Exhibit 99.1
LIBERTY MEDIA REPORTS RESULTS FOR
FULL YEAR AND FOURTH QUARTER 2009
Englewood, Colorado, February 25,
2010 — Liberty Media Corporation (“Liberty”) (NASDAQ: LCAPA, LCAPB, LINTA,
LINTB, LSTZA, LSTZB) today reported fourth quarter and full year results for
Liberty Capital group, Liberty Interactive group and Liberty Starz group. Highlights include(1):
· Grew
adjusted OIBDA(2) at QVC by 27% on revenue growth of 14%, respectively,
for the quarter
· Increased
adjusted OIBDA at Starz Entertainment by 28% in 2009
· Increased
adjusted OIBDA and revenue at our eCommerce companies by 17% and 63%,
respectively, in the quarter
· Saw
the value of Liberty’s SIRIUS XM stake increase to $2.8 billion
· Introduced
the Liberty Starz group tracking stock in November and repurchased 1.2% of
outstanding shares through January, 2010
· Completed
the sale of GSI Commerce and low-vote IAC shares in Q1 2010
“QVC’s management team did an
extraordinary job and delivered impressive results,” stated Greg Maffei,
Liberty President and CEO.
“Additionally, Starz, our eCommerce companies and SIRIUS XM all had
strong operating performance. We were
also pleased to complete the LEI/DIRECTV transaction and commenced a stock
buyback of our newest stock, Liberty Starz.”
“Separately, today we announced the
change in attribution of certain assets and liabilities between Liberty Capital
group and Liberty Interactive group. We
believe this reattribution further rationalizes Liberty’s capital structure and
will provide increased flexibility for Liberty in the future.” These changes are effective immediately and
additional information can be found in a Current Report on Form 8-K filed
with the SEC today.
1
LIBERTY INTERACTIVE GROUP — Liberty Interactive group’s revenue
increased 14% to $2.7 billion in the fourth quarter and 3% to $8.3 billion for
the year. Adjusted OIBDA increased 29%
to $556 million in the fourth quarter and 6% to $1.7 billion for the year,
while operating income increased 76% and 15%, respectively. The increase in revenue and adjusted OIBDA
for the fourth quarter and the year was primarily due to favorable results at
QVC and the eCommerce companies.
QVC
QVC’s consolidated revenue increased 14%
in the fourth quarter to $2.4 billion and 1% to $7.4 billion for the year. Adjusted OIBDA increased 27% to $530 million
in the fourth quarter and 4% to $1.6 billion for the year, while operating
income increased 40% and 7%, respectively.
“QVC’s fourth quarter results are
outstanding,” stated Mike George, QVC President and CEO. “We grew revenue and profitability at one of
the highest rates in the last decade and are showing improving trends in all
markets. The fourth quarter was the
first quarter since Q1 of 2008 when every country posted positive revenue
growth in local currency. We are also
encouraged that our results show a balanced performance, with strong gains in
top and bottom line results indicative that growth is due to both compelling,
exclusive content as well as aggressive cost management. In the fourth quarter we debuted our Isaac
Mizrahi lifestyle brand along with several other leading brands and designers,
and experienced the most successful Black Friday event in QVC history. QVC’s global market position will be further
strengthened in 2010 with the launch of QVC Italy and the implementation of our
technology makeover including our global eCommerce platform, customer
relationship and call center management platform and our multi-media
infrastructure.”
With respect to QVC’s domestic business,
revenue increased 13% in the fourth quarter to $1.7 billion and 2% for the year
to $5.0 billion. Adjusted OIBDA
increased 32% to $371 million in the fourth quarter and 4% for the year to $1.1
billion. For the quarter and the year,
the mix of products shifted from the jewelry and apparel product areas to home
and, to a lesser extent, the accessories product areas. The average selling price for the fourth
quarter increased 4% from $48.33 to $50.37 with the total number of units sold
increasing 6% to 35.2 million from 33.2 million. For the year, the average selling price increased
2% from $47.94 to $49.01 and the total number of units sold declined 3% to
108.7 million from 112.5 million.
Returns as a percent of domestic sales decreased to 16% from 18% for the
fourth quarter and to 18% from 19% for the year due to the sales mix moving
from jewelry and apparel to home products, which typically have a lower return
rate. QVC.com sales as a percentage of
domestic sales increased from 28% to 31% for the quarter and
2
from 25% to 29% for the year. The domestic adjusted OIBDA margin(2) increased
306 basis points to 22% for the quarter and remained relatively consistent at
22% for the year. The increase for the
quarter was primarily due to a higher gross margin percentage resulting from
more efficient warehouse operations and freight savings as well as favorable
customer service expenses and the leverage of fixed costs.
QVC’s international revenue increased 15%
in the fourth quarter to $751 million from $655 million including the impact of
favorable exchange rates in the UK, Germany and Japan. For the year, international revenue remained
flat at $2.4 billion despite the unfavorable foreign currency exchange rates in
the UK and Germany and including favorable exchange rates in Japan. Excluding the effect of exchange rates,
international revenue increased 6% in the UK, 8% in Germany and 4% in Japan in
the fourth quarter and increased 2% in the UK, 3% in Germany and 1% in Japan
for the year. International adjusted
OIBDA increased 19% to $159 million in the fourth quarter and 4% to $451
million for the year. International
adjusted OIBDA margins increased 70 basis points for the quarter and 80 basis
points for the year due primarily to favorable gross margins. The fourth quarter gross margin increased due
primarily to favorable warehouse operations across each market and a reduction
in realized inventory foreign exchange losses, particularly in the UK. The gross margin increased for the year due
primarily to lower warehouse costs and a favorable obsolescence provision
across each market. Excluding the impact
of exchange rates, QVC’s international adjusted OIBDA increased 10% in the
fourth quarter and 5% for the year.
