In the news release, "Liberty Interactive Corporation Reports
Fourth Quarter and Year End 2016 Financial Results,” issued
February 28, 2017 by Liberty Interactive Corporation, we are
advised that the cash and liquid investments attributed to the QVC
Group and Liberty Ventures Group as of December 31, 2016 as
presented in the Cash and Debt table in the Notes to the press
release was inaccurate. This has been revised in the corrected
release, which follows:
LIBERTY INTERACTIVE CORPORATION REPORTS
FOURTH QUARTER AND YEAR END 2016 FINANCIAL RESULTS
Liberty Interactive Corporation (“Liberty Interactive”) (Nasdaq:
QVCA, QVCB, LVNTA, LVNTB) today reported fourth quarter and year
end 2016 results. Highlights include(1):
Attributed to QVC Group
- Consolidated QVC revenue down 1% to
$8.7 billion in 2016
- QVC International revenue in local
currency increased in all markets in the fourth quarter
- QVC International revenue grew 3% on a
constant currency(2) basis
- QVC consolidated mobile penetration was
58% of QVC.com orders in 2016, a 795 basis point increase
- QVC US mobile penetration was 57% of
QVC.com orders, an 820 basis point increase
- zulily revenue grew 14% to $1.5
billion(3) and operating loss was $152 million in 2016, driven by
approximately $223 million of amortization of intangible assets
primarily related to purchase accounting from the acquisition
- zulily adjusted OIBDA(4) grew 58% to
$112 million(3)
- From November 1, 2016 through January
31, 2017, repurchased 12.5 million QVCA shares at an average price
per share of $20.37 and a total cost of $255 million
“Internationally, QVC continues to perform well, while
domestically we are focusing on strengthening a few merchandise
categories that have been weak,” said Greg Maffei, Liberty
Interactive President and CEO. “zulily finished the year strong and
we took advantage of the stock pullback to repurchase $255 million
of QVCA shares.”
Unless otherwise noted, the following discussion compares
financial information for the thee months and year ended December
31, 2016 to the same period in 2015.
QVC GROUP – For the quarter, QVC Group's revenue
decreased 3% to $3.1 billion, operating income was roughly flat at
$384 million, adjusted OIBDA(4) decreased 2% to $610 million, net
income decreased 16% to $188 million and adjusted net income(5)
decreased 15% to $266 million. For the full year, QVC Group's
revenue increased 11% to $10.2 billion, operating income decreased
14% to $1.0 billion, adjusted OIBDA increased 3% to $1.9 billion,
net income decreased 26% to $473 million and adjusted net income
decreased 8% to $812 million. Approximately $39 million of
corporate level selling, general and administrative expense
(“SG&A”) (including stock-based compensation expense) was
allocated to QVC Group for the full year 2016. QVC Group’s reported
GAAP results include the zulily acquisition beginning in the fourth
quarter of 2015 (see the “zulily” section below for a further
discussion of the impact of the acquisition).
QVC
“Our international segment generated strong results in the
quarter with broad-based sales gains and margin expansion,” said
QVC president and CEO Mike George. “The sales trend in our US
business persisted from the third quarter primarily due to
continued headwinds in select categories. We have strong action
plans in place and are confident in our ability to return the US
business to growth.”
“In 2016, we continued to significantly advance our digital
platforms. eCommerce and mobile penetration grew approximately 260
and 800 basis points, respectively. As we begin 2017, we are
serving a large, engaged customer base, and we are creating
competitive advantages as we further extend our reach across
digital and next generation commerce platforms. We will leverage
these strengths to build on our highly differentiated shopping
experience.”
Beginning in the first quarter of 2016, QVC began allocating
certain corporate costs for management reporting purposes
differently. Historically, QVC allocated these costs to the market
from which the services were provided. As more of QVC's costs
support initiatives in multiple markets, QVC is allocating costs to
the markets that will benefit from the expenditures. These
management cost allocations are related to certain functions, such
as merchandising, commerce platforms, information technology, human
resources, legal, finance, brand and communications, corporate
development and administration. The cost allocations (from QVC US
to QVC International) totaled approximately $7 million in the
fourth quarter and $31 million for the full year 2016. As a result
of the allocations, the US segment's operating income and adjusted
OIBDA margins were each positively impacted approximately 35 basis
points in the quarter and 50 basis points for the full year. The
international segment's operating income and adjusted OIBDA margins
were each negatively impacted approximately 100 and 120 basis
points in the fourth quarter and full year, respectively. There was
no impact to consolidated operating income and adjusted OIBDA
margins. With the completion of the ONE Q implementation, QVC's
financial disclosure is consistent with the way it evaluates its
business performance and manages its operations.
QVC's consolidated revenue decreased 5% in the fourth quarter to
$2.7 billion and decreased 1% to $8.7 billion in 2016. eCommerce
revenue increased slightly to $1.3 billion and grew to 50% of
consolidated revenue in the quarter, up from 47% a year ago. Mobile
orders were 60% of total eCommerce orders in the quarter, compared
to 52% a year ago. For the full year, consolidated eCommerce
revenue increased 5% to $4.0 billion and grew to 47% from 44% of
consolidated revenue. Mobile orders were 58% of eCommerce orders in
2016, compared to 50% in 2015. Operating income decreased 11% to
$404 million in the quarter and declined 6% to $1.2 billion in
2016. Adjusted OIBDA decreased 6% to $569 million in the quarter
and declined 3% to $1.8 billion in 2016. Operating income margin
and adjusted OIBDA margin decreased 105 and 30 basis points,
respectively, in the quarter and decreased 72 and 47 basis points,
respectively, in the full year.
US Dollar denominated results were slightly impacted by
unfavorable exchange rate fluctuations in the fourth quarter. The
Dollar strengthened against the British Pound and Euro 18% and 2%,
respectively, and weakened 11% versus the Japanese Yen in the
quarter. On a constant currency basis(2) in the fourth quarter,
consolidated revenue, operating income and adjusted OIBDA decreased
4%, 10% and 5%, respectively, compared to a 5%, 11% and 6%
respective decrease in US Dollars. For the full year, US Dollar
denominated results were not impacted materially by exchange rate
fluctuations. The Dollar strengthened versus the British Pound 12%,
weakened against the Japanese Yen 11% and was essentially flat
versus the Euro. Consolidated revenue, operating income and
adjusted OIBDA decreased 1%, 6% and 3%, respectively, on both a
reported and constant currency basis.
