[February 25, 2015] |
|
Liberty Interactive Corporation Reports Fourth Quarter and Year End 2014 Financial Results
Liberty Interactive Corporation ("Liberty Interactive") (Nasdaq: QVCA,
QVCB, LVNTA, LVNTB) today reported fourth quarter and year end 2014
results. Highlights include(1):
Attributed to QVC Group
-
Grew QVC US revenue by 5% and adjusted OIBDA(2) by 8% in
the fourth quarter
-
QVC US operating income increased by 8%
-
QVC.com revenue as a percent of total US revenue increased to 48%,
a 254 basis point increase
-
QVC US mobile penetration was 42% of QVC.com orders, a 1,023 basis
point increase
-
Achieved positive quarterly adjusted OIBDA at QVC Italy for the first
time
-
Grew QVC US revenue by 4% and adjusted OIBDA by 6% in 2014
-
QVC US operating income increased by 4%
-
Returned $3.26 billion in value to QVC Group shareholders in 2014
through share repurchases and the Liberty Ventures share dividend
-
Received a one-time special dividend of $10/share from HSN, Inc.
("HSN"), on February 19, 2015; pre-tax proceeds to QVC Group, net of
amounts passed through on Liberty Interactive's HSN Exchangeable
notes, were $146 million
Attributed to Liberty Ventures Group
-
Closed the sale of Provide Commerce ("Provide") to FTD Companies, Inc.
("FTD"), on December 31, in exchange for $145 million in cash and 10.2
million shares of FTD, representing an approximate 35% ownership
interest, resulting in a gain of $75 million
-
Finished 2014 with $2.8 billion of attributed cash and liquid
investments
"QVC posted another strong quarter in the US, while its international
markets performed better than our dollar denominated results would
indicate. Currency weakness was a material headwind in the quarter and
we expect that to continue into 2015. QVC Italy reached a milestone in
Q4 posting its first quarter of positive adjusted OIBDA. At Liberty
Ventures we were active with our Digital Commerce companies, closing the
sale of Provide and CommerceHub's acquisition of Mercent." stated Greg
Maffei, Liberty Interactive President and CEO. "We are also pleased by
the performance of the Liberty Ventures and QVC Group stocks post the
reattribution we completed in October with both stocks trading above
their respective pre-reattribution levels."
QVC GROUP - Excluding the pre-reattribution impact of the Digital
Commerce companies (see reconciling schedule 1): QVC Group's revenue
increased 1% to $2.8 billion in the quarter and 2% to $8.8 billion for
the year; adjusted OIBDA increased 3% to $612 million for the quarter
and 4% to $1.9 billion for the year; operating income increased 5% to
$445 million for the quarter and increased 3% to $1.2 billion for the
year; adjusted net income(3) increased 25% to $273 million
for the quarter and increased 10% to $739 million for the year; and net
income increased 41% to $222 million for the quarter and increased 19%
to $520 million for the year.
QVC
QVC's consolidated revenue increased 1% in the fourth quarter to $2.8
billion and increased 2% to $8.8 billion for the full year. Adjusted
OIBDA increased 4% to $620 million in the fourth quarter and 4% to $1.9
billion for the full year. Adjusted OIBDA margin increased 59 basis
points in the quarter and 35 basis points for the full year. Operating
income increased 4% to $459 million in the quarter and 3% to $1.3
billion for the year.
US Dollar denominated revenue was negatively impacted by exchange rate
fluctuations in the fourth quarter and full year. In the quarter, the US
Dollar strengthened against the Japanese Yen, Euro and British Pound
Sterling 12%, 8% and 2%, respectively. On a constant currency basis,
consolidated revenue increased 4% in the quarter vs. 1% in US Dollars.
For the year, the US Dollar strengthened 8% against the Yen, weakened 5%
against the Pound Sterling and was mostly stable versus the Euro. On a
constant currency basis, consolidated revenues increased 3% in the full
year vs 2% in US Dollars.
"Our 2014 performance was led by outstanding growth in the US, UK and
China and was driven by successful execution of our strategies to create
a highly engaging and differentiated shopping experience globally," said
QVC President and CEO Mike George. "As a result, we generated strong
consolidated operating leverage and margin expansion in both the fourth
quarter and full year. We are well positioned for 2015, entering the new
year with the largest television reach, eCommerce and mobile penetration
and customer base in our history."
US revenue increased 5% to $2.0 billion in the fourth quarter and 4% to
$6.1 billion for the year. For both periods, the US experienced growth
in all categories except electronics. Units sold increased 9%, average
selling price per unit ("ASP") decreased 5% to $61.64 and returns as a
percentage of gross product revenue improved 40 basis points in the
quarter. For the year, units sold increased 5%, ASP decreased 1% to
$59.61, and the return rate was flat. In the quarter, eCommerce revenue
increased 11% to $969 million and grew to 48% from 45% of total US
revenue. For the year, eCommerce revenue increased 10% to $2.7 billion
and grew to 45% from 43% of total US revenue. In the quarter, adjusted
OIBDA increased 8% to $474 million, and adjusted OIBDA margin increased
73 basis points primarily due to higher product margins and lower
marketing expense, which were partially offset by higher freight, bad
debt and personnel expenses. For the year, adjusted OIBDA rose 6% to
$1.4 billion, and adjusted OIBDA margin increased 47 basis points,
primarily due to higher product margins and net proprietary credit card
income, which were partially offset by higher freight, personnel and bad
debt expenses.
QVC's international revenue decreased 7% to $751 million in the fourth
quarter and decreased 1% to $2.7 billion for the full year. The revenue
declines include the impact of the aforementioned unfavorable exchange
rate fluctuations, and on a constant currency basis, international
revenues increased slightly in both periods. Adjusted OIBDA decreased 8%
to $146 million in the quarter and 2% to $481 million in year. Adjusted
OIBDA margin was essentially flat in both periods. The fourth quarter
and full year results included $3 and $6 million, respectively, of costs
related to the scheduled launch of QVC France in the summer of 2015.
QVC Japan's revenue in local currency decreased 2% and 4% in the fourth
quarter and for the full year, respectively. For both periods, the
decline in revenue reflects macro-economic challenges, particularly a
local consumption tax increase that became effective in April of 2014.
QVC Japan experienced sales declines in local currency in all categories
except beauty in the quarter and in all categories except electronics
and beauty in the full year. The return rate improved 182 basis points
in the quarter and 104 basis points for the year. For both periods, the
improvement in the return rate principally reflects lower returns in
jewelry, apparel and accessories and a greater mix of beauty. In the
quarter, adjusted OIBDA in local currency decreased 8%, and adjusted
OIBDA margin decreased 107 basis points primarily due to higher
inventory obsolescence and commission expenses and the timing of
personnel expenses. For the year, adjusted OIBDA decreased 10%, and
adjusted OIBDA margin decreased 132 basis points, primarily due to lower
product margins, higher commissions and lack of sales leverage of fixed
costs.
QVC Germany's revenue in local currency declined 1% in the fourth
quarter and increased slightly for the full year. In the quarter, sales
declined in local currency primarily in the home category and increased
mainly in apparel, accessories and jewelry. For the year, sales
increased in local currency largely in the home category and declined
mainly in apparel and jewelry. The return rate increased 88 basis points
in the quarter, and for the year, the return rate improved 177 basis
points. The return rate improvement for the year was primarily due to
lower return rates in all categories and to a lesser extent a positive
mix shift from apparel and jewelry to home. For both periods, adjusted
OIBDA in local currency and adjusted OIBDA margin were relatively stable
due to cost management.
QVC UK's revenue increased 6% in local currency in both the fourth
quarter and the full year. In the quarter, QVC UK experienced sales
growth primarily in the jewelry and beauty categories. For the year, the
business experienced gains mainly in beauty, home and jewelry. The
return rate improved 105 basis points in the quarter, primarily due to
variance from prior-period estimates based on actual experience. For the
year, the return rate improved 78 basis points. In the quarter, adjusted
OIBDA in local currency increased 12% and adjusted OIBDA margin
increased 77 basis points. For the year, adjusted OIBDA in local
currency increased 16% and adjusted OIBDA margin increased 135 basis
points. For both periods, the margin improvement was largely due to
leverage of operating costs due to sales growth.
QVC Italy's revenue increased 8% and 9% in local currency in the fourth
quarter and the full year, respectively. For both periods, the business
experienced gains in all categories except electronics. The return rate
improved 76 basis points in the quarter and 38 basis points for the
year. QVC Italy generated its first quarterly positive adjusted OIBDA of
€0.6 million in the quarter and improved adjusted OIBDA margin 776 basis
points. For the year, QVC Italy's adjusted OIBDA deficit in local
currency improved 70%, and adjusted OIBDA margin improved by 813 basis
points. For both periods, the margin improvement mainly reflects lower
freight, commission, customer service and fixed costs as a percent of
revenue.
CNR Home Shopping Co., Ltd. ("CNRS"), QVC's joint venture in China,
delivered a 27% and 24% increase in revenue in local currency in the
fourth quarter and for the full year, respectively. CNRS' adjusted OIBDA
deficit in local currency increased 25% and 23% in the quarter and for
the year, respectively, due to continued investment in TV distribution
expansion. This joint venture is being accounted for as an equity method
investment, and as a result, QVC reported a $3 million and $8 million
reduction in net income for the quarter and year, respectively.
QVC's outstanding debt was $4.6 billion at December 31, 2014, an
increase of $0.8 billion from the prior year.
Share Repurchases
From November 1, 2014 through January 31, 2015, Liberty Interactive
repurchased approximately 3.8 million Series A QVC Group shares (Nasdaq:
QVCA) at an average cost per share of $28.36 for total cash
consideration of $107 million. Since the creation of the QVC Group stock
(including its predecessor, Liberty Interactive Group) in May 2006,
Liberty Interactive has repurchased shares for aggregate cash
consideration of $5.4 billion, representing approximately 36.6% of the
shares outstanding at the time of creation of the QVC Group stock. All
repurchases up to August 9, 2012, the date on which the QVC Group stock
was recapitalized to create the Liberty Ventures Group stock, were
comprised of shares of the combined stocks. The remaining repurchase
authorization as of February 1, 2015 for QVC Group stock was
approximately $677 million, which includes $162 million remaining under
the authorization put in place in connection with the spin-off of
Liberty TripAdvisor Holdings, Inc. and which may be used to repurchase
either QVC Group stock or Liberty Ventures Group stock (the "Liberty
TripAdvisor spin-off authorization"). Liberty Ventures has been
compensated dollar-for-dollar for all repurchases made under the Liberty
TripAdvisor spin-off authorization.
