UNITED STATES

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024



☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-33982

QURATE RETAIL, INC.

(Exact name of Registrant as specified in its charter)

incorporation or organization)	Identification No.)
State of Delaware (State or other jurisdiction of incorporation or organization)	84-1288730 (I.R.S. Employer Identification No.)

12300 Liberty Boulevard Englewood, Colorado (Address of principal executive offices)	80112 (Zip Code)

Registrant's telephone number, including area code: (720) 875-5300

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Series A common stock	QRTEA	The Nasdaq Stock Market LLC
Series B common stock	QRTEB	The Nasdaq Stock Market LLC
8.0% Series A Cumulative Redeemable Preferred Stock	QRTEP	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer ☐	Accelerated Filer ☒	Non-accelerated Filer ☐	Smaller Reporting Company ☐	Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes ☐ No ☒

The number of outstanding shares of Qurate Retail, Inc.'s common stock as of July 31, 2024 was:


Series A common stock		387,993,706
Series B common stock		8,927,840

Table of Contents

QURATE RETAIL, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(unaudited)


	June 30,		December 31,
	2024		2023

	amounts in millions
Assets
Current assets:
Cash and cash equivalents	$	1,210	1,121
Trade and other receivables, net of allowance for credit losses of $86 million and $102 million, respectively		897	1,308
Inventory, net		1,122	1,044
Other current assets		187	209
Total current assets		3,416	3,682
Property and equipment, net		488	512
Intangible assets not subject to amortization (note 5):
Goodwill		3,126	3,164
Trademarks		2,698	2,698
		5,824	5,862
Intangible assets subject to amortization, net (note 5)		457	526
Operating lease right-of-use assets		619	635
Other assets, at cost, net of accumulated amortization		135	151
Total assets	$	10,939	11,368

(continued)

See accompanying notes to condensed consolidated financial statements.

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Table of Contents

QURATE RETAIL, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Continued)

(unaudited)


	June 30,		December 31,
	2024		2023

	amounts in millions,
	except share amounts
Liabilities and Equity
Current liabilities:
Accounts payable	$	762	895
Accrued liabilities		787	983
Current portion of debt, $271 million and $219 million measured at fair value (note 6)		856	642
Other current liabilities		138	97
Total current liabilities		2,543	2,617
Long-term debt (note 6)		4,483	4,698
Deferred income tax liabilities		1,468	1,531
Preferred stock (note 7)		1,272	1,270
Operating lease liabilities		612	615
Other liabilities		140	148
Total liabilities		10,518	10,879
Equity
Stockholders' equity:
Series A common stock, $.01 par value. Authorized 4,000,000,000 shares; issued and outstanding 387,993,706 shares at June 30, 2024 and 383,047,720 shares at December 31, 2023		4	4
Series B common stock, $.01 par value. Authorized 150,000,000 shares; issued and outstanding 8,927,840 shares at June 30, 2024 and 8,700,380 shares at December 31, 2023		—	—
Series C common stock, $.01 par value. Authorized 4,000,000,000 shares; no shares issued		—	—
Additional paid-in capital		115	99
Accumulated other comprehensive earnings (loss), net of taxes		(6)	86
Retained earnings		215	196
Total stockholders' equity		328	385
Noncontrolling interests in equity of subsidiaries		93	104
Total equity		421	489
Commitments and contingencies (note 8)
Total liabilities and equity	$	10,939	11,368

See accompanying notes to condensed consolidated financial statements.

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Table of Contents

QURATE RETAIL, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(unaudited)


	Three months ended			Six months ended
	June 30,			June 30,
	2024		2023	2024		2023

	amounts in millions, except per share amounts
Total revenue, net	$	2,407	2,649		4,749	5,293
Operating costs and expenses:
Cost of goods sold (exclusive of depreciation shown separately below)		1,532	1,734		3,043	3,543
Operating expense		178	193		358	387
Selling, general and administrative, including stock-based compensation (note 2)		418	466		826	944
Restructuring, penalties and fire related costs, net of (recoveries) (note 8)		18	(208)		18	(208)
Depreciation and amortization		96	104		195	204
Gain on sale of assets and leaseback transactions (note 8)		—	(6)		(1)	(119)
		2,242	2,283		4,439	4,751
Operating income (loss)		165	366		310	542
Other income (expense):
Interest expense		(119)	(123)		(236)	(217)
Dividend and interest income		15	14		27	25
Realized and unrealized gains (losses) on financial instruments, net (note 4)		(10)	(14)		(17)	(46)
Loss on disposition of Zulily, net		—	(64)		—	(64)
Other, net		(4)	6		(6)	10
		(118)	(181)		(232)	(292)
Earnings (loss) before income taxes		47	185		78	250
Income tax (expense) benefit		(15)	(66)		(38)	(98)
Net earnings (loss)		32	119		40	152
Less net earnings (loss) attributable to the noncontrolling interests		12	12		21	25
Net earnings (loss) attributable to Qurate Retail, Inc. shareholders	$	20	107		19	127

Basic net earnings (loss) attributable to Series A and Series B Qurate Retail, Inc. shareholders per common share (note 3):	$	0.05	0.28		0.05	0.33
Diluted net earnings (loss) attributable to Series A and Series B Qurate Retail, Inc. shareholders per common share (note 3):	$	0.05	0.28		0.05	0.33

See accompanying notes to condensed consolidated financial statements.

