Annual report pursuant to Section 13 and 15(d)

Information about QVC's Operating Segments

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Information about QVC's Operating Segments
 12 Months Ended
Dec. 31, 2023
Segment Reporting [Abstract]  
Segment reporting disclosure Information about QVC's Operating Segments and Geographical Data
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 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 17), operating expenses, and selling, general and administrative expenses (excluding stock-based compensation and restructuring costs). 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 sale leaseback transactions, restructuring and fire related costs, net of recoveries, 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 the Company's Chief Executive Officer who 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 (see below).
For the year ended December 31, 2023, QVC has 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.
QVC allocates certain corporate costs for management reporting purposes from its QxH segment to the QVC-International segment. These management cost allocations are related to certain functions such as merchandising, commerce platforms, information technology, human resources, legal, finance, brand and communications, corporate development and administration that support all of QVC’s operations. For the years ended December 31, 2023, 2022 and 2021, the costs allocated to QVC-International totaled $49 million, $46 million and $37 million, respectively.
Performance measures
Years ended December 31,
2023 2022 2021
(in millions) Net
revenue		 Adjusted
OIBDA		 Net
revenue		 Adjusted
OIBDA		 Net
revenue		 Adjusted
OIBDA
QxH $ 6,995  746  7,359  750  8,277  1,439 
QVC-International 2,454  325  2,528  358  3,077  562 
Consolidated QVC $ 9,449  1,071  9,887  1,108  11,354  2,001 
Other information
Years ended December 31,
2023 2022 2021
(in millions) Depreciation Amortization Depreciation Amortization Depreciation Amortization
QxH $ 59  265  77  277  105  256 
QVC-International 31  17  34  13  54  14 
Consolidated QVC $ 90  282  111  290  159  270 
Years ended December 31,
2023 2022
(in millions) Total
assets		 Capital
expenditures		 Total
assets		 Capital
expenditures
QxH $ 9,828  128  10,471  178 
QVC-International 1,892  54  1,933  38 
Consolidated QVC $ 11,720  182  12,404  216 
Property and equipment, net of accumulated depreciation, by segment was as follows:
December 31,
(in millions) 2023 2022
QxH $ 263  280 
QVC-International 164  192 
Consolidated QVC $ 427  472 
The following table provides a reconciliation of Adjusted OIBDA to income before income taxes:
Years ended December 31,
(in millions) 2023 2022 2021
Adjusted OIBDA $ 1,071  1,108  2,001 
Gains on sale of assets and sale leaseback transactions
 113  520  — 
Restructuring, penalties and fire related costs, net of (recoveries) (including Rocky Mount inventory losses)
 196  10  (21)
Impairment losses (326) (2,600) — 
Stock-based compensation (37) (36) (44)
Depreciation and amortization (372) (401) (429)
Operating income (loss) 645  (1,399) 1,507 
Equity in losses of investee —  —  (2)
(Losses) gains on financial instruments (1) (9) 8 
Interest expense, net (228) (228) (249)
Foreign currency (loss) gain (10) 32  (9)
Gain (loss) on extinguishment of debt 10  (6) (7)
Other income —  20  11 
Income (loss) before income taxes $ 416  (1,590) 1,259 
The following table summarizes net revenues based on revenues generated by subsidiaries located within the identified geographic area:
Years ended December 31,
(in millions) 2023 2022 2021
United States $ 6,995  7,359  8,277 
Japan 945  1,017  1,167 
Germany 788  813  1,027 
United Kingdom 594  565  722 
Other countries 127  133  161 
Consolidated QVC $ 9,449  9,887  11,354 
The following table summarizes property and equipment, net of accumulated depreciation, based on physical location:
December 31,
(in millions) 2023 2022
United States $ 263  280 
Japan 91  104 
Germany 19  36 
United Kingdom 26  25 
Other countries 28  27 
Consolidated QVC $ 427  472