Liberty Interactive Corporation (“Liberty”) (Nasdaq: LINTA,
LINTB, LVNTA, LVNTB) today reported fourth quarter and year end
2013 results. Highlights include(1):
Attributed to Liberty Interactive Group
- Grew QVC US revenue by 6% and adjusted
OIBDA(2) by 2% in the fourth quarter
- QVC US operating income increased by
4%
- QVC.com revenue as a percent of total
US revenue increased to 45%, a 246 bps increase
- QVC US mobile penetration was 32% of
QVC.com orders
- Grew QVC US revenue by 5% and adjusted
OIBDA by 5% in 2013
- QVC US operating income increased by
4%
- Achieved revenue growth of 12% for the
eCommerce group in 2013
- Repurchased $309 million LINTA shares
from November 1, 2013 to January 31, 2014 and $1.1 billion in 2013
- On February 27, 2014, the Board of
Directors voted to increase the stock repurchase authorization by
$1 billion
Attributed to Liberty Ventures Group
- Reported strong fourth quarter results
at both TripAdvisor and Expedia
- Announced a two for one stock split of
the Liberty Ventures stock
“QVC posted strong results in the US and UK for the fourth
quarter driven by a return on strategic investments in TV and
digital efforts and solid operational execution. Additionally, QVC
experienced rapid growth in their China joint venture. Japan and
Germany proved more challenging and were further negatively
impacted by currency fluctuations in Japan,” stated Greg Maffei,
Liberty President and CEO. “We repurchased $309 million of Liberty
Interactive stock from November 1, 2013 to January 31, 2014 and
$1.1 billion in 2013.”
Greg Maffei continued, “Today we are also announcing the two for
one stock split of the Liberty Ventures stock. This is in order to
bring Liberty into compliance with a Nasdaq listing requirement for
a minimum number of publicly held shares of the Series B Liberty
Ventures stock. Due to the requirements of our charter we are also
required to split the Series A Liberty Ventures shares. We expect
this split to be effected early in the second quarter.”
LIBERTY INTERACTIVE GROUP - Liberty Interactive Group's
revenue increased 3% to $3.2 billion in the quarter and 3% to $10.3
billion for the year. Adjusted OIBDA decreased 1% to $618 million
for the quarter and was essentially flat for the year at $1.9
billion. Operating income increased 6% to $404 million for the
quarter and increased 1% to $1.1 billion for the year.
QVC
QVC's consolidated revenue increased 2% in the fourth quarter to
$2.7 billion and increased 1% to $8.6 billion for the full year.
Adjusted OIBDA decreased 1% to $595 million and increased 1% to
$1.8 billion in the fourth quarter and for the full year,
respectively. Operating income decreased 2% in the fourth quarter
to $441 million and 2% to $1.2 billion for the full year.
U.S. denominated results were negatively impacted by exchange
rate fluctuations, primarily the strengthening of the U.S. Dollar
against the Japanese Yen, which decreased 19% and 18% in the fourth
quarter and for the full year, respectively. On a constant currency
basis, consolidated revenue increased 4% in both the fourth quarter
and for the full year. Further, adjusted OIBDA was also impacted by
a $20 million net favorable legal settlement in the U.S. that
occurred in the fourth quarter of 2012. On a constant currency
basis and excluding the impact of the legal settlement, adjusted
OIBDA increased 4% in both the fourth quarter and for the full year
2013.
"We generated over $3.2 billion in eCommerce revenues in 2013,
including $1.2 billion in mobile orders, making QVC one of the
world’s largest and most profitable eCommerce and mobile commerce
retailers,” said Mike George, QVC President and CEO. “We credit
this success to the trust-based relationships we've built and
continue to cultivate with our existing customers, in addition to
the 3.8 million new customers who joined our global shopping
communities last year.”
U.S. revenue increased 6% to $1.9 billion in the fourth quarter
and 5% to $5.8 billion for the year. For the fourth quarter and
full year, the U.S. experienced growth in all categories except
jewelry. Average selling price per unit (“ASP”) increased 4% from
$61.83 to $64.56 and units sold increased 2% compared to the prior
year fourth quarter. Fourth quarter returns as a percent of gross
product revenue increased 25 basis points. For the full year, ASP
increased 5% from $57.52 to $60.15 and units sold were flat.
Returns as a percent of gross product revenue improved 33 basis
points. In the fourth quarter, eCommerce revenue increased 12% to
$873 million and grew to 45% from 43% as a percentage of total U.S.
revenue. For the full year, eCommerce revenue increased 12% to $2.5
billion and grew to 43% from 40% as a percentage of total U.S.
revenue. Adjusted OIBDA increased 2% to $437 million in the fourth
quarter and 5% to $1.4 billion for the year. Adjusted OIBDA
margin(2) decreased 85 basis points in the fourth quarter and was
flat for the full year. Adjusted OIBDA margin decreased in the
fourth quarter primarily due to a $20 million net favorable legal
settlement that occurred in the fourth quarter of 2012, and for the
full year, the year over year negative impact of the settlement was
primarily offset by improved product margins and lower warehouse
costs. Excluding the impact of the legal settlement, adjusted OIBDA
increased 7% and 6% in the fourth quarter and for the full year,
respectively, and adjusted OIBDA margin would have increased 25
basis points and 35 basis points in the fourth quarter and for the
full year, respectively.
QVC's international revenue decreased 6% in the fourth quarter
to $809 million and 5% to $2.8 billion for the full year. The
fourth quarter and full year results included the negative impact
of the strengthening of the U.S. Dollar against the Japanese Yen
that was somewhat offset by the weakening of the U.S. Dollar
against the Euro. For both periods, the U.S. Dollar remained stable
against the UK Pound Sterling. Adjusted OIBDA decreased 9% to $158
million and 9% to $489 million in the fourth quarter and for the
full year, respectively. Adjusted OIBDA margin decreased 61 basis
points in the fourth quarter and decreased 69 basis points for the
full year.
QVC Japan's revenue decreased 3% and remained flat in local
currency in the fourth quarter and for the full year, respectively.
The decrease in the fourth quarter was primarily due to decreased
sales in local currency of jewelry, accessories and beauty
products, partially offset by increases in apparel and electronics.