QVC Group consists of Liberty Interactive's subsidiary, QVC, Inc., and
Liberty Interactive's interest in HSN.
LIBERTY VENTURES GROUP - On October 3, 2014, Liberty Interactive
reattributed from the QVC Group (formerly known as the Liberty
Interactive Group prior to the reattribution) to the Liberty Ventures
Group its Digital Commerce companies, which were valued at $1.5 billion,
and approximately $1 billion in cash. In connection with the
reattribution, each holder of QVC Group common stock received 0.14217 of
a share of the corresponding series of Liberty Ventures Group common
stock for each share of QVC Group common stock held as of the record
date, with cash paid in lieu of fractional shares. Additionally, on
December 31, 2014, FTD acquired Provide from Liberty Interactive in
return for approximately 10.2 million shares of FTD common stock
representing approximately 35% of the combined company and approximately
$145 million in cash. Subsequent to the transaction, Liberty Interactive
accounts for FTD as an equity-method affiliate based on our ownership
level and board representation. The results of the Digital Commerce
companies continue to be reflected in the QVC Group for periods prior to
the reattribution (which for accounting purposes is, September 30, 2014
in our attributed financial statements filed with the SEC). The results
of the Digital Commerce companies are reflected in the Liberty Ventures
Group prospectively from September 30, 2014. Our continuing consolidated
Digital Commerce companies include Backcountry.com, Bodybuilding.com,
CommerceHub, Evite and The Right Start and exclude Provide.
Revenue for the continuing consolidated Digital Commerce companies
increased 7% to $306 million in the quarter and 9% to $1.0 billion for
the year. For the year, the increase in revenue was due to increases at
each of our subsidiaries Backcountry ($37 million), Bodybuilding ($34
million) and CommerceHub ($15 million). Backcountry revenue increased as
a result of increases in order volume and average order value. The
increase in Bodybuilding revenue was primarily due to increased order
volume on flat average order values. CommerceHub revenue growth was
primarily attributed to growth in active customers (vendors and
suppliers) who pay a license and setup fee and an increase in the number
of aggregate transactions processed for which CommerceHub earns a per
transaction fee.
Adjusted OIBDA for the continuing Digital Commerce companies increased
17% to $41 million in the quarter and 22% to $90 million for the year.
For the year, the growth in Adjusted OIBDA was primarily due to the
increases in revenue discussed above and was driven by increases at
Backcountry ($9 million), Bodybuilding ($2 million) and CommerceHub ($8
million). Adjusted OIBDA represented 8.8% of revenue in 2014, as
compared to 7.8% of revenue in 2013. Most of our subsidiaries
experienced flat to slightly increased Adjusted OIBDA as a percentage of
sales for the year ended December 31, 2014, which was primarily the
result of improved product margins and cost containment efforts offset
by increased marketing and promotional spend and lower advertising
revenue due to unfavorable pricing and a shift to mobile applications.
Operating income for the continuing Digital Commerce companies increased
286% to $13 million in the quarter and decreased 30% to $7 million for
the year.
Share Repurchases
There were no repurchases of Liberty Ventures Group common stock
(Nasdaq: LVNTA) from November 1, 2014 through January 31, 2015. The
total remaining repurchase authorization for Liberty Ventures Group
stock is approximately $812 million, which includes $162 million
remaining under the Liberty TripAdvisor spin-off authorization.
The businesses and assets attributed to the Liberty Ventures Group are
all of Liberty's businesses and assets other than those attributed to
the QVC Group, including its interests in Expedia, Interval and FTD, its
subsidiaries Backcountry.com, Bodybuilding.com, CommerceHub, The Right
Start and Evite, and minority interests in Time Warner, Time Warner
Cable and Lending Tree.
FOOTNOTES
1)
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Liberty Interactive's President and CEO, Greg Maffei, will discuss
these highlights and other matters in Liberty Interactive's earnings
conference call which will begin at 5:15 p.m. (E.S.T.) on February
25, 2015. For information regarding how to access the call, please
see "Important Notice" later in this document.
|
2)
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For a definition of adjusted OIBDA and applicable reconciliations
and a definition of adjusted OIBDA margin, see the accompanying
schedules.
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3)
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For a definition of adjusted net income and applicable
reconciliations, see the accompanying schedules.
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QVC GROUP FINANCIAL METRICS - QUARTER
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in millions)
|
|
|
4Q13
|
|
|
4Q14
|
|
|
% Change
|
|
|
Revenue(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
QVC
|
|
|
|
|
|
|
|
|
|
|
|
|
US
|
|
|
$
|
1,932
|
|
|
|
$
|
2,030
|
|
|
|
5
|
|
%
|
Japan
|
|
|
|
272
|
|
|
|
|
235
|
|
|
|
(14
|
)
|
%
|
Germany
|
|
|
|
290
|
|
|
|
|
264
|
|
|
|
(9
|
)
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%
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UK
|
|
|
|
208
|
|
|
|
|
214
|
|
|
|
3
|
|
%
|
Italy
|
|
|
|
39
|
|
|
|
|
38
|
|
|
|
(3
|
)
|
%
|
Total QVC Group Revenue
|
|
|
$
|
2,741
|
|
|
|
$
|
2,781
|
|
|
|
1
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
QVC
|
|
|
|
|
|
|
|
|
|
|
|
|
US
|
|
|
$
|
437
|
|
|
|
$
|
474
|
|
|
|
8
|
|
%
|
Japan
|
|
|
|
55
|
|
|
|
|
45
|
|
|
|
(18
|
)
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%
|
Germany
|
|
|
|
58
|
|
|
|
|
53
|
|
|
|
(9
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)
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%
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UK
|
|
|
|
47
|
|
|
|
|
50
|
|
|
|
6
|
|
%
|
Italy
|
|
|
|
(2
|
)
|
|
|
|
1
|
|
|
|
150
|
|
%
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France
|
|
|
|
-
|
|
|
|
|
(3
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)
|
|
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n/m
|
|
%
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Total QVC Adjusted OIBDA
|
|
|
|
595
|
|
|
|
|
620
|
|
|
|
4
|
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%
|
Corporate and other
|
|
|
|
(3
|
)
|
|
|
|
(8
|
)
|
|
|
(167
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)
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%
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Total QVC Group Adjusted OIBDA
|
|
|
$
|
592
|
|
|
|
$
|
612
|
|
|
|
3
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
QVC
|
|
|
|
|
|
|
|
|
|
|
|
|
US
|
|
|
$
|
323
|
|
|
|
$
|
349
|
|
|
|
8
|
|
%
|
Japan
|
|
|
|
43
|
|
|
|
|
38
|
|
|
|
(12
|
)
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%
|
Germany
|
|
|
|
41
|
|
|
|
|
35
|
|
|
|
(15
|
)
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%
|
UK
|
|
|
|
39
|
|
|
|
|
42
|
|
|
|
8
|
|
%
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Italy
|
|
|
|
(5
|
)
|
|
|
|
(2
|
)
|
|
|
60
|
|
%
|
France
|
|
|
|
-
|
|
|
|
|
(3
|
)
|
|
|
n/m
|
|
%
|
Total QVC Operating Income
|
|
|
|
441
|
|
|
|
|
459
|
|
|
|
4
|
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%
|
Corporate and other
|
|
|
|
(16
|
)
|
|
|
|
(14
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)
|
|
|
13
|
|
%
|
Total QVC Group Operating Income
|
|
|
$
|
425
|
|
|
|
$
|
445
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|
|
|
5
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|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income(1)(2)
|
|
|
|
|
|
|
|
|
|
|
|
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Total QVC Group Adjusted Net Income
|
|
|
$
|
219
|
|
|
|
$
|
273
|
|
|
|
25
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
China JV(3)
|
|
|
|
|
|
|
|
|
|
|
|
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Revenue
|
|
|
$
|
31
|
|
|
|
$
|
39
|
|
|
|
26
|
|
%
|
Adjusted OIBDA
|
|
|
$
|
(2
|
)
|
|
|
$
|
(3
|
)
|
|
|
(50
|
)
|
%
|
|
|
|
|
|
|
|
(amounts in millions)
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|
|
|
|
|
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QVC Shares Outstanding
|
|
|
|
1/31/2014
|
|
1/31/2015
|
Outstanding A and B shares
|
|
|
|
498
|
|
474
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in millions)
|
|
|
Quarter ended
|
|
|
Quarter ended
|
QVCA and QVCB Basic and Diluted Shares
|
|
|
12/31/2013
|
|
|
12/31/2014
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Basic Weighted Average Shares Outstanding ("WASO")
|
|
|
503
|
|
|
475
|
Potentially dilutive Shares
|
|
|
10
|
|
|
7
|
Diluted WASO
|
|
|
513
|
|
|
482
|
|
|
|
|
|
|
|
1)
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Non-GAAP presentation. For GAAP purposes, the Digital Commerce
companies were recorded as part of the QVC Group through September
30, 2014 (the date of the reattribution). For presentation purposes
in this table, the results of the Digital Commerce have been removed
from the QVC Group for all periods shown (see reconciling schedule
1).
|
2)
|
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GAAP net income was $157 million and $222 million for the three
months ended December 31, 2013 and 2014, respectively (see
reconciling schedule 4).
