Board of Directors Announces Intent to Declare Special Dividend of
“We generated strong growth in revenue, OIBDA, and free cash flow in the second quarter, with every business unit and geographic market achieving meaningful sales gains and significant new customer additions,” said
Second quarter operating results:
-
Total
Qurate Retail revenue increased 10% to$3.4 billion - Revenue increased 10% in constant currency(2)
-
eCommerce revenue grew 19% to
$2.2 billion or 64% of total revenue
-
Qurate Retail reported diluted EPS of$0.53 -
Adjusted diluted EPS(3) of
$0.54
-
Adjusted diluted EPS(3) of
-
QxH revenue increased 7% to
$2.0 billion -
QVC International revenue increased 11% to$713 million - Revenue increased 12% in constant currency
-
Zulily revenue increased 16% to
$422 million -
Cornerstone revenue increased 18% to
$277 million
Corporate updates:
-
Anticipate approximately
$262 million pre-tax proceeds from sale of green energy investment to be received in August -
Board of Directors announced their intent to return capital to shareholders via a potential dividend, subject to official declaration, consisting of:
-
Special dividend of cash equal to
$1.50 per share of common stock -
Special dividend of preferred stock equivalent to
$3.00 in initial liquidation value per share with 8.0% dividend rate subject to mandatory redemption in the first quarter of 2031
-
Special dividend of cash equal to
“Qurate posted tremendous results, utilizing the flexibility of its operating model to meet customers’ changing demands,” said
Key actions in the quarter:
-
Focused on protecting the health and financial well-being of team members. Team members who can work from home will continue to do so, until at least early 2021, with some working from home permanently. Social distancing, mandatory mask requirements and stringent safety and sanitation protocols are in effect at all sites.
Qurate Retail provided special pay and work from home allowances and continues to provide leave, medical and other benefits. -
Committed over
$40 million to community support and team member relief. The company facilitated significant support for those impacted by the pandemic, including contributions toMeals on Wheels , No Kid Hungry, Cancer and Careers and a variety of other organizations around the world; partnered with theNational Retail Federation to support and celebrate small businesses; established a team member relief fund; elevated its commitment to racial and economic justice within the company and around the world, including support for the Equal Justice Initiative. - Rapidly adapted product offerings, merchandising, marketing, and on-air and online programming to be in tune with what customers most cared about throughout the various stages of the pandemic. Achieved meaningfully improved sales and new customer growth trends across business segments in the second quarter.
- Executed a significant, strategic pull back on promotional activity across all businesses, to provide a better foundation for healthy, sustainable product margins while also managing elevated demand.
-
Took a variety of actions to simplify and streamline its operating structure as it accelerated its strategic plan and incorporated key operational learnings from its COVID response. This necessitated separating with approximately 450 team members in July, incurring
$20 million of severance costs in the second quarter.Qurate Retail also closed QVC customer contact centers inSan Antonio, Texas andChesapeake, Virginia and the Zulily customer contact center and digital studio inGahanna, Ohio as the businesses shifted to permanent work from home positions in those locations. - Further strengthened its balance sheet with prudent inventory reductions, more conservative credit practices and a new trade payables program.
