Liberty Interactive Corporation Reports Fourth Quarter and Year End 2013 Financial Results

  Liberty Interactive Corporation Reports Fourth Quarter and Year End 2013
  Financial Results

Business Wire

ENGLEWOOD, Colo. -- February 28, 2014

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

Attributed to Liberty Interactive Group

  *Grew QVC US revenue by 6% and adjusted OIBDA^(2) by 2% in the fourth
    quarter

       *QVC US operating income increased by 4%
       *QVC.com revenue as a percent of total US revenue increased to 45%, a
         246 bps increase
       *QVC US mobile penetration was 32% of QVC.com orders

  *Grew QVC US revenue by 5% and adjusted OIBDA by 5% in 2013

       *QVC US operating income increased by 4%

  *Achieved revenue growth of 12% for the eCommerce group in 2013
  *Repurchased $309 million LINTA shares from November 1, 2013 to January 31,
    2014 and $1.1 billion in 2013

       *On February 27, 2014, the Board of Directors voted to increase the
         stock repurchase authorization by $1 billion

Attributed to Liberty Ventures Group

  *Reported strong fourth quarter results at both TripAdvisor and Expedia
  *Announced a two for one stock split of the Liberty Ventures stock

“QVC posted strong results in the US and UK for the fourth quarter driven by a
return on strategic investments in TV and digital efforts and solid
operational execution. Additionally, QVC experienced rapid growth in their
China joint venture. Japan and Germany proved more challenging and were
further negatively impacted by currency fluctuations in Japan,” stated Greg
Maffei, Liberty President and CEO. “We repurchased $309 million of Liberty
Interactive stock from November 1, 2013 to January 31, 2014 and $1.1 billion
in 2013.”

Greg Maffei continued, “Today we are also announcing the two for one stock
split of the Liberty Ventures stock. This is in order to bring Liberty into
compliance with a Nasdaq listing requirement for a minimum number of publicly
held shares of the Series B Liberty Ventures stock. Due to the requirements of
our charter we are also required to split the Series A Liberty Ventures
shares. We expect this split to be effected early in the second quarter.”

LIBERTY INTERACTIVE GROUP - Liberty Interactive Group's revenue increased 3%
to $3.2 billion in the quarter and 3% to $10.3 billion for the year. Adjusted
OIBDA decreased 1% to $618 million for the quarter and was essentially flat
for the year at $1.9 billion. Operating income increased 6% to $404 million
for the quarter and increased 1% to $1.1 billion for the year.

QVC

QVC's consolidated revenue increased 2% in the fourth quarter to $2.7 billion
and increased 1% to $8.6 billion for the full year. Adjusted OIBDA decreased
1% to $595 million and increased 1% to $1.8 billion in the fourth quarter and
for the full year, respectively. Operating income decreased 2% in the fourth
quarter to $441 million and 2% to $1.2 billion for the full year.

U.S. denominated results were negatively impacted by exchange rate
fluctuations, primarily the strengthening of the U.S. Dollar against the
Japanese Yen, which decreased 19% and 18% in the fourth quarter and for the
full year, respectively. On a constant currency basis, consolidated revenue
increased 4% in both the fourth quarter and for the full year. Further,
adjusted OIBDA was also impacted by a $20 million net favorable legal
settlement in the U.S. that occurred in the fourth quarter of 2012. On a
constant currency basis and excluding the impact of the legal settlement,
adjusted OIBDA increased 4% in both the fourth quarter and for the full year
2013.

"We generated over $3.2 billion in eCommerce revenues in 2013, including $1.2
billion in mobile orders, making QVC one of the world’s largest and most
profitable eCommerce and mobile commerce retailers,” said Mike George, QVC
President and CEO. “We credit this success to the trust-based relationships
we've built and continue to cultivate with our existing customers, in addition
to the 3.8 million new customers who joined our global shopping communities
last year.”

U.S. revenue increased 6% to $1.9 billion in the fourth quarter and 5% to $5.8
billion for the year. For the fourth quarter and full year, the U.S.
experienced growth in all categories except jewelry. Average selling price per
unit (“ASP”) increased 4% from $61.83 to $64.56 and units sold increased 2%
compared to the prior year fourth quarter. Fourth quarter returns as a percent
of gross product revenue increased 25 basis points. For the full year, ASP
increased 5% from $57.52 to $60.15 and units sold were flat. Returns as a
percent of gross product revenue improved 33 basis points. In the fourth
quarter, eCommerce revenue increased 12% to $873 million and grew to 45% from
43% as a percentage of total U.S. revenue. For the full year, eCommerce
revenue increased 12% to $2.5 billion and grew to 43% from 40% as a percentage
of total U.S. revenue. Adjusted OIBDA increased 2% to $437 million in the
fourth quarter and 5% to $1.4 billion for the year. Adjusted OIBDA margin^(2)
decreased 85 basis points in the fourth quarter and was flat for the full
year. Adjusted OIBDA margin decreased in the fourth quarter primarily due to a
$20 million net favorable legal settlement that occurred in the fourth quarter
of 2012, and for the full year, the year over year negative impact of the
settlement was primarily offset by improved product margins and lower
warehouse costs. Excluding the impact of the legal settlement, adjusted OIBDA
increased 7% and 6% in the fourth quarter and for the full year, respectively,
and adjusted OIBDA margin would have increased 25 basis points and 35 basis
points in the fourth quarter and for the full year, respectively.