QVC UK’s revenue grew 6% and 2% in local
currency in the fourth quarter and for the year, respectively. The UK’s average selling price in local
currency increased 1% for the fourth quarter and 4% for the year and units sold
increased 4% for the fourth quarter but declined 2% for the year. QVC UK experienced a higher gross margin in
the fourth quarter and the year due primarily to a favorable obsolescence
provision, lower warehouse expenses and a reduction in realized inventory
foreign exchange losses.
QVC Germany’s revenue grew 8% and 3% in
local currency in the fourth quarter and for the year, respectively. QVC Germany’s average selling price in local
currency increased 3% for the fourth quarter and 4% for the year and units sold
increased 5% for the fourth quarter but declined 1% for the year. QVC Germany experienced a lower gross margin
in an effort to move less productive inventory and an unfavorable obsolescence
provision, partially offset by favorable warehouse costs. For the year, Germany’s gross margin
increased due to a favorable obsolescence provision and warehouse costs
partially offset by a lower product margin.
QVC Japan’s revenue grew 4% and 1% in
local currency in the fourth quarter and for the year, respectively. QVC Japan achieved growth of 17% in units
sold for the quarter and 9% for the year with the average selling price in
local currency declining 12% and 7% for the fourth quarter and year,
respectively. For the fourth
3
quarter, Japan experienced sales growth
in accessories, apparel and health and beauty categories and declines in sales
of jewelry and home products. For the
year, Japan experienced sales growth in the accessories, apparel and jewelry
categories and declines in sales of home, health and beauty products.
QVC intends to launch its television
programming in Italy in the fourth quarter of 2010. Included in the international adjusted OIBDA
results for the fourth quarter and the year ended December 31, 2009 are $2
million and $5 million, respectively, of costs related to the expected launch
of the QVC Italy service.
QVC’s outstanding bank and bond debt was
$4.0 billion at December 31, 2009.
eCommerce Businesses
In the aggregate, the eCommerce
businesses revenue increased 17% to $281 million in the fourth quarter and 20%
to $931 million for the year. Adjusted
OIBDA grew 63% to $31 million for the fourth quarter and 45% to $103 million
for the year, while operating income increased to $16 million and $49 million,
respectively Included in the overall
increase in revenue and adjusted OIBDA for 2009 is $62 million and $16 million,
respectively, related to small acquisitions by our eCommerce companies in
2008. Exclusive of the impact of
acquisitions, eCommerce revenue and adjusted OIBDA increased organically 13%
and 21%, respectively, for the year ended December 31, 2009. Included in organic revenue and adjusted
OIBDA growth is an increase of $15 million related to commission revenue earned
when customers sign up for third-party on-line discount services.
Share Repurchases
There were no share repurchases of
Liberty Interactive stock from November 2, 2009 through January 29,
2010. Liberty has approximately $740
million remaining under its Liberty Interactive stock repurchase authorization.
The businesses and
assets attributed to Liberty Interactive group are engaged in, or are ownership
interests in companies that are engaged in, video and on-line commerce, and
currently include Liberty’s subsidiaries QVC, Provide Commerce,
Backcountry.com, Bodybuilding.com, BUYSEASONS, LOCKERZ and The Right Start, and
its interests in IAC/InterActiveCorp, HSN, Live Nation, Tree.com, Interval
Leisure Group, and Expedia. Liberty has
identified wholly-owned QVC as the principal operating segment of Liberty
Interactive group.
4
LIBERTY STARZ GROUP — Liberty
Starz group’s revenue increased 6% to $304 million in the fourth quarter and 7%
to $1.2 billion for the year. Adjusted
OIBDA decreased 2% to $74 million for the quarter and increased 29% to $374
million for the year. Operating income
increased to $49 million in the fourth quarter from an operating loss of $1.2
billion. For the year, operating income
increased to $272 million from an operating loss of $1 billion for 2008. The increase in revenue for both periods was
due to growth at Starz Entertainment.
The decrease in adjusted OIBDA for the quarter was primarily due to
increases in marketing and production costs at Starz Entertainment. The operating loss in 2008 is largely due to
a $1.2 billion impairment charge recorded by Starz Entertainment.
Starz
Entertainment, LLC
Starz
Entertainment’s revenue increased 5% in the fourth quarter to $300 million and
7% for the year to $1.2 billion. The $82
million increase in 2009 revenue was due to a $31 million increase in rates, a
$30 million increase resulting from growth in the average number of
subscription units and a $21 million increase due to new products and
services. Adjusted OIBDA decreased 4%
during the quarter to $78 million and increased 28% for the year to $384
million. Operating income increased to $65 million in the
fourth quarter from an operating loss of $1.1 billion. For the year, operating income increased to
$330 million from an operating loss of $1 billion. The operating loss in 2008
was largely due to the $1.2 billion impairment charge discussed above. Starz experienced average subscription unit
increases of 3%, and Encore’s average subscriptions were essentially flat in
2009.
