Amazon.com 2013 Annual Report Download - page 34

Download and view the complete annual report

Please find page 34 of the 2013 Amazon.com annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 86

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86

23
Results of Operations
We have organized our operations into two 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.
Net Sales
Net sales include product and services sales. Product sales represent revenue from the sale of products and related
shipping fees and digital content where we are the seller of record. Services sales represent third-party seller fees earned
(including commissions) and related shipping fees, digital content subscriptions, and non-retail activities such as AWS,
advertising services, and our co-branded credit card agreements. Amazon Prime membership fees are allocated between
product sales and services sales. Net sales information is as follows (in millions):
Year Ended December 31,
2013 2012 2011
Net Sales:
North America $ 44,517 $ 34,813 $ 26,705
International 29,935 26,280 21,372
Consolidated $ 74,452 $ 61,093 $ 48,077
Year-over-year Percentage Growth:
North America 28% 30% 43%
International 14 23 38
Consolidated 22 27 41
Year-over-year Percentage Growth, excluding effect of exchange rates:
North America 28% 30% 43%
International 19 27 31
Consolidated 24 29 37
Net Sales Mix:
North America 60% 57% 56%
International 40 43 44
Consolidated 100% 100% 100%
Sales grew 22%, 27%, and 41% in 2013, 2012, and 2011, compared to the comparable prior year periods. Changes in
currency exchange rates impacted net sales by $(1.3) billion, $(854) million, and $1.1 billion for 2013, 2012, and 2011. For a
discussion of the effect on sales growth of exchange rates, see “Effect of Exchange Rates” below.
North America sales grew 28%, 30%, and 43% in 2013, 2012, and 2011, compared to the comparable prior year periods.
The sales growth in each year primarily reflects increased unit sales, including sales by marketplace sellers. Increased unit sales
were driven largely by our continued efforts to reduce prices for our customers, including from our shipping offers, by sales in
faster growing categories such as electronics and other general merchandise, by increased in-stock inventory availability, and
by increased selection of product offerings.
International sales grew 14%, 23%, and 38% in 2013, 2012, and 2011, compared to the comparable prior year periods.
The sales growth in each year primarily reflects increased unit sales, including sales by marketplace sellers. Increased unit sales
were driven largely by our continued efforts to reduce prices for our customers, including from our shipping offers, by sales in
faster growing categories such as electronics and other general merchandise, by increased in-stock inventory availability, and
by increased selection of product offerings. Additionally, changes in currency exchange rates impacted International net sales
by $(1.3) billion, $(853) million, and $1.1 billion in 2013, 2012, and 2011. We expect that, over time, our International segment
will represent 50% or more of our consolidated net sales. See Item 8 of Part II, “Financial Statements and Supplementary Data
—Note 12—Segment Information” for net sales attributed to foreign countries.