Segment Information

3 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Segment Information

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.

Information on reportable segments and reconciliation to consolidated net income is as follows (in millions):

	Three Months Ended   March 31,
	2014			2013
North America
Net sales	$	11,858		$	9,391
Segment operating expenses (1)	11,296			8,934
Segment operating income	$	562		$	457
International
Net sales	$	7,883		$	6,679
Segment operating expenses (1)	7,943			6,695
Segment operating income (loss)	$	(60	)	$	(16	)
Consolidated
Net sales	$	19,741		$	16,070
Segment operating expenses (1)	19,239			15,629
Segment operating income	502			441
Stock-based compensation	(321		)	(229		)
Other operating income (expense), net	(35		)	(31		)
Income from operations	146			181
Total non-operating income (expense)	(26		)	(100		)
Benefit (provision) for income taxes	(73		)	18
Equity-method investment activity, net of tax	61			(17		)
Net income	$	108		$	82

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(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):

	Three Months Ended   March 31,
	2014		2013
Net Sales:
Media	$	5,467	$	5,058
Electronics and other general merchandise	13,017		10,214
Other (1)	1,257		798
	$	19,741	$	16,070

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(1) Includes sales from non-retail activities, such as Amazon Web Services (“AWS”), advertising services, and our co-branded credit card agreements.