Starz, LLC President and
CEO Chris Albrecht said “With solid improvement in both revenue and adjusted
OIBDA, Starz Entertainment posted strong results in 2009. A decline in fourth quarter adjusted OIBDA
was largely due to the marketing campaigns and production cost amortization
associated with our two big dramatic series, Spartacus:
Blood and Sand which premiered in January to the largest
audiences ever for a Starz original, and Crash.”
Starz Entertainment’s operating expenses
were relatively flat for the year.
Programming expenses are Starz Entertainment’s primary operating expense
and comprised approximately 91% of the total for 2009. Programming costs decreased from $629 million
in 2008 to $615 million in 2009 due to a decrease in the percentage of
first-run movie and original programming exhibitions and a lower effective rate
for first-run movies, partially offset by an increase in amortization of
production costs for original series.
The 2009
5
decrease in operating expense from
programming expenses were offset by increases in the amortization and write-off
of production costs related to the home video and international distribution of
original programming and other operating expenses.
Share Repurchases
Since the introduction of Liberty Starz
on November 19, 2009 through January 29, 2010, Liberty repurchased
643,000 shares of Series A Liberty Starz common stock at an average cost
per share of $48.52 for total cash consideration of $31 million. These repurchases represent 1.2% of the
shares outstanding and Liberty has approximately $469 million remaining under
its Liberty Starz stock repurchase authorization.
The businesses and
assets attributed to Liberty Starz group are primarily engaged in, or are
ownership interests in companies that are focused on video programming
businesses and currently include Liberty’s subsidiaries
Starz Entertainment and Liberty Sports Interactive. Liberty
has identified Starz Entertainment as the principal operating segment of
Liberty Starz group. For
purposes of presentation, we treat the assets and businesses attributed to the
Liberty Starz group as though they had been attributed to the group since January 1,
2009.
LIBERTY CAPITAL GROUP - Liberty Capital group’s revenue increased
18% to $154 million in the fourth quarter and 6% to $649 million for the
year. The adjusted OIBDA deficit decreased 29% to $76
million in the fourth quarter and 41% to $175 million for the year, while
operating income increased 72% and 60%, respectively. The increase in revenue for both periods was
primarily due to revenue growth at Starz Media related to increases in
theatrical, home video and television revenue from movies released by Overture
Films. The decrease in the adjusted OIBDA deficit for the year
was primarily due the timing of revenue and expenses associated with films
released by Overture Films and Starz animation.
Starz, LLC President and CEO Chris
Albrecht said “Starz Media results improved in 2009 versus the prior year. However, we recognize that Overture Films
continues to face significant challenges and we are currently evaluating
strategic alternatives for Overture.
While no final decisions have been made, we do not expect it to incur
annual operating losses in the future of the same magnitude that it has
experienced in recent years.”
6
Share Repurchases
From November 2, 2009 through January 29,
2010, Liberty repurchased 82,000 shares of Series A Liberty Capital common
stock at an average cost per share of $22.94 for total cash consideration of
$1.9 million. Since the reclassification
of Liberty Capital on March 4, 2008 through January 29, 2010, Liberty
has repurchased 33.8 million shares at an average cost per share of $14.27 for
total cash consideration of $482 million.
These repurchases represent 26.2% of the shares outstanding. Liberty has approximately $117 million
remaining under its Liberty Capital stock repurchase authorization.
The businesses and assets attributed to
Liberty Capital group are all of Liberty’s businesses and assets other than
those attributed to the Liberty Interactive group and Liberty Starz group and
include its subsidiaries Starz Media, TruePosition, Atlanta National League
Baseball Club (the owner of the Atlanta Braves), its interests in SIRIUS XM,
and minority interests in Time Warner, Inc., Time Warner Cable, and Sprint
Nextel.
FOOTNOTES
(1) Liberty’s President and CEO, Gregory B.
Maffei, will discuss these highlights and other matters in Liberty’s earnings
conference call which will begin at 12:00 p.m. (ET) on February 25,
2010. For information regarding how to
access the call, please see “Important Notice” on page 10.
(2) For a definition of adjusted OIBDA and
applicable reconciliations and a definition of adjusted OIBDA margin, see the accompanying
schedules.
NOTES
Liberty Media Corporation operates and
owns interests in a broad range of video and on-line commerce, media,
communications and entertainment businesses. Those interests are
currently attributed to three tracking stock groups: Liberty Interactive group,
Liberty Starz group and Liberty Capital group.
Unless otherwise noted, the foregoing
discussion compares financial information for the twelve months and three
months ended December 31, 2009 to the same period in 2008. Certain prior period amounts have been
reclassified for comparability with the 2009 presentation. During the fourth quarter of 2009, Liberty
completed the split-off of Liberty Entertainment Inc. (LEI), and as such, the
financial results of the businesses and assets of LEI have been excluded from
all periods presented.
The following financial information is
intended to supplement Liberty’s consolidated statements of operations to be
included in its Form 10-K.
