Annual report pursuant to Section 13 and 15(d)

Information About Qurate Retail's Operating Segments

v3.24.0.1
Information About Qurate Retail's Operating Segments
 12 Months Ended
Dec. 31, 2023
Information About Qurate Retail's Operating Segments  
Information About Qurate Retail's Operating Segments

(15) Information About Qurate Retail's Operating Segments

Qurate Retail, through its ownership interests in subsidiaries and other companies, is primarily engaged in the video and on-line commerce industries. Qurate Retail identifies its reportable segments as (A) those consolidated subsidiaries that represent 10% or more of its consolidated annual revenue, annual Adjusted OIBDA or total assets and (B) those equity method affiliates whose share of earnings represent 10% or more of Qurate Retail's annual pre-tax earnings. The segment presentation for prior periods has been conformed to the current period segment presentation.

Qurate Retail evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as revenue, Adjusted OIBDA, gross margin, average sales price per unit, number of units shipped and revenue or sales per customer equivalent. In addition, Qurate Retail reviews nonfinancial measures such as unique website visitors, conversion rates and active customers, as appropriate.

For segment reporting purposes, Qurate Retail defines Adjusted OIBDA as revenue less cost of goods sold, operating expenses, and SG&A excluding stock-based compensation and, where applicable, separately identified items impacting comparability. Qurate Retail believes this measure is an important indicator of the operational strength and performance of its businesses by identifying those items that are not directly a reflection of each business’ performance or indicative of ongoing business trends. In addition, this measure allows management to view operating results and perform analytical comparisons and benchmarking between businesses and identify strategies to improve performance. This measure of performance excludes depreciation and amortization, stock-based compensation, and where applicable, separately identified impairments, litigation settlements, restructuring, penalties, acquisition-related costs, fire related costs, net of recoveries (including Rocky Mount inventory losses) and gains on sale leaseback transactions, that are included in the measurement of operating income (loss) pursuant to GAAP.  Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, net income, cash flow provided by operating activities and other measures of financial performance prepared in accordance with GAAP. Qurate Retail generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current prices.

For the year ended December 31, 2023, Qurate Retail has identified the following consolidated subsidiaries as its reportable segments:

● QxH – QxH markets and sells a wide variety of consumer products in the U.S., primarily by means of its televised shopping programs and via the Internet through their websites and mobile applications.
● QVC International – QVC International markets and sells a wide variety of consumer products in several foreign countries, primarily by means of its televised shopping programs and via the Internet through its international websites and mobile applications.
● CBI – CBI consists of a portfolio of aspirational home and apparel brands in the U.S. that sell merchandise through brick-and-mortar retail locations as well as via the Internet through their websites.

Qurate Retail's operating segments are strategic business units that offer different products and services. They are managed separately because each segment requires different technologies, distribution channels and marketing strategies.  The accounting policies of the segments that are also consolidated subsidiaries are the same as those described in the Company's summary of significant accounting policies.

Performance Measures

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Years ended December 31,

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2023

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2022

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2021

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Adjusted

    

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Adjusted

    

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Adjusted

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Revenue

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OIBDA

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Revenue

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OIBDA

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Revenue

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 OIBDA

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amounts in millions

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QxH

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$

6,995

 

746

 

7,359

 

750

 

8,277

 

1,439

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QVC International

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​

2,454

​

325

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2,528

​

358

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3,077

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562

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CBI

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​

1,165

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67

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1,313

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78

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1,238

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137

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Corporate and other

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301

 

(64)

 

906

 

(122)

 

1,453

 

(58)

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Inter-segment eliminations

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—

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—

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—

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—

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(1)

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—

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Consolidated Qurate Retail

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$

10,915

 

1,074

 

12,106

 

1,064

 

14,044

 

2,080

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Other Information

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December 31, 2023

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December 31, 2022

 

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Total

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Capital

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Total

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Capital

 

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assets

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expenditures

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assets

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expenditures

 

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amounts in millions

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QxH

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$

8,088

 

128

 

8,731

 

178

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QVC International

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1,892

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54

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1,933

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38

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CBI

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566

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45

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558

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39

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Corporate and other

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822

 

3

 

1,349

 

13

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Consolidated Qurate Retail

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$

11,368

 

230

 

12,571

 

268

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The following table provides a reconciliation of consolidated segment Adjusted OIBDA to operating income and earnings (loss) from continuing operations before income taxes:

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Years ended December 31,

 

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2023

    

2022

    

2021

 

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amounts in millions

 

Consolidated segment Adjusted OIBDA

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$

1,074

 

1,064

 

2,080

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Stock-based compensation

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(53)

 

(60)

 

(72)

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Depreciation and amortization

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(407)

 

(481)

 

(537)

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Restructuring, penalties and fire related (costs), net of recoveries

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189

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(3)

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(21)

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Gains on sale of assets and sale leaseback transactions

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113

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520

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—

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Impairment of intangible assets

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(326)

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(3,081)

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(363)

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Operating income

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590

 

(2,041)

 

1,087

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Interest expense

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(451)

 

(456)

 

(468)

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Interest and dividend income

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52

 

10

 

5

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Realized and unrealized gains (losses) on financial instruments, net

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(61)

 

55

 

98

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Loss on disposition of Zulily, net

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(64)

 

—

 

—

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Tax sharing income (expense) with Liberty Broadband

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(11)

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79

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10

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Other, net

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11

 

45

 

(94)

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Earnings (loss) from continuing operations before income taxes

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$

66

 

(2,308)

 

638

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Revenue by Geographic Area

The following table summarizes net revenue generated by subsidiaries located within the identified geographic areas:

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Years ended December 31,

 

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2023

    

2022

    

2021

 

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amounts in millions

 

United States

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$

8,442

 

9,514

 

10,864

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Japan

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945

 

1,017

 

1,167

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Germany

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788

 

813

 

1,027

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Other foreign countries

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740

 

762

 

986

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$

10,915

 

12,106

 

14,044

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Long-lived Assets by Geographic Area

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December 31,

 

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2023

    

2022

 

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amounts in millions

 

U.S.

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$

348

 

378

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Japan

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91

 

104

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Germany

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19

 

36

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Other foreign countries

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54

 

52

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$

512

 

570

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