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Acquisitions, Goodwill, and Acquired Intangible Assets
 12 Months Ended
Dec. 31, 2019
Business Combinations [Abstract]  
Acquisitions, Goodwill, and Acquired Intangible Assets ACQUISITIONS, GOODWILL, AND ACQUIRED INTANGIBLE ASSETS
2017 Acquisition Activity
On May 12, 2017, we acquired Souq Group Ltd., an e-commerce company, for approximately $583 million, net of cash acquired, and on August 28, 2017, we acquired Whole Foods Market, a grocery store chain, for approximately $13.2 billion, net of cash acquired. Both acquisitions are intended to expand our retail presence. During 2017, we also acquired certain other companies for an aggregate purchase price of $204 million. The primary reason for our other 2017 acquisitions was to acquire technologies and know-how to enable Amazon to serve customers more effectively.
2018 Acquisition Activity
On April 12, 2018, we acquired Ring Inc. (“Ring”) for cash consideration of approximately $839 million, net of cash acquired, and on September 11, 2018, we acquired PillPack, Inc. (“PillPack”) for cash consideration of approximately $753 million, net of cash acquired, to expand our product and service offerings. During 2018, we also acquired certain other companies for an aggregate purchase price of $57 million. The primary reason for our other 2018 acquisitions was to acquire technologies and know-how to enable Amazon to serve customers more effectively.
2019 Acquisition Activity
During 2019, we acquired certain companies for an aggregate purchase price of $315 million. The primary reason for these acquisitions, none of which were individually material to our consolidated financial statements, was to acquire technologies and know-how to enable Amazon to serve customers more effectively.
Acquisition-related costs were expensed as incurred and were not significant.
Pro forma results of operations have not been presented because the effects of 2019 acquisitions, individually and in the aggregate, were not material to our consolidated results of operations.
Purchase Price Allocation
The aggregate purchase price of these acquisitions was allocated as follows (in millions):
 
December 31,
 
2017
 
2018
 
2019
 
 
 
 
 
 
Purchase Price
 
 
 
 
 
Cash paid, net of cash acquired
$
13,859

 
$
1,618

 
$
276

Indemnification holdback
104

 
31

 
39

 
$
13,963

 
$
1,649

 
$
315

Allocation
 
 
 
 
 
Goodwill
$
9,501

 
$
1,228

 
$
189

Intangible assets (1):
 
 
 
 
 
Marketing-related
1,987

 
186

 
8

Contract-based
440

 
13

 
—

Technology-based
166

 
285

 
139

Customer-related
54

 
193

 
14

 
2,647

 
677

 
161

Property and equipment
3,810

 
11

 
3

Deferred tax assets
117

 
174

 
29

Other assets acquired
1,858

 
282

 
41

Long-term debt
(1,165
)
 
(176
)
 
(31
)
Deferred tax liabilities
(961
)
 
(159
)
 
(34
)
Other liabilities assumed
(1,844
)
 
(388
)
 
(43
)
 
$
13,963

 
$
1,649

 
$
315

 ___________________
(1)
Intangible assets acquired in 2017, 2018, and 2019 have estimated useful lives of between one and twenty-five years, two and seven years, and two and seven years, with weighted-average amortization periods of twenty-one years, six years, and five years.
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.
Goodwill
The goodwill of the acquired companies is primarily related to expected improvements in technology performance and functionality, as well as sales growth from future product and service offerings and new customers, together with certain intangible assets that do not qualify for separate recognition. The goodwill of the acquired companies is generally not deductible for tax purposes. The following summarizes our goodwill activity in 2018 and 2019 by segment (in millions):
 
North
America
 
International
 
AWS
 
Consolidated
Goodwill - January 1, 2018
$
11,165

 
$
1,108

 
$
1,077

 
$
13,350

New acquisitions (1)
1,031

 
177

 
20

 
1,228

Other adjustments (2)
(5
)
 
(15
)
 
(10
)
 
(30
)
Goodwill - December 31, 2018
12,191

 
1,270

 
1,087

 
14,548

New acquisitions
71

 
29

 
89

 
189

Other adjustments (2)
2

 
1

 
14

 
17

Goodwill - December 31, 2019
$
12,264

 
$
1,300

 
$
1,190

 
$
14,754

 ___________________
(1)
Primarily includes the acquisitions of Ring and PillPack in the North America segment.
(2)
Primarily includes changes in foreign exchange rates.
Intangible Assets
Acquired intangible assets, included within “Other assets” on our consolidated balance sheets, consist of the following (in millions):
 
 
December 31,
 
 
 
2018
 
2019
 
 
  
Acquired
Intangibles,
Gross (1)
 
Accumulated
Amortization (1)
 
Acquired
Intangibles,
Net
 
Acquired
Intangibles,
Gross (1)
 
Accumulated
Amortization (1)
 
Acquired
Intangibles,
Net
 
Weighted
Average Life
Remaining
Marketing-related
$
2,542

 
$
(431
)
 
$
2,111

 
$
2,303

 
$
(340
)
 
$
1,963

 
20.7
Contract-based
1,430

 
(224
)
 
1,206

 
1,702

 
(302
)
 
1,400

 
10.5
Technology- and content-based
941

 
(377
)
 
564

 
1,011

 
(477
)
 
534

 
3.6
Customer-related
437

 
(208
)
 
229

 
282

 
(130
)
 
152

 
4.3
Acquired intangibles (2)
$
5,350

 
$
(1,240
)
 
$
4,110

 
$
5,298

 
$
(1,249
)
 
$
4,049

 
14.3
 ___________________
(1)
Excludes the original cost and accumulated amortization of fully-amortized intangibles.
(2)
Intangible assets have estimated useful lives of between one and twenty-five years.
Amortization expense for acquired intangibles was $366 million, $475 million, and $565 million in 2017, 2018, and 2019. Expected future amortization expense of acquired intangible assets as of December 31, 2019 is as follows (in millions):
 
Year Ended December 31,
2020
$
486

2021
424

2022
391

2023
334

2024
270

Thereafter
2,116

 
$
4,021