jvid视频

(1) Basis of Presentation

The accompanying consolidated financial statements include the accounts of jvid视频. (formerly named Liberty Interactive Corporation prior to the Transactions (defined and described below), or 鈥淟iberty鈥�) and its controlled subsidiaries (collectively, "jvid视频," the "Company," 鈥渨e,鈥� 鈥渦s,鈥� and 鈥渙ur鈥�) unless the context otherwise requires). All significant intercompany accounts and transactions have been eliminated in consolidation.

jvid视频, through its ownership of interests in subsidiaries and other companies, is primarily engaged in the video and online commerce industries in North America, Europe and Asia.

Prior to the Transactions (described and defined below), the Company utilized tracking stocks in its capital structure. A tracking stock is a type of common stock that the issuing company intends to reflect or "track" the economic performance of a particular business or "group," rather than the economic performance of the company as a whole. jvid视频 had two tracking stocks鈥擰VC Group common stock and Liberty Ventures common stock, which were intended to track and reflect the economic performance of the businesses, assets and liabilities attributed to the QVC Group and the Ventures Group, respectively.听听The QVC Group was comprised of the Company鈥檚 wholly-owned subsidiaries QVC, Inc., Zulily, LLC (鈥淶ulily鈥�), HSN, Inc. (鈥淗SN鈥�) and Cornerstone Brands, Inc. (鈥淐ornerstone鈥�), among other assets and liabilities.听听The Ventures Group was comprised of businesses not included in the QVC Group including Evite, Inc. (鈥淓vite鈥�) and our interests in Liberty Broadband Corporation (鈥淟iberty Broadband鈥�), LendingTree, Inc. (鈥淟endingTree鈥�),听investments in Charter Communications, Inc. (鈥淐harter鈥�) and ILG, Inc. (鈥淚LG鈥�), among other assets and liabilities. The Company鈥檚 results are attributed to the QVC Group and the Ventures Group through March 9, 2018.

On December 29, 2017, jvid视频 acquired the approximately 62% of HSN it did not already own in an all-stock transaction making HSN a wholly-owned subsidiary. HSN stockholders (other than jvid视频) received fixed consideration of 1.65 shares of Series A QVC Group common stock (鈥淨VCA鈥�) for each share of HSN common stock. jvid视频 issued 53.6 million shares QVCA common stock to HSN stockholders. 听On December 31, 2018, jvid视频 transferred its 100% ownership interest in HSN to QVC, Inc. through a transaction among entities under common control. References throughout this annual report to 鈥淨VC鈥� refer to QVC, Inc., which includes HSN, QVC U.S. and QVC International. 听Cornerstone remains a subsidiary of jvid视频.

On March听9, 2018, jvid视频 completed the transactions contemplated by the Agreement and Plan of Reorganization (as amended, the 鈥淩eorganization Agreement,鈥� and the transactions contemplated thereby, the 鈥淭ransactions鈥�) among General Communication,听Inc. (鈥淕CI鈥�), an Alaska corporation, and Liberty Interactive听LLC, a Delaware limited liability company and a direct wholly-owned subsidiary of jvid视频 (鈥淟I听LLC鈥�). Pursuant to the Reorganization Agreement, GCI amended and restated its articles of incorporation (which resulted in GCI being renamed GCI Liberty,听Inc. (鈥淕CI Liberty鈥�)) and effected a reclassification and auto conversion of its common stock. After market close on March 8, 2018, jvid视频鈥檚 board of directors approved the reattribution of certain assets and liabilities from jvid视频鈥檚 Ventures Group to its QVC Group, which was effective immediately. The reattributed assets and liabilities included cash, jvid视频鈥檚 interest in ILG, certain green energy investments, LI LLC鈥檚 exchangeable debentures, and certain tax benefits.

Following these events, jvid视频 acquired GCI Liberty through a reorganization in which certain jvid视频 interests, assets and liabilities attributed to the Ventures Group were contributed (the 鈥渃ontribution鈥�) to GCI Liberty in exchange for a controlling interest in GCI Liberty. jvid视频 and LI听LLC contributed to GCI Liberty their entire equity interest in Liberty Broadband, Charter, and LendingTree, the Evite operating business and other assets and liabilities attributed to jvid视频鈥檚 Venture Group (following the reattribution), in exchange for (a)听the issuance to LI听LLC of听a number of shares of GCI Liberty Class听A Common Stock and a number of shares of GCI Liberty Class听B Common Stock equal to the number of outstanding shares of Series听A Liberty Ventures common stock and Series听B Liberty Ventures

common stock on March听9, 2018, respectively, (b)听cash and (c)听the assumption of certain liabilities by GCI Liberty. The following is a reconciliation of the assets and liabilities that were derecognized by the Company (in millions) at the date of the GCI Liberty Split-Off (as defined below):