|
3)
|
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This joint venture is being accounted for as an equity investment.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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QVC GROUP FINANCIAL METRICS - FULL YEAR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in millions)
|
|
|
2013
|
|
|
|
2014
|
|
|
|
% Change
|
|
|
Revenue(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
QVC
|
|
|
|
|
|
|
|
|
|
|
|
|
US
|
|
|
$
|
5,844
|
|
|
|
$
|
6,055
|
|
|
|
4
|
|
%
|
Japan
|
|
|
|
1,024
|
|
|
|
|
908
|
|
|
|
(11
|
)
|
%
|
Germany
|
|
|
|
971
|
|
|
|
|
970
|
|
|
|
0
|
|
%
|
UK
|
|
|
|
657
|
|
|
|
|
730
|
|
|
|
11
|
|
%
|
Italy
|
|
|
|
127
|
|
|
|
|
138
|
|
|
|
9
|
|
%
|
Total QVC Group Revenue
|
|
|
$
|
8,623
|
|
|
|
$
|
8,801
|
|
|
|
2
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
QVC
|
|
|
|
|
|
|
|
|
|
|
|
|
US
|
|
|
$
|
1,352
|
|
|
|
$
|
1,429
|
|
|
|
6
|
|
%
|
Japan
|
|
|
|
212
|
|
|
|
|
176
|
|
|
|
(17
|
)
|
%
|
Germany
|
|
|
|
173
|
|
|
|
|
174
|
|
|
|
1
|
|
%
|
UK
|
|
|
|
118
|
|
|
|
|
141
|
|
|
|
19
|
|
%
|
Italy
|
|
|
|
(14
|
)
|
|
|
|
(4
|
)
|
|
|
71
|
|
%
|
France
|
|
|
|
-
|
|
|
|
|
(6
|
)
|
|
|
n/m
|
|
%
|
Total QVC Adjusted OIBDA
|
|
|
|
1,841
|
|
|
|
|
1,910
|
|
|
|
4
|
|
%
|
Corporate and other
|
|
|
|
(20
|
)
|
|
|
|
(24
|
)
|
|
|
(20
|
)
|
%
|
Total QVC Group Adjusted OIBDA
|
|
|
$
|
1,821
|
|
|
|
$
|
1,886
|
|
|
|
4
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
QVC
|
|
|
|
|
|
|
|
|
|
|
|
|
US
|
|
|
$
|
901
|
|
|
|
$
|
941
|
|
|
|
4
|
|
%
|
Japan
|
|
|
|
180
|
|
|
|
|
148
|
|
|
|
(18
|
)
|
%
|
Germany
|
|
|
|
105
|
|
|
|
|
103
|
|
|
|
(2
|
)
|
%
|
UK
|
|
|
|
89
|
|
|
|
|
110
|
|
|
|
24
|
|
%
|
Italy
|
|
|
|
(30
|
)
|
|
|
|
(17
|
)
|
|
|
43
|
|
%
|
France
|
|
|
|
-
|
|
|
|
|
(6
|
)
|
|
|
n/m
|
|
%
|
Total QVC Operating Income
|
|
|
|
1,245
|
|
|
|
|
1,279
|
|
|
|
3
|
|
%
|
Corporate and other
|
|
|
|
(64
|
)
|
|
|
|
(57
|
)
|
|
|
11
|
|
%
|
Total QVC Group Operating Income
|
|
|
$
|
1,181
|
|
|
|
$
|
1,222
|
|
|
|
3
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income(1)(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total QVC Group Adjusted Net Income
|
|
|
$
|
672
|
|
|
|
$
|
739
|
|
|
|
10
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
China JV(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
$
|
113
|
|
|
|
$
|
140
|
|
|
|
24
|
|
%
|
Adjusted OIBDA
|
|
|
$
|
(8
|
)
|
|
|
$
|
(10
|
)
|
|
|
(25
|
)
|
%
|
1)
|
|
Non-GAAP presentation. For GAAP purposes, the Digital Commerce
companies were recorded as part of the QVC Group through September
30, 2014 (the date of the reattribution). For presentation purposes
in this table, the results of the Digital Commerce have been removed
from the QVC Group for all periods shown (see reconciling schedule
1).
|
2)
|
|
GAAP net income was $438 million and $520 million for the twelve
months ended December 31, 2013 and 2014, respectively (see
reconciling schedule 4).
|
3)
|
|
This joint venture is being accounted for as an equity investment.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QVC OPERATING METRICS - QUARTER
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in millions)
|
|
|
4Q13
|
|
|
|
4Q14
|
|
|
|
% Change
|
|
|
QVC - Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
eCommerce $ of total revenue
|
|
|
$
|
1,096
|
|
|
|
$
|
1,200
|
|
|
|
9
|
|
%
|
eCommerce % of total revenue
|
|
|
|
39.99
|
|
%
|
|
|
43.15
|
|
%
|
|
316
|
|
bps
|
Mobile % of total eCommerce(1)
|
|
|
|
33.51
|
|
%
|
|
|
43.55
|
|
%
|
|
1,004
|
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QVC - US
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
eCommerce $ of total revenue
|
|
|
$
|
873
|
|
|
|
$
|
969
|
|
|
|
11
|
|
%
|
eCommerce % of total revenue
|
|
|
|
45.19
|
|
%
|
|
|
47.73
|
|
%
|
|
254
|
|
bps
|
Mobile % of total eCommerce(1)
|
|
|
|
31.59
|
|
%
|
|
|
41.82
|
|
%
|
|
1,023
|
|
bps
|
Return Rate
|
|
|
|
17.27
|
|
%
|
|
|
16.87
|
|
%
|
|
(40)
|
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QVC OPERATING METRICS - FULL YEAR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in millions)
|
|
2013
|
|
|
2014
|
|
|
% Change
|
|
|
QVC - Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
eCommerce $ of total revenue
|
|
$
|
3,242
|
|
|
$
|
3,533
|
|
|
9
|
|
%
|
eCommerce % of total revenue
|
|
|
37.60
|
|
%
|
|
40.14
|
|
%
|
254
|
|
bps
|
Mobile % of total eCommerce(1)
|
|
|
31.17
|
|
%
|
|
41.47
|
|
%
|
1,030
|
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QVC - US
|
|
|
|
|
|
|
|
|
|
|
|
|
eCommerce $ of total revenue
|
|
$
|
2,501
|
|
|
$
|
2,740
|
|
|
10
|
|
%
|
eCommerce % of total revenue
|
|
|
42.80
|
|
%
|
|
45.25
|
|
%
|
245
|
|
bps
|
Mobile % of total eCommerce(1)
|
|
|
29.82
|
|
%
|
|
39.61
|
|
%
|
979
|
|
bps
|
Return Rate
|
|
|
18.51
|
|
%
|
|
18.55
|
|
%
|
4
|
|
bps
|
_________________________________
(1) Based on gross US Dollar orders.
|
|
|
|
|
|
|
|
|
|
|
|
|
DIGITAL COMMERCE FINANCIAL METRICS -
QUARTER
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in millions)
|
|
|
4Q13
|
|
|
4Q14
|
|
|
% Change
|
|
Revenue(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Provide
|
|
|
$
|
165
|
|
|
|
$
|
165
|
|
|
|
0
|
%
|
Digital Commerce companies - continuing
|
|
|
|
287
|
|
|
|
|
306
|
|
|
|
7
|
%
|
Digital Commerce Companies Revenue
|
|
|
$
|
452
|
|
|
|
$
|
471
|
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Provide
|
|
|
$
|
(5
|
)
|
|
|
$
|
3
|
|
|
|
160
|
%
|
Digital Commerce companies - continuing
|
|
|
|
35
|
|
|
|
|
41
|
|
|
|
17
|
%
|
Digital Commerce Companies Adjusted OIBDA
|
|
|
$
|
30
|
|
|
|
$
|
44
|
|
|
|
47
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Provide
|
|
|
$
|
(8
|
)
|
|
|
$
|
(5
|
)
|
|
|
38
|
%
|
Digital Commerce companies - continuing
|
|
|
|
(7
|
)
|
|
|
|
13
|
|
|
|
286
|
%
|
Digital Commerce Companies Operating Income
|
|
|
$
|
(15
|
)
|
|
|
$
|
8
|
|
|
|
153
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DIGITAL COMMERCE FINANCIAL METRICS - FULL
YEAR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in millions)
|
|
|
2013
|
|
|
2014
|
|
|
% Change
|
|
Revenue(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Provide
|
|
|
$
|
653
|
|
|
|
$
|
666
|
|
|
|
2
|
|
%
|
Digital Commerce companies - continuing
|
|
|
|
943
|
|
|
|
|
1,032
|
|
|
|
9
|
|
%
|
Digital Commerce Companies Revenue
|
|
|
$
|
1,596
|
|
|
|
$
|
1,698
|
|
|
|
6
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Provide
|
|
|
$
|
29
|
|
|
|
$
|
7
|
|
|
|
(76
|
)
|
%
|
Digital Commerce companies - continuing
|
|
|
|
74
|
|
|
|
|
90
|
|
|
|
22
|
|
%
|
Digital Commerce Companies Adjusted OIBDA
|
|
|
$
|
103
|
|
|
|
$
|
97
|
|
|
|
(6
|
)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Provide
|
|
|
$
|
(36
|
)
|
|
|
$
|
(15
|
)
|
|
|
58
|
|
%
|
Digital Commerce companies - continuing
|
|
|
|
10
|
|
|
|
|
7
|
|
|
|
(30
|
)
|
%
|
Digital Commerce Companies Operating Income
|
|
|
$
|
(26
|
)
|
|
|
$
|
(8
|
)
|
|
|
69
|
|
%
|
_____________________________________________
1)
|
|
Non-GAAP presentation. For GAAP purposes, the Digital Commerce
companies have been recorded as part of Liberty Ventures Group
subsequent to September 30, 2014 (the date of the reattribution).
For presentation purposes in this table, the results of the Digital
Commerce companies are included in Liberty Ventures Group for all
periods shown.
|
|
|
|
NOTES
Unless otherwise noted, the foregoing discussion compares financial
information for the year ended December 31, 2014 to the same period in
2013.
The following financial information with respect to Liberty
Interactive's equity affiliates and available for sale securities is
intended to supplement Liberty Interactive's consolidated statements of
operations which are included in its Form 10-K for the year ended
December 31, 2014.
Fair Value of Public Holdings
|
|
|
|
|
|
|
|
|
(amounts in millions)
|
|
|
9/30/2014
|
|
|
12/31/2014
|
HSN(1)
|
|
|
$
|
1,228
|
|
|
$
|
1,521
|
Total Attributed QVC Group
|
|
|
$
|
1,228
|
|
|
$
|
1,521
|
|
|
|
|
|
|
|
|
|
Expedia(2)
|
|
|
$
|
2,022
|
|
|
$
|
1,992
|
FTD(3)
|
|
|
|
-
|
|
|
|
355
|
Interval Leisure Group and Lending Tree(4)
|
|
|
|
417
|
|
|
|
482
|
Other Public Holdings(5)
|
|
|
|
1,135
|
|
|
|
1,210
|
Total Attributed Liberty Ventures Group
|
|
|
$
|
3,574
|
|
|
$
|
4,039
|
_________________________________
(1)
|
|
Represents fair value of QVC Group's investment in HSN. In
accordance with GAAP, QVC Group accounts for this investment using
the equity method of accounting and includes this investment in its
attributed balance sheet at its historical carrying value which
aggregated $322 million and $328 million at September 30, 2014 and
December 31, 2014, respectively.
|
|
|
|
(2)
|
|
Represents fair value of Liberty Ventures Group's investment in
Expedia. In accordance with GAAP, Liberty Ventures Group accounts
for this investment using the equity method of accounting and
includes this investment in its attributed balance sheet at its
historical carrying value which aggregated $501 million and $514
million at September 30, 2014 and December 31, 2014, respectively.
|
|
|
|
(3)
|
|
Represents fair value of Liberty Ventures Group's investment in FTD.
