Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 30, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
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 | 2023 | |
Document Fiscal Period Focus | Q1 | |
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 | 379,933,996 | |
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 | 8,700,380 | |
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 | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 1,286 | $ 1,275 |
Trade and other receivables, net of allowance for credit losses of $107 million and $111 million, respectively | 1,062 | 1,394 |
Inventory, net | 1,326 | 1,346 |
Indemnification agreement receivable | 29 | 50 |
Other current assets | 183 | 210 |
Total current assets | 3,886 | 4,275 |
Property and equipment, net | 563 | 570 |
Intangible assets not subject to amortization (note 5): | ||
Goodwill | 3,512 | 3,501 |
Trademarks | 2,718 | 2,718 |
Intangible assets not subject to amortization | 6,230 | 6,219 |
Intangible assets subject to amortization, net (note 5) | 646 | 612 |
Operating lease right-of-use assets | 643 | 585 |
Other assets, at cost, net of accumulated amortization | 232 | 310 |
Total assets | 12,200 | 12,571 |
Current liabilities: | ||
Accounts payable | 819 | 976 |
Accrued liabilities | 948 | 1,133 |
Current portion of debt, $319 million and $614 million measured at fair value (note 6) | 319 | 828 |
Other current liabilities | 176 | 162 |
Total current liabilities | 2,262 | 3,099 |
Long-term debt (note 6) | 5,796 | 5,525 |
Deferred income tax liabilities | 1,474 | 1,440 |
Preferred stock (note 7) | 1,269 | 1,266 |
Operating lease liabilities | 582 | 518 |
Other liabilities | 126 | 198 |
Total liabilities | 11,509 | 12,046 |
Stockholders' equity: | ||
Additional paid-in capital | 67 | 53 |
Accumulated other comprehensive earnings (loss), net of taxes | 149 | 18 |
Retained earnings | 358 | 337 |
Total stockholders' equity | 578 | 412 |
Noncontrolling interests in equity of subsidiaries | 113 | 113 |
Total equity | 691 | 525 |
Commitments and contingencies (note 8) | ||
Total liabilities and equity | 12,200 | 12,571 |
Common Class A | ||
Stockholders' equity: | ||
Common stock value | 4 | 4 |
Common Class B | ||
Stockholders' equity: | ||
Common stock value | ||
Common Class C | ||
Stockholders' equity: | ||
Common stock value |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Allowance for doubtful accounts | $ 107 | $ 111 |
Current portion of debt, fair value | $ 319 | $ 614 |
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 | 379,933,996 | 374,390,323 |
Common stock, shares outstanding | 379,933,996 | 374,390,323 |
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 | 8,700,380 | 8,373,512 |
Common stock, shares outstanding | 8,700,380 | 8,373,512 |
Common Class C | ||
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 | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue: | ||
Total revenue, net | $ 2,644 | $ 2,883 |
Type of revenue | us-gaap:RetailMember | us-gaap:RetailMember |
Operating costs and expenses: | ||
Cost of goods sold (exclusive of depreciation shown separately below) | $ 1,809 | $ 2,002 |
Type of cost of retail sales | us-gaap:RetailMember | us-gaap:RetailMember |
Operating expense | $ 194 | $ 196 |
Selling, general and administrative, including stock-based compensation (note 2) | 478 | 445 |
Restructuring and fire related costs, net of (recoveries) (note 8) | 4 | |
Depreciation and amortization | 100 | 130 |
Gain on sale leaseback transactions (note 8) | (113) | |
Total operating costs and expenses | 2,468 | 2,777 |
Operating income (loss) | 176 | 106 |
Other income (expense): | ||
Interest expense | (94) | (117) |
Realized and unrealized gains (losses) on financial instruments, net (note 4) | (47) | 30 |
Gain (loss) on extinguishment of debt | 15 | |
Other, net | 15 | 52 |
Total other income (expense) | (111) | (35) |
Earnings (loss) before income taxes | 65 | 71 |
Income tax (expense) benefit | (32) | (58) |
Net earnings (loss) | 33 | 13 |
Less net earnings (loss) attributable to the noncontrolling interests | 13 | 12 |
Net earnings (loss) attributable to Qurate Retail, Inc. shareholders | $ 20 | $ 1 |
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): | $ 0.05 | $ 0 |
Diluted net earnings (loss) attributable to Series A and Series B Qurate Retail, Inc. shareholders per common share (note 3): | $ 0.05 | $ 0 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Earnings (Loss) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Condensed Consolidated Statements of Comprehensive Earnings (Loss) | ||
Net earnings (loss) | $ 33 | $ 13 |
Other comprehensive earnings (loss), net of taxes: | ||
Foreign currency translation adjustments | 20 | (60) |
Recognition of previously unrealized losses (gains) on debt, net | (19) | |
Credit risk on fair value debt instruments gains (loss) | 129 | 29 |
Other comprehensive earnings (loss) | 130 | (31) |
Comprehensive earnings (loss) | 163 | (18) |
Less comprehensive earnings (loss) attributable to the noncontrolling interests | 12 | 6 |
Comprehensive earnings (loss) attributable to Qurate Retail, Inc. shareholders | $ 151 | $ (24) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net earnings (loss) | $ 33 | $ 13 |
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 100 | 130 |
Stock-based compensation | 16 | 15 |
Realized and unrealized (gains) losses on financial instruments, net | 47 | (30) |
(Gains) losses on sale leaseback transactions | (113) | |
Gain on insurance proceeds, net of fire related costs | (17) | |
Insurance proceeds received for operating losses | 37 | |
(Gains) losses on extinguishment of debt | (15) | |
Deferred income tax expense (benefit) | (2) | 29 |
Other, net | 9 | (24) |
Changes in operating assets and liabilities | ||
Decrease (increase) in accounts receivable | 294 | 365 |
Decrease (increase) in inventory | 25 | (155) |
Decrease (increase) in prepaid expenses and other assets | 48 | 8 |
(Decrease) increase in trade accounts payable | (167) | (211) |
(Decrease) increase in accrued and other liabilities | (279) | (319) |
Net cash provided (used) by operating activities | 16 | (179) |
Cash flows from investing activities: | ||
Investment in and loans to cost and equity investees | (7) | |
Capital expenditures | (54) | (43) |
Expenditures for television distribution rights | (38) | (2) |
Cash proceeds from dispositions of investments | 1 | 12 |
Proceeds from sale of fixed assets | 198 | |
Insurance proceeds | 18 | |
Payments for settlements of financial instruments | (179) | |
Proceeds from settlements of financial instruments | 167 | |
Other investing activities, net | (1) | 24 |
Net cash provided (used) by investing activities | 112 | (16) |
Cash flows from financing activities: | ||
Borrowings of debt | 677 | 460 |
Repayments of debt | (803) | (195) |
Withholding taxes on net settlements of stock-based compensation | (1) | (7) |
Dividends paid to noncontrolling interest | (12) | (14) |
Dividends paid to common shareholders | (7) | (10) |
Indemnification agreement settlement | 24 | |
Other financing activities, net | (5) | |
Net cash provided (used) by financing activities | (122) | 229 |
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash | 4 | (13) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 10 | 21 |
Cash, cash equivalents and restricted cash at beginning of period | 1,285 | 596 |
Cash, cash equivalents and restricted cash at end of period | $ 1,295 | $ 617 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements Of Cash Flows (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Condensed Consolidated Statements of Cash Flows | ||
Cash and cash equivalents | $ 1,286 | $ 1,275 |
Restricted cash included in other current assets | $ 9 | $ 10 |
Restricted Cash and Cash Equivalents, Asset, Statement of Financial Position [Extensible List] | Other Assets, Current | Other Assets, Current |
Total cash, cash equivalents and restricted cash in the consolidated statement of cash flows | $ 1,295 | $ 1,285 |
Condensed Consolidated Statem_5
Condensed Consolidated Statement of Equity - USD ($) $ in Millions | Common Class A Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Earnings (loss), Net of taxes | Retained Earnings | Noncontrolling Interest In Equity Of Subsidiaries | Total |
Balance at Dec. 31, 2021 | $ 4 | $ (79) | $ 2,925 | $ 136 | $ 2,986 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings (loss) | 1 | 12 | 13 | |||
Other comprehensive earnings (loss) | (25) | (6) | (31) | |||
Stock-based compensation | $ 14 | 14 | ||||
Distribution to noncontrolling interest | (15) | (15) | ||||
Withholding taxes on net share settlements of stock-based compensation | (7) | (7) | ||||
Other | 3 | 3 | ||||
Balance at Mar. 31, 2022 | 4 | 7 | (104) | 2,929 | 127 | 2,963 |
Balance at Dec. 31, 2022 | 4 | 53 | 18 | 337 | 113 | 525 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings (loss) | 20 | 13 | 33 | |||
Other comprehensive earnings (loss) | 131 | (1) | 130 | |||
Stock-based compensation | 14 | 14 | ||||
Distribution to noncontrolling interest | (12) | (12) | ||||
Withholding taxes on net share settlements of stock-based compensation | (1) | (1) | ||||
Other | 1 | 1 | 2 | |||
Balance at Mar. 31, 2023 | $ 4 | $ 67 | $ 149 | $ 358 | $ 113 | $ 691 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2023 | |
Basis of Presentation | |