QVC's US revenue decreased 7% to $1.9 billion in the fourth
quarter and 2% to $6.1 billion in 2016. In the quarter, average
selling price per unit ("ASP") decreased 8% to $56.78, units sold
increased 1%, and returns as a percentage of gross product revenue
improved 32 basis points. The US experienced year-over-year
declines in all categories except apparel. For the year, ASP
decreased 6% to $57.00, units sold increased 2%, and returns as a
percentage of gross product revenue improved 104 basis points. The
US experienced declines in jewelry, electronics and beauty, which
were partially offset by gains in apparel, home and accessories.
eCommerce revenue decreased 1% to $1.1 billion and grew 326 basis
points to 56% of total US revenue in the quarter. For the year,
eCommerce revenue increased 4% to $3.2 billion and grew 328 basis
points to 52% of total US revenue. In the quarter, operating income
decreased 15% to $303 million, operating income margin declined 143
basis points, adjusted OIBDA decreased 9% to $438 million and
adjusted OIBDA margin declined 43 basis points, including the
aforementioned cost allocations. Excluding the cost allocations,
adjusted OIBDA decreased 10% to $431 million and adjusted OIBDA
margin declined approximately 80 basis points, primarily due to
higher freight and warehouse expenses and lack of sales leverage.
For the year, operating income decreased 6% to $915 million,
operating income margin declined 58 basis points, adjusted OIBDA
decreased 2% to $1.4 billion and adjusted OIBDA margin was flat,
including the aforementioned cost allocations. Excluding the cost
allocations, adjusted OIBDA decreased 4% to $1.4 billion million
and adjusted OIBDA margin decreased approximately 50 basis points,
primarily due to lower product margins and higher bad debt, freight
and warehouse expenses, which were partially offset by lower
personnel expenses and favorable inventory obsolescence.
QVC's international revenue was flat at $711 million in the
fourth quarter and increased 3% to $2.6 billion in 2016. The
quarterly revenue performance included the net impact of
unfavorable exchange rate fluctuations. On a constant currency
basis, international revenue increased 3% in the quarter,
reflecting gains in all markets. Units sold and ASP in constant
currency each increased 1% in the quarter. QVC International
experienced growth in all categories except apparel and jewelry.
For the full year, international revenue on a constant currency
basis increased 3%. Units sold increased 3% and ASP in constant
currency was flat. QVC International experienced gains in all
categories except apparel and jewelry for the full year.
International eCommerce revenue increased 6% to $247 million and
grew 197 basis points to 35% of total international revenue in the
quarter. For 2016, International eCommerce revenue increased 8% to
$854 million and grew 147 basis points to 33% of total
international revenue. In the fourth quarter, operating income
increased 1% to $101 million and adjusted OIBDA increased 2% to
$131 million. On a constant currency basis, operating income
increased 6% and adjusted OIBDA increased 5%, including the cost
allocations from ONE Q. Excluding the cost allocations, adjusted
OIBDA increased 11% and adjusted OIBDA margin grew approximately
140 basis points on a constant currency basis, primarily due to
lower personnel, marketing and freight expenses, which were
partially offset by lower product margins and higher commissions.
QVC France generated an operating loss of $8 million in the fourth
quarter of 2016 versus $9 million in the fourth quarter of 2015,
and an adjusted OIBDA loss of $6 million in the fourth quarter of
2016 versus $8 million in the fourth quarter of 2015. For the full
year, operating income decreased 5% to $288 million and adjusted
OIBDA decreased 5% to $405 million. On a constant currency basis,
operating income decreased 4% and adjusted OIBDA decreased 5%,
including the cost allocations from ONE Q. Excluding the cost
allocations, adjusted OIBDA increased 3% and adjusted OIBDA margin
was essentially flat on a constant currency basis, reflecting lower
personnel costs, which were offset by lower product margins. QVC
France generated an operating loss of $33 million in 2016 compared
to $27 million in 2015, and an adjusted OIBDA loss of $29 million
in 2016 compared to $24 million in 2015.
CNR Home Shopping Co., Ltd. ("CNRS"), QVC's joint venture in
China, reported revenue increased 4% and 2% in local currency in
the fourth quarter and full year, respectively. CNRS' operating
loss and adjusted OIBDA loss in local currency decreased 4% and 8%,
respectively, in the quarter primarily due to lower fixed costs,
commissions and freight expenses, which were partially offset by
lower product margins and higher warehouse costs. For the year,
CNRS' operating loss and adjusted OIBDA deficit in local currency
increased 5% and 1%, respectively, primarily due to lower product
margins and higher commissions, which were partially offset by
lower fixed costs and freight expenses. This joint venture is being
accounted for as an equity method investment, and as a result, QVC
reported a $2 and $6 million reduction in net income for the fourth
quarter and full year, respectively.
QVC's total debt, net of original issue discount, was $5.3
billion at December 31, 2016, a decrease of $0.1 billion from
December 31, 2015
zulily
“Our fourth quarter performance was solid, even with softness in
demand for the couple of weeks following the election,” said zulily
President and CEO Darrell Cavens. “We continue to enhance our
customer experience and innovate in existing and emerging
engagement channels through our investments in marketing and
technology opportunities and will continue to focus on these areas
in 2017.”