QVC's international revenue decreased 6% in the fourth quarter to $809 million
and 5% to $2.8 billion for the full year. The fourth quarter and full year
results included the negative impact of the strengthening of the U.S. Dollar
against the Japanese Yen that was somewhat offset by the weakening of the U.S.
Dollar against the Euro. For both periods, the U.S. Dollar remained stable
against the UK Pound Sterling. Adjusted OIBDA decreased 9% to $158 million and
9% to $489 million in the fourth quarter and for the full year, respectively.
Adjusted OIBDA margin decreased 61 basis points in the fourth quarter and
decreased 69 basis points for the full year.

QVC Japan's revenue decreased 3% and remained flat in local currency in the
fourth quarter and for the full year, respectively. The decrease in the fourth
quarter was primarily due to decreased sales in local currency of jewelry,
accessories and beauty products, partially offset by increases in apparel and
electronics. For the full year, QVC Japan's sales in local currency improved
primarily in the apparel, home and electronics categories, offset by declines
in accessories and jewelry. QVC Japan’s results were also negatively impacted
in the fourth quarter and for the full year due to an increase in returns as a
percent of gross product revenue in local currency that increased 142 basis
points and 150 basis points, respectively. For both periods, the increases
were primarily due to higher returns in the apparel and jewelry categories and
a greater mix of apparel products that return at higher rates than other
categories. QVC Japan’s ASP in local currency remained flat and decreased 1%
in the fourth quarter and for the full year, respectively. Units sold
decreased 1% and increased 4% in the fourth quarter and for the full year,
respectively. QVC Japan’s adjusted OIBDA in local currency decreased 14% in
the fourth quarter and 7% for the full year. Adjusted OIBDA margin decreased
255 basis points and 167 basis points in the fourth quarter and for the full
year, respectively. Adjusted OIBDA margins decreased in the fourth quarter and
for full year primarily due to higher programming distribution expenses and
lower product margins.

QVC Germany's revenue declined 4% and 2% in local currency in the fourth
quarter and for the full year, respectively. The decrease in the fourth
quarter was primarily due to decreased sales in local currency of jewelry,
apparel and electronics products. For the full year, QVC Germany's sales in
local currency increased primarily in the apparel and accessories categories,
but this growth was more than offset by declines in jewelry and electronics
and an increase in estimated product returns as discussed below. QVC Germany's
ASP in local currency decreased 7% and 3% for the fourth quarter and for the
full year, respectively. Units sold increased 2% in the fourth quarter and 4%
for the full year. QVC Germany’s fourth quarter and year-to-date returns as a
percent of gross product revenue in local currency declined 63 basis points
and increased 210 basis points, respectively, from the prior year. The return
rate decreased in the fourth quarter primarily due to a positive mix impact.
The increase for the full year was primarily due to higher returns in the
apparel and jewelry categories and a greater mix of apparel products that
return at higher rates than other categories. QVC Germany’s adjusted OIBDA in
local currency decreased 3% in the fourth quarter and 6% for the full year.
Adjusted OIBDA margins were essentially flat and decreased 91 basis points in
the fourth quarter and for the full year, respectively. Adjusted OIBDA margins
remained flat in the fourth quarter as improved product margins and lower
obsolescence expense were offset by increases in severance costs. For the full
year, the adjusted OIBDA margin decreased primarily due to higher severance
costs, somewhat offset by a favorable gross profit margin.

QVC UK's revenue increased 5% and 4% in local currency in the fourth quarter
and for the full year, respectively. For both the fourth quarter and the full
year, QVC UK's shipped sales growth in local currency was primarily the result
of increased sales in the home and beauty categories, partially offset by
declines in jewelry. QVC UK's ASP in local currency increased 5% and 6% for
the fourth quarter and the full year, respectively. Units sold increased 1% in
the fourth quarter and declined 2% 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 49 basis points and remained flat, respectively, from the
prior year. The increase in the return rate in the fourth quarter was
primarily due to the mix of products sold within the beauty and jewelry
categories. QVC UK’s adjusted OIBDA in local currency increased 10% for the
fourth quarter and 14% for the full year. Adjusted OIBDA margin increased 117
basis points and 174 basis points in the fourth quarter and for the full year,
respectively. For the fourth quarter and the full year, adjusted OIBDA margin
increased primarily due to higher product margins. Full year results were also
favorably impacted by the transition and running costs associated with the
move to QVC UK’s new headquarters in 2012.

QVC Italy's revenue increased 17% and 41% in local currency in the fourth
quarter and for the full year, respectively. QVC Italy’s sales were primarily
from the home, beauty and apparel product categories. QVC Italy's ASP in local
currency remained flat and decreased 1% for the fourth quarter and the full
year, respectively. Units sold increased 20% in the fourth quarter and 45% for
the full year. The adjusted OIBDA deficit in local currency improved by 67% in
the fourth quarter and 49% for the full year.

CNR Home Shopping Co., Ltd. ("CNRS"), QVC's joint venture in China,
experienced a 39% and 43% increase in revenue in local currency in the fourth
quarter and for the full year, respectively. CNRS' adjusted OIBDA deficit in
local currency improved by 7% and 30% in the fourth quarter and for the full
year, respectively. This joint venture is being accounted for as an equity
method investment, and as a result, QVC reported a $1 million and a $4 million
reduction in net income for the fourth quarter and full year, respectively.

