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Liberty Interactive Corporation Reports Third Quarter 2013 Financial Results

  Liberty Interactive Corporation Reports Third Quarter 2013 Financial Results

Business Wire

ENGLEWOOD, Colo. -- November 5, 2013

Liberty Interactive Corporation (“Liberty”) (Nasdaq: LINTA, LINTB, LVNTA,
LVNTB) today reported third quarter 2013 results. Highlights include^(1):

Attributed to Liberty Interactive Group

  *Grew QVC US revenue by 5% and adjusted OIBDA^(2) by 9%

       *QVC US operating income increased by 10%
       *QVC.com revenue as a percent of total US revenue increased to 41%, a
         2 point increase
       *QVC US mobile penetration was 32% of QVC.com orders

  *Repurchased $303 million LINTA shares from August 1 to October 31, 2013
  *Announced plan to create QVC Group and Liberty Digital Commerce Group
    tracking stocks out of Liberty Interactive Group

Attributed to Liberty Ventures Group

  *Announced plan to spin-off Liberty TripAdvisor Holdings
  *Invested $300 million in Abengoa solar project

“QVC again posted solid results in the US, while the international markets
proved more challenging and were negatively impacted by currency fluctuations
in Japan and the UK. We announced our plan to create the new QVC Group and
Liberty Digital Commerce Group tracking stocks,” stated Greg Maffei, Liberty
President and CEO. “We repurchased $303 million of Liberty Interactive stock
from August 1 to October 31, and $854 million year to date. We announced our
plan to spin-off Liberty TripAdvisor Holdings (which is attributable to
Liberty Ventures) and we expect the spin-off to occur in the first half of
2014.”

LIBERTY INTERACTIVE GROUP - Liberty Interactive Group's revenue increased 2%
to $2.2 billion in the third quarter, adjusted OIBDA was relatively flat at
$396 million and operating income increased 3% to $199 million. The increase
in revenue was due to favorable results at QVC and the eCommerce companies.

QVC

QVC's consolidated net revenue increased 2% in the third quarter to $1.9
billion. During the same period, adjusted OIBDA increased 3% to $408 million
and operating income remained relatively flat at $259 million. On a constant
currency basis, consolidated net revenue increased 4% and adjusted OIBDA grew
5% in the third quarter as the US denominated results were negatively impacted
by exchange rate fluctuations, primarily the strengthening of the US Dollar
against the Japanese Yen, which decreased 20%.

“QVC had strong results in the third quarter, and marked great success in the
growth of our global TV and digital platforms,” said Mike George, QVC
President and CEO. “We’ve expanded QVC’s audience reach to 290 million homes
worldwide, and created new digital platforms that include the launch of
toGather, our new social commerce platform. We’re delivering a unique shopping
experience that is perfectly aligned with the megatrends that are reshaping
the retail industry today.”

QVC's US revenue increased 5% to $1.3 billion in the third quarter primarily
as a result of strength in the home, accessories and beauty categories.
Average selling price per unit ("ASP") increased 5% from $55.21 to $57.88 and
units sold increased 1% compared to the prior year third quarter. Returns as a
percent of gross product revenue improved 42 basis points due primarily to
lower product return mix within the categories. In the same period, QVC US
eCommerce revenue increased 12% to $535 million and grew to 41% from 39% as a
percentage of total QVC US net revenue. Adjusted OIBDA increased 9% to $304
million and adjusted OIBDA margin^(2) increased 86 basis points in the third
quarter. Adjusted OIBDA margin increased primarily due to improved product
margins, due in part to a favorable product mix, and favorable warehouse and
freight expenses.

QVC's international revenue in US Dollars decreased 5% in the third quarter to
$644 million. The third quarter results included the negative impact of the
strengthening of the US Dollar against the Japanese Yen, and to a lesser
extent, the UK Pound Sterling, which were somewhat offset by the weakening of
the US Dollar against the Euro. Adjusted OIBDA decreased 13% to $104 million
and adjusted OIBDA margin decreased 132 basis points in the third quarter. In
constant currency, QVC's international revenue and adjusted OIBDA increased 2%
and decreased 4%, respectively.

QVC Japan's revenue decreased 1% in local currency in the third quarter. QVC
Japan's ASP in local currency decreased 3%, but units sold increased 4% in the
third quarter. Japan experienced growth in apparel that was more than offset
by declines in accessories and beauty sales as well as a 205 basis point
increase in the return rate driven by the higher mix of apparel that returns
at a higher rate. QVC Japan's adjusted OIBDA in local currency decreased 14%
and adjusted OIBDA margin decreased 277 basis points in the third quarter. The
decrease in adjusted OIBDA margin was primarily due to lower product margins,
increased programming distribution costs and higher personnel expenses.

