Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2021 | Jul. 31, 2021 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-33982 | |
Entity Registrant Name | QURATE RETAIL, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-1288730 | |
Entity Address, Address Line One | 12300 Liberty Boulevard | |
Entity Address, City or Town | Englewood | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80112 | |
City Area Code | 720 | |
Local Phone Number | 875-5300 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001355096 | |
Amendment Flag | false | |
Common Class A | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Series A common stock | |
Trading Symbol | QRTEA | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 399,082,098 | |
Common Class B | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Series B common stock | |
Trading Symbol | QRTEB | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 8,177,190 | |
8.0% Series A Cumulative Redeemable Preferred Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 8.0% Series A Cumulative Redeemable Preferred Stock | |
Trading Symbol | QRTEP | |
Security Exchange Name | NASDAQ |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 950 | $ 806 |
Trade and other receivables, net of allowance for doubtful accounts of $103 million and $132 million, respectively | 1,199 | 1,640 |
Inventory, net | 1,428 | 1,301 |
Indemnification agreement receivable | 385 | 345 |
Other current assets | 465 | 473 |
Total current assets | 4,427 | 4,565 |
Property and equipment, net | 1,205 | 1,300 |
Intangible assets not subject to amortization (note 5): | ||
Goodwill | 6,607 | 6,638 |
Trademarks | 3,168 | 3,168 |
Intangible assets not subject to amortization | 9,775 | 9,806 |
Intangible assets subject to amortization, net (note 5) | 848 | 779 |
Other assets, at cost, net of accumulated amortization | 651 | 549 |
Total assets | 16,906 | 16,999 |
Current liabilities: | ||
Accounts payable | 1,156 | 1,305 |
Accrued liabilities | 1,123 | 1,418 |
Current portion of debt, including $1,922 million and $1,750 million measured at fair value (note 6) | 1,922 | 1,750 |
Other current liabilities | 201 | 231 |
Total current liabilities | 4,402 | 4,704 |
Long-term debt (note 6) | 5,266 | 5,186 |
Deferred income tax liabilities | 1,344 | 1,359 |
Preferred stock (note 7) | 1,260 | 1,249 |
Other liabilities | 722 | 768 |
Total liabilities | 12,994 | 13,266 |
Stockholders' equity : | ||
Accumulated other comprehensive earnings (loss), net of taxes | (20) | 72 |
Retained earnings | 3,787 | 3,522 |
Total stockholders' equity | 3,771 | 3,598 |
Noncontrolling interests in equity of subsidiaries | 141 | 135 |
Total equity | 3,912 | 3,733 |
Commitments and contingencies (note 9) | ||
Total liabilities and equity | 16,906 | 16,999 |
Common Class A | ||
Stockholders' equity : | ||
Common stock value | 4 | 4 |
Common Class B | ||
Stockholders' equity : | ||
Common stock value | ||
Common Class C | ||
Stockholders' equity : | ||
Common stock value |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Allowance for doubtful accounts | $ 103 | $ 132 |
Current portion of debt, fair value | $ 1,922 | $ 1,750 |
Common Class A | ||
Common stock, par or stated value per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 4,000,000,000 | 4,000,000,000 |
Common stock, shares issued | 402,484,679 | 382,165,550 |
Common stock, shares outstanding | 402,484,679 | 382,165,550 |
Common Class B | ||
Common stock, par or stated value per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 8,177,190 | 29,366,492 |
Common stock, shares outstanding | 8,177,190 | 29,366,492 |
Common Class C | ||
Common stock, par or stated value per share | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenue: | ||||
Total revenue, net | $ 3,504 | $ 3,422 | $ 6,841 | $ 6,342 |
Type of revenue | us-gaap:RetailMember | us-gaap:RetailMember | us-gaap:RetailMember | us-gaap:RetailMember |
Operating costs and expenses: | ||||
Cost of retail sales (exclusive of depreciation shown separately below) | $ 2,240 | $ 2,217 | $ 4,435 | $ 4,150 |
Type of cost of retail sales | us-gaap:RetailMember | us-gaap:RetailMember | us-gaap:RetailMember | us-gaap:RetailMember |
Operating expense | $ 217 | $ 209 | $ 423 | $ 402 |
Selling, general and administrative, including stock-based compensation (note 2) | 485 | 447 | 920 | 868 |
Depreciation and amortization | 129 | 144 | 257 | 286 |
Total operating costs and expenses | 3,071 | 3,017 | 6,035 | 5,706 |
Operating income (loss) | 433 | 405 | 806 | 636 |
Other income (expense): | ||||
Interest expense | (118) | (95) | (235) | (192) |
Share of earnings (loss) of affiliates, net | (22) | (28) | (54) | (64) |
Realized and unrealized gains (losses) on financial instruments, net (note 4) | 19 | 23 | 60 | (115) |
Other, net | (23) | (12) | (10) | 1 |
Total other income (expense) | (144) | (112) | (239) | (370) |
Earnings (loss) before income taxes | 289 | 293 | 567 | 266 |
Income tax (expense) benefit | (39) | (59) | (93) | (41) |
Net earnings (loss) | 250 | 234 | 474 | 225 |
Less net earnings (loss) attributable to the noncontrolling interests | 28 | 14 | 46 | 25 |
Net earnings (loss) attributable to Qurate Retail, Inc. shareholders | $ 222 | $ 220 | $ 428 | $ 200 |
Earnings (Loss) Per Common Share | ||||
Basic net earnings (loss) attributable to Series A and Series B Qurate Retail, Inc. shareholders per common share (note 3): | $ 0.54 | $ 0.53 | $ 1.04 | $ 0.48 |
Diluted net earnings (loss) attributable to Series A and Series B Qurate Retail, Inc. shareholders per common share (note 3): | $ 0.52 | $ 0.53 | $ 1.01 | $ 0.48 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements Of Comprehensive Earnings (Loss) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Consolidated Statements Of Comprehensive Earnings (Loss) | ||||
Net earnings (loss) | $ 250 | $ 234 | $ 474 | $ 225 |
Other comprehensive earnings (loss), net of taxes: | ||||
Foreign currency translation adjustments | 9 | 18 | (64) | (4) |
Recognition of previously unrealized losses (gains) on debt, net | (1) | |||
Comprehensive earnings (loss) attributable to debt credit risk adjustments | 19 | (68) | (37) | 99 |
Other comprehensive earnings (loss) | 28 | (50) | (101) | 94 |
Comprehensive earnings (loss) | 278 | 184 | 373 | 319 |
Less comprehensive earnings (loss) attributable to the noncontrolling interests | 28 | 15 | 37 | 27 |
Comprehensive earnings (loss) attributable to Qurate Retail, Inc. shareholders | $ 250 | $ 169 | $ 336 | $ 292 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flows from operating activities: | ||
Net earnings (loss) | $ 474 | $ 225 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 257 | 286 |
Stock-based compensation | 35 | 27 |
Share of (earnings) losses of affiliates, net | 54 | 64 |
Realized and unrealized (gains) losses on financial instruments, net | (60) | 115 |
Deferred income tax expense (benefit) | (10) | 1 |
Other, net | 7 | 4 |
Changes in operating assets and liabilities | ||
Decrease (increase) in accounts receivable | 429 | 531 |
Decrease (increase) in inventory | (133) | 108 |
Decrease (increase) in prepaid expenses and other assets | 64 | 37 |
(Decrease) increase in trade accounts payable | (136) | (152) |
(Decrease) increase in accrued and other liabilities | (279) | (48) |
Net cash provided (used) by operating activities | 702 | 1,198 |
Cash flows from investing activities: | ||
Investment in and loans to cost and equity investees | (139) | (55) |
Capital expenditures | (110) | (108) |
Expenditures for television distribution rights | (170) | (10) |
Cash proceeds from dispositions of investments | 2 | |
Proceeds from sale of fixed assets | 40 | |
Other investing activities, net | (2) | 7 |
Net cash provided (used) by investing activities | (379) | (166) |
Cash flows from financing activities: | ||
Borrowings of debt | 302 | 753 |
Repayments of debt | (230) | (1,477) |
Repurchases of Qurate Retail common stock | (105) | |
Withholding taxes on net share settlements of stock-based compensation | (24) | (2) |
Derivative payments to counterparties | (81) | |
Derivative proceeds from counterparties | 24 | |
Dividends paid to noncontrolling interest | (31) | (30) |
Dividends paid to common shareholders | (13) | |
Other financing activities, net | (6) | 2 |
Net cash provided (used) by financing activities | (164) | (754) |
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash | (15) | (3) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 144 | 275 |
Cash, cash equivalents and restricted cash at beginning of period | 814 | 681 |
Cash, cash equivalents and restricted cash at end of period | $ 958 | $ 956 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements Of Cash Flows (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Consolidated Statements Of Cash Flows | ||
Cash and cash equivalents | $ 950 | $ 806 |
Restricted cash included in other current assets | $ 8 | $ 8 |
Restricted Cash and Cash Equivalents, Asset, Statement of Financial Position [Extensible List] | us-gaap:OtherCurrentAssetsMember | us-gaap:OtherCurrentAssetsMember |
Total cash, cash equivalents and restricted cash in the condensed consolidated statement of cash flows | $ 958 | $ 814 |
Condensed Consolidated Statem_5
Condensed Consolidated Statement Of Equity - USD ($) $ in Millions | Common Class ACommon Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Earnings (Loss) | Retained Earnings | Noncontrolling Interest In Equity Of Subsidiaries | Total |
Balance at Dec. 31, 2019 | $ 4 | $ (55) | $ 4,891 | $ 132 | $ 4,972 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings (loss) | 200 | 25 | 225 | |||
Other comprehensive earnings (loss) | 92 | 2 | 94 | |||
Stock compensation | $ 27 | 27 | ||||
Distribution to noncontrolling interest | (30) | (30) | ||||
Reclassification | (2) | (2) | ||||
Balance at Jun. 30, 2020 | 4 | 25 | 37 | 5,091 | 129 | 5,286 |
Balance at Mar. 31, 2020 | 4 | 9 | 88 | 4,871 | 129 | 5,101 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings (loss) | 220 | 14 | 234 | |||
Other comprehensive earnings (loss) | (51) | 1 | (50) | |||
Stock compensation | 16 | 16 | ||||
Distribution to noncontrolling interest | (15) | (15) | ||||
Balance at Jun. 30, 2020 | 4 | 25 | 37 | 5,091 | 129 | 5,286 |
Balance at Dec. 31, 2020 | 4 | 72 | 3,522 | 135 | 3,733 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings (loss) | 428 | 46 | 474 | |||
Other comprehensive earnings (loss) | (92) | (9) | (101) | |||
Stock compensation | 33 | 33 | ||||
Series A Qurate Retail stock repurchases | (105) | (105) | ||||
Distribution to noncontrolling interest | (31) | (31) | ||||
Withholding taxes on net share settlements of stock-based compensation | (24) | (24) | ||||
Other | (70) | 3 | (67) | |||
Reclassification | 166 | (166) | ||||
Balance at Jun. 30, 2021 | 4 | (20) | 3,787 | 141 | 3,912 | |
Balance at Mar. 31, 2021 | 4 | (48) | 3,680 | 128 | 3,764 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings (loss) | 222 | 28 | 250 | |||
