Exhibit 99.1

Unaudited Attributed Financial Information for Tracking Stock Groups

The following tables present our assets and liabilities as of March 31, 2016, revenue and expenses for the three months ended March 31, 2016 and 2015 and cash flows for the three months ended March 31, 2016 and 2015. The tables further present our assets, liabilities, revenue, expenses and cash flows that are attributed to the QVC Group and the Ventures Group, respectively.  The financial information in this Exhibit should be read in conjunction with our unaudited condensed consolidated financial statements for the three months ended March 31, 2016 included in this Quarterly Report on Form 10-Q.

As discussed in note 3 of the accompanying condensed consolidated financial statements, Liberty sold Backcountry.com, Inc. (“Backcountry) on June 30, 2015.  Backcountry is not presented as a discontinued operation as the sale did not represent a strategic shift that had a major effect on Liberty’s operations and financial results.

As discussed in note 2 of the accompanying condensed consolidated financial statements, on October 1, 2015, Liberty acquired all of the outstanding shares of zulily, inc. (“zulily”) (now known as zulily, llc). zulily is an online retailer offering customers a fun and entertaining shopping experience with a fresh selection of new product styles launched each day.  zulily is attributed to the QVC Group.  

The QVC Group common stock is intended to reflect the separate performance of our QVC Group which is comprised of our consolidated subsidiaries, QVC, Inc. (“QVC”) and zulily, and our approximate 38% interest in HSN, Inc. The Liberty Ventures common stock is intended to reflect the separate performance of our Ventures Group which is comprised primarily of our interests in Bodybuilding.com, LLC, CommerceHub, Evite, Inc. and Backcountry (through June 30, 2015) (collectively, the “Digital Commerce” businesses), interests in equity method investments of Expedia, Inc., Interval Leisure Group, Inc., FTD Companies, Inc. (“FTD”) and LendingTree, Inc. and available-for-sale securities Time Warner Inc. and Time Warner Cable Inc.

Notwithstanding the following attribution of assets, liabilities, revenue, expenses and cash flows to the QVC Group and the Ventures Group, our tracking stock structure does not affect the ownership or the respective legal title to our assets or responsibility for our liabilities. We and our subsidiaries are each responsible for our respective liabilities. Holders of QVC Group common stock and Liberty Ventures common stock are holders of our common stock and are subject to risks associated with an investment in our company and all of our businesses, assets and liabilities. The issuance of QVC Group common stock and Liberty Ventures common stock does not affect the rights of our creditors or creditors of our subsidiaries.

 

 

 


 

 

SUMMARY ATTRIBUTED FINANCIAL DATA

QVC Group

 

 

 

 

 

 

 

 

 

 

March 31, 2016

 

December 31, 2015

 

 

 

amounts in millions

 

Summary balance sheet data:

    

 

 

    

    

 

Cash and cash equivalents

 

$

440

 

426

 

Trade and other receivables, net

 

$

1,040

 

1,379

 

Inventory

 

$

1,032

 

945

 

Investments in affiliates, accounted for using the equity method

 

$

223

 

208

 

Total assets

 

$

14,825

 

15,141

 

Long-term debt, including current portion

 

$

6,615

 

6,535

 

Deferred income tax liabilities

 

$

1,290

 

1,359

 

Net assets attributable to QVC Group common stock shareholders

 

$

5,098

 

5,195

 

 

 

 

 

 

 

 

 

 

 

Three months ended 

 

 

March 31,

 

 

2016

    

2015

 

 

amounts in millions

 

Summary operations data:

    

 

    

 

 

Revenue

$

2,367

 

1,938

 

Cost of sales

 

1,535

 

1,221

 

Operating expenses

 

153

 

138

 

Selling, general and administrative expenses (1)

 

264

 

190

 

Depreciation and amortization

 

209

 

152

 

Operating income (loss)

 

206

 

237

 

Interest expense

 

(76)

 

(75)

 

Share of earnings (losses) of affiliates, net

 

21

 

24

 

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

 

(1)

 

(10)

 

Other income (expense), net

 

5

 

8

 

Income tax benefit (expense)

 

(57)

 

(24)

 

Net earnings (loss)

 

98

 

160

 

Less net earnings (loss) attributable to noncontrolling interests

 

8

 

9

 

Net earnings (loss) attributable to Liberty Interactive Corporation shareholders

$

90

 

151

 


Includes stock-based compensation of $18 million and $12 million for the three months ended March 31, 2016 and 2015, respectively.

