Segment Information

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Segment Information

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

	Year Ended December 31,
	2014			2015			2016
North America
Net sales	$	50,834		$	63,708		$	79,785
Operating expenses	49,542			60,957			75,686
Operating income before stock-based compensation and other	1,292			2,751			4,099
Stock-based compensation and other	932			1,326			1,738
Operating income	$	360		$	1,425		$	2,361
International
Net sales	$	33,510		$	35,418		$	43,983
Operating expenses	33,654			35,509			44,460
Operating income (loss) before stock-based compensation and other	(144		)	(91		)	(477		)
Stock-based compensation and other	496			608			806
Operating income (loss)	$	(640	)	$	(699	)	$	(1,283	)
AWS
Net sales	$	4,644		$	7,880		$	12,219
Operating expenses	3,984			6,017			8,513
Operating income before stock-based compensation and other	660			1,863			3,706
Stock-based compensation and other	202			356			598
Operating income	$	458		$	1,507		$	3,108
Consolidated
Net sales	$	88,988		$	107,006		$	135,987
Operating expenses	87,180			102,483			128,659
Operating income before stock-based compensation and other	1,808			4,523			7,328
Stock-based compensation and other	1,630			2,290			3,142
Operating income	178			2,233			4,186
Total non-operating income (expense)	(289		)	(665		)	(294		)
Provision for income taxes	(167		)	(950		)	(1,425		)
Equity-method investment activity, net of tax	37			(22		)	(96		)
Net income (loss)	$	(241	)	$	596		$	2,371

Net sales by groups of similar products and services are as follows (in millions):

	Year Ended December 31,
	2014		2015		2016
Net Sales:
Retail products (1)	$	68,513	$	76,863	$	91,431
Retail third-party seller services (2)	11,747		16,086		22,993
Retail subscription services (3)	2,762		4,467		6,394
AWS	4,644		7,880		12,219
Other (4)	1,322		1,710		2,950
	$	88,988	$	107,006	$	135,987

___________________

(1) Includes product sales and digital media content where we record revenue gross. We leverage our retail infrastructure to offer a wide selection of consumable and durable goods that includes electronics and general merchandise as well as media products available in both a physical and digital format, such as books, music, video, games, and software. These product sales include digital products sold on a transactional basis; digital product subscriptions that provide unlimited viewing or usage rights are included in Retail subscription services.

(2) Includes commissions, related fulfillment and shipping fees, and other third-party seller services.

(3) Includes annual and monthly fees associated with Amazon Prime membership, as well as audiobook, e-book, digital video, digital music, and other subscription services.

(4) Includes sales not otherwise included above, such as certain advertising services and our co-branded credit card agreements.

Net sales generated from our internationally-focused websites are denominated in local functional currencies. Revenues are translated at average rates prevailing throughout the period. Net sales attributed to countries that represent a significant portion of consolidated net sales are as follows (in millions):

	Year Ended December 31,
	2014		2015		2016
United States	$	54,717	$	70,537	$	90,349
Germany	11,919		11,816		14,148
United Kingdom	8,341		9,033		9,547
Japan	7,912		8,264		10,797
Rest of world	6,099		7,356		11,146
Consolidated	$	88,988	$	107,006	$	135,987

Total segment assets exclude corporate assets, such as cash and cash equivalents, marketable securities, other long-term investments, corporate facilities, goodwill and other acquired intangible assets, capitalized internal-use software and website development costs, and tax assets. Technology infrastructure assets are allocated among the segments based on usage, with the majority allocated to the AWS segment. Total segment assets reconciled to consolidated amounts are as follows (in millions):

	December 31,
	2014		2015		2016
North America (1)	$	13,257	$	16,772	$	22,225
International (1)	6,747		7,754		10,429
AWS (2)	6,981		9,787		12,698
Corporate	27,520		30,434		38,050
Consolidated	$	54,505	$	64,747	$	83,402

___________________

(1) North America and International segment assets primarily consist of property and equipment, inventory, and accounts receivable.

(2) AWS segment assets primarily consist of property and equipment and accounts receivable.

Property and equipment, net by segment is as follows (in millions):

	December 31,
	2014		2015		2016
North America	$	5,373	$	6,707	$	10,143
International	2,000		2,266		3,448
AWS	6,043		8,356		10,300
Corporate	3,551		4,509		5,223
Consolidated	$	16,967	$	21,838	$	29,114

Total property and equipment additions by segment are as follows (in millions):

	Year Ended December 31,
	2014		2015		2016
North America (1)	$	2,833	$	2,485	$	5,132
International (1)	767		658		1,680
AWS (2)	4,295		4,681		5,193
Corporate	1,586		1,801		1,580
Consolidated	$	9,481	$	9,625	$	13,585

___________________

(1) Includes property and equipment added under capital leases of $887 million, $938 million, and $1.5 billion in 2014, 2015, and 2016, and under other financing arrangements of $599 million, $219 million, and $849 million in 2014, 2015, and 2016.

(2) Includes property and equipment added under capital leases of $3.0 billion, $3.7 billion, and $4.0 billion in 2014, 2015, and 2016, and under finance leases of $62 million, $81 million, and $75 million in 2014, 2015, and 2016.

U.S. property and equipment, net was $13.1 billion, $16.8 billion, and $22.0 billion, in 2014, 2015, and 2016, and rest of world property and equipment, net was $3.8 billion, $5.0 billion, and $7.1 billion in 2014, 2015, and 2016. 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, including amortization of capitalized internal-use software and website development costs and other corporate property and equipment depreciation expense, are allocated to all segments based on usage. Total depreciation expense, by segment, is as follows (in millions):

	Year Ended December 31,
	2014		2015		2016
North America	$	1,203	$	1,551	$	1,971
International	740		822		930
AWS	1,673		2,576		3,461
Consolidated	$	3,616	$	4,949	$	6,362