Thank you for joining us. It is a big day in the history of a great company as we reveal our course for the next few years. Before I begin today, we'd like to show a short video. It went like. One, two, three, four. This is where the party is tonight. One, two, three. two, three. One, two, three, four. Kara Starcher live in our studio. I mean, you just look rich, lady. Should I have summoned the car? Take a swim, bring me to see water time. We can fly if you take me under your wing. But let me do my thing. It went like. Hey, hey. A five, six, seven, eight. You can see what's in future. What you got me in the picture, yeah, I'm gonna. Make it nice, yeah, I'll bring the good fight. Gotta win if you let me into the ring. But I'ma do it my way. It went like. A o ne, two, three, four. A o three, four. A o ne, two, three, four. One of the top 10 most magical things I've ever done in my life. A o ne, two, three, four. Whoo. Whoo. three, four. Whoo. Whoo. three, four. Whoo. Whoo. It went like. You look so cute, Jamie. Oh. I love the color combo. It went like. Here is why I love these kitchens. Plenty of cabinet space for kind of all my goodies. It went like. This has been a dream come true. I'm truly having the time of my life. It's your opening night. I'm so nervous. I feel like I'm singing on The Oscars. A o ne, two, three, four. It went like. Do the filet and the brisket happy dance. I know there's some new interest in our story, so I want to start with an overview. We are a company united by one fundamental belief, that retail needs to have a human soul, and that it is losing it. In that reel, you can see people relating to each other or relating to aspirational visions about the products they use in their daily lives. This is not where retail is heading today. Today, it is being driven by massive online players like Amazon, who use algorithms to maximize convenience, efficiency, and profitability above every purchase. They will continue to be a winner, and they should. They provide something incredibly useful. There's another category, a retailer with massive boxes with tens of thousands of products, reached by pacing around a concrete floor and consummated by self-checkout. They will win as well. The question is, outside of these examples, in extreme luxury, will anyone else win? Will only the wealthiest have shopping that stirs and excites? We don't think so. We think that in a world more starved than ever for human connection, we can help provide some of that connection, as we have for decades, and in doing so, create great returns to you, our investors, along the way. Today, we are going to talk about our path there. Qurate Retail is a remarkable and unique collection of leading brands. QVC U.S., HSN, and QVC International are the global leaders in video commerce. In the 12 months ending March thirty-first, QVC U.S. and HSN generated $8 billion of revenue and served nearly 10 million customers. In the same time period, QVC International generated $3 billion in revenue and served more than 4.5 million customers. In recent years, our international businesses have been more consistent performers than our U.S. business. I will spend a lot of today addressing the U.S. business because it makes up the great majority of Qurate Retail revenue and adjusted OIBDA. However, we continue to see large opportunities for improvement and growth in our international business. Zulily recognized that moms were underserved and needed value, and it also recognized that retail was often overstocked and needed a separately branded outlet. That insight propelled Zulily towards fast growth and consistent profitability until recent years. Today, it remains a billion-dollar revenue business with millions of customers and powerful vendor relationships. Finally, the outstanding Cornerstone Brands. These brands were previously rooted in the catalog, but now have very successfully made the transition online. With a remarkable direct marketing mindset, almost exclusively protected and proprietary products, and strong independent brands, Cornerstone has thrived in the at-home lifestyle of the pandemic and beyond. Frontgate, Ballard Designs, Garnet Hill, Grandin Road are all brands that stir the imagination. That is the Qurate Retail Group, a group with an audacious mission to make sure retail stays human. Globally, we reach more than 200 million households through our 14 television channels. In the U.S., our video commerce business of QVC and HSN reach more than 90 million households with our core flagship video commerce offering. That offering has never been more attractive. We set a U.S. record with 66 billion minutes, about 125,000 person years viewed last year. This is driven by ubiquity across the viewing universe, including hard work to secure premium channel positioning across platforms. It is arguably the most unique retail asset in the world. When people find and try us, they tend to love us and stay. Our frequency and spend per customer and retention rates are world-class in the world of retail. It is often observed that this business grew out of over-the-air and linear cable TV. Thanks to the foresight of our prior leaders, we are very present across most of the relevant modern streaming platforms. We'll talk about what we must do to grow from there, but we have incredible reach. I have to say, we have a nearly perfect customer. Our core customer is a woman in her fifties. They are strong, active, influential women with high purchasing power. They are women living in major cities or suburbs. They enjoy meeting new people and staying connected on social media. This profile has stayed remarkably stable year- after- year, and according to some estimates, at this stage, they control over 70% of household purchasing decisions. She is at the peak of her wealth and consumerism, and she is relatively insulated during downturns and recessions. When you think about a woman in her fifties, think about Julia Roberts or Jennifer Aniston or Jennifer Lopez, Halle Berry or Michelle Obama. She is youthful and just reaching her prime. Our average U.S. customer is married, the vast majority are homeowners, and they have above-average household income. If you had to pick a customer to serve during highly inflationary times or through a recession, I can't imagine a better demographic. I am sometimes asked whether we want a younger customer. What I want is to consistently graduate younger customers into a new and richer way of shopping as they mature into great consumers. Now, you may ask, with this exceptional set of capabilities and assets and