Exhibit 99.1
Unaudited Attributed Financial Information for Tracking Stock Groups
Our Liberty Interactive common stock is intended to reflect the separate performance of our Interactive Group which is comprised of our businesses engaged in video and on-line commerce, including our subsidiaries, QVC, Inc., Provide Commerce, Inc., Backcountry.com, Inc., Bodybuilding.com, LLC, Celebrate Interactive Holdings, Inc., CommerceHub and our interest in HSN, Inc. Our Liberty Ventures common stock is intended to reflect the separate performance of our Ventures Group which consists of all of our businesses not included in the Interactive Group including our consolidated subsidiary, TripAdvisor, Inc., and our interests in equity method investments of Expedia, Inc., Interval Leisure Group, Inc. and Tree.com, Inc. and available-for-sale securities Time Warner Inc. and Time Warner Cable Inc.
The following tables present our assets and liabilities as of September 30, 2013, revenue and expenses for the three and nine months ended September 30, 2013 and 2012, and cash flows for the nine months ended September 30, 2013 and 2012. The tables further present our assets, liabilities, revenue, expenses and cash flows that are attributed to the Interactive Group and the Ventures Group, respectively, as if those businesses and assets had been attributed to those respective groups at the beginning of each period, for comparative purposes. Therefore, the attributed earnings in the periods presented in the Unaudited Attributed Financial Information Statements are not the same as those reflected in the Liberty Interactive Corporation condensed consolidated financial statements. The earnings attributed to the Liberty Interactive common stock and and Liberty Ventures common stock for purposes of those financial statements only relate to the period after the Liberty Ventures stock was issued on August 9, 2012. The financial information in this Exhibit should be read in conjunction with our unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2013 included in this Quarterly Report on Form 10-Q.
Notwithstanding the following attribution of assets, liabilities, revenue, expenses and cash flows to the Interactive Group and the Ventures Group, our tracking stock structure does not affect the ownership or the respective legal title to our assets or responsibility for our liabilities. We and our subsidiaries are each responsible for our respective liabilities. Holders of Liberty Interactive common stock and Liberty Ventures common stock are holders of our common stock and are subject to risks associated with an investment in our company and all of our businesses, assets and liabilities. The issuance of Liberty Interactive common stock and Liberty Ventures common stock does not affect the rights of our creditors or creditors of our subsidiaries.
1
SUMMARY ATTRIBUTED FINANCIAL DATA
Interactive Group
| September 30, 2013 | December 31, 2012 | |||||
| amounts in millions | ||||||
| Summary balance sheet data: | ||||||
| Cash and cash equivalents | $ | 455 | 699 | |||
| Trade and other receivables, net | $ | 764 | 1,095 | |||
| Inventory | $ | 1,328 | 1,106 | |||
| Investments in affiliates, accounted for using the equity method | $ | 335 | 304 | |||
| Total assets | $ | 14,484 | 15,115 | |||
| Long-term debt | $ | 4,396 | 4,277 | |||
| Deferred income tax liabilities | $ | 1,158 | 1,318 | |||
| Net assets attributable to the Interactive Group shareholders | $ | 6,575 | 7,011 | |||
