Exhibit 99.2
Unaudited Attributed Financial Information for Tracking Stock Groups
On May 9, 2006, we completed a restructuring and recapitalization pursuant to which we issued two new tracking stocks, one (“Liberty Interactive Stock”) intended to reflect the separate performance of our businesses engaged in video and on-line commerce, the second (“Old Liberty Capital Stock”) intended to reflect the separate performance of all of our assets and businesses not attributed to the Interactive Group. Each share of our existing Series A and Series B common stock was exchanged for .25 of a share of the same series of Liberty Interactive Stock and .05 of a share of the same series of Liberty Capital Stock.
On March 3, 2008, we completed a reclassification of our Old Liberty Capital Stock, whereby each share of Old Liberty Capital Stock was reclassified into four shares of the same series of Liberty Entertainment Stock and one share of the same series of Liberty Capital Stock. Our Liberty Entertainment Stock is intended to reflect the separate performance of our Entertainment Group, which is comprised of certain of our businesses previously attributed to the Capital Group and which are engaged in video programming, direct-to-home satellite distribution and communications. Our Capital Group is comprised of our assets and businesses not attributed to either the Interactive Group or the Entertainment Group.
The following tables present our assets, liabilities, revenue, expenses and cash flows as of and for the years ended December 31, 2008, 2007 and 2006. The tables further present our assets, liabilities, revenue, expenses and cash flows that are attributed to the Interactive Group, the Entertainment Group and the Capital Group, respectively. The financial information should be read in conjunction with our audited financial statements for the years ended December 31, 2008, 2007 and 2006 included in this Annual Report on Form 10-K. The attributed financial information presented in the tables has been prepared assuming the restructuring and the reclassification had been completed as of January 1, 2006.
Notwithstanding the following attribution of assets, liabilities, revenue, expenses and cash flows to the Interactive Group, the Entertainment Group and the Capital Group, our tracking stock capital structure does not affect the ownership or the respective legal title to our assets or responsibility for our liabilities. We and our subsidiaries each continue to be responsible for our respective liabilities. Holders of Liberty Interactive Stock, Liberty Entertainment Stock and Liberty Capital Stock are holders of our common stock and continue to be subject to risks associated with an investment in our company and all of our businesses, assets and liabilities. The issuance of Liberty Interactive Stock, Liberty Entertainment Stock and Liberty Capital Stock does not affect the rights of our creditors.
1
SUMMARY ATTRIBUTED FINANCIAL DATA
Interactive Group
|
|
|
December 31, |
|
|||||
|
|
|
2008 |
|
2007 |
|
2006 |
|
|
|
|
|
amounts in millions |
|
|||||
|
Summary Balance Sheet Data: |
|
|
|
|
|
|
|
|
|
Current assets |
|
$ |
3,282 |
|
2,921 |
|
2,984 |
|
|
Cost investments |
|
$ |
739 |
|
2,044 |
|
2,572 |
|
|
Equity investments |
|
$ |
901 |
|
1,311 |
|
1,358 |
|
|
Total assets |
|
$ |
17,487 |
|
19,326 |
|
19,820 |
|
|
Long-term debt, including current portion |
|
$ |
7,131 |
|
7,177 |
|
6,383 |
|
|
Deferred income tax liabilities, noncurrent |
|
$ |
1,999 |
|
2,670 |
|
3,057 |
|
|
Attributed net assts |
|
$ |
6,303 |
|
7,530 |
|
8,561 |
|
|
|
|
Years ended December 31, |
|
|||||
|
|
|
2008 |
|
2007 |
|
2006 |
|
|
|
|
|
amounts in millions |
|
|||||
|
Summary Operations Data: |
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
8,079 |
|
7,802 |
|
7,326 |
|
|
Cost of goods sold |
|
(5,224 |
) |
(4,925 |
) |
(4,565 |
) |
|
|
Operating expenses |
|
(748 |
) |
(712 |
) |
(668 |
) |
|
|
Selling, general and administrative expenses (1) |
|
(584 |
) |
(516 |
) |
(472 |
) |
|
|
Depreciation and amortization |
|
(561 |
) |
(536 |
) |
(491 |
) |
|
|
Impairment of long-lived assets |
|
(56 |
) |
— |
|
— |
|
|
|
Operating income |
|
906 |
|
1,113 |
|
1,130 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(473 |
) |
(465 |
) |
(417 |
) |
|
|
Share of earnings (losses) of affiliates |
|
(1,192 |
) |
77 |
|
47 |
|
|
|
Other than temporary declines in fair value of investments |
|
(440 |
) |
— |
|
— |
|
|
|
Other income (expense), net |
|
(39 |
) |
51 |
|
83 |
|
|
|
Income tax benefit (expense) |
|
493 |
|
(306 |
) |
(210 |
) |
|
|
Earnings (loss) before cumulative effect of accounting change |
|
(745 |
) |
470 |
|
633 |
|
|
|
Cumulative effect of accounting change, net of taxes |
|
— |
|
— |
|
(87 |
) |
|
|
Net earnings (loss) |
|
(745 |
) |
470 |
|
546 |
|
|
|
Less net earnings attributable to the noncontrolling interests |
|
36 |
|
29 |
|
35 |
|
|
|
Net earnings (loss) attributable to Liberty Media Corporation shareholders |
|
$ |
(781 |
) |
441 |
|
511 |
|
|
(1) |
|
Includes stock-based compensation of $32 million, $35 million and $59 million for the years ended December 31, 2008, 2007 and 2006, respectively. |
2
SUMMARY ATTRIBUTED FINANCIAL DATA
Entertainment Group
|
|
|
December 31, |
|
|||||
|
|
|
2008 |
|
2007 |
|
2006 |
|
|
|
|
|
amounts in millions |
|
|||||
|
Summary Balance Sheet Data: |
|
|
|
|
|
|
|
|
|
Current assets |
|
$ |
1,631 |
|
793 |
|
804 |
|
|
Cost investments |
|
$ |
2 |
|
10,652 |
|
11,160 |
|
|
Equity investments |
|
$ |
13,366 |
|
249 |
|
253 |
|
|
Total assets |
|
$ |
16,322 |
|
13,808 |
|
14,340 |
|
|
Long-term debt, including current portion |
|
$ |
2,033 |
|
473 |
|
176 |
|
|
Deferred income tax liabilities, noncurrent |
|
$ |
1,735 |
|
3,521 |
|
3,703 |
|
|
Attributed net assts |
|
$ |
12,180 |
|
9,457 |
|
9,797 |
|
|
|
|
Years ended December 31, |
|
|||||
|
|
|
2008 |
|
2007 |
|
2006 |
|
|
|
|
|
amounts in millions |
|
|||||
|
Summary Operations Data: |
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
1,391 |
|
1,136 |
|
1,075 |
|
|
Operating expenses |
|
(863 |
) |
(728 |
) |
(768 |
) |
|
|
Selling, general and administrative expenses (1) |
|
(220 |
) |
(199 |
) |
(141 |
) |
|
|
Depreciation and amortization |
|
(48 |
) |
(37 |
) |
(41 |
) |
|
|
Impairment of long-lived assets |
|
(1,262 |
) |
(41 |
) |
(113 |
) |
|
|
Operating income (loss) |
|
(1,002 |
) |
131 |
|
12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(74 |
) |
(25 |
) |
(31 |
) |
|
|
Share of earnings of affiliates |
|
418 |
|
13 |
|
14 |
|
|
|
Gains (losses) on dispositions of assets, net |
|
3,661 |
|
(1 |
) |
— |
|
|
|
Other income, net |
|
502 |
|
74 |
|
25 |
|
|
|
Income tax benefit (expense) |
|
1,347 |
|
(77 |
) |
(43 |
) |
|
|
Earnings (loss) before cumulative effect of accounting change |
|
4,852 |
|
115 |
|
(23 |
) |
|
|
Cumulative effect of accounting change, net of taxes |
|
— |
|
— |
|
(2 |
) |
|
|
Net earnings (loss) |
|
4,852 |
|
115 |
|
(25 |
) |
|
|