For the full year, QVC Japan's sales in local currency improved
primarily in the apparel, home and electronics categories, offset
by declines in accessories and jewelry. QVC Japan’s results were
also negatively impacted in the fourth quarter and for the full
year due to an increase in returns as a percent of gross product
revenue in local currency that increased 142 basis points and 150
basis points, respectively. For both periods, the increases were
primarily due to higher returns in the apparel and jewelry
categories and a greater mix of apparel products that return at
higher rates than other categories. QVC Japan’s ASP in local
currency remained flat and decreased 1% in the fourth quarter and
for the full year, respectively. Units sold decreased 1% and
increased 4% in the fourth quarter and for the full year,
respectively. QVC Japan’s adjusted OIBDA in local currency
decreased 14% in the fourth quarter and 7% for the full year.
Adjusted OIBDA margin decreased 255 basis points and 167 basis
points in the fourth quarter and for the full year, respectively.
Adjusted OIBDA margins decreased in the fourth quarter and for full
year primarily due to higher programming distribution expenses and
lower product margins.
QVC Germany's revenue declined 4% and 2% in local currency in
the fourth quarter and for the full year, respectively. The
decrease in the fourth quarter was primarily due to decreased sales
in local currency of jewelry, apparel and electronics products. For
the full year, QVC Germany's sales in local currency increased
primarily in the apparel and accessories categories, but this
growth was more than offset by declines in jewelry and electronics
and an increase in estimated product returns as discussed below.
QVC Germany's ASP in local currency decreased 7% and 3% for the
fourth quarter and for the full year, respectively. Units sold
increased 2% in the fourth quarter and 4% for the full year. QVC
Germany’s fourth quarter and year-to-date returns as a percent of
gross product revenue in local currency declined 63 basis points
and increased 210 basis points, respectively, from the prior year.
The return rate decreased in the fourth quarter primarily due to a
positive mix impact. The increase for the full year was primarily
due to higher returns in the apparel and jewelry categories and a
greater mix of apparel products that return at higher rates than
other categories. QVC Germany’s adjusted OIBDA in local currency
decreased 3% in the fourth quarter and 6% for the full year.
Adjusted OIBDA margins were essentially flat and decreased 91 basis
points in the fourth quarter and for the full year, respectively.
Adjusted OIBDA margins remained flat in the fourth quarter as
improved product margins and lower obsolescence expense were offset
by increases in severance costs. For the full year, the adjusted
OIBDA margin decreased primarily due to higher severance costs,
somewhat offset by a favorable gross profit margin.
QVC UK's revenue increased 5% and 4% in local currency in the
fourth quarter and for the full year, respectively. For both the
fourth quarter and the full year, QVC UK's shipped sales growth in
local currency was primarily the result of increased sales in the
home and beauty categories, partially offset by declines in
jewelry. QVC UK's ASP in local currency increased 5% and 6% for the
fourth quarter and the full year, respectively. Units sold
increased 1% in the fourth quarter and declined 2% for the full
year. QVC UK's fourth quarter and full year return rates as a
percent of gross product revenue in local currency increased 49
basis points and remained flat, respectively, from the prior year.
The increase in the return rate in the fourth quarter was primarily
due to the mix of products sold within the beauty and jewelry
categories. QVC UK’s adjusted OIBDA in local currency increased 10%
for the fourth quarter and 14% for the full year. Adjusted OIBDA
margin increased 117 basis points and 174 basis points in the
fourth quarter and for the full year, respectively. For the fourth
quarter and the full year, adjusted OIBDA margin increased
primarily due to higher product margins. Full year results were
also favorably impacted by the transition and running costs
associated with the move to QVC UK’s new headquarters in 2012.
QVC Italy's revenue increased 17% and 41% in local currency in
the fourth quarter and for the full year, respectively. QVC Italy’s
sales were primarily from the home, beauty and apparel product
categories. QVC Italy's ASP in local currency remained flat and
decreased 1% for the fourth quarter and the full year,
respectively. Units sold increased 20% in the fourth quarter and
45% for the full year. The adjusted OIBDA deficit in local currency
improved by 67% in the fourth quarter and 49% for the full
year.
CNR Home Shopping Co., Ltd. ("CNRS"), QVC's joint venture in
China, experienced a 39% and 43% increase in revenue in local
currency in the fourth quarter and for the full year, respectively.
CNRS' adjusted OIBDA deficit in local currency improved by 7% and
30% in the fourth quarter and for the full year, respectively. This
joint venture is being accounted for as an equity method
investment, and as a result, QVC reported a $1 million and a $4
million reduction in net income for the fourth quarter and full
year, respectively.
QVC's outstanding bank and bond debt was $3.7 billion at
December 31, 2013, an increase of $0.3 billion since the prior
year.
eCommerce Businesses
In the aggregate, Liberty Interactive Group's eCommerce
businesses increased revenue 8% to $487 million for the quarter and
12% to $1.7 billion for the year. The increased revenue was the
result of increased marketing efforts driving additional traffic,
investments in site improvements, increased shipping charges and
broader inventory offerings. Additionally, the increased revenue
was partially driven by product discounting to move seasonal
inventory. Adjusted OIBDA decreased 29% to $25 million for the
quarter and 11% to $85 million for the year. The decrease in
adjusted OIBDA for the quarter and the year was the result of lower
product margins from continued product discounts and promotions.
Additionally, increased credit card chargebacks impacted the annual
results. The most significant declines in operating results for the
eCommerce businesses, as compared to prior periods, were the
Celebrate retail business and the Red Envelope business within
Provide. These businesses had declining revenues as well as
decreasing contribution margin (product margin less direct expenses
of the business), which hurt the overall Celebrate and Provide
businesses. These declining operating results were partially offset
by the growth of other eCommerce businesses primarily, CommerceHub
and Bodybuilding.com. Operating income improved by $18 million to a
loss of $21 million for the quarter and improved by 38% to a loss
of $50 million for the year. The improvement in the operating loss
for the quarter and the year was primarily due to lower impairment
charges offset somewhat by the lower adjusted OIBDA and higher
stock compensation expense.
On October 10, 2013, Liberty announced that its board has
authorized management to pursue a plan to recapitalize its Liberty
Interactive Group tracking stock into two new tracking stocks, one
(currently the Liberty Interactive common stock) to be renamed the
QVC Group common stock and the other to be designated as the
Liberty Digital Commerce common stock. The Liberty Digital Commerce
Group would have attributed to it Liberty's subsidiaries Provide
Commerce, Backcountry.com, Bodybuilding.com, CommerceHub, Right
Start, and Evite, which is currently a part of Liberty's subsidiary
Celebrate, along with cash and certain liabilities. The QVC Group,
which is currently known as the Liberty Interactive Group, would
have attributed to it Liberty’s subsidiary QVC, Inc. and its
approximate 38% interest in HSN, Inc., along with cash and certain
liabilities. Management continues to review the proposed
recapitalization and no assurance can be given as to when or if it
will be completed.