| Three months ended | Nine months ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||
| amounts in millions | ||||||||||||
| Summary operations data: | ||||||||||||
| Revenue | $ | 2,245 | 2,196 | 7,079 | 6,875 | |||||||
| Cost of sales | (1,437 | ) | (1,407 | ) | (4,511 | ) | (4,361 | ) | ||||
| Operating expenses | (206 | ) | (201 | ) | (621 | ) | (608 | ) | ||||
| Selling, general and administrative expenses (1) | (228 | ) | (209 | ) | (734 | ) | (688 | ) | ||||
| Impairment of intangible assets | (19 | ) | (39 | ) | (19 | ) | (39 | ) | ||||
| Depreciation and amortization | (156 | ) | (147 | ) | (467 | ) | (437 | ) | ||||
| Operating income (loss) | 199 | 193 | 727 | 742 | ||||||||
| Interest expense | (70 | ) | (84 | ) | (224 | ) | (241 | ) | ||||
| Share of earnings (losses) of affiliates, net | 13 | 6 | 33 | 26 | ||||||||
| Realized and unrealized gains (losses) on financial instruments, net | (18 | ) | 14 | (1 | ) | 39 | ||||||
| Gains on disposition, net | — | — | (1 | ) | — | |||||||
| Other income (expense), net | (1 | ) | — | (55 | ) | (4 | ) | |||||
| Income tax benefit (expense) | (38 | ) | (65 | ) | (165 | ) | (226 | ) | ||||
| Net earnings (loss) | 85 | 64 | 314 | 336 | ||||||||
| Less net earnings (loss) attributable to noncontrolling interests | 8 | 15 | 33 | 44 | ||||||||
| Net earnings (loss) attributable to Liberty Interactive Corporation shareholders | $ | 77 | 49 | 281 | 292 | |||||||
______________________________________________
| (1) | Includes stock-based compensation of $22 million and $17 million for the three months ended September 30, 2013 and 2012, respectively, and $75 million and $52 million for the nine months ended September 30, 2013 and 2012, respectively. |
2
SUMMARY ATTRIBUTED FINANCIAL DATA (Continued)
Ventures Group
| September 30, 2013 | December 31, 2012 | |||||
| amounts in millions | ||||||
| Summary balance sheet data: | ||||||
| Cash and cash equivalents | $ | 526 | 1,961 | |||
| Investments in available-for-sale securities and other cost investments | $ | 1,339 | 1,815 | |||
| Investments in affiliates, accounted for using the equity method | $ | 890 | 547 | |||
| Long-term debt, including current portion | $ | 2,199 | 3,342 | |||
| Deferred income tax liabilities, including current portion | $ | 2,833 | 2,959 | |||
| Net assets attributable to the Ventures Group shareholders | $ | 478 | 551 | |||
| Three months ended | Nine months ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||
| amounts in millions | ||||||||||||
| Summary operations data: | ||||||||||||
| Revenue | $ | 255 | — | 732 | — | |||||||
| Operating expenses (1) | (40 | ) | — | (112 | ) | — | ||||||
| Selling, general and administrative expenses (1) | (130 | ) | (4 | ) | (352 | ) | (5 | ) | ||||
| Depreciation and amortization | (79 | ) | — | (235 | ) | — | ||||||
| Operating income (loss) | 6 | (4 | ) | 33 | (5 | ) | ||||||
| Interest expense | (17 | ) | (27 | ) | (64 | ) | (83 | ) | ||||
| Share of earnings (losses) of affiliates, net | 16 | 37 | (8 | ) | 63 | |||||||
| Realized and unrealized gains (losses) on financial instruments, net | 33 | (174 | ) | (48 | ) | (377 | ) | |||||
| Gains (losses) on dispositions, net | — | — | (1 | ) | 288 | |||||||
| Other, net | 4 | (2 | ) | 5 | 35 | |||||||
| Income tax benefit (expense) | 4 | 80 | 103 | 71 | ||||||||
| Net earnings (loss) | 46 | (90 | ) | 20 | (8 | ) | ||||||
| Less net earnings (loss) attributable to noncontrolling interests | 10 | — | 41 | — | ||||||||