Less net loss attributable to the noncontrolling interests |
|
— |
|
(21 |
) |
(10 |
) |
|
|
Net earnings (loss) attributable to Liberty Media Corporation shareholders |
|
$ |
4,852 |
|
136 |
|
(15 |
) |
|
(1) |
|
Includes stock-based compensation of $16 million, $46 million and $2 million for the years ended December 31, 2008, 2007 and 2006, respectively. |
3
SUMMARY ATTRIBUTED FINANCIAL DATA
Capital Group
|
|
|
December 31, |
|
|||||
|
|
|
2008 |
|
2007 |
|
2006 |
|
|
|
|
|
amounts in millions |
|
|||||
|
Summary Balance Sheet Data: |
|
|
|
|
|
|
|
|
|
Current assets |
|
$ |
2,973 |
|
2,759 |
|
2,972 |
|
|
Cost investments |
|
$ |
2,118 |
|
4,873 |
|
7,890 |
|
|
Total assets |
|
$ |
8,361 |
|
12,679 |
|
13,509 |
|
|
Long-term debt, including current portion |
|
$ |
3,063 |
|
4,065 |
|
2,464 |
|
|
Deferred income tax liabilities, noncurrent |
|
$ |
1,166 |
|
2,267 |
|
2,901 |
|
|
Attributed net assets |
|
$ |
1,121 |
|
2,599 |
|
3,275 |
|
|
|
|
Years ended December 31, |
|
|||||
|
|
|
2008 |
|
2007 |
|
2006 |
|
|
|
|
|
amounts in millions |
|
|||||
|
Summary Operations Data: |
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
614 |
|
485 |
|
212 |
|
|
Operating expenses |
|
(515 |
) |
(480 |
) |
(164 |
) |
|
|
Selling, general and administrative expenses (1) |
|
(398 |
) |
(227 |
) |
(119 |
) |
|
|
Depreciation and amortization |
|
(101 |
) |
(102 |
) |
(50 |
) |
|
|
Impairment of long-lived assets |
|
(251 |
) |
(182 |
) |
— |
|
|
|
Operating loss |
|
(651 |
) |
(506 |
) |
(121 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(172 |
) |
(151 |
) |
(232 |
) |
|
|
Realized and unrealized gains (losses) on derivative instruments, net |
|
(292 |
) |
1,261 |
|
(268 |
) |
|
|
Gain on dispositions, net |
|
16 |
|
635 |
|
607 |
|
|
|
Other income, net |
|
75 |
|
114 |
|
139 |
|
|
|
Income tax benefit |
|
440 |
|
62 |
|
1 |
|
|
|
Earnings (loss) from continuing operations |
|
(584 |
) |
1,415 |
|
126 |
|
|
|
Earnings from discontinued operations, net of taxes |
|
— |
|
149 |
|
212 |
|
|
|
Net earnings (loss) |
|
(584 |
) |
1,564 |
|
338 |
|
|
|
Less net earnings (loss) attributable to the noncontrolling interests |
|
8 |
|
27 |
|
(6 |
) |
|
|
Net earnings (loss) attributable to Liberty Media Corporation shareholders |
|
$ |
(592 |
) |
1,537 |
|
344 |
|
|
(1) |
|
Includes stock-based compensation of $2 million, $12 million and $6 million for the years ended December 31, 2008, 2007 and 2006, respectively. |
4
BALANCE SHEET INFORMATION
December 31, 2008
(unaudited)
|
|
|
Attributed (note 1) |
|
|
|
|
|
|||||
|
|
|
Interactive |
|
Entertainment |
|
Capital |
|
Inter-group |
|
Consolidated |
|
|
|
|
|
Group |
|
Group |
|
Group |
|
eliminations |
|
Liberty |
|
|
|
|
|
amounts in millions |
|
|||||||||
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
832 |
|
807 |
|
1,496 |
|
— |
|
3,135 |
|
|
Trade and other receivables, net |
|
1,171 |
|
236 |
|
156 |
|
— |
|
1,563 |
|
|
|
Inventory, net |
|
1,032 |
|
— |
|
— |
|
— |
|
1,032 |
|
|
|
Program rights |
|
— |
|
498 |
|
— |
|
(1 |
) |
497 |
|
|
|
Financial instruments |
|
— |
|
38 |
|
1,119 |
|
— |
|
1,157 |
|
|
|
Current deferred tax assets |
|
201 |
|
47 |
|
— |
|
(248 |
) |
— |
|
|
|
Other current assets |
|
46 |
|
5 |
|
202 |
|
(18 |
) |
235 |
|
|
|
Total current assets |
|
3,282 |
|
1,631 |
|
2,973 |
|
(267 |
) |
7,619 |
|
|
|
Investments in available-for-sale securities and other cost investments (note 2) |
|
739 |
|
2 |
|
2,118 |
|
— |
|
2,859 |
|
|
|
Long-term financial instruments |
|
— |
|
162 |
|
1,166 |
|
— |
|
1,328 |
|
|
|
Investments in affiliates, accounted for using the equity method (note 3) |
|
901 |
|
13,366 |
|
223 |
|
— |
|
14,490 |
|
|
|
Property and equipment, net |
|
1,064 |
|
120 |
|
147 |
|
— |
|
1,331 |
|
|
|
Goodwill |
|
5,859 |
|
486 |
|
205 |
|
— |
|
6,550 |
|
|
|
Trademarks |
|
2,491 |
|
6 |
|
14 |
|
— |
|
2,511 |
|
|
|
Other non-amortizable intangibles |
|
— |
|
— |
|
158 |
|
— |
|
158 |
|
|
|
Intangible assets subject to amortization, net |
|
3,115 |
|
144 |
|
230 |
|
— |
|
3,489 |
|
|
|
Other assets, at cost, net of accumulated amortization |
|
36 |
|
405 |
|
1,127 |
|
— |
|
1,568 |
|
|
|
Total assets |
|
$ |
17,487 |
|
16,322 |
|
8,361 |
|
(267 |
) |
41,903 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
513 |
|
13 |
|
24 |
|
— |
|
550 |
|
|
Accrued interest |
|
57 |
|
— |
|
46 |
|
— |
|
103 |
|
|
|
Other accrued liabilities |
|
684 |
|
150 |
|
166 |
|
(1 |
) |
999 |
|
|
|
Intergroup payable/receivable |
|
71 |
|
15 |
|
(86 |
) |
— |
|
— |
|
|
|
Financial instruments |
|
155 |
|
— |
|
398 |
|
— |
|
553 |
|
|
|
Current portion of debt (note 4) |
|
175 |
|
256 |
|
437 |
|
— |
|
868 |
|
|
|
Accrued stock compensation |
|
17 |
|
176 |
|
3 |
|
— |
|
196 |
|
|
|
Current deferred tax liabilities |
|
— |
|
— |
|
1,029 |
|
(248 |
) |
781 |
|
|
|
Other current liabilities |
|
38 |
|
7 |
|
68 |
|
(15 |
) |
98 |
|
|
|
Total current liabilities |
|
1,710 |
|
617 |
|
2,085 |
|
(264 |
) |
4,148 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt (note 4) |
|
6,956 |
|
1,777 |
|
2,626 |
|
— |
|
11,359 |
|
|
|
Long-term financial instruments |
|
178 |
|
— |
|
11 |
|
— |
|
189 |
|
|
|
Deferred income tax liabilities (note 6) |
|
1,999 |
|
1,735 |
|
1,166 |
|
— |
|
4,900 |
|
|
|
Other liabilities |
|
187 |
|
13 |
|
1,351 |
|
(1 |
) |
1,550 |
|
|
|
Total liabilities |
|
11,030 |
|
4,142 |
|
7,239 |
|
(265 |
) |
22,146 |
|
|
|
Equity/Attributed net assets |
|
6,303 |
|
12,180 |
|
1,121 |
|
(2 |
) |
19,602 |
|
|
|
Noncontrolling interests in equity of subsidiaries |
|
154 |
|
— |
|
1 |
|
— |
|
155 |
|
|
|
Total liabilities and equity |
|
$ |
17,487 |
|
16,322 |
|
8,361 |
|
(267 |
) |
41,903 |
|
5
BALANCE SHEET INFORMATION
December 31, 2007
(unaudited)
|
|
|
Attributed (note 1) |
|
|
|
|
|
|||||
|
|
|
Interactive |
|
Entertainment |
|
Capital |
|
Inter-group |
|
Consolidated |
|
|
|
|
|
Group |
|
Group |
|
Group |
|
eliminations |
|
Liberty |
|
|
|
|
|
amounts in millions |
|
|||||||||
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
557 |
|
90 |
|
2,488 |
|
— |
|
3,135 |
|
|
Trade and other receivables, net |
|
1,179 |
|
183 |
|
155 |
|
— |
|
1,517 |
|
|
|
Inventory, net |
|
975 |
|
— |
|
— |
|
— |
|
975 |
|
|
|
Program rights |
|
— |
|
515 |
|
— |
|
— |
|
515 |
|
|
|
Financial instruments |
|
— |
|
— |
|
23 |
|
— |
|
23 |
|
|
|
Current deferred tax assets |
|
149 |
|
— |
|
— |
|
(149 |
) |
— |
|
|
|
Other current assets |
|
61 |
|
5 |
|
93 |
|
(15 |
) |
144 |
|
|
|
Total current assets |
|
2,921 |
|
793 |
|
2,759 |
|
(164 |
) |
6,309 |
|
|
|
Investments in available-for-sale securities and other cost investments (note 2) |
|
2,044 |
|
10,652 |
|
4,873 |
|
— |
|
17,569 |
|
|
|
Long-term financial instruments |
|
14 |
|
29 |
|
1,547 |
|
— |
|
1,590 |
|
|
|
Investments in affiliates, accounted for using the equity method (note 3) |
|
1,311 |
|
249 |
|
257 |
|
— |
|
1,817 |
|
|
|
Investment in special purpose entity |
|
— |
|
— |
|
750 |
|
— |
|
750 |
|
|
|
Property and equipment, net |
|
1,074 |
|
