Liberty Interactive Corporation Reports Fourth Quarter and Year End 2012 Financial Results

  Liberty Interactive Corporation Reports Fourth Quarter and Year End 2012
  Financial Results

Business Wire

ENGLEWOOD, Colo. -- February 27, 2013

Liberty Interactive Corporation (“Liberty”) (Nasdaq: LINTA, LINTB, LVNTA,
LVNTB) today reported fourth quarter and year end 2012 results. Highlights
include^(1):

Attributed to Liberty Interactive Group

  *Grew consolidated QVC revenue by 2% and adjusted OIBDA^(2) by 4% in Q4

       *Grew QVC US revenue by 2% and adjusted OIBDA by 7%
       *QVC.com revenue as a percent of total US revenue increased to 43%, a
         3 point increase

            *Mobile penetration was 23% of QVC.com orders
            *QVC is the second largest mobile commerce multi-category
              retailer in 2012, behind only Amazon, according to Internet
              Retailer
            *QVC tied for 2^nd (with Apple) in ForeSee Mobile Retail
              Satisfaction Index: Holiday Retail Edition

       *Operating income increased 13%

  *Repurchased $177 million of Liberty Interactive stock from November 1,
    2012 to January 31, 2013

Attributed to Liberty Ventures Group

  *Purchased additional 4.8 million shares of TripAdvisor, Liberty now has
    voting control of the company with 57% of the total votes
  *Announced full redemption of 3.25% exchangeable debentures due 2031

“QVC continues to produce solid results, with significant growth in eCommerce
and mobile revenue. We are proud that a new customer satisfaction survey from
ForeSee ranked QVC as one of the top performing mobile eCommerce companies,”
stated Greg Maffei, Liberty President and CEO. “We accelerated our repurchases
of Liberty Interactive stock and bought $177 million worth of shares.
Attributable to Liberty Ventures, we purchased additional shares of
TripAdvisor acquiring voting control of the company.”

LIBERTY INTERACTIVE GROUP - Liberty Interactive Group’s revenue increased 2%
to $3.1 billion in the fourth quarter and 4% to $10 billion for the year.
Adjusted OIBDA increased 1% to $626 million for the quarter and 4% to $1.9
billion for the year. Operating income decreased 7% to $382 million for the
quarter and 1% to $1.1 billion for the year. The increase in revenue was the
result of increased revenue for QVC and the eCommerce companies. The increase
in adjusted OIBDA was due to favorable results at QVC, which was offset by
unfavorable results at the eCommerce companies. The decrease in operating
income was primarily due to the increase in stock compensation expense and the
impairment of goodwill and intangible assets at certain eCommerce
subsidiaries. Operating income has been reduced by $325 million and $323
million of non-tax-deductible amortization related to Liberty’s acquisition of
QVC for the years ended December 31, 2011 and 2012, respectively.

QVC

QVC's consolidated net revenue increased 2% in the fourth quarter to $2.7
billion and 3% to $8.5 billion for the year. Adjusted OIBDA increased 4% to
$603 million in the fourth quarter and 5% to $1.8 billion for the year.

“We see 2012 as a year highlighted by global expansion and mobile leadership
for QVC,” said Mike George, QVC President and CEO. “We expanded globally by
launching a joint venture in China and ended the year reaching 48 million
homes in China, up from 32 million at the start of the year. Additionally, we
completed important foundation work that will prepare us for more rapid global
expansion in the coming years. Furthermore, QVC is now recognized as an
industry leader in mobile commerce. We’re truly changing the way the world
shops – together with our loyal and expanding customer base.”

QVC's US revenue increased 2% to $1.8 billion in the fourth quarter and 3% to
$5.6 billion for the year. The fourth quarter and full year sales showed
strength in home and beauty products and full year results also showed
strength in apparel sales. For the fourth quarter and full year, these
increases were partially offset by a decline in electronics and jewelry
product sales. Average selling price (“ASP”) increased 2% from $60.35 to
$61.83 and units sold declined 1% compared to the prior year fourth quarter.
The return rate was relatively flat compared to the prior year. For the full
year, ASP increased 3% from $55.74 to $57.52 and units sold remained flat.
Returns as a percent of gross product revenue increased 55 basis points due to
the mix of products sold, namely apparel that returns at higher rates. In the
fourth quarter, eCommerce revenue increased 10% to $781 million and grew to
43% from 40% as a percentage of total US net revenue. For the year, eCommerce
revenue increased 12% to $2.2 billion and grew to 40% from 37% as a percentage
of total US net revenue. Adjusted OIBDA increased 7% to $429 million in the
fourth quarter and 5% to $1.3 billion for the year. Adjusted OIBDA margin^(2)
increased 109 basis points and 50 basis points for the fourth quarter and the
full year, respectively. Adjusted OIBDA margin increased in the fourth quarter
and full year due partially to a $20 million net favorable settlement that
occurred in the fourth quarter. For the full year, adjusted OIBDA margin was
also positively impacted by an improved gross margin as a result of a
favorable net shipping and handling position including warehouse productivity
and a decrease in credit card processing fees due to a change in US
legislation associated with debit card purchases resulting in lower fees
charged to merchants.