(1)

2


 

 

SUMMARY ATTRIBUTED FINANCIAL DATA (Continued)

Ventures Group

 

 

 

 

 

 

 

 

 

March 31, 2016

 

December 31, 2015

 

 

 

amounts in millions

 

Summary balance sheet data:

    

 

    

    

    

 

Cash and cash equivalents

 

$

2,303

 

2,023

 

Investments in available-for-sale securities and other cost investments

 

$

1,478

 

1,349

 

Investments in affiliates, accounted for using the equity method

 

$

1,428

 

1,433

 

Total assets

 

$

6,133

 

6,039

 

Long-term debt, including current portion

 

$

2,261

 

2,172

 

Deferred income tax liabilities

 

$

2,164

 

2,143

 

Net assets attributable to Liberty Ventures common stock shareholders

 

$

1,568

 

1,592

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended 

 

 

 

March 31,

 

 

 

2016

 

2015

 

 

 

amounts in millions

 

Summary operations data:

    

 

    

    

    

 

Revenue

 

$

143

 

276

 

Cost of sales

 

 

91

 

194

 

Operating

 

 

17

 

22

 

Selling, general and administrative expenses (1)

 

 

44

 

45

 

Depreciation and amortization

 

 

8

 

16

 

Operating income (loss)

 

 

(17)

 

(1)

 

Interest expense

 

 

(17)

 

(20)

 

Share of earnings (losses) of affiliates, net

 

 

(42)

 

(21)

 

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

 

 

(6)

 

6

 

Other, net

 

 

29

 

7

 

Income tax benefit (expense)

 

 

26

 

21

 

Net earnings (loss) attributable to Liberty Interactive Corporation shareholders

 

$

(27)

 

(8)

 

 


(1)

Includes stock-based compensation of $13 million and $3 million for the three months ended March 31, 2016 and 2015, respectively.

3


 

 

BALANCE SHEET INFORMATION

March 31, 2016

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Attributed (note 1)

 

 

 

 

    

QVC

    

Ventures

    

Consolidated

 

 

 

Group

 

Group

 

Liberty

 

 

 

amounts in millions

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

440

 

2,303

 

2,743

 

Trade and other receivables, net

 

 

1,040

 

54

 

1,094

 

Inventory, net

 

 

1,032

 

52

 

1,084

 

Short-term marketable securities

 

 

 —

 

601

 

601

 

Other current assets

 

 

79

 

8

 

87

 

Total current assets

 

 

2,591

 

3,018

 

5,609

 

Investments in available-for-sale securities and other cost investments (note 2)

 

 

4

 

1,478

 

1,482

 

Investments in affiliates, accounted for using the equity method
(note 3)

 

 

223

 

1,428

 

1,651

 

Property and equipment, net

 

 

1,164

 

37

 

1,201

 

Intangible assets not subject to amortization

 

 

9,391

 

129

 

9,520

 

Intangible assets subject to amortization, net

 

 

1,419

 

38

 

1,457

 

Other assets, at cost, net of accumulated amortization

 

 

33

 

5

 

38

 

Total assets

 

$

14,825

 

6,133

 

20,958

 

Liabilities and Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Intergroup payable (receivable) (note 7)

 

$

45

 

(45)

 

 —

 

Accounts payable

 

 

642

 

25

 

667

 

Accrued liabilities

 

 

576

 

47

 

623

 

Current portion of debt (note 4)

 

 

358

 

2,247

 

2,605

 

Other current liabilities

 

 

184

 

111

 

295

 

Total current liabilities

 

 

1,805

 

2,385

 

4,190

 

Long-term debt (note 4)

 

 

6,257

 

14

 

6,271

 

Deferred income tax liabilities

 

 

1,290

 

2,164

 

3,454

 

Other liabilities

 

 

283

 

12

 

295

 

Total liabilities

 

 

9,635

 

4,575

 

14,210

 

Equity/Attributed net assets (liabilities)

 

 

5,098

 

1,568

 

6,666

 

Noncontrolling interests in equity of subsidiaries

 

 

92

 

(10)

 

82

 

Total liabilities and equity

 

$

14,825

 

6,133

 

20,958

 

 

 

 

 

 

 

 

 

 

 

4


 

 

 

STATEMENT OF OPERATIONS INFORMATION

Three months ended March 31, 2016

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Attributed (note 1)

 

 

 

 

 

QVC

 

Ventures

 

Consolidated

 

 

 

Group

 

Group

 

Liberty

 

