||
2001
|
2000
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
540,282
|
|
$
|
822,435
|
|
||
Marketable securities
|
|
456,303
|
|
|
278,087
|
|
||
Inventories
|
|
143,722
|
|
|
174,563
|
|
||
Prepaid expenses and other current assets
|
|
67,613
|
|
|
86,044
|
|
||
|
|
|||||||
Total current assets
|
|
1,207,920
|
|
|
1,361,129
|
|
||
Fixed assets, net
|
|
271,751
|
|
|
366,416
|
|
||
Goodwill, net
|
|
45,367
|
|
|
158,990
|
|
||
Other intangibles, net
|
|
34,382
|
|
|
96,335
|
|
||
Investments in equity-method investees
|
|
10,387
|
|
|
52,073
|
|
||
Other equity investments
|
|
17,972
|
|
|
40,177
|
|
||
Other assets
|
|
49,768
|
|
|
60,049
|
|
||
|
|
|||||||
Total assets
|
$
|
1,637,547
|
|
$
|
2,135,169
|
|
||
|
|
|||||||
LIABILITIES AND STOCKHOLDERS DEFICIT
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
444,748
|
|
$
|
485,383
|
|
||
Accrued expenses and other current liabilities
|
|
305,064
|
|
|
272,683
|
|
||
Unearned revenue
|
|
87,978
|
|
|
131,117
|
|
||
Interest payable
|
|
68,632
|
|
|
69,196
|
|
||
Current portion of long-term debt and other
|
|
14,992
|
|
|
16,577
|
|
||
|
|
|||||||
Total current liabilities
|
|
921,414
|
|
|
974,956
|
|
||
Long-term debt and other
|
|
2,156,133
|
|
|
2,127,464
|
|
||
Commitments and contingencies
|
||||||||
Stockholders deficit:
|
||||||||
Preferred stock, $0.01 par value:
|
||||||||
Authorized shares500,000
|
||||||||
Issued and outstanding sharesnone
|
|
|
|
|
|
|
||
Common stock, $0.01 par value:
|
||||||||
Authorized shares5,000,000
|
||||||||
Issued and outstanding shares373,218 and 357,140 shares, respectively
|
|
3,732
|
|
|
3,571
|
|
||
Additional paid-in capital
|
|
1,462,769
|
|
|
1,338,303
|
|
||
Deferred stock-based compensation
|
|
(9,853
|
)
|
|
(13,448
|
)
|
||
Accumulated other comprehensive loss
|
|
(36,070
|
)
|
|
(2,376
|
)
|
||
Accumulated deficit
|
|
(2,860,578
|
)
|
|
(2,293,301
|
)
|
||
|
|
|||||||
Total stockholders deficit
|
|
(1,440,000
|
)
|
|
(967,251
|
)
|
||
|
|
|||||||
Total liabilities and stockholders deficit
|
$
|
1,637,547
|
|
$
|
2,135,169
|
|
||
|
|
Years Ended December 31,
|
||||||||||||
2001
|
2000
|
1999
|
||||||||||
Net sales
|
$
|
3,122,433
|
|
$
|
2,761,983
|
|
$
|
1,639,839
|
|
|||
Cost of sales
|
|
2,323,875
|
|
|
2,106,206
|
|
|
1,349,194
|
|
|||
|
|
|
||||||||||
Gross profit
|
|
798,558
|
|
|
655,777
|
|
|
290,645
|
|
|||
Operating expenses:
|
||||||||||||
Fulfillment
|
|
374,250
|
|
|
414,509
|
|
|
237,312
|
|
|||
Marketing
|
|
138,283
|
|
|
179,980
|
|
|
175,838
|
|
|||
Technology and content
|
|
241,165
|
|
|
269,326
|
|
|
159,722
|
|
|||
General and administrative
|
|
89,862
|
|
|
108,962
|
|
|
70,144
|
|
|||
Stock-based compensation
|
|
4,637
|
|
|
24,797
|
|
|
30,618
|
|
|||
Amortization of goodwill and other intangibles
|
|
181,033
|
|
|
321,772
|
|
|
214,694
|
|
|||
Restructuring-related and other
|
|
181,585
|
|
|
200,311
|
|
|
8,072
|
|
|||
|
|
|
||||||||||
Total operating expenses
|
|
1,210,815
|
|
|
1,519,657
|
|
|
896,400
|
|
|||
|
|
|
||||||||||
Loss from operations
|
|
(412,257
|
)
|
|
(863,880
|
)
|
|
(605,755
|
)
|
|||
Interest income
|
|
29,103
|
|
|
40,821
|
|
|
45,451
|
|
|||
Interest expense
|
|
(139,232
|
)
|
|
(130,921
|
)
|
|
(84,566
|
)
|
|||
Other income (expense), net
|
|
(1,900
|
)
|
|
(10,058
|
)
|
|
1,671
|
|
|||
Other gains (losses), net
|
|
(2,141
|
)
|
|
(142,639
|
)
|
|
|
|
|||
|
|
|
||||||||||
Net interest expense and other
|
|
(114,170
|
)
|
|
(242,797
|
)
|
|
(37,444
|
)
|
|||
|
|
|
||||||||||
Loss before equity in losses of equity-method investees
|
|
(526,427
|
)
|
|
(1,106,677
|
)
|
|
(643,199
|
)
|
|||
Equity in losses of equity-method investees, net
|
|
(30,327
|
)
|
|
(304,596
|
)
|
|
(76,769
|
)
|
|||
|
|
|
||||||||||
Loss before change in accounting principle
|
$
|
(556,754
|
)
|
$
|
(1,411,273
|
)
|
$
|
(719,968
|
)
|
|||
Cumulative effect of change in accounting principle
|
|
(10,523
|
)
|
|
|
|
|
|
|
|||
|
|
|
||||||||||
Net loss
|
$
|
(567,277
|
)
|
$
|
(1,411,273
|
)
|
$
|
(719,968
|
)
|
|||
|
|
|
||||||||||
Basic and diluted loss per share:
|
||||||||||||
Prior to cumulative effect of change in accounting principle
|
$
|
(1.53
|
)
|
$
|
(4.02
|
)
|
$
|
(2.20
|
)
|
|||
Cumulative effect of change in accounting principle
|
|
(0.03
|
)
|
|
|
|
|
|
|
|||
|
|
|
||||||||||
$
|
(1.56
|
)
|
$
|
(4.02
|
)
|
$
|
(2.20
|
)
|
||||
|
|
|
||||||||||
Shares used in computation of basic and diluted loss per share
|
|
364,211
|
|
|
350,873
|
|
|
326,753
|
|
|||
|
|
|
Years Ended December 31,
|
||||||||||||
2001
|
2000
|
1999
|
||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
$
|
822,435
|
|
$
|
133,309
|
|
$
|
71,583
|
|
|||
OPERATING ACTIVITIES:
|
||||||||||||
Net loss
|
|
(567,277
|
)
|
|
(1,411,273
|
)
|
|
(719,968
|
)
|
|||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||||||
Depreciation of fixed assets and other amortization
|
|
84,709
|
|
|
84,460
|
|
|
36,806
|
|
|||
Stock-based compensation
|
|
4,637
|
|
|
24,797
|
|
|
30,618
|
|
|||
Equity in losses of equity-method investees, net
|
|
30,327
|
|
|
304,596
|
|
|
76,769
|
|
|||
Amortization of goodwill and other intangibles
|
|
181,033
|
|
|
321,772
|
|
|
214,694
|
|
|||
Non-cash restructuring-related and other
|
|
73,293
|
|
|
200,311
|
|
|
8,072
|
|
|||
Loss (gain) on sale of marketable securities, net
|
|
(1,335
|
)
|
|
(280
|
)
|
|
8,688
|
|
|||
Other losses (gains), net
|
|
2,141
|
|
|
142,639
|
|
|
|
|
|||
Non-cash interest expense and other
|
|
26,629
|
|
|
24,766
|
|
|
29,171
|
|
|||
Cumulative effect of change in accounting principle
|
|
10,523
|
|
|
|
|
|
|
|
|||
Changes in operating assets and liabilities:
|
||||||||||||
Inventories
|
|
30,628
|
|
|
46,083
|
|
|
(172,069
|
)
|
|||
Prepaid expenses and other current assets
|
|
20,732
|
|
|
(8,585
|
)
|
|
(54,927
|
)
|
|||
Accounts payable
|
|
(44,438
|
)
|
|
22,357
|
|
|
330,166
|
|
|||
Accrued expenses and other current liabilities
|
|
50,031
|
|
|
93,967
|
|
|
95,839
|
|
|||
Unearned revenue
|
|
114,738
|
|
|
97,818
|
|
|
6,225
|
|
|||
Amortization of previously unearned revenue
|
|
(135,808
|
)
|
|
(108,211
|
)
|
|
(5,837
|
)
|
|||
Interest payable
|
|
(345
|
)
|
|
34,341
|
|
|
24,878
|
|
|||
|
|
|
||||||||||
Net cash used in operating activities
|
|
(119,782
|
)
|
|
(130,442
|
)
|
|
(90,875
|
)
|
|||
INVESTING ACTIVITIES:
|
||||||||||||
Sales and maturities of marketable securities
|
|
370,377
|
|
|
545,724
|
|
|
2,064,101
|
|
|||
Purchases of marketable securities
|
|
(567,152
|
)
|
|
(184,455
|
)
|
|
(2,359,398
|
)
|
|||
Purchases of fixed assets, including internal use software and web-site development
|
|
(50,321
|
)
|
|
(134,758
|
)
|
|
(287,055
|
)
|
|||
Investments in equity-method investees and other investments
|
|
(6,198
|
)
|
|
(62,533
|
)
|
|
(369,607
|
)
|
|||
|
|
|
||||||||||
Net cash provided by (used in) investing activities
|
|
(253,294
|
)
|
|
163,978
|
|
|
(951,959
|
)
|
|||
FINANCING ACTIVITIES:
|
||||||||||||
Proceeds from exercise of stock options and other
|
|
16,625
|
|
|
44,697
|
|
|
64,469
|
|
|||
Proceeds from issuance of common stock, net of issuance costs
|
|
99,831
|
|
|
|
|
|
|
|
|||
Proceeds from long-term debt and other
|
|
10,000
|
|
|
681,499
|
|
|
1,263,639
|
|
|||
Repayment of long-term debt and other
|
|
(19,575
|
)
|
|
(16,927
|
)
|
|
(188,886
|
)
|
|||
Financing costs
|
|
|
|
|
(16,122
|
)
|
|
(35,151
|
)
|
|||
|
|
|
||||||||||
Net cash provided by financing activities
|
|
106,881
|
|
|
693,147
|
|
|
1,104,071
|
|
|||
Effect of exchange-rate changes on cash and cash equivalents
|
|
(15,958
|
)
|
|
(37,557
|
)
|
|
489
|
|
|||
|
|
|
||||||||||
Net increase (decrease) in cash and cash equivalents
|
|
(282,153
|
)
|
|
689,126
|
|
|
61,726
|
|
|||
|
|
|
||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$
|
540,282
|
|
$
|
822,435
|
|
$
|
133,309
|
|
|||
|
|
|
||||||||||
SUPPLEMENTAL CASH FLOW INFORMATION:
|
||||||||||||
Fixed assets acquired under capital leases
|
$
|
4,597
|
|
$
|
4,459
|
|
$
|
25,850
|
|
|||
Fixed assets acquired under financing agreements
|
|
1,000
|
|
|
4,844
|
|
|
5,608
|
|
|||
Equity securities received for commercial agreements
|
|
331
|
|
|
106,848
|
|
|
54,402
|
|
|||
Stock issued in connection with business acquisitions and minority investments
|
|
5,000
|
|
|
32,130
|
|
|
774,409
|
|
|||
Cash paid for interest
|
|
112,184
|
|
|
67,252
|
|
|
30,526
|
|
Common Stock Shares
|
Amount
|
Accumulated Other Comprehensive Income (Loss)
|
Accumulated Deficit
|
Total Stockholders Equity (Deficit)
|
|||||||||||||||||||||
Additional Paid-In Capital
|
Deferred Stock-Based Compensation
|
||||||||||||||||||||||||
Balance at December 31, 1998
|
318,534
|
$
|
3,186
|
$
|
297,438
|
|
$
|
(1,625
|
)
|
$
|
1,806
|
|
$
|
(162,060
|
)
|
$
|
138,745
|
|
|||||||
|
|||||||||||||||||||||||||
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(719,968
|
)
|
|
(719,968
|
)
|
|||||||
Foreign currency translation gains
|
|
|
|
|
|
|
|
|
|
|
490
|
|
|
|
|
|
490
|
|
|||||||
Change in unrealized gain (loss) on available-for-sale securities, net
|
|
|
|
|
|
|
|
|
|
|
(4,005
|
)
|
|
|
|
|
(4,005
|
)
|
|||||||
|
|||||||||||||||||||||||||
Comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(723,483
|
)
|
|||||||
Issuance of capital stock, net of issuance costs
|
10,496
|
|
105
|
|
743,169
|
|
|
|
|
|
|
|
|
|
|
|
743,274
|
|
|||||||
Exercise of common stock options, net
|
16,125
|
|
161
|
|
67,969
|
|
|
|
|
|
|
|
|
|
|
|
68,130
|
|
|||||||
Public offering of equity-method investee
|
|
|
|
|
13,787
|
|
|
|
|
|
|
|
|
|
|
|
13,787
|
|
|||||||
Note receivable for common stock
|
|
|
|
|
(72
|
)
|
|
|
|
|
|
|
|
|
|
|
(72
|
)
|
|||||||
Deferred stock-based compensation, net of adjustments
|
|
|
|
|
72,078
|
|
|
(72,078
|
)
|
|
|
|
|
|
|
|
|
|
|||||||
Amortization of deferred stock-based compensation
|
|
|
|
|
|
|
|
25,897
|
|
|
|
|
|
|
|
|
25,897
|
|
|||||||
|
|
|
|
|
|
|
|||||||||||||||||||
Balance at December 31, 1999
|
345,155
|
|
3,452
|
|
1,194,369
|
|
|
(47,806
|
)
|
|
(1,709
|
)
|
|
(882,028
|
)
|
|
266,278
|
|
|||||||
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,411,273
|
)
|
|
(1,411,273
|
)
|
|||||||
Foreign currency translation losses
|
|
|
|
|
|
|
|
|
|
|
(364
|
)
|
|
|
|
|
(364
|
)
|
|||||||
Change in unrealized gain (loss) on available-for-sale securities, net
|
|
|
|
|
|
|
|
|
|
|
(303
|
)
|
|
|
|
|
(303
|
)
|
|||||||
|
|||||||||||||||||||||||||
Comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,411,940
|
)
|
|||||||
Issuance of capital stock, net of issuance costs
|
866
|
|
8
|
|
30,977
|
|
|
|
|
|
|
|
|
|
|
|
30,985
|
|
|||||||
Exercise of common stock options, net
|
11,119
|
|
111
|
|
41,995
|
|
|
|
|
|
|
|
|
|
|
|
42,106
|
|
|||||||
Public offering of equity-method investee
|
|
|
|
|
76,898
|
|
|
|
|
|
|
|
|
|
|
|
76,898
|
|
|||||||
Note receivable for common stock
|
|
|
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
27
|
|
|||||||
Deferred stock-based compensation, net of adjustments
|
|
|
|
|
(5,963
|
)
|
|
2,528
|
|
|
|
|
|
|
|
|
(3,435
|
)
|
|||||||
Amortization of deferred stock-based compensation
|
|
|
|
|
|
|
|
31,830
|
|
|
|
|
|
|
|
|
31,830
|
|
|||||||
|
|
|
|
|
|
|
|||||||||||||||||||
Balance at December 31, 2000
|
357,140
|
|
3,571
|
|
1,338,303
|
|
|
(13,448
|
)
|
|
(2,376
|
)
|
|
(2,293,301
|
)
|
|
(967,251
|
)
|
|||||||
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(567,277
|
)
|
|
(567,277
|
)
|
|||||||
Foreign currency translation losses
|
|
|
|
|
|
|
|
|
|
|
(1,257
|
)
|
|
|
|
|
(1,257
|
)
|
|||||||
Change in unrealized gain (loss) on available-for-sale securities, net
|
|
|
|
|
|
|
|
|
|
|
7,005
|
|
|
|
|
|
7,005
|
|
|||||||
Net Unrealized losses on Euro-based currency swap
|
|
|
|
|
|
|
|
|
|
|
(17,337
|
)
|
|
|
|
|
(17,337
|
)
|
|||||||
Reclassification of currency gains on 6.875% PEACS
|
|
|
|
|
|
|
|
|
|
|
(9,811
|
)
|
|
|
|
|
(9,811
|
)
|
|||||||
Cumulative effect of change in accounting principle
|
|
|
|
|
|
|
|
|
|
|
(12,294
|
)
|
|
|
|
|
(12,294
|
)
|
|||||||
|
|||||||||||||||||||||||||
Comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(600,971
|
)
|
|||||||
Issuance of capital stock, net of issuance costs
|
8,989
|
|
90
|
|