Share Repurchases
From November 1, 2013 through January 31, 2014, Liberty
repurchased approximately 11.1 million Series A Liberty Interactive
shares (Nasdaq: LINTA) at an average cost per share of $27.85 for
total cash consideration of $309.2 million. Since the creation of
the Liberty Interactive stock in May 2006, Liberty has repurchased
approximately 230.0 million shares at an average cost per share of
$20.01 for aggregate cash consideration of $4.6 billion. These
repurchases represent approximately 32.8% of the shares outstanding
at the time of creation of the Liberty Interactive stock. All
repurchases up to August 9, 2012, the date on which the Liberty
Interactive stock was recapitalized to create the Liberty Ventures
stock, were comprised of shares of the combined stocks. The
remaining repurchase authorization as of February 1, 2014 for
Liberty Interactive Group stock was approximately $0.1 billion. On
February 27, 2014, the Board of Directors voted to increase the
stock repurchase authorization for the Liberty Interactive Group by
an additional $1.0 billion.
Liberty Interactive Group holds controlling interests in
companies that are engaged in digital commerce, including QVC,
Provide Commerce, Backcountry.com, Bodybuilding.com, Celebrate
Interactive, CommerceHub, and also owns an interest in HSN.
LIBERTY VENTURES GROUP - As of December 31, 2013,
the fair value of the public equity method securities and other
public holdings attributed to the Liberty Ventures Group was $2.2
billion and $1.1 billion, respectively. When compared to
September 30, 2013, the fair value of Liberty Ventures Group's
public equity method securities increased 33%. The Liberty Ventures
Group's other public holdings balance increased 16% primarily due
to changes in market prices of certain securities during the fourth
quarter.
On October 10, 2013, Liberty announced that its board has also
authorized management to pursue a plan to spin-off to holders of
its Liberty Ventures common stock shares of a newly formed company
to be called Liberty TripAdvisor Holdings (“Trip Holdings”). Trip
Holdings would be comprised of, among other things, Liberty’s 22%
economic and 57% voting interest in TripAdvisor, as well as the
Celebrate retail business, which is currently a part of Celebrate,
and an anticipated initial corporate level net debt balance of $350
million. Management continues to review the proposed spin-off, and
no assurance can be given as to when or if it will be completed.
For TripAdvisor's stand-alone operating results as reported by
TripAdvisor, see TripAdvisor's Form 10-K for the year ended
December 31, 2013.
On February 27, 2014, Liberty’s board approved a two for one
stock split of Series A and Series B Liberty Ventures common stock,
to be effected by means of a dividend. The stock split is being
done in order to bring Liberty into compliance with a Nasdaq
listing requirement regarding the minimum number of publicly held
shares of the Series B Liberty Ventures stock. In the stock split,
holders of Series A and Series B Liberty Ventures stock as of 5:00
p.m. New York City time on April 4, 2014 will receive a dividend of
one share of Series A or Series B Liberty Ventures stock for each
shares of Series A or Series B Liberty Ventures stock,
respectively, held by them as of such time. The payment date for
the dividend will be April 11, 2014.
Share Repurchases
There were no repurchases of Liberty Ventures Group common stock
(Nasdaq: LVNTA) from November 1, 2013 through January 31, 2014. The
Liberty Ventures Group does not have an outstanding stock
repurchase authorization at this time.
The businesses and assets attributed to the Liberty Ventures
Group are all of Liberty's businesses and assets other than those
attributed to the Liberty Interactive Group and include its
subsidiary TripAdvisor, its interest in Expedia, and minority
interests in Time Warner and Time Warner Cable. TripAdvisor is a
separate publicly traded company and additional information about
TripAdvisor can be obtained through its website and filings with
the Securities and Exchange Commission.
FOOTNOTES
1) Liberty's President and CEO, Greg Maffei,
will discuss these highlights and other matters in Liberty's
earnings conference call which will begin at 12:15 p.m. (ET) on
February 28, 2014. For information regarding how to access the
call, please see “Important Notice” later in this document. 2) For
a definition of adjusted OIBDA and applicable reconciliations and a
definition of adjusted OIBDA margin, see the accompanying
schedules.
