UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30, 2022~~March 31, 2023



☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-33982

QURATE RETAIL, INC.

(Exact name of Registrant as specified in its charter)

incorporation or organization)	Identification No.)
State of Delaware (State or other jurisdiction of incorporation or organization)	84-1288730 (I.R.S. Employer Identification No.)

12300 Liberty Boulevard Englewood, Colorado (Address of principal executive offices)	80112 (Zip Code)

Registrant's telephone number, including area code: (720) 875-5300

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Series A common stock	QRTEA	The Nasdaq Stock Market LLC
Series B common stock	QRTEB	The Nasdaq Stock Market LLC
8.0% Series A Cumulative Redeemable Preferred Stock	QRTEP	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer ☒	Accelerated Filer ☐	Non-accelerated Filer ☐	Smaller Reporting Company ☐	Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes ☐ No ☒

The number of outstanding shares of Qurate Retail, Inc.'s common stock as of ~~July 31, 2022~~April 30, 2023 was:


Series A common stock		~~373,732,994~~379,933,996
Series B common stock		~~8,373,512~~8,700,380

Table of Contents

Table of Contents


PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
QURATE RETAIL, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (unaudited)		I-3
QURATE RETAIL, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (unaudited)		I-5
QURATE RETAIL, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Comprehensive Earnings (Loss) (unaudited)		I-6
QURATE RETAIL, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (unaudited)		I-7
QURATE RETAIL, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Equity (unaudited)		I-8
QURATE RETAIL, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (unaudited)		~~I-10~~I-9
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		~~I-25~~I-23
Item 3. Quantitative and Qualitative Disclosures about Market Risk.		~~I-38~~I-35
Item 4. Controls and Procedures.		~~I-39~~I-35

PART II—OTHER INFORMATION		~~II-1~~
~~Item 1. Legal Proceedings~~		II-1
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		II-1
Item 6. Exhibits		II-2

SIGNATURES		II-3

I-2

Table of Contents

QURATE RETAIL, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(unaudited)

June 30,

December 31,

2022

2021

amounts in millions

Assets

Current assets:

Cash and cash equivalents

$
561

587

Trade and other receivables, net of allowance for credit losses of $109 million and $107 million, respectively

1,142

1,679

Inventory, net

1,737

1,623

Indemnification agreement receivable

175

324

Other current assets

226

235

Total current assets

3,841

4,448

Property and equipment, net

813

1,030

Intangible assets not subject to amortization (note 5):

Goodwill

6,250

6,339

Trademarks

3,038

3,038

9,288

9,377

Intangible assets subject to amortization, net (note 5)

666

745

Other assets, at cost, net of accumulated amortization

621

602

Total assets

$
15,229

16,202


	March 31,		December 31,
	2023		2022

	amounts in millions
Assets
Current assets:
Cash and cash equivalents	$	1,286	1,275
Trade and other receivables, net of allowance for credit losses of $107 million and $111 million, respectively		1,062	1,394
Inventory, net		1,326	1,346
Indemnification agreement receivable		29	50
Other current assets		183	210
Total current assets		3,886	4,275
Property and equipment, net		563	570
Intangible assets not subject to amortization (note 5):
Goodwill		3,512	3,501
Trademarks		2,718	2,718
		6,230	6,219
Intangible assets subject to amortization, net (note 5)		646	612
Operating lease right-of-use assets		643	585
Other assets, at cost, net of accumulated amortization		232	310
Total assets	$	12,200	12,571

(continued)

See accompanying notes to condensed consolidated financial statements.

I-3

Table of Contents

QURATE RETAIL, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Continued)

(unaudited)

June 30,

December 31,

2022

2021

amounts in millions,

except share amounts

Liabilities and Equity






Current liabilities:

Accounts payable

$
1,043

1,429

Accrued liabilities

1,020

1,236

Current portion of debt, $895 million and $1,315 million measured at fair value (note 6)

1,109

1,315

Other current liabilities

202

244

Total current liabilities

3,374

4,224

Long-term debt (note 6)

5,360

5,674

Deferred income tax liabilities

1,457

1,350

Preferred stock (note 7)

1,265

1,261

Other liabilities

582

707

Total liabilities

12,038

13,216

Equity

Stockholders' equity:

Series A common stock, $.01 par value. Authorized 4,000,000,000 shares; issued and outstanding 373,731,326 shares at June 30, 2022 and 371,132,684 shares at December 31, 2021

4

4

Series B common stock, $.01 par value. Authorized 150,000,000 shares; issued and outstanding 8,373,512 shares at June 30, 2022 and 8,163,190 shares at December 31, 2021

—

—

Series C common stock, $.01 par value. Authorized 400,000,000 shares; 0 shares issued

—

—

Additional paid-in capital

23

—

Accumulated other comprehensive earnings (loss), net of taxes

(89)

(79)

Retained earnings

3,134

2,925

Total stockholders' equity

3,072

2,850

Noncontrolling interests in equity of subsidiaries

119

136

Total equity

3,191

2,986

Commitments and contingencies (note 8)

Total liabilities and equity

$
15,229

16,202


	March 31,		December 31,
	2023		2022

	amounts in millions,
	except share amounts
Liabilities and Equity
Current liabilities:
Accounts payable	$	819	976
Accrued liabilities		948	1,133
Current portion of debt, $319 million and $614 million measured at fair value (note 6)		319	828
Other current liabilities		176	162
Total current liabilities		2,262	3,099
Long-term debt (note 6)		5,796	5,525
Deferred income tax liabilities		1,474	1,440
Preferred stock (note 7)		1,269	1,266
Operating lease liabilities		582	518
Other liabilities		126	198
Total liabilities		11,509	12,046
Equity
Stockholders' equity:
Series A common stock, $.01 par value. Authorized 4,000,000,000 shares; issued and outstanding 379,933,996 shares at March 31, 2023 and 374,390,323 shares at December 31, 2022		4	4
Series B common stock, $.01 par value. Authorized 150,000,000 shares; issued and outstanding 8,700,380 shares at March 31, 2023 and 8,373,512 shares at December 31, 2022		—	—
Series C common stock, $.01 par value. Authorized 4,000,000,000 shares; no shares issued		—	—
Additional paid-in capital		67	53
Accumulated other comprehensive earnings (loss), net of taxes		149	18
Retained earnings		358	337
Total stockholders' equity		578	412
Noncontrolling interests in equity of subsidiaries		113	113
Total equity		691	525
Commitments and contingencies (note 8)
Total liabilities and equity	$	12,200	12,571

See accompanying notes to condensed consolidated financial statements.

I-4

Table of Contents

QURATE RETAIL, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(unaudited)


	Three months ended			Six months ended			Three months ended
	June 30,			June 30,			March 31,
	2022		2021	2022		2021	2023		2022

	amounts in millions, except per share amounts						amounts in millions, except per share amounts
Total revenue, net	$	2,953	3,504		5,836	6,841	$	2,644	2,883
Operating costs and expenses:
Cost of goods sold (exclusive of depreciation shown separately below)		1,978	2,240		3,980	4,435		1,809	2,002
Operating expense		198	217		394	423		194	196
Selling, general and administrative, including stock-based compensation (note 2)		461	485		906	920		478	445
Restructuring and fire related costs, net		7	—		11	—
Restructuring and fire related costs, net of (recoveries) (note 8)								—	4
Depreciation and amortization		134	129		264	257		100	130
(Gain) loss on sale of fixed assets, net (note 8)		(243)	—		(243)	—
Gains on sale leaseback transactions (note 8)								(113)	—
		2,535	3,071		5,312	6,035		2,468	2,777
Operating income (loss)		418	433		524	806		176	106
Other income (expense):
Interest expense		(119)	(118)		(236)	(235)		(94)	(117)
Share of earnings (losses) of affiliates, net		—	(22)		(1)	(54)
Realized and unrealized gains (losses) on financial instruments, net (note 4)		7	19		37	60		(47)	30
Gain (loss) on extinguishment of debt								15	—
Other, net		35	(23)		88	(10)		15	52
		(77)	(144)		(112)	(239)		(111)	(35)
Earnings (loss) before income taxes		341	289		412	567		65	71
Income tax (expense) benefit		(120)	(39)		(178)	(93)		(32)	(58)
Net earnings (loss)		221	250		234	474		33	13
Less net earnings (loss) attributable to the noncontrolling interests		18	28		30	46		13	12
Net earnings (loss) attributable to Qurate Retail, Inc. shareholders	$	203	222		204	428	$	20	1

Basic net earnings (loss) attributable to Series A and Series B Qurate Retail, Inc. shareholders per common share (note 3):	$	0.53	0.54		0.54	1.04	$	0.05	0.00
Diluted net earnings (loss) attributable to Series A and Series B Qurate Retail, Inc. shareholders per common share (note 3):	$	0.53	0.52		0.53	1.01	$	0.05	0.00

See accompanying notes to condensed consolidated financial statements.

I-5

Table of Contents

QURATE RETAIL, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Earnings (Loss)

(unaudited)


	Three months ended			Six months ended		Three months ended
	June 30,			June 30,		March 31,
	2022		2021	2022	2021	2023		2022

	amounts in millions					amounts in millions
Net earnings (loss)	$	221	250	234	474	$	33	13
Other comprehensive earnings (loss), net of taxes:
Foreign currency translation adjustments		(143)	9	(203)	(64)		20	(60)
Comprehensive earnings (loss) attributable to debt credit risk adjustments		145	19	174	(37)
Recognition of previously unrealized losses (gains) on debt, net							(19)	—
Credit risk on fair value debt instruments gains (loss)							129	29
Other comprehensive earnings (loss)		2	28	(29)	(101)		130	(31)
Comprehensive earnings (loss)		223	278	205	373		163	(18)
Less comprehensive earnings (loss) attributable to the noncontrolling interests		5	28	11	37		12	6
Comprehensive earnings (loss) attributable to Qurate Retail, Inc. shareholders	$	218	250	194	336	$	151	(24)

See accompanying notes to condensed consolidated financial statements.

I-6

Table of Contents

QURATE RETAIL, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(unaudited)

Six months ended

June 30,

2022

2021

amounts in millions

Cash flows from operating activities:

Net earnings (loss)

$
234

474

Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:

Depreciation and amortization

264

257

Stock-based compensation

31

35

Share of (earnings) losses of affiliates, net

1

54

Realized and unrealized (gains) losses on financial instruments, net

(37)

(60)

(Gain) loss on sale of fixed assets, net

(243)

—

Deferred income tax expense (benefit)

56

(10)

Other, net

(5)

7

Changes in operating assets and liabilities

Decrease (increase) in accounts receivable

420

429

Decrease (increase) in inventory

(139)

(133)

Decrease (increase) in prepaid expenses and other assets

41

64

(Decrease) increase in trade accounts payable

(364)

(136)

(Decrease) increase in accrued and other liabilities

(317)

(279)

Net cash provided (used) by operating activities

(58)

702

Cash flows from investing activities:

Investments in and loans to cost and equity investees

(7)

(139)

Capital expenditures

(101)

(110)

Expenditures for television distribution rights

(15)

(170)

Cash proceeds from dispositions of investments

12

2

Proceeds from sale of fixed assets

256

40

Insurance proceeds

70

—

Other investing activities, net

22

(2)

Net cash provided (used) by investing activities

237

(379)

Cash flows from financing activities:

Borrowings of debt

1,355

302

Repayments of debt

(1,466)

(230)

Repurchases of Qurate Retail common stock

—

(105)

Withholding taxes on net settlements of stock-based compensation

(8)

(24)

Derivative payments to counterparties

—

(81)

Derivative proceeds from counterparties

—

24

Dividends paid to noncontrolling interest

(27)

(31)

Dividends paid to common shareholders

(10)

(13)

Other financing activities, net

(10)

(6)

Net cash provided (used) by financing activities

(166)

(164)

Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash

(39)

(15)

Net increase (decrease) in cash, cash equivalents and restricted cash

(26)

144

Cash, cash equivalents and restricted cash at beginning of period

596

814

Cash, cash equivalents and restricted cash at end of period

$
570

958


	Three months ended
	March 31,
	2023		2022

	amounts in millions
Cash flows from operating activities:
Net earnings (loss)	$	33	13
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation and amortization		100	130
Stock-based compensation		16	15
Realized and unrealized (gains) losses on financial instruments, net		47	(30)
(Gains) losses on sale leaseback transactions		(113)	—
Gain on insurance proceeds, net of fire related costs		(17)	—
Insurance proceeds received for operating losses		37	—
(Gain) loss on extinguishment of debt		(15)	—
Deferred income tax expense (benefit)		(2)	29
Other, net		9	(24)
Changes in operating assets and liabilities
Decrease (increase) in accounts receivable		294	365
Decrease (increase) in inventory		25	(155)
Decrease (increase) in prepaid expenses and other assets		48	8
(Decrease) increase in trade accounts payable		(167)	(211)
(Decrease) increase in accrued and other liabilities		(279)	(319)
Net cash provided (used) by operating activities		16	(179)
Cash flows from investing activities:
Investments in and loans to cost and equity investees		—	(7)
Capital expenditures		(54)	(43)
Expenditures for television distribution rights		(38)	(2)
Cash proceeds from dispositions of investments		1	12
Proceeds from sale of fixed assets		198	—
Insurance proceeds		18	—
Payments for settlements of financial instruments		(179)	—
Proceeds from settlements of financial instruments		167	—
Other investing activities, net		(1)	24
Net cash provided (used) by investing activities		112	(16)
Cash flows from financing activities:
Borrowings of debt		677	460
Repayments of debt		(803)	(195)
Withholding taxes on net settlements of stock-based compensation		(1)	(7)
Dividends paid to noncontrolling interest		(12)	(14)
Dividends paid to common shareholders		(7)	(10)
Indemnification agreement settlement		24	—
Other financing activities, net		—	(5)
Net cash provided (used) by financing activities		(122)	229
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash		4	(13)
Net increase (decrease) in cash, cash equivalents and restricted cash		10	21
Cash, cash equivalents and restricted cash at beginning of period		1,285	596
Cash, cash equivalents and restricted cash at end of period	$	1,295	617

The following table reconciles cash, cash equivalents and restricted cash reported in our condensed consolidated balance sheets to the total amount presented in our condensed consolidated statements of cash flows:


		June 30,	December 31,		March 31,	December 31,
		2022	2021		2023	2022

	in millions			in millions
Cash and cash equivalents	$	561	587	$	1,286	1,275
Restricted cash included in other current assets		9	9		9	10
Total cash, cash equivalents and restricted cash in the condensed consolidated statement of cash flows	$	570	596	$	1,295	1,285

See accompanying notes to condensed consolidated financial statements.

I-7

Table of Contents

QURATE RETAIL, INC. AND SUBSIDIARIES

Condensed Consolidated Statement of Equity

(unaudited)



	Stockholders' Equity									Stockholders' Equity
						Accumulated									Accumulated
					Additional	other		Noncontrolling						Additional	other		Noncontrolling
	Preferred		Common stock		paid-in	comprehensive	Retained	interest in equity	Total	Preferred		Common stock		paid-in	comprehensive	Retained	interest in equity	Total
	stock		Series A	Series B	capital	earnings (loss)	earnings	of subsidiaries	equity	stock		Series A	Series B	capital	earnings (loss)	earnings	of subsidiaries	equity

	amounts in millions									amounts in millions
Balance at January 1, 2022	$	—	4	—	—	(79)	2,925	136	2,986
Balance at January 1, 2023										$	—	4	—	53	18	337	113	525
Net earnings (loss)		—	—	—	—	—	204	30	234		—	—	—	—	—	20	13	33
Other comprehensive earnings (loss)		—	—	—	—	(10)	—	(19)	(29)		—	—	—	—	131	—	(1)	130
Stock-based compensation		—	—	—	30	—	—	—	30		—	—	—	14	—	—	—	14
Distribution to noncontrolling interest		—	—	—	—	—	—	(28)	(28)		—	—	—	—	—	—	(12)	(12)
Withholding taxes on net share settlements of stock-based compensation		—	—	—	(8)	—	—	—	(8)		—	—	—	(1)	—	—	—	(1)
Other		—	—	—	1	—	5	—	6		—	—	—	1	—	1	—	2
Balance at June 30, 2022	$	—	4	—	23	(89)	3,134	119	3,191
Balance at March 31, 2023										$	—	4	—	67	149	358	113	691

Stockholders' Equity

Accumulated

Additional

other

Noncontrolling

Preferred

Common stock

paid-in

comprehensive

Retained

interest in equity

Total


stock

Series A

Series B

capital

earnings (loss)

earnings

of subsidiaries

equity

amounts in millions

Balance at March 31, 2022

$
—

4

—

7

(104)

2,929

127

2,963

Net earnings (loss)

—

—

—

—

—

203

18

221

Other comprehensive earnings (loss)

—

—

—

—

15

—

(13)

2

Stock-based compensation

—

—

—

16

—

—

—

16

Distribution to noncontrolling interest

—

—

—

—

—

—

(13)

(13)

Withholding taxes on net share settlements of stock-based compensation

—

—

—

(1)

—

—

—

(1)

Other

—

—

—

1

—

2

—

3

Balance at June 30, 2022

$
—

4

—

23

(89)

3,134

119

3,191



	Stockholders' Equity
						Accumulated
					Additional	other		Noncontrolling
	Preferred		Common stock		paid-in	comprehensive	Retained	interest in equity	Total
	stock		Series A	Series B	capital	earnings (loss)	earnings	of subsidiaries	equity

	amounts in millions
Balance at January 1, 2022	$	—	4	—	—	(79)	2,925	136	2,986
Net earnings (loss)		—	—	—	—	—	1	12	13
Other comprehensive earnings (loss)		—	—	—	—	(25)	—	(6)	(31)
Stock-based compensation		—	—	—	14	—	—	—	14
Distribution to noncontrolling interest		—	—	—	—	—	—	(15)	(15)
Withholding taxes on net share settlements of stock-based compensation		—	—	—	(7)	—	—	—	(7)
Other		—	—	—	—	—	3	—	3
Balance at March 31, 2022	$	—	4	—	7	(104)	2,929	127	2,963

~~I-8~~

~~Table of Contents~~

Stockholders' Equity

Accumulated

Additional

other

Noncontrolling

Preferred

Common stock

paid-in

comprehensive

Retained

interest in equity

Total


stock

Series A

Series B

capital

earnings (loss)

earnings

of subsidiaries

equity

amounts in millions

Balance at January 1, 2021

$
—

4

—

—

72

3,478

135

3,689

Net earnings (loss)

—

—

—

—

—

428

46

474

Other comprehensive income (loss)

—

—

—

—

(92)

—

(9)

(101)

Stock-based compensation

—

—

—

33

—

—

—

33

Series A Qurate Retail stock repurchases

—

—

—

(105)

—

—

—

(105)

Distribution to noncontrolling interest

—

—

—

—

—

—

(31)

(31)

Withholding taxes on net share settlements of stock-based compensation

—

—

—

(24)

—

—

—

(24)

Other

—

—

—

(70)

—

3

—

(67)

Reclassification

—

—

—

166

—

(166)

—

—

Balance at June 30, 2021

$
—

4

—

—

(20)

3,743

141

3,868

Stockholders' Equity

Common stock

Accumulated

Qurate

Additional

other

Noncontrolling

Preferred

Retail

paid-in

comprehensive

Retained

interest in equity

Total


stock

Series A

Series B

capital

earnings (loss)

earnings

of subsidiaries

equity

amounts in millions

Balance at March 31, 2021

$
—

4

—

—

(48)

3,636

128

3,720

Net earnings (loss)

—

—

—

—

—

222

28

250

Other comprehensive income (loss)

—

—

—

—

28

—

—

28

Stock-based compensation

—

—

—

18

—

—

—

18

Series A Qurate Retail stock repurchases

—

—

—

(64)

—

—

—

(64)

Distribution to noncontrolling interest

—

—

—

—

—

—

(15)

(15)

Withholding taxes on net share settlements of stock-based compensation

—

—

—

(3)

—

—

—

(3)

Other

—

—

—

(68)

—

2

—

(66)

Reclassification

—

—

—

117

—

(117)

—

—

Balance at June 30, 2021

$
—

4

—

—

(20)

3,743

141

3,868

See accompanying notes to condensed consolidated financial statements.