98,716
|
|
|
|
|
|
|
|
|
|
|
|
98,806
|
|
|||||||
Exercise of common stock options, net
|
6,089
|
|
61
|
|
14,989
|
|
|
|
|
|
|
|
|
|
|
|
15,050
|
|
|||||||
Repayments of note receivable for common stock
|
|
|
|
|
1,130
|
|
|
|
|
|
|
|
|
|
|
|
1,130
|
|
|||||||
Deferred stock-based compensation, net of adjustments
|
1,000
|
|
10
|
|
9,631
|
|
|
(4,797
|
)
|
|
|
|
|
|
|
|
4,844
|
|
|||||||
Amortization of deferred stock-based compensation
|
|
|
|
|
|
|
|
8,392
|
|
|
|
|
|
|
|
|
8,392
|
|
|||||||
|
|
|
|
|
|
|
|||||||||||||||||||
Balance at December 31, 2001
|
373,218
|
$
|
3,732
|
$
|
1,462,769
|
|
$
|
(9,853
|
)
|
$
|
(36,070
|
)
|
$
|
(2,860,578
|
)
|
$
|
(1,440,000
|
)
|
|||||||
|
|
|
|
|
|
|
December 31, 2001
|
|||||||||||||
Amortized Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Estimated Fair Value
|
||||||||||
(in thousands)
|
|||||||||||||
Cash
|
$
|
149,968
|
$
|
|
$
|
|
|
$
|
149,968
|
||||
Commercial paper and short-term obligations
|
|
394,613
|
|
|
|
(4,299
|
)
|
|
390,314
|
||||
|
|
|
|
||||||||||
$
|
544,581
|
$
|
|
$
|
(4,299
|
)
|
$
|
540,282
|
|||||
|
|
|
|
December 31, 2000
|
|||||||||||||
Amortized Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Estimated Fair Value
|
||||||||||
(in thousands)
|
|||||||||||||
Cash
|
$
|
141,922
|
$
|
|
$
|
|
|
$
|
141,922
|
||||
Commercial paper and short-term obligations
|
|
696,545
|
|
87
|
|
(18,737
|
)
|
|
677,895
|
||||
Asset-backed and agency securities
|
|
2,618
|
|
|
|
|
|
|
2,618
|
||||
|
|
|
|
||||||||||
$
|
841,085
|
$
|
87
|
$
|
(18,737
|
)
|
$
|
822,435
|
|||||
|
|
|
|
December 31, 2001
|
|||||||||||||
Amortized Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Estimated Fair Value
|
||||||||||
(in thousands)
|
|||||||||||||
Certificates of deposit
|
$
|
18,692
|
$
|
|
$
|
(533
|
)
|
$
|
18,159
|
||||
Commercial paper and short-term obligations
|
|
28,614
|
|
8
|
|
|
|
|
28,622
|
||||
Corporate notes and bonds
|
|
37,370
|
|
240
|
|
(8
|
)
|
|
37,602
|
||||
Asset-backed and agency securities
|
|
231,912
|
|
909
|
|
|
|
|
232,821
|
||||
Treasury notes and bonds
|
|
125,687
|
|
260
|
|
|
|
|
125,947
|
||||
Equity securities
|
|
12,395
|
|
832
|
|
(75
|
)
|
|
13,152
|
||||
|
|
|
|
||||||||||
$
|
454,670
|
$
|
2,249
|
$
|
(616
|
)
|
$
|
456,303
|
|||||
|
|
|
|
December 31, 2000
|
|||||||||||||
Amortized Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Estimated Fair Value
|
||||||||||
(in thousands)
|
|||||||||||||
Corporate notes and bonds
|
$
|
16,063
|
$
|
1,384
|
$
|
|
|
$
|
17,447
|
||||
Asset-backed and agency securities
|
|
80,748
|
|
1,982
|
|
(159
|
)
|
|
82,571
|
||||
Treasury notes and bonds
|
|
134,646
|
|
7,647
|
|
(208
|
)
|
|
142,085
|
||||
Equity securities
|
|
37,434
|
|
|
|
(1,450
|
)
|
|
35,984
|
||||
|
|
|
|
||||||||||
$
|
268,891
|
$
|
11,013
|
$
|
(1,817
|
)
|
$
|
278,087
|
|||||
|
|
|
|
Amortized Cost
|
Estimated Fair Value
|
|||||
(in thousands)
|
||||||
Due within one year
|
$
|
454,190
|
$
|
449,391
|
||
Due after one year through three years
|
|
150,786
|
|
151,253
|
||
Asset-backed and agency securities with various maturities
|
|
231,912
|
|
232,821
|
||
|
|
|||||
$
|
836,888
|
$
|
833,465
|
|||
|
|
December 31,
|
||||||||
2001
|
2000
|
|||||||
(in thousands)
|
||||||||
Computers, equipment and software
|
$
|
205,687
|
|
$
|
262,103
|
|
||
Internal software, website and content development
|
|
62,754
|
|
|
34,358
|
|
||
Leasehold improvements
|
|
102,412
|
|
|
107,367
|
|
||
Leased assets
|
|
42,444
|
|
|
51,969
|
|
||
Construction in progress
|
|
24,846
|
|
|
25,467
|
|
||
|
|
|||||||
|
438,143
|
|
|
481,264
|
|
|||
Less accumulated depreciation
|
|
(152,443
|
)
|
|
(99,244
|
)
|
||
Less accumulated amortization on leased assets
|
|
(13,949
|
)
|
|
(15,604
|
)
|
||
|
|
|||||||
Fixed assets, net
|
$
|
271,751
|
|
$
|
366,416
|
|
||
|
|
December 31,
|
||||||||
2001
|
2000
|
|||||||
(in thousands)
|
||||||||
Goodwill, net of adjustments
|
$
|
617,827
|
|
$
|
776,208
|
|
||
Accumulated amortization
|
|
(572,460
|
)
|
|
(454,433
|
)
|
||
Impairment adjustments
|
|
|
|
|
(162,785
|
)
|
||
|
|
|||||||
Goodwill, net
|
$
|
45,367
|
|
$
|
158,990
|
|
||
|
|
|||||||
Other intangibles, net of adjustments
|
$
|
221,879
|
|
$
|
241,357
|
|
||
Accumulated amortization
|
|
(187,497
|
)
|
|
(123,848
|
)
|
||
Impairment adjustments
|
|
|
|
|
(21,174
|
)
|
||
|
|
|||||||
Other intangibles, net
|
$
|
34,382
|
|
$
|
96,335
|
|
||
|
|
Company
|
Percentage Ownership
|
||
Altura International
|
20
|
%
|
|
Basis Technology
|
9
|
|
|
Daksh.com
|
11
|
|
|
drugstore.com
|
20
|
|
|
Eziba.com
|
20
|
|
December 31,
|
||||||
2001
|
2000
|
|||||
(unaudited)
|
||||||
(in thousands)
|
||||||
Current assets
|
$
|
153,185
|
$
|
279,487
|
||
Noncurrent assets
|
|
242,728
|
|
511,671
|
||
Current liabilities
|
|
51,652
|
|
71,954
|
||
Noncurrent liabilities
|
|
2,074
|
|
113,258
|
For the Years Ended December 31,
|
||||||||||||
2001
|
2000
|
1999
|
||||||||||
(unaudited)
|
||||||||||||
(in thousands)
|
||||||||||||
Net sales
|
$
|
155,797
|
|
$
|
133,821
|
|
$
|
27,996
|
|
|||
Gross profit (loss)
|
|
30,226
|
|
|
42,402
|
|
|
(3,072
|
)
|
|||
Net loss
|
|
(160,335
|
)
|
|
(453,263
|
)
|
|
(152,541
|
)
|
Equity- Method Investments
|
Other Equity Investments
|
Total
|
||||||||||
(in thousands)
|
||||||||||||
Balance, December 31, 1999
|
$
|
226,727
|
|
$
|
144,735
|
|
$
|
371,462
|
|
|||
Investments cash consideration
|
|
48,091
|
|
|
13,485
|
|
|
61,576
|
|
|||
Fair value of equity securities received in services-related
transactions |
|
80,190
|
|
|
26,658
|
|
|
106,848
|
|
|||
Equity-method losses, net
|
|
(304,596
|
)
|
|
|
|
|
(304,596
|
)
|
|||
Sales of investments
|
|
(41
|
)
|
|
(9,163
|
)
|
|
(9,204
|
)
|
|||
Realized gains (losses) on sales of investments
|
|
(2,763
|
)
|
|
8,156
|
|
|
5,393
|
|
|||
Basis adjustments for public offerings of investees
|
|
76,898
|
|
|
|
|
|
76,898
|
|
|||
Non-cash gain, acquisition of Homegrocer.com, Inc. by Webvan Group, Inc.
|
|
40,160
|
|
|
|
|
|
40,160
|
|
|||
Loss resulting from Living.com bankruptcy
|
|
(14,092
|
)
|
|
|
|
|
(14,092
|
)
|
|||
Losses resulting from other-than-temporary declines in fair value
|
|
|
|
|
(100,726
|
)
|
|
(100,726
|
)
|
|||
Unrealized gains on available-for-sale investments, net
|
|
|
|
|
693
|
|
|
693
|
|
|||
Investment reclassifications, net, at fair value
|
|
(98,501
|
)
|
|
(43,661
|
)
|
|
(142,162
|
)
|
|||
|
|
|
||||||||||
Balance, December 31, 2000
|
|
52,073
|
|
|
40,177
|
|
|
92,250
|
|
|||
Investments common stock consideration
|
|
5,000
|
|
|
|
|
|
5,000
|
|
|||
Fair value of equity securities received in services-related
transactions |
|
331
|
|
|
|
|
|
331
|
|
|||
Equity-method losses, net
|
|
(30,327
|
)
|
|
|
|
|
(30,327
|
)
|
|||
Sales of investments
|
|
(800
|
)
|
|
(28
|
)
|
|
(828
|
)
|
|||
Realized gains (losses) on sales of investments
|
|
800
|
|
|
|
|
|
800
|
|
|||
Non-cash gains (losses) for acquisitions of investees by a third
party |
|
1,242
|
|
|
(458
|
)
|
|
784
|
|
|||
Losses resulting from other-than-temporary declines in fair value
|
|
(16,696
|
)
|
|
(10,189
|
)
|
|
(26,885
|
)
|
|||
Unrealized gains on available-for-sale investments, net
|
|
|
|
|
227
|
|
|
227
|
|
|||
Losses for change in fair value of warrant investments, net
|
|
|
|
|
(5,293
|
)
|
|
(5,293
|
)
|
|||
Loss from change in accounting principle
|
|
|
|
|
(7,700
|
)
|
|
(7,700
|
)
|
|||
Investment reclassifications, net, at fair value
|
|
(1,236
|
)
|
|
1,236
|
|
|
|
|
|||
|
|
|
||||||||||
Balance, December 31, 2001
|
$
|
10,387
|
|
$
|
17,972
|
|
$
|
28,359
|
|
|||
|
|
|
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
|
|
|
Cash received or cash receivable
|
|
114,738
|
|
|
Fair value of equity securities received
|
|
331
|
|
|
Amortization to revenue
|
|
(135,808
|
)
|
|
Contract termination
|
|
(22,400
|
)
|
|
|
||||
Balance, December 31, 2001
|
$
|
87,978
|
|
|
|
December 31,
|
||||||||
2001
|
2000
|
|||||||
(in thousands)
|
||||||||
6.875% PEACS
|
$
|
608,787
|
|
$
|
650,463
|
|
||
Euro Currency Swap
|
|
33,265
|
|
|
|
|
||
4.75% Convertible Subordinated Notes
|
|
1,249,807
|
|
|
1,249,807
|
|
||
Senior Discount Notes
|
|
231,830
|
|
|
210,278
|
|
||
Capital Lease Obligations
|
|
16,415
|
|
|
24,837
|
|
||
Long-term Restructuring
|
|
20,640
|
|
|
|
|
||
Other Long-term Debt
|
|
10,381
|
|
|
8,656
|
|
||
|
|
|||||||
|
2,171,125
|
|
|
2,144,041
|
|
|||
Less current portion of long-term debt
|
|
(5,070
|
)
|
|
(4,831
|
)
|
||
Less current portion of capital lease obligations
|
|
(9,922
|
)
|
|
(11,746
|
)
|
||
|
|
|||||||
$
|
2,156,133
|
|
$
|
2,127,464
|
|
|||
|
|
Restructuring-Related Commitments
|
Other Commitments
|
Total
|
|||||||||||||||||||||||
Leases
|
Termination Benefits
|
Other
|
Sub-Total
|
Capital Leases
|
Operating Leases
|
Marketing Agreements
|
|||||||||||||||||||
(in thousands)
|
|||||||||||||||||||||||||
Year Ending December 31,
|
|||||||||||||||||||||||||
2002
|
$
|
35,578
|
$
|
61
|
$
|
5,159
|
$
|
40,798
|
$
|
11,339
|
|
$
|
60,837
|
$
|
16,411
|
$
|
129,385
|
||||||||
2003
|
|
5,476
|
|
|
|
3,031
|
|
8,507
|
|
6,573
|
|
|
57,501
|
|
217
|
|
72,798
|
||||||||
2004
|
|
2,016
|
|
|
|
|
|
2,016
|
|
41
|
|
|
48,729
|
|
|
|
50,786
|
||||||||
2005
|
|
1,983
|
|
|
|
|
|
1,983
|
|
|
|
|
41,953
|
|
|
|
43,936
|
||||||||
2006
|
|
2,068
|
|
|
|
|
|
2,068
|
|
|
|
|
42,400
|
|
|
|
44,468
|
||||||||
Thereafter
|
|
6,066
|
|
|
|
|
|
6,066
|
|
|
|
|
206,373
|
|
|
|
212,439
|
||||||||
|
|
|
|
|
|
|
|
||||||||||||||||||
Total estimated cash outflows
|
$
|
53,187
|
$
|
61
|
$
|
8,190
|
$
|
61,438
|
$
|
17,953
|
|
$
|
457,793
|
$
|
16,628
|
$
|
553,812
|
||||||||
|
|
|
|
|
|
|
|||||||||||||||||||
Less imputed interest
|
|
(1,538
|
)
|
||||||||||||||||||||||
|
|||||||||||||||||||||||||
Present value of net minimum lease
payments |
|
16,415
|
|
||||||||||||||||||||||
Less current portion
|
|
(9,922
|
)
|
||||||||||||||||||||||
|
|||||||||||||||||||||||||
Long-term capital lease
obligation |
$
|
6,493
|
|
||||||||||||||||||||||
|
Number of Shares
|
Weighted Average Exercise Price
|
|||||
(in thousands)
|
||||||
Balance January 1, 1999
|
76,009
|
|
$
|
6.69
|
||
Options granted and assumed
|
31,379
|
|
|
63.60
|
||
Options canceled
|
(11,281
|
)
|
|
19.70
|
||
Options exercised
|
(16,125
|
)
|
|
4.00
|
||
|
||||||
Balance December 31, 1999
|
80,342
|
|
|
27.76
|
||
Options granted and assumed
|
20,717
|
|
|
38.13
|
||
Options canceled
|
(19,502
|
)
|
|
37.19
|
||
Options exercised
|
(11,119
|
)
|
|
4.02
|
||
|
||||||
Balance December 31, 2000
|
70,438
|
|
|
32.17
|
||
Net effect of option exchange:
|
||||||
Options granted
|
12,503
|
|
|
13.38
|
||
Options exchanged and canceled
|
(31,170
|
)
|
|
51.94
|
||
|
||||||
Net effect of option exchange
|
(18,667
|
)
|
||||
|
||||||
Options granted
|
33,706
|
|
|
8.10
|
||
Options canceled
|
(13,438
|
)
|
|
25.29
|
||
Options exercised
|
(6,089
|
)
|
|
2.73
|
||
|
||||||
Balance December 31, 2001
|
65,950
|
|
|
10.65
|
||
|
Range of
Exercise Prices |
Options Outstanding
|
Options Exercisable
|
||||||||||
Number of Options
|
Remaining Life (yrs)
|
Weighted Average Exercise Price
|
Number of Options
|
Weighted Average Exercise Price
|
||||||||
(in thousands)
|
(in thousands)
|
|||||||||||
$ 0.03 $ 1.00
|
5,000
|
5.0
|
$
|
0.42
|
4,222
|
$
|
0.39
|
|||||
1.17 5.37
|
5,095
|
5.9
|
|
4.01
|
1,943
|
|
3.85
|
|||||
5.81 7.86
|
4,838
|
6.8
|
|
7.13
|
2,360
|
|
7.11
|
|||||
7.93 7.93
|
26,071
|
9.7
|
|
7.93
|
|
|
7.93
|
|||||
7.95 8.55
|
3,660
|
8.5
|
|
8.51
|
263
|
|
8.23
|
|||||
8.72 13.24
|
1,872
|
8.2
|
|
11.40
|
471
|
|
11.86
|
|||||
13.38 13.38
|
10,712
|
1.8
|
|
13.38
|
4,227
|
|
13.38
|
|||||
13.57 19.89
|
3,602
|
7.3
|
|
16.76
|
1,575
|
|
17.04
|
|||||
20.06 104.97
|
5,100
|
7.7
|
|
35.77
|
1,903
|
|
30.53
|
|||||
|
|
|||||||||||
0.03 104.97
|
65,950
|
7.1
|
|
10.65
|
16,964
|
|
10.32
|
|||||
|
|
Year Ended December 31,
|
||||||||||||
2001
|
2000
|
1999
|
||||||||||
(in thousands)
|
||||||||||||
Net loss
|
$
|
(567,277
|
)
|
$
|
(1,411,273
|
)
|
$
|
(719,968
|
)
|
|||
Other comprehensive loss:
|
||||||||||||
Foreign-currency translations gains (losses), net
|
|
(1,257
|
)
|
|
(364
|
)
|
|
490
|
|
|||