QVC's international revenue increased 1% in the fourth quarter to $864 million
and 3% to $2.9 billion for the year. The fourth quarter results included the
negative impact of the strengthening of the US dollar against the Japanese Yen
and Euro that was somewhat offset by the weakening of the US dollar against
the Pound Sterling. The full year results included the negative impact of
unfavorable exchange rates in each of QVC’s markets. Adjusted OIBDA decreased
2% to $174 million in the fourth quarter, but increased 6% to $536 million for
the year. Adjusted OIBDA margin decreased 63 basis points and increased 50
basis points for the fourth quarter and the full year, respectively.

QVC Japan's revenue grew 6% and 11% in local currency in the fourth quarter
and the full year, respectively. The increases in the fourth quarter and the
full year were primarily due to increased sales in home, apparel and
accessories products. QVC Japan’s ASP in local currency decreased 3% and 1%
for the fourth quarter and the full year, respectively. However, units shipped
increased 11% and 14% for the fourth quarter and the full year, respectively.
QVC Japan’s fourth quarter and year-to-date returns as a percent of gross
product revenue in local currency increased 106 basis points and 92 basis
points, respectively, due primarily to the shift in sales mix to apparel that
returns at higher rates. QVC Japan’s adjusted OIBDA in local currency
increased 8% for the fourth quarter and 17% for the full year. Adjusted OIBDA
margin remained flat and increased 99 basis points for the fourth quarter and
the full year, respectively. Adjusted OIBDA margin increased for the full year
primarily due to lower packaging expense, lower commissions expense as a
percentage of revenue and fixed cost leverage.

QVC Germany's revenue declined 3% and 4% in local currency in the fourth
quarter and the full year, respectively. The decrease in revenue in the fourth
quarter was due primarily to declines in sales of home, beauty and electronics
products, offset by an increase in apparel. Full year revenue declines were
primarily due to decreases in sales in the health and fitness, apparel and
accessories categories, partially offset by an increase in sales of beauty
products. QVC Germany's ASP in local currency decreased 5% and 3% for the
fourth quarter and the full year, respectively. Units shipped increased 1% in
the fourth quarter, but decreased 3% for the full year. QVC Germany's fourth
quarter return rate as a percent of gross product revenue in local currency
increased 26 basis points from the prior year due primarily to increased sales
of apparel products that have higher return rates, while full year returns as
a percent of gross product revenue declined 138 basis points from the prior
year due primarily to declining sales in higher return categories, including
apparel. QVC Germany’s adjusted OIBDA in local currency decreased 13% for the
fourth quarter and decreased 3% for the full year. Adjusted OIBDA margin
decreased 205 basis points and remained flat for the fourth quarter and the
full year, respectively. Adjusted OIBDA margin decreased in the fourth quarter
due primarily to unfavorable product margins.

QVC UK's revenue increased 3% in local currency for both the fourth quarter
and the full year. The increase in the fourth quarter was primarily due to
sales in the electronics and home categories. The increase in revenue for the
full year was primarily due to an increase in sales of beauty products. QVC
UK's ASP in local currency increased 7% and 3% for the fourth quarter and the
full year, respectively. Units shipped decreased 3% in the fourth quarter and
remained flat for the full year. QVC UK's fourth quarter and full year return
rates as a percent of gross product revenue in local currency increased 27 and
28 basis points, respectively, from the prior year. QVC UK’s adjusted OIBDA in
local currency increased 1% for the fourth quarter, but decreased 6% for the
full year. Adjusted OIBDA margin increased slightly and decreased 151 basis
points for the fourth quarter and the full year, respectively. For the full
year, adjusted OIBDA margin decreased primarily due to lower product margins
and higher transition and running costs associated with QVC UK’s new
headquarters move in June 2012.

QVC Italy continues the trend upward with sequential fourth quarter sales
growth of 44% in local currency over the third quarter of 2012. QVC Italy's
revenue increased 119% and 168% in local currency in the fourth quarter and
the full year, respectively. QVC Italy’s sales were primarily from the cooking
and dining, beauty and apparel product categories. The adjusted OIBDA deficit
improved by 44% in the fourth quarter and 34% for the year. QVC Italy's ASP in
local currency increased 5% and 2% for the fourth quarter and the full year,
respectively. Units shipped increased 111% in the fourth quarter and 171% for
the full year.

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 sequential sales growth in the fourth quarter of 37% in
local currency over the third quarter of 2012. CNRS revenue increased 14% and
85% in local currency for the fourth quarter and the full year 2012 compared
to the same periods in 2011, respectively. This joint venture is being
accounted for as an equity method investment, and as a result, QVC reported a
$1 million and $4 million reduction in net income for the fourth quarter and
full year, respectively.

QVC's outstanding bank and bond debt was $3.4 billion at December 31, 2012, an
increase of $1.0 billion since the prior year. The increase 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 5% to $451 million for the fourth quarter and 11% to $1.5 billion for
the year. Adjusted OIBDA decreased 29% to $35 million for the quarter and 22%
to $96 million for the year. Operating income decreased 230% to a $39 million
loss for the quarter and 247% to an $81 million loss for the year. The
increase in revenue was the result of increased marketing efforts driving
additional traffic, greater conversion resulting from site optimization,
broader inventory offerings and a lift in sales from discounted pricing of
seasonal inventory. 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 resulting in lower gross margins 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
and other intangibles at Celebrate Interactive and Evite as a result of
continued declining operating results and unfavorable trends during 2012.