Other comprehensive earnings (loss) | 28 | 28 | ||||
Stock compensation | 18 | 18 | ||||
Series A Qurate Retail stock repurchases | (64) | (64) | ||||
Distribution to noncontrolling interest | (15) | (15) | ||||
Withholding taxes on net share settlements of stock-based compensation | (3) | (3) | ||||
Other | (68) | 2 | (66) | |||
Reclassification | $ 117 | (117) | ||||
Balance at Jun. 30, 2021 | $ 4 | $ (20) | $ 3,787 | $ 141 | $ 3,912 |
Basis Of Presentation
Basis Of Presentation | 6 Months Ended |
Jun. 30, 2021 | |
Basis of Presentation | |
Basis of Presentation | (1) Basis of Presentation The accompanying condensed consolidated financial statements include the accounts of Qurate Retail, Inc. and its controlled subsidiaries (collectively, "Qurate Retail," the "Company," “Consolidated Qurate Retail,” “us,” “we,” or “our” unless the context otherwise requires). All significant intercompany accounts and transactions have been eliminated in consolidation. Qurate Retail is made up of wholly-owned subsidiaries QVC, Inc. (“QVC”), which includes HSN, Inc. (“HSN”), Cornerstone Brands, Inc. (“Cornerstone”), Zulily, LLC (“Zulily”), and other cost and equity method investments. Qurate Retail is primarily engaged in the video and online commerce industries in North America, Europe and Asia. The businesses of the Company’s wholly-owned subsidiaries, QVC, Cornerstone and Zulily, are seasonal due to a higher volume of sales in the fourth calendar quarter related to year-end holiday shopping. The accompanying (a) condensed consolidated balance sheet as of December 31, 2020, which has been derived from audited financial statements, and (b) the interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for such periods have been included. Additionally, certain prior period amounts have been reclassified for comparability with current period presentation. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in Qurate Retail's Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 10-K”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Qurate Retail considers (i) fair value measurements, (ii) accounting for income taxes, and (iii) estimates of retail-related adjustments and allowances to be its most significant estimates. In December 2019, a new coronavirus (“COVID-19”) was reported to have surfaced in Wuhan, China and has subsequently spread across the globe causing a global pandemic, impacting all countries where Qurate Retail operates. As a result of the spread of COVID-19, certain local governmental agencies have imposed travel restrictions, local quarantines or stay at home restrictions to contain the spread, which has caused a significant disruption to most sectors of the economy. Management is not presently aware of any events or circumstances arising from COVID-19 that would require the Company to update the estimates, judgments or revise the carrying value of our assets or liabilities. Management's estimates may change, however, as new events occur and additional information is obtained, and any such changes will be recognized in the consolidated financial statements. Actual results could differ from estimates, and any such differences may be material to our financial statements. As a result of repurchases of Series A Qurate Retail common stock (“QRTEA”), the Company’s additional paid-in capital balance was in a deficit position as of June 30, 2021. In order to ensure that the additional paid-in capital account is not negative, we reclassified the amount of the deficit ($166 million) at June 30, 2021 to retained earnings. Qurate Retail has entered into certain agreements with Liberty Media Corporation ("LMC") (for accounting purposes, a related party of the Company), a separate publicly traded company. These agreements include a reorganization agreement, services agreement and facilities sharing agreement. As a result of certain corporate transactions, LMC and Qurate Retail may have obligations to each other for certain tax related matters. Neither Qurate Retail nor LMC has any stock ownership, beneficial or otherwise, in the other. In connection with a split-off transaction that occurred in the first quarter of 2018 (the “GCI Liberty Split-Off”), Qurate Retail and GCI Liberty, Inc. (“GCI Liberty”) entered into a tax sharing agreement. Pursuant to the tax sharing agreement, GCI Liberty agreed to indemnify Qurate Retail for taxes and tax-related losses resulting from the GCI Liberty Split-Off to the extent such taxes or tax-related losses (i) result primarily from, individually or in the aggregate, the breach of certain restrictive covenants made by GCI Liberty (applicable to actions or failures to act by GCI Liberty and its subsidiaries following the completion of the GCI Liberty Split-Off), or (ii) result from Section 355(e) of the Internal Revenue Code applying to the GCI Liberty Split-Off as a result of the GCI Liberty Split-Off being part of a plan (or series of related transactions) pursuant to which one or more persons acquire, directly or indirectly, a 50-percent or greater interest (measured by vote or value) in the stock of GCI Liberty (or any successor corporation). Following a merger between Liberty Broadband Corporation (“Liberty Broadband”) and GCI Liberty, Liberty Broadband has assumed the tax sharing agreement. In December 2019, the Company entered into an amendment to the services agreement in connection with LMC’s entry into a new employment arrangement with Gregory B. Maffei, the Company’s Chairman of the Board (the “Chairman”). Under the amended services agreement, components of his compensation will either be paid directly to him by each of the Company, Liberty TripAdvisor Holdings, Inc., and Liberty Broadband (collectively, the “Service Companies”) or reimbursed to LMC, in each case, based on allocations among LMC and the Service Companies set forth in the amended services agreement, currently set at 17% for the Company. The reorganization agreement with LMC provides for, among other things, provisions governing the relationship between Qurate Retail and LMC, including certain cross-indemnities. Pursuant to the services agreement, LMC provides Qurate Retail with certain general and administrative services including legal, tax, accounting, treasury and investor relations support. Qurate Retail reimburses LMC for direct, out-of-pocket expenses incurred by LMC in providing these services and for Qurate Retail's allocable portion of costs associated with any shared services or personnel based on an estimated percentage of time spent providing services to Qurate Retail. Under the facilities sharing agreement, LMC shares office space and related amenities at its corporate headquarters with Qurate Retail. Under these various agreements, approximately $3 million and $2 million was reimbursable to LMC for the three months ended June 30, 2021 and 2020, respectively, and $6 million and $5 million was reimbursable to LMC for the six months ended June 30, 2021 and 2020, respectively. Qurate Retail had a tax sharing payable to LMC and Liberty Broadband in the amount of approximately $119 million and $129 million as of June 30, 2021 and December 31, 2020, respectively, included in Other liabilities in the condensed consolidated balance sheets. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2021 | |
Stock-Based Compensation | |
Stock-Based Compensation | (2) Stock-Based Compensation The Company has granted to certain of its directors, employees and employees of its subsidiaries, restricted stock (“RSAs”), restricted stock units (“RSUs”) and options to purchase shares of the Company’s common stock (collectively, "Awards"). The Company measures the cost of employee services received in exchange for an equity classified Award (such as stock options and restricted stock) based on the grant-date fair value (“GDFV”) of the Award, and recognizes that cost over the period during which the employee is required to provide service (usually the vesting period of the Award). The Company measures the cost of employee services received in exchange for a liability classified Award based on the current fair value of the Award, and remeasures the fair value of the Award at each reporting date. Included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations are $19 million and $16 million of stock-based compensation during the three months ended June 30, 2021 and 2020, respectively, and $35 million and $27 million of stock-based compensation during the six months ended June 30, 2021 and 2020, respectively. The following table presents the number and weighted average GDFV of options granted by the Company during the six months ended June 30, 2021: Six months ended June 30, 2021 Options Granted (000's) Weighted Average GDFV Series A Qurate Retail common stock, QVC and HSN employees (1) 895 $ 6.75 Series A Qurate Retail common stock, Zulily employees (1) 79 $ 6.74 Series A Qurate Retail common stock, Qurate Retail employees (2) 63 $ 6.18 (1) Grants vest semi-annually over four years . (2) Grants vest between two and three years . During the six months ended June 30, 2021, Qurate Retail granted to employees and directors 4.7 million RSUs of QRTEA, which RSUs have a GDFV of $12.93 per share and generally vest annually over four years. In connection with our Chairman’s employment agreement, during the six months ended June 30, 2021, Qurate Retail granted 229 thousand performance-based RSUs of QRTEA to our Chairman. The Series A RSUs had a GDFV of $12.90 per share at the time they were granted and will cliff vest one year from the month of grant, subject to the satisfaction of certain performance objectives. As a result of the Letter Agreement discussed in Note 8, during the six months ended June 30, 2021, Qurate Retail granted 1.1 million time-based RSAs of Series B Qurate Retail common stock (“QRTEB”) to our Chairman, which RSAs have a GDFV of $13.65 per share and vest in two equal tranches on December 10, 2024 and June 3, 2026, subject to earlier vesting under certain circumstances. During the six months ended June 30, 2021, Qurate Retail also granted 423 thousand performance-based RSUs and 423 thousand time-based RSUs of QRTEA to our chief executive officer (“CEO”). Both the performance-based and time-based Series A RSUs had a GDFV The Company has calculated the GDFV for all of its equity classified Awards and any subsequent remeasurement of its liability classified Awards using the Black-Scholes-Merton Model. The Company estimates the expected term of the Awards based on historical exercise and forfeiture data. The volatility used in the calculation for Awards is based on the historical volatility of Qurate Retail's stock and the implied volatility of publicly traded Qurate Retail options. The Company uses a zero dividend rate and the risk-free rate for Treasury Bonds with a term similar to that of the subject options. Qurate Retail—Outstanding Awards The following tables present the number and weighted average exercise price ("WAEP") of the Awards to purchase Qurate Retail common stock granted to certain officers, employees and directors of the Company, as well as the weighted average remaining life and aggregate intrinsic value of the Awards. Weighted Aggregate average intrinsic Series A remaining value (000's) WAEP life (millions) Outstanding at January 1, 2021 40,553 $ 10.61 Granted 1,037 $ 12.92 Exercised (1,919) $ 6.26 Forfeited/Cancelled (2,683) $ 12.89 Outstanding at June 30, 2021 36,988 $ 10.73 3.8 years $ 129 Exercisable at June 30, 2021 21,354 $ 14.07 2.6 years $ 19 Weighted Aggregate average intrinsic Series B remaining value (000's) WAEP life (millions) Outstanding at January 1, 2021 3,243 $ 15.39 Granted — $ — Exercised — $ — Forfeited/Cancelled (1,335) $ 16.93 Outstanding at June 30, 2021 1,908 $ 14.31 2.3 years $ — Exercisable at June 30, 2021 1,908 $ 14.31 2.3 years $ — As of June 30, 2021, Qurate Retail had 13.0 million QRTEA RSUs and 1.1 million QRTEB RSAs outstanding with a weighted average GDFV of $9.77 and $13.65 per share, respectively. As of June 30, 2021, the total unrecognized compensation cost related to unvested Awards was approximately $139 million. Such amount will be recognized in the Company's consolidated statements of operations over a weighted average period of approximately 2.3 years. As of June 30, 2021, Qurate Retail reserved for issuance upon exercise of outstanding stock options approximately 37.0 million shares of QRTEA and 1.9 million shares of QRTEB common stock. |