an ideal target customer, why has the business struggled in recent years with falling sales and shrinking profits? I think we fundamentally made five mistakes. First, we held our customer too loosely. In a human connection, trust means everything, and our desire to bring in a new and different customer, we lost focus, and that trust eroded over time. It eroded because when QVC and HSN merged, we merged the management and started losing sight of the customer identities of each. We under-rewarded our most loyal customers. For example, our best customers for QVC U.S. number about 1.3 million, or about 16% of its customer base, and make up 70% of its sales. They know us very well, and we have to show that we know and prize and recognize them. Our digital properties were not sufficiently personalized. We did not tailor the experience enough to their individual preferences, and we can see that in our organic traffic and returns. Second, in recent years, we lost sight of our fundamentals. At the center of our video commerce engine is the today's special or today's special value. It makes up 20%-25% of our sales on any particular day. Our TSV is still an incredibly powerful tool to move massive volume. As was widely reported, for example, Jessica Simpson sold 13,000 dresses in 30 minutes of airtime. Over time, we made the TSV less valuable to customers compared to a normal sale, which confused the customer. They eventually came to view us as commanding a premium even when we were actually at a material discount to our competitors. There are real opportunities to optimize our most important asset, our airtime. We have room to devote more airtime to subcategories with higher productivity and higher margin. Third, our business became too expensive to operate. While this model performed well during the pandemic-fueled boom, it was financially punishing during down markets. Compounded by the fire at Rocky Mount, our distribution network became too heavy, tilted towards the East Coast, and inflexible. Further, we failed to take advantage, full advantage of opportunities to lower the cost of goods for our merchandise. We also did not fully capture opportunities to grow private label, and we purchased too much inventory. All of these operational issues led to too many people having too much manual work. Fourth, we failed to optimize the portfolio. The purchase of Zulily was meant to bring digital DNA into the core video commerce business. When this fit proved less than natural, we did not sufficiently sharpen Zulily's focus. As a result, its profitability eroded, its reputation for quality declined, and its focus on younger mothers was lost as its average customer aged. In contrast, in the last two years, the Cornerstone Brands stayed laser focused on their product and customer, and the business has been a robust growth story in recent years. Despite that success, we failed to expand an under-penetrated and profitable store footprint. Fundamentally, Qurate Retail should only own and operate companies that generate strong emotional connections to customers and that can contribute to strong cash flows in the short to medium term. As we think about the portfolio going forward, that is the filter we will employ. Finally, while we were largely on the right platforms, we consistently failed to take advantage of our streaming reach. This was a necessity because, as everyone knows, customers are cutting the cord and increasingly moving to streaming. Many studies show that in the U.S., cable has been losing 45 million customers a year. In contrast, streaming is growing. While our exposure to U.S. cable declines might be less than the broader industry, we had not sufficiently focused on streaming to drive growth. As livestream shopping was beginning to take off, we were not participating. That all led us here, to a point where we have fantastic assets but disappointing performance. We start on a new path today. Today, we start Project Athens, an aggressive and deliberate path through 2024 to strong returns for shareholders, employees, and the millions of customers we serve. This plan is the result of a rigorous, in-depth internal analysis in which we thoroughly reviewed our operations in every part of the business, the financial drivers of historical performance, benchmarked against world-class competitors in retail and media, and have had transparent and honest conversations about our current path. In addition, we partnered with various third-party experts to pressure test our conclusions and provide further analysis. The result is Project Athens. We will begin by reconnecting in powerful ways with our customers. As the first pillar, we will more deliberately consider the whole customer and their whole life cycle. Early this year, I appointed dedicated presidents for both QVC U.S. and the HSN business with Mike Fitzharris and Rob Muller. They are very capable leaders who are focused on driving our connection with our customers to new levels. QVC is doubling down on its mission to be the premier experiential retailer for women over 50 who love to shop. She is a relationship-driven shopper who is constantly in the know. HSN is rediscovering its mission to cater to 40+ year-old boutique shoppers looking to celebrate their uniqueness and individuality. We know the QVC customer is incrementally wealthier and more influenced by host, and we know the HSN customer is incrementally more diverse and open to novelty. Recently, Rob sent a letter to some HSN customers letting them know that we understand the current economic environment and are going to work hard to bring the best deals at the right time to help. That is the type of connection we will have going forward, personal, trustworthy, and authentic. Mike has had similar communications with our QVC U.S. customers. We have a scaled e-commerce operation in the U.S. with $5 billion in sales, and we have the opportunity to use our substantial data and digital marketing to improve the amount and quality of online traffic. Additionally, we have been behind in personalization, and this is key to retention. We'll be making improvements to our websites and other digital properties to be sure our customers get an experience tailored for them. We have a deep understanding of our customer behavior and rich data. We have not utilized analytics as well as we could, and that is going to change. We will leverage technology to improve personalization and serve and reward our best customers. That is pillar one of our plan, improve customer experience and grow relationships. Pillar two is the rigorous