Basis of Presentation | (1) Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of Qurate Retail, Inc. and its controlled subsidiaries (collectively, "Qurate Retail," the "Company," “Consolidated Qurate Retail,” “us,” “we,” or “our” unless the context otherwise requires). All significant intercompany accounts and transactions have been eliminated in consolidation. Qurate Retail is made up of wholly-owned subsidiaries QVC, Inc. (“QVC”), which includes HSN, Inc. (“HSN”), Cornerstone Brands, Inc. (“CBI”), Zulily, LLC (“Zulily”), and other cost and equity method investments. Qurate Retail is primarily engaged in the video and online commerce industries in North America, Europe and Asia. The businesses of the Company’s wholly-owned subsidiaries, QVC, CBI and Zulily, are seasonal due to a higher volume of sales in the fourth calendar quarter related to year-end holiday shopping. The accompanying (a) condensed consolidated balance sheet as of December 31, 2022, which has been derived from audited financial statements, and (b) the interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for such periods have been included. Additionally, certain prior period amounts have been reclassified for comparability with current period presentation. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in Qurate Retail's Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 10-K”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Qurate Retail considers (i) fair value measurements, (ii) accounting for income taxes, and (iii) estimates of retail-related adjustments and allowances to be its most significant estimates. Qurate Retail has entered into certain agreements with Liberty Media Corporation ("LMC"), a separate publicly traded company. These agreements include a reorganization agreement, services agreement and facilities sharing agreement. As a result of certain corporate transactions, LMC and Qurate Retail may have obligations to each other for certain tax related matters. Neither Qurate Retail nor LMC has any stock ownership, beneficial or otherwise, in the other. In connection with a split-off transaction that occurred in the first quarter of 2018 (the “GCI Liberty Split-Off”), Qurate Retail and GCI Liberty, Inc. (“GCI Liberty”) entered into a tax sharing agreement. Pursuant to the tax sharing agreement, GCI Liberty agreed to indemnify Qurate Retail for taxes and tax-related losses resulting from the GCI Liberty Split-Off to the extent such taxes or tax-related losses (i) result primarily from, individually or in the aggregate, the breach of certain restrictive covenants made by GCI Liberty (applicable to actions or failures to act by GCI Liberty and its subsidiaries following the completion of the GCI Liberty Split-Off), or (ii) result from Section 355(e) of the Internal Revenue Code applying to the GCI Liberty Split-Off as a result of the GCI Liberty Split-Off being part of a plan (or series of related transactions) pursuant to which one or more persons acquire, directly or indirectly, a 50-percent or greater interest (measured by vote or value) in the stock of GCI Liberty (or any successor corporation). Following a merger between Liberty Broadband Corporation (“Liberty Broadband”) and GCI Liberty, Liberty Broadband has assumed the tax sharing agreement. In December 2019, the Company entered into an amendment to the services agreement in connection with LMC’s entry into a new employment arrangement with Gregory B. Maffei, the Company’s Chairman of the Board (the “Chairman” or “Mr. Maffei”). Under the amended services agreement, components of his compensation will either be paid directly to him by each of the Company, Liberty TripAdvisor Holdings, Inc., and Liberty Broadband (collectively, the “Service Companies”) or reimbursed to LMC, in each case, based on allocations among LMC and the Service Companies set forth in the amended services agreement, currently set at 11% 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 and $3 million was reimbursable to LMC for the three months ended March 31, 2023 and 2022, respectively. Qurate Retail had a tax sharing payable to LMC and Liberty Broadband in the amount of approximately $10 million and $18 million as of March 31, 2023 and December 31, 2022, respectively, included in other liabilities in the condensed consolidated balance sheets. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
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. Included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations are $16 million and $15 million of stock-based compensation during the three months ended March 31, 2023 and 2022, respectively. Qurate Retail—RSUs The following table presents the number and weighted average GDFV of RSUs granted by the Company during the three months ended March 31, 2023: Three months ended March 31, 2023 RSUs Granted (000's) Weighted Average GDFV Series A Qurate Retail common stock, subsidiary employees (1) 935 $ 0.89 Series A Qurate Retail common stock, Qurate Retail employees and directors (2) 553 $ 1.51 Series A Qurate Retail common stock, Qurate Retail President and CEO (3) 1,869 $ 1.51 Series B Qurate Retail common stock, Qurate Retail Chairman of the Board (4) 353 $ 5.51 (1) Grant vests equally over three years . (2) Grants mainly vest one year from the month of grant, subject to the satisfaction of certain performance objectives. (3) Grant vests one year from the month of grant, subject to the satisfaction of certain performance objectives. Grant was made in connection with the employment agreement of our President and Chief Executive Officer. (4) Grant vests one year from the month of grant, subject to the satisfaction of certain performance objectives. Grant was made in connection with our Chairman’s employment agreement. Also during the three months ended March 31, 2023, Qurate Retail granted 20.4 million performance-based, cash-settled RSUs of Series A Qurate Retail common stock to subsidiary employees. These RSUs vest equally over three years, subject to the satisfaction of certain performance objectives. The liability and compensation expense related to such awards is adjusted at the end of each reporting period based on the closing market price of Series A Qurate Retail common stock on the last trading day of the quarter combined with the probability of satisfying the performance objectives. For awards that are performance-based, performance objectives, which are subjective, are considered in determining the timing and amount of compensation expense recognized. When the satisfaction of the performance objectives becomes probable, the Company records compensation expense. The probability of satisfying the performance objectives is assessed at the end of each reporting period. Pursuant to the terms of the Stock Exchange Agreement, dated as of June 3, 2021, by and between Mr. Maffei and the Company, on March 25, 2022, Mr. Maffei transferred to the Company an aggregate of 229,022 shares of Series A common stock of Qurate Retail (“QRTEA”) received by Mr. Maffei upon vesting of the performance-based restricted stock unit award granted to Mr. Maffei on March 10, 2021 and in exchange, the Company issued to Mr. Maffei an equivalent number of shares of Series B common stock of Qurate Retail (“QRTEB”). Each share of QRTEB stock is convertible, at the option of the holder, into one share of QRTEA. Qurate Retail—Outstanding Awards The following tables present the number and weighted average exercise price ("WAEP") of the options to purchase Qurate Retail common stock granted to certain officers, employees and directors of the Company, as well as the weighted average remaining life and aggregate intrinsic value of the options. Weighted Aggregate average intrinsic Series A remaining value (000's) WAEP life (millions) Options outstanding at January 1, 2023 32,914 $ 8.78 Granted — $ — Exercised (14) $ 2.17 Forfeited/Cancelled (4,016) $ 12.90 Options outstanding at March 31, 2023 28,884 $ 8.21 2.9 years $ — Options exercisable at March 31, 2023 18,954 $ 9.61 2.3 years $ — Weighted Aggregate average intrinsic Series B remaining value (000's) WAEP life (millions) Options outstanding at January 1, 2023 2,221 $ 12.25 Granted — $ — Exercised — $ — Forfeited/Cancelled (1,498) $ 12.20 Options outstanding at March 31, 2023 723 $ 12.35 1.6 years $ — Options exercisable at March 31, 2023 723 $ 12.35 1.6 years $ — The following table presents the number and weighted average GDFV of RSUs granted to certain officers, employees and directors of the Company. Weighted Weighted Series A Average Series B Average (000's) GDFV (000's) GDFV RSUs outstanding at January 1, 2023 23,166 $ 5.09 327 $ 4.95 Granted 3,357 $ 1.34 353 $ 5.51 Vested (5,544) $ 6.37 (327) $ 4.95 Forfeited/Cancelled (1,850) $ 5.71 — $ — RSUs outstanding at March 31, 2023 19,129 $ 4.00 353 $ 5.51 As of March 31, 2023, Qurate Retail also had 1.1 million QRTEB RSAs and 40 thousand Qurate Retail 8.0% Series A Cumulative Redeemable Preferred Stock RSAs and RSUs outstanding. The QRTEB unvested RSAs had a GDFV of $13.65 per share, and 36 thousand of the Qurate Retail 8.0% Series A Cumulative Redeemable Preferred Stock unvested RSUs had an incremental cost of $48.99 per share. As of March 31, 2023, the total unrecognized compensation cost related to unvested Awards was approximately $101 million. Such amount will be recognized in the Company's consolidated statements of operations over a weighted average period of approximately 1.6 years. As of March 31, 2023, Qurate Retail reserved for issuance upon exercise of outstanding stock options approximately 28.9 million shares of QRTEA and 0.7 million shares of QRTEB common stock. |
Earnings (Loss) Per Common Shar
Earnings (Loss) Per Common Share | 3 Months Ended |
Mar. 31, 2023 | |
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 the three months ended March 31, 2023 and 2022 are 30 million and 26 million potential common shares, respectively, because their inclusion would have been antidilutive. Qurate Retail Common Stock Three months ended March 31, 2023 2022 number of shares in millions Basic WASO 383 379 Potentially dilutive shares 1 5 Diluted WASO 384 384 |
