麻豆最新出品 Media Reports Third Quarter 2010 Financial Results
ENGLEWOOD, Colo., Nov. 5, 2010 /PRNewswire-FirstCall/ -- 麻豆最新出品 ("麻豆最新出品") (Nasdaq: LCAPA, LCAPB, LINTA, LINTB, LSTZA, LSTZB) today reported third quarter results for 麻豆最新出品 Capital group, 麻豆最新出品 Interactive group and 麻豆最新出品 Starz group. 聽Highlights include(1):
-- Achieved revenue and adjusted OIBDA(2) growth at QVC of 7% and 8%,
respectively
-- Entered into a comprehensive multi-year affiliation agreement with DISH
Network at Starz Entertainment
-- Refinanced QVC's bank credit facilities at lower rates, with a longer
maturity and more flexible security
-- Repurchased $156 million of 麻豆最新出品 Capital stock, from July 31 through
October 29, 2010, year-to-date purchases represent 13.9% of shares
outstanding
-- Changed the attribution of Starz Media from 麻豆最新出品 Capital to 麻豆最新出品
Starz
-- Filed a preliminary proxy statement with the SEC for the split-off of
麻豆最新出品 Capital and 麻豆最新出品 Starz
-- Value of 麻豆最新出品's stake in SIRIUS XM increased to $3.8 billion as of
November 4, 2010
-- Purchased additional 1.5% of the stock of Live Nation from former
Chairman, Barry Diller, on November 4, 2010
"QVC continued its strong operating performance once again growing faster than its peer group in revenue and adjusted OIBDA while maintaining the leading return on invested capital," stated Greg Maffei, 麻豆最新出品 President and CEO. 聽"Starz completed an important multi-year agreement with DISH while growing subscribers."
LIBERTY INTERACTIVE GROUP 鈥� 麻豆最新出品 Interactive group's revenue increased 8% to $2.0 billion and adjusted OIBDA increased 8% to $373 million, while operating income increased 13% to $220 million. 聽The increase in revenue, adjusted OIBDA, and operating income was primarily due to favorable results at QVC.
QVC
QVC's consolidated revenue increased 7% in the third quarter to $1.8 billion, adjusted OIBDA increased 8% to $369 million and operating income increased 13% to $235 million.
"Every QVC market generated strong revenue growth in local currency, increased adjusted OIBDA margins and attracted more new customers in the third quarter," stated Mike George, QVC President and CEO. 聽"Our consolidated adjusted OIBDA margin, excluding our start-up operations related to Italy and the negative impact of our new QCard arrangement, improved 105 basis points from a strong adjusted OIBDA margin last year. 聽QVC expanded its global footprint through the successful launch of QVC Italy on October 1st. 聽In addition, we continue to leverage our programming assets through the launch of second channels in both Germany and the UK and the iPad app in the US. 聽Our pop-up store and studio in Rockefeller Center for Fashion's Night Out generated positive press attention but more importantly engaged our customers through our live broadcasts, Facebook, Twitter, YouTube and QVC.com."
QVC's domestic revenue increased 7% in the third quarter to $1.2 billion and adjusted OIBDA increased 8% to $261 million compared to the third quarter 2009. 聽The product mix continued to show steady growth in accessories, apparel and home and a decline in jewelry sales. 聽The average selling price increased 2% from $47.52 to $48.30 while total units sold increased 5% to 26.2 million. 聽Returns as a percent of gross product revenue decreased from 19.3% to 18.8%. 聽QVC.com sales as a percentage of domestic sales grew from 28% in the third quarter of 2009 to 31% in the third quarter of 2010. 聽The domestic adjusted OIBDA margin increased 22 basis points to 22.4% for the quarter primarily due to a lower inventory obsolescence provision as well as more efficient customer service operations partially offset by increased fixed costs primarily due to the non-recurrence of favorable franchise and sales tax audit settlements recorded in the prior year period. 聽Overall, the domestic adjusted OIBDA results were negatively impacted by $5 million due to QVC's new credit card agreement with GE Money Bank which was effective August 2nd. 聽QVC entered into a new agreement with GE Money Bank, who provides revolving credit directly to QVC customers solely for the purchase of merchandise from QVC. 聽Under the new agreement QVC receives a portion of the economics from the credit card program according to percentages that vary with the performance of the portfolio. 聽QVC also recovered its noninterest bearing cash deposit maintained in connection with the prior arrangement in the amount of $501 million. 聽During the third quarter, QVC entered into a new bank credit agreement which provides for a $2 billion revolving credit facility and reduced bank borrowings by $745 million, lowering QVC's leverage ratio below 2:1.