In accordance with GAAP, Liberty Ventures Group accounts for this
investment using the equity method of accounting and includes this
investment in its attributed balance sheet at its historical
carrying value which was $355 million at December 31, 2014.
|
|
|
|
(4)
|
|
Represents fair value of Liberty Ventures Group's investments. In
accordance with GAAP, Liberty Ventures Group accounts for these
investments using the equity method of accounting and includes these
investments in its attributed balance sheet at their historical
carrying values which aggregated $111 million and $108 million at
September 30, 2014 and December 31, 2014, respectively.
|
|
|
|
(5)
|
|
Represents Liberty Ventures Group's other public holdings which are
accounted for at fair value. Excludes $23 million and $10 million of
long-term marketable securities as of September 30, 2014 and
December 31, 2014, respectively.
|
|
|
|
Cash and Debt
The following presentation is provided to separately identify cash and
liquid investments and debt information.
|
|
|
|
|
|
|
|
|
(amounts in millions)
|
|
|
9/30/2014
|
|
|
12/31/2014
|
Cash and Liquid Investments Attributable to:
|
|
|
|
|
|
|
|
|
QVC Group(1)
|
|
|
$
|
749
|
|
|
|
$
|
443
|
Liberty Ventures Group(2)(3)
|
|
|
|
1,547
|
|
|
|
|
2,762
|
Total Liberty Consolidated Cash and Liquid Investments
|
|
|
$
|
2,296
|
|
|
|
$
|
3,205
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
Short-term marketable securities - QVC Group
|
|
|
$
|
16
|
|
|
|
$
|
21
|
Short-term marketable securities - Liberty Ventures Group
|
|
|
|
651
|
|
|
|
|
868
|
Long-term marketable securities - Liberty Ventures Group
|
|
|
|
23
|
|
|
|
|
10
|
Total Liberty Consolidated Cash (GAAP)
|
|
|
$
|
1,606
|
|
|
|
$
|
2,306
|
|
|
|
|
|
|
|
|
|
Debt:
|
|
|
|
|
|
|
|
|
Senior notes and debentures(4)
|
|
|
$
|
791
|
|
|
|
$
|
791
|
Senior exchangeable debentures(5)
|
|
|
|
400
|
|
|
|
|
400
|
QVC senior notes(4)
|
|
|
|
4,050
|
|
|
|
|
4,050
|
QVC bank credit facility
|
|
|
|
32
|
|
|
|
|
508
|
Other
|
|
|
|
157
|
|
|
|
|
75
|
Total Attributed QVC Group Debt
|
|
|
$
|
5,430
|
|
|
|
$
|
5,824
|
Unamortized discount and fair market value adjustment
|
|
|
|
5
|
|
|
|
|
36
|
Total Attributed QVC Group Debt (GAAP)
|
|
|
$
|
5,435
|
|
|
|
$
|
5,860
|
|
|
|
|
|
|
|
|
|
Senior exchangeable debentures(5)
|
|
|
$
|
2,082
|
|
|
|
$
|
2,081
|
Other
|
|
|
|
-
|
|
|
|
|
61
|
Total Attributed Liberty Ventures Group Debt
|
|
|
$
|
2,082
|
|
|
|
$
|
2,142
|
Fair market value adjustment
|
|
|
|
(22
|
)
|
|
|
|
49
|
Total Attributed Liberty Ventures Group Debt (GAAP)
|
|
|
$
|
2,060
|
|
|
|
$
|
2,191
|
|
|
|
|
|
|
|
|
|
Total Liberty Interactive Corporation Debt (GAAP)
|
|
|
$
|
7,495
|
|
|
|
$
|
8,051
|
________________________________
(1)
|
|
Includes $16 million and $21 million of short-term marketable
securities with an original maturity greater than 90 days as of
September 30, 2014 and December 31, 2014, respectively.
|
|
|
|
(2)
|
|
Includes $651 million and $868 million of short-term marketable
securities with an original maturity greater than 90 days as of
September 30, 2014 and December 31, 2014, respectively.
|
|
|
|
(3)
|
|
Includes $23 million and $10 million of marketable securities with
an original maturity greater than one year as of September 30, 2014
and December 31, 2014, respectively, which are reflected in
investments in available-for-sale securities in Liberty Ventures
Group's condensed attributed balance sheet.
|
|
|
|
(4)
|
|
Face amount of Senior Notes and Debentures with no reduction for the
unamortized discounts.
|
|
|
|
(5)
|
|
Face amount of Senior Exchangeable Debentures with no reduction for
the fair market value adjustment.
|
|
|
|
Total cash and liquid investments attributed to the QVC Group decreased
by approximately $306 million during the fourth quarter, primarily
driven by the reattribution of $1 billion to Liberty Ventures Group,
stock repurchases and capital expenditures. These outflows were
partially offset by cash flows from operations and borrowings on the QVC
bank credit facility in excess of repayments. Total debt attributed to
the QVC Group increased by $394 million, primarily due to borrowings on
the QVC bank credit facility, partially offset by debt at the Digital
Commerce companies which was reattributed to Ventures during the fourth
quarter.
Total cash and liquid investments attributed to the Liberty Ventures
Group increased $1.2 billion, primarily due to cash received as part of
the reattribution and the closing of the sale of Provide to FTD.
Important Notice: Liberty Interactive (Nasdaq: QVCA, QVCB, LVNTA,
LVNTB) President and CEO, Greg Maffei will discuss Liberty Interactive's
earnings release in a conference call which will begin at 5:15 p.m.
(E.S.T.) on February 25, 2015. The call can be accessed by dialing (888)
296-4204 or (719) 325-2498 at least 10 minutes prior to the start time.
Replays of the conference call can be accessed until 7:15 p.m. (E.S.T.)
on March 4, 2015, by dialing (888) 203-1112 or (719) 457-0820 plus the
passcode 3596339. The call will also be broadcast live across the
Internet and archived on our website. To access the webcast go to http://www.libertyinteractive.com/events.
Links to this press release will also be available on Liberty
Interactive's website.
This press release includes certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995,
including statements about business strategies, market potential, future
financial prospects, international expansion, including the launch of
QVC France and the expected expenditures in connection therewith, new
service and product offerings, the monetization of our non-core assets,
the continuation of our stock repurchase program, the estimated
liabilities under exchangeable debentures and other matters that are not
historical facts. These forward-looking statements involve many
risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by such statements,
including, without limitation, possible changes in market acceptance of
new products or services, competitive issues, regulatory matters
affecting our businesses, continued access to capital on terms
acceptable to Liberty Interactive, changes in law and government
regulations that may impact the derivative instruments that hedge
certain of our financial risks, the availability of investment
opportunities, and market conditions conducive to stock repurchases. These
forward-looking statements speak only as of the date of this
presentation, and Liberty Interactive expressly disclaims any obligation
or undertaking to disseminate any updates or revisions to any
forward-looking statement contained herein to reflect any change in
Liberty Interactive's expectations with regard thereto or any change in
events, conditions or circumstances on which any such statement is
based. Please refer to the publicly filed documents of Liberty
Interactive, including the most recent Form 10-K, for additional
information about Liberty Interactive and about the risks and
uncertainties related to Liberty Interactive's business which may affect
the statements made in this presentation.
SUPPLEMENTAL INFORMATION
As a supplement to Liberty Interactive's consolidated statements of
operations, which are included in its Form 10-K for the year ended
December 31, 2014, the following is a presentation of quarterly
information and operating metrics on a stand-alone basis for the largest
business owned by Liberty Interactive (QVC) at December 31, 2014, which
Liberty Interactive has identified as a reportable segment.
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. See Schedule 2 to this press
release for a reconciliation of QVC's adjusted OIBDA to operating income
for the same period, as determined under GAAP.
QUARTERLY SUMMARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in millions)
|
|
|
4Q13
|
|
|
1Q14
|
|
|
2Q14
|
|
|
3Q14
|
|
|
4Q14
|
|
QVC Group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QVC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue - US
|
|
|
$
|
1,932
|
|
|
$
|
1,305
|
|
|
$
|
1,352
|
|
|
$
|
1,368
|
|
|
$
|
2,030
|
|
Revenue - International
|
|
|
|
809
|
|
|
|
681
|
|
|
|
662
|
|
|
|
652
|
|
|
|
751
|
|
Revenue - Total
|
|
|
$
|
2,741
|
|
|
$
|
1,986
|
|
|
$
|
2,014
|
|
|
$
|
2,020
|
|
|
$
|
2,781
|
|
Adjusted OIBDA - US
|
|
|
|
437
|
|
|
|
301
|
|
|
|
325
|
|
|
|
329
|
|
|
|
474
|
|
Adjusted OIBDA - International
|
|
|
|
158
|
|
|
|
111
|
|
|
|
114
|
|
|
|
110
|
|
|
|
146
|
|
Adjusted OIBDA - Total
|
|
|
$
|
595
|
|
|
$
|
412
|
|
|
$
|
439
|
|
|
$
|
439
|
|
|
$
|
620
|
|
Operating income - US
|
|
|
|
323
|
|
|
|
186
|
|
|
|
203
|
|
|
|
203
|
|
|
|
349
|
|
Operating income - International
|
|
|
|
118
|
|
|
|
74
|
|
|
|
81
|
|
|
|
73
|
|
|
|
110
|
|
Operating income - Total
|
|
|
$
|
441
|
|
|
$
|
260
|
|
|
$
|
284
|
|
|
$
|
276
|
|
|
$
|
459
|
|
Gross margin - US
|
|
|
|
34.7
|
|
%
|
|
36.4
|
|
%
|
|
37.7
|
|
%
|
|
37.2
|
|
%
|
|
35.6
|
%
|
Gross margin - International
|
|
|
|
37.8
|
|
%
|
|
37.4
|
|
%
|
|
38.3
|
|
%
|
|
37.8
|
|
%
|
|
37.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ANNUAL SUMMARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in millions)
|
|
|
|
|
|
2013
|
|
|
2014
|
|
|
QVC Group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QVC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue - US
|
|
|
|
|
|
$
|
5,844
|
|
|
$
|
6,055
|
|
|
Revenue - International
|
|
|
|
|
|
|
2,779
|
|
|
|
2,746
|
|
|
Revenue - Total
|
|
|
|
|
|
$
|
8,623
|
|
|
$
|
8,801
|
|
|
Adjusted OIBDA - US
|
|
|
|
|
|
|
1,352
|
|
|
|
1,429
|
|
|
Adjusted OIBDA - International
|
|
|
|
|
|
|
489
|
|
|
|
481
|
|
|
Adjusted OIBDA - Total
|
|
|
|
|
|
$
|
1,841
|
|
|
$
|
1,910
|
|
|
Operating income - US
|
|
|
|
|
|
|
901
|
|
|
|
941
|
|
|
Operating income - International
|
|
|
|
|
|
|
344
|
|
|
|
338
|
|
|
Operating income - Total
|
|
|
|
|
|
$
|
1,245
|
|
|
$
|
1,279
|
|
|
Gross margin - US
|
|
|
|
|
|
|
36.1
|
|
%
|
|
36.6
|
|
%
|
Gross margin - International
|
|
|
|
|
|
|
37.7
|
|
%
|
|
37.8
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 Digital Commerce companies together with a
reconciliation to that entity or such businesses' 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 all stock 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.