~~I-9~~I-8

Table of Contents

QURATE RETAIL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

(1) Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts of Qurate Retail, Inc. and its controlled subsidiaries (collectively, "Qurate Retail," the "Company," “Consolidated Qurate Retail,” “us,” “we,” or “our” unless the context otherwise requires). All significant intercompany accounts and transactions have been eliminated in consolidation. Qurate Retail is made up of wholly-owned subsidiaries QVC, Inc. (“QVC”), which includes HSN, Inc. (“HSN”), Cornerstone Brands, Inc. (“~~Cornerstone”~~CBI”), Zulily, LLC (“Zulily”), and other cost and equity method investments.

Qurate Retail is primarily engaged in the video and online commerce industries in North America, Europe and Asia. The businesses of the Company’s wholly-owned subsidiaries, QVC, ~~Cornerstone~~CBI and Zulily, are seasonal due to a higher volume of sales in the fourth calendar quarter related to year-end holiday shopping.

The accompanying (a) condensed consolidated balance sheet as of December 31, ~~2021,~~2022, which has been derived from audited financial statements, and (b) the interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for such periods have been included. Additionally, certain prior period amounts have been reclassified for comparability with current period presentation. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in Qurate Retail's Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 (the ~~“2021~~“2022 10-K”).

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Qurate Retail considers (i) fair value measurements, (ii) accounting for income taxes, and (iii) estimates of retail-related adjustments and allowances to be its most significant estimates.

In December 2019, a new coronavirus (“COVID-19”) was reported to have surfaced in Wuhan, China and has subsequently spread across the globe causing a global pandemic, impacting all countries where Qurate Retail operates. As a result of the spread of COVID-19, certain local governmental agencies have imposed travel restrictions, local quarantines or stay at home restrictions to contain the spread, which has caused a significant disruption to most sectors of the economy.

Management is not presently aware of any events or circumstances arising from COVID-19 that would require the Company to update the estimates, judgments or revise the carrying value of our assets or liabilities. Management's estimates may change, however, as new events occur and additional information is obtained, and any such changes will be recognized in the consolidated financial statements. Actual results could differ from estimates, and any such differences may be material to our financial statements.

Qurate Retail has entered into certain agreements with Liberty Media Corporation ("LMC") ~~(for accounting purposes, a related party of the Company)~~, a separate publicly traded company. These agreements include a reorganization agreement, services agreement and facilities sharing agreement. As a result of certain corporate transactions, LMC and Qurate Retail may have obligations to each other for certain tax related matters. Neither Qurate Retail nor LMC has any stock ownership, beneficial or otherwise, in the other. In connection with a split-off transaction that occurred in the first quarter of 2018 (the “GCI Liberty Split-Off”), Qurate Retail and GCI Liberty, Inc. (“GCI Liberty”) entered into a tax sharing agreement. Pursuant to the tax sharing agreement, GCI Liberty agreed to indemnify Qurate Retail for taxes and tax-related losses resulting from the GCI Liberty Split-Off to the extent such taxes or tax-related losses (i) result primarily from, individually or in the aggregate, the breach of certain restrictive covenants made by GCI Liberty (applicable to actions or failures to act by GCI Liberty and its subsidiaries following the completion of the GCI Liberty Split-Off), or (ii) result from Section 355(e) of the Internal Revenue Code applying to the GCI Liberty Split-Off as a result of the GCI Liberty Split-Off being part of a plan (or series of related transactions) pursuant to which one or more persons acquire, directly or indirectly, a ~~50-~~

~~I-10~~

~~Table of Contents~~

~~QURATE RETAIL, INC. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Continued)~~

~~(unaudited)~~

~~percent~~50-percent or greater interest (measured by vote or value) in the stock of GCI Liberty (or any successor corporation). Following a merger between Liberty Broadband Corporation (“Liberty Broadband”) and GCI Liberty, Liberty Broadband ~~(for accounting purposes, a related party of the Company)~~ has assumed the tax sharing agreement.

In December 2019, the Company entered into an amendment to the services agreement in connection with LMC’s entry into a new employment arrangement with Gregory B. Maffei, the Company’s Chairman of the Board (the “Chairman” or “Mr. Maffei”). Under the amended services agreement, components of his compensation will either be paid directly to him by each of the Company, Liberty TripAdvisor Holdings, Inc., and Liberty Broadband (collectively, the “Service Companies”) or reimbursed to LMC, in each case, based on allocations among LMC and the Service Companies set forth in the amended services agreement, currently set at ~~13%~~11% for the Company.

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Table of Contents

QURATE RETAIL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

The reorganization agreement with LMC provides for, among other things, provisions governing the relationship between Qurate Retail and LMC, including certain cross-indemnities. Pursuant to the services agreement, LMC provides Qurate Retail with certain general and administrative services including legal, tax, accounting, treasury and investor relations support. Qurate Retail reimburses LMC for direct, out-of-pocket expenses incurred by LMC in providing these services and for Qurate Retail's allocable portion of costs associated with any shared services or personnel based on an estimated percentage of time spent providing services to Qurate Retail. Under the facilities sharing agreement, LMC shares office space and related amenities at its corporate headquarters with Qurate Retail. Under these various agreements, approximately $2 million and $3 million was reimbursable to LMC for the three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and $5 million and $6 million was reimbursable to LMC for the six months ended June 30, 2022 and 2021,~~ respectively. Qurate Retail had a tax sharing payable to LMC and Liberty Broadband in the amount of approximately ~~$55~~$10 million and ~~$96~~$18 million as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively, included in ~~Other~~other liabilities in the condensed consolidated balance sheets.

~~Revision of Prior Period Financial Information~~

The Company has revised its condensed consolidated financial statements and related notes included herein to correct immaterial errors in depreciation expense reported in periods prior to 2021, along with deferred tax adjustments. Revisions have been reflected in the comparative 2021 financial statements to reduce property and equipment, net by $47 million, reduce deferred income tax liabilities by $3 million and reduce retained earnings by $44 million, including the opening balance as of January 1, 2021.

(2) Stock-Based Compensation

The Company has granted to certain of its directors, employees and employees of its subsidiaries, restricted stock (“RSAs”), restricted stock units (“RSUs”) and options to purchase shares of the Company’s common stock (collectively, "Awards"). The Company measures the cost of employee services received in exchange for an equity classified Award (such as stock options and restricted stock) based on the grant-date fair value (“GDFV”) of the Award, and recognizes that cost over the period during which the employee is required to provide service (usually the vesting period of the Award). The Company measures the cost of employee services received in exchange for a liability classified Award based on the current fair value of the Award, and remeasures the fair value of the Award at each reporting date.

Included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations are $16 million and ~~$19 millon~~$15 million of stock-based compensation during the three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and $31 million and $35 million of stock-based compensation during the six months ended June 30, 2022 and 2021,~~ respectively.

~~I-11~~

~~Table of Contents~~

~~QURATE RETAIL, INC. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Continued)~~

~~(unaudited)~~

Qurate ~~Retail –~~ Retail—RSUs

The following table presents the number and weighted average GDFV of RSUs granted by the Company during the ~~six~~three months ended ~~June 30, 2022:~~March 31, 2023:


	Six months ended			Three months ended
	June 30, 2022			March 31, 2023
	RSUs Granted (000's)	Weighted Average GDFV		RSUs Granted (000's)	Weighted Average GDFV

Series A Qurate Retail common stock, subsidiary employees (1)	11,023	$	4.83	935	$	0.89
Series A Qurate Retail common stock, Qurate Retail employees and directors (2)	217	$	4.91	553	$	1.51
Series A Qurate Retail common stock, Qurate Retail President and CEO (3)	596	$	4.91	1,869	$	1.51
Series B Qurate Retail common stock, Qurate Retail Chairman of the Board (4)	327	$	4.95	353	$	5.51

(1)

~~Grants mainly vest~~Grant vests equally over three years.

(2)

Grants mainly vest one year from the month of grant, subject to the satisfaction of certain performance objectives.

(3)

Grant vests one year from the month of grant, subject to the satisfaction of certain performance objectives. Grant was made in connection with the employment agreement of our President and Chief Executive Officer.

(4)

Grant vests one year from the month of grant, subject to the satisfaction of certain performance objectives. Grant was made in connection with our Chairman’s employment agreement.

Also during the three months ended March 31, 2023, Qurate Retail granted 20.4 million performance-based, cash-settled RSUs of Series A Qurate Retail common stock to subsidiary employees. These RSUs vest equally over three years, subject to the satisfaction of certain performance objectives. The liability and compensation expense related to such awards

I-10

Table of Contents

QURATE RETAIL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

is adjusted at the end of each reporting period based on the closing market price of Series A Qurate Retail common stock on the last trading day of the quarter combined with the probability of satisfying the performance objectives.

For awards that are performance-based, performance objectives, which are subjective, are considered in determining the timing and amount of compensation expense recognized. When the satisfaction of the performance objectives becomes probable, the Company records compensation expense. The probability of satisfying the performance objectives is assessed at the end of each reporting period.

Pursuant to the terms of the Stock Exchange Agreement, dated as of June 3, 2021, by and between Mr. Maffei and the Company, on March 25, 2022, Mr. Maffei transferred to the Company an aggregate of 229,022 shares of Series A common stock of Qurate Retail (“QRTEA”) received by Mr. Maffei upon vesting of the performance-based restricted stock unit award granted to Mr. Maffei on March 10, 2021 and in exchange, the Company issued to Mr. Maffei an equivalent number of shares of Series B common stock of Qurate Retail (“QRTEB”). Each share of QRTEB stock is convertible, at the option of the holder, into 1one share of QRTEA.

Qurate Retail—Outstanding Awards

The following tables present the number and weighted average exercise price ("WAEP") of the options to purchase Qurate Retail common stock granted to certain officers, employees and directors of the Company, as well as the weighted average remaining life and aggregate intrinsic value of the options.



				Weighted		Aggregate					Weighted		Aggregate
				average		intrinsic					average		intrinsic
	Series A			remaining		value		Series A			remaining		value
	(000's)	WAEP		life		(millions)		(000's)	WAEP		life		(millions)
Options outstanding at January 1, 2022	42,110	$	9.23
Options outstanding at January 1, 2023								32,914	$	8.78
Granted	—	$	—					—	$	—
Exercised	(343)	$	2.27					(14)	$	2.17
Forfeited/Cancelled	(4,176)	$	11.25					(4,016)	$	12.90
Options outstanding at June 30, 2022	37,591	$	9.07	3.1	years	$	4
Options exercisable at June 30, 2022	23,795	$	11.24	2.1	years	$	1
Options outstanding at March 31, 2023								28,884	$	8.21	2.9	years	$	—
Options exercisable at March 31, 2023								18,954	$	9.61	2.3	years	$	—



				Weighted		Aggregate
				average		intrinsic
	Series B			remaining		value
	(000's)	WAEP		life		(millions)
Options outstanding at January 1, 2023	2,221	$	12.25
Granted	—	$	—
Exercised	—	$	—
Forfeited/Cancelled	(1,498)	$	12.20
Options outstanding at March 31, 2023	723	$	12.35	1.6	years	$	—
Options exercisable at March 31, 2023	723	$	12.35	1.6	years	$	—

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Table of Contents

QURATE RETAIL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

Weighted

Aggregate

average

intrinsic

Series B

remaining

value

(000's)

WAEP

life

(millions)

Options outstanding at January 1, 2022

2,221

$
12.25

Granted

—

$
—

Exercised

—

$
—

Forfeited/Cancelled

—

$
—

Options outstanding at June 30, 2022

2,221

$
12.25

1.3
years

$
—

Options exercisable at June 30, 2022

2,221

$
12.25

1.3
years

$
—

The following table presents the number and weighted average GDFV of RSUs granted to certain officers, employees and directors of the Company.


		Weighted			Weighted			Weighted			Weighted
	Series A	Average		Series B	Average		Series A	Average		Series B	Average
	(000's)	GDFV		(000's)	GDFV		(000's)	GDFV		(000's)	GDFV
RSUs outstanding at January 1, 2022	12,905	$	9.38	—	$	—
RSUs outstanding at January 1, 2023							23,166	$	5.09	327	$	4.95
Granted	11,836	$	4.83	327	$	4.95	3,357	$	1.34	353	$	5.51
Vested	(3,734)	$	9.94	—	$	—	(5,544)	$	6.37	(327)	$	4.95
Forfeited/Cancelled	(2,380)	$	7.75	—	$	—	(1,850)	$	5.71	—	$	—
RSUs outstanding at June 30, 2022	18,627	$	6.59	327	$	4.95
RSUs outstanding at March 31, 2023							19,129	$	4.00	353	$	5.51

As of ~~June 30, 2022,~~March 31, 2023, Qurate Retail also had 1.1 million QRTEB RSAs and ~~104~~40 thousand Qurate Retail 8.0% Series A Cumulative Redeemable Preferred Stock RSAs and RSUs outstanding. The QRTEB unvested RSAs had a ~~weighted average~~ GDFV of $13.65 per share, and 8736 thousand of the Qurate Retail 8.0% Series A Cumulative Redeemable Preferred Stock unvested RSUs had an incremental cost of ~~$49.17~~$48.99 per share.

As of ~~June 30, 2022,~~March 31, 2023, the total unrecognized compensation cost related to unvested Awards was approximately ~~$129~~$101 million. Such amount will be recognized in the Company's consolidated statements of operations over a weighted average period of approximately ~~2.1~~1.6 years.

As of ~~June 30, 2022,~~March 31, 2023, Qurate Retail reserved for issuance upon exercise of outstanding stock options approximately ~~37.6~~28.9 million shares of QRTEA and ~~2.2~~0.7 million shares of QRTEB common stock.

(3) Earnings (Loss) Per Common Share

Basic earnings (loss) per common share ("EPS") is computed by dividing net earnings (loss) by the weighted average number of common shares outstanding ("WASO") for the period. Diluted EPS presents the dilutive effect on a per share basis of potential common shares as if they had been converted at the beginning of the periods presented. Potentially dilutive shares are excluded from the computation of diluted EPS during periods in which losses are reported since the result would be antidilutive.

Excluded from diluted EPS for the three months ended March 31, 2023 and 2022 are 30 million and 26 million potential common shares, respectively, because their inclusion would have been antidilutive.


	Qurate Retail Common Stock
	Three months ended
	March 31,
	2023	2022

	number of shares in millions
Basic WASO	383	379
Potentially dilutive shares	1	5
Diluted WASO	384	384

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Table of Contents

QURATE RETAIL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

Excluded from diluted EPS for the three months ended June 30, 2022 and 2021 are 35 million and 22 million potential common shares, respectively, because their inclusion would have been antidilutive. Excluded from diluted EPS for the six months ended June 30, 2022 and 2021 are 30 million and 22 million potential common shares, respectively, because their inclusion would have been antidilutive.

Qurate Retail Common Stock

Three months ended

Six months ended

June 30,

June 30,

2022

2021

2022

2021

number of shares in millions

Basic WASO

381

410

380

410

Potentially dilutive shares

1

13

3

13

Diluted WASO

382

423

383

423

(4) Assets and Liabilities Measured at Fair Value

For assets and liabilities required to be reported at fair value, GAAP provides a hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs, other than quoted market prices included within Level 1, that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability.