QVC's outstanding bank and bond debt was $3.7 billion at December 31, 2013, an
increase of $0.3 billion since the prior year.

eCommerce Businesses

In the aggregate, Liberty Interactive Group's eCommerce businesses increased
revenue 8% to $487 million for the quarter and 12% to $1.7 billion for the
year. 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 product discounting to move seasonal
inventory. Adjusted OIBDA decreased 29% to $25 million for the quarter and 11%
to $85 million for the year. The decrease in adjusted OIBDA for the quarter
and the year was the result of lower product margins from continued product
discounts and promotions. Additionally, increased credit card chargebacks
impacted the annual results. The most significant declines in operating
results for the eCommerce businesses, as compared to prior periods, were the
Celebrate retail business and the Red Envelope business within Provide. These
businesses had declining revenues as well as decreasing contribution margin
(product margin less direct expenses of the business), which hurt the overall
Celebrate and Provide businesses. These declining operating results were
partially offset by the growth of other eCommerce businesses primarily,
CommerceHub and Bodybuilding.com. Operating income improved by $18 million to
a loss of $21 million for the quarter and improved by 38% to a loss of $50
million for the year. The improvement in the operating loss for the quarter
and the year was primarily due to lower impairment charges offset somewhat by
the lower adjusted OIBDA and higher 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 common stock) to be renamed the QVC Group common stock and the
other to be designated as the Liberty Digital Commerce common stock. The
Liberty Digital Commerce Group would have attributed to it Liberty's
subsidiaries Provide Commerce, Backcountry.com, Bodybuilding.com, CommerceHub,
Right Start, and Evite, which is currently a part of Liberty's subsidiary
Celebrate, 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. Management continues to review the
proposed recapitalization and no assurance can be given as to when or if it
will be completed.

Share Repurchases

From November 1, 2013 through January 31, 2014, Liberty repurchased
approximately 11.1 million Series A Liberty Interactive shares (Nasdaq: LINTA)
at an average cost per share of $27.85 for total cash consideration of $309.2
million. Since the creation of the Liberty Interactive stock in May 2006,
Liberty has repurchased approximately 230.0 million shares at an average cost
per share of $20.01 for aggregate cash consideration of $4.6 billion. These
repurchases represent approximately 32.8% 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 remaining repurchase authorization as of February
1, 2014 for Liberty Interactive Group stock was approximately $0.1 billion. On
February 27, 2014, the Board of Directors voted to increase the stock
repurchase authorization for the Liberty Interactive Group by an additional
$1.0 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, and also owns an
interest in HSN.

LIBERTY VENTURES GROUP - As of December31, 2013, the fair value of the public
equity method securities and other public holdings attributed to the Liberty
Ventures Group was $2.2 billion and $1.1 billion, respectively. When compared
to September30, 2013, the fair value of Liberty Ventures Group's public
equity method securities increased 33%. The Liberty Ventures Group's other
public holdings balance increased 16% primarily due to changes in market
prices of certain securities during the fourth 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
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 the Celebrate retail business, which is currently a part of Celebrate, and
an anticipated initial corporate level net debt balance of $350 million.
Management continues to review the proposed spin-off, and no assurance can be
given as to when or if it will be completed. For TripAdvisor's stand-alone
operating results as reported by TripAdvisor, see TripAdvisor's Form 10-K for
the year ended December 31, 2013.

On February 27, 2014, Liberty’s board approved a two for one stock split of
Series A and Series B Liberty Ventures common stock, to be effected by means
of a dividend. The stock split is being done in order to bring Liberty into
compliance with a Nasdaq listing requirement regarding the minimum number of
publicly held shares of the Series B Liberty Ventures stock. In the stock
split, holders of Series A and Series B Liberty Ventures stock as of 5:00 p.m.
New York City time on April 4, 2014 will receive a dividend of one share of
Series A or Series B Liberty Ventures stock for each shares of Series A or
Series B Liberty Ventures stock, respectively, held by them as of such time.
The payment date for the dividend will be April 11, 2014.

Share Repurchases

There were no repurchases of Liberty Ventures Group common stock (Nasdaq:
LVNTA) from November 1, 2013 through January 31, 2014. 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 12:15 p.m. (ET) on February 28, 2014. 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)         4Q12          4Q13          % Change
Revenue
QVC
US                                $ 1,828           $ 1,932           6    %
International                     864              809              (6   )%
Total QVC Revenue                 $ 2,692          $ 2,741          2    %
eCommerce businesses              451              487              8    %
Total Liberty Interactive         $ 3,143          $ 3,228          3    %
Group Revenue
                                                                      
Adjusted OIBDA
QVC
US                                $ 429             $ 437             2    %
International                     174              158              (9   )%
Total QVC Adjusted OIBDA          $ 603            $ 595            (1   )%
eCommerce businesses              35                25                (29  )%
Corporate and other               (12     )         (2      )         83   %
Total Liberty Interactive         $ 626            $ 618            (1   )%
Group Adjusted OIBDA
                                                                      
Operating Income
QVC
US                                $ 312             $ 323             4    %
International                     137              118              (14  )%
Total QVC Operating               $ 449            $ 441            (2   )%
Income
eCommerce businesses              (39     )         (21     )         46   %
Corporate and other               (28     )         (16     )         43   %
Total Liberty Interactive         $ 382            $ 404            6    %
Group Operating Income
                                                                           

(amounts in millions)                             
LINT Shares Outstanding                        1/31/2013         1/31/2014
Outstanding A and B shares                     542               498
                                                                 

(amounts in millions)
LINTA and LINTB Basic and            Quarter ended     Quarter ended
Diluted Shares                             12/31/2012            12/31/2013
Basic Weighted Average Shares              541                   503
Outstanding (“WASO”)
Potentially dilutive Shares                6                     10
Diluted WASO                               547                   513
                                                                 
                                                                 

