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