129 |
|
148 |
|
— |
|
1,351 |
|
|
|
Goodwill |
|
5,928 |
|
1,500 |
|
427 |
|
— |
|
7,855 |
|
|
|
Trademarks |
|
2,489 |
|
8 |
|
18 |
|
— |
|
2,515 |
|
|
|
Other non-amortizable intangibles |
|
— |
|
— |
|
173 |
|
— |
|
173 |
|
|
|
Intangible assets subject to amortization, net |
|
3,502 |
|
46 |
|
315 |
|
— |
|
3,863 |
|
|
|
Other assets, at cost, net of accumulated amortization |
|
43 |
|
402 |
|
1,412 |
|
— |
|
1,857 |
|
|
|
Total assets |
|
$ |
19,326 |
|
13,808 |
|
12,679 |
|
(164 |
) |
45,649 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
571 |
|
6 |
|
28 |
|
— |
|
605 |
|
|
Accrued interest |
|
100 |
|
8 |
|
40 |
|
— |
|
148 |
|
|
|
Other accrued liabilities |
|
644 |
|
148 |
|
144 |
|
— |
|
936 |
|
|
|
Intergroup payable/receivable |
|
95 |
|
(1 |
) |
(94 |
) |
— |
|
— |
|
|
|
Financial instruments |
|
16 |
|
— |
|
1,190 |
|
— |
|
1,206 |
|
|
|
Current portion of debt (note 4) |
|
13 |
|
3 |
|
175 |
|
— |
|
191 |
|
|
|
Accrued stock compensation |
|
20 |
|
164 |
|
23 |
|
— |
|
207 |
|
|
|
Current deferred tax liabilities |
|
— |
|
— |
|
242 |
|
(149 |
) |
93 |
|
|
|
Other current liabilities |
|
46 |
|
6 |
|
51 |
|
(15 |
) |
88 |
|
|
|
Total current liabilities |
|
1,505 |
|
334 |
|
1,799 |
|
(164 |
) |
3,474 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt (note 4) |
|
7,164 |
|
470 |
|
3,890 |
|
— |
|
11,524 |
|
|
|
Long-term financial instruments |
|
79 |
|
— |
|
97 |
|
— |
|
176 |
|
|
|
Deferred income tax liabilities (note 6) |
|
2,670 |
|
3,521 |
|
2,267 |
|
— |
|
8,458 |
|
|
|
Other liabilities |
|
271 |
|
26 |
|
1,268 |
|
— |
|
1,565 |
|
|
|
Total liabilities |
|
11,689 |
|
4,351 |
|
9,321 |
|
(164 |
) |
25,197 |
|
|
|
Equity/Attributed net assets |
|
7,530 |
|
9,457 |
|
2,599 |
|
— |
|
19,586 |
|
|
|
Noncontrolling interests in equity of subsidiaries |
|
107 |
|
— |
|
759 |
|
— |
|
866 |
|
|
|
Total liabilities and equity |
|
$ |
19,326 |
|
13,808 |
|
12,679 |
|
(164 |
) |
45,649 |
|
6
STATEMENT OF OPERATIONS AND COMPREHENSIVE EARNINGS (LOSS) INFORMATION
Year ended December 31, 2008
(unaudited)
|
|
|
Attributed (note 1) |
|
|
|
|||||
|
|
|
Interactive |
|
Entertainment |
|
Capital |
|
Consolidated |
|
|
|
|
|
Group |
|
Group |
|
Group |
|
Liberty |
|
|
|
|
|
amounts in millions |
|
|||||||
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
Net retail sales |
|
$ |
8,079 |
|
— |
|
— |
|
8,079 |
|
|
Communications and programming services |
|
— |
|
1,391 |
|
614 |
|
2,005 |
|
|
|
|
|
8,079 |
|
1,391 |
|
614 |
|
10,084 |
|
|
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
5,224 |
|
— |
|
— |
|
5,224 |
|
|
|
Operating |
|
748 |
|
863 |
|
515 |
|
2,126 |
|
|
|
Selling, general and administrative, including stock-based compensation (notes 1 and 5) |
|
584 |
|
220 |
|
398 |
|
1,202 |
|
|
|
Depreciation and amortization |
|
561 |
|
48 |
|
101 |
|
710 |
|
|
|
Impairment of long-lived assets |
|
56 |
|
1,262 |
|
251 |
|
1,569 |
|
|
|
|
|
7,173 |
|
2,393 |
|
1,265 |
|
10,831 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
906 |
|
(1,002 |
) |
(651 |
) |
(747 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(473 |
) |
(74 |
) |
(172 |
) |
(719 |
) |
|
|
Dividend and interest income |
|
22 |
|
16 |
|
136 |
|
174 |
|
|
|
Share of earnings (losses) of affiliates, net |
|
(1,192 |
) |
418 |
|
(64 |
) |
(838 |
) |
|
|
Realized and unrealized gains (losses) on financial instruments, net |
|
(240 |
) |
498 |
|
(292 |
) |
(34 |
) |
|
|
Gains on dispositions of assets, net |
|
2 |
|
3,661 |
|
16 |
|
3,679 |
|
|
|
Other than temporary declines in fair value of investments |
|
(440 |
) |
— |
|
(1 |
) |
(441 |
) |
|
|
Gain on early extinguishment of debt |
|
240 |
|
— |
|
— |
|
240 |
|
|
|
Other, net |
|
(63 |
) |
(12 |
) |
4 |
|
(71 |
) |
|
|
|
|
(2,144 |
) |
4,507 |
|
(373 |
) |
1,990 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) before income taxes |
|
(1,238 |
) |
3,505 |
|
(1,024 |
) |
1,243 |
|
|
|
Income tax benefit (note 6) |
|
493 |
|
1,347 |
|
440 |
|
2,280 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) |
|
(745 |
) |
4,852 |
|
(584 |
) |
3,523 |
|
|
|
Less net earnings attributable to the noncontrolling interests |
|
36 |
|
— |
|
8 |
|
44 |
|
|
|
Net earnings (loss) attributable to Liberty Media Corporation shareholders |
|
$ |
(781 |
) |
4,852 |
|
(592 |
) |
3,479 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive earnings (loss), net of taxes: |
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
|
(10 |
) |
— |
|
(9 |
) |
(19 |
) |
|
|
Unrealized holding losses arising during the period |
|
(498 |
) |
(312 |
) |
(2 |
) |
(812 |
) |
|
|
Recognition of previously unrealized losses (gains) on available-for-sale securities, net |
|
272 |
|
(2,273 |
) |
1 |
|
(2,000 |
) |
|
|
Share of other comprehensive earnings of equity affiliates |
|
(10 |
) |
(33 |
) |
— |
|
(43 |
) |
|
|
Other |
|
(60 |
) |
— |
|
(2 |
) |
(62 |
) |
|
|
Other comprehensive loss |
|
(306 |
) |
(2,618 |
) |
(12 |
) |
(2,936 |
) |
|
|
Comprehensive earnings (loss) |
|
(1,051 |
) |
2,234 |
|
(596 |
) |
587 |
|
|
|
Less comprehensive earnings attributable to the noncontrolling interests |
|
63 |
|
— |
|
8 |
|
71 |
|
|
|
Comprehensive earnings (loss) attributable to Liberty Media Corporation shareholders |
|
$ |
(1,114 |
) |
2,234 |
|
(604 |
) |
516 |
|
7
STATEMENT OF OPERATIONS AND COMPREHENSIVE EARNINGS (LOSS) INFORMATION
Year ended December 31, 2007
(unaudited)
|
|
|
Attributed (note 1) |
|
|
|
|||||
|
|
|
Interactive |
|
Entertainment |
|
Capital |
|
Consolidated |
|
|
|
|
|
Group |
|
Group |
|
Group |
|
Liberty |
|
|
|
|
|
amounts in millions |
|
|||||||
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
Net retail sales |
|
$ |
7,802 |
|
— |
|
— |
|
7,802 |
|
|
Communications and programming services |
|
— |
|
1,136 |
|
485 |
|
1,621 |
|
|
|
|
|
7,802 |
|
1,136 |
|
485 |
|
9,423 |
|
|
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
4,925 |
|
— |
|
— |
|
4,925 |
|
|
|
Operating |
|
712 |
|
728 |
|
480 |
|
1,920 |
|
|
|
Selling, general and administrative, including stock-based compensation (notes 1 and 5) |
|
516 |
|
199 |
|
227 |
|
942 |
|
|
|
Depreciation and amortization |
|
536 |
|
37 |
|
102 |
|
675 |
|
|
|
Impairment of long-lived assets |
|
— |
|
41 |
|
182 |
|
223 |
|
|
|
|
|
6,689 |
|
1,005 |
|
991 |
|
8,685 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
1,113 |
|
131 |
|
(506 |
) |
738 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(465 |
) |
(25 |
) |
(151 |
) |
(641 |
) |
|
|
Dividend and interest income |
|
44 |
|
60 |
|
217 |
|
321 |
|
|
|
Share of earnings (losses) of affiliates, net |
|
77 |
|
13 |
|
(68 |
) |
22 |
|
|
|
Realized and unrealized gains (losses) on financial instruments, net |
|
(6 |
) |
14 |
|
1,261 |
|
1,269 |
|
|
|
Gains (losses) on dispositions of assets, net |
|
12 |
|
(1 |
) |
635 |
|
646 |
|
|
|
Other than temporary declines in fair value of investments |
|
— |
|
— |
|
(33 |
) |
(33 |
) |
|
|
Other, net |
|
1 |
|
— |
|
(2 |
) |
(1 |
) |
|
|
|
|
(337 |
) |
61 |
|
1,859 |
|
