Liberty Live Holdings (LLYVK) Q4 2005 earnings summary

Executive summary

• 2005 revenue rose 12.9% to $7.960B and operating income reached $897M; net loss was $33M, versus net earnings of $46M in 2004.

• Strategic priorities included completing the Discovery Holding spin-off and creating Liberty Capital and Liberty Interactive tracking stocks to simplify the asset portfolio and support growth.

Financial highlights

• Consolidated operating cash flow was $1.588B, up 10.4% YoY; QVC added $192M and TruePosition improved $30M, partly offset by a $68M decline at SEG.

• Net loss of $33M included $449M of investment impairments, including $352M related to News Corp. voting shares; net earnings were $46M in 2004.

• Interest expense was $623M in 2005 versus $615M in 2004, as higher variable rates more than offset lower debt balances.

Outlook and guidance

• QVC priorities for 2006: domestic and international customer growth, broader product selection, and continued website development; management expected revenue growth to moderate as markets mature.

• SEG expected 2006 programming costs to rise 5%–7%; Vongo launch and marketing expenses would offset much of the slower cost growth, with revenue and operating cash flow growth expected in 2007.

• Planned 2006 cash uses included $1.4B of senior-note maturities, $481M for Provide Commerce, ~$465M of interest, ~$200M for FUN Technologies, and ~$200M for a secured WildBlue loan.