Corporate Updates
As of
Discussion of Results
Unless otherwise noted, the following discussion compares financial information for the three months ended
SECOND QUARTER 2020 FINANCIAL RESULTS |
|||||||||||||
(amounts in millions) |
2Q19 |
|
|
2Q20 |
|
|
% Change |
|
% Change
|
|
|||
Revenue |
|
|
|
|
|
|
|
|
|
|
|||
QxH |
$ |
1,874 |
|
|
$ |
2,010 |
|
|
7 |
% |
|
|
|
|
|
640 |
|
|
|
713 |
|
|
11 |
% |
|
12 |
% |
Zulily |
|
363 |
|
|
|
422 |
|
|
16 |
% |
|
|
|
Cornerstone |
|
234 |
|
|
|
277 |
|
|
18 |
% |
|
|
|
Total Qurate Retail Revenue |
$ |
3,111 |
|
|
$ |
3,422 |
|
|
10 |
% |
|
10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|||
Operating Income |
|
|
|
|
|
|
|
|
|
|
|||
QxH |
$ |
292 |
|
|
$ |
280 |
|
|
(4 |
)% |
|
|
|
|
|
73 |
|
|
|
101 |
|
|
38 |
% |
|
39 |
% |
Zulily(c) |
|
(23 |
) |
|
|
20 |
|
|
187 |
% |
|
|
|
Cornerstone |
|
6 |
|
|
|
13 |
|
|
117 |
% |
|
|
|
Unallocated corporate cost(d) |
|
(12 |
) |
|
|
(9 |
) |
|
25 |
% |
|
|
|
Total Qurate Retail Operating Income |
$ |
336 |
|
|
$ |
405 |
|
|
21 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Adjusted OIBDA |
|
|
|
|
|
|
|
|
|
|
|||
QxH |
$ |
395 |
|
|
$ |
388 |
|
|
(2 |
)% |
|
|
|
|
|
106 |
|
|
|
119 |
|
|
12 |
% |
|
13 |
% |
Zulily(c) |
|
7 |
|
|
|
45 |
|
|
543 |
% |
|
|
|
Cornerstone |
|
14 |
|
|
|
21 |
|
|
50 |
% |
|
|
|
Unallocated corporate cost(d) |
|
(9 |
) |
|
|
(8 |
) |
|
11 |
% |
|
|
|
Total Qurate Retail Adjusted OIBDA |
$ |
513 |
|
|
$ |
565 |
|
|
10 |
% |
|
|
|
a) |
For a definition of constant currency financial metrics, see the accompanying schedules. |
b) |
Includes |
c) |
Zulily’s operating income and adjusted OIBDA in the second quarter of 2020 benefited from a |
d) |
Includes corporate costs incurred at |
SECOND QUARTER 2020 NET INCOME AND ADJUSTED NET INCOME(3) |
||||||
(amounts in millions) |
2Q19 |
|
2Q20 |
|
||
Net income (loss)(a) |
$ |
118 |
|
$ |
220 |
|
Adjusted net income(b) |
$ |
206 |
|
$ |
226 |
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding ("WASO") |
|
428 |
|
|
417 |
|
Potentially dilutive shares |
|
— |
|
|
1 |
|
Diluted WASO |
|
428 |
|
|
418 |
|
|
|
|
|
|
|
|
GAAP EPS(a) |
$ |
0.28 |
|
$ |
0.53 |
|
Adjusted EPS(b) |
$ |
0.48 |
|
$ |
0.54 |
|
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 growth in the home, electronics and beauty categories, which were partially offset by declines in apparel and jewelry.
Product margins decreased primarily due to category mix shifts and pricing and promotional offers early in the second quarter. Gross margin decreased primarily due to higher fulfillment (warehouse and freight) costs mainly associated with COVID-related premium pay in our fulfillment centers, lower productivity due to COVID-related protocols, reduced pack factor and general freight rate increases. These factors were partially offset by favorable customer returns. Operating income and adjusted OIBDA margin(3) were also impacted by
US Dollar denominated results were slightly negatively affected by exchange rate fluctuations, primarily due to the Dollar strengthening 3% versus the British Pound and 2% against the Euro, offset by weakening 2% 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 second quarter of 2020.
Zulily
Zulily revenue increased on higher unit volume and average selling price. Gross margin increased primarily due to higher product margins and sales leverage of warehouse expense, partially offset by higher freight costs. Operating income and adjusted OIBDA margin increased primarily due to lower marketing and administrative expenses, partially offset by higher incentive compensation accrual. Additionally, Zulily recognized a
Cornerstone
Cornerstone revenue increased due to strong demand in its home brands (Frontgate,
Operating income and adjusted OIBDA margin increased primarily from the strength of the home brand’s revenue and gross margin expansion as well as leverage in marketing expense, partially offset by higher incentive compensation accrual and organizational restructuring expense. Gross margin expansion was mainly driven by higher product margins, which were partially offset by an inventory obsolescence provision for Ryllace (marketing for this new business has been paused due to the pandemic, while future plans are reassessed) and higher fulfillment expense.