QVC's international revenue increased 6% in the third quarter to $604 million from $569 million including the impact of unfavorable exchange rates in the UK and Germany and favorable exchange rates in Japan. 聽International adjusted OIBDA increased 9% to $108 million and adjusted OIBDA margin increased 48 basis points for the quarter. 聽The increase in the adjusted OIBDA margin was primarily due to the increased gross product margin in Germany, partially offset by $9 million of costs related to the October 1, 2010 launch of QVC Italy service. 聽Excluding the effect of exchange rates, QVC's international revenue and adjusted OIBDA both grew 8%. 聽International adjusted OIBDA increased 17%, excluding the effect of exchange rates and start up costs related to QVC Italy.
QVC UK's revenue grew 6% in local currency in the third quarter through increased sales in the consumer electronics, apparel and beauty product areas. 聽These increases were partially offset by declines in the fine jewelry product area. 聽The UK's average selling price in local currency decreased 2% and units sold increased 7% for the third quarter. 聽QVC UK's adjusted OIBDA margin increased 135 basis points due primarily to leveraging fixed costs and lower personnel expenses offset somewhat by an unfavorable gross margin percentage related to a higher inventory obsolescence provision.
QVC Germany's revenue grew 9% in local currency in the third quarter. 聽QVC Germany's average selling price in local currency decreased 3% for the third quarter and units sold increased 14%. 聽QVC Germany experienced an increase of 146 basis points in gross margin percentage for the quarter primarily due to increased initial product margins and a lower obsolescence provision. 聽QVC Germany's adjusted OIBDA margin increased 210 basis points due to gross margin increases as well as further leverage of fixed cost expenses.
QVC Japan's revenue grew 9% in local currency in the third quarter. 聽QVC Japan achieved growth of 15% in units sold for the quarter with the average selling price in local currency declining 5%. 聽QVC Japan's gross margin percentage was virtually flat for the third quarter with adjusted OIBDA margin increasing 125 basis points due primarily to reductions in cable operator commission expense due to favorable renegotiated contract terms.
eCommerce Businesses
In the aggregate, the eCommerce businesses increased revenue 19% to $197 million for the quarter. 聽Overall revenue growth was partially offset by lower commission revenue earned for referring customers to third-party on-line discount services. 聽In the first quarter of 2010, a decision was made to change the way these promotions are offered which reduced the revenue earned in the third quarter by $2 million. 聽These changes are expected to continue to adversely impact commission revenue throughout 2010. 聽Revenue earned from commissions yielded significantly higher margins than product sales, and therefore the reduction in this revenue more negatively impacted adjusted OIBDA on a percentage basis. 聽Furthermore, during the quarter increased marketing spend helped grow revenue and new customer names but negatively impacted adjusted OIBDA margins. 聽Adjusted OIBDA for the eCommerce businesses increased by $3 million to $10 million for the quarter and operating income improved by $7 million from an operating loss of $7 million. 聽During the third quarter, we deconsolidated Lockerz based on a change in the governance of the entity through an issuance of equity of Lockerz. 聽Adjusted OIBDA for the eCommerce businesses was relatively flat for the quarter, excluding Lockerz' adjusted OIBDA loss of $2 million for the third quarter 2009. 聽The results of Lockerz for the third quarter 2010 were reflected in our Share of Earnings (Losses) and will be reflected in that manner prospectively.