 

 

amounts in millions

 

Total revenue, net

 

$

2,367

 

143

 

2,510

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

Cost of sales

 

 

1,535

 

91

 

1,626

 

Operating

 

 

153

 

17

 

170

 

Selling, general and administrative, including stock-based compensation (note 5)

 

 

264

 

44

 

308

 

Depreciation and amortization

 

 

209

 

8

 

217

 

 

 

 

2,161

 

160

 

2,321

 

Operating income (loss)

 

 

206

 

(17)

 

189

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Interest expense

 

 

(76)

 

(17)

 

(93)

 

Share of earnings (losses) of affiliates, net (note 3)

 

 

21

 

(42)

 

(21)

 

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

 

 

(1)

 

(6)

 

(7)

 

Other, net

 

 

5

 

29

 

34

 

 

 

 

(51)

 

(36)

 

(87)

 

Earnings (loss) before income taxes

 

 

155

 

(53)

 

102

 

Income tax benefit (expense)

 

 

(57)

 

26

 

(31)

 

Net earnings (loss)

 

 

98

 

(27)

 

71

 

Less net earnings (loss) attributable to noncontrolling interests

 

 

8

 

 —

 

8

 

Net earnings (loss) attributable to Liberty stockholders

 

$

90

 

(27)

 

63

 

 

    

 

 

    

 

    

 

 

 

 

 

 

5


 

 

 

STATEMENT OF OPERATIONS INFORMATION

Three months ended March 31, 2015

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Attributed (note 1)

 

 

 

 

    

QVC

    

Ventures

    

Consolidated

 

 

 

Group

 

Group

 

Liberty

 

 

 

amounts in millions

 

Total revenue, net

 

$

1,938

 

276

 

2,214

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

Cost of sales

 

 

1,221

 

194

 

1,415

 

Operating

 

 

138

 

22

 

160

 

Selling, general and administrative, including stock-based compensation (note 5)

 

 

190

 

45

 

235

 

Depreciation and amortization

 

 

152

 

16

 

168

 

 

 

 

1,701

 

277

 

1,978

 

Operating income (loss)

 

 

237

 

(1)

 

236

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Interest expense

 

 

(75)

 

(20)

 

(95)

 

Share of earnings (losses) of affiliates, net (note 3)

 

 

24

 

(21)

 

3

 

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

 

 

(10)

 

6

 

(4)

 

Other, net

 

 

8

 

7

 

15

 

 

 

 

(53)

 

(28)

 

(81)

 

Earnings (loss) before income taxes

 

 

184

 

(29)

 

155

 

Income tax benefit (expense)

 

 

(24)

 

21

 

(3)

 

Net earnings (loss)

 

 

160

 

(8)

 

152

 

Less net earnings (loss) attributable to noncontrolling interests

 

 

9

 

 —

 

9

 

Net earnings (loss) attributable to Liberty stockholders

 

$

151

 

(8)

 

143

 

 

 

6


 

 

STATEMENT OF CASH FLOWS INFORMATION

Three months ended March 31, 2016

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Attributed (note 1)

 

 

 

 

    

QVC

    

Ventures

    

Consolidated

 

 

 

Group

 

Group

 

Liberty

 

 

 

amounts in millions

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net earnings (loss)

 

$

98

 

(27)

 

71

 

Adjustments to reconcile net earnings to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

209

 

8

 

217

 

Stock-based compensation

 

 

18

 

13

 

31

 

Cash payments for stock based compensation

 

 

 —

 

(10)

 

(10)

 

Excess tax benefit from stock based compensation

 

 

(5)

 

 —

 

(5)

 

Share of (earnings) losses of affiliates, net

 

 

(21)

 

42

 

21

 

Cash receipts from return on equity investments

 

 

6

 

9

 

15

 

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

 

 

1

 

6

 

7

 

Deferred income tax (benefit) expense

 

 

(30)

 

24

 

(6)

 

Other, net

 

 

(2)

 

(25)

 

(27)

 

Intergroup tax allocation

 

 

49

 

(49)

 

 —

 

Intergroup tax (payments) receipts

 

 

(54)

 

54

 

 —

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

Current and other assets

 

 

268

 

13

 

281

 

Payables and other current liabilities

 

 

(297)

 

(3)

 

(300)

 

Net cash provided (used) by operating activities

 

 

240

 

55

 

295

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Cash proceeds from dispositions

 

 

 —

 

9

 

9

 

Investments in and loans to cost and equity investees

 