SECOND QUARTER 2020 SUPPLEMENTAL METRICS |
||||||||||||
(amounts in millions unless otherwise noted) |
|
2Q19 |
|
2Q20 |
|
% Change |
|
% Change
|
|
|||
QxH |
|
|
|
|
|
|
|
|
|
|
||
Cost of Sales % of Revenue |
|
|
63.2 |
% |
|
64.1 |
% |
90 |
bps |
|
|
|
Operating Income Margin (%) |
|
|
15.6 |
% |
|
13.9 |
% |
(170 |
)bps |
|
|
|
Adjusted OIBDA Margin (%) |
|
|
21.1 |
% |
|
19.3 |
% |
(180 |
)bps |
|
|
|
Average Selling Price |
|
$ |
53.00 |
|
$ |
53.38 |
|
1 |
% |
|
|
|
Units Sold |
|
|
|
|
|
|
5 |
% |
|
|
|
|
Return Rate(b) |
|
|
17.1 |
% |
|
14.9 |
% |
220 |
bps |
|
|
|
eCommerce Revenue(c) |
|
$ |
1,040 |
|
$ |
1,204 |
|
16 |
% |
|
|
|
eCommerce % of Total Revenue |
|
|
55.5 |
% |
|
59.9 |
% |
440 |
bps |
|
|
|
Mobile % of eCommerce Revenue(d) |
|
|
67.6 |
% |
|
65.0 |
% |
(260 |
)bps |
|
|
|
LTM Total Customers(e) |
|
|
10.7 |
|
|
11.1 |
|
4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
QVC – International |
|
|
|
|
|
|
|
|
|
|
||
Cost of Sales % of Revenue |
|
|
61.2 |
% |
|
62.6 |
% |
140 |
bps |
|
|
|
Operating Income Margin (%) |
|
|
11.4 |
% |
|
14.2 |
% |
280 |
bps |
|
|
|
Adjusted OIBDA Margin (%) |
|
|
16.6 |
% |
|
16.7 |
% |
10 |
bps |
|
|
|
Average Selling Price |
|
|
|
|
|
|
(1 |
)% |
|
- |
% |
|
Units Sold |
|
|
|
|
|
|
11 |
% |
|
|
|
|
eCommerce Revenue(c) |
|
$ |
261 |
|
$ |
337 |
|
29 |
% |
|
31 |
% |
eCommerce % of Total Revenue |
|
|
40.8 |
% |
|
47.3 |
% |
650 |
bps |
|
|
|
Mobile % of eCommerce Revenue(d) |
|
|
75.6 |
% |
|
73.2 |
% |
(240 |
)bps |
|
|
|
LTM Total Customers(e) |
|
|
4.7 |
|
|
4.8 |
|
2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Zulily |
|
|
|
|
|
|
|
|
|
|
||
Cost of Sales % of Revenue |
|
|
74.4 |
% |
|
73.0 |
% |
(140 |
)bps |
|
|
|
Operating Income Margin (%) |
|
|
(6.3 |
)% |
|
4.7 |
% |
1,100 |
bps |
|
|
|
Adjusted OIBDA Margin (%) |
|
|
1.9 |
% |
|
10.7 |
% |
880 |
bps |
|
|
|
Mobile % of Total Orders |
|
|
73.9 |
% |
|
74.5 |
% |
60 |
bps |
|
|
|
LTM Total Customers(e) |
|
|
6.2 |
|
|
5.3 |
|
(15 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Cornerstone |
|
|
|
|
|
|
|
|
|
|
||
Operating Income Margin (%) |
|
|
2.6 |
% |
|
4.7 |
% |
210 |
bps |
|
|
|
Adjusted OIBDA Margin (%) |
|
|
6.0 |
% |
|
7.6 |
% |
160 |
bps |
|
|
|
eCommerce Revenue(c) |
|
$ |
169 |
|
$ |
223 |
|
32 |
% |
|
|
|
eCommerce % of Total Revenue |
|
|
72.2 |
% |
|
80.5 |
% |
830 |
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) |
|
$ |
555 |
|
|
$ |
948 |
|
|
|
|
|
|
|
|
|
|
||
Indemnification Asset(a) |
|
$ |
180 |
|
|
$ |
215 |
|
|
|
|
|
|
|
|
|
|
||
Debt: |
|
|
|
|
|
|
|
||
QVC senior notes(b) |
|
$ |
4,450 |
|
|
$ |
4,450 |
|
|
QVC bank credit facility |
|
|
525 |
|
|
|
— |
|
|
Total Qurate Retail Group Debt |
|
$ |
4,975 |
|
|
$ |
4,450 |
|
|
|
|
|
|
|
|
|
|
||
Senior notes(b) |
|
|
791 |
|
|
|
791 |
|
|
Senior exchangeable debentures(c) |
|
|
1,417 |
|
|
|
1,417 |
|
|
Corporate Level Debentures |
|
|
2,208 |
|
|
|
2,208 |
|
|
|
|
$ |
7,183 |
|
|
$ |
6,658 |
|
|
Unamortized discount, fair market value adjustment and deferred loan costs |