execution of our core processes. Qurate Retail is the best in the world at telling the human story behind a product and then communicating a clear and compelling value proposition for that product. The result is magic, but the process underneath the magic demands rigor. We will recurate our assortment and price offerings to restore clarity and newness that will drive units and margin. This includes trimming underperforming items from less productive categories to reinvest in higher productivity items and in newness. The TS and TSV must be special. At both QVC and HSN, we are reinvigorating the value of the day and making it a special event once again. The TS and TSV used to be a time-limited, one-time opportunity. Unfortunately, the days the TSV is on offer have grown, and as we order too much, you could often find the same item days later. This reduced the urgency to buy and trust in our pricing. We have already begun reversing this, especially at HSN, and are seeing early encouraging signs. What else? You can expect to see a better-managed programming roster and exciting new relationship. On programming, we are now building a powerful advanced analytics program for the U.S. We will be reengineering the overall pricing architecture as well as how we use our airtime. We know an incredible amount about what drives sales. For example, culinary does better on Mondays and Thursdays than Saturdays, and some categories, like jewelry, perform better in the late evening. We have an opportunity to use our expansive reach, our most precious resource, more effectively. We will devote more airtime to highly desired, high-margin items and less time to low productivity sub-subcategories and clearance of overstock. It is an increasingly sophisticated approach to managing our airtime. We also know how to be a great partner and build excellent brands. You see here one of HSN's stars, Curtis Stone. What a partnership. We have sold more than $200 million in products with Curtis, and there are many others like Curtis, including IT Cosmetics, HALO, Ring, philosophy, Beekman 1802, Scrub Daddy, and many more. You can imagine once brands understand the power, they wanna work with us. We are talking to all of them, and we look forward to announcing new relationships. To build these brands, we often use our studios. We possess world-class broadcasting capabilities that allow us to engage and inspire our loyal customers. At the heart of our broadcasting capabilities is our Media Operations Center, from which we monitor our broadcasts as well as our satellite, internet protocol, OTT, and social feeds. This master control allows us to better deliver the best experience for our customers and vendors. We'd like to give you a brief peek into this newly improved operation. QVC Master Control is around-the-clock operation, and it all takes place in a not-so-little space called Media Operations Center. Encompassing 2,840 sq ft and housing a total of 120 screens in the round, this impressive new room is the all-seeing eye of QVC and HSN. The MC team actively monitors all four QVC channels as well as content on HSN. Additionally, Media Operations Center keeps track of our broadcast satellites, direct fiber, internet protocol, and over-the-top distributors such as Roku and Apple TV. In the last year, Master Control has monitored more than 8,000 streaming events to Facebook. Plus, every broadcast camera is patched into the MOC for color correction and other necessary adjustments. The best connection for the best experience, Media Operations Center is laser focused on enriching the lives of our customers and viewers by delivering the best experience on every platform. Pillar three is a substantial reset of our cost base and cost to serve. The Project Athens transformation program was designed to improve operating margins, profitability, and cash generation. Last December, we suffered a horrific incident with the fire at our Rocky Mount fulfillment facility. At over 1 million sq ft of highly automated space, it was one of our most advanced and efficient fulfillment centers. This tragedy drove us to reimagine and future-proof our fulfillment network footprint. We trail our competitive set on order to delivery times, disappointing customers who had to wait too long for their exciting new purchase. Over the next 24-36 months, we expect to materially reduce the operating costs of our network and reduce our delivery times. At full execution, we plan to be able to deliver more than 90% of our orders in less than five days and the vast majority in three days or less. It is a substantial improvement in the efficiency and speed. Perhaps most importantly, it will be a noticeable improvement in the experience for our customers. As part of this effort, we are also building a clean sheeting team that will better inform the negotiations on cost of goods and indirect purchases. We will utilize the same process and many of the same tools utilized within our private label offering, which has delivered measurable, favorable outcomes. Speaking of private label, we are also leaning in here. Our real estate footprint and staffing levels are also opportunities to reduce costs. Later in the year, I'll speak to the real estate footprint and expect to have more to say on staffing. Finally, we have a significant opportunity to be more efficient and optimize inventory. We plan to lower our investment in our inventory days outstanding in QVC U.S. and HSN between 20% and 30% over the next 18 months. We are already in the early stages of implementing this program and are seeing success. Taken together, these opportunities represent $hundreds of millions of net OIBDA and free cash flow expansion. Many of these programs are already underway, and others are under development for implementation in the second half of the year. We expect to see the impact of these efforts flow through in 2023 and to pick up momentum through 2024. Pillar four is about the portfolio. During its hypergrowth phase, Zulily excited customers with flash drops and exciting deals and revolutionary marketing approaches. It also thrived on excess inventory. As the digital, especially social, marketing environment matured and the pandemic took inventories to historic lows, the business lost steam. Now influencers are recreating marketing, and retailers are starting to see inventory levels rise quickly. Zulily is poised again to benefit, including by helping QVC and HSN clear excess inventory. We also see an opportunity to double down on the experience with moms with an always-on sales strategy targeted at mom