Liberty Interactive Corporation Reports Third Quarter 2012 Financial Results Business Wire ENGLEWOOD, Colo. -- November 06, 2012 Liberty Interactive Corporation (“Liberty”) (Nasdaq: LINTA, LINTB, LVNTA, LVNTB) today reported third quarter results. Highlights include^(1): *Grew consolidated QVC revenue by 2% and adjusted OIBDA^(2) by 6% *Grew QVC US revenue by 3% and adjusted OIBDA by 7% *QVC.com revenue as a percent of total US revenue increased to 39%, a 4 point increase *Operating income increased 11% *Recapitalized our common stock into two tracking stocks, Liberty Interactive Group and Liberty Ventures Group *Shareholder value creation of $2.6 billion *Successfully completed rights offering at Liberty Ventures Group, raising $328 million “QVC continues to produce strong results, especially on a constant currency basis, despite a challenging macroeconomic environment, and we are pleased with the performance of our newest market, China,” stated Greg Maffei, Liberty President and CEO. “We successfully completed the recapitalization of the company’s common stock into two tracking stocks, which increased shareholder value by $2.6 billion. Our share repurchases were lower this quarter, as we were out of the market for six weeks due to the recapitalization. But, we remain committed to repurchases at the Liberty Interactive Group and the board of directors has increased our repurchase authorization by $1 billion.” LIBERTY INTERACTIVE GROUP - Liberty Interactive Group’s revenue increased 3% to $2.2 billion in the third quarter, adjusted OIBDA increased 5% to $397 million and operating income decreased 14% to $193 million. The increase in revenue was due to favorable results at QVC and the eCommerce companies. The increase in adjusted OIBDA for the quarter was due to favorable results at QVC, which was offset by unfavorable results at the eCommerce companies. The decrease in operating income for the quarter was primarily due to unfavorable results at the eCommerce companies and the impairment of goodwill of one of the eCommerce companies during the quarter. QVC QVC's consolidated revenue increased 2% in the third quarter to $1.9 billion. During the same period, adjusted OIBDA increased 6% to $397 million and operating income increased 11% to $260 million. “QVC delivered strong results in the third quarter, with eCommerce continuing its double digit growth – now accounting for 33% of global revenue," said QVC President and CEO, Mike George. “With mobile commerce orders up 96% globally, we see these results as clear confirmation that our strategy to create a highly immersive digital shopping experience, with strong integration across TV, PC, tablet and mobile platforms, is not only succeeding, but significantly outpacing the industry.” QVC's U.S. revenue increased 3% to $1.2 billion in the third quarter as a result of strength in cooking and dining, beauty, apparel and accessories products, partially offset by a decline in electronics. Additionally, average selling price per unit ("ASP") increased 1% from $54.49 to $55.21 and units sold increased 1% compared to the prior year third quarter. Gross product revenue increased 2%; however, U.S. revenue grew 3% overall due to a 14% increase in shipping and handling revenue due, in part, to a price increase implemented in the fourth quarter of 2011. Third quarter returns as a percent of gross product revenue remained relatively flat. In the same period, eCommerce revenue increased 14% to $479 million and grew to 39% from 35% as a percentage of total U.S. revenue. Adjusted OIBDA increased 7% to $278 million and adjusted OIBDA margin^(2) increased 81 basis points. The increase in adjusted OIBDA margin was primarily due to an improved gross margin as a result of a favorable net shipping and handling position including warehouse productivity, as well as lower commissions, credit card and customer service expenses as a percentage of revenue. QVC's international revenue decreased 1% in the third quarter to $681 million. The third quarter results included the negative impact of the strengthening U.S. Dollar against the Japanese Yen, Euro and U.K. Pound Sterling. International adjusted OIBDA increased 4% to $119 million and adjusted OIBDA margin increased 95 basis points in the third quarter. QVC