Liberty Interactive acquired zulily on October 1, 2015. Although
zulily’s results are only included in Liberty Interactive’s results
since October 1, 2015, we believe a discussion of zulily’s
standalone results promotes a better understanding of the overall
results of its business. Upon acquisition, zulily reclassified
certain costs between financial statement line items to conform to
Liberty Interactive's reporting structure for ease of comparability
for all reporting periods. zulily also changed its year end to
December 31 on a prospective basis upon acquisition. This resulted
in 92 days in the fourth quarter of 2016 compared to 95 days the
prior year and 366 days for the full year 2016 compared to 368 in
2015. In addition, as part of purchase accounting, zulily reduced
deferred revenue that was recognized as of October 1, 2015
(acquisition date) by $17 million. This had the effect of a
one-time, non-cash reduction in reported revenue and adjusted OIBDA
during the fourth quarter of 2015. zulily’s stand-alone operating
results for the three months and years ended December 31, 2015 and
December 31, 2016 were as follows:
zulily Operating
Results - Quarter
(amounts in millions)
Three Months Ended December
31, 2015 2016
As reportedPost-Acquisition:
Deferred
RevenueAdjustment
AdjustedPost-Acquisition
Net revenue $ 426 17 443 467 Cost of sales (318 ) —
(318 ) (340 ) Gross profit 108 17 125 127 Operating expenses
(13 ) — (13 ) (13 ) SG&A expenses (excluding stock-based
compensation) (74 ) — (74 ) (74 ) Adjusted OIBDA 21
17 38 40 Stock-based compensation (5 ) — (5 ) (3 ) Depreciation and
amortization (69 ) — (69 ) (51 ) Deferred revenue adjustment
— (17 ) (17 ) — Operating income (loss) $ (53 ) —
(53 ) (14 )
zulily Operating
Results – Full Year
(amounts in millions)
Twelve Months Ended December
31, 2015 2016 Net
revenue(a) $ 1,361 1,547 Cost of sales (978 ) (1,108 ) Gross
profit(a) 383 439 Operating expenses (43 ) (47 ) SG&A expenses
(excluding stock-based compensation) (269 ) (280 ) Adjusted
OIBDA(a) 71 112 Acquisition related expenses (30 ) — Stock-based
compensation (19 ) (19 ) Depreciation and amortization (83 ) (245 )
Deferred revenue adjustment (17 ) — Operating income
(loss) $ (78 ) (152 )
____________________________
(a) Adds back the impact of a $17 million one-time,
non-cash purchase accounting reduction in deferred revenue
(adjustment shown at bottom of table above).
zulily revenue increased 10% from $426 million in the fourth
quarter of 2015 to $467 million in the fourth quarter of 2016. As
described above, the fourth quarter of 2015 was impacted by a $17
million purchase accounting reduction in deferred revenue. Adjusted
for this, zulily’s revenue increased 5% in the fourth quarter of
2016 and 14% for the full year. The increases in revenue for both
the fourth quarter and full year were primarily attributed to an
increase in total orders, driven primarily by an increase in the
number of orders placed per active customer. Mobile orders were 66%
of total orders placed in the fourth quarter, compared to 59% the
prior year.
Operating loss improved to $(14) million in the fourth quarter
of 2016 compared to $(53) million in the same period last year.
zulily’s fourth quarter 2016 operating loss includes approximately
$45 million of amortization of intangible assets, primarily
recognized as a result of purchase accounting, compared to
approximately $63 million recognized in the fourth quarter of 2015.
zulily’s operating loss was $(152) million for the full year 2016
as compared to $(78) million in the prior year. The increase in
operating loss was primarily driven by higher amortization of
intangible assets recognized as a result of purchase accounting
(approximately $223 million for full year 2016 compared to $65
million in 2015). zulily's full year 2015 operating loss also
includes $30 million in costs associated with the closing of
Liberty Interactive’s acquisition.
Adjusted OIBDA increased 90% from $21 million in the fourth
quarter of 2015 to $40 million in the fourth quarter of 2016.
Adjusting for the aforementioned $17 million purchase accounting
reduction in deferred revenue in the fourth quarter of 2015,
adjusted OIBDA grew 5% in the fourth quarter of 2016 and 58% for
full year 2016. zulily's full year 2015 adjusted OIBDA excludes the
aforementioned $30 million in transaction costs related to Liberty
Interactive’s purchase of zulily (recognized in the third quarter
of 2015).
Share Repurchases
From November 1, 2016 through January 31, 2017, Liberty
Interactive repurchased approximately 12.5 million Series A QVC
Group shares (Nasdaq: QVCA) at an average cost per share of $20.37
for total cash consideration of $255 million. On October 26, 2016,
the Board of Directors authorized the repurchase of an additional
$300 million of either the QVC Group or the Liberty Ventures Group.
The remaining repurchase authorization for Liberty Interactive as
of February 1, 2017 is approximately $1,026 million, of which $376
million can be applied to repurchases of either QVC Group or
Liberty Ventures Group stock and $650 million can only be applied
to Liberty Ventures Group stock.
QVC Group has attributed to it Liberty Interactive’s
subsidiaries, QVC, Inc. and zulily, llc, and Liberty Interactive’s
interest in HSN.
LIBERTY VENTURES GROUP – On November 4, 2016, Liberty
Interactive completed the split-off of Expedia Holdings (the
“Split-off”), which is comprised of, among other things, Liberty
Interactive’s former interest in Expedia, Inc. (approximately 16%
equity interest and approximately 52% voting interest as of
December 31, 2016), its former subsidiary Vitalize, LLC
(“Vitalize,” formerly referred to as Bodybuilding.com), $350
million of debt and $50 million of cash. The Split-off was
accomplished through the redemption of 40% of the shares of each
series of Liberty Ventures common stock outstanding at 5:00 p.m.
New York City time, on November 4, 2016 for 100% of the outstanding
shares of Expedia Holdings. Accordingly, (i) 0.4 of each
outstanding share of Series A Liberty Ventures common stock
(“LVNTA”) was redeemed for 0.4 of a share of Series A Expedia
Holdings common stock (“LEXEA”) and (ii) 0.4 of each outstanding
share of Series B Liberty Ventures common stock (“LVNTB”) was
redeemed for 0.4 of a share of Series B Expedia Holdings common
stock (“LEXEB”), in each case, with cash paid in lieu of fractional
shares. In connection with the Split-off, Expedia Holdings
distributed $299 million, net of certain debt related costs, to
Liberty Interactive, which is attributed to the Liberty Ventures
Group.
Following the Split-off, the consolidated financial statements
of Liberty Interactive have been prepared such that our former
investment in Expedia is presented as a discontinued operation and
Vitalize is not presented as a discontinued operation.
Approximately $54 million of corporate level SG&A expense
(including stock-based compensation expense) was allocated to
Liberty Ventures Group for the full year 2016. SG&A incurred by
Liberty Ventures Group was elevated in 2016 due to the Split-Off
and the spin-off of CommerceHub, Inc.
Share Repurchases
There were no repurchases of Liberty Ventures Group common stock
(Nasdaq: LVNTA) from November 1, 2016 through January 31, 2017. On
October 26, 2016, the Board of Directors authorized the repurchase
of an additional $300 million of either the QVC Group or the
Liberty Ventures Group. The remaining repurchase authorization for
Liberty Interactive as of February 1, 2017 is approximately $1,026
million, of which $376 million can be applied to repurchases of
either QVC Group or Liberty Ventures Group stock and $650 million
can only be applied to Liberty Ventures Group stock.