and her entire family, including kids and baby. With many offline retailers shrinking or abandoning the target market, there is a new opening. We believe that Zulily can return to growth by year-end 2023. Terry Boyle, our newly installed leader of that business, is operating it largely independently and with a strong view on strategy and execution. Finally, Cornerstone Brands has been an outstanding business, growing revenue 37% in the last two years and quadrupling OIBDA. We are finding exciting opportunities with that business, including a Grandin Road Halloween in July event on QVC and HSN, our streaming app. We have a strong growth plan for Cornerstone, which includes expanding our highly profitable retail footprint. The fifth and final pillar is about participating in the fastest-growing parts of our addressable market, streaming on the big screen and live stream shopping. We have reached a point where we are present in more homes in the U.S. on a streaming service than we are over linear TV, but we have not taken advantage of it. You can find this streaming service just about anywhere you watch streaming on your television, from Roku to your Xfinity On Demand service. Earlier this year, I established the vCommerce Ventures Group. This group now owns our streaming experience. After just three months of effort, we have launched several new exclusive content programs and deal concepts. For example, we have new channels, including Fashion Finds and our popular In the Kitchen series. We have exclusive streaming deals via our new 24/7 Deal Drop, which is an exclusive daily deal for QVC and HSN streaming app users. We also have new static shows such as Vanessa Can't Cook with Vanessa Herring and Total Look with our program host, Julia, that features one staple apparel item styled three ways. The Total Experience is a show dedicated to a brand or personality with exclusive content. So far, we have featured Calista and Mally Beauty products as well as recipes, cooking ideas, and cookware from Blue Jean Chef, Meredith Laurence, and apparel from Dennis Basso. We have added more original programming, including Host School in relationship with Showtime, the launch of Encore by Idina Menzel, an apparel line in collaboration with Tony Award-winning Broadway Star, a live product launch of luxury handbags, and our first Spanish language show. Given our substantial in-house production ability, we can make a lot of high-quality production content inexpensively, a real competitive advantage. As a result of this effort, we have already grown streaming by more than 70% since the beginning of the year. 70%. We have grown monthly active users of our streaming service to almost 600,000, with more growth expected to come this year. Let me also point out that an MAU for us is more valuable than an MAU for a normal streaming service because we monetize through multiple sales and not through a flat low fee or from advertising. Further, unlike the wider streaming industry, our expansion is profitable. It is impressive growth from a small but solid and profitable base. The future of television, the future of the television screen, is streaming, and we will be there. We also understand that we have to be everywhere on the big screen. Therefore, we have been working hard on distribution to replace the loss and reach from cord cutters. I am grateful to announce that we have signed a new agreement with Ion that will put our QVC and HSN programming in an additional 15 million households through their over-the-air service. This will take effect starting in July and will be fully productive by year-end. I am also happy with our new relationship with Fubo, announced this month, which will add our QVC service to their 1 million subscribers, making us the first live stream shopping channel on their platform. With these additions, we now reach nearly 95% of the vMVPD households in the U.S. We also know that live stream shopping on the small screen is set to explode in the U.S. The best estimates suggest that this market will triple, growing to over $35 billion by 2024. We are currently building a next generation shopping application, which will host countless vendors with self-made and hosted content. We expect to be in the market with that product in the first half of 2023. We are also working with entrepreneurs in the space on their exciting concepts. Everybody in the space knows that we have a right to win here. No one else has the vendor relationships, distribution capacity, ability to generate content inexpensively at scale, engaged customer base, and other assets needed to cost effectively participate in this growth. We were not sufficiently focused before. We are now. This is Project Athens, our three-year roadmap to strong shareholder returns. It will not happen overnight or without hard choices and relentless focus on execution. The execution of some parts of this plan have already begun, and some parts will take time and investment to build. We know that given recent years' performance as a new management team, we will need to show this progress over time. We are happy to be judged by our progress, not our words. Of course, we continue to operate in a challenging macro environment along with the entire retail industry, compounded by the operating mistakes we've discussed and the need to work through various issues associated with the tragic Rocky Mount fire. We expect 2022 to be the low watermark on revenue for the business. We are actively taking steps to stabilize the business and have already begun implementing many of the initiatives we discussed today. We expect most initiatives to be in flight as we exit 2022, with increasing impact through 2024. As we move forward from 2024, we expect stable revenue through... I'm sorry. As we move forward from 2022, we expect stable revenue through 2024. We are focused on our cost structure and driving margin improvement, and we anticipate double-digit compound annual growth rates for net adjusted OIBDA and free cash flow through 2024. We will maintain a focus on cash flow. This is a business that has returned $2.4 billion in cash through dividends and share repurchases since 2020. When we perform, we reward our shareholders. We also reiterate our commitment to a 2.5 x or better long-term leverage target and feel confident in having multiple capital strategies to manage the balance sheet. Why should you invest in Qurate Retail? Invest in Qurate Retail because we have a credible plan, Project Athens, that will create a great place to shop for customers and a compelling return for investors. We