LIBERTY INTERACTIVE GROUP FINANCIAL METRICS - FULL YEAR
                                                             
(amounts in millions)                   2012           2013           % Change
Revenue
QVC
US                                      $ 5,585        $ 5,844        5    %
International                           2,931         2,779         (5   )%
Total QVC Revenue                       $ 8,516       $ 8,623       1    %
eCommerce businesses                    1,502         1,684         12   %
Total Liberty Interactive Group         $ 10,018      $ 10,307      3    %
Revenue
                                                                      
Adjusted OIBDA
QVC
US                                      $ 1,292        $ 1,352        5    %
International                           536           489           (9   )%
Total QVC Adjusted OIBDA                $ 1,828       $ 1,841       1    %
eCommerce businesses                    96             85             (11  )%
Corporate and other                     (27      )     (20      )     26   %
Total Liberty Interactive Group         $ 1,897       $ 1,906       —    %
Adjusted OIBDA
                                                                      
Operating Income
QVC
US                                      $ 870          $ 901          4    %
International                           398           344           (14  )%
Total QVC Operating Income              $ 1,268       $ 1,245       (2   )%
eCommerce businesses                    (81      )     (50      )     38   %
Corporate and other                     (63      )     (64      )     (2   )%
Total Liberty Interactive Group         $ 1,124       $ 1,131       1    %
Operating Income
                                                                           
                                                                           

QVC OPERATING METRICS - QUARTER
                                                            
(amounts in millions
except average sale              4Q12              4Q13              % Change
price amounts)
QVC - Consolidated^(1)
Revenue                          $ 2,692           $ 2,741           2     %
Adjusted OIBDA                   $ 603             $ 595             (1    )%
Adjusted OIBDA margin            22.40      %      21.71      %      (69) bps
Operating Income                 $ 449             $ 441             (2    )%
                                                                     
eCommerce and Mobile
Metrics
eCommerce $ of total             $ 1,000           $ 1,096           10    %
revenue
eCommerce % of total             37.15      %      39.99      %      284 bps
revenue
                                                                     
Mobile % of total            24.06      %    33.51      %    945 bps
eCommerce^(2)
QVC - US^(1)
Revenue                          $ 1,828           $ 1,932           6     %
Adjusted OIBDA                   $ 429             $ 437             2     %
Adjusted OIBDA margin            23.47      %      22.62      %      (85) bps
Operating Income                 $ 312             $ 323             4     %
Average sale price (ASP)         61.83             64.56             4     %
$
Units sold                       31.91             32.57             2     %
Return rate                      17.02      %      17.27      %      (25) bps
                                                                     
eCommerce and Mobile
Metrics
eCommerce $ of US                $ 781             $ 873             12    %
revenue
eCommerce % of US                42.72      %      45.19      %      246 bps
revenue
                                                                     
Mobile % of US               22.64      %    31.59      %    895 bps
eCommerce^(2)
QVC - Japan^(1)
Revenue                          $ 347             $ 272             (22   )%
Adjusted OIBDA                   $ 79              $ 55              (30   )%
Adjusted OIBDA margin            22.77      %      20.22      %      (255) bps
Operating Income                 $ 73              $ 43              (41   )%
Average sale price (ASP)         ¥ 7,087.07        ¥ 7,101.39        —     %
Units sold                   4.50           4.46           (1    )%
QVC - Germany^(1)
Revenue                          $ 288             $ 290             1     %
Adjusted OIBDA                   $ 58              $ 58              —     %
Adjusted OIBDA margin            20.14      %      20.00      %      (14) bps
Operating Income                 $ 41              $ 41              —     %
Average sale price (ASP)         € 36.73           € 34.07           (7    )%
Units sold                   7.74           7.92           2     %
QVC - UK^(1)
Revenue                          $ 196             $ 208             6     %
Adjusted OIBDA                   $ 42              $ 47              12    %
Adjusted OIBDA margin            21.43      %      22.60      %      117 bps
Operating Income                 $ 30              $ 39              30    %
Average sale price (ASP)         £ 31.36           £ 32.81           5     %
Units sold                   4.19           4.22           1     %
QVC - Italy^(1)
Revenue                          $ 33              $ 39              18    %
Adjusted OIBDA                   $ (5       )      $ (2       )      60    %
Adjusted OIBDA margin            (15.15     )%     (5.13      )%     1,002 bps
Operating Income                 $ (7       )      $ (5       )      (29   )%
Average sale price (ASP)         € 34.56           € 34.53           —     %
Units sold                       0.74              0.89              20    %

  (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.
          
          

QVC OPERATING METRICS - FULL YEAR
                                                            
(amounts in millions
except average sale              2012              2013              % Change
price amounts)
QVC - Consolidated^(1)
Revenue                          $ 8,516           $ 8,623           1     %
Adjusted OIBDA                   $ 1,828           $ 1,841           1     %
Adjusted OIBDA margin            21.47      %      21.35      %      (12) bps
Operating Income                 $ 1,268           $ 1,245           (2    )%
                                                                     
eCommerce and Mobile
Metrics
eCommerce $ of total             $ 2,935           $ 3,242           10    %
revenue
eCommerce % of total             34.46      %      37.60      %      314 bps
revenue
                                                                     
Mobile % of total            22.10      %    31.17      %    907 bps
eCommerce^(2)
QVC - US^(1)
Revenue                          $ 5,585           $ 5,844           5     %
Adjusted OIBDA                   $ 1,292           $ 1,352           5     %
Adjusted OIBDA margin            23.13      %      23.13      %      0 bps
Operating Income                 $ 870             $ 901             4     %
Average sale price (ASP)         57.52             60.15             5     %
$
Units sold                       106.02            106.28            —     %
Return rate                      18.84      %      18.51      %      33 bps
                                                                     
eCommerce and Mobile
Metrics
eCommerce $ of US                $ 2,239           $ 2,501           12    %
revenue
eCommerce % of US                40.09      %      42.80      %      271 bps
revenue
                                                                     
