Amazon.com 2013 Annual Report Download - page 60

Download and view the complete annual report

Please find page 60 of the 2013 Amazon.com annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 86

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86

49
significant investment in tenant improvements. As a result, the buildings are being depreciated over the shorter of their useful
lives or the related leases’ terms. Additionally, certain build-to-suit lease arrangements and financing leases provide purchase
options. Upon occupancy, the long-term construction obligations are considered long-term financing lease obligations with
amounts payable during the next 12 months recorded as “Accrued expenses and other.” Gross assets remaining under financing
leases were $578 million and $9 million as of December 31, 2013 and 2012. Accumulated depreciation associated with
financing leases was $22 million and $5 million as of December 31, 2013 and 2012.
Note 4—ACQUISITIONS, GOODWILL, AND ACQUIRED INTANGIBLE ASSETS
2013 Acquisition Activity
In 2013, we acquired several companies in cash transactions for an aggregate purchase price of $195 million, resulting in
goodwill of $103 million and acquired intangible assets of $83 million. The primary reasons for these acquisitions were to
expand our customer base and sales channels and to obtain certain technologies to be used in product development. We
determined the estimated fair value of identifiable intangible assets acquired primarily by using the income and cost
approaches. These assets are included within “Other assets” on our consolidated balance sheets and are being amortized to
operating expenses on a straight-line or accelerated basis over their estimated useful lives. Acquisition-related costs were
expensed as incurred and were not significant.
Pro forma results of operations have not been presented because the effects of these acquisitions, individually and in the
aggregate, were not material to our consolidated results of operations.
2012 Acquisition Activity
In May 2012, we acquired Kiva Systems, Inc. (“Kiva”) for a purchase price of $678 million. The primary reason for this
acquisition was to improve fulfillment center productivity. Acquisition-related costs were expensed as incurred and were not
significant. The aggregate purchase price of this acquisition was allocated as follows (in millions):
Purchase Price
Cash paid, net of cash acquired $ 613
Stock options assumed 65
$ 678
Allocation
Goodwill $ 560
Intangible assets (1):
Marketing-related 5
Contract-based 3
Technology-based 168
Customer-related 17
193
Property and equipment 9
Deferred tax assets 34
Other assets acquired 41
Deferred tax liabilities (81)
Other liabilities assumed (78)
$ 678
___________________
(1) Acquired intangible assets have estimated useful lives of between four and 10 years, with a weighted-average
amortization period of five years.
The fair value of assumed stock options was estimated using the Black-Scholes model. We determined the estimated fair
value of identifiable intangible assets acquired primarily by using the income and cost approaches. These assets are included
within “Other assets” on our consolidated balance sheets and are being amortized to operating expenses on a straight-line or
accelerated basis over their estimated useful lives.