Share Repurchases
There were no repurchases of 麻豆最新出品 Interactive stock from July 31, 2010 through October 29, 2010. 聽麻豆最新出品 has approximately $740 million remaining under its 麻豆最新出品 Interactive stock repurchase authorization.
The businesses and assets attributed to 麻豆最新出品 Interactive group are engaged in, or are ownership interests in companies that are engaged in, video and on-line commerce, and currently include 麻豆最新出品's subsidiaries QVC, Provide Commerce, Backcountry.com, Bodybuilding.com, BUYSEASONS, CommerceHub, and The Right Start, and its interests in IAC/InterActiveCorp, HSN, Tree.com, Interval Leisure Group, Expedia and Lockerz. 聽麻豆最新出品 has identified wholly-owned QVC as the principal operating segment of the 麻豆最新出品 Interactive group.
LIBERTY STARZ GROUP 鈥� 麻豆最新出品 Starz group's revenue increased 5% to $319 million, adjusted OIBDA decreased 3% to $89 million, and operating income increased 15% for the third quarter. 聽The increase in revenue was primarily driven by results at Starz Entertainment. 聽The decrease in adjusted OIBDA was primarily due to an increase in operating expenses at Starz Entertainment.
Starz Entertainment, LLC
Starz Entertainment's revenue increased 5% to $316 million in the third quarter while adjusted OIBDA decreased 1% to $92 million and operating income increased 12% to $87 million. 聽Starz Entertainment's operating expenses increased 9% in the quarter as a result of higher programming costs associated with original programming, stronger box office performance of output titles aired during the period, and costs associated with the revenue earned on original programs. 聽Starz' subscription units increased 1% and Encore subscriptions increased 4% vs. the third quarter 2009.
"Starz Entertainment enjoyed another solid quarter with continued positive revenue growth and the third consecutive quarter of sequential subscriber gains at Starz and Encore," said Chris Albrecht, Starz, LLC, President and CEO. 聽"The business continues to perform well and we are pleased with a new, multi-year affiliation agreement signed with DISH Network last month. 聽We look forward to the return of Spartacus with the Gods of the Arena prequel in January."
Share Repurchases
There were no repurchases of 麻豆最新出品 Starz stock from July 31, 2010 through October 29, 2010. 聽麻豆最新出品 has approximately $447 million remaining under its 麻豆最新出品 Starz stock repurchase authorization.
The businesses and assets attributed to 麻豆最新出品 Starz group are primarily engaged in the production and distribution of video programming and related businesses. 聽麻豆最新出品 has identified Starz Entertainment as the principal operating segment of the 麻豆最新出品 Starz group. 聽For purposes of presentation, we treat the assets and businesses attributed to the 麻豆最新出品 Starz group as though they had been attributed to the group since January 1, 2009.
On September 16, 2010, 麻豆最新出品 Media's board of directors approved a change in attribution of 麻豆最新出品 Media's interest in Starz Media from its Capital group to its Starz group, effective September 30, 2010. 聽麻豆最新出品 reflected this attribution prospectively therefore the operating results of Starz Media for the three and nine months ended September 30, 2010 continue to be reflected in 麻豆最新出品 Capital. 聽However the balance sheet of Starz Media as of September 30, 2010 has been included in the 麻豆最新出品 Starz group. 聽
LIBERTY CAPITAL GROUP 鈥� 麻豆最新出品 Capital group's revenue increased 47% while adjusted OIBDA and operating losses decreased by $96 million and $91 million, respectively, for the third quarter. 聽The increase in revenue was primarily due to revenue growth at Starz Media related to theatrical and home video revenue from movies released by Overture Films. 聽The decrease in the adjusted OIBDA loss was primarily due to the number and timing of films released theatrically, on home video and through television by Starz Media and Overture Films and the related marketing expenses associated with these films.