Net unrealized gains (losses) on available-for-sale securities:
|
||||||||||||
Unrealized losses arising during year
|
|
(33,479
|
)
|
|
(178,815
|
)
|
|
(12,698
|
)
|
|||
Less reclassification of net realized losses included in net loss
|
|
40,484
|
|
|
178,512
|
|
|
8,693
|
|
|||
|
|
|
||||||||||
Net unrealized gains (losses) on available-for-sale securities
|
|
7,005
|
|
|
(303
|
)
|
|
(4,005
|
)
|
|||
Net unrealized losses on Euro-based currency swap:
|
||||||||||||
Unrealized losses on remeasurement to fair value
|
|
(21,867
|
)
|
|
|
|
|
|
|
|||
Reclassification of losses to offset currency gains on hedged portion of 6.875% PEACS included in net loss
|
|
4,530
|
|
|
|
|
|
|
|
|||
|
|
|
||||||||||
Net unrealized losses on Euro-based currency swap
|
|
(17,337
|
)
|
|
|
|
|
|
|
|||
Reclassification of currency gains on 6.875% PEACS
|
|
(9,811
|
)
|
|
|
|
|
|
|
|||
Cumulative effect of accounting change to adopt SFAS No. 133
|
|
(12,294
|
)
|
|
|
|
|
|
|
|||
|
|
|
||||||||||
Other comprehensive loss
|
$
|
(33,694
|
)
|
|
(667
|
)
|
|
(3,515
|
)
|
|||
|
|
|
||||||||||
Comprehensive loss
|
$
|
(600,971
|
)
|
$
|
(1,411,940
|
)
|
$
|
(723,483
|
)
|
|||
|
|
|
For the Years Ended December 31,
|
||||||||||||
2001
|
2000
|
1999
|
||||||||||
(in thousands, except per share data)
|
||||||||||||
Net loss as reported
|
$
|
(567,277
|
)
|
$
|
(1,411,273
|
)
|
$
|
(719,968
|
)
|
|||
Net loss SFAS No. 123 pro forma
|
|
(963,085
|
)
|
|
(1,720,312
|
)
|
|
(1,031,925
|
)
|
|||
Basic and diluted loss per share as reported
|
$
|
(1.56
|
)
|
$
|
(4.02
|
)
|
$
|
(2.20
|
)
|
|||
Basic and diluted loss per share SFAS No. 123 pro forma
|
|
(2.64
|
)
|
|
(4.90
|
)
|
|
(3.16
|
)
|
For the Years Ended December 31,
|
|||||||||
2001
|
2000
|
1999
|
|||||||
Average risk-free interest rates
|
4.1
|
%
|
6.2
|
%
|
5.5
|
%
|
|||
Average expected life (in years)
|
3.3
|
|
3.0
|
|
3.5
|
|
|||
Volatility
|
98.0
|
%
|
89.6
|
%
|
84.9
|
%
|
Stock options
|
129,324
|
|
Shares issuable upon conversion of 4.75% Convertible Subordinated Notes
|
16,017
|
|
Shares issuable upon conversion of 6.875% PEACS
|
8,129
|
|
|
||
Total
|
153,470
|
|
|
For the Years Ended December 31,
|
||||||||||||
2001
|
2000
|
1999
|
||||||||||
(in thousands, except per share data)
|
||||||||||||
Loss before change in accounting principle
|
$
|
(556,754
|
)
|
$
|
(1,411,273
|
)
|
$
|
(719,968
|
)
|
|||
Cumulative effect of change in accounting principle
|
|
(10,523
|
)
|
|
|
|
|
|
|
|||
|
|
|
||||||||||
Net loss
|
$
|
(567,277
|
)
|
$
|
(1,411,273
|
)
|
$
|
(719,968
|
)
|
|||
|
|
|
||||||||||
Weighted average shares outstanding
|
|
365,180
|
|
|
353,394
|
|
|
332,409
|
|
|||
Weighted average common shares issued subject to repurchase agreements
|
|
(969
|
)
|
|
(2,521
|
)
|
|
(5,656
|
)
|
|||
|
|
|
||||||||||
Shares used in computation of basic and diluted loss per share
|
|
364,211
|
|
|
350,873
|
|
|
326,753
|
|
|||
|
|
|
||||||||||
Basic and diluted loss per share:
|
||||||||||||
Prior to cumulative effect of change in accounting principle
|
$
|
(1.53
|
)
|
$
|
(4.02
|
)
|
$
|
(2.20
|
)
|
|||
Cumulative effect of change in accounting principle
|
|
(0.03
|
)
|
|
|
|
|
|
|
|||
|
|
|
||||||||||
$
|
(1.56
|
)
|
$
|
(4.02
|
)
|
$
|
(2.20
|
)
|
||||
|
|
|
For the Years Ended December 31,
|
||||||||||
2001
|
2000
|
1999
|
||||||||
(in thousands)
|
||||||||||
Fulfillment
|
$
|
481
|
$
|
(1,606
|
)
|
$
|
188
|
|||
Marketing
|
|
690
|
|
(858
|
)
|
|
3,957
|
|||
Technology and content
|
|
2,723
|
|
28,253
|
|
|
25,322
|
|||
General and administrative
|
|
743
|
|
(992
|
)
|
|
1,151
|
|||
|
|
|
||||||||
$
|
4,637
|
$
|
24,797
|
|
$
|
30,618
|
||||
|
|
|
Asset impairments
|
$
|
68,528
|
|
Continuing lease obligations
|
|
87,049
|
|
Termination benefits
|
|
14,970
|
|
Broker commissions, professional fees and other miscellaneous restructuring costs
|
|
11,038
|
|
|
|||
$
|
181,585
|
||
|
Balance at March 31, 2001
|
Subsequent Accruals, net
|
Non-Cash Settlements and Other Adjustments
|
Payments
|
Balance at December 31, 2001
|
Due Within 12 Months
|
Due After 12 Months
|
|||||||||||||||||
Lease obligations
|
$
|
34,667
|
$
|
52,738
|
$
|
(2,675
|
)
|
$
|
(31,543
|
)
|
$
|
53,187
|
$
|
35,578
|
$
|
17,609
|
|||||||
Termination benefits
|
|
8,445
|
|
113
|
|
(2,354
|
)
|
|
(6,143
|
)
|
|
61
|
|
61
|
|
|
|||||||
Broker commissions, professional fees and other miscellaneous restructuring costs
|
|
4,121
|
|
5,052
|
|
1,559
|
|
|
(2,542
|
)
|
|
8,190
|
|
5,159
|
|
3,031
|
|||||||
|
|
|
|
|
|
|
|||||||||||||||||
$
|
47,233
|
$
|
57,903
|
$
|
(3,470
|
)
|
$
|
(40,228
|
)
|
$
|
61,438
|
$
|
40,798
|
$
|
20,640
|
||||||||
|
|
|
|
|
|
|
Years Ended December 31,
|
||||||||
2001
|
2000
|
|||||||
(in thousands)
|
||||||||
Foreign-currency gains on 6.875% PEACS
|
$
|
46,613
|
|
$
|
|
|
||
Losses on sales of Euro-denominated investments, net
|
|
(22,548
|
)
|
|
|
|
||
Other-than-temporary impairment losses, equity investments
|
|
(43,588
|
)
|
|
(188,832
|
)
|
||
Contract termination by third parties
|
|
22,400
|
|
|
6,033
|
|
||
Net gains from acquisitions of investments by third parties
|
|
784
|
|
|
40,160
|
|
||
Warrant fair-value remeasurements and other
|
|
(5,802
|
)
|
|
|
|
||
|
|
|||||||
$
|
(2,141
|
)
|
$
|
(142,639
|
)
|
|||
|
|
December 31,
|
||||||||
2001
|
2000
|
|||||||
(in thousands)
|
||||||||
Net operating loss carryforwards
|
$
|
769,632
|
|
$
|
576,024
|
|
||
Equity in losses of equity-method investees
|
|
152,502
|
|
|
|
|
||
Depreciation and amortization
|
|
148,450
|
|
|
9,777
|
|
||
Accrued expenses
|
|
53,186
|
|
|
32,050
|
|
||
Unearned revenue
|
|
37,834
|
|
|
39,916
|
|
||
Other
|
|
9,674
|
|
|
19,435
|
|
||
|
|
|||||||
Total deferred tax assets
|
|
1,171,278
|
|
|
677,202
|
|
||
Valuation allowance for deferred tax assets
|
|
(1,169,130
|
)
|
|
(677,202
|
)
|
||
|
|
|||||||
Net deferred tax assets
|
$
|
2,148
|
|
$
|
|
|
||
|
|
U.S. Retail
|
||||||||||||||||||||||
Books, Music and DVD/Video
|
Electronics, Tools and Kitchen
|
Total
|
Services
|
International
|
Consolidated
|
|||||||||||||||||
(in thousands)
|
||||||||||||||||||||||
2001:
|
||||||||||||||||||||||
Net sales
|
$
|
1,688,752
|
$
|
547,190
|
|
$
|
2,235,942
|
|
$
|
225,117
|
$
|
661,374
|
|
$
|
3,122,433
|
|
||||||
Gross profit
|
|
453,129
|
|
78,384
|
|
|
531,513
|
|
|
126,439
|
|
140,606
|
|
|
798,558
|
|
||||||
Pro forma income (loss) from operations
|
|
156,753
|
|
(140,685
|
)
|
|
16,068
|
|
|
42,042
|
|
(103,112
|
)
|
|
(45,002
|
)
|
||||||
Stock-based compensation
|
|
(4,637
|
)
|
|||||||||||||||||||
Amortization of goodwill and other intangibles
|
|
(181,033
|
)
|
|||||||||||||||||||
Restructuring-related and other
|
|
(181,585
|
)
|
|||||||||||||||||||
Net interest expense and other
|
|
(114,170
|
)
|
|||||||||||||||||||
Equity in losses of equity-method investees, net
|
|
(30,327
|
)
|
|||||||||||||||||||
Cumulative effect of change in accounting principle
|
|
(10,523
|
)
|
|||||||||||||||||||
|
||||||||||||||||||||||
Net loss
|
$
|
(567,277
|
)
|
|||||||||||||||||||
|
||||||||||||||||||||||
U.S. Retail
|
||||||||||||||||||||||
Books, Music and DVD/Video
|
Electronics, Tools and Kitchen
|
Total
|
Services
|
International
|
Consolidated
|
|||||||||||||||||
(in thousands)
|
||||||||||||||||||||||
2000:
|
||||||||||||||||||||||
Net sales
|
$
|
1,698,266
|
$
|
484,151
|
|
$
|
2,182,417
|
|
$
|
198,491
|
$
|
381,075
|
|
$
|
2,761,983
|
|
||||||
Gross profit
|
|
417,452
|
|
44,655
|
|
|
462,107
|
|
|
116,234
|
|
77,436
|
|
|
655,777
|
|
||||||
Pro forma income (loss) from operations
|
|
71,441
|
|
(269,890
|
)
|
|
(198,449
|
)
|
|
26,519
|
|
(145,070
|
)
|
|
(317,000
|
)
|
||||||
Stock-based compensation
|
|
(24,797
|
)
|
|||||||||||||||||||
Amortization of goodwill and other intangibles
|
|
(321,772
|
)
|
|||||||||||||||||||
Restructuring-related and other
|
|
(200,311
|
)
|
|||||||||||||||||||
Net interest expense and other
|
|
(242,797
|
)
|
|||||||||||||||||||
Equity in losses of equity-method investees, net
|
|
(304,596
|
)
|
|||||||||||||||||||
|
||||||||||||||||||||||
Net loss
|
$
|
(1,411,273
|
)
|
|||||||||||||||||||
|
U.S. Retail
|
||||||||||||||||||||||||
Books, Music and DVD/Video
|
Electronics, Tools and Kitchen
|
Total
|
Services
|
International
|
Consolidated
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
1999:
|
||||||||||||||||||||||||
Net sales
|
$
|
1,308,292
|
|
$
|
150,654
|
|
$
|
1,458,946
|
|
$
|
13,150
|
|
$
|
167,743
|
|
$
|
1,639,839
|
|
||||||
Gross profit
|
|
262,871
|
|
|
(20,086
|
)
|
|
242,785
|
|
|
12,285
|
|
|
35,575
|
|
|
290,645
|
|
||||||
Pro forma income (loss) from operations
|
|
(31,000
|
)
|
|
(163,827
|
)
|
|
(194,827
|
)
|
|
(78,321
|
)
|
|
(79,223
|
)
|
|
(352,371
|
)
|
||||||
Stock-based compensation
|
|
(30,618
|
)
|
|||||||||||||||||||||
Amortization of goodwill and other intangibles
|
|
(214,694
|
)
|
|||||||||||||||||||||
Restructuring-related and other
|
|
(8,072
|
)
|
|||||||||||||||||||||
Net interest expense and other
|
|
(37,444
|
)
|
|||||||||||||||||||||
Equity in losses of equity-method investees, net
|
|
(76,769
|
)
|
|||||||||||||||||||||
|
||||||||||||||||||||||||
Net loss
|
$
|
(719,968
|
)
|
|||||||||||||||||||||
|
U.S. Retail
|
||||||||||||
Year Ended December 31,
|
Books,
Music and
DVD/Video
|
Electronics,
Tools and
Kitchen
|
Total
|
Services
|
International
|
Consolidated
|
||||||
2001
|
$29,317
|
$21,670
|
$50,987
|
$8,349
|
$24,108
|
$83,444
|
||||||
2000
|
29,501
|
26,818
|
56,319
|
7,649
|
18,970
|
82,938
|
||||||
1999
|
15,304
|
7,730
|
23,034
|
4,873
|
6,674
|
34,581
|
Year Ended December 31, 2001
|
||||||||||||||||
Fourth Quarter
|
Third Quarter
|
Second Quarter
|
First Quarter
|
|||||||||||||
(in thousands, except per share data)
|
||||||||||||||||
Net sales
|
$
|
1,115,171
|
|
$
|
639,281
|
|
$
|
667,625
|
|
$
|
700,356
|
|
||||
Gross profit
|
|
274,049
|
|
|
162,192
|
|
|
179,720
|
|
|
182,597
|
|
||||
Net income (loss)
|
|
5,087
|
|
|
(169,874
|
)
|
|
(168,359
|
)
|
|
(234,131
|
)
|
||||
Basic and diluted income (loss) per share:
|
||||||||||||||||
Prior to cumulative effect of change in accounting principle
|
$
|
0.01
|
|
$
|
(0.46
|
)
|
$
|
(0.47
|
)
|
$
|
(0.63
|
)
|
||||
Cumulative effect of change in accounting principle
|
|
|
|
|
|
|
|
|
|
|
(0.03
|
)
|
||||
|
|
|
|
|||||||||||||
Basic and diluted income (loss) per share (1)
|
$
|
0.01
|
|
$
|
(0.46
|
)
|
$
|
(0.47
|
)
|
$
|
(0.66
|
)
|
||||
Shares used in computation of basic income (loss) per share
|
|
371,420
|
|
|
368,052
|
|
|
359,752
|
|
|
357,424
|
|
||||
Shares used in computation of diluted income (loss) per share
|
|
384,045
|
|
|
368,052
|
|
|
359,752
|
|
|
357,424
|
|
||||
Year Ended December 31, 2000
|
||||||||||||||||
Fourth Quarter
|
Third Quarter
|
Second Quarter
|
First Quarter
|
|||||||||||||
(in thousands, except per share data)
|
||||||||||||||||
Net sales
|
$
|
972,360
|
|
$
|
637,858
|
|
$
|
577,876
|
|
$
|
573,889
|
|
||||
Gross profit
|
|
224,300
|
|
|
167,279
|
|
|
136,064
|
|
|
128,134
|
|
||||
Net loss
|
|
(545,140
|
)
|
|
(240,524
|
)
|
|
(317,184
|
)
|
|
(308,425
|
)
|
||||
Basic and diluted loss per share (1)
|
$
|
(1.53
|
)
|
$
|
(0.68
|
)
|
$
|
(0.91
|
)
|
$
|
(0.90
|
)
|
||||
Shares used in computation of basic and diluted loss per share
|
|
355,681
|
|
|
353,954
|
|
|
349,886
|
|
|
343,884
|
|
||||
Year Ended December 31, 1999
|
||||||||||||||||
Fourth Quarter
|
Third Quarter
|
Second Quarter
|
First Quarter
|
|||||||||||||
(in thousands, except per share data)
|
||||||||||||||||
Net sales
|
$
|
676,042
|
|
$
|
355,777
|
|
$
|
314,377
|
|
$
|
293,643
|
|
||||
Gross profit
|
|
87,846
|
|
|
70,477
|
|
|
67,531
|
|
|
64,791
|
|
||||
Net loss
|
|
(323,213
|
)
|
|
(197,080
|
)
|
|
(138,008
|
)
|
|
(61,667
|
)
|
||||
Basic and diluted loss per share (1)
|
$
|
(0.96
|
)
|
$
|
(0.59
|
)
|
$
|
(0.43
|
)
|
$
|
(0.20
|
)
|
||||
Shares used in computation of basic and diluted loss per share
|
|
338,389
|
|
|
332,488
|
|
|
322,340
|
|
|
313,794
|
|
(1)
|
|
The sum of quarterly per share amounts may not equal per share amounts reported for year-to-date periods. This is due to changes in the number of weighted-average shares
outstanding and the effects of rounding for each period.
