Annual report pursuant to Section 13 and 15(d)

Information about QVC's Operating Segments

v2.4.1.9
Information about QVC's Operating Segments
 12 Months Ended
Dec. 31, 2014
Segment Reporting [Abstract]  
Segment reporting disclosure
Information about QVC's Operating Segments
Each of the Company's 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. The Company has identified six reportable operating segments: the United States, Germany, Japan, the United Kingdom, Italy and France.
The Company evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as net revenue, Adjusted OIBDA, gross margin, average sales price per unit, number of units shipped and revenue or sales per subscriber equivalent. The Company defines Adjusted OIBDA as revenue less cost of sales, 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, including the ability to service debt and fund capital expenditures. In addition, this measure allows management to view operating results and perform analytical comparisons and benchmarking among our businesses and identify strategies to improve performance. This measure of performance excludes depreciation, amortization and stock-based compensation, 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.
Performance measures
 
Years ended December 31,
 
 
2014
 
2013
 
2012
 
(in millions)
Net
revenue

Adjusted
OIBDA

Net
revenue

Adjusted
OIBDA

Net
revenue

Adjusted
OIBDA

QVC-U.S.
$
6,055

1,429

5,844

1,352

5,585

1,292

QVC-Germany
970

174

971

173

956

179

QVC-Japan
908

176

1,024

212

1,247

279

QVC-U.K.
730

141

657

118

641

104

QVC-Italy
138

(4
)
127

(14
)
87

(26
)
QVC-France
—

(6
)
—

—

—

—

Consolidated QVC
$
8,801

1,910

8,623

1,841

8,516

1,828


Net revenue amounts by product category are not available from our general purpose financial statements.
Other information
 
Years ended December 31,
 
 
2014
 
2013
 
2012
 
(in millions)
Depreciation

Amortization

Depreciation

Amortization

Depreciation

Amortization

QVC-U.S.
$
56

391

55

362

51

338

QVC-Germany
33

36

30

38

31

33

QVC-Japan
19

9

23

9

16

10

QVC-U.K.
16

14

12

14

21

12

QVC-Italy
11

2

7

8

7

7

QVC-France
—

—

—

—

—

—

Consolidated QVC
$
135

452

127

431

126

400


 
Years ended December 31,
 
 
2014
 
2013
 
(in millions)
Total
assets

Capital
expenditures, net

Total
assets

Capital
expenditures, net

QVC-U.S.
$
10,133

141

10,322

123

QVC-Germany
915

10

1,109

28

QVC-Japan
644

2

732

16

QVC-U.K.
537

16

613

16

QVC-Italy
245

12

280

28

QVC-France
2

1

—

—

Consolidated QVC
$
12,476

182

13,056

211


Long-lived assets, net of accumulated depreciation, by geographic area were as follows:
 
December 31,
 
(in millions)
2014

2013

QVC-U.S.
$
463

448

QVC-Germany
209

244

QVC-Japan
176

220

QVC-U.K.
120

129

QVC-Italy
57

65

QVC-France
1

—

Consolidated QVC
$
1,026

1,106


The following table provides a reconciliation of Adjusted OIBDA to income before income taxes:
 
Years ended December 31,
 
(in millions)
2014

2013

2012

Adjusted OIBDA
$
1,910

1,841

1,828

Stock-based compensation
(44
)
(38
)
(34
)
Depreciation and amortization
(587
)
(558
)
(526
)
Equity in losses of investee
(8
)
(4
)
(4
)
Gains on financial instruments
—

15

48

Interest expense, net
(239
)
(214
)
(233
)
Foreign currency gain
3

1

2

Loss on extinguishment of debt
(48
)
(57
)
—

Income before income taxes
$
987

986

1,081