7
Fair Value of Public
Holdings and Derivatives
|
(amounts in millions and include the value of derivatives)
|
|
September
30, 2009
|
|
December
31, 2009 (4)
|
|
|
InterActiveCorp
|
|
$
|
688
|
|
461
|
|
|
InterActiveCorp Spin-Off Companies (1)
|
|
724
|
|
810
|
|
|
Expedia (1)
|
|
1,658
|
|
1,781
|
|
|
Other
|
|
179
|
|
235
|
|
|
Total Attributed Liberty Interactive Group
|
|
$
|
3,249
|
|
3,287
|
|
|
|
|
|
|
|
|
|
Other
|
|
2
|
|
31
|
|
|
Total Attributed Liberty Starz Group
|
|
$
|
2
|
|
31
|
|
|
|
|
|
|
|
|
|
SIRIUS XM Debt and Equity (2)
|
|
1,922
|
|
1,853
|
|
|
Non Strategic Public Holdings (3)
|
|
3,144
|
|
2,933
|
|
|
Total Attributed Liberty Capital Group
|
|
$
|
5,066
|
|
4,786
|
|
(1) Represents fair value of
Liberty’s investments in the InterActiveCorp spin-off companies (HSN,
Ticketmaster, Interval Leisure Group, and Tree.com), and Expedia. In accordance with GAAP, Liberty accounts for
these investments using the equity method of accounting and includes these
investments in its consolidated balance sheet at their historical carrying
values.
(2) Represents the fair value of
Liberty’s various debt and equity investments in SIRIUS XM. The fair value of Liberty’s convertible
preferred stock is calculated on an as-if-converted basis into common
stock. In accordance with GAAP, Liberty
accounts for the convertible preferred stock using the equity method of
accounting and includes this in its consolidated balance sheet at historical
carrying value.
(3) Represents Liberty’s
non-strategic public holdings which are accounted for at fair value including
any associated equity derivatives on such investments. Also includes the liability associated with
borrowed shares which totaled $865 million and $851 million on September 30,
2009, and December 31, 2009, respectively.
(4) Does not reflect the change in attribution of certain
assets and liabilities between the Liberty Capital group and the Liberty
Interactive group announced on February 25, 2010.
8
Cash and Debt
The following
presentation is provided to separately identify cash and liquid investments and
debt information.
|
(amounts in millions)
|
|
September
30, 2009
|
|
December
31, 2009 (5)
|
|
|
Cash Attributable to:
|
|
|
|
|
|
|
Liberty Interactive Group
|
|
816
|
|
884
|
|
|
Liberty Starz Group
|
|
540
|
|
794
|
|
|
Liberty Capital Group (1)
|
|
2,923
|
|
3,157
|
|
|
Total Liberty Consolidated Cash (GAAP)
|
|
4,279
|
|
4,835
|
|
|
|
|
|
|
|
|
|
Debt:
|
|
|
|
|
|
|
Senior Notes and Debentures (2)
|
|
1,594
|
|
1,594
|
|
|
Senior Exchangeable Debentures (4)
|
|
541
|
|
541
|
|
|
QVC Senior Notes (2)
|
|
1,000
|
|
1,000
|
|
|
QVC Bank Credit Facility
|
|
3,235
|
|
2,996
|
|
|
Other
|
|
190
|
|
188
|
|
|
Total Attributed Liberty Interactive Group Debt
(3)
|
|
6,560
|
|
6,319
|
|
|
Less: Unamortized Discount
|
|
(25
|
)
|
(25
|
)
|
|
Less: Fair Market Value
Adjustment
|
|
(240
|
)
|
(221
|
)
|
|
Total Attributed Liberty Interactive Group Debt
(GAAP)
|
|
6,295
|
|
6,073
|
|
|
|
|
|
|
|
|
|
Other
|
|
49
|
|
48
|
|
|
Total Attributed Liberty Starz Group Debt (GAAP)
|
|
49
|
|
48
|
|
|
|
|
|
|
|
|
|
Senior Exchangeable Debentures (4)
|
|
2,561
|
|
2,561
|
|
|
Bank Credit Facility
|
|
750
|
|
750
|
|
|
Liberty Derivative Borrowing
|
|
1,155
|
|
838
|
|
|
Other
|
|
80
|
|
131
|
|
|
Total Attributed Liberty Capital Group Debt
|
|
4,546
|
|
4,280
|
|
|
Less: Fair Market Value
Adjustment
|
|
(694
|
)
|
(627
|
)
|
|
Total Attributed Liberty Capital Group Debt
(GAAP)
|
|
3,852
|
|
3,653
|
|
|
|
|
|
|
|
|
|
Total Consolidated Liberty Debt (GAAP)
|
|
10,196
|
|
9,774
|
|
|
(1)
|
Does not include $471 million and $465 million of restricted cash on
September 30, 2009 and December 31, 2009, respectively, which is
reflected in other long-term assets in Liberty’s condensed consolidated
balance sheet.
|
|
(2)
|
Face amount of Senior Notes and Debentures with no reduction for the
unamortized discount or fair market value adjustment.
|
|
(3)
|
Does not include $316 million in intergroup loans. Each of the Starz
group and Capital group have an intergroup loan outstanding to the
Interactive group in the amount of $158 million. Such loans (i) are
secured by various public stocks attributed to the Interactive group,
(ii) accrue interest quarterly at the rate of LIBOR plus 500 basis
points and (iii) are due June 16, 2010.
|
|
(4)
|
Face amount of Senior Exchangeable Debentures with no reduction for
the fair market value adjustment.
|
|
(5)
|
Does not reflect the change in attribution of certain assets and
liabilities between the Liberty Capital group and the Liberty Interactive
group announced on February 25, 2010.
|
Total attributed Liberty Interactive group
cash increased $68 million compared to September 30, 2009 primarily as a
result of cash flow from QVC operations and the sale of IAC stock during the
fourth quarter of 2009, partially offset by $239 million of debt paid down of
the QVC credit facility and $97 million of intergroup loan repayment to each
Liberty Starz and Liberty Capital.