Japan's revenue grew 9% in local currency in the third quarter primarily due to increased sales in home, apparel and accessories. QVC Japan's ASP in local currency decreased 1%, but units sold increased 10% in the third quarter. QVC Japan's third quarter returns as a percent of gross product revenue remained relatively flat. QVC Japan's adjusted OIBDA in local currency increased 12% and adjusted OIBDA margin increased 55 basis points in the third quarter. The increase in adjusted OIBDA margin was due primarily to lower warehouse expenses and fixed cost leverage. QVC Germany's revenue declined 6% in local currency in the third quarter primarily due to decreased sales in health, apparel and accessories, somewhat offset by increased sales of beauty products. QVC Germany's ASP in local currency decreased 4% and units sold declined 4% in the third quarter. QVC Germany's third quarter returns as a percent of gross product revenue in local currency improved by 201 basis points and was primarily due to a shift in product mix from apparel to beauty. QVC Germany's adjusted OIBDA in local currency increased 2% and adjusted OIBDA margin increased 119 basis points in the third quarter. The improvement in OIBDA margin was driven by warehouse productivity, including the positive impact of lower returns processing, as well as lower commissions and fixed costs. QVC U.K.'s revenue increased 3% in local currency in the third quarter primarily due to sales increases in home décor and beauty products. QVC U.K.'s ASP in local currency increased 1%, while units sold remained relatively flat for the third quarter. QVC U.K.’s third quarter returns as a percent of gross product revenue in local currency decreased by 78 basis points primarily due to a product mix shift to home and beauty products. QVC U.K.’s adjusted OIBDA in local currency decreased 9% and adjusted OIBDA margin decreased 224 basis points in the third quarter. The decrease in adjusted OIBDA margin was primarily due to lower product margins and higher transition and running costs associated with QVC U.K.’s new headquarters move in June 2012. QVC Italy continued the trend upward with a 16% sequential revenue growth in local currency over the second quarter of 2012. QVC Italy’s sales were primarily from the cooking and dining, beauty and apparel product categories. On July 4, 2012, QVC entered into a joint venture with China Broadcasting Corporation, a limited liability company, owned by China National Radio (“CNR”) for a 49% interest in a CNR subsidiary, CNR Home Shopping Co., Ltd. (‘‘CNRS’’). CNRS had an 85% growth in revenue over the prior year third quarter. This joint venture is being accounted for as an equity method investment, and as a result, QVC reported a $3 million reduction in net income for the period. QVC's outstanding bank and bond debt was $3.4 billion at September 30, 2012. The increase of $1.1 billion from June 30, 2012 was primarily associated with borrowings to fund the Liberty Ventures Group as part of the Liberty Interactive Group’s recapitalization of its common stock. eCommerce Businesses In the aggregate, Liberty Interactive Group’s eCommerce businesses increased revenue 13% to $278 million for the third quarter. Adjusted OIBDA decreased 56% to $4 million for the quarter and operating income decreased to a loss of $56 million. All but one of our eCommerce businesses reported an increase in revenue for the quarter as a result of increased marketing efforts and increased conversion resulting from site optimization and broader inventory offerings. The decrease in adjusted OIBDA was the result of increased spending in paid search as a percentage of revenue, increased promotional activity to move seasonal inventory and lower advertising revenue due to pricing and a shift to mobile applications. The decrease in operating income was primarily due to an impairment of goodwill at Celebrate Interactive as a result of continued declining operating results and disappointing third quarter trends. Share Repurchases From August 1, 2012 through October 31, 2012, Liberty repurchased approximately 3.0 million Series A Liberty Interactive shares at an average cost per share of $18.37 for total cash consideration of $55.9 million. Since the creation of the Liberty Interactive