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 September 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 October 31, 2024 was:


Series A common stock		388,022,184
Series B common stock		8,927,840

Table of Contents

QURATE RETAIL, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(unaudited)


	September 30,		December 31,
	2024		2023

	amounts in millions
Assets
Current assets:
Cash and cash equivalents	$	873	1,121
Trade and other receivables, net of allowance for credit losses of $82 million and $102 million, respectively		883	1,308
Inventory, net		1,299	1,044
Other current assets		174	209
Total current assets		3,229	3,682
Property and equipment, net		500	512
Intangible assets not subject to amortization (note 5):
Goodwill		3,175	3,164
Trademarks		2,698	2,698
		5,873	5,862
Intangible assets subject to amortization, net (note 5)		437	526
Operating lease right-of-use assets		618	635
Other assets, at cost, net of accumulated amortization		116	151
Total assets	$	10,773	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)


	September 30,		December 31,
	2024		2023

	amounts in millions,
	except share amounts
Liabilities and Equity
Current liabilities:
Accounts payable	$	839	895
Accrued liabilities		802	983
Current portion of debt, $289 million and $219 million measured at fair value (note 6)		874	642
Other current liabilities		134	97
Total current liabilities		2,649	2,617
Long-term debt (note 6)		4,185	4,698
Deferred income tax liabilities		1,443	1,531
Preferred stock (note 7)		1,272	1,270
Operating lease liabilities		614	615
Other liabilities		131	148
Total liabilities		10,294	10,879
Equity
Stockholders' equity:
Series A common stock, $.01 par value. Authorized 4,000,000,000 shares; issued and outstanding 388,020,873 shares at September 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 September 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		123	99
Accumulated other comprehensive earnings (loss), net of taxes		78	86
Retained earnings		192	196
Total stockholders' equity		397	385
Noncontrolling interests in equity of subsidiaries		82	104
Total equity		479	489
Commitments and contingencies (note 8)
Total liabilities and equity	$	10,773	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			Nine months ended
	September 30,			September 30,
	2024		2023	2024		2023

	amounts in millions, except per share amounts
Total revenue, net	$	2,344	2,479		7,093	7,772
Operating costs and expenses:
Cost of goods sold (exclusive of depreciation shown separately below)		1,517	1,603		4,560	5,146
Operating expense		175	186		533	573
Selling, general and administrative, including stock-based compensation (note 2)		405	415		1,231	1,359
Restructuring, penalties and fire related costs, net of (recoveries) (note 8)		—	19		18	(189)
Depreciation and amortization		95	105		290	309
Gain on sale of assets and leaseback transactions (note 8)		—	—		(1)	(119)
		2,192	2,328		6,631	7,079
Operating income (loss)		152	151		462	693
Other income (expense):
Interest expense		(117)	(119)		(353)	(336)
Dividend and interest income		14	14		41	39
Realized and unrealized gains (losses) on financial instruments, net (note 4)		(36)	(14)		(53)	(60)
Loss on disposition of Zulily, net		—	—		—	(64)
Other, net		(13)	1		(19)	11
		(152)	(118)		(384)	(410)
Earnings (loss) before income taxes		—	33		78	283
Income tax (expense) benefit		(15)	(21)		(53)	(119)
Net earnings (loss)		(15)	12		25	164
Less net earnings (loss) attributable to the noncontrolling interests		8	11		29	36
Net earnings (loss) attributable to Qurate Retail, Inc. shareholders	$	(23)	1		(4)	128

Basic net earnings (loss) attributable to Series A and Series B Qurate Retail, Inc. shareholders per common share (note 3):	$	(0.06)	—		(0.01)	0.33
Diluted net earnings (loss) attributable to Series A and Series B Qurate Retail, Inc. shareholders per common share (note 3):	$	(0.06)	—		(0.01)	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			Nine months ended
	September 30,			September 30,
	2024		2023	2024	2023

	amounts in millions
Net earnings (loss)	$	(15)	12	25	164
Other comprehensive earnings (loss), net of taxes:
Foreign currency translation adjustments		94	(47)	21	(51)
Recognition of previously unrealized losses (gains) on debt, net		—	—	—	(32)
Credit risk on fair value debt instruments gains (loss)		—	1	(29)	82
Other comprehensive earnings (loss)		94	(46)	(8)	(1)
Comprehensive earnings (loss)		79	(34)	17	163
Less comprehensive earnings (loss) attributable to the noncontrolling interests		18	8	29	25
Comprehensive earnings (loss) attributable to Qurate Retail, Inc. shareholders	$	61	(42)	(12)	138

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)


