Annual report pursuant to Section 13 and 15(d)

Information About Qurate Retail's Operating Segments

Information About Qurate Retail's Operating Segments

12 Months Ended

Dec. 31, 2023

Information About Qurate Retail's Operating Segments

Information About Qurate Retail's Operating Segments

(15) Information About Qurate Retail's Operating Segments

Qurate Retail, through its ownership interests in subsidiaries and other companies, is primarily engaged in the video and on-line commerce industries. Qurate Retail identifies its reportable segments as (A) those consolidated subsidiaries that represent 10% or more of its consolidated annual revenue, annual Adjusted OIBDA or total assets and (B) those equity method affiliates whose share of earnings represent 10% or more of Qurate Retail's annual pre-tax earnings. The segment presentation for prior periods has been conformed to the current period segment presentation.

Qurate Retail evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as revenue, Adjusted OIBDA, gross margin, average sales price per unit, number of units shipped and revenue or sales per customer equivalent. In addition, Qurate Retail reviews nonfinancial measures such as unique website visitors, conversion rates and active customers, as appropriate.

For segment reporting purposes, Qurate Retail defines Adjusted OIBDA as revenue less cost of goods sold, operating expenses, and SG&A excluding stock-based compensation and, where applicable, separately identified items impacting comparability. Qurate Retail believes this measure is an important indicator of the operational strength and performance of its businesses by identifying those items that are not directly a reflection of each business’ performance or indicative of ongoing business trends. In addition, this measure allows management to view operating results and perform analytical comparisons and benchmarking between businesses and identify strategies to improve performance. This measure of performance excludes depreciation and amortization, stock-based compensation, and where applicable, separately identified impairments, litigation settlements, restructuring, penalties, acquisition-related costs, fire related costs, net of recoveries (including Rocky Mount inventory losses) and gains on sale leaseback transactions, that are included in the measurement of operating income (loss) pursuant to 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 GAAP. Qurate Retail generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current prices.

For the year ended December 31, 2023, Qurate Retail has identified the following consolidated subsidiaries as its reportable segments:

●

QxH – QxH markets and sells a wide variety of consumer products in the U.S., primarily by means of its televised shopping programs and via the Internet through their websites and mobile applications.

●

QVC International – QVC International markets and sells a wide variety of consumer products in several foreign countries, primarily by means of its televised shopping programs and via the Internet through its international websites and mobile applications.

●

CBI – CBI consists of a portfolio of aspirational home and apparel brands in the U.S. that sell merchandise through brick-and-mortar retail locations as well as via the Internet through their websites.

Qurate Retail's operating segments are strategic business units that offer different products and services. They are managed separately because each segment requires different technologies, distribution channels and marketing strategies. The accounting policies of the segments that are also consolidated subsidiaries are the same as those described in the Company's summary of significant accounting policies.

Performance Measures


	Years ended December 31,
	2023			2022		2021
			Adjusted		Adjusted		Adjusted
	Revenue		OIBDA	Revenue	OIBDA	Revenue	OIBDA

	amounts in millions
QxH	$	6,995	746	7,359	750	8,277	1,439
QVC International		2,454	325	2,528	358	3,077	562
CBI		1,165	67	1,313	78	1,238	137
Corporate and other		301	(64)	906	(122)	1,453	(58)
Inter-segment eliminations		—	—	—	—	(1)	—
Consolidated Qurate Retail	$	10,915	1,074	12,106	1,064	14,044	2,080

Other Information


	December 31, 2023			December 31, 2022

	Total		Capital	Total	Capital
	assets		expenditures	assets	expenditures

	amounts in millions
QxH	$	8,088	128	8,731	178
QVC International		1,892	54	1,933	38
CBI		566	45	558	39
Corporate and other		822	3	1,349	13
Consolidated Qurate Retail	$	11,368	230	12,571	268

The following table provides a reconciliation of consolidated segment Adjusted OIBDA to operating income and earnings (loss) from continuing operations before income taxes:


	Years ended December 31,
	2023		2022	2021

	amounts in millions
Consolidated segment Adjusted OIBDA	$	1,074	1,064	2,080
Stock-based compensation		(53)	(60)	(72)
Depreciation and amortization		(407)	(481)	(537)
Restructuring, penalties and fire related (costs), net of recoveries		189	(3)	(21)
Gains on sale of assets and sale leaseback transactions		113	520	—
Impairment of intangible assets		(326)	(3,081)	(363)
Operating income		590	(2,041)	1,087
Interest expense		(451)	(456)	(468)
Interest and dividend income		52	10	5
Realized and unrealized gains (losses) on financial instruments, net		(61)	55	98
Loss on disposition of Zulily, net		(64)	—	—
Tax sharing income (expense) with Liberty Broadband		(11)	79	10
Other, net		11	45	(94)
Earnings (loss) from continuing operations before income taxes	$	66	(2,308)	638

Revenue by Geographic Area

The following table summarizes net revenue generated by subsidiaries located within the identified geographic areas:


	Years ended December 31,
	2023		2022	2021

	amounts in millions
United States	$	8,442	9,514	10,864
Japan		945	1,017	1,167
Germany		788	813	1,027
Other foreign countries		740	762	986
	$	10,915	12,106	14,044

Long-lived Assets by Geographic Area


	December 31,
	2023		2022

	amounts in millions
U.S.	$	348	378
Japan		91	104
Germany		19	36
Other foreign countries		54	52
	$	512	570

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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+ Details