Unless otherwise noted, the foregoing discussion compares financial information for the three months ended June 30, 2012 to the same period in 2011.

On September 23, 2011, Liberty Interactive completed the split-off of a wholly owned subsidiary, Liberty Media Corporation ("LMC") (formerly known as Liberty CapStarz, Inc. and Liberty Splitco, Inc.) (the "Split-Off"). At the time of the Split-Off, LMC owned all the assets, businesses and liabilities attributed to the Liberty Capital and Liberty Starz tracking stock groups immediately prior to the Split-Off. The Split-Off was effected by means of a redemption of all of the Liberty Capital common stock and Liberty Starz common stock of Liberty Interactive for all of the common stock of LMC. This transaction has been accounted for at historical cost due to the pro rata nature of the distribution.

Following the Split-Off, Liberty Interactive and LMC operate as separate, publicly traded companies, and neither has any stock ownership, beneficial or otherwise, in the other. In connection with the Split-Off, Liberty Interactive and LMC entered into certain agreements in order to govern certain of the ongoing relationships between the two companies after the Split-Off and to provide for an orderly transition. These agreements include a Reorganization Agreement, a Services Agreement, a Facilities Sharing Agreement and a Tax Sharing Agreement. Certain prior period amounts have been reclassified for comparability with the current presentation.

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

Fair Value of Public Holdings
(amounts in millions)   3/31/2012   6/30/2012
Expedia (1)   $ 1,157   1,664
TripAdvisor (1) 1,235 1,169
HSN (1) 761 808
Interval Leisure Group and (1) 311 348
Non Strategic Public Holdings (2) 1,339   1,380
Total Liberty Interactive   $ 4,803   5,369
  (1)   Represents fair value of Liberty Interactive’s investments. In accordance with GAAP, Liberty Interactive 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 $1,137 million and $1,160 million at March 31, 2012 and June 30, 2012, respectively.
(2) Represents Liberty Interactive’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)   3/31/2012   6/30/2012
Cash and liquid investments (1) $ 802   790
Less: Short-term marketable securities   8     0  
Total Liberty Interactive Cash (GAAP) $ 794     790  
Senior notes and debentures (2) $ 1,100 1,100
Senior exchangeable debentures (3) 2,965 2,854
QVC senior notes (2) 2,000 2,000
QVC bank credit facility 382 302
Other   97     118  
Total Liberty Interactive Debt 6,544 6,374
Unamortized discount (19 ) (19 )
Fair market value adjustment   (342 )   (306 )
Total Liberty Interactive Debt (GAAP) $ 6,183     6,049  
  (1)   Includes $8 million of short-term marketable securities with an original maturity greater than 90 days as of March 31, 2012, which are included as other current assets on Liberty Interactive’s balance sheet.
(2) Face amount of Senior Notes and Debentures with no reduction for the unamortized discount or fair market value adjustment.
(3) Face amount of Senior Exchangeable Debentures with no reduction for the unamortized discount or fair market value adjustment.

Total cash and liquid investments decreased $12 million, primarily due to stock repurchases, debt repayments and capital expenditures. These cash outflows were partially offset by cash flow from operations at QVC and proceeds received from dispositions. Total debt decreased by $170 million, primarily due to repayments on the QVC bank credit facility and $111 million of extraordinary distributions made on the 3.5% senior exchangeable debentures as a result of the Motorola Mobility acquisition. These repayments were partially offset by borrowings at various eCommerce businesses.

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