beatandraise : SEC Filings Research with AI

1.0.0.3 false ACQUISITIONS, GOODWILL, AND ACQUIRED INTANGIBLE ASSETS false 1 $ false false iso4217_USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 iso4217_USD_per_shares Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares 0 shares Standard http://www.xbrl.org/2003/instance shares 0 5 ACQUISITIONS, GOODWILL, AND ACQUIRED INTANGIBLE ASSETS 3 amzn_AcquisitionsGoodwillAndIntangibleAssetsDisclosureTextBlock amzn false na duration string Acquisitions, Goodwill and Intangible Assets Disclosure false false false false false false false false false 1 false false 0 0 <div> Note 4—ACQUISITIONS, GOODWILL, AND ACQUIRED INTANGIBLE ASSETS 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):   <table cellspacing="0" cellpadding="0" width="92%" align="center" border="0"> <tr> <td width="90%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Stock issued </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,079</td> </tr> <tr> <td valign="top"> Assumed stock options, net </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">55</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"></td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,134</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> </table>   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 has been determined primarily by using the income approach. Purchased identifiable intangible assets are amortized on a straight-line and accelerated basis over their respective useful lives. The following summarizes the allocation of the Zappos purchase price (in millions):   <table cellspacing="0" cellpadding="0" width="92%" align="center" border="0"> <tr> <td width="90%"></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Goodwill </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">778</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Other net assets acquired </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">83</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Deferred tax liabilities net </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(167</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td valign="top"> Intangible assets (1): </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Marketing-related </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">223</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Contract-based </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">103</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Customer-related </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">114</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td> </td> </tr> <tr> <td valign="top"></td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,134</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td> </td> </tr> </table>   <table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td valign="top" align="left" width="4%">(1)</td> <td valign="top" align="left">Acquired intangible assets have estimated useful lives of between 1 and 10 years.</td> </tr> </table> Zappos’ financial results have been included in our consolidated statements of income as of November 1, 2009. The following pro forma financial information presents the results as if the Zappos acquisition had occurred at the beginning of each year presented (in millions):   <table cellspacing="0" cellpadding="0" width="92%" align="center" border="0"> <tr> <td width="78%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center" colspan="5">Year Ended December 31,</td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center" colspan="2">    2009    </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center" colspan="2">    2008    </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Net sales </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">25,064</td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">19,801</td> </tr> <tr> <td valign="top"> Net income </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">853</td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">606</td> </tr> </table> We acquired certain additional companies during 2009 for an aggregate purchase price of $26 million, resulting in goodwill of $16 million and acquired intangible assets of $5 million. The results of operations of each of the businesses acquired have been included in our consolidated results from each transactions closing date forward. The effect of these acquisitions on consolidated net sales and operating income during 2009 was not significant. 2008 and 2007 Acquisition Activity We acquired certain companies during 2008 for an aggregate purchase price of $432 million, resulting in goodwill of $210 million and acquired intangible assets of $162 million. We acquired certain companies during 2007 for an aggregate purchase price of $33 million, resulting in goodwill of $21 million and acquired intangible assets of $18 million. We also made principal payments of $13 million on acquired debt in connection with one of these acquisitions. The results of operations of each of the businesses acquired in 2008 and 2007 have been included in our consolidated results from each transaction closing date forward. The effect of these acquisitions on consolidated net sales and operating income during 2008 and 2007 was not significant.   Goodwill The following summarizes our goodwill activity in 2009 (in millions):   <table cellspacing="0" cellpadding="0" width="92%" align="center" border="0"> <tr> <td width="90%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Goodwill—January 1, 2009 </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">438</td> </tr> <tr> <td valign="top"> New acquisitions </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">794</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Other adjustments (1) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">2</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="top"> Goodwill—December 31, 2009 </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,234</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> </table>   <table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td valign="top" align="left" width="4%">(1)</td> <td valign="top" align="left">Primarily includes changes in foreign exchange for goodwill in our International segment.</td> </tr> </table> At December 31, 2009 and December 31, 2008, approximately 9% and 22% of our acquired goodwill related to our International segment. Intangible Assets Acquired intangible assets, included within “Other assets” on our consolidated balance sheets, consist of the following:   <table cellspacing="0" cellpadding="0" width="100%" align="center" border="0"> <tr> <td width="33%"></td> <td valign="bottom" width="6%"></td> <td></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center" colspan="21">December 31,</td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center" colspan="11">2009</td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center" colspan="9">2008</td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center">Weighted Average Life Remaining</td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center" colspan="2">Acquired Intangibles, Gross (1)</td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center" colspan="2">Accumulated Amortization (1)</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center" colspan="2">Acquired Intangibles, Net</td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center" colspan="2">Acquired Intangibles, Gross (1)</td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center" colspan="2">Accumulated Amortization (1)</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" align="center" colspan="2">Acquired Intangibles, Net</td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="center" colspan="21">(in millions)</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Marketing-related </td> <td valign="bottom"> </td> <td valign="bottom" align="right">9.5</td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">249</td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(11</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">238</td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">23</td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(4</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">19</td> </tr> <tr> <td valign="top"> Contract-based </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">166</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(20</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">146</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">62</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(8</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">54</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Technology and content </td> <td valign="bottom"> </td> <td valign="bottom" align="right">3.1</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">15</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(7</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">8</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">10</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(5</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">5</td> </tr> <tr> <td valign="top"> Customer-related </td> <td valign="bottom"> </td> <td valign="bottom" align="right">4.8</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">215</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(40</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">175</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">97</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(15</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">82</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Acquired intangibles (2) </td> <td valign="bottom"> </td> <td valign="bottom" align="right">7.3</td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">645</td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(78</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">567</td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">192</td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(32</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">160</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td> </td> <td valign="bottom"> </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> </table>   <table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td valign="top" align="left" width="4%">(1)</td> <td valign="top" align="left">Excludes the original cost and accumulated amortization of fully-amortized intangibles.</td> </tr> </table> <table style="BORDER-COLLAPSE: collapse" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td valign="top" align="left" width="4%">(2)</td> <td valign="top" align="left">Intangible assets have estimated useful lives of between 1 and 13 years.</td> </tr> </table> Amortization expense for acquired intangibles was $48 million, $29 million, and $13 million in 2009, 2008, and 2007. Expected future amortization expense of acquired intangible assets as of December 31, 2009 is as follows (in millions):   <table cellspacing="0" cellpadding="0" width="92%" align="center" border="0"> <tr> <td width="92%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Year Ended December 31, </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> 2010 </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">100</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> 2011 </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">90</td> </tr> <tr> <td valign="top"> 2012 </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">74</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> 2013 </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">69</td> </tr> <tr> <td valign="top"> 2014 </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">58</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Thereafter </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">176</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> <td style="BORDER-TOP: #000000 1px solid" valign="bottom">  </td> </tr> <tr> <td valign="top"></td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">567</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> <td style="BORDER-TOP: #000000 3px double" valign="bottom">  </td> </tr> </table> </div> Note 4—ACQUISITIONS, GOODWILL, AND ACQUIRED INTANGIBLE ASSETS 2009 Acquisition Activity On November 1, 2009, we acquired 100% of the outstanding false false Acquisitions, Goodwill and Intangible Assets Disclosure No authoritative reference available. false false 1 1 false UnKnown UnKnown UnKnown false true