The Company's assets and liabilities measured at fair value are as follows:

Fair Value Measurements at

June 30, 2022

December 31, 2021

March 31, 2023

December 31, 2022

Quoted

prices

in active

Significant

in active

Significant

in active

Significant

in active

Significant

markets for

other

markets for

other

markets for

other

markets for

other

identical

observable

identical

observable

identical

observable

identical

observable

assets

inputs

assets

inputs

assets

inputs

assets

inputs

Description

Total

(Level 1)

(Level 2)

Total

(Level 1)

(Level 2)

Total

(Level 1)

(Level 2)

Total

(Level 1)

(Level 2)

amounts in millions

Cash equivalents

191

—

149

—

924

—

938

—

Indemnification asset

175

—

175

324

—

324

—

Debt

895

—

895

1,315

—

1,315

319

—

319

614

—

614

The majority of the Company's Level 2 financial assets and liabilities are primarily debt instruments and derivative instruments with quoted market prices that are not considered to be traded on "active markets," as defined in GAAP. The fair values for such instruments are derived from a typical model using observable market data as the significant inputs.

The indemnification asset relates to Liberty Broadband’s agreement to indemnify Liberty Interactive LLC (“LI LLC”) and pertains to the ability of holders of LI LLC’s 1.75% exchangeable debentures due 2046 (the “1.75% Exchangeable Debentures”) to exercise their exchange right according to the terms of the debentures on or before October 5, 2023. Such amount will equal the difference between the exchange value and par value of the 1.75% Exchangeable Debentures at the time the exchange occurs. The indemnification asset recorded in the condensed consolidated balance sheets as of ~~June 30, 2022~~March 31, 2023 represents the fair value of the estimated exchange feature included in the 1.75% Exchangeable Debentures primarily based on market observable inputs (Level 2). As of ~~June 30, 2022,~~March 31, 2023, a holder of the 1.75% Exchangeable Debentures has the ability to ~~exchange~~put their debentures on October 5, 2023, and accordingly, such indemnification asset is included as a current asset in our condensed consolidated balance sheet as of ~~that date.~~March 31, 2023.

During the three months ended March 31, 2023, indemnification payments of $24 million were made to Qurate Retail by Liberty Broadband in connection with exchanges of $157 million of the 1.75% Exchangeable Debentures that settled in the quarter.

Realized and Unrealized Gains (Losses) on Financial Instruments

Realized and unrealized gains (losses) on financial instruments are comprised of changes in the fair value of the following:


	Three months ended
	March 31,
	2023		2022

	amounts in millions
Equity securities		(3)	(10)
Exchangeable senior debentures		(46)	124
Indemnification asset		3	(85)
Other financial instruments		(1)	1
	$	(47)	30

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Table of Contents

QURATE RETAIL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

~~Realized and Unrealized Gains (Losses) on Financial Instruments~~

~~Realized and unrealized gains (losses) on financial instruments are comprised of changes in the fair value of the following:~~

Three months ended

Six months ended

June 30,

June 30,


2022

2021

2022

2021

amounts in millions

Equity securities

5

43

(5)

50

Exchangeable senior debentures

66

(179)

190

(133)

Indemnification asset

(64)

93

(149)

41

Other financial instruments

—

62

1

102

$
7

19

37

60

The Company has elected to account for its exchangeable debt using the fair value option. Changes in the fair value of the exchangeable senior debentures recognized in the condensed consolidated statement of operations are primarily due to market factors primarily driven by changes in the fair value of the underlying shares into which the debt is exchangeable. The Company isolates the portion of the unrealized gain (loss) attributable to the change in the instrument specific credit risk and recognizes such amount in other comprehensive earnings (loss). The change in the fair value of the exchangeable senior debentures attributable to changes in the instrument specific credit risk was a gain of ~~$190~~$169 million and a gain of ~~$24~~$34 million for the three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and a gain of $224 million and a loss of $44 million for~~respectively. During the ~~six~~three months ended ~~June 30, 2022 and 2021, respectively.~~March 31, 2023, the Company recognized $25 million of previously unrecognized gains related to the retirement of a portion of the 1.75% Exchangeable Debentures, which was recognized through gain (loss) on extinguishment of debt on the condensed consolidated statement of operations. The cumulative change was a gain of ~~$372~~$633 million as of ~~June 30, 2022,~~March 31, 2023, net of the recognition of previously unrecognized gains and losses.

(5) Intangible Assets

Goodwill

Changes in the carrying amount of goodwill are as follows:


					Corporate and						Corporate and
	QxH		QVC Int'l	Zulily	Other	Total	QxH		QVC Int'l	CBI	Other	Total

	amounts in millions						amounts in millions
Balance at January 1, 2022	$	5,228	855	244	12	6,339
Balance at January 1, 2023							$	2,693	778	12	18	3,501
Foreign currency translation adjustments		—	(89)	—	—	(89)		—	11	—	—	11
Balance at June 30, 2022	$	5,228	766	244	12	6,250
Balance at March 31, 2023							$	2,693	789	12	18	3,512

Intangible Assets Subject to Amortization

Amortization expense for intangible assets with finite useful lives was $74 million and $82 million for the three months ended March 31, 2023 and 2022, respectively. Based on its amortizable intangible assets as of March 31, 2023, Qurate Retail expects that amortization expense will be as follows for the next five years (amounts in millions):


Remainder of 2023	$	226
2024	$	235
2025	$	108
2026	$	76
2027	$	3

~~I-15~~I-14

Table of Contents

QURATE RETAIL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

~~Intangible Assets Subject to Amortization~~

Amortization expense for intangible assets with finite useful lives was $78 million and $85 million for the three months ended June 30, 2022 and 2021, respectively, and $160 million and $167 million for the six months ended June 30, 2022 and 2021, respectively. Based on its amortizable intangible assets as of June 30, 2022, Qurate Retail expects that amortization expense will be as follows for the next five years (amounts in millions):

Remainder of 2022

$
175

2023

$
227

2024

$
144

2025

$
61

2026

$
50

QVC’s current business trends and global economic conditions are making it a challenge for the business to be able to realize its current long-term forecast. The Company will continue to monitor its current business performance versus the current and updated long-term forecasts, among other relevant considerations, to determine if the carrying value of its assets (including Goodwill and Trademarks) is appropriate. Future outlook declines in revenue, cash flows, or other factors could result in a sustained decrease in fair value that may result in a determination that carrying value adjustments are required, which could be material.

(6) Long-Term Debt

Debt is summarized as follows:


	Outstanding					Outstanding
	principal at		Carrying value			principal at		Carrying value
	June 30, 2022		June 30, 2022		December 31, 2021	March 31, 2023		March 31, 2023		December 31, 2022

	amounts in millions					amounts in millions
Corporate level debentures
8.5% Senior Debentures due 2029	$	287		286	286	$	287		286	286
8.25% Senior Debentures due 2030		505		503	503		505		503	503
4% Exchangeable Senior Debentures due 2029		395		207	328		354		58	134
3.75% Exchangeable Senior Debentures due 2030		431		221	347		429		84	157
1.75% Exchangeable Senior Debentures due 2046		332		467	640		173		177	323
Subsidiary level notes and facilities
QVC 4.375% Senior Secured Notes due 2023		214		214	750		—		—	214
QVC 4.85% Senior Secured Notes due 2024		600		600	600		600		600	600
QVC 4.45% Senior Secured Notes due 2025		600		599	599		600		599	599
QVC 4.75% Senior Secured Notes due 2027		575		575	575		575		575	575
QVC 4.375% Senior Secured Notes due 2028		500		500	500		500		500	500
QVC 5.45% Senior Secured Notes due 2034		400		399	399		400		399	399
QVC 5.95% Senior Secured Notes due 2043		300		300	300		300		300	300
QVC 6.375% Senior Secured Notes due 2067		225		225	225		225		225	225
QVC 6.25% Senior Secured Notes due 2068		500		500	500		500		500	500
QVC Senior Secured Credit Facility		914		914	481		1,345		1,345	1,075
Deferred loan costs		—		(41)	(44)		—		(36)	(37)
Total consolidated Qurate Retail debt	$	6,778		6,469	6,989	$	6,793		6,115	6,353
Less current classification				(1,109)	(1,315)				(319)	(828)
Total long-term debt			$	5,360	5,674			$	5,796	5,525

~~I-16~~

~~Table of Contents~~

~~QURATE RETAIL, INC. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Continued)~~

~~(unaudited)~~

QVC Senior Secured Notes

In June 2022, QVC completed its purchase of $536 million of the outstanding 4.375% Senior Secured Notes due 2023 (the "2023 Notes") pursuant to a cash tender offer to purchase any and all of its outstanding 2023 Notes (the “Tender Offer”). The remaining outstanding 2023 Notes were repaid at maturity in March 2023.

The senior secured notes permit QVC to make unlimited dividends or other restricted payments so long as QVC is not in default under the indentures governing the senior secured notes and QVC’s consolidated leverage ratio is not greater than 3.5 to 1.0 (the “senior secured notes leverage basket”). As of March 31, 2023, QVC’s consolidated leverage ratio (as calculated under QVC’s senior secured notes) was greater than 3.5 to 1.0 and as a result QVC is restricted in its ability to make dividends or other restricted payments under the senior secured notes. Although QVC will not be able to make unlimited dividends or other restricted payments under the senior secured notes leverage basket, QVC will continue to be permitted to make unlimited dividends to parent entities of QVC to service the ~~Tender Offer,~~principal and interest when due in respect of indebtedness of such parent entities (so long as there is no default under the ~~Company recorded a loss on extinguishment~~indentures governing QVC’s senior secured notes) and permitted to make certain restricted payments to parent entities of ~~debt~~QVC under an intercompany tax sharing agreement in ~~the condensed consolidated statements~~respect of ~~operations~~certain tax obligations of ~~$6 million for the three~~QVC and ~~six months ended June 30, 2022. As of June 30, 2022, the remaining outstanding 4.375% Senior Secured Notes due 2023 are classified within current portion of debt as they mature in less than one year.~~its subsidiaries.

QVC Senior Secured Credit Facility

On October 27, 2021, QVC amended and restated its latest credit agreement (as amended and restated, the “Fifth Amended and Restated Credit Agreement”) and refinanced QVC’s existing bank credit facility by entering into ~~a fifth amended~~the Fifth Amended and ~~restated agreement~~Restated Credit Agreement with ~~QVC,~~ Zulily, ~~Cornerstone,~~CBI, and QVC Global Corporate Holdings, LLC (“QVC Global”),

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QURATE RETAIL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

each a direct or indirect wholly owned subsidiary of Qurate Retail, as borrowers (QVC, Zulily, ~~Cornerstone~~CBI and QVC Global, collectively, the “Borrowers”), JPMorgan Chase Bank, N.A., as administrative agent, and the other parties named therein.

The Fifth Amended and Restated Credit Agreement is a multi-currency facility providing for a $3.25 billion revolving credit facility (the ~~“New Credit~~“Credit Facility”), with a $450 million sub-limit for letters of credit and an alternative currency revolving sub-limit equal to 50% of the revolving commitments thereunder. The ~~New~~ Credit Facility may be borrowed by any Borrower, with each Borrower jointly and severally liable for the outstanding borrowings. Borrowings under the Fifth Amended and Restated Credit Agreement bear interest at either the alternate base rate (such rate, the “ABR Rate”) or a LIBOR-based rate (or the applicable non-U.S. Dollar equivalent rate) (such rate, the “Term Benchmark/RFR Rate”) at the applicable Borrower’s election in each case plus a margin. Borrowings that are ABR Rate loans will bear interest at a per annum rate equal to the base rate plus a margin that varies between 0.25% and 0.625% depending on the Borrowers’ combined ratio of consolidated total debt to consolidated EBITDA (the “consolidated leverage ratio”). Borrowings that are Term Benchmark/RFR Rate loans will bear interest at a per annum rate equal to the applicable rate plus a margin that varies between 1.25% and 1.625% depending on the Borrowers’ consolidated leverage ratio. Each loan may be prepaid at any time and from time to time without penalty other than customary breakage costs. No mandatory prepayments will be required other than when borrowings and letter of credit usage exceed availability; provided that, if Zulily, ~~Cornerstone,~~CBI, QVC Global or any other borrower under the ~~New~~ Credit Facility (other than QVC) is removed, at the election of QVC, as a borrower thereunder, all of its loans must be repaid and its letters of credit are terminated or cash collateralized. Any amounts prepaid on the ~~New~~ Credit Facility may be reborrowed.

The loans under the ~~New~~ Credit Facility are scheduled to mature on October 27, 2026. Payment of the loans may be accelerated following certain customary events of default.

The payment and performance of the Borrowers’ obligations under the Fifth Amended and Restated Credit Agreement are guaranteed by each of QVC’s, QVC Global’s, Zulily’s and ~~Cornerstone’s~~CBI’s Material Domestic Subsidiaries (as defined in the Fifth Amended and Restated Credit Agreement), if any, and certain other subsidiaries of any Borrower that such Borrower has chosen to provide guarantees. Further, the borrowings under the Fifth Amended and Restated Credit Agreement are secured, pari passu with QVC’s existing notes, by a pledge of all of QVC’s equity interests. The borrowings under the Fifth Amended and Restated Credit Agreement are also secured by a pledge of all of Zulily’s and ~~Cornerstone’s~~CBI’s equity interests.

The Fifth Amended and Restated Credit Agreement contains certain affirmative and negative covenants, including certain restrictions on the Borrowers and each of their respective restricted subsidiaries (subject to certain exceptions) with respect to, among other things: incurring additional indebtedness; creating liens on property or assets; making certain loans or investments; selling or disposing of assets; paying certain dividends and other restricted payments; dissolving, consolidating or merging; entering into certain transactions with affiliates; entering into sale or leaseback transactions; restricting subsidiary distributions; and limiting the Borrowers’ consolidated leverage ratio.

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~~QURATE RETAIL, INC. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Continued)~~

~~(unaudited)~~

Borrowings under the Fifth Amended and Restated Credit Agreement may be used to repay outstanding indebtedness, pay certain fees and expenses, finance working capital needs and general purposes of the Borrowers and their respective subsidiaries and make certain restricted payments and loans to the Borrowers’ respective parents and affiliates.

Availability under the Fifth Amended and Restated Credit Agreement at ~~June 30, 2022~~March 31, 2023 was ~~$2,314~~$1,882 million. The interest rate on the ~~Fifth Amended~~Credit Facility was 6.3% and ~~Restated Credit Agreement was 3.0%~~1.8% at ~~June 30, 2022.~~March 31, 2023 and 2022, respectively.

Exchangeable Senior Debentures

The Company has elected to account for its exchangeable senior debentures using the fair value option. Accordingly, changes in the fair value of these instruments are recognized as unrealized gains (losses) in the statements of operations. See note 4 for information related to unrealized gains (losses) on debt measured at fair value. As of ~~June 30, 2022~~March 31, 2023 the Company’s ~~exchangeable debentures~~3.75% and 4.0% Exchangeable Debentures have been classified as current because the Company does not own shares to exchange the debentures. The 1.75% Exchangeable Debentures are classified as current as the Company does not own the shares to exchange the debentures ~~or they are currently exchangeable.~~and the holders have the ability to put their debentures on October 5, 2023. The

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QURATE RETAIL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

Company reviews the terms of the debentures on a quarterly basis to determine whether a triggering event has occurred to require current classification of the exchangeables upon a call event. ~~Although we do not own shares underlying certain~~

During the three months ended March 31, 2023, a portion of the ~~exchangeable senior debentures, the Company has entered into certain derivative transactions in order~~1.75% Exchangeable Debentures were exchanged for total principal amount of $157 million. An additional $94 million were exchanged subsequent to hedge against upward price fluctuations on certain shares. Such derivative instruments are recognized in the other current assets line item in the condensed consolidated balance sheets, and are marked to fair value each reporting period. The changes in fair value are recognized in the realized and unrealized gains (losses) on financial instruments, net line item in the condensed statement of operations. March 31, 2023.

Debt Covenants

Qurate Retail and its subsidiaries are in compliance with all debt covenants at ~~June 30, 2022.~~March 31, 2023.

Fair Value of Debt

Qurate Retail estimates the fair value of its debt based on the quoted market prices for the same or similar issues or on the current rate offered to Qurate Retail for debt of the same remaining maturities (Level 2). The QVC 6.375% Senior Secured Notes due 2067 (“2067 Notes”) and the QVC 6.25% Senior Secured Notes Due 2068 (“2068 Notes”) are traded on the New York Stock Exchange, and the Company considers them to be actively traded. As such, the 2067 Notes and 2068 Notes are valued based on their trading price (Level 1). The fair value of Qurate Retail's publicly traded debt securities that are not reported at fair value in the accompanying condensed consolidated balance sheet at ~~June 30, 2022~~March 31, 2023 are as follows (amounts in millions):


Senior debentures	$	529	$	199
QVC senior secured notes	$	3,115	$	1,782

Due to the variable rate nature, Qurate Retail believes that the carrying amount of its other debt, not discussed above, approximated fair value at ~~June 30, 2022.~~March 31, 2023.

(7) Preferred Stock

On September 14, 2020, Qurate Retail issued its 8.0% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share (the “Preferred Stock”). There were 13,500,000 shares of Preferred Stock authorized and ~~12,669,780~~12,704,807 shares of Preferred Stock issued and outstanding at ~~June 30, 2022.~~March 31, 2023.

Priority. The Preferred Stock ranks senior to the shares of common stock of Qurate Retail, with respect to dividend rights, rights of redemption and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of Qurate Retail’s affairs. Shares of Preferred Stock are not convertible into shares of common stock of Qurate Retail.

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~~QURATE RETAIL, INC. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Continued)~~

~~(unaudited)~~

Dividends. Holders of the Preferred Stock are entitled to receive quarterly cash dividends at a rate of 8.0% per annum of the liquidation price (as described below) on a cumulative basis, during the term. If declared, accrued dividends will be payable quarterly on each dividend payment date, beginning December 15, 2020 and thereafter on each March 15, June 15, September 15, and December 15 during the term (or, if such date is not a business day, the next business day after such date). If Qurate Retail fails to pay dividends or the applicable redemption price with respect to any redemption within 30 days after the applicable dividend payment or redemption date, the dividend rate will increase as provided by the Certificate of Designations for the Preferred Stock (the “Certificate of Designations”). Accrued dividends that are not paid within 30 days after the applicable dividend payment date will be added to the liquidation price until paid together with all dividends accrued thereon.