1,583 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations before income taxes |
|
776 |
|
192 |
|
1,353 |
|
2,321 |
|
|
|
Income tax benefit (expense) (note 6) |
|
(306 |
) |
(77 |
) |
62 |
|
(321 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations |
|
470 |
|
115 |
|
1,415 |
|
2,000 |
|
|
|
Earnings from discontinued operations, net of taxes |
|
— |
|
— |
|
149 |
|
149 |
|
|
|
Net earnings |
|
470 |
|
115 |
|
1,564 |
|
2,149 |
|
|
|
Less net earnings (loss) attributable to the noncontrolling interests |
|
29 |
|
(21 |
) |
27 |
|
35 |
|
|
|
Net earnings attributable to Liberty Media Corporation shareholders |
|
$ |
441 |
|
136 |
|
1,537 |
|
2,114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive earnings (loss), net of taxes: |
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
|
102 |
|
— |
|
(1 |
) |
101 |
|
|
|
Unrealized holding losses arising during the period |
|
(394 |
) |
(317 |
) |
(845 |
) |
(1,556 |
) |
|
|
Recognition of previously unrealized gains on available-for-sale securities, net |
|
— |
|
— |
|
(375 |
) |
(375 |
) |
|
|
Share of other comprehensive earnings of equity affiliates |
|
3 |
|
— |
|
— |
|
3 |
|
|
|
Other |
|
(46 |
) |
— |
|
— |
|
(46 |
) |
|
|
Other comprehensive loss |
|
(335 |
) |
(317 |
) |
(1,221 |
) |
(1,873 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive earnings (loss) |
|
135 |
|
(202 |
) |
343 |
|
276 |
|
|
|
Less comprehensive earnings (loss) attributable to the noncontrolling interests |
|
35 |
|
(21 |
) |
27 |
|
41 |
|
|
|
Comprehensive earnings (loss) attributable to Liberty Media Corporation shareholders |
|
$ |
100 |
|
(181 |
) |
316 |
|
235 |
|
8
STATEMENT OF OPERATIONS AND COMPREHENSIVE EARNINGS INFORMATION
Year ended December 31, 2006
(unaudited)
|
|
|
Attributed (note 1) |
|
|
|
|||||
|
|
|
Interactive |
|
Entertainment |
|
Capital |
|
Consolidated |
|
|
|
|
|
Group |
|
Group |
|
Group |
|
Liberty |
|
|
|
|
|
amounts in millions |
|
|||||||
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
Net retail sales |
|
$ |
7,326 |
|
— |
|
— |
|
7,326 |
|
|
Communications and programming services |
|
— |
|
1,075 |
|
212 |
|
1,287 |
|
|
|
|
|
7,326 |
|
1,075 |
|
212 |
|
8,613 |
|
|
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
|
4,565 |
|
— |
|
— |
|
4,565 |
|
|
|
Operating |
|
668 |
|
768 |
|
164 |
|
1,600 |
|
|
|
Selling, general and administrative, including stock-based compensation (notes 1 and 5) |
|
472 |
|
141 |
|
119 |
|
732 |
|
|
|
Depreciation and amortization |
|
491 |
|
41 |
|
50 |
|
582 |
|
|
|
Impairment of long-lived assets |
|
— |
|
113 |
|
— |
|
113 |
|
|
|
|
|
6,196 |
|
1,063 |
|
333 |
|
7,592 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
1,130 |
|
12 |
|
(121 |
) |
1,021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
(417 |
) |
(31 |
) |
(232 |
) |
(680 |
) |
|
|
Dividend and interest income |
|
40 |
|
61 |
|
113 |
|
214 |
|
|
|
Share of earnings of affiliates, net |
|
47 |
|
14 |
|
30 |
|
91 |
|
|
|
Realized and unrealized gains (losses) on financial instruments, net |
|
20 |
|
(31 |
) |
(268 |
) |
(279 |
) |
|
|
Gains on dispositions of assets, net |
|
— |
|
— |
|
607 |
|
607 |
|
|
|
Other than temporary declines in fair value of investments |
|
— |
|
— |
|
(4 |
) |
(4 |
) |
|
|
Other, net |
|
23 |
|
(5 |
) |
— |
|
18 |
|
|
|
|
|
(287 |
) |
8 |
|
246 |
|
(33 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations before income taxes |
|
843 |
|
20 |
|
125 |
|
988 |
|
|
|
Income tax benefit (expense) (note 6) |
|
(210 |
) |
(43 |
) |
1 |
|
(252 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from continuing operations |
|
633 |
|
(23 |
) |
126 |
|
736 |
|
|
|
Earnings from discontinued operations, net of taxes |
|
— |
|
— |
|
212 |
|
212 |
|
|
|
Cumulative effect of accounting change, net of taxes |
|
(87 |
) |
(2 |
) |
— |
|
(89 |
) |
|
|
Net earnings (loss) |
|
546 |
|
(25 |
) |
338 |
|
859 |
|
|
|
Less net earnings (loss) attributable to the noncontrolling interests |
|
35 |
|
(10 |
) |
(6 |
) |
19 |
|
|
|
Net earnings (loss) attributable to Liberty Media Corporation shareholders |
|
$ |
511 |
|
(15 |
) |
344 |
|
840 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive earnings (loss), net of taxes: |
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
|
107 |
|
3 |
|
(1 |
) |
109 |
|
|
|
Unrealized holding gains arising during the period |
|
351 |
|
1,850 |
|
403 |
|
2,604 |
|
|
|
Recognition of previously unrealized gains on available-for-sale securities, net |
|
— |
|
— |
|
(185 |
) |
(185 |
) |
|
|
Share of other comprehensive earnings of equity affiliates |
|
1 |
|
— |
|
— |
|
1 |
|
|
|
Other comprehensive earnings |
|
459 |
|
1,853 |
|
217 |
|
2,529 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive earnings |
|
1,005 |
|
1,828 |
|
555 |
|
3,388 |
|
|
|
Less comprehensive earnings (loss) attributable to the noncontrolling interests |
|
34 |
|
(11 |
) |
(6 |
) |
17 |
|
|
|
Comprehensive earnings attributable to Liberty Media Corporation shareholders |
|
$ |
971 |
|
1,839 |
|
561 |
|
3,371 |
|
9
STATEMENT OF CASH FLOWS INFORMATION
Year ended December 31, 2008
(unaudited)
|
|
|
Attributed (note 1) |
|
|
|
|||||
|
|
|
Interactive |
|
Entertainment |
|
Capital |
|
Consolidated |
|
|
|
|
|
Group |
|
Group |
|
Group |
|
Liberty |
|
|
|
|
|
amounts in millions |
|
|||||||
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) |
|
$ |
(745 |
) |
4,852 |
|
(584 |
) |
3,523 |
|
|
Adjustments to reconcile net earnings (loss) to net cash provided (used) by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
561 |
|
48 |
|
101 |
|
710 |
|
|
|
Impairment of long-lived assets |
|
56 |
|
1,262 |
|
251 |
|
1,569 |
|
|
|
Stock-based compensation |
|
32 |
|
16 |
|
2 |
|
50 |
|
|
|
Cash payments for stock-based compensation |
|
(9 |
) |
(14 |
) |
(1 |
) |
(24 |
) |
|
|
Noncash interest expense |
|
7 |
|
51 |
|
1 |
|
59 |
|
|
|
Share of losses (earnings) of affiliates, net |
|
1,192 |
|
(418 |
) |
64 |
|
838 |
|
|
|
Realized and unrealized losses (gains) on financial instruments, net |
|
240 |
|
(498 |
) |
292 |
|
34 |
|
|
|
Gains on dispositions of assets, net |
|
(2 |
) |
(3,661 |
) |
(16 |
) |
(3,679 |
) |
|
|
Other than temporary declines in fair value of investments |
|
440 |
|
— |
|
1 |
|
441 |
|
|
|
Deferred income tax benefit |
|
(828 |
) |
(1,433 |
) |
(300 |
) |
(2,561 |
) |
|
|
Other noncash charges (credits), net |
|
(178 |
) |
— |
|
98 |
|
(80 |
) |
|
|
Intergroup tax allocation |
|
239 |
|
83 |
|
(322 |
) |
— |
|
|
|
Intergroup tax payments |
|
(190 |
) |
(81 |
) |
271 |
|
— |
|
|
|
Other intergroup cash transfers, net |
|
(68 |
) |
9 |
|
59 |
|
— |
|
|
|
Changes in operating assets and liabilities, net of the effects of acquisitions: |
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
(74 |
) |
23 |
|
(129 |
) |
(180 |
) |
|
|
Payables and other current liabilities |
|
(165 |
) |
(13 |
) |
122 |
|
(56 |
) |
|
|
Net cash provided (used) by operating activities |
|
508 |
|
226 |
|
(90 |
) |