Assets and Liabilities Measured
Assets and Liabilities Measured at Fair Value | 3 Months Ended |
Mar. 31, 2023 | |
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 March 31, 2023 December 31, 2022 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 $ 924 924 — 938 938 — Indemnification asset $ 29 — 29 50 — 50 Debt $ 319 — 319 614 — 614 The majority of the Company's Level 2 financial assets and liabilities are primarily debt instruments and derivative instruments with quoted market prices that are not considered to be traded on "active markets," as defined in GAAP. The fair values for such instruments are derived from a typical model using observable market data as the significant inputs. The indemnification asset relates to Liberty Broadband’s agreement to indemnify Liberty Interactive LLC (“LI LLC”) and pertains to the ability of holders of LI LLC’s 1.75% exchangeable debentures due 2046 (the “ 1.75% Exchangeable Debentures”) to exercise their exchange right according to the terms of the debentures on or before October 5, 2023. Such amount will equal the difference between the exchange value and par value of the 1.75% Exchangeable Debentures at the time the exchange occurs. The indemnification asset recorded in the condensed consolidated balance sheets as of March 31, 2023 represents the fair value of the estimated exchange feature included in the 1.75% Exchangeable Debentures primarily based on market observable inputs (Level 2). As of March 31, 2023, a holder of the 1.75% Exchangeable Debentures has the ability to put their debentures on October 5, 2023, and accordingly, such indemnification asset is included as a current asset in our condensed consolidated balance sheet as of March 31, 2023. During the three months ended March 31, 2023, indemnification payments of $24 million were made to Qurate Retail by Liberty Broadband in connection with exchanges of $157 million of the 1.75% Exchangeable Debentures that settled in the quarter. Realized and Unrealized Gains (Losses) on Financial Instruments Realized and unrealized gains (losses) on financial instruments are comprised of changes in the fair value of the following: Three months ended March 31, 2023 2022 amounts in millions Equity securities (3) (10) Exchangeable senior debentures (46) 124 Indemnification asset 3 (85) Other financial instruments (1) 1 $ (47) 30 The Company has elected to account for its exchangeable debt using the fair value option. Changes in the fair value of the exchangeable senior debentures recognized in the condensed consolidated statement of operations are primarily due to market factors primarily driven by changes in the fair value of the underlying shares into which the debt is exchangeable. The Company isolates the portion of the unrealized gain (loss) attributable to the change in the instrument specific credit risk and recognizes such amount in other comprehensive earnings (loss). The change in the fair value of the exchangeable senior debentures attributable to changes in the instrument specific credit risk was a gain of $169 million and a gain of $34 million for the three months ended March 31, 2023 and 2022, respectively. During the three months ended March 31, 2023, the Company recognized $25 million of previously unrecognized gains related to the retirement of a portion of the 1.75% Exchangeable Debentures, which was recognized through gain (loss) on extinguishment of debt on the condensed consolidated statement of operations. The cumulative change was a gain of $633 million as of March 31, 2023, net of the recognition of previously unrecognized gains and losses. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2023 | |
Intangible Assets | |
Intangible Assets | (5) Intangible Assets Goodwill Changes in the carrying amount of goodwill are as follows: Corporate and QxH QVC Int'l CBI Other Total amounts in millions Balance at January 1, 2023 $ 2,693 778 12 18 3,501 Foreign currency translation adjustments — 11 — — 11 Balance at March 31, 2023 $ 2,693 789 12 18 3,512 Intangible Assets Subject to Amortization Amortization expense for intangible assets with finite useful lives was $74 million and $82 million for the three months ended March 31, 2023 and 2022, respectively. Based on its amortizable intangible assets as of March 31, 2023, Qurate Retail expects that amortization expense will be as follows for the next five years (amounts in millions): Remainder of 2023 $ 226 2024 $ 235 2025 $ 108 2026 $ 76 2027 $ 3 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2023 | |
Long-Term Debt | |
Long-Term Debt | (6) Long-Term Debt Debt is summarized as follows: Outstanding principal at Carrying value March 31, 2023 March 31, 2023 December 31, 2022 amounts in millions Corporate level debentures 8.5% Senior Debentures due 2029 $ 287 286 286 8.25% Senior Debentures due 2030 505 503 503 4% Exchangeable Senior Debentures due 2029 354 58 134 3.75% Exchangeable Senior Debentures due 2030 429 84 157 1.75% Exchangeable Senior Debentures due 2046 173 177 323 Subsidiary level notes and facilities QVC 4.375% Senior Secured Notes due 2023 — — 214 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 575 575 575 QVC 4.375% Senior Secured Notes due 2028 500 500 500 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 Senior Secured Credit Facility 1,345 1,345 1,075 Deferred loan costs — (36) (37) Total consolidated Qurate Retail debt $ 6,793 6,115 6,353 Less current classification (319) (828) Total long-term debt $ 5,796 5,525 QVC Senior Secured Notes In June 2022, QVC completed its purchase of $536 million of the outstanding 4.375% Senior Secured Notes due 2023 (the "2023 Notes") pursuant to a cash tender offer to purchase any and all of its outstanding 2023 Notes (the “Tender Offer”). The remaining outstanding 2023 Notes were repaid at maturity in March 2023. The senior secured notes permit QVC to make unlimited dividends or other restricted payments so long as QVC is not in default under the indentures governing the senior secured notes and QVC’s consolidated leverage ratio is not greater than 3.5 to 1.0 (the “senior secured notes leverage basket”). As of March 31, 2023, QVC’s consolidated leverage ratio (as calculated under QVC’s senior secured notes) was greater than 3.5 to 1.0 and as a result QVC is restricted in its ability to make dividends or other restricted payments under the senior secured notes. Although QVC will not be able to make unlimited dividends or other restricted payments under the senior secured notes leverage basket, QVC will continue to be permitted to make unlimited dividends to parent entities of QVC to service the principal and interest when due in respect of indebtedness of such parent entities (so long as there is no default under the indentures governing QVC’s senior secured notes) and permitted to make certain restricted payments to parent entities of QVC under an intercompany tax sharing agreement in respect of certain tax obligations of QVC and its subsidiaries. QVC Senior Secured Credit Facility On October 27, 2021, QVC amended and restated its latest credit agreement (as amended and restated, the “Fifth Amended and Restated Credit Agreement”) and refinanced QVC’s existing bank credit facility by entering into the Fifth Amended and Restated Credit Agreement with Zulily, CBI, and QVC Global Corporate Holdings, LLC (“QVC Global”), each a direct or indirect wholly owned subsidiary of Qurate Retail, as borrowers (QVC, Zulily, CBI and QVC Global, collectively, the “Borrowers”), JPMorgan Chase Bank, N.A., as administrative agent, and the other parties named therein. The Fifth Amended and Restated Credit Agreement is a multi-currency facility providing for a $3.25 billion revolving credit facility (the “Credit Facility”), with a $450 million sub-limit for letters of credit and an alternative currency revolving sub-limit equal to 50% of the revolving commitments thereunder. The Credit Facility may be borrowed by any Borrower, with each Borrower jointly and severally liable for the outstanding borrowings. Borrowings under the Fifth Amended and Restated Credit Agreement bear interest at either the alternate base rate (such rate, the “ABR Rate”) or a LIBOR-based rate (or the applicable non-U.S. Dollar equivalent rate) (such rate, the “Term Benchmark/RFR Rate”) at the applicable Borrower’s election in each case plus a margin. Borrowings that are ABR Rate loans will bear interest at a per annum rate equal to the base rate plus a margin that varies between 0.25% and 0.625% depending on the Borrowers’ combined ratio of consolidated total debt to consolidated EBITDA (the “consolidated leverage ratio”). Borrowings that are Term Benchmark/RFR Rate loans will bear interest at a per annum rate equal to the applicable rate plus a margin that varies between 1.25% and 1.625% depending on the Borrowers’ consolidated leverage ratio. Each loan may be prepaid at any time and from time to time without penalty other than customary breakage costs. No mandatory prepayments will be required other than when borrowings and letter of credit usage exceed availability; provided that, if Zulily, CBI, QVC Global or any other borrower under the Credit Facility (other than QVC) is removed, at the election of QVC, as a borrower thereunder, all of its loans must be repaid and its letters of credit are terminated or cash collateralized. Any amounts prepaid on the Credit Facility may be reborrowed. The loans under the Credit Facility are scheduled to mature on October 27, 2026. Payment of the