The ability of Qurate Retail to declare or pay any dividend on, or purchase, redeem, or otherwise acquire, any of its common stock or any other stock ranking on parity with the Preferred Stock will be subject to restrictions if Qurate Retail does not pay all dividends and all redemption payments on the Preferred Stock, subject to certain exceptions as set forth in the Certificate of Designations.

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QURATE RETAIL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

Distributions upon Liquidation, Dissolution or Winding Up. Upon Qurate Retail’s liquidation, winding-up or dissolution, each holder of shares of the Preferred Stock will be entitled to receive, before any distribution is made to the holders of Qurate Retail common stock, an amount equal to the liquidation price plus all unpaid dividends (whether or not declared) accrued from the immediately preceding dividend payment date, subject to the prior payment of liabilities owed to Qurate Retail’s creditors and the preferential amounts to which any stock senior to the Preferred Stock is entitled. The Preferred Stock has a liquidation price equal to the sum of (i) $100, plus (ii) all accrued and unpaid dividends (whether or not declared) that have been added to the liquidation price.

Mandatory and Optional Redemption. The Preferred Stock is subject to mandatory redemption on March 15, 2031 at the liquidation price plus all unpaid dividends (whether or not declared) accrued from the most recent dividend payment date. On or after the fifth anniversary of September 14, 2020 (the “Original Issue Date”), Qurate Retail may redeem all or a portion of the outstanding shares of Preferred Stock, at the liquidation price plus all unpaid dividends (whether or not declared) accrued from the most recent dividend payment date plus, if the redemption is (x) on or after the fifth anniversary of the Original Issue Date but prior to its sixth anniversary, 4.00% of the liquidation price, (y) on or after the sixth anniversary of the Original Issue Date but prior to its seventh anniversary, 2.00% of the liquidation price and (z) on or after the seventh anniversary of the Original Issue Date, 0.zero. Both mandatory and optional redemptions must be paid in cash.

Voting Power. Holders of the Preferred Stock will not have any voting rights or powers, except as specified in the Certificate of Designations or as required by Delaware law.

Preferred Stock Directors. So long as the aggregate liquidation price of the outstanding shares of Preferred Stock exceeds 25% of the aggregate liquidation price of the shares of Preferred Stock issued on the Original Issue Date, holders of Preferred Stock will have certain director election rights as described in the Certificate of Designations whenever dividends on shares of Preferred Stock have not been declared and paid for 2two consecutive dividend periods and whenever Qurate Retail fails to pay the applicable redemption price in full with respect to any redemption of the Preferred Stock or fails to make a payment with respect to the Preferred Stock in connection with a liquidation or Extraordinary Transactions (as defined in the Certificate of Designations).

Recognition. As the Preferred Stock is subject to unconditional mandatory redemption in cash and was issued in the form of a share, the Company concluded the Preferred Stock was a mandatorily redeemable financial instrument and should be classified as a liability in the condensed consolidated balance sheets. The Preferred Stock was initially recorded at its fair value, which was determined to be the liquidation preference of $100 per share. Given the liability classification of the Preferred Stock, all dividends accrued will be classified as interest expense in the condensed consolidated statements of operations. The fair value of the Preferred Stock (level 1) was $372 million as of March 31, 2023.

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~~QURATE RETAIL, INC. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Continued)~~

~~(unaudited)~~

(8) Commitments and Contingencies

Litigation

The Company has contingent liabilities related to legal and tax proceedings and other matters arising in the ordinary course of business. Although it is reasonably possible Qurate Retail may incur losses upon conclusion of such matters, an estimate of any loss or range of loss cannot be made. In the opinion of management, it is expected that amounts, if any, which may be required to satisfy such contingencies will not be material in relation to the accompanying condensed consolidated financial statements.

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QURATE RETAIL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

Fire at Rocky Mount Fulfillment Center

On December 18, 2021, QVC experienced a fire at its Rocky Mount ~~Inc.~~ fulfillment center in North Carolina. Rocky Mount was QVC’s second-largest fulfillment center for the operating segment comprised of QVC U.S. and HSN (“QxH”) and QVC’s primary returns center for hard goods.

QVC maintains property, general liability and business interruption insurance coverage. Based on provisions of QVC's insurance policies, the Company records estimated insurance recoveries for fire related costs for which recovery is deemed probable.

~~For the year ended December 31, 2021,~~ QVC ~~recorded $250 million~~determined that recovery of certain fire related costs was probable and ~~estimated~~recorded an insurance ~~recoveries of $229 million for which recovery was deemed probable.~~ receivable.

As of December 31, ~~2021, the Company received $100 million of insurance proceeds and~~2022 QVC had an insurance receivable of ~~$129~~$40 million ~~which was~~ recorded in ~~Trade~~trade and other receivables, net of allowance for credit losses in the condensed consolidated balance sheet.

~~For~~During the ~~six~~three months ended June 30, 2022, the Company recorded an additional $135 million of fire related costs, including $95 million for the write-down of inventory, and estimated insurance recoveries of $37 million for which recovery was deemed probable. For the six months ended June 30, 2022, the CompanyMarch 31, 2023, QVC received ~~$100~~$55 million of insurance proceeds ~~($30~~of which $40 million was applied to the insurance receivable and $15 million was recognized as a gain, partially offset by $11 million of other fire related costs which ~~is recorded~~are included in ~~Other,~~restructuring and fire related costs, net ~~in the cash flows from operating activities section~~of (recoveries) in the condensed consolidated statement of ~~cash flows) and had an~~operations. There was no remaining insurance receivable outstanding as of ~~$66~~March 31, 2023.

In February 2023, QVC sold the Rocky Mount fulfillment center to an independent third party and received net cash proceeds of $15 million. QVC recognized a $13 million ~~which was recorded~~gain on the sale during the three months ended March 31, 2023 calculated as the difference between the aggregate consideration received and the carrying value of the property. The gain is included in ~~Trade~~restructuring and ~~other receivables,~~fire related costs, net of (recoveries) in the condensed consolidated ~~balance sheet.~~statement of operations.

During the ~~six~~three months ended ~~June 30,~~March 31, 2022, the Company recorded $2 million of fire related costs, net of (recoveries). Additionally, during the three months ended March 31, 2022, inventory write-downs related to Rocky Mount inventory of ~~$95~~$80 million were included in cost of goods sold. Due to the circumstances surrounding the write-downs of inventory, these write-downs have been excluded from Adjusted OIBDA (as defined in note 9). ~~These write-downs are expected to be~~QVC submitted ~~as part of QVC’s~~its business interruption claim with the insurance ~~claim;~~company; however, there can be no guarantee ~~they~~that all business interruption losses will be recovered. QVC expects to continue to record additional costs and recoveries until the ~~property damage and inventory recoverability assessment is completed and the~~ insurance claim is fully settled.

Project Athens

On June 27, 2022, Qurate Retail announced a five-point turnaround plan designed to stabilize and differentiate its core QxH and QVC International businesses and expand the company's leadership in video streaming commerce (“Project Athens”). Project Athens main initiatives include: (i) improve customer experience and grow relationships; (ii) rigorously execute core processes; (iii) lower cost to serve; (iv) optimize the brand portfolio; and (v) build new high growth businesses anchored in strength.

During 2022 QVC commenced the first phase of Project Athens including actions to reduce inventory and a planned workforce reduction. These initiatives are consistent with QVC’s strategy to operate more efficiently as it implements its turnaround plan. During the three months ended March 31, 2023, QVC implemented a workforce reduction and recorded restructuring charges of $13 million in restructuring and fire related costs, net of (recoveries) in the condensed consolidated statement of operations.

Zulily Restructuring

In the first quarter of 2022, Zulily began to execute a series of transformation initiatives, beginning with the announcement of the closure of its fulfillment center in Bethlehem, Pennsylvania, and reduction in corporate workforce. These initiatives are consistent with Zulily’s strategy to operate more efficiently as it implements its turnaround plan, and Zulily expects to incur additional expenses related to these transformation initiatives in future periods. Zulily recorded ~~$3 million and $5~~$4 million of restructuring charges during the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 related to its reduction in corporate workforce. Zulily recorded $2 million of restructuring charges during the three months ended March 31, 2022, ~~respectively,~~ principally related to its regional office space strategy and expenses associated with the Pennsylvania facility closure. ~~Zulily recorded $3 million of restructuring charges during the three and six months ended June 30, 2022 related to its reduction in corporate workforce.~~

~~Gain on Sale of Fixed Assets~~

In June 2022, QVC modified the finance lease for its distribution center in Ontario, California which reduced the term of the lease and removed QVC’s ability to take ownership of the distribution center at the end of the lease term. QVC will make annual payments over the modified lease term. Since the lease was modified and removed QVC’s ability to take ownership at the end of the lease term, the Company accounted for the modification similar to a sale and leaseback

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Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

transaction, and as a result, QVC recognized a $240 million gain on the sale of the distribution center for the three and six months ended June 30, 2022 calculated as the difference between the aggregate consideration received (including cash and forgiveness of the remaining financing obligation of $84 million) and the carrying value of the distribution center. The gain is included in (gain) lossGains on sale ~~of fixed assets, net in the condensed consolidated statement of operations. The Company accounted for the modified lease as an operating lease and recorded a $37 million~~ ~~right-of-use asset~~leaseback transactions ~~and a $31 million~~ ~~operating lease liability, with the difference attributable to prepaid rent.~~

In ~~July~~November 2022, QVC ~~sold 5 owned and operated~~entered into agreements to sell two properties located in Germany and the ~~U.S.~~United Kingdom (“U.K.”) to an independent third ~~party and~~party. Under the terms of the agreements, QVC received net cash proceeds of ~~$443 million.~~$102 million related to its German facility and $80 million related to its U.K. facility when the sale closed in January 2023. Concurrent with the sale, the Company entered into agreements to lease each of the properties back from the purchaser over an initial term of 20 years with the ~~the~~ option to extend the terms of the property leases for up to 4four consecutive terms of five years. QVC ~~will make initial base rent payments of $27 million per year and increasing to $39 million per year. QVC expects to record~~recorded a gain ~~in the third quarter~~of $69 million and $44 million related to the successful sale leaseback ~~transaction.~~of the German and U.K. properties, respectively, during the first quarter of 2023 calculated as the difference between the aggregate consideration received and the carrying value of the properties. QVC accounted for the leases as operating at the close of the sale leaseback transaction, leases and recorded a $42 million and $32 million right-of-use asset and operating lease liability for the German and U.K. properties, respectively.

On October 31, 2022, the Company entered into foreign currency forward contracts with an aggregate notional amount of $167 million to mitigate the foreign currency risk associated with the sale and leaseback of Germany and U.K. properties. The forward did not qualify as a cash flow hedge under GAAP. Changes in the fair value of the forward are reflected in realized and unrealized gains (losses) on financial instruments, net in the condensed consolidated statements of operations. The forward contract was in a net liability position of $10 million as of December 31, 2022, which was included in other current liabilities in the condensed consolidated balance sheet. The contract expired in January 2023 which resulted in a net cash settlement of $12 million.

As of December 31, 2022, assets of $71 million primarily related to the Germany and U.K. properties were classified as held for sale, and included in other assets, at cost, net of accumulated amortization in the consolidated balance sheet, as the proceeds from the sale were used to repay a portion of the Credit Facility borrowings which were classified as noncurrent as of December 31, 2022. Qurate Retail classifies obligations as current when they are contractually required to be satisfied in the next twelve months.

(

(9) Information About Qurate Retail's Operating Segments

Qurate Retail, through its ownership interests in subsidiaries and other companies, is primarily engaged in the video and online commerce industries. Qurate Retail identifies its reportable segments as (A) those operating segments that represent 10% or more of its consolidated annual revenue, annual Adjusted OIBDA (as defined below) or total assets and (B) those equity method affiliates whose share of earnings represent 10% or more of Qurate Retail's annual pre-tax earnings.

The Qurate Retail chief operating decision maker primarily evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as revenue and Adjusted OIBDA. In addition, Qurate Retail reviews nonfinancial measures such as unique website visitors, number of units shipped, conversion rates and active customers, as appropriate.

For the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, Qurate Retail has identified the following operating segments as its reportable segments:

●

QxH -– QVC U.S. and HSN market and sell a wide variety of consumer products in the United States, primarily by means of their televised shopping programs and via the Internet through their websites and mobile applications.

●

QVC International – QVC International markets and sells a wide variety of consumer products in several foreign countries, primarily by means of its televised shopping programs and via the Internet through its international websites and mobile applications.

●

~~Zulily~~CBI – ~~Zulily markets~~CBI consists of a portfolio of aspirational home and ~~sells a wide variety of consumer products~~apparel brands in the ~~United States and several foreign countries~~U.S. that sell merchandise through ~~flash sales events, primarily~~brick-and-mortar retail locations as well as via the Internet through ~~its app, mobile and desktop experiences.~~their websites.

Qurate Retail's operating segments are strategic business units that offer different products and services. They are managed separately because each segment requires different technologies, distribution channels and marketing strategies. The accounting policies of the segments are the same as those described in the Company's Summary of Significant Accounting Policies in the 2021 10-K.

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QURATE RETAIL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

Performance Measures

Disaggregated revenue by segment and product category consisted of the following:

Three months ended

June 30, 2022

QxH

QVC Int'l

Zulily

Corp and other

Total

in millions

Home

$
680

248

53

296

1,277

Apparel

356

117

92

45

610

Beauty

253

145

10

—

408

Accessories

241

58

49

—

348

Electronics

112

25

1

—

138

Jewelry

71

42

8

—

121

Other revenue

41

3

7

—

51

Total Revenue

$
1,754

638

220

341

2,953

Six months ended

June 30, 2022

QxH

QVC Int'l

Zulily

Corp and other

Total

in millions

Home

$
1,329

521

114

542

2,506

Apparel

652

234

186

96

1,168

Beauty

514

290

21

—

825

Accessories

443

113

98

—

654

Electronics

259

51

3

—

313

Jewelry

158

94

17

—

269

Other revenue

83

5

13

—

101

Total Revenue

$
3,438

1,308

452

638

5,836


	Three months ended							Three months ended
	June 30, 2021							March 31, 2023
		QxH	QVC Int'l	Zulily	Corp and other	Total			QxH	QVC Int'l	CBI	Corp and other	Total

	in millions						in millions
Home	$	775	309	120	284	1,488		$	635	237	214	50	1,136
Apparel		359	127	162	43	691			295	113	45	70	523
Beauty		294	193	16	—	503			246	133	—	9	388
Accessories		272	71	77	—	420			192	51	—	50	293
Electronics		167	32	3	—	202			110	17	—	2	129
Jewelry		76	54	12	—	142			77	39	—	8	124
Other revenue		46	5	7	—	58			46	2	—	3	51
Total Revenue	$	1,989	791	397	327	3,504		$	1,601	592	259	192	2,644

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~~QURATE RETAIL, INC. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Continued)~~

~~(unaudited)~~


		Six months ended							Three months ended
		June 30, 2021							March 31, 2022
			QxH	QVC Int'l	Zulily	Corp and other	Total			QxH	QVC Int'l	CBI	Corp and other	Total

	in millions							in millions
Home		$	1,550	633	243	490	2,916		$	649	273	246	61	1,229
Apparel			649	253	297	87	1,286			296	117	51	94	558
Beauty			580	357	35	—	972			261	145	—	11	417
Accessories			510	137	152	—	799			202	55	—	49	306
Electronics			368	65	7	—	440			147	26	—	2	175
Jewelry			174	114	26	—	314			87	52	—	9	148
Other revenue			94	6	14	—	114			42	2	—	6	50
Total Revenue		$	3,925	1,565	774	577	6,841		$	1,684	670	297	232	2,883

For segment reporting purposes, Qurate Retail defines Adjusted OIBDA as revenue less cost of goods sold, operating expenses, and selling, general and administrative expenses excluding stock-based compensation and, where applicable, separately identified items impacting comparability. Qurate Retail believes this measure is an important indicator of the operational strength and performance of its businesses by identifying those items that are not directly a reflection of each business’ performance or indicative of ongoing business trends. In addition, this measure allows management to view operating results and perform analytical comparisons and benchmarking between businesses and identify strategies to improve performance. This measure of performance excludes depreciation and amortization, stock-based compensation, and where applicable, separately identified impairments, litigation settlements, restructuring, acquisition-related costs, fire related costs, net (including Rocky Mount inventory losses) and ~~gain (loss)~~gains (losses) on sale

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Table of ~~fixed assets, net,~~Contents

QURATE RETAIL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

leaseback transactions, that are included in the measurement of operating income (loss) pursuant to GAAP. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income (loss), net earnings (loss), cash flows provided by operating activities and other measures of financial performance prepared in accordance with GAAP. Qurate Retail generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current prices.