The businesses and assets attributed to the Liberty Ventures
Group are all of Liberty Interactive's businesses and assets other
than those attributed to the QVC Group, including its interests in
Liberty Broadband Corporation and FTD, Liberty Interactive’s
subsidiary Evite, and minority interests in Interval Leisure Group,
Lending Tree and Charter Communications.
FOOTNOTES
- 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 12:00 p.m. (E.S.T.) on February 28, 2017. For information
regarding how to access the call, please see “Important Notice”
later in this document.
- For a definition of constant currency
financial metrics and applicable reconciliations, see the
accompanying schedules.
- Adds back the impact of a one-time,
non-cash purchase accounting reduction to deferred revenue of $17
million in the fourth quarter 2015.
- For a definition of adjusted OIBDA and
applicable reconciliations and a definition of adjusted OIBDA
margin, see the accompanying schedules.
- For a definition of adjusted net income
and applicable reconciliations, see the accompanying
schedules.
QVC GROUP
FINANCIAL METRICS – QUARTER
(amounts in millions) 4Q15 4Q16 % Change
Revenue QVC US $ 2,089 $ 1,947 (7 ) % QVC International(1)
711 711 - % Total QVC Revenue
2,800 2,658 (5 ) % zulily(2) 426 467 10
%
Total QVC Group Revenue $ 3,226
$ 3,125 (3 ) %
Gross Margins QVC US 34.6 % 34.1 % QVC
International(1) 38.0 % 37.9 % zulily(2) 25.4 % 27.1 %
Operating Income QVC US(3) $ 355 $ 303 (15 ) % QVC
International(1)(3) 100 101 1 %
Total QVC Operating Income 455 404 (11 ) % zulily(2) (53 ) (14 ) 74
% Corporate and Other (17 ) (6 ) 65 %
Total
QVC Group Operating Income $ 385 $
384 (0 ) % Adjusted
OIBDA QVC US(3) $ 479 $ 438 (9 ) % QVC International(1)(3)
129 131 2 % Total QVC Adjusted
OIBDA 608 569 (6 ) % zulily(2) 21 40 90 % Corporate and Other
(9 ) 1 111 %
Total QVC Group
Adjusted OIBDA $ 620 $ 610
(2 ) % Adjusted Net
Income Total QVC Group Net Income $ 223 $ 188 (16 ) % Total QVC
Group Adjusted Net Income(4) $ 312 $ 266 (15 ) %
China
JV(5) Revenue $ 45 $ 44 (2 ) % Adjusted OIBDA $ (1 ) $
(1 ) - %
QVC Shares Outstanding 1/31/2016
1/31/2017 Outstanding A and B shares 487 455
Quarter ended Quarter ended QVCA and QVCB
Basic and Diluted Shares 12/31/2015
12/31/2016 Basic Weighted Average Shares Outstanding
(“WASO”) 495 464 Potentially Dilutive Shares 7 3
Diluted WASO 502 467
___________________
1) Includes QVC France, QVC Germany, QVC Italy, QVC
Japan and QVC UK. 2) zulily fourth quarter 2015 results include the
impact of a $17 million one-time, non-cash purchase accounting
reduction in deferred revenue. Excluding the impact of this
purchase accounting adjustment, revenue grew 5% and adjusted OIBDA
grew 5% in the fourth quarter of 2016. 3) Includes the reallocation
of $7 million in corporate costs from QVC US to QVC International
for the fourth quarter 2016. 4) See reconciling schedule 4. 5) This
joint venture is being accounted for as an equity investment.
QVC GROUP
FINANCIAL METRICS - FULL YEAR
(amounts in millions) 2015 2016 %
Change
Revenue QVC US $ 6,257 $ 6,120 (2 ) % QVC
International(1) 2,486 2,562 3 %
Total QVC Revenue 8,743 8,682 (1 ) % zulily(2) 426 1,547 NA %
Intergroup eliminations - (10 ) NA %
Total
QVC Group Revenue $ 9,169 $
10,219 11 % Gross
Margin QVC US 36.2 % 35.6 % QVC International(1) 38.3 % 37.6 %
zulily(2) 25.4 % 28.4 %
Operating Income QVC US(3) $
972 $ 915 (6 ) % QVC International(1)(3) 303
288 (5 ) % Total QVC Operating Income 1,275 1,203 (6 ) %
zulily(2) (53 ) (152 ) NA % Corporate and other (52 )
(40 ) 23 %
Total QVC Group Operating Income $
1,170 $ 1,011 (14
) % Adjusted OIBDA QVC US(3) $ 1,467 $
1,435 (2 ) % QVC International(1)(3) 427 405
(5 ) % Total QVC Adjusted OIBDA 1,894 1,840 (3 ) % zulily(2)
21 112 NA % Corporate and other (28 ) (16 ) 43
%
Total QVC Group Adjusted OIBDA $ 1,887
$ 1,936 3 %
Net Income and Adjusted Net Income Total QVC Group Net
Income $ 640 $ 473 (26 ) % Total QVC Group Adjusted Net Income(4) $
878 $ 812 (8 ) %
China JV(5) Revenue $ 165 $
159 (4 ) % Adjusted OIBDA $ (6 ) $ (6 ) - %
_______________________
1) Includes QVC France, QVC Germany, QVC Italy, QVC
Japan and QVC UK. 2) Includes zulily as of the beginning of the
fourth quarter 2015. 2015 results include the impact of a $17
million one-time, non-cash purchase accounting reduction in
deferred revenue. 3) Includes the reallocation of $31 million in
corporate costs from QVC US to QVC International for the full year
2016. 4) See reconciling schedule 4. 5) This joint venture is being
accounted for as an equity investment.