In US Dollars, QVC Japan's revenue and adjusted OIBDA decreased 22% and 31%,
respectively. The decrease in revenue and adjusted OIBDA during the quarter
was driven by a 20% decline in the Japanese Yen, which created significant
pressure on US Dollar denominated results.

QVC Germany's revenue remained relatively flat in local currency in the third
quarter. QVC Germany's ASP in local currency decreased 3%, while units sold
increased 6% in the third quarter. QVC Germany had growth in apparel and home
sales, offset by a decrease in jewelry and beauty as well as a 170 basis point
increase in the return rate due to the greater mix of apparel that returns at
a higher rate as well as higher returns in the apparel, jewelry and home
categories. QVC Germany's adjusted OIBDA in local currency decreased 3% and
adjusted OIBDA margin decreased 54 basis points for the third quarter.
Adjusted OIBDA margin decreased primarily due to higher information technology
and personnel expenses, partially offset by a reversal of an accrual made in
connection with additional taxes and social security contributions related to
a reclassification of certain workers.

QVC UK's revenue grew 7% in local currency in the third quarter primarily due
to sales in the home and accessories categories. QVC UK's ASP in local
currency increased 9%, while units sold decreased 1% in the third quarter.
UK's adjusted OIBDA in local currency increased 25% and adjusted OIBDA margin
increased 258 basis points in the third quarter. The increase in adjusted
OIBDA margin was primarily due to improved product margins.

QVC Italy's revenue increased 27% in local currency in the third quarter. QVC
Italy's sales were primarily from the home, beauty and apparel product
categories. QVC Italy's ASP in local currency decreased 5%, but units sold
increased 31% in the third quarter. In the same period, the adjusted OIBDA
deficit remained at €4 million as compared to the third quarter of 2012,
primarily due to one-time warehouse transition costs from the QVC Germany
Distribution Center to an outsourced provider in Italy.

CNR Home Shopping Co., Ltd. ("CNRS"), QVC's joint venture in China,
experienced a revenue increase of 54% in local currency in the third quarter.
In the same period, CNRS' adjusted OIBDA deficit improved by 44%. This joint
venture is being accounted for as an equity method investment.

QVC's outstanding bank and bond debt was $3.5 billion at September 30, 2013,
an increase of $101 million since December 31, 2012.

eCommerce Businesses

In the aggregate, Liberty Interactive Group's eCommerce businesses increased
revenue 7% to $298 million for the third quarter. The increased revenue was
the result of increased marketing efforts driving additional traffic,
investments in site improvements, increased shipping charges and broader
inventory offerings. Additionally, the increased revenue was partially driven
by the selling of product at a discount to continue to manage inventory to
appropriate levels. Adjusted OIBDA decreased $9 million to a loss of $5
million. The decrease in adjusted OIBDA was the result of lower product
margins as a result of continued product discounts and promotions and
increased credit card chargebacks. Operating income improved by 18% to a loss
of $46 million. The decrease in operating loss was primarily attributable to
less significant impairments during the current quarter, offset by greater
depreciation and amortization and stock compensation expense.

On October 10, 2013, Liberty announced that its board has authorized
management to pursue a plan to recapitalize its Liberty Interactive Group
tracking stock into two new tracking stocks, one (currently the Liberty
Interactive Group common stock) to be renamed the QVC Group common stock and
the other to be designated as the Liberty Digital Commerce Group common stock.
In the recapitalization, record holders of Series A and Series B Liberty
Interactive Group common stock would receive 1 share of the corresponding
series of Liberty Digital Commerce Group common stock for each 10 shares of
the renamed QVC Group common stock held by them as of the effective date.
Liberty intends to attribute to the Liberty Digital Commerce Group its
subsidiaries Provide Commerce, Backcountry.com, Bodybuilding.com, CommerceHub,
Right Start, and Evite along with cash and certain liabilities. The QVC Group,
which is currently known as the Liberty Interactive Group, would have
attributed to it Liberty’s subsidiary QVC, Inc. and its approximate 38%
interest in HSN, Inc., along with cash and certain liabilities. Liberty
expects that the Series A and Series B Liberty Digital Commerce Group common
stock will trade under the symbols “LDCA” and “LDCB” and that the Series A and
Series B QVC Group common stock will trade under the symbols “QVCA” and
“QVCB,” in each case, on the Nasdaq Stock Market.

The recapitalization is subject to various conditions, including the requisite
approval of the holders of Liberty Interactive Group common stock and Liberty
Ventures Group common stock at a stockholders’ meeting and the receipt of the
opinion of tax counsel. Subject to the satisfaction of these conditions, the
recapitalization is expected to occur in the first half of 2014.

