Segment Information

12 Months Ended

Dec. 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 expect to change our reportable segments to report North America, International, and AWS, beginning with the first quarter of 2015.

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.

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,
	2014			2013			2012
North America
Net sales	$	55,469		$	44,517		$	34,813
Segment operating expenses (1)	53,364			42,631			33,221
Segment operating income	$	2,105		$	1,886		$	1,592
International
Net sales	$	33,519		$	29,935		$	26,280
Segment operating expenses (1)	33,816			29,828			26,204
Segment operating income (loss)	$	(297	)	$	107		$	76
Consolidated
Net sales	$	88,988		$	74,452		$	61,093
Segment operating expenses (1)	87,180			72,459			59,425
Segment operating income	1,808			1,993			1,668
Stock-based compensation	(1,497		)	(1,134		)	(833		)
Other operating income (expense), net	(133		)	(114		)	(159		)
Income from operations	178			745			676
Total non-operating income (expense)	(289		)	(239		)	(132		)
Provision for income taxes	(167		)	(161		)	(428		)
Equity-method investment activity, net of tax	37			(71		)	(155		)
Net income (loss)	$	(241	)	$	274		$	(39	)

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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 products 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.

	Year Ended December 31,
	2014		2013		2012
Net Sales:
Media	$	22,505	$	21,716	$	19,942
Electronics and other general merchandise	60,886		48,802		38,628
Other (1)	5,597		3,934		2,523
	$	88,988	$	74,452	$	61,093

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(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,
	2014		2013		2012
Germany	$	11,919	$	10,535	$	8,732
Japan	7,912		7,639		7,800
United Kingdom	8,341		7,291		6,478

Total assets, property and equipment, net, and total property and equipment additions, by geography, reconciled to consolidated amounts are (in millions):

	December 31,
	2014		2013		2012
North America
Total assets	$	39,157	$	26,108	$	20,703
Property and equipment, net	13,163		8,447		5,481
Total property and equipment additions	7,464		4,837		3,348
International
Total assets	$	15,348	$	14,051	$	11,852
Property and equipment, net	3,804		2,502		1,579
Total property and equipment additions	2,017		1,536		969
Consolidated
Total assets	$	54,505	$	40,159	$	32,555
Property and equipment, net	16,967		10,949		7,060
Total property and equipment additions	9,481		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,
	2014		2013		2012
North America	$	2,701	$	1,863	$	1,229
International	915		597		424
Consolidated	$	3,616	$	2,460	$	1,653