QVC GROUP
OPERATING METRICS – QUARTER
(amounts in millions) 4Q15 4Q16 % Change
QVC -
Consolidated eCommerce $ of total revenue $ 1,328 $ 1,331 0 %
eCommerce % of total revenue 47.4 % 50.1 % 265 bps Mobile % of
total eCommerce(1) 51.6 % 59.6 % 799 bps
QVC - US
eCommerce $ of total revenue $ 1,095 $ 1,084 (1 ) % eCommerce % of
total revenue 52.4 % 55.7 % 326 bps Mobile % of total eCommerce(1)
50.4 % 58.6 % 818 bps Return rate 15.9 % 15.6 % (32 ) bps
QVC - International eCommerce $ of total revenue $ 233 $ 247
6 % eCommerce % of total revenue 32.8 % 34.7 % 197 bps Mobile % of
total eCommerce(1) 56.8 % 63.6 % 684 bps
zulily
Mobile % of total orders 58.6 % 66.0 % 740 bps
QVC GROUP
OPERATING METRICS – FULL YEAR
(amounts in millions) 2015 2016 % Change
QVC - Consolidated eCommerce $ of total revenue $ 3,851 $
4,047 5 % eCommerce % of total revenue 44.0 % 46.6 % 257 bps Mobile
% of total eCommerce(1) 50.4 % 58.4 % 795 bps LTM total
customers(2) 12.6 12.7 1 %
QVC - US eCommerce $ of
total revenue $ 3,059 $ 3,193 4 % eCommerce % of total revenue 48.9
% 52.2 % 328 bps Mobile % of total eCommerce(1) 49.2 % 57.4 % 820
bps LTM total customers(2) 8.3 8.1 (2 ) % Return rate 18.4 % 17.4 %
(104 ) bps
QVC - International eCommerce $ of total
revenue $ 792 $ 854 8 % eCommerce % of total revenue 31.9 % 33.3 %
147 bps Mobile % of total eCommerce(1) 54.9 % 61.7 % 680 bps LTM
total customers(2) 4.4 4.6 5 %
zulily Mobile % of
total orders 57.3 % 64.3 % 705 bps LTM total customers(2) 5.0 5.0 0
%
___________________________
1) Based on gross US Dollar orders. 2) LTM: Last
twelve months. Consolidated customer count may not sum due to
rounding.
NOTES
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, 2016.
Fair Value of Public
Holdings
(amounts in millions) 9/30/2016 12/31/2016
HSN(1) $ 797 $ 687
Total Attributed QVC Group $
797 $ 687 Charter(2) $ 1,447 $ 1,543
FTD(3) 210 243 Liberty Broadband(2) 3,051 3,161 Lending Tree(4) 269
281 Other public holdings(2) 295 307
Total
Attributed Liberty Ventures Group $ 5,272
$ 5,535
_________________________
1) Represents fair value of the investment in HSN
attributed to QVC Group. In accordance with GAAP, this investment
is accounted for using the equity method of accounting and is
included in the attributed balance sheet of QVC Group at historical
carrying value which aggregated $184 million at both September 30,
2016 and December 31, 2016. 2) Represents fair value of the
investments in Charter, Liberty Broadband and other public holdings
attributed to Liberty Ventures Group, which are accounted for at
fair value. 3) Represents fair value of the investment in FTD
attributed to Liberty Ventures Group. In accordance with GAAP, this
investment is accounted for using the equity method of accounting
and is included in the attributed balance sheet of Liberty Ventures
Group at historical carrying value which aggregated $251 million
and $216 million at September 30, 2016 and December 31, 2016,
respectively. 4) Represents fair value of the investment in Lending
Tree attributed to Liberty Ventures Group. In accordance with GAAP,
this investment is accounted for using the equity method of
accounting and is included in the attributed balance sheet of
Liberty Ventures Group at historical carrying values which
aggregated $30 million and $31 million at September 30, 2016 and
December 31, 2016, respectively.
Cash and Debt
The following presentation is provided to separately identify
cash and liquid investments and debt information.
(amounts in millions) 9/30/2016
12/31/2016
Cash and Liquid Investments Attributable
to: QVC Group $ 348 $
338
Liberty Ventures Group 157
487
Total Liberty Consolidated Cash and Liquid
Investments $ 505 $
825
Debt: Senior notes and debentures(1) $ 791 $
791 Senior exchangeable debentures(2) 345 1 QVC senior notes(1)
3,550 3,550 QVC bank credit facility 1,625 1,896 Other 178
174
Total Attributed QVC Group Debt
$ 6,489 $ 6,412 Unamortized discount,
fair market value adjustment and deferred loan costs (37 )
(37 )
Total Attributed QVC Group Debt (GAAP) $
6,452 $ 6,375 Senior
exchangeable debentures(2) $ 1,961 $ 1,959 Other 26
-
Total Attributed Liberty Ventures Group Debt
$ 1,987 $ 1,959 Fair market value
adjustment (284 ) (292 )
Total Attributed Liberty
Ventures Group Debt (GAAP) $ 1,703
$ 1,667 Total
Liberty Interactive Corporation Debt (GAAP) $
8,155 $ 8,042
_______________________
1) Face amount of senior notes and debentures with no
reduction for the unamortized discounts. 2) 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
increased by approximately $56 million during the fourth quarter
primarily due to cash from operations and borrowings under the QVC
bank credit facility, partially offset by share repurchases, net
debt repayments and capital expenditures. Total debt attributed to
the QVC Group decreased by $78 million. On October 5, 2016, Liberty
Interactive LLC (“LI LLC”) paid $345 million to holders of
substantially all of its 1% Exchangeable Senior Debentures due 2043
(the “1% Exchangeables”) that chose to exercise a purchase option
requiring LI LLC to repurchase the 1% Exchangeables for a price
equal to the adjusted principal amount per debenture plus accrued
and unpaid interest. LI LLC funded this payment with cash on the
balance sheet and borrowings under the QVC bank credit
facility.
Total cash and liquid investments attributed to the Liberty
Ventures Group increased $332 million, primarily due to the $299
million distribution (net of certain debt related costs) from
Expedia Holdings in connection with the Split-off. Total debt
attributed to Liberty Ventures Group decreased by $28 million
primarily due to the Split-off and associated subsidiary debt at
Vitalize.
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 12:00 p.m. (E.S.T.) on February 28, 2017. The call
can be accessed by dialing (844) 307-2219 or (678) 509-7635 at
least 10 minutes prior to the start time. 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 and performance, new service
and product offerings, the benefits of QVC’s changed cost
allocation structure, 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 press release.
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 zulily 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).
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. 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 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).
This presentation also references certain financial metrics on a
constant currency basis, which is a non-GAAP measure, for QVC
Group. Constant currency financial metrics, as presented herein,
are calculated by translating the current-year and prior-year
reported amounts into comparable amounts using a single foreign
exchange rate for each currency.
