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, 2024
Segment Reporting [Abstract]  
Segment reporting disclosure
(9) Information about QVC's Operating Segments

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 three months ended March 31, 2024 and 2023, 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
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 10), operating expenses, and selling, general and administrative expenses (excluding stock-based compensation, penalties 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 of assets and sale leaseback transactions, restructuring, penalties 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.
Disaggregated revenue by segment and product category consisted of the following:
Three months ended March 31, 2024 Three months ended March 31, 2023
(in millions) QxH QVC-International Total QxH QVC-International Total
Home $ 589  237  826  635  237  872 
Apparel 282  108  390  295  113  408 
Beauty 239  129  368  246  133  379 
Accessories 201  48  249  192  51  243 
Electronics 108  15  123  110  17  127 
Jewelry 80  33  113  77  39  116 
Other revenue 40  2  42  46  2  48 
Total net revenue $ 1,539  572  2,111  1,601  592  2,193 

Adjusted OIBDA is summarized as follows:
Three months ended March 31,
2024 2023
(in millions) Net
revenue		 Adjusted
OIBDA		 Net
revenue		 Adjusted
OIBDA
QxH $ 1,539  185  1,601  139 
QVC-International 572  75  592  72 
   Consolidated QVC $ 2,111  260  2,193  211 
Other information
Three months ended March 31,
2024 2023
(in millions) Depreciation Amortization Depreciation Amortization
QxH $ 14  67  15  63 
QVC-International 6  5  8  3 
Consolidated QVC $ 20  72  23  66 
March 31, 2024
(in millions) Total
assets		 Capital
expenditures		 Property and equipment, net
QxH $ 9,582  22  254 
QVC-International 1,793  10  153 
Consolidated QVC $ 11,375  32  407 
The following table provides a reconciliation of Adjusted OIBDA to operating income and income before income taxes:
Three months ended March 31,
(in millions) 2024 2023
Adjusted OIBDA $ 260  211 
Gains on sales of assets and sale leaseback transactions 1  113 
Restructuring, penalties and fire related costs, net of (recoveries) (including Rocky Mount inventory losses) —  4 
Stock-based compensation (12) (9)
Depreciation and amortization (92) (89)
Operating income 157  230 
Losses on financial instruments —  (1)
Interest expense, net (62) (37)
Foreign currency loss (1) (6)
Income before income taxes $ 94  186