Quarterly report pursuant to Section 13 or 15(d)

Information about QVC's Operating Segments

v3.22.2.2
Information about QVC's Operating Segments
 9 Months Ended
Sep. 30, 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 of recoveries 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, impairment losses, Gains on sales of fixed assets, Fire related costs, net of recoveries 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 and nine months ended September 30, 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 September 30, Nine months ended September 30,
2022 2021 2022 2021
(in millions) Net
revenue		 Adjusted
OIBDA		 Net
revenue		 Adjusted
OIBDA		 Net
revenue		 Adjusted
OIBDA		 Net
revenue		 Adjusted
OIBDA
QxH $ 1,663  143  1,813  325  5,101  600  5,738  1,065 
QVC-International 554  62  699  115  1,862  261  2,264  402 
   Consolidated QVC $ 2,217  205  2,512  440  6,963  861  8,002  1,467 
Other information
Three months ended September 30, Nine months ended September 30,
2022 2021 2022 2021
(in millions) Depreciation Amortization Depreciation Amortization Depreciation Amortization Depreciation Amortization
QxH $ 17  70  24  70  62  207  74  190 
QVC-International 4  3  13  4  26  10  41  10 
Consolidated QVC $ 21  73  37  74  88  217  115  200 
September 30, 2022
(in millions) Total
assets		 Capital
expenditures		 Property and equipment, net
QxH $ 10,675  116  272 
QVC-International 1,767  19  232 
Consolidated QVC $ 12,442  135  504 
The following table provides a reconciliation of Adjusted OIBDA to operating income and income before income taxes:
Three months ended September 30, Nine months ended September 30,
(in millions) 2022 2021 2022 2021
Adjusted OIBDA $ 205  440  861  1,467 
Gains on sales of fixed assets 277  —  520  — 
Fire related costs, net of recoveries and Rocky Mount inventory losses (see note 13) 137  —  39  — 
Impairment losses (2,600) —  (2,600) — 
Stock-based compensation (9) (13) (27) (33)
Depreciation and amortization (94) (111) (305) (315)
Operating (loss) income (2,084) 316  (1,512) 1,119 
Equity in losses of investee —  (2) —  (2)
(Losses) gains on financial instruments —  (5) 1  (8)
Interest expense, net (50) (64) (175) (192)
Foreign currency gain (loss) 21  —  50  (4)
Loss on extinguishment of debt —  —  (6) — 
Other income —  —  20  8 
(Loss) income before income taxes $ (2,113) 245  (1,622) 921