Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 31, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-33982 | |
Entity Registrant Name | QURATE RETAIL, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-1288730 | |
Entity Address, Address Line One | 12300 Liberty Boulevard | |
Entity Address, City or Town | Englewood | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80112 | |
City Area Code | 720 | |
Local Phone Number | 875-5300 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001355096 | |
Amendment Flag | false | |
Common Class A | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Series A common stock | |
Trading Symbol | QRTEA | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 387,844,870 | |
Common Class B | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Series B common stock | |
Trading Symbol | QRTEB | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 29,376,619 | |
8.0% Series A Cumulative Redeemable Preferred Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 8.0% Series A Cumulative Redeemable Preferred Stock | |
Trading Symbol | QRTEP | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 1,044 | $ 673 |
Trade and other receivables, net of allowance for doubtful accounts of $147 million and $129 million, respectively | 1,142 | 1,854 |
Inventory, net | 1,481 | 1,413 |
Other current assets | 702 | 636 |
Total current assets | 4,369 | 4,576 |
Property and equipment, net | 1,282 | 1,351 |
Intangible assets not subject to amortization (note 5): | ||
Goodwill | 6,601 | 6,576 |
Trademarks | 3,168 | 3,168 |
Intangible assets not subject to amortization | 9,769 | 9,744 |
Intangible assets subject to amortization, net (note 5) | 799 | 955 |
Other assets, at cost, net of accumulated amortization | 573 | 679 |
Total assets | 16,792 | 17,305 |
Current liabilities: | ||
Accounts payable | 1,147 | 1,091 |
Accrued liabilities | 1,101 | 1,173 |
Current portion of debt, including $1,682 million and $1,557 million measured at fair value (note 6) | 1,682 | 1,557 |
Other current liabilities | 226 | 180 |
Total current liabilities | 4,156 | 4,001 |
Long-term debt (note 6) | 5,184 | 5,855 |
Deferred income tax liabilities | 1,744 | 1,716 |
Other liabilities | 753 | 761 |
Preferred stock (note 7) | 1,248 | |
Total liabilities | 13,085 | 12,333 |
Stockholders' equity: | ||
Additional paid-in capital | 27 | |
Accumulated other comprehensive earnings (loss), net of taxes | 16 | (55) |
Retained earnings | 3,531 | 4,891 |
Total stockholders' equity | 3,578 | 4,840 |
Noncontrolling interests in equity of subsidiaries | 129 | 132 |
Total equity | 3,707 | 4,972 |
Commitments and contingencies (note 8) | ||
Total liabilities and equity | 16,792 | 17,305 |
Common Class A | ||
Stockholders' equity: | ||
Common stock value | 4 | 4 |
Common Class B | ||
Stockholders' equity: | ||
Common stock value | ||
Common Class C | ||
Stockholders' equity: | ||
Common stock value |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Allowance for doubtful accounts | $ 147 | $ 129 |
Current portion of debt, fair value | $ 1,682 | $ 1,557 |
Common Class A | ||
Common stock, par or stated value per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 4,000,000,000 | 4,000,000,000 |
Common stock, shares issued | 387,810,463 | 386,691,461 |
Common stock, shares outstanding | 387,810,463 | 386,691,461 |
Common Class B | ||
Common stock, par or stated value per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 29,376,619 | 29,278,424 |
Common stock, shares outstanding | 29,376,619 | 29,278,424 |
Common Class C | ||
Common stock, par or stated value per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue: | ||||
Total revenue, net | $ 3,383 | $ 3,089 | $ 9,725 | $ 9,285 |
Type of revenue | us-gaap:RetailMember | us-gaap:RetailMember | us-gaap:RetailMember | us-gaap:RetailMember |
Operating costs and expenses: | ||||
Cost of retail sales (exclusive of depreciation shown separately below) | $ 2,178 | $ 2,026 | $ 6,328 | $ 6,045 |
Type of cost of retail sales | us-gaap:RetailMember | us-gaap:RetailMember | us-gaap:RetailMember | us-gaap:RetailMember |
Operating expense | $ 203 | $ 200 | $ 605 | $ 593 |
Selling, general and administrative, including stock-based compensation (note 2) | 455 | 424 | 1,323 | 1,273 |
Depreciation and amortization | 141 | 146 | 427 | 457 |
Impairment of intangible assets | 1,020 | 1,020 | ||
Total operating costs and expenses | 2,977 | 3,816 | 8,683 | 9,388 |
Operating income (loss) | 406 | (727) | 1,042 | (103) |
Other income (expense): | ||||
Interest expense | (98) | (93) | (290) | (282) |
Share of earnings (losses) of affiliates, net | (32) | (36) | (96) | (104) |
Realized and unrealized gains (losses) on financial instruments, net (note 4) | (12) | (45) | (127) | (239) |
Gains (losses) on transactions, net | 223 | 224 | (1) | |
Other, net | (65) | (4) | (65) | (18) |
Total other income (expense) | 16 | (178) | (354) | (644) |
Earnings (loss) before income taxes | 422 | (905) | 688 | (747) |
Income tax (expense) benefit | (70) | 150 | (111) | 188 |
Net earnings (loss) | 352 | (755) | 577 | (559) |
Less net earnings (loss) attributable to the noncontrolling interests | 14 | 15 | 39 | 38 |
Net earnings (loss) attributable to Qurate Retail, Inc. shareholders | $ 338 | $ (770) | $ 538 | $ (597) |
Earnings (Loss) Per Common Share | ||||
Basic net earnings (loss) attributable to Series A and Series B Qurate Retail, Inc. Shareholders per common share (note 3) | $ 0.81 | $ (1.85) | $ 1.29 | $ (1.40) |
Diluted net earnings (loss) attributable to Series A and Series B Qurate Retail, Inc. shareholders per common share (note 3) | $ 0.80 | $ (1.85) | $ 1.28 | $ (1.40) |
Condensed Consolidated Statemen
Condensed Consolidated Statements Of Comprehensive Earnings (Loss) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Condensed Consolidated Statements Of Comprehensive Earnings (Loss) | ||||
Net earnings (loss) | $ 352 | $ (755) | $ 577 | $ (559) |
Other comprehensive earnings (loss), net of taxes: | ||||
Foreign currency translation adjustments | 49 | (37) | 45 | (29) |
Recognition of previously unrealized losses (gains) on debt, net | (1) | |||
Comprehensive earnings (loss) attributable to debt credit risk adjustments | (68) | 5 | 31 | (9) |
Other comprehensive earnings (loss) | (19) | (32) | 75 | (38) |
Comprehensive earnings (loss) | 333 | (787) | 652 | (597) |
Less comprehensive earnings (loss) attributable to the noncontrolling interests | 16 | 14 | 43 | 40 |
Comprehensive earnings (loss) attributable to Qurate Retail, Inc. shareholders | $ 317 | $ (801) | $ 609 | $ (637) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net earnings (loss) | $ 577 | $ (559) |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 427 | 457 |
Impairment of intangible assets | 1,020 | |
Stock-based compensation | 46 | 54 |
Share of (earnings) losses of affiliates, net | 96 | 104 |
Realized and unrealized (gains) losses on financial instruments, net | 127 | 239 |
(Gains) losses on transactions, net | (224) | 1 |
Deferred income tax expense (benefit) | 19 | (165) |
Other, net | 52 | 10 |
Changes in operating assets and liabilities | ||
Decrease (increase) in accounts receivable | 720 | 575 |
Decrease (increase) in inventory | (63) | (209) |
Decrease (increase) in prepaid expenses and other assets | 69 | 53 |
(Decrease) increase in trade accounts payable | 52 | (192) |
(Decrease) increase in accrued and other liabilities | (43) | (478) |
Net cash provided (used) by operating activities | 1,855 | 910 |
Cash flows from investing activities: | ||
Investment in and loans to cost and equity investees | (88) | (109) |
Capital expenditures | (165) | (249) |
Expenditures for television distribution rights | (41) | (128) |
Proceeds from Sale and Maturity of Marketable Securities | 269 | |
Net cash provided (used) by investing activities | (25) | (486) |
Cash flows from financing activities: | ||
Borrowings of debt | 1,300 | 2,215 |
Repayments of debt | (2,077) | (2,179) |
Repurchases of Qurate Retail common stock | (392) | |
Withholding taxes on net settlements of stock-based compensation | (3) | (6) |
Dividends paid to noncontrolling interest | (46) | (34) |
Dividends paid to common shareholders | (626) | |
Other financing activities, net | (12) | (72) |
Net cash provided (used) by financing activities | (1,464) | (468) |
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash | 5 | (3) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 371 | (47) |
Cash, cash equivalents and restricted cash at beginning of period | 681 | 660 |
Cash, cash equivalents and restricted cash at end of period | $ 1,052 | $ 613 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements Of Cash Flows (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Condensed Consolidated Statements Of Cash Flows | ||