Mobile % of US               19.95      %    29.82      %    987 bps
eCommerce^(2)
QVC - Japan^(1)
Revenue                          $ 1,247           $ 1,024           (18   )%
Adjusted OIBDA                   $ 279             $ 212             (24   )%
Adjusted OIBDA margin            22.37      %      20.70      %      (167) bps
Operating Income                 $ 253             180               (29   )%
Average sale price (ASP)         ¥ 6,531.07        ¥ 6,468.71        (1    )%
Units sold                   16.97          17.58          4     %
QVC - Germany^(1)
Revenue                          $ 956             $ 971             2     %
Adjusted OIBDA                   $ 179             $ 173             (3    )%
Adjusted OIBDA margin            18.72      %      17.82      %      (91) bps
Operating Income                 $ 114             $ 105             (8    )%
Average sale price (ASP)         € 36.08           € 34.97           (3    )%
Units sold                   26.26          27.39          4     %
QVC - UK^(1)
Revenue                          $ 641             $ 657             2     %
Adjusted OIBDA                   $ 104             $ 118             13    %
Adjusted OIBDA margin            16.22      %      17.96      %      174 bps
Operating Income                 $ 70              $ 89              27    %
Average sale price (ASP)         £ 28.98           £ 30.62           6     %
Units sold                   15.06          14.82          (2    )%
QVC - Italy^(1)
Revenue                          $ 87              $ 127             46    %
Adjusted OIBDA                   $ (26      )      $ (14      )      46    %
Adjusted OIBDA margin            (29.89     )%     (11.02     )%     1887 bps
Operating Income                 $ (39      )      $ (30      )      (23   )%
Average sale price (ASP)         € 33.34           € 32.84           (1    )%
Units sold                       2.14              3.11              45    %

  (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 year ended December 31, 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-K.

Fair Value of Public Holdings
                                                           
(amounts in millions)                             9/30/2013         12/31/2013
HSN^(1)                                           $ 1,073          $   1,247
Total Attributed Liberty Interactive              $ 1,073          $   1,247
Group
                                                                    
Expedia^(2)                                       $ 1,196           $   1,608
Interval Leisure Group and Tree.com^(3)           466               606
Other Public Holdings^(4)                         947              1,095
Total Attributed Liberty Ventures Group           $ 2,609          $   3,309
                                                                        

          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 $283 million and $293 million at
          September 30, 2013 and December 31, 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 $465 million and $477
          million at September 30, 2013 and December 31, 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 $98 million and $101 million at
          September 30, 2013 and December 31, 2013, respectively.
          Represents Liberty Ventures Group's other public holdings which are
    (4)   accounted for at fair value. Excludes $392 million and $402 million
          of long-term marketable securities as of September 30, 2013 and
          December 31, 2013, respectively.
          
          

Cash and Debt

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

(amounts in millions)                         9/30/2013     12/31/2013
Cash and Liquid Investments Attributable
to:
Liberty Interactive Group                         $ 455             $  598
Liberty Ventures Group^(1)(2)(3)                  1,470            1,603    
Total Liberty Consolidated Cash and               $ 1,925          $  2,201 
Liquid Investments
                                                                             
Less:
Short-term marketable securities -                $ 552             $  543
Liberty Ventures Group
Long-term marketable securities - Liberty         392              402      
Ventures Group
Total Liberty Consolidated Cash (GAAP)            $ 981            $  1,256 
                                                                             
Debt:
Senior notes and debentures^(4)                   $ 792             $  791
Senior exchangeable debentures^(5)                400               400
QVC senior notes^(4)                              2,819             2,819
QVC bank credit facility                          673               922
Other                                             153              141      
Total Attributed Liberty Interactive              $ 4,837           $  5,073
Group Debt
Unamortized discount and fair market              (2      )         10       
value adjustment
Total Attributed Liberty Interactive              $ 4,835          $  5,083 
Group Debt (GAAP)
                                                                             
Senior exchangeable debentures^(5)                $ 2,091           $  2,091
TripAdvisor debt facilities                       376              369      
Total Attributed Liberty Ventures Group           $ 2,467           $  2,460
Debt
Fair market value adjustment                      (268    )         (159     )
Total Attributed Liberty Ventures Group           $ 2,199          $  2,301 
Debt (GAAP)
                                                                           
Total Liberty Interactive Corporation             $ 7,034          $  7,384 
Debt (GAAP)
                                                                             

          Includes $552 million and $543 million of short-term marketable
  (1)  securities with an original maturity greater than 90 days as of
          September 30, 2013 and December 31, 2013, respectively.
          Includes $392 million and $402 million of marketable securities with
          an original maturity greater than one year as of September 30, 2013
    (2)   and December 31, 2013, respectively, which are reflected in
          investments in available-for-sale securities in Liberty Ventures
          Group's attributed balance sheet.
          Includes $596 million and $670 million of cash and liquid
    (3)   investments held at TripAdvisor as of September 30, 2013 and
          December 31, 2013, respectively.
    (4)   Face amount of Senior Notes and Debentures with no reduction for the
          unamortized discounts.
    (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
increased by approximately $143 million during the fourth quarter. Cash flows
from operations and borrowings on the QVC bank credit facility in excess of
repayments were partially offset by capital expenditures and stock
repurchases. Total debt attributed to the Liberty Interactive Group increased
by $236 million, primarily due to borrowings on the QVC bank credit facility.

