Please see below for the definition of adjusted OIBDA and a discussion of why management believes the presentation of adjusted OIBDA for QVC provides useful information for investors. Schedule 2 to this press release provides a reconciliation of adjusted OIBDA for each identified reportable segment to that segment’s operating income for the same period, as determined under GAAP.
|(amounts in millions)||2Q11||3Q11||4Q11||1Q12||2Q12|
|Revenue – US||$||1,232||1,196||1,792||1,240||1,280|
|Revenue – International||666||690||857||692||694|
|Revenue – Total||$||1,898||1,886||2,649||1,932||1,974|
|Adjusted OIBDA – US||305||259||401||270||315|
|Adjusted OIBDA – International||113||114||178||120||123|
|Adjusted OIBDA – Total||$||418||373||579||390||438|
|Operating income – US||204||159||254||171||214|
|Operating income – International||77||75||143||87||87|
|Operating income – Total||$||281||234||397||258||301|
|Gross margin – US||37.5||%||35.7||%||34.6||%||35.6||%||37.2||%|
|Gross margin – International||38.0||%||36.7||%||37.4||%||37.7||%||38.1||%|
NON-GAAP FINANCIAL MEASURES
This press release includes a presentation of adjusted OIBDA, which is a non-GAAP financial measure, for Liberty Interactive, QVC (and certain of its subsidiaries), and the eCommerce businesses together with a reconciliation to that entity’s operating income, as determined under GAAP. Liberty Interactive defines adjusted OIBDA as revenue less cost of sales, operating expenses, and selling, general and administrative expenses (excluding stock and other equity-based compensation) and excludes from that definition depreciation and amortization and restructuring and impairment charges that are included in the measurement of operating income pursuant to GAAP. Further, this press release includes adjusted OIBDA margin which is also a non-GAAP financial measure. Liberty Interactive defines adjusted OIBDA margin as adjusted OIBDA divided by revenue.