loans may be accelerated following certain customary events of default. The payment and performance of the Borrowers’ obligations under the Fifth Amended and Restated Credit Agreement are guaranteed by each of QVC’s, QVC Global’s, Zulily’s and CBI’s Material Domestic Subsidiaries (as defined in the Fifth Amended and Restated Credit Agreement), if any, and certain other subsidiaries of any Borrower that such Borrower has chosen to provide guarantees. Further, the borrowings under the Fifth Amended and Restated Credit Agreement are secured, pari passu with QVC’s existing notes, by a pledge of all of QVC’s equity interests. The borrowings under the Fifth Amended and Restated Credit Agreement are also secured by a pledge of all of Zulily’s and CBI’s equity interests. The Fifth Amended and Restated Credit Agreement contains certain affirmative and negative covenants, including certain restrictions on the Borrowers and each of their respective restricted subsidiaries (subject to certain exceptions) with respect to, among other things: incurring additional indebtedness; creating liens on property or assets; making certain loans or investments; selling or disposing of assets; paying certain dividends and other restricted payments; dissolving, consolidating or merging; entering into certain transactions with affiliates; entering into sale or leaseback transactions; restricting subsidiary distributions; and limiting the Borrowers’ consolidated leverage ratio. Borrowings under the Fifth Amended and Restated Credit Agreement may be used to repay outstanding indebtedness, pay certain fees and expenses, finance working capital needs and general purposes of the Borrowers and their respective subsidiaries and make certain restricted payments and loans to the Borrowers’ respective parents and affiliates. Availability under the Fifth Amended and Restated Credit Agreement at March 31, 2023 was $1,882 million. The interest rate on the Credit Facility was 6.3% and 1.8% at March 31, 2023 and 2022, respectively. Exchangeable Senior Debentures The Company has elected to account for its exchangeable senior debentures using the fair value option. Accordingly, changes in the fair value of these instruments are recognized as unrealized gains (losses) in the statements of operations. See note 4 for information related to unrealized gains (losses) on debt measured at fair value. As of March 31, 2023 the Company’s 3.75% and 4.0% Exchangeable Debentures have been classified as current because the Company does not own shares to exchange the debentures. The 1.75% Exchangeable Debentures are classified as current as the Company does not own the shares to exchange the debentures and the holders have the ability to put their debentures on October 5, 2023. 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. During the three months ended March 31, 2023, a portion of the 1.75% Exchangeable Debentures were exchanged for total principal amount of $157 million. An additional $94 million were exchanged subsequent to March 31, 2023. Debt Covenants Qurate Retail and its subsidiaries are in compliance with all debt covenants at March 31, 2023. Fair Value of Debt Qurate Retail estimates the fair value of its debt based on the quoted market prices for the same or similar issues or on the current rate offered to Qurate Retail for debt of the same remaining maturities (Level 2). The QVC 6.375% Senior Secured Notes due 2067 (“2067 Notes”) and the QVC 6.25% Senior Secured Notes Due 2068 (“2068 Notes”) are traded on the New York Stock Exchange, and the Company considers them to be actively traded. As such, the 2067 Notes and 2068 Notes are valued based on their trading price (Level 1). The fair value of Qurate Retail's publicly traded debt securities that are not reported at fair value in the accompanying condensed consolidated balance sheet at March 31, 2023 are as follows (amounts in millions): Senior debentures $ 199 QVC senior secured notes $ 1,782 Due to the variable rate nature, Qurate Retail believes that the carrying amount of its other debt, not discussed above, approximated fair value at March 31, 2023. |
Preferred Stock
Preferred Stock | 3 Months Ended |
Mar. 31, 2023 | |
Preferred Stock. | |
Preferred Stock | (7) Preferred Stock On September 14, 2020, Qurate Retail issued its 8.0% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share (the “Preferred Stock”). There were 13,500,000 shares of Preferred Stock authorized and 12,704,807 shares of Preferred Stock 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. 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. The fair value of the Preferred Stock (level 1) was $372 million as of March 31, 2023. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
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. Fire at Rocky Mount Fulfillment Center On December 18, 2021, QVC experienced a fire at its Rocky Mount fulfillment center in North Carolina. Rocky Mount was QVC’s second-largest fulfillment center for the operating segment comprised of QVC U.S. and HSN (“QxH”) and QVC’s primary returns center for hard goods. QVC maintains property, general liability and business interruption insurance coverage. Based on provisions of QVC's insurance policies, the Company records estimated insurance recoveries for fire related costs for which recovery is deemed probable. QVC determined that recovery of certain fire related costs was probable and recorded an insurance receivable. As of December 31, 2022 QVC had an insurance receivable of $40 million recorded in trade and other receivables, net of allowance for credit losses in the condensed consolidated balance sheet. During the three months ended March 31, 2023, QVC received $55 million of insurance proceeds of which $40 million was applied to the insurance receivable and $15 million was recognized as a gain, partially offset by $11 million of other fire related costs which are included in restructuring and fire related costs, net of (recoveries) in the condensed consolidated statement of operations. There was no remaining insurance receivable outstanding as of March 31, 2023. In February 2023, QVC sold the Rocky Mount fulfillment center to an independent third party and received net cash proceeds of $15 million. QVC recognized a $13 million gain on the sale during the three months ended March 31, 2023 calculated as the difference between the aggregate consideration received and the carrying value of the property. The gain is included in restructuring and fire related costs, net of (recoveries) in the condensed consolidated statement of operations. During the three months ended March 31, 2022, the Company recorded $2 million of fire related costs, net of (recoveries). Additionally, during the three months ended March 31, 2022, inventory write-downs related to Rocky Mount inventory of $80 million were included in cost of goods sold. Due to the circumstances surrounding the write-downs of inventory, these write-downs have been excluded from Adjusted OIBDA (as defined in note 9). QVC submitted its business interruption claim with the insurance company; however, there can be no guarantee that all business interruption losses will be recovered. QVC expects to continue to record additional costs and recoveries until the insurance claim is fully settled. Project Athens On June 27, 2022, Qurate Retail announced a five-point turnaround plan designed to stabilize and differentiate its core QxH and QVC International businesses and expand the company's leadership in video streaming commerce (“Project Athens”). Project Athens main initiatives include: (i) improve customer experience and grow relationships; (ii) rigorously execute core processes; (iii) lower cost to serve; (iv) optimize the brand portfolio; and (v) build new high growth businesses anchored in strength. During 2022 QVC commenced the first phase of Project Athens including actions to reduce inventory and a planned workforce reduction. These initiatives are consistent with QVC’s strategy to operate more efficiently as it implements its turnaround plan. During the three months ended March 31, 2023, QVC implemented a workforce reduction and recorded restructuring charges of $13 million in restructuring and fire related costs, net of (recoveries) in the condensed consolidated statement of operations. Zulily Restructuring In the first quarter of 2022, Zulily began to execute a series of transformation initiatives, beginning with the announcement of the closure of its fulfillment center in Bethlehem, Pennsylvania, and reduction in corporate workforce. These initiatives are consistent with Zulily’s strategy to operate more efficiently as it implements its turnaround plan, and Zulily expects to incur additional expenses related to these transformation initiatives in future periods. Zulily recorded $4 million of restructuring charges during the three months ended March 31, 2023 related to its reduction in corporate workforce. Zulily recorded $2 million of restructuring charges during the three months ended March 31, 2022, principally related to its regional office space strategy and expenses associated with the Pennsylvania facility closure. Gains on sale leaseback transactions In November 2022, QVC entered into agreements to sell two properties located in Germany and the United Kingdom (“U.K.”) to an independent third party. Under the terms of the agreements, QVC received net cash proceeds of $102 million related to its German facility and $80 million related to its U.K. facility when the sale closed in January 2023. Concurrent with the sale, the Company entered into agreements to lease each of the properties back from the purchaser over an