are a competitively advantaged group with a focus on total shareholder return through 2024. We are committed to a plan to grow strategic differentiation, OIBDA, and cash flow, and the unique ability to participate in the exciting future growth of streaming and live stream shopping in a capital efficient way. I feel good about our starting point. I feel even better about where we're going. In the Republic, Plato was trying to figure out how to design a society as an alternative to the militaristic oligarchy of Amazon. I mean, Sparta. He thought deeply about how to inject soul in society, just as we must inject soul into retail. He wanted an Athens that was more than just efficient. This concludes this part of the program. We're gonna take a short break, and then I'll be back to answer questions. To ask a question, please submit it using the chat portion of the live stream link. Welcome back. My name is Jennifer Coffey. I'm a program host at QVC, and I'll be moderating the question and answer portion of our investor event. If you'd like to submit a question, please do so using the chat portion of the live stream link. I'm joined, of course, by David Rawlinson, President and CEO of Qurate Retail. David, we'll start with kind of a big picture question, right? In going through the process to formulate the strategy review, was there anything that particularly surprised you in these findings, either positive or negative? Yeah. It's a great question. First, I talked about the connection we have to our customers. It's in large part because of the work that you and the other hosts do, so it's a real honor to be here with you, so I wanna start with that. You know, strong customer relationships, I think, were one of the biggest surprises. She loves us. She comes back on a very regular basis. I think the level of relationship we have with our customer, I knew coming in that it was very strong. It's even stronger than I suspected. I think the business has more scale and more reach than I understood. In that way, there's a more powerful underlying business model than I think I understood coming in. I would also say the opportunity in streaming and live streaming are greater than I understood, I'd say. On the other hand, there were probably more underlying execution challenges than I knew. Zulily had drifted from its core customer more than I think I knew. There were definitely some things I didn't appreciate about that. I would also say you can never predict the macro environment, so I certainly didn't predict the supply chain issues we would run into and some of the product difficulties. I would say back to the more positive side, one of the things, and Mike George, my predecessor, was brilliant at this, I think. We have a bunch of team members who have a really deep sense of devotion and care for our customers and for the business. I really appreciate our employees, and I appreciate our leadership, and I appreciate prior leadership because we have the right culture of caring that I think with Project Athens and with the right concentration on growth and margin, and cost, there's real room to do something really powerful with this business. Excellent. What gives you confidence then that you now have the right pieces in place to execute a turnaround, and what may have prevented us from taking any action on that before? Yeah. Another good question. Our investors ask good questions. Thank you. I think a big part of it is just reality. I think this business was relatively flat, maybe down a little bit going into the pandemic. During the pandemic, I would think we had some false positives that were not representative of the underlying business, but I think it made it hard for leadership to get a good read on what was happening. Consumer behavior was fundamentally altered by the pandemic, and the business had to respond to that. Together with Bill Wafford, our CFO, and the team, we underwent a really intensive, extensive examination, as I talked a little bit about before, about the business' strengths and weaknesses and opportunities and threats. We brought in a number of outside parties to pressure test it and validate our conclusions. I think part of it was just different team, different time, but part of it was just the urgency. We came off of the pandemic. Our results showed the pain of coming off of some of that pandemic boom. Mm-hmm. It made us get really realistic and really practical about what it was gonna take to have a business with a stable top line and a growing bottom line. Once we got to that conclusion, we did the work to understand it. Now we're in the process of taking, I think, very aggressive action in what will be a relatively short time. A lot of that's already happened, by the way, as you know. Mm-hmm. We have a new organizational structure. That organizational structure was designed with an eye toward execution and accountability and business leadership. We've created a new team to build our high-growth businesses. They're largely responsible for the type of growth we've seen in streaming. Hopefully, we're starting to build the type of sense of urgency and the performance culture we need to really drive a program like Project Athens. How do you think about our current consumer sentiment, right? Thinking about sensitivity to inflation. Yeah. potential recession, and other macroeconomic pressures. Yeah. Another great question. Maybe I'll start with the overall macro view from our perspective. I think you can see sentiment impacted across the world. That starts with inflation, I think. Obviously, we have history-making levels of inflation in the U.S., in Europe, and it's a type of inflation that I think is immediately felt inflation. It's food, and it's in gas. That's had a real impact on consumer sentiment. Consumer sentiment, in my view, has sort of followed inflation, and so you've seen pretty deep impacts in consumer sentiment in the U.S. You see a drop in Europe as well, and that's been further complicated, and you can see it in the numbers further impacted by the war in Ukraine. I would say my view is consumer sentiment is now very strongly weakening. That said, in the U.S., we're coming out of a period with very strong household balance sheets. We had strong savings left over from the pandemic, so we had some cushion going in. In the last recession, if you zoom back out for a second from the current circumstances and you look at how this business model has performed over time, in the last recession, our business model stood up reasonably well. It was impacted, for sure, along with the rest