“We remain open for business thanks to the dedication and resilience of our 25,000 team members, and we are seeing encouraging increases in sales and new customers at the start of the second quarter,” said
First quarter operating results:
-
Total
Qurate Retail revenue decreased 5% to$2.9 billion - Revenue decreased 5% in constant currency(2)
-
eCommerce revenue of
$1.7 billion or 59% of total revenue
-
Qurate Retail reported diluted EPS of$(0.05) -
Adjusted diluted EPS(3) of
$0.27
-
Adjusted diluted EPS(3) of
- QxH revenue decreased 4%
-
QVC International revenue decreased 1%- Revenue declined slightly in constant currency
- Zulily revenue decreased 20%
- Cornerstone revenue decreased 5%
Corporate updates:
-
Repurchased 50k of Liberty Interactive LLC’s 3.50% MSI exchangeable bonds in the quarter for
$49 million
Key responses to COVID-19:
-
Focused on the safety and financial well-being of team members.
Qurate Retail shifted all team members who could work from home to do so temporarily; team members unable to work remote could choose to stay home with partial pay options; increased safety and sanitation protocols at fulfillment centers and live studios; established anEmergency Assistance Fund for one-time grants to team members most impacted by the pandemic; and offered alternative work arrangements where possible when team members must manage unexpected pressures. - Closed retail stores to the public in March while broadcast studios and fulfillment centers remain open.
- Rapidly adjusted product offerings, merchandising, marketing, and on-air and online programming. Meaningfully improved sales and new customer growth trends across business segments beginning late March in response to changes.
-
Incurred additional costs impacting margins, including appreciation and emergency pay for onsite team members (recently extended through
May 31 st); relaxation of productivity requirements in fulfillment centers primarily driven by enforcing social distancing; enhanced sanitation protocols; and increased reserves for potentially higher bad debt rates and customer returns. -
Reduced planned spending, including an anticipated
$30 to$50 million reduction in capital spend in 2020; reduced discretionary expenses and hiring where possible. -
Supported several COVID-19 relief programs, including donating airtime for public service announcements; creating a Small Business Spotlight program across TV, streaming and digital commerce channels to benefit vendors and small retailers; supporting global PPE-making efforts of a community of more than one million artisans; donating to relief programs globally, including
Meals on Wheels and No Kid Hungry in the US, theRed Cross inGermany , and theNational Emergency Trust in theUK ; and creating customer- and team-member matching opportunities. -
Qurate Retail has ample liquidity and a healthy balance sheet. -
More information about Qurate Retail’s response to COVID-19 is available in the
April 23 rd press release and in the Q1 earnings presentation posted to our investor relations website.
Discussion of Results
Unless otherwise noted, the following discussion compares financial information for the three months ended
|
FIRST QUARTER 2020 FINANCIAL RESULTS
|
|||||||||||||||
|
(amounts in millions) |
1Q19 |
|
1Q20 |
|
% Change |
|
|
% Change
|
|
||||||
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
||||
|
QxH |
$ |
1,857 |
|
|
$ |
1,792 |
|
|
(4 |
) |
% |
|
|
|
|
|
|
|
644 |
|
|
|
635 |
|
|
(1 |
) |
% |
|
- |
|
% |
|
Zulily |
|
397 |
|
|
|
316 |
|
|
(20 |
) |
% |
|
|
|
|
|
Cornerstone |
|
187 |
|
|
|
177 |
|
|
(5 |
) |
% |
|
|
|
|
|
Total Qurate Retail Revenue |
$ |