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Following the contribution, jvid视频 effected a tax-free separation of its controlling interest in the combined company (the 鈥淕CI Liberty Split-Off鈥�), GCI Liberty, to the holders of Liberty Ventures common stock in full redemption of all outstanding shares of such stock, in which each outstanding share of Series听A Liberty Ventures common stock was redeemed for one share of GCI Liberty Class听A common stock and each outstanding share of Series听B Liberty Ventures common stock was redeemed for one share of GCI Liberty Class听B common stock.听听Simultaneous with the closing of the Transactions, QVC Group common stock became the only outstanding common stock of jvid视频, and thus QVC Group common stock ceased to function as a tracking stock. On April 9, 2018, Liberty Interactive Corporation was renamed jvid视频. On May 23, 2018, jvid视频 amended its charter to eliminate the tracking stock capitalization structure and reclassify each share of QVC Group common stock into one share of the corresponding series of new common stock of jvid视频. Throughout this annual report, we refer to our Series A and Series B common stock as 鈥渏vid视频 common stock鈥� and 鈥淨VC Group common stock.鈥� In July 2018, the Internal Revenue Service (鈥淚RS鈥�) completed its review of the GCI Liberty Split-Off and informed jvid视频 that it agreed with the nontaxable characterization of the transactions. jvid视频 received an Issue Resolution Agreement from the IRS documenting this conclusion.

On October 17, 2018, jvid视频 announced a series of initiatives designed to better position its HSN and QVC U.S. businesses (鈥淨RG Initiatives鈥�). As part of the QRG Initiatives, QVC will close its fulfillment centers in Lancaster, Pennsylvania and Roanoke, Virginia and leased a new fulfillment center in Bethlehem, Pennsylvania, that commenced in 2019 (see note 9). jvid视频 recorded transaction related costs of $41 million during the year ended December 31, 2018 related to the QRG Initiatives, which primarily related to severance costs. Also, as a result of changes in internal reporting from the QRG Initiatives, during the first quarter of 2019 the Company changed its reportable segments to combine HSN and QVC U.S. into one reportable segment called 鈥淨xH.鈥�

jvid视频 and GCI Liberty (for accounting purposes a related party of jvid视频) entered into a tax sharing agreement. Pursuant to that tax sharing agreement, GCI Liberty has agreed to indemnify jvid视频 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).

jvid视频 and Liberty Media Corporation (鈥淟MC鈥�) (for accounting purposes a related party of jvid视频) entered into certain agreements in order to govern certain of the ongoing relationships between the two companies. These agreements include a reorganization agreement, a services agreement (the 鈥淪ervices Agreement鈥�), a facilities sharing agreement (the 鈥淔acilities Sharing Agreement鈥�) and a tax sharing agreement (the 鈥淭ax Sharing Agreement鈥�). The Tax Sharing Agreement provides for the allocation and indemnification of tax liabilities and benefits between jvid视频 and LMC and other agreements related to tax matters. 听jvid视频 is party to on-going discussions with the IRS under the Compliance Assurance Process audit program. 听The IRS may propose adjustments that relate to tax attributes allocated to and income allocable to LMC. 听Any potential outcome associated with any proposed adjustments would be covered by the Tax Sharing Agreement and are not expected to have any impact on jvid视频's financial position. 听Pursuant to the Services Agreement, LMC provides jvid视频 with general and administrative services including legal, tax, accounting, treasury and investor relations support. See below for a description of an amendment to the services agreement entered into in December 2019. jvid视频 reimburses LMC for direct, out-of-pocket expenses incurred by LMC in providing these services and for jvid视频's allocable portion of costs associated with any shared services or personnel based on an estimated percentage of time spent providing services to jvid视频. Under the Facilities Sharing Agreement, jvid视频 shares office space with LMC and related amenities at LMC's corporate headquarters. 听Under these various agreements approximately $8 million, $8 million and $11 million of these allocated expenses were reimbursable from jvid视频 to LMC for the years ended December 31, 2019, 2018 and 2017, respectively. jvid视频 had a tax sharing payable of approximately $95 million and $114 million as of December 31, 2019 and 2018, respectively, included in Other liabilities in the consolidated balance sheets. 听

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In December 2019, the Company entered into an amendment to the Services Agreement in connection with LMC鈥檚 entry into a new employment arrangement with Gregory B. Maffei, the Company鈥檚 Chairman of the Board (the 鈥淐hairman鈥�). Under the amended Services Agreement, components of his compensation will either be paid directly to him by each of the Company, Liberty TripAdvisor Holdings, Inc., GCI Liberty, Inc., and Liberty Broadband Corporation. (collectively, the 鈥淪ervice Companies鈥�) or reimbursed to LMC, in each case, based on allocations among LMC and the Service Companies set forth in the amended Services Agreement, currently set at 19% for the Company. The new agreement provides for a five year employment term which began on January 1, 2020 and ends December 31, 2024, with an aggregate annual base salary of $3 million (with no contracted increase), an aggregate one-time cash commitment bonus of $5 million, an aggregate annual target cash performance bonus of $17 million, aggregate annual equity awards of $17.5 million and aggregate equity awards granted in connection with his entry into his new agreement of $90 million (the 鈥渦pfront awards鈥�). 听A portion of the grants made to our Chairman in the year ended December 31, 2019 related to our Company鈥檚 allocable portion of these upfront awards.