Earnings (Loss) Per Common Shar
Earnings (Loss) Per Common Share | 6 Months Ended |
Jun. 30, 2021 | |
Earnings (Loss) Per Common Share | |
Earnings (Loss) Per Common Share | (3) Earnings (Loss) Per Common Share Basic earnings (loss) per common share ("EPS") is computed by dividing net earnings (loss) by the weighted average number of common shares outstanding ("WASO") for the period. Diluted EPS presents the dilutive effect on a per share basis of potential common shares as if they had been converted at the beginning of the periods presented. Potentially dilutive shares are excluded from the computation of diluted EPS during periods in which losses are reported since the result would be antidilutive. Excluded from diluted EPS for both of the three months ended June 30, 2021 and 2020 are 22 million potential common shares, because their inclusion would have been antidilutive. Excluded from diluted EPS for both of the six months ended June 30, 2021 and 2020 are 22 million potential common shares, because their inclusion would have been antidilutive. Qurate Retail Common Stock Three months ended Six months ended June 30, June 30, 2021 2020 2021 2020 number of shares in millions Basic WASO 410 417 410 416 Potentially dilutive shares 13 1 13 2 Diluted WASO 423 418 423 418 |
Assets and Liabilities Measured
Assets and Liabilities Measured at Fair Value | 6 Months Ended |
Jun. 30, 2021 | |
Assets and Liabilities Measured at Fair Value | |
Assets and Liabilities Measured at Fair Value | (4) Assets and Liabilities Measured at Fair Value For assets and liabilities required to be reported at fair value, GAAP provides a hierarchy that prioritizes inputs to valuation techniques used to measure fair value into three broad levels. Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs, other than quoted market prices included within Level 1, that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. The Company's assets and liabilities measured at fair value are as follows: Fair Value Measurements at Fair Value Measurements at June 30, 2021 December 31, 2020 Quoted Quoted prices prices in active Significant in active Significant markets for other markets for other identical observable identical observable assets inputs assets inputs Description Total (Level 1) (Level 2) Total (Level 1) (Level 2) amounts in millions Cash equivalents $ 383 383 — 290 290 — Indemnification asset $ 385 — 385 345 — 345 Financial instrument asset $ 107 — 107 23 — 23 Debt $ 1,922 — 1,922 1,750 — 1,750 The majority of the Company's Level 2 financial assets and liabilities are primarily debt instruments and derivative instruments with quoted market prices that are not considered to be traded on "active markets," as defined in GAAP. The fair values for such instruments are derived from a typical model using observable market data as the significant inputs. The indemnification asset relates to Liberty Broadband’s agreement to indemnify Liberty Interactive LLC (“LI LLC”) and pertains to the ability of holders of LI LLC’s 1.75% exchangeable debentures due 2046 (the “1.75% Exchangeable Debentures”) to exercise their exchange right according to the terms of the debentures on or before October 5, 2023. Such amount will equal the difference between the exchange value and par value of the 1.75% Exchangeable Debentures at the time the exchange occurs. The indemnification asset recorded in the condensed consolidated balance sheets as of June 30, 2021 represents the fair value of the estimated exchange feature included in the 1.75% Exchangeable Debentures primarily based on market observable inputs (Level 2). As of June 30, 2021, a holder of the 1.75% Exchangeable Debentures has the ability to exchange and, accordingly, such indemnification asset is included as a current asset in our condensed consolidated balance sheet as of that date. Realized and Unrealized Gains (Losses) on Financial Instruments Realized and unrealized gains (losses) on financial instruments are comprised of changes in the fair value of the following: Three months ended Six months ended June 30, June 30, 2021 2020 2021 2020 amounts in millions Equity securities 43 — 50 (4) Exchangeable senior debentures (179) (30) (133) (80) Indemnification asset 93 35 41 13 Other financial instruments 62 18 102 (44) $ 19 23 60 (115) The Company has elected to account for its exchangeable debt using the fair value option. Changes in the fair value of the exchangeable senior debentures recognized in the condensed consolidated statement of operations are primarily due to market factors primarily driven by changes in the fair value of the underlying shares into which the debt is exchangeable. The Company isolates the portion of the unrealized gain (loss) attributable to the change in the instrument specific credit risk and recognizes such amount in other comprehensive earnings (loss). The change in the fair value of the exchangeable senior debentures attributable to changes in the instrument specific credit risk was a gain of $24 million and a loss of $90 million for the three months ended June 30, 2021 and 2020, respectively, and a loss of $44 million and a gain of $129 million for the six months ended June 30, 2021 and 2020, respectively. The cumulative change was a gain of $149 million as of June 30, 2021. |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2021 | |
Intangible Assets | |
Intangible Assets | (5) Intangible Assets Goodwill Changes in the carrying amount of goodwill are as follows: Corporate and QxH QVC Int'l Zulily Other Total amounts in millions Balance at January 1, 2021 $ 5,228 921 477 12 6,638 Foreign currency translation adjustments — (31) — — (31) Balance at June 30, 2021 $ 5,228 890 477 12 6,607 Intangible Assets Subject to Amortization Amortization expense for intangible assets with finite useful lives was $85 million and $94 million for the three months ended June 30, 2021 and 2020, respectively, and $167 million and $185 million for the six months ended June 30, 2021 and 2020, respectively. Based on its amortizable intangible assets as of June 30, 2021, Qurate Retail expects that amortization expense will be as follows for the next five years (amounts in millions): Remainder of 2021 $ 198 2022 $ 287 2023 $ 158 2024 $ 91 2025 $ 51 |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2021 | |
Long-Term Debt | |
Long-Term Debt | (6) Long-Term Debt Debt is summarized as follows: Outstanding principal at Carrying value June 30, 2021 June 30, 2021 December 31, 2020 amounts in millions Corporate level debentures 8.5% Senior Debentures due 2029 $ 287 285 285 8.25% Senior Debentures due 2030 505 502 502 4% Exchangeable Senior Debentures due 2029 429 361 362 3.75% Exchangeable Senior Debentures due 2030 432 349 346 1.75% Exchangeable Senior Debentures due 2046 332 705 649 Subsidiary level notes and facilities QVC 4.375% Senior Secured Notes due 2023 750 750 750 QVC 4.85% Senior Secured Notes due 2024 600 600 600 QVC 4.45% Senior Secured Notes due 2025 600 599 599 QVC 4.75% Senior Secured Notes due 2027 575 575 575 QVC 4.375% Senior Secured Notes due 2028 500 500 500 QVC 5.45% Senior Secured Notes due 2034 400 399 399 QVC 5.95% Senior Secured Notes due 2043 300 300 300 QVC 6.375% Senior Secured Notes due 2067 225 225 225 QVC 6.25% Senior Secured Notes due 2068 500 500 500 3.5% Exchangeable Senior Debentures due 2031 214 507 393 QVC Bank Credit Facilities 77 77 — Deferred loan costs — (46) (49) Total consolidated Qurate Retail debt $ 6,726 7,188 6,936 Less current classification (1,922) (1,750) Total long-term debt $ 5,266 5,186 QVC Bank Credit Facilities On December 31, 2018, QVC entered into the Fourth Amended and Restated Credit Agreement with Zulily as co-borrower (collectively, the “Borrowers”) which is a multi-currency facility that provides for a $2.95 billion revolving credit facility, with a $450 million sub-limit for standby letters of credit and $1.5 billion of uncommitted incremental revolving loan commitments or incremental term loans. The Fourth Amended and Restated Credit Agreement includes a $400 million tranche that may be borrowed by QVC or Zulily, with a $50 million sub-limit for standby letters of credit. The remaining $2.55 billion and any incremental loans may be borrowed only by QVC. Borrowings that are alternate base rate loans will bear interest at a per annum rate equal to the base rate plus a margin that varies between 0.25% to 0.75% depending on the Borrowers combined ratio of Consolidated Total Debt to Consolidated EBITDA (the “Combined Consolidated Leverage Ratio”). Borrowings that are LIBOR loans will bear interest at a per annum rate equal to the applicable LIBOR rate plus a margin that varies between 1.25% and 1.75% depending on the Borrowers’ Combined Consolidated Leverage Ratio. Each loan may be prepaid at any time and from time to time without penalty other than customary breakage costs. No mandatory prepayments will be required other than when borrowings and letter of credit usage exceed availability; provided that, if Zulily ceases to be controlled by Qurate Retail, all of its loans must be repaid and its letters of credit cash collateralized. The facility matures on December 31, 2023. Payment of loans may be accelerated following certain customary events of default. The payment and performance of the Borrowers’ obligations (including Zulily’s obligations) under the Fourth Amended and Restated Credit Agreement are