Adjusted OIBDA is summarized as follows:


	Three months ended June 30,			Six months ended June 30,			Three months ended March 31,
		2022	2021		2022	2021		2023	2022

	amounts in millions						amounts in millions
QxH	$	232	391		457	740	$	139	225
QVC International		95	144		199	287		72	104
Zulily		(18)	9		(36)	15
CBI								4	31
Corporate and other		38	37		62	56		(36)	(25)
Consolidated Qurate Retail	$	347	581		682	1,098	$	179	335

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~~QURATE RETAIL, INC. AND SUBSIDIARIES~~

~~Notes to Condensed Consolidated Financial Statements (Continued)~~

~~(unaudited)~~

Other Information


	June 30, 2022			March 31, 2023
	Total assets		Capital expenditures	Total assets		Capital expenditures

	amounts in millions			amounts in millions
QxH	$	11,609	71	$	8,454	33
QVC International		1,990	10		1,923	7
Zulily		592	8
CBI					548	3
Corporate and other		1,038	12		1,275	11
Consolidated Qurate Retail	$	15,229	101	$	12,200	54

The following table provides a reconciliation of Adjusted OIBDA to Operating income (loss) and Earnings (loss) before income taxes:


	Three months ended			Six months ended		Three months ended
	June 30,			June 30,		March 31,
	2022		2021	2022	2021	2023		2022

	amounts in millions					amounts in millions
Adjusted OIBDA	$	347	581	682	1,098	$	179	335
Stock-based compensation		(16)	(19)	(31)	(35)		(16)	(15)
Depreciation and amortization		(134)	(129)	(264)	(257)		(100)	(130)
Restructuring and fire related costs, net (including Rocky Mount inventory losses, see note 8)		(22)	—	(106)	—
Gain (loss) on sale of fixed assets, net		243	—	243	—
Restructuring and fire related costs, net of recoveries (including Rocky Mount inventory losses, see note 8)							—	(84)
Gains on sale leaseback transactions							113	—
Operating income (loss)	$	418	433	524	806	$	176	106
Interest expense		(119)	(118)	(236)	(235)		(94)	(117)
Share of earnings (loss) of affiliates, net		—	(22)	(1)	(54)
Realized and unrealized gains (losses) on financial instruments, net		7	19	37	60		(47)	30
Gain (loss) on extinguishment of debt							15	—
Other, net		35	(23)	88	(10)		15	52
Earnings (loss) before income taxes	$	341	289	412	567	$	65	71

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Certain statements in this Quarterly Report on Form 10-Q constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our business strategies; ~~COVID-19 (as defined below);~~ the impact of the fire at the Rocky Mount fulfillment center; insurance recoveries; the remediation of a material weakness; revenue growth at QVC, Inc. ("QVC"); our projected sources and uses of cash; the recoverability of our goodwill and other intangible assets; and fluctuations in interest rates and foreign currency exchange rates. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be achieved or accomplished. The following include some but not all of the factors that could cause actual results or events to differ materially from those anticipated:

●

~~the impact~~The continuing global and regional economic impacts of the ~~novel coronavirus (“COVID-19”)~~COVID-19 pandemic and ~~local, state~~other public health-related risks and ~~federal governmental responses to the pandemic~~events, on ~~the economy,~~ our customers, our vendors and our businesses generally;

●

customer demand for our products and services and our ability to attract new customers and retain existing customers by anticipating customer demand and adapting to changes in demand;

●

competitor responses to our products and services;

●

increased digital TV penetration and the impact on channel positioning of our programs;

●

the levels of online traffic to our businesses' websites and our ability to convert visitors into customers or contributors;

●

uncertainties inherent in the development and integration of new business lines and business strategies;

●

our future financial performance, including availability, terms, deployment of capital and our level of indebtedness;

●

our ability to effectively manage our installment sales plans and revolving credit card programs;

●

the cost and ability of shipping companies, manufacturers, suppliers, digital marketing channels, and vendors to deliver products, equipment, software and services;

●

the outcome of any pending or threatened litigation;

●

availability of qualified personnel;

●

the impact of the seasonality of our businesses;

●

changes in, or failure or inability to comply with, government regulations, including, without limitation, regulations of the Federal Communications Commission (“FCC”), and adverse outcomes from regulatory proceedings;

●

changes in the nature of key strategic relationships with partners, distributors, suppliers and vendors;

●

domestic and international economic and business conditions and industry trends, including the impact of Brexit (as defined below) and the impact of inflation and ~~the United Kingdom’s exit from the European Union;~~increased labor costs;

●

increases in market interest rates;

●

changes in the trade policy and trade relations with China;

●

consumer spending levels, including the availability and amount of individual consumer debt and customer credit losses;

●

system interruption and the lack of integration and redundancy in the systems and infrastructures of our businesses;

●

advertising spending levels;

●

changes in distribution and viewing of television programming, including the expanded deployment of video on demand technologies and Internet protocol television and their impact on home shopping programming;

●

rapid technological changes;

●

failure to protect the security of personal information, subjecting us to potentially costly government enforcement actions and/or private litigation and reputational damage;

●

the regulatory and competitive environment of the industries in which we operate;

●

natural disasters, public health crises (including ~~COVID-19)~~resurgences of COVID-19 and its variants), political crises, and other catastrophic events or other events outside of our ~~control;~~control, including climate change;

●

threatened terrorist attacks, political and economic unrest in international markets and ongoing military action around the world;

●

failure to successfully implement Project Athens (defined below); and

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●

fluctuations in foreign currency exchange rates.

For additional risk factors, please see Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 (the ~~“2021~~“2022 10-K”). These forward-looking statements and such risks, uncertainties and other

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factors speak only as of the date of this Quarterly Report on Form 10-Q, and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based.

The following discussion and analysis provides information concerning our results of operations and financial condition. This discussion should be read in conjunction with our accompanying condensed consolidated financial statements and the notes thereto and the ~~2021~~2022 10-K.

The information herein relates to Qurate Retail, Inc. and its controlled subsidiaries (collectively “Qurate Retail,” the “Company,” “Consolidated Qurate Retail,” “us,” “we” or “our” unless the context otherwise requires).

Overview

We own controlling interests in video and online commerce companies. Our largest businesses and reportable segments are our operating segment comprised of QVC U.S. and HSN (“QxH”) and QVC International. QVC markets and sells a wide variety of consumer products in the United States (“U.S.”) and several foreign countries via highly engaging video-rich, interactive shopping experiences, primarily by means of its televised shopping programs and the Internet through its domestic and international websites and mobile applications. ~~Zulily, LLC~~Cornerstone Brands, Inc. (“~~Zulily”~~CBI”), ~~an online retailer offering customers~~consists of a ~~fun~~portfolio of aspirational home and ~~entertaining shopping experience with a fresh selection of new product styles launched every day,~~apparel brands, and is a reportable ~~segment.~~segment.

Our “Corporate and other” category includes our consolidated subsidiary ~~Cornerstone Brands, Inc.~~Zulily, LLC (“~~Cornerstone”~~Zulily”), along with various cost and equity method investments.

~~In December 2019, COVID-19 was reported to have surfaced in Wuhan, China and has subsequently spread across the globe causing a global pandemic, impacting all countries where~~On June 27, 2022, Qurate Retail ~~operates. As~~announced a ~~result of~~five-point turnaround plan designed to stabilize and differentiate its core QxH and QVC International businesses and expand the ~~spread of~~Company's leadership in video streaming commerce (“Project Athens”). Project Athens main initiatives include: (i) improve customer experience and grow relationships; (ii) rigorously execute core processes; (iii) lower cost to serve; (iv) optimize the ~~virus, certain local governmental agencies have imposed travel restrictions, local quarantines or stay at home restrictions~~brand portfolio; and (v) build new high growth businesses anchored in strength.

Improve Customer Experience and Grow Relationships. Qurate Retail is focused on rebuilding stronger connections with our customers. In order to ~~contain~~improve customer experience and grow relationships, Qurate Retail is working to optimize programming using advanced analytics to align product offerings, promotions and airtime with customer preferences. In addition, we expect to invest in infrastructure which will endeavor to improve the ~~spread,~~customer's order to delivery experience by increasing personalization, reducing shipping time and improving shipment tracking visibility. We expect to develop a customer loyalty program which ~~has caused~~will provide customers with a ~~significant disruption to most sectors of the economy.~~more personalized experience.

Rigorously execute core processes. ~~QVC transitioned most administrative employees~~Qurate Retail is enhancing its core processes to deliver the human story telling experience behind a ~~hybrid work model~~product while also sharing a clear and ~~certain employees have moved~~compelling value proposition. In order to ~~permanent work from home arrangements which has resulted~~rigorously execute core processes, Qurate Retail will optimize pricing and assortment by investing in ~~the reduction of office space. Due~~enhanced Information Technology systems that will support real-time pricing and promotion adjustments at an item level. We will also focus on growing our private label brands to ~~ongoing staffing issues~~drive revenue and ~~labor shortages, QVC has increased wages and offered incentives, resulting in additional costs to the company. As a result of these resource constraints QVC has experienced some delays in shipping~~margin at certain fulfillment centers. The inability to control the spread of COVID-19, or the expansion or extension of containment measures, such as stay at home restrictions, could negatively impact QVC’s results in the future.productive scale.

~~The stay at home restrictions imposed in response~~Lower cost to ~~COVID-19 required many traditional brick~~serve. Qurate Retail is right sizing its cost base to improve profitability and ~~mortar retailers~~cash generation. In order to ~~temporarily close their stores, but allowed distance retailers,~~lower cost to serve, Qurate Retail will enhance review of spending to identify cost savings opportunities, including ~~QVC, to continue operating. As a result, from the end of the first quarter of 2020~~opportunities for workforce reduction. Additionally, we will improve product margin through market vendor efficiency and ~~continuing~~lower fulfillment costs through ~~the first quarter of 2021, QVC observed an increase in new customers~~freight optimization and an increase in demand for certain categories, such as home. Beginning in the second quarter of 2021 through the second quarter of 2022, QVC observed a decline in new customers and a decline in demand for its home product category, while also seeing an increase in demand for its apparel product category.higher productivity.

Optimize the brand portfolio. Qurate Retail is exploring untapped opportunities at Zulily and our CBI brands. In order to optimize the brand portfolio at Zulily, we are building the foundation to achieve persistent everyday value for Mom while evaluating and identifying ways we can reduce costs. At CBI we will continue to expand our retail footprint in addition ~~there are several potential adverse impacts of COVID-19 that could cause a material negative impact~~ to the Company’s financial results, including its capital and liquidity. These include reduced demand for products we sell; decreases in the disposable income of existing and potential new customers; the impacts of any recession and other uncertainties with respect to government responses to COVID-19; increased currency volatility resulting in adverse currency rate fluctuations; higher unemployment; labor shortages; and an adverse impact to our supply chain and shipping disruptions for both the products we import and purchase domestically and the products we sell, including essential products experiencing higher demand, due to factory closures, labor shortages and other resource constraints. While the future impact is currently uncertain, the inability to control the spread of COVID-19 could cause any one of these adverse impacts, or combination of adverse impacts, to have a material impactfocusing on ~~our financial results.~~cross-brand promotions.

Beginning in the second quarter of 2021, QVC saw increased product shortages as a result of high market demand in some product categories such as home and electronics. QVC also experienced escalating shipping disruptions due to challenges in the global supply chain and labor market causing extended lead time on inventory orders. As a result, the

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~~delayed receipt~~

Build new high growth businesses anchored in strength. Finally, Qurate Retail is focused on expanding in the video streaming shopping market. In order to build new high growth businesses anchored in strength, Qurate Retail expects to expand streaming viewership by improving the current streaming experience with enhanced video and navigation and seamless transactions. Additionally, we are shaping the future streaming experience with exclusive content, program and deal concepts. We are also building a next generation shopping app featuring vendors with self-made content.

During 2022 QVC commenced the first phase of Project Athens, including actions to reduce inventory ~~ordered~~and a planned workforce reduction. These initiatives are consistent with QVC’s strategy to operate more efficiently as it implements its turnaround plan, and QVC expects to incur additional expenses related to Project Athens initiatives in ~~prior periods impacted~~ future periods. During the three months ended March 31, 2023, QVC implemented a workforce reduction and recorded restructuring charges of $13 million in Restructuring and fire related costs, net of (recoveries) in the condensed consolidated statement of operations.

QVC’s future net revenue will depend on its ability to ~~have~~grow through digital platforms, retain and grow revenue from existing customers, and attract new customers. QVC's future net revenue may also be affected by (i) the ~~right products at the right time~~willingness of cable television and ~~has contributed~~direct-to-home satellite system operators to ~~higher inventory levels as of June 30, 2022. These factors also impacted QVC’s~~continue carrying QVC's programming service; (ii) QVC's ability to ~~offer certain goods~~maintain favorable channel positioning, which may become more difficult due to governmental action or from distributors converting analog customers to digital; (iii) changes in television viewing habits because of video-on-demand technologies and ~~ship orders timely~~Internet video services; (iv) QVC's ability to ~~its customers. In addition, QVC~~source new and compelling products and (v) general economic conditions.

The current economic uncertainty in various regions of the world in which our subsidiaries and affiliates operate could adversely affect demand for our products and services since a substantial portion of our revenue is derived from discretionary spending by individuals, which typically falls during times of economic instability. Global financial markets may experience disruptions, including increased volatility and diminished liquidity and credit availability. If economic and financial market conditions in the U.S. or other key markets, including Japan and Europe, continue to be uncertain or deteriorate, our customers may respond by suspending, delaying or reducing their discretionary spending. A suspension, delay or reduction in discretionary spending could adversely affect revenue. Accordingly, our ability to increase or maintain revenue and earnings could be adversely affected to the extent that relevant economic environments decline. Such weak economic conditions may also inhibit our expansion into new European and other markets. We currently are unable to predict the extent of any of these potential adverse effects.

The Company has seen ~~increasing~~ inflationary pressures during the period including higher wages ~~freight,~~ and merchandise costs. ~~Russia’s invasion of Ukraine, as well as the related international response, is exacerbating inflationary pressures.~~ If these pressures persist, inflated costs may ~~continue to outpace QVC’s~~result in certain increased costs outpacing our pricing power in the near term.

Early decisions by the Biden Administration confirm continuity of a bipartisan consensus in the U.S. government favoring increased confrontation of China in trade practices and economic matters, national security and human rights. The imposition of any new U.S. tariffs on Chinese imports or the taking of other actions against China in the future, and any responses by China, could impair the Company’s ability to meet customer demand and could result in lost sales or an increase in the Company’s cost of merchandise, which would have a material adverse impact on the Company’s businesses and results of operations.

On December 18, 2021, QVC experienced a fire at its Rocky Mount, Inc. fulfillment center in North Carolina. Rocky Mount was QVC’s second-largest fulfillment center, processing approximately 25% to 30% of volume for QVC U.S., and also served as QVC U.S.’s primary returns center for hard goods. The building was significantly damaged as a result of the fire and related smoke and will not reopen. QVC ~~has made a decision not to rebuild the facility; however, it is still in the process of determining future plans for the property. QVC has taken~~took steps to mitigate disruption to operations including diverting inbound orders, leveraging its existing fulfillment centers and supplementing these facilities with short-term leased space as needed. QVC sold the property in February 2023, received net cash proceeds of $15 million and recognized a $13 million gain on the sale during the three months ended March 31, 2023. QVC is currently evaluating long-term alternatives to alleviate the strain on its network caused by the loss of the Rocky Mount fulfillment center.

Based on the provisions of QVC’s insurance policies and discussions with insurance carriers, QVC determined that recovery of certain fire related costs is probable, and recorded an insurance receivable. ~~For the year ended~~As of December 31, ~~2021,~~2022, the Company recorded ~~$250 million of~~cumulative fire related costs ~~and~~of $407 million, including $119 million of costs that will not be reimbursed by QVC’s insurance policies, estimated insurance recoveries of ~~$229~~$288 million for which recovery was deemed ~~probable. For the six months ended June 30,~~probable, received cumulative insurance proceeds of $380 million and recorded a gain of $132 million in restructuring and fire related costs, net of (recoveries). As of December 31, 2022, the Company recorded ~~$135 million of fire related costs, including $95 million for the write-down of inventory, and estimated insurance recoveries of $37 million for which recovery was deemed probable. The~~an insurance receivable, ~~balance was $66 million as of June 30, 2022,~~ net of ~~$200 million of insurance~~advance proceeds received, of $40 million in ~~advance, which was recorded in Trade~~trade and other receivables, net of allowance for credit losses in the condensed consolidated balance sheet.

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During the ~~six~~three months ended ~~June 30, 2022, inventory write-downs~~March 31, 2023, QVC received $55 million of insurance proceeds of which $40 million was applied to the insurance receivable and $15 million was recognized as a gain, partially offset by $11 million of other fire related ~~to Rocky Mount of $95 million were~~costs which are included in ~~cost~~fire related costs, net of ~~goods sold. Due to~~(recoveries) in the ~~circumstances surrounding the write-downs~~condensed consolidated statement of ~~the inventory, these write-downs have been excluded from Adjusted OIBDA (as defined below). These write-downs are expected to be~~operations. There was no remaining insurance receivable outstanding as of March 31, 2023.

QVC submitted ~~as part of QVC’s~~its business interruption claim with the insurance ~~claim; however,~~company and is still in the process of assessing the valuation of loss with its insurer; there can be no guarantee ~~they~~that all business interruption losses will be recovered. QVC expects to continue to record additional costs and recoveries until the ~~property damage and inventory recoverability assessment is completed and the~~ insurance claim is fully settled. While QVC ~~has taken~~took steps to minimize the overall impact to the business, it experienced increased warehouse and logistics costs during the ~~six~~three months ended ~~June 30,~~March 31, 2023 and 2022 and anticipates these increased warehouse and logistics costs to continue during ~~2022.~~2023.

In ~~June~~November 2022, QVC ~~modified the finance lease for its distribution center in Ontario, California which reduced the term of the lease and removed QVC’s ability~~International entered into agreements to take ownership of the distribution center at the end of the lease term. QVC will make annual payments over the modified lease term. Since the lease was modified and removed QVC’s ability to take ownership at the end of the lease term, the Company concluded that a successful sale and leaseback transaction had occurred. QVC recognized a $240 million gain on the sale of the distribution center for the three and six months ended June 30, 2022 calculated as the difference between the aggregate consideration received (including cash and forgiveness of the remaining financing obligation of $84 million) and the carrying value of the distribution center. The gain is included in (gain) loss on sale of fixed assets, net in the condensed consolidated statement of operations. The Company accounted for the modified lease as an operating lease and recorded a $37 million right-of-use asset and a $31 million operating lease liability, with the difference attributable to prepaid rent.

