Segment Information (Tables)

9 Months Ended

Sep. 30, 2020

Information on Reportable Segments and Reconciliation to Consolidated Net Income

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2020		2019		2020
North America
Net sales	$	42,638	$	59,373	$	117,104	$	160,936
Operating expenses	41,356		57,121		111,971		155,232
Operating income	$	1,282	$	2,252	$	5,133	$	5,704

International
Net sales	$	18,348	$	25,171	$	50,910	$	66,945
Operating expenses	18,734		24,764		51,986		66,590
Operating income (loss)	$	(386)	$	407	$	(1,076)	$	355

AWS
Net sales	$	8,995	$	11,601	$	25,072	$	32,628
Operating expenses	6,734		8,066		18,467		22,661
Operating income	$	2,261	$	3,535	$	6,605	$	9,967

Consolidated
Net sales	$	69,981	$	96,145	$	193,086	$	260,509
Operating expenses	66,824		89,951		182,424		244,483
Operating income	3,157		6,194		10,662		16,026
Total non-operating income (expense)	(525)		615		(739)		387
Provision for income taxes	(494)		(569)		(1,588)		(2,298)
Equity-method investment activity, net of tax	(4)		91		(15)		(6)
Net income	$	2,134	$	6,331	$	8,320	$	14,109

Disaggregation of Revenue

Net sales by groups of similar products and services, which also have similar economic characteristics, is as follows (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2020		2019		2020
Net Sales:
Online stores (1)	$	35,039	$	48,350	$	95,590	$	130,899
Physical stores (2)	4,192		3,788		12,829		12,201
Third-party seller services (3)	13,212		20,436		36,316		53,121
Subscription services (4)	4,957		6,572		13,975		18,146
AWS	8,995		11,601		25,072		32,628
Other (5)	3,586		5,398		9,304		13,514
Consolidated	$	69,981	$	96,145	$	193,086	$	260,509

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(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 media products available in both a physical and digital format, such as books, music, videos, 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 “Subscription services.”

(2)Includes product sales where our customers physically select items in a store. Sales from customers who order goods online for delivery or pickup at our physical stores are included in “Online stores.”

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

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

(5)Primarily includes sales of advertising services, as well as sales related to our other service offerings.