LIBERTY
INTERACTIVE GROUP FINANCIAL METRICS - QUARTER
(amounts in millions) 4Q12
4Q13 %
Change
Revenue QVC US $ 1,828 $ 1,932 6 % International 864
809 (6 )%
Total QVC Revenue $
2,692 $ 2,741 2 %
eCommerce businesses 451 487 8 %
Total Liberty
Interactive Group Revenue $ 3,143 $
3,228 3 % Adjusted OIBDA
QVC US $ 429 $ 437 2 % International 174 158 (9 )%
Total QVC Adjusted OIBDA $ 603 $
595 (1 )% eCommerce businesses 35 25
(29 )% Corporate and other (12 ) (2 ) 83 %
Total Liberty
Interactive Group Adjusted OIBDA $ 626
$ 618 (1 )% Operating
Income QVC US $ 312 $ 323 4 % International 137 118
(14 )%
Total QVC Operating Income $ 449
$ 441 (2 )% eCommerce
businesses (39 ) (21 ) 46 % Corporate and other (28 ) (16 ) 43 %
Total Liberty Interactive Group Operating Income $
382 $ 404 6 %
(amounts in millions)
LINT Shares Outstanding 1/31/2013
1/31/2014 Outstanding A and B shares 542 498
(amounts in millions)
LINTA and LINTB Basic and Diluted
Shares
Quarter
ended12/31/2012
Quarter
ended12/31/2013
Basic Weighted Average Shares Outstanding (“WASO”) 541 503
Potentially dilutive Shares 6 10
Diluted WASO 547 513
LIBERTY
INTERACTIVE GROUP FINANCIAL METRICS - FULL YEAR
(amounts in
millions) 2012 2013 % Change
Revenue QVC US $ 5,585 $ 5,844
5 % International 2,931 2,779 (5 )%
Total QVC
Revenue $ 8,516 $ 8,623
1 % eCommerce businesses 1,502 1,684
12 %
Total Liberty Interactive Group Revenue $
10,018 $ 10,307 3
% Adjusted OIBDA QVC US $ 1,292 $ 1,352 5 %
International 536 489 (9 )%
Total QVC Adjusted
OIBDA $ 1,828 $ 1,841
1 % eCommerce businesses 96 85 (11 )% Corporate and
other (27 ) (20 ) 26 %
Total Liberty Interactive Group Adjusted
OIBDA $ 1,897 $ 1,906
— % Operating Income QVC US $ 870 $ 901
4 % International 398 344 (14 )%
Total QVC
Operating Income $ 1,268 $
1,245 (2 )% eCommerce businesses (81 )
(50 ) 38 % Corporate and other (63 ) (64 ) (2 )%
Total Liberty
Interactive Group Operating Income $ 1,124
$ 1,131 1 %
QVC OPERATING
METRICS - QUARTER
(amounts
in millions except average sale price amounts) 4Q12 4Q13 %
Change
QVC - Consolidated(1) Revenue $ 2,692 $ 2,741
2 % Adjusted OIBDA $ 603 $ 595 (1 )% Adjusted OIBDA margin 22.40 %
21.71 % (69) bps Operating Income $ 449 $ 441 (2 )%
eCommerce and Mobile
Metrics
eCommerce $ of total revenue $ 1,000 $ 1,096 10 % eCommerce % of
total revenue 37.15 % 39.99 % 284 bps Mobile % of total
eCommerce(2) 24.06 %
33.51 % 945 bps
QVC - US(1) Revenue $
1,828 $ 1,932 6 % Adjusted OIBDA $ 429 $ 437 2 % Adjusted OIBDA
margin 23.47 % 22.62 % (85) bps Operating Income $ 312 $ 323 4 %
Average sale price (ASP) $ 61.83 64.56 4 % Units sold 31.91 32.57 2
% Return rate 17.02 % 17.27 % (25) bps
eCommerce and Mobile
Metrics
eCommerce $ of US revenue $ 781 $ 873 12 % eCommerce % of US
revenue 42.72 % 45.19 % 246 bps Mobile % of US eCommerce(2)
22.64 % 31.59 %
895 bps
QVC - Japan(1) Revenue $ 347 $ 272 (22
)% Adjusted OIBDA $ 79 $ 55 (30 )% Adjusted OIBDA margin 22.77 %
20.22 % (255) bps Operating Income $ 73 $ 43 (41 )% Average sale
price (ASP) ¥ 7,087.07 ¥ 7,101.39 — % Units sold
4.50 4.46
(1 )%
QVC - Germany(1) Revenue $ 288 $ 290 1 %
Adjusted OIBDA $ 58 $ 58 — % Adjusted OIBDA margin 20.14 % 20.00 %
(14) bps Operating Income $ 41 $ 41 — % Average sale price (ASP) €
36.73 € 34.07 (7 )% Units sold 7.74
7.92 2 %
QVC -
UK(1) Revenue $ 196 $ 208 6 % Adjusted OIBDA $ 42 $ 47
12 % Adjusted OIBDA margin 21.43 % 22.60 % 117 bps Operating Income
$ 30 $ 39 30 % Average sale price (ASP) £ 31.36 £ 32.81 5 % Units
sold 4.19 4.22
1 %
QVC - Italy(1) Revenue $ 33
$ 39 18 % Adjusted OIBDA $ (5 ) $ (2 ) 60 % Adjusted OIBDA margin
(15.15 )% (5.13 )% 1,002 bps Operating Income $ (7 ) $ (5 ) (29 )%
Average sale price (ASP) € 34.56 € 34.53 — % Units sold 0.74 0.89
20 % (1) Revenue change, adjusted OIBDA change
and eCommerce and Mobile Metrics calculated in US Dollars, not
local currency. (2) Based on gross US Dollar orders.
QVC OPERATING
METRICS - FULL YEAR
(amounts
in millions except average sale price amounts) 2012 2013 %
Change
QVC - Consolidated(1) Revenue $ 8,516 $ 8,623
1 % Adjusted OIBDA $ 1,828 $ 1,841 1 % Adjusted OIBDA margin 21.47
% 21.35 % (12) bps Operating Income $ 1,268 $ 1,245 (2 )%
eCommerce and Mobile
Metrics
eCommerce $ of total revenue $ 2,935 $ 3,242 10 % eCommerce % of
total revenue 34.46 % 37.60 % 314 bps Mobile % of total
eCommerce(2) 22.10 %
31.17 % 907 bps
QVC - US(1) Revenue $
5,585 $ 5,844 5 % Adjusted OIBDA $ 1,292 $ 1,352 5 % Adjusted OIBDA
margin 23.13 % 23.13 % 0 bps Operating Income $ 870 $ 901 4 %
Average sale price (ASP) $ 57.52 60.15 5 % Units sold 106.02 106.28
— % Return rate 18.84 % 18.51 % 33 bps
eCommerce and Mobile
Metrics
eCommerce $ of US revenue $ 2,239 $ 2,501 12 % eCommerce % of US
revenue 40.09 % 42.80 % 271 bps Mobile % of US eCommerce(2)
19.95 % 29.82 %
987 bps
QVC - Japan(1) Revenue $ 1,247 $ 1,024
(18 )% Adjusted OIBDA $ 279 $ 212 (24 )% Adjusted OIBDA margin
22.37 % 20.70 % (167) bps Operating Income $ 253 180 (29 )% Average
sale price (ASP) ¥ 6,531.07 ¥ 6,468.71 (1 )% Units sold
16.97 17.58
4 %
QVC - Germany(1) Revenue $ 956 $ 971 2 %
Adjusted OIBDA $ 179 $ 173 (3 )% Adjusted OIBDA margin 18.72 %
17.82 % (91) bps Operating Income $ 114 $ 105 (8 )% Average sale
price (ASP) € 36.08 € 34.97 (3 )% Units sold
26.26 27.39 4 %
QVC - UK(1) Revenue $ 641 $ 657 2 % Adjusted OIBDA $
104 $ 118 13 % Adjusted OIBDA margin 16.22 % 17.96 % 174 bps
Operating Income $ 70 $ 89 27 % Average sale price (ASP) £ 28.98 £
30.62 6 % Units sold 15.06
14.82 (2 )%
QVC -
Italy(1) Revenue $ 87 $ 127 46 % Adjusted OIBDA $ (26 )
$ (14 ) 46 % Adjusted OIBDA margin (29.89 )% (11.02 )% 1887 bps
Operating Income $ (39 ) $ (30 ) (23 )% Average sale price (ASP) €
33.34 € 32.84 (1 )% Units sold 2.14 3.11 45 % (1)
Revenue change, adjusted OIBDA change and eCommerce and
Mobile Metrics calculated in US Dollars, not local currency. (2)
Based on gross US Dollar orders.