stock in May 2006, Liberty has repurchased approximately 175.3 million shares at an average cost per share of $18.98 for aggregate cash consideration of $3.3 billion. These repurchases represent approximately 25.0% of the shares outstanding at the time of creation of the Liberty Interactive stock. On October 30, 2012, the Board of Directors voted to increase the stock repurchase authorization for the Liberty Interactive Group by an additional $1.0 billion. Including the newly authorized amount, the total current repurchase authorization for Liberty Interactive Group stock is approximately $1.4 billion. Liberty Interactive Group holds controlling interests in companies that are engaged in digital commerce, including QVC, Provide Commerce, Backcountry.com, Bodybuilding.com, Celebrate Interactive, CommerceHub, MotoSport and Right Start, and also owns interests in HSN and Lockerz. LIBERTY VENTURES GROUP – As of September 30, 2012 the fair value of the equity method securities and non-strategic AFS securities attributed to the Liberty Ventures Group was $3.2 billion and $1.6 billion, respectively. When compared to the prior quarter, the fair value of Liberty Ventures Group’s equity method securities increased 1% and AFS securities increased 19%. Share Repurchases There were no repurchases of Liberty Ventures Group stock from August 10, 2012 through October 31, 2012. The Liberty Ventures Group does not have an outstanding stock repurchase authorization at this time. The businesses and assets attributed to the Liberty Ventures Group are all of Liberty’s businesses and assets other than those attributed to the Liberty Interactive Group and include its interests in TripAdvisor, Expedia, and minority interests in Time Warner and Time Warner Cable. FOOTNOTES Liberty’s President and CEO, Gregory B. Maffei, will discuss these highlights and other matters in Liberty’s earnings conference call which (1) will begin at 11:00 a.m. (ET) on November 6, 2012. For information regarding how to access the call, please see “Important Notice” later in this document. (2) For a definition of adjusted OIBDA and applicable reconciliations and a definition of adjusted OIBDA margin, see the accompanying schedules. LIBERTY INTERACTIVE GROUP FINANCIAL METRICS (amounts in millions) 3Q11 3Q12 % Change Revenue QVC US $1,196 1,237 3 % International 690 681 -1 % Total QVC Revenue 1,886 1,918 2 % eCommerce businesses 247 278 13 % Total Liberty Interactive Group $2,133 2,196 3 % Revenue Adjusted OIBDA QVC US $ 259 278 7 % International 114 119 4 % Total QVC Adjusted OIBDA 373 397 6 % eCommerce businesses 9 4 -56 % Corporate and other (4 ) (4 ) 0 % Total Liberty Interactive Group $378 397 5 % Adjusted OIBDA Operating Income QVC US $159 173 9 % International 75 87 16 % Total QVC Operating Income 234 260 11 % eCommerce businesses (2 ) (56 ) -2,700 % Corporate and other (7 ) (11 ) -57 % Total Liberty Interactive Group $225 193 -14 % Operating Income QVC OPERATING METRICS (amounts in millions except 3Q11 3Q12 % Change average sale price amounts) QVC - US^(1) Revenue $1,196 1,237 3 % Adjusted OIBDA $259 278 7 % Adjusted OIBDA margin 21.66 % 22.47 % 81 bps Average sale price (ASP) 54.49 55.21 1 % Units sold 24.44 24.64 1 % eCommerce % of US revenue 35.26 % 38.74 % 348 bps Return rate 19.91 % 20.05 % (14) bps QVC - Japan^(1) Revenue $281 301 7 % Adjusted OIBDA $61 67 10 % Adjusted OIBDA margin 21.71 % 22.26 % 55 bps Average sale price (ASP) ¥6,267 6,215 -1 % Units sold 3.81 4.18 10 % QVC - Germany^(1) Revenue $252 211 -16 % Adjusted OIBDA $40 36 -10 % Adjusted OIBDA margin 15.87 % 17.06 % 119 bps Average sale price (ASP) €36.56 35.23 -4 % Units sold 6.45 6.16 -4 % QVC - UK^(1) Revenue $147 149 1 % Adjusted OIBDA $24 21 -13 % Adjusted OIBDA margin 16.33 % 14.09 % (224) bps Average sale price (ASP) £27.66 27.91 1 % Units sold 3.60 3.61 0 % QVC - Italy^(1) Revenue $10 20 100 % Adjusted OIBDA ($11 ) (5 ) 55 % Adjusted OIBDA margin -110.00 % -25.00 % NM Average sale price (ASP) €31.98 33.01 3 % Units sold 0.22 0.54 145 % (1) Revenue and adjusted OIBDA change calculated in US dollars, not local currency NOTES Unless otherwise noted, the foregoing discussion compares financial information for the three months ended September 30, 2012 to the same period in 2011. On September 