"We continue to make significant progress in realigning and focusing the core Starz Media companies through the recent attribution of the Starz Media assets to the 麻豆最新出品 Starz group and the pending sale of the Film Roman animation studio," said Chris Albrecht Starz, LLC, President and CEO. 聽"Though not complete, we are pleased with the progress achieved so far and the cleaner financial and operating structures of the combined businesses of Starz Entertainment and Starz Media."
Share Repurchases
From July 31, 2010 through October 29, 2010, 麻豆最新出品 repurchased 3.3 million shares of Series A 麻豆最新出品 Capital common stock at an average cost per share of $46.61 for total cash consideration of $155.5 million. 聽Since the reclassification of 麻豆最新出品 Capital on March 4, 2008 through October 29, 2010, 麻豆最新出品 has repurchased 47.3 million shares at an average cost per share of $22.60 for total cash consideration of $1.07 billion. 聽These repurchases represent 36.6% of the shares outstanding. 聽麻豆最新出品 has approximately $530 million remaining under its 麻豆最新出品 Capital stock repurchase authorization.
The businesses and assets attributed to 麻豆最新出品 Capital group are all of 麻豆最新出品's businesses and assets other than those attributed to the 麻豆最新出品 Interactive group and 麻豆最新出品 Starz group and include its subsidiaries Starz Media (through September 30, 2010), TruePosition, Atlanta National League Baseball Club (the owner of the Atlanta Braves), its interests in SIRIUS XM, and minority interests in Time Warner, Time Warner Cable, and Live Nation.
FOOTNOTES
1. 麻豆最新出品's President and CEO, Gregory B. Maffei, will discuss these
highlights and other matters in 麻豆最新出品's earnings conference call which
will begin at 12:00 p.m. (ET) on November 5, 2010. For information
regarding how to access the call, please see "Important Notice" on page 9.
2. For a definition of adjusted OIBDA and applicable reconciliations and a
definition of adjusted OIBDA margin, see the accompanying schedules.
NOTES
麻豆最新出品 operates and owns interests in a broad range of video and on-line commerce, media, communications and entertainment businesses. 聽Those interests are currently attributed to three tracking stock groups: 麻豆最新出品 Interactive group, 麻豆最新出品 Starz group and 麻豆最新出品 Capital group.
Unless otherwise noted, the foregoing discussion compares financial information for the three months ended September 30, 2010 to the same period in 2009. 聽Certain prior period amounts have been reclassified for comparability with the 2010 presentation. 聽During the fourth quarter of 2009, 麻豆最新出品 completed the split-off of 麻豆最新出品 Entertainment Inc. (LEI), and as such, the financial results of the businesses and assets of LEI have been excluded from all periods presented.
The following financial information is intended to supplement 麻豆最新出品's consolidated statements of operations to be included in its Form 10-Q.
Fair Value of Public Holdings and Derivatives (amounts in millions and include the value of June 30, September 30, derivatives) 2010 2010 Expedia(1) 1,300 1,954 InterActiveCorp 281 336 HSN, Interval Leisure Group, and Tree.com(1) 669 796 Total Attributed 麻豆最新出品 Interactive Group $ 2,250 3,086 Other(2) 1 1 Total Attributed 麻豆最新出品 Starz Group $ 1 1 SIRIUS XM debt and equity(3) 2,857 3,533 Non-strategic public holdings(4) 2,458 2,614 Total Attributed 麻豆最新出品 Capital Group $ 5,315 6,147 (1) Represents fair value of 麻豆最新出品's investments. In accordance with GAAP, 麻豆最新出品 accounts for these investments using the equity method of accounting and includes these investments in its consolidated balance sheet at their historical carrying values. (2) Excludes $20 million of marketable securities with an original maturity greater than one year which are included in cash and liquid investments on the following schedule as of June 30, 2010. (3) Represents the fair value of 麻豆最新出品's various debt and equity investments in SIRIUS XM. The fair value of 麻豆最新出品's convertible preferred stock is calculated on an as-if-converted basis into common stock. In accordance with GAAP, 麻豆最新出品 accounts for the convertible preferred stock using the equity method of accounting and includes this in its consolidated balance sheet at historical carrying value. (4) Represents 麻豆最新出品's non-strategic public holdings which are accounted for at fair value including any associated equity derivatives on such investments. Also includes the liability associated with borrowed shares which totaled $904 million and $1,148 million on June 30, 2010 and September 30, 2010, respectively.
