Quarterly report pursuant to Section 13 or 15(d)

Information about QVC's Operating Segments

v2.4.1.9
Information about QVC's Operating Segments
 3 Months Ended
Mar. 31, 2015
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 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, 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
 
Three months ended March 31,
 
 
2015
 
2014
 
(in millions)
Net
revenue

Adjusted
OIBDA

Net
revenue

Adjusted
OIBDA

QVC-U.S.
$
1,342

306

1,305

301

QVC-Germany
212

39

250

39

QVC-Japan
199

39

234

47

QVC-U.K.
156

28

165

27

QVC-Italy
29

(2
)
32

(2
)
QVC-France
—

(3
)
—

—

Consolidated QVC
$
1,938

407

1,986

412


Net revenue amounts by product category are not available from our general purpose financial statements.
Other information
 
Three months ended March 31,
 
 
2015
 
2014
 
(in millions)
Depreciation

Amortization

Depreciation

Amortization

QVC-U.S.
$
16

106

13

94

QVC-Germany
7

8

8

11

QVC-Japan
5

2

5

2

QVC-U.K.
3

3

4

3

QVC-Italy
2

1

3

1

Consolidated QVC
$
33

120

33

111


 
March 31, 2015
 
December 31, 2014
 
(in millions)
Total
assets

Capital
expenditures, net

Total
assets

Capital
expenditures, net

QVC-U.S.
$
9,982

23

10,133

141

QVC-Germany
811

2

915

10

QVC-Japan
589

—

644

2

QVC-U.K.
477

1

537

16

QVC-Italy
214

1

245

12

QVC-France
8

4

2

1

Consolidated QVC
$
12,081

31

12,476

182


Long-lived assets, net of accumulated depreciation, by geographic area were as follows:
(in millions)
March 31, 2015

December 31, 2014

QVC-U.S.
$
455

463

QVC-Germany
181

209

QVC-Japan
171

176

QVC-U.K.
111

120

QVC-Italy
50

57

QVC-France
4

1

Consolidated QVC
$
972

1,026


The following table provides a reconciliation of Adjusted OIBDA to income before income taxes:
 
Three months ended March 31,
 
(in millions)
2015

2014

Adjusted OIBDA
$
407

412

Stock-based compensation
(8
)
(8
)
Depreciation and amortization
(153
)
(144
)
Equity in losses of investee
(1
)
(1
)
Interest expense, net
(59
)
(62
)
Foreign currency gain (loss)
10

(1
)
Income before income taxes
$
196

196