644 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
Cash proceeds from dispositions |
|
18 |
|
8 |
|
17 |
|
43 |
|
|
|
Proceeds from settlement of derivatives |
|
— |
|
45 |
|
33 |
|
78 |
|
|
|
Cash received in exchange transactions |
|
— |
|
463 |
|
— |
|
463 |
|
|
|
Cash paid for acquisitions, net of cash acquired |
|
(69 |
) |
(7 |
) |
(1 |
) |
(77 |
) |
|
|
Investment in and loans to cost and equity investees |
|
(340 |
) |
(1,996 |
) |
(232 |
) |
(2,568 |
) |
|
|
Capital expenditures |
|
(166 |
) |
(8 |
) |
(29 |
) |
(203 |
) |
|
|
Net purchases of short term investments |
|
— |
|
— |
|
(25 |
) |
(25 |
) |
|
|
Net decrease in restricted cash |
|
— |
|
— |
|
383 |
|
383 |
|
|
|
Other investing activities, net |
|
16 |
|
(13 |
) |
(63 |
) |
(60 |
) |
|
|
Net cash provided (used) by investing activities |
|
(541 |
) |
(1,508 |
) |
83 |
|
(1,966 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
Borrowings of debt |
|
1,483 |
|
2,159 |
|
1,548 |
|
5,190 |
|
|
|
Repayments of debt |
|
(1,437 |
) |
(232 |
) |
(1,323 |
) |
(2,992 |
) |
|
|
Repurchases of Liberty common stock |
|
(75 |
) |
— |
|
(462 |
) |
(537 |
) |
|
|
Settlement of financial instruments |
|
(56 |
) |
(13 |
) |
(277 |
) |
(346 |
) |
|
|
Purchase of noncontrolling interest |
|
— |
|
— |
|
(11 |
) |
(11 |
) |
|
|
Intergroup cash transfers, net |
|
— |
|
450 |
|
(450 |
) |
— |
|
|
|
Reattribution of cash |
|
380 |
|
(380 |
) |
— |
|
— |
|
|
|
Other financing activities, net |
|
(17 |
) |
15 |
|
3 |
|
1 |
|
|
|
Net cash provided (used) by financing activities |
|
278 |
|
1,999 |
|
(972 |
) |
1,305 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of foreign currency rates on cash |
|
30 |
|
— |
|
(13 |
) |
17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
275 |
|
717 |
|
(992 |
) |
— |
|
|
|
Cash and cash equivalents at beginning of year |
|
557 |
|
90 |
|
2,488 |
|
3,135 |
|
|
|
Cash and cash equivalents at end of year |
|
$ |
832 |
|
807 |
|
1,496 |
|
3,135 |
|
10
STATEMENT OF CASH FLOWS INFORMATION
Year ended December 31, 2007
(unaudited)
|
|
|
Attributed (note 1) |
|
|
|
|||||
|
|
|
Interactive |
|
Entertainment |
|
Capital |
|
Consolidated |
|
|
|
|
|
Group |
|
Group |
|
Group |
|
Liberty |
|
|
|
|
|
amounts in millions |
|
|||||||
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
470 |
|
115 |
|
1,564 |
|
2,149 |
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
Earnings from discontinued operations |
|
— |
|
— |
|
(149 |
) |
(149 |
) |
|
|
Depreciation and amortization |
|
536 |
|
37 |
|
102 |
|
675 |
|
|
|
Impairment of long-lived assets |
|
— |
|
41 |
|
182 |
|
223 |
|
|
|
Stock-based compensation |
|
35 |
|
46 |
|
12 |
|
93 |
|
|
|
Cash payments for stock-based compensation |
|
(37 |
) |
— |
|
(3 |
) |
(40 |
) |
|
|
Noncash interest expense |
|
4 |
|
— |
|
5 |
|
9 |
|
|
|
Share of losses (earnings) of affiliates, net |
|
(77 |
) |
(13 |
) |
68 |
|
(22 |
) |
|
|
Realized and unrealized losses (gains) on financial instruments, net |
|
6 |
|
(14 |
) |
(1,261 |
) |
(1,269 |
) |
|
|
Losses (gains) on dispositions of assets, net |
|
(12 |
) |
1 |
|
(635 |
) |
(646 |
) |
|
|
Other than temporary declines in fair value of investments |
|
— |
|
— |
|
33 |
|
33 |
|
|
|
Deferred income tax expense (benefit) |
|
(128 |
) |
48 |
|
200 |
|
120 |
|
|
|
Other noncash charges (credits), net |
|
(1 |
) |
— |
|
142 |
|
141 |
|
|
|
Intergroup tax allocation |
|
278 |
|
28 |
|
(306 |
) |
— |
|
|
|
Intergroup tax payments |
|
(321 |
) |
(50 |
) |
371 |
|
— |
|
|
|
Other intergroup cash transfers, net |
|
54 |
|
— |
|
(54 |
) |
— |
|
|
|
Changes in operating assets and liabilities, net of the effects of acquisitions: |
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
(290 |
) |
19 |
|
(165 |
) |
(436 |
) |
|
|
Payables and other current liabilities |
|
87 |
|
(40 |
) |
230 |
|
277 |
|
|
|
Net cash provided by operating activities |
|
604 |
|
218 |
|
336 |
|
1,158 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
Cash proceeds from dispositions |
|
12 |
|
— |
|
483 |
|
495 |
|
|
|
Net proceeds from settlement of derivatives |
|
— |
|
— |
|
75 |
|
75 |
|
|
|
Cash received in exchange transactions |
|
— |
|
— |
|
1,154 |
|
1,154 |
|
|
|
Cash paid for acquisitions, net of cash acquired |
|
(236 |
) |
— |
|
(7 |
) |
(243 |
) |
|
|
Investment in special purpose entity |
|
— |
|
— |
|
(750 |
) |
(750 |
) |
|
|
Capital expenditures |
|
(289 |
) |
(11 |
) |
(16 |
) |
(316 |
) |
|
|
Net sales of short term investments |
|
— |
|
— |
|
34 |
|
34 |
|
|
|
Net increase in restricted stock |
|
— |
|
— |
|
(882 |
) |
(882 |
) |
|
|
Other investing activities, net |
|
(74 |
) |
11 |
|
(132 |
) |
(195 |
) |
|
|
Net cash used by investing activities |
|
(587 |
) |
— |
|
(41 |
) |
(628 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
Borrowings of debt |
|
1,112 |
|
— |
|
757 |
|
1,869 |
|
|
|
Repayments of debt |
|
(332 |
) |
(3 |
) |
(163 |
) |
(498 |
) |
|
|
Intergroup cash transfers, net |
|
— |
|
(111 |
) |
111 |
|
— |
|
|
|
Repurchases of Liberty common stock |
|
(1,224 |
) |
— |
|
(1,305 |
) |
(2,529 |
) |
|
|
Contribution from noncontrolling owner |
|
— |
|
— |
|
751 |
|
751 |
|
|
|
Purchase of noncontrolling interest |
|
— |
|
(105 |
) |
— |
|
(105 |
) |
|
|
Other financing activities, net |
|
28 |
|
— |
|
(27 |
) |
1 |
|
|
|
Net cash provided (used) by financing activities |
|
(416 |
) |
(219 |
) |
124 |
|
(511 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of foreign currency rates on cash |
|
10 |
|
— |
|
(2 |
) |
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
Cash provided by operating activities |
|
— |
|
— |
|
8 |
|
8 |
|
|
|
Cash used by investing activities |
|
— |
|
— |
|
(9 |
) |
(9 |
) |
|
|
Change in available cash held by discontinued operations |
|
— |
|
— |
|
2 |
|
2 |
|
|
|
Net cash provided by discontinued operations |
|
— |
|
— |
|
1 |
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
(389 |
) |
(1 |
) |
418 |
|
28 |
|
|
|
Cash and cash equivalents at beginning of year |
|
946 |
|
91 |
|
2,070 |
|
3,107 |
|
|
|
Cash and cash equivalents at end of year |
|
$ |
557 |
|
90 |
|
2,488 |
|
3,135 |
|
11
STATEMENT OF CASH FLOWS INFORMATION
Year ended December 31, 2006
(unaudited)
|
|
|
Attributed (note 1) |
|
|
|
|||||
|
|
|
Interactive |
|
Entertainment |
|
Capital |
|
Consolidated |
|
|
|
|
|
Group |
|
Group |
|
Group |
|
Liberty |
|
|
|
|
|
amounts in millions |
|
|||||||
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) |
|
$ |
546 |
|
(25 |
) |
338 |
|
859 |
|
|
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
Earnings from discontinued operations |
|
— |
|
— |
|
(212 |
) |
(212 |
) |
|
|
Cumulative effect of accounting change |
|
87 |
|
2 |
|
— |
|
89 |
|
|
|
Depreciation and amortization |
|
491 |
|
41 |
|
50 |
|
582 |
|
|
|
Impairment of long-lived assets |
|
— |
|
113 |
|
— |
|
113 |
|
|
|
Stock-based compensation |
|
59 |
|
2 |
|
6 |
|
67 |
|
|
|
Cash payments for stock-based compensation |
|
(111 |
) |
— |
|
(4 |
) |
(115 |
) |
|
|
Noncash interest expense |
|