|
Exhibit
Number |
Description
|
|
3.1
|
Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the
period ending March 31, 2000).
|
|
3.2
|
Restated Bylaws of the Company (incorporated by reference to the Company's Current Report on Form 8-K dated February 28, 2000).
|
|
4.1
|
Indenture, dated as of May 8, 1998, between Amazon.com, Inc. and the Bank of New York, as trustee (incorporated by reference to the Company's
Quarterly Report on Form 10-Q for the Quarterly Period Ended March 31, 1998).
|
|
4.2
|
Form of 10% Senior Discount Notes Due 2008 (incorporated by reference to the Company's Registration Statement on Form S-4 (Registration No.
333-56723) filed June 12, 1998).
|
|
4.3
|
Indenture, dated as of February 3, 1999, between Amazon.com, Inc. and The Bank of New York, as trustee, including the form of 4
3
/
4
% Convertible Subordinated Note Due 2009 attached as Exhibit A thereto (incorporated by reference to the Company's Current Report
on Form 8-K dated February 3, 1999).
|
|
4.4
|
Registration Rights Agreement by and among Amazon.com, Inc. and the Initial Purchasers (incorporated by reference to the Company's Current Report on
Form 8-K dated February 3, 1999).
|
|
4.5
|
Indenture, dated as of February 16, 2000, between Amazon.com, Inc. and the Bank of New York, as trustee (incorporated by Reference to the Company's
Current Report on Form 8-K dated February 16, 2000).
|
|
4.6
|
Form of 6
7
/
8
% Convertible
Subordinated Notes due 2010 (incorporated by reference to the Company's Current Report on Form 8-K dated February 28, 2000).
|
|
10.1
|
Amended and Restated 1994 Stock Option Plan (version as of December 20, 1996 for Amended and Restated Grants and version as of December 20, 1996 for
New Grants) (incorporated by reference to the Company's Registration Statement on Form S-1 (Registration No. 333-23795) filed March 24, 1997).
|
|
10.2
|
1997 Stock Incentive Plan (incorporated by reference to Appendix B to the Company's Proxy Statement on Schedule 14A, filed with the Securities and
Exchange Commission on March 29, 2000).
|
|
10.3
|
1999 Non-Officer Employee Stock Option Plan (incorporated by reference to the Company's Registration Statement on Form S-8 (Registration No.
333-74419) filed March 15, 1999).
|
|
10.4
|
Accept.com Financial Services Corporation 1998 Stock Option Plan (incorporated by reference to the Company's Registration Statement on Form S-8
(Registration No. 333-80495) filed June 11, 1999).
|
|
10.5
|
Form of Indemnification Agreement between the Company and each of its Directors (incorporated by reference to the Company's Registration Statement on
Form S-1 (Registration No. 333-23795) filed March 24, 1997).
|
|
10.6
|
Investor Rights Agreement, dated as of June 21, 1996, by and among the Company, Kleiner Perkins Caufield & Byers VIII, KPCB Information Sciences
Zaibatsu Fund II and Jeffrey P. Bezos (incorporated by reference to the Company's Registration Statement on Form S-1 (Registration No. 333-23795) filed March 24, 1997).
|
|
10.7
|
Offer Letter of Employment to Warren C. Jenson dated September 4, 1999, as amended and restated September 30, 1999 (incorporated by reference to the
Company's Annual Report on Form 10-K for the Year Ended December 31, 1999).
|
Exhibit
Number |
Description
|
|
10.8
|
Offer Letter of Employment to Jeff Wilke, dated September 2, 1999 (incorporated by reference to the Company's Annual Report on Form 10-K for the Year
Ended December 31, 1999).
|
|
10.9
|
Offer Letter of Employment to Diego Piacentini, dated January 17, 2000 (incorporated by reference to the Companys Annual Report on Form 10-K
for the Year Ended December 31, 2000).
|
|
10.10
|
Executive Compensation Letter to Jeff Wilke, dated May 16, 2000 (incorporated by reference to the Company's Quarterly Report on Form 10-Q for the
Quarter Ended June 30, 2000).
|
|
10.11
|
Executive Compensation Letter to Warren Jenson, dated May 16, 2000 (incorporated by reference to the Company's Quarterly Report on Form 10-Q for the
Quarter Ended June 30, 2000).
|
|
10.12
|
Executive Compensation Letter to Mark Britto, dated January 3, 2000 (incorporated by reference to the Companys Annual Report on Form 10-K for
the Year Ended December 31, 2000).
|
|
10.13
|
Executive Compensation Letter to Mark Britto, dated July 27, 2000 (incorporated by reference to the Companys Annual Report on Form 10-K for the
Year Ended December 31, 2000).
|
|
10.14
|
Executive Compensation Letter to Diego Piacentini, dated May 16, 2000 (incorporated by reference to the Companys Annual Report on Form 10-K for
the Year Ended December 31, 2000).
|
|
10.15
|
Common Stock Purchase Agreement, dated July 23, 2001, between Amazon.com, Inc. and America Online, Inc. (incorporated by reference to the
Companys Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2001).
|
|
10.16
|
Form of Restricted Stock Agreement.
|
|
12.1
|
Computation of Ratio of Earnings to Fixed Charges.
|
|
18.1
|
Preferability Letter of Ernst & Young LLP, Independent Auditors, regarding change in accounting principle (incorporated by reference to the
Companys Annual Report on Form 10-K for the Year Ended December 31, 2000).
|
|
21.1
|
List of Subsidiaries.
|
|
23.1
|
Consent of Ernst & Young LLP, Independent Auditors.
|
|
99.1
|
Press Release dated January 22, 2002 Announcing the Companys Fourth Quarter Financial Results.
|
|
|
Executive Compensation Plan or Agreement
|
AMAZON.COM, INC.
|
||
By:
|
/
S
/ J
EFFREY
P.
B
EZOS
|
|
Jeffrey P. Bezos
President, Chief Executive Officer and Chairman of the Board |
Signature
|
Title
|
|
/
S
/ J
EFFREY
P.
B
EZOS
Jeffrey P. Bezos
|
Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer)
|
|
/
S
/ W
ARREN
C.
J
ENSON
Warren C. Jenson
|
Senior Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
|
|
/
S
/ T
OM
A.
A
LBERG
Tom A. Alberg
|
Director
|
|
/
S
/ S
COTT
D.
C
OOK
Scott D. Cook
|
Director
|
|
/
S
/ L. J
OHN
D
OERR
L. John Doerr
|
Director
|
|
/
S
/ M
ARK
S.
H
ANSEN
Mark S. Hansen
|
Director
|
|
/
S
/ P
ATRICIA
Q.
S
TONESIFER
Patricia Q. Stonesifer
|
Director
|
Year Ended
|
Balance at Beginning of Period
|
Charged/ (Credited) to Costs and Expenses
|
Inventory Disposed or Written Off
|
Balance at End of Period
|
|||||||||
(in thousands)
|
|||||||||||||
December 31, 2001
|
$
|
20,453
|
$
|
17,160
|
$
|
(17,805
|
)
|
$
|
19,808
|
||||
December 31, 2000
|
$
|
29,583
|
$
|
31,095
|
$
|
(40,225
|
)
|
$
|
20,453
|
||||
December 31, 1999
|
$
|
4,600
|
$
|
38,152
|
$
|
(13,169
|
)
|
$
|
29,583
|
Year Ended
|
Balance at Beginning of Period
|
Charged/ (Credited) to Costs and Expenses
|
Amounts Written Off
|
Balance at End of Period
|
|||||||||
(in thousands)
|
|||||||||||||
December 31, 2001
|
$
|
15,493
|
$
|
4,477
|
$
|
(8,305
|
)
|
$
|
11,665
|
||||
December 31, 2000
|
$
|
3,503
|
$
|
14,585
|
$
|
(2,595
|
)
|
$
|
15,493
|
||||
December 31, 1999
|
$
|
855
|
$
|
3,579
|
$
|
(931
|
)
|
$
|
3,503
|
Year Ended
|
Balance at Beginning of Period
|
Charged/ (Credited) to Costs and Expenses
|
Amounts Written Off
|
Balance at End of Period
|
|||||||||
(in thousands)
|
|||||||||||||
December 31, 2001
|
$
|
14,133
|
$
|
19,322
|
$
|
(14,075
|
)
|
$
|
19,380
|
||||
December 31, 2000
|
$
|
10,337
|
$
|
12,499
|
$
|
(8,703
|
)
|
$
|
14,133
|
||||
December 31, 1999
|
$
|
|
$
|
10,677
|
$
|
(340
|
)
|
$
|
10,337
|
Exhibit
Number |
Description
|
|
3.1
|
Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Companys Quarterly Report on Form 10-Q
for the period ending March 31, 2000).
|
|
3.2
|
Restated Bylaws of the Company (incorporated by reference to the Companys Current Report on Form 8-K dated February 28,
2000).
|
|
4.1
|
Indenture, dated as of May 8, 1998, between Amazon.com, Inc. and the Bank of New York, as trustee (incorporated by reference to the Companys
Quarterly Report on Form 10-Q for the Quarterly Period Ended March 31, 1998).
|
|
4.2
|
Form of 10% Senior Discount Notes Due 2008 (incorporated by reference to the Companys Registration Statement on Form S-4 (Registration No.
333-56723) filed June 12, 1998).
|
|
4.3
|
Indenture, dated as of February 3, 1999, between Amazon.com, Inc. and The Bank of New York, as trustee, including the form of 4
3
/
4
% Convertible Subordinated Note Due 2009 attached as Exhibit A thereto (incorporated by reference to the Companys Current
Report on Form 8-K dated February 3, 1999).
|
|
4.4
|
Registration Rights Agreement by and among Amazon.com, Inc. and the Initial Purchasers (incorporated by reference to the Companys Current
Report on Form 8-K dated February 3, 1999).
|
|
4.5
|
Indenture, dated as of February 16, 2000, between Amazon.com, Inc. and the Bank of New York, as trustee (incorporated by Reference to the
Companys Current Report on Form 8-K dated February 16, 2000).
|
|
4.6
|
Form of 6
7
/
8
% Convertible
Subordinated Notes due 2010 (incorporated by reference to the Companys Current Report on Form 8-K dated February 28, 2000).
|
|
10.1
|
Amended and Restated 1994 Stock Option Plan (version as of December 20, 1996 for Amended and Restated Grants and version as of December 20, 1996 for
New Grants) (incorporated by reference to the Companys Registration Statement on Form S-1 (Registration No. 333-23795) filed March 24, 1997).
|
|
10.2
|
1997 Stock Incentive Plan (incorporated by reference to Appendix B to the Companys Proxy Statement on Schedule 14A, filed with the Securities
and Exchange Commission on March 29, 2000).
|
|
10.3
|
1999 Non-Officer Employee Stock Option Plan (incorporated by reference to the Companys Registration Statement on Form S-8 (Registration No.
