Amazon.com 2013 Annual Report Download - page 61

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50
Pro Forma Financial Information – 2012 Acquisition Activity (unaudited)
Kiva was consolidated into our financial statements starting on its acquisition date. The net sales and operating loss of
Kiva recorded in our consolidated statement of operations from its acquisition date through December 31, 2012, were $61
million and $(62) million. The following pro forma financial information presents our results as if the Kiva acquisition had
occurred at the beginning of 2011 (in millions):
Year Ended
December 31,
2012 2011
Net sales $ 61,118 $ 48,157
Net income (loss) (2) 499
2011 Acquisition Activity
In 2011, we acquired certain companies for an aggregate purchase price of $771 million. The primary reasons for these
acquisitions, none of which was individually material to our consolidated financial statements, were to expand our customer
base and sales channels, including our consumer channels and subscription entertainment services. Acquisition-related costs
were expensed as incurred and were not significant. The aggregate purchase price of these acquisitions was allocated as follows
(in millions):
Purchase Price
Cash paid, net of cash acquired $ 637
Existing equity interest 89
Indemnification holdbacks 25
Stock options assumed 20
$ 771
Allocation
Goodwill $ 615
Intangible assets (1):
Marketing-related 130
Customer-related 94
Contract-based 6
230
Property and equipment 119
Deferred tax assets 49
Other assets acquired 68
Accounts payable (65)
Debt (70)
Deferred tax liabilities (75)
Other liabilities assumed (100)
$ 771
___________________
(1) Amortization periods range from two to 10 years, with a weighted-average amortization period of eight years.
In addition to cash consideration and the fair value of vested stock options, the aggregate purchase price included the
estimated fair value of our previous, noncontrolling interest in one of the acquired companies. We remeasured this equity
interest to fair value at the acquisition date and recognized a non-cash gain of $6 million in “Equity-method investment activity,
net of tax,” in our 2011 consolidated statement of operations. 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. Purchased identifiable intangible 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.