Total cash and liquid investments attributed to the Liberty Ventures Group
increased $133 million, primarily due to cash flows from operations. Included
in the fourth quarter total cash and liquid investments attributed to the
Liberty Ventures Group is $670 million held at TripAdvisor, which is comprised
of $351 million of cash, $131 million of short-term marketable securities and
$188 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 $7 million during the fourth quarter, primarily
due to repayments made on TripAdvisor debt facilities.

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 12:15 p.m. (ET) on February 28, 2014. The call can be
accessed by dialing (877) 548-7901 or (719) 325-4784 at least 10 minutes prior
to the start time. Replays of the conference call can be accessed until 2:15
p.m. (ET) on March 7, 2014, by dialing (888) 203-1112 or (719) 457-0820 plus
the passcode 7682293. 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
recapitalization of our capital stock and potential spin-off of our interest
in TripAdvisor, 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 completion of the Liberty
Ventures stock split, 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, the ability of
Liberty to complete the Liberty Ventures stock split, 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 press release,
and Liberty Interactive expressly disclaims any obligation or undertaking to
disseminate any updates or revisions to any forward-looking statement
contained herein to reflect any change in Liberty Interactive's expectations
with regard thereto or any change in events, conditions or circumstances on
which any such statement is based. Please refer to the publicly filed
documents of Liberty Interactive, including the most recent Form 10-K, for
additional information about Liberty Interactive and about the risks and
uncertainties related to Liberty Interactive's business which may affect the
statements made in this press release.

Additional Information

Nothing in this press release shall constitute a solicitation to buy or an
offer to sell shares of the proposed QVC Group tracking stock, the proposed
Liberty Digital Commerce tracking stock or Liberty's existing common stock.
The offer and sale of shares of the proposed new tracking stocks will only be
made pursuant to an effective registration statement. Liberty stockholders and
other investors are urged to read the registration statement to be filed with
the SEC, including the proxy statement/prospectus to be contained therein,
because they will contain important information about the issuance of shares
of the proposed tracking stocks. Copies of Liberty's SEC filings are available
free of charge at the SEC's website (http://www.sec.gov). Copies of the
filings together with the materials incorporated by reference therein will
also be available, without charge, by directing a request to Liberty
Interactive Corporation, 12300 Liberty Boulevard, Englewood, Colorado 80112,
Attention: Investor Relations, Telephone: (720) 875-5408.

Participants in a Solicitation

The directors and executive officers of Liberty and other persons may be
deemed to be participants in the solicitation of proxies in respect of
proposals relating to the approval of the issuance of the new tracking stocks.
Information regarding the directors and executive officers of Liberty and
other participants in the proxy solicitation and a description of their
respective direct and indirect interests, by security holdings or otherwise,
will be available in the proxy materials to be filed with the SEC.

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, 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           4Q12          1Q13          2Q13          3Q13          4Q13
millions)
Liberty
Interactive
Group
QVC
Revenue - US          $ 1,828       $ 1,297       $ 1,312       $ 1,303       $ 1,932
Revenue -             864          677          649          644          809     
International
Revenue -             $ 2,692      $ 1,974      $ 1,961      $ 1,947      $ 2,741 
Total
Adjusted              429           291           320           304           437
OIBDA - US
Adjusted
OIBDA -               174          113          114          104          158     
International
Adjusted              $ 603        $ 404        $ 434        $ 408        $ 595   
OIBDA - Total
Operating             312           180           207           191           323
income - US
Operating
income -              137          80           78           68           118     
International
Operating
income -              $ 449        $ 260        $ 285        $ 259        $ 441   
Total
Gross margin          34.7    %     36.1    %     37.3    %     37.1    %     34.7    %
- US
Gross margin
-                     37.1    %     37.5    %     37.8    %     37.4    %     37.8    %
International
                                                                                      
                                                                                      

ANNUAL SUMMARY
                                                      
(amounts in millions)                            2012              2013
Liberty Interactive Group
QVC
Revenue - US                                     $ 5,585           $ 5,844
Revenue - International                          2,931            2,779   
Revenue - Total                                  $ 8,516          $ 8,623 
Adjusted OIBDA - US                              1,292             1,352
Adjusted OIBDA - International                   536              489     
Adjusted OIBDA - Total                           $ 1,828          $ 1,841 
Operating income - US                            870               901
Operating income - International                 398              344     
Operating income - Total                         $ 1,268          $ 1,245 
Gross margin - US                                35.8    %         36.1    %
Gross margin - International                     37.5    %         37.7    %
                                                                           
                                                                           

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 December 31, 2012, March 31, 2013, June 30, 2013,
September 31, 2013 and December 31, 2013, respectively and years ended
December 31, 2012 and 2013.

QUARTERLY SUMMARY
                                                          
(amounts in            4Q12        1Q13        2Q13        3Q13        4Q13
millions)
Liberty
Interactive
Group
Adjusted OIBDA         $ 626       $ 437       $ 455       396         $ 618
Depreciation
and                    (159  )     (153  )     (158  )     (156  )     (165  )
amortization
Stock
compensation           (32   )     (24   )     (29   )     (22   )     (35   )
expense
Impairment of
intangible             (53   )     —          —          (19   )     (14   )
assets
Operating              $ 382      $ 260      $ 268      $ 199      $ 404 
Income
                                                                             
                                                                             

ANNUAL SUMMARY
                                                     
(amounts in millions)                           2012              2013
Liberty Interactive Group
Adjusted OIBDA                                  $ 1,897           $ 1,906
Depreciation and amortization                   (596    )         (632    )
Stock compensation expense                      (85     )         (110    )
Impairment of intangible assets                 (92     )         (33     )
Operating Income                                $ 1,124          $ 1,131 
                                                                          
                                                                          

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 December 31, 2012, March 31, 2013, June 30, 2013,
September 31, 2013 and December 31, 2013, respectively and years ended
December, 31, 2012 and 2013.