4 |
|
1 |
|
103 |
|
108 |
|
|
|
Share of earnings of affiliates, net |
|
(47 |
) |
(14 |
) |
(30 |
) |
(91 |
) |
|
|
Realized and unrealized losses (gains) on financial instruments, net |
|
(20 |
) |
31 |
|
268 |
|
279 |
|
|
|
Gains on dispositions of assets, net |
|
— |
|
— |
|
(607 |
) |
(607 |
) |
|
|
Other than temporary declines in fair value of investments |
|
— |
|
— |
|
4 |
|
4 |
|
|
|
Deferred income tax expense (benefit) |
|
(262 |
) |
17 |
|
(220 |
) |
(465 |
) |
|
|
Other noncash charges (credits), net |
|
(13 |
) |
5 |
|
52 |
|
44 |
|
|
|
Changes in operating assets and liabilities, net of the effects of acquisitions: |
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
(219 |
) |
72 |
|
(155 |
) |
(302 |
) |
|
|
Payables and other current liabilities |
|
38 |
|
(106 |
) |
728 |
|
660 |
|
|
|
Net cash provided by operating activities |
|
553 |
|
139 |
|
321 |
|
1,013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
Cash proceeds from dispositions |
|
— |
|
— |
|
1,322 |
|
1,322 |
|
|
|
Proceeds (payments) from origination of derivatives |
|
(5 |
) |
— |
|
64 |
|
59 |
|
|
|
Net proceeds from settlement of derivatives |
|
— |
|
— |
|
101 |
|
101 |
|
|
|
Cash paid for acquisitions, net of cash acquired |
|
(436 |
) |
(174 |
) |
(266 |
) |
(876 |
) |
|
|
Capital expenditures |
|
(259 |
) |
(9 |
) |
(10 |
) |
(278 |
) |
|
|
Net sales of short term investments |
|
23 |
|
— |
|
264 |
|
287 |
|
|
|
Other investing activities, net |
|
(8 |
) |
80 |
|
(241 |
) |
(169 |
) |
|
|
Net cash provided (used) by investing activities |
|
(685 |
) |
(103 |
) |
1,234 |
|
446 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
Borrowings of debt |
|
3,227 |
|
— |
|
2 |
|
3,229 |
|
|
|
Repayments of debt |
|
(2,188 |
) |
(3 |
) |
— |
|
(2,191 |
) |
|
|
Intergroup cash transfers, net |
|
293 |
|
(32 |
) |
(261 |
) |
— |
|
|
|
Repurchases of Liberty common stock |
|
(954 |
) |
— |
|
— |
|
(954 |
) |
|
|
Purchase of noncontrolling interest |
|
(331 |
) |
— |
|
— |
|
(331 |
) |
|
|
Other financing activities, net |
|
68 |
|
5 |
|
(93 |
) |
(20 |
) |
|
|
Net cash provided (used) by financing activities |
|
115 |
|
(30 |
) |
(352 |
) |
(267 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of foreign currency rates on cash |
|
18 |
|
— |
|
— |
|
18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by discontinued operations: |
|
|
|
|
|
|
|
|
|
|
|
Cash provided by operating activities |
|
— |
|
— |
|
62 |
|
62 |
|
|
|
Cash used by investing activities |
|
— |
|
— |
|
(67 |
) |
(67 |
) |
|
|
Cash provided by financing activities |
|
— |
|
— |
|
6 |
|
6 |
|
|
|
Net cash provided by discontinued operations |
|
— |
|
— |
|
1 |
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents |
|
1 |
|
6 |
|
1,204 |
|
1,211 |
|
|
|
Cash and cash equivalents at beginning of year |
|
945 |
|
85 |
|
866 |
|
1,896 |
|
|
|
Cash and cash equivalents at end of year |
|
$ |
946 |
|
91 |
|
2,070 |
|
3,107 |
|
12
Notes to Attributed Financial Information
(unaudited)
(1) The assets attributed to our Interactive Group as of December 31, 2008 include our consolidated subsidiaries QVC, Inc., Provide Commerce, Inc., Backcountry.com, Inc., Bodybuilding.com, LLC and BuySeasons, Inc., and our noncontrolling interests in IAC/InterActiveCorp, Expedia, Inc., GSI Commerce, Inc., HSN, Inc., Interval Leisure Group, Inc., Ticketmaster Entertainment, Inc. and Tree.com, Inc. Accordingly, the accompanying attributed financial information for the Interactive Group includes the foregoing investments, as well as the assets, liabilities, revenue, expenses and cash flows of QVC, Provide, Backcountry, Bodybuilding and BuySeasons. We have also attributed certain of our debt obligations (and related interest expense) to the Interactive Group based upon a number of factors, including the cash flow available to the Interactive Group and its ability to pay debt service and our assessment of the optimal capitalization for the Interactive Group. The specific debt obligations attributed to each of the Interactive Group, the Entertainment Group and the Capital Group are described in note 4 below. In addition, we have allocated certain corporate general and administrative expenses among the Interactive Group, the Entertainment Group and the Capital Group as described in note 5 below.
The Interactive Group focuses on video and on-line commerce businesses. Accordingly, we expect that businesses that we may acquire in the future that we believe are complementary to this strategy will also be attributed to the Interactive Group.
The Entertainment Group consists of our subsidiaries Starz Entertainment, LLC, FUN Technologies, Inc and Liberty Sports Holdings, LLC, our noncontrolling equity interests in The DIRECTV Group, Inc., GSN, LLC and WildBlue Communications, Inc. and approximately $633 million of corporate cash and cash equivalents. Accordingly, the accompanying attributed financial information for the Entertainment Group includes these investments and the assets, liabilities, revenue, expenses and cash flows of these consolidated subsidiaries. We have also attributed, an equity collar on 98.75 million shares of DIRECTV common stock and $1,981 million of borrowings against the put value of such collar to the Entertainment Group.
The Entertainment Group focuses primarily on programming and communications businesses. Accordingly, we expect that businesses that we may acquire in the future that we believe are complementary to this strategy will also be attributed to the Entertainment Group.
The Capital Group consists of all of our businesses not included in the Interactive Group or the Entertainment Group, including our consolidated subsidiaries Starz Media, LLC, Atlanta National League Baseball Club, Inc., TruePosition, Inc., Leisure Arts, Inc., and WFRV and WJMN Television Station, Inc., and certain cost and equity investments. Accordingly, the accompanying attributed financial information for the Capital Group includes these investments and the assets, liabilities, revenue, expenses and cash flows of these consolidated subsidiaries. In addition, we have attributed to the Capital Group all of our notes and debentures (and related interest expense) that have not been attributed to the Interactive Group or the Entertainment Group. See note 4 below for the debt obligations attributed to the Capital Group.
Any businesses that we may acquire in the future that we do not attribute to the Interactive Group or the Entertainment Group will be attributed to the Capital Group.
While we believe the allocation methodology described above is reasonable and fair to each group, we may elect to change the allocation methodology in the future. In the event we elect to transfer assets or businesses from one group to the other, such transfer would be made on a fair value basis and would be accounted for as a short-term loan unless our board of directors determines to account for it as a long-term loan or through an inter-group interest.