guaranteed by each of QVC’s Material Domestic Subsidiaries (as defined in the Fourth Amended and Restated Credit Agreement). Further, the borrowings under the Fourth Amended and Restated Credit Agreement are secured, pari passu The Fourth Amended and Restated Credit Agreement contains certain affirmative and negative covenants, including certain restrictions on QVC and Zulily and each of their respective restricted subsidiaries (subject to certain exceptions) with respect to, among other things: incurring additional indebtedness; creating liens on property or assets; making certain loans or investments; selling or disposing of assets; paying certain dividends and other restricted payments; dissolving, consolidating or merging; entering into certain transactions with affiliates; entering into sale or leaseback transactions; restricting subsidiary distributions; and limiting QVC’s consolidated leverage ratio, and the Borrowers’ Combined Consolidated Leverage Ratio. During the six months ended June 30, 2021, Zulily borrowed $77 million under the Fourth Amended and Restated Credit Agreement, and the interest rate was 1.6% at June 30, 2021. Availability under the Fourth Amended and Restated Credit Agreement at June 30, 2021 was $2,851 million, including the portion available under the $400 million tranche that Zulily may also borrow on. Exchangeable Senior Debentures The Company has elected to account for its exchangeable senior debentures using the fair value option. Accordingly, changes in the fair value of these instruments are recognized as unrealized gains (losses) in the statements of operations. See note 4 for information related to unrealized gains (losses) on debt measured at fair value. As of June 30, 2021 the Company’s exchangeable debentures have been classified as current because the Company does not own shares to redeem the debentures or they are currently redeemable. The Company reviews the terms of the debentures on a quarterly basis to determine whether a triggering event has occurred to require current classification of the exchangeables upon a call event. Although we do not own shares underlying certain of the exchangeable senior debentures, the Company has entered into certain derivative transactions in order to hedge against upward price fluctuations on certain shares. Such derivative instruments are recognized in the other current assets line item in the condensed consolidated balance sheets, and are marked to fair value each reporting period. The changes in fair value are recognized in the realized and unrealized gains (losses) on financial instruments, net line item in the condensed statement of operations. Debt Covenants Qurate Retail and its subsidiaries are in compliance with all debt covenants at June 30, 2021. Fair Value of Debt Qurate Retail estimates the fair value of its debt based on the quoted market prices for the same or similar issues or on the current rate offered to Qurate Retail for debt of the same remaining maturities (Level 2). The QVC 6.375% Senior Secured Notes due 2067 (“2067 Notes”) and the QVC 6.25% Senior Secured Notes Due 2068 (“2068 Notes”) are traded on the New York Stock Exchange, and the Company considers them to be actively traded. As such, the 2067 Notes and 2068 Notes are valued based on their trading price (Level 1). The fair value of Qurate Retail's publicly traded debt securities that are not reported at fair value in the accompanying condensed consolidated balance sheet at June 30, 2021 are as follows (amounts in millions): Senior debentures $ 908 QVC senior secured notes $ 4,708 Due to the variable rate nature, Qurate Retail believes that the carrying amount of its other debt, not discussed above, approximated fair value at June 30, 2021. |
Preferred Stock
Preferred Stock | 6 Months Ended |
Jun. 30, 2021 | |
Preferred Stock. | |
Preferred Stock | (7) Preferred Stock On September 14, 2020, Qurate Retail issued its 8.0% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share (the “Preferred Stock”). There were 13,500,000 shares of Preferred Stock authorized and 12,619,560 shares of Preferred Stock issued and outstanding Priority. The Preferred Stock ranks senior to the shares of common stock of Qurate Retail, with respect to dividend rights, rights of redemption and rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of Qurate Retail’s affairs. Shares of Preferred Stock are not convertible into shares of common stock of Qurate Retail. Dividends. The ability of Qurate Retail to declare or pay any dividend on, or purchase, redeem, or otherwise acquire, any of its common stock or any other stock ranking on parity with the Preferred Stock will be subject to restrictions if Qurate Retail does not pay all dividends and all redemption payments on the Preferred Stock, subject to certain exceptions as set forth in the Certificate of Designations. Distributions upon Liquidation, Dissolution or Winding Up. Upon Qurate Retail’s liquidation, winding-up or dissolution, each holder of shares of the Preferred Stock will be entitled to receive, before any distribution is made to the holders of Qurate Retail common stock, an amount equal to the liquidation price plus all unpaid dividends (whether or not declared) accrued from the immediately preceding dividend payment date, subject to the prior payment of liabilities owed to Qurate Retail’s creditors and the preferential amounts to which any stock senior to the Preferred Stock is entitled. The Preferred Stock has a liquidation price equal to the sum of (i) $100 , plus (ii) all accrued and unpaid dividends (whether or not declared) that have been added to the liquidation price. Mandatory and Optional Redemption. The Preferred Stock is subject to mandatory redemption on March 15, 2031 at the liquidation price plus all unpaid dividends (whether or not declared) accrued from the most recent dividend payment date . On or after the fifth anniversary of September 14, 2020 (the “Original Issue Date”), Qurate Retail may redeem all or a portion of the outstanding shares of Preferred Stock, at the liquidation price plus all unpaid dividends (whether or not declared) accrued from the most recent dividend payment date plus, if the redemption is (x) on or after the fifth anniversary of the Original Issue Date but prior to its sixth anniversary, 4.00% of the liquidation price, (y) on or after the sixth anniversary of the Original Issue Date but prior to its seventh anniversary, 2.00% of the liquidation price and (z) on or after the seventh anniversary of the Original Issue Date, zero . Both mandatory and optional redemptions must be paid in cash. Voting Power. Holders of the Preferred Stock will not have any voting rights or powers, except as specified in the Certificate of Designations or as required by Delaware law. Preferred Stock Directors . So long as the aggregate liquidation price of the outstanding shares of Preferred Stock exceeds 25% of the aggregate liquidation price of the shares of Preferred Stock issued on the Original Issue Date, holders of Preferred Stock will have certain director election rights as described in the Certificate of Designations whenever dividends on shares of Preferred Stock have not been declared and paid for two consecutive dividend periods and whenever Qurate Retail fails to pay the applicable redemption price in full with respect to any redemption of the Preferred Stock or fails to make a payment with respect to the Preferred Stock in connection with a liquidation or Extraordinary Transactions (as defined in the Certificate of Designations). Recognition . As the Preferred Stock is subject to unconditional mandatory redemption in cash and was issued in the form of a share, the Company concluded the Preferred Stock was a mandatorily redeemable financial instrument and should be classified as a liability in the condensed consolidated balance sheets. The Preferred Stock was initially recorded at its fair value, which was determined to be the liquidation preference of $100 per share. Given the liability classification of the Preferred Stock, all dividends accrued will be classified as interest expense in the condensed consolidated statements of operations. |
Related Party Transactions with
Related Party Transactions with Officers and Directors | 6 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions with Officers and Directors | |
Related Party Transactions with Officers and Directors | (8) Related Party Transactions with Officers and Directors Malone Stock Exchange and Maffei Arrangements On May 18, 2021, Gregory B. Maffei, the Chairman of the Board and a director of the Company, delivered a written offer (the “Offer”) to John C. Malone, a director of Qurate Retail, to acquire all of the outstanding shares of QRTEB beneficially owned by Mr. Malone, his wife Leslie Malone and certain trusts for the benefit of Mr. Malone, Mrs. Malone and/or their children (the “Malone Group,” and such shares, the “Subject Shares”) at a per share price of $14.00 payable in cash, securities or such other form of consideration as to which Mr. Maffei and Mr. Malone might mutually agree. The transfer by the Malone Group of the Subject Shares was subject to the terms of that certain call agreement, dated February 9, 1998 (the “Call Agreement”), among Qurate Retail, as successor-in-interest to the assignee of Tele-Communications, Inc., a Delaware corporation, Mr. Malone and Mrs. Malone, which provided Qurate Retail with the right to acquire all, but not less than all, of the Subject Shares at a per share price equal to the lower of (x) the Offer price or (y) 110% of the average closing prices of a share of QRTEA for the 30 consecutive trading days ending on May 17, 2021 (with the price calculated pursuant to clause (y) equal to $13.62 per share (the “Call Price”)) (the “Call Right”). As previously disclosed, on May 18, 2021, Mr. Malone provided written notice to Qurate Retail of his desire to accept the Offer, subject to the approval by the Board of Directors of the Company of the transactions contemplated thereby for purposes of Section 203 of the General Corporation Law of the State of Delaware, pursuant to the terms of the Call Agreement. However, in the event the Company determined to exercise the Call Right, Mr. Malone indicated a preference for the payment of the per share price in the form of shares of QRTEA such that he would continue to hold a substantial investment in the Company. On June 2, 2021, Qurate Retail delivered written notice to Mr. Malone to exercise the Call Right and to pay the per share Call Price required by the Call Agreement in shares of QRTEA. On June 3, 2021, the Company and the Malone Group entered into a Stock Exchange Agreement (the “Malone Stock Exchange Agreement”) to effect the closing of the Call Right exercise, pursuant to which the Malone Group transferred to the Company an aggregate of 27,655,931 shares of QRTEB, and in exchange (the “Malone Exchange”), Qurate Retail