| Net earnings (loss) attributable to Liberty Interactive Corporation shareholders | $ | 36 | (90 | ) | (21 | ) | (8 | ) | ||||
______________________________________________
| (1) | Included in the Ventures Group statements of operations are the following amounts of stock-based compensation: |
| Three months ended September 30, | Nine months ended September 30, | |||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||
| amounts in millions | ||||||||||||
| Operating expenses | $ | 7 | — | 20 | — | |||||||
| Selling, general and administrative expenses | 9 | 1 | 29 | 1 | ||||||||
| $ | 16 | 1 | 49 | 1 | ||||||||
3
BALANCE SHEET INFORMATION
September 30, 2013
(unaudited)
| Attributed (note 1) | ||||||||||||
Interactive Group | Ventures Group | Inter-group eliminations | Consolidated Liberty | |||||||||
| amounts in millions | ||||||||||||
| Assets | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 455 | 526 | — | 981 | |||||||
| Trade and other receivables, net | 764 | 190 | — | 954 | ||||||||
| Inventory, net | 1,328 | — | — | 1,328 | ||||||||
| Short term marketable securities | — | 552 | — | 552 | ||||||||
| Other current assets | 288 | 19 | (155 | ) | 152 | |||||||
| Total current assets | 2,835 | 1,287 | (155 | ) | 3,967 | |||||||
| Investments in available-for-sale securities and other cost investments (note 2) | 4 | 1,339 | 1,343 | |||||||||
| Investments in affiliates, accounted for using the equity method (note 3) | 335 | 890 | — | 1,225 | ||||||||
| Property and equipment, net | 1,181 | 25 | — | 1,206 | ||||||||
| Intangible assets not subject to amortization, net | 8,388 | 5,515 | — | 13,903 | ||||||||
| Intangible assets subject to amortization, net | 1,656 | 968 | — | 2,624 | ||||||||
| Other assets, at cost, net of accumulated amortization | 85 | 17 | — | 102 | ||||||||
| Total assets | $ | 14,484 | 10,041 | (155 | ) | 24,370 | ||||||
| Liabilities and Equity | ||||||||||||
| Current liabilities: | ||||||||||||
| Intergroup payable (receivable) (note 7) | $ | 78 | (78 | ) | — | — | ||||||
| Accounts payable | 641 | 41 | — | 682 | ||||||||
| Accrued liabilities | 681 | 113 | — | 794 | ||||||||
| Current portion of debt (note 4) | 439 | 927 | — | 1,366 | ||||||||
| Deferred tax liabilities | — | 1,097 | (155 | ) | 942 | |||||||
| Other current liabilities | 163 | 47 | — | 210 | ||||||||
| Total current liabilities | 2,002 | 2,147 | (155 | ) | 3,994 | |||||||
| Long-term debt (note 4) | 4,396 | 1,272 | — | 5,668 | ||||||||
| Deferred income tax liabilities | 1,158 | 1,736 | — | 2,894 | ||||||||
| Other liabilities | 212 | 43 | — | 255 | ||||||||
| Total liabilities | 7,768 | 5,198 | (155 | ) | 12,811 | |||||||
| Equity/Attributed net assets (liabilities) | 6,575 | 478 | — | 7,053 | ||||||||
| Noncontrolling interests in equity of subsidiaries | 141 | 4,365 | — | 4,506 | ||||||||
| Total liabilities and equity | $ | 14,484 | 10,041 | (155 | ) | 24,370 | ||||||
4
STATEMENT OF OPERATIONS INFORMATION
Three months ended September 30, 2013
(unaudited)
| Attributed (note 1) | |||||||||
| Interactive Group | Ventures Group | Consolidated Liberty | |||||||
| amounts in millions | |||||||||
| Revenue: | |||||||||
| Net retail sales | $ | 2,245 | — | 2,245 | |||||
| Other revenue | — | 255 | 255 | ||||||
| Total revenue | 2,245 | 255 | 2,500 | ||||||
| Operating costs and expenses: | |||||||||
| Cost of sales | 1,437 | — | 1,437 | ||||||
| Operating, including stock-based compensation (note 5) | 206 | 40 | 246 | ||||||
| Selling, general and administrative, including stock-based compensation (note 5) | 228 | 130 | 358 | ||||||