3,085 |
|
|
$ |
2,920 |
|
|
(5 |
) |
% |
|
(5 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Operating Income |
|
|
|
|
|
|
|
|
|
|
|
||||
|
QxH |
$ |
247 |
|
|
$ |
190 |
|
|
(23 |
) |
% |
|
|
|
|
|
|
|
79 |
|
|
|
80 |
|
|
1 |
|
% |
|
2 |
|
% |
|
Zulily |
|
(13 |
) |
|
|
(20 |
) |
|
(54 |
) |
% |
|
|
|
|
|
Cornerstone |
|
(7 |
) |
|
|
(11 |
) |
|
(57 |
) |
% |
|
|
|
|
|
Unallocated corporate cost(c) |
|
(18 |
) |
|
|
(8 |
) |
|
56 |
|
% |
|
|
|
|
|
Total Qurate Retail Operating Income |
$ |
288 |
|
|
$ |
231 |
|
|
(20 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Adjusted OIBDA |
|
|
|
|
|
|
|
|
|
|
|
||||
|
QxH |
$ |
352 |
|
|
$ |
293 |
|
|
(17 |
) |
% |
|
|
|
|
|
|
|
101 |
|
|
|
97 |
|
|
(4 |
) |
% |
|
(3 |
) |
% |
|
Zulily |
|
17 |
|
|
|
2 |
|
|
(88 |
) |
% |
|
|
|
|
|
Cornerstone |
|
3 |
|
|
|
(2 |
) |
|
(167 |
) |
% |
|
|
|
|
|
Unallocated corporate cost(c) |
|
(13 |
) |
|
|
(6 |
) |
|
54 |
|
% |
|
|
|
|
|
Total Qurate Retail Adjusted OIBDA |
$ |
460 |
|
|
$ |
384 |
|
|
(17 |
) |
% |
|
|
|
|
____________________________
| a) |
For a definition of constant currency financial metrics, see the accompanying schedules. |
|
b) |
Includes |
|
c) |
Includes corporate costs incurred at |
|
FIRST QUARTER 2020 NET INCOME AND ADJUSTED NET INCOME (3)
|
|||||||
|
(amounts in millions) |
1Q19 |
|
1Q20 |
|
|||
|
Net income (loss)(a) |
$ |
55 |
|
$ |
(20 |
) |
|
|
Adjusted net income(b) |
$ |
151 |
|
$ |
114 |
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding ("WASO") |
|
433 |
|
|
416 |
|
|
|
Potentially dilutive shares |
|
1 |
|
|
1 |
|
|
|
Diluted WASO |
|
434 |
|
|
417 |
|
|
|
|
|
|
|
|
|
|
|
|
GAAP EPS(a) |
$ |
0.13 |
|
$ |
(0.05 |
) |
|
|
Adjusted EPS(b) |
$ |
0.35 |
|
$ |
0.27 |
|
|
__________________________
| a) |
Represents net income (loss) and diluted net income (loss) per share attributable to Series A and Series B common stockholders as presented in Qurate Retail’s financial statements. |
|
b) |
See reconciling schedule 3. |
QxH
QxH reported revenue declines in all categories in the quarter. In mid-March, when COVID-19 awareness escalated in the US, QxH experienced accelerated declines in sales combined with a shift from higher margin fashion products to lower margin home products. In late March, QxH began to see positive sales and new customer growth as it adjusted its merchandising, programming and marketing to meet customers’ changing needs.
Product margins were essentially flat in the quarter, reflecting gains through February, mostly offset by reductions in March due to COVID-19 related product mix shifts. Gross margins decreased primarily due to higher fulfillment (warehouse and freight) expenses driven by the network optimization initiatives, general freight rate increases and incremental costs related to COVID-19. These factors were partially offset by lower inventory obsolescence expense primarily due to lower inventory levels. Operating income and adjusted OIBDA margin(3) were also impacted by higher incentive compensation accrual, cost for outside services, higher marketing expense and an increase in bad debt reserves in anticipation of risks associated with COVID-19.
US Dollar denominated results were negatively impacted by exchange rate fluctuations, primarily due to the Dollar strengthening 3% versus the Euro and 2% against the British Pound, partially offset by weakening 1% versus the Japanese Yen. The financial metrics presented in this press release also provide a comparison of the percentage change in QVC International’s results in constant currency (where applicable) to the comparable figures calculated in accordance with US GAAP for the first quarter of 2020.