Cash and cash equivalents | $ 1,044 | $ 673 |
Restricted cash included in other current assets | $ 8 | $ 8 |
Restricted Cash and Cash Equivalents, Asset, Statement of Financial Position [Extensible List] | us-gaap:OtherCurrentAssetsMember | us-gaap:OtherCurrentAssetsMember |
Total cash, cash equivalents and restricted cash in the condensed consolidated statement of cash flows | $ 1,052 | $ 681 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement Of Equity - USD ($) $ in Millions | Common Class ACommon Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Earnings (Loss) | Retained Earnings | Noncontrolling Interest In Equity Of Subsidiaries | Total |
Balance at Dec. 31, 2018 | $ 4 | $ (55) | $ 5,675 | $ 120 | $ 5,744 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings (loss) | (597) | 38 | (559) | |||
Other comprehensive earnings (loss) | (40) | 2 | (38) | |||
Stock compensation | $ 54 | 54 | ||||
Series A Qurate Retail stock repurchases | (392) | (392) | ||||
Distribution to noncontrolling interest | (34) | (34) | ||||
Withholding taxes on net share settlements of stock-based compensation | (6) | (6) | ||||
Reclassification | 344 | (344) | ||||
Balance at Sep. 30, 2019 | 4 | (95) | 4,734 | 126 | 4,769 | |
Balance at Jun. 30, 2019 | 4 | (64) | 5,583 | 118 | 5,641 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings (loss) | (770) | 15 | (755) | |||
Other comprehensive earnings (loss) | (31) | (1) | (32) | |||
Stock compensation | 17 | 17 | ||||
Series A Qurate Retail stock repurchases | (96) | (96) | ||||
Distribution to noncontrolling interest | (6) | (6) | ||||
Reclassification | 79 | (79) | ||||
Balance at Sep. 30, 2019 | 4 | (95) | 4,734 | 126 | 4,769 | |
Balance at Dec. 31, 2019 | 4 | (55) | 4,891 | 132 | 4,972 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings (loss) | 538 | 39 | 577 | |||
Other comprehensive earnings (loss) | 71 | 4 | 75 | |||
Stock compensation | 44 | 44 | ||||
Distribution to noncontrolling interest | (46) | (46) | ||||
Distribution of dividends to common shareholders | (1,898) | (1,898) | ||||
Other | (17) | (17) | ||||
Balance at Sep. 30, 2020 | 4 | 27 | 16 | 3,531 | 129 | 3,707 |
Balance at Jun. 30, 2020 | 4 | 25 | 37 | 5,091 | 129 | 5,286 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings (loss) | 338 | 14 | 352 | |||
Other comprehensive earnings (loss) | (21) | 2 | (19) | |||
Stock compensation | 17 | 17 | ||||
Distribution to noncontrolling interest | (16) | (16) | ||||
Distribution of dividends to common shareholders | (1,898) | (1,898) | ||||
Other | (15) | (15) | ||||
Balance at Sep. 30, 2020 | $ 4 | $ 27 | $ 16 | $ 3,531 | $ 129 | $ 3,707 |
Basis Of Presentation
Basis Of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Basis of Presentation | |
Basis of Presentation | (1) Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of Qurate Retail, Inc. (formerly named Liberty Interactive Corporation, prior to the GCI Liberty Split-Off defined and described below) 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”), 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 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, 2019, 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, 2019 (the “2019 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 the virus, 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. As a result of COVID-19, management increased the amounts of certain estimated reserves, including but not limited to, uncollectible receivables and inventory obsolescence for the three and nine months ended September 30, 2020. Other than these changes, management is not presently aware of any events or circumstances arising from the COVID-19 pandemic that would require the Company to update our estimates or 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 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”) (for accounting purposes, a related party of the Company) entered into a tax sharing agreement. Pursuant to the tax sharing agreement, GCI Liberty has 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-percent or greater interest (measured by vote or value) in the stock of GCI Liberty (or any successor corporation). 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”). 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., GCI Liberty, and Liberty Broadband Corporation (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 19% for the Company. 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 was reimbursable to LMC for both the three months ended September 30, 2020 and 2019, and $7 million and $5 million was reimbursable to LMC for the nine months ended September 30, 2020 and 2019, respectively. Qurate Retail had a tax sharing payable with LMC and GCI Liberty in the amount of approximately $125 million and $95 million as of September 30, 2020 and December 31, 2019, respectively, included in Other liabilities in the condensed consolidated balance sheets. On August 21, 2020, Qurate Retail announced that an authorized committee of its Board of Directors had declared a special dividend (the “Special Dividend”) on each outstanding share of its Series A and Series B common stock consisting of (i) cash in the amount of $1.50 per common share, for an aggregate cash dividend of approximately $633 million, and (ii) 0.03 shares of newly issued 8.0% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share (the “Preferred Stock”), having an initial liquidation price of $100 per share of Preferred Stock, with cash paid in lieu of fractional shares. The distribution ratio for the Preferred Stock portion of the Special Dividend was equivalent to $3.00 in initial liquidation preference per common share, for an aggregate issuance of approximately $1.3 billion aggregate liquidation preference. The dividend was distributed on September 14, 2020 to holders of record of Qurate Retail’s Series A and Series B common stock. Holders of the Preferred Stock are entitled to receive quarterly cash dividends at a fixed rate of 8.0% per year on a cumulative basis, beginning December 15, 2020 and thereafter on each of March 15, June 15, September 15 and December 15 during the term. The Preferred Stock is non-voting, except in limited circumstances as required by law, and subject to a mandatory redemption on March 15, 2031. During the three and nine months ended September 30, 2020 the Company recognized a gain as a result of the sale of one of its alternative energy investments. The Company received total cash consideration of $272 million and recorded a gain of $224 million on the sale. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Stock-Based Compensation | |
Stock-Based Compensation | (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. In connection with the Special Dividend, holders of RSAs and RSUs of Series A Qurate Retail common stock (“QRTEA”) outstanding at the close of business on the record date received: i. a special cash dividend in the amount of $1.50 per share for each QRTEA RSA and RSU so held (“Cash Dividend”), and ii. a special dividend of 0.03 shares of newly issued Preferred Stock for each QRTEA RSA and RSU so held, with cash distributed in lieu of fractional shares. The Preferred Stock dividend related to QRTEA RSAs and RSUs was issued in the form of Preferred Stock RSAs and RSUs, corresponding to the original grant of either RSAs or RSUs. The Cash Dividend for RSA holders was paid upon distribution. The Cash Dividend for RSU holders along with the Preferred Stock RSAs and RSUs are subject to the same vesting schedules as those applicable to the corresponding original QRTEA RSAs and RSUs. Also in connection with the Special Dividend, holders of outstanding stock options and stock appreciation rights (“SARs”) to purchase shares of QRTEA or Series B Qurate Retail common stock (“QRTEB” and together with QRTEA, “QRTEA/B”) on the record date were adjusted pursuant to the anti-dilution provisions of the incentive plans under which the stock options and SARs were granted. The adjustment to the exercise price and the number of shares subject to the original stock option or SAR award preserved: i. the pre-Special Dividend intrinsic value of the original QRTEA/B stock option or SAR, and ii. the pre-Special Dividend ratio of the exercise price to the market price of the corresponding original QRTEA/B stock option or SAR. Included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations are $19 million and $17 million of stock-based compensation during the three months ended September 30, 2020 and 2019, respectively, and $46 million and $54 million of stock-based compensation during the nine months ended September 30, 2020 and 2019, respectively. The following table presents the number and weighted average GDFV of options granted