Liberty Interactive believes adjusted OIBDA is an important indicator of
the operational strength and performance of its businesses, including
each business' ability to service debt and fund capital expenditures. In
addition, this measure allows management to view operating results and
perform analytical comparisons and benchmarking between businesses and
identify strategies to improve performance. Because adjusted OIBDA is
used as a measure of operating performance, Liberty Interactive views
operating income as the most directly comparable GAAP measure. Adjusted
OIBDA is not meant to replace or supersede operating income or any other
GAAP measure, but rather to supplement such GAAP measures in order to
present investors with the same information that Liberty Interactive's
management considers in assessing the results of operations and
performance of its assets. Please see the attached schedules for
applicable reconciliations.
In addition, this presentation includes references to adjusted net
income, which is a non-GAAP financial measure, for QVC Group. Liberty
Interactive defines adjusted net income as net income, excluding the
impact of purchase accounting amortization (net of deferred tax benefit)
and net income (loss) generated by the Digital Commerce companies.
Liberty Interactive believes adjusted net income is an important
indicator of financial performance, in particular for QVC Group, due to
the impact of purchase accounting amortization and the reattribution of
the Digital Commerce companies. Because adjusted net income is used as a
measure of overall financial performance, Liberty Interactive views net
income as the most directly comparable GAAP measure. Adjusted net income
is not meant to replace or supersede net income or any other GAAP
measure, but rather to supplement such GAAP measures in order to present
investors with a valuable supplemental metric of financial performance.
Please see the attached schedules for a reconciliation of adjusted net
income to net income (loss) calculated in accordance with GAAP for QVC
Group (Schedule 4).
SCHEDULE 1
The following table provides a reconciliation of QVC Group's adjusted
OIBDA to its operating income calculated in accordance with GAAP for the
three months ended December 31, 2013, March 31, 2014, June 30, 2014,
September 30, 2014 and December 31, 2014, respectively and years ended
December 31, 2013 and 2014.
QUARTERLY SUMMARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in millions)
|
|
|
4Q13
|
|
|
1Q14
|
|
|
2Q14
|
|
|
3Q14
|
|
|
4Q14
|
QVC Group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QVC Group Adjusted OIBDA (exclusive of Digital Commerce)(1)
|
|
|
$
|
592
|
|
|
|
$
|
408
|
|
|
|
$
|
433
|
|
|
|
$
|
433
|
|
|
|
$
|
612
|
|
Digital Commerce Adjusted OIBDA(1)
|
|
|
|
30
|
|
|
|
|
28
|
|
|
|
|
27
|
|
|
|
|
(2
|
)
|
|
|
|
NA
|
Adjusted OIBDA
|
|
|
|
622
|
|
|
|
$
|
436
|
|
|
|
|
460
|
|
|
|
|
431
|
|
|
|
|
612
|
|
Depreciation and amortization
|
|
|
|
(166
|
)
|
|
|
|
(162
|
)
|
|
|
|
(165
|
)
|
|
|
|
(166
|
)
|
|
|
|
(150
|
)
|
Stock compensation expense
|
|
|
|
(35
|
)
|
|
|
|
(24
|
)
|
|
|
|
(24
|
)
|
|
|
|
(18
|
)
|
|
|
|
(17
|
)
|
Impairment of intangible assets
|
|
|
|
(11
|
)
|
|
|
|
-
|
|
|
|
|
(7
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
Operating Income
|
|
|
$
|
410
|
|
|
|
$
|
250
|
|
|
|
$
|
264
|
|
|
|
$
|
247
|
|
|
|
$
|
445
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ANNUAL SUMMARY
|
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in millions)
|
|
|
|
|
|
2013
|
|
|
|
2014
|
QVC Group
|
|
|
|
|
|
|
|
|
|
|
|
|
QVC Group Adjusted OIBDA (exclusive of Digital Commerce)(1)
|
|
|
|
|
|
$
|
1,821
|
|
|
|
|
$
|
1,886
|
|
Digital Commerce Adjusted OIBDA(1)
|
|
|
|
|
|
|
103
|
|
|
|
|
|
53
|
|
Adjusted OIBDA
|
|
|
|
|
|
|
1,924
|
|
|
|
|
|
1,939
|
|
Depreciation and amortization
|
|
|
|
|
|
|
(629
|
)
|
|
|
|
|
(643
|
)
|
Stock compensation expense
|
|
|
|
|
|
|
(110
|
)
|
|
|
|
|
(83
|
)
|
Impairment of intangible assets
|
|
|
|
|
|
|
(30
|
)
|
|
|
|
|
(7
|
)
|
Operating Income
|
|
|
|
|
|
$
|
1,155
|
|
|
|
|
$
|
1,206
|
|
1)
|
|
QVC Group adjusted OIBDA presented exclusive of the impact of the
Digital Commerce companies and reconciled to both QVC Group adjusted
OIBDA and GAAP operating income. Under GAAP, the Digital Commerce
companies were only included as part of the QVC Group through
September 30, 2014.
|
|
|
|
SCHEDULE 2
The following table provides a reconciliation of adjusted OIBDA for QVC
(and certain of its subsidiaries) and the Digital Commerce companies to
that entity or such businesses' operating income (loss) calculated in
accordance with GAAP for the three months ended December 31, 2013, March
31, 2014, June 30, 2014, September 30, 2014 and December 31, 2014,
respectively and years ended December, 31, 2013 and 2014.
QUARTERLY SUMMARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in millions)
|
|
|
4Q13
|
|
|
1Q14
|
|
|
2Q14
|
|
|
3Q14
|
|
|
4Q14
|
QVC Group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QVC Adjusted OIBDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QVC US
|
|
|
$
|
437
|
|
|
|
$
|
301
|
|
|
|
$
|
325
|
|
|
|
$
|
329
|
|
|
|
$
|
474
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QVC Japan
|
|
|
|
55
|
|
|
|
|
47
|
|
|
|
|
43
|
|
|
|
|
41
|
|
|
|
|
45
|
|
QVC Germany
|
|
|
|
58
|
|
|
|
|
39
|
|
|
|
|
40
|
|
|
|
|
42
|
|
|
|
|
53
|
|
QVC UK
|
|
|
|
47
|
|
|
|
|
27
|
|
|
|
|
33
|
|
|
|
|
31
|
|
|
|
|
50
|
|
QVC Italy
|
|
|
|
(2
|
)
|
|
|
|
(2
|
)
|
|
|
|
(2
|
)
|
|
|
|
(1
|
)
|
|
|
|
1
|
|
QVC France
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(3
|
)
|
|
|
|
(3
|
)
|
QVC International adjusted OIBDA
|
|
|
$
|
158
|
|
|
|
$
|
111
|
|
|
|
$
|
114
|
|
|
|
$
|
110
|
|
|
|
$
|
146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated QVC adjusted OIBDA
|
|
|
|
595
|
|
|
|
|
412
|
|
|
|
|
439
|
|
|
|
|
439
|
|
|
|
|
620
|
|
Depreciation and amortization
|
|
|
|
(145
|
)
|
|
|
|
(144
|
)
|
|
|
|
(145
|
)
|
|
|
|
(147
|
)
|
|
|
|
(151
|
)
|
Stock compensation
|
|
|
|
(9
|
)
|
|
|
|
(8
|
)
|
|
|
|
(10
|
)
|
|
|
|
(16
|
)
|
|
|
|
(10
|
)
|
QVC Operating Income
|
|
|
$
|
441
|
|
|
|
$
|
260
|
|
|
|
$
|
284
|
|
|
|
$
|
276
|
|
|
|
$
|
459
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liberty Ventures Group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital Commerce Companies(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA
|
|
|
$
|
30
|
|
|
|
$
|
28
|
|
|
|
$
|
27
|
|
|
|
$
|
(2
|
)
|
|
|
$
|
44
|
|
Depreciation and amortization
|
|
|
|
(20
|
)
|
|
|
|
(18
|
)
|
|
|
|
(20
|
)
|
|
|
|
(19
|
)
|
|
|
|
(20
|
)
|
Stock compensation
|
|
|
|
(14
|
)
|
|
|
|
(5
|
)
|
|
|
|
(7
|
)
|
|
|
|
7
|
|
|
|
|
(16
|
)
|
Impairment of intangible assets
|
|
|
|
(11
|
)
|
|
|
|
-
|
|
|
|
|
(7
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
Operating Income (Loss)
|
|
|
$
|
(15
|
)
|
|
|
$
|
5
|
|
|
|
$
|
(7
|
)
|
|
|
$
|
(14
|
)
|
|
|
$
|
8
|
|
___________________________
1)
|
|
For GAAP purposes, the Digital Commerce companies have been recorded
as part of Liberty Ventures Group beginning with the fourth quarter
of 2014 (due to the reattribution). For presentation purposes in
this table, the results of the Digital Commerce companies are
included in Liberty Ventures Group for all periods shown.