initial term of 20 years with the option to extend the terms of the property leases for up to four consecutive terms of five years . QVC recorded a gain of $ 69 million and $44 million related to the successful sale leaseback of the German and U.K. properties, respectively, during the first quarter of 2023 calculated as the difference between the aggregate consideration received and the carrying value of the properties. QVC accounted for the leases as operating at the close of the sale leaseback transaction, leases and recorded a $42 million and $32 million right-of-use asset and operating lease liability for the German and U.K. properties, respectively. On October 31, 2022, the Company entered into foreign currency forward contracts with an aggregate notional amount of $167 million to mitigate the foreign currency risk associated with the sale and leaseback of Germany and U.K. properties. The forward did not qualify as a cash flow hedge under GAAP. Changes in the fair value of the forward are reflected in realized and unrealized gains (losses) on financial instruments, net in the condensed consolidated statements of operations. The forward contract was in a net liability position of $10 million as of December 31, 2022, which was included in other current liabilities in the condensed consolidated balance sheet. The contract expired in January 2023 which resulted in a net cash settlement of $12 million. As of December 31, 2022, assets of $71 million primarily related to the Germany and U.K. properties were classified as held for sale, and included in other assets, at cost, net of accumulated amortization in the consolidated balance sheet, as the proceeds from the sale were used to repay a portion of the Credit Facility borrowings which were classified as noncurrent as of December 31, 2022. Qurate Retail classifies obligations as current when they are contractually required to be satisfied in the next twelve months. |
Information About Qurate Retail
Information About Qurate Retail's Operating Segments | 3 Months Ended |
Mar. 31, 2023 | |
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. The Qurate Retail chief operating decision maker primarily evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as revenue and Adjusted OIBDA. In addition, Qurate Retail reviews nonfinancial measures such as unique website visitors, number of units shipped, conversion rates and active customers, as appropriate. For the three months ended March 31, 2023, Qurate Retail has identified the following operating segments as its reportable segments: ● QxH – QVC U.S. and HSN market and sell a wide variety of consumer products in the United States, primarily by means of their televised shopping programs and via the Internet through their websites and mobile applications. ● QVC International – QVC International markets and sells a wide variety of consumer products in several foreign countries, primarily by means of its televised shopping programs and via the Internet through its international websites and mobile applications. ● CBI – CBI consists of a portfolio of aspirational home and apparel brands in the U.S. that sell merchandise through brick-and-mortar retail locations as well as via the Internet through their websites. Qurate Retail's operating segments are strategic business units that offer different products and services. They are managed separately because each segment requires different technologies, distribution channels and marketing strategies. The accounting policies of the segments are the same as those described in the Company's Summary of Significant Accounting Policies in the 2022 10-K. Performance Measures Disaggregated revenue by segment and product category consisted of the following: Three months ended March 31, 2023 QxH QVC Int'l CBI Corp and other Total in millions Home $ 635 237 214 50 1,136 Apparel 295 113 45 70 523 Beauty 246 133 — 9 388 Accessories 192 51 — 50 293 Electronics 110 17 — 2 129 Jewelry 77 39 — 8 124 Other revenue 46 2 — 3 51 Total Revenue $ 1,601 592 259 192 2,644 Three months ended March 31, 2022 QxH QVC Int'l CBI Corp and other Total in millions Home $ 649 273 246 61 1,229 Apparel 296 117 51 94 558 Beauty 261 145 — 11 417 Accessories 202 55 — 49 306 Electronics 147 26 — 2 175 Jewelry 87 52 — 9 148 Other revenue 42 2 — 6 50 Total Revenue $ 1,684 670 297 232 2,883 leaseback transactions, that are included in the measurement of operating income (loss) pursuant to GAAP. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income (loss), net earnings (loss), cash flows provided by operating activities and other measures of financial performance prepared in accordance with GAAP. Qurate Retail generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current prices. Adjusted OIBDA is summarized as follows: Three months ended March 31, 2023 2022 amounts in millions QxH $ 139 225 QVC International 72 104 CBI 4 31 Corporate and other (36) (25) Consolidated Qurate Retail $ 179 335 Other Information March 31, 2023 Total assets Capital expenditures amounts in millions QxH $ 8,454 33 QVC International 1,923 7 CBI 548 3 Corporate and other 1,275 11 Consolidated Qurate Retail $ 12,200 54 The following table provides a reconciliation of Adjusted OIBDA to Operating income (loss) and Earnings (loss) before income taxes: Three months ended March 31, 2023 2022 amounts in millions Adjusted OIBDA $ 179 335 Stock-based compensation (16) (15) Depreciation and amortization (100) (130) Restructuring and fire related costs, net of recoveries (including Rocky Mount inventory losses, see note 8) — (84) Gains on sale leaseback transactions 113 — Operating income (loss) $ 176 106 Interest expense (94) (117) Realized and unrealized gains (losses) on financial instruments, net (47) 30 Gain (loss) on extinguishment of debt 15 — Other, net 15 52 Earnings (loss) before income taxes $ 65 71 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Schedule of number and weighted average GDFV of option granted | Three months ended March 31, 2023 RSUs Granted (000's) Weighted Average GDFV Series A Qurate Retail common stock, subsidiary employees (1) 935 $ 0.89 Series A Qurate Retail common stock, Qurate Retail employees and directors (2) 553 $ 1.51 Series A Qurate Retail common stock, Qurate Retail President and CEO (3) 1,869 $ 1.51 Series B Qurate Retail common stock, Qurate Retail Chairman of the Board (4) 353 $ 5.51 (1) Grant vests equally over three years . (2) Grants mainly vest one year from the month of grant, subject to the satisfaction of certain performance objectives. (3) Grant vests one year from the month of grant, subject to the satisfaction of certain performance objectives. Grant was made in connection with the employment agreement of our President and Chief Executive Officer. (4) Grant vests one year from the month of grant, subject to the satisfaction of certain performance objectives. Grant was made in connection with our Chairman’s employment agreement. |
Schedule of number and weighted average GDFV of RSUs granted to certain officers, employees and directors | Weighted Weighted Series A Average Series B Average (000's) GDFV (000's) GDFV RSUs outstanding at January 1, 2023 23,166 $ 5.09 327 $ 4.95 Granted 3,357 $ 1.34 353 $ 5.51 Vested (5,544) $ 6.37 (327) $ 4.95 Forfeited/Cancelled (1,850) $ 5.71 — $ — RSUs outstanding at March 31, 2023 19,129 $ 4.00 353 $ 5.51 |
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) Options outstanding at January 1, 2023 32,914 $ 8.78 Granted — $ — Exercised (14) $ 2.17 Forfeited/Cancelled (4,016) $ 12.90 Options outstanding at March 31, 2023 28,884 $ 8.21 2.9 years $ — Options exercisable at March 31, 2023 18,954 $ 9.61 2.3 years $ — |
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) Options outstanding at January 1, 2023 2,221 $ 12.25 Granted — $ — Exercised — $ — Forfeited/Cancelled (1,498) $ 12.20 Options outstanding at March 31, 2023 723 $ 12.35 1.6 years $ — Options exercisable at March 31, 2023 723 $ 12.35 1.6 years $ — |
Earnings (Loss) Per Common Sh_2
Earnings (Loss) Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings (Loss) Per Common Share | |
Schedule of WASO | Qurate Retail Common Stock Three months ended March 31, 2023 2022 number of shares in millions Basic WASO 383 379 Potentially dilutive shares 1 5 Diluted WASO 384 384 |
Assets and Liabilities Measur_2
Assets and Liabilities Measured at Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Assets and Liabilities Measured at Fair Value | |
Schedule of assets and liabilities measured at fair value | Fair Value Measurements at Fair Value Measurements at March 31, 2023 December 31, 2022 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 $ 924 924 — 938 938 — Indemnification asset $ 29 — 29 50 — 50 Debt $ 319 — 319 614 — 614 |
Summary of realized and unrealized gains (losses) on financial instruments | Three months ended March 31, 2023 2022 amounts in millions Equity securities (3) (10) Exchangeable senior debentures (46) 124 Indemnification asset 3 (85) Other financial instruments (1) 1 $ (47) 30 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Intangible Assets | |
Schedule of changes in the carrying amount of goodwill | Corporate and QxH QVC Int'l CBI Other Total amounts in millions Balance at January 1, 2023 $ 2,693 778 12 18 3,501 Foreign currency translation adjustments — 11 — — 11 Balance at March 31, 2023 $ 2,693 789 12 18 3,512 |
Schedule of amortization expense for the next five years | Based on its amortizable intangible assets as of March 31, 2023, Qurate Retail expects that amortization expense will be as follows for the next five years (amounts in millions): Remainder of 2023 $ 226 2024 $ 235 2025 $ 108 2026 $ 76 2027 $ 3 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Long-Term Debt | |