Total attributed Liberty Interactive group debt decreased $241 million
compared to September 30, 2009.
9
Total attributed Liberty Starz group cash
increased $254 million compared to September 30, 2009 primarily due to
cash received in connection with the LEI split-off, cash flow from Starz
Entertainment operations and the repayment of a portion of the intergroup loan
to Liberty Interactive.
Total attributed Liberty Capital group cash increased
$234 million compared to September 30, 2009 primarily due to cash received
upon the expiration of a certain equity derivative, the repayment of a portion
of the intergroup loan to Liberty Interactive and borrowings at Starz Media,
partially offset by the retirement of derivative borrowings. Total attributed Liberty Capital group debt
decreased $266 million due to the retirement of derivative borrowings mentioned
above, partially offset by borrowings at Starz Media.
Important
Notice: Liberty
Media Corporation (Nasdaq: LCAPA, LCAPB, LINTA, LINTB, LSTZA, LSTZB,) President
and CEO, Gregory B. Maffei will discuss Liberty’s earnings release in a conference call which will begin at 12:00
noon (ET) on February 25, 2010. The
call can be accessed by dialing (800) 475-3716 or (719) 325-2450 at least 10
minutes prior to the start time. Replays
of the conference call can be accessed until 2:00 p.m. (ET) March 11,
2010, by dialing (719) 457-0820 or (888) 203-1112 plus the pass code
3160074#. The call will also be
broadcast live across the Internet and archived on our website. To access the webcast go to
http://www.libertymedia.com/events.
Links to this press release will also be available on the Liberty Media
web site.
This press
release includes certain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, including statements about,
business strategies, market potential, future financial performance, new
service and product launches and other matters that are not historical
facts. These forward-looking statements
involve many risks and uncertainties that could cause actual results to differ
materially from those expressed or implied by such statements, including, without
limitation, possible changes in market acceptance of new products or services,
competitive issues, regulatory issues and continued access to capital on terms
acceptable to Liberty Media. These forward looking statements speak only as of
the date of this presentation, and Liberty Media expressly disclaims any
obligation or undertaking to disseminate any updates or revisions to any
forward-looking statement contained herein to reflect any change in Liberty
Media’s expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement is based. Please refer to the publicly filed documents
of Liberty Media, including the most recent Form 10-K, for additional
information about Liberty Media and about the risks and uncertainties related
to Liberty Media’s business which may affect the statements made in this press
release.
Contact: Courtnee Ulrich (720) 875-5420
10
SUPPLEMENTAL
INFORMATION
As
a supplement to Liberty’s consolidated statements of operations, to be included
in its Form 10-K, the following is a presentation of quarterly financial
information and operating metrics on a stand-alone basis for the three largest
privately held businesses (QVC, Starz Entertainment and Starz Media) owned by
Liberty at December 31, 2009.
Please see below for the definition of adjusted OIBDA and a discussion
of management’s use of this performance measure. Schedule 2 to this press release provides a reconciliation of adjusted OIBDA for each
identified entity to that entity’s operating income for the same period, as
determined under GAAP.