QUARTERLY SUMMARY
                                                          
(amounts in            4Q12        1Q13        2Q13        3Q13        4Q13
millions)
Liberty
Interactive
Group
QVC Adjusted
OIBDA
QVC US                 $ 429       $ 291       $ 320       $ 304       $ 437
                                                                       
QVC Japan              79          54          57          46          55
QVC Germany            58          43          35          37          58
QVC UK                 42          19          26          26          47
QVC Italy              (5    )     (3    )     (4    )     (5    )     (2    )
QVC
International          $ 174      $ 113      $ 114      $ 104      $ 158 
adjusted OIBDA
                                                                       
Consolidated
QVC adjusted           603         404         434         408         595
OIBDA
Depreciation
and                    (141  )     (134  )     (140  )     (139  )     (145  )
amortization
Stock                  (13   )     (10   )     (9    )     (10   )     (9    )
compensation
Operating              $ 449      $ 260      $ 285      $ 259      $ 441 
Income
                                                                       
eCommerce
Businesses
Adjusted OIBDA         $ 35        $ 39        $ 26        $ (5  )     $ 25
Depreciation
and                    (19   )     (18   )     (18   )     (19   )     (18   )
amortization
Stock                  (2    )     (2    )     (10   )     (3    )     (14   )
compensation
Impairment of
intangible             (53   )     —          —          (19   )     (14   )
assets
Operating              $ (39 )     $ 19       $ (2  )     $ (46 )     $ (21 )
Income (Loss)
                                                                             
                                                                             

ANNUAL SUMMARY
                                                      
(amounts in millions)                            2012              2013
Liberty Interactive Group
QVC Adjusted OIBDA
QVC US                                           $ 1,292           $ 1,352
                                                                   
QVC Japan                                        279               212
QVC Germany                                      179               173
QVC UK                                           104               118
QVC Italy                                        (26     )         (14     )
QVC International adjusted OIBDA                 $ 536            $ 489   
                                                                   
Consolidated QVC adjusted OIBDA                  1,828             1,841
Depreciation and amortization                    (526    )         (558    )
Stock compensation                               (34     )         (38     )
Operating Income                                 $ 1,268          $ 1,245 
                                                                   
eCommerce Businesses
Adjusted OIBDA                                   $ 96              $ 85
Depreciation and amortization                    (70     )         (73     )
Stock compensation                               (15     )         (29     )
Impairment of intangible assets                  (92     )         (33     )
Operating Income (Loss)                          $ (81   )         $ (50   )
                                                                           
                                                                           

LIBERTY INTERACTIVE CORPORATION
BALANCE SHEET INFORMATION
December 31, 2013 - (unaudited)
                                                                
                           Attributed
                           Interactive   Ventures     Inter-group      Consolidated
                           Group           Group        Eliminations     Liberty
                           amounts in millions
Assets
Current assets:
Cash and cash              $  598          658          —                1,256
equivalents
Trade and other            1,150           124          —                1,274
receivables, net
Inventory, net             1,135           —            —                1,135
Short-term
marketable                 —               543          —                543
securities
Other current              362            26          (170    )        218      
assets
Total current              3,245          1,351       (170    )        4,426    
assets
Investments in
available-for-sale
securities and             4               1,497        —                1,501
other cost
investments
Investments in
affiliates,
accounted for              343             894          —                1,237
using the equity
method
Property and               1,213           34           —                1,247
equipment, net
Intangible assets
not subject to             8,387           5,288        —                13,675
amortization
Intangible assets
subject to                 1,589           903          —                2,492
amortization, net
Other assets, at
cost, net of               81             17          —               98       
accumulated
amortization
Total assets               $  14,862      9,984       (170    )        24,676   
                                                                                  
Liabilities and
Equity
Current
liabilities:
Intergroup Payable         $  221          (221   )     —                —
(receivable)
Accounts payable           553             38           —                591
Accrued                    958             109          —                1,067
liabilities
Current portion of         39              939          —                978
debt
Current deferred           —               1,095        (170    )        925
tax liabilities
Other current              145            50          —               195      
liabilities
Total current              1,916          2,010       (170    )        3,756    
liabilities
Long-term debt             5,044           1,362        —                6,406
Deferred income            1,208           1,636        —                2,844
tax liabilities
Other liabilities          192            43          —               235      
Total liabilities          8,360          5,051       (170    )        13,241   
Equity/Attributed
net assets                 6,378           558          —                6,936
(liabilities)
Noncontrolling
interests in               124            4,375       —               4,499    
equity of
subsidiaries
Total liabilities          $  14,862      9,984       (170    )        24,676   
and equity
                                                                                  
                                                                                  

LIBERTY INTERACTIVE CORPORATION
STATEMENT OF OPERATIONS INFORMATION
Twelve months ended December 31, 2013 - (unaudited)

                                 Attributed                
                                     Interactive   Ventures     Consolidated
                                     Group           Group        Liberty
                                     amounts in millions
Revenue:
Net retail sales                     $  10,307       —            10,307
Other revenue                        —              945         945      
Total revenue                        10,307         945         11,252   
                                                                  
Operating costs and
expenses:
Cost of retail sales
(exclusive of depreciation           6,602           —            6,602
shown separately below)
Operating, including                 876             153          1,029
stock-based compensation
Selling, general and
administrative, including
stock-based                          1,033           492          1,525

compensation
Impairment of intangible             33              —            33
assets
Depreciation and                     632            311         943      
amortization
                                     9,176          956         10,132   
Operating income                     1,131           (11   )      1,120
                                                                  