Share Repurchases

From November 1, 2012 through January 31, 2013, Liberty repurchased
approximately 9.0 million Series A Liberty Interactive shares at an average
cost per share of $19.76 for total cash consideration of $177.0 million. Since
the creation of the Liberty Interactive stock in May 2006, Liberty has
repurchased approximately 184.2 million shares at an average cost per share of
$19.02 for aggregate cash consideration of $3.5 billion. These repurchases
represent approximately 26.3% of the shares outstanding at the time of
creation of the Liberty Interactive stock. All repurchases up to August 9,
2012, the date on which the Liberty Interactive stock was recapitalized to
create the Liberty Ventures stock, were comprised of shares of the combined
stocks. The total current repurchase authorization for Liberty Interactive
Group stock is approximately $1.2 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 – Fair value of the equity method securities and
non-strategic AFS securities attributed to the Liberty Ventures Group
decreased from $4.9 billion at September 30, 2012 to $3.6 billion at December
31, 2012. The decrease is primarily attributable to the sale of 12 million
shares of Expedia and the consolidation of TripAdvisor due to the acquisition
of the controlling interest during the fourth quarter of 2012.

Share Repurchases

There were no repurchases of Liberty Ventures Group stock from November 1,
2012 through January 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, and 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
 1)  which will begin at 5:30 p.m. (ET) on February 27, 2013. 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 - QUARTER
                                                                  
(amounts in millions)                 4Q11           4Q12           % Change
Revenue
QVC
US                                    $ 1,792         $ 1,828         2     %
International                          857          864         1     %
Total QVC Revenue                      2,649       $ 2,692       2     %
eCommerce businesses                   430          451         5     %
Total Liberty Interactive Group       $ 3,079       $ 3,143       2     %
Revenue
                                                                      
Adjusted OIBDA
QVC
US                                    $ 401           $ 429           7     %
International                          178          174         -2    %
Total QVC Adjusted OIBDA               579          603         4     %
eCommerce businesses                    49              35            -29   %
Corporate and other                    (9        )   (12       )  -33   %
Total Liberty Interactive Group       $ 619         $ 626         1     %
Adjusted OIBDA
                                                                      
Operating Income
QVC
US                                    $ 254           $ 312           23    %
International                          143          137         -4    %
Total QVC Operating Income            $ 397         $ 449         13    %
eCommerce businesses                    30              (39       )   -230  %
Corporate and other                    (18       )   (28       )  -56   %
Total Liberty Interactive Group       $ 409         $ 382         -7    %
Operating Income
                                                                
                                                                      
                                                                
(amounts in millions)
Liberty Interactive Group Shares        1/31/2012      1/31/2013
Outstanding
Outstanding A and B shares              575             542
                                                                      

LIBERTY INTERACTIVE GROUP FINANCIAL METRICS – FULL YEAR
                                                                  
(amounts in millions)                            2011     2012      % Change
Revenue
QVC
US                                               $ 5,412   $ 5,585    3%
International                                     2,856   2,931   3%
Total QVC Revenue                                $ 8,268  $ 8,516   3%
eCommerce businesses                              1,348   1,502   11%
Total Liberty Interactive Group Revenue          $ 9,616  $ 10,018  4%
                                                                      
Adjusted OIBDA
QVC
US                                               $ 1,225   $ 1,292    5%
International                                     508     536     6%
Total QVC Adjusted OIBDA                         $ 1,733  $ 1,828   5%
eCommerce businesses                               123       96       -22%
Corporate and other                               (29)    (27)    7%
Total Liberty Interactive Group Adjusted OIBDA   $ 1,827  $ 1,897   4%
                                                                      
Operating Income
QVC
US                                               $ 776     $ 870      12%
International                                     361     398     10%
Total QVC Operating Income                       $ 1,137  $ 1,268   12%
eCommerce businesses                               55        (81)     -247%
Corporate and other                               (55)    (63)    -15%
Total Liberty Interactive Group Operating        $ 1,137  $ 1,124   -1%
Income
                                                                      

QVC OPERATING METRICS - QUARTER
                                                                 
(amounts in millions except average sale     4Q11       4Q12       % Change
price amounts)
QVC - US^(1)
Revenue                                      $1,792      $1,828      2%
Adjusted OIBDA                               $401        $429        7%
Adjusted OIBDA margin                        22.38%      23.47%      109 bps
Average sale price (ASP)                     60.35       61.83       2%
Units sold                                   32.12       31.91       -1%
Return rate                                  17.12%      17.02%      10 bps
                                                                     
eCommerce and Mobile Metrics
eCommerce $ of US revenue                    $712        $781        10%
eCommerce % of US revenue                    39.72%      42.71%      299 bps
Mobile % of US eCommerce revenue^(2)         11.84%      22.64%      NM
                                                                     
                                                                     
QVC - Japan^(1)
Revenue                                      $344        $347        1%
Adjusted OIBDA                               $78         $79         1%
Adjusted OIBDA margin                        22.67%      22.77%      10 bps
Average sale price (ASP)                     ¥7,301.71   ¥7,087.07   -3%
Units sold                                   4.07        4.50        11%
                                                                     