Share Repurchases

From August 1, 2013 through October 31, 2013, Liberty repurchased
approximately 12.4 million Series A Liberty Interactive shares (Nasdaq: LINTA)
at an average cost per share of $24.37 for total cash consideration of $303.3
million. Since the creation of the Liberty Interactive stock in May 2006,
Liberty has repurchased approximately 220.0 million shares at an average cost
per share of $19.65 for aggregate cash consideration of $4.3 billion. These
repurchases represent approximately 31.2% 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 remaining repurchase authorization for
Liberty Interactive Group stock is approximately $406 million.

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, and also owns an
interest in HSN.

LIBERTY VENTURES GROUP - As of September30, 2013, the fair value of the
public equity method securities and other public holdings attributed to the
Liberty Ventures Group was $1,662 million and $947 million, respectively. When
compared to June 30, 2013, the fair value of Liberty Ventures Group's public
equity method securities decreased 6%. The Liberty Ventures Group's other
public holdings balance increased 3% primarily due to changes in market prices
of certain securities during the third quarter.

On October 10, 2013, Liberty announced that its board has also authorized
management to pursue a plan to spin-off to holders of its Liberty Ventures
Group common stock shares of a newly formed company to be called Liberty
TripAdvisor Holdings (“Trip Holdings”). Trip Holdings would be comprised of,
among other things, Liberty’s 22% economic and 57% voting interest in
TripAdvisor, as well as Liberty’s BuySeasons business, which is currently a
part of Liberty’s subsidiary Celebrate Interactive, LLC (“Celebrate
Interactive”) and an anticipated net debt balance of $350 million. BuySeasons
would be reattributed from the Liberty Interactive Group to the Liberty
Ventures Group prior to the spin-off and cash equal to the fair market value
of BuySeasons would be reattributed from the Liberty Ventures Group to the
Liberty Interactive Group. The Evite business, also currently a part of
Celebrate Interactive, would remain at Liberty attributed to the Liberty
Interactive Group (or, assuming the completion of the recapitalization, the
new Liberty Digital Commerce Group). In the spin-off, record holders of Series
A and Series B Liberty Ventures common stock would receive 1 share of the
corresponding series of Trip Holdings common stock for each share of the
Liberty Ventures  common stock held by them as of a to-be-determined record
date. Liberty expects that the Series A and Series B Liberty TripAdvisor
Holdings common stock will trade under the symbols “LTRPA” and “LTRPB” and
that the Series A and Series B Liberty Ventures Group common stock will
continue to trade under the symbols “LVNTA” and “LVNTB,” in each case, on the
Nasdaq Stock Market.

The spin-off is intended to be tax-free to stockholders of Liberty and its
completion will be subject to various conditions, including the receipt of an
IRS private letter ruling and an opinion of tax counsel. Subject to the
satisfaction of these conditions, the completion of the spin-off is expected
to occur in the first half of 2014.

Share Repurchases

There were no repurchases of Liberty Ventures Group common stock (Nasdaq:
LVNTA) from August 1, 2013 through October 31, 2013. 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 subsidiary TripAdvisor, its interest in
Expedia, and minority interests in Time Warner and Time Warner Cable.
TripAdvisor is a separate publicly traded company and additional information
about TripAdvisor can be obtained through its website and filings with the
Securities and Exchange Commission.

FOOTNOTES

         Liberty's President and CEO, Greg Maffei, will discuss these
         highlights and other matters in Liberty's earnings conference call
  1)  which will begin at 4:00 p.m. (ET) on November 5, 2013. For
         information regarding how to access the call, please see “Important
         Notice” later in this document.
         For a definition of adjusted OIBDA and applicable reconciliations and
    2)   a definition of adjusted OIBDA margin, see the accompanying
         schedules.
         

LIBERTY INTERACTIVE GROUP FINANCIAL METRICS - QUARTER
                                                               
(amounts in millions)             3Q12              3Q13              % Change
Revenue
QVC
US                                $   1,237         $   1,303         5     %
International                     681              644              (5    )%
Total QVC Revenue                 1,918            $   1,947        2     %
eCommerce businesses              278              298              7     %
Total Liberty Interactive         $   2,196        $   2,245        2     %
Group Revenue
                                                                      
Adjusted OIBDA
QVC
US                                $   278           $   304           9     %
International                     119              104              (13   )%
Total QVC Adjusted OIBDA          397              408              3     %
eCommerce businesses              4                 (5         )      (225  )%
Corporate and other               (5         )      (7         )      (40   )%
Total Liberty Interactive         $   396          $   396          —     %
Group Adjusted OIBDA
                                                                      