| Impairment of intangible assets | 19 | — | 19 | ||||||
| Depreciation and amortization | 156 | 79 | 235 | ||||||
| 2,046 | 249 | 2,295 | |||||||
| Operating income (loss) | 199 | 6 | 205 | ||||||
| Other income (expense): | |||||||||
| Interest expense | (70 | ) | (17 | ) | (87 | ) | |||
| Share of earnings (losses) of affiliates, net (note 3) | 13 | 16 | 29 | ||||||
| Realized and unrealized gains (losses) on financial instruments, net | (18 | ) | 33 | 15 | |||||
| Other, net | (1 | ) | 4 | 3 | |||||
| (76 | ) | 36 | (40 | ) | |||||
| Earnings (loss) before income taxes | 123 | 42 | 165 | ||||||
| Income tax benefit (expense) | (38 | ) | 4 | (34 | ) | ||||
| Net earnings (loss) | 85 | 46 | 131 | ||||||
| Less net earnings (loss) attributable to noncontrolling interests | 8 | 10 | 18 | ||||||
| Net earnings (loss) attributable to Liberty Interactive Corporation shareholders | $ | 77 | 36 | 113 | |||||
5
STATEMENT OF OPERATIONS INFORMATION
Three months ended September 30, 2012
(unaudited)
| Attributed (note 1) | |||||||||
| Interactive Group | Ventures Group | Consolidated Liberty | |||||||
| amounts in millions | |||||||||
| Revenue: | |||||||||
| Net retail sales | $ | 2,196 | — | 2,196 | |||||
| Operating costs and expenses: | |||||||||
| Cost of sales | 1,407 | — | 1,407 | ||||||
| Operating | 201 | — | 201 | ||||||
| Selling, general and administrative, including stock-based compensation (note 5) | 209 | 4 | 213 | ||||||
| Impairment of intangible assets | 39 | — | 39 | ||||||
| Depreciation and amortization | 147 | — | 147 | ||||||
| 2,003 | 4 | 2,007 | |||||||
| Operating income (loss) | 193 | (4 | ) | 189 | |||||
| Other income (expense): | |||||||||
| Interest expense | (84 | ) | (27 | ) | (111 | ) | |||
| Share of earnings (losses) of affiliates, net (note 3) | 6 | 37 | 43 | ||||||
| Realized and unrealized gains (losses) on financial instruments, net | 14 | (174 | ) | (160 | ) | ||||
| Other, net | — | (2 | ) | (2 | ) | ||||
| (64 | ) | (166 | ) | (230 | ) | ||||
| Earnings (loss) from continuing operations before income taxes | 129 | (170 | ) | (41 | ) | ||||
| Income tax benefit (expense) | (65 | ) | 80 | 15 | |||||
| Net earnings (loss) | 64 | (90 | ) | (26 | ) | ||||
| Less net earnings (loss) attributable to noncontrolling interests | 15 | — | 15 | ||||||
| Net earnings (loss) attributable to Liberty Interactive Corporation shareholders | $ | 49 | (90 | ) | (41 | ) | |||
6
STATEMENT OF OPERATIONS INFORMATION
Nine months ended September 30, 2013
(unaudited)
| Attributed (note 1) | ||||||||||
| Interactive Group | Ventures Group | Consolidated Liberty | ||||||||
| amounts in millions | ||||||||||
| Revenue: | ||||||||||
| Net retail sales | $ | 7,079 | — | 7,079 | ||||||
| Other revenue | — | 732 | 732 | |||||||
| Total revenue | 7,079 | 732 | 7,811 | |||||||
| Operating costs and expenses: | ||||||||||
| Cost of sales | 4,511 | — | 4,511 | |||||||
| Operating, including stock-based compensation (note 5) | 621 | 112 | 733 | |||||||
| Selling, general and administrative, including stock-based compensation (note 5) | 734 | 352 | 1,086 | |||||||
| Impairment of intangible assets | 19 | — | 19 | |||||||
| Depreciation and amortization | 467 | 235 | 702 | |||||||
| 6,352 | 699 | 7,051 | ||||||||
| Operating income (loss) | 727 | 33 | 760 | |||||||
| Other income (expense): | ||||||||||
| Interest expense | (224 | ) | (64 | ) | (288 | ) | ||||
| Share of earnings (losses) of affiliates, net (note 3) | 33 | (8 | ) | 25 | ||||||