QVC - Germany^(1)
Revenue                                      $311        $288        -7%
Adjusted OIBDA                               $69         $58         -16%
Adjusted OIBDA margin                        22.19%      20.14%      (205) bps
Average sale price (ASP)                     €38.51      € 36.73     -5%
Units sold                                   7.65        7.74        1%
                                                                     
QVC - UK^(1)
Revenue                                      $187        $196        5%
Adjusted OIBDA                               $40         $42         5%
Adjusted OIBDA margin                        21.39%      21.43%      4 bps
Average sale price (ASP)                     £29.32      £31.36      7%
Units sold                                   4.33        4.19        -3%
                                                                     
QVC - Italy^(1)
Revenue                                      $15         $33         120%
Adjusted OIBDA                               ($9)        ($5)        44%
Adjusted OIBDA margin                        NM          NM          NM
Average sale price (ASP)                     €33.00      €34.56      5%
Units sold                                  0.35       0.74       111%

  (1)  Revenue and adjusted OIBDA change calculated in US dollars, not
          local currency
    (2)   Based on gross dollar orders less projected cancellations plus
          waitlist shipped.
          

QVC OPERATING METRICS – FULL YEAR
                                                                 
(amounts in millions except average sale     2011       2012       % Change
price amounts)
QVC - US^(1)
Revenue                                      $5,412      $5,585      3%
Adjusted OIBDA                               $1,225      $1,292      5%
Adjusted OIBDA margin                        22.63%      23.13%      50 bps
Average sale price (ASP)                     55.74       57.52       3%
Units sold                                   105.94      106.02      0%
Return rate                                  18.29%      18.84%      (55) bps
                                                                     
eCommerce and Mobile Metrics
eCommerce $ of US revenue                    $1,993      $2,239      12%
eCommerce % of US revenue                    36.83%      40.09%      326 bps
                                                                     
Mobile % of US eCommerce revenue^(2)         9.43%       19.95%      NM
                                                                     
                                                                     
QVC - Japan^(1)
Revenue                                      $1,127      $1,247      11%
Adjusted OIBDA                               $241        $279        16%
Adjusted OIBDA margin                        21.38%      22.37%      99 bps
Average sale price (ASP)                     ¥6,595.87   ¥6,531.07   -1%
Units sold                                   14.92       16.97       14%
                                                                     
QVC - Germany^(1)
Revenue                                      $1,068      $956        -10%
Adjusted OIBDA                               $199        $179        -10%
Adjusted OIBDA margin                        18.63%      18.72%      9 bps
Average sale price (ASP)                     €37.02      €36.08      -3%
Units sold                                   27.06       26.26       -3%
                                                                     
QVC - UK^(1)
Revenue                                      $626        $641        2%
Adjusted OIBDA                               $111        $104        -6%
Adjusted OIBDA margin                        17.73%      16.22%      (151) bps
Average sale price (ASP)                     £28.06      £28.98      3%
Units sold                                   15.02       15.06       0%
                                                                     
QVC - Italy^(1)
Revenue                                      $35         $87         149%
Adjusted OIBDA                               ($43)       ($26)       40%
Adjusted OIBDA margin                        NM          NM          NM
Average sale price (ASP)                     €32.68      €33.34      2%
Units sold                                  0.79       2.14       171%

  (1)  Revenue and adjusted OIBDA change calculated in US dollars, not
          local currency
    (2)   Based on gross dollar orders less projected cancellations plus
          waitlist shipped.
          

NOTES

Unless otherwise noted, the foregoing discussion compares financial
information for the three months and 12 months ended December 31, 2012 to the
same period in 2011.

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 with respect to Liberty’s equity
affiliates and available for sale securities is intended to supplement
Liberty’s consolidated statements of operations which are included in its Form
10-K.

Fair Value of Public Holdings

(amounts in millions)                       9/30/2012  12/31/2012
HSN^(1)                                     $  982     $   1,102
Total Attributed Liberty Interactive Group   $  982     $   1,102
                                                       
Expedia^(2)(3)                               $  2,002    $   1,389
TripAdvisor^(4)                                 861          --
Interval Leisure Group and Tree.com^(5)         358          373
Other Public Holdings^(6)                      1,639      1,815
Total Attributed Liberty Ventures Group     $  4,860   $   3,577