Operating Income
QVC
US                                $   173           $   191           10    %
International                     87               68               (22   )%
Total QVC Operating Income        260              259              —     %
eCommerce businesses              (56        )      (46        )      18    %
Corporate and other               (11        )      (14        )      (27   )%
Total Liberty Interactive         $   193          $   199          3     %
Group Operating Income
                                                                            
                                                                            
(amounts in millions)
LINT Shares Outstanding           10/31/2012        10/31/2013
Outstanding A and B shares        544               508
                                                                      
                                                                      
(amounts in millions)
LINTA and LINTB Basic and         Quarter ended     Quarter ended
Diluted Shares                    9/30/2012^(1)     9/30/2013
Basic Weighted Average Shares     542               513
Outstanding (“WASO”)
Potentially dilutive Shares       10               10         
Diluted WASO                      552              523        
                                                                      

          Represents the Liberty Interactive Group from the date of the
  (1)  recapitalization of Liberty Interactive Corporation into the Liberty
          Interactive Group and Liberty Ventures Group tracking stocks on
          August 9, 2012 through September 30, 2012.
          

QVC OPERATING METRICS - QUARTER
                                                         
(amounts in millions
except average sale           3Q12                3Q13                % Change
price amounts)
QVC -
Consolidated^(1)
Revenue                       $  1,918            $  1,947            2    %
Adjusted OIBDA                $  397              $  408              3    %
Adjusted OIBDA margin         20.70    %          20.96    %          26 bps
Operating Income              $  260              $  259              —    %
                                                                      
eCommerce and Mobile
Metrics
eCommerce $ of total          $  642              $  705              10   %
revenue
eCommerce % of total          33.47    %          36.21    %          274 bps
revenue
                                                                      
Mobile % of total           23.82 %      32.70    %      888 bps
eCommerce^(2)
QVC - US^(1)
Revenue                       $  1,237            $  1,303            5    %
Adjusted OIBDA                $  278              $  304              9    %
Adjusted OIBDA margin         22.47    %          23.33    %          86 bps
Operating Income              $  173              $  191              10   %
Average sale price            55.21               57.88               5    %
(ASP) $
Units sold                    24.64               24.82               1    %
Return rate                   20.05    %          19.63    %          (42) bps
                                                                      
eCommerce and Mobile
Metrics
eCommerce $ of US             $  479              $  535              12   %
revenue
eCommerce % of US             38.72    %          41.06    %          234 bps
revenue
                                                                      
Mobile % of US            21.68    %      31.62    %      994 bps
eCommerce^(2)
QVC - Japan^(1)
Revenue                       $  301              $  236              (22  )%
Adjusted OIBDA                $  67               $  46               (31  )%
Adjusted OIBDA margin         22.26    %          19.49    %          (277)
                                                                      bps
Operating Income              $  61               38                  (38  )%
Average sale price            6,214.50            6,029.91            (3   )%
(ASP) ¥
Units sold                4.18           4.36           4    %
QVC - Germany^(1)
Revenue                       $  211              $  224              6    %
Adjusted OIBDA                $  36               $  37               3    %
Adjusted OIBDA margin         17.06    %          16.52    %          (54) bps
Operating Income              $  21               $  19               (10  )%
Average sale price            35.23               34.03               (3   )%
(ASP) €
Units sold                6.16           6.55           6    %
QVC - UK^(1)
Revenue                       $  149              $  156              5    %
Adjusted OIBDA                $  21               $  26               24   %
Adjusted OIBDA margin         14.09    %          16.67    %          258 bps
Operating Income              $  15               $  21               40   %
Average sale price            27.91               30.50               9    %
(ASP) £
Units sold                3.61           3.57           (1   )%
QVC - Italy^(1)
Revenue                       $  20               $  28               40   %
Adjusted OIBDA                $  (5    )          $  (5    )          —    %
Adjusted OIBDA margin         (25.00   )%         (17.86   )%         714 bps
Operating Income              $  (10   )          $  (10   )          —    %
Average sale price            33.01               31.51               (5   )%
(ASP) €
Units sold                    0.54                0.71                31   %
                                                                           

  (1)  Revenue change, adjusted OIBDA change and eCommerce and Mobile
          Metrics calculated in US Dollars, not local currency.
    (2)   Based on gross US Dollar orders.
          

NOTES

Unless otherwise noted, the foregoing discussion compares financial
information for the three months ended September30, 2013 to the same period
in 2012.

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-Q.