 

 —

 

(22)

 

(22)

 

Capital expended for property and equipment

 

 

(43)

 

(8)

 

(51)

 

Purchases of short term and other marketable securities

 

 

 —

 

(116)

 

(116)

 

Sales of short term and other marketable securities

 

 

12

 

413

 

425

 

Other investing activities, net

 

 

(13)

 

1

 

(12)

 

Net cash provided (used) by investing activities

 

 

(44)

 

277

 

233

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Borrowings of debt

 

 

515

 

108

 

623

 

Repayments of debt

 

 

(438)

 

(160)

 

(598)

 

Repurchases of QVC Group common stock

 

 

(238)

 

 —

 

(238)

 

Minimum withholding taxes on net settlements of stock-based compensation

 

 

(7)

 

(1)

 

(8)

 

Excess tax benefit from stock-based compensation

 

 

5

 

 —

 

5

 

Other financing activities, net

 

 

(6)

 

1

 

(5)

 

Net cash provided (used) by financing activities

 

 

(169)

 

(52)

 

(221)

 

Effect of foreign currency rates on cash

 

 

(13)

 

 —

 

(13)

 

Net increase (decrease) in cash and cash equivalents

 

 

14

 

280

 

294

 

Cash and cash equivalents at beginning of period

 

 

426

 

2,023

 

2,449

 

Cash and cash equivalents at end period

 

$

440

 

2,303

 

2,743

 

 

 

 

 

 

 

 

 

 

7


 

 

 

STATEMENT OF CASH FLOWS INFORMATION

Three months ended March 31, 2015

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Attributed (note 1)

 

 

 

 

    

QVC

    

Ventures

    

Consolidated

 

 

 

Group

 

Group

 

Liberty

 

 

 

amounts in millions

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net earnings (loss)

 

$

160

 

(8)

 

152

 

Adjustments to reconcile net earnings to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

152

 

16

 

168

 

Stock-based compensation

 

 

12

 

3

 

15

 

Cash payments for stock based compensation

 

 

 —

 

(2)

 

(2)

 

Excess tax benefit from stock-based compensation

 

 

(13)

 

 —

 

(13)

 

Share of losses (earnings) of affiliates, net

 

 

(24)

 

21

 

(3)

 

Cash receipts from return on equity investments

 

 

7

 

6

 

13

 

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

 

 

10

 

(6)

 

4

 

Deferred income tax (benefit) expense

 

 

(79)

 

25

 

(54)

 

Other, net

 

 

(9)

 

1

 

(8)

 

Intergroup tax allocation

 

 

47

 

(47)

 

 —

 

Intergroup tax (payments) receipts

 

 

(6)

 

6

 

 —

 

Changes in operating assets and liabilities

 

 

 

 

 

 

 

 

Current and other assets

 

 

238

 

20

 

258

 

Payables and other current liabilities

 

 

(268)

 

(42)

 

(310)

 

Net cash provided (used) by operating activities

 

 

227

 

(7)

 

220

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

Cash paid for acquisitions

 

 

 —

 

(20)

 

(20)

 

Investments in and loans to cost and equity investees

 

 

(1)

 

(44)

 

(45)

 

Cash receipts from returns of equity investments

 

 

200

 

 —

 

200

 

Capital expended for property and equipment

 

 

(31)

 

(13)

 

(44)

 

Purchases of short term and other marketable securities

 

 

(54)

 

(233)

 

(287)

 

Sales of short term and other marketable securities

 

 

66

 

247

 

313

 

Other investing activities, net

 

 

(44)

 

 —

 

(44)

 

Net cash provided (used) by investing activities

 

 

136

 

(63)

 

73

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

Borrowings of debt

 

 

351

 

180

 

531

 

Repayments of debt

 

 

(466)

 

(176)

 

(642)

 

Repurchases of QVC Group common stock

 

 

(123)

 

 —

 

(123)

 

Minimum withholding taxes on net settlements of stock-based compensation

 

 

(12)

 

1

 

(11)

 

Excess tax benefit from stock-based compensation

 

 

13

 

 —

 

13

 

Other financing activities, net

 

 

(8)

 

1

 

(7)

 

Net cash provided (used) by financing activities

 

 

(245)

 

6

 

(239)

 

Effect of foreign currency rates on cash

 

 

(10)

 

 —

 

(10)

 

Net increase (decrease) in cash and cash equivalents

 

 

108

 

(64)

 

44

 

Cash and cash equivalents at beginning of period

 