Gross margins decreased, primarily from higher inventory obsolescence and lower product margins, which were partially offset by lower freight costs. Operating income and adjusted OIBDA margin benefited from lower fixed costs. As previously announced, QVC closed its television and digital platforms in
Zulily
Zulily revenue declined primarily due to lower unit volume driven by a decrease in new customers, as well as an unfavorable supply chain impact from COVID-19. Zulily’s results were also negatively affected by less efficient customer acquisition spend on certain digital marketing channels.
Gross margins decreased, primarily due to lower product margins and increased fulfillment costs. Operating income and adjusted OIBDA margin were also affected by fixed cost deleverage, partially offset by reduced marketing spend.
Cornerstone
Cornerstone revenue decreased mainly due to significant demand weakness in March related to COVID-19. Cornerstone temporarily closed its retail stores on
|
FIRST QUARTER 2020 SUPPLEMENTAL METRICS
|
|||||||||||||||
|
(amounts in millions unless otherwise noted) |
|
1Q19 |
|
1Q20 |
|
% Change |
|
|
% Change
|
|
|||||
|
QxH |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Cost of Sales % of Revenue |
|
|
65.0 |
|
% |
|
66.0 |
|
% |
100 |
|
bps |
|
|
|
|
Operating Income Margin (%) |
|
|
13.3 |
|
% |
|
10.6 |
|
% |
(270 |
) |
bps |
|
|
|
|
Adjusted OIBDA Margin (%) |
|
|
19.0 |
|
% |
|
16.4 |
|
% |
(260 |
) |
bps |
|
|
|
|
Average Selling Price |
|
$ |
54.48 |
|
|
$ |
53.96 |
|
|
(1 |
) |
% |
|
|
|
|
Units Sold |
|
|
|
|
|
|
|
(3 |
) |
% |
|
|
|
||
|
Return Rate(b) |
|
|
17.4 |
|
% |
|
16.6 |
|
% |
(80 |
) |
bps |
|
|
|
|
eCommerce Revenue(c) |
|
$ |
1,031 |
|
|
$ |
1,022 |
|
|
(1 |
) |
% |
|
|
|
|
eCommerce % of Total Revenue |
|
|
55.5 |
|
% |
|
57.0 |
|
% |
150 |
|
bps |
|
|
|
|
Mobile % of eCommerce Revenue(d) |
|
|
67.4 |
|
% |
|
65.3 |
|
% |
(210 |
) |
bps |
|
|
|
|
LTM Total Customers(e) |
|
|
10.9 |
|
|
|
10.5 |
|
|
(4 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
QVC – International |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Cost of Sales % of Revenue |
|
|
62.6 |
|
% |
|
63.3 |
|
% |
70 |
|
bps |
|
|
|
|
Operating Income Margin (%) |
|
|
12.3 |
|
% |
|
12.6 |
|
% |
30 |
|
bps |
|
|
|
|
Adjusted OIBDA Margin (%) |
|
|
15.7 |
|
% |
|
15.3 |
|
% |
(40 |
) |
bps |
|
|
|
|
Average Selling Price |
|
|
|
|
|
|
|
2 |
|
% |
|
3 |
% |
||
|
Units Sold |
|
|
|
|
|
|
|
(4 |
) |
% |
|
|
|
||
|
eCommerce Revenue(c) |
|
$ |
251 |
|
|
$ |
265 |
|
|
6 |
|
% |
|
7 |
% |
|
eCommerce % of Total Revenue |
|
|
39.0 |
|
% |
|
41.7 |
|
% |
270 |
|
bps |
|
|
|
|
Mobile % of eCommerce Revenue(d) |
|
|
73.5 |
|
% |
|
73.2 |
|
% |
(30 |
) |
bps |
|
|
|
|
LTM Total Customers(e) |
|
|
4.7 |
|
|
|
4.6 |
|
|
(2 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Zulily |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Cost of Sales % of Revenue |