QUARTERLY SUMMARY
|
(amounts
in millions)
|
|
4Q08
|
|
1Q09
|
|
2Q09
|
|
3Q09
|
|
4Q09
|
|
|
Liberty Interactive Group
|
|
|
|
|
|
|
|
|
|
|
|
|
QVC
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
– Domestic
|
|
1,481
|
|
1,053
|
|
1,157
|
|
1,098
|
|
1,679
|
|
|
Revenue
– International
|
|
655
|
|
540
|
|
527
|
|
569
|
|
751
|
|
|
Revenue
– Total
|
|
2,136
|
|
1,593
|
|
1,684
|
|
1,667
|
|
2,430
|
|
|
Adjusted OIBDA – Domestic
|
|
282
|
|
222
|
|
277
|
|
244
|
|
371
|
|
|
Adjusted OIBDA – International
|
|
134
|
|
97
|
|
96
|
|
99
|
|
159
|
|
|
Adjusted OIBDA – Total
|
|
416
|
|
319
|
|
373
|
|
343
|
|
530
|
|
|
Operating
Income
|
|
278
|
|
178
|
|
243
|
|
209
|
|
389
|
|
|
Gross
Margin – Domestic
|
|
32.1
|
%
|
34.2
|
%
|
36.6
|
%
|
34.8
|
%
|
33.7
|
%
|
|
Gross
Margin – International
|
|
36.6
|
%
|
37.0
|
%
|
37.6
|
%
|
36.9
|
%
|
37.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liberty Starz Group
|
|
|
|
|
|
|
|
|
|
|
|
|
Starz Entertainment
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
285
|
|
296
|
|
296
|
|
301
|
|
300
|
|
|
Adjusted
OIBDA
|
|
81
|
|
108
|
|
105
|
|
93
|
|
78
|
|
|
Operating
Income (Loss)
|
|
(1,151
|
)
|
95
|
|
92
|
|
78
|
|
65
|
|
|
Subscription
Units – Starz
|
|
17.7
|
|
18.1
|
|
17.5
|
|
17.3
|
|
16.9
|
|
|
Subscription
Units – Encore
|
|
31.7
|
|
31.9
|
|
31.5
|
|
30.7
|
|
30.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liberty Capital Group
|
|
|
|
|
|
|
|
|
|
|
|
|
Starz Media
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
98
|
|
102
|
|
90
|
|
56
|
|
116
|
|
|
Adjusted
OIBDA
|
|
(64
|
)
|
5
|
|
17
|
|
(71
|
)
|
(44
|
)
|
|
Operating
Income (Loss)
|
|
(260
|
)
|
2
|
|
15
|
|
(73
|
)
|
(44
|
)
|
11
ANNUAL SUMMARY
|
(amounts
in millions)
|
|
2008
|
|
2009
|
|
|
Liberty Interactive Group
|
|
|
|
|
|
|
QVC
|
|
|
|
|
|
|
Revenue
– Domestic
|
|
4,911
|
|
4,987
|
|
|
Revenue
– International
|
|
2,392
|
|
2,387
|
|
|
Revenue
– Total
|
|
7,303
|
|
7,374
|
|
|
Adjusted
OIBDA – Domestic
|
|
1,070
|
|
1,114
|
|
|
Adjusted
OIBDA – International
|
|
432
|
|
451
|
|
|
Adjusted
OIBDA – Total
|
|
1,502
|
|
1,565
|
|
|
Operating
Income
|
|
956
|
|
1,019
|
|
|
Gross
Margin – Domestic
|
|
34.8
|
%
|
34.7
|
%
|
|
Gross
Margin – International
|
|
36.6
|
%
|
37.2
|
%
|
|
|
|
|
|
|
|
|
Liberty Starz Group
|
|
|
|
|
|
|
Starz Entertainment
|
|
|
|
|
|
|
Revenue
|
|
1,111
|
|
1,193
|
|
|
Adjusted
OIBDA
|
|
301
|
|
384
|
|
|
Operating
Income (Loss)
|
|
(975
|
)
|
330
|
|
|
|
|
|
|
|
|
|
Liberty Capital Group
|
|
|
|
|
|
|
Starz Media
|
|
|
|
|
|
|
Revenue
|
|
321
|
|
364
|
|
|
Adjusted
OIBDA
|
|
(189
|
)
|
(93
|
)
|
|
Operating
Income (Loss)
|
|
(395
|
)
|
(100
|
)
|
NON-GAAP FINANCIAL MEASURES
This
press release includes a presentation of adjusted OIBDA, which is a non-GAAP
financial measure, for each of Liberty’s tracking stock groups and each of QVC,
Starz Entertainment and Starz Media together with a reconciliation to that
group’s or entity’s operating income, as determined under GAAP. Liberty defines adjusted OIBDA as revenue
less cost of sales, operating expenses, and selling, general and administrative
expenses (excluding stock and other equity-based compensation) and excludes
from that definition depreciation and amortization and restructuring and
impairment charges that are included in the measurement of operating income
pursuant to GAAP. Further, this press
release includes adjusted OIBDA margin which is also a non-GAAP financial
measure. Liberty defines adjusted OIBDA
margin as adjusted OIBDA divided by revenue.
Liberty
believes adjusted OIBDA is an important indicator of the operational strength
and performance of its businesses, including each business’ ability to service
debt and fund capital expenditures. In
addition, this measure allows management to view operating results and perform
analytical comparisons and benchmarking between businesses and identify strategies
to improve performance. Because adjusted
OIBDA is used as a measure of operating performance, Liberty views operating
income as the most directly comparable GAAP measure. Adjusted OIBDA is not meant to replace or
supersede operating income or any other GAAP measure, but rather to supplement
such GAAP measures in order to present investors with the same information that
Liberty’s management considers in assessing the results of operations and
performance of its assets. Please see
the attached schedules for applicable reconciliations.
12
SCHEDULE 1
The following table
provides a reconciliation of adjusted OIBDA for each of Liberty Interactive
group, Liberty Starz group, and Liberty Capital group to that group’s operating
income calculated in accordance with GAAP for the three months ended December 31,
2008, March 31, 2009, June 30, 2009, September 30, 2009 and December 31,
2009, respectively, and the years ended December 31, 2008 and 2009.