Cash and Debt
The following presentation is provided to separately identify cash and liquid investments and debt information.
June 30, September 30,
(amounts in millions) 2010 2010
Cash and Liquid Investments Attributable to:
麻豆最新出品 Interactive group 1,100 935
麻豆最新出品 Starz group(1) (2) 1,083 1,164
麻豆最新出品 Capital group(3) (4) 2,265 1,894
Total 麻豆最新出品 Consolidated Cash and Liquid Investments 4,448 3,993
Less:
Short-term marketable securities 鈥� 麻豆最新出品 Starz
group 117 149
Long-term marketable securities 鈥� 麻豆最新出品 Starz
group 20 --
Short-term marketable securities 鈥� 麻豆最新出品 Capital
group 205 313
Total 麻豆最新出品 Consolidated Cash (GAAP) 4,106 3,531
Debt:
Senior notes and debentures(5) 1,165 1,115
Senior exchangeable debentures(6) 1,962 1,960
QVC senior notes(5) 2,000 2,000
QVC bank credit facility 1,825 1,080
Other 71 77
Total Attributed 麻豆最新出品 Interactive Group Debt 7,023 6,232
Unamortized discount (23) (23)
Fair market value adjustment (905) (794)
Total Attributed 麻豆最新出品 Interactive Group Debt (GAAP) 6,095 5,415
Other 46 99
Total Attributed 麻豆最新出品 Starz Group Debt (GAAP) 46 99
Senior exchangeable debentures(6) 1,138 1,138
Bank investment facility 750 750
Other 86 --
Total Attributed 麻豆最新出品 Capital Group Debt 1,974 1,888
Fair market value adjustment 40 117
Total Attributed 麻豆最新出品 Capital Group Debt (GAAP) 2,014 2,005
Total Consolidated 麻豆最新出品 Debt (GAAP) 8,155 7,519
(1) Includes $117 million and $149 million of short-term marketable securities
with an original maturity greater than 90 days as of June 30, 2010 and
September 30, 2010, respectively, which is reflected in other current assets in
麻豆最新出品's condensed consolidated balance sheet.
(2) Includes $20 million of marketable securities with an original maturity
greater than one year as of June 30, 2010, which is reflected in investments in
available-for-sale securities in 麻豆最新出品's condensed consolidated balance
sheet.
(3) Includes $205 million and $313 million of short-term marketable securities
with an original maturity greater than 90 days as of June 30, 2010 and
September 30, 2010, respectively, which is reflected in other current assets in
麻豆最新出品's condensed consolidated balance sheet.
(4) Excludes $476 million and $476 million of restricted cash on June 30, 2010
and September 30, 2010, respectively, associated with the bank credit facility
which is reflected in other long-term assets in 麻豆最新出品's condensed
consolidated balance sheet.
(5) Face amount of Senior Notes and Debentures with no reduction for the
unamortized discount or fair market value adjustment.
(6) Face amount of Senior Exchangeable Debentures with no reduction for the
fair market value adjustment.
Total attributed 麻豆最新出品 Interactive group cash decreased $165 million, primarily due to a net reduction of bank debt of $745 million and $50 million in repayments of Senior Notes and Debentures. 聽These repayments were offset by cash flow from operations at QVC which includes the return of a $501 million unsecured deposit from GE Money Bank. 聽Total attributed Interactive group debt decreased as a result of the repayments discussed above.