23, 2011, Liberty completed the split-off of a wholly owned subsidiary, Liberty Media Corporation ("LMC") (formerly known as Liberty CapStarz, Inc. and Liberty Splitco, Inc.) (the "Split-Off"). At the time of the Split-Off, LMC owned all the assets, businesses and liabilities attributed to the Liberty Capital and Liberty Starz tracking stock groups immediately prior to the Split-Off. The Split-Off was effected by means of redemption of all of the Liberty Capital common stock and Liberty Starz common stock of Liberty for all of the common stock of LMC. This transaction was accounted for at historical cost due to the pro rata nature of the distribution. The financial information provided reflects LMC as discontinued operations. Accordingly, the relevant financial statement balances and activities of the businesses, assets and liabilities owned by LMC at the time of the Split-off (for periods prior to the Split-Off) have been excluded from the included financial information. Following the Split-Off, Liberty and LMC operate as separate, publicly traded companies, and neither has any stock ownership, beneficial or otherwise, in the other. In connection with the Split-Off, Liberty and LMC entered into certain agreements in order to govern certain of the ongoing relationships between the two companies after the Split-Off and to provide for an orderly transition. These agreements include a Reorganization Agreement, a Services Agreement, a Facilities Sharing Agreement and a Tax Sharing Agreement. Certain prior period amounts have been reclassified for comparability with the current presentation. On August 9, 2012 Liberty Interactive completed the approved recapitalization of its common stock through the creation of the Liberty Interactive common stock and Liberty Ventures common stock as tracking stocks. In the recapitalization, each holder of Liberty Interactive common stock remained a holder of the same amount and series of Liberty Interactive common stock and received 0.05 of a share of the corresponding series of Liberty Ventures common stock, by means of a dividend, with cash issued in lieu of fractional shares of Liberty Ventures common stock. In connection with the creation of the Liberty Ventures tracking stock, Liberty distributed subscription rights to purchase shares of Series A Liberty Ventures common stock at a per share subscription price of $35.99 for one share of Series A Liberty Ventures common stock pursuant to a basic subscription privilege and also entitled the holder to subscribe for additional shares pursuant to an oversubscription privilege. The rights offering commenced on September 12, 2012 and expired on October 9, 2012. In the fourth quarter, approximately 9 million Series A Liberty Ventures shares were issued in connection with the rights offering resulting in approximately $328 million of cash proceeds. The following financial information is intended to supplement Liberty’s condensed consolidated statements of operations which are included in its Form 10-Q. Fair Value of Public Holdings (amounts in millions) 6/30/2012 9/30/2012 HSN^(1) $ 808 982 Total Attributed Liberty Interactive Group $ 808 982 Expedia^(2) $ 1,664 2,002 TripAdvisor^(2) 1,169 861 Interval Leisure Group and Tree.com^(2) 348 358 Non Strategic Public Holdings^(3) 1,380 1,639 Total Attributed Liberty Ventures Group $ 4,561 4,860 Represents fair value of Liberty Interactive Group’s investment in HSN. In accordance with GAAP, Liberty Interactive Group accounts for this (1) investment using the equity method of accounting and includes this investment in its consolidated balance sheet at its historical carrying value which aggregated $233 million and $241 million at June 30, 2012 and September 30, 2012, respectively. Represents fair value of Liberty Ventures Group’s investments. In accordance with GAAP, Liberty Ventures Group accounts for these (2) investments using the equity method of accounting and includes these investments in its consolidated balance sheet at their historical carrying values which aggregated $927 million and $975 million at June 30, 2012 and September 30, 2012, respectively. (3) Represents Liberty Ventures Group’s non-strategic public holdings which are accounted for at fair value. Cash and Debt The following presentation