by the Company during the nine months ended September 30, 2020: Nine months ended September 30, 2020 Options Granted (000's) Weighted Average GDFV Series A Qurate Retail common stock, QVC and HSN employees (1) 4,166 $ 1.94 Series A Qurate Retail common stock, Zulily employees (1) 618 $ 1.94 Series A Qurate Retail common stock, Qurate Retail employees (2) 84 $ 4.65 (1) Grants vest semi-annually over four years . (2) Grants vest between three and four years . During the nine months ended September 30, 2020, Qurate Retail granted to employees 9.8 million RSUs of QRTEA. The Series A RSUs had a GDFV of $4.66 per share and generally vest annually over four years. In connection with our Chairman’s employment agreement, during the nine months ended September 30, 2020, Qurate Retail granted 584 thousand performance-based RSUs of QRTEA to the Chairman. The Series A RSUs had a GDFV of $4.44 per share at the time they were granted and will cliff vest one year from the month of grant, subject to the satisfaction of certain performance objectives. During the nine months ended September 30, 2020, Qurate Retail also granted 725 thousand performance-based RSUs of QRTEA to its CEO. The Series A RSUs had a GDFV of $4.44 per share at the time they were granted and will cliff vest one year from the month of grant, subject to the satisfaction of certain performance objectives. 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. Also during the nine months ended September 30, 2020, Qurate Retail granted 38 thousand time-based RSUs of QRTEA to our Chairman. The RSUs had a GDFV of $7.44 per share and cliff vest on December 10, 2020. This RSU grant was issued in lieu of our Chairman receiving 50% of his remaining base salary for the last three quarters of calendar year 2020, and he has waived his right to receive the other 50%, in each case, in light of the ongoing financial impact of COVID-19. The Company has calculated the GDFV for all of its equity classified Awards and any subsequent remeasurement of its liability classified Awards using the Black-Scholes-Merton Model. The Company estimates the expected term of the Awards based on historical exercise and forfeiture data. The volatility used in the calculation for Awards is based on the historical volatility of Qurate Retail's stock and the implied volatility of publicly traded Qurate Retail options. The Company uses a zero dividend rate and the risk-free rate for Treasury Bonds with a term similar to that of the subject options. Qurate Retail—Outstanding Awards The following tables present the number and weighted average exercise price ("WAEP") of the Awards 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 Awards. Weighted Aggregate average intrinsic Series A remaining value (000's) WAEP life (millions) Outstanding at January 1, 2020 23,248 $ 21.28 Granted 4,868 $ 4.53 Exercised (212) $ 0.50 Forfeited/Cancelled (4,447) $ 18.74 Special Dividend adjustment 15,145 $ 11.19 Outstanding at September 30, 2020 38,602 $ 11.22 4.3 years $ 45 Exercisable at September 30, 2020 20,002 $ 14.59 3.2 years $ 7 Weighted Aggregate average intrinsic Series B remaining value (000's) WAEP life (millions) Outstanding at January 1, 2020 1,844 $ 27.09 Granted — $ — Exercised — $ — Forfeited/Cancelled — $ — Special Dividend adjustment 1,182 $ 16.51 Outstanding at September 30, 2020 3,026 $ 16.51 2.3 years $ — Exercisable at September 30, 2020 3,026 $ 16.51 2.3 years $ — There were no options to purchase shares of QRTEB granted during the nine months ended September 30, 2020. As of September 30, 2020, the total unrecognized compensation cost related to unvested Awards was approximately $45 million. Such amount will be recognized in the Company's consolidated statements of operations over a weighted average period of approximately 2.4 years. As of September 30, 2020, Qurate Retail reserved for issuance upon exercise of outstanding stock options approximately 38.6 million shares of QRTEA and 3.0 million shares of QRTEB. |
Earnings (Loss) Per Common Shar
Earnings (Loss) Per Common Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings (Loss) Per Common Share | |
Earnings (Loss) Per Common Share | (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 both of the three and nine months ended September 30, 2020 and 2019 are 29 million potential common shares, because their inclusion would have been antidilutive. Qurate Retail Common Stock Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 number of shares in millions Basic WASO 417 417 417 426 Potentially dilutive shares 4 1 3 1 Diluted WASO 421 418 420 427 |
Assets and Liabilities Measured
Assets and Liabilities Measured at Fair Value | 9 Months Ended |
Sep. 30, 2020 | |
Assets and Liabilities Measured at Fair Value | |
Assets and Liabilities Measured at Fair Value | (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 Fair Value Measurements at September 30, 2020 December 31, 2019 Quoted Quoted prices prices in active Significant in active Significant markets for other markets for other identical observable identical observable assets inputs assets inputs Description Total (Level 1) (Level 2) Total (Level 1) (Level 2) amounts in millions Cash equivalents $ 524 524 — 339 339 — Indemnification asset $ 310 — 310 202 — 202 Debt $ 1,682 — 1,682 1,557 — 1,557 The majority of the Company's Level 2 financial assets and liabilities are primarily debt 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 GCI Liberty’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 September 30, 2020 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 September 30, 2020, a holder of the 1.75% Exchangeable Debentures has the ability to exchange and, accordingly, such indemnification asset is included as a current asset in our condensed consolidated balance sheet as of that date. 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 Nine months ended September 30, September 30, 2020 2019 2020 2019 amounts in millions Exchangeable senior debentures (145) (49) (225) (304) Indemnification asset 94 3 107 58 Other financial instruments 39 1 (9) 7 $ (12) (45) (127) (239) 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 loss of $90 million and a gain of $7 million for the three months ended September 30, 2020 and 2019, respectively, and a gain of $39 million and a loss of $12 million for the nine months ended September 30, 2020 and 2019, respectively. The cumulative change was a gain of $210 million as of September 30, 2020. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2020 | |
Intangible Assets | |
Intangible Assets | (5) Intangible Assets Goodwill Changes in the carrying amount of goodwill are as follows: Corporate and QxH QVC Int'l Zulily Other Total amounts in millions Balance at January 1, 2020 $ 5,228 859 477 12 6,576 Foreign currency translation adjustments — 25 — — 25 Balance at September 30, 2020 $ 5,228 884 477 12 6,601 Intangible Assets Subject to Amortization Amortization expense for intangible assets with finite useful lives was $89 million and $95 million for the three months ended September 30, 2020 and 2019, respectively, and $274 million and $289 million for the nine months ended September 30, 2020 and 2019, respectively. Based on its amortizable intangible assets as of September 30, 2020, Qurate Retail expects that amortization expense will be as follows for the next five years (amounts in millions): Remainder of 2020 $ 92 2021 $ 267 2022 $ 157 2023 $ 103 2024 $ 75 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2020 | |
Long-Term Debt | |