Liberty Interactive believes constant currency financial metrics
are an important indicator of financial performance, in particular
for QVC Group, due to the translational impact of foreign currency
exchange rate fluctuations relating to its subsidiaries in the UK,
Germany, Italy, Japan and France, as well as its JV in China. We
use constant currency financial metrics to provide a framework to
assess how our businesses performed excluding the effects of such
fluctuations. Please see the attached schedules for a
reconciliation of the impact of foreign currency fluctuations on
revenue, operating income and adjusted OIBDA (Schedule 5).
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, 2015, March 31,
2016, June 30, 2016, September 30, 2016 and December 31, 2016,
respectively, and years ended December 31, 2015 and 2016.
QUARTERLY
SUMMARY
(amounts in millions) 4Q15 1Q16 2Q16
3Q16 4Q16
QVC Group Adjusted OIBDA(1) $ 620 $
433 487 406 $ 610 Depreciation and amortization (215 ) (209 ) (214
) (219 ) (208 ) Stock compensation expense (20 ) (18
) (19 ) (20 ) (18 )
Operating Income
$ 385 $ 206 $
254 $ 167 $ 384
ANNUAL
SUMMARY
(amounts in millions) 2015
2016
QVC Group Adjusted OIBDA(1) 1,887
1,936 Depreciation and amortization (657 ) (850 ) Stock
compensation expense (60 ) (75 )
Operating
Income $ 1,170 $ 1,011
__________________________
1)
Includes zulily as of the beginning of the
fourth quarter 2015. zulily’s results for the fourth quarter 2015
include the impact of a $17 million non-cash, one-time reduction in
deferred revenue.
SCHEDULE 2
The following table provides a reconciliation of adjusted OIBDA
for QVC (and certain of its subsidiaries) and zulily to that entity
or such businesses' operating income (loss) calculated in
accordance with GAAP for the three months ended December 31, 2015,
March 31, 2016, June 30, 2016, September 30, 2016 and December 31,
2016, respectively, and years ended December 31, 2015 and 2016.
QUARTERLY
SUMMARY
(amounts in millions) 4Q15 1Q16 2Q16
3Q16 4Q16
QVC
Group
QVC Adjusted OIBDA QVC US $ 479 $ 326 $ 363 $ 308 $ 438 QVC
International 129 89 100 85 131 Consolidated QVC adjusted
OIBDA 608 415 463 393 569 Depreciation and amortization (146 ) (148
) (146 ) (154 ) (157 ) Stock compensation (7 ) (6 )
(10 ) (8 ) (8 )
QVC Operating Income
$ 455 $ 261 $
307 $ 231 $ 404
zulily Adjusted OIBDA(1) $ 21 $ 23 $ 31 $ 18 $
40 Depreciation and amortization (69 ) (61 ) (68 ) (65 ) (51 )
Stock compensation (5 ) (5 ) (6 ) (5 )
(3 )
zulily Operating Income $ (53
) $ (43 ) $ (43 )
$ (52 ) $ (14 )
ANNUAL
SUMMARY
(amounts in millions)
2015 2016
QVC
Group
QVC Adjusted OIBDA QVC US $ 1,467 $ 1,435 QVC International
427 405 Consolidated QVC adjusted OIBDA 1,894 1,840
Depreciation and amortization (588 ) (605 ) Stock compensation
(31 ) (32 )
QVC Operating Income $
1,275 $ 1,203
zulily Adjusted OIBDA(1) $ 21 $ 112 Depreciation and
amortization (69 ) (245 ) Stock compensation (5 ) (19
)
zulily Operating Income $ (53 )
$ (152 )
___________________________
1) Includes zulily as of the beginning of the fourth
quarter 2015. zulily’s results for the fourth quarter 2015 include
the impact of a $17 million non-cash, one-time reduction in
deferred revenue.
SCHEDULE 3
The following table provides a reconciliation of adjusted OIBDA
for QVC Group and the Liberty Ventures Group to the Liberty
Interactive Corporation operating income (loss) calculated in
accordance with GAAP for the three months ended December 31, 2015,
March 31, 2016, June 30, 2016, September 30, 2016 and December 31,
2016, respectively, and years ended December 31, 2015 and 2016.
QUARTERLY
SUMMARY
(amounts in millions) 4Q15 1Q16 2Q16
3Q16 4Q16 QVC Group Adjusted OIBDA $ 620 $ 433
$ 487 $ 406 $ 610 Liberty Ventures Group Adjusted OIBDA 14
4 8 (4 ) (5 )
Consolidated Liberty Interactive Corp. Adjusted OIBDA
$ 634 $ 437 $
495 $ 402 $ 605
Depreciation and amortization (224 ) (217 ) (221 ) (225 )
(211 ) Stock compensation (46 ) (31 ) (24 )
(20 ) (22 )
Consolidated Liberty Interactive Corp.
Operating Income $ 364 $ 189
$ 250 $ 157
$ 372
ANNUAL
SUMMARY
(amounts in millions)
2015 2016 QVC Group Adjusted OIBDA $
1,887 $ 1,936 Liberty Ventures Group Adjusted OIBDA 59
3
Consolidated Liberty Interactive Corp.
Adjusted OIBDA $ 1,946 $
1,939 Depreciation and amortization (703 ) (874 )
Stock compensation (127 ) (97 )
Consolidated
Liberty Interactive Corp. Operating Income $
1,116 $ 968
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, 2015, March 31, 2016,
June 30, 2016, September 30, 2016 and December 31, 2016,
respectively, and years ended December 31, 2015 and 2016.
QUARTERLY
SUMMARY
(amounts in millions) 4Q15 1Q16
2Q16 3Q16 4Q16 LTM
QVC Group Net income(1) $ 223 $ 94 $ 130 $ 61 $ 188 $ 473
QVC purchase accounting amort, net deferred tax benefit (2) 50 50
50 50 49 199 zulily purchase accounting amort, net deferred tax
benefit(3) 39 36 38 37 29
140 QVC Group Adjusted net income $ 312 $ 180 $ 218 $ 148 $ 266 $
812 QVCA/B shares outstanding as of January 31, 2017 455
Adjusted LTM earnings per share $ 1.79
ANNUAL
SUMMARY
(amounts in millions)
2015 2016
QVC Group Net income(1) $ 640 $ 473 QVC
purchase accounting amort, net deferred tax benefit (2) 199 199
zulily purchase accounting amort, net deferred tax benefit(3) 39
140 QVC Group Adjusted net income $ 878 $ 812
________________________
1) Includes the results of zulily beginning in the
fourth quarter of 2015. zulily’s results for the fourth quarter
2015 include the impact of a $17 million non-cash, one-time
reduction in deferred revenue. 2) 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 $316 million and $315 million for the twelve
months ended December 31, 2015 and 2016, respectively, and is
applied ratably across the four quarters in each year). 3) Add-back
relates to non-cash, non-tax deductible purchase accounting
amortization from Liberty Interactive’s acquisition of zulily, net
of book deferred tax benefit.