13
Notes to Attributed Financial Information
(unaudited)
(2) Investments in AFS securities, which are recorded at their respective fair market values, and other cost investments are summarized as follows:
|
|
|
December 31, |
|
|||
|
|
|
2008 |
|
2007 |
|
|
|
|
|
amounts in millions |
|
|||
|
Capital Group |
|
|
|
|
|
|
|
Time Warner Inc. (a) |
|
$ |
1,033 |
|
1,695 |
|
|
Sprint Nextel Corporation (a) |
|
160 |
|
1,150 |
|
|
|
Motorola, Inc. (a) |
|
328 |
|
1,187 |
|
|
|
Viacom, Inc. |
|
145 |
|
333 |
|
|
|
Embarq Corporation (a) |
|
157 |
|
216 |
|
|
|
Other AFS equity securities (a) |
|
40 |
|
104 |
|
|
|
Other AFS debt securities |
|
224 |
|
156 |
|
|
|
Other cost investments and related receivables |
|
31 |
|
32 |
|
|
|
Total attributed Capital Group |
|
2,118 |
|
4,873 |
|
|
|
Interactive Group |
|
|
|
|
|
|
|
IAC/InterActiveCorp |
|
638 |
|
1,863 |
|
|
|
Other AFS securities |
|
101 |
|
181 |
|
|
|
Total attributed Interactive Group |
|
739 |
|
2,044 |
|
|
|
Entertainment Group |
|
|
|
|
|
|
|
News Corporation |
|
— |
|
10,647 |
|
|
|
Other |
|
2 |
|
5 |
|
|
|
Total attributed Entertainment Group |
|
2 |
|
10,652 |
|
|
|
|
|
|
|
|
|
|
|
Consolidated Liberty |
|
$ |
2,859 |
|
17,569 |
|
(a) Includes shares pledged as collateral for share borrowing arrangements.
(3) The following table presents information regarding certain equity method investments attributed to each of the Interactive Group and the Entertainment Group:
|
|
|
|
|
|
|
|
|
Share of earnings (losses) |
|
|||||
|
|
|
December 31, 2008 |
|
Years ended |
|
|||||||||
|
|
|
Percentage |
|
Carrying |
|
Market |
|
December 31, |
|
|||||
|
|
|
ownership |
|
value |
|
value |
|
2008 |
|
2007 |
|
2006 |
|
|
|
|
|
dollar amounts in millions |
|
|||||||||||
|
|
|
|
|
|||||||||||
|
Interactive Group |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expedia |
|
24 |
% |
$ |
559 |
|
570 |
|
(726 |
) |
68 |
|
50 |
|
|
Entertainment Group |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DIRECTV |
|
54 |
% |
$ |
13,085 |
|
12,571 |
|
404 |
|
— |
|
— |
|
Our share of losses of Expedia for the year ended December 31, 2008 includes the write off of our excess basis in the amount of $119 million.
14
Notes to Attributed Financial Information
(unaudited)
(4) Debt attributed to the Interactive Group, the Capital Group and the Entertainment Group is comprised of the following:
|
|
|
December 31, 2008 |
|
|||
|
|
|
Outstanding |
|
Carrying |
|
|
|
|
|
principal |
|
value |
|
|
|
|
|
amounts in millions |
|
|||
|
Interactive Group |
|
|
|
|
|
|
|
7.875% Senior Notes due 2009 |
|
$ |
104 |
|
104 |
|
|
7.75% Senior Notes due 2009 |
|
13 |
|
13 |
|
|
|
5.7% Senior Notes due 2013 |
|
803 |
|
801 |
|
|
|
8.5% Senior Debentures due 2029 |
|
287 |
|
284 |
|
|
|
8.25% Senior Debentures due 2030 |
|
505 |
|
501 |
|
|
|
3.25% Exchangeable Senior Debentures due 2031 |
|
551 |
|
138 |
|
|
|
QVC bank credit facilities |
|
5,230 |
|
5,230 |
|
|
|
Other subsidiary debt |
|
60 |
|
60 |
|
|
|
Total Interactive Group debt |
|
7,553 |
|
7,131 |
|
|
|
Capital Group |
|
|
|
|
|
|
|
3.125% Exchangeable Senior Debentures due 2023 |
|
1,264 |
|
918 |
|
|
|
4% Exchangeable Senior Debentures due 2029 |
|
869 |
|
256 |
|
|
|
3.75% Exchangeable Senior Debentures due 2030 |
|
810 |
|
241 |
|
|
|
3.5% Exchangeable Senior Debentures due 2031 |
|
497 |
|
138 |
|
|
|
Liberty bank facility |
|
750 |
|
750 |
|
|
|
Liberty derivative loan |
|
625 |
|
625 |
|
|
|
Subsidiary debt |
|
135 |
|
135 |
|
|
|
Total Capital Group debt |
|
4,950 |
|
3,063 |
|
|
|
Entertainment Group |
|
|
|
|
|
|
|
DIRECTV Collar Loan |
|
1,981 |
|
1,981 |
|
|
|
Subsidiary debt |
|
52 |
|
52 |
|
|
|
Total Entertainment Group debt |
|
2,033 |
|
2,033 |
|
|
|
Total debt |
|
$ |
14,536 |
|
12,227 |
|
(5) Cash compensation expense for our corporate employees has been allocated among the Interactive Group, the Entertainment Group and the Capital Group based on the estimated percentage of time spent providing services for each group. Stock-based compensation expense for our corporate employees has been allocated among the Interactive Group, the Entertainment Group and the Capital Group based on the compensation derived from the equity awards for the respective tracking stock. Other general and administrative expenses are charged directly to the groups whenever possible and are otherwise allocated based on estimated usage or some other reasonably determined methodology. Amounts allocated from the Capital Group to the Interactive Group and the Entertainment Group, including stock-based compensation, are as follows:
|
|
|
Years ended December 31, |
|
|||||
|
|
|
2008 |
|
2007 |
|
2006 |
|
|
|
|
|
amounts in millions |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
Interactive Group |
|
$ |
19 |
|
17 |
|
13 |
|
|
Entertainment Group |
|
$ |
11 |
|
19 |
|
12 |
|
While we believe that this allocation method is reasonable and fair to each group, we may elect to change the allocation methodology or percentages used to allocate general and administrative expenses in the future.
15
Notes to Attributed Financial Information
(unaudited)
(6) We have accounted for income taxes for the Interactive Group, the Entertainment Group and the Capital Group in the accompanying attributed financial information in a manner similar to a stand-alone company basis. To the extent this methodology differs from our tax sharing policy, differences have been reflected in the attributed net assets of the groups.
Interactive Group
The Interactive Group’s income tax benefit (expense) consists of:
|
|
|
Years ended December 31, |
|
|||||
|
|
|
2008 |
|
2007 |
|
2006 |
|
|
|
|
|
amounts in millions |
|
|||||
|
Current: |
|
|
|
|
|
|
|
|
|
Federal |
|
$ |
(220 |
) |
(280 |
) |
(305 |
) |
|
State and local |
|
(19 |
) |
(64 |
) |
(57 |
) |
|
|
Foreign |
|
(96 |
) |
(90 |
) |
(110 |
) |
|
|
|
|
(335 |
) |
(434 |
) |
(472 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Deferred: |
|
|
|
|
|
|
|
|
|
Federal |
|
708 |
|
94 |
|
197 |
|
|
|
State and local |
|
110 |
|
33 |
|
62 |
|
|
|
Foreign |
|
10 |
|
1 |
|
3 |
|
|
|
|
|
828 |
|
128 |
|
262 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit (expense) |
|
$ |
493 |
|
(306 |
) |
(210 |
) |
The Interactive Group’s income tax benefit (expense) differs from the amounts computed by applying the U.S. federal income tax rate of 35% as a result of the following:
|
|
|
Years ended December 31, |
|
|||||
|
|
|
2008 |
|
2007 |
|
2006 |
|
|
|
|
|
amounts in millions |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
Computed expected tax benefit (expense) |
|
$ |
433 |
|
(272 |
) |
(295 |
) |
|
Change in estimated foreign and state tax rates |
|
4 |
|
(6 |
) |
132 |
|
|
|
State and local income taxes, net of federal income taxes |
|
57 |
|
(19 |
) |
(23 |
) |
|
|
Foreign taxes, net of foreign tax credits |
|
28 |
|
(10 |
) |
(20 |
) |
|
|
Change in valuation allowance affecting tax expense |
|
15 |
|
5 |
|
(14 |
) |
|
|
Nondeductible losses related to the Company’s common stock |
|
(57 |
) |
— |
|
— |
|
|
|
Recognition of tax benefits (expense) not previously recognized, net |
|
19 |
|
(5 |
) |
(5 |
) |
|
|
Disqualifying disposition of incentive stock options not deductible for book purposes |
|
— |
|
— |
|
14 |
|
|
|
Other, net |
|
(6 |
) |
1 |
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit (expense) |
|
$ |
493 |
|
(306 |
) |
(210 |
) |
16
Notes to Attributed Financial Information
(unaudited)
The tax effects of temporary differences that give rise to significant portions of the Interactive Group’s deferred tax assets and deferred tax liabilities are presented below:
|
|
|