| Realized and unrealized gains (losses) on financial instruments, net | (1 | ) | (48 | ) | (49 | ) | ||||
| Gains (losses) on transactions, net | (1 | ) | (1 | ) | (2 | ) | ||||
| Other, net | (55 | ) | 5 | (50 | ) | |||||
| (248 | ) | (116 | ) | (364 | ) | |||||
| Earnings (loss) before income taxes | 479 | (83 | ) | 396 | ||||||
| Income tax benefit (expense) | (165 | ) | 103 | (62 | ) | |||||
| Net earnings (loss) | 314 | 20 | 334 | |||||||
| Less net earnings (loss) attributable to noncontrolling interests | 33 | 41 | 74 | |||||||
| Net earnings (loss) attributable to Liberty Interactive Corporation shareholders | $ | 281 | $ | (21 | ) | 260 | ||||
7
STATEMENT OF OPERATIONS INFORMATION
Nine months ended September 30, 2012
(unaudited)
| Attributed (note 1) | |||||||||
| Interactive Group | Ventures Group | Consolidated Liberty | |||||||
| amounts in millions | |||||||||
| Revenue: | |||||||||
| Net retail sales | $ | 6,875 | — | 6,875 | |||||
| Operating costs and expenses: | |||||||||
| Cost of sales | 4,361 | — | 4,361 | ||||||
| Operating | 608 | — | 608 | ||||||
| Selling, general and administrative, including stock-based compensation (note 5) | 688 | 5 | 693 | ||||||
| Impairment of intangible assets | 39 | — | 39 | ||||||
| Depreciation and amortization | 437 | — | 437 | ||||||
| 6,133 | 5 | 6,138 | |||||||
| Operating income (loss) | 742 | (5 | ) | 737 | |||||
| Other income (expense): | |||||||||
| Interest expense | (241 | ) | (83 | ) | (324 | ) | |||
| Share of earnings (losses) of affiliates, net (note 3) | 26 | 63 | 89 | ||||||
| Realized and unrealized gains (losses) on financial instruments, net | 39 | (377 | ) | (338 | ) | ||||
| Gains (losses) on transactions, net | — | 288 | 288 | ||||||
| Other, net | (4 | ) | 35 | 31 | |||||
| (180 | ) | (74 | ) | (254 | ) | ||||
| Earnings (loss) from continuing operations before income taxes | 562 | (79 | ) | 483 | |||||
| Income tax benefit (expense) | (226 | ) | 71 | (155 | ) | ||||
| Net earnings (loss) | 336 | (8 | ) | 328 | |||||
| Less net earnings (loss) attributable to noncontrolling interests | 44 | — | 44 | ||||||
| Net earnings (loss) attributable to Liberty Interactive Corporation shareholders | $ | 292 | (8 | ) | 284 | ||||
8
STATEMENT OF CASH FLOWS INFORMATION
Nine months ended September 30, 2013
(unaudited)
| Attributed (note 1) | |||||||||
Interactive Group | Ventures Group | Consolidated Liberty | |||||||
| amounts in millions | |||||||||
| Cash flows from operating activities: | |||||||||
| Net earnings (loss) | $ | 314 | 20 | 334 | |||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||
| Depreciation and amortization | 467 | 235 | 702 | ||||||
| Stock-based compensation | 75 | 49 | 124 | ||||||
| Cash payments for stock based compensation | (6 | ) | (2 | ) | (8 | ) | |||
| Share of losses (earnings) of affiliates, net | (33 | ) | 8 | (25 | ) | ||||
| Cash receipts from return on equity investments | 11 | 14 | 25 | ||||||
| Realized and unrealized gains (losses) on financial instruments, net | 1 | 48 | 49 | ||||||
| (Gains) losses on disposition of assets, net | 1 | 1 | 2 | ||||||
| Impairment of intangible assets | 19 | — | 19 | ||||||
| Deferred income tax (benefit) expense | (143 | ) | (128 | ) | (271 | ) | |||
| Other, net | 67 | 5 | 72 | ||||||
| Intergroup tax allocation | 49 | (49 | ) | — | |||||
| Intergroup tax payment | 30 | (30 | ) | — | |||||
| Changes in operating assets and liabilities | |||||||||
| Current and other assets | 98 | (83 | ) | 15 | |||||
| Payables and other current liabilities | (408 | ) | 121 | (287 | ) | ||||