|
|
74.3 |
|
% |
|
75.9 |
|
% |
160 |
|
bps |
|
|
|
|
Operating Income Margin (%) |
|
|
(3.3 |
) |
% |
|
(6.3 |
) |
% |
(300 |
) |
bps |
|
|
|
|
Adjusted OIBDA Margin (%) |
|
|
4.3 |
|
% |
|
0.6 |
|
% |
(370 |
) |
bps |
|
|
|
|
Mobile % of Total Orders |
|
|
74.2 |
|
% |
|
73.7 |
|
% |
(50 |
) |
bps |
|
|
|
|
LTM Total Customers(e) |
|
|
6.5 |
|
|
|
5.0 |
|
|
(23 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Cornerstone |
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Operating Income Margin (%) |
|
|
(3.7 |
) |
% |
|
(6.2 |
) |
% |
(250 |
) |
bps |
|
|
|
|
Adjusted OIBDA Margin (%) |
|
|
1.6 |
|
% |
|
(1.1 |
) |
% |
(270 |
) |
bps |
|
|
|
|
eCommerce Revenue(c) |
|
$ |
135 |
|
|
$ |
123 |
|
|
(9 |
) |
% |
|
|
|
|
eCommerce % of Total Revenue |
|
|
72.2 |
|
% |
|
69.5 |
|
% |
(270 |
) |
bps |
|
|
|
_________________________
| a) |
For a definition of constant currency financial metrics, see the accompanying schedules. |
|
b) |
Measured as returned sales over gross shipped sales. |
|
c) |
Based on net revenue. |
|
d) |
Based on gross US Dollar orders. |
|
e) |
LTM: Last twelve months. |
Taxes
Share Repurchases
FOOTNOTES
|
1) |
Qurate Retail’s President and CEO, |
|
2) |
For a definition of constant currency financial metrics, see the accompanying schedules. Applicable reconciliations can be found in the financial tables at the beginning of this press release. |
|
3) |
For definitions and applicable reconciliations of Adjusted OIBDA, Adjusted OIBDA margin, adjusted net income and adjusted EPS, see the accompanying schedules. |
NOTES
Cash and Debt
The following presentation is provided to separately identify cash and debt information.
|
|
|
|
|
|
|
|
|
|
|
(amounts in millions) |
|
|
|
|
|
|||
|
Cash and cash equivalents (GAAP) |
|
$ |
673 |
|
$ |
555 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Indemnification Asset(a) |
|
$ |
202 |
|
$ |
180 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt: |
|
|
|
|
|
|
|
|
|
QVC senior notes(b) |
|
$ |
3,875 |
|
$ |
4,450 |
|
|
|
QVC bank credit facility |
|
|
1,235 |
|
|
525 |
|
|
|
Total Qurate Retail Group Debt |
|
$ |
5,110 |
|
$ |
4,975 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior notes(b) |
|
|
791 |
|
|
791 |
|
|
|
Senior exchangeable debentures(c) |
|
|
1,447 |
|
|
1,417 |
|
|
|
Corporate Level Debentures |
|
|
2,238 |
|
|
2,208 |
|
|
|
|
|
$ |
7,348 |
|
$ |
7,183 |
|
|
|
Unamortized discount, fair market value adjustment and deferred loan costs |
|
|
64 |
|
|
(138 |
) |
|
|
|
|
$ |
7,412 |
|
$ |
7,045 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.4x |
|
|
2.4x |
|
|
_____________________________
| a) |
Indemnity from GCI Liberty, pursuant to an indemnification agreement with respect to the 1.75% exchangeable debentures due 2046 (the “Charter exchangeable debentures”) issued by |
|
b) |
Face amount of Senior Notes and Debentures with no reduction for the unamortized discount. |