is provided to separately identify cash and liquid investments and debt information. (amounts in millions) 6/30/2012 9/30/2012 Cash and Liquid Investments Attributable to: Liberty Interactive Group $ 790 558 Liberty Ventures Group -- 1,235 Total Liberty Consolidated Cash (GAAP) $ 790 1,793 Debt: Senior notes and debentures^(1) $ 1,100 1,070 QVC senior notes^(1) 2,000 2,500 QVC bank credit facility 302 851 Other 118 118 Total Attributed Liberty Interactive $ 3,520 4,539 Group Debt Unamortized discount (19 ) (19 ) Total Attributed Liberty Interactive $ 3,501 4,520 Group Debt (GAAP) Senior exchangeable debentures^(2) 2,854 2,852 Total Attributed Liberty Ventures $ 2,854 2,852 Group Debt Fair market value adjustment (306 ) (15 ) Total Attributed Liberty Ventures $ 2,548 2,837 Group Debt (GAAP) Total Consolidated Liberty Debt (GAAP) $ 6,049 7,357 (1) Face amount of Senior Notes and Debentures with no reduction for the unamortized discount or fair market value adjustment. (2) Face amount of Senior Exchangeable Debentures with no reduction for the unamortized discount or fair market value adjustment. Total cash and liquid investments attributed to the Liberty Interactive Group decreased $232 million, primarily due to $1,346 million in cash reattributed to the Liberty Ventures Group, stock repurchases, debt repayments and capital expenditures. These cash outflows were partially offset by cash flow from operations at QVC and borrowings of debt at QVC. Total debt attributed to the Liberty Interactive Group increased by $1,018 million, primarily due to borrowings on the QVC bank credit facility and new 5.00% senior notes issued in the third quarter. Total cash and liquid investments attributed to the Liberty Ventures Group increased $1,235 million, primarily due to cash reattributed from the Liberty Interactive Group offset by investing activities. Total debt attributed to the Liberty Ventures Group decreased by $2 million, primarily due to principal repayments. Important Notice: Liberty (Nasdaq: LINTA, LINTB, LVNTA, LVNTB) President and CEO, Gregory B. Maffei will discuss Liberty’s earnings release in a conference call which will begin at 11:00 a.m. (ET) on November 6, 2012. The call can be accessed by dialing (888) 455-2265 or (719) 457-2703 at least 10 minutes prior to the start time. Replays of the conference call can be accessed until 1:00 p.m. (ET) on November 13, 2012, by dialing (888) 203-1112 or (719) 457-0820 plus the pass code 7834540#. The call will also be broadcast live across the Internet and archived on our website. To access the webcast go to http://www.libertyinteractive.com/events. Links to this press release will also be available on Liberty’s website. This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about business strategies, market potential, future financial prospects, international expansion, new service and product offerings, the continuation of our stock repurchase program, and other matters that are not historical facts. These forward-looking statements involve many risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including, without limitation, possible changes in market acceptance of new products or services, competitive issues, regulatory matters affecting our businesses, continued access to capital on terms acceptable to Liberty Interactive, and market conditions conducive to stock repurchases. These forward-looking statements speak only as of the date of this press release, and Liberty Interactive expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Liberty Interactive’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Please refer to the publicly filed documents of Liberty Interactive, including the most recent Forms 10-Q and 10-K, for additional information about Liberty Interactive and about the risks and uncertainties related to Liberty Interactive’s business which may affect the statements made in this press release. SUPPLEMENTAL INFORMATION As a supplement to Liberty’s consolidated statements of operations, which are included in its Form 10-Q, the following is a presentation of quarterly information and operating metrics on a stand-alone basis for the largest privately held business (QVC) owned by Liberty at September 30, 2012, which Liberty has identified as a reportable