|
|
(138 |
) |
|
|
(17 |
) |
|
|
|
$ |
7,045 |
|
|
$ |
6,641 |
|
|
|
|
|
|
|
|
|
|
||
|
|
|
2.4x |
|
|
2.0x |
|
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
QVC’s bank credit facility is undrawn as of
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, the anticipated cash and preferred stock dividend, including the declaration and timing thereof and the issuance and timing thereof, the amount of cash portion of the dividend, the amount of preferred stock portion of the dividend, the terms of the preferred stock 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) |
|
2Q19 |
|
3Q19 |
|
4Q19 |
|
1Q20 |
|
2Q20 |
||||||
|
|
$ |
336 |
|
$ |
(727 |
) |
|
$ |
287 |
|
$ |
231 |
|
$ |
405 |
Depreciation and amortization |
|
|
158 |
|
|
146 |
|
|
|
149 |
|
|
142 |
|
|
144 |
Stock compensation expense |
|
|
18 |
|
|
17 |
|
|
|
17 |
|
|
11 |
|
|
16 |
Impairment of intangible assets |
|
|
— |
|
|
1,020 |
|
|
|
147 |
|
|
— |
|
|
— |
Operating company level transaction related costs |
|
|
1 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
$ |
513 |
|
$ |
456 |
|
|
$ |
600 |
|
$ |
384 |
|
$ |
565 |
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) |
|
2Q19 |
|
3Q19 |
|
4Q19 |
|
1Q20 |
|
2Q20 |
|||||||||
QVC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating income |
|
$ |
365 |
|
|
$ |
330 |
|
|
$ |
306 |
|
|
$ |
270 |
|
|
$ |
381 |
Depreciation and amortization |
|
|
124 |
|
|
|
112 |
|
|
|
114 |
|
|
|
114 |
|
|
|
116 |
Stock compensation |
|
|
11 |
|
|
|
10 |
|
|
|
9 |
|
|
|
6 |
|
|
|
10 |
Impairment of intangible assets |
|
|
— |
|
|
|
— |
|
|
|
147 |
|
|
|
— |
|
|
|
— |
Transaction related costs |
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
Adjusted OIBDA |
|
$ |
501 |
|
|
$ |
452 |
|
|
$ |
576 |
|
|
$ |
390 |
|
|
$ |
507 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
QxH Adjusted OIBDA |
|
$ |
395 |
|
|
$ |
346 |
|
|
$ |
443 |
|
|
$ |
293 |
|
|
$ |
388 |
QVC International Adjusted OIBDA |
|
|
106 |
|
|
|
106 |
|
|
|
133 |
|
|
|
97 |
|
|
|
119 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Zulily |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating income (loss) |
|
$ |
(23 |
) |
|
$ |
(1,042 |
) |
|
$ |
(13 |
) |
|
$ |
(20 |
) |
|
$ |
20 |
Depreciation and amortization |
|
|
26 |
|
|
|
26 |
|
|
|
26 |
|
|
|
20 |
|
|
|
20 |
Stock compensation |
|
|
4 |
|
|
|
4 |
|
|
|
3 |
|
|
|
2 |
|
|
|
5 |
Impairment of intangible assets |
|
|
— |
|
|
|
1,020 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
Adjusted OIBDA |
|
$ |
7 |
|
|
$ |
8 |
|
|
$ |
16 |
|
|
$ |
2 |
|
|
$ |
45 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cornerstone |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating income (loss) |
|
$ |
6 |
|
|
$ |
(5 |
) |
|
$ |
3 |
|
|
$ |
(11 |
) |
|
$ |
13 |
Depreciation and amortization |
|
|
8 |
|
|
|
8 |
|
|
|
9 |
|
|
|
8 |
|
|
|
8 |
Stock compensation |
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
Adjusted OIBDA |
|
$ |
14 |
|
|
$ |
4 |
|
|
$ |
12 |