QUARTERLY SUMMARY
|
(amounts
in millions)
|
|
4Q08
|
|
1Q09
|
|
2Q09
|
|
3Q09
|
|
4Q09
|
|
|
Liberty Interactive Group
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
OIBDA
|
|
432
|
|
341
|
|
412
|
|
345
|
|
556
|
|
|
Depreciation
and Amortization
|
|
(143
|
)
|
(147
|
)
|
(135
|
)
|
(139
|
)
|
(145
|
)
|
|
Stock
Compensation Expense
|
|
(7
|
)
|
(10
|
)
|
(11
|
)
|
(12
|
)
|
(14
|
)
|
|
Impairment
of Long-Lived Assets
|
|
(56
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Operating Income
|
|
226
|
|
184
|
|
266
|
|
194
|
|
397
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liberty Starz Group
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
OIBDA
|
|
76
|
|
104
|
|
104
|
|
92
|
|
74
|
|
|
Depreciation
and Amortization
|
|
(6
|
)
|
(6
|
)
|
(6
|
)
|
(5
|
)
|
(4
|
)
|
|
Stock
Compensation Expense
|
|
21
|
|
(17
|
)
|
(23
|
)
|
(20
|
)
|
(16
|
)
|
|
Impairment
of Long-Lived Assets
|
|
(1,262
|
)
|
—
|
|
—
|
|
—
|
|
(5
|
)
|
|
Operating Income (Loss)
|
|
(1,171
|
)
|
81
|
|
75
|
|
67
|
|
49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liberty Capital Group
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
OIBDA
|
|
(106
|
)
|
(32
|
)
|
4
|
|
(71
|
)
|
(76
|
)
|
|
Depreciation
and Amortization
|
|
(23
|
)
|
(20
|
)
|
(22
|
)
|
(20
|
)
|
(17
|
)
|
|
Stock
Compensation Expense
|
|
3
|
|
(1
|
)
|
(1
|
)
|
(3
|
)
|
—
|
|
|
Impairment
of Long-Lived Assets
|
|
(217
|
)
|
—
|
|
—
|
|
—
|
|
(4
|
)
|
|
Operating Loss
|
|
(343
|
)
|
(53
|
)
|
(19
|
)
|
(94
|
)
|
(97
|
)
|
ANNUAL SUMMARY
|
(amounts
in millions)
|
|
2008
|
|
2009
|
|
|
Liberty Interactive Group
|
|
|
|
|
|
|
Adjusted
OIBDA
|
|
1,555
|
|
1,654
|
|
|
Depreciation
and Amortization
|
|
(561
|
)
|
(566
|
)
|
|
Stock
Compensation Expense
|
|
(32
|
)
|
(47
|
)
|
|
Impairment
of Long-Lived Assets
|
|
(56
|
)
|
—
|
|
|
Operating Income
|
|
906
|
|
1,041
|
|
|
|
|
|
|
|
|
|
Liberty Starz Group
|
|
|
|
|
|
|
Adjusted
OIBDA
|
|
290
|
|
374
|
|
|
Depreciation
and Amortization
|
|
(26
|
)
|
(21
|
)
|
|
Stock
Compensation Expense
|
|
(15
|
)
|
(76
|
)
|
|
Impairment
of Long-Lived Assets
|
|
(1,262
|
)
|
(5
|
)
|
|
Operating Income (Loss)
|
|
(1,013
|
)
|
272
|
|
|
|
|
|
|
|
|
|
Liberty Capital Group
|
|
|
|
|
|
|
Adjusted
OIBDA
|
|
(297
|
)
|
(175
|
)
|
|
Depreciation
and Amortization
|
|
(101
|
)
|
(79
|
)
|
|
Stock
Compensation Expense
|
|
(2
|
)
|
(5
|
)
|
|
Impairment
of Long-Lived Assets
|
|
(251
|
)
|
(4
|
)
|
|
Operating Loss
|
|
(651
|
)
|
(263
|
)
|
13
The following table provides
a reconciliation of adjusted OIBDA to earnings from continuing operations
before income taxes and minority interest for the years ended December 31,
2008 and 2009, respectively.
ANNUAL SUMMARY
|
(amounts
in millions)
|
|
2008
|
|
2009
|
|
|
Liberty
Interactive Group
|
|
$
|
1,555
|
|
1,654
|
|
|
Liberty
Starz Group
|
|
290
|
|
374
|
|
|
Liberty
Capital Group
|
|
(297
|
)
|
(175
|
)
|
|
Consolidated adjusted OIBDA
|
|
$
|
1,548
|
|
1,853
|
|
|
|
|
|
|
|
|
|
Consolidated
segment adjusted OIBDA
|
|
$
|
1,548
|
|
1,853
|
|
|
Stock-based
compensation
|
|
(49
|
)
|
(128
|
)
|
|
Depreciation
and amortization
|
|
(688
|
)
|
(666
|
)
|
|
Impairment
of long-lived assets
|
|
(1,569
|
)
|
(9
|
)
|
|
Interest
expense
|
|
(667
|
)
|
(628
|
)
|
|
Share
of earnings (losses) of affiliates
|
|
(1,263
|
)
|
(58
|
)
|
|
Realized
and unrealized gains (losses) on derivative instruments, net
|
|
(260
|
)
|
(155
|
)
|
|
Gains
on dispositions, net
|
|
15
|
|
284
|
|
|
Other
than temporary declines in fair value of investments
|
|
(441
|
)
|
(9
|
)
|
|
Other,
net
|
|
343
|
|
137
|
|
|
Earnings (loss) from continuing operations
before income taxes and minority interest
|
|
$
|
(3,031
|
)
|
621
|
|
14
SCHEDULE 2
The following table
provides a reconciliation of adjusted OIBDA for QVC, Starz Entertainment and
Starz Media to that entity’s operating income calculated in accordance with
GAAP for the three months ended December 31, 2008, March 31, 2009, June 30,
2009, September 30, 2009 and December 31, 2009, and the years ended December 31,
2008 and 2009, respectively.