Schedule of debt summarized | Outstanding principal at Carrying value March 31, 2023 March 31, 2023 December 31, 2022 amounts in millions Corporate level debentures 8.5% Senior Debentures due 2029 $ 287 286 286 8.25% Senior Debentures due 2030 505 503 503 4% Exchangeable Senior Debentures due 2029 354 58 134 3.75% Exchangeable Senior Debentures due 2030 429 84 157 1.75% Exchangeable Senior Debentures due 2046 173 177 323 Subsidiary level notes and facilities QVC 4.375% Senior Secured Notes due 2023 — — 214 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 575 575 575 QVC 4.375% Senior Secured Notes due 2028 500 500 500 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 Senior Secured Credit Facility 1,345 1,345 1,075 Deferred loan costs — (36) (37) Total consolidated Qurate Retail debt $ 6,793 6,115 6,353 Less current classification (319) (828) Total long-term debt $ 5,796 5,525 |
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 March 31, 2023 are as follows (amounts in millions): Senior debentures $ 199 QVC senior secured notes $ 1,782 |
Information About Qurate Reta_2
Information About Qurate Retail's Operating Segments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Information About Qurate Retail's Operating Segments | |
Schedule of disaggregation of revenue | Three months ended March 31, 2023 QxH QVC Int'l CBI Corp and other Total in millions Home $ 635 237 214 50 1,136 Apparel 295 113 45 70 523 Beauty 246 133 — 9 388 Accessories 192 51 — 50 293 Electronics 110 17 — 2 129 Jewelry 77 39 — 8 124 Other revenue 46 2 — 3 51 Total Revenue $ 1,601 592 259 192 2,644 Three months ended March 31, 2022 QxH QVC Int'l CBI Corp and other Total in millions Home $ 649 273 246 61 1,229 Apparel 296 117 51 94 558 Beauty 261 145 — 11 417 Accessories 202 55 — 49 306 Electronics 147 26 — 2 175 Jewelry 87 52 — 9 148 Other revenue 42 2 — 6 50 Total Revenue $ 1,684 670 297 232 2,883 |
Performance Measures | Three months ended March 31, 2023 2022 amounts in millions QxH $ 139 225 QVC International 72 104 CBI 4 31 Corporate and other (36) (25) Consolidated Qurate Retail $ 179 335 |
Other Information By Segment | March 31, 2023 Total assets Capital expenditures amounts in millions QxH $ 8,454 33 QVC International 1,923 7 CBI 548 3 Corporate and other 1,275 11 Consolidated Qurate Retail $ 12,200 54 |
Reconciliation Of Segment Adjusted OIBDA To Operating income (loss) and Earnings (Loss) From Continuing Operations Before Income Taxes | Three months ended March 31, 2023 2022 amounts in millions Adjusted OIBDA $ 179 335 Stock-based compensation (16) (15) Depreciation and amortization (100) (130) Restructuring and fire related costs, net of recoveries (including Rocky Mount inventory losses, see note 8) — (84) Gains on sale leaseback transactions 113 — Operating income (loss) $ 176 106 Interest expense (94) (117) Realized and unrealized gains (losses) on financial instruments, net (47) 30 Gain (loss) on extinguishment of debt 15 — Other, net 15 52 Earnings (loss) before income taxes $ 65 71 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Liberty Media | |||
Basis | |||
Related Party Transaction, Amounts of Transaction | $ 2 | $ 3 | |
Liberty Media | CEO | |||
Basis | |||
CEO compensation allocation percentage | 11% | ||
Liberty Media Corporation and Liberty Broadband Corporation | |||
Basis | |||
Tax sharing payable | $ 10 | $ 18 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Jun. 03, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | |
Stock-based compensation | |||
Stock-based compensation | $ 16 | $ 15 | |
Common Class A | Restricted Stock Units (RSUs) | |||
Stock-based compensation | |||
Grants in period | 3,357,000 | ||
Weighted Average GDFV | $ 1.34 | ||
Common Class A | Restricted Stock Units (RSUs) | Maffei Stock Exchange Agreement | |||
Stock-based compensation | |||
Number of shares transferred | 229,022 | ||
Share received in exchange | 1 | ||
Common Class A | Qurate Retail common stock, subsidiary employees | Restricted Stock Units (RSUs) | |||
Stock-based compensation | |||
Grants in period | 935,000 | ||
Weighted Average GDFV | $ 0.89 | ||
Award vesting period | 3 years | ||
Common Class A | Qurate Retail common stock, subsidiary employees | Performance Shares | |||
Stock-based compensation | |||
Grants in period | 20,400,000 | ||
Award vesting period | 3 years | ||
Common Class A | Qurate Retail Employees and Directors | Restricted Stock Units (RSUs) | |||
Stock-based compensation | |||
Grants in period | 553,000 | ||
Weighted Average GDFV | $ 1.51 | ||
Award vesting period | 1 year | ||
Common Class A | Qurate Retail President and CEO | Restricted Stock Units (RSUs) | |||
Stock-based compensation | |||
Grants in period | 1,869,000 | ||
Weighted Average GDFV | $ 1.51 | ||
Award vesting period | 1 year | ||
Common Class B | Restricted Stock Units (RSUs) | |||
Stock-based compensation | |||
Grants in period | 353,000 | ||
Weighted Average GDFV | $ 5.51 | ||
Common Class B | Qurate Retail Chairman Of Board | Restricted Stock Units (RSUs) | |||
Stock-based compensation | |||
Grants in period | 353,000 | ||
Weighted Average GDFV | $ 5.51 | ||
Award vesting period | 1 year |
Stock-Based Compensation - Gran
Stock-Based Compensation - Grants (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Common Class A | |
Number of options | |
Outstanding at beginning of period | shares | 32,914 |
Exercised | shares | (14) |
Forfeited/Cancelled | shares | (4,016) |
Outstanding at end of period | shares | 28,884 |
Exercisable at end of period | shares | 18,954 |
WAEP | |
Outstanding at beginning of period | $ / shares | $ 8.78 |
Exercised | $ / shares | 2.17 |
Forfeited/Cancelled | $ / shares | 12.90 |
Outstanding at end of period | $ / shares | 8.21 |
Exercisable at end of period | $ / shares | $ 9.61 |
Additional disclosures | |
Weighted average remaining life - options outstanding | 2 years 10 months 24 days |
Weighted average remaining life - options exercisable | 2 years 3 months 18 days |
Common Class B | |
Number of options | |
Outstanding at beginning of period | shares | 2,221 |
Forfeited/Cancelled | shares | (1,498) |
Outstanding at end of period | shares | 723 |
Exercisable at end of period | shares | 723 |
WAEP | |
Outstanding at beginning of period | $ / shares | $ 12.25 |
Forfeited/Cancelled | $ / shares | 12.20 |
Outstanding at end of period | $ / shares | 12.35 |
Exercisable at end of period | $ / shares | $ 12.35 |
Additional disclosures | |
Weighted average remaining life - options outstanding | 1 year 7 months 6 days |
Weighted average remaining life - options exercisable | 1 year 7 months 6 days |
Stock-Based Compensation - GDFV
Stock-Based Compensation - GDFV of RSUs (Details) - Restricted Stock Units (RSUs) shares in Thousands | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Common Class A | |
Number of shares | |
RSUs outstanding, Beginning Balance | shares | 23,166 |
Granted | shares | 3,357 |
Vested | shares | (5,544) |
Forfeited/Cancelled | shares | (1,850) |
RSUs outstanding, Ending Balance | shares | 19,129 |
Weighted Average GDFV | |
RSUs Outstanding , Beginning Balance | $ / shares | $ 5.09 |
Granted | $ / shares | 1.34 |
Vested | $ / shares | 6.37 |
Forfeited/Cancelled | $ / shares | 5.71 |
RSUs Outstanding , Ending Balance | $ / shares | $ 4 |
Common Class B | |
Number of shares | |
RSUs outstanding, Beginning Balance | shares | 327 |
Granted | shares | 353 |
Vested | shares | (327) |
RSUs outstanding, Ending Balance | shares | 353 |
Weighted Average GDFV | |
RSUs Outstanding , Beginning Balance | $ / shares | $ 4.95 |
Granted | $ / shares | 5.51 |
Vested | $ / shares | 4.95 |
RSUs Outstanding , Ending Balance | $ / shares | $ 5.51 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Stock-based compensation | ||
Total unrecognized compensation cost related to unvested Awards | $ 101 | |
Weighted average period of recognition related to unvested equity awards (in years) | 1 year 7 months 6 days | |
Common Class A | ||
Stock-based compensation | ||
Shares reserved for future issuance upon exercise of stock options | 28,900 | |
Common Class B | ||
Stock-based compensation | ||
Shares reserved for future issuance upon exercise of stock options | 700 | |
8.0% Series A Cumulative Redeemable Preferred Stock | ||
Stock-based compensation | ||
Dividend rate | 8% | |
RSA and RSU | 8.0% Series A Cumulative Redeemable Preferred Stock | ||
Stock-based compensation | ||
RSUs Outstanding | 40 | |
Restricted Stock Units (RSUs) | Common Class A | ||
Stock-based compensation | ||
RSUs Outstanding | 19,129 | 23,166 |
RSUs/RSAs GDFV | $ 4 | $ 5.09 |
Restricted Stock Units (RSUs) | Common Class B | ||
Stock-based compensation | ||
RSUs Outstanding | 353 | 327 |
RSUs/RSAs GDFV | $ 5.51 | $ 4.95 |
Restricted Stock Units (RSUs) | 8.0% Series A Cumulative Redeemable Preferred Stock | ||
Stock-based compensation | ||
RSUs Outstanding | 36 | |
Incremental cost | $ 48.99 | |
Restricted Stock | Common Class B | ||
Stock-based compensation | ||
RSUs Outstanding | 1,100 | |
RSUs/RSAs GDFV | $ 13.65 |
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 | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings (Loss) Per Common Share | ||
Antidilutive securities | 30 | 26 |
Basic WASO | 383 | 379 |
Potentially dilutive shares | 1 | 5 |
Diluted WASO | 384 | 384 |
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 | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Assets and liabilities measured at fair value | ||
Indemnification payment from Liberty Broadband | $ 24 | |
Recurring | ||
Assets and liabilities measured at fair value | ||