Fair Value of Public Holdings
                                                            
(amounts in millions)                              6/30/2013         9/30/2013
HSN^(1)                                            $ 1,075          $  1,073
Total Attributed Liberty Interactive Group         $ 1,075          $  1,073
                                                                     
Expedia^(2)                                        $ 1,388           $  1,196
Interval Leisure Group and Tree.com^(3)            379               466
Other Public Holdings^(4)                          917              947
Total Attributed Liberty Ventures Group            $ 2,684          $  2,609
                                                                        

          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 attributed balance sheet at its historical
          carrying value which aggregated $270 million and $283 million at
          June 30, 2013 and September 30, 2013, respectively.
          Represents fair value of Liberty Ventures Group's investment in
          Expedia. In accordance with GAAP, Liberty Ventures Group accounts
    (2)   for this investment using the equity method of accounting and
          includes this investment in its attributed balance sheet at its
          historical carrying value which aggregated $438 million and $465
          million at June 30, 2013 and September 30, 2013, respectively.
          Represents fair value of Liberty Ventures Group's investments. In
          accordance with GAAP, Liberty Ventures Group accounts for these
    (3)   investments using the equity method of accounting and includes these
          investments in its attributed balance sheet at their historical
          carrying values which aggregated $95 million and $98 million at June
          30, 2013 and September 30, 2013, respectively.
          Represents Liberty Ventures Group's other public holdings which are
    (4)   accounted for at fair value. Excludes $444 million and $392 million
          of long-term marketable securities as of June 30, 2013 and September
          30, 2013, respectively.
          

Cash and Debt

The following presentation is provided to separately identify cash and liquid
investments and debt information.

(amounts in millions)                          6/30/2013     9/30/2013
Cash and Liquid Investments Attributable
to:
Liberty Interactive Group                          $ 591             $ 455
Liberty Ventures Group^(1)(2)(3)                   1,809            1,470   
Total Liberty Consolidated Cash and Liquid         $ 2,400          $ 1,925 
Investments
                                                                     
Less:
Short-term marketable securities - Liberty         $ 508             $ 552
Ventures Group
Long-term marketable securities - Liberty          444              392     
Ventures Group
Total Liberty Consolidated Cash (GAAP)             $ 1,448          $ 981   
                                                                     
Debt:
Senior notes and debentures^(4)                    $ 792             $ 792
Senior exchangeable debentures^(5)                 —                 400
QVC senior notes^(4)                               2,819             2,819
QVC bank credit facility                           990               673
Other                                              138              153     
Total Attributed Liberty Interactive Group         $ 4,739           $ 4,837
Debt
Unamortized discount and fair market value         (15     )         (2      )
adjustment
Total Attributed Liberty Interactive Group         $ 4,724          $ 4,835 
Debt (GAAP)
                                                                     
Senior exchangeable debentures^(5)                 $ 2,146           $ 2,091
TripAdvisor debt facilities                        385              376     
Total Attributed Liberty Ventures Group            $ 2,531           $ 2,467
Debt
Fair market value adjustment                       (267    )         (268    )
Total Attributed Liberty Ventures Group            $ 2,264          $ 2,199 
Debt (GAAP)
                                                                    
Total Liberty Interactive Corporation Debt         $ 6,988          $ 7,034 
(GAAP)
                                                                             

          Includes $508 million and $552 million of short-term marketable
  (1)  securities with an original maturity greater than 90 days as of June
          30, 2013 and September 30, 2013, respectively.
          Includes $444 million and $392 million of marketable securities with
          an original maturity greater than one year as of June 30, 2013 and
    (2)   September 30, 2013, respectively, which are reflected in investments
          in available-for-sale securities in Liberty Ventures Group's
          condensed attributed balance sheet.
          Includes $616 million and $596 million of cash and liquid
    (3)   investments held at TripAdvisor as of June 30, 2013 and September
          30, 2013, respectively.
    (4)   Face amount of Senior Notes and Debentures with no reduction for the
          unamortized discount.
    (5)   Face amount of Senior Exchangeable Debentures with no reduction for
          the fair market value adjustment.
          

Total cash and liquid investments attributed to the Liberty Interactive Group
decreased by approximately $136 million during the third quarter. Cash flows
from operations were offset by capital expenditures and stock repurchases.
Total debt attributed to the Liberty Interactive Group increased by $98
million, primarily due to the issuance of new senior exchangeable debentures
during the quarter, partially offset by payments made on the QVC bank credit
facility.

Total cash and liquid investments attributed to the Liberty Ventures Group
decreased $339 million, primarily due to investments in cost and equity
investees, debt repayments during the quarter and shares repurchased by
subsidiary. These cash outflows were partially offset by cash flows from
operations. Included in the third quarter total cash and liquid investments
attributed to the Liberty Ventures Group is $596 million held at TripAdvisor,
which is comprised of $276 million of cash, $156 million of short-term
marketable securities and $164 million of long-term marketable securities.
Although TripAdvisor is a consolidated subsidiary, they are a separate public
company with a significant noncontrolling interest, therefore Liberty does not
have ready access to those cash and liquid investments. Total debt outstanding
attributed to the Liberty Ventures Group decreased by $64 million from the
second quarter to the third quarter, primarily due to repayments made on
senior exchangeable debentures.