segment. Please see below for the definition of adjusted OIBDA and a discussion of why management believes the presentation of adjusted OIBDA for QVC provides useful information for investors. Schedule 2 to this press release provides a reconciliation of adjusted OIBDA for each identified reportable segment to that segment’s operating income for the same period, as determined under GAAP. QUARTERLY SUMMARY (amounts in 3Q11 4Q11 1Q12 2Q12 3Q12 millions) Liberty Interactive Group QVC Revenue – US $ 1,196 1,792 1,240 1,280 1,237 Revenue – 690 857 692 694 681 International Revenue – $ 1,886 2,649 1,932 1,974 1,918 Total Adjusted 259 401 270 315 278 OIBDA – US Adjusted OIBDA – 114 178 120 123 119 International Adjusted $ 373 579 390 438 397 OIBDA – Total Operating 159 254 171 214 173 income – US Operating income – 75 143 87 87 87 International Operating income – $ 234 397 258 301 260 Total Gross margin 35.7 % 34.6 % 35.6 % 37.2 % 36.1 % – US Gross margin – 36.7 % 37.4 % 37.7 % 38.1 % 37.4 % International NON-GAAP FINANCIAL MEASURES This press release includes a presentation of adjusted OIBDA, which is a non-GAAP financial measure, for Liberty, QVC (and certain of its subsidiaries), and the eCommerce businesses together with a reconciliation to that entity’s operating income, as determined under GAAP. Liberty defines adjusted OIBDA as revenue less cost of sales, operating expenses, and selling, general and administrative expenses (excluding stock and other equity-based compensation) and excludes from that definition depreciation and amortization and restructuring and impairment charges that are included in the measurement of operating income pursuant to GAAP. Further, this press release includes adjusted OIBDA margin which is also a non-GAAP financial measure. Liberty defines adjusted OIBDA margin as adjusted OIBDA divided by revenue. Liberty believes adjusted OIBDA is an important indicator of the operational strength and performance of its businesses, including each business’ ability to service debt and fund capital expenditures. In addition, this measure allows management to view operating results and perform analytical comparisons and benchmarking between businesses and identify strategies to improve performance. Because adjusted OIBDA is used as a measure of operating performance, Liberty views operating income as the most directly comparable GAAP measure. Adjusted OIBDA is not meant to replace or supersede operating income or any other GAAP measure, but rather to supplement such GAAP measures in order to present investors with the same information that Liberty's management considers in assessing the results of operations and performance of its assets. Please see the attached schedules for applicable reconciliations. SCHEDULE 1 The following table provides a reconciliation of Liberty Interactive Group’s adjusted OIBDA to its operating income calculated in accordance with GAAP for the three months ended September 30, 2011, December 31, 2011, March 31, 2012, June 30, 2012 and September 30, 2012, respectively. QUARTERLY SUMMARY (amounts in 3Q11 4Q11 1Q12 2Q12 3Q12 millions) Liberty Interactive Group Adjusted $ 378 619 419 455 397 OIBDA Depreciation and (151 ) (193 ) (143 ) (147 ) (147 ) amortization Stock compensation (2 ) (17 ) (17 ) (18 ) (18 ) expense Impairment -- -- -- -- (39 ) of goodwill Operating $ 225 409 259 290 193 Income SCHEDULE 2 The following table provides a reconciliation of adjusted OIBDA for QVC (and certain of its subsidiaries) and the eCommerce businesses to that entity or Group’s operating income (loss) calculated in accordance with GAAP for the three months ended September 30, 2011, December 31, 2011, March 31, 2012, June 30, 2012 and September 30, 2012, respectively. QUARTERLY SUMMARY (amounts in 3Q11 4Q11 1Q12 2Q12 3Q12 millions) Liberty Interactive Group QVC Adjusted OIBDA QVC US $ 259 401 270 315 278 QVC Japan 61 78 63 70 67 QVC Germany 40 69 46 39 36 QVC UK 24 40 20 21 21 QVC Italy (11 ) (9 ) (9 ) (7 ) (5 ) QVC International $ 114 178 120 123 119 adjusted OIBDA Consolidated QVC adjusted $ 373 579 390 438 397 OIBDA Depreciation and (133 ) (176 ) (127 ) (129 ) (129 ) amortization Stock (6 ) (6 ) (5 ) (8 ) (8 ) compensation Operating $ 234 397 258 301 260 Income eCommerce Businesses Adjusted $ 9 49 34 