|
|
|
|
ANNUAL SUMMARY
|
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in millions)
|
|
|
|
|
|
2013
|
|
|
|
2014
|
QVC Group
|
|
|
|
|
|
|
|
|
|
|
|
|
QVC Adjusted OIBDA
|
|
|
|
|
|
|
|
|
|
|
|
|
QVC US
|
|
|
|
|
|
$
|
1,352
|
|
|
|
|
$
|
1,429
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QVC Japan
|
|
|
|
|
|
|
212
|
|
|
|
|
|
176
|
|
QVC Germany
|
|
|
|
|
|
|
173
|
|
|
|
|
|
174
|
|
QVC UK
|
|
|
|
|
|
|
118
|
|
|
|
|
|
141
|
|
QVC Italy
|
|
|
|
|
|
|
(14
|
)
|
|
|
|
|
(4
|
)
|
QVC France
|
|
|
|
|
|
|
-
|
|
|
|
|
|
(6
|
)
|
QVC International adjusted OIBDA
|
|
|
|
|
|
$
|
489
|
|
|
|
|
$
|
481
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated QVC adjusted OIBDA
|
|
|
|
|
|
|
1,841
|
|
|
|
|
|
1,910
|
|
Depreciation and amortization
|
|
|
|
|
|
|
(558
|
)
|
|
|
|
|
(587
|
)
|
Stock compensation
|
|
|
|
|
|
|
(38
|
)
|
|
|
|
|
(44
|
)
|
Operating Income
|
|
|
|
|
|
$
|
1,245
|
|
|
|
|
$
|
1,279
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liberty Ventures Group
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital Commerce Companies(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA
|
|
|
|
|
|
$
|
103
|
|
|
|
|
$
|
97
|
|
Depreciation and amortization
|
|
|
|
|
|
|
(71
|
)
|
|
|
|
|
(77
|
)
|
Stock compensation
|
|
|
|
|
|
|
(28
|
)
|
|
|
|
|
(21
|
)
|
Impairment of intangible assets
|
|
|
|
|
|
|
(30
|
)
|
|
|
|
|
(7
|
)
|
Operating Income (Loss)
|
|
|
|
|
|
$
|
(26
|
)
|
|
|
|
$
|
(8
|
)
|
_____________________________
1)
|
|
For GAAP purposes, the Digital Commerce companies have been recorded
as part of Liberty Ventures Group beginning with the fourth quarter
of 2014 (due to the reattribution). For presentation purposes in
this table, the results of the Digital Commerce companies are
included in Liberty Ventures Group for all periods shown.
|
|
|
|
SCHEDULE 3
The following table provides a reconciliation of adjusted OIBDA for QVC
Group and the Digital Commerce companies to the Liberty Interactive
Corporation operating income (loss) calculated in accordance with GAAP
for the three months ended December 31, 2013, March 31, 2014, June 30,
2014, September 30, 2014 and December 31, 2014, respectively and years
ended December, 31, 2013 and 2014.
QUARTERLY SUMMARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in millions)
|
|
|
4Q13
|
|
|
1Q14
|
|
|
2Q14
|
|
|
3Q14
|
|
|
4Q14
|
QVC Group Adjusted OIBDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated QVC
|
|
|
$
|
595
|
|
|
|
$
|
412
|
|
|
|
$
|
439
|
|
|
|
$
|
439
|
|
|
|
$
|
620
|
|
Corporate and other
|
|
|
|
(3
|
)
|
|
|
|
(4
|
)
|
|
|
|
(6
|
)
|
|
|
|
(6
|
)
|
|
|
|
(8
|
)
|
QVC Group Adjusted OIBDA(1)
|
|
|
$
|
592
|
|
|
|
$
|
408
|
|
|
|
$
|
433
|
|
|
|
$
|
433
|
|
|
|
$
|
612
|
|
Liberty Ventures Group Adjusted OIBDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Digital Commerce(1)
|
|
|
$
|
30
|
|
|
|
$
|
28
|
|
|
|
$
|
27
|
|
|
$
|
|
(2
|
)
|
|
|
$
|
44
|
|
Corporate and other
|
|
|
|
(1
|
)
|
|
|
|
(2
|
)
|
|
|
|
(4
|
)
|
|
|
|
(6
|
)
|
|
|
|
(6
|
)
|
Liberty Ventures Group Adjusted OIBDA
|
|
|
$
|
29
|
|
|
|
$
|
26
|
|
|
|
$
|
23
|
|
|
|
$
|
(8
|
)
|
|
|
$
|
38
|
|
Consolidated Liberty Interactive Corp. Adjusted OIBDA
|
|
|
$
|
621
|
|
|
|
$
|
434
|
|
|
|
$
|
456
|
|
|
|
$
|
425
|
|
|
|
$
|
650
|
|
Depreciation and amortization
|
|
|
|
(166
|
)
|
|
|
|
(163
|
)
|
|
|
|
(164
|
)
|
|
|
|
(166
|
)
|
|
|
|
(169
|
)
|
Stock compensation
|
|
|
|
(38
|
)
|
|
|
|
(25
|
)
|
|
|
|
(26
|
)
|
|
|
|
(20
|
)
|
|
|
|
(37
|
)
|
Impairment of intangible assets
|
|
|
|
(11
|
)
|
|
|
|
-
|
|
|
|
|
(7
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
Consolidated Liberty Interactive Corp. Operating Income
|
|
|
$
|
406
|
|
|
|
$
|
246
|
|
|
|
$
|
259
|
|
|
|
$
|
239
|
|
|
|
$
|
444
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ANNUAL SUMMARY
|
|
|
|
|
|
|
|
|
|
|
(amounts in millions)
|
|
|
|
|
|
2013
|
|
2014
|
QVC Group Adjusted OIBDA
|
|
|
|
|
|
|
|
|
|
|
Consolidated QVC
|
|
|
|
|
|
$
|
1,841
|
|
$
|
1,910
|
Corporate and other
|
|
|
|
|
|
|
(20)
|
|
|
(24)
|
QVC Group Adjusted OIBDA(1)
|
|
|
|
|
|
$
|
1,821
|
|
$
|
1,886
|
Liberty Ventures Group Adjusted OIBDA
|
|
|
|
|
|
|
|
|
|
|
Digital Commerce(1)
|
|
|
|
|
|
$
|
103
|
|
$
|
97
|
Corporate and other
|
|
|
|
|
|
|
(11)
|
|
|
(18)
|
Liberty Ventures Group Adjusted OIBDA
|
|
|
|
|
|
$
|
92
|
|
$
|
79
|
Consolidated Liberty Interactive Corp. Adjusted OIBDA
|
|
|
|
|
|
$
|
1,913
|
|
$
|
1,965
|
Depreciation and amortization
|
|
|
|
|
|
|
(629)
|
|
|
(662)
|
Stock compensation
|
|
|
|
|
|
|
(118)
|
|
|
(108)
|
Impairment of intangible assets
|
|
|
|
|
|
|
(30)
|
|
|
(7)
|
Consolidated Liberty Interactive Corp. Operating Income
|
|
|
|
|
|
$
|
1,136
|
|
$
|
1,188
|
______________________________
1)
|
|
For GAAP purposes, the Digital Commerce companies have been recorded
as part of Liberty Ventures Group beginning with the fourth quarter
of 2014 (due to the reattribution). For presentation purposes in
this table, the results of the Digital Commerce companies are
included in Liberty Ventures Group for all periods shown.
|
|
|
|
SCHEDULE 4
The following table provides a reconciliation of QVC Group's adjusted
net income to its net income calculated in accordance with GAAP for the
three months ended December 31, 2013, March 31, 2014, June 30, 2014,
September 31, 2014 and December 31, 2014, respectively and years ended
December 31, 2013 and 2014. Adjusted net income excludes the impact of
the Digital Commerce companies due to their reattribution to Liberty
Ventures Group in the fourth quarter of 2014.
QUARTERLY SUMMARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in millions)
|
|
|
|
4Q13
|
|
|
|
1Q14
|
|
|
|
2Q14
|
|
|
|
3Q14
|
|
|
|
4Q14
|
|
|
|
LTM
|
QVC Group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
157
|
|
|
|
$
|
110
|
|
|
$
|
105
|
|
|
|
$
|
83
|
|
|
|
$
|
222
|
|
|
$
|
520
|
|
Purchase accounting amort., net of deferred tax benefit (1)
|
|
|
|
51
|
|
|
|
|
51
|
|
|
|
51
|
|
|
|
|
51
|
|
|
|
|
51
|
|
|
|
204
|
|
Digital Commerce net income (loss)
|
|
|
|
(11
|
)
|
|
|
|
2
|
|
|
|
(1
|
)
|
|
|
|
(16
|
)
|
|
|
|
-
|
|
|
|
(15
|
)
|
QVC Group Adjusted net income
|
|
|
$
|
219
|
|
|
|
$
|
159
|
|
|
$
|
157
|
|
|
|
$
|
150
|
|
|
|
$
|
273
|
|
|
$
|
739
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QVCA/B shares outstanding as of January 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
474
|
|
Adjusted LTM earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ANNUAL SUMMARY
|
|
|
|
|
|
|
|
|
|
|
|
|
(amounts in millions)
|
|
|
|
|
|
2013
|
|
|
|
2014
|
QVC Group
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
|
$
|
438
|
|
|
|
|
$
|
520
|
|
Purchase accounting amort., net of deferred tax benefit (1)
|
|
|
|
|
|
|
203
|
|
|
|
|
|
204
|
|
Digital Commerce net income (loss)
|
|
|
|
|
|
|
(31
|
)
|
|
|
|
|
(15
|
)
|
QVC Group Adjusted net income
|
|
|
|
|
|
$
|
672
|
|
|
|
|
$
|
739
|
|
________________________________
1)
|
|
Add-back relates to non-cash, non-tax deductible purchase accounting
amortization from Liberty Interactive's acquisition of QVC, net of
book deferred tax benefit (gross non-cash, non-tax deductible
purchase accounting amortization was $322 million and $323 million
for the twelve months ended December 31, 2013 and 2014,
respectively, and is applied ratably across the four quarters in
each year).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIBERTY INTERACTIVE CORPORATION
BALANCE SHEET INFORMATION
December 31, 2014 - (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributed
|
|
|
|
|
|
|
|
|
|
QVC
|
|
|
Ventures
|
|
|
Inter-group
|
|
|
Consolidated
|
|
|
|
Group
|
|
|
Group
|
|
|
Eliminations
|
|
|
Liberty
|
|
|
|
amounts in millions