December 31, |
|
|||
|
|
|
2008 |
|
2007 |
|
|
|
|
|
amounts in millions |
|
|||
|
Deferred tax assets: |
|
|
|
|
|
|
|
Net operating and capital loss carryforwards |
|
$ |
42 |
|
43 |
|
|
Accrued stock compensation |
|
11 |
|
11 |
|
|
|
Other accrued liabilities |
|
197 |
|
148 |
|
|
|
Deferred revenue |
|
9 |
|
11 |
|
|
|
Investments |
|
181 |
|
— |
|
|
|
Other future deductible amounts |
|
121 |
|
100 |
|
|
|
Deferred tax assets |
|
561 |
|
313 |
|
|
|
Valuation allowance |
|
— |
|
(12 |
) |
|
|
Net deferred tax assets |
|
561 |
|
301 |
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities: |
|
|
|
|
|
|
|
Investments |
|
— |
|
594 |
|
|
|
Intangible assets |
|
1,959 |
|
2,083 |
|
|
|
Discount on exchangeable debentures |
|
300 |
|
— |
|
|
|
Other |
|
100 |
|
145 |
|
|
|
Deferred tax liabilities |
|
2,359 |
|
2,822 |
|
|
|
|
|
|
|
|
|
|
|
Net deferred tax liabilities |
|
$ |
1,798 |
|
2,521 |
|
Entertainment Group
The Entertainment Group’s income tax benefit (expense) consists of:
|
|
|
Years ended December 31, |
|
|||||
|
|
|
2008 |
|
2007 |
|
2006 |
|
|
|
|
|
amounts in millions |
|
|||||
|
Current: |
|
|
|
|
|
|
|
|
|
Federal |
|
$ |
(74 |
) |
(28 |
) |
(24 |
) |
|
State and local |
|
(11 |
) |
1 |
|
— |
|
|
|
Foreign |
|
(1 |
) |
(2 |
) |
(2 |
) |
|
|
|
|
(86 |
) |
(29 |
) |
(26 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Deferred: |
|
|
|
|
|
|
|
|
|
Federal |
|
1,276 |
|
(38 |
) |
(12 |
) |
|
|
State and local |
|
157 |
|
(10 |
) |
(5 |
) |
|
|
Foreign |
|
— |
|
— |
|
— |
|
|
|
|
|
1,433 |
|
(48 |
) |
(17 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit (expense) |
|
$ |
1,347 |
|
(77 |
) |
(43 |
) |
17
Notes to Attributed Financial Information
(unaudited)
The Entertainment Group’s income tax benefit (expense) differs from the amounts computed by applying the U.S. federal income tax rate of 35% as a result of the following:
|
|
|
Years ended December 31, |
|
|||||
|
|
|
2008 |
|
2007 |
|
2006 |
|
|
|
|
|
amounts in millions |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
Computed expected tax expense |
|
$ |
(1,227 |
) |
(67 |
) |
(7 |
) |
|
Nontaxable exchange of investments for subsidiaries and cash |
|
2,933 |
|
— |
|
— |
|
|
|
State and local income taxes, net of federal income taxes |
|
92 |
|
(6 |
) |
(3 |
) |
|
|
Change in valuation allowance affecting tax expense |
|
(10 |
) |
(4 |
) |
(6 |
) |
|
|
Impairment of goodwill not deductible for tax purposes |
|
(442 |
) |
(11 |
) |
(39 |
) |
|
|
Dividends received deduction |
|
— |
|
12 |
|
12 |
|
|
|
Other, net |
|
1 |
|
(1 |
) |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit (expense) |
|
$ |
1,347 |
|
(77 |
) |
(43 |
) |
The tax effects of temporary differences that give rise to significant portions of the Entertainment Group’s deferred tax assets and deferred tax liabilities are presented below:
|
|
|
December 31, |
|
|||
|
|
|
2008 |
|
2007 |
|
|
|
|
|
amounts in millions |
|
|||
|
Deferred tax assets: |
|
|
|
|
|
|
|
Net operating and capital loss carryforwards |
|
$ |
37 |
|
1 |
|
|
Accrued stock compensation |
|
69 |
|
65 |
|
|
|
Intangible assets |
|
— |
|
47 |
|
|
|
Other future deductible amounts |
|
11 |
|
3 |
|
|
|
Deferred tax assets |
|
117 |
|
116 |
|
|
|
Valuation allowance |
|
(45 |
) |
(33 |
) |
|
|
Net deferred tax assets |
|
72 |
|
83 |
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities: |
|
|
|
|
|
|
|
Investments |
|
1,699 |
|
3,396 |
|
|
|
Discount on exchangeable debentures |
|
— |
|
193 |
|
|
|
Other |
|
61 |
|
15 |
|
|
|
Deferred tax liabilities |
|
1,760 |
|
3,604 |
|
|
|
|
|
|
|
|
|
|
|
Net deferred tax liabilities |
|
$ |
1,688 |
|
3,521 |
|
18
Notes to Attributed Financial Information
(unaudited)
Capital Group
The Capital Group’s income tax benefit (expense) consists of:
|
|
|
Years ended December 31, |
|
|||||
|
|
|
2008 |
|
2007 |
|
2006 |
|
|
|
|
|
amounts in millions |
|
|||||
|
Current: |
|
|
|
|
|
|
|
|
|
Federal |
|
$ |
127 |
|
281 |
|
(184 |
) |
|
State and local |
|
9 |
|
(18 |
) |
(35 |
) |
|
|
Foreign |
|
3 |
|
(1 |
) |
— |
|
|
|
|
|
139 |
|
262 |
|
(219 |
) |
|
|
Deferred: |
|
|
|
|
|
|
|
|
|
Federal |
|
266 |
|
(208 |
) |
177 |
|
|
|
State and local |
|
34 |
|
8 |
|
42 |
|
|
|
Foreign |
|
— |
|
— |
|
1 |
|
|
|
|
|
300 |
|
(200 |
) |
220 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit |
|
$ |
439 |
|
62 |
|
1 |
|
The Capital Group’s income tax benefit (expense) differs from the amounts computed by applying the U.S. federal income tax rate of 35% as a result of the following:
|
|
|
Years ended December 31, |
|
|||||
|
|
|
2008 |
|
2007 |
|
2006 |
|
|
|
|
|
amounts in millions |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
Computed expected tax benefit (expense) |
|
$ |
359 |
|
(473 |
) |
(44 |
) |
|
Nontaxable exchange of investments for subsidiaries and cash |
|
(2 |
) |
541 |
|
— |
|
|
|
State and local income taxes, net of federal income taxes |
|
28 |
|
(10 |
) |
(8 |
) |
|
|
Change in valuation allowance affecting tax expense |
|
(3 |
) |
(10 |
) |
96 |
|
|
|
Disposition of nondeductible goodwill in sales transaction |
|
— |
|
— |
|
(43 |
) |
|
|
Recognition of tax benefit not previously recognized, net |
|
56 |
|
— |
|
— |
|
|
|
Other, net |
|
1 |
|
14 |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit |
|
$ |
439 |
|
62 |
|
1 |
|
19
Notes to Attributed Financial Information
(unaudited)
The tax effects of temporary differences that give rise to significant portions of the Capital Group’s deferred tax assets and deferred tax liabilities are presented below:
|
|
|
December 31, |
|
|||
|
|
|
2008 |
|
2007 |
|
|
|
|
|
amounts in millions |
|
|||
|
Deferred tax assets: |
|
|
|
|
|
|
|
Net operating and capital loss carryforwards |
|
$ |
287 |
|
271 |
|
|
Accrued liabilities |
|
70 |
|
72 |
|
|
|
Deferred revenue |
|
359 |
|
302 |
|
|
|
Other future deductible amounts |
|
17 |
|
68 |
|
|
|
Deferred tax assets |
|
733 |
|
713 |
|
|
|
Valuation allowance |
|
(17 |
) |
(18 |
) |
|
|
Net deferred tax assets |
|
716 |
|
695 |
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities: |
|
|
|
|
|
|
|
Investments |
|
1,414 |
|
1,982 |
|
|
|
Intangible assets |
|
146 |
|
248 |
|
|
|
Discount on exchangeable debentures |
|
1,351 |
|
974 |
|
|
|
Other |
|
— |
|
— |
|
|
|
Deferred tax liabilities |
|
2,911 |
|
3,204 |
|
|
|
|
|
|
|
|
|
|
|
Net deferred tax liabilities |
|
$ |
2,195 |
|
2,509 |
|
(7) The Liberty Interactive Stock, the Liberty Entertainment Stock and the Liberty Capital Stock have voting and conversion rights under our amended charter. Following is a summary of those rights. Holders of Series A common stock of each group are entitled to one vote per share, and holders of Series B common stock of each group are entitled to ten votes per share. Holders of Series C common stock of each group, if issued, will be entitled to 1/100th of a vote per share in certain limited cases and will otherwise not be entitled to vote. In general, holders of Series A and Series B common stock vote as a single class. In certain limited circumstances, the board may elect to seek the approval of the holders of only Series A and Series B Liberty Interactive Stock, the approval of the holders of only Series A and Series B Liberty Entertainment Stock or the approval of the holders of only Series A and Series B Liberty Capital Stock.
At the option of the holder, each share of Series B common stock will be convertible into one share of Series A common stock of the same group. At the discretion of our board, the common stock related to one group may be converted into common stock of the same series that is related to one of our other groups.
20