Important Notice: Liberty (Nasdaq: LINTA, LINTB, LVNTA, LVNTB) President and
CEO, Greg Maffei will discuss Liberty's earnings release in a conference call
which will begin at 4:00 p.m. (ET) on November 5, 2013. The call can be
accessed by dialing (888) 437-9357 or (719) 325-2449 at least 10 minutes prior
to the start time. Replays of the conference call can be accessed until 6:00
p.m. (ET) on November 12, 2013, by dialing (888) 203-1112 or (719) 457-0820
plus the passcode 2267905. 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, the proposed spin-off
of our interest in TripAdvisor, the proposed recapitalization of the Liberty
Interactive Group tracking stock into the QVC Group tracking stock and a new
Liberty Digital Commerce tracking stock, future financial prospects,
international expansion, new service and product offerings, the monetization
of our non-core assets, the continuation of our stock repurchase program, the
estimated liabilities under exchangeable debentures and the ability of
invested cash flows to meet obligations under the debentures 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, changes in law
and government regulations that may impact the derivative instruments that
hedge certain of our financial risks, our ability to satisfy the conditions to
the proposed recapitalization and spin-off 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 10-Q, 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-Q, 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 September30, 2013, 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       3Q12          4Q12          1Q13          2Q13          3Q13
millions)
Liberty
Interactive
Group
QVC
Revenue - US      $ 1,237       $ 1,828       $ 1,297       $ 1,312       $ 1,303
Revenue -         681          864          677          649          644     
International
Revenue -         $ 1,918      $ 2,692      $ 1,974      $ 1,961      $ 1,947 
Total
Adjusted          278           429           291           320           304
OIBDA - US
Adjusted
OIBDA -           119          174          113          114          104     
International
Adjusted          $ 397        $ 603        $ 404        $ 434        $ 408   
OIBDA - Total
Operating         173           312           180           207           191
income - US
Operating
income -          87           137          80           78           68      
International
Operating
income -          $ 260        $ 449        $ 260        $ 285        $ 259   
Total
Gross margin      36.1    %     34.7    %     36.1    %     37.3    %     37.1    %
- US
Gross margin
-                 37.4    %     37.1    %     37.5    %     37.8    %     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 all stock 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, 2012, December 31, 2012, March 31, 2013,
June 30, 2013 and September 31, 2013, respectively.

QUARTERLY SUMMARY

(amounts in          3Q12      4Q12      1Q13      2Q13      3Q13
millions)
Liberty
Interactive Group
Adjusted OIBDA         $ 397       $ 626       $ 437       $ 455       396
Depreciation and       (147  )     (159  )     (153  )     (158  )     (156  )
amortization
Stock compensation     (18   )     (32   )     (24   )     (29   )     (22   )
expense
Impairment of          (39   )     (53   )     —          —          (19   )
intangible assets
Operating Income       $ 193      $ 382      $ 260      $ 268      $ 199 
                                                                             

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
such businesses' operating income (loss) calculated in accordance with GAAP
for the three months ended September 30, 2012, December 31, 2012, March 31,
2013, June 30, 2013 and September 31, 2013, respectively.

QUARTERLY SUMMARY
                                                            
(amounts in            3Q12        4Q12        1Q13        2Q13        3Q13
millions)
Liberty
Interactive Group
QVC Adjusted OIBDA
QVC US                 $ 278       $ 429       $ 291       $ 320       $ 304
                                                                       
QVC Japan              67          79          54          57          46
QVC Germany            36          58          43          35          37
QVC UK                 21          42          19          26          26
QVC Italy              (5    )     (5    )     (3    )     (4    )     (5    )
QVC International      $ 119      $ 174      $ 113      $ 114      $ 104 
adjusted OIBDA
                                                                       
Consolidated QVC       397         603         404         434         408
adjusted OIBDA
Depreciation and       (129  )     (141  )     (134  )     (140  )     (139  )
amortization
Stock compensation     (8    )     (13   )     (10   )     (9    )     (10   )
Operating Income       $ 260      $ 449      $ 260      $ 285      $ 259 
                                                                       
eCommerce
Businesses
Adjusted OIBDA         4           35          39          26          (5    )
Depreciation and       (18   )     (19   )     (18   )     (18   )     (19   )
amortization
Stock compensation     (3    )     (2    )     (2    )     (10   )     (3    )
Impairment of          (39   )     (53   )     —          —          (19   )
intangible assets
Operating Income       $ (56 )     $ (39 )     $ 19       $ (2  )     $ (46 )
(Loss)
                                                                             

