Segment Information

9 Months Ended

Sep. 30, 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. Our “Technology and content” costs included in our segments are primarily based on the geographic location of where the costs are incurred; the majority of these costs are incurred in the U.S. and included in our North America segment. There are no internal revenue transactions between our reporting segments.

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

	Three Months Ended   September 30,						Nine Months Ended   September 30,
	2014			2013			2014			2013
North America
Net sales	$	12,867		$	10,301		$	36,722		$	29,186
Segment operating expenses (1)	12,779			10,006			35,634			28,024
Segment operating income	$	88		$	295		$	1,088		$	1,162
International
Net sales	$	7,712		$	6,791		$	22,937		$	19,679
Segment operating expenses (1)	7,936			6,819			23,254			19,724
Segment operating income (loss)	$	(224	)	$	(28	)	$	(317	)	$	(45	)
Consolidated
Net sales	$	20,579		$	17,092		$	59,659		$	48,865
Segment operating expenses (1)	20,715			16,825			58,888			47,748
Segment operating income (loss)	(136		)	267			771			1,117
Stock-based compensation	(377		)	(281		)	(1,089		)	(808		)
Other operating income (expense), net	(31		)	(11		)	(94		)	(74		)
Income (loss) from operations	(544		)	(25		)	(412		)	235
Total non-operating income (expense)	(90		)	(18		)	(128		)	(181		)
Benefit (provision) for income taxes	205			12			38			18
Equity-method investment activity, net of tax	(8		)	(10		)	47			(38		)
Net income (loss)	$	(437	)	$	(41	)	$	(455	)	$	34

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(1) Represents operating expenses, excluding stock-based compensation and “Other operating expense (income), net,” which are not allocated to segments.

We have aggregated our products and services into groups of similar product and services and provided the supplemental disclosure of net sales (in millions) below. We evaluate whether additional disclosure is appropriate when a product or service category begins to approach a significant level of net sales. For the periods presented no individual product or service represented more than 10% of net sales.

	Three Months Ended   September 30,				Nine Months Ended   September 30,
	2014		2013		2014		2013
Net Sales:
Media	$	5,244	$	5,033	$	15,555	$	14,488
Electronics and other general merchandise	13,953		11,048		40,248		31,677
Other (1)	1,382		1,011		3,856		2,700
	$	20,579	$	17,092	$	59,659	$	48,865

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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.