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
422
|
|
|
|
1,884
|
|
|
-
|
|
|
|
2,306
|
Trade and other receivables, net
|
|
|
|
1,196
|
|
|
|
36
|
|
|
-
|
|
|
|
1,232
|
Inventory, net
|
|
|
|
882
|
|
|
|
167
|
|
|
-
|
|
|
|
1,049
|
Short-term marketable securities
|
|
|
|
21
|
|
|
|
868
|
|
|
-
|
|
|
|
889
|
Other current assets
|
|
|
|
262
|
|
|
|
9
|
|
|
(199
|
)
|
|
|
72
|
Total current assets
|
|
|
|
2,783
|
|
|
|
2,964
|
|
|
(199
|
)
|
|
|
5,548
|
Investments in available-for-sale securities and other cost
investments
|
|
|
|
4
|
|
|
|
1,220
|
|
|
-
|
|
|
|
1,224
|
Investments in affiliates, accounted for using the equity method
|
|
|
|
375
|
|
|
|
1,258
|
|
|
-
|
|
|
|
1,633
|
Property and equipment, net
|
|
|
|
1,026
|
|
|
|
67
|
|
|
-
|
|
|
|
1,093
|
Intangible assets not subject to amortization
|
|
|
|
7,634
|
|
|
|
259
|
|
|
-
|
|
|
|
7,893
|
Intangible assets subject to amortization, net
|
|
|
|
1,130
|
|
|
|
55
|
|
|
-
|
|
|
|
1,185
|
Other assets, at cost, net of accumulated amortization
|
|
|
|
60
|
|
|
|
5
|
|
|
-
|
|
|
|
65
|
Total assets
|
|
|
$
|
13,012
|
|
|
|
5,828
|
|
|
(199
|
)
|
|
|
18,641
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intergroup Payable (receivable)
|
|
|
$
|
(5
|
)
|
|
|
5
|
|
|
-
|
|
|
|
-
|
Accounts payable
|
|
|
|
629
|
|
|
|
106
|
|
|
-
|
|
|
|
735
|
Accrued liabilities
|
|
|
|
688
|
|
|
|
55
|
|
|
-
|
|
|
|
743
|
Current portion of debt
|
|
|
|
9
|
|
|
|
937
|
|
|
-
|
|
|
|
946
|
Current deferred tax liabilities
|
|
|
|
-
|
|
|
|
1,171
|
|
|
(199
|
)
|
|
|
972
|
Other current liabilities
|
|
|
|
269
|
|
|
|
74
|
|
|
-
|
|
|
|
343
|
Total current liabilities
|
|
|
|
1,590
|
|
|
|
2,348
|
|
|
(199
|
)
|
|
|
3,739
|
Long-term debt
|
|
|
|
5,851
|
|
|
|
1,254
|
|
|
-
|
|
|
|
7,105
|
Deferred income tax liabilities
|
|
|
|
1,033
|
|
|
|
816
|
|
|
-
|
|
|
|
1,849
|
Other liabilities
|
|
|
|
157
|
|
|
|
11
|
|
|
-
|
|
|
|
168
|
Total liabilities
|
|
|
|
8,631
|
|
|
|
4,429
|
|
|
(199
|
)
|
|
|
12,861
|
Equity/Attributed net assets (liabilities)
|
|
|
|
4,280
|
|
|
|
1,393
|
|
|
-
|
|
|
|
5,673
|
Non-controlling interests in equity of subsidiaries
|
|
|
|
101
|
|
|
|
6
|
|
|
-
|
|
|
|
107
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity
|
|
|
$
|
13,012
|
|
|
|
5,828
|
|
|
(199
|
)
|
|
|
18,641
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIBERTY INTERACTIVE CORPORATION
STATEMENT OF OPERATIONS INFORMATION
Twelve months ended December 31, 2014 - (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributed
|
|
|
|
|
|
|
QVC
|
|
|
Ventures
|
|
|
Consolidated
|
|
|
|
Group
|
|
|
Group
|
|
|
Liberty
|
|
|
|
amounts in millions
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
Net retail sales
|
|
|
$
|
10,028
|
|
|
|
471
|
|
|
|
10,499
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of retail sales (exclusive of depreciation shown separately
below)
|
|
|
|
6,378
|
|
|
|
306
|
|
|
|
6,684
|
|
Operating, including stock-based compensation
|
|
|
|
854
|
|
|
|
37
|
|
|
|
891
|
|
Selling, general and administrative, including stock-based
compensation
|
|
|
|
940
|
|
|
|
127
|
|
|
|
1,067
|
|
Depreciation and amortization
|
|
|
|
643
|
|
|
|
19
|
|
|
|
662
|
|
Impairment of intangible assets
|
|
|
|
7
|
|
|
|
-
|
|
|
|
7
|
|
|
|
|
|
8,822
|
|
|
|
489
|
|
|
|
9,311
|
|
Operating income
|
|
|
|
1,206
|
|
|
|
(18
|
)
|
|
|
1,188
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
(312
|
)
|
|
|
(75
|
)
|
|
|
(387
|
)
|
Share of earnings (losses) of affiliates, net
|
|
|
|
51
|
|
|
|
(12
|
)
|
|
|
39
|
|
Realized and unrealized gains (losses) on financial instruments, net
|
|
|
|
(22
|
)
|
|
|
(35
|
)
|
|
|
(57
|
)
|
Gains (losses) on transactions, net
|
|
|
|
-
|
|
|
|
74
|
|
|
|
74
|
|
Other, net
|
|
|
|
(43
|
)
|
|
|
22
|
|
|
|
(21
|
)
|
|
|
|
|
(326
|
)
|
|
|
(26
|
)
|
|
|
(352
|
)
|
Earnings (loss) before income taxes
|
|
|
|
880
|
|
|
|
(44
|
)
|
|
|
836
|
|
Income tax benefit (expense)
|
|
|
|
(306
|
)
|
|
|
48
|
|
|
|
(258
|
)
|
Net earnings (loss) from continuing operations
|
|
|
|
574
|
|
|
|
4
|
|
|
|
578
|
|
Net earnings (loss) from discontinued operations, net of taxes
|
|
|
|
(15
|
)
|
|
|
63
|
|
|
|
48
|
|
Net earnings (loss)
|
|
|
|
559
|
|
|
|
67
|
|
|
|
626
|
|
Less net earnings (loss) attributable to noncontrolling interests
|
|
|
|
39
|
|
|
|
50
|
|
|
|
89
|
|
Net earnings (loss) attributable to Liberty Interactive Corporation
shareholders
|
|
|
$
|
520
|
|
|
|
17
|
|
|
|
537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIBERTY INTERACTIVE CORPORATION
STATEMENT OF OPERATIONS INFORMATION
Twelve months ended December 31, 2013 - (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributed
|
|
|
|
|
|
|
QVC
|
|
|
Ventures
|
|
|
Consolidated
|
|
|
|
Group
|
|
|
Group
|
|
|
Liberty
|
|
|
|
amounts in millions
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
Net retail sales
|
|
|
$
|
10,219
|
|
|
|
-
|
|
|
|
10,219
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of retail sales (exclusive of depreciation shown separately
below)
|
|
|
|
6,533
|
|
|
|
-
|
|
|
|
6,533
|
|
Operating
|
|
|
|
862
|
|
|
|
-
|
|
|
|
862
|
|
Selling, general and administrative, including stock-based
compensation
|
|
|
|
1,010
|
|
|
|
19
|
|
|
|
1,029
|
|
Depreciation and amortization
|
|
|
|
629
|
|
|
|
-
|
|
|
|
629
|
|
Impairment of intangible assets
|
|
|
|
30
|
|
|
|
-
|
|
|
|
30
|
|
|
|
|
|
9,064
|
|
|
|
19
|
|
|
|
9,083
|
|
Operating income
|
|
|
|
1,155
|
|
|
|
(19
|
)
|
|
|
1,136
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
(290
|
)
|
|
|
(90
|
)
|
|
|
(380
|
)
|
Share of earnings (losses) of affiliates, net
|
|
|
|
48
|
|
|
|
(15
|
)
|
|
|
33
|
|
Realized and unrealized gains (losses) on financial instruments, net
|
|
|
|
(12
|
)
|
|
|
(10
|
)
|
|
|
(22
|
)
|
Gains (losses) on transactions, net
|
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
(1
|
)
|
Other, net
|
|
|
|
(54
|
)
|
|
|
25
|
|
|
|
(29
|
)
|
|
|
|
|
(309
|
)
|
|
|
(90
|
)
|
|
|
(399
|
)
|
Earnings (loss) before income taxes
|
|
|
|
846
|
|
|
|
(109
|
)
|
|
|
737
|
|
Income tax benefit (expense)
|
|
|
|
(346
|
)
|
|
|
163
|
|
|
|
(183
|
)
|
Net earnings (loss) from continuing operations
|
|
|
|
500
|
|
|
|
54
|
|
|
|
554
|
|
Net earnings (loss) from discontinued operations, net of taxes
|
|
|
|
(17
|
)
|
|
|
43
|
|
|
|
26
|
|
Net earnings (loss)
|
|
|
|
483
|
|
|
|
97
|
|
|
|
580
|
|
Less net earnings (loss) attributable to non-controlling interests
|
|
|
|
45
|
|
|
|
34
|
|
|
|
79
|
|
Net earnings (loss) attributable to Liberty Interactive Corporation
shareholders
|
|
|
$
|
438
|
|
|
|
63
|
|
|
|
501
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIBERTY INTERACTIVE CORPORATION
STATEMENT OF CASH FLOWS INFORMATION
Twelve months ended December 31, 2014 - (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributed
|
|
|
|
|
|
|
QVC
|
|
|
Ventures
|
|
|
Consolidated
|
|
|
|
Group
|
|
|
Group
|
|
|
Liberty
|
|
|
|
amounts in millions
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
|
|
|
$
|
559
|
|
|
|
67
|
|
|
|
626
|
|
Adjustments to reconcile net earnings to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
(Earnings) loss from discontinued operations
|
|
|
|
15
|
|
|
|
(63
|
)
|
|
|
(48
|
)
|
Depreciation and amortization
|
|
|
|
643
|
|
|
|
19
|
|
|
|
662
|
|
Stock-based compensation
|
|
|
|
83
|
|
|
|
25
|
|
|
|
108
|
|
Cash payments for stock based compensation
|
|
|
|
(13
|
)
|
|
|
(2
|
)
|
|
|
(15
|
)
|
Excess tax benefit from stock based compensation
|
|
|
|
(20
|
)
|
|
|
(1
|
)
|
|
|
(21
|
)
|
Noncash interest expense
|
|
|
|
6
|
|
|
|
-
|
|
|
|
6
|
|
Share of (earnings) losses of affiliates, net
|
|
|
|
(51
|
)
|
|
|
12
|
|
|
|
(39
|
)
|
Cash receipts from return on equity investments
|
|
|
|
22
|
|
|
|
23
|
|
|
