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Liberty Interactive Corporation Reports Third Quarter 2012 Financial Results

In connection with the creation of the Liberty Ventures tracking stock, Liberty distributed subscription rights to purchase shares of Series A Liberty Ventures common stock at a per share subscription price of $35.99 for one share of Series A Liberty Ventures common stock pursuant to a basic subscription privilege and also entitled the holder to subscribe for additional shares pursuant to an oversubscription privilege. The rights offering commenced on September 12, 2012 and expired on October 9, 2012. In the fourth quarter, approximately 9 million Series A Liberty Ventures shares were issued in connection with the rights offering resulting in approximately $328 million of cash proceeds.

The following financial information is intended to supplement Liberty’s condensed consolidated statements of operations which are included in its Form 10-Q.

Fair Value of Public Holdings

(amounts in millions)         6/30/2012       9/30/2012
HSN (1)       $ 808       982
Total Attributed Liberty Interactive Group $ 808       982
     
Expedia (2) $ 1,664 2,002
TripAdvisor (2) 1,169 861
Interval Leisure Group and Tree.com (2) 348 358
Non Strategic Public Holdings (3)   1,380       1,639
Total Attributed Liberty Ventures Group $ 4,561       4,860

(1)

 

Represents fair value of Liberty Interactive Group’s investment in HSN. In accordance with GAAP, Liberty Interactive Group accounts for this investment using the equity method of accounting and includes this investment in its consolidated balance sheet at its historical carrying value which aggregated $233 million and $241 million at June 30, 2012 and September 30, 2012, respectively.

(2)

Represents fair value of Liberty Ventures Group’s investments. In accordance with GAAP, Liberty Ventures Group accounts for these investments using the equity method of accounting and includes these investments in its consolidated balance sheet at their historical carrying values which aggregated $927 million and $975 million at June 30, 2012 and September 30, 2012, respectively.

(3)

Represents Liberty Ventures Group’s non-strategic public holdings which are accounted for at fair value.

Cash and Debt

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

(amounts in millions)           6/30/2012         9/30/2012  
Cash and Liquid Investments Attributable to:      
Liberty Interactive Group $ 790 558
Liberty Ventures Group   --         1,235  
Total Liberty Consolidated Cash (GAAP) $ 790         1,793  
 
Debt:
Senior notes and debentures (1) $ 1,100 1,070
QVC senior notes (1) 2,000 2,500
QVC bank credit facility 302 851
Other   118         118  
Total Attributed Liberty Interactive Group Debt $ 3,520 4,539
Unamortized discount   (19 )       (19 )
Total Attributed Liberty Interactive Group Debt (GAAP) $ 3,501         4,520  
 
Senior exchangeable debentures (2)   2,854         2,852  
Total Attributed Liberty Ventures Group Debt $ 2,854 2,852
Fair market value adjustment   (306 )       (15 )
Total Attributed Liberty Ventures Group Debt (GAAP) $ 2,548         2,837  
         
Total Consolidated Liberty Debt (GAAP) $ 6,049         7,357  
(1)   Face amount of Senior Notes and Debentures with no reduction for the unamortized discount or fair market value adjustment.
(2) Face amount of Senior Exchangeable Debentures with no reduction for the unamortized discount or fair market value adjustment.
 

Total cash and liquid investments attributed to the Liberty Interactive Group decreased $232 million, primarily due to $1,346 million in cash reattributed to the Liberty Ventures Group, stock repurchases, debt repayments and capital expenditures. These cash outflows were partially offset by cash flow from operations at QVC and borrowings of debt at QVC. Total debt attributed to the Liberty Interactive Group increased by $1,018 million, primarily due to borrowings on the QVC bank credit facility and new 5.00% senior notes issued in the third quarter.

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