I-5

Table of Contents

QURATE RETAIL, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Earnings (Loss)

(unaudited)


	Three months ended			Six months ended
	June 30,			June 30,
	2024		2023	2024	2023

	amounts in millions
Net earnings (loss)	$	32	119	40	152
Other comprehensive earnings (loss), net of taxes:
Foreign currency translation adjustments		(29)	(24)	(73)	(4)
Recognition of previously unrealized losses (gains) on debt, net		—	(13)	—	(32)
Credit risk on fair value debt instruments gains (loss)		70	(48)	(29)	81
Other comprehensive earnings (loss)		41	(85)	(102)	45
Comprehensive earnings (loss)		73	34	(62)	197
Less comprehensive earnings (loss) attributable to the noncontrolling interests		8	5	11	17
Comprehensive earnings (loss) attributable to Qurate Retail, Inc. shareholders	$	65	29	(73)	180

See accompanying notes to condensed consolidated financial statements.

I-6

Table of Contents

QURATE RETAIL, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(unaudited)


	Six months ended
	June 30,
	2024		2023

	amounts in millions
Cash flows from operating activities:
Net earnings (loss)	$	40	152
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation and amortization		195	204
Stock-based compensation		19	30
Realized and unrealized (gains) losses on financial instruments, net		17	46
Gain on sale of assets and sale leaseback transactions		(1)	(119)
Gain on insurance proceeds, net of fire related costs		—	(228)
Insurance proceeds received for operating expenses and business interruption losses		—	226
Loss on disposition of Zulily		—	64
Deferred income tax expense (benefit)		(60)	25
Other, net		6	6
Changes in operating assets and liabilities
Decrease (increase) in accounts receivable		395	403
Decrease (increase) in inventory		(84)	131
Decrease (increase) in prepaid expenses and other assets		39	61
(Decrease) increase in trade accounts payable		(122)	(220)
(Decrease) increase in accrued and other liabilities		(151)	(313)
Net cash provided (used) by operating activities		293	468
Cash flows from investing activities:
Capital expenditures		(94)	(105)
Expenditures for television distribution rights		(13)	(107)
Cash proceeds from dispositions of investments		6	71
Cash paid for disposal of Zulily		—	(28)
Proceeds from sale of fixed assets		6	200
Insurance proceeds received for fixed asset loss		—	54
Payments for settlements of financial instruments		—	(179)
Proceeds from settlements of financial instruments		—	167
Other investing activities, net		(3)	(1)
Net cash provided (used) by investing activities		(98)	72
Cash flows from financing activities:
Borrowings of debt		1,660	1,002
Repayments of debt		(1,716)	(1,320)
Dividends paid to noncontrolling interest		(22)	(24)
Dividends paid to common shareholders		(4)	(7)
Indemnification agreement settlement		—	25
Other financing activities, net		(3)	(2)
Net cash provided (used) by financing activities		(85)	(326)
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash		(21)	(7)
Net increase (decrease) in cash, cash equivalents and restricted cash		89	207
Cash, cash equivalents and restricted cash at beginning of period		1,136	1,285
Cash, cash equivalents and restricted cash at end of period	$	1,225	1,492

The following table reconciles cash, cash equivalents and restricted cash reported in our condensed consolidated balance sheets to the total amount presented in our condensed consolidated statements of cash flows:


		June 30,	December 31,
		2024	2023

	in millions
Cash and cash equivalents	$	1,210	1,121
Restricted cash included in other current assets		15	15
Total cash, cash equivalents and restricted cash in the condensed consolidated statement of cash flows	$	1,225	1,136

See accompanying notes to condensed consolidated financial statements.

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Table of Contents

QURATE RETAIL, INC. AND SUBSIDIARIES

Condensed Consolidated Statement of Equity

(unaudited)



	Stockholders' Equity
						Accumulated
					Additional	other		Noncontrolling
	Preferred		Common stock		paid-in	comprehensive	Retained	interest in equity	Total
	stock		Series A	Series B	capital	earnings (loss)	earnings	of subsidiaries	equity

	amounts in millions
Balance at January 1, 2024	$	—	4	—	99	86	196	104	489
Net earnings (loss)		—	—	—	—	—	19	21	40
Other comprehensive earnings (loss)		—	—	—	—	(92)	—	(10)	(102)
Stock-based compensation		—	—	—	17	—	—	—	17
Distribution to noncontrolling interest		—	—	—	—	—	—	(22)	(22)
Withholding taxes on net share settlements of stock-based compensation		—	—	—	(2)	—	—	—	(2)
Other		—	—	—	1	—	—	—	1
Balance at June 30, 2024	$	—	4	—	115	(6)	215	93	421



	Stockholders' Equity
						Accumulated
					Additional	other		Noncontrolling
	Preferred		Common stock		paid-in	comprehensive	Retained	interest in equity	Total
	stock		Series A	Series B	capital	earnings (loss)	earnings	of subsidiaries	equity

	amounts in millions
Balance at March 31, 2024	$	—	4	—	107	(51)	195	96	351
Net earnings (loss)		—	—	—	—	—	20	12	32
Other comprehensive earnings (loss)		—	—	—	—	45	—	(4)	41
Stock-based compensation		—	—	—	8	—	—	—	8
Distribution to noncontrolling interest		—	—	—	—	—	—	(11)	(11)
Balance at June 30, 2024	$	—	4	—	115	(6)	215	93	421

See accompanying notes to condensed consolidated financial statements.