SCHEDULE 5
The following table provides a comparison of the year over year
percentage change in QVC Inc.'s constant currency revenue,
operating income, adjusted OIBDA and ASP to the comparable figures
calculated in accordance with GAAP for the three months and year
ended December 31, 2016.
Percent Change for Three Months Ended
12/31/2016
QVC
As Reported Constant Currency Consolidated revenue (5 %) (4
%) Consolidated operating income (11 %) (10 %) Consolidated adj.
OIBDA (6 %) (5 %) International revenue 0 % 3 % International
operating income(1) 1 % 6 % International adj. OIBDA(1) 2 % 5 %
International ASP (2 %) 1 % Percent
Change for Twelve Months Ended 12/31/2016
QVC
As Reported Constant Currency Consolidated revenue (1 %) (1
%) Consolidated operating income (6 %) (6 %) Consolidated adj.
OIBDA (3 %) (3 %) International revenue 3 % 3 % International
operating income(1) (5 %) (4 %) International adj. OIBDA(1) (5 %)
(5 %) International ASP 0 % 0 %
________________________
1) Includes the impact of the reallocation of
corporate costs from QVC US to QVC International in 2016.
LIBERTY INTERACTIVE CORPORATION
BALANCE SHEET INFORMATION
December 31, 2016 - (unaudited)
Attributed QVC
Ventures Consolidated Group Group
Liberty amounts in millions
Assets Current assets:
Cash and cash equivalents $ 338 487 825 Trade and other
receivables, net 1,270 38 1,308 Inventory, net 968 - 968 Other
current assets 66 2 68 Total current assets
2,642 527 3,169 Investments in available-for-sale securities
and other cost investments 4 1,918 1,922 Investments in affiliates,
accounted for using the equity method 224 357 581 Investment in
Liberty Broadband measured at fair value - 3,161 3,161 Property and
equipment, net 1,131 - 1,131 Intangible assets not subject to
amortization 9,325 29 9,354 Intangible assets subject to
amortization, net 1,001 4 1,005 Other assets, at cost, net of
accumulated amortization 30 2 32 Total assets $
14,357 5,998 20,355
Liabilities and Equity
Current liabilities: Intergroup Payable (receivable) $ 113 (113 ) -
Accounts payable 789 1 790 Accrued liabilities 684 22 706 Current
portion of debt 14 862 876 Other current liabilities 160 2
162 Total current liabilities 1,760 774 2,534
Long-term debt 6,361 805 7,166 Deferred income tax liabilities
1,116 2,520 3,636 Other liabilities 161 (3 ) 158 Total
liabilities 9,398 4,096 13,494 Equity/Attributed net
assets (liabilities) 4,860 1,912 6,772 Non-controlling interests in
equity of subsidiaries 99 (10 ) 89 Total liabilities and
equity $ 14,357 5,998 20,355
LIBERTY INTERACTIVE CORPORATION
STATEMENT OF OPERATIONS
INFORMATION
Twelve months ended December 31, 2016 -
(unaudited)
Attributed QVC
Ventures Consolidated Group Group
Liberty amounts in millions Revenue: Net retail sales $
10,219 428 10,647 Operating costs and expenses: Cost of
retail sales (exclusive of depreciation shown separately below)
6,642 266 6,908 Operating, including stock-based compensation 653
54 707 Selling, general and administrative, including stock-based
compensation 1,063 127 1,190 Depreciation and amortization
850 24 874 9,208 471
9,679 Operating income 1,011 (43 ) 968 Other income
(expense): Interest expense (289 ) (74 ) (363 ) Share of earnings
(losses) of affiliates, net 42 (110 ) (68 ) Realized and unrealized
gains (losses) on financial instruments, net 2 1,173 1,175 Gains
(losses) on transactions, net - 9 9 Other, net 42 89
131 (203 ) 1,087 884 Earnings
(loss) from continuing operations before income taxes 808 1,044
1,852 Income tax benefit (expense) (297 ) (301 ) (598 )
Earnings (loss) from continuing operations, net of taxes 511 743
1,254 Earnings (loss) from discontinued operations operations, net
of taxes - 20 20 Net earnings (loss)
511 763 1,274 Less net earnings (loss) attributable to
noncontrolling interests 38 1 39 Net
earnings (loss) attributable to Liberty Interactive Corporation
shareholders $ 473 762 1,235
LIBERTY INTERACTIVE CORPORATION
STATEMENT OF OPERATIONS
INFORMATION
Twelve months ended December 31, 2015 -
(unaudited)
Attributed QVC
Ventures Consolidated Group Group
Liberty amounts in millions Revenue: Net retail sales $
9,169 820 9,989 Operating costs and expenses: Cost of retail
sales (exclusive of depreciation shown separately below) 5,847 546
6,393 Operating 620 79 699 Selling, general and administrative,
including stock-based compensation 875 203 1,078 Depreciation and
amortization 657 46 703 7,999
874 8,873 Operating income 1,170 (54 ) 1,116
Other income (expense): Interest expense (283 ) (77 ) (360 )
Share of earnings (losses) of affiliates, net 55 (233 ) (178 )
Realized and unrealized gains (losses) on financial instruments,
net 42 72 114 Gains (losses) on transactions, net - 110 110 Other,
net (6 ) 20 14 (192 ) (108 ) (300 )
Earnings (loss) before income taxes 978 (162 ) 816 Income tax
benefit (expense) (304 ) 119 (185 ) Net earnings
(loss) from continuing operations 674 (43 ) 631 Net earnings (loss)
from discontinued operations, net of taxes - 280
280 Net earnings (loss) 674 237 911
Less net earnings (loss) attributable to non-controlling
interests 34 8 42 Net earnings (loss)
attributable to Liberty Interactive Corporation shareholders $ 640
229 869
LIBERTY INTERACTIVE CORPORATION
STATEMENT OF CASH FLOWS
INFORMATION
Twelve months ended December 31, 2016 -
(unaudited)
Attributed QVC
Ventures Consolidated Group Group
Liberty amounts in millions
CASH FLOWS FROM OPERATING
