jvid视频

(1)听听听Basis of Presentation

The accompanying condensed 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," 鈥淐onsolidated jvid视频,鈥� 鈥渦s,鈥� 鈥渨e,鈥� or 鈥渙ur鈥� unless the context otherwise requires). All significant intercompany accounts and transactions have been eliminated in consolidation. jvid视频 is made up of wholly-owned subsidiaries QVC, Inc. (鈥淨VC鈥�), zulily, llc (鈥渮ulily鈥�), and HSN, Inc. (鈥淗SNi鈥� which includes its televised shopping business 鈥淗SN鈥� and its catalog retail business 鈥淐ornerstone鈥�), an equity investment in FTD Companies, Inc. (鈥淔TD鈥�) and an investment in ILG, Inc. (鈥淚LG鈥�).

jvid视频 is primarily engaged in the video and online commerce industries in North America, Europe and Asia. The businesses of the Company鈥檚 wholly-owned subsidiaries, QVC and HSNi, 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听31,听2017, 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听10-Q and Article听10 of Regulation听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 jvid视频's Annual Report on Form听10-K for the year ended December听31,听2017.

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. jvid视频 considers (i)听fair value measurement, (ii)听accounting for income taxes, (iii)听assessments of other-than-temporary declines in fair value of its investments and (iv)听estimates of retail-related adjustments and allowances to be its most significant estimates.听听听

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, zulily and HSNi (as of December 29, 2017), 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�), FTD,听investments in Charter Communications, Inc. (鈥淐harter鈥�) and ILG, 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 HSNi it did not already own in an all-stock transaction making HSNi a wholly-owned subsidiary. HSNi 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 HSNi common stock. jvid视频 issued 53.6 million shares QVCA common stock to HSNi stockholders.

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 Liberty (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, FTD, certain green energy investments, LI LLC鈥檚 exchangeable debentures, and certain tax benefits.听

Following these events, jvid视频 acquired GCI (renamed 鈥淕CI Liberty, Inc.鈥�) 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.

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. With respect to events on or after May 23, 2018, we refer to our Series A and Series B common stock as 鈥渏vid视频 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.

As a result of repurchases of Series A jvid视频 common stock and the GCI Liberty Split-Off, the Company鈥檚 additional paid-in capital balance was in a deficit position as of June听30, 2018.听听In order to ensure that the additional paid-in capital account is not negative, we reclassified the amount of the deficit ($3.8 billion) at June听30, 2018 to retained earnings.

jvid视频 holds investments that are accounted for using the equity method. jvid视频 does not control the decision making process or business management practices of these affiliates. Accordingly, jvid视频 relies on management of these affiliates to provide it with accurate financial information prepared in accordance with GAAP that jvid视频 uses in the application of the equity method. In addition, jvid视频 relies on audit reports that are provided by the affiliates' independent auditors on the financial statements of such affiliates. The Company is not aware, however, of any errors in or possible misstatements of the financial information provided by its equity affiliates that would have a material effect on jvid视频's condensed consolidated financial statements.

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jvid视频 has entered into certain agreements with Liberty Media Corporation ("LMC") (for accounting purposes, a related party of the Company), a separate publicly traded company. These agreements include a reorganization agreement, services agreement and facilities sharing agreement. Neither jvid视频 nor LMC has any stock ownership, beneficial or otherwise, in the other.

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The reorganization agreement with LMC provides for, among other things, provisions governing the relationship between jvid视频 and LMC, including certain cross-indemnities. Pursuant to the services agreement, LMC provides jvid视频 with certain general and administrative services including legal, tax, accounting, treasury and investor relations support. 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, LMC shares office space and related amenities at its corporate headquarters with jvid视频. Under these various agreements, approximately听$2 million and $3 million was reimbursable to LMC for the three months ended听June听30, 2018 and 2017, respectively, and $4 million and $5 million was reimbursable to LMC for the six months ended June听30,听2018 and 2017, respectively.听

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The Tax Cuts and Jobs Act (the 鈥淭ax Act鈥�) was enacted in December 2017. The Tax Act significantly changed U.S. tax law by, among other things, lowering the听U.S. corporate income tax rate, implementing a territorial tax system and imposing a one-time transition tax on deemed repatriated earnings of foreign subsidiaries. 听In the prior year, we recognized the provisional tax impacts related to the one-time transition tax and the revaluation of deferred tax balances and included these estimates in our consolidated financial statements for the year ended December 31, 2017. We are still in the process of analyzing the impact of the various provisions of the Tax Act. The ultimate impact may materially differ from these provisional amounts due to, among other things, continued analysis of the estimates and further guidance and interpretations on the application of the law. We expect to complete our analysis by December 2018.