issued to the Malone Group an aggregate of 30,421,522 shares of QRTEA. Under the terms of the Call Agreement, the aggregate Call Price converts into an equivalent ratio of 1.1 shares of QRTEA for each share of QRTEB with the aggregate number of shares of QRTEA issued to each member of the Malone Group rounded down to the nearest whole share. On June 3, 2021, the Company, LMC and Mr. Maffei entered into a Waiver Letter and Amendment of Employment Agreement (the “Letter Agreement”), pursuant to which, among other things, Mr. Maffei (x) waived his rights to assert that Qurate Retail’s exercise of the Call Right, the transactions to be consummated pursuant to the Malone Stock Exchange Agreement or the resulting reduction in the Malone Group’s voting power with respect to Qurate Retail (collectively, the “Specified Events”) would constitute a “Change in Control” or “Good Reason,” in each case, as defined in the Executive Employment Agreement, dated as of December 13, 2019, by and between LMC and Mr. Maffei (the “Employment Agreement”), with respect to Qurate Retail, and agreed not to terminate his employment with Qurate Retail for “Good Reason” in connection with or arising out of the Option Cancellation (as defined below) or any of the Specified Events, and (y) consented to the cancellation (the “Option Cancellation”) of stock option awards to purchase shares of QRTEB that had been granted to Mr. Maffei on each of December 24, 2014, and March 31, 2015 for 1,137,228 shares at an exercise price of $16.97 per share, and 197,783 shares at an exercise price of $16.71 per share, respectively. In consideration for the foregoing, pursuant to the Letter Agreement, (i) Mr. Maffei received a grant of 1,101,321 restricted shares of QRTEB that are scheduled to vest, subject to Mr. Maffei’s continued employment with the Company, in two equal tranches on December 10, 2024 and the fifth anniversary of the grant date, subject to earlier vesting under certain circumstances, and (ii) Qurate Retail agreed that the portion of the Annual Equity Awards (as defined in the Employment Agreement) to be granted by Qurate Retail to Mr. Maffei pursuant to Section 4.11 of the Employment Agreement for calendar years 2022, 2023 and 2024 shall be granted with respect to the QRTEB. Exchange and Cap. CEO Employment Agreement On July 12, 2021, the compensation committee of the board of directors of Qurate Retail approved the Company’s entry into an employment agreement with David Rawlinson II, effective July 12, 2021. Effective August 1, 2021, Mr. Rawlinson will serve as President and Chief Executive Officer-Elect of Qurate Retail, with Mike George (current President and Chief Executive Officer) continuing as Chief Executive Officer, and effective October 1, Mr. Rawlinson will serve as President and Chief Executive Officer of Qurate Retail, with Mr. George assuming the role of Senior Advisor. Mr. George will resign from the board of directors effective January 1, 2022, at which time Mr. Rawlinson is expected to join the Board. With respect to his roles at Qurate Retail and QVC, Mr. George will step down as President effective August 1, 2021 and as Chief Executive Officer effective October 1, 2021. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies. | |
Commitments and Contingencies | (9) Commitments and Contingencies Litigation The Company has contingent liabilities related to legal and tax proceedings and other matters arising in the ordinary course of business. Although it is reasonably possible Qurate Retail may incur losses upon conclusion of such matters, an estimate of any loss or range of loss cannot be made. In the opinion of management, it is expected that amounts, if any, which may be required to satisfy such contingencies will not be material in relation to the accompanying condensed consolidated financial statements. |
Information About Qurate Retail
Information About Qurate Retail's Operating Segments | 6 Months Ended |
Jun. 30, 2021 | |
Information About Qurate Retail's Operating Segments | |
Information About Qurate Retail's Operating Segments | (10) Information About Qurate Retail's Operating Segments Qurate Retail, through its ownership interests in subsidiaries and other companies, is primarily engaged in the video and online commerce industries. Qurate Retail identifies its reportable segments as (A) those operating segments that represent 10% or more of its consolidated annual revenue, annual Adjusted OIBDA (as defined below) or total assets and (B) those equity method affiliates whose share of earnings represent 10% or more of Qurate Retail's annual pre-tax earnings. Qurate Retail evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as revenue, Adjusted OIBDA, gross margin, average sales price per unit and revenue or sales per customer equivalent. In addition, Qurate Retail reviews nonfinancial measures such as unique website visitors, number of units shipped, conversion rates and active customers, as appropriate. For the six months ended June 30, 2021, Qurate Retail has identified the following operating segments as its reportable segments: ● QxH - QVC U.S. and HSN market and sell a wide variety of consumer products in the United States, primarily by means of their televised shopping programs and via the Internet through their websites and mobile applications. ● QVC International – QVC International markets and sells a wide variety of consumer products in several foreign countries, primarily by means of its televised shopping programs and via the Internet through its international websites and mobile applications. ● Zulily – Zulily markets and sells a wide variety of consumer products in the United States and several foreign countries through flash sales events, primarily through its app, mobile and desktop experiences. Qurate Retail's operating segments are strategic business units that offer different products and services. They are managed separately because each segment requires different technologies, distribution channels and marketing strategies. The accounting policies of the segments are the same as those described in the Company's Summary of Significant Accounting Policies in the 2020 10-K. Performance Measures Disaggregated revenue by segment and product category consisted of the following: Three months ended June 30, 2021 QxH QVC Int'l Zulily Corp and other Total in millions Home $ 775 309 120 284 1,488 Apparel 359 127 162 43 691 Beauty 294 193 16 — 503 Accessories 272 71 77 — 420 Electronics 167 32 3 — 202 Jewelry 76 54 12 — 142 Other revenue 46 5 7 — 58 Total Revenue $ 1,989 791 397 327 3,504 Six months ended June 30, 2021 QxH QVC Int'l Zulily Corp and other Total in millions Home $ 1,550 633 243 490 2,916 Apparel 649 253 297 87 1,286 Beauty 580 357 35 — 972 Accessories 510 137 152 — 799 Electronics 368 65 7 — 440 Jewelry 174 114 26 — 314 Other revenue 94 6 14 — 114 Total Revenue $ 3,925 1,565 774 577 6,841 Three months ended June 30, 2020 QxH QVC Int'l Zulily Corp and other Total in millions Home $ 803 286 130 242 1,461 Apparel 302 100 144 35 581 Beauty 325 186 17 — 528 Accessories 245 63 111 — 419 Electronics 217 31 4 — 252 Jewelry 82 47 9 — 138 Other revenue 36 — 7 — 43 Total Revenue $ 2,010 713 422 277 3,422 Six months ended June 30, 2020 QxH QVC Int'l Zulily Corp and other Total in millions Home $ 1,484 543 211 383 2,621 Apparel 601 201 264 71 1,137 Beauty 613 331 33 — 977 Accessories 457 121 187 — 765 Electronics 391 53 7 — 451 Jewelry 180 96 22 — 298 Other revenue 76 3 14 — 93 Total Revenue $ 3,802 1,348 738 454 6,342 For segment reporting purposes, Qurate Retail defines Adjusted OIBDA as revenue less cost of sales, operating expenses, and selling, general and administrative expenses excluding all stock-based compensation and transaction related costs. Qurate Retail believes this measure is an important indicator of the operational strength and performance of its businesses by identifying those items that are not directly a reflection of each business’ performance or indicative of ongoing business trends. In addition, this measure allows management to view operating results and perform analytical comparisons and benchmarking between businesses and identify strategies to improve performance. This measure of performance excludes depreciation and amortization, stock-based compensation, certain acquisition accounting adjustments, separately reported litigation settlements, transaction related costs (including restructuring, integration, and advisory fees), and impairment charges that are included in the measurement of operating income pursuant to GAAP. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, net income, cash flows provided by operating activities and other measures of financial performance prepared in accordance with GAAP. Qurate Retail generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current prices. Adjusted OIBDA is summarized as follows: Three months ended June 30, Six months ended June 30, 2021 2020 2021 2020 amounts in millions QxH $ 391 388 740 681 QVC International 144 119 287 216 Zulily 9 45 15 47 Corporate and other 37 13 56 5 Consolidated Qurate Retail $ 581 565 1,098 949 Other Information June 30, 2021 Total assets Capital expenditures amounts in millions QxH $ 12,243 81 QVC International 2,315 13 Zulily 1,036 11 Corporate and other 1,312 5 Consolidated Qurate Retail $ 16,906 110 The following table provides a reconciliation of Adjusted OIBDA to Operating income (loss) and Earnings (loss) before income taxes: Three months ended Six months ended June 30, June 30, 2021 2020 2021 2020 amounts in millions Adjusted OIBDA $ 581 565 1,098 949 Stock-based compensation (19) (16) (35) (27) Depreciation and amortization (129) (144) (257) (286) Operating income (loss) $ 433 405 806 636 Interest expense (118) (95) (235) (192) Share of earnings (loss) of affiliates, net (22) (28) (54) (64) Realized and unrealized gains (losses) on financial instruments, net 19 23 60 (115) Other, net (23) (12) (10) 1 Earnings (loss) before income taxes $ 289 293 567 266 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Schedule of number and weighted average GDFV of option granted | Six months ended June 30, 2021 Options Granted (000's) Weighted Average GDFV Series A Qurate Retail common stock, QVC and HSN employees (1) 895 $ 6.75 Series A Qurate Retail common stock, Zulily employees (1) 79 $ 6.74 Series A Qurate Retail common stock, Qurate Retail employees (2) 63 $ 6.18 (1) Grants vest semi-annually over four years . (2) Grants vest between two and three years . |
Common Class A | |
Schedule of number, weighted average exercise price ("WAEP"), Weighted average remaining life and aggregate intrinsic value of the awards | Weighted Aggregate average intrinsic Series A remaining value (000's) WAEP life (millions) Outstanding at January 1, 2021 40,553 $ 10.61 Granted 1,037 $ 12.92 Exercised (1,919) $ 6.26 Forfeited/Cancelled (2,683) $ 12.89 Outstanding at June 30, 2021 36,988 $ 10.73 3.8 years $ 129 Exercisable at June 30, 2021 21,354 $ 14.07 2.6 years $ 19 |
