Amazon.com 2015 Annual Report Download - page 63

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53
Note 4—ACQUISITIONS, GOODWILL, AND ACQUIRED INTANGIBLE ASSETS
2015 Acquisition Activity
During 2015, we acquired certain companies for an aggregate purchase price of $690 million. The primary reasons for
these acquisitions, none of which was individually material to our consolidated financial statements, were to acquire
technologies and know-how to enable Amazon to serve customers more effectively.
Acquisition-related costs were expensed as incurred and not significant. The aggregate purchase price of these
acquisitions was allocated as follows (in millions):
Purchase Price
Cash paid, net of cash acquired $ 599
Stock options and restricted stock units assumed 5
Indemnification holdback 86
$ 690
Allocation
Goodwill $ 482
Intangible assets (1):
Marketing-related 3
Contract-based 1
Technology-based 208
Customer-related 18
230
Property and equipment 4
Deferred tax assets 55
Other assets acquired 53
Deferred tax liabilities (85)
Other liabilities assumed (49)
$ 690
___________________
(1) Acquired intangible assets have estimated useful lives of between one and six years, with a weighted-average amortization
period of five years.
The fair value of assumed stock options, estimated using the Black-Scholes model, and restricted stock units of $9 million
will be expensed over the remaining service period. We determined the estimated fair value of identifiable intangible assets
acquired primarily by using the income approach. These assets are included within “Other assets” on our consolidated balance
sheets and are being amortized to operating expenses on a straight-line basis over their estimated useful lives.
Pro Forma Financial Information – 2015 Acquisition Activity (unaudited)
The acquired companies were consolidated into our financial statements starting on their respective acquisition dates. The
aggregate net sales and operating income (loss) of the companies acquired was $23 million and $(112) million for 2015. The
following financial information, which excludes certain acquired companies for which the pro forma impact is not meaningful,
presents our results as if the acquisitions during 2015 had occurred at the beginning of 2014 (in millions):
Year Ended December 31,
2015 2014
Net sales $ 107,054 $ 89,039
Net income (loss) $ 576 $ (311)