~~In July 2022, QVC sold five owned and operated~~sell two properties located in Germany and the ~~U.S.~~United Kingdom (“U.K.”) to an independent third ~~party and~~party. Under the terms of the agreements, QVC received net cash proceeds of ~~$443 million.~~$102 million related to its German facility and $80 million related to its U.K. facility when the sale closed in January 2023. Concurrent with the sale, ~~the Company~~QVC entered into agreements to lease each of the properties back from the purchaser over an initial term of 20 years with the option to extend the terms of the property leases for up to four consecutive terms of five years. QVC ~~will make initial base rent payments of $27~~recognized a $69 million ~~per year~~ and ~~increasing to $39~~$44 million ~~per year. QVC expects to record a~~ gain ~~in the third quarter~~ related to the successful sale leaseback ~~transaction.~~of the German and U.K. properties, respectively, during the first quarter of 2023 calculated as the difference between the aggregate consideration received and the carrying value of the properties. The Company accounted for the leases as operating leases and recorded a $42 million and $32 million right-of-use asset and operating lease liability for the German and U.K. properties, respectively.

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Results of Operations—Consolidated

General. We provide in the tables below information regarding our consolidated Operating Results and Other Income and Expense, as well as information regarding the contribution to those items from our principal reporting segments. The "Corporate and other" category consists of those assets or businesses which we do not disclose separately. For a more detailed discussion and analysis of the financial results of the principal reporting segments, see "Results of Operations—Businesses" below.

Operating Results


	Three months ended			Six months ended		Three months ended
	June 30,			June 30,		March 31,
	2022		2021	2022	2021	2023		2022

	amounts in millions					amounts in millions
Revenue
QxH	$	1,754	1,989	3,438	3,925	$	1,601	1,684
QVC International		638	791	1,308	1,565		592	670
Zulily		220	397	452	774
CBI							259	297
Corporate and other		341	327	638	577		192	232
Consolidated Qurate Retail	$	2,953	3,504	5,836	6,841	$	2,644	2,883

Operating Income (Loss)
QxH	$	361	295	403	552	$	74	42
QVC International		81	127	169	251		156	88
Zulily		(51)	(15)	(89)	(33)
CBI							(2)	24
Corporate and other		27	26	41	36		(52)	(48)
Consolidated Qurate Retail	$	418	433	524	806	$	176	106

Adjusted OIBDA
QxH	$	232	391	457	740	$	139	225
QVC International		95	144	199	287		72	104
Zulily		(18)	9	(36)	15
CBI							4	31
Corporate and other		38	37	62	56		(36)	(25)
Consolidated Qurate Retail	$	347	581	682	1,098	$	179	335

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Revenue. Consolidated Qurate Retail revenue decreased ~~15.7%~~8.3% or ~~$551 million and 14.7% or $1,005~~$239 million for the three ~~and six~~ months ended ~~June 30, 2022, respectively,~~March 31, 2023, as compared to the corresponding ~~periods~~period in the prior year. The decrease in the three months ended ~~June 30, 2022~~March 31, 2023 was due to decreased revenue at QxH of ~~$235~~$83 million, ~~decreased revenue at Zulily of $177 million and~~ decreased revenue at QVC International of ~~$153~~$78 million, ~~partially offset by increased~~decreased revenue in the Corporate and other segment of ~~$14~~$40 million, and decreased revenue at CBI of $38 million, compared to the same period in the prior year. The ~~increase~~decrease in Corporate and other revenue was due to ~~an increase~~a decrease in revenue at ~~Cornerstone~~Zulily primarily due to ~~strong customer demand in the home and apparel categories. The~~a 20% decrease in ~~the six months ended June 30, 2022~~total units shipped attributable to a continued decrease in active customers. This decrease was ~~due to decreased revenue at QxH of $487 million, decreased revenue at Zulily of $322 million, and decreased revenue at QVC International of $257 million,~~ partially offset by ~~increased revenue~~a 9.3% increase in the Corporate and other segment of $61 million, compared to the same period in the prior year. The increase in Corporate and other revenue was due to an increase in revenue at Cornerstone due to increased sales across all major product categories.average selling price (“ASP”). See "Results of Operations—Businesses" below for a more complete discussion of the results of operations of QVC and ~~Zulily.~~CBI.

Stock-based compensation. Stock-based compensation includes compensation primarily related to options, restricted stock awards and restricted stock units for shares of our common stock that are granted to certain of our officers and employees.

We recorded $16 million and ~~$19~~$15 million of stock-based compensation for the three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and $31 million and $35 million of stock-based compensation for the six months ended June 30, 2022 and 2021,~~ respectively. The ~~decreases~~increase of ~~$3 million and $4~~$1 million for the three ~~and six~~ months ended ~~June 30, 2022, respectively, were~~March 31, 2023 was primarily due to ~~decreases~~increases at QxH and CBI, partially offset by a decrease at Zulily. As of ~~June 30, 2022,~~March 31, 2023, the total unrecognized compensation

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cost related to unvested Qurate Retail equity awards was approximately ~~$129~~$101 million. Such amount will be recognized in our condensed consolidated statements of operations over a weighted average period of approximately ~~2.1~~1.6 years.

Operating income. Our consolidated operating income ~~decreased $15~~increased $70 million ~~and $282 million for the three and six months ended June 30, 2022, as compared to the corresponding periods in the prior year. The decrease in operating results~~ for the three months ended June 30, 2022 was primarily due to a decrease in operating income at QVC International of $46 million and a decrease in operating income at Zulily of $36 million, partially offset by an increase in operating income at QxH of $66 million, and an increase in operating income at the Corporate and other segment of $1 million, compared to the corresponding period in the prior year. The increase in operating income at QxH was primarily the result of the gain on sale of fixed assets, net of $243 million during the three months ended June 30, 2022. Operating income in the Corporate and other segment increased for the three months ended June 30, 2022,March 31, 2023, as compared to the corresponding period in the prior year, primarily ~~related~~as a result of gains on sale leaseback transactions, partially offset by a decline in operating results. The increase in operating results for the three months ended March 31, 2023 was primarily due to ~~fewer expenses~~an increase in operating income at ~~the corporate level,~~QVC International of $68 million, and an increase in operating income at QxH of $32 million, partially offset by a decrease in operating income at ~~Cornerstone due to higher supply chain costs despite revenue growth and product margin expansion.~~

~~The decrease in operating results for the six months ended June 30, 2022 was primarily due to a decrease in operating income at QxH~~CBI of ~~$149 million, a decrease in operating income at QVC International of $82~~$26 million, and a decrease ~~in operating income at Zulily of $56 million, partially offset by an increase~~ in operating income at the Corporate and other segment of $5$4 million, compared to the corresponding period in the prior year. Operating income in the Corporate and other segment ~~increased~~decreased for the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, as compared to the corresponding period in the prior year, primarily related to ~~fewer expenses at the corporate level, partially offset by~~ a decrease in operating income at ~~Cornerstone due~~Zulily attributed to a reduction in total demand and higher ~~supply chain~~product costs ~~despite revenue growth~~including inflationary pressures as well as an increase in marketing expenses, partially offset by lower depreciation and ~~product margin expansion.~~amortization expenses and lower salaries and bonuses at Zulily following several reductions in workforce. See "Results of Operations—Businesses" below for a more complete discussion of the results of operations of QVC and ~~Zulily.~~CBI.

Adjusted OIBDA. To provide investors with additional information regarding our financial results, we also disclose Adjusted OIBDA, which is a non-GAAP financial measure. We define Adjusted OIBDA as operating income (loss) plus depreciation and amortization, stock-based compensation, and where applicable, separately identified impairments, litigation settlements, restructuring, acquisition-related costs, fire related costs, net (including Rocky Mount inventory losses), and ~~(gain) loss~~(gains) losses on sale ~~of fixed assets, net.~~leaseback transactions. Our chief operating decision maker and management team use this measure of performance in conjunction with other measures to evaluate our businesses and make decisions about allocating resources among our businesses. We believe this is an important indicator of the operational strength and performance of our businesses by identifying those items that are not directly a reflection of each business’ performance or indicative of ongoing business trends. In addition, this measure allows us to view operating results, perform analytical comparisons and benchmarking between businesses and identify strategies to improve performance. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, net earnings (loss), cash flows provided by operating activities and other measures of financial performance prepared in accordance with U.S. generally accepted accounting principles.

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The following table provides a reconciliation of Operating income (loss) to Adjusted OIBDA:


	Three months ended			Six months ended		Three months ended
	June 30,			June 30,		March 31,
	2022		2021	2022	2021	2023		2022

	amounts in millions					amounts in millions
Operating income (loss)	$	418	433	524	806	$	176	106
Depreciation and amortization		134	129	264	257		100	130
Stock-based compensation		16	19	31	35		16	15
Restructuring and fire related costs, net (including Rocky Mount inventory losses)		22	—	106	—
(Gain) on sale of fixed assets, net		(243)	—	(243)	—
Restructuring and fire related costs, net of (recoveries) (including Rocky Mount inventory losses)							—	84
(Gains) on sale leaseback transactions							(113)	—
Adjusted OIBDA	$	347	581	682	1,098	$	179	335

Consolidated Adjusted OIBDA decreased ~~40.3%~~46.6% or ~~$234 million and 37.9% or $416~~$156 million for the three ~~and six~~ months ended ~~June 30, 2022, respectively,~~March 31, 2023, as compared to the corresponding ~~periods~~period in the prior year. The decrease in Adjusted OIBDA for the three months ended ~~June 30, 2022~~March 31, 2023 was primarily due to a decrease at QxH of ~~$159~~$86 million, a decrease at QVC International of ~~$49~~$32 million, a decrease at CBI of $27 million and a decrease at ~~Zulily of $27 million, partially offset by an increase at~~ Corporate and other of $1$11 million, compared to the corresponding period in the prior year. The change in the Corporate and other segment for the three months ended ~~June 30, 2022~~March 31, 2023 was primarily due to ~~fewer expenses at the corporate level, partially offset by~~ a decrease in Adjusted OIBDA at ~~Cornerstone~~Zulily due to reduction in total demand and higher ~~supply chain~~product costs ~~despite revenue growth and product margin expansion. The decrease~~including inflationary pressures as well as an increase in ~~Adjusted OIBDA for the six months ended June 30, 2022 was primarily due to a decrease at QxH of $283 million, a decrease at QVC International of $88 million, and a decrease at Zulily of $51 million,~~marketing expenses, partially offset by ~~an increase~~lower salaries and bonuses at Corporate and other of $6 million, compared to the corresponding period in the prior year. The change in the Corporate and other segment for the six months ended June 30, 2022 was primarily due to fewer expenses at the corporate level, partially offset by a decrease in Adjusted OIBDA at Cornerstone due to higher supply chain costs despite revenue growth and product margin expansion.Zulily as discussed above. See "Results of Operations—Businesses" below for a more complete discussion of the results of operations of QVC and ~~Zulily.~~CBI.

Other Income and Expense

Components of Other income (expense) are presented in the table below.


	Three months ended			Six months ended		Three months ended
	June 30,			June 30,		March 31,
	2022		2021	2022	2021	2023		2022

	amounts in millions					amounts in millions

Interest expense	$	(119)	(118)	(236)	(235)	$	(94)	(117)
Share of earnings (losses) of affiliates		—	(22)	(1)	(54)
Realized and unrealized gains (losses) on financial instruments, net		7	19	37	60		(47)	30
Gain (loss) on extinguishment of debt							15	—
Other, net		35	(23)	88	(10)		15	52
Other income (expense)	$	(77)	(144)	(112)	(239)	$	(111)	(35)

Interest expense. Interest expense ~~remained relatively flat~~decreased $23 million for the three ~~and six~~ months ended ~~June 30, 2022, respectively,~~March 31, 2023, as compared to the corresponding ~~periods in the prior year.~~

~~Share of earnings (losses) of affiliates.~~ ~~Share of losses of affiliates decreased $22 million and $53 million for the three and six months ended June 30, 2022, respectively, as compared to the corresponding periods~~period in the prior year. The ~~losses decreased during~~decrease in interest expense for the three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023, compared to the same period in the prior year, is due to the ~~sale~~reversal of interest expense accrued in prior periods related to QVC’s settlement of state income tax reserves during the current period, partially offset by higher interest expense as a result of higher outstanding debt and ~~wind down of the Company’s~~ ~~alternative energy entities as the federal tax credits expire. Historically, the alternative energy entities typically operated at~~ a ~~loss, and the Company recorded its share of such losses, but had favorable tax attributes and credits, which were recorded in the Company’s tax accounts.~~higher interest rate on QVC’s senior secured credit facility (defined below).

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Realized and unrealized gains (losses) on financial instruments, net. Realized and unrealized gains (losses) on financial instruments, net are comprised of changes in the fair value of the following:


	Three months ended			Six months ended		Three months ended
	June 30,			June 30,		March 31,
	2022		2021	2022	2021	2023		2022

	amounts in millions					amounts in millions
Equity securities		5	43	(5)	50		(3)	(10)
Exchangeable senior debentures		66	(179)	190	(133)		(46)	124
Indemnification asset		(64)	93	(149)	41		3	(85)
Other financial instruments		—	62	1	102		(1)	1
	$	7	19	37	60	$	(47)	30

The changes in realized and unrealized gains (losses) on financial instruments, net are due to market activity in the applicable period related to the financial instruments that are marked to market on a periodic basis. The ~~decrease~~increase in realized and unrealized ~~gains~~losses for the three ~~and six~~ months ended ~~June 30, 2022,~~March 31, 2023, compared to the corresponding period in the prior year, was primarily driven by an increase in unrealized losses on the exchangeable senior debentures driven by increases in stock prices of the securities underlying the debentures compared to the prior year, partially offset by a decrease in unrealized ~~gains~~losses on the indemnification asset (described in note 4 of the accompanying condensed consolidated financial statements),.

Gain (loss) on extinguishment of debt. During the three months ended March 31, 2023, the Company recognized a decrease in unrealized gains related to derivative instruments and a decrease in unrealized gains related to several of the Company’s equity securities, partially offset by an increase in unrealized gains$15 million gain on the ~~exchangeable senior debentures driven~~ ~~by declines~~extinguishment of its 1.75% Exchangeable Senior Debentures due 2046 (as described in ~~stock prices of the securities underlying the debentures compared~~note 6 to the ~~prior year~~accompanying condensed consolidated financial statements).

Other, net. Other, net income ~~increased $58 million and $98~~decreased $37 million for the three ~~and six~~ months ended ~~June 30, 2022, respectively,~~March 31, 2023, compared to the corresponding ~~periods~~period in the prior year. The ~~increase~~decrease for the three months ended ~~June 30, 2022,~~March 31, 2023, compared to the same period in the prior year, was primarily the result of an increase in tax sharing benefit with Liberty Broadband Corporation (“Liberty Broadband”), and an increase in foreign currency exchange gains, partially offset by a loss on early extinguishment of debt in the current year. The increase for the six months ended June 30, 2022, compared to the same period in the prior year, was primarily the result of an increase in tax sharing benefit with Liberty Broadband, an increase in foreign currency exchange gains, and the sale of warrants at QVC in the prior year and no similar sale in the current year, a lower tax sharing benefit than the prior year, and foreign exchange losses in the current year compared to foreign exchange gains in the prior year, partially offset by ~~a loss on early extinguishment of debt~~an increase in interest and dividend income in the current year.

Income taxes. ~~We had income tax expense of $120 million and $39 million for~~During the three months ended ~~June 30,~~March 31, 2023 and 2022, we had earnings before income taxes of $65 million and ~~2021,~~$71 million, respectively, and income tax expense of ~~$178~~$32 million and ~~$93~~$58 million, ~~for the six months ended June 30, 2022 and 2021,~~ respectively. Income tax expense was higher than the U.S. statutory tax rate of 21% during the three months ended ~~June 30,~~March 31, 2023 due to foreign income tax expense and non-deductible interest on preferred stock, partially offset by state income tax benefit. Income tax expense was higher than the U.S. statutory tax rate of 21% during the three months ended March 31, 2022 due to non-deductible expenses from a decrease in the fair value of the indemnification receivable owed to Qurate from Liberty Broadband, as well as state and foreign income tax expense. Income tax expense was lower than the U.S. statutory tax rate of 21% during the three months ended June 30, 2021 due to tax benefits from tax credits generated by our alternative energy investments and from the accrual of non-deductible equity distributions related to the indemnification agreement between Liberty Broadband and Qurate Retail, partially offset by state and foreign income tax expense. Income tax expense was higher than the U.S. statutory tax rate of 21% during the six months ended June 30, 2022 due to non-deductible expenses from a decrease in the fair value of the indemnification receivable owed to Qurate from Liberty Broadband, as well as state and foreign income tax expense. Income tax expense was lower than the U.S. statutory tax rate of 21% during the six months ended June 30, 2021 due to tax benefits from tax credits generated by our alternative energy investments, partially offset by state and foreign income tax expense.

Net earnings. We had net earnings of ~~$221~~$33 million and ~~$250~~$13 million for the three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and net earnings of $234 million and $474 million for the six months ended June 30, 2022 and 2021,~~ respectively. The change in net earnings (loss) was the result of the above-described fluctuations in our revenue, expenses and other gains and losses.

Material Changes in Financial Condition

As of ~~June 30, 2022,~~March 31, 2023, substantially all of our cash and cash equivalents are invested in U.S. Treasury securities, securities of other government agencies, AAA rated money market funds and other highly rated financial and corporate debt instruments.

