Amazon.com 2007 Annual Report Download - page 82

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AMAZON.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Information on reportable segments and reconciliation to consolidated net income was as follows:
Year Ended December 31,
2007 2006 2005
(in millions)
North America
Net sales ....................................................... $ 8,095 $ 5,869 $4,711
Cost of sales .................................................... 6,064 4,344 3,444
Gross profit ..................................................... 2,031 1,525 1,267
Direct segment operating expenses .................................. 1,631 1,295 971
Segment operating income ......................................... $ 400 $ 230 $ 296
International
Net sales ....................................................... $ 6,740 $ 4,842 $3,779
Cost of sales .................................................... 5,418 3,911 3,007
Gross profit ..................................................... 1,322 931 772
Direct segment operating expenses .................................. 873 661 502
Segment operating income ......................................... $ 449 $ 270 $ 270
Consolidated
Net sales ....................................................... $14,835 $10,711 $8,490
Cost of sales .................................................... 11,482 8,255 6,451
Gross profit ..................................................... 3,353 2,456 2,039
Direct segment operating expenses .................................. 2,504 1,956 1,473
Segment operating income ......................................... 849 500 566
Stock-based compensation ......................................... (185) (101) (87)
Other operating expense, net ....................................... (9) (10) (47)
Income from operations ........................................... 655 389 432
Total non-operating income (expense), net ............................ 5 (12) (4)
Provision for income taxes ......................................... (184) (187) (95)
Cumulative effect of change in accounting principle .................... — — 26
Net income ..................................................... $ 476 $ 190 $ 359
Net sales shipped to customers outside of the U.S. represented approximately half of net sales for 2007,
2006, and 2005. Net sales from www.amazon.co.uk,www.amazon.de, and www.amazon.co.jp each represented
10% or more of consolidated net sales in 2007, 2006 and 2005. Net fixed assets held in locations outside the U.S.
were $139 million, $108 million, and $68 million at December 31, 2007, 2006, and 2005.
Total assets, by segment, reconciled to consolidated amounts were (in millions):
December 31,
2007 2006
North America .............................................. $4,227 $2,801
International ............................................... 2,258 1,562
Consolidated ........................................... $6,485 $4,363
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