LIBERTY INTERACTIVE CORPORATION
BALANCE SHEET INFORMATION
September 30, 2013 - (unaudited)

                     Attributed                               
                       Interactive   Ventures     Inter-group      Consolidated
                       Group           Group        Eliminations     Liberty
                       amounts in millions

                       
Assets
Current assets:
Cash and cash          $  455          526          —                981
equivalents
Trade and other        764             190          —                954
receivables, net
Inventory, net         1,328           —            —                1,328
Short-term
marketable             —               552          —                552
securities
Other current          288            19          (155    )        152
assets
Total current          2,835          1,287       (155    )        3,967
assets
Investments in
available-for-sale
securities and         4               1,339        —                1,343
other cost
investments
Investments in
affiliates,
accounted for          335             890          —                1,225
using the equity
method
Property and           1,181           25           —                1,206
equipment, net
Intangible assets
not subject to         8,388           5,515        —                13,903
amortization
Intangible assets
subject to             1,656           968          —                2,624
amortization, net
Other assets, at
cost, net of           85             17          —               102
accumulated
amortization
Total assets           $  14,484      10,041      (155    )        24,370
                                                                     
Liabilities and
Equity
Current
liabilities:
Intergroup Payable     $  78           (78    )     —                —
(receivable)
Accounts payable       641             41           —                682
Accrued                681             113          —                794
liabilities
Current portion of     439             927          —                1,366
debt
Current deferred       —               1,097        (155    )        942
tax liabilities
Other current          163            47          —               210
liabilities
Total current          2,002          2,147       (155    )        3,994
liabilities
Long-term debt         4,396           1,272        —                5,668
Deferred income        1,158           1,736        —                2,894
tax liabilities
Other liabilities      212            43          —               255
Total liabilities      7,768          5,198       (155    )        12,811
Equity/Attributed
net assets             6,575           478          —                7,053
(liabilities)
Noncontrolling
interests in           141            4,365       —               4,506
equity of
subsidiaries
Total liabilities      $  14,484      10,041      (155    )        24,370
and equity
                                                                     
                                                                     

LIBERTY INTERACTIVE CORPORATION
STATEMENT OF OPERATIONS INFORMATION
Three months ended September 30, 2013 - (unaudited)

                                 Attributed                  
                                   Interactive     Ventures     Consolidated
                                   Group             Group        Liberty
                                   amounts in millions
Revenue:
Net retail sales                   $   2,245         —            2,245
Other revenue                      —                255         255      
Total revenue                      2,245            255         2,500    
                                                                  
Operating costs and expenses:
Cost of sales                      1,437             —            1,437
Operating, including               206               40           246
stock-based compensation
Selling, general and
administrative, including          228               130          358
stock-based compensation
Impairment of intangible           19                —            19
assets
Depreciation and amortization      156              79          235      
                                   2,046            249         2,295    
Operating income                   199               6            205
                                                                  
Other income (expense):
Interest expense                   (70         )     (17   )      (87      )
Share of earnings (losses) of      13                16           29
affiliates, net
Realized and unrealized gains
(losses) on financial              (18         )     33           15
instruments, net
Other, net                         (1          )     4           3        
                                   (76         )     36          (40      )
Earnings (loss) before income      123               42           165
taxes
Income tax benefit (expense)       (38         )     4           (34      )
Net earnings (loss)                85                46           131
Less net earnings (loss)
attributable to noncontrolling     8                10          18       
interests
Net earnings (loss)
attributable to Liberty            $   77           36          113      
stockholders
                                                                  
LINT Shares Outstanding
Outstanding A and B shares as
of October 31, 2013 (in            508
millions)
                                                                  
LINTA and LINTB Basic and          Quarter ended
Diluted Shares (in millions)       9/30/2013
Basic Weighted Average Shares      513
Outstanding (“WASO”)
Potentially dilutive shares        10          
Diluted WASO                       523         
                                                                  
                                                                  

LIBERTY INTERACTIVE CORPORATION
STATEMENT OF OPERATIONS INFORMATION
Three months ended September 30, 2012 - (unaudited)
                                                             
                                   Attributed
                                   Interactive     Ventures     Consolidated
                                   Group             Group        Liberty
                                   amounts in millions
Revenue:
Net retail sales                   $   2,196         —            2,196
Other revenue                      —                —           —        
Total revenue                      2,196            —           2,196    
                                                                  