Common Class B | |
Schedule of number, weighted average exercise price ("WAEP"), Weighted average remaining life and aggregate intrinsic value of the awards | Weighted Aggregate average intrinsic Series B remaining value (000's) WAEP life (millions) Outstanding at January 1, 2021 3,243 $ 15.39 Granted — $ — Exercised — $ — Forfeited/Cancelled (1,335) $ 16.93 Outstanding at June 30, 2021 1,908 $ 14.31 2.3 years $ — Exercisable at June 30, 2021 1,908 $ 14.31 2.3 years $ — |
Earnings (Loss) Per Common Sh_2
Earnings (Loss) Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Earnings (Loss) Per Common Share | |
Schedule of weighted average number of shares outstanding | Qurate Retail Common Stock Three months ended Six months ended June 30, June 30, 2021 2020 2021 2020 number of shares in millions Basic WASO 410 417 410 416 Potentially dilutive shares 13 1 13 2 Diluted WASO 423 418 423 418 |
Assets and Liabilities Measur_2
Assets and Liabilities Measured at Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Assets and Liabilities Measured at Fair Value | |
Schedule of assets and liabilities measured at fair value | Fair Value Measurements at Fair Value Measurements at June 30, 2021 December 31, 2020 Quoted Quoted prices prices in active Significant in active Significant markets for other markets for other identical observable identical observable assets inputs assets inputs Description Total (Level 1) (Level 2) Total (Level 1) (Level 2) amounts in millions Cash equivalents $ 383 383 — 290 290 — Indemnification asset $ 385 — 385 345 — 345 Financial instrument asset $ 107 — 107 23 — 23 Debt $ 1,922 — 1,922 1,750 — 1,750 |
Summary of realized and unrealized gains (losses) on financial instruments | Three months ended Six months ended June 30, June 30, 2021 2020 2021 2020 amounts in millions Equity securities 43 — 50 (4) Exchangeable senior debentures (179) (30) (133) (80) Indemnification asset 93 35 41 13 Other financial instruments 62 18 102 (44) $ 19 23 60 (115) |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Intangible Assets | |
Schedule of changes in the carrying amount of goodwill | Corporate and QxH QVC Int'l Zulily Other Total amounts in millions Balance at January 1, 2021 $ 5,228 921 477 12 6,638 Foreign currency translation adjustments — (31) — — (31) Balance at June 30, 2021 $ 5,228 890 477 12 6,607 |
Schedule of amortization expense for the next five years | Based on its amortizable intangible assets as of June 30, 2021, Qurate Retail expects that amortization expense will be as follows for the next five years (amounts in millions): Remainder of 2021 $ 198 2022 $ 287 2023 $ 158 2024 $ 91 2025 $ 51 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Long-Term Debt | |
Schedule of debt summarized | Outstanding principal at Carrying value June 30, 2021 June 30, 2021 December 31, 2020 amounts in millions Corporate level debentures 8.5% Senior Debentures due 2029 $ 287 285 285 8.25% Senior Debentures due 2030 505 502 502 4% Exchangeable Senior Debentures due 2029 429 361 362 3.75% Exchangeable Senior Debentures due 2030 432 349 346 1.75% Exchangeable Senior Debentures due 2046 332 705 649 Subsidiary level notes and facilities QVC 4.375% Senior Secured Notes due 2023 750 750 750 QVC 4.85% Senior Secured Notes due 2024 600 600 600 QVC 4.45% Senior Secured Notes due 2025 600 599 599 QVC 4.75% Senior Secured Notes due 2027 575 575 575 QVC 4.375% Senior Secured Notes due 2028 500 500 500 QVC 5.45% Senior Secured Notes due 2034 400 399 399 QVC 5.95% Senior Secured Notes due 2043 300 300 300 QVC 6.375% Senior Secured Notes due 2067 225 225 225 QVC 6.25% Senior Secured Notes due 2068 500 500 500 3.5% Exchangeable Senior Debentures due 2031 214 507 393 QVC Bank Credit Facilities 77 77 — Deferred loan costs — (46) (49) Total consolidated Qurate Retail debt $ 6,726 7,188 6,936 Less current classification (1,922) (1,750) Total long-term debt $ 5,266 5,186 |
Schedule of fair value of debt securities that are not reported at fair value condensed consolidated balance sheet | The fair value of Qurate Retail's publicly traded debt securities that are not reported at fair value in the accompanying condensed consolidated balance sheet at June 30, 2021 are as follows (amounts in millions): Senior debentures $ 908 QVC senior secured notes $ 4,708 |
Information About Qurate Reta_2
Information About Qurate Retail's Operating Segments (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Information About Qurate Retail's Operating Segments | |
Schedule of disaggregation of revenue | Three months ended June 30, 2021 QxH QVC Int'l Zulily Corp and other Total in millions Home $ 775 309 120 284 1,488 Apparel 359 127 162 43 691 Beauty 294 193 16 — 503 Accessories 272 71 77 — 420 Electronics 167 32 3 — 202 Jewelry 76 54 12 — 142 Other revenue 46 5 7 — 58 Total Revenue $ 1,989 791 397 327 3,504 Six months ended June 30, 2021 QxH QVC Int'l Zulily Corp and other Total in millions Home $ 1,550 633 243 490 2,916 Apparel 649 253 297 87 1,286 Beauty 580 357 35 — 972 Accessories 510 137 152 — 799 Electronics 368 65 7 — 440 Jewelry 174 114 26 — 314 Other revenue 94 6 14 — 114 Total Revenue $ 3,925 1,565 774 577 6,841 Three months ended June 30, 2020 QxH QVC Int'l Zulily Corp and other Total in millions Home $ 803 286 130 242 1,461 Apparel 302 100 144 35 581 Beauty 325 186 17 — 528 Accessories 245 63 111 — 419 Electronics 217 31 4 — 252 Jewelry 82 47 9 — 138 Other revenue 36 — 7 — 43 Total Revenue $ 2,010 713 422 277 3,422 Six months ended June 30, 2020 QxH QVC Int'l Zulily Corp and other Total in millions Home $ 1,484 543 211 383 2,621 Apparel 601 201 264 71 1,137 Beauty 613 331 33 — 977 Accessories 457 121 187 — 765 Electronics 391 53 7 — 451 Jewelry 180 96 22 — 298 Other revenue 76 3 14 — 93 Total Revenue $ 3,802 1,348 738 454 6,342 |
Performance Measures | Three months ended June 30, Six months ended June 30, 2021 2020 2021 2020 amounts in millions QxH $ 391 388 740 681 QVC International 144 119 287 216 Zulily 9 45 15 47 Corporate and other 37 13 56 5 Consolidated Qurate Retail $ 581 565 1,098 949 |
Other Information By Segment | June 30, 2021 Total assets Capital expenditures amounts in millions QxH $ 12,243 81 QVC International 2,315 13 Zulily 1,036 11 Corporate and other 1,312 5 Consolidated Qurate Retail $ 16,906 110 |
Reconciliation Of Segment Adjusted OIBDA To Operating income (loss) and Earnings (Loss) From Continuing Operations Before Income Taxes | Three months ended Six months ended June 30, June 30, 2021 2020 2021 2020 amounts in millions Adjusted OIBDA $ 581 565 1,098 949 Stock-based compensation (19) (16) (35) (27) Depreciation and amortization (129) (144) (257) (286) Operating income (loss) $ 433 405 806 636 Interest expense (118) (95) (235) (192) Share of earnings (loss) of affiliates, net (22) (28) (54) (64) Realized and unrealized gains (losses) on financial instruments, net 19 23 60 (115) Other, net (23) (12) (10) 1 Earnings (loss) before income taxes $ 289 293 567 266 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Basic of presentation | |||||
Amount Of Deficit Reclassified To Retained Earnings | $ 166 | $ 166 | |||
Liberty Media Corporation | |||||
Basic of presentation | |||||
Related Party Transaction, Amounts of Transaction | 3 | $ 2 | $ 6 | $ 5 | |
Liberty Media Corporation | CEO | |||||
Basic of presentation | |||||
CEO compensation allocation percentage | 17.00% | ||||
Liberty Media Corporation and Liberty Broadband Corporation | |||||
Basic of presentation | |||||
Tax sharing payable | $ 119 | $ 119 | $ 129 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Stock-based compensation | ||||
Share-based Compensation Expense | $ 19 | $ 16 | $ 35 | $ 27 |
Dividend rate | 0.00% | |||
Common Class A | ||||
Stock-based compensation | ||||
Options Granted | 1,037 | |||
Common Class A | Restricted Stock Units (RSUs) | ||||
Stock-based compensation | ||||
RSUs/RSAs GDFV | $ 9.77 | $ 9.77 | ||
Nonvested awards, number | 13,000 | 13,000 | ||
Common Class A | QVC, HSN and Zulily Employees | ||||
Stock-based compensation | ||||
Award vesting period | 4 years | |||
Common Class A | QVC and HSN employees | ||||
Stock-based compensation | ||||
Options Granted | 895 | |||
Weighted Average GDFV | $ 6.75 | |||
Common Class A | Zulily Employees | ||||
Stock-based compensation | ||||
Options Granted | 79 | |||
Weighted Average GDFV | $ 6.74 | |||
Common Class A | Qurate Retail Employees and Directors | ||||
Stock-based compensation | ||||
Options Granted | 63 | |||
Weighted Average GDFV | $ 6.18 | |||
Common Class A | Qurate Retail Employees and Directors | Restricted Stock Units (RSUs) | ||||
Stock-based compensation | ||||
Award vesting period | 4 years | |||
RSUs/RSAs granted | 4,700 | |||
RSUs/RSAs GDFV | $ 12.93 | $ 12.93 | ||
Common Class A | Qurate Retail Employees and Directors | Minimum | ||||
Stock-based compensation | ||||
Award vesting period | 2 years | |||
Common Class A | Qurate Retail Employees and Directors | Maximum | ||||
Stock-based compensation | ||||
Award vesting period | 3 years | |||
Common Class A | Board of Directors Chairman | Performance Shares | ||||
Stock-based compensation | ||||
Award vesting period | 1 year | |||
RSUs/RSAs granted | 229 | |||
RSUs/RSAs GDFV | 12.90 | $ 12.90 | ||
Common Class A | CEO | Restricted Stock Units (RSUs) | ||||
Stock-based compensation | ||||
Award vesting period | 1 year | |||
Common Class A | CEO | Performance Shares | ||||
Stock-based compensation | ||||
RSUs/RSAs granted | 423 | |||
RSUs/RSAs GDFV | 12.90 | $ 12.90 | ||
Common Class A | CEO | Time-based RSUs | ||||
Stock-based compensation | ||||
RSUs/RSAs granted | 423 | |||
RSUs/RSAs GDFV | 12.90 | $ 12.90 | ||
Common Class B | Restricted Stock | ||||
Stock-based compensation | ||||
RSUs/RSAs GDFV | $ 13.65 | $ 13.65 | ||
Nonvested awards, number | 1,100 | 1,100 | ||
Common Class B | Board of Directors Chairman | Time-Based RSAs | ||||
Stock-based compensation | ||||
RSUs/RSAs granted | 1,100 | |||
RSUs/RSAs GDFV | $ 13.65 | $ 13.65 |
Stock-Based Compensations - Gra
Stock-Based Compensations - Grants (Details) $ / shares in Units, shares in Thousands, $ in Millions | 6 Months Ended |
Jun. 30, 2021USD ($)$ / sharesshares | |
Common Class A | |
Number of options | |
Outstanding at beginning of period | shares | 40,553 |
Granted | shares | 1,037 |
Exercised | shares | (1,919) |
Forfeited/Cancelled | shares | (2,683) |
Outstanding at end of period | shares | 36,988 |
Exercisable at end of period | shares | 21,354 |
WAEP | |
Outstanding at beginning of period | $ / shares | $ 10.61 |
Exercise price | $ / shares | 12.92 |
Exercised | $ / shares | 6.26 |
Forfeited/Cancelled | $ / shares | 12.89 |
Outstanding at end of period | $ / shares | 10.73 |
Exercisable at end of period | $ / shares | $ 14.07 |
Additional disclosures | |
Weighted average remaining life - options outstanding | 3 years 9 months 18 days |