333-74419) filed March 15, 1999).
|
|
10.4
|
Accept.com Financial Services Corporation 1998 Stock Option Plan (incorporated by reference to the Companys Registration Statement on Form S-8
(Registration No. 333-80495) filed June 11, 1999).
|
|
10.5
|
Form of Indemnification Agreement between the Company and each of its Directors (incorporated by reference to the Companys Registration
Statement on Form S-1 (Registration No. 333-23795) filed March 24, 1997).
|
|
10.6
|
Investor Rights Agreement, dated as of June 21, 1996, by and among the Company, Kleiner Perkins Caufield & Byers VIII, KPCB Information Sciences
Zaibatsu Fund II and Jeffrey P. Bezos (incorporated by reference to the Companys Registration Statement on Form S-1 (Registration No. 333-23795) filed March 24, 1997).
|
|
10.7
|
Offer Letter of Employment to Warren C. Jenson dated September 4, 1999, as amended and restated September 30, 1999 (incorporated by reference to the
Companys Annual Report on Form 10-K for the Year Ended December 31, 1999).
|
Exhibit
Number |
Description
|
|
10.8
|
Offer Letter of Employment to Jeff Wilke, dated September 2, 1999 (incorporated by reference to the Companys Annual Report on Form 10-K for the
Year Ended December 31, 1999).
|
|
10.9
|
Offer Letter of Employment to Diego Piacentini, dated January 17, 2000 (incorporated by reference to the Companys Annual Report on Form 10-K
for the Year Ended December 31, 2000).
|
|
10.10
|
Executive Compensation Letter to Jeff Wilke, dated May 16, 2000 (incorporated by reference to the Companys Quarterly Report on Form 10-Q for
the Quarter Ended June 30, 2000).
|
|
10.11
|
Executive Compensation Letter to Warren Jenson, dated May 16, 2000 (incorporated by reference to the Companys Quarterly Report on Form 10-Q for
the Quarter Ended June 30, 2000).
|
|
10.12
|
Executive Compensation Letter to Mark Britto, dated January 3, 2000 (incorporated by reference to the Companys Annual Report on Form 10-K for
the Year Ended December 31, 2000).
|
|
10.13
|
Executive Compensation Letter to Mark Britto, dated July 27, 2000 (incorporated by reference to the Companys Annual Report on Form 10-K for the
Year Ended December 31, 2000).
|
|
10.14
|
Executive Compensation Letter to Diego Piacentini, dated May 16, 2000 (incorporated by reference to the Companys Annual Report on Form 10-K for
the Year Ended December 31, 2000).
|
|
10.15
|
Common Stock Purchase Agreement, dated July 23, 2001, between Amazon.com, Inc. and America Online, Inc. (incorporated by reference to the
Companys Quarterly Report on Form 10-Q for the Quarter Ended June 30, 2001).
|
|
10.16
|
Form of Restricted Stock Agreement.
|
|
12.1
|
Computation of Ratio of Earnings to Fixed Charges.
|
|
18.1
|
Preferability Letter of Ernst & Young LLP, Independent Auditors, regarding change in accounting principle (incorporated by reference to the
Companys Annual Report on Form 10-K for the Year Ended December 31, 2000).
|
|
21.1
|
List of Subsidiaries.
|
|
23.1
|
Consent of Ernst & Young LLP, Independent Auditors.
|
|
99.1
|
Press Release dated January 22, 2002 Announcing the Companys Fourth Quarter Financial Results.
|
|
|
Executive Compensation Plan or Agreement
|
TO:
|
Date at Which Portion of
Restricted Stock Award Is No Longer Subject to Forfeiture |
% of Restricted Stock Award No Longer Subject to Forfeiture
|
|
__________________, ____
|
___%
|
|
__________________, ____
|
An additional ___%
|
|
__________________, ____
|
An additional ___%
|
|
__________________, ____
|
An additional ___%
|
Very truly yours,
AMAZON.COM, INC.
|
||
By:
|
|
|
Its Chief Executive Officer
|
Year Ended December 31,
|
||||||||||||||||||||
2001
|
2000
|
1999
|
1998
|
1997
|
||||||||||||||||
(amounts in thousands)
|
||||||||||||||||||||
Net loss
|
$
|
(567,277
|
)
|
$
|
(1,411,273
|
)
|
$
|
(719,968
|
)
|
$
|
(124,546
|
)
|
$
|
(31,020
|
)
|
|||||
Equity in losses of equity-method investees
|
|
30,327
|
|
|
304,596
|
|
|
76,769
|
|
|
2,905
|
|
|
|
|
|||||
|
|
|
|
|
||||||||||||||||
Net loss before equity in losses of equity-method investees
|
|
(536,950
|
)
|
|
(1,106,677
|
)
|
|
(643,199
|
)
|
|
(121,641
|
)
|
|
(31,020
|
)
|
|||||
|
|
|
|
|
||||||||||||||||
Plus fixed charges:
|
||||||||||||||||||||
Interest expense including amortization of debt issuance costs
|
|
139,232
|
|
|
130,921
|
|
|
84,566
|
|
|
26,639
|
|
|
326
|
|
|||||
Assumed interest element included in rent expense
|
|
8,880
|
|
|
10,773
|
|
|
4,732
|
|
|
2,833
|
|
|
700
|
|
|||||
|
|
|
|
|
||||||||||||||||
|
148,112
|
|
|
141,694
|
|
|
89,298
|
|
|
29,472
|
|
|
1,026
|
|
||||||
|
|
|
|
|
||||||||||||||||
Adjusted earnings (loss)
|
|
(388,838
|
)
|
|
(964,983
|
)
|
|
(553,901
|
)
|
|
(92,169
|
)
|
|
(29,994
|
)
|
|||||
Fixed charges
|
|
(148,112
|
)
|
|
(141,694
|
)
|
|
(89,298
|
)
|
|
(29,472
|
)
|
|
(1,026
|
)
|
|||||
|
|
|
|
|
||||||||||||||||
Deficiency in earnings to cover fixed
charges |
$
|
(536,950
|
)
|
$
|
(1,106,677
|
)
|
$
|
(643,199
|
)
|
$
|
(121,641
|
)
|
$
|
(31,020
|
)
|
|||||
|
|
|
|
|
Name
|
Jurisdiction of Incorporation
|
Percent Owned
|
||
Alexa Internet
|
California
|
100%
|
||
Borders Teamed with Amazon.com
|
Delaware
|
100%
|
||
Amazon Global Resources, Inc.
|
Delaware
|
100%
|
||
Amazon Japan KK
|
Japan
|
100%
|
||
Amazon Japan Logistics KK
|
Japan
|
100%
|
||
Amazon.co.uk, Ltd.
|
United Kingdom
|
100%
|
||
Amazon.com.dedc, LLC
|
Delaware
|
100%
|
||
Amazon.com.gadc, Inc.
|
Delaware
|
100%
|
||
Fulfillco.ksdc, Inc
|
Delaware
|
100%
|
||
Amazon.com.kydc, Inc.
|
Delaware
|
100%
|
||
Amazon.com.nvdc, Inc.
|
Delaware
|
100%
|
||
Amazon.com Commerce Services, Inc.
|
Delaware
|
100%
|
||
Amazon.com Holdings, Inc.
|
Delaware
|
100%
|
||
Amazon.com Kids, Inc.
|
Delaware
|
100%
|
||
Amazon.com Int'l Sales, Inc.
|
Delaware
|
100%
|
||
Amazon.com LLC
|
Delaware
|
100%
|
||
Amazon.com Payments, Inc.
|
Delaware
|
100%
|
||
Amazon.com TC2, Inc.
|
Delaware
|
100%
|
||
Amazon.de GmbH
|
Germany
|
100%
|
||
NV Services, Inc.
|
Nevada
|
100%
|
|
/
S
/ E
RNST
& Y
OUNG
LLP
|
|
|
Net sales for the 2001 fiscal year reached a record-setting $3.12 billion, a 13% increase.
|
|
|
Fiscal 2001 pro forma operating loss was $45 million, an improvement of more than $270 million.
|
|
|
Pro forma operating losses from our International sites declined by 76% to $11 million, or 4% of International net sales in fourth quarter 2001.
|
|
|
Electronics, Tools and Kitchen segment pro forma operating losses declined by $52 million, or 72%, to $20 million in fourth quarter 2001.
|
|
|
Marketplace (Used and other new) orders equaled approximately 15% of total U.S. orders in fourth quarter 2001, compared with 1% (Used launched November, 2000).
|
|
|
Annualized inventory turns improved 38% to 25 in fourth quarter 2001, up from 18.
|
|
|
Operating cash flow improved 41% to $349 million in fourth quarter 2001, a $101 million increase.
|
|
|
Cash and marketable securities were approximately $1 billion at December 31, 2001.
|
|
|
Net sales are expected to be between $775 million and $825 million, or grow between 11% and 18%.
|
|
|
Pro forma loss from operations is expected to be between break-even and $16 million, or between 0% and 2% of net sales.
|
|
|
Net sales are expected to grow by 10% or more.
|
|
|
Positive operating cash flow, and possibly free cash flow, is expected.
|
|
|
Pro forma income from operations is expected to be $30 million or more.
|
|
|
Stock-based compensation
|
|
|
Amortization of goodwill and other intangibles
|
|
|
Restructuring-related and other
|
|
|
Other gains (losses), net
|
|
|
Equity in losses of equity-method investees, net
|
|
|
Cumulative effect of change in accounting principle
|
Three Months Ended
December 31, |
Year Ended
December 31, |
|||||||||||||||
2001
|
2000
|
2001
|
2000
|
|||||||||||||
Net sales
|
$
|
1,115,171
|
|
$
|
972,360
|
|
$
|
3,122,433
|
|
$
|
2,761,983
|
|
||||
Cost of sales
|
|
841,122
|
|
|
748,060
|
|
|
2,323,875
|
|
|
2,106,206
|
|
||||
|
|
|
|
|||||||||||||
Gross profit
|
|
274,049
|
|
|
224,300
|
|
|
798,558
|
|
|
655,777
|
|
||||
Operating expenses:
|
||||||||||||||||
Fulfillment
|
|
109,019
|
|
|
131,028
|
|
|
374,250
|
|
|
414,509
|
|
||||
Marketing
|
|
34,450
|
|
|
55,195
|
|
|
138,283
|
|
|
179,980
|
|
||||
Technology and content
|
|
52,325
|
|
|
69,791
|
|
|
241,165
|
|
|
269,326
|
|
||||
General and administrative
|
|
19,575
|
|
|
28,232
|
|
|
89,862
|
|
|
108,962
|
|
||||
Stock-based compensation
|
|
1,937
|
|
|
(1,112
|
)
|
|
4,637
|
|
|
24,797
|
|
||||
Amortization of goodwill and other intangibles
|
|
37,537
|
|
|
79,210
|
|
|
181,033
|
|
|
321,772
|
|
||||
Restructuring-related and other
|
|
4,681
|
|
|
184,052
|
|
|
181,585
|
|
|
200,311
|
|
||||
|
|
|
|
|||||||||||||
Total operating expenses
|
|
259,524
|
|
|
546,396
|
|
|
1,210,815
|
|
|
1,519,657
|
|
||||
|
|
|
|
|||||||||||||
Income (loss) from operations
|
|
14,525
|
|
|
(322,096
|
)
|
|
(412,257
|
)
|
|
(863,880
|
)
|
||||
Interest income
|
|
6,030
|
|
|
10,979
|
|
|
29,103
|
|
|
40,821
|
|
||||
Interest expense
|
|
(35,290
|
)
|
|
(36,094
|
)
|
|
(139,232
|
)
|
|
(130,921
|
)
|
||||
Other income (expense), net
|
|
5,365
|
|
|
(5,365
|
)
|
|
(1,900
|
)
|
|
(10,058
|
)
|
||||
Other gains (losses), net
|
|
16,312
|
|
|
(155,005
|
)
|
|
(2,141
|
)
|
|
(142,639
|
)
|
||||
|
|
|
|
|||||||||||||
Net interest expense and other
|
|
(7,583
|
)
|
|
(185,485
|
)
|
|
(114,170
|
)
|
|
(242,797
|
)
|
||||
|
|
|
|
|||||||||||||
Income (loss) before equity in losses of equity-method investees
|
|
6,942
|
|
|
(507,581
|
)
|
|
(526,427
|
)
|
|
(1,106,677
|
)
|
||||
Equity in losses of equity-method investees, net
|
|
(1,855
|
)
|
|
(37,559
|
)
|
|
(30,327
|
)
|
|
(304,596
|
)
|
||||
|
|
|
|
|||||||||||||
Income (loss) before change in accounting principle
|
|
5,087
|
|
|
(545,140
|
)
|
|
(556,754
|
)
|
|
(1,411,273
|
)
|
||||
Cumulative effect of change in accounting principle
|
|
|
|
|
|
|
|
(10,523
|
)
|
|
|
|
||||
|
|
|
|
|||||||||||||
Net income (loss)
|
$
|
5,087
|
|
$
|
(545,140
|
)
|
$
|
(567,277
|
)
|
$
|
(1,411,273
|
)
|
||||
|
|
|
|
|||||||||||||
Basic and diluted income (loss) per share:
|
||||||||||||||||
Prior to cumulative effect of change in accounting principle
|
$
|
0.01
|
|
$
|
(1.53
|
)
|
$
|
(1.53
|
)
|
$
|
(4.02
|
)
|
||||
Cumulative effect of change in accounting principle
|
|
|
|
|
|
|
|
(0.03
|
)
|
|
|
|
||||
|
|
|
|
|||||||||||||
$
|
0.01
|
|
$
|
(1.53
|
)
|
$
|
(1.56
|
)
|
$
|
(4.02
|
)
|
|||||
|
|
|
|
|||||||||||||
Shares used in computation of
|
||||||||||||||||
Basic income (loss) per share
|
|
371,420
|
|
|
355,681
|
|
|
364,211
|
|
|
350,873
|
|
||||
|
|
|
|
|||||||||||||
Diluted income (loss) per share
|
|
384,045
|
|
|
355,681
|
|
|
364,211
|
|
|
350,873
|
|
||||
|
|
|
|
Three Months Ended
|
||||||||||||||||||||||||
December 31, 2001
|
December 31, 2000
|
|||||||||||||||||||||||
As Reported (1)
|
Pro Forma Adjustments
|
Pro Forma
|
As Reported (1)
|
Pro Forma Adjustments
|
Pro Forma
|
|||||||||||||||||||
Net sales
|
$
|
1,115,171
|
|
$
|
|
|
$
|
1,115,171
|
|
$
|
972,360
|
|
$
|
|
|
$
|
972,360
|
|
||||||
Cost of sales
|
|
841,122
|
|
|
|
|
|
841,122
|
|
|
748,060
|
|
|
|
|
|
748,060
|
|
||||||
|
|
|
|
|
|
|||||||||||||||||||
Gross profit
|
|
274,049
|
|
|
|
|
|
274,049
|
|
|
224,300
|
|
|
|
|
|
224,300
|
|
||||||
Operating expenses:
|
||||||||||||||||||||||||
Fulfillment
|
|
109,019
|
|
|
|
|
|
109,019
|
|
|
131,028
|
|
|
|
|
|
131,028
|
|
||||||
Marketing
|
|
34,450
|
|
|
|
|
|
34,450
|
|
|
55,195
|
|
|
|
|
|
55,195
|
|
||||||
Technology and content
|
|
52,325
|
|
|
|
|
|
52,325
|
|
|
69,791
|
|
|
|
|
|
69,791
|
|
||||||
General and administrative
|
|
19,575
|
|
|
|
|
|
19,575
|
|
|
28,232
|
|
|
|
|
|
28,232
|
|
||||||
Stock-based compensation
|
|
1,937
|
|
|
(1,937
|
)
|
|
|
|
|
(1,112
|
)
|
|
1,112
|
|
|
|
|
||||||
Amortization of goodwill and other intangibles
|
|
37,537
|
|
|
(37,537
|
)
|
|
|
|
|
79,210
|
|
|
(79,210
|
)
|
|
|
|
||||||
Restructuring-related and other
|
|
4,681
|
|
|
(4,681
|
)
|
|
|
|
|
184,052
|
|
|
(184,052
|
)
|
|
|
|
||||||
|
|
|
|
|
|
|||||||||||||||||||
Total operating expenses
|
|
259,524
|
|
|
(44,155
|
)
|
|
215,369
|
|
|
546,396
|
|
|
(262,150
|
)
|
|
284,246
|
|
||||||
|
|
|
|
|
|
|||||||||||||||||||
Income (loss) from operations
|
|
14,525
|
|
|
44,155
|
|
|
58,680
|
|
|
(322,096
|
)
|
|
262,150
|
|
|
(59,946
|
)
|
||||||
Interest income
|
|
6,030
|
|
|
|
|
|
6,030
|
|
|
10,979
|
|
|
|
|
|
10,979
|
|
||||||
Interest expense
|
|
(35,290
|
)
|
|
|
|
|
(35,290
|
)
|
|
(36,094
|
)
|
|
|
|
|
(36,094
|
)
|
||||||
Other income (expense), net
|
|
5,365
|
|
|
|
|
|
5,365
|
|
|
(5,365