Total attributed 麻豆最新出品 Starz group cash increased $81 million, primarily as a result of cash flow from operations at Starz Entertainment and the attribution of Starz Media to the 麻豆最新出品 Starz group. 聽Total attributed Starz group debt increased $53 million as a result of the reattribution of Starz Media to the 麻豆最新出品 Starz group.
Total attributed 麻豆最新出品 Capital group cash decreased $371 million, primarily due to $301 million of LCAPA stock repurchases in the third quarter. 聽Total attributed 麻豆最新出品 Capital group debt decreased $86 million due to the reattribution of Starz Media to the 麻豆最新出品 Starz group, as discussed previously.
Important Notice: 麻豆最新出品 (Nasdaq: LCAPA, LCAPB, LINTA, LINTB, LSTZA, LSTZB,) President and CEO, Gregory B. Maffei will discuss 麻豆最新出品's earnings release in a conference call which will begin at 12:00 p.m. (ET) on November 5, 2010. 聽The call can be accessed by dialing (877) 795-3648 or (719) 325-4793 at least 10 minutes prior to the start time. 聽Replays of the conference call can be accessed until 3:00 p.m. (ET) November 12, 2010, by dialing (888) 203-1112 or (719) 457-0820 plus the pass code 4402387#. 聽The call will also be broadcast live across the Internet and archived on our website. 聽To access the webcast go to . 聽Links to this press release will also be available on the 麻豆最新出品 Media website.
This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about financial guidance, business strategies, market potential, future financial performance, new service and product launches the proposed split-off of our 麻豆最新出品 Capital and 麻豆最新出品 Starz tracking stock groups and other matters that are not historical facts. These forward-looking statements involve many risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including, without limitation, possible changes in market acceptance of new products or services, competitive issues, regulatory matters affecting our businesses, continued access to capital on terms acceptable to 麻豆最新出品 Media, changes in law and government regulations that may impact the derivative instruments that hedge certain of our financial risks and the satisfaction of the conditions to the proposed split-off. These forward looking statements speak only as of the date of this press release, and 麻豆最新出品 Media expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in 麻豆最新出品 Media's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Please refer to the publicly filed documents of 麻豆最新出品 Media, including the most recent Form 10-Q and 10-K, for additional information about 麻豆最新出品 Media and about the risks and uncertainties related to 麻豆最新出品 Media's business which may affect the statements made in this press release. 聽
Additional Information
Nothing in this presentation shall constitute a solicitation to buy or an offer to sell shares of the split-off entity or any of 麻豆最新出品's tracking stocks. 聽The offer and sale of shares in the proposed split-off will only be made pursuant to an effective registration statement. 麻豆最新出品 stockholders and other investors are urged to read the registration statement to be filed with the SEC, including the proxy statement/prospectus to be contained therein (a preliminary filing of which has been made with the SEC), because they will contain important information about the split-off. Copies of聽麻豆最新出品's SEC filings聽are available free of charge at the SEC's website (). Copies of the filings together with the materials incorporated by reference therein will also be available, without charge, by directing a request to 麻豆最新出品, 12300 麻豆最新出品 Boulevard, Englewood, Colorado 80112, Attention: Investor Relations, Telephone: (720) 875-5408.
Participants in a Solicitation
The directors and executive officers of 麻豆最新出品 and other persons may be deemed to be participants in the solicitation of proxies in respect of proposals to approve the split-off. Information regarding the directors and executive officers of each of 麻豆最新出品 and the split-off entity and other participants in the proxy solicitation and a description of their respective direct and indirect interests, by security holdings or otherwise, will be available in the proxy materials filed with the SEC (a preliminary filing of which has been made with the SEC).
