Skip to main content

Liberty Interactive Corporation (



Q4 2011 Earnings Conference Call

February 23, 2012 11:00 am ET


Courtnee Ulrich – Vice President, Investor Relations

Gregory B. Maffei – President and Chief Executive Officer

Christopher W. Shean – Senior Vice President and Chief Financial Officer

Mike George – QVC, President and Chief Executive Officer


David Gober – Morgan Stanley

Barton Crockett – Lazard Capital Markets

Ben Mogil – Stifel Nicolaus

Thomas Forte – Telsey Advisory Group LLC

Matthew Harrigan – Wunderlich Securities

Scroll to Continue

TheStreet Recommends

Jason Bazinet – Citigroup



Compare to:
Previous Statements by LINTA
» Liberty Media's CEO Discusses Q3 2011 Results - Earnings Call Transcript
» Liberty Media CEO Discusses Q2 2011 Results - Earnings Call Transcript
» Liberty Media Q2 2007 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Liberty Interactive Corporation Quarterly Earnings Conference Call. Today's call is being recorded.

At this time I would like to turn the presentation over to Courtnee Ulrich, Vice President of Investor Relations to read the forward-looking statements.

Courtnee Ulrich

Good morning. Before we begin we would like to remind everyone that this call includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about financial guidance, business strategies, and market potential, future financial performance, new service and product launches, 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 limitations, possible changes in market acceptance of new products or services, competitive issues, regulatory issues and continued access to capital on terms acceptable to Liberty Interactive. These forward-looking statements speak only as of the date of this call and Liberty Interactive expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements 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. On today’s call we will discuss certain non-GAAP financial measures including adjusted OIBDA. The required definitions and reconciliations, preliminary notes and schedules one through three can be found at the end of this presentation.

And with that I will turn the call over to Greg Maffei, Liberty Interactive’s President and CEO.

Gregory B. Maffei

Courtnee thank you, and good morning to all of you for joining us on the Liberty Interactive Earnings Call. Today besides myself speaking on the call we’ll have Liberty CFO, Chris Sean and QVC CEO, Mike George. After that we will take questions.

We hope you have seen our announcement this morning on our plan to recapitalize Liberty Interactive into two tracking stocks, Liberty Interactive and Liberty Ventures. Attributing to Liberty Interactive we will have in a QVC, our eCommerce companies, our 34% interest in HSN, cash of about $500 million, QVC’s debt which is comprised of the bank debt it has and the bonds it’s issued and the senior notes that were issued by Liberty. Attributing to Liberty Ventures we’re going to have all of our non-consolidated interest excluding HSN but including Expedia, TRIP, Time Warner, our green investments and more.

This entity will have cash of about $1.25 billion, we’re also attributing all of our exchangeable debentures including those associated with the Time Warner entities and at the time we complete these split-off of Liberty Ventures or the creation of Liberty Ventures, we’ll have some subscription rights handed out to each of the shareholders which will allow you to acquire more Liberty Ventures stock at a discount. We’ll talk more bout that going forward.

The reason for that is to raise capital for investments in new business opportunities and to ensure the balance sheet strength of Liberty ventures. Regarding the process, we need to file an S-4 for the SEC, we need the shareholder vote on a meeting and we will not be required to get an IRS ruling. Our anticipation is that we’ll close some time hopefully early this summer.

The rationale for this recapitalization is not because as some has adjusted we want to maintain our market-leading share in trackers but instead to increase transparency and investor choice. With Liberty Interactive you're going to able to get a pure play video and eCommerce company better aligned with our retail eCommerce peers.

We hope to highlight the operations and financial strengths of these very good businesses to further simplify this operating story and to isolate the complexity which Liberty has sum up two Liberty Ventures.

With Liberty Venture we hope to better highlight some of the investments we have here that may have been overlooked due to their relative small size compared to QVC, to give us some flexibility, and in the same way we have the Liberty Capital to bet on our ability to tax efficiently monetize some of these investments and make other attractive investments. We also hope that better capital rates and prospects for both tracking stocks and as always given the tracking stock structure we’re able to maintain tax efficiency.

Let me get back to the Q4 and year-end results for those operating businesses, looking at slide seven and I would note HSN’s good numbers today. It's clear that video commerce is alive and well and adapting.

QVC had solid results in revenue and OIBDA growth especially I’d highlight our Q4 results in the U.S. Internet penetration in the U.S. reached 40% in Q4, an all-time high and we had very large mobile growth which Mike George I’m sure will talk about more. The eCommerce companies also grew significantly outpacing comp score estimates for the quarter. And finally, I know we made significant repurchase of our stock at attractive prices. We bought $257 million of LINTA stock not quite the pace that I outlined at the Investor Day last fall but still quite strong.

Read the rest of this transcript for free on