SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2012

SEGMENT INFORMATION

Note 12—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 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. 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 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,
	2012			2011			2010
North America
Net sales	$	34,813		$	26,705		$	18,707
Segment operating expenses (1)		33,221			25,772			17,752
Segment operating income	$	1,592		$	933		$	955
International
Net sales	$	26,280		$	21,372		$	15,497
Segment operating expenses (1)		26,204			20,732			14,516
Segment operating income	$	76		$	640		$	981
Consolidated
Net sales	$	61,093		$	48,077		$	34,204
Segment operating expenses (1)		59,425			46,504			32,268
Segment operating income		1,668			1,573			1,936
Stock-based compensation		(833	)		(557	)		(424	)
Other operating income (expense), net		(159	)		(154	)		(106	)
Income from operations		676			862			1,406
Total non-operating income (expense)		(132	)		72			91
Provision for income taxes		(428	)		(291	)		(352	)
Equity-method investment activity, net of tax		(155	)		(12	)		7
Net income (loss)	$	(39	)	$	631		$	1,152

(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 (in millions):

	Year Ended December 31,
	2012		2011		2010
Net Sales:
Consolidated
Media	$	19,942	$	17,779	$	14,888
Electronics and other general merchandise		38,628		28,712		18,363
Other (1)		2,523		1,586		953
Total consolidated	$	61,093	$	48,077	$	34,204

(1) Includes sales from non-retail activities, such as AWS in the North America segment, advertising services, and our co-branded credit card agreements in both segments.

Net sales attributed to foreign countries are as follows (in millions):

	Year Ended December 31,
	2012		2011		2010
Germany	$	8,732	$	7,230	$	5,296
Japan		7,800		6,576		5,025
United Kingdom		6,478		5,348		3,929

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

	Year Ended December 31,
	2012		2011
North America
Total assets	$	20,703	$	16,461
Property and equipment, net		5,481		3,413
Total property and equipment additions		3,348		2,259
International
Total assets	$	11,852	$	8,817
Property and equipment, net		1,579		1,004
Total property and equipment additions		969		785
Consolidated
Total assets	$	32,555	$	25,278
Property and equipment, net		7,060		4,417
Total property and equipment additions		4,317		3,044

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,
	2012		2011		2010
North America	$	1,229	$	795	$	455
International		424		239		97
Consolidated	$	1,653	$	1,034	$	552