	Nine months ended
	September 30,
	2024		2023

	amounts in millions
Cash flows from operating activities:
Net earnings (loss)	$	25	164
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation and amortization		290	309
Stock-based compensation		22	40
Realized and unrealized (gains) losses on financial instruments, net		53	60
Gain on sale of assets and sale leaseback transactions		(1)	(119)
Gain on insurance proceeds, net of fire related costs		—	(225)
Insurance proceeds received for operating expenses and business interruption losses		—	226
Loss on disposition of Zulily		—	64
Deferred income tax expense (benefit)		(86)	62
Other, net		11	3
Changes in operating assets and liabilities
Decrease (increase) in accounts receivable		411	378
Decrease (increase) in inventory		(249)	63
Decrease (increase) in prepaid expenses and other assets		71	90
(Decrease) increase in trade accounts payable		(59)	(103)
(Decrease) increase in accrued and other liabilities		(175)	(410)
Net cash provided (used) by operating activities		313	602
Cash flows from investing activities:
Capital expenditures		(137)	(151)
Expenditures for television distribution rights		(23)	(111)
Cash proceeds from dispositions of investments		7	71
Cash paid for disposal of Zulily		—	(35)
Proceeds from sale of fixed assets		6	202
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		(2)	—
Net cash provided (used) by investing activities		(149)	18
Cash flows from financing activities:
Borrowings of debt		1,895	1,137
Repayments of debt		(2,249)	(1,893)
Dividends paid to noncontrolling interest		(51)	(35)
Dividends paid to common shareholders		(4)	(8)
Indemnification agreement settlement		—	26
Other financing activities, net		(3)	(3)
Net cash provided (used) by financing activities		(412)	(776)
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash		2	(17)
Net increase (decrease) in cash, cash equivalents and restricted cash		(246)	(173)
Cash, cash equivalents and restricted cash at beginning of period		1,136	1,285
Cash, cash equivalents and restricted cash at end of period	$	890	1,112

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:


		September 30,	December 31,
		2024	2023

	in millions
Cash and cash equivalents	$	873	1,121
Restricted cash included in other current assets		17	15
Total cash, cash equivalents and restricted cash in the condensed consolidated statement of cash flows	$	890	1,136

See accompanying notes to condensed consolidated financial statements.

I-7

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)		—	—	—	—	—	(4)	29	25
Other comprehensive earnings (loss)		—	—	—	—	(8)	—	—	(8)
Stock-based compensation		—	—	—	24	—	—	—	24
Distribution to noncontrolling interest		—	—	—	—	—	—	(51)	(51)
Withholding taxes on net share settlements of stock-based compensation		—	—	—	(2)	—	—	—	(2)
Other		—	—	—	2	—	—	—	2
Balance at September 30, 2024	$	—	4	—	123	78	192	82	479



	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 June 30, 2024	$	—	4	—	115	(6)	215	93	421
Net earnings (loss)		—	—	—	—	—	(23)	8	(15)
Other comprehensive earnings (loss)		—	—	—	—	84	—	10	94
Stock-based compensation		—	—	—	7	—	—	—	7
Distribution to noncontrolling interest		—	—	—	—	—	—	(29)	(29)
Other		—	—	—	1	—	—	—	1
Balance at September 30, 2024	$	—	4	—	123	78	192	82	479

See accompanying notes to condensed consolidated financial statements.

I-8

Table of Contents

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)		—	—	—	—	—	128	36	164
Other comprehensive earnings (loss)		—	—	—	—	10	—	(11)	(1)
Stock-based compensation		—	—	—	36	—	—	—	36
Distribution to noncontrolling interest		—	—	—	—	—	—	(35)	(35)
Withholding taxes on net share settlements of stock-based compensation		—	—	—	(1)	—	—	—	(1)
Other		—	—	—	2	—	3	—	5
Balance at September 30, 2023	$	—	4	—	90	28	468	103	693



	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 June 30, 2023	$	—	4	—	79	71	467	106	727
Net earnings (loss)		—	—	—	—	—	1	11	12
Other comprehensive income (loss)		—	—	—	—	(43)	—	(3)	(46)
Stock-based compensation		—	—	—	11	—	—	—	11
Distribution to noncontrolling interest		—	—	—	—	—	—	(11)	(11)
Balance at September 30, 2023	$	—	4	—	90	28	468	103	693

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 nine months ended September 30, 2024:


		Nine months ended
		September 30, 2024
		RSUs Granted (000's)

QRTEA time-based RSUs, subsidiary employees (1)		21,171
QRTEA performance-based RSUs, subsidiary employees (2)		20,409
QRTEA performance-based RSUs, Qurate Retail employees (3)		941

(1)

Grants mainly vest equally over three years.

(2)

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

(3)

Grants mainly 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

remaining

value

(000's)

WAEP

life

(millions)

Options outstanding at January 1, 2024


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-25
Item 3. Quantitative and Qualitative Disclosures about Market Risk		I-39
Item 4. Controls and Procedures		I-40

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