Quarterly report pursuant to Section 13 or 15(d)

Information About Qurate Retail's Operating Segments

v3.22.2
Information About Qurate Retail's Operating Segments
6 Months Ended
Jun. 30, 2022
Information About Qurate Retail's Operating Segments  
Information About Qurate Retail's Operating Segments

(9)   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 online commerce industries. Qurate Retail identifies its reportable segments as (A) those operating segments that represent 10% or more of its consolidated annual revenue, annual Adjusted OIBDA (as defined below) 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 Qurate Retail chief operating decision maker primarily evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as revenue and Adjusted OIBDA. In addition, Qurate Retail reviews nonfinancial measures such as unique website visitors, number of units shipped, conversion rates and active customers, as appropriate.

For the six months ended June 30, 2022, Qurate Retail has identified the following operating segments as its reportable segments:

QxH -  QVC U.S. and HSN market and sell a wide variety of consumer products in the United States, primarily by means of their 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.
Zulily – Zulily markets and sells a wide variety of consumer products in the United States and several foreign countries through flash sales events, primarily through its app, mobile and desktop experiences.

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 are the same as those described in the Company's Summary of Significant Accounting Policies in the 2021 10-K.

Performance Measures

Disaggregated revenue by segment and product category consisted of the following:

Three months ended

June 30, 2022

QxH

QVC Int'l

Zulily

Corp and other

Total

in millions

Home

$

680

248

53

296

1,277

Apparel

356

117

92

45

610

Beauty

253

145

10

408

Accessories

241

58

49

348

Electronics

112

25

1

138

Jewelry

71

42

8

121

Other revenue

41

3

7

51

Total Revenue

$

1,754

638

220

341

2,953

Six months ended

June 30, 2022

QxH

QVC Int'l

Zulily

Corp and other

Total

in millions

Home

$

1,329

521

114

542

2,506

Apparel

652

234

186

96

1,168

Beauty

514

290

21

825

Accessories

443

113

98

654

Electronics

259

51

3

313

Jewelry

158

94

17

269

Other revenue

83

5

13

101

Total Revenue

$

3,438

1,308

452

638

5,836

Three months ended

June 30, 2021

QxH

QVC Int'l

Zulily

Corp and other

Total

in millions

Home

$

775

309

120

284

1,488

Apparel

359

127

162

43

691

Beauty

294

193

16

503

Accessories

272

71

77

420

Electronics

167

32

3

202

Jewelry

76

54

12

142

Other revenue

46

5

7

58

Total Revenue

$

1,989

791

397

327

3,504

Six months ended

June 30, 2021

QxH

QVC Int'l

Zulily

Corp and other

Total

in millions

Home

$

1,550

633

243

490

2,916

Apparel

649

253

297

87

1,286

Beauty

580

357

35

972

Accessories

510

137

152

799

Electronics

368

65

7

440

Jewelry

174

114

26

314

Other revenue

94

6

14

114

Total Revenue

$

3,925

1,565

774

577

6,841

For segment reporting purposes, Qurate Retail defines Adjusted OIBDA as revenue less cost of goods sold, operating expenses, and selling, general and administrative expenses 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, acquisition-related costs, fire related costs, net (including Rocky Mount inventory losses) and gain (loss) on sale of fixed assets, net, 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 (loss), net earnings (loss), cash flows 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.

Adjusted OIBDA is summarized as follows:

Three months ended June 30,

Six months ended June 30,

2022

2021

2022

2021

amounts in millions

QxH

$

232

 

391

457

 

740

QVC International

95

144

199

287

Zulily

 

(18)

 

9

(36)

 

15

Corporate and other

 

38

 

37

62

 

56

Consolidated Qurate Retail

$

347

 

581

682

 

1,098

Other Information

June 30, 2022

 

Total assets

Capital expenditures

 

amounts in millions

 

QxH

$

11,609

 

71

QVC International

1,990

10

Zulily

592

8

Corporate and other

 

1,038

 

12

Consolidated Qurate Retail

$

15,229

 

101

The following table provides a reconciliation of Adjusted OIBDA to Operating income (loss) and Earnings (loss) before income taxes:

Three months ended

Six months ended

 

June 30,

June 30,

 

    

2022

    

2021

    

2022

    

2021

 

amounts in millions

 

Adjusted OIBDA

$

347

 

581

 

682

 

1,098

Stock-based compensation

 

(16)

 

(19)

 

(31)

 

(35)

Depreciation and amortization

 

(134)

 

(129)

 

(264)

 

(257)

Restructuring and fire related costs, net (including Rocky Mount inventory losses, see note 8)

(22)

(106)

Gain (loss) on sale of fixed assets, net

243

243

Operating income (loss)

$

418

433

524

806

Interest expense

 

(119)

 

(118)

 

(236)

 

(235)

Share of earnings (loss) of affiliates, net

 

 

(22)

 

(1)

 

(54)

Realized and unrealized gains (losses) on financial instruments, net

 

7

 

19

 

37

 

60

Other, net

 

35

 

(23)

 

88

 

(10)

Earnings (loss) before income taxes

$

341

 

289

 

412

 

567