|
c) |
Face amount of Senior Exchangeable Debentures with no reduction for the fair market value adjustment. |
|
d) |
As defined in QVC, Inc.’s credit agreement. Includes QxH, |
Cash at
Important Notice:
This press release includes certain forward-looking statements, including statements about business strategies and initiatives and their expected benefits, market potential, future financial performance and prospects (including results for current and future periods stemming from COVID-19 impacts), Qurate Retail’s estimated ongoing annual tax rate, the impact of COVID-19, market conditions, the indemnification by GCI Liberty, future repayment of debt, the continuation of our stock repurchase program 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
NON-GAAP FINANCIAL MEASURES
To provide investors with additional information regarding our financial results, this press release includes a presentation of Adjusted OIBDA, which is a non-GAAP financial measure, for
In addition, this press release includes references to adjusted net income and adjusted earnings per share, which are non-GAAP financial measures, for
This press release also references certain financial metrics on a constant currency basis, which is a non-GAAP measure, for
SCHEDULE 1
The following table provides a reconciliation of Qurate Retail’s Adjusted OIBDA to its operating income calculated in accordance with GAAP for the three months ended
|
CONSOLIDATED OPERATING INCOME AND ADJUSTED OIBDA RECONCILIATION
|
||||||||||||||||
|
(amounts in millions) |
|
1Q19 |
|
2Q19 |
|
3Q19 |
|
4Q19 |
|
1Q20 |
||||||
|
|
|
$ |
288 |
|
$ |
336 |
|
$ |
(727 |
) |
|
$ |
287 |
|
$ |
231 |
|
Depreciation and amortization |
|
|
153 |
|
|
158 |
|
|
146 |
|
|
|
149 |
|
|
142 |
|
Stock compensation expense |
|
|
19 |
|
|
18 |
|
|
17 |
|
|
|
17 |
|
|
11 |
|
Impairment of intangible assets |
|
|
— |
|
|
— |
|
|
1,020 |
|
|
|
147 |
|
|
— |
|
Operating company level transaction related costs |
|
|
— |
|
|
1 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
$ |
460 |
|
$ |
513 |
|
$ |
456 |
|
|
$ |
600 |
|
$ |
384 |
SCHEDULE 2
The following table provides a reconciliation of Adjusted OIBDA for QVC, Zulily and Cornerstone to that entity or such businesses' operating income (loss) calculated in accordance with GAAP for the three months ended
|
SUBSIDIARY ADJUSTED OIBDA RECONCILIATION
|
||||||||||||||||||||
|
(amounts in millions) |
|
1Q19 |
|
2Q19 |
|
3Q19 |
|
4Q19 |
|
1Q20 |
||||||||||
|
QVC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Operating income |
|
$ |
326 |
|
|
$ |
365 |
|
|
$ |
330 |
|
|
$ |
306 |
|
|
$ |
270 |
|
|
Depreciation and amortization |
|
|
118 |
|
|
|
124 |
|
|
|
112 |
|
|
|
114 |
|
|
|
114 |
|
|
Stock compensation |
|
|
9 |
|
|
|
11 |
|
|
|
10 |
|
|
|
9 |
|
|
|
6 |
|
|
Impairment of intangible assets |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
147 |
|
|
|
— |
|
|
Transaction related costs |
