Qurate Retail(QRTEA) - 2023 Q1 - Quarterly Report

PART I – FINANCIAL INFORMATION This section presents Qurate Retail, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, cash flows, and equity, with accompanying notes for the period ended March 31, 2023 Item 1. Financial Statements. This section provides Qurate Retail's unaudited condensed consolidated financial statements, including balance sheets, income statements, cash flows, and equity, with detailed explanatory notes Condensed Consolidated Balance Sheets This section presents the unaudited condensed consolidated balance sheets of Qurate Retail, Inc. and its subsidiaries as of March 31, 2023, and December 31, 2022 | Metric | March 31, 2023 (millions) | December 31, 2022 (millions) | | :-------------------------------- | :-------------------------- | :--------------------------- | | Assets | | | | Total current assets | $3,886 | $4,275 | | Total assets | $12,200 | $12,571 | | Liabilities and Equity | | | | Total current liabilities | $2,262 | $3,099 | | Total liabilities | $11,509 | $12,046 | | Total equity | $691 | $525 | - Total assets decreased by $371 million from December 31, 2022, to March 31, 2023, primarily driven by a reduction in current assets, notably trade and other receivables[10] - Total liabilities decreased by $537 million, largely due to a significant reduction in current portion of debt from $828 million to $319 million[14] - Total equity increased by $166 million, primarily driven by an increase in accumulated other comprehensive earnings (loss) and retained earnings[14] Condensed Consolidated Statements of Operations This section presents the unaudited condensed consolidated statements of operations for Qurate Retail, Inc. for the three months ended March 31, 2023 and 2022 | Metric | Three months ended March 31, 2023 (millions) | Three months ended March 31, 2022 (millions) | | :-------------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Total revenue, net | $2,644 | $2,883 | | Operating income (loss) | $176 | $106 | | Net earnings (loss) | $33 | $13 | | Net earnings (loss) attributable to Qurate Retail, Inc. shareholders | $20 | $1 | | Basic net earnings (loss) per common share | $0.05 | $0.00 | | Diluted net earnings (loss) per common share | $0.05 | $0.00 | - Total revenue decreased by $239 million (8.3%) year-over-year[17][145] - Operating income increased significantly from $106 million in Q1 2022 to $176 million in Q1 2023, primarily due to gains on sale leaseback transactions[17][148] - Net earnings attributable to Qurate Retail, Inc. shareholders increased from $1 million to $20 million[17][159] Condensed Consolidated Statements of Comprehensive Earnings (Loss) This section presents the unaudited condensed consolidated statements of comprehensive earnings (loss) for Qurate Retail, Inc. for Q1 2023 and 2022 | Metric | Three months ended March 31, 2023 (millions) | Three months ended March 31, 2022 (millions) | | :---------------------------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net earnings (loss) | $33 | $13 | | Other comprehensive earnings (loss) | $130 | $(31) | | Comprehensive earnings (loss) | $163 | $(18) | | Comprehensive earnings (loss) attributable to Qurate Retail, Inc. shareholders | $151 | $(24) | - Other comprehensive earnings (loss) saw a significant positive swing, from a loss of $31 million in Q1 2022 to a gain of $130 million in Q1 2023, driven by foreign currency translation adjustments and credit risk on fair value debt instruments[20] Condensed Consolidated Statements of Cash Flows This section presents the unaudited condensed consolidated statements of cash flows for Qurate Retail, Inc. for the three months ended March 31, 2023 and 2022 | Cash Flow Activity | Three months ended March 31, 2023 (millions) | Three months ended March 31, 2022 (millions) | | :--------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net cash provided (used) by operating activities | $16 | $(179) | | Net cash provided (used) by investing activities | $112 | $(16) | | Net cash provided (used) by financing activities | $(122) | $229 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $10 | $21 | - Operating activities generated $16 million in cash in Q1 2023, a significant improvement from a $179 million use of cash in Q1 2022[23] - Investing activities provided $112 million in cash, primarily from proceeds from sale of fixed assets and insurance proceeds, contrasting with a $16 million use in the prior year[23][167] - Financing activities used $122 million in cash, mainly due to net debt repayments, compared to providing $229 million in Q1 2022[23][167] Condensed Consolidated Statements of Equity This section presents the unaudited condensed consolidated statements of equity for Qurate Retail, Inc. for the three months ended March 31, 2023 | Equity Component | Balance at January 1, 2023 (millions) | Net earnings (loss) (millions) | Other comprehensive earnings (loss) (millions) | Stock-based compensation (millions) | Balance at March 31, 2023 (millions) | | :-------------------------------- | :------------------------------------ | :----------------------------- | :--------------------------------------------- | :---------------------------------- | :----------------------------------- | | Total stockholders' equity | $412 | $20 | $131 | $14 | $578 | | Noncontrolling interests | $113 | $13 | $(1) | — | $113 | | Total equity | $525 | $33 | $130 | $14 | $691 | - Total equity increased from $525 million at January 1, 2023, to $691 million at March 31, 2023, primarily driven by net earnings and other comprehensive earnings[25] Notes to Condensed Consolidated Financial Statements This section provides detailed notes explaining the basis of presentation, significant accounting policies, and specific financial line items for the consolidated statements (1) Basis of Presentation This note outlines Qurate Retail's structure, business activities, and the basis for preparing the condensed consolidated financial statements, including key estimates and related party agreements - Qurate Retail operates primarily in video and online commerce through wholly-owned subsidiaries QVC (including HSN), Cornerstone Brands, and Zulily[28] - The businesses are seasonal, with higher sales volumes in the fourth calendar quarter due to holiday shopping[29] - Significant estimates include fair value measurements, accounting for income taxes, and retail-related adjustments and allowances[31] - Qurate Retail has agreements with Liberty Media Corporation (LMC) and Liberty Broadband Corporation for services, facilities sharing, and tax-related matters, with approximately $2 million reimbursable to LMC for services in Q1 2023[32][36] [(2) Stock-Based Compensation](index