~~I-31~~

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The following are potential sources of liquidity: available cash balances, equity issuances, dividend and interest receipts, proceeds from asset sales, debt (including availability under QVC’s bank credit facilities (the “Credit Facility”), as discussed in note 6 of the accompanying consolidated financial statements), and cash generated by the operating activities of our wholly-owned subsidiaries. Cash generated by the operating activities of our subsidiaries is only a source of liquidity to the extent such cash exceeds the working capital needs of the subsidiaries and is not otherwise restricted. For example, under QVC’s bond indentures, it is able to pay dividends or make other restricted payments if it is not in default on its senior secured notes and its consolidated leverage ratio is no greater than 3.5 to 1.0. In addition, under ~~QVC’s bank credit facility it~~the Credit Facility QVC is able to pay dividends or make other restricted payments if it is not in default on the ~~bank credit facility~~Credit Facility and the

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consolidated leverage ratio of QVC, QVC Global Corporate Holdings, LLC, Zulily and ~~Cornerstone~~CBI is no greater than 4.0 to 1.0. Further, under QVC’s bond indentures and the ~~bank credit facility credit agreement,~~Credit Facility, unlimited dividends are permitted to service the debt of ~~Qurate Retail~~parent entities of QVC so long as there is no default (i.e., no leverage test is needed).

As of ~~June 30, 2022,~~March 31, 2023, QVC’s consolidated leverage ratio (as calculated under QVC’s senior secured notes) was greater than 3.5 to 1.0 and as a result QVC is restricted in its ability to make dividends or other restricted payments under the senior secured notes. Although QVC will not be able to make unlimited dividends or other restricted payments under the senior secured notes leverage basket, QVC will continue to be permitted to make unlimited dividends to parent entities of QVC to service the principal and interest when due in respect of indebtedness of such parent entities (so long as there is no default under the indentures governing QVC’s senior secured notes) and permitted to make certain restricted payments to Qurate Retail under an intercompany tax sharing agreement in respect of certain tax obligations of QVC and its subsidiaries.

Qurate Retail and certain of its subsidiaries’ debt credit ratings were downgraded during the quarter ended March 31, 2023 as follows: (i) Fitch Ratings downgraded Qurate Retail, LI LLC, and QVC’s long-term issuer default ratings from “BB-” to “B”, LI LLC’s senior unsecured rating from “BB-” to “CCC+”, and QVC’s senior secured rating from “BB+” to “B+”; (ii) S&P Global downgraded LI LLC’s issuer credit rating from “B-” to “CCC+”, LI LLC’s senior unsecured rating from “CCC” to “CCC-”, and QVC’s senior secured rating from “B+” to “B-”; and (iii) Moody’s downgraded LI LLC corporate family rating from “B1” to “B3”, LI LLC’s senior unsecured rating from “B3” to “Caa2”, and QVC’s senior secured debt ratings from “Ba3” to “B2.”

As of March 31, 2023, Qurate Retail's liquidity position included the following:


	Cash and cash		Cash and cash
	equivalents		equivalents

	amounts in millions		amounts in millions
QVC	$	413	$	421
Zulily		2
CBI				15
Corporate and other(1)		146		850
Total Qurate Retail	$	561	$	1,286

		Borrowing capacity
		amount in millions
QVC Senior Secured Credit Facility	$	2,314

(1)

Corporate cash was $846 million as of March 31, 2023


		Borrowing capacity
		amount in millions
Credit Facility	$	1,882

To the extent that the Company recognizes any taxable gains from the sale of assets we may incur tax expense and be required to make tax payments, thereby reducing any cash proceeds. As of ~~June 30, 2022,~~March 31, 2023, the Company had approximately ~~$235~~$240 million of cash, cash equivalents and restricted cash held in foreign subsidiaries that is available for domestic purposes with no significant tax consequences upon repatriation to the United States. QVC accrues foreign taxes on the unremitted earnings of its international subsidiaries. Approximately ~~82%~~58% of QVC’s foreign cash balance was that of QVC-Japan (as defined below). QVC owns 60% of QVC-Japan and shares all profits and losses with the 40% minority interest holder, Mitsui & Co., LTD (“Mitsui”).

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Additionally, ~~our operating businesses have generated, on average, more than $1 billion in annual cash provided by operating activities over the prior three years and although~~ we believe our businesses will generate positive cash flow from operations ~~we anticipate reductions from the historical average~~ during ~~2022.~~2023.


	Six months ended			Three months ended
	June 30,			March 31,
	2022		2021	2023		2022

	amounts in millions			amounts in millions
Cash Flow Information
Net cash provided (used) by operating activities	$	(58)	702	$	16	(179)
Net cash provided (used) by investing activities	$	237	(379)	$	112	(16)
Net cash provided (used) by financing activities	$	(166)	(164)	$	(122)	229

During the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, Qurate Retail's primary sources of cash were proceeds from the sale of fixed assets of ~~$256~~$198 million, ~~and~~ insurance proceeds related to the Rocky Mount fire of ~~$100~~$55 million (see note 8 to the accompanying condensed consolidated financial statements), and an indemnification agreement settlement of $24 million, partially offset by net debt repayments of ~~$111~~$126 million, capital expenditures of ~~$101~~$54 million, and ~~dividends paid to noncontrolling interests~~net payments for settlements of ~~$27~~financial instruments of $12 million. ~~The cash proceeds from the sale of fixed assets of $256 million were used to repay amounts outstanding under QVC’s Senior Secured Credit Facility.~~

The projected uses of Qurate Retail cash for the remainder of ~~2022~~2023 are continued capital improvement spending between ~~$170~~$200 million and ~~$197~~$245 million, debt service payments (including approximately ~~$176~~$245 million for interest payments on outstanding debt), repayment of debt, ~~the potential buyback of common stock under the approved share~~

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~~Table of Contents~~

~~buyback program,~~and payment of dividends to the holders of Qurate Retail 8.0% Series A Cumulative Redeemable Preferred ~~Stock (the “Preferred Stock”) and additional investments in existing or new businesses.~~Stock. We also may be required to make net payments of income tax liabilities to settle items under discussion with tax authorities. We expect that cash on hand and cash provided by operating activities and borrowing capacity in future periods will be sufficient to fund projected uses of cash.

In July 2022, QVC generated cash through a series of sale-leaseback transactions (see note 8 to the accompanying condensed consolidated financial statements), and used this cash to repay amounts outstanding under QVC’s Senior Secured Credit Facility.

Results of Operations—Businesses

QVC. QVC is a retailer of a wide range of consumer products, which are marketed and sold primarily by merchandise-focused televised shopping programs, the Internet and mobile applications. In the U.S., QVC’s televised shopping programs, including live and recorded content, are ~~broadcast~~distributed across multiple channels nationally on a full-time basis, including QVC, QVC 2, QVC 3, HSN and HSN2. ~~QVC~~QVC’s U.S. programming is also available on QVC.com and HSN.com, ~~QVC’s~~which we refer to as “QVC’s U.S. ~~websites;~~websites”; virtual multichannel video programming distributors (including Hulu + Live TV, ~~AT&T TV,~~DirecTV Stream, and ~~You Tube~~YouTube TV); applications via streaming video; Facebook Live, Roku, Apple TV, Amazon Fire, Xfinity Flex and Samsung TV Plus; mobile applications; social media pages and over-the-air broadcasters.

QVC’s digital platforms enable consumers to purchase goods offered on its ~~broadcast~~televised programming, along with a wide assortment of products that are available only on ~~its~~QVC’s U.S. websites. QVC.com and its other digital platforms (including its mobile applications, social media pages and others) are natural extensions of its business model, allowing customers to engage in its shopping experience wherever they are, with live or on-demand content customized to the device they are using. In addition to offering video content, QVC’s U.S. websites allow shoppers to browse, research, compare and perform targeted searches for products, read customer reviews, control the order-entry process and conveniently access their account.

QVC’s international televised shopping programs, including live and recorded content, are distributed to households outside of the U.S., primarily in Germany, Austria, Japan, the ~~United Kingdom ("~~U.K."), the Republic of Ireland and Italy. In some of the countries where QVC operates, its televised shopping programs are ~~broadcast~~distributed across multiple QVC channels: QVC Style and QVC2 in Germany and QVC Beauty, QVC Extra, and QVC Style in the U.K. Similar to the U.S., QVC’s international businesses also engage customers via websites, mobile applications, and social media pages. QVC’s international business employs product sourcing teams who select products tailored to the interests of each local market.

QVC's Japanese operations (“QVC-Japan”) are conducted through a joint venture with Mitsui. QVC-Japan is owned 60% by QVC and 40% by Mitsui. QVC and Mitsui share in all profits and losses based on their respective ownership interests. During the ~~six~~three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ QVC-Japan paid dividends to Mitsui of ~~$27~~$12 million and ~~$31~~$14 million, respectively.

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QVC's operating results were as follows:


	Three months ended			Six months ended		Three months ended
	June 30,			June 30,		March 31,
	2022		2021	2022	2021	2023		2022

	amounts in millions					amounts in millions
Net revenue	$	2,392	2,780	4,746	5,490	$	2,193	2,354
Cost of goods sold (excluding depreciation, amortization and Rocky Mount inventory losses shown below)		(1,593)	(1,755)	(3,154)	(3,513)		(1,488)	(1,561)
Operating expenses		(179)	(196)	(357)	(382)		(178)	(178)
SG&A expenses (excluding stock-based compensation)		(293)	(294)	(579)	(568)
Selling, general and administrative ("SG&A") expenses (excluding stock-based compensation)							(316)	(286)
Adjusted OIBDA		327	535	656	1,027		211	329
Fire related costs, net (including Rocky Mount inventory losses)		(16)	—	(98)	—
Gain (loss) on sale of fixed assets, net		243	—	243	—
Restructuring and fire related (costs), net of recoveries (including Rocky Mount inventory losses)							4	(82)
Gains on sale leaseback transactions							113	—
Stock-based compensation		(10)	(11)	(18)	(20)		(9)	(8)
Depreciation and amortization		(102)	(102)	(211)	(204)		(89)	(109)
Operating income	$	442	422	572	803	$	230	130

Net revenue was generated in the following geographical areas:


	Three months ended				Six months ended				Three months ended
	June 30,				June 30,				March 31,
	2022		2021		2022		2021		2023		2022

	amounts in millions								amounts in millions
QxH	$	1,754		1,989		3,438		3,925	$	1,601		1,684
QVC International		638		791		1,308		1,565		592		670
Consolidated QVC	$	2,392		2,780		4,746		5,490	$	2,193		2,354

QVC's consolidated net revenue decreased ~~14.0% and 13.6%~~6.8% for the three ~~and six~~ months ended ~~June 30, 2022, respectively,~~March 31, 2023, as compared to the corresponding ~~periods~~period in the prior year. The three month decrease in net revenue is primarily due to ~~an 8.3%~~a 6.0% decrease in units shipped, ~~$93~~$57 million in unfavorable foreign exchange rates ~~a 5.7% decline in average selling price per unit ("ASP") driven by QxH,~~ and a $26 million decrease in shipping and handling revenue. These decreases were partially offset by a $37 million decrease in estimated product returns driven by QxH. The six month decrease in net revenue is primarily due to a 9.4% decrease in units shipped, $143 million in unfavorable foreign exchange rates, a $54$19 million decrease in shipping and handling revenue ~~and a 3.8% decline in ASP driven by~~primarily at QxH. These declines were partially offset by a ~~$62 million decrease~~2.9% increase in ~~estimated product returns primarily driven by QxH.~~ASP.

During the ~~six~~three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021,~~ the changes in revenue and expenses were affected by changes in the exchange rates for the ~~Japanese Yen,~~U.K. Pound Sterling, the Euro and the ~~U.K. Pound Sterling.~~Japanese Yen. In the event the U.S. Dollar strengthens against these foreign currencies in the future, QVC's revenue and operating cash flow will be negatively affected.

In describing QVC’s operating results, the term currency exchange rates refers to the currency exchange rates QVC uses to convert the operating results for all countries where the functional currency is not the U.S. Dollar. QVC calculates the effect of changes in currency exchange rates as the difference between current period activity translated using the prior period's currency exchange rates. QVC refers to the results of this calculation as the impact of currency exchange rate fluctuations. Constant currency operating results refers to operating results without the impact of the currency exchange rate fluctuations. The disclosure of constant currency amounts or results permits investors to better understand QVC’s underlying performance without the effects of currency exchange rate fluctuations.

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The percentage change in net revenue for each of QVC's geographic areas in U.S. Dollars and in constant currency was as follows:


	Three months ended						Six months ended						Three months ended
	June 30, 2022						June 30, 2022						March 31, 2023
	U.S. Dollars		Foreign Currency Exchange Impact		Constant Currency		U.S. Dollars		Foreign Currency Exchange Impact		Constant currency		U.S. Dollars		Foreign Currency Exchange Impact		Constant Currency
QxH	(11.8)	%	—	%	(11.8)	%	(12.4)	%	—	%	(12.4)	%	(4.9)	%	—	%	(4.9)	%
QVC International	(19.3)	%	(11.7)	%	(7.6)	%	(16.4)	%	(9.1)	%	(7.3)	%	(11.6)	%	(8.3)	%	(3.3)	%

The decrease in QxH net revenue for the three months ended ~~June 30, 2022~~March 31, 2023 was primarily due to a ~~9.0%~~5.5% decrease in units shipped ~~a 2.9% decline in ASP,~~ and a ~~$19~~$17 million decrease in shipping and handling ~~revenue. These declines were~~revenue, which was partially offset by a ~~$37 million decrease~~2.1% increase in ~~estimated product returns.~~ASP. For the three months ended ~~June 30, 2022,~~March 31, 2023, QxH experienced shipped sales declines across all categories. For the six months ended June 30, 2022, QxH net revenue decreased due to a 10.6% decrease in units shipped, a 1.4% decline in ASP, and a $42 million decrease in shipping and handling revenue. These declines were partially offset by a $56 million decrease in estimated product returns. For the six months ended June 30, 2022, QxH experienced shipped sales decline in all categories except for apparel. The decrease in estimated product returns for the three and six months ended June 30, 2022 was primarily due to a decrease in sales volume.

QVC ~~International~~International’s net revenue decline in constant currency for the three months ended ~~June 30, 2022~~March 31, 2023 was primarily due to ~~6.5%~~a 7.1% decrease in units shipped across all ~~markets except Japan and a $7 million decrease in shipping and handling revenue. These declines were~~markets. This decline was partially offset by a ~~slight~~4.8% increase in ASP ~~driven by~~across all markets except the U.K. For the three months ended ~~June 30, 2022,~~March 31, 2023, QVC International experienced shipped sales ~~decline~~growth in constant currency in apparel, accessories and beauty with declines across all other product categories except apparel. QVC International net revenue decline in constant currency for the six months ended June 30, 2022 was primarily due to a 6.5% decrease in units shipped across all markets except Japan and a $12 million decrease in shipping and handling revenue. These declines were partially offset by a slight increase in ASP driven by the U.K. For the six months ended June 30, 2022, QVC International experienced shipped sales decline in constant currency across all product categories except apparel.

QVC's future net revenue growth will primarily depend on sales growth from e-commerce, mobile platforms, and applications via streaming video, additions of new customers from households already receiving QVC's televised programming and increased spending from existing customers. QVC's future net revenue may also be affected by (i) the willingness of cable television and direct-to-home satellite system operators to continue carrying QVC's programming service; (ii) QVC's ability to maintain favorable channel positioning, which may become more difficult due to governmental action or from distributors converting analog customers to digital; (iii) changes in television viewing habits because of video-on-demand technologies and Internet video services; (iv) QVC’s ability to source new and compelling products; and (v) general economic conditions.categories.

QVC's cost of goods sold as a percentage of net revenue was ~~66.6% and 66.5%~~67.9% for the three ~~and six~~ months ended ~~June 30, 2022, respectively,~~March 31, 2023, compared to ~~63.1% and 64.0%~~66.3% for the three ~~and six~~ months ended ~~June 30, 2021, respectively.~~March 31, 2022. The increase in cost of goods sold as a percentage of revenue for the three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023 is primarily due to higher fulfillment costs across both segments ~~driven by increased freight~~ and ~~warehousing costs.~~product margin pressure primarily at QxH. Higher fulfillment costs ~~at QxH were also impacted by strains on our fulfillment network due to the loss~~include higher rent expense as a result of ~~the Rocky Mount fulfillment center~~warehouses sold and ~~higher wages, partially offset by efficiencies from fulfillment centers closed in~~leased back during the prior ~~year.~~year and current period as well as higher labor costs. The increase in cost of goods sold was ~~also impacted~~partially offset by ~~increased~~lower inventory obsolescence at QxH due to ~~higher~~lower levels of ~~inventory. For~~inventory in the ~~three and six months ended June 30, 2022, QxH experienced product margin favorability that was offset by margin pressure at QVC International.~~current period.

QVC's operating expenses are principally comprised of commissions, order processing and customer service expenses, credit card processing fees and telecommunications expenses. Operating expenses ~~decreased $17 million and $25 million~~were 8.1% of net revenue for the three ~~and six~~ months ended ~~June 30, 2022, respectively, as compared to~~March 31, 2023, and were 7.6% for the ~~same periods~~three months ended March 31, 2022. For the three months ended March 31, 2023, the increase in ~~the prior year. The three month decrease is primarily due to a $7 million decrease~~operating expenses as a ~~result~~percent of ~~favorable exchange rates, a $4 million decrease in commissions, primarily at QxH, and a $4 million decrease in credit card fees, primarily at QxH. The six month decrease is~~sales was primarily due to an ~~$11 million decrease as a result of~~increase in commissions expense at QxH related to fixed commissions payments, partially offset by favorable exchange ~~rates, an $8 million~~

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decrease in commissions across both segments and a $5 million decrease in credit card fees, primarily at QxH. The decreases in commissions and credit card fees for the three and six months ended June 30, 2022 are primarily due to lower sales volume.rates.