QUARTERLY SUMMARY
|
(amounts
in millions)
|
|
4Q08
|
|
1Q09
|
|
2Q09
|
|
3Q09
|
|
4Q09
|
|
|
Liberty Interactive Group
|
|
|
|
|
|
|
|
|
|
|
|
|
QVC
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
OIBDA
|
|
416
|
|
319
|
|
373
|
|
343
|
|
530
|
|
|
Depreciation
and Amortization
|
|
(135
|
)
|
(137
|
)
|
(127
|
)
|
(130
|
)
|
(134
|
)
|
|
Stock
Compensation Expense
|
|
(3
|
)
|
(4
|
)
|
(3
|
)
|
(4
|
)
|
(7
|
)
|
|
Operating Income
|
|
278
|
|
178
|
|
243
|
|
209
|
|
389
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
eCommerce Businesses
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
OIBDA
|
|
19
|
|
25
|
|
42
|
|
5
|
|
31
|
|
|
Depreciation
and Amortization
|
|
(9
|
)
|
(9
|
)
|
(9
|
)
|
(9
|
)
|
(11
|
)
|
|
Stock
Compensation Expense
|
|
(3
|
)
|
(4
|
)
|
(4
|
)
|
(4
|
)
|
(4
|
)
|
|
Impairment
of Long-Lived Assets
|
|
(56
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Operating Income (Loss)
|
|
(49
|
)
|
12
|
|
29
|
|
(8
|
)
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liberty Starz Group
|
|
|
|
|
|
|
|
|
|
|
|
|
Starz Entertainment
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
OIBDA
|
|
81
|
|
108
|
|
105
|
|
93
|
|
78
|
|
|
Depreciation
and Amortization
|
|
(5
|
)
|
(4
|
)
|
(5
|
)
|
(3
|
)
|
(4
|
)
|
|
Stock
Compensation Expense
|
|
12
|
|
(9
|
)
|
(8
|
)
|
(12
|
)
|
(9
|
)
|
|
Impairment
of Long-Lived Assets
|
|
(1,239
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Operating Income (Loss)
|
|
(1,151
|
)
|
95
|
|
92
|
|
78
|
|
65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liberty Capital Group
|
|
|
|
|
|
|
|
|
|
|
|
|
Starz Media
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
OIBDA
|
|
(64
|
)
|
5
|
|
17
|
|
(71
|
)
|
(44
|
)
|
|
Depreciation
and Amortization
|
|
(3
|
)
|
(3
|
)
|
(3
|
)
|
(2
|
)
|
(1
|
)
|
|
Stock
Compensation Expense
|
|
(1
|
)
|
—
|
|
1
|
|
—
|
|
1
|
|
|
Impairment
of Long-Lived Assets
|
|
(192
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Operating Income (Loss)
|
|
(260
|
)
|
2
|
|
15
|
|
(73
|
)
|
(44
|
)
|
15
ANNUAL SUMMARY
|
(amounts
in millions)
|
|
2008
|
|
2009
|
|
|
Liberty Interactive Group
|
|
|
|
|
|
|
QVC
|
|
|
|
|
|
|
Adjusted OIBDA
|
|
1,502
|
|
1,565
|
|
|
Depreciation and Amortization
|
|
(531
|
)
|
(528
|
)
|
|
Stock Compensation Expense
|
|
(15
|
)
|
(18
|
)
|
|
Operating Income
|
|
956
|
|
1,019
|
|
|
|
|
|
|
|
|
|
eCommerce Businesses
|
|
|
|
|
|
|
Adjusted OIBDA
|
|
71
|
|
103
|
|
|
Depreciation and Amortization
|
|
(30
|
)
|
(38
|
)
|
|
Stock Compensation Expense
|
|
(14
|
)
|
(16
|
)
|
|
Impairment of Long-Lived Assets
|
|
(56
|
)
|
—
|
|
|
Operating Income (Loss)
|
|
(29
|
)
|
49
|
|
|
|
|
|
|
|
|
|
Liberty Starz Group
|
|
|
|
|
|
|
Starz Entertainment
|
|
|
|
|
|
|
Adjusted OIBDA
|
|
301
|
|
384
|
|
|
Depreciation and Amortization
|
|
(18
|
)
|
(16
|
)
|
|
Stock Compensation Expense
|
|
(19
|
)
|
(38
|
)
|
|
Impairment of long-lived assets
|
|
(1,239
|
)
|
—
|
|
|
Operating Income (Loss)
|
|
(975
|
)
|
(330
|
)
|
|
|
|
|
|
|
|
|
Liberty Capital Group
|
|
|
|
|
|
|
Starz Media
|
|
|
|
|
|
|
Adjusted OIBDA
|
|
(189
|
)
|
(93
|
)
|
|
Depreciation and Amortization
|
|
(12
|
)
|
(9
|
)
|
|
Stock Compensation Expense
|
|
(2
|
)
|
2
|
|
|
Impairment of long-lived assets
|
|
(192
|
)
|
—
|
|
|
Operating (Loss)
|
|
(395
|
)
|
(100
|
)
|
16