|
)
|
|
|
|
|
(5,365
|
)
|
||||||
Other gains (losses), net
|
|
16,312
|
|
|
(16,312
|
)
|
|
|
|
|
(155,005
|
)
|
|
155,005
|
|
|
|
|
||||||
|
|
|
|
|
|
|||||||||||||||||||
Net interest expense and other
|
|
(7,583
|
)
|
|
(16,312
|
)
|
|
(23,895
|
)
|
|
(185,485
|
)
|
|
155,005
|
|
|
(30,480
|
)
|
||||||
|
|
|
|
|
|
|||||||||||||||||||
Income (loss) before equity in losses of equity-method investees
|
|
6,942
|
|
|
27,843
|
|
|
34,785
|
|
|
(507,581
|
)
|
|
417,155
|
|
|
(90,426
|
)
|
||||||
Equity in losses of equity-method investees, net
|
|
(1,855
|
)
|
|
1,855
|
|
|
|
|
|
(37,559
|
)
|
|
37,559
|
|
|
|
|
||||||
|
|
|
|
|
|
|||||||||||||||||||
Net income (loss)
|
$
|
5,087
|
|
$
|
29,698
|
|
$
|
34,785
|
|
$
|
(545,140
|
)
|
$
|
454,714
|
|
$
|
(90,426
|
)
|
||||||
|
|
|
|
|
|
|||||||||||||||||||
Net cash provided by operating activities
|
$
|
349,120
|
|
$
|
349,120
|
|
$
|
247,653
|
|
$
|
247,653
|
|
||||||||||||
|
|
|
|
|||||||||||||||||||||
Basic and diluted income (loss) per share
|
$
|
0.01
|
|
$
|
0.09
|
|
|
1.53
|
)
|
|
0.25
|
)
|
||||||||||||
|
|
|
|
|||||||||||||||||||||
Shares used in computation of
|
||||||||||||||||||||||||
Basic income (loss) per share
|
|
371,420
|
|
|
371,420
|
|
|
355,681
|
|
|
355,681
|
|
||||||||||||
|
|
|
|
|||||||||||||||||||||
Diluted income (loss) per share
|
|
384,045
|
|
|
384,045
|
|
|
355,681
|
|
|
355,681
|
|
||||||||||||
|
|
|
|
(1)
|
|
In accordance with accounting principles generally accepted in the United States
|
Year Ended
|
||||||||||||||||||||||||
December 31, 2001
|
December 31, 2000
|
|||||||||||||||||||||||
As
Reported (1) |
Pro Forma Adjustments
|
Pro Forma
|
As
Reported (1) |
Pro Forma Adjustments
|
Pro Forma
|
|||||||||||||||||||
Net sales
|
$
|
3,122,433
|
|
$
|
|
|
$
|
3,122,433
|
|
$
|
2,761,983
|
|
$
|
|
|
$
|
2,761,983
|
|
||||||
Cost of sales
|
|
2,323,875
|
|
|
|
|
|
2,323,875
|
|
|
2,106,206
|
|
|
|
|
|
2,106,206
|
|
||||||
|
|
|
|
|
|
|||||||||||||||||||
Gross profit
|
|
798,558
|
|
|
|
|
|
798,558
|
|
|
655,777
|
|
|
|
|
|
655,777
|
|
||||||
Operating expenses:
|
||||||||||||||||||||||||
Fulfillment
|
|
374,250
|
|
|
|
|
|
374,250
|
|
|
414,509
|
|
|
|
|
|
414,509
|
|
||||||
Marketing
|
|
138,283
|
|
|
|
|
|
138,283
|
|
|
179,980
|
|
|
|
|
|
179,980
|
|
||||||
Technology and content
|
|
241,165
|
|
|
|
|
|
241,165
|
|
|
269,326
|
|
|
|
|
|
269,326
|
|
||||||
General and administrative
|
|
89,862
|
|
|
|
|
|
89,862
|
|
|
108,962
|
|
|
|
|
|
108,962
|
|
||||||
Stock-based compensation
|
|
4,637
|
|
|
(4,637
|
)
|
|
|
|
|
24,797
|
|
|
(24,797
|
)
|
|
|
|
||||||
Amortization of goodwill and other intangibles
|
|
181,033
|
|
|
(181,033
|
)
|
|
|
|
|
321,772
|
|
|
(321,772
|
)
|
|
|
|
||||||
Restructuring-related and other
|
|
181,585
|
|
|
(181,585
|
)
|
|
|
|
|
200,311
|
|
|
(200,311
|
)
|
|
|
|
||||||
|
|
|
|
|
|
|||||||||||||||||||
Total operating expenses
|
|
1,210,815
|
|
|
(367,255
|
)
|
|
843,560
|
|
|
1,519,657
|
|
|
(546,880
|
)
|
|
972,777
|
|
||||||
|
|
|
|
|
|
|||||||||||||||||||
Loss from operations
|
|
(412,257
|
)
|
|
367,255
|
|
|
(45,002
|
)
|
|
(863,880
|
)
|
|
546,880
|
|
|
(317,000
|
)
|
||||||
Interest income
|
|
29,103
|
|
|
|
|
|
29,103
|
|
|
40,821
|
|
|
|
|
|
40,821
|
|
||||||
Interest expense
|
|
(139,232
|
)
|
|
|
|
|
(139,232
|
)
|
|
(130,921
|
)
|
|
|
|
|
(130,921
|
)
|
||||||
Other expense, net
|
|
(1,900
|
)
|
|
|
|
|
(1,900
|
)
|
|
(10,058
|
)
|
|
|
|
|
(10,058
|
)
|
||||||
Other gains (losses), net
|
|
(2,141
|
)
|
|
2,141
|
|
|
|
|
|
(142,639
|
)
|
|
142,639
|
|
|
|
|
||||||
|
|
|
|
|
|
|||||||||||||||||||
Net interest expense and other
|
|
(114,170
|
)
|
|
2,141
|
|
|
(112,029
|
)
|
|
(242,797
|
)
|
|
142,639
|
|
|
(100,158
|
)
|
||||||
|
|
|
|
|
|
|||||||||||||||||||
Loss before equity in losses of equity-method investees
|
|
(526,427
|
)
|
|
369,396
|
|
|
(157,031
|
)
|
|
(1,106,677
|
)
|
|
689,519
|
|
|
(417,158
|
)
|
||||||
Equity in losses of equity-method investees, net
|
|
(30,327
|
)
|
|
30,327
|
|
|
|
|
|
(304,596
|
)
|
|
304,596
|
|
|
|
|
||||||
|
|
|
|
|
|
|||||||||||||||||||
Loss before change in accounting principle
|
|
(556,754
|
)
|
|
399,723
|
|
|
(157,031
|
)
|
|
(1,411,273
|
)
|
|
994,115
|
|
|
(417,158
|
)
|
||||||
Cumulative effect of change in accounting principle
|
|
(10,523
|
)
|
|
10,523
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|||||||||||||||||||
Net loss
|
$
|
(567,277
|
)
|
$
|
410,246
|
|
$
|
(157,031
|
)
|
$
|
(1,411,273
|
)
|
$
|
994,115
|
|
$
|
(417,158
|
)
|
||||||
|
|
|
|
|
|
|||||||||||||||||||
Net cash used in operating activities
|
$
|
(119,782
|
)
|
$
|
(119,782
|
)
|
$
|
(130,442
|
)
|
$
|
(130,442
|
)
|
||||||||||||
|
|
|
|
|||||||||||||||||||||
Basic and diluted loss per share:
|
||||||||||||||||||||||||
Prior to cumulative effect of change in accounting principle
|
$
|
(1.53
|
)
|
$
|
(0.43
|
)
|
$
|
(4.02
|
)
|
$
|
(1.19
|
)
|
||||||||||||
Cumulative effect of change in accounting principle
|
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|||||||||||||||||||||
$
|
(1.56
|
)
|
$
|
(0.43
|
)
|
$
|
(4.02
|
)
|
$
|
(1.19
|
)
|
|||||||||||||
|
|
|
|
|||||||||||||||||||||
Shares used in computation of basic and diluted loss per share
|
|
364,211
|
|
|
364,211
|
|
|
350,873
|
|
|
350,873
|
|
||||||||||||
|
|
|
|
(1)
|
|
In accordance with accounting principles generally accepted in the United States
|
Three Months Ended December 31, 2001
|
||||||||||||||||||||||||
U.S. Retail
|
||||||||||||||||||||||||
Books, Music and DVD/Video
|
Electronics, Tools and Kitchen
|
Total
|
Services
|
International
|
Consolidated
|
|||||||||||||||||||
Net sales
|
$
|
538,012
|
|
$
|
216,614
|
|
$
|
754,626
|
|
$
|
98,113
|
|
$
|
262,432
|
|
$
|
1,115,171
|
|
||||||
Gross profit
|
|
139,812
|
|
|
34,678
|
|
|
174,490
|
|
|
44,531
|
|
|
55,028
|
|
|
274,049
|
|
||||||
Pro forma income (loss) from operations
|
|
63,938
|
|
|
(20,423
|
)
|
|
43,515
|
|
|
25,715
|
|
|
(10,550
|
)
|
|
58,680
|
|
||||||
Stock-based compensation
|
|
(1,937
|
)
|
|||||||||||||||||||||
Amortization of goodwill and other intangibles
|
|
(37,537
|
)
|
|||||||||||||||||||||
Restructuring-related and other
|
|
(4,681
|
)
|
|||||||||||||||||||||
Net interest expense and other
|
|
(7,583
|
)
|
|||||||||||||||||||||
Equity in losses of equity-method investees, net
|
|
(1,855
|
)
|
|||||||||||||||||||||
|
||||||||||||||||||||||||
Net income (loss)
|
$
|
5,087
|
|
|||||||||||||||||||||
|
||||||||||||||||||||||||
Segment highlights:
|
||||||||||||||||||||||||
Y / Y net sales growth
|
|
5
|
%
|
|
(2
|
%)
|
|
3
|
%
|
|
3
|
%
|
|
81
|
%
|
|
15
|
%
|
||||||
Y / Y gross profit growth
|
|
1
|
%
|
|
55
|
%
|
|
8
|
%
|
|
21
|
%
|
|
110
|
%
|
|
22
|
%
|
||||||
Gross margin
|
|
26
|
%
|
|
16
|
%
|
|
23
|
%
|
|
45
|
%
|
|
21
|
%
|
|
25
|
%
|
||||||
Pro forma operating margin
|
|
12
|
%
|
|
(9
|
%)
|
|
6
|
%
|
|
26
|
%
|
|
(4
|
%)
|
|
5
|
%
|
||||||
Net sales mix
|
|
48
|
%
|
|
19
|
%
|
|
67
|
%
|
|
9
|
%
|
|
24
|
%
|
|
100
|
%
|
||||||
Three Months Ended December 31, 2000
|
||||||||||||||||||||||||
U.S. Retail
|
||||||||||||||||||||||||
Books, Music and DVD/Video
|
Electronics, Tools and Kitchen
|
Total
|
Services
|
International
|
Consolidated
|
|||||||||||||||||||
Net sales
|
$
|
511,671
|
|
$
|
220,203
|
|
$
|
731,874
|
|
$
|
95,601
|
|
$
|
144,885
|
|
$
|
972,360
|
|
||||||
Gross profit
|
|
138,989
|
|
|
22,407
|
|
|
161,396
|
|
|
36,672
|
|
|
26,232
|
|
|
224,300
|
|
||||||
Pro forma income (loss) from operations
|
|
39,122
|
|
|
(72,725
|
)
|
|
(33,603
|
)
|
|
17,207
|
|
|
(43,550
|
)
|
|
(59,946
|
)
|
||||||
Stock-based compensation
|
|
1,112
|
|
|||||||||||||||||||||
Amortization of goodwill and other intangibles
|
|
(79,210
|
)
|
|||||||||||||||||||||
Restructuring-related and other
|
|
(184,052
|
)
|
|||||||||||||||||||||
Net interest expense and other
|
|
(185,485
|
)
|
|||||||||||||||||||||
Equity in losses of equity-method investees, net
|
|
(37,559
|
)
|
|||||||||||||||||||||
|
||||||||||||||||||||||||
Net loss
|
$
|
(545,140
|
)
|
|||||||||||||||||||||
|
||||||||||||||||||||||||
Segment highlights:
|
||||||||||||||||||||||||
Y / Y net sales growth
|
|
11
|
%
|
|
62
|
%
|
|
23
|
%
|
|
967
|
%
|
|
104
|
%
|
|
44
|
%
|
||||||
Y / Y gross profit growth
|
|
79
|
%
|
|
N/A
|
|
|
152
|
%
|
|
315
|
%
|
|
77
|
%
|
|
155
|
%
|
||||||
Gross margin
|
|
27
|
%
|
|
10
|
%
|
|
22
|
%
|
|
38
|
%
|
|
18
|
%
|
|
23
|
%
|
||||||
Pro forma operating margin
|
|
8
|
%
|
|
(33
|
%)
|
|
(5
|
%)
|
|
18
|
%
|
|
(30
|
%)
|
|
(6
|
%)
|
||||||
Net sales mix
|
|
53
|
%
|
|
22
|
%
|
|
75
|
%
|
|
10
|
%
|
|
15
|
%
|
|
100
|
%
|
Year Ended December 31, 2001
|
||||||||||||||||||||||||
U.S. Retail
|
||||||||||||||||||||||||
Books, Music and DVD/Video
|
Electronics, Tools and Kitchen
|
Total
|
Services
|
International
|
Consolidated
|
|||||||||||||||||||
Net sales
|
$
|
1,688,752
|
|
$
|
547,190
|
|
$
|
2,235,942
|
|
$
|
225,117
|
|
$
|
661,374
|
|
$
|
3,122,433
|
|
||||||
Gross profit
|
|
453,129
|
|
|
78,384
|
|
|
531,513
|
|
|
126,439
|
|
|
140,606
|
|
|
798,558
|
|
||||||
Pro forma income (loss) from operations
|
|
156,753
|
|
|
(140,685
|
)
|
|
16,068
|
|
|
42,042
|
|
|
(103,112
|
)
|
|
(45,002
|
)
|
||||||
Stock-based compensation
|
|
(4,637
|
)
|
|||||||||||||||||||||
Amortization of goodwill and other intangibles
|
|
(181,033
|
)
|
|||||||||||||||||||||
Restructuring-related and other
|
|
(181,585
|
)
|
|||||||||||||||||||||
Net interest expense and other
|
|
(114,170
|
)
|
|||||||||||||||||||||
Equity in losses of equity-method investees, net
|
|
(30,327
|
)
|
|||||||||||||||||||||
Cumulative effect of change in accounting principle
|
|
(10,523
|
)
|
|||||||||||||||||||||
|
||||||||||||||||||||||||
Net loss
|
$
|
(567,277
|
)
|
|||||||||||||||||||||
|
||||||||||||||||||||||||
Segment highlights:
|
||||||||||||||||||||||||
Y / Y net sales growth
|
|
(1
|
%)
|
|
13
|
%
|
|
2
|
%
|
|
13
|
%
|
|
74
|
%
|
|
13
|
%
|
||||||
Y / Y gross profit growth
|
|
9
|
%
|
|
76
|
%
|
|
15
|
%
|
|
9
|
%
|
|
82
|
%
|
|
22
|
%
|
||||||
Gross margin
|
|
27
|
%
|
|
14
|
%
|
|
24
|
%
|
|
56
|
%
|
|
21
|
%
|
|
26
|
%
|
||||||
Pro forma operating margin
|
|
9
|
%
|
|
(26
|
%)
|
|
1
|
%
|
|
19
|
%
|
|
(16
|
%)
|
|
(1
|
%)
|
||||||
Net sales mix
|
|
54
|
%
|
|
18
|
%
|
|
72
|
%
|
|
7
|
%
|
|
21
|
%
|
|
100
|
%
|
||||||
Year Ended December 31, 2000
|
||||||||||||||||||||||||
U.S. Retail
|
||||||||||||||||||||||||
Books, Music and DVD/Video
|
Electronics, Tools and Kitchen
|
Total
|
Services
|
International
|
Consolidated
|
|||||||||||||||||||
Net sales
|
$
|
1,698,266
|
|
$
|
484,151
|
|
$
|
2,182,417
|
|
$
|
198,491
|
|
$
|
381,075
|
|
$
|
2,761,983
|
|
||||||
Gross profit
|
|
417,452
|
|
|
44,655
|
|
|
462,107
|
|
|
116,234
|
|
|
77,436
|
|
|
655,777
|
|
||||||
Pro forma income (loss) from operations
|
|
71,441
|
|
|
(269,890
|
)
|
|
(198,449
|
)
|
|
26,519
|
|
|
(145,070
|
)
|
|
(317,000
|
)
|
||||||
Stock-based compensation
|
|
(24,797
|
)
|
|||||||||||||||||||||
Amortization of goodwill and other intangibles
|
|
(321,772
|
)
|
|||||||||||||||||||||
Restructuring-related and other
|
|
(200,311
|
)
|
|||||||||||||||||||||
Net interest expense and other
|
|
(242,797
|
)
|
|||||||||||||||||||||
Equity in losses of equity-method investees, net
|
|
(304,596
|
)
|
|||||||||||||||||||||
|
||||||||||||||||||||||||
Net loss
|
$
|
(1,411,273
|
)
|
|||||||||||||||||||||
|
||||||||||||||||||||||||
Segment highlights:
|
||||||||||||||||||||||||
Y / Y net sales growth
|
|
30
|
%
|
|
221
|
%
|
|
50
|
%
|
|
N/A
|
|
|
127
|
%
|
|
68
|
%
|
||||||
Y / Y gross profit growth
|
|
59
|
%
|
|
N/A
|
|
|
90
|
%
|
|
N/A
|
|
|
118
|
%
|
|
126
|
%
|
||||||
Gross margin
|
|
25
|
%
|
|
9
|
%
|
|
21
|
%
|
|
59
|
%
|
|
20
|
%
|
|
24
|
%
|
||||||
Pro forma operating margin
|
|
4
|
%
|
|
(56
|
%)
|
|
(9
|
%)
|
|
13
|
%
|
|
(38
|
%)
|
|
(11
|
%)
|
||||||
Net sales mix
|
|
61
|
%
|
|
18
|
%
|
|
79
|
%
|
|
7
|
%
|
|
14
|
%
|
|
100
|
%
|
December 31, 2001
|
December 31, 2000
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
540,282
|
|
$
|
822,435
|
|
||
Marketable securities
|
|
456,303
|
|
|
278,087
|
|
||
Inventories
|
|
143,722
|
|
|
174,563
|
|
||
Prepaid expenses and other current assets
|
|
67,613
|
|
|
86,044
|
|
||
|
|
|||||||
Total current assets
|
|
1,207,920
|
|
|
1,361,129
|
|
||
Fixed assets, net
|
|
271,751
|
|
|
366,416
|
|
||
Goodwill, net
|
|
45,367
|
|
|
158,990
|
|
||
Other intangibles, net
|
|
34,382
|
|
|
96,335
|
|
||
Investments in equity-method investees
|
|
10,387
|
|
|
52,073
|
|
||
Other equity investments
|
|
17,972
|
|
|
40,177
|
|
||
Other assets
|
|
49,768
|
|
|
60,049
|
|
||
|
|
|||||||