Cash equivalents | 924 | $ 938 |
Indemnification asset | 29 | 50 |
Debt | 319 | 614 |
Recurring | Fair Value, Inputs, Level 1 | ||
Assets and liabilities measured at fair value | ||
Cash equivalents | 924 | 938 |
Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets and liabilities measured at fair value | ||
Indemnification asset | 29 | 50 |
Debt | 319 | $ 614 |
1.75% Exchangeable Senior Debentures due 2046 | ||
Assets and liabilities measured at fair value | ||
Debt exchanged | $ 157 | |
Interest rate (as a percent) | 1.75% | |
Indemnification payment from Liberty Broadband | $ 24 |
Assets and Liabilities Measur_4
Assets and Liabilities Measured at Fair Value - Realized and Unrealized Gains (Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Realized and unrealized gains (losses) on financial instruments | ||
Realized and unrealized gains (losses) on financial instruments | $ (47) | $ 30 |
Change in fair value of exchangeable senior debentures realized gain | 169 | 34 |
Cumulative amount of gain in change in fair value | 633 | |
Gain (loss) on extinguishment of debt | 15 | |
1.75% Exchangeable Senior Debentures due 2046 | ||
Realized and unrealized gains (losses) on financial instruments | ||
Gain (loss) on extinguishment of debt | $ 25 | |
Interest rate (as a percent) | 1.75% | |
Equity securities | ||
Realized and unrealized gains (losses) on financial instruments | ||
Realized and unrealized gains (losses) on financial instruments | $ (3) | (10) |
Exchangeable senior debentures | ||
Realized and unrealized gains (losses) on financial instruments | ||
Realized and unrealized gains (losses) on financial instruments | (46) | 124 |
Indemnification asset | ||
Realized and unrealized gains (losses) on financial instruments | ||
Realized and unrealized gains (losses) on financial instruments | 3 | (85) |
Other Financial Instruments | ||
Realized and unrealized gains (losses) on financial instruments | ||
Realized and unrealized gains (losses) on financial instruments | $ (1) | $ 1 |
Intangible Assets - Changes In
Intangible Assets - Changes In The Carrying Amount Of Goodwill (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Changes in the carrying amount of goodwill | |
Balance, beginning of the year | $ 3,501 |
Foreign currency translation adjustments | 11 |
Balance, end of the year | 3,512 |
Corporate and Other | |
Changes in the carrying amount of goodwill | |
Balance, beginning of the year | 18 |
Balance, end of the year | 18 |
QxH | |
Changes in the carrying amount of goodwill | |
Balance, beginning of the year | 2,693 |
Balance, end of the year | 2,693 |
QVC International | |
Changes in the carrying amount of goodwill | |
Balance, beginning of the year | 778 |
Foreign currency translation adjustments | 11 |
Balance, end of the year | 789 |
CBI | |
Changes in the carrying amount of goodwill | |
Balance, beginning of the year | 12 |
Balance, end of the year | $ 12 |
Intangible Assets - Amortizatio
Intangible Assets - Amortization Expense For The Next Five Fiscal Years (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Intangible Assets | ||
Amortization expense for intangible assets | $ 74 | $ 82 |
Amortization expense for the next five years | ||
Remainder of 2023 | 226 | |
2024 | 235 | |
2025 | 108 | |
2026 | 76 | |
2027 | $ 3 |
Long-Term Debt - Debt Table (De
Long-Term Debt - Debt Table (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
Long-term debt | |||
Outstanding principal | $ 6,793 | ||
Carrying value | 6,115 | $ 6,353 | |
Deferred loan costs | (36) | (37) | |
Total consolidated debt | 6,115 | 6,353 | |
Less debt classified as current | (319) | (828) | |
Total long-term debt | 5,796 | 5,525 | |
8.5% Senior Debentures Due 2029 | |||
Long-term debt | |||
Outstanding principal | 287 | ||
Carrying value | 286 | 286 | |
Total consolidated debt | $ 286 | 286 | |
Debt instrument interest rate | 8.50% | ||
8.25% Senior Debentures Due 2030 | |||
Long-term debt | |||
Outstanding principal | $ 505 | ||
Carrying value | 503 | 503 | |
Total consolidated debt | $ 503 | 503 | |
Debt instrument interest rate | 8.25% | ||
4% Exchangeable Senior Debentures Due 2029 | |||
Long-term debt | |||
Outstanding principal | $ 354 | ||
Carrying value | 58 | 134 | |
Total consolidated debt | $ 58 | 134 | |
Debt instrument interest rate | 4% | ||
3.75% Exchangeable Senior Debentures Due 2030 | |||
Long-term debt | |||
Outstanding principal | $ 429 | ||
Carrying value | 84 | 157 | |
Total consolidated debt | $ 84 | 157 | |
Debt instrument interest rate | 3.75% | ||
1.75% Exchangeable Senior Debentures due 2046 | |||
Long-term debt | |||
Outstanding principal | $ 173 | ||
Carrying value | 177 | 323 | |
Total consolidated debt | $ 177 | 323 | |
Debt instrument interest rate | 1.75% | ||
QVC | QVC 4.375% Senior Secured Notes due 2023 | |||
Long-term debt | |||
Carrying value | 214 | ||
Total consolidated debt | 214 | ||
Debt instrument interest rate | 4.375% | 4.375% | |
QVC | QVC 4.85% Senior Secured Notes Due 2024 | |||
Long-term debt | |||
Outstanding principal | $ 600 | ||
Carrying value | 600 | 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 | ||
Carrying value | 599 | 599 | |
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 | ||
Carrying value | 575 | 575 | |
Total consolidated debt | $ 575 | 575 | |
Debt instrument interest rate | 4.75% | ||
QVC | QVC 4.375% Senior Secured Notes due 2028 | |||
Long-term debt | |||
Outstanding principal | $ 500 | ||
Carrying value | 500 | 500 | |
Total consolidated debt | $ 500 | 500 | |
Debt instrument interest rate | 4.375% | ||
QVC | QVC 5.45% Senior Secured Notes Due 2034 | |||
Long-term debt | |||
Outstanding principal | $ 400 | ||
Carrying value | 399 | 399 | |
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 | ||
Carrying value | 300 | 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 | ||
Carrying value | 225 | 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 | ||
Carrying value | 500 | 500 | |
Total consolidated debt | $ 500 | 500 | |
Debt instrument interest rate | 6.25% | ||
QVC | QVC Senior Secured Credit Facility | |||
Long-term debt | |||
Outstanding principal | $ 1,345 | ||
Carrying value | 1,345 | 1,075 | |
Total consolidated debt | $ 1,345 | $ 1,075 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) $ in Millions | 1 Months Ended | 3 Months Ended | ||||
Apr. 01, 2023 USD ($) | Oct. 27, 2021 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Long-term debt | ||||||
Debt, Current | $ 319 | $ 828 | ||||
Repayments of Long-term Debt | 803 | $ 195 | ||||
Loss on extinguishment of debt | $ 15 | |||||
8.5% Senior Debentures Due 2029 | ||||||
Long-term debt | ||||||
Interest rate (as a percent) | 8.50% | |||||
8.25% Senior Debentures Due 2030 | ||||||
Long-term debt | ||||||
Interest rate (as a percent) | 8.25% | |||||
4% Exchangeable Senior Debentures Due 2029 | ||||||
Long-term debt | ||||||
Interest rate (as a percent) | 4% | |||||
3.75% Exchangeable Senior Debentures Due 2030 | ||||||
Long-term debt | ||||||
Interest rate (as a percent) | 3.75% | |||||
1.75% Exchangeable Senior Debentures due 2046 | ||||||
Long-term debt | ||||||
Interest rate (as a percent) | 1.75% | |||||
Debt exchanged | $ 157 | |||||
Loss on extinguishment of debt | $ 25 | |||||
1.75% Exchangeable Senior Debentures due 2046 | Subsequent Event | ||||||
Long-term debt | ||||||
Debt exchanged | $ 94 | |||||
Amendment No. 5 Credit Facility | Portion of Credit Facility Available to QVC or zulily | ||||||
Long-term debt | ||||||
Maximum borrowing capacity | $ 3,250 | |||||
Amendment No. 5 Credit Facility | Portion of Credit Facility Available to QVC or zulily | Alternate Base Rate | Minimum | ||||||
Long-term debt | ||||||
Debt Instrument, Basis Spread on Variable Rate | 0.25% | |||||
Amendment No. 5 Credit Facility | Portion of Credit Facility Available to QVC or zulily | Alternate Base Rate | Maximum | ||||||
Long-term debt | ||||||
Debt Instrument, Basis Spread on Variable Rate | 0.625% | |||||
Amendment No. 5 Credit Facility | Portion of Credit Facility Available to QVC or zulily | LIBOR | Minimum | ||||||
Long-term debt | ||||||
Debt Instrument, Basis Spread on Variable Rate | 1.25% | |||||
Amendment No. 5 Credit Facility | Portion of Credit Facility Available to QVC or zulily | LIBOR | Maximum | ||||||
Long-term debt | ||||||
Debt Instrument, Basis Spread on Variable Rate | 1.625% | |||||
Amendment No. 5 Credit Facility | Letter of Credit | ||||||
Long-term debt | ||||||
Maximum borrowing capacity | $ 450 | |||||
Percentage of sub-limit | 50% | |||||
QVC | QVC 4.375% Senior Secured Notes due 2023 | ||||||
Long-term debt | ||||||
Interest rate (as a percent) | 4.375% | 4.375% | ||||
Leverage ratio | 3.5 | |||||
Repayments of Long-term Debt | $ 536 | |||||
QVC | QVC 4.85% Senior Secured Notes Due 2024 | ||||||
Long-term debt | ||||||
Interest rate (as a percent) | 4.85% | |||||
QVC | QVC 4.45% Senior Secured Notes Due 2025 | ||||||
Long-term debt | ||||||
Interest rate (as a percent) | 4.45% | |||||
QVC | QVC 5.45% Senior Secured Notes Due 2034 | ||||||
Long-term debt | ||||||
Interest rate (as a percent) | 5.45% | |||||
QVC | QVC 5.95% Senior Secured Notes due 2043 | ||||||
Long-term debt | ||||||
Interest rate (as a percent) | 5.95% | |||||
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% | |||||
QVC | QVC 4.75% Senior Secured Notes Due 2027 | ||||||
Long-term debt | ||||||
Interest rate (as a percent) | 4.75% | |||||
QVC | QVC 4.375% Senior Secured Notes due 2028 | ||||||
Long-term debt | ||||||
Interest rate (as a percent) | 4.375% | |||||
QVC | Amendment No. 5 Credit Facility | ||||||
Long-term debt | ||||||
Interest rate (as a percent) | 6.30% | 1.80% | ||||