NOTES
Unless otherwise noted, the foregoing discussion compares
financial information for the year ended December 31, 2013 to the
same period in 2012.
The following financial information with respect to Liberty's
equity affiliates and available for sale securities is intended to
supplement Liberty's consolidated statements of operations which
are included in its Form 10-K.
Fair Value of Public
Holdings
(amounts in
millions) 9/30/2013 12/31/2013 HSN(1) $ 1,073 $ 1,247
Total Attributed Liberty Interactive Group $
1,073 $ 1,247 Expedia(2) $ 1,196
$ 1,608 Interval Leisure Group and Tree.com(3) 466 606 Other Public
Holdings(4) 947 1,095
Total Attributed Liberty Ventures
Group $ 2,609 $ 3,309
(1) Represents fair value of Liberty
Interactive Group's investment in HSN. In accordance with GAAP,
Liberty Interactive Group accounts for this investment using the
equity method of accounting and includes this investment in its
attributed balance sheet at its historical carrying value which
aggregated $283 million and $293 million at September 30, 2013 and
December 31, 2013, respectively. (2) Represents fair value of
Liberty Ventures Group's investment in Expedia. In accordance with
GAAP, Liberty Ventures Group accounts for this investment using the
equity method of accounting and includes this investment in its
attributed balance sheet at its historical carrying value which
aggregated $465 million and $477 million at September 30, 2013 and
December 31, 2013, respectively. (3) Represents fair value of
Liberty Ventures Group's investments. In accordance with GAAP,
Liberty Ventures Group accounts for these investments using the
equity method of accounting and includes these investments in its
attributed balance sheet at their historical carrying values which
aggregated $98 million and $101 million at September 30, 2013 and
December 31, 2013, respectively. (4) Represents Liberty Ventures
Group's other public holdings which are accounted for at fair
value. Excludes $392 million and $402 million of long-term
marketable securities as of September 30, 2013 and December 31,
2013, respectively.
Cash and Debt
The following presentation is provided to separately identify
cash and liquid investments and debt information.
(amounts in millions) 9/30/2013
12/31/2013
Cash and Liquid Investments
Attributable to: Liberty Interactive Group $ 455 $ 598 Liberty
Ventures Group(1)(2)(3) 1,470 1,603
Total Liberty
Consolidated Cash and Liquid Investments $ 1,925
$ 2,201 Less: Short-term
marketable securities - Liberty Ventures Group $ 552 $ 543
Long-term marketable securities - Liberty Ventures Group 392
402
Total Liberty Consolidated Cash (GAAP) $
981 $ 1,256 Debt:
Senior notes and debentures(4) $ 792 $ 791 Senior exchangeable
debentures(5) 400 400 QVC senior notes(4) 2,819 2,819 QVC bank
credit facility 673 922 Other 153 141
Total
Attributed Liberty Interactive Group Debt $ 4,837
$ 5,073 Unamortized discount and fair market value
adjustment (2 ) 10
Total Attributed Liberty Interactive
Group Debt (GAAP) $ 4,835 $
5,083 Senior exchangeable debentures(5) $
2,091 $ 2,091 TripAdvisor debt facilities 376 369
Total Attributed Liberty Ventures Group Debt $
2,467 $ 2,460 Fair market value adjustment
(268 ) (159 )
Total Attributed Liberty Ventures Group Debt
(GAAP) $ 2,199 $ 2,301
Total Liberty Interactive
Corporation Debt (GAAP) $ 7,034 $
7,384 (1) Includes $552
million and $543 million of short-term marketable securities with
an original maturity greater than 90 days as of September 30, 2013
and December 31, 2013, respectively. (2) Includes $392 million and
$402 million of marketable securities with an original maturity
greater than one year as of September 30, 2013 and December 31,
2013, respectively, which are reflected in investments in
available-for-sale securities in Liberty Ventures Group's
attributed balance sheet. (3) Includes $596 million and $670
million of cash and liquid investments held at TripAdvisor as of
September 30, 2013 and December 31, 2013, respectively. (4) Face
amount of Senior Notes and Debentures with no reduction for the
unamortized discounts. (5) Face amount of Senior Exchangeable
Debentures with no reduction for the fair market value adjustment.
Total cash and liquid investments attributed to the Liberty
Interactive Group increased by approximately $143 million during
the fourth quarter. Cash flows from operations and borrowings on
the QVC bank credit facility in excess of repayments were partially
offset by capital expenditures and stock repurchases. Total debt
attributed to the Liberty Interactive Group increased by $236
million, primarily due to borrowings on the QVC bank credit
facility.
Total cash and liquid investments attributed to the Liberty
Ventures Group increased $133 million, primarily due to cash flows
from operations. Included in the fourth quarter total cash and
liquid investments attributed to the Liberty Ventures Group is $670
million held at TripAdvisor, which is comprised of $351 million of
cash, $131 million of short-term marketable securities and $188
million of long-term marketable securities. Although TripAdvisor is
a consolidated subsidiary, they are a separate public company with
a significant noncontrolling interest, therefore Liberty does not
have ready access to those cash and liquid investments. Total debt
outstanding attributed to the Liberty Ventures Group decreased by
$7 million during the fourth quarter, primarily due to repayments
made on TripAdvisor debt facilities.