Total assets
|
$
|
1,637,547
|
|
$
|
2,135,169
|
|
||
|
|
|||||||
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
444,748
|
|
$
|
485,383
|
|
||
Accrued expenses and other current liabilities
|
|
305,064
|
|
|
272,683
|
|
||
Unearned revenue
|
|
87,978
|
|
|
131,117
|
|
||
Interest payable
|
|
68,632
|
|
|
69,196
|
|
||
Current portion of long-term debt and other
|
|
14,992
|
|
|
16,577
|
|
||
|
|
|||||||
Total current liabilities
|
|
921,414
|
|
|
974,956
|
|
||
Long-term debt and other
|
|
2,156,133
|
|
|
2,127,464
|
|
||
Commitments and contingencies
|
||||||||
Stockholders' deficit:
|
||||||||
Preferred stock, $0.01 par value:
|
||||||||
Authorized shares500,000
|
||||||||
Issued and outstanding sharesnone
|
|
|
|
|
|
|
||
Common stock, $0.01 par value:
|
||||||||
Authorized shares5,000,000
|
||||||||
Issued and outstanding shares373,218 and 357,140, respectively
|
|
3,732
|
|
|
3,571
|
|
||
Additional paid-in capital
|
|
1,462,769
|
|
|
1,338,303
|
|
||
Deferred stock-based compensation
|
|
(9,853
|
)
|
|
(13,448
|
)
|
||
Accumulated other comprehensive loss
|
|
(36,070
|
)
|
|
(2,376
|
)
|
||
Accumulated deficit
|
|
(2,860,578
|
)
|
|
(2,293,301
|
)
|
||
|
|
|||||||
Total stockholders' deficit
|
|
(1,440,000
|
)
|
|
(967,251
|
)
|
||
|
|
|||||||
Total liabilities and stockholders' deficit
|
$
|
1,637,547
|
|
$
|
2,135,169
|
|
||
|
|
Three Months Ended December 31,
|
Year Ended
December 31, |
|||||||||||||||
2001
|
2000
|
2001
|
2000
|
|||||||||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
$
|
432,307
|
|
$
|
647,048
|
|
$
|
822,435
|
|
$
|
133,309
|
|
||||
OPERATING ACTIVITIES:
|
||||||||||||||||
Net income (loss)
|
|
5,087
|
|
|
(545,140
|
)
|
|
(567,277
|
)
|
|
(1,411,273
|
)
|
||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
||||||||||||||||
Depreciation of fixed assets and other amortization
|
|
21,047
|
|
|
22,741
|
|
|
84,709
|
|
|
84,460
|
|
||||
Stock-based compensation
|
|
1,937
|
|
|
(1,112
|
)
|
|
4,637
|
|
|
24,797
|
|
||||
Equity in losses of equity-method investees, net
|
|
1,855
|
|
|
37,559
|
|
|
30,327
|
|
|
304,596
|
|
||||
Amortization of goodwill and other intangibles
|
|
37,537
|
|
|
79,210
|
|
|
181,033
|
|
|
321,772
|
|
||||
Non-cash restructuring-related and other
|
|
2,883
|
|
|
184,052
|
|
|
73,293
|
|
|
200,311
|
|
||||
Loss (gain) on sale of marketable securities, net
|
|
(198
|
)
|
|
3,877
|
|
|
(1,335
|
)
|
|
(280
|
)
|
||||
Other losses (gains), net
|
|
(16,312
|
)
|
|
155,005
|
|
|
2,141
|
|
|
142,639
|
|
||||
Non-cash interest expense and other
|
|
6,510
|
|
|
6,450
|
|
|
26,629
|
|
|
24,766
|
|
||||
Cumulative effect of change in accounting principle
|
|
|
|
|
|
|
|
10,523
|
|
|
|
|
||||
Changes in operating assets and liabilities:
|
||||||||||||||||
Inventories
|
|
(13,813
|
)
|
|
(10,683
|
)
|
|
30,628
|
|
|
46,083
|
|
||||
Prepaid expenses and other current assets
|
|
2,641
|
|
|
3,412
|
|
|
20,732
|
|
|
(8,585
|
)
|
||||
Accounts payable
|
|
209,546
|
|
|
180,674
|
|
|
(44,438
|
)
|
|
22,357
|
|
||||
Accrued expenses and other current liabilities
|
|
65,243
|
|
|
113,374
|
|
|
50,031
|
|
|
93,967
|
|
||||
Unearned revenue
|
|
38,098
|
|
|
31,727
|
|
|
114,738
|
|
|
97,818
|
|
||||
Amortization of previously unearned revenue
|
|
(40,408
|
)
|
|
(42,653
|
)
|
|
(135,808
|
)
|
|
(108,211
|
)
|
||||
Interest payable
|
|
27,467
|
|
|
29,160
|
|
|
(345
|
)
|
|
34,341
|
|
||||
|
|
|
|
|||||||||||||
Net cash provided by (used in) operating activities
|
|
349,120
|
|
|
247,653
|
|
|
(119,782
|
)
|
|
(130,442
|
)
|
||||
INVESTING ACTIVITIES:
|
||||||||||||||||
Sales and maturities of marketable securities
|
|
67,316
|
|
|
23,811
|
|
|
370,377
|
|
|
545,724
|
|
||||
Purchases of marketable securities
|
|
(286,214
|
)
|
|
(88,715
|
)
|
|
(567,152
|
)
|
|
(184,455
|
)
|
||||
Purchases of fixed assets, including internal-use software and web-site development
|
|
(7,534
|
)
|
|
(37,331
|
)
|
|
(50,321
|
)
|
|
(134,758
|
)
|
||||
Investments in equity-method investees and other investments
|
|
(6,198
|
)
|
|
(691
|
)
|
|
(6,198
|
)
|
|
(62,533
|
)
|
||||
|
|
|
|
|||||||||||||
Net cash provided by (used in) investing activities
|
|
(232,630
|
)
|
|
(102,926
|
)
|
|
(253,294
|
)
|
|
163,978
|
|
||||
FINANCING ACTIVITIES:
|
||||||||||||||||
Proceeds from exercise of stock options and other
|
|
2,047
|
|
|
4,980
|
|
|
16,625
|
|
|
44,697
|
|
||||
Proceeds from issuance of common stock, net of issuance costs
|
|
|
|
|
|
|
|
99,831
|
|
|
|
|
||||
Proceeds from long-term debt and other
|
|
|
|
|
|
|
|
10,000
|
|
|
681,499
|
|
||||
Repayment of long-term debt and other
|
|
(4,440
|
)
|
|
(3,930
|
)
|
|
(19,575
|
)
|
|
(16,927
|
)
|
||||
Financing costs
|
|
|
|
|
|
|
|
|
|
|
(16,122
|
)
|
||||
|
|
|
|
|||||||||||||
Net cash provided by (used in) financing activities
|
|
(2,393
|
)
|
|
1,050
|
|
|
106,881
|
|
|
693,147
|
|
||||
Effect of exchange-rate changes on cash and cash equivalents
|
|
(6,122
|
)
|
|
29,610
|
|
|
(15,958
|
)
|
|
(37,557
|
)
|
||||
|
|
|
|
|||||||||||||
Net increase (decrease) in cash and cash equivalents
|
|
107,975
|
|
|
175,387
|
|
|
(282,153
|
)
|
|
689,126
|
|
||||
|
|
|
|
|||||||||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$
|
540,282
|
|
$
|
822,435
|
|
$
|
540,282
|
|
$
|
822,435
|
|
||||
|
|
|
|
|||||||||||||
SUPPLEMENTAL CASH FLOW INFORMATION:
|
||||||||||||||||
Fixed assets acquired under capital leases
|
$
|
114
|
|
$
|
113
|
|
$
|
4,597
|
|
$
|
4,459
|
|
||||
Fixed assets acquired under financing agreements
|
|
1,000
|
|
|
|
|
|
1,000
|
|
|
4,844
|
|
||||
Equity securities received for commercial agreements
|
|
|
|
|
|
|
|
331
|
|
|
106,848
|
|
||||
Stock issued in connection with business acquisitions and minority investments
|
|
5,000
|
|
|
|
|
|
5,000
|
|
|
32,130
|
|
||||
Cash paid for interest
|
|
1,194
|
|
|
1,870
|
|
|
112,184
|
|
|
67,252
|
|
Q4
2000
|
Q1
2001
|
Q2
2001
|
Q3
2001
|
Q4 2001
|
Y/Y Growth %
|
||||||||||||||||||
Results of Operations
|
|||||||||||||||||||||||
Net sales
|
$
|
972
|
|
$
|
700
|
|
$
|
668
|
|
$
|
639
|
|
$
|
1,115
|
|
15
|
%
|
||||||
Net salestrailing twelve months (TTM)
|
$
|
2,762
|
|
$
|
2,888
|
|
$
|
2,978
|
|
$
|
2,980
|
|
$
|
3,122
|
|
13
|
%
|
||||||
Net sales to customers outside the U.S. % of net sales
|
|
21
|
%
|
|
26
|
%
|
|
28
|
%
|
|
29
|
%
|
|
29
|
%
|
N/A
|
|
||||||
Gross profit
|
$
|
224
|
|
$
|
183
|
|
$
|
180
|
|
$
|
162
|
|
$
|
274
|
|
22
|
%
|
||||||
Gross margin% of net sales
|
|
23.1
|
%
|
|
26.1
|
%
|
|
26.9
|
%
|
|
25.4
|
%
|
|
24.6
|
%
|
N/A
|
|
||||||
Gross profitTTM
|
$
|
656
|
|
$
|
710
|
|
$
|
754
|
|
$
|
749
|
|
$
|
799
|
|
22
|
%
|
||||||
Gross marginTTM % of net sales
|
|
23.7
|
%
|
|
24.6
|
%
|
|
25.3
|
%
|
|
25.1
|
%
|
|
25.6
|
%
|
N/A
|
|
||||||
Fulfillment costs% of net sales
|
|
13.5
|
%
|
|
14.0
|
%
|
|
12.8
|
%
|
|
12.7
|
%
|
|
9.8
|
%
|
N/A
|
|
||||||
Fulfillment costs% of U.S. Retail and International combined net sales
|
|
14.9
|
%
|
|
14.9
|
%
|
|
13.6
|
%
|
|
13.7
|
%
|
|
10.7
|
%
|
N/A
|
|
||||||
Pro forma operating expenses
|
$
|
284
|
|
$
|
231
|
|
$
|
208
|
|
$
|
189
|
|
$
|
215
|
|
(24
|
%)
|
||||||
Pro forma operating expensesTTM
|
$
|
973
|
|
$
|
977
|
|
$
|
959
|
|
$
|
912
|
|
$
|
844
|
|
(13
|
%)
|
||||||
Pro forma operating income (loss)
|
$
|
(60
|
)
|
$
|
(49
|
)
|
$
|
(28
|
)
|
$
|
(27
|
)
|
$
|
59
|
|
N/A
|
|
||||||
Pro forma operating margin% of net sales
|
|
(6.2
|
%)
|
|
(6.9
|
%)
|
|
(4.2
|
%)
|
|
(4.2
|
%)
|
|
5.3
|
%
|
N/A
|
|
||||||
Pro forma operating income (loss)TTM
|
$
|
(317
|
)
|
$
|
(266
|
)
|
$
|
(205
|
)
|
$
|
(164
|
)
|
$
|
(45
|
)
|
(86
|
%)
|
||||||
GAAP operating income (loss)
|
$
|
(322
|
)
|
$
|
(217
|
)
|
$
|
(140
|
)
|
$
|
(70
|
)
|
$
|
15
|
|
N/A
|
|
||||||
GAAP operating income (loss)% of net sales
|
|
(33.1
|
%)
|
|
(30.9
|
%)
|
|
(20.9
|
%)
|
|
(11.0
|
%)
|
|
1.3
|
%
|
N/A
|
|
||||||
GAAP operating income (loss)TTM
|
$
|
(864
|
)
|
$
|
(883
|
)
|
$
|
(842
|
)
|
$
|
(749
|
)
|
$
|
(412
|
)
|
(52
|
%)
|
||||||
Pro forma net income (loss)
|
$
|
(90
|
)
|
$
|
(76
|
)
|
$
|
(58
|
)
|
$
|
(58
|
)
|
$
|
35
|
|
N/A
|
|
||||||
Pro forma net income (loss) per share
|
$
|
(0.25
|
)
|
$
|
(0.21
|
)
|
$
|
(0.16
|
)
|
$
|
(0.16
|
)
|
$
|
0.09
|
|
N/A
|
|
||||||
Pro forma net income (loss)TTM
|
$
|
(417
|
)
|
$
|
(372
|
)
|
$
|
(314
|
)
|
$
|
(282
|
)
|
$
|
(157
|
)
|
(62
|
%)
|
||||||
GAAP net income (loss)
|
$
|
(545
|
)
|
$
|
(234
|
)
|
$
|
(168
|
)
|
$
|
(170
|
)
|
$
|
5
|
|
N/A
|
|
||||||
GAAP net income (loss) per share
|
$
|
(1.53
|
)
|
$
|
(0.66
|
)
|
$
|
(0.47
|
)
|
$
|
(0.46
|
)
|
$
|
0.01
|
|
N/A
|
|
||||||
GAAP net income (loss)TTM
|
$
|
(1,411
|
)
|
$
|
(1,337
|
)
|
$
|
(1,188
|
)
|
$
|
(1,118
|
)
|
$
|
(567
|
)
|
(60
|
%)
|
||||||
U.S. books, music and DVD/video (US BMVD) segment:
|
|||||||||||||||||||||||
US BMVD net sales
|
$
|
512
|
|
$
|
410
|
|
$
|
390
|
|
$
|
351
|
|
$
|
538
|
|
5
|
%
|
||||||
US BMVD net salesTTM
|
$
|
1,698
|
|
$
|
1,706
|
|
$
|
1,711
|
|
$
|
1,662
|
|
$
|
1,689
|
|
(1
|
%)
|
||||||
US BMVD gross profit
|
$
|
139
|
|
$
|
109
|
|
$
|
111
|
|
$
|
93
|
|
$
|
140
|
|
1
|
%
|
||||||
US BMVD pro forma operating margin% of US BMVD net sales
|
|
8
|
%
|
|
7
|
%
|
|
10
|
%
|
|
7
|
%
|
|
12
|
%
|
N/A
|
|
||||||
U.S. electronics, tools and kitchen (US ETK) segment:
|
|||||||||||||||||||||||
US ETK net sales
|
$
|
220
|
|
$
|
117
|
|
$
|
111
|
|
$
|
103
|
|
$
|
217
|
|
(2
|
%)
|
||||||
US ETK net salesTTM
|
$
|
484
|
|
$
|
526
|
|
$
|
545
|
|
$
|
551
|
|
$
|
547
|
|
13
|
%
|
||||||
US ETK gross profit
|
$
|
22
|
|
$
|
17
|
|
$
|
13
|
|
$
|
13
|
|
$
|
35
|
|
55
|
%
|
||||||
US ETK pro forma operating margin% of US ETK net sales
|
|
(33
|
%)
|
|
(39
|
%)
|
|
(37
|
%)
|
|
(32
|
%)
|
|
(9
|
%)
|
N/A
|
|
||||||
Services segment:
|
|||||||||||||||||||||||
Services net sales
|
$
|
96
|
|
$
|
42
|
|
$
|
39
|
|
$
|
46
|
|
$
|
98
|
|
3
|
%
|
||||||
Services net salesTTM
|
$
|
198
|
|
$
|
218
|
|
$
|
229
|
|
$
|
223
|
|
$
|
225
|
|
13
|
%
|
||||||
Services gross profit
|
$
|
37
|
|
$
|
28
|
|
$
|
26
|
|
$
|
27
|
|
$
|
45
|
|
21
|
%
|
||||||
Services pro forma operating margin% of Services net sales
|
|
18
|
%
|
|
10
|
%
|
|
11
|
%
|
|
17
|
%
|
|
26
|
%
|
N/A
|
|
||||||
International segment:
|
|||||||||||||||||||||||
International net sales
|
$
|
145
|
|
$
|
132
|
|
$
|
128
|
|
$
|
138
|
|
$
|
262
|
|
81
|
%
|
||||||
International net salesTTM
|
$
|
381
|
|
$
|
438
|
|
$
|
493
|
|
$
|
544
|
|
$
|
661
|
|
74
|
%
|
||||||
International gross profit
|
$
|
26
|
|
$
|
28
|
|
$
|
29
|
|
$
|
28
|
|
$
|
55
|
|
110
|
%
|
||||||
International pro forma operating margin% of International
|
|||||||||||||||||||||||
net sales
|
|
(30
|
%)
|
|
(26
|
%)
|
|
(23
|
%)
|
|
(20
|
%)
|
|
(4
|
%)
|
N/A
|
|
Q4 2000
|
Q1 2001
|
Q2 2001
|
Q3 2001
|
Q4 2001
|
Y / Y
Growth %
|
||||||||||||||||||
Customer Data *
|
|||||||||||||||||||||||
New customer accounts
|
|
4.1
|
|
|
3.0
|
|
|
2.6
|
|
|
2.9
|
|
|
4.7
|
|
15
|
%
|
||||||
Active customer accountsTTM
|
|
19.8
|
|
|
20.5
|
|
|
21.1
|
|
|
23.0
|
|
|
24.7
|
|
25
|
%
|
||||||
New customer accountsinternational
|
|
1.1
|
|
|
1.0
|
|
|
0.9
|
|
|
1.0
|
|
|
1.6
|
|
45
|
%
|
||||||
Active customer accountsinternationalTTM
|
|
4.2
|
|
|
4.9
|
|
|
5.4
|
|
|
6.1
|
|
|
6.9
|
|
64
|
%
|
||||||
Net sales (excluding catalog sales) per active customer accountTTM
|
$
|
134
|
|
$
|
135
|
|
$
|
136
|
|
$
|
126
|
|
$
|
123
|
|
(8
|
%)
|
||||||
Marketing cost per new customer account
|
$
|
13
|
|
$
|
12
|
|
$
|
14
|
|
$
|
11
|
|
$
|
7
|
|
(46
|
%)
|
||||||
U.S. customers (excluding Marketplace, Auctions and zShops customers) ordering from non-US BMVD stores
|
|
36
|
%
|
|
19
|
%
|
|
21
|
%
|
|
22
|
%
|
|
37
|
%
|
N/A
|
|
||||||
Balance Sheet
|
|||||||||||||||||||||||
Cash and marketable securities
|
$
|
1,101
|
|
$
|
643
|
|
$
|
609
|
|
$
|
668
|
|
$
|
997
|
|
(9
|
%)
|
||||||
Inventory, net
|
$
|
175
|
|
$
|
156
|
|
$
|
129
|
|
$
|
131
|
|
$
|
144
|
|
(18
|
%)
|
||||||
Inventory% of net sales
|
|
17
|
%
|
|
24
|
%
|
|
21
|
%
|
|
20
|
%
|
|
12
|
%
|
N/A
|
|
||||||
Inventory% of TTM net sales
|
|
7
|
%
|
|
6
|
%
|
|
5
|
%
|
|
5
|
%
|
|
5
|
%
|
N/A
|
|
||||||
Inventory turnoverannualized
|
|
17.7
|
|
|
12.6
|
|
|
13.7
|
|
|
14.7
|
|
|
24.5
|
|
38
|
%
|
||||||
Inventory turnoverTTM
|
|
11.7
|
|
|
13.0
|
|
|
14.0
|
|
|
14.8
|
|
|
15.8
|
|
35
|
%
|
||||||
Fixed assets, net
|
$
|
366
|
|
$
|
304
|
|
$
|
292
|
|
$
|
288
|
|
$
|
272
|
|
(26
|
%)
|
||||||
Accounts payable daysending
|
|
60
|
|
|
45
|
|
|
48
|
|
|
46
|
|
|
49
|
|
(18
|
%)
|
||||||
Cash Flows
|
|||||||||||||||||||||||
Cash generated by (used in) operations
|
$
|
248
|
|
$
|
(407