 

422

 

1,884

 

2,306

 

Cash and cash equivalents at end period

 

$

530

 

1,820

 

2,350

 

 

 

 

8


 

Notes to Attributed Financial Information

(unaudited)

 

 

(1)

At March 31, 2016, the QVC Group is comprised of our consolidated subsidiaries, QVC and zulily, and our approximate 38% interest in HSN, Inc., accounted for under the equity method.  Accordingly, the accompanying attributed financial information for the QVC Group includes the foregoing investment, as well as the assets, liabilities, revenue, expenses and cash flows of QVC and zulily.  We have also attributed certain of our debt obligations (and related interest expense) to the QVC Group based upon a number of factors, including the cash flow available to the QVC Group and its ability to pay debt service and our assessment of the optimal capitalization for the QVC Group.  The specific debt obligations attributed to each of the QVC Group and the Ventures Group are described in note 4 below.  In addition, we have allocated certain corporate general and administrative expenses among the QVC Group and the Ventures Group as described in note 5 below.

 

At March 31, 2016, the QVC Group is primarily comprised of our merchandise-focused televised shopping programs, Internet and mobile application 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 QVC Group.

 

At March 31, 2016, the Ventures Group consists of all of our businesses not included in the QVC Group, including the Digital Commerce businesses, interests in equity method investments of Expedia, Inc., Interval Leisure Group, Inc., FTD and LendingTree, Inc. and available-for-sale securities Time Warner Inc. and Time Warner Cable Inc.  Accordingly, the accompanying attributed financial information for the Ventures Group includes these investments as well as the assets, liabilities, revenue, expenses and cash flows of the Digital Commerce businesses. In addition, we have attributed to the Ventures Group all of our senior exchangeable debentures (and related interest expense).  See note 4 below for the debt obligations attributed to the Ventures Group.

 

As discussed in note 2 to the accompanying condensed consolidated financial statements, Liberty entered into an agreement with Liberty Broadband Corporation (“Liberty Broadband”), whereby Liberty will invest up to $2.4 billion in Liberty Broadband in connection with the closing of the proposed merger of Charter Communications, Inc. and Time Warner Cable Inc. The proceeds of this investment will be used by Liberty Broadband to fund, in part, its agreement to acquire $4.3 billion of Charter stock.  However, Liberty Broadband has the right, and may determine, to incur debt financing (subject to certain conditions) to fund a portion of the purchase price for its investment in Charter, in which case Liberty Broadband may reduce the aggregate subscription for its Series C shares by up to 25%, with such reduction applied pro rata to all investors, including Liberty.  Liberty's investment in Liberty Broadband will be funded using cash on hand and short term investments and will be attributed to the Ventures Group.

 

As previously discussed, on October 1, 2015, Liberty acquired all of the outstanding shares of zulily for consideration of approximately $2.3 billion, comprised of $9.375 of cash and 0.3098 newly issued shares of Series A QVC Group common stock for each zulily share, plus cash paid in lieu of any fractional shares. Effective October 1, 2015, zulily is attributed to the QVC Group and we believe that its business is complementary to QVC’s.

 

As previously discussed, Liberty sold Backcountry on June 30, 2015 for aggregate consideration, including assumption of debt, amounts held in escrow, and a noncontrolling interest, of approximately $350 million.

 

Any businesses that we may acquire in the future that we do not attribute to the QVC Group will be attributed to the Ventures Group.

 

9


 

Notes to Attributed Financial Information

(unaudited)

 

(2)

Investments in available-for-sale securities, including non-strategic securities, and other cost investments are summarized as follows:

 

 

 

 

 

 

 

 

 

    

March 31,

    

December 31,

 

 

 

2016

 

2015

 

 

 

amounts in millions

 

QVC Group

 

 

 

 

 

 

Other

 

$

4

 

4

 

Total QVC Group

 

 

4

 

4

 

Ventures Group

 

 

 

 

 

 

Time Warner Inc.

 

 

309

 

284

 

Time Warner Cable Inc.

 

 

1,096

 

994

 

Other

 

 

73

 

71

 

Total Ventures Group

 

 

1,478

 

1,349

 

Consolidated Liberty

 

$

1,482

 

1,353

 

 

 

(3)

The following table presents information regarding certain equity method investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share of earnings (losses)

 

 

 

March 31, 2016

 

Three months ended

 

 

 

Percentage

 

Carrying

 

Market

 

March 31,

 

 

 

ownership

    

value

 

value

 

2016

 

2015

 

 

 

dollar amounts in millions

 

QVC Group

    

    

  

    

 

    

    

    

    

    

  

    

 

HSN, Inc.

