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
 6 Months Ended
Jun. 30, 2024
Segment Reporting [Abstract]  
Segment reporting disclosure 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 and six months ended June 30, 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 June 30, 2024 Six months ended June 30, 2024
(in millions) QxH QVC-International Total QxH QVC-International Total
Home $ 596  221  817  1,185  458  1,643 
Apparel 328  105  433  610  213  823 
Beauty 239  141  380  478  270  748 
Accessories 212  53  265  413  101  514 
Jewelry 73  39  112  153  72  225 
Electronics 73  16  89  181  31  212 
Other revenue 37  1  38  77  3  80 
Total net revenue $ 1,558  576  2,134  3,097  1,148  4,245 
Three months ended June 30, 2023 Six months ended June 30, 2023
(in millions) QxH QVC-International Total QxH QVC-International Total
Home $ 602  244  846  1,237  481  1,718 
Apparel 340  111  451  635  224  859 
Beauty 264  143  407  510  276  786 
Accessories 223  56  279  415  107  522 
Jewelry 65  35  100  142  74  216 
Electronics 82  15  97  192  32  224 
Other revenue 42  2  44  88  4  92 
Total net revenue $ 1,618  606  2,224  3,219  1,198  4,417 
Adjusted OIBDA is summarized as follows:
Three months ended June 30, Six months ended June 30,
2024 2023 2024 2023
(in millions) Net
revenue		 Adjusted
OIBDA		 Net
revenue		 Adjusted
OIBDA		 Net
revenue		 Adjusted
OIBDA		 Net
revenue		 Adjusted
OIBDA
QxH $ 1,558  194  1,618  185  3,097  379  3,219  324 
QVC-International 576  77  606  77  1,148  152  1,198  149 
   Consolidated QVC $ 2,134  271  2,224  262  4,245  531  4,417  473 
Other information
Three months ended June 30, Six months ended June 30,
2024 2023 2024 2023
(in millions) Depreciation Amortization Depreciation Amortization Depreciation Amortization Depreciation Amortization
QxH $ 13  63  14  67  27  130  29  130 
QVC-International 6  6  8  5  12  11  16  8 
Consolidated QVC $ 19  69  22  72  39  141  45  138 
June 30, 2024
(in millions) Total
assets		 Capital
expenditures		 Property and equipment, net
QxH $ 9,493  61  252 
QVC-International 1,748  20  146 
Consolidated QVC $ 11,241  81  398 
The following table provides a reconciliation of Adjusted OIBDA to operating income and income before income taxes:
Three months ended June 30, Six months ended June 30,
(in millions) 2024 2023 2024 2023
Adjusted OIBDA $ 271  262  531  473 
Gains on sales of assets and sale leaseback transactions —  6  1  119 
Restructuring, penalties and fire related (costs), net of recoveries (including Rocky Mount inventory losses)
 (18) 211  (18) 215 
Stock-based compensation (2) (11) (14) (20)
Depreciation and amortization (88) (94) (180) (183)
Operating income 163  374  320  604 
Losses on financial instruments —  —  —  (1)
Interest expense, net (67) (67) (129) (104)
Foreign currency gain (loss) 1  (3) —  (9)
Gain on extinguishment of debt —  10  —  10 
Income before income taxes $ 97  314  191  500