|
|
$ |
(2 |
) |
|
$ |
21 |
SCHEDULE 3
The following table provides a reconciliation of Qurate Retail’s net income (loss) to its adjusted net income and diluted earnings (loss) per share to adjusted 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) |
|
|
2Q19 |
|
|
3Q19 |
|
|
4Q19 |
|
|
1Q20 |
|
|
2Q20 |
|
|||||
|
|
$ |
118 |
|
|
|
(770 |
) |
|
|
141 |
|
|
$ |
(20 |
) |
|
$ |
220 |
|
|
Purchase accounting amort., net of deferred tax benefit (a) |
|
|
34 |
|
|
|
32 |
|
|
|
33 |
|
|
|
29 |
|
|
|
24 |
|
|
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) |
|
|
87 |
|
|
|
34 |
|
|
|
8 |
|
|
|
105 |
|
|
|
(18 |
) |
|
Adjusted Net Income |
|
$ |
206 |
|
|
$ |
177 |
|
|
$ |
284 |
|
|
$ |
114 |
|
|
$ |
226 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Diluted earnings (loss) per share (GAAP) |
|
$ |
0.28 |
|
|
$ |
(1.85 |
) |
|
$ |
0.34 |
|
|
$ |
(0.05 |
) |
|
$ |
0.53 |
|
|
Total adjustments per share, net of tax |
|
|
0.20 |
|
|
|
2.27 |
|
|
|
0.34 |
|
|
|
0.32 |
|
|
|
0.01 |
|
|
Adjusted earnings per share |
|
$ |
0.48 |
|
|
$ |
0.42 |
|
|
$ |
0.68 |
|
|
$ |
0.27 |
|
|
$ |
0.54 |
|
|
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 |
|
$ |
948 |
|
673 |
Trade and other receivables, net |
|
|
1,324 |
|
1,854 |
Inventory, net |
|
|
1,304 |
|
1,413 |
Other current assets |
|
|
618 |
|
636 |
Total current assets |
|
|
4,194 |
|
4,576 |
Investments in equity securities |
|
|
71 |
|
76 |
Property and equipment, net |
|
|
1,292 |
|
1,351 |
Intangible assets not subject to amortization |
|
|
9,742 |
|
9,744 |
Intangible assets subject to amortization, net |
|
|
830 |
|
955 |
Other assets, at cost, net of accumulated amortization |
|
|
568 |
|
603 |
Total assets |
|
$ |
16,697 |
|
17,305 |
Liabilities and Equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
|
|
936 |
|
1,091 |
Accrued liabilities |
|
|
1,146 |
|
1,173 |
Current portion of debt |
|
|
1,452 |
|
1,557 |
Other current liabilities |
|
|
216 |
|
180 |
Total current liabilities |
|
|
3,750 |
|
4,001 |
Long-term debt |
|
|
5,189 |
|
5,855 |
Deferred income tax liabilities |
|
|
1,746 |
|
1,716 |
Other liabilities |
|
|
726 |
|
761 |
Total liabilities |
|
|
11,411 |
|
12,333 |
Equity |
|
|
5,157 |
|
4,840 |
Non-controlling interests in equity of subsidiaries |
|
|
129 |
|
132 |
Total liabilities and equity |
|
$ |
16,697 |
|
17,305 |
STATEMENT OF OPERATIONS INFORMATION (unaudited) |
|||||||
|
|
Three months ended |
|||||
|
|
|
|||||
|
|
2020 |
|
2019 |
|||
Revenue: |
|
|
|
|
|
||
Total revenue, net |
|
$ |
3,422 |
|
|
3,111 |
|
|
|
|
|
|
|
||
Operating costs and expenses: |
|
|
|
|
|
||
Cost of retail sales (exclusive of depreciation shown separately below) |
|
|
2,217 |
|
|
1,996 |
|
Operating expense |
|
|
209 |
|
|
197 |
|
Selling, general and administrative, including stock-based compensation |
|
|
447 |
|
|
424 |
|
Depreciation and amortization |
|
|
144 |
|
|
158 |
|
|
|
|
3,017 |
|
|
2,775 |
|
Operating income (loss) |
|
|
405 |
|
|
336 |
|
|
|
|
|
|
|
||
Other income (expense): |