Important Notice: Liberty (Nasdaq: LINTA, LINTB, LVNTA,
LVNTB) President and CEO, Greg Maffei will discuss Liberty's
earnings release in a conference call which will begin at 12:15
p.m. (ET) on February 28, 2014. The call can be accessed by dialing
(877) 548-7901 or (719) 325-4784 at least 10 minutes prior to the
start time. Replays of the conference call can be accessed until
2:15 p.m. (ET) on March 7, 2014, by dialing (888) 203-1112 or (719)
457-0820 plus the passcode 7682293. 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'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, the proposed recapitalization of our capital stock and
potential spin-off of our interest in TripAdvisor, future financial
prospects, international expansion, new service and product
offerings, the monetization of our non-core assets, the
continuation of our stock repurchase program, the completion of the
Liberty Ventures stock split, and the ability of invested cash
flows to meet obligations under the 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, the ability of
Liberty to complete the Liberty Ventures stock split, 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, our ability to satisfy the conditions to the
proposed recapitalization and spin-off and market conditions
conducive to stock repurchases. These forward-looking statements
speak only as of the date of this press release, 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.
Additional Information
Nothing in this press release shall constitute a solicitation to
buy or an offer to sell shares of the proposed QVC Group tracking
stock, the proposed Liberty Digital Commerce tracking stock or
Liberty's existing common stock. The offer and sale of shares of
the proposed new tracking stocks will only be made pursuant to an
effective registration statement. Liberty stockholders and other
investors are urged to read the registration statement to be filed
with the SEC, including the proxy statement/prospectus to be
contained therein, because they will contain important information
about the issuance of shares of the proposed tracking stocks.
Copies of Liberty's SEC filings are available free of charge at the
SEC's website (http://www.sec.gov). Copies of the filings together
with the materials incorporated by reference therein will also be
available, without charge, by directing a request to Liberty
Interactive Corporation, 12300 Liberty Boulevard, Englewood,
Colorado 80112, Attention: Investor Relations, Telephone: (720)
875-5408.
Participants in a
Solicitation
The directors and executive officers of Liberty and other
persons may be deemed to be participants in the solicitation of
proxies in respect of proposals relating to the approval of the
issuance of the new tracking stocks. Information regarding the
directors and executive officers of Liberty and other participants
in the proxy solicitation and a description of their respective
direct and indirect interests, by security holdings or otherwise,
will be available in the proxy materials to be filed with the
SEC.
SUPPLEMENTAL INFORMATION
As a supplement to Liberty's consolidated statements of
operations, which are included in its Form 10-K, the following is a
presentation of quarterly information and operating metrics on a
stand-alone basis for the largest business owned by Liberty (QVC)
at December 31, 2013, which Liberty has identified as a reportable
segment.
Please see below for the definition of adjusted OIBDA and a
discussion of why management believes the presentation of adjusted
OIBDA for QVC provides useful information for investors. Schedule 2
to this press release provides a reconciliation of adjusted OIBDA
for each identified reportable segment to that segment's operating
income for the same period, as determined under GAAP.
QUARTERLY
SUMMARY
(amounts in millions) 4Q12 1Q13 2Q13 3Q13 4Q13
Liberty Interactive Group QVC Revenue - US $ 1,828 $
1,297 $ 1,312 $ 1,303 $ 1,932 Revenue - International 864
677 649 644 809 Revenue - Total $ 2,692
$ 1,974 $ 1,961 $ 1,947 $ 2,741
Adjusted OIBDA - US 429 291 320 304 437 Adjusted OIBDA -
International 174 113 114 104 158
Adjusted OIBDA - Total $ 603 $ 404 $ 434
$ 408 $ 595 Operating income - US 312 180 207
191 323 Operating income - International 137 80 78
68 118 Operating income - Total $ 449 $
260 $ 285 $ 259 $ 441 Gross margin - US
34.7 % 36.1 % 37.3 % 37.1 % 34.7 % Gross margin - International
37.1 % 37.5 % 37.8 % 37.4 % 37.8 %
ANNUAL
SUMMARY
(amounts in millions) 2012 2013
Liberty
Interactive Group QVC Revenue - US $ 5,585 $ 5,844
Revenue - International 2,931 2,779 Revenue - Total $
8,516 $ 8,623 Adjusted OIBDA - US 1,292 1,352
Adjusted OIBDA - International 536 489 Adjusted OIBDA
- Total $ 1,828 $ 1,841 Operating income - US 870 901
Operating income - International 398 344 Operating
income - Total $ 1,268 $ 1,245 Gross margin - US 35.8
% 36.1 % Gross margin - International 37.5 % 37.7 %
NON-GAAP FINANCIAL MEASURES
This press release includes a presentation of adjusted OIBDA,
which is a non-GAAP financial measure, for Liberty, QVC (and
certain of its subsidiaries), and the eCommerce businesses together
with a reconciliation to that entity's operating income, as
determined under GAAP. Liberty 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 defines adjusted OIBDA margin
as adjusted OIBDA divided by revenue.
Liberty 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 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's management
considers in assessing the results of operations and performance of
its assets. Please see the attached schedules for applicable
reconciliations.
SCHEDULE 1
The following table provides a reconciliation of Liberty
Interactive Group's adjusted OIBDA to its operating income
calculated in accordance with GAAP for the three months ended
December 31, 2012, March 31, 2013, June 30, 2013, September 31,
2013 and December 31, 2013, respectively and years ended December
31, 2012 and 2013.
QUARTERLY
SUMMARY
(amounts in millions) 4Q12 1Q13 2Q13 3Q13 4Q13
Liberty Interactive Group Adjusted OIBDA $ 626 $ 437 $ 455
396 $ 618 Depreciation and amortization (159 ) (153 ) (158 ) (156 )
(165 ) Stock compensation expense (32 ) (24 ) (29 ) (22 ) (35 )
Impairment of intangible assets (53 ) — — (19 ) (14 )
Operating Income $ 382 $
260 $ 268 $ 199
$ 404
ANNUAL
SUMMARY
(amounts in millions) 2012 2013
Liberty
Interactive Group Adjusted OIBDA $ 1,897 $ 1,906 Depreciation
and amortization (596 ) (632 ) Stock compensation expense (85 )
(110 ) Impairment of intangible assets (92 ) (33 )
Operating
Income $ 1,124 $ 1,131
SCHEDULE 2
The following table provides a reconciliation of adjusted OIBDA
for QVC (and certain of its subsidiaries) and the eCommerce
businesses to that entity or such businesses' operating income
(loss) calculated in accordance with GAAP for the three months
ended December 31, 2012, March 31, 2013, June 30, 2013, September
31, 2013 and December 31, 2013, respectively and years ended
December, 31, 2012 and 2013.