Weighted average remaining life - options exercisable | 2 years 7 months 6 days |
Aggregate intrinsic value of options outstanding | $ | $ 129 |
Aggregate intrinsic value of options exercisable | $ | $ 19 |
Common Class B | |
Number of options | |
Outstanding at beginning of period | shares | 3,243 |
Forfeited/Cancelled | shares | (1,335) |
Outstanding at end of period | shares | 1,908 |
Exercisable at end of period | shares | 1,908 |
WAEP | |
Outstanding at beginning of period | $ / shares | $ 15.39 |
Forfeited/Cancelled | $ / shares | 16.93 |
Outstanding at end of period | $ / shares | 14.31 |
Exercisable at end of period | $ / shares | $ 14.31 |
Additional disclosures | |
Weighted average remaining life - options outstanding | 2 years 3 months 18 days |
Weighted average remaining life - options exercisable | 2 years 3 months 18 days |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) $ / shares in Units, shares in Millions, $ in Millions | 6 Months Ended |
Jun. 30, 2021USD ($)$ / sharesshares | |
Stock-based compensation | |
Total unrecognized compensation cost related to unvested Awards | $ | $ 139 |
Weighted average period of recognition related to unvested equity awards (in years) | 2 years 3 months 18 days |
Common Class A | |
Stock-based compensation | |
Shares reserved for future issuance upon exercise of stock options | 37 |
Common Class B | |
Stock-based compensation | |
Shares reserved for future issuance upon exercise of stock options | 1.9 |
Restricted Stock Units (RSUs) | Common Class A | |
Stock-based compensation | |
RSUs Outstanding | 13 |
RSUs/RSAs GDFV | $ / shares | $ 9.77 |
Restricted Stock | Common Class B | |
Stock-based compensation | |
RSUs Outstanding | 1.1 |
RSUs/RSAs GDFV | $ / shares | $ 13.65 |
Qurate Retail Employees and Directors | Restricted Stock Units (RSUs) | Common Class A | |
Stock-based compensation | |
RSUs/RSAs GDFV | $ / shares | $ 12.93 |
Earnings (Loss) Per Common Sh_3
Earnings (Loss) Per Common Share - Earnings Per Share Basic and Diluted (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Earnings (Loss) Per Common Share | ||||
Antidilutive securities | 22 | 22 | 22 | 22 |
Basic WASO | 410 | 417 | 410 | 416 |
Potentially dilutive shares | 13 | 1 | 13 | 2 |
Diluted WASO | 423 | 418 | 423 | 418 |
Assets and Liabilities Measur_3
Assets and Liabilities Measured at Fair Value - Assets And Liabilities Measured At Fair Value On A Recurring Basis (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Recurring | ||
Assets and liabilities measured at fair value | ||
Cash equivalents | $ 383 | $ 290 |
Indemnification asset | 385 | 345 |
Financial instrument assets | 107 | 23 |
Debt | 1,922 | 1,750 |
Recurring | Level 1 | ||
Assets and liabilities measured at fair value | ||
Cash equivalents | 383 | 290 |
Recurring | Level 2 | ||
Assets and liabilities measured at fair value | ||
Indemnification asset | 385 | 345 |
Financial instrument assets | 107 | 23 |
Debt | $ 1,922 | $ 1,750 |
1.75% Exchangeable Senior Debentures due 2046 | ||
Assets and liabilities measured at fair value | ||
Interest rate (as a percent) | 1.75% |
Assets and Liabilities Measur_4
Assets and Liabilities Measured at Fair Value - Realized and Unrealized Gains (Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Realized and unrealized gains (losses) on financial instruments | ||||
Realized and unrealized gains (losses) on financial instruments | $ 19 | $ 23 | $ 60 | $ (115) |
Change in fair value of exchangeable senior debentures realized gain | 24 | (90) | (44) | 129 |
Cumulative amount of gain in change in fair value | 149 | 149 | ||
Equity securities | ||||
Realized and unrealized gains (losses) on financial instruments | ||||
Realized and unrealized gains (losses) on financial instruments | 43 | 50 | (4) | |
Exchangeable senior debentures | ||||
Realized and unrealized gains (losses) on financial instruments | ||||
Realized and unrealized gains (losses) on financial instruments | (179) | (30) | (133) | (80) |
Indemnification asset | ||||
Realized and unrealized gains (losses) on financial instruments | ||||
Realized and unrealized gains (losses) on financial instruments | 93 | 35 | 41 | 13 |
Other Financial Instruments | ||||
Realized and unrealized gains (losses) on financial instruments | ||||
Realized and unrealized gains (losses) on financial instruments | $ 62 | $ 18 | $ 102 | $ (44) |
Intangible Assets - Changes In
Intangible Assets - Changes In The Carrying Amount Of Goodwill (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Changes in the carrying amount of goodwill | |
Balance, beginning of the year | $ 6,638 |
Foreign currency translation adjustments | (31) |
Balance, end of the year | 6,607 |
Corporate and Other | |
Changes in the carrying amount of goodwill | |
Balance, beginning of the year | 12 |
Balance, end of the year | 12 |
QxH | |
Changes in the carrying amount of goodwill | |
Balance, beginning of the year | 5,228 |
Balance, end of the year | 5,228 |
QVC International | |
Changes in the carrying amount of goodwill | |
Balance, beginning of the year | 921 |
Foreign currency translation adjustments | (31) |
Balance, end of the year | 890 |
Zulily | |
Changes in the carrying amount of goodwill | |
Balance, beginning of the year | 477 |
Balance, end of the year | $ 477 |
Intangible Assets - Amortizatio
Intangible Assets - Amortization Expense For The Next Five Fiscal Years (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Intangible Assets | ||||
Amortization expense for intangible assets | $ 85 | $ 94 | $ 167 | $ 185 |
Amortization expense for the next five years | ||||
Remainder of 2021 | 198 | 198 | ||
2022 | 287 | 287 | ||
2023 | 158 | 158 | ||
2024 | 91 | 91 | ||
2025 | $ 51 | $ 51 |
Long-Term Debt - Debt Table (De
Long-Term Debt - Debt Table (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Long-term debt | ||
Outstanding principal | $ 6,726 | |
Carrying value | 7,188 | $ 6,936 |
Deferred loan costs | (46) | (49) |
Total consolidated debt | 7,188 | 6,936 |
Less current classification | (1,922) | (1,750) |
Total long-term debt | 5,266 | 5,186 |
8.5% Senior Debentures Due 2029 | ||
Long-term debt | ||
Outstanding principal | 287 | |
Carrying value | 285 | 285 |
Total consolidated debt | $ 285 | 285 |
Debt instrument interest rate | 8.50% | |
8.25% Senior Debentures Due 2030 | ||
Long-term debt | ||
Outstanding principal | $ 505 | |
Carrying value | 502 | 502 |
Total consolidated debt | $ 502 | 502 |
Debt instrument interest rate | 8.25% | |
4% Exchangeable Senior Debentures Due 2029 | ||
Long-term debt | ||
Outstanding principal | $ 429 | |
Carrying value | 361 | 362 |
Total consolidated debt | $ 361 | 362 |
Debt instrument interest rate | 4.00% | |
3.75% Exchangeable Senior Debentures Due 2030 | ||
Long-term debt | ||
Outstanding principal | $ 432 | |
Carrying value | 349 | 346 |
Total consolidated debt | $ 349 | 346 |
Debt instrument interest rate | 3.75% | |
1.75% Exchangeable Senior Debentures due 2046 | ||
Long-term debt | ||
Outstanding principal | $ 332 | |
Carrying value | 705 | 649 |
Total consolidated debt | $ 705 | 649 |
Debt instrument interest rate | 1.75% | |
QVC | QVC 4.375% Senior Secured Notes due 2023 | ||
Long-term debt | ||
Outstanding principal | $ 750 | |
Carrying value | 750 | 750 |
Total consolidated debt | $ 750 | 750 |
Debt instrument interest rate | 4.375% | |
QVC | QVC 4.85% Senior Secured Notes Due 2024 | ||
Long-term debt | ||
Outstanding principal | $ 600 | |
Carrying value | 600 | 600 |
Total consolidated debt | $ 600 | 600 |
Debt instrument interest rate | 4.85% | |
QVC | QVC 4.45% Senior Secured Notes Due 2025 | ||
Long-term debt | ||
Outstanding principal | $ 600 | |
Carrying value | 599 | 599 |
Total consolidated debt | $ 599 | 599 |
Debt instrument interest rate | 4.45% | |
QVC | QVC 4.75% Senior Secured Notes Due 2027 | ||
Long-term debt | ||
Outstanding principal | $ 575 | |
Carrying value | 575 | 575 |
Total consolidated debt | $ 575 | 575 |
Debt instrument interest rate | 4.75% | |
QVC | QVC 4.375% Senior Secured Notes due 2028 | ||
Long-term debt | ||
Outstanding principal | $ 500 | |
Carrying value | 500 | 500 |
Total consolidated debt | $ 500 | 500 |
Debt instrument interest rate | 4.375% | |
QVC | QVC 5.45% Senior Secured Notes Due 2034 | ||
Long-term debt | ||
Outstanding principal | $ 400 | |
Carrying value | 399 | 399 |
Total consolidated debt | $ 399 | 399 |
Debt instrument interest rate | 5.45% | |
QVC | QVC 5.95% Senior Secured Notes due 2043 | ||
Long-term debt | ||
Outstanding principal | $ 300 | |
Carrying value | 300 | 300 |
Total consolidated debt | $ 300 | 300 |
Debt instrument interest rate | 5.95% | |
QVC | QVC 6.375% Senior Secured Notes Due 2067 | ||
Long-term debt | ||
Outstanding principal | $ 225 | |
Carrying value | 225 | 225 |
Total consolidated debt | $ 225 | 225 |
Debt instrument interest rate | 6.375% | |
QVC | QVC 6.25% Senior Secured Notes Due 2068 | ||
Long-term debt | ||
Outstanding principal | $ 500 | |
Carrying value | 500 | 500 |
Total consolidated debt | $ 500 | 500 |
Debt instrument interest rate | 6.25% | |
QVC | 3.5% Exchangeable Senior Debentures Due 2031 | ||
Long-term debt | ||
Outstanding principal | $ 214 | |
Carrying value | 507 | 393 |
Total consolidated debt | $ 507 | $ 393 |
Debt instrument interest rate | 3.50% | |
QVC | QVC Bank Credit Facilities | ||
Long-term debt | ||
Outstanding principal | $ 77 | |
Carrying value | 77 | |
Total consolidated debt | $ 77 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2018 | |
Long-term debt | ||
Outstanding principal | $ 6,726 | |
QVC | Standby Letters of Credit | ||
Long-term debt | ||
Maximum borrowing capacity | $ 450 | |
QVC | Amendment No. 4 QVC Bank Credit Facility | ||
Long-term debt | ||
Maximum borrowing capacity | 2,950 | |
QVC | Amendment No. 4 QVC Bank Credit Facility | Alternate Base Rate | ||
Long-term debt | ||
Debt Instrument, Description of Variable Rate Basis | alternate base | |
QVC | Amendment No. 4 QVC Bank Credit Facility | Alternate Base Rate | Minimum | ||
Long-term debt | ||
Debt Instrument, Basis Spread on Variable Rate | 0.25% | |
QVC | Amendment No. 4 QVC Bank Credit Facility | Alternate Base Rate | Maximum | ||
Long-term debt | ||
Debt Instrument, Basis Spread on Variable Rate | 0.75% | |
QVC | Amendment No. 4 QVC Bank Credit Facility | LIBOR | ||
Long-term debt | ||
Debt Instrument, Description of Variable Rate Basis | LIBOR | |
QVC | Amendment No. 4 QVC Bank Credit Facility | LIBOR | Minimum | ||
Long-term debt | ||
Debt Instrument, Basis Spread on Variable Rate | 1.25% | |
QVC | Amendment No. 4 QVC Bank Credit Facility | LIBOR | Maximum | ||
Long-term debt | ||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | |
QVC | Uncommitted Incremental Revolving Loan Commitments or Incremental Term Loans | ||
Long-term debt | ||
Maximum borrowing capacity | 1,500 | |
QVC | Portion of Credit Facility Available to QVC or zulily | ||
Long-term debt | ||
Maximum borrowing capacity | 400 | |
