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) 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) For a definition of adjusted OIBDA and applicable
reconciliations and a definition of adjusted OIBDA margin, see the
accompanying schedules. 3) For a definition of adjusted net income
and applicable reconciliations, see the accompanying schedules.
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 ) % 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 ) % Germany 58 53 (9 ) % UK 47 50 6 %
Italy (2 ) 1 150 % France — (3 ) n/m %
Total QVC Adjusted OIBDA 595 620 4 % Corporate and other (3
) (8 ) (167 ) %
Total QVC Group Adjusted OIBDA
$ 592 $ 612 3
% Operating Income(1) QVC US $
323 $ 349 8 % Japan 43 38 (12 ) % Germany 41 35 (15 ) % UK 39 42 8
% Italy (5 ) (2 ) 60 % France — (3 ) n/m % Total QVC
Operating Income 441 459 4 % Corporate and other (16 )
(14 ) 13 %
Total QVC Group Operating Income
$ 425 $ 445 5
% Adjusted Net Income(1)(2)
Total QVC Group Adjusted Net Income $ 219
$ 273 25 % China
JV(3) Revenue $ 31 $ 39 26 % Adjusted OIBDA $ (2 ) $ (3
) (50 ) % (amounts in millions)
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 Basic Weighted Average Shares
Outstanding (“WASO”) 503 475 Potentially dilutive Shares 10 7
Diluted WASO 513 482 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 $157 million and $222 million for the three 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 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
Liberty Interactive CorporationCourtnee Ulrich
720-875-5420
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