Contact: Courtnee Ulrich (720) 875-5420
SUPPLEMENTAL INFORMATION
As a supplement to 麻豆最新出品's consolidated statements of operations, to be included in its Form 10-Q, the following is a presentation of quarterly financial information and operating metrics on a stand-alone basis for the three largest privately held businesses (QVC, Starz Entertainment and Starz Media) owned by 麻豆最新出品 at September 30, 2010.
Please see below for the definition of adjusted OIBDA and a discussion of management's use of this performance measure. 聽Schedule 2 to this press release provides a reconciliation of adjusted OIBDA for each identified entity to that entity's operating income for the same period, as determined under GAAP.
QUARTERLY SUMMARY (amounts in millions) 3Q09 4Q09 1Q10 2Q10 3Q10 麻豆最新出品 Interactive Group QVC Revenue 鈥� Domestic 1,093 1,672 1,156 1,193 1,167 Revenue 鈥� International 569 751 601 565 604 Revenue 鈥� Total 1,662 2,423 1,757 1,758 1,771 Adjusted OIBDA 鈥� Domestic 242 368 261 303 261 Adjusted OIBDA 鈥� International 99 159 105 100 108 Adjusted OIBDA 鈥� Total 341 527 366 403 369 Operating income 208 388 232 270 235 Gross margin 鈥� Domestic 34.7% 33.5% 35.6% 37.3% 35.9% Gross margin 鈥� International 36.9% 37.3% 36.6% 36.9% 37.4% 麻豆最新出品 Starz Group Starz Entertainment Revenue 301 300 305 308 316 Adjusted OIBDA 93 78 106 107 92 Operating income 78 65 99 102 87 Subscription units 鈥� Starz 17.3 16.9 17.1 17.3 17.4 Subscription units 鈥� Encore 30.7 30.6 31.1 31.9 32.0 麻豆最新出品 Capital Group Starz Media Revenue 56 116 144 84 89 Adjusted OIBDA (71) (44) (7) (54) (6) Operating income (loss) (73) (44) (9) (55) (7)
NON-GAAP FINANCIAL MEASURES
This press release includes a presentation of adjusted OIBDA, which is a non-GAAP financial measure, for each of 麻豆最新出品's tracking stock groups and each of QVC (and certain of its subsidiaries), the eCommerce businesses, Starz Entertainment and Starz Media together with a reconciliation to that group's or entity's operating income, as determined under GAAP. 聽麻豆最新出品 defines adjusted OIBDA as revenue less cost of sales, operating expenses, and selling, general and administrative expenses (excluding stock and other equity-based compensation) and excludes from that definition depreciation and amortization and restructuring and impairment charges that are included in the measurement of operating income pursuant to GAAP. 聽Further, this press release includes adjusted OIBDA margin which is also a non-GAAP financial measure. 聽麻豆最新出品 defines adjusted OIBDA margin as adjusted OIBDA divided by revenue.
麻豆最新出品 believes adjusted OIBDA is an important indicator of the operational strength and performance of its businesses, including each business' ability to service debt and fund capital expenditures. 聽In addition, this measure allows management to view operating results and perform analytical comparisons and benchmarking between businesses and identify strategies to improve performance. 聽Because adjusted OIBDA is used as a measure of operating performance, 麻豆最新出品 views operating income as the most directly comparable GAAP measure. 聽Adjusted OIBDA is not meant to replace or supersede operating income or any other GAAP measure, but rather to supplement such GAAP measures in order to present investors with the same information that 麻豆最新出品's management considers in assessing the results of operations and performance of its assets. 聽Please see the attached schedules for applicable reconciliations.
SCHEDULE 1
The following table provides a reconciliation of adjusted OIBDA for each of 麻豆最新出品 Interactive group, 麻豆最新出品 Starz group, and 麻豆最新出品 Capital group to that group's operating income calculated in accordance with GAAP for the three months ended September 30, 2009, December 31, 2009, March 31, 2010 and June 30, 2010 and September 30, 2010, respectively.