 

38

%  

 

$

180

 

1,047

 

22

 

25

 

Other

 

various

 

 

 

43

 

NA

 

(1)

 

(1)

 

Total QVC Group

 

 

 

 

 

223

 

 

 

21

 

24

 

Ventures Group

 

 

 

 

 

 

 

 

 

 

 

 

 

Expedia, Inc.

 

16

%  

 

 

894

 

2,545

 

(24)

 

4

 

FTD

 

37

%  

 

 

261

 

268

 

(3)

 

(2)

 

Other

 

various

 

 

 

273

 

NA

 

(15)

 

(23)

 

Total Ventures Group

 

 

 

 

 

1,428

 

 

 

(42)

 

(21)

 

Consolidated Liberty

 

 

 

 

$

1,651

 

 

 

(21)

 

3

 

 

(4)

10


 

Notes to Attributed Financial Information

(unaudited)

 

(4)

Debt attributed to the QVC Group and the Ventures Group is comprised of the following:

 

 

 

 

 

 

 

 

 

 

 

March 31, 2016

 

 

 

Outstanding

 

Carrying

 

 

 

principal

 

value

 

 

 

amounts in millions

 

QVC Group

    

 

    

    

 

    

 

8.5% Senior Debentures due 2029

 

$

287

 

 

285

 

8.25% Senior Debentures due 2030

 

 

504

 

 

501

 

1% Exchangeable Senior Debentures due 2043

 

 

346

 

 

349

 

QVC 3.125% Senior Secured Notes due 2019

 

 

400

 

 

399

 

QVC 5.125% Senior Secured Notes due 2022

 

 

500

 

 

500

 

QVC 4.375% Senior Secured Notes due 2023

 

 

750

 

 

750

 

QVC 4.85% Senior Secured Notes due 2024

 

 

600

 

 

600

 

QVC 4.45% Senior Secured Notes due 2025

 

 

600

 

 

599

 

QVC 5.45% Senior Secured Notes due 2034

 

 

400

 

 

399

 

QVC 5.95% Senior Secured Notes due 2043

 

 

300

 

 

300

 

QVC Bank Credit Facilities

 

 

1,894

 

 

1,894

 

Other subsidiary debt

 

 

72

 

 

72

 

Deferred loan costs

 

 

 

 

 

(33)

 

Total QVC Group debt

 

 

6,653

 

 

6,615

 

Ventures Group

 

 

 

 

 

 

 

4% Exchangeable Senior Debentures due 2029

 

 

437

 

 

264

 

3.75% Exchangeable Senior Debentures due 2030

 

 

437

 

 

260

 

3.5% Exchangeable Senior Debentures due 2031

 

 

342

 

 

331

 

0.75% Exchangeable Senior Debentures due 2043

 

 

824

 

 

1,373

 

Subsidiary level notes and facilities

 

 

33

 

 

33

 

Total Ventures Group debt

 

 

2,073

 

 

2,261

 

Total consolidated Liberty debt

 

$

8,726

 

 

8,876

 

Less current maturities

 

 

 

 

 

(2,605)

 

Total long-term debt

 

 

 

 

$

6,271

 

 

(5)

Cash compensation expense for our corporate employees is allocated between the QVC Group and the Ventures Group based on the estimated percentage of time spent providing services for each group.  On a semi-annual basis, estimated time spent will be determined through an interview process and a review of personnel duties unless transactions significantly change the composition of companies and investments in either respective group, which would require a more timely reevaluation of estimated time spent.  Other general and administrative expenses will be 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 QVC Group to the Ventures Group were determined to be $9 million and $4 million for the three months ended March 31, 2016 and 2015, respectively.  We note that stock compensation related to each tracking stock group is determined based on actual options outstanding for each respective tracking stock group.

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.

(6)

The QVC Group common stock and the Liberty Ventures common stock have voting and conversion rights under our restated 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

11


 

Notes to Attributed Financial Information

(unaudited)

 

votes per share.  Holders of Series C common stock of each group, if issued, are 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 will 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 QVC Group common stock or the approval of the holders of only Series A and Series B Liberty Ventures common stock.

At the option of the holder, each share of Series B common stock is 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 the other group.

(7)The intergroup payable (receivable) is primarily attributable to intergroup income taxes payable from the QVC Group to the Ventures Group.

 

12