23 4 OIBDA Depreciation and (17 ) (17 ) (17 ) (16 ) (18 ) amortization Stock 6 (2 ) (2 ) (8 ) (3 ) compensation Impairment of -- -- -- -- (39 ) goodwill Operating $ (2 ) 30 15 (1 ) (56 ) Income (Loss) LIBERTY INTERACTIVE CORPORATION BALANCE SHEET INFORMATION September 30, 2012 – (unaudited) Attributed Interactive Ventures Inter-group Consolidated Group Group Eliminations Liberty ASSETS amounts in millions Current assets: Cash and cash $ 558 1,235 -- 1,793 equivalents Trade and other 711 -- -- 711 receivables, net Inventory, net 1,247 -- -- 1,247 Other current 260 -- (165 ) 95 assets Total current 2,776 1,235 (165 ) 3,846 assets Investments in available-for-sale securities and 3 1,639 -- 1,642 other cost investments Investments in affiliates, accounted for 305 1,004 -- 1,309 using the equity method Property and 1,207 -- -- 1,207 equipment, net Intangible assets not subject to 8,493 -- -- 8,493 amortization Intangible assets subject to 1,964 -- -- 1,964 amortization, net Other assets, at cost, net of 82 -- -- 82 accumulated amortization Total assets $ 14,830 3,878 (165 ) 18,543 LIABILITIES AND EQUITY Current liabilities: Intergroup Payable $ 63 (63 ) -- -- (Receivable) Accounts payable 640 6 -- 646 Accrued 672 15 -- 687 liabilities Current portion of 300 1,251 -- 1,551 debt Current deferred -- 951 (165 ) 786 tax liabilities Other current 186 288 -- 474 liabilities Total current 1,861 2,448 (165 ) 4,144 liabilities Long-term debt 4,220 1,586 -- 5,806 Deferred income 1,382 708 -- 2,090 tax liabilities Other liabilities 221 -- -- 221 Total liabilities 7,684 4,742 (165 ) 12,261 Equity/Attributed net assets 6,995 (864 ) -- 6,131 (liabilities) Noncontrolling interests in 151 -- -- 151 equity of subsidiaries Total liabilities $ 14,830 3,878 (165 ) 18,543 and equity LIBERTY INTERACTIVE CORPORATION STATEMENT OF OPERATIONS INFORMATION Three months ended September 30, 2012 - (unaudited) Attributed Interactive Ventures Consolidated Liberty Group Group amounts in millions REVENUE: Net retail sales $ 2,196 -- 2,196 Cost of sales 1,407 -- 1,407 Gross profit 789 -- 789 OPERATING COSTS AND EXPENSES: Operating 201 -- 201 Selling, general and administrative, including 209 4 213 stock-based compensation Impairment of goodwill 39 -- 39 Depreciation and amortization 147 -- 147 596 4 600 Operating income 193 (4 ) 189 OTHER INCOME (EXPENSE): Interest expense (84 ) (27 ) (111 ) Share of earnings (losses) of 6 37 43 affiliates, net Realized and unrealized gains (losses) on financial 14 (174 ) (160 ) instruments, net Other, net -- (2 ) (2 ) (64 ) (166 ) (230 ) Earnings (loss) before income 129 (170 ) (41 ) taxes Income tax (expense) benefit (65 ) 80 15 Net earnings (loss) 64 (90 ) (26 ) Less net earnings (losses) attributable to noncontrolling 15 -- 15 interests Net earnings (loss) attributable $ 49 (90 ) (41 ) to Liberty stockholders LIBERTY INTERACTIVE CORPORATION STATEMENT OF OPERATIONS INFORMATION Three months ended September 30, 2011 - (unaudited) Attributed Interactive Ventures Consolidated Liberty Group Group amounts in millions REVENUE: Net retail sales $ 2,133 -- 2,133 Cost of sales 1,364 -- 1,364 Gross profit 769 -- 769 OPERATING COSTS AND EXPENSES: Operating 209 -- 209 Selling, general and administrative, including 184 1 185 stock-based compensation Depreciation and amortization 151 -- 151 544 1 545 Operating income (loss) 225 (1 ) 224 OTHER INCOME (EXPENSE): Interest expense (76 ) (29 ) (105 ) Share of earnings (losses) of 6 56 62 affiliates, net Realized and unrealized gains (losses) on financial 12 (103 ) (91 ) instruments, net Other, net (12 ) 3 (9 ) (70 ) (73 ) (143 ) Earnings (loss) before income 155 (74 ) 81 taxes Income tax (expense) benefit (86 ) 30 (56 ) Earnings (loss) from continuing 69 (44 ) 25 operations Earnings (loss) from discontinued operations, net of (32 ) -- (32 ) taxes Net earnings (loss) 37 (44 ) (7 ) Less net earnings (loss) attributable to the 12 -- 12 noncontrolling interests Net earnings (loss) attributable $ 25 (44 ) (19 ) to Liberty stockholders LIBERTY INTERACTIVE CORPORATION STATEMENT OF CASH FLOWS INFORMATION Nine months ended September 30, 2012 – (unaudited) Attributed Interactive Ventures Consolidated Liberty Group Group amounts in millions CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings (loss) $ 