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Adjusted OIBDA |
|
$ |
453 |
|
|
$ |
501 |
|
|
$ |
452 |
|
|
$ |
576 |
|
|
$ |
390 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
QxH Adjusted OIBDA |
|
$ |
352 |
|
|
$ |
395 |
|
|
$ |
346 |
|
|
$ |
443 |
|
|
$ |
293 |
|
|
QVC International Adjusted OIBDA |
|
|
101 |
|
|
|
106 |
|
|
|
106 |
|
|
|
133 |
|
|
|
97 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Zulily |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Operating loss |
|
$ |
(13 |
) |
|
$ |
(23 |
) |
|
$ |
(1,042 |
) |
|
$ |
(13 |
) |
|
$ |
(20 |
) |
|
Depreciation and amortization |
|
|
26 |
|
|
|
26 |
|
|
|
26 |
|
|
|
26 |
|
|
|
20 |
|
|
Stock compensation |
|
|
4 |
|
|
|
4 |
|
|
|
4 |
|
|
|
3 |
|
|
|
2 |
|
|
Impairment of intangible assets |
|
|
— |
|
|
|
— |
|
|
|
1,020 |
|
|
|
— |
|
|
|
— |
|
|
Adjusted OIBDA |
|
$ |
17 |
|
|
$ |
7 |
|
|
$ |
8 |
|
|
$ |
16 |
|
|
$ |
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Cornerstone |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Operating income (loss) |
|
$ |
(7 |
) |
|
$ |
6 |
|
|
$ |
(5 |
) |
|
$ |
3 |
|
|
$ |
(11 |
) |
|
Depreciation and amortization |
|
|
9 |
|
|
|
8 |
|
|
|
8 |
|
|
|
9 |
|
|
|
8 |
|
|
Stock compensation |
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
Adjusted OIBDA |
|
$ |
3 |
|
|
$ |
14 |
|
|
$ |
4 |
|
|
$ |
12 |
|
|
$ |
(2 |
) |
SCHEDULE 3
The following table provides a reconciliation of Qurate Retail’s adjusted net income to its net income and adjusted earnings per share to diluted earnings per share, in each case, calculated in accordance with GAAP for the three months ended
|
ADJUSTED NET INCOME AND ADJUSTED EPS RECONCILIATION
|
||||||||||||||||||||
|
(amounts in millions) |
|
|
1Q19 |
|
|
2Q19 |
|
|
3Q19 |
|
|
4Q19 |
|
|
1Q20 |
|
||||
|
|
|
$ |
55 |
|
|
118 |
|
|
|
(770 |
) |
|
|
141 |
|
|
$ |
(20 |
) |
|
|
Purchase accounting amort., net of deferred tax benefit (a) |
|
|
34 |
|
|
34 |
|
|
|
32 |
|
|
|
33 |
|
|
|
29 |
|
|
|
Operating company level transaction related costs, net of tax benefit |
|
|
— |
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
Impairment of intangible assets, net of tax impact |
|
|
— |
|
|
— |
|
|
|
881 |
|
|
|
113 |
|
|
|
— |
|
|
|
Non-recurring tax items(b) |
|
|
— |
|
|
(34 |
) |
|
|
— |
|
|
|
(11 |
) |
|
|
— |
|
|
|
Mark-to-market adjustments, net(c) |
|
|
62 |
|
|
87 |
|
|
|
34 |
|
|
|
8 |
|
|
|
105 |
|
|
|
Adjusted Net Income |
|
$ |
151 |
|
$ |
206 |
|
|
$ |
177 |
|
|
$ |
284 |
|
|
$ |
114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Diluted earnings (loss) per share (GAAP) |
|
$ |
0.13 |
|
$ |
0.28 |
|
|
$ |
(1.85 |
) |
|
$ |
0.34 |
|
|
$ |
(0.05 |
) |
|
|
Total adjustments per share, net of tax |
|
|
0.22 |
|
|
0.20 |
|
|
|
2.27 |
|
|
|
0.34 |
|
|
|
0.32 |
|
|
|
Adjusted earnings per share |
|
$ |
0.35 |
|
$ |
0.48 |
|
|
$ |
0.42 |
|
|
$ |
0.68 |
|
|
$ |
0.27 |
|
|
____________________________
| a) |