        Represents fair value of Liberty Interactive Group’s investment in
        HSN. In accordance with GAAP, Liberty Interactive Group accounts for
 (1)  this investment using the equity method of accounting and includes
        this investment in its consolidated balance sheet at its historical
        carrying value which aggregated $241 million and $242 million at
        September 30, 2012 and December 31, 2012, respectively.
        Represents fair value of Liberty Ventures Group’s investment in
        Expedia. In accordance with GAAP, Liberty Ventures Group accounts for
  (2)   this investment using the equity method of accounting and includes
        this investment in its consolidated balance sheet at its historical
        carrying value which aggregated $681 million and $431 million at
        September 30, 2012 and December 31, 2012, respectively.
        Liberty entered into a forward sales contract on 12 million shares of
        Expedia common stock in March 2012 at a per share forward price of
        $34.316. The forward contract was settled in October 2012 for total
        cash proceeds of $412 million and the 12 million shares of Expedia
  (3)   common stock, previously held as collateral, were released to the
        counterparty. In the fourth quarter when the forward contract settled,
        the difference between the fair value of the Expedia shares and the
        carrying value of the shares, $443 million, was recognized in the gain
        (loss) on transactions, net line item in the statement of operations.
  (4)   TripAdvisor became a consolidated subsidiary attributed to Liberty
        Ventures Group in the fourth quarter of 2012.
        Represents fair value of Liberty Ventures Group’s investments. In
        accordance with GAAP, Liberty Ventures Group accounts for these
  (5)   investments using the equity method of accounting and includes these
        investments in its consolidated balance sheet at their historical
        carrying values which aggregated $94 million and $90 million at
        September 30, 2012 and December 31, 2012, respectively.
  (6)   Represents Liberty Ventures Group’s other 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)                                  9/30/2012  12/31/2012
Cash and Liquid Investments Attributable to:                      
Liberty Interactive Group                               $ 558       $  699
Liberty Ventures Group^(1)                               1,235     2,147 
Total Liberty Consolidated Cash (GAAP)                  $ 1,793   $  2,846 
                                                                    
Less:
Short-term marketable securities – Liberty Ventures     $ --      $  186   
Group
Total Liberty Consolidated Cash (GAAP)                  $ 1,793   $  2,660 
                                                                    
Debt:
Senior notes and debentures^(2)                         $ 1,070     $  1,032
QVC senior notes^(2)                                      2,500        2,500
QVC bank credit facility                                  851          903
Other                                                    118       125   
Total Attributed Liberty Interactive Group Debt         $ 4,539     $  4,560
Unamortized discount                                     (19   )    (18   )
Total Attributed Liberty Interactive Group Debt         $ 4,520   $  4,542 
(GAAP)
                                                                    
Senior exchangeable debentures^(3)                        2,852        2,852
TripAdvisor debt facilities                              --        412   
Total Attributed Liberty Ventures Group Debt            $ 2,852     $  3,264
Fair market value adjustment                             (15   )    78    
Total Attributed Liberty Ventures Group Debt (GAAP)     $ 2,837   $  3,342 
                                                                  
Total Liberty Interactive Corporation Debt (GAAP)       $ 7,357   $  7,884 

 (1)  Includes $186 million of short-term marketable securities with an
        original maturity greater than 90 days as of December 31, 2012.
  (2)   Face amount of Senior Notes and Debentures with no reduction for the
        unamortized discount or fair market value adjustment.
  (3)   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
increased $141 million, primarily due to cash flow from operations at QVC and
borrowings of debt at QVC, partially offset by repayments of debt, stock
repurchases and capital expended for property and equipment. Total debt
attributed to the Liberty Interactive Group increased by $21 million,
primarily due to net borrowings on the QVC bank credit facility offset by
repayments on senior notes and debentures.

Total cash and liquid investments attributed to the Liberty Ventures Group
increased $912 million, primarily due to cash proceeds from dispositions, cash
acquired for financial reporting purposes as a result of consolidating
TripAdvisor and proceeds received on the rights offering. These inflows were
partially offset by payments on settlements of financial instruments and
investments in and loans to cost and equity investees. Total debt attributed
to the Liberty Ventures Group increased by $412 million, due to the debt
acquired for financial reporting purposes as a result of consolidating
TripAdvisor effective December 11, 2012.

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 5:30 p.m. (ET) on February 27, 2013. The call can be
accessed by dialing (888) 487-0361 or (719) 325-2138 at least 10 minutes prior
to the start time. Replays of the conference call can be accessed until 7:30
p.m. (ET) on March 6, 2013, by dialing (888) 203-1112 or (719) 457-0820 plus
the pass code 8544178#. 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, the effect of digital conversion on QVC’s
channel placement, new service and product offerings, QVC’s mobile commerce
platform, 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 presentation, 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-K and 8-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
presentation.

SUPPLEMENTAL INFORMATION

As a supplement to Liberty’s consolidated statements of operations, which are
included in its Form 10-K, the following is a presentation of quarterly
information and operating metrics on a stand-alone basis for the largest
business owned by Liberty (QVC) at December 31, 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         4Q11       1Q12       2Q12       3Q12       4Q12
millions)
Liberty                                                         
Interactive Group
QVC
Revenue – US         $ 1,792     $ 1,240     $ 1,280     $ 1,237     $ 1,828
Revenue –             857      692      694      681      864   
International
Revenue – Total      $ 2,649   $ 1,932   $ 1,974   $ 1,918   $ 2,692 
Adjusted OIBDA –       401         270         315         278         429
US
Adjusted OIBDA –      178      120      123      119      174   
International
Adjusted OIBDA –     $ 579     $ 390     $ 438     $ 397     $ 603   
Total
Operating income –     254         171         214         173         312
US
Operating income –    143      87       87       87       137   
International
Operating income –   $ 397     $ 258     $ 301     $ 260     $ 449   
Total
Gross margin – US      34.6  %     35.6  %     37.2  %     36.1  %     34.7  %
Gross margin –        37.4  %   37.7  %   38.1  %   37.4  %   37.1  %
International
                                                                             