QUARTERLY SUMMARY (amounts in millions) 3Q09 4Q09 1Q10 2Q10 3Q10 麻豆最新出品 Interactive Group Adjusted OIBDA 345 556 381 428 373 Depreciation and amortization (139) (145) (141) (139) (141) Stock compensation expense (12) (14) (22) (15) (12) Operating Income 194 397 218 274 220 麻豆最新出品 Starz Group Adjusted OIBDA 92 74 103 103 89 Depreciation and amortization (5) (4) (5) (4) (7) Stock compensation expense (20) (16) (6) (3) (5) Impairment of long-lived assets -- (5) -- -- -- Operating Income 67 49 92 96 77 麻豆最新出品 Capital Group Adjusted OIBDA (71) (76) (43) (59) 25 Depreciation and amortization (20) (17) (16) (21) (20) Stock compensation expense (3) -- (11) (3) (8) Impairment of long-lived assets -- (4) -- -- -- Operating Loss (94) (97) (70) (83) (3)
The following table provides a reconciliation of adjusted OIBDA to earnings from continuing operations before income taxes for the three months ended September 30, 2009 and 2010, respectively.
(amounts in millions) 3Q09 3Q10 麻豆最新出品 Interactive group $ 345 $ 373 麻豆最新出品 Starz group 92 89 麻豆最新出品 Capital group (71) 25 Consolidated Adjusted OIBDA $ 366 $ 487 Consolidated segment adjusted OIBDA $ 366 $ 487 Stock-based compensation (35) (25) Depreciation and amortization (164) (168) Interest expense (177) (170) Share of earnings (losses) of affiliates, net 10 (23) Realized and unrealized gains (losses) on financial instruments, net (167) 2 (Losses) on dispositions, net (13) 28 Other, net 16 35 Earnings (Losses) from Continuing Operations Before Income Taxes $ (164) $ 166
SCHEDULE 2
The following table provides a reconciliation of adjusted OIBDA for QVC (and certain of its subsidiaries), the eCommerce businesses, Starz Entertainment and Starz Media to that entity or group's operating income (loss) calculated in accordance with GAAP for the three months ended September 30, 2009, December 31, 2009, March 31, 2010 and June 30, 2010 and September, 30, 2010, respectively.
QUARTERLY SUMMARY (amounts in millions) 3Q09 4Q09 1Q10 2Q10 3Q10 麻豆最新出品 Interactive Group QVC QVC US adjusted OIBDA 242 368 261 303 261 QVC UK 23 39 19 22 25 QVC Germany 34 65 42 30 38 QVC Japan 43 57 48 53 54 QVC Italy (1) (2) (4) (5) (9) QVC International adjusted OIBDA 99 159 105 100 108 Total QVC adjusted OIBDA 341 527 366 403 369 Depreciation and amortization (129) (134) (129) (129) (129) Stock compensation expense (4) (5) (5) (4) (5) Operating Income 208 388 232 270 235 eCommerce Businesses Adjusted OIBDA 7 34 18 28 10 Depreciation and amortization (10) (11) (10) (11) (12) Stock compensation expense (4) (6) (4) (9) 2 Operating Income (Loss) (7) 17 4 8 -- 麻豆最新出品 Starz Group Starz Entertainment Adjusted OIBDA 93 78 106 107 92 Depreciation and amortization (3) (4) (4) (4) (3) Stock compensation expense (12) (9) (3) (1) (2) Operating Income 78 65 99 102 87 麻豆最新出品 Capital Group Starz Media Adjusted OIBDA (71) (44) (7) (54) (6) Depreciation and amortization (2) (1) (2) (2) (1) Stock compensation expense -- 1 -- 1 -- Operating Loss (73) (44) (9) (55) (7)
SOURCE 麻豆最新出品
Released November 5, 2010