Amazon.com 2002 Annual Report Download - page 87

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AMAZON.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
BMVD Segment
The BMVD segment includes retail sales from www.amazon.com and www.amazon.ca of books,
music and DVD/video products and magazine subscription commissions. This segment also includes
commissions from sales of these products, new, used or collectible, through Amazon Marketplace, amounts
earned from sales of these products by other businesses through the Merchants@ program and product
revenues from stores oÅering these products through the Syndicated Stores program.
ETK Segment
The ETK segment includes www.amazon.com retail sales of electronics, home improvement and
home and garden products, as well as our mail-order catalog sales. This segment also includes commissions
from sales of these products, new, used or collectible, through Amazon Marketplace and amounts earned
from sales of these products by other businesses through the Merchants@ program, such as with OÇce
Depot, and will include revenues from stores oÅering these products, if any, through the Syndicated Stores
program.
International Segment
The International segment includes all retail sales of the following internationally-focused Web sites:
www.amazon.co.uk, www.amazon.de, www.amazon.fr and www.amazon.co.jp. These international sites
share a common Amazon.com experience, but are localized in terms of language, products, customer
service and fulÑllment. To the extent available on these sites, this segment includes commissions and other
amounts earned from sales of products through Amazon Marketplace and revenues from stores oÅering
products through the Syndicated Stores program, such as www.waterstones.co.uk and
www.virginmega.co.jp, and amounts earned from sales of products by other businesses through the
Merchants@ program. The International segment includes export sales from www.amazon.co.uk,
www.amazon.de, www.amazon.fr and www.amazon.co.jp (including export sales from these sites to
customers in the U.S. and Canada), but excludes export sales from www.amazon.com and
www.amazon.ca. Operating results for the International segment are aÅected by movements in foreign
exchange rates. During 2002, International segment revenues improved $47 million, and operating results
improved $4 million in comparison to the prior year due to changes in foreign exchange rates.
Services Segment
The Services segment consists of commissions, fees and other amounts earned from the services
business, including the Merchant.com program (such as www.target.com), and to the extent full product
categories are not also oÅered by the Company through its online retail stores, the Merchants@ program,
such as the apparel store, Toysrus.com and Babiesrus.com stores, and portions of the Target store at
www.amazon.com, as well as the commercial agreement with America Online, Inc. This segment also
includes Auctions, zShops, Amazon Payments and miscellaneous marketing and promotional agreements.
Included in Services segment revenues are equity-based service revenues of $13 million, $27 million
and $79 million for 2002, 2001 and 2000, respectively.
The Company measures the results of operations of its reportable segments using a pro forma
measure. Pro forma results from operations, which exclude stock-based compensation, amortization of
goodwill and other intangibles, and restructuring-related and other charges, are not in conformity with
accounting principles generally accepted in the United States. Stock-based compensation, amortization of
goodwill and other intangibles, and restructuring-related and other costs are not allocated to segment
results. All other centrally-incurred operating costs are fully allocated to segment results. There are no
internal transactions between the Company's reporting segments.
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