Remaining borrowing capacity | $ 1,882 |
Long-Term Debt- Debt Securities
Long-Term Debt- Debt Securities That Are Not Reported At Fair Value (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Senior Debentures | |
Long-term debt | |
Fair value of debt securities that are not reported at fair value | $ 199 |
QVC Senior Secured Notes | |
Long-term debt | |
Fair value of debt securities that are not reported at fair value | $ 1,782 |
Preferred Stock (Details)
Preferred Stock (Details) - 8.0% Series A Cumulative Redeemable Preferred Stock $ / shares in Units, $ in Millions | 3 Months Ended | |
Sep. 14, 2020 $ / shares | Mar. 31, 2023 USD ($) item shares | |
Preferred Stock | ||
Preferred stock par value | $ / shares | $ 0.01 | |
Preferred stock authorized | 13,500,000 | |
Preferred shares issued | 12,704,807 | |
Preferred shares outstanding | 12,704,807 | |
Preferred Stock, Dividend Rate, Percentage | 8% | |
Dividend redemption period | 30 days | |
Liquidation preference per share | $ / shares | $ 100 | |
Minimum liquidation price excess for certain director election rights | 25% | |
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% | |
On or after the sixth anniversary of the Original Issue Date but prior to its seventh anniversary | ||
Preferred Stock | ||
Redemption price | 2% | |
On or after the seventh anniversary of the Original Issue Date | ||
Preferred Stock | ||
Redemption price | 0% | |
Level 1 | ||
Preferred Stock | ||
Fair value of the Preferred Stock | $ | $ 372 |
Commitments and Contingencies -
Commitments and Contingencies - Fire at Rocky Mount Fulfillment Center (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Feb. 28, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | |
Unusual or Infrequent Item, or Both [Line Items] | |||
Gain on insurance proceeds received in excess of losses | $ 17 | ||
Proceeds from Sale of Property, Plant, and Equipment | 198 | ||
QVC Rocky Mount Fire | QVC | |||
Unusual or Infrequent Item, or Both [Line Items] | |||
Insurance receivable beginning balance | 40 | ||
Insurance proceeds received for inventory loss | 55 | ||
Insurance proceeds applied to receivable | 40 | ||
Gain on insurance proceeds received in excess of losses | 15 | ||
Insurance receivable ending balance | 0 | ||
gain on sale of assets | 13 | ||
Fire related costs | 11 | $ 2 | |
Loss on inventory | $ 80 | ||
Proceeds from Sale of Property, Plant, and Equipment | $ 15 |
Commitments and Contingencies_2
Commitments and Contingencies - Restructuring (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
QVC | Workforce reduction | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 13 | |
Zulily | Facility Closing | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 2 | |
Severance Costs | $ 4 |
Commitments and Contingencies_3
Commitments and Contingencies - Gain on Sale Leaseback Transaction (Details) $ in Millions | 1 Months Ended | 3 Months Ended | ||||
Nov. 02, 2022 property item | Jan. 31, 2023 USD ($) | Nov. 30, 2022 USD ($) | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Oct. 31, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | ||||||
Proceeds from sale of fixed assets | $ 198 | |||||
Sale Leaseback gain | 113 | |||||
Operating lease right-of-use assets | 643 | $ 585 | ||||
Operating lease liabilities | 582 | 518 | ||||
Other assets held for sale | 71 | |||||
Foreign Exchange Forward | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Derivative, Notional Amount | $ 167 | |||||
derivative liability | $ 10 | |||||
Payment for net cash settlement of derivative | $ 12 | |||||
Derivative Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued Liabilities, Current | |||||
QVC | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Number Of Properties Sold | property | 2 | |||||
Initial term of lease (in years) | 20 years | |||||
Maximum number of consecutive terms eligible for extension | item | 4 | |||||
Renewal term | 5 years | |||||
QVC | German Facility | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Proceeds from sale of fixed assets | $ 102 | |||||
Sale Leaseback gain | 69 | |||||
Operating lease right-of-use assets | 42 | |||||
Operating lease liabilities | 42 | |||||
QVC | United Kingdom Facility | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Proceeds from sale of fixed assets | $ 80 | |||||
Sale Leaseback gain | 44 | |||||
Operating lease right-of-use assets | 32 | |||||
Operating lease liabilities | $ 32 |
Information About Qurate Reta_3
Information About Qurate Retail's Operating Segments - Performance Measures (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Total revenue, net | $ 2,644 | $ 2,883 |
Adjusted OIBDA | 179 | 335 |
Operating Segments | QxH | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 1,601 | 1,684 |
Adjusted OIBDA | 139 | 225 |
Operating Segments | QVC International | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 592 | 670 |
Adjusted OIBDA | 72 | 104 |
Operating Segments | CBI | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 259 | 297 |
Adjusted OIBDA | 4 | 31 |
Corporate and Other | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 192 | 232 |
Adjusted OIBDA | (36) | (25) |
Home | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 1,136 | 1,229 |
Home | Operating Segments | QxH | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 635 | 649 |
Home | Operating Segments | QVC International | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 237 | 273 |
Home | Operating Segments | CBI | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 214 | 246 |
Home | Corporate and Other | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 50 | 61 |
Beauty | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 388 | 417 |
Beauty | Operating Segments | QxH | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 246 | 261 |
Beauty | Operating Segments | QVC International | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 133 | 145 |
Beauty | Corporate and Other | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 9 | 11 |
Apparel | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 523 | 558 |
Apparel | Operating Segments | QxH | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 295 | 296 |
Apparel | Operating Segments | QVC International | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 113 | 117 |
Apparel | Operating Segments | CBI | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 45 | 51 |
Apparel | Corporate and Other | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 70 | 94 |
Accessories | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 293 | 306 |
Accessories | Operating Segments | QxH | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 192 | 202 |
Accessories | Operating Segments | QVC International | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 51 | 55 |
Accessories | Corporate and Other | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 50 | 49 |
Electronics | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 129 | 175 |
Electronics | Operating Segments | QxH | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 110 | 147 |
Electronics | Operating Segments | QVC International | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 17 | 26 |
Electronics | Corporate and Other | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 2 | 2 |
Jewelry | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 124 | 148 |
Jewelry | Operating Segments | QxH | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 77 | 87 |
Jewelry | Operating Segments | QVC International | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 39 | 52 |
Jewelry | Corporate and Other | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 8 | 9 |
Other revenue | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 51 | 50 |
Other revenue | Operating Segments | QxH | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 46 | 42 |
Other revenue | Operating Segments | QVC International | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | 2 | 2 |
Other revenue | Corporate and Other | ||
Segment Reporting Information [Line Items] | ||
Total revenue, net | $ 3 | $ 6 |
Information About Qurate Reta_4
Information About Qurate Retail's Operating Segments - Other Information By Segment (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Information about Qurate Retail's operating segments | |||
Total assets | $ 12,200 | $ 12,571 | |
Capital expenditures | 54 | $ 43 | |
Operating Segments | QxH | |||
Information about Qurate Retail's operating segments | |||
Total assets | 8,454 | ||
Capital expenditures | 33 | ||
Operating Segments | QVC International | |||
Information about Qurate Retail's operating segments | |||
Total assets | 1,923 | ||
Capital expenditures | 7 | ||
Operating Segments | CBI | |||
Information about Qurate Retail's operating segments | |||
Total assets | 548 | ||
Capital expenditures | 3 | ||
Corporate and Other | |||
Information about Qurate Retail's operating segments | |||
Total assets | 1,275 | ||
Capital expenditures | $ 11 |
Information About Qurate Reta_5
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 | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Information About Qurate Retail's Operating Segments | ||
Adjusted OIBDA | $ 179 | $ 335 |
Stock-based compensation | (16) | (15) |
Depreciation and amortization | (100) | (130) |
Restructuring and fire related (costs), net of recoveries | (84) | |
Gains on sale leaseback transactions | 113 | |
Operating income (loss) | 176 | 106 |
Interest expense | (94) | (117) |
Realized and unrealized gains (losses) on financial instruments, net | (47) | 30 |
Gain (loss) on extinguishment of debt | 15 | |
Other, net | 15 | 52 |
Earnings (loss) before income taxes | $ 65 | $ 71 |