|
)
|
$
|
2
|
|
$
|
(64
|
)
|
$
|
349
|
|
41
|
%
|
||||||
Cash used in operationsTTM
|
$
|
(130
|
)
|
$
|
(217
|
)
|
$
|
(161
|
)
|
$
|
(221
|
)
|
$
|
(120
|
)
|
(8
|
%)
|
||||||
Purchases of fixed assets
|
$
|
(37
|
)
|
$
|
(19
|
)
|
$
|
(10
|
)
|
$
|
(13
|
)
|
$
|
(8
|
)
|
(78
|
%)
|
||||||
Purchases of fixed assetsTTM
|
$
|
(135
|
)
|
$
|
(128
|
)
|
$
|
(109
|
)
|
$
|
(80
|
)
|
$
|
(50
|
)
|
(63
|
%)
|
||||||
Other
|
|||||||||||||||||||||||
Common shares outstanding
|
|
357
|
|
|
359
|
|
|
362
|
|
|
372
|
|
|
373
|
|
5
|
%
|
||||||
Options outstanding% of common shares outstanding
|
|
20
|
%
|
|
12
|
%
|
|
12
|
%
|
|
18
|
%
|
|
18
|
%
|
N/A
|
|
||||||
Employees (full-time and part-time)
|
|
9,000
|
|
|
8,600
|
|
|
7,800
|
|
|
7,900
|
|
|
7,800
|
|
(13
|
%)
|
*
|
|
Our customer account and active customer calculation methodology was modified in the third quarter 2001, primarily to include all customers who order new and used products
through Amazon Marketplace. Our prior methodology did not capture all such customers. If second quarter 2001 customer metrics were presented under the modified methodology, new customer accounts, active customer accounts, International customer
accounts, International active customer accounts, TTM net sales per active customer account, and marketing cost per new customer account would have been 2.7 million, 21.9 million, .8 million, 5.5 million, $131, and $13, respectively. Amounts prior
to the 2001 second quarter have not been recalculated under the current methodology.
|
|
|
Shipping revenue was approximately $125 million, up from $112 million.
|
|
|
The cash portion of Services net sales increased to approximately $93 million, or 95% of net sales, from $75 million, or 78%; non-cash Services revenues decreased to
approximately $5 million, or 5%, from $21 million, or 22%.
|
|
|
Excluding fourth quarter 2000 online sales of toys and video games, which since September 2000 are now sold at
www.amazon.com
through our strategic alliance with
Toysrus.com and reported in our Services segment, growth rates for our U.S. Electronics, Tools and Kitchen segment would have been 5%.
|
|
|
Gross margin, excluding the results of our Services segment, would have been 23%, up from 21%.
|
|
|
Costs associated with our service revenues classified as cost of services generally include fulfillment-related costs to ship products on behalf of third-party sellers, costs
to provide customer service, credit card fees and other related costs.
|
|
|
Shipping gross loss was approximately $11 million, down from $17 million; this includes the International segments shipping gross loss of approximately $6 million, up
from $2 million. We continue to measure our shipping results relative to their impact on our overall financial results, with the viewpoint that shipping promotions are an effective promotional tool. We will continue offering shipping promotions to
our customers, which reduce shipping revenue as a percentage of sales and will negatively affect gross margins on our retail sales.
|
|
|
Fulfillment costs represent those costs incurred in operating and staffing our fulfillment and customer service centers, including costs attributable to receiving, inspecting
and warehousing inventories; picking, packaging and preparing customers orders for shipment; credit card fees and bad debt costs; and responding to inquiries from customers. Fulfillment costs also include amounts paid to third-party cosourcers
who assist us in fulfillment and customer service operations.
|
|
|
During the first quarter of 2001, we offered a limited non-compulsory exchange of employee stock options. This option exchange offer results in variable accounting treatment
for approximately 12 million stock options at December 31, 2001, which includes approximately 11 million options granted under the exchange offer with an exercise price of $13.375, and approximately 1 million options that were subject to the
exchange offer but were not exchanged. Variable accounting treatment will result in unpredictable and potentially significant charges or credits, dependent on fluctuations in quoted prices for our common stock, which we are unable to forecast.
|
|
|
The Financial Accounting Standards Board issued SFAS No. 142, Goodwill and Other Intangible Assets which requires use of a non-amortization approach to account for
purchased goodwill and
|
certain intangibles, effective January 1, 2002. We expect the adoption of this accounting standard will result in approximately $25 million of intangible assets being subsumed into goodwill, and
will have the impact of substantially reducing our amortization of goodwill and intangibles effective January 1, 2002. Transitional impairments, if any, are not expected to be material; however, impairment reviews may result in future periodic
write-downs.
|
|
|
We continued the implementation of our operational restructuring plan to reduce our operating costs, streamline our organizational structure and consolidate certain of our
fulfillment and customer service operations. As a result of this initiative, we recorded restructuring and other charges of approximately $177 million during the first three quarters of 2001, and $5 million in the fourth quarter ended
December 31, 2001. This initiative involved the reduction of employee staff by approximately 1,300 positions throughout the Company in managerial, professional, clerical, technical and fulfillment roles; consolidation of our Seattle
corporate office locations; closure of our McDonough, Georgia, fulfillment center; seasonal operation of our Seattle fulfillment center (if necessary); closure of our customer service centers in Seattle and The Hague, Netherlands; and ongoing lease
obligations for technology infrastructure no longer utilized. Each component of the restructuring plan has been substantially completed.
|
|
|
Costs that relate to ongoing operations, including inventory write-downs, are not part of restructuring charges. There have been no significant inventory write-downs resulting
from the restructuring, and none are anticipated.
|
|
|
Cash payments resulting from the restructuring were $49 million in 2001, $14 million of which was paid in the December quarter. We anticipate the restructuring charges will
result in the following net cash outflows:
|
Leases (a)
|
Termination Benefits
|
Other
|
Total
|
|||||||||
(in thousands)
|
||||||||||||
Year Ending December 31,
|
||||||||||||
2002
|
$
|
35,578
|
$
|
61
|
$
|
5,159
|
$
|
40,798
|
||||
2003
|
|
5,476
|
|
|
|
3,031
|
|
8,507
|
||||
2004
|
|
2,016
|
|
|
|
|
|
2,016
|
||||
2005
|
|
1,983
|
|
|
|
|
|
1,983
|
||||
2006
|
|
2,068
|
|
|
|
|
|
2,068
|
||||
Thereafter
|
|
6,066
|
|
|
|
|
|
6,066
|
||||
|
|
|
|
|||||||||
Total estimated cash outflows
|
$
|
53,187
|
$
|
61
|
$
|
8,190
|
$
|
61,438
|
||||
|
|
|
|
(a)
|
|
Net of anticipated sublease income of approximately $68 million.
|
|
|
Other income (expense) consists primarily of net realized gains and losses on sales of marketable securities, miscellaneous state and foreign taxes and certain
foreign-currency-related transaction gains and losses.
|
|
|
Other gains, net were $16 million for the three months ended December 31, 2001, primarily consisting of a foreign-currency gain on 6.875% PEACS.
|
|
|
Currency gains and losses arising from the remeasurement of the 6.875% PEACS principal from Euros to U.S. dollars are recorded each quarter. We are unable to forecast the gains
or losses associated with
|
our PEACS that will result from fluctuations in foreign exchange rates in future periods. Absent the foreign-currency gain recorded this quarter, we would have reported a fourth quarter 2001 GAAP
net loss.
|
|
|
Equity in losses of equity-method investees represents our share of losses of companies in which we have investments that give us the ability to exercise significant influence,
but not control, over an investee. Equity-method losses reduce our underlying investment balances until the recorded basis is reduced to zero.
|
|
|
At December 31, 2001, we had net operating losses of approximately $2.3 billion related to U.S. federal, state and foreign jurisdictions.
|
|
|
Diluted earnings per share is computed using the weighted average number of common and common stock equivalent shares outstanding during the period; common stock equivalent
shares such as options, warrants and convertible securities are excluded from the computation if their effect is antidilutive.
|
|
|
Cash and marketable securities are impacted by the effect of quarterly fluctuations in foreign-currency exchange rates, particularly the Euro. Our Euro investments, classified
as available for sale, had a balance of 179 million Euros ($158 million, based on the exchange rate as of December 31, 2001).
|
|
|
Our marketable securities, at estimated fair value, consist of the following, as of December 31, 2001 (in thousands):
|
Certificates of deposit
|
$
|
18,159
|
|
Commercial paper and short-term obligations
|
|
28,622
|
|
Corporate notes and bonds
|
|
37,602
|
|
Asset-backed and agency securities
|
|
232,821
|
|
Treasury notes and bonds
|
|
125,947
|
|
Equity securities
|
|
13,152
|
|
|
|||
$
|
456,303
|
||
|
|
|
Our segment reporting includes four segments: U.S. Books, Music and DVD/Video; U.S. Electronics, Tools and Kitchen; International; and Services. Allocation methodologies are
consistent with past presentations, and prior period amounts have been reclassified to conform with the current period presentation.
|
|
|
The U.S. Books, Music and DVD/Video segment includes revenues, direct costs and cost allocations associated with retail sales from www.amazon.com for books, music, DVD and
video products and for magazine subscriptions, including commissions earned on sales of similar products, new or used, through Amazon Marketplace. This segment also includes product sales, direct costs and cost allocations associated with stores
offering these products through our Syndicated Stores program, such as
www.borders.com.
|
|
|
The U.S. Electronics, Tools and Kitchen segment includes revenues, direct costs and cost allocations associated with
www.amazon.com
retail sales of electronics,
computers, kitchen and housewares, camera and photo items, software, cell phones and service, tools and hardware, outdoor living items, and computer and video games products, sold other than through our Toysrus.com strategic alliance, as well as
catalog sales of toys, tools and hardware. This segment also includes commissions earned on sales of similar products, new or used, through Amazon Marketplace. This segment includes commissions and other amounts earned from offerings of these
products by third-party sellers under our Merchant@amazon.com Program, including our strategic alliance with Circuit City, and will include stores offering these products, if any, through its Syndicated Stores.
|
|
|
The International segment includes all revenues, direct costs and cost allocations associated with the retail sales of our four internationally-focused sites:
www.amazon.de,
www.amazon.fr, www.amazon.co.jp and www.amazon.co.uk.
|
|
|
The Services segment includes revenues, direct costs and cost allocations associated with our business-to-business strategic alliances, including the Merchant Program and
certain aspects of the Merchant@amazon.com Program, as well as the strategic alliance with America Online. This segment also includes Amazon Auctions, zShops and Payments, and miscellaneous marketing and promotional agreements.
|
|
|
All references to customers mean customer accounts, which are unique e-mail addresses, established either when a customers order is shipped or when a customer orders from
a third-party seller. Customer accounts include customers of Amazon Marketplace, Auctions and zShops services, and customer accounts under our Merchant@amazon.com and Syndicated Stores programs, but exclude Amazon Payments customers, our catalog
customers, and the customers of selected companies with whom we have strategic marketing and promotional relationships.
|
|
|
Trailing twelve-month net sales per active customer account figures include all amounts earned through Internet sales, including net sales earned from new or used products sold
through Amazon Marketplace, Auctions and zShops services, and products sold through our Merchant@amazon.com and Syndicated Stores programs, but excluding products sold through our catalogs and certain strategic alliances and sales of inventory to
Toysrus.com. A customer is considered active upon placing an order.
|