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Liberty Interactive's CEO Discusses Q2 2012 Results - Earnings Call Transcript

With that, let me turn it over to Chris Shean to discuss the financials at LINTA.

Christopher Shean

Thanks, Greg. Liberty Interactive’s revenue increased 5% in the second quarter, while adjusted OIBDA increased 1%. QVC increased total revenue by 4% for the quarter, while adjusted OIBDA increased 5%. Liberty Interactive’s other e-commerce businesses grew revenue at 13%, while adjusted OIBDA decreased 36%. Regarding this decline in adjusted OIBDA, we had some hiccups in the second quarter, with negative impacts occurring at most of our e-commerce businesses. These included some unusual and hopefully nonrecurring items such as legal settlements and a compensation arrangement that we had put in place due to some turnover at one of our e-com subsidiaries. The rest of the decline was due to operating decisions to increase spending and paid search as a percentage of revenue, and to be more promotional to move out seasonal inventory.

Now let’s take a quick look at the liquidity picture. At the end of the quarter, we had cash balances of $790 million and $6.4 billion in debt. QVC’s total debt-to-adjusted-OIBDA ratio, as defined in their credit agreement, was approximately 1.3 times, as compared to a maximum allowable leverage of 3.5 times. Now with that, I’ll hand the call over to Mike George for additional insights on QVC.

Mike George

Thank you, Chris. We were very pleased with our results in the quarter, with consolidated revenue up 4% and adjusted OIBDA up 5%, despite the difficult economic situation that we face in most of our markets, and every market achieved positive OIBDA growth after adjusting for the one-time cost of our U.K. headquarters transition.

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