Long-Term Debt | (6) Long-Term Debt Debt is summarized as follows: Outstanding principal at Carrying value September 30, 2020 September 30, 2020 December 31, 2019 amounts in millions Corporate level debentures 8.5% Senior Debentures due 2029 $ 287 285 285 8.25% Senior Debentures due 2030 504 502 502 4% Exchangeable Senior Debentures due 2029 431 355 327 3.75% Exchangeable Senior Debentures due 2030 432 342 318 3.5% Exchangeable Senior Debentures due 2031 218 371 422 0.75% Exchangeable Senior Debentures due 2043 — — 2 1.75% Exchangeable Senior Debentures due 2046 332 614 488 Subsidiary level notes and facilities QVC 5.125% Senior Secured Notes due 2022 — — 500 QVC 4.375% Senior Secured Notes due 2023 750 750 750 QVC 4.85% Senior Secured Notes due 2024 600 600 600 QVC 4.45% Senior Secured Notes due 2025 600 599 599 QVC 4.75% Senior Secured Notes due 2027 575 575 — QVC 4.375% Senior Secured Notes due 2028 500 500 — QVC 5.45% Senior Secured Notes due 2034 400 399 399 QVC 5.95% Senior Secured Notes due 2043 300 300 300 QVC 6.375% Senior Secured Notes due 2067 225 225 225 QVC 6.25% Senior Secured Notes due 2068 500 500 500 QVC Bank Credit Facilities — — 1,235 Deferred loan costs — (51) (40) Total consolidated Qurate Retail debt $ 6,654 6,866 7,412 Less current classification (1,682) (1,557) Total long-term debt $ 5,184 5,855 QVC Bank Credit Facilities On December 31, 2018, QVC entered into the Fourth Amended and Restated Credit Agreement with Zulily as co-borrower (collectively, the “Borrowers”) which is a multi-currency facility that provides for a $2.95 billion revolving credit facility, with a $450 million sub-limit for standby letters of credit and $1.5 billion of uncommitted incremental revolving loan commitments or incremental term loans. The Fourth Amended and Restated Credit Agreement includes a $400 million tranche that may be borrowed by QVC or Zulily, with a $50 million sub-limit for standby letters of credit. The remaining $2.55 billion and any incremental loans may be borrowed only by QVC. Borrowings that are alternate base rate loans will bear interest at a per annum rate equal to the base rate plus a margin that varies between 0.25% to 0.75% depending on the Borrowers combined ratio of Consolidated Total Debt to Consolidated EBITDA (the “Combined Consolidated Leverage Ratio”). Borrowings that are LIBOR loans will bear interest at a per annum rate equal to the applicable LIBOR rate plus a margin that varies between 1.25% and 1.75% depending on the Borrowers’ Combined 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 ceases to be controlled by Qurate Retail, all of its loans must be repaid and its letters of credit cash collateralized. The facility matures on December 31, 2023. Payment of loans may be accelerated following certain customary events of default. The payment and performance of the Borrowers’ obligations (including Zulily’s obligations) under the Fourth Amended and Restated Credit Agreement are guaranteed by each of QVC’s Material Domestic Subsidiaries (as defined in the Fourth Amended and Restated Credit Agreement). Further, the borrowings under the Fourth Amended and Restated Credit Agreement are secured, pari passu The Fourth Amended and Restated Credit Agreement contains certain affirmative and negative covenants, including certain restrictions on QVC and Zulily 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 QVC’s consolidated leverage ratio, and the Borrowers’ Combined Consolidated Leverage Ratio. Availability under the Fourth Amended and Restated Credit Agreement at September 30, 2020 was $2.9 billion, including the portion available under the $400 million tranche that Zulily may also borrow on. 4.75% Senior Secured Notes due 2027 On February 4, 2020, QVC completed a registered debt offering for $575 million of the 4.75% Senior Secured Notes due 2027 (the "2027 Notes") at par. Interest on the 2027 Notes will be paid semi-annually in February and August, with payments commencing on August 15, 2020. The proceeds were used to partially prepay existing indebtedness under QVC's bank credit facilities. 4.375% Senior Secured Notes due 2028 On August 20, 2020, QVC completed a registered debt offering for $500 million of the 4.375% Senior Secured Notes due 2028 (the "2028 Notes") at par. Interest on the 2028 Notes will be paid semi-annually in March and September, with payments commencing on March 1, 2021. The proceeds were used in a cash tender offer (the “Tender Offer”) to purchase the outstanding $500 million of 5.125% Senior Secured Notes due 2022 (the “2022 Notes”). QVC also issued a notice of redemption exercising its right to optionally redeem any of the 2022 Notes that remained outstanding following the Tender Offer. As a result of the Tender Offer and the redemption, the Company recorded a loss on extinguishment of debt in the condensed consolidated statements of operations of $42 million for both the three and nine months ended September 30, 2020. 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 September 30, 2020 the Company’s exchangeable debentures have been classified as current because the Company does not own shares to redeem the debentures or they are currently redeemable. The 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. On April 1, 2020, T-Mobile US, Inc. completed its acquisition of Sprint Corporation (“TMUS/S Acquisition”) for 0.10256 shares of T-Mobile US, Inc. for every share of Sprint Corporation. Following the TMUS/S Acquisition, the reference shares attributable to each $1,000 original principal amount of the 4.0% Senior Exchangeable Debentures due 2029 and the 3.75% Senior Exchangeable Debentures due 2030 consist of 0.3309 shares and 0.2419 shares of common stock of T-Mobile US, Inc., respectively, and 0.7860 shares and 0.5746 shares of common stock of CenturyLink, Inc., respectively. Debt Covenants Qurate Retail and its subsidiaries are in compliance with all debt covenants at September 30, 2020. 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 September 30, 2020 are as follows (amounts in millions): Senior debentures $ 846 QVC senior secured notes $ 4,481 Due to the variable rate nature, Qurate Retail believes that the carrying amount of its other debt, not discussed above, approximated fair value at September 30, 2020. |
Preferred Stock
Preferred Stock | 9 Months Ended |
Sep. 30, 2020 | |
Preferred Stock | |
Preferred Stock | (7) Preferred Stock On September 14, 2020, Qurate Retail issued the Preferred Stock. There were 13,500,000 shares of Preferred Stock authorized and 12,500,216 shares issued and outstanding 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. 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. 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, 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 two 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. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies. | |
Commitments and Contingencies | (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. |
Information About Qurate Retail
Information About Qurate Retail's Operating Segments | 9 Months Ended |
Sep. 30, 2020 | |
Information About Qurate Retail's Operating Segments | |
Information About Qurate Retail's Operating Segments | (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. Qurate Retail evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as revenue, Adjusted OIBDA, gross margin, average sales price per unit and revenue or sales per customer equivalent. 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 nine months ended September 30, 2020, 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 – Zulily markets and sells a wide variety of consumer products in the United States and several foreign countries through flash sales events, primarily through its app, mobile and desktop experiences. 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 2019 10-K. Performance Measures Disaggregated revenue by segment and product category consisted of the following: Three months ended September 30, 2020 QxH QVC Int'l Zulily Corp and other Total in millions Home $ 819 286 115 248 1,468 Apparel 312 115 147 37 611 Beauty 297 168 17 — 482 Accessories 219 67 94 — 380 Electronics 197 25 3 — 225 Jewelry 93 59 12 — 164 Other revenue 43 3 7 — 53 Total Revenue $ 1,980 723 395 285 3,383 Nine months ended September 30, 2020 QxH QVC Int'l Zulily Corp and other Total in millions Home $ 2,303 829 326 631 4,089 Apparel 913 316 411 108 1,748 Beauty 910 499 50 — 1,459 Accessories 676 188 281 — 1,145 Electronics 588 78 10 — 676 Jewelry 273 155 34 — 462 Other revenue 119 6 21 146 Total Revenue $ 5,782 2,071 1,133 739 9,725 Three months ended September 30, 2019 QxH QVC Int'l Zulily Corp and other Total in millions Home $ 670 236 95 187 1,188 Apparel 334 107 141 39 621 Beauty 303 161 12 — 476 Accessories 199 63 90 — 352 Electronics 209 21 3 — 233 Jewelry 98 59 12 — 169 Other revenue 41 3 6 — 50 Total Revenue $ 1,854 650 359 226 3,089 Nine months ended September 30, 2019 QxH QVC Int'l Zulily Corp and other Total in millions Home $ 2,009 714 298 530 3,551 Apparel 1,005 327 422 117 1,871 Beauty 915 462 37 — 1,414 Accessories 667 190 295 — 1,152 Electronics 564 68 10 — 642 Jewelry 303 161 37 — 501 Other revenue 122 12 20 — 154 Total Revenue $ 5,585 1,934 1,119 647 9,285 For segment reporting purposes, Qurate Retail defines Adjusted OIBDA as revenue less cost of sales, operating expenses, and selling, general and administrative expenses excluding all stock-based compensation and transaction related costs. 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, certain acquisition accounting adjustments, separately reported litigation settlements, transaction related costs (including restructuring, integration, and advisory fees), and impairment charges that are included in the measurement of operating income pursuant to GAAP. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, net income, 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 September 30, Nine months ended September 30, 2020 2019 2020 2019 amounts in millions QxH $ 380 346 1,061 1,093 QVC International 132 106 348 313 Zulily 27 8 74 32 Corporate and other 27 (4) 32 (9) Consolidated Qurate Retail $ 566 456 1,515 1,429 Other Information September 30, 2020 Total assets Investments in affiliates Capital expenditures amounts in millions QxH $ 11,928 38 121 QVC International 2,294 — 19 Zulily 1,085 — 17 Corporate and other 1,485 14 8 Consolidated Qurate Retail $ 16,792 52 165 The following table provides a reconciliation of Adjusted OIBDA to Operating income (loss) and Earnings (loss) before income taxes: Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 amounts in millions Adjusted OIBDA $ 566 456 1,515 1,429 Stock-based compensation (19) (17) (46) (54) Depreciation and amortization (141) (146) (427) (457) Impairment of intangible assets — (1,020) — (1,020) Transaction related costs — — — (1) Operating income (loss) $ 406 (727) 1,042 (103) Interest expense (98) (93) (290) (282) Share of earnings (loss) of affiliates, net (32) (36) (96) (104) Realized and unrealized gains (losses) on financial instruments, net (12) (45) (127) (239) Gains (losses) on transactions, net 223 — 224 (1) Other, net (65) (4) (65) (18) Earnings (loss) before income taxes $ 422 (905) 688 (747) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Schedule of number and weighted average GDFV of option granted | Nine months ended September 30, 2020 Options Granted (000's) Weighted Average GDFV Series A Qurate Retail common stock, QVC and HSN employees (1) 4,166 $ 1.94 Series A Qurate Retail common stock, Zulily employees (1) 618 $ 1.94 Series A Qurate Retail common stock, Qurate Retail employees (2) 84 $ 4.65 (1) Grants vest semi-annually over four years . (2) Grants vest between three and four years . |
Common Class A | |
Schedule of number, weighted average exercise price ("WAEP"), Weighted average remaining life and aggregate intrinsic value of the awards | Weighted Aggregate average intrinsic Series A remaining value (000's) WAEP life (millions) Outstanding at January 1, 2020 23,248 $ 21.28 Granted 4,868 $ 4.53 Exercised (212) $ 0.50 Forfeited/Cancelled (4,447) $ 18.74 Special Dividend adjustment 15,145 $ 11.19 Outstanding at September 30, 2020 38,602 $ 11.22 4.3 years $ 45 Exercisable at September 30, 2020 20,002 $ 14.59 3.2 years $ 7 |
Common Class B | |
Schedule of number, weighted average exercise price ("WAEP"), Weighted average remaining life and aggregate intrinsic value of the awards | Weighted Aggregate average intrinsic Series B remaining value (000's) WAEP life (millions) Outstanding at January 1, 2020 1,844 $ 27.09 Granted — $ — Exercised — $ — Forfeited/Cancelled — $ — Special Dividend adjustment 1,182 $ 16.51 Outstanding at September 30, 2020 3,026 $ 16.51 2.3 years $ — Exercisable at September 30, 2020 3,026 $ 16.51 2.3 years $ — |
Earnings (Loss) Per Common Sh_2
Earnings (Loss) Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings (Loss) Per Common Share | |
Schedule of weighted average number of shares outstanding | Qurate Retail Common Stock Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 number of shares in millions Basic WASO 417 417 417 426 Potentially dilutive shares 4 1 3 1 Diluted WASO 421 418 420 427 |
Assets and Liabilities Measur_2
Assets and Liabilities Measured at Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Assets and Liabilities Measured at Fair Value | |
Schedule of assets and liabilities measured at fair value | Fair Value Measurements at Fair Value Measurements at September 30, 2020 December 31, 2019 Quoted Quoted prices prices in active Significant in active Significant markets for other markets for other identical observable identical observable assets inputs assets inputs Description Total (Level 1) (Level 2) Total (Level 1) (Level 2) amounts in millions Cash equivalents $ 524 524 — 339 339 — Indemnification asset $ 310 — 310 202 — 202 Debt $ 1,682 — 1,682 1,557 — 1,557 |
Summary of realized and unrealized gains (losses) on financial instruments | Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 amounts in millions Exchangeable senior debentures (145) (49) (225) (304) Indemnification asset 94 3 107 58 Other financial instruments 39 1 (9) 7 $ (12) (45) (127) (239) |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Intangible Assets | |
Schedule of changes in the carrying amount of goodwill | Corporate and QxH QVC Int'l Zulily Other Total amounts in millions Balance at January 1, 2020 $ 5,228 859 477 12 6,576 Foreign currency translation adjustments — 25 — — 25 Balance at September 30, 2020 $ 5,228 884 477 12 6,601 |
Schedule of amortization expense for the next five years | Based on its amortizable intangible assets as of September 30, 2020, Qurate Retail expects that amortization expense will be as follows for the next five years (amounts in millions): Remainder of 2020 $ 92 2021 $ 267 2022 $ 157 2023 $ 103 2024 $ 75 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Long-Term Debt | |
Schedule of debt summarized | Outstanding principal at Carrying value September 30, 2020 September 30, 2020 December 31, 2019 amounts in millions Corporate level debentures 8.5% Senior Debentures due 2029 $ 287 285 285 8.25% Senior Debentures due 2030 504 502 502 4% Exchangeable Senior Debentures due 2029 431 355 327 3.75% Exchangeable Senior Debentures due 2030 432 342 318 3.5% Exchangeable Senior Debentures due 2031 218 371 422 0.75% Exchangeable Senior Debentures due 2043 — — 2 1.75% Exchangeable Senior Debentures due 2046 332 614 488 Subsidiary level notes and facilities QVC 5.125% Senior Secured Notes due 2022 — — 500 QVC 4.375% Senior Secured Notes due 2023 750 750 750 QVC 4.85% Senior Secured Notes due 2024 600 600 600 QVC 4.45% Senior Secured Notes due 2025 600 599 599 QVC 4.75% Senior Secured Notes due 2027 575 575 — QVC 4.375% Senior Secured Notes due 2028 500 500 — QVC 5.45% Senior Secured Notes due 2034 400 399 399 QVC 5.95% Senior Secured Notes due 2043 300 300 300 QVC 6.375% Senior Secured Notes due 2067 225 225 225 QVC 6.25% Senior Secured Notes due 2068 500 500 500 QVC Bank Credit Facilities — — 1,235 Deferred loan costs — (51) (40) Total consolidated Qurate Retail debt $ 6,654 6,866 7,412 Less current classification (1,682) (1,557) Total long-term debt $ 5,184 5,855 |
Schedule of fair value of debt securities that are not reported at fair value condensed consolidated balance sheet | 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 September 30, 2020 are as follows (amounts in millions): Senior debentures $ 846 QVC senior secured notes $ 4,481 |
Information About Qurate Reta_2
Information About Qurate Retail's Operating Segments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Information About Qurate Retail's Operating Segments | |
Schedule of disaggregation of revenue | Three months ended September 30, 2020 QxH QVC Int'l Zulily Corp and other Total in millions Home $ 819 286 115 248 1,468 Apparel 312 115 147 37 611 Beauty 297 168 17 — 482 Accessories 219 67 94 — 380 Electronics 197 25 3 — 225 Jewelry 93 59 12 — 164 Other revenue 43 3 7 — 53 Total Revenue $ 1,980 723 395 285 3,383 Nine months ended September 30, 2020 QxH QVC Int'l Zulily Corp and other Total in millions Home $ 2,303 829 326 631 4,089 Apparel 913 316 411 108 1,748 Beauty 910 499 50 — 1,459 Accessories 676 188 281 — 1,145 Electronics 588 78 10 — 676 Jewelry 273 155 34 — 462 Other revenue 119 6 21 146 Total Revenue $ 5,782 2,071 1,133 739 9,725 Three months ended September 30, 2019 QxH QVC Int'l Zulily Corp and other Total in millions Home $ 670 236 95 187 1,188 Apparel 334 107 141 39 621 Beauty 303 161 12 — 476 Accessories 199 63 90 — 352 Electronics 209 21 3 — 233 Jewelry 98 59 12 — 169 Other revenue 41 3 6 — 50 Total Revenue $ 1,854 650 359 226 3,089 Nine months ended September 30, 2019 QxH QVC Int'l Zulily Corp and other Total in millions Home $ 2,009 714 298 530 3,551 Apparel 1,005 327 422 117 1,871 Beauty 915 462 37 — 1,414 Accessories 667 190 295 — 1,152 Electronics 564 68 10 — 642 Jewelry 303 161 37 — 501 Other revenue 122 12 20 — 154 Total Revenue $ 5,585 1,934 1,119 647 9,285 |
Summarized Adjusted OIBDA | Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 amounts in millions QxH $ 380 346 1,061 1,093 QVC International 132 106 348 313 Zulily 27 8 74 32 Corporate and other 27 (4) 32 (9) Consolidated Qurate Retail $ 566 456 1,515 1,429 |
Other Information By Segment | September 30, 2020 Total assets Investments in affiliates Capital expenditures amounts in millions QxH $ 11,928 38 121 QVC International 2,294 — 19 Zulily 1,085 — 17 Corporate and other 1,485 14 8 Consolidated Qurate Retail $ 16,792 52 165 |