ANNUAL SUMMARY

(amounts in millions)             2011       2012
Liberty Interactive Group                    
QVC
Revenue – US                       $ 5,412     $ 5,585
Revenue – International             2,856    2,931 
Revenue – Total                    $ 8,268   $ 8,516 
Adjusted OIBDA – US                  1,225       1,292
Adjusted OIBDA – International      508      536   
Adjusted OIBDA – Total             $ 1,733   $ 1,828 
Operating income – US                776         870
Operating income – International    361      398   
Operating income – Total           $ 1,137   $ 1,268 
Gross margin – US                    35.6  %     35.8  %
Gross margin – International        37.3  %   37.5  %
                                                       

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 December 31, 2011, March 31, 2012, June 30, 2012,
September 30, 2012 and December 31, 2012, respectively, and the years ended
December 31, 2011 and 2012.

QUARTERLY SUMMARY

(amounts in millions)    4Q11      1Q12      2Q12      3Q12      4Q12
Liberty Interactive                                              
Group
Adjusted OIBDA            $ 619      $ 419      $ 455      $ 397      $ 626
Depreciation and            (193 )     (143 )     (147 )     (147 )     (159 )
amortization
Stock compensation          (17  )     (17  )     (18  )     (18  )     (32  )
expense
Impairment of              --      --      --      (39  )   (53  )
intangible assets
Operating Income          $ 409    $ 259    $ 290    $ 193    $ 382  
                                                                      

ANNUAL SUMMARY

(amounts in millions)            2011       2012
Liberty Interactive Group                   
Adjusted OIBDA                    $ 1,827     $ 1,897
Depreciation and amortization       (641  )     (596  )
Stock compensation expense          (49   )     (85   )
Impairment of intangible assets    --       (92   )
Operating Income                  $ 1,137   $ 1,124 
                                                      

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 December 31, 2011, March 31, 2012, June 30, 2012, September
30, 2012 and December 31, 2012, respectively, and the years ended December 31,
2011 and 2012.

QUARTERLY SUMMARY

(amounts in millions)    4Q11      1Q12      2Q12      3Q12      4Q12
Liberty Interactive                                              
Group
QVC Adjusted OIBDA
QVC US                    $ 401      $ 270      $ 315      $ 278      $ 429
                                                                      
QVC Japan                   78         63         70         67         79
QVC Germany                 69         46         39         36         58
QVC UK                      40         20         21         21         42
QVC Italy                  (9   )   (9   )   (7   )   (5   )   (5   )
QVC International         $ 178    $ 120    $ 123    $ 119    $ 174  
adjusted OIBDA
                                                                      
Consolidated QVC            579        390        438        397        603
adjusted OIBDA
Depreciation and            (176 )     (127 )     (129 )     (129 )     (141 )
amortization
Stock compensation         (6   )   (5   )   (8   )   (8   )   (13  )
Operating Income          $ 397    $ 258    $ 301    $ 260    $ 449  
                                                                      
eCommerce Businesses
Adjusted OIBDA              49         34         23         4          35
Depreciation and            (17  )     (17  )     (16  )     (18  )     (19  )
amortization
Stock compensation          (2   )     (2   )     (8   )     (3   )     (2   )
Impairment of              --      --      --      (39  )   (53  )
intangible assets
Operating Income (Loss)   $ 30     $ 15     $ (1   )  $ (56  )  $ (39  )
                                                                             

ANNUAL SUMMARY

(amounts in millions)             2011       2012
Liberty Interactive Group                    
QVC Adjusted OIBDA
QVC US                             $ 1,225     $ 1,292
                                               
QVC Japan                            241         279
QVC Germany                          199         179
QVC UK                               111         104
QVC Italy                           (43   )   (26   )
QVC International adjusted OIBDA   $ 508     $ 536   
                                               
Consolidated QVC adjusted OIBDA      1,733       1,828
Depreciation and amortization        (574  )     (526  )
Stock compensation                  (22   )   (34   )
Operating Income                   $ 1,137   $ 1,268 
                                               
eCommerce Businesses
Adjusted OIBDA                       123         96
Depreciation and amortization        (66   )     (70   )
Stock compensation                   (2    )     (15   )
Impairment of intangible assets     --       (92   )
Operating Income (Loss)            $ 55      $ (81   )
                                                       

LIBERTY INTERACTIVE CORPORATION
BALANCE SHEET INFORMATION
December 31, 2012 – (unaudited)
                                                              
                          Attributed
                          Interactive  Ventures   Inter-group    Consolidated
                          Group         Group      Eliminations   Liberty
ASSETS                    amounts in millions
Current assets:
Cash and cash             $  699        1,961      --             2,660
equivalents
Trade and other           1,095         106        --             1,201
receivables, net
Inventory, net            1,106         --         --             1,106
Other current assets      241         206      (156     )    291
Total current assets      3,141       2,273    (156     )    5,258
Investments in
available-for-sale        4             1,815      --             1,819
securities and other
cost investments
Investments in
affiliates, accounted     304           547        --             851
for using the equity
method
Property and equipment,   1,220         15         --             1,235
net
Intangible assets not     8,431         5,449      --             13,880
subject to amortization
Intangible assets
subject to                1,934         1,183      --             3,117
amortization, net
Other assets, at cost,
net of accumulated        81          14       --           95
amortization
Total assets              $  15,115   11,296   (156     )    26,255
                                                                  