Add-back relates to non-cash, non-tax deductible purchase accounting amortization from Qurate Retail’s acquisitions of QVC, HSN, Zulily and Cornerstone, net of book deferred tax benefit. |
|
b) |
Includes impact of US tax reform and other one-time tax items. |
|
c) |
Add-back includes realized and unrealized gains/losses on financial instruments, net of tax. |
|
BALANCE SHEET INFORMATION (unaudited) |
|||||
|
|
|
|
|
|
|
|
|
|
|
2020 |
|
2019 |
|
|
|
|
amounts in millions |
||
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
555 |
|
673 |
|
Trade and other receivables, net |
|
|
1,440 |
|
1,854 |
|
Inventory, net |
|
|
1,433 |
|
1,413 |
|
Other current assets |
|
|
320 |
|
636 |
|
Total current assets |
|
|
3,748 |
|
4,576 |
|
Investments in equity securities |
|
|
72 |
|
76 |
|
Property and equipment, net |
|
|
1,317 |
|
1,351 |
|
Intangible assets not subject to amortization |
|
|
9,731 |
|
9,744 |
|
Intangible assets subject to amortization, net |
|
|
886 |
|
955 |
|
Other assets, at cost, net of accumulated amortization |
|
|
756 |
|
603 |
|
Total assets |
|
$ |
16,510 |
|
17,305 |
|
Liabilities and Equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
|
844 |
|
1,091 |
|
Accrued liabilities |
|
|
907 |
|
1,173 |
|
Current portion of debt |
|
|
888 |
|
1,557 |
|
Other current liabilities |
|
|
174 |
|
180 |
|
Total current liabilities |
|
|
2,813 |
|
4,001 |
|
Long-term debt |
|
|
6,157 |
|
5,855 |
|
Deferred income tax liabilities |
|
|
1,723 |
|
1,716 |
|
Other liabilities |
|
|
716 |
|
761 |
|
Total liabilities |
|
|
11,409 |
|
12,333 |
|
Equity |
|
|
4,972 |
|
4,840 |
|
Non-controlling interests in equity of subsidiaries |
|
|
129 |
|
132 |
|
Total liabilities and equity |
|
$ |
16,510 |
|
17,305 |
|
STATEMENT OF OPERATIONS INFORMATION (unaudited) |
|||||||
|
|
|
|
|
|
|
||
|
|
|
Three months ended |
|||||
|
|
|
|
|||||
|
|
|
2020 |
|
2019 |
|||
|
Revenue: |
|
|
|
|
|
||
|
Total revenue, net |
|
$ |
2,920 |
|
|
3,085 |
|
|
|
|
|
|
|
|
||
|
Operating costs and expenses: |
|
|
|
|
|
||
|
Cost of retail sales (exclusive of depreciation shown separately below) |
|
|
1,933 |
|
|
2,023 |
|
|
Operating expense |
|
|
193 |
|
|
196 |
|
|
Selling, general and administrative, including stock-based compensation |
|
|
421 |
|
|
425 |
|
|
Depreciation and amortization |
|
|
142 |
|
|
153 |
|
|
|
|
|
2,689 |
|
|
2,797 |
|
|
Operating income (loss) |
|
|
231 |
|
|
288 |
|
|
|
|
|
|
|
|
||
|
Other income (expense): |
|
|
|
|
|
||
|
Interest expense |
|
|
(97 |
) |
|
(96 |
) |
|
Share of earnings (losses) of affiliates, net |
|
|
(36 |
) |
|
(45 |
) |
|
Realized and unrealized gains (losses) on financial instruments, net |
|
|
(138 |
) |
|
(81 |
) |
|
Other, net |
|
|
13 |
|
|
(8 |
) |
|
|
|
|
(258 |
) |
|
(230 |
) |
|
Earnings (loss) before income taxes |
|
|
(27 |
) |
|
58 |
|
|
Income tax benefit (expense) |
|
|
18 |
|
|
8 |
|
|
Net earnings (loss) |
|
|
(9 |
) |
|
