Quarterly report pursuant to Section 13 or 15(d)

Information about QVC's Operating Segments

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Information about QVC's Operating Segments
 3 Months Ended
Mar. 31, 2020
Segment Reporting [Abstract]  
Segment reporting disclosure Information about QVC's Operating Segments
The Company evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as net revenue, Adjusted OIBDA (defined below), gross margin, average sales price per unit, number of units shipped and revenue. For segment reporting purposes, the Company defines Adjusted OIBDA, as net revenue less cost of goods sold, operating expenses, and selling, general and administrative expenses (excluding stock-based compensation). The Company believes this measure is an important indicator of the operational strength and performance of its segments by identifying those items that are not directly a reflection of each segment's performance or indicative of ongoing business trends. In addition, this measure allows management to view operating results and perform analytical comparisons and benchmarking among the Company's businesses and identify strategies to improve performance. This measure of performance excludes depreciation, amortization, stock-based compensation and impairment loss (if any) that are included in the measurement of operating income pursuant to U.S. 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 U.S. GAAP.
QVC's chief operating decision maker ("CODM") is QVC's Chief Executive Officer. QVC's CODM has ultimate responsibility for enterprise decisions. QVC's CODM determines, in particular, resource allocation for, and monitors performance of, the consolidated enterprise. The segment managers have responsibility for operating decisions, allocating resources and assessing performance within their respective segments. QVC's CODM relies on internal management reporting that analyzes enterprise results and segment results to the Adjusted OIBDA level.
For the three months ended March 31, 2021 and 2020, QVC identified QxH and QVC-International as its two reportable segments. Both operating segments are retailers of a wide range of consumer products, which are marketed and sold primarily by merchandise-focused televised-shopping programs as well as via the Internet and mobile applications in certain markets.
Performance measures
Three months ended March 31,
2021 2020
(in millions) Net
revenue		 Adjusted
OIBDA		 Net
revenue		 Adjusted
OIBDA
QxH $ 1,936  349  1,792  293 
QVC-International 774  143  635  97 
   Consolidated QVC $ 2,710  492  2,427  390 
Other information
Three months ended March 31,
2021 2020
(in millions) Depreciation Amortization Depreciation Amortization
QxH $ 26  59  29  68 
QVC-International 14  3  14  3 
Consolidated QVC $ 40  62  43  71 
March 31, 2021
(in millions) Total
assets		 Capital
expenditures		 Property and equipment, net
QxH $ 13,891  36  728 
QVC-International 2,240  5  378 
Consolidated QVC $ 16,131  41  1,106 
The following table provides a reconciliation of Adjusted OIBDA to operating income and income before income taxes:
Three months ended March 31,
(in millions) 2021 2020
Adjusted OIBDA $ 492  390 
Stock-based compensation (9) (6)
Depreciation and amortization (102) (114)
Operating income 381  270 
Equity in losses of investee —  (1)
Gains (losses) on financial instruments 1  (4)
Interest expense, net (63) (65)
Foreign currency (loss) gain (2) 1 
Other income 6  — 
Income before income taxes $ 323  201