Operating costs and expenses:
Cost of sales                      1,407             —            1,407
Operating, including               201               —            201
stock-based compensation
Selling, general and
administrative, including          209               4            213
stock-based compensation
Impairment of intangible           39                —            39
assets
Depreciation and amortization      147              —           147      
                                   2,003            4           2,007    
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 benefit (expense)       (65         )     80          15       
Net earnings (loss)                64                (90   )      (26      )
Less net earnings (loss)
attributable to noncontrolling     15               —           15       
interests
Net earnings (loss)
attributable to Liberty            $   49           (90   )      (41      )
stockholders
                                                                  
LINT Shares Outstanding
Outstanding A and B shares as
of October 31, 2012 (in            544
millions)
                                                                  
LINTA and LINTB Basic and          Quarter ended
Diluted Shares (in millions)       9/30/2012
Basic Weighted Average Shares      542
Outstanding (“WASO”)
Potentially dilutive shares        10          
Diluted WASO                       552         
                                                                  
                                                                  

LIBERTY INTERACTIVE CORPORATION
STATEMENT OF CASH FLOWS INFORMATION
Nine months ended September 30, 2013 - (unaudited)

                                   Attributed                
                                     Interactive   Ventures     Consolidated
                                     Group           Group        Liberty
                                     amounts in millions
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net earnings (loss)                  $   314         20           334
Adjustments to reconcile net
earnings to net cash provided by
operating activities:
Depreciation and amortization        467             235          702
Stock-based compensation             75              49           124
Cash payments for stock based        (6       )      (2     )     (8       )
compensation
Share of (earnings) losses of        (33      )      8            (25      )
affiliates, net
Cash receipts from return on         11              14           25
equity investments
Realized and unrealized gains
(losses) on financial                1               48           49
instruments, net
Gains (losses) on disposition of     1               1            2
assets, net
Impairment of intangible assets      19              —            19
Deferred income tax (benefit)        (143     )      (128   )     (271     )
expense
Other, net                           67              5            72
Intergroup tax allocation            49              (49    )     —
Intergroup tax payments              30              (30    )     —
Changes in operating assets and
liabilities
Current and other assets             98              (83    )     15
Payables and other current           (408     )      121         (287     )
liabilities
Net cash provided (used) by          542            209         751      
operating activities
                                                                  
CASH FLOWS FROM INVESTING
ACTIVITIES:
Cash proceeds from dispositions      —               1,136        1,136
Investments in and loans to cost     (4       )      (367   )     (371     )
and equity investees
Capital expended for property        (178     )      (39    )     (217     )
and equipment
Purchases of short term and          —               (1,388 )     (1,388   )
other marketable securities
Sales of short term and other        —               725          725
marketable securities
Other investing activities, net      (19      )      (34    )     (53      )
Net cash provided (used) by          (201     )      33          (168     )
investing activities
                                                                  
CASH FLOWS FROM FINANCING
ACTIVITIES:
Borrowings of debt                   2,867           851          3,718
Repayments of debt                   (2,645   )      (2,407 )     (5,052   )
Intergroup receipts (payments),      2               (2     )     —
net
Shares repurchased by subsidiary     —               (142   )     (142     )
Shares issued by subsidiary          —               24           24
Repurchases of Liberty common        (750     )      —            (750     )
stock
Other financing activities, net      (38      )      (1     )     (39      )
Net cash provided (used) by          (564     )      (1,677 )     (2,241   )
financing activities
                                                                  
Effect of foreign currency rates     (21      )      —           (21      )
on cash
Net increase (decrease) in cash      (244     )      (1,435 )     (1,679   )
and cash equivalents
Cash and cash equivalents at         699            1,961       2,660    
beginning of period
Cash and cash equivalents at end     $   455        526         981      
period
                                                                           
                                                                           

LIBERTY INTERACTIVE CORPORATION
STATEMENT OF CASH FLOWS INFORMATION
Nine months ended September 30, 2012 - (unaudited)

                                   Attributed                
                                     Interactive   Ventures     Consolidated
                                     Group           Group        Liberty
CASH FLOWS FROM OPERATING            amounts in millions
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 losses (earnings) of        (26      )      (63    )     (89      )
affiliates, net
Cash receipts from return on         8               13           21
equity investments
Realized and unrealized gains
(losses) on financial                (39      )      377          338
instruments, net
Gains (losses) on disposition of     —               (288   )     (288     )
assets, net
Impairment of intangible assets      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
Sales (purchases) of short term      46              —            46
and other marketable securities
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 receipts (payments),      122             (122   )     —
net
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
                                                                           
                                                                           

Contact:

Liberty Interactive Corporation
Courtnee Ulrich, 720-875-5420
 
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