XML 26 R14.htm IDEA: XBRL DOCUMENT v3.5.0.2
Related Party Transactions
6 Months Ended
Jun. 30, 2016
Related Party Transactions [Abstract]  
Related Party Transactions
Related Party Transactions
(a)   Transactions with QVC
We provide our solutions to an affiliate company, QVC, Inc. (“QVC”), which is a wholly owned subsidiary of Liberty. For the six-month periods ended June 30, 2016 and 2015, QVC accounted for approximately 7% and 8% of total revenue, respectively. We had receivables relating to ordinary business with QVC of approximately $631 thousand and $511 thousand at June 30, 2016 and December 31, 2015, respectively.
(b)   Transactions with Parent
Historically, we have had outstanding a promissory note as a lender to Liberty. This note carried an interest rate based on one-year LIBOR plus 100 basis points. In the three months ended June 30, 2016, Liberty fully repaid amounts outstanding of $36.4 million pursuant to this agreement, including accumulated interest of $2.4 million. As of June 30, 2016 and December 31, 2015, the balance due from Liberty, including accrued interest, was $0 and $36.1 million, respectively.
During June 2016, to assist the Company in meeting its financial obligations under the SAR Plan and Liquidity Program (see Note 11 to these condensed consolidated financial statements), the Company entered into a funding arrangement with Parent pursuant to a previously established intercompany funding agreement. Under the funding arrangement, the Parent agreed to loan the Company cash at current market interest rates, or make additional equity investments in common stock, in amounts sufficient to fulfill the Company's obligations under the SAR Plan and Liquidity Program. As of June 30, 2016, the balance due to Liberty was $28.7 million and is included in note payable - Parent on the condensed consolidated balance sheet. Subsequent to June 30, 2016, amounts outstanding pursuant to this arrangement, including accumulated interest, were repaid to Liberty by the Company using borrowings under our credit facility (see Note 13 to these condensed consolidated financial statements). The funding agreement between the Company and Liberty was terminated as of the completion of the Spin-Off.
CommerceHub entered into certain agreements (effective July 22, 2016) with Liberty and/or Liberty Media, including a reorganization agreement, a services agreement and a tax sharing agreement. The reorganization agreement provides for, among other things, the principal corporate transactions (including the internal restructuring) required to effect the Spin-Off, certain conditions to the Spin-Off and provisions governing the relationship between CommerceHub and Liberty with respect to and resulting from the Spin-Off. The tax sharing agreement provides for the allocation and indemnification of tax liabilities and benefits between Liberty and CommerceHub and other agreements related to tax matters. Pursuant to the services agreement, Liberty Media will provide CommerceHub with general and administrative services including legal, tax, accounting, treasury and investor relations support related to necessary public company functions. CommerceHub will reimburse Liberty Media for direct, out-of pocket expenses incurred by Liberty Media in providing these services, and CommerceHub will pay a services fee to Liberty Media under the services agreement. Liberty Media and CommerceHub will evaluate all charges for reasonableness on a quarterly basis and make such adjustments to these charges as the parties mutually agree.
Refer to Note 15 to these condensed consolidated financial statements for further discussion of transactions with Liberty that occurred subsequent to June 30, 2016.