Reconciliation Of Segment Adjusted OIBDA To Operating income (loss) and Earnings (Loss) From Continuing Operations Before Income Taxes | Three months ended Nine months ended September 30, September 30, 2020 2019 2020 2019 amounts in millions Adjusted OIBDA $ 566 456 1,515 1,429 Stock-based compensation (19) (17) (46) (54) Depreciation and amortization (141) (146) (427) (457) Impairment of intangible assets — (1,020) — (1,020) Transaction related costs — — — (1) Operating income (loss) $ 406 (727) 1,042 (103) Interest expense (98) (93) (290) (282) Share of earnings (loss) of affiliates, net (32) (36) (96) (104) Realized and unrealized gains (losses) on financial instruments, net (12) (45) (127) (239) Gains (losses) on transactions, net 223 — 224 (1) Other, net (65) (4) (65) (18) Earnings (loss) before income taxes $ 422 (905) 688 (747) |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ / shares in Units, $ in Millions | Sep. 14, 2020 | Aug. 21, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Basic of presentation | |||||||
Dividends paid to common shareholders | $ 633 | $ 626 | |||||
Proceeds from sale of an alternative energy investment | $ 272 | 272 | |||||
Gain on sale of alternative energy investment | 224 | 224 | |||||
LMC | |||||||
Basic of presentation | |||||||
Related Party Transaction, Amounts of Transaction | 2 | $ 2 | 7 | $ 5 | |||
Liberty Media Corporation and GCI Liberty, Inc. | |||||||
Basic of presentation | |||||||
Tax sharing payable | $ 125 | $ 125 | $ 95 | ||||
CEO | LMC | |||||||
Basic of presentation | |||||||
Chief Executive Officer Compensation Allocation Percentage | 19.00% | ||||||
Common Class A and B | |||||||
Basic of presentation | |||||||
Dividend per share, cash paid | $ 1.50 | ||||||
Preferred shares issued per common share outstanding | 0.03 | ||||||
8.0% Series A Cumulative Redeemable Preferred Stock | |||||||
Basic of presentation | |||||||
Preferred Stock, Dividend Rate, Percentage | 8.00% | 8.00% | |||||
Preferred stock par value | $ 0.01 | ||||||
Liquidation preference per share | $ 100 | 100 | |||||
Distribution ratio for the preferred share dividend | $ 3 | ||||||
Liquidation preference | $ 1,300 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Stock-based compensation | ||||
Share-based Compensation Expense | $ 19 | $ 17 | $ 46 | $ 54 |
RSA and RSU | ||||
Stock-based compensation | ||||
Dividend per share, cash paid | $ 1.50 | |||
Common Class A | ||||
Stock-based compensation | ||||
Options Granted | 4,868,000 | |||
Common Class A | Restricted Stock Units (RSUs) | ||||
Stock-based compensation | ||||
Award vesting period | 4 years | |||
RSUs granted | 9,800,000 | |||
RSUs GDFV | $ 4.66 | $ 4.66 | ||
Common Class A | QVC, HSN and Zulily Employees | ||||
Stock-based compensation | ||||
Award vesting period | 4 years | |||
Common Class A | QVC and HSN employees | ||||
Stock-based compensation | ||||
Options Granted | 4,166,000 | |||
Weighted Average GDFV | $ 1.94 | |||
Common Class A | Zulily Employees | ||||
Stock-based compensation | ||||
Options Granted | 618,000 | |||
Weighted Average GDFV | $ 1.94 | |||
Common Class A | Qurate Retail employees | ||||
Stock-based compensation | ||||
Options Granted | 84,000 | |||
Weighted Average GDFV | $ 4.65 | |||
Common Class A | Qurate Retail employees | Minimum | ||||
Stock-based compensation | ||||
Award vesting period | 3 years | |||
Common Class A | Qurate Retail employees | Maximum | ||||
Stock-based compensation | ||||
Award vesting period | 4 years | |||
Common Class A | Chairman | Performance Shares | ||||
Stock-based compensation | ||||
Award vesting period | 1 year | |||
RSUs granted | 584,000 | |||
RSUs GDFV | 4.44 | $ 4.44 | ||
Common Class A | Chairman | Time-based RSUs | ||||
Stock-based compensation | ||||
RSUs granted | 38,000 | |||
RSUs GDFV | 7.44 | $ 7.44 | ||
Percentage of basic salary for which awards granted | 50.00% | |||
Remaining percentage of basic salary waived | 50.00% | |||
Common Class A | CEO | Performance Shares | ||||
Stock-based compensation | ||||
Award vesting period | 1 year | |||
RSUs granted | 725,000 | |||
RSUs GDFV | $ 4.44 | $ 4.44 | ||
Common Class B | ||||
Stock-based compensation | ||||
Options Granted | 0 | |||
8.0% Series A Cumulative Redeemable Preferred Stock | RSA and RSU | ||||
Stock-based compensation | ||||
Preferred Stock Dividends Per Share Shares Issued | 0.03 |
Stock-Based Compensations - Gra
Stock-Based Compensations - Grants (Details) $ / shares in Units, shares in Thousands, $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Stock-based compensation | |
Dividend rate | 0.00% |
Common Class A | |
Number of options | |
Outstanding at beginning of period | 23,248 |
Granted | 4,868 |
Exercised | (212) |
Forfeited/Cancelled | (4,447) |
Special Dividend adjustment | 15,145 |
Outstanding at end of period | 38,602 |
Exercisable at end of period | 20,002 |
WAEP | |
Outstanding at beginning of period | $ / shares | $ 21.28 |
Granted | $ / shares | 4.53 |
Exercised | $ / shares | 0.50 |
Forfeited/Cancelled | $ / shares | 18.74 |
Special Dividend adjustment | $ / shares | 11.19 |
Outstanding at end of period | $ / shares | 11.22 |
Exercisable at end of period | $ / shares | $ 14.59 |
Additional disclosures | |
Weighted average remaining life - options outstanding | 4 years 3 months 18 days |
Weighted average remaining life - options exercisable | 3 years 2 months 12 days |
Aggregate intrinsic value of options outstanding | $ | $ 45 |
Aggregate intrinsic value of options exercisable | $ | $ 7 |
Common Class B | |
Number of options | |
Outstanding at beginning of period | 1,844 |
Granted | 0 |
Special Dividend adjustment | 1,182 |
Outstanding at end of period | 3,026 |
Exercisable at end of period | 3,026 |
WAEP | |
Outstanding at beginning of period | $ / shares | $ 27.09 |
Special Dividend adjustment | $ / shares | 16.51 |
Outstanding at end of period | $ / shares | 16.51 |
Exercisable at end of period | $ / shares | $ 16.51 |
Additional disclosures | |
Weighted average remaining life - options outstanding | 2 years 3 months 18 days |
Weighted average remaining life - options exercisable | 2 years 3 months 18 days |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) shares in Millions, $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($)shares | |
Stock-based compensation | |
Total unrecognized compensation cost related to unvested Awards | $ | $ 45 |
Weighted average period of recognition related to unvested equity awards (in years) | 2 years 4 months 24 days |
Common Class A | |
Stock-based compensation | |
Shares reserved for future issuance upon exercise of stock options | 38.6 |
Common Class B | |
Stock-based compensation | |
Shares reserved for future issuance upon exercise of stock options | 3 |
Earnings (Loss) Per Common Sh_3
Earnings (Loss) Per Common Share - Earnings Per Share Basic and Diluted (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings (Loss) Per Common Share | ||||
Antidilutive securities | 29 | 29 | 29 | 29 |
Basic WASO | 417 | 417 | 417 | 426 |
Potentially dilutive shares | 4 | 1 | 3 | 1 |
Diluted WASO | 421 | 418 | 420 | 427 |
Assets and Liabilities Measur_3
Assets and Liabilities Measured at Fair Value - Assets And Liabilities Measured At Fair Value On A Recurring Basis (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Recurring | ||
Assets and liabilities measured at fair value | ||
Cash equivalents | $ 524 | $ 339 |
Indemnification asset | 310 | 202 |
Debt | 1,682 | 1,557 |
Recurring | Level 1 | ||
Assets and liabilities measured at fair value | ||
Cash equivalents | 524 | 339 |
Recurring | Level 2 | ||
Assets and liabilities measured at fair value | ||
Indemnification asset | 310 | 202 |
Debt | $ 1,682 | $ 1,557 |
1.75% Exchangeable Senior Debentures due 2046 | ||
Assets and liabilities measured at fair value | ||
Interest rate (as a percent) | 1.75% |
Assets and Liabilities Measur_4
Assets and Liabilities Measured at Fair Value - Realized and Unrealized Gains (Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Realized and unrealized gains (losses) on financial instruments | ||||
Realized and unrealized gains (losses) on financial instruments, net | $ (12) | $ (45) | $ (127) | $ (239) |
Gain (loss) on changes in fair value | (90) | 7 | 39 | (12) |
Cumulative amount of gain (loss) in change in fair value | 210 | 210 | ||
Exchangeable senior debentures | ||||
Realized and unrealized gains (losses) on financial instruments | ||||
Realized and unrealized gains (losses) on financial instruments, net | (145) | (49) | (225) | (304) |
Indemnification asset | ||||
Realized and unrealized gains (losses) on financial instruments | ||||
Realized and unrealized gains (losses) on financial instruments, net | 94 | 3 | 107 | 58 |
Other Financial Instruments | ||||
Realized and unrealized gains (losses) on financial instruments | ||||
Realized and unrealized gains (losses) on financial instruments, net | $ 39 | $ 1 | $ (9) | $ 7 |
