SEGMENT INFORMATION
We have organized our operations into two segments: North America and International. We present our segment information along the same lines that our Chief Executive Officer reviews our operating results in assessing performance and allocating resources.
We allocate to segment results the operating expenses “Fulfillment,” “Marketing,” “Technology and content,” and “General and administrative,” but exclude from our allocations the portions of these expense lines attributable to stock-based compensation. We do not allocate the line item “Other operating expense (income), net” to our segment operating results. A majority of our costs for “Technology and content” are incurred in the U.S. and most of these costs are allocated to our North America segment. There are no internal revenue transactions between our reporting segments.
North America
The North America segment consists of amounts earned from retail sales of consumer products (including from sellers) and subscriptions through North America-focused websites such as www.amazon.com and www.amazon.ca and include amounts earned from AWS. This segment includes export sales from www.amazon.com and www.amazon.ca.
International
The International segment consists of amounts earned from retail sales of consumer products (including from sellers) and subscriptions through internationally-focused websites. This segment includes export sales from these internationally based websites (including export sales from these sites to customers in the U.S. and Canada), but excludes export sales from our U.S. and Canadian websites.
Information on reportable segments and reconciliation to consolidated net income (loss) is as follows (in millions):
|
| | | | | | | | | | | |
| Year Ended December 31, |
| 2013 | | 2012 | | 2011 |
North America | | | | | |
Net sales | $ | 44,517 |
| | $ | 34,813 |
| | $ | 26,705 |
|
Segment operating expenses (1) | 42,631 |
| | 33,221 |
| | 25,772 |
|
Segment operating income | $ | 1,886 |
| | $ | 1,592 |
| | $ | 933 |
|
International | | | | | |
Net sales | $ | 29,935 |
| | $ | 26,280 |
| | $ | 21,372 |
|
Segment operating expenses (1) | 29,828 |
| | 26,204 |
| | 20,732 |
|
Segment operating income | $ | 107 |
| | $ | 76 |
| | $ | 640 |
|
Consolidated | | | | | |
Net sales | $ | 74,452 |
| | $ | 61,093 |
| | $ | 48,077 |
|
Segment operating expenses (1) | 72,459 |
| | 59,425 |
| | 46,504 |
|
Segment operating income | 1,993 |
| | 1,668 |
| | 1,573 |
|
Stock-based compensation | (1,134 | ) | | (833 | ) | | (557 | ) |
Other operating income (expense), net | (114 | ) | | (159 | ) | | (154 | ) |
Income from operations | 745 |
| | 676 |
| | 862 |
|
Total non-operating income (expense) | (239 | ) | | (132 | ) | | 72 |
|
Provision for income taxes | (161 | ) | | (428 | ) | | (291 | ) |
Equity-method investment activity, net of tax | (71 | ) | | (155 | ) | | (12 | ) |
Net income (loss) | $ | 274 |
| | $ | (39 | ) | | $ | 631 |
|
___________________
| |
(1) | Represents operating expenses, excluding stock-based compensation and “Other operating expense (income), net,” which are not allocated to segments. |
Net sales of similar products and services were as follows (in millions):
|
| | | | | | | | | | | |
| Year Ended December 31, |
| 2013 | | 2012 | | 2011 |
Net Sales: | |
Media | $ | 21,716 |
| | $ | 19,942 |
| | $ | 17,779 |
|
Electronics and other general merchandise | 48,802 |
| | 38,628 |
| | 28,712 |
|
Other (1) | 3,934 |
| | 2,523 |
| | 1,586 |
|
| $ | 74,452 |
| | $ | 61,093 |
| | $ | 48,077 |
|
___________________
| |
(1) | Includes sales from non-retail activities, such as AWS, advertising services, and our co-branded credit card agreements. |
Net sales generated from these internationally-focused websites are denominated in local functional currencies. Revenues are translated at average rates prevailing throughout the period. Net sales attributed to foreign countries are as follows (in millions):
|
| | | | | | | | | | | |
| Year Ended December 31, |
| 2013 | | 2012 | | 2011 |
Germany | $ | 10,535 |
| | $ | 8,732 |
| | $ | 7,230 |
|
Japan | 7,639 |
| | 7,800 |
| | 6,576 |
|
United Kingdom | 7,291 |
| | 6,478 |
| | 5,348 |
|
Total assets, property and equipment, net, and total property and equipment additions, by geography, reconciled to consolidated amounts are (in millions):
|
| | | | | | | |
| December 31, |
| 2013 | | 2012 |
North America | | | |
Total assets | $ | 26,108 |
| | $ | 20,703 |
|
Property and equipment, net | 8,447 |
| | 5,481 |
|
Total property and equipment additions | 4,837 |
| | 3,348 |
|
International | | | |
Total assets | $ | 14,051 |
| | $ | 11,852 |
|
Property and equipment, net | 2,502 |
| | 1,579 |
|
Total property and equipment additions | 1,536 |
| | 969 |
|
Consolidated | | | |
Total assets | $ | 40,159 |
| | $ | 32,555 |
|
Property and equipment, net | 10,949 |
| | 7,060 |
|
Total property and equipment additions | 6,373 |
| | 4,317 |
|
Except for the U.S., property and equipment, net, in any single country was less than 10% of consolidated property and equipment, net.
Depreciation expense, by segment, is as follows (in millions):
|
| | | | | | | | | | | |
| Year Ended December 31, |
| 2013 | | 2012 | | 2011 |
North America | $ | 1,863 |
| | $ | 1,229 |
| | $ | 795 |
|
International | 597 |
| | 424 |
| | 239 |
|
Consolidated | $ | 2,460 |
| | $ | 1,653 |
| | $ | 1,034 |
|
