Amazon.com 2011 Annual Report Download - page 60

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Pro Forma Financial Information (unaudited)
The acquired companies were consolidated into our financial statements starting on their respective acquisition dates.
The aggregate net sales and net losses of the acquired companies recorded in our consolidated statement of operations from
the respective acquisition dates through December 31, 2011 were $511 million and $95 million. The following pro forma
financial information presents our results as if these acquisitions had occurred at the beginning of 2010 (in millions):
Year Ended December 31,
2011 2010
Net sales ....................................................... $48,356 $34,813
Net income ..................................................... 608 1,051
2010 Acquisition Activity
In 2010, we acquired certain companies for an aggregate purchase price of $228 million, resulting in
goodwill of $111 million and acquired intangible assets of $91 million. The primary reasons for these
acquisitions were to expand our customer base and sales channels. The purchase price was allocated to the
tangible assets and intangible assets acquired and liabilities assumed based on their estimated fair values on the
acquisition date, with the remaining unallocated purchase price recorded as goodwill. The fair value assigned to
identifiable intangible assets acquired was determined primarily by using the income and cost approaches. These
intangible assets are being amortized on a straight-line or accelerated basis over their respective useful lives.
The acquired companies were consolidated into our financial statements starting on their respective
acquisition dates. Pro forma results of operations have not been presented because the effects of these business
combinations, individually and in the aggregate, were not material to our consolidated results of operations.
2009 Acquisition Activity
On November 1, 2009, we acquired 100% of the outstanding equity of Zappos.com, Inc. (“Zappos”), in exchange
for shares of our common stock, to expand our presence in softline retail categories, such as shoes and apparel.
The fair value of Zappos’ stock options assumed was determined using the Black-Scholes model. The
following table summarizes the consideration paid for Zappos (in millions):
Stock issued ................................................................ $1,079
Assumed stock options, net .................................................... 55
$1,134
The fair value assigned to identifiable intangible assets acquired has been determined primarily by using the
income approach. Purchased identifiable intangible assets are being amortized on a straight-line or accelerated
basis over their respective useful lives.
52