QUARTERLY
SUMMARY
(amounts in millions) 4Q12 1Q13 2Q13 3Q13 4Q13
Liberty
Interactive Group
QVC Adjusted OIBDA QVC US $ 429 $ 291 $ 320 $ 304 $ 437
QVC Japan 79 54 57 46 55 QVC Germany 58 43 35 37 58 QVC UK
42 19 26 26 47 QVC Italy (5 ) (3 ) (4 ) (5 ) (2 ) QVC International
adjusted OIBDA $ 174 $ 113 $ 114 $ 104
$ 158 Consolidated QVC adjusted OIBDA 603 404 434 408
595 Depreciation and amortization (141 ) (134 ) (140 ) (139 ) (145
) Stock compensation (13 ) (10 ) (9 ) (10 ) (9 )
Operating
Income $ 449 $ 260
$ 285 $ 259 $
441 eCommerce Businesses Adjusted OIBDA
$ 35 $ 39 $ 26 $ (5 ) $ 25 Depreciation and amortization (19 ) (18
) (18 ) (19 ) (18 ) Stock compensation (2 ) (2 ) (10 ) (3 ) (14 )
Impairment of intangible assets (53 ) — — (19 ) (14 )
Operating Income (Loss) $ (39 )
$ 19 $ (2 ) $
(46 ) $ (21 )
ANNUAL
SUMMARY
(amounts in millions) 2012 2013
Liberty
Interactive Group
QVC Adjusted OIBDA QVC US $ 1,292 $ 1,352 QVC Japan
279 212 QVC Germany 179 173 QVC UK 104 118 QVC Italy (26 ) (14 )
QVC International adjusted OIBDA $ 536 $ 489
Consolidated QVC adjusted OIBDA 1,828 1,841 Depreciation and
amortization (526 ) (558 ) Stock compensation (34 ) (38 )
Operating Income $ 1,268 $
1,245 eCommerce Businesses Adjusted
OIBDA $ 96 $ 85 Depreciation and amortization (70 ) (73 ) Stock
compensation (15 ) (29 ) Impairment of intangible assets (92 ) (33
)
Operating Income (Loss) $ (81 )
$ (50 ) LIBERTY INTERACTIVE
CORPORATION BALANCE SHEET INFORMATION December 31,
2013 - (unaudited)
Attributed
InteractiveGroup
VenturesGroup
Inter-groupEliminations
ConsolidatedLiberty
amounts in millions
Assets Current assets: Cash and cash
equivalents $ 598 658 — 1,256 Trade and other receivables, net
1,150 124 — 1,274 Inventory, net 1,135 — — 1,135 Short-term
marketable securities — 543 — 543 Other current assets 362
26 (170 ) 218
Total current assets
3,245 1,351 (170 )
4,426 Investments in available-for-sale securities
and other cost investments 4 1,497 — 1,501 Investments in
affiliates, accounted for using the equity method 343 894 — 1,237
Property and equipment, net 1,213 34 — 1,247 Intangible assets not
subject to amortization 8,387 5,288 — 13,675 Intangible assets
subject to amortization, net 1,589 903 — 2,492 Other assets, at
cost, net of accumulated amortization 81 17 —
98
Total assets $ 14,862
9,984 (170 ) 24,676
Liabilities and Equity Current liabilities:
Intergroup Payable (receivable) $ 221 (221 ) — — Accounts payable
553 38 — 591 Accrued liabilities 958 109 — 1,067 Current portion of
debt 39 939 — 978 Current deferred tax liabilities — 1,095 (170 )
925 Other current liabilities 145 50 — 195
Total current liabilities 1,916
2,010 (170 ) 3,756
Long-term debt 5,044 1,362 — 6,406 Deferred income tax liabilities
1,208 1,636 — 2,844 Other liabilities 192 43 —
235
Total liabilities 8,360
5,051 (170 ) 13,241
Equity/Attributed net assets (liabilities) 6,378 558 — 6,936
Noncontrolling interests in equity of subsidiaries 124 4,375
— 4,499
Total liabilities and equity
$ 14,862 9,984 (170
) 24,676 LIBERTY INTERACTIVE
CORPORATION STATEMENT OF OPERATIONS INFORMATION
Twelve months ended December 31, 2013 - (unaudited)
Attributed
InteractiveGroup
VenturesGroup
ConsolidatedLiberty
amounts in millions
Revenue: Net retail sales $ 10,307 —
10,307 Other revenue — 945 945 Total revenue
10,307 945 11,252
Operating costs
and expenses: Cost of retail sales (exclusive of depreciation
shown separately below) 6,602 — 6,602 Operating, including
stock-based compensation 876 153 1,029 Selling, general and
administrative, including stock-based
compensation
1,033 492 1,525 Impairment of intangible assets 33 — 33
Depreciation and amortization 632 311 943
9,176 956 10,132 Operating income 1,131 (11 )
1,120
Other income (expense): Interest expense (292 )
(81 ) (373 ) Share of earnings (losses) of affiliates, net 48 (15 )
33 Realized and unrealized gains (losses) on financial instruments,
net (12 ) (10 ) (22 ) Gains (losses) on transactions, net (1 ) (1 )
(2 ) Other, net (53 ) 7 (46 ) (310 ) (100 ) (410 ) Earnings
(loss) before income taxes 821 (111 ) 710 Income tax benefit
(expense) (338 ) 208 (130 ) Net earnings (loss) 483 97 580
Less net earnings (loss) attributable to noncontrolling interests
45 34 79 Net earnings (loss) attributable to
Liberty stockholders $ 438 63 501
LIBERTY INTERACTIVE CORPORATION STATEMENT OF
OPERATIONS INFORMATION Twelve months ended December 31, 2012
- (unaudited)
Attributed
InteractiveGroup
VenturesGroup
ConsolidatedLiberty
amounts in millions
Revenue: Net retail sales $ 10,018 —
10,018 Other revenue — 36 36
Total revenue
10,018 36 10,054
Operating costs and
expenses: Cost of retail sales (exclusive of depreciation shown
separately below) 6,396 — 6,396 Operating 833 7 840 Selling,
general and administrative, including stock-based
compensation
977 32 1,009 Impairment of intangible assets 92 — 92 Depreciation
and amortization 596 13 609 8,894 52
8,946 Operating income 1,124 (16 ) 1,108
Other income (expense): Interest expense (322 ) (110 ) (432
) Share of earnings (losses) of affiliates, net 28 57 85 Realized
and unrealized gains (losses) on financial instruments, net 51 (402
) (351 ) Gains (losses) on transactions, net — 1,531 1,531 Other,
net — 44 44 (243 ) 1,120 877
Earnings (loss) before income taxes 881 1,104 1,985 Income tax
benefit (expense) (352 ) (42 ) (394 ) Net earnings (loss) 529 1,062