336 (8 ) 328 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 437 -- 437 Stock-based compensation 52 1 53 Cash payments for stock based (9 ) -- (9 ) compensation Share of (earnings) losses of (26 ) (63 ) (89 ) affiliates, net Cash receipts from return on 8 13 21 equity investments Realized and unrealized (gains) losses on financial instruments, (39 ) 377 338 net (Gains) losses on disposition of -- (288 ) (288 ) assets, net Impairment of goodwill 39 -- 39 Deferred income tax (benefit) (119 ) 85 (34 ) expense Other, net 11 (33 ) (22 ) Intergroup tax allocation 156 (156 ) -- Changes in operating assets and liabilities Current and other assets 162 -- 162 Payables and other current 27 (19 ) 8 liabilities Net cash provided (used) by 1,035 (91 ) 944 operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Cash proceeds from dispositions -- 348 348 Investments in and loans to cost (60 ) (132 ) (192 ) and equity investees Capital expended for property (237 ) -- (237 ) and equipment Net sales of short term 46 -- 46 investments Other investing activities, net (41 ) 1 (40 ) Net cash provided (used) by (292 ) 217 (75 ) investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings of debt 2,043 -- 2,043 Repayments of debt (1,123 ) (115 ) (1,238 ) Reattribution of cash between (1,346 ) 1,346 -- groups Intergroup borrowings (payments) 122 (122 ) -- Repurchases of Liberty common (690 ) -- (690 ) stock Other financing activities, net (30) -- (30 ) Net cash provided (used) by (1,024) 1,109 85 financing activities Effect of foreign currency rates (8 ) -- (8 ) on cash Net increase (decrease) in cash (289 ) 1,235 946 and cash equivalents Cash and cash equivalents at 847 -- 847 beginning of period Cash and cash equivalents at end $ 558 1,235 1,793 period LIBERTY INTERACTIVE CORPORATION STATEMENT OF CASH FLOWS INFORMATION Nine months ended September 30, 2011 - (unaudited) Attributed Interactive Ventures Consolidated Liberty Group Group CASH FLOWS FROM OPERATING amounts in millions ACTIVITIES: Net earnings (loss) $ 723 (62 ) 661 Adjustments to reconcile net earnings to net cash provided by operating activities: (Earnings) loss from (378 ) -- (378 ) discontinued operations Depreciation and amortization 448 -- 448 Stock-based compensation 32 -- 32 Cash payments for stock based (2 ) -- (2 ) compensation Share of (earnings) losses of (18 ) (101 ) (119 ) affiliates, net Cash receipts from return on -- 15 15 equity investments Realized and unrealized (gains) losses on financial instruments, (57 ) 118 61 net Deferred income tax (benefit) (56 ) (5 ) (61 ) expense Other, net (12 ) 8 (4 ) Intergroup tax allocation (40 ) 40 -- Changes in operating assets and liabilities Current and other assets 106 -- 106 Payables and other current (216 ) (27 ) (243 ) liabilities Net cash provided (used) by 530 (14 ) 516 operating activities CASH FLOWS FROM INVESTING ACTIVITIES: Capital expended for property (192 ) (192 ) and equipment Net sales (purchases) of short (89 ) -- (89 ) term investments Other investing activities, net (21 ) -- (21 ) Net cash provided (used) by (302 ) -- (302 ) investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings of debt 305 (110 ) 195 Repayments of debt (673 ) -- (673 ) Intergroup borrowings (payments) (124 ) 124 -- Repurchases of Liberty common (87 ) -- (87 ) stock Other financing activities, net (50 ) -- (50 ) Net cash provided (used) by (629 ) 14 (615 ) financing activities Effect of foreign currency rates (7 ) -- (7 ) on cash Net cash provided (used) by financing activities Net cash provided by (to) discontinued operations Net cash provided (used) by 304 -- 304 operating activities Net cash provided (used) by (104 ) -- (104 ) investing activities Net cash provided (used) by (264 ) -- (264 ) financing activities Change in available cash held by 15 -- 15 discontinued operations Net cash provided by (to) (49 ) -- (49 ) discontinued operations Net increase (decrease) in cash (457 ) -- (457 ) and cash equivalents Cash and cash equivalents at 1,353 -- 1,353 beginning of period Cash and cash equivalents at end $ 896 -- 896 period Contact: Liberty Interactive Corporation Courtnee Ulrich, 720-875-5420
Liberty Interactive Corporation Reports Third Quarter 2012 Financial Results
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