LIABILITIES AND EQUITY
Current liabilities:
Intergroup Payable        $  70         (70    )   --             --
(Receivable)
Accounts payable          705           14         --             719
Accrued liabilities       819           99         --             918
Current portion of debt   265           1,373      --             1,638
Current deferred tax      --            1,068      (156     )     912
liabilities
Other current             267         35       --           302
liabilities
Total current             2,126       2,519    (156     )    4,489
liabilities
Long-term debt            4,277         1,969      --             6,246
Deferred income tax       1,318         1,891      --             3,209
liabilities
Other liabilities         234         26       --           260
Total liabilities         7,955       6,405    (156     )    14,204
Equity/Attributed net     7,011         551        --             7,562
assets (liabilities)
Noncontrolling
interests in equity of    149         4,340    --           4,489
subsidiaries
Total liabilities and     $  15,115   11,296   (156     )    26,255
equity
                                                                  

LIBERTY INTERACTIVE CORPORATION
STATEMENT OF OPERATIONS INFORMATION
Twelve months ended December 31, 2012 - (unaudited)
                                                               
                                         Attributed
                                         Interactive  Ventures   Consolidated
                                         Group         Group      Liberty
                                         amounts in millions
REVENUE:
Net retail sales                         $  10,018     36         10,054
Cost of sales                            6,396       --       6,396    
Gross profit                             3,622       36       3,658    
                                                                           
OPERATING COSTS AND EXPENSES:
Operating                                833           7          840
Selling, general and administrative,     977           32         1,009
including stock-based compensation
Impairment of intangible assets          92            --         92
Depreciation and amortization            596         13       609      
                                         2,498       52       2,550    
Operating income                         1,124         (16    )   1,108
                                                                  
OTHER INCOME (EXPENSE):
Interest expense                         (322      )   (110   )   (432     )
Share of earnings (losses) of            28            57         85
affiliates, net
Realized and unrealized gains (losses)   51            (402   )   (351     )
on financial instruments, net
Gains (losses) on transactions, net      --            1,531      1,531
Other, net                               --          44       44       
                                         (243      )  1,120    877      
Earnings (loss) before income taxes      881           1,104      1,985
Income tax (expense) benefit             (352      )  (42    )  (394     )
Net earnings (loss)                      529           1,062      1,591
Less net earnings (losses)
attributable to noncontrolling           63          (2     )  61       
interests
Net earnings (loss) attributable to      $  466      1,064    1,530    
Liberty stockholders
                                                                           
                                                                           
Liberty Interactive Group Shares
Outstanding
Outstanding A and B shares as of            542
January 31, 2013 (in millions)
                                                                           

LIBERTY INTERACTIVE CORPORATION
STATEMENT OF OPERATIONS INFORMATION
Twelve months ended December 31, 2011 - (unaudited)
                                                               
                                         Attributed
                                         Interactive  Ventures   Consolidated
                                         Group         Group      Liberty
                                         amounts in millions
REVENUE:
Net retail sales                         $  9,616      --         9,616
Cost of sales                            6,114       --       6,114    
Gross profit                             3,502       --       3,502    
                                                                           
OPERATING COSTS AND EXPENSES:
Operating                                866           --         866
Selling, general and administrative,     858           4          862
including stock-based compensation
Depreciation and amortization            641         --       641      
                                         2,365       4        2,369    
Operating income (loss)                  1,137         (4    )    1,133
                                                                  
OTHER INCOME (EXPENSE):
Interest expense                         (317      )   (110  )    (427     )
Share of earnings (losses) of            23            117        140
affiliates, net
Realized and unrealized gains (losses)   75            9          84
on financial instruments, net
Other, net                               15          (6    )   9        
                                         (204      )  10       (194     )
Earnings (loss) before income taxes      933           6          939
Income tax (expense) benefit             (353      )  1        (352     )
Earnings (loss) from continuing          580           7          587
operations
Earnings (loss) from discontinued        378         --       378      
operations, net of taxes
Net earnings (loss)                      958           7          965
Less net earnings (loss) attributable    53          --       53       
to the noncontrolling interests
Net earnings (loss) attributable to      $  905      7        912      
Liberty stockholders
                                                                           
                                                                           
Liberty Interactive Group Shares
Outstanding
Outstanding A and B shares as of            575
January 31, 2012 (in millions)
                                                                           

LIBERTY INTERACTIVE CORPORATION
STATEMENT OF CASH FLOWS INFORMATION
Twelve months ended December 31, 2012 – (unaudited)
                                                               