66 |
|
|
Less net earnings (loss) attributable to noncontrolling interests |
|
|
11 |
|
|
11 |
|
|
Net earnings (loss) attributable to |
|
$ |
(20 |
) |
|
55 |
|
|
STATEMENT OF CASH FLOWS INFORMATION (unaudited) |
|||||||||
|
|
|
Three months ended |
|
|
|||||
|
|
|
|
|
|
|||||
|
|
|
2020 |
|
2019 |
|
|
|||
|
|
|
amounts in millions |
|
|
|||||
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
||
|
Net earnings (loss) |
|
$ |
(9 |
) |
|
66 |
|
|
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
|
|
|
|
|
|
|
||
|
Depreciation and amortization |
|
|
142 |
|
|
153 |
|
|
|
|
Stock-based compensation |
|
|
11 |
|
|
19 |
|
|
|
|
Share of (earnings) losses of affiliates, net |
|
|
36 |
|
|
45 |
|
|
|
|
Realized and unrealized gains (losses) on financial instruments, net |
|
|
138 |
|
|
81 |
|
|
|
|
Deferred income tax expense (benefit) |
|
|
(43 |
) |
|
(31 |
) |
|
|
|
Other, net |
|
|
4 |
|
|
5 |
|
|
|
|
Changes in operating assets and liabilities |
|
|
|
|
|
|
|
||
|
Decrease (increase) in accounts receivable |
|
|
411 |
|
|
370 |
|
|
|
|
Decrease (increase) in inventory |
|
|
(23 |
) |
|
(86 |
) |
|
|
|
Decrease (increase) in prepaid expenses and other assets |
|
|
62 |
|
|
52 |
|
|
|
|
(Decrease) increase in trade accounts payable |
|
|
(240 |
) |
|
(272 |
) |
|
|
|
(Decrease) increase in accrued and other liabilities |
|
|
(317 |
) |
|
(246 |
) |
|
|
|
Net cash provided (used) by operating activities |
|
|
172 |
|
|
156 |
|
|
|
|
|
|
|
|
|
|
|
|
||
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
||
|
Investments in and loans to cost and equity investees |
|
|
(36 |
) |
|
(43 |
) |
|
|
|
Capital expenditures |
|
|
(45 |
) |
|
(61 |
) |
|
|
|
Expenditures for television distribution rights |
|
|
(1 |
) |
|
(52 |
) |
|
|
|
Other investing activities, net |
|
|
8 |
|
|
(10 |
) |
|
|
|
Net cash provided (used) by investing activities |
|
|
(74 |
) |
|
(166 |
) |
|
|
|
|
|
|
|
|
|
|
|
||
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
||
|
Borrowings of debt |
|
|
743 |
|
|
731 |
|
|
|
|
Repayments of debt |
|
|
(942 |
) |
|
(618 |
) |
|
|
|
Repurchases of |
|
|
— |
|
|
(210 |
) |
|
|
|
Withholding taxes on net settlements of stock-based compensation |
|
|
(2 |
) |
|
(6 |
) |
|
|
|
Dividends paid to noncontrolling interest |
|
|
(15 |
) |
|
(22 |
) |
|
|
|
Other financing activities, net |
|
|
6 |
|
|
(6 |
) |
|
|
|
Net cash provided (used) by financing activities |
|
|
(210 |
) |
|
(131 |
) |
|
|
|
Effect of foreign currency rates on cash, cash equivalents and restricted cash |
|
|
(6 |
) |
|
(4 |
) |
|
|
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
|
(118 |
) |
|
(145 |
) |
|
|
|
Cash, cash equivalents and restricted cash at beginning of period |
|
|
681 |
|
|
660 |
|
|
|
|
Cash, cash equivalents and restricted cash at end period |
|
$ |
563 |
|
|
515 |
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20200506006006/en/
720-875-5420
Source:
