Segment Information

3 Months Ended

Mar. 31, 2013

Segment Information

Note 8 — 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.

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

	Three Months Ended March 31,
	2013			2012
North America
Net sales	$	9,391		$	7,427
Segment operating expenses (1)		8,934			7,078
Segment operating income	$	457		$	349
International
Net sales	$	6,679		$	5,758
Segment operating expenses (1)		6,695			5,709
Segment operating income (loss)	$	(16	)	$	49
Consolidated
Net sales	$	16,070		$	13,185
Segment operating expenses (1)		15,629			12,787
Segment operating income		441			398
Stock-based compensation		(229	)		(160	)
Other operating income (expense), net		(31	)		(46	)
Income from operations		181			192
Total non-operating income (expense)		(100	)		(108	)
Benefit (provision) for income taxes		18			(43	)
Equity-method investment activity, net of tax		(17	)		89
Net income	$	82		$	130

(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):

	Three Months Ended March 31,
	2013		2012
Net Sales:
Media	$	5,058	$	4,710
Electronics and other general merchandise		10,214		7,975
Other (1)		798		500
	$	16,070	$	13,185

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