SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2011

SEGMENT INFORMATION

Note 11—SEGMENT INFORMATION

We have organized our operations into two principal segments: North America and International. We present our segment information along the same lines that our chief executive 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 United States and most of these costs are allocated to 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 locations. This segment includes export sales from these internationally based locations (including export sales from these sites to customers in the U.S. and Canada), but excludes export sales from our U.S. and Canadian locations.

Information on reportable segments and reconciliation to consolidated net income is as follows:

	Year Ended December 31,
	2011			2010			2009
	(in millions)
North America
Net sales	$	26,705		$	18,707		$	12,828
Segment operating expenses (1)		25,772			17,752			12,119
Segment operating income	$	933		$	955		$	709
International
Net sales	$	21,372		$	15,497		$	11,681
Segment operating expenses (1)		20,732			14,516			10,818
Segment operating income	$	640		$	981		$	863
Consolidated
Net sales	$	48,077		$	34,204		$	24,509
Segment operating expenses (1)		46,504			32,268			22,937
Segment operating income		1,573			1,936			1,572
Stock-based compensation		(557	)		(424	)		(341	)
Other operating income (expense), net		(154	)		(106	)		(102	)
Income from operations		862			1,406			1,129
Total non-operating income (expense)		72			91			32
Provision for income taxes		(291	)		(352	)		(253	)
Equity-method investment activity, net of tax		(12	)		7			(6	)
Net income	$	631		$	1,152		$	902

(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:

	Year Ended December 31,
	2011		2010		2009
	(in millions)
Net Sales:
Consolidated
Media	$	17,779	$	14,888	$	12,774
Electronics and other general merchandise		28,712		18,363		11,082
Other (1)		1,586		953		653
Total consolidated	$	48,077	$	34,204	$	24,509

(1) Includes non-retail activities, such as AWS, miscellaneous marketing and promotional activities, other seller sites, and our co-branded credit card agreements.

Net sales earned from retail sales of consumer products (including from sellers) and subscriptions outside of the U.S. represented between 45% to 49% of net sales for 2011, 2010, and 2009. Net sales earned in Germany, Japan, and United Kingdom each represented 11% to 15% of net sales in 2011 and 2010, and 13% to 17% of net sales in 2009.

Total assets, fixed assets, net, and total fixed asset additions, by segment, reconciled to consolidated amounts were (in millions):

	Year Ended December 31,
	2011		2010
North America
Total assets	$	16,461	$	12,460
Fixed assets, net		3,413		1,958
Total fixed asset additions		2,259		1,365
International
Total assets	$	8,817	$	6,337
Fixed assets, net		1,004		456
Total fixed asset additions		785		321
Consolidated
Total assets	$	25,278	$	18,797
Fixed assets, net		4,417		2,414
Total fixed asset additions		3,044		1,686

Fixed assets, net, located outside of the U.S. represented less than 10% of consolidated fixed assets, net, for any individual country.

Depreciation expense, by segment, is as follows (in millions):

	Year Ended December 31,
	2011		2010		2009
North America	$	795	$	455	$	327
International		239		97		57
Consolidated	$	1,034	$	552	$	384