|
45
|
|
Realized and unrealized gains (losses) on financial instruments, net
|
|
|
|
22
|
|
|
|
35
|
|
|
|
57
|
|
Gains (losses) on transactions, net
|
|
|
|
-
|
|
|
|
(74
|
)
|
|
|
(74
|
)
|
Loss (gain) on extinguishment of debt
|
|
|
|
48
|
|
|
|
-
|
|
|
|
48
|
|
Impairment of intangible assets
|
|
|
|
7
|
|
|
|
-
|
|
|
|
7
|
|
Deferred income tax (benefit) expense
|
|
|
|
(160
|
)
|
|
|
119
|
|
|
|
(41
|
)
|
Intergroup tax allocation
|
|
|
|
169
|
|
|
|
(169
|
)
|
|
|
-
|
|
Intergroup tax payments
|
|
|
|
(388
|
)
|
|
|
388
|
|
|
|
-
|
|
Other noncash charges (credits), net
|
|
|
|
(3
|
)
|
|
|
1
|
|
|
|
(2
|
)
|
Changes in operating assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
Current and other assets
|
|
|
|
(80
|
)
|
|
|
(4
|
)
|
|
|
(84
|
)
|
Payables and other current liabilities
|
|
|
|
345
|
|
|
|
60
|
|
|
|
405
|
|
Net cash provided (used) by operating activities
|
|
|
|
1,204
|
|
|
|
436
|
|
|
|
1,640
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
Cash proceeds from dispositions
|
|
|
|
-
|
|
|
|
163
|
|
|
|
163
|
|
Investments in and loans to cost and equity investees
|
|
|
|
(4
|
)
|
|
|
(87
|
)
|
|
|
(91
|
)
|
Capital expended for property and equipment
|
|
|
|
(226
|
)
|
|
|
(15
|
)
|
|
|
(241
|
)
|
Purchases of short term and other marketable securities
|
|
|
|
(73
|
)
|
|
|
(791
|
)
|
|
|
(864
|
)
|
Sales of short term and other marketable securities
|
|
|
|
52
|
|
|
|
539
|
|
|
|
591
|
|
Other investing activities, net
|
|
|
|
(30
|
)
|
|
|
14
|
|
|
|
(16
|
)
|
Net cash provided (used) by investing activities
|
|
|
|
(281
|
)
|
|
|
(177
|
)
|
|
|
(458
|
)
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
Borrowings of debt
|
|
|
|
4,360
|
|
|
|
146
|
|
|
|
4,506
|
|
Repayments of debt
|
|
|
|
(3,563
|
)
|
|
|
(186
|
)
|
|
|
(3,749
|
)
|
Intergroup receipts (payments), net
|
|
|
|
(1,035
|
)
|
|
|
1,035
|
|
|
|
-
|
|
Repurchases of Liberty common stock
|
|
|
|
(785
|
)
|
|
|
-
|
|
|
|
(785
|
)
|
Taxes paid in lieu of shares issued for stock-based compensation
|
|
|
|
(25
|
)
|
|
|
(1
|
)
|
|
|
(26
|
)
|
Excess tax benefit from stock based compensation
|
|
|
|
20
|
|
|
|
1
|
|
|
|
21
|
|
Other financing activities, net
|
|
|
|
(8
|
)
|
|
|
(25
|
)
|
|
|
(33
|
)
|
Net cash provided (used) by financing activities
|
|
|
|
(1,036
|
)
|
|
|
970
|
|
|
|
(66
|
)
|
Effect of foreign currency rates on cash
|
|
|
|
(46
|
)
|
|
|
-
|
|
|
|
(46
|
)
|
Net cash provided (used) by discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
Cash provided (used) by operating activities
|
|
|
|
(20
|
)
|
|
|
293
|
|
|
|
273
|
|
Cash provided (used) by investing activities
|
|
|
|
-
|
|
|
|
(194
|
)
|
|
|
(194
|
)
|
Cash provided (used) by financing activities
|
|
|
|
3
|
|
|
|
368
|
|
|
|
371
|
|
Change in available cash held by discontinued operations
|
|
|
|
3
|
|
|
|
(119
|
)
|
|
|
(116
|
)
|
Net cash provided (used) by discontinued operations
|
|
|
|
(14
|
)
|
|
|
348
|
|
|
|
334
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
(173
|
)
|
|
|
1,577
|
|
|
|
1,404
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
595
|
|
|
|
307
|
|
|
|
902
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
422
|
|
|
|
1,884
|
|
|
|
2,306
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIBERTY INTERACTIVE CORPORATION
STATEMENT OF CASH FLOWS INFORMATION
Twelve months ended December 31, 2013 - (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributed
|
|
|
|
|
|
|
QVC
|
|
|
Ventures
|
|
|
Consolidated
|
|
|
|
Group
|
|
|
Group
|
|
|
Liberty
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
amounts in millions
|
Net earnings (loss)
|
|
|
$
|
483
|
|
|
|
97
|
|
|
|
580
|
|
Adjustments to reconcile net earnings to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
(Earnings) loss from discontinued operations
|
|
|
|
17
|
|
|
|
(43
|
)
|
|
|
(26
|
)
|
Depreciation and amortization
|
|
|
|
629
|
|
|
|
-
|
|
|
|
629
|
|
Stock-based compensation
|
|
|
|
110
|
|
|
|
8
|
|
|
|
118
|
|
Cash payments for stock based compensation
|
|
|
|
(8
|
)
|
|
|
-
|
|
|
|
(8
|
)
|
Excess tax benefit from stock based compensation
|
|
|
|
(13
|
)
|
|
|
-
|
|
|
|
(13
|
)
|
Noncash interest expense
|
|
|
|
12
|
|
|
|
1
|
|
|
|
13
|
|
Share of losses (earnings) of affiliates, net
|
|
|
|
(48
|
)
|
|
|
15
|
|
|
|
(33
|
)
|
Cash receipts from return on equity investments
|
|
|
|
16
|
|
|
|
19
|
|
|
|
35
|
|
Realized and unrealized gains (losses) on financial instruments, net
|
|
|
|
12
|
|
|
|
10
|
|
|
|
22
|
|
Gains (losses) on transactions, net
|
|
|
|
1
|
|
|
|
-
|
|
|
|
1
|
|
(Gains) losses on extinguishment of debt
|
|
|
|
57
|
|
|
|
-
|
|
|
|
57
|
|
Impairment of intangible assets
|
|
|
|
30
|
|
|
|
-
|
|
|
|
30
|
|
Deferred income tax (benefit) expense
|
|
|
|
(132
|
)
|
|
|
110
|
|
|
|
(22
|
)
|
Intergroup tax allocation
|
|
|
|
272
|
|
|
|
(272
|
)
|
|
|
-
|
|
Intergroup tax payments
|
|
|
|
(52
|
)
|
|
|
52
|
|
|
|
-
|
|
Other noncash charges (credits), net
|
|
|
|
(14
|
)
|
|
|
11
|
|
|
|
(3
|
)
|
Changes in operating assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
Current and other assets
|
|
|
|
(81
|
)
|
|
|
(3
|
)
|
|
|
(84
|
)
|
Payables and other current liabilities
|
|
|
|
(306
|
)
|
|
|
37
|
|
|
|
(269
|
)
|
Net cash provided (used) by operating activities
|
|
|
|
985
|
|
|
|
42
|
|
|
|
1,027
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
Cash proceeds from dispositions
|
|
|
|
1
|
|
|
|
1,136
|
|
|
|
1,137
|
|
Investments in and loans to cost and equity investees
|
|
|
|
(4
|
)
|
|
|
(380
|
)
|
|
|
(384
|
)
|
Capital expended for property and equipment
|
|
|
|
(291
|
)
|
|
|
-
|
|
|
|
(291
|
)
|
Cash paid for acquisitions, net of cash acquired
|
|
|
|
(24
|
)
|
|
|
-
|
|
|
|
(24
|
)
|
Purchases of short term and other marketable securities
|
|
|
|
-
|
|
|
|
(959
|
)
|
|
|
(959
|
)
|
Sales of short term investments and other marketable securities
|
|
|
|
-
|
|
|
|
400
|
|
|
|
400
|
|
Other investing activities, net
|
|
|
|
(38
|
)
|
|
|
(3
|
)
|
|
|
(41
|
)
|
Net cash provided (used) by investing activities
|
|
|
|
(356
|
)
|
|
|
194
|
|
|
|
(162
|
)
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
Borrowings of debt
|
|
|
|
3,520
|
|
|
|
841
|
|
|
|
4,361
|
|
Repayments of debt
|
|
|
|
(3,052
|
)
|
|
|
(2,363
|
)
|
|
|
(5,415
|
)
|
Repurchases of Liberty common stock
|
|
|
|
(1,089
|
)
|
|
|
-
|
|
|
|
(1,089
|
)
|
Taxes paid in lieu of shares issued for stock-based compensation
|
|
|
|
(21
|
)
|
|
|
-
|
|
|
|
(21
|
)
|
Excess tax benefit from stock based compensation
|
|
|
|
13
|
|
|
|
-
|
|
|
|
13
|
|
Other financing activities, net
|
|
|
|
(57
|
)
|
|
|
-
|
|
|
|
(57
|
)
|
Net cash provided (used) by financing activities
|
|
|
|
(686
|
)
|
|
|
(1,522
|
)
|
|
|
(2,208
|
)
|
Effect of foreign currency rates on cash
|
|
|
|
(24
|
)
|
|
|
-
|
|
|
|
(24
|
)
|
Net cash provided (used) by discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
Cash provided (used) by operating activities
|
|
|
|
(13
|
)
|
|
|
346
|
|
|
|
333
|
|
Cash provided (used) by investing activities
|
|
|
|
(6
|
)
|
|
|
(192
|
)
|
|
|
(198
|
)
|
Cash provided (used) by financing activities
|
|
|
|
(1
|
)
|
|
|
(171
|
)
|
|
|
(172
|
)
|
Change in available cash held by discontinued operations
|
|
|
|
(2
|
)
|
|
|
17
|
|
|
|
15
|
|
Net cash provided (used) by discontinued operations
|
|
|
|
(22
|
)
|
|
|
-
|
|
|
|
(22
|
)
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
(103
|
)
|
|
|
(1,286
|
)
|
|
|
(1,389
|
)
|
Cash and cash equivalents at beginning of period
|
|
|
|
698
|
|
|
|
1,593
|
|
|
|
2,291
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
595
|
|
|
|
307
|
|
|
|
902
|
|
|
|
|
|
|
|
|
|
|
|
|
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