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, 2021
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 or sales per customer. For segment reporting purposes, the Company defines Adjusted OIBDA, as net revenue less cost of goods sold (excluding Fire related costs, net and Rocky Mount inventory losses, see note 13), 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, Fire related costs, net and Rocky Mount inventory losses 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.
The Company'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, QxH, and QVC-International. 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, 2022 and 2021, 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,
2022 2021
(in millions) Net
revenue		 Adjusted
OIBDA		 Net
revenue		 Adjusted
OIBDA
QxH $ 1,684  225  1,936  349 
QVC-International 670  104  774  143 
   Consolidated QVC $ 2,354  329  2,710  492 
Other information
Three months ended March 31,
2022 2021
(in millions) Depreciation Amortization Depreciation Amortization
QxH $ 23  71  26  59 
QVC-International 12  3  14  3 
Consolidated QVC $ 35  74  40  62 
March 31, 2022
(in millions) Total
assets		 Capital
expenditures		 Property and equipment, net
QxH $ 13,697  30  591 
QVC-International 2,126  4  335 
Consolidated QVC $ 15,823  34  926 
The following table provides a reconciliation of Adjusted OIBDA to operating income and income before income taxes:
Three months ended March 31,
(in millions) 2022 2021
Adjusted OIBDA $ 329  492 
Fire related costs, net and Rocky Mount inventory losses (see note 13) (82) — 
Stock-based compensation (8) (9)
Depreciation and amortization (109) (102)
Operating income 130  381 
Gains on financial instruments 1  1 
Interest expense, net (62) (63)
Foreign currency gain (loss) 8  (2)
Other income 20  6 
Income before income taxes $ 97  323