1,591 Less net earnings (loss) attributable to noncontrolling
interests 63 (2 ) 61 Net earnings (loss) attributable
to Liberty stockholders $ 466 1,064 1,530
LIBERTY INTERACTIVE CORPORATION STATEMENT
OF CASH FLOWS INFORMATION Twelve months ended December 31,
2013 - (unaudited)
Attributed
InteractiveGroup
VenturesGroup
ConsolidatedLiberty
amounts in millions
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) $ 483 97 580 Adjustments to reconcile net
earnings to net cash provided by operating activities: Depreciation
and amortization 632 311 943 Stock-based compensation 110 68 178
Cash payments for stock based compensation (8 ) (2 ) (10 ) Excess
tax benefit from stock based compensation (13 ) (10 ) (23 ) Noncash
interest expense 11 2 13 Share of (earnings) losses of affiliates,
net (48 ) 15 (33 ) Cash receipts from return on equity investments
16 19 35 Realized and unrealized gains (losses) on financial
instruments, net 12 10 22 Gains (losses) on transactions, net 1 1 2
Impairment of intangible assets 33 — 33 Deferred income tax
(benefit) expense (131 ) (5 ) (136 ) Loss (gain) on extinguishment
of debt 57 — 57 Other, net (3 ) 1 (2 ) Intergroup tax allocation
272 (272 ) — Intergroup tax payments (52 ) 52 — Changes in
operating assets and liabilities Current and other assets (63 ) (18
) (81 ) Payables and other current liabilities (337 ) 119
(218 )
Net cash provided (used) by operating activities
972 388 1,360
CASH FLOWS FROM INVESTING ACTIVITIES: Cash paid for
acquisitions, net of cash acquired (24 ) (34 ) (58 ) Cash proceeds
from dispositions 1 1,136 1,137 Investments in and loans to cost
and equity investees (4 ) (380 ) (384 ) Capital expended for
property and equipment (295 ) (57 ) (352 ) Purchases of short term
and other marketable securities — (1,391 ) (1,391 ) Sales of short
term and other marketable securities — 726 726 Other investing
activities, net (40 ) 2 (38 )
Net cash provided (used) by
investing activities (362 ) 2
(360 ) CASH FLOWS FROM FINANCING
ACTIVITIES: Borrowings of debt 3,520 853 4,373 Repayments of
debt (3,056 ) (2,418 ) (5,474 ) Intergroup receipts (payments), net
2 (2 ) — Shares repurchased by subsidiary — (145 ) (145 ) Shares
issued by subsidiary — 27 27 Taxes paid in lieu of shares issued
for stock-based compensation (21 ) (17 ) (38 ) Excess tax benefit
from stock based compensation 13 10 23 Repurchases of Liberty
common stock (1,089 ) — (1,089 ) Other financing activities, net
(56 ) (1 ) (57 )
Net cash provided (used) by financing
activities (687 ) (1,693 )
(2,380 ) Effect of foreign currency rates on
cash (24 ) — (24 ) Net increase (decrease) in cash and cash
equivalents (101 ) (1,303 ) (1,404 ) Cash and cash equivalents at
beginning of period 699 1,961 2,660
Cash
and cash equivalents at end period $ 598
658 1,256 LIBERTY
INTERACTIVE CORPORATION STATEMENT OF CASH FLOWS
INFORMATION Twelve months ended December 31, 2012 -
(unaudited)
Attributed
InteractiveGroup
VenturesGroup
ConsolidatedLiberty
CASH FLOWS FROM OPERATING ACTIVITIES: amounts in millions
Net earnings (loss) $ 529 1,062 1,591
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 596 13 609 Stock-based compensation
85 6 91 Cash payments for stock based compensation (12 ) — (12 )
Excess tax benefit from stock based compensation (56 ) (8 ) (64 )
Noncash interest expense 9 — 9 Share of losses (earnings) of
affiliates, net (28 ) (57 ) (85 ) Cash receipts from return on
equity investments 11 34 45 Realized and unrealized gains (losses)
on financial instruments, net (51 ) 402 351 Gains (losses) on
transactions, net — (1,531 ) (1,531 ) Impairment of intangible
assets 92 — 92 Deferred income tax (benefit) expense (179 ) 192 13
Other, net — (30 ) (30 ) Intergroup tax allocation 152 (152 ) —
Intergroup tax payments (33 ) 33 — Changes in operating assets and
liabilities Current and other assets (78 ) 8 (70 ) Payables and
other current liabilities 433 (10 ) 423
Net cash provided (used) by operating activities
1,470 (38 ) 1,432
CASH FLOWS FROM INVESTING ACTIVITIES: Cash
proceeds from dispositions — 1,030 1,030 Investments in and loans
to cost and equity investees (59 ) (177 ) (236 ) Proceeds from
settlement of financial instruments, net — (258 ) (258 ) Capital
expended for property and equipment (338 ) (1 ) (339 ) Sales
(purchases) of short term and other marketable securities 46 (76 )
(30 ) Other investing activities, net (111 ) 97
(14 )
Net cash provided (used) by investing
activities (462 ) 615
153 CASH FLOWS FROM FINANCING
ACTIVITIES: Borrowings of debt 2,316 — 2,316 Repayments of debt
(1,392 ) (120 ) (1,512 ) Reattribution of cash between groups
(1,346 ) 1,346 — Intergroup receipts (payments), net 162 (162 ) —
Proceeds from rights offering — 328 328 Repurchases of Liberty
common stock (815 ) — (815 ) Taxes paid in lieu of shares issued
for stock-based compensation (112 ) (16 ) (128 ) Excess tax benefit
from stock based compensation 56 8 64 Other financing activities,
net (5 ) — (5 )
Net cash provided (used) by
financing activities (1,136 ) 1,384
248 Effect of foreign currency
rates on cash (20 ) — (20 ) Net increase
(decrease) in cash and cash equivalents (148 ) 1,961 1,813 Cash and
cash equivalents at beginning of period 847 —
847
Cash and cash equivalents at end period
$ 699 1,961
2,660
Liberty Interactive CorporationCourtnee Ulrich, 720-875-5420
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