Intangible Assets - Changes In
Intangible Assets - Changes In The Carrying Amount Of Goodwill (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Changes in the carrying amount of goodwill | |
Balance, beginning of the year | $ 6,576 |
Foreign currency translation adjustments | 25 |
Balance, end of the year | 6,601 |
Corporate and Other | |
Changes in the carrying amount of goodwill | |
Balance, beginning of the year | 12 |
Balance, end of the year | 12 |
QxH | |
Changes in the carrying amount of goodwill | |
Balance, beginning of the year | 5,228 |
Balance, end of the year | 5,228 |
QVC International | |
Changes in the carrying amount of goodwill | |
Balance, beginning of the year | 859 |
Foreign currency translation adjustments | 25 |
Balance, end of the year | 884 |
Zulily | |
Changes in the carrying amount of goodwill | |
Balance, beginning of the year | 477 |
Balance, end of the year | $ 477 |
Intangible Assets - Amortizatio
Intangible Assets - Amortization Expense For The Next Five Fiscal Years (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Intangible Assets | ||||
Amortization expense for intangible assets | $ 89 | $ 95 | $ 274 | $ 289 |
Amortization expense for the next five years | ||||
Remainder of 2020 | 92 | 92 | ||
2021 | 267 | 267 | ||
2022 | 157 | 157 | ||
2023 | 103 | 103 | ||
2024 | $ 75 | $ 75 |
Long-Term Debt - Debt Table (De
Long-Term Debt - Debt Table (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Long-term debt | ||
Outstanding principal | $ 6,654 | |
Total consolidated debt | 6,866 | $ 7,412 |
Less debt classified as current | (1,682) | (1,557) |
Long-term debt, including current portion | 5,184 | 5,855 |
Deferred loan costs | (51) | (40) |
8.5% Senior Debentures Due 2029 | ||
Long-term debt | ||
Outstanding principal | 287 | |
Total consolidated debt | $ 285 | 285 |
Debt instrument interest rate | 8.50% | |
8.25% Senior Debentures Due 2030 | ||
Long-term debt | ||
Outstanding principal | $ 504 | |
Total consolidated debt | $ 502 | 502 |
Debt instrument interest rate | 8.25% | |
4% Exchangeable Senior Debentures Due 2029 | ||
Long-term debt | ||
Outstanding principal | $ 431 | |
Total consolidated debt | $ 355 | 327 |
Debt instrument interest rate | 4.00% | |
3.75% Exchangeable Senior Debentures Due 2030 | ||
Long-term debt | ||
Outstanding principal | $ 432 | |
Total consolidated debt | $ 342 | 318 |
Debt instrument interest rate | 3.75% | |
3.5% Exchangeable Senior Debentures Due 2031 | ||
Long-term debt | ||
Outstanding principal | $ 218 | |
Total consolidated debt | $ 371 | 422 |
Debt instrument interest rate | 3.50% | |
0.75% Exchangeable Senior Debentures due 2043 | ||
Long-term debt | ||
Total consolidated debt | 2 | |
Debt instrument interest rate | 0.75% | |
1.75% Exchangeable Senior Debentures due 2046 | ||
Long-term debt | ||
Outstanding principal | $ 332 | |
Total consolidated debt | $ 614 | 488 |
Debt instrument interest rate | 1.75% | |
QVC | QVC 5.125% Senior Secured Notes Due 2022 | ||
Long-term debt | ||
Total consolidated debt | 500 | |
Debt instrument interest rate | 5.125% | |
QVC | QVC 4.375% Senior Secured Notes due 2023 | ||
Long-term debt | ||
Outstanding principal | $ 750 | |
Total consolidated debt | $ 750 | 750 |
Debt instrument interest rate | 4.375% | |
QVC | QVC 4.85% Senior Secured Notes Due 2024 | ||
Long-term debt | ||
Outstanding principal | $ 600 | |
Total consolidated debt | $ 600 | 600 |
Debt instrument interest rate | 4.85% | |
QVC | QVC 4.45% Senior Secured Notes Due 2025 | ||
Long-term debt | ||
Outstanding principal | $ 600 | |
Total consolidated debt | $ 599 | 599 |
Debt instrument interest rate | 4.45% | |
QVC | QVC 4.75% Senior Secured Notes Due 2027 | ||
Long-term debt | ||
Outstanding principal | $ 575 | |
Total consolidated debt | $ 575 | |
Debt instrument interest rate | 4.75% | |
QVC | QVC 4.375% Senior Secured Notes due 2028 | ||
Long-term debt | ||
Outstanding principal | $ 500 | |
Total consolidated debt | $ 500 | |
Debt instrument interest rate | 4.375% | |
QVC | QVC 5.45% Senior Secured Notes Due 2034 | ||
Long-term debt | ||
Outstanding principal | $ 400 | |
Total consolidated debt | $ 399 | 399 |
Debt instrument interest rate | 5.45% | |
QVC | QVC 5.95% Senior Secured Notes due 2043 | ||
Long-term debt | ||
Outstanding principal | $ 300 | |
Total consolidated debt | $ 300 | 300 |
Debt instrument interest rate | 5.95% | |
QVC | QVC 6.375% Senior Secured Notes Due 2067 | ||
Long-term debt | ||
Outstanding principal | $ 225 | |
Total consolidated debt | $ 225 | 225 |
Debt instrument interest rate | 6.375% | |
QVC | QVC 6.25% Senior Secured Notes Due 2068 | ||
Long-term debt | ||
Outstanding principal | $ 500 | |
Total consolidated debt | $ 500 | 500 |
Debt instrument interest rate | 6.25% | |
QVC | QVC Bank Credit Facilities | ||
Long-term debt | ||
Total consolidated debt | $ 1,235 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) | Aug. 20, 2020USD ($) | Apr. 01, 2020USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Feb. 04, 2020USD ($) |
Long-term debt | |||||||
Repayments of Long-term Debt | $ 2,077,000,000 | $ 2,179,000,000 | |||||
4% Exchangeable Senior Debentures Due 2029 | |||||||
Long-term debt | |||||||
Interest rate (as a percent) | 4.00% | 4.00% | |||||
3.75% Exchangeable Senior Debentures Due 2030 | |||||||
Long-term debt | |||||||
Interest rate (as a percent) | 3.75% | 3.75% | |||||
T-Mobile US, Inc. | 4% Exchangeable Senior Debentures Due 2029 | |||||||
Long-term debt | |||||||
Debt instrument, conversion ratio | 0.3309 | ||||||
T-Mobile US, Inc. | 3.75% Exchangeable Senior Debentures Due 2030 | |||||||
Long-term debt | |||||||
Debt instrument, conversion ratio | 0.2419 | ||||||
Century Link, Inc. | 4% Exchangeable Senior Debentures Due 2029 | |||||||
Long-term debt | |||||||
Debt instrument, conversion ratio | 0.7860 | ||||||
Century Link, Inc. | 3.75% Exchangeable Senior Debentures Due 2030 | |||||||
Long-term debt | |||||||
Debt instrument, conversion ratio | 0.5746 | ||||||
QVC | Standby Letters of Credit | |||||||
Long-term debt | |||||||
Maximum borrowing capacity | $ 450,000,000 | ||||||
QVC | Amendment No. 4 QVC Bank Credit Facility | |||||||
Long-term debt | |||||||
Maximum borrowing capacity | $ 2,950,000,000 | ||||||
Remaining borrowing capacity | $ 2,900,000,000 | $ 2,900,000,000 | |||||
QVC | Amendment No. 4 QVC Bank Credit Facility | Base Rate | |||||||
Long-term debt | |||||||
Debt Instrument, Description of Variable Rate Basis | base rate | ||||||
QVC | Amendment No. 4 QVC Bank Credit Facility | Base Rate | Minimum | |||||||
Long-term debt | |||||||
Debt Instrument, Basis Spread on Variable Rate | 0.25% | ||||||
QVC | Amendment No. 4 QVC Bank Credit Facility | Base Rate | Maximum | |||||||
Long-term debt | |||||||
Debt Instrument, Basis Spread on Variable Rate | 0.75% | ||||||
QVC | Amendment No. 4 QVC Bank Credit Facility | LIBOR | |||||||
Long-term debt | |||||||
Debt Instrument, Description of Variable Rate Basis | LIBOR | ||||||
QVC | Amendment No. 4 QVC Bank Credit Facility | LIBOR | Minimum | |||||||
Long-term debt | |||||||
Debt Instrument, Basis Spread on Variable Rate | 1.25% | ||||||
QVC | Amendment No. 4 QVC Bank Credit Facility | LIBOR | Maximum | |||||||
Long-term debt | |||||||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | ||||||
QVC | Uncommitted Incremental Revolving Loan Commitments or Incremental Term Loans | |||||||
Long-term debt | |||||||
Maximum borrowing capacity | $ 1,500,000,000 | ||||||
QVC | Portion of Credit Facility Available to QVC or zulily | |||||||
Long-term debt | |||||||
Maximum borrowing capacity | 400,000,000 | ||||||
QVC | Portion of Credit Facility Available to QVC or zulily | Standby Letters of Credit | |||||||
Long-term debt | |||||||
Maximum borrowing capacity | 50,000,000 | ||||||
QVC | Portion of Credit Facility Available Only to QVC | |||||||
Long-term debt | |||||||
Maximum borrowing capacity | $ 2,550,000,000 | ||||||
QVC | Credit Facility Portion Available to Zulily And Letters Of Credit | |||||||
Long-term debt | |||||||
Remaining borrowing capacity | $ 400,000,000 | $ 400,000,000 | |||||
QVC | QVC 4.75% Senior Secured Notes Due 2027 | |||||||
Long-term debt | |||||||
Interest rate (as a percent) | 4.75% | 4.75% | |||||
Debt Instrument, Face Amount | $ 575,000,000 | ||||||
QVC | QVC 4.375% Senior Secured Notes due 2028 | |||||||
Long-term debt | |||||||
Interest rate (as a percent) | 4.375% | 4.375% | |||||
Debt Instrument, Face Amount | $ 500,000,000 | ||||||
QVC | QVC 5.125% Senior Secured Notes Due 2022 | |||||||
Long-term debt | |||||||
Interest rate (as a percent) | 5.125% | 5.125% | |||||
Repayments of Long-term Debt | $ 500,000,000 | ||||||
Loss on extinguishment of debt | $ (42,000,000) | $ (42,000,000) | |||||
