Liberty Live Holdings (LLYVK) Q4 2008 earnings summary

Executive summary

• Revenue rose 7.0% to $10.084B, while Adjusted OIBDA fell 8.5% to $1.582B; a $1.569B impairment drove a $747M operating loss versus $738M income in 2007.

• Net earnings were $3.479B versus $2.114B, supported by a $2.280B income tax benefit and $3.679B in disposition gains, including the $3.665B News Corporation exchange gain.

Financial highlights

• Revenue was $10.084B, comprising $8.079B net retail sales and $2.005B communications and programming services.

• Adjusted OIBDA declined to $1.582B from $1.729B; the $147M decrease was primarily attributable to QVC.

• Operating loss was $747M, compared with operating income of $738M in 2007; long-lived asset impairment charges totaled $1.569B.

• Net earnings were $3.479B versus $2.114B; income from continuing operations was $3.479B versus $1.965B in 2007.

Outlook and guidance

• Retail challenges were expected to persist in the U.S. and extend into international markets; expense, inventory, credit and capital needs remained key management priorities.

• QVC planned product and programming updates, website improvements, cost controls and the launch of QVC Italy in 2010.

• Completion of the Entertainment asset split-off and DIRECTV merger was targeted by year-end 2009; the split-off was expected in Q2 2009, subject to approvals and tax conditions.

• Projected 2009 uses included $330M for Interactive Group interest, $215M for capex and $117M of maturing public debt; Capital Group expected $300M of debt repayment and $175M of interest payments.