                                         Attributed
                                         Interactive  Ventures   Consolidated
                                         Group         Group      Liberty
                                         amounts in millions
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss)                      $   529       1,062      1,591
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation and amortization            596           13         609
Stock-based compensation                 85            6          91
Cash payments for stock based            (12      )    --         (12      )
compensation
Excess tax benefit from stock-based      (56      )    (8     )   (64      )
compensation
Share of (earnings) losses of            (28      )    (57    )   (85      )
affiliates, net
Cash receipts from return on equity      11            34         45
investments
Realized and unrealized (gains) losses   (51      )    402        351
on financial instruments, net
(Gains) losses on transactions, net      --            (1,531 )   (1,531   )
Impairment of intangible assets          92            --         92
Deferred income tax (benefit) expense    (179     )    192        13
Other, net                               9             (30    )   (21      )
Intergroup tax allocation                152           (152   )   --
Intergroup tax payments                  (33      )    33         --
Changes in operating assets and
liabilities
Current and other assets                 (78      )    8          (70      )
Payables and other current liabilities   433         (10    )  423      
Net cash provided (used) by operating    1,470       (38    )  1,432    
activities
                                                                  
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash proceeds from dispositions          --            1,030      1,030
Proceeds from settlements of financial   --            (258   )   (258     )
instruments, net
Investments in and loans to cost and     (59      )    (177   )   (236     )
equity investees
Capital expended for property and        (338     )    (1     )   (339     )
equipment
Net sales (purchases) of short term      46            (76    )   (30      )
and other marketable securities
Other investing activities, net          (111     )   97       (14      )
Net cash provided (used) by investing    (462     )   615      153      
activities
                                                                  
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of debt                       2,316         --         2,316
Repayments of debt                       (1,392   )    (120   )   (1,512   )
Proceeds from rights offering            --            328        328
Reattribution of cash between groups     (1,346   )    1,346      --
Intergroup receipts (payments), net      162           (162   )   --
Repurchases of Liberty common stock      (815     )    --         (815     )
Taxes paid in lieu of shares issued      (112     )    (16    )   (128     )
for stock-based compensation
Excess tax benefit from stock-based      56            8          64
compensation
Other financing activities, net          (5       )   --       (5       )
Net cash provided (used) by financing    (1,136   )   1,384    248      
activities
                                                                           
Effect of foreign currency rates on      (20      )   --       (20      )
cash
Net increase (decrease) in cash and      (148     )    1,961      1,813
cash equivalents
Cash and cash equivalents at beginning   847         --       847      
of period
Cash and cash equivalents at end         $   699     1,961    2,660    
period
                                                                           

LIBERTY INTERACTIVE CORPORATION
STATEMENT OF CASH FLOWS INFORMATION
Twelve months ended December 31, 2011 - (unaudited)
                                                               
                                         Attributed
                                         Interactive  Ventures   Consolidated
                                         Group         Group      Liberty
CASH FLOWS FROM OPERATING ACTIVITIES:    amounts in millions
Net earnings (loss)                      $   958       7          965
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
(Earnings) loss from discontinued        (378     )    --         (378      )
operations
Depreciation and amortization            641           --         641
Stock-based compensation                 49            --         49
Cash payments for stock based            (3       )    --         (3        )
compensation
Excess tax benefit from stock-based      (19      )    --         (19       )
compensation
Share of losses (earnings) of            (23      )    (117   )   (140      )
affiliates, net
Cash receipts from return on equity      3             19         22
affiliates, net
Realized and unrealized gains (losses)   (75      )    (9     )   (84       )
on financial instruments, net
Deferred income tax (benefit) expense    (109     )    153        44
Other, net                               (16      )    20         4
Intergroup tax allocation                154           (154   )   --
Changes in operating assets and
liabilities
Current and other assets                 (174     )    --         (174      )
Payables and other current liabilities   (20      )   (7     )  (27       )
Net cash provided (used) by operating    988         (88    )  900       
activities
                                                                            
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash proceeds from dispositions          --            --         --
Investments in and loans to cost and     (56      )    (9     )   (65       )
equity investees
Capital expended for property and        (312     )    --         (312      )
equipment
Net sales (purchases) of short term      (46      )    --         (46       )
and other marketable securities
Other investing activities, net          (14      )   --       (14       )
Net cash provided (used) by investing    (428     )   (9     )  (437      )
activities
                                                                            
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings of debt                       383           --         383
Repayments of debt                       (788     )    (111   )   (899      )
Intergroup receipts (payments), net      (208     )    208        --
Repurchases of Liberty common stock      (366     )    --         (366      )
Taxes paid in lieu of shares issued      (5       )    --         (5        )
for stock-based compensation
Excess tax benefit from stock-based      19            --         19
compensation
Other financing activities, net          (48      )   --       (48       )
Net cash provided (used) by financing    (1,013   )   97       (916      )
activities
Effect of foreign currency rates on      (4       )    --         (4        )
cash
Net cash provided (used) by financing
activities
Net cash provided by (to) discontinued
operations
Net cash provided (used) by operating    304           --         304
activities
Net cash provided (used) by investing    (104     )    --         (104      )
activities
Net cash provided (used) by financing    (264     )    --         (264      )
activities
Change in available cash held by         15          --       15        
discontinued operations
Net cash provided by (to) discontinued   (49      )   --       (49       )
operations
Net increase (decrease) in cash and      (506     )    --         (506      )
cash equivalents
Cash and cash equivalents at beginning   1,353       --       1,353     
of period
Cash and cash equivalents at end         $ 847       --       847       
period
                                                                            

Contact:

Liberty Interactive Corporation
Courtnee Ulrich, 720-875-5420
 
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