T-Mobile US, Inc. | Sprint Corporation | |||||||
Long-term debt | |||||||
Debt instrument, face amount per debenture | $ 1,000 | ||||||
Acquisition, conversion ratio of shares | 0.10256 |
Long-Term Debt - Debt Securitie
Long-Term Debt - Debt Securities That Are Not Reported At Fair Value (Details) $ in Millions | Sep. 30, 2020USD ($) |
Senior Debentures | |
Long-term debt | |
Fair value of debt securities that are not reported at fair value | $ 846 |
QVC | QVC Senior Secured Notes | |
Long-term debt | |
Fair value of debt securities that are not reported at fair value | $ 4,481 |
QVC | QVC 6.375% Senior Secured Notes Due 2067 | |
Long-term debt | |
Interest rate (as a percent) | 6.375% |
QVC | QVC 6.25% Senior Secured Notes Due 2068 | |
Long-term debt | |
Interest rate (as a percent) | 6.25% |
Preferred Stock (Details)
Preferred Stock (Details) - 8.0% Series A Cumulative Redeemable Preferred Stock | Sep. 14, 2020$ / shares | Aug. 21, 2020$ / shares | Sep. 30, 2020itemshares |
Preferred Stock | |||
Preferred stock authorized | 13,500,000 | ||
Preferred shares issued | 12,500,216 | ||
Preferred shares outstanding | 12,500,216 | ||
Preferred Stock, Dividend Rate, Percentage | 8.00% | 8.00% | |
Dividend redemption period | 30 days | ||
Liquidation preference per share | $ / shares | $ 100 | $ 100 | |
Minimum liquidation price excess for certain director election rights | 25.00% | ||
Number of consecutive dividend periods without dividends that will certain director elections rights | item | 2 | ||
On or after the fifth anniversary of the Original Issue Date but prior to its sixth anniversary | |||
Preferred Stock | |||
Redemption price | 4.00% | ||
On or after the sixth anniversary of the Original Issue Date but prior to its seventh anniversary | |||
Preferred Stock | |||
Redemption price | 2.00% | ||
On or after the seventh anniversary of the Original Issue Date | |||
Preferred Stock | |||
Redemption price | 0.00% |
Information About Qurate Reta_3
Information About Qurate Retail's Operating Segments - Revenue Disaggregation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Total revenue, net | $ 3,383 | $ 3,089 | $ 9,725 | $ 9,285 |
Home | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 1,468 | 1,188 | 4,089 | 3,551 |
Apparel | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 611 | 621 | 1,748 | 1,871 |
Beauty | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 482 | 476 | 1,459 | 1,414 |
Accessories | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 380 | 352 | 1,145 | 1,152 |
Electronics | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 225 | 233 | 676 | 642 |
Jewelry | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 164 | 169 | 462 | 501 |
Other revenue | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 53 | 50 | 146 | 154 |
Operating Segments | QxH | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 1,980 | 1,854 | 5,782 | 5,585 |
Operating Segments | QxH | Home | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 819 | 670 | 2,303 | 2,009 |
Operating Segments | QxH | Apparel | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 312 | 334 | 913 | 1,005 |
Operating Segments | QxH | Beauty | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 297 | 303 | 910 | 915 |
Operating Segments | QxH | Accessories | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 219 | 199 | 676 | 667 |
Operating Segments | QxH | Electronics | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 197 | 209 | 588 | 564 |
Operating Segments | QxH | Jewelry | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 93 | 98 | 273 | 303 |
Operating Segments | QxH | Other revenue | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 43 | 41 | 119 | 122 |
Operating Segments | QVC International | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 723 | 650 | 2,071 | 1,934 |
Operating Segments | QVC International | Home | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 286 | 236 | 829 | 714 |
Operating Segments | QVC International | Apparel | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 115 | 107 | 316 | 327 |
Operating Segments | QVC International | Beauty | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 168 | 161 | 499 | 462 |
Operating Segments | QVC International | Accessories | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 67 | 63 | 188 | 190 |
Operating Segments | QVC International | Electronics | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 25 | 21 | 78 | 68 |
Operating Segments | QVC International | Jewelry | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 59 | 59 | 155 | 161 |
Operating Segments | QVC International | Other revenue | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 3 | 3 | 6 | 12 |
Operating Segments | Zulily | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 395 | 359 | 1,133 | 1,119 |
Operating Segments | Zulily | Home | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 115 | 95 | 326 | 298 |
Operating Segments | Zulily | Apparel | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 147 | 141 | 411 | 422 |
Operating Segments | Zulily | Beauty | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 17 | 12 | 50 | 37 |
Operating Segments | Zulily | Accessories | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 94 | 90 | 281 | 295 |
Operating Segments | Zulily | Electronics | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 3 | 3 | 10 | 10 |
Operating Segments | Zulily | Jewelry | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 12 | 12 | 34 | 37 |
Operating Segments | Zulily | Other revenue | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 7 | 6 | 21 | 20 |
Corporate and Other | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 285 | 226 | 739 | 647 |
Corporate and Other | Home | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 248 | 187 | 631 | 530 |
Corporate and Other | Apparel | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | $ 37 | $ 39 | $ 108 | $ 117 |
Information About Qurate Reta_4
Information About Qurate Retail's Operating Segments - Performance Measures By Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Information about Qurate Retail's operating segments | ||||
Adjusted OIBDA | $ 566 | $ 456 | $ 1,515 | $ 1,429 |
Corporate and Other | ||||
Information about Qurate Retail's operating segments | ||||
Adjusted OIBDA | 27 | (4) | 32 | (9) |
QxH | Operating Segments | ||||
Information about Qurate Retail's operating segments | ||||
Adjusted OIBDA | 380 | 346 | 1,061 | 1,093 |
QVC International | Operating Segments | ||||
Information about Qurate Retail's operating segments | ||||
Adjusted OIBDA | 132 | 106 | 348 | 313 |
Zulily | Operating Segments | ||||
Information about Qurate Retail's operating segments | ||||
Adjusted OIBDA | $ 27 | $ 8 | $ 74 | $ 32 |
Information About Qurate Reta_5
Information About Qurate Retail's Operating Segments - Other Information By Segment (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Information about Qurate Retail's operating segments | |||
Total assets | $ 16,792 | $ 17,305 | |
Investments in affiliates | 52 | ||
Capital expenditures | 165 | $ 249 | |
Operating Segments | QxH | |||
Information about Qurate Retail's operating segments | |||
Total assets | 11,928 | ||
Investments in affiliates | 38 | ||
Capital expenditures | 121 | ||
Operating Segments | QVC International | |||
Information about Qurate Retail's operating segments | |||
Total assets | 2,294 | ||
Capital expenditures | 19 | ||
Operating Segments | Zulily | |||
Information about Qurate Retail's operating segments | |||
Total assets | 1,085 | ||
Capital expenditures | 17 | ||
Corporate and Other | |||
Information about Qurate Retail's operating segments | |||
Total assets | 1,485 | ||
Investments in affiliates | 14 | ||
Capital expenditures | $ 8 |
Information About Qurate Reta_6
Information About Qurate Retail's Operating Segments - Reconciliation Of Segment Adjusted OIBDA To Earnings (Loss) From Continuing Operations Before Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Information About Qurate Retail's Operating Segments | ||||
Adjusted OIBDA | $ 566 | $ 456 | $ 1,515 | $ 1,429 |
Stock-based compensation | (19) | (17) | (46) | (54) |
Depreciation and amortization | (141) | (146) | (427) | (457) |
Impairment of intangible assets | (1,020) | (1,020) | ||
Transaction related costs | (1) | |||
Operating income (loss) | 406 | (727) | 1,042 | (103) |
Interest expense | (98) | (93) | (290) | (282) |
Share of earnings (losses) of affiliates, net | (32) | (36) | (96) | (104) |
Realized and unrealized gains (losses) on financial instruments, net | (12) | (45) | (127) | (239) |
Gains (losses) on transactions, net | 223 | 224 | (1) | |
Other, net | (65) | (4) | (65) | (18) |
Earnings (loss) before income taxes | $ 422 | $ (905) | $ 688 | $ (747) |