of retail, but we tended to do better, for example, than department stores. I think we have a good underlying business model going in. As I've talked about before, we also have customers who are above average income and I think less susceptible than some other customers. One of the things you do see in some of the consumer and credit data is a bifurcation between less insulated and more insulated customers, at least going into this recession. I feel very fortunate that our customers tend to be more in the more insulated camp. Not that they won't be impacted. If we have a recession, they certainly will, and they're certainly impacted by inflation, but they're relatively protected versus other segments of the consumer set. Our next question is new customers and total customer numbers have been pressured. Yeah. How do you go about reversing that trend? You know, we're pressured in part because we haven't done a good job of meeting customer expectations. There's just what we need to do to execute better on our core value proposition. Then there's what we need to do to attract new customers. They build on each other. As I discussed a little bit before, I think our pricing got too confusing. I think TV and our TSVs were too long. Our assortments became stale. Our delivery times were too long and that really impacted our customer. We can see it in our Net Promoter Score. We have a bunch of ways to keep really close track on how our customers are doing, and we've seen over time those scores, frankly, decline as we've disappointed our customer. The first thing is just to get our core value proposition, which we know how to do really well, just to get that going well again. Further, we've been pressured by the supply chain pressures and the inability to secure product, home electronics, et cetera. That's definitely had an impact. It's had an impact on giving the customer what they want at the right time. It's also had an impact on our ability to execute well. We've had inflation in the digital marketing channels. That's impacted new customer acquisition. 40%+ of new customers for QVC come through some sort of digital channel or through paid marketing. When inflation hits digital marketing and that gets more expensive, you have to reevaluate the economics of those new customer acquisition channels. That's impacted us in two ways really. The first is it's meant that our spend was less efficient, so we got fewer new customers for the spend. Second, we keep a close eye on the economics, and it's often meant that it didn't make economic sense to stay very active in those digital marketing channels. That was definitely a hit to our new customer acquisition as well. Final thing I'll say on new customers is part of how we designed Project Athens was to be able to reverse some of these trends. You know, if you look at pillar one, improving the customer experience, growing and deepening our customer relationship, just getting our base value proposition right is the first part of this. That's why we're trying to have a clear and distinct focus on QVC and HSN. We're trying to make sure we're engaging the customer in the right personalized way in digital. We're trying to build greater connection and through that, build a greater lifetime relationship and lifetime value of our customer. Just going back to pillar two, pillar two is all about the execution. It's about the right programming, right assortment, right pricing, driving urgency and immediacy in our today's special value. Buried in pillar three again is transportation. How do we get our products to our customers on a timeline that meets or exceeds their expectations? That's never been more important. Some of our competitors are out there with really aggressive moves to try to shorten shipping times. We got a little bit behind. We're in the process now of catching up with, I think order to delivery times that our customers are going to be really pleased with. Excellent. We have a follow-up question to that. Can you speak to your best customer count and any attrition that you've seen? Yes. What's interesting about this business is when it works, it works for everybody. When it doesn't work, I think we see some weakness overall. First of all, I should just say our best customers are among the best customers you can find in retail. I hear from them all the time. I know you do. I know you do as well. We have a wonderful customer, and you know, I think I talked a little bit, call it 17%-20% in QVC U.S. of the customers make up about 70% of our revenue. So our best customers are really powerful best customers, and our best customer file has largely stayed stable. We've seen some slight declines, which is a little bit unusual for us. We think we're now seeing stability again, and I think this program, nobody had a bigger voice in how we designed Project Athens and how we thought about it, than what we hear from our best customers and what we think it takes to grow that file. Over the period of Project Athens from now to 2024, we're putting in a program that is gonna be more aggressive about building the funnel with new customers and then much more aggressive about taking newer customers and making them best customers by rewarding them, engaging with them, being very deliberate with them along the way. Feel good that we're so blessed to have such a great customer and to have so many super customers. We're taking a really fresh, determined, hopefully caring approach to continuing to bring them along the journey with us. All right. Our next question is how should we think about the cadence and phasing of your planned cost savings over the next two to three years? Yeah, great question. In many ways, the implementation of the program has already begun. We've done a lot of new things already. It's beginning now. It will be implemented in the remainder of 2022. Some things we've already done are in flight. Some things we're gonna have to roll out as we go through the balance of the year. I would say we expect to see real impact in 2023, and then we expect to see, sort of full and growing impact, through 2024. All right. Next, can you outline cash costs to achieve Project Athens? Yeah. Another great question. We're not prepared today to give a precise dollar amount. I would just point out that when I spoke earlier about the impact, the estimate was of net OIBDA, not just OIBDA. We're talking net OIBDA dollar growth, so that accounts for the anticipated cost of the program. All right. Next is are Zulily and Cornerstone strategic assets? If not, would you consider divesting of them? Yeah. Very