Amazon.com 2007 Annual Report Download - page 39

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Results of Operations
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.
Net Sales and Gross Profit
Net sales information is as follows:
Year Ended December 31,
2007 2006 2005
(in millions)
Net Sales:
North America ............................................. $ 8,095 $ 5,869 $4,711
International .............................................. 6,740 4,842 3,779
Consolidated .......................................... $14,835 $10,711 $8,490
Year-over-year Percentage Growth:
North America ............................................. 38% 25% 22%
International .............................................. 39 28 23
Consolidated .......................................... 39 26 23
Year-over-year Percentage Growth, excluding effect of exchange rates:
North America ............................................. 38% 24% 22%
International .............................................. 31 28 25
Consolidated .......................................... 35 26 24
Net Sales Mix:
North America ............................................. 55% 55% 55%
International .............................................. 45 45 45
Consolidated .......................................... 100% 100% 100%
Revenue increased 39% in 2007, reflecting revenue growth in both our North America and International
segments. Additionally, changes in currency exchange rates positively affected net sales by $399 million for
2007. For a discussion of the effect on revenue growth of exchange rates, see “Effect of Exchange Rates” below.
The North America revenue growth rate was 38% in 2007. This revenue growth primarily reflects increased
unit sales driven largely by our continued efforts to reduce prices for our customers, including from our free
shipping offers and Amazon Prime, a larger base of sales in faster growing categories such as electronics and
other general merchandise, increased in-stock inventory availability, and increased selection of product offerings.
The International revenue growth rate was 39% in 2007. This revenue growth reflects increased unit sales
driven largely by our continued efforts to reduce prices for our customers, including from our free shipping
offers, a larger base of sales in faster growing categories such as electronics and other general merchandise,
increased in-stock inventory availability, and increased selection of product offerings. Additionally, changes in
currency exchange rates positively affected International net sales by $390 million in 2007.
We expect that, over time, our International segment will represent 50% or more of our consolidated net
sales. Additionally, as we continue to offer increased selection, lower prices, and additional product lines within
our electronics and other general merchandise category, we expect to see the relative mix of sales from this
category increase. See “Supplemental Information” below.
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