Other income (expense):
Interest expense                     (292      )     (81   )      (373     )
Share of earnings (losses)           48              (15   )      33
of affiliates, net
Realized and unrealized
gains (losses) on financial          (12       )     (10   )      (22      )
instruments, net
Gains (losses) on                    (1        )     (1    )      (2       )
transactions, net
Other, net                           (53       )     7           (46      )
                                     (310      )     (100  )      (410     )
Earnings (loss) before               821             (111  )      710
income taxes
Income tax benefit (expense)         (338      )     208         (130     )
Net earnings (loss)                  483             97           580
Less net earnings (loss)
attributable to                      45             34          79       
noncontrolling interests
Net earnings (loss)
attributable to Liberty              $  438         63          501      
stockholders
                                                                           
                                                                           

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       —            10,018
Other revenue                        —              36          36       
Total revenue                        10,018         36          10,054   
                                                                  
Operating costs and
expenses:
Cost of retail sales
(exclusive of depreciation           6,396           —            6,396
shown separately below)
Operating                            833             7            840
Selling, general and
administrative, including
stock-based                          977             32           1,009

compensation
Impairment of intangible             92              —            92
assets
Depreciation and                     596            13          609      
amortization
                                     8,894          52          8,946    
Operating income                     1,124           (16    )     1,108
                                                                  
Other income (expense):
Interest expense                     (322      )     (110   )     (432     )
Share of earnings (losses)           28              57           85
of affiliates, net
Realized and unrealized
gains (losses) on financial          51              (402   )     (351     )
instruments, net
Gains (losses) on                    —               1,531        1,531
transactions, net
Other, net                           —              44          44       
                                     (243      )     1,120       877      
Earnings (loss) before               881             1,104        1,985
income taxes
Income tax benefit (expense)         (352      )     (42    )     (394     )
Net earnings (loss)                  529             1,062        1,591
Less net earnings (loss)
attributable to                      63             (2     )     61       
noncontrolling interests
Net earnings (loss)
attributable to Liberty              $  466         1,064       1,530    
stockholders
                                                                           
                                                                           

LIBERTY INTERACTIVE CORPORATION
STATEMENT OF CASH FLOWS INFORMATION
Twelve months ended December 31, 2013 - (unaudited)
                                                           
                                     Attributed
                                     Interactive   Ventures     Consolidated
                                     Group           Group        Liberty
                                     amounts in millions
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net earnings (loss)                  $   483         97           580
Adjustments to reconcile net
earnings to net cash
provided by operating
activities:
Depreciation and                     632             311          943
amortization
Stock-based compensation             110             68           178
Cash payments for stock              (8       )      (2     )     (10      )
based compensation
Excess tax benefit from              (13      )      (10    )     (23      )
stock based compensation
Noncash interest expense             11              2            13
Share of (earnings) losses           (48      )      15           (33      )
of affiliates, net
Cash receipts from return on         16              19           35
equity investments
Realized and unrealized
gains (losses) on financial          12              10           22
instruments, net
Gains (losses) on                    1               1            2
transactions, net
Impairment of intangible             33              —            33
assets
Deferred income tax                  (131     )      (5     )     (136     )
(benefit) expense
Loss (gain) on                       57              —            57
extinguishment of debt
Other, net                           (3       )      1            (2       )
Intergroup tax allocation            272             (272   )     —
Intergroup tax payments              (52      )      52           —
Changes in operating assets
and liabilities
Current and other assets             (63      )      (18    )     (81      )
Payables and other current           (337     )      119         (218     )
liabilities
Net cash provided (used) by          972            388         1,360    
operating activities
                                                                  
CASH FLOWS FROM INVESTING
ACTIVITIES:
Cash paid for acquisitions,          (24      )      (34    )     (58      )
net of cash acquired
Cash proceeds from                   1               1,136        1,137
dispositions
Investments in and loans to          (4       )      (380   )     (384     )
cost and equity investees
Capital expended for                 (295     )      (57    )     (352     )
property and equipment
Purchases of short term and          —               (1,391 )     (1,391   )
other marketable securities
Sales of short term and              —               726          726
other marketable securities
Other investing activities,          (40      )      2           (38      )
net
Net cash provided (used) by          (362     )      2           (360     )
investing activities
                                                                  
CASH FLOWS FROM FINANCING
ACTIVITIES:
Borrowings of debt                   3,520           853          4,373
Repayments of debt                   (3,056   )      (2,418 )     (5,474   )
Intergroup receipts                  2               (2     )     —
(payments), net
Shares repurchased by                —               (145   )     (145     )
subsidiary
Shares issued by subsidiary          —               27           27
Taxes paid in lieu of shares
issued for stock-based               (21      )      (17    )     (38      )
compensation
Excess tax benefit from              13              10           23
stock based compensation
Repurchases of Liberty               (1,089   )      —            (1,089   )
common stock
Other financing activities,          (56      )      (1     )     (57      )
net
Net cash provided (used) by          (687     )      (1,693 )     (2,380   )
financing activities
                                                                  
Effect of foreign currency           (24      )      —           (24      )
rates on cash
Net increase (decrease) in           (101     )      (1,303 )     (1,404   )
cash and cash equivalents
Cash and cash equivalents at         699            1,961       2,660    
beginning of period
Cash and cash equivalents at         $   598        658         1,256    
end period
                                                                           
                                                                           

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

Contact:

Liberty Interactive Corporation
Courtnee Ulrich, 720-875-5420
 
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