investor type question? Mm-hmm. You know, the core Project Athens is returning growth to our flagship vCommerce businesses and building a high growth digital live stream commerce business. That's the core of it. The fourth pillar is where I talked about optimization of all of our brands. We now have a strong leader in place in Zulily and a strong leader in place in Cornerstone. Both of those businesses are doing well with a clear plan. Both of them are out operating relatively independently. I think the best way we can create value in the short term is to return Zulily to growth and to profitability, and to sustain Cornerstone's momentum. I think as always, we're always gonna be open-minded on what the right thing to do for our shareholders is, but I just have to say, I love the brands. I love their people. You can play around with whether they're core to us or not. One thing I know for sure is, they're core to a lot of their customers. Both leaders are doing a great job. Both businesses, I think, are in a good place. Great. Our next question is how does the quality of your digital or streaming customer compare to your linear customer? Yeah. It's a good question. You know, the direct comparison is a little bit hard. I come from Nielsen, where we used to do multi-touch attribution and run models to try to get at that question. Mm-hmm. Nobody's quite mastered it perfectly. I think what we know is that we're in a better position than other streaming players because of the monetization of our model. If you look at us versus even a Netflix or Pluto TV, most of the streaming services are losing money or having trouble with profitability. Ours, we think, is very profitable. Why is it profitable? Well, we can make a lot of the content in our studio. You know, it's hard to make a direct comparison, but when you look at our estimates of what we think a streaming customer is worth and you look at the monetization of the other services, we feel very good about our economics. We think we're more profitable than just about everybody and on a per user basis and substantially more profitable with more revenue than some of the services. The other thing I would say about what I'm excited about in the streaming service versus some of our linear services is we do have a world of opportunity for personalization. We can serve much more content with many more product and programming options than on linear TV. The content can be more relevant in part because she can choose it, whether it's live, video on demand, can search for specific shows. Things that are not available on the linear broadcast, we can make available there. We don't have to program everything to be attractive to a large audience that includes millions of people. We can go after one segment with one value proposition or a special product with much less investment than our precious over the air time. The opportunities within the streaming service are really powerful. Our ability to do it efficiently puts us in, I think, a really good starting position versus the other streaming services that are out there. David, don't forget your world-class talent. World-class talent. Thank you. Okay. Great host. Love the host. All right, next question coming in is what type of technology and IT updates will be needed to deliver on the new financial outlook? Are there plans to improve the dot-com and mobile experience? Yes. Working very hard on both of those. Also, what's included in Project Athens is a pretty comprehensive plan to upgrade our IT infrastructure. We have some incremental investments in that infrastructure. I would also say that as we moved out the front ends of QVC U.S. and HSN, we created e-commerce teams for both businesses. Those e-commerce teams have now formulated new strategies for the way that the e-commerce properties for both of those businesses operate, and we're gonna have a lot of improvements there. I'm really excited about what I think you're gonna see over the next 6-12 months in that space. Okay. Next is, could you please discuss the security of the preferred dividend on QRTEP as the price of the preferred stock has fallen precipitously? Is this signifying a risk to the dividend? Yeah, another good question. Here I think I'd just say we have a range of options for funding the dividend. We do not feel there is a risk to the dividend. Try not to comment on market prices all that much. I think I would just say I think the price has fallen on a comparable basis with the rise in rates, and then the widening of our more senior debt yields. I think there are multiple impacts on the price, but we have multiple things at our disposal to be able to pay the dividend, and I do not view that as being at risk. Okay. Next question is we've heard this discussion from other retailers. Are you noticing any moderation in supply chain issues? Yeah, great question. I would say we're seeing some improvements. Mm-hmm. It's only partial. We still have very substantial supply chain issues where some things like container costs, which were all the rage and all the talk in retail for a little while. We've seen those costs start to moderate, but I would say they're still very, very high relative to historical levels. The environment, I think, is still volatile, especially given Ukraine. There's still difficulties. There's no question. I've talked in the past about needing to switch out TS's and TSV's from the program because we didn't get the product in time or because there are other implications in supply chain. We're still having to do a fair amount of that because of supply chain issues. What I do wanna say, our third pillar, cost to serve, which really focuses on supply chain for one, is designed to have a supply chain that is much more flexible and more efficient, that is faster, and that has a cost profile that I think would, in the future, allow us to weather some of these storms a little bit better. You can never completely insulate yourself from that. A global supply chain problem and what we saw at various ports compounded by COVID and shortages, you can never completely insulate yourself from that. I think we're in the future footprint for the network as we're building it, we're doing as much as we can to be able to get back to a regular way of operating. Once we're in that regular way of operating, have enough flexibility to do even better navigating future challenges in the supply chain. It looks like this next question kind of ties into that, and it's what do you expect your future fulfillment center footprint to look like? How long will it take to reach