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QURATE RETAIL, INC. AND SUBSIDIARIES

Condensed Consolidated Statement of Equity (continued)

(unaudited)



	Stockholders' Equity
						Accumulated
					Additional	other		Noncontrolling
	Preferred		Common stock		paid-in	comprehensive	Retained	interest in equity	Total
	stock		Series A	Series B	capital	earnings (loss)	earnings	of subsidiaries	equity

	amounts in millions
Balance at January 1, 2023	$	—	4	—	53	18	337	113	525
Net earnings (loss)		—	—	—	—	—	127	25	152
Other comprehensive earnings (loss)		—	—	—	—	53	—	(8)	45
Stock-based compensation		—	—	—	25	—	—	—	25
Distribution to noncontrolling interest		—	—	—	—	—	—	(24)	(24)
Withholding taxes on net share settlements of stock-based compensation		—	—	—	(1)	—	—	—	(1)
Other		—	—	—	2	—	3	—	5
Balance at June 30, 2023	$	—	4	—	79	71	467	106	727



	Stockholders' Equity
						Accumulated		Accumulated
					Additional	other		Noncontrolling
	Preferred		Common stock		paid-in	comprehensive	Retained	interest in equity	Total
	stock		Series A	Series B	capital	earnings (loss)	earnings	of subsidiaries	equity

	amounts in millions
Balance at March 31, 2023	$	—	4	—	67	149	358	113	691
Net earnings (loss)		—	—	—	—	—	107	12	119
Other comprehensive income (loss)		—	—	—	—	(78)	—	(7)	(85)
Stock-based compensation		—	—	—	11	—	—	—	11
Distribution to noncontrolling interest		—	—	—	—	—	—	(12)	(12)
Other		—	—	—	1	—	2	—	3
Balance at June 30, 2023	$	—	4	—	79	71	467	106	727

See accompanying notes to condensed consolidated financial statements.

I-9

Table of Contents

QURATE RETAIL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

(unaudited)

(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. (“CBI”), and other cost 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 and CBI, 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, 2023, 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, 2023 (the “2023 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.

Qurate Retail has entered into certain agreements with Liberty Media Corporation ("LMC"), 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 amended services agreement. Under the amended services agreement, components of LMC’s Chief Executive Officer’s compensation are either paid directly to him or reimbursed to LMC, in each case, based on allocations set forth in the amended services agreement, currently set at 10% for the Company but subject to adjustment on an annual basis and upon the occurrence of certain events.

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

I-10

Table of Contents

QURATE RETAIL, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Continued)

(unaudited)

The following table presents the number of cash-settled RSUs granted by the Company during the six months ended June 30, 2024:


		Six months ended
		June 30, 2024
		RSUs Granted (000's)

QRTEA time-based RSUs, subsidiary employees (1)		20,945
QRTEA performance-based RSUs, subsidiary employees (2)		20,305
QRTEA performance-based RSUs, Qurate Retail employees (3)		921

(1)

Grants mainly vest equally over three years.

(2)

Grants vest equally over three years, subject to the satisfaction of certain performance objectives.

(3)

Grants vest one year from the month of grant, subject to the satisfaction of certain performance objectives.

For cash-settled RSUs, the liability and compensation expense related to such awards is adjusted at the end of each reporting period based on the closing market price of QRTEA on the last trading day of the quarter.

For awards that are performance-based, performance objectives, which are subjective, are considered in determining the timing and amount of compensation expense recognized. When the satisfaction of the performance objectives becomes probable, the Company records compensation expense. The probability of satisfying the performance objectives is assessed at the end of each reporting period.

Qurate Retail—Outstanding Awards

The following tables present the number and weighted average exercise price ("WAEP") of the options 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 options.

Weighted

Aggregate

average

intrinsic

Series A


PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
QURATE RETAIL, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (unaudited)		I-3
QURATE RETAIL, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Operations (unaudited)		I-5
QURATE RETAIL, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Comprehensive Earnings (Loss) (unaudited)		I-6
QURATE RETAIL, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows (unaudited)		I-7
QURATE RETAIL, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Equity (unaudited)		I-8
QURATE RETAIL, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (unaudited)		I-10
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations		I-24
Item 3. Quantitative and Qualitative Disclosures about Market Risk.		I-37
Item 4. Controls and Procedures.		I-38

PART II—OTHER INFORMATION		II-1
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		II-1
Item 5. Other Information		II-1
Item 6. Exhibits		II-2

SIGNATURES		II-3