ACTIVITIES: Net earnings (loss) $ 511 763 1,274 Adjustments to
reconcile net earnings to net cash provided by operating
activities: (Earnings) loss from discontinued operations - (20 )
(20 ) Depreciation and amortization 850 24 874 Stock-based
compensation 75 22 97 Cash payments for stock based compensation -
(92 ) (92 ) Noncash interest expense 3 9 12 Share of (earnings)
losses of affiliates, net (42 ) 110 68 Cash receipts from return on
equity investments 28 3 31 Realized and unrealized gains (losses)
on financial instruments, net (2 ) (1,173 ) (1,175 ) (Gains) losses
on transactions, net - (9 ) (9 ) (Gains) losses on extinguishment
of debt (1 ) 7 6 Deferred income tax (benefit) expense (199 ) 672
473 Intergroup tax allocation 360 (360 ) - Intergroup tax payments
(301 ) 301 - Other noncash charges (credits), net (33 ) (82 ) (115
) Changes in operating assets and liabilities Current and other
assets 92 44 136 Payables and other current liabilities (68
) (49 ) (117 ) Net cash provided (used) by operating activities
1,273 170 1,443
CASH FLOWS
FROM INVESTING ACTIVITIES: Cash proceeds from dispositions -
353 353 Investments in and loans to cost and equity investees - (86
) (86 ) Capital expended for property and equipment (206 ) (27 )
(233 ) Purchases of short term and other marketable securities -
(264 ) (264 ) Sales of short term and other marketable securities
12 1,162 1,174 Investment in Liberty Broadband - (2,400 ) (2,400 )
Other investing activities, net (44 ) 8 (36 ) Net
cash provided (used) by investing activities (238 ) (1,254 )
(1,492 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of debt 1,905 1,522 3,427 Repayments of debt (2,178 )
(2,320 ) (4,498 ) Repurchases of QVC Group common stock (799 ) -
(799 ) Withholding taxes on net settlements of stock-based
compensation (15 ) (1 ) (16 ) Distribution from Liberty Expedia
Holdings - 299 299 Other financing activities, net (16 ) 31
15 Net cash provided (used) by financing activities
(1,103 ) (469 ) (1,572 ) Effect of foreign currency rates on
cash (20 ) - (20 ) Net cash provided (used) by
discontinued operations: Cash provided (used) by operating
activities - 17 17 Cash provided (used) by investing activities - -
- Cash provided (used) by financing activities - - - Change in
available cash held by discontinued operations - - -
Net cash provided (used) by discontinued operations -
17 17 Net increase (decrease) in cash and cash
equivalents (88 ) (1,536 ) (1,624 ) Cash and cash equivalents at
beginning of period 426 2,023 2,449
Cash and cash equivalents at end of period
$ 338
487 825
LIBERTY INTERACTIVE CORPORATION
STATEMENT OF CASH FLOWS
INFORMATION
Twelve months ended December 31,
2015 - (unaudited)
Attributed QVC
Ventures Consolidated Group Group
Liberty CASH FLOWS FROM OPERATING ACTIVITIES: amounts
in millions Net earnings (loss) $ 674 237 911 Adjustments to
reconcile net earnings to net cash provided by operating
activities: (Earnings) loss from discontinued operations - (280 )
(280 ) Depreciation and amortization 657 46 703 Stock-based
compensation 60 67 127 Cash payments for stock based compensation -
(16 ) (16 ) Noncash interest expense 6 (1 ) 5 Share of losses
(earnings) of affiliates, net (55 ) 233 178 Cash receipts from
return on equity investments 22 10 32 Realized and unrealized gains
(losses) on financial instruments, net (42 ) (72 ) (114 ) (Gains)
losses on transactions, net - (110 ) (110 ) (Gains) losses on
extinguishment of debt 21 - 21 Deferred income tax (benefit)
expense (122 ) 19 (103 ) Intergroup tax allocation 141 (141 ) -
Intergroup tax payments (101 ) 101 - Other noncash charges
(credits), net (14 ) 3 (11 ) Changes in operating assets and
liabilities Current and other assets (245 ) 8 (237 ) Payables and
other current liabilities 3 (47 ) (44 ) Net cash
provided (used) by operating activities 1,005 57
1,062
CASH FLOWS FROM INVESTING
ACTIVITIES: Cash paid for acquisitions, net of cash acquired
(824 ) (20 ) (844 ) Cash proceeds from dispositions - 271 271
Investments in and loans to cost and equity investees - (120 ) (120
) Cash receipts from returns of equity investments 200 50 250
Capital expended for property and equipment (218 ) (40 ) (258 )
Purchases of short term and other marketable securities (184 )
(1,186 ) (1,370 ) Sales of short term investments and other
marketable securities 193 1,166 1,359 Other investing activities,
net (76 ) - (76 ) Net cash provided (used) by
investing activities (909 ) 121 (788 )
CASH
FLOWS FROM FINANCING ACTIVITIES: Borrowings of debt 3,969 589
4,558 Repayments of debt (3,244 ) (567 ) (3,811 ) Repurchases of
QVC Group common stock (785 ) - (785 ) Withholding taxes on net
settlements of stock-based compensation (25 ) (5 ) (30 ) Purchase
of noncontrolling interest - (33 ) (33 ) Other financing
activities, net (4 ) (17 ) (21 ) Net cash provided (used) by
financing activities (89 ) (33 ) (122 ) Effect of foreign
currency rates on cash (3 ) - (3 ) Net cash provided
(used) by discontinued operations: Cash provided (used) by
operating activities - 17 17 Cash provided (used) by investing
activities - (23 ) (23 ) Cash provided (used) by financing
activities - - - Net cash provided (used) by discontinued
operations - (6 ) (6 ) Net increase (decrease) in
cash and cash equivalents 4 139 143 Cash and cash equivalents at
beginning of period 422 1,884 2,306
Cash and cash equivalents at end of period $ 426 2,023
2,449
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