|
|
|
|
|
||
Interest expense |
|
|
(95 |
) |
|
(93 |
) |
Share of earnings (losses) of affiliates, net |
|
|
(28 |
) |
|
(23 |
) |
Realized and unrealized gains (losses) on financial instruments, net |
|
|
23 |
|
|
(113 |
) |
Other, net |
|
|
(12 |
) |
|
(7 |
) |
|
|
|
(112 |
) |
|
(236 |
) |
Earnings (loss) before income taxes |
|
|
293 |
|
|
100 |
|
Income tax benefit (expense) |
|
|
(59 |
) |
|
30 |
|
Net earnings (loss) |
|
|
234 |
|
|
130 |
|
Less net earnings (loss) attributable to noncontrolling interests |
|
|
14 |
|
|
12 |
|
Net earnings (loss) attributable to |
|
$ |
220 |
|
|
118 |
|
STATEMENT OF CASH FLOWS INFORMATION (unaudited) |
|||||
|
Six months ended |
||||
|
|
||||
|
2020 |
2019 |
|||
|
amounts in millions |
||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
||
Net earnings (loss) |
$ |
225 |
|
196 |
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
|
|
|
||
Depreciation and amortization |
|
286 |
|
311 |
|
Stock-based compensation |
|
27 |
|
37 |
|
Share of (earnings) losses of affiliates, net |
|
64 |
|
68 |
|
Realized and unrealized gains (losses) on financial instruments, net |
|
115 |
|
194 |
|
Deferred income tax expense (benefit) |
|
1 |
|
(21 |
) |
Other, net |
|
4 |
|
9 |
|
Changes in operating assets and liabilities |
|
|
|
||
Decrease (increase) in accounts receivable |
|
531 |
|
544 |
|
Decrease (increase) in inventory |
|
108 |
|
(38 |
) |
Decrease (increase) in prepaid expenses and other assets |
|
37 |
|
62 |
|
(Decrease) increase in trade accounts payable |
|
(152 |
) |
(352 |
) |
(Decrease) increase in accrued and other liabilities |
|
(48 |
) |
(417 |
) |
Net cash provided (used) by operating activities |
|
1,198 |
|
593 |
|
|
|
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
||
Investments in and loans to cost and equity investees |
|
(55 |
) |
(76 |
) |
Capital expenditures |
|
(108 |
) |
(167 |
) |
Expenditures for television distribution rights |
|
(10 |
) |
(124 |
) |
Other investing activities, net |
|
7 |
|
— |
|
Net cash provided (used) by investing activities |
|
(166 |
) |
(367 |
) |
|
|
|
|
||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
||
Borrowings of debt |
|
753 |
|
1,909 |
|
Repayments of debt |
|
(1,477 |
) |
(1,912 |
) |
Repurchases of |
|
— |
|
(296 |
) |
Withholding taxes on net settlements of stock-based compensation |
|
(2 |
) |
(8 |
) |
Dividends paid to noncontrolling interest |
|
(30 |
) |
(28 |
) |
Other financing activities, net |
|
2 |
|
(25 |
) |
Net cash provided (used) by financing activities |
|
(754 |
) |
(360 |
) |
Effect of foreign currency rates on cash, cash equivalents and restricted cash |
|
(3 |
) |
1 |
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
275 |
|
(133 |
) |
Cash, cash equivalents and restricted cash at beginning of period |
|
681 |
|
660 |
|
Cash, cash equivalents and restricted cash at end period |
$ |
956 |
|
527 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20200810005656/en/
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