QVC's SG&A expenses (excluding stock-based compensation) include personnel, information technology, provision for doubtful accounts, production costs, and marketing and advertising expenses. Such expenses ~~decreased $1 million and~~ increased ~~$11~~$30 million for the three ~~and six~~ months ended ~~June 30, 2022, respectively,~~March 31, 2023, as compared to the same ~~periods~~period in the prior year, and as a percentage of net revenue, increased from ~~10.6%~~12.1% to ~~12.2% and from 10.3% to 12.2%~~14.4% for the three ~~and six~~ months ended ~~June 30, 2022, respectively,~~March 31, 2023, as compared to the three ~~and six~~ months ended ~~June 30, 2021. For the three months ended June 30, 2022, there~~March 31, 2022. The increase was ~~an $18 million decrease in personnel costs across both segments and a $12 million decrease~~primarily due to ~~favorable exchange rates. These decreases were partially offset by~~ a ~~$14 million increase in credit losses, primarily at QxH, an $8~~$28 million increase in consulting expenses primarily related to Project Athens, mainly at QxH and a $4$12 million increase in non-income related taxes and a $2 million increase in IT expenses. For the six months ended June 30, 2022, the increase was primarily due to a $25 million increase in credit losses, primarily at QxH, an $8 million increase in consulting expenses primarily at QxH, a $6 million increase in non-income related taxes and a $3 million increase in IT expenses.personnel costs across both segments. These increases were partially offset by a ~~$19 million decrease due to favorable exchange rates and a $14~~$9 million decrease in ~~personnel costs across both segments. The increase to estimated credit losses for the three~~marketing expenses and ~~six months ended June 30, 2022 was due to lower expected collections~~$8 million in ~~the current year compared to~~ favorable adjustments recognized in the prior year based on actual collections experience. The decrease in personnel costs for the three and six months ended June 30, 2022 was primarily due to a decrease to our estimated incentive pay across all markets, partially offset by higher wages.exchange rates.

QVC recorded ~~$16~~a gain of $4 million and ~~$98~~a loss of $82 million for the three months ended March 31, 2023 and 2022, respectively, in restructuring and fire related costs, net of recoveries. For the three months ended March 31, 2023, the gain related to a $15 million gain on insurance proceeds received in excess of fire losses and a $13 million gain on the sale of the Rocky Mount property, partially offset by $13 million of restructuring costs related to workforce reduction and $11 million of other fire related costs. For the three months ended March 31, 2022, the loss was due to an $80 million write-down related to Rocky Mount inventory and $2 million of fire related ~~costs, net (including Rocky Mount inventory losses) for the three and six months ended June 30, 2022, respectively, primarily due to a write-down on Rocky Mount inventory.~~costs. Fire related costs, net includes expenses directly related to the Rocky Mount fulfillment center fire net of expected and received insurance ~~recoveries.~~recoveries and gain on the sale of the Rocky Mount property. Expenses indirectly related to the Rocky Mount fulfillment center fire, including operational inefficiencies, are primarily included in cost of goods sold. These indirect expenses ~~will be~~have been submitted as part of QVC’s business interruption insurance claim; however, there can be no guarantee they will be recovered.

QVC recorded ~~$243~~$113 million of ~~gain~~gains on sale ~~of fixed assets~~leaseback transactions for the three ~~and six~~ months ended ~~June 30, 2022 primarily~~March 31, 2023. The gains related to the ~~sale-leaseback~~sale leaseback of two properties located in Germany and the ~~Ontario distribution center.~~U.K. There were no gains on sale leaseback transactions recorded for the three months ended March 31, 2022.

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Stock-based compensation includes compensation related to options and restricted stock units granted to certain officers and employees. QVC recorded ~~$10 million and $18~~$9 million of stock-based compensation expense for the three ~~and six~~ months ended ~~June 30, 2022, respectively,~~March 31, 2023, and ~~$11~~$8 million for the three months ended March 31, 2022.

Depreciation and amortization decreased $20 million for the three ~~and six~~ months ended ~~June 30, 2021, respectively.~~

~~Depreciation and amortization remained flat and increased $7 million for the three and six months ended June 30, 2022, respectively,~~March 31, 2023, and included ~~$15~~$16 million of acquisition related amortization for both of the three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and $31 million~~respectively. The decrease for ~~both of~~ the ~~six~~three months ended ~~June 30, 2022 and 2021, respectively. The increase for the six months ended June 30, 2022~~March 31, 2023 was primarily related to software amortization associated with QVC’s new enterprise resource planning system and increased channel placement amortization and related expenses, partially offset by a decrease in depreciation due to assets disposed of related to the ~~Rocky Mount fulfillment center fire.~~six owned and operated U.S. properties sold and leased back during 2022 and the Germany and the U.K. properties sold and leased back during the three months ended March 31, 2023, as well as lower channel placement amortization and related expenses due to adjustments recognized related to lower subscriber counts.

~~Zulily.~~CBI. ~~Zulily~~CBI consists of a portfolio of aspirational home and apparel brands. Although there is ~~an online retailer offering customers a fun~~some overlap in the product offerings, the home brands are comprised of Ballard Designs, Frontgate, and entertaining shopping experience with a fresh selection of new product styles launched each day. The Zulily website was launched in January 2010 with the goal of revolutionizing the way consumers shop. Through its app, mobile and desktop experiences, Zulily helps its customers discover new and unique products at great values that they would likely not find elsewhere. Zulily’s merchandise includes women’s, children’s and men’sGrandin Road. Garnet Hill focuses primarily on apparel and ~~other products such as home,~~ accessories and ~~beauty products.~~is categorized as an apparel brand. There are also 29 retail and outlet stores located throughout the United States.

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~~Zulily's~~CBI's stand-alone operating results for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~ were as follows:


	Three months ended			Six months ended		Three months ended
	June 30,			June 30,		March 31,
	2022		2021	2022	2021	2023		2022

	amounts in millions					amounts in millions
Net revenue	$	220	397	452	774	$	259	297
Costs of goods sold		(170)	(301)	(348)	(589)		(165)	(183)
Operating expenses		(7)	(10)	(14)	(20)		(10)	(11)
SG&A expenses (excluding stock-based compensation)		(61)	(77)	(126)	(150)		(80)	(72)
Adjusted OIBDA		(18)	9	(36)	15		4	31
Restructuring charges		(6)	—	(8)	—
Stock-based compensation		(3)	(4)	(6)	(8)		(1)	(1)
Depreciation and amortization		(24)	(20)	(39)	(40)		(5)	(6)
Operating income (loss)	$	(51)	(15)	(89)	(33)	$	(2)	24

~~Zulily's~~CBI's consolidated net revenue decreased ~~44.6% and 41.6%~~12.8% for the three ~~and six~~ months ended ~~June 30, 2022, respectively,~~March 31, 2023, as compared to the corresponding ~~periods~~period in the prior year. The decrease in net revenue for the three ~~and six~~ months ended ~~June 30, 2022~~March 31, 2023 was the result of a ~~50.6%~~decrease in ASP and ~~48.2% decline, respectively,~~orders shipped compared to the prior year. The decrease in ~~total units~~ASP was the result of increased promotional activity. The decrease in orders shipped ~~offset by a 12.2% increase in ASP. The decline in shipped units resulted from a 38.1% decline in active customers~~was due to ~~a reduction in total marketing spend~~softness across home categories and ~~product scarcity.~~the apparel segment.

~~Zulily's~~CBI's cost of goods sold as a percentage of net revenue was ~~77.3%~~63.7% and ~~75.8%~~61.6% for the three months ended ~~June 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and 77.0% and 76.1% for the six months ended June 30, 2022 and 2021,~~ respectively. For the three months ended ~~June 30, 2022,~~March 31, 2023, the increase in cost of goods sold as a percentage of net revenue was primarily due to unfavorable fixed costs driven mostly by sales deleverage. For the six months ended June 30, 2022, the increase was primarily due to unfavorable fixed costs driven mostly by sales deleverage, partially offset by favorable product margin.increased promotional activity and higher warehousing costs.

Operating expenses are principally comprised of credit card processing fees and customer service ~~expenses.~~expenses which are variable expenses that support sales activity. For the three ~~and six~~ months ended ~~June 30, 2022,~~March 31, 2023, operating expenses decreased slightly compared to the corresponding period in the prior year due to ~~decreased sales volumes.~~lower revenue.

~~Zulily’s~~CBI’s SG&A expenses (excluding stock-based compensation) include ~~personnel related costs for general corporate functions, marketing~~print, digital and ~~advertising expenses, information technology, and the costs associated with the use by these functions of facilities and equipment, including rent.~~retail marketing. For the three months ended ~~June 30, 2022,~~March 31, 2023, as a percentage of net revenue, these expenses increased from ~~19.4%~~24.2% to ~~27.7% and for~~30.9%. For the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, the increase in SG&A expenses as a percentage of net revenue ~~these expense increased from 19.4% to 27.9%. For the three and six months ended June 30, 2022, the increase~~ was primarily attributable to ~~sales deleverage~~increased catalog production costs, digital marketing investments, and ~~an increase in technology spend partially offset by reduced marketing spend.~~retail store expansion.

Zulily recorded $6 million and $8 million of restructuring charges during the three and six months ended June 30, 2022, respectively, principally related to its regional office space strategy and expenses associated with its Pennsylvania facility closure, coupled with reduction in corporate workforce.

~~Zulily’s~~CBI’s total depreciation and amortization expense ~~increased $4 million and~~ decreased $1 million for the three ~~and six~~ months ended ~~June 30, 2022, respectively,~~March 31, 2023, as compared to the corresponding ~~periods~~period in the prior year. The ~~increase~~decrease for the three months ended ~~June 30,~~March 31, 2022 was primarily due to ~~accelerated depreciation resulting from its Pennsylvania facility closure, partially offset by amortization of Zulily’s customer relationship asset~~certain assets reaching the end of ~~its~~their useful life on December, 31, 2021. The decrease for the six months ended June 30, 2022 was primarily due to amortization of Zulily’s customer relationship asset reaching the end of its useful life on December, 31, 2021, partially offset by accelerated depreciation resulting from its Pennsylvania facility closure.lives.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk.

We are exposed to market risk in the normal course of business due to our ongoing investing and financial activities and the conduct of operations by our subsidiaries in different foreign countries. Market risk refers to the risk of loss arising from adverse changes in stock prices, interest rates and foreign currency exchange rates. The risk of loss can be assessed from the perspective of adverse changes in fair values, cash flows and future earnings. We have established policies, procedures and internal processes governing our management of market risks and the use of financial instruments to manage our exposure to such risks.

We are exposed to changes in interest rates primarily as a result of our borrowing and investment activities, which include investments in fixed and floating rate debt instruments and borrowings used to maintain liquidity and to fund business operations. The nature and amount of our long-term and short-term debt are expected to vary as a result of future requirements, market conditions and other factors. We manage our exposure to interest rates by maintaining what we believe is an appropriate mix of fixed and variable rate debt. We believe this best protects us from interest rate risk. We have achieved this mix by (i) issuing fixed rate debt that we believe has a low stated interest rate and significant term to maturity, (ii) issuing variable rate debt with appropriate maturities and interest rates and (iii) entering into interest rate swap arrangements when we deem appropriate. As of ~~June 30, 2022,~~March 31, 2023, our debt is comprised of the following amounts:


	Variable rate debt				Fixed rate debt				Variable rate debt				Fixed rate debt
			Weighted				Weighted				Weighted				Weighted
	Principal		average		Principal		average		Principal		average		Principal		average
	amount		interest rate		amount		interest rate		amount		interest rate		amount		interest rate

	dollar amounts in millions								dollar amounts in millions
QxH and QVC International	$	562	3.0	%	$	4,039	5.1	%	$	1,240	6.3	%	$	3,700	5.1	%
Zulily	$	227	3.0	%	$	—	—	%
CBI									$	48	6.3	%	$	—	—	%
Corporate and other	$	—	—	%	$	1,950	5.3	%	$	57	6.3	%	$	1,748	5.7	%

Qurate Retail is exposed to foreign exchange rate fluctuations related primarily to the monetary assets and liabilities and the financial results of QVC's foreign subsidiaries. Assets and liabilities of foreign subsidiaries for which the functional currency is the local currency are translated into U.S. Dollars at period-end exchange rates, and the statements of operations are generally translated at the average exchange rate for the period. Exchange rate fluctuations on translating foreign currency financial statements into U.S. Dollars that result in unrealized gains or losses are referred to as translation adjustments. Cumulative translation adjustments are recorded in accumulated other comprehensive earnings (loss) as a separate component of stockholders' equity. Transactions denominated in currencies other than the functional currency are recorded based on exchange rates at the time such transactions arise. Subsequent changes in exchange rates result in transaction gains and losses, which are reflected in income as unrealized (based on period-end translations) or realized upon settlement of the transactions. Cash flows from our operations in foreign countries are translated at the average rate for the period. Accordingly, Qurate Retail may experience economic loss and a negative impact on earnings and equity with respect to our holdings solely as a result of foreign currency exchange rate fluctuations. QVC's reported Adjusted OIBDA for the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 would have been impacted by approximately $2$1 million, for every 1% change in foreign currency exchange rates relative to the U.S. Dollar.

We periodically assess the effectiveness of our derivative financial instruments. With regard to interest rate swaps, we monitor the fair value of interest rate swaps as well as the effective interest rate of the interest rate swap yields, in comparison to historical interest rate trends. We believe that any losses incurred with regard to interest rate swaps would be largely offset by the effects of interest rate movements on the underlying debt facilities. These measures allow our management to evaluate the success of our use of derivative instruments and to determine when to enter into or exit from derivative instruments.

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Item 4. Controls and Procedures.

Disclosure Controls and Procedures

In accordance with Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company carried out an evaluation, under the supervision and with the participation of management, including its chief executive officer and its principal accounting and financial officer (the "Executives"), of the effectiveness of its

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disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Executives concluded that the Company's disclosure controls and procedures were not effective as of ~~June 30, 2022 to provide reasonable assurance that information required to be disclosed~~March 31, 2023 because of the material weakness in its ~~reports filed or submitted under~~internal control over financial reporting as discussed in our Annual Report on Form 10-K for the ~~Exchange Act~~year ended December 31, 2022 (“2022 10-K”). Management is ~~recorded, processed, summarized and reported within~~monitoring the ~~time periods specified~~implementation of the remediation plan described in the ~~Securities and Exchange Commission's rules and forms.~~2022 10-K, as described below.

Changes in Internal Control Over Financial Reporting

There ~~has been~~was no change in the Company’s internal control over financial reporting that occurred during the ~~three months~~Company’s quarter ended ~~June 30, 2022~~March 31, 2023, that has materially affected, or is reasonably likely to materially affect, ~~its~~the Company’s internal control over financial reporting.

Remediation Plan for Material Weakness in Internal Control over Financial Reporting

In response to the material weakness described in the 2022 10-K, the Company developed a plan with oversight from the audit committee of the board of directors to remediate the material weakness. The remediation activities include:

●

Enhancing the ITGC risk assessment process;

●

Evaluating talent and addressing identified gaps;

●

Delivering training on internal control over financial reporting;

●

Improving change management and logical access control activities that contributed to the ITGC material weakness including removing all inappropriate IT system access associated with the ITGC material weakness;

●

Implementing user activity monitoring for control activities contributing to the ITGC material weakness; and

●

Implementing additional compensating control activities over the completeness and accuracy of data provided by the affected systems.

The Company believes the foregoing efforts will remediate the material weakness described in the 2022 10-K. Because the reliability of the internal control process requires repeatable execution, the successful on-going remediation of the material weakness will require on-going review and evidence of effectiveness prior to concluding that the controls are effective.

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PART II—OTHER INFORMATION

~~Item 1. Legal Proceedings~~

~~None.~~

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Share Repurchase Programs

In May 2019, the Company’s board of directors authorized the repurchase of $500 million of Series A Qurate Retail common stock (“QRTEA”) or Series B Qurate Retail common stock (“QRTEB”). In August 2021, the Company’s board of directors authorized the repurchase of $500 million of QRTEA or QRTEB.

There were no repurchases of QRTEA or QRTEB during the three months ended ~~June 30, 2022~~March 31, 2023 under the Company’s share repurchase program.

During the three months ended ~~June 30, 2022,~~March 31, 2023, no shares of QRTEA or QRTEB, orand 15 shares of Qurate Retail 8.0% Series A Cumulative Redeemable Preferred Stock were surrendered by our officers and employees to pay withholding taxes and other deductions in connection with the vesting of their restricted stock, restricted stock units, and options.

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Item 6. Exhibits

(a) Exhibits

Listed below are the exhibits which are filed as a part of this Quarterly Report (according to the number assigned to them in Item 601 of Regulation S-K):


10.1		Qurate Retail, Inc. Nonemployee Director Deferred Compensation Plan (Amended and Restated Effective December 8, 2022)*
31.1		Rule 13a-14(a)/15d-14(a) Certification*
31.2		Rule 13a-14(a)/15d-14(a) Certification*
32		Section 1350 Certification**
99.1		Reconciliation of Qurate Retail, Inc. Net Assets and Net Earnings to Liberty Interactive LLC Net Assets and Net Earnings**
101.INS		Inline XBRL Instance Document* - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document*
101.CAL		Inline XBRL Taxonomy Calculation Linkbase Document*
101.LAB		Inline XBRL Taxonomy Label Linkbase Document*
101.PRE		Inline XBRL Taxonomy Presentation Linkbase Document*
101.DEF		Inline XBRL Taxonomy Definition Document*
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*

*	Filed herewith

**	Furnished herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	QURATE RETAIL, INC.
Date: ~~August~~May 5, ~~2022~~2023	By:	/s/ DAVID RAWLINSON II
		David Rawlinson II President and Chief Executive Officer
Date: ~~August~~May 5, ~~2022~~2023	By:	/s/ BRIAN J. WENDLING
		Brian J. Wendling Chief Accounting Officer and Principal Financial Officer

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