this point, and how are you managing near-term headwinds? Yeah, great question. First, I think we've already announced that we will not be rebuilding our facility in Rocky Mount. That was a very hard decision. I know it was hard on the local communities and those impacted by that decision. It wasn't a decision that we took lightly. That decision was primarily driven by the fact that we have to have a better coverage in the Midwest and on the West Coast to get more effective national coverage. Like I said earlier, we're moving very quickly to get to a stronger competitive position versus our competitors nationwide on order to delivery times. We wanna be able to get to most customers in three days or less, and to get that sort of performance in our supply chain in the next three years. We anticipate in Project Athens stabilizing unit volumes, and so our fulfillment center footprint wasn't about shrinking it because we thought we were gonna have shrinking unit volumes. We think we have a path to stabilizing unit volumes through the period. The driver was mostly cost and efficiency and performance. All right. Next is, prior management used to speak about the value that Q provides to brands, video content, demonstrable selling, increasing sales at other outlets. Given the proliferation of ways that brands have to reach customers. Yeah. Does Q still have leverage with brands? Yeah. We still have massive leverage. We really do. I mean, from smaller growth brands like a Beekman that we've been working with since 2018 to millions of units across Q and H. I mean, you look at who we work with. We work with a Ralph Lauren, Dyson, Estée Lauder. But also the celebrities we work with, chefs, designers, actors, musicians, Tony Award-winning Broadway stars, Curtis Stone and Isaac and Jason Wu, Candace and Jessica Simpson, Dolly Parton, Iman, Idina Menzel, Vanessa Williams. Like, it's an amazing roster of people. I can tell you, and I'm sure you probably get some too, the number of people who are trying to find a way to work with us, who are trying to find their way on air is just really unbelievable. We talked about surprises. One of the biggest surprises was just the demand because people see what we can do. There's nothing else in retail that allows you to move 10,000, 20,000 units in 30 minutes of airtime. There's just nothing quite like that. We know how to do it. It's not just that we're there. We know how to create powerful, personal, branded storytelling that drives engagement and urgency and action. Our reach means we are as valuable as we have ever been. I think the other thing that's true is, the other ways to getting to market, whether it's direct to consumer or through retail, some of those have been really challenged, right? I talked about the digital marketing. Direct to consumer was all the rage for a while, but then it became really expensive to reach customers. You've seen some of the heat come off of that trend. Being able to get to market through something like QVC or HSN is still a really remarkable opportunity, and that still gives us tons of leverage and still makes us very attractive to lots and lots of brands. Great. Next question is, how do you feel about your long-term leverage? Are you maintaining your commitment to 2.5x leverage? Yes. We are. Absolutely. We're committed to maintaining and managing the business to a long-term 2.5x or better leverage target. Our actions in Project Athens are focused on returning to growth, expanding margins, and generating free cash flow. I'd say we also have other actions available to us to manage the debt and the balance sheet, and I think you can expect us to be relatively active there. All right. Our final question, I believe, how does Q think about content creation for both linear and some of your new platforms? What makes your content differentiated? Yes. I'll start with our host. Certainly. Since you're here. Look, consumers love live content. I think we produce as much or more live content than any network in the world. They love it live on linear. They also love live on streaming. They love the video on demand, but they also like to be able to tune into live feeds. Then there are core things that they want. They want experts who can tell them something that they don't already know about the product, and that elevates trust. They want authenticity. They wanna feel like they're in that experience with you. Then they want a sharply produced video experience. I think as lots of people have tried to move into the space, and especially in the live stream space, one of the things that's happened is they thought that they could self-make a lot of video and upload it. What we've actually found, and they've actually found, is the consumer wants a relatively high-quality video experience. We have the ability to do that. We have all the resources to do that. Obviously, we're the established expert and the pioneer, really, in live selling video. I think all of those things give us the right platform for the future. We have the right raw materials for the future. We have the right customer base for the future. Now it's just about looking at the market, understanding where the market is going, being able to put our substantial capabilities to work against all of those market opportunities. All of those substantial capabilities are rooted in executing our core value proposition, all of our core processes, better. Once we do that, I think we're gonna thrill and delight our customers. I think we're gonna thrill and delight our employees 'cause it's gonna be an incredible place to work over the next couple of years. I think we're really gonna thrill and delight our investors because we're gonna be operating in this business in a way where it ought to produce better results than we have in the last few years. Excellent. Well, that will close out the question and answer portion of our investor event. Thank you, David, and thank you all for your submission of questions. I'll hand it back to David for our concluding remarks. Awesome. Thank you for being here. Let me just say, thank you for joining us. We are all excited about the future of this great company and about having a clear path to capturing the future, along with the best customers in the industry. I look forward to seeing all of you very soon as we continue to update you on your progress. On your progress, maybe, but mostly on our progress. Thank you for joining. This was wonderful. Really enjoyed the time with you. I appreciate you taking some time to hear our story, and I look forward to visiting with you soon.