QVC | Portion of Credit Facility Available to QVC or zulily | Maximum | ||
Long-term debt | ||
Maximum borrowing capacity | 50 | |
QVC | Portion of Credit Facility Available Only to QVC | ||
Long-term debt | ||
Maximum borrowing capacity | $ 2,550 | |
QVC | QVC Bank Credit Facilities | ||
Long-term debt | ||
Outstanding principal | $ 77 | |
Zulily | Amendment No. 4 QVC Bank Credit Facility | ||
Long-term debt | ||
Remaining borrowing capacity | 2,851 | |
Zulily | Credit Facility Portion Available to Zulily And Letters Of Credit | ||
Long-term debt | ||
Remaining borrowing capacity | 400 | |
Zulily | QVC Bank Credit Facilities | ||
Long-term debt | ||
Outstanding principal | $ 77 | |
Interest rate (as a percent) | 1.60% |
Long-Term Debt - Debt Securitie
Long-Term Debt - Debt Securities That Are Not Reported At Fair Value (Details) $ in Millions | Jun. 30, 2021USD ($) |
Senior Debentures | |
Long-term debt | |
Fair value of debt securities that are not reported at fair value | $ 908 |
QVC Senior Secured Notes | |
Long-term debt | |
Fair value of debt securities that are not reported at fair value | $ 4,708 |
Preferred Stock (Details)
Preferred Stock (Details) - 8.0% Series A Cumulative Redeemable Preferred Stock | Sep. 14, 2020$ / shares | Jun. 30, 2021itemshares |
Preferred Stock | ||
Preferred stock par value | $ / shares | $ 0.01 | |
Preferred stock authorized | 13,500,000 | |
Preferred shares issued | 12,619,560 | |
Preferred shares outstanding | 12,619,560 | |
Preferred Stock, Dividend Rate, Percentage | 8.00% | |
Dividend redemption period | 30 days | |
Liquidation preference per share | $ / shares | $ 100 | |
Minimum liquidation price excess for certain director election rights | 25.00% | |
Number of consecutive dividend periods without dividends that will certain director elections rights | item | 2 | |
On or after the fifth anniversary of the Original Issue Date but prior to its sixth anniversary | ||
Preferred Stock | ||
Redemption price | 4.00% | |
On or after the sixth anniversary of the Original Issue Date but prior to its seventh anniversary | ||
Preferred Stock | ||
Redemption price | 2.00% | |
On or after the seventh anniversary of the Original Issue Date | ||
Preferred Stock | ||
Redemption price | 0.00% |
Related Party Transactions wi_2
Related Party Transactions with Officers and Directors (Details) | Jun. 03, 2021tranche$ / sharesshares | May 18, 2021$ / shares | Jun. 30, 2021$ / sharesshares |
Common Class A | |||
Related Party Transaction [Line Items] | |||
Cancellation | 2,683,000 | ||
WAEP forfeited/cancelled during period | $ / shares | $ 12.89 | ||
Common Class B | |||
Related Party Transaction [Line Items] | |||
Cancellation | 1,335,000 | ||
WAEP forfeited/cancelled during period | $ / shares | $ 16.93 | ||
Malone Maffei Transaction | |||
Related Party Transaction [Line Items] | |||
Cash price payable | $ / shares | $ 14 | ||
Call price | $ / shares | $ 13.62 | ||
Malone Maffei Transaction | Common Class A | |||
Related Party Transaction [Line Items] | |||
Average closing price | 110.00% | ||
Number of consecutive trading days | 30 days | ||
Malone Stock Exchange Agreement | Common Class A | |||
Related Party Transaction [Line Items] | |||
Number of shares issued | 30,421,522 | ||
Call price conversion ratio | 1.1 | ||
Malone Stock Exchange Agreement | Common Class B | |||
Related Party Transaction [Line Items] | |||
Number of shares transferred | 27,655,931 | ||
Maffei Waiver Letter and Amendment of Employment Agreement | Option granted on December 24, 2014 | |||
Related Party Transaction [Line Items] | |||
Cancellation | 1,137,228 | ||
WAEP forfeited/cancelled during period | $ / shares | $ 16.97 | ||
Maffei Waiver Letter and Amendment of Employment Agreement | Option granted on March 31, 2015 | |||
Related Party Transaction [Line Items] | |||
Cancellation | 197,783 | ||
WAEP forfeited/cancelled during period | $ / shares | $ 16.71 | ||
Maffei Waiver Letter and Amendment of Employment Agreement | Common Class B | Restricted Stock | |||
Related Party Transaction [Line Items] | |||
Grants in period | 1,101,321 | ||
Number of equal tranches | tranche | 2 | ||
Maffei Stock Exchange Agreement | |||
Related Party Transaction [Line Items] | |||
Number of shares transferred | 5,378,308 | ||
Period following the vesting of awards | 6 months | ||
Threshold percentage of voting power | 20.00% |
Information About Qurate Reta_3
Information About Qurate Retail's Operating Segments - Revenue Disaggregation (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Segment Reporting Information [Line Items] | ||||
Total revenue, net | $ 3,504 | $ 3,422 | $ 6,841 | $ 6,342 |
Home | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 1,488 | 1,461 | 2,916 | 2,621 |
Apparel | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 691 | 581 | 1,286 | 1,137 |
Beauty | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 503 | 528 | 972 | 977 |
Accessories | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 420 | 419 | 799 | 765 |
Electronics | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 202 | 252 | 440 | 451 |
Jewelry | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 142 | 138 | 314 | 298 |
Other revenue | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 58 | 43 | 114 | 93 |
Operating Segments | QxH | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 1,989 | 2,010 | 3,925 | 3,802 |
Operating Segments | QxH | Home | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 775 | 803 | 1,550 | 1,484 |
Operating Segments | QxH | Apparel | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 359 | 302 | 649 | 601 |
Operating Segments | QxH | Beauty | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 294 | 325 | 580 | 613 |
Operating Segments | QxH | Accessories | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 272 | 245 | 510 | 457 |
Operating Segments | QxH | Electronics | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 167 | 217 | 368 | 391 |
Operating Segments | QxH | Jewelry | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 76 | 82 | 174 | 180 |
Operating Segments | QxH | Other revenue | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 46 | 36 | 94 | 76 |
Operating Segments | QVC International | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 791 | 713 | 1,565 | 1,348 |
Operating Segments | QVC International | Home | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 309 | 286 | 633 | 543 |
Operating Segments | QVC International | Apparel | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 127 | 100 | 253 | 201 |
Operating Segments | QVC International | Beauty | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 193 | 186 | 357 | 331 |
Operating Segments | QVC International | Accessories | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 71 | 63 | 137 | 121 |
Operating Segments | QVC International | Electronics | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 32 | 31 | 65 | 53 |
Operating Segments | QVC International | Jewelry | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 54 | 47 | 114 | 96 |
Operating Segments | QVC International | Other revenue | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 5 | 6 | 3 | |
Operating Segments | Zulily | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 397 | 422 | 774 | 738 |
Operating Segments | Zulily | Home | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 120 | 130 | 243 | 211 |
Operating Segments | Zulily | Apparel | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 162 | 144 | 297 | 264 |
Operating Segments | Zulily | Beauty | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 16 | 17 | 35 | 33 |
Operating Segments | Zulily | Accessories | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 77 | 111 | 152 | 187 |
Operating Segments | Zulily | Electronics | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 3 | 4 | 7 | 7 |
Operating Segments | Zulily | Jewelry | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 12 | 9 | 26 | 22 |
Operating Segments | Zulily | Other revenue | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 7 | 7 | 14 | 14 |
Corporate and Other | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 327 | 277 | 577 | 454 |
Corporate and Other | Home | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | 284 | 242 | 490 | 383 |
Corporate and Other | Apparel | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue, net | $ 43 | $ 35 | $ 87 | $ 71 |
Information About Qurate Reta_4
Information About Qurate Retail's Operating Segments - Performance Measures By Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Information about Qurate Retail's operating segments | ||||
Adjusted OIBDA | $ 581 | $ 565 | $ 1,098 | $ 949 |
Corporate and Other | ||||
Information about Qurate Retail's operating segments | ||||
Adjusted OIBDA | 37 | 13 | 56 | 5 |
QxH | Operating Segments | ||||
Information about Qurate Retail's operating segments | ||||
Adjusted OIBDA | 391 | 388 | 740 | 681 |
QVC International | Operating Segments | ||||
Information about Qurate Retail's operating segments | ||||
Adjusted OIBDA | 144 | 119 | 287 | 216 |
Zulily | Operating Segments | ||||
Information about Qurate Retail's operating segments | ||||
Adjusted OIBDA | $ 9 | $ 45 | $ 15 | $ 47 |
Information About Qurate Reta_5
Information About Qurate Retail's Operating Segments - Other Information By Segment (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Information about Qurate Retail's operating segments | |||
Total assets | $ 16,906 | $ 16,999 | |
Capital expenditures | 110 | $ 108 | |
Operating Segments | QxH | |||
Information about Qurate Retail's operating segments | |||
Total assets | 12,243 | ||
Capital expenditures | 81 | ||
Operating Segments | QVC International | |||
Information about Qurate Retail's operating segments | |||
Total assets | 2,315 | ||
Capital expenditures | 13 | ||
Operating Segments | Zulily | |||
Information about Qurate Retail's operating segments | |||
Total assets | 1,036 | ||
Capital expenditures | 11 | ||
Corporate and Other | |||
Information about Qurate Retail's operating segments | |||
Total assets | 1,312 | ||
Capital expenditures | $ 5 |
Information About Qurate Reta_6
Information About Qurate Retail's Operating Segments - Reconciliation Of Segment Adjusted OIBDA To Earnings (Loss) From Continuing Operations Before Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Information About Qurate Retail's Operating Segments | ||||
Adjusted OIBDA | $ 581 | $ 565 | $ 1,098 | $ 949 |
Stock-based compensation | (19) | (16) | (35) | (27) |
Depreciation and amortization | (129) | (144) | (257) | (286) |
Operating income (loss) | 433 | 405 | 806 | 636 |
Interest expense | (118) | (95) | (235) | (192) |
Share of earnings (loss) of affiliates, net | (22) | (28) | (54) | (64) |
Realized and unrealized gains (losses) on financial instruments | 19 | 23 | 60 | (115) |
Other, net | (23) | (12) | (10) | 1 |
Earnings (loss) before income taxes | $ 289 | $ 293 | $ 567 | $ 266 |