| Net cash provided (used) by operating activities | 542 | 209 | 751 | ||||||
| Cash flows from investing activities: | |||||||||
| Cash proceeds from dispositions | — | 1,136 | 1,136 | ||||||
| Investments in and loans to cost and equity investees | (4 | ) | (367 | ) | (371 | ) | |||
| Capital expended for property and equipment | (178 | ) | (39 | ) | (217 | ) | |||
| Purchases of short-term and other marketable securities | — | (1,388 | ) | (1,388 | ) | ||||
| Sales of short term and other marketable securities | — | 725 | 725 | ||||||
| Other investing activities, net | (19 | ) | (34 | ) | (53 | ) | |||
| Net cash provided (used) by investing activities | (201 | ) | 33 | (168 | ) | ||||
| Cash flows from financing activities: | |||||||||
| Borrowings of debt | 2,867 | 851 | 3,718 | ||||||
| Repayments of debt | (2,645 | ) | (2,407 | ) | (5,052 | ) | |||
| Intergroup receipts (payments), net | 2 | (2 | ) | — | |||||
| Shares repurchased by subsidiary | — | (142 | ) | (142 | ) | ||||
| Shares issued by subsidiary | — | 24 | 24 | ||||||
| Repurchases of Liberty common stock | (750 | ) | — | (750 | ) | ||||
| Other financing activities, net | (38 | ) | (1 | ) | (39 | ) | |||
| Net cash provided (used) by financing activities | (564 | ) | (1,677 | ) | (2,241 | ) | |||
| Effect of foreign currency rates on cash | (21 | ) | — | (21 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | (244 | ) | (1,435 | ) | (1,679 | ) | |||
| Cash and cash equivalents at beginning of period | 699 | 1,961 | 2,660 | ||||||
| Cash and cash equivalents at end period | $ | 455 | 526 | 981 | |||||
9
STATEMENT OF CASH FLOWS INFORMATION
Nine months ended September 30, 2012
(unaudited)
| Attributed (note 1) | |||||||||
Interactive Group | Ventures Group | Consolidated Liberty | |||||||
| amounts in millions | |||||||||
| Cash flows from operating activities: | |||||||||
| Net earnings (loss) | $ | 336 | (8 | ) | 328 | ||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||
| Depreciation and amortization | 437 | — | 437 | ||||||
| Stock-based compensation | 52 | 1 | 53 | ||||||
| Cash payments for stock based compensation | (9 | ) | — | (9 | ) | ||||
| Share of losses (earnings) of affiliates, net | (26 | ) | (63 | ) | (89 | ) | |||
| Cash receipts from return on equity investments | 8 | 13 | 21 | ||||||
| Realized and unrealized gains (losses) on financial instruments, net | (39 | ) | 377 | 338 | |||||
| (Gains) losses on disposition of assets, net | — | (288 | ) | (288 | ) | ||||
| Impairment of intangible assets | 39 | — | 39 | ||||||
| Deferred income tax (benefit) expense | (119 | ) | 85 | (34 | ) | ||||
| Other, net | 11 | (33 | ) | (22 | ) | ||||
| Intergroup tax allocation | 156 | (156 | ) | — | |||||
| Changes in operating assets and liabilities | |||||||||
| Current and other assets | 162 | — | 162 | ||||||
| Payables and other current liabilities | 27 | (19 | ) | 8 | |||||
| Net cash provided (used) by operating activities | 1,035 | (91 | ) | 944 | |||||
| Cash flows from investing activities: | |||||||||
| Cash proceeds from dispositions | — | 348 | 348 | ||||||
| Investments in and loans to cost and equity investees | (60 | ) | (132 | ) | (192 | ) | |||
| Capital expended for property and equipment | (237 | ) | — | (237 | ) | ||||
| Sales of short term and other marketable securities | 46 | — | 46 | ||||||
| Other investing activities, net | (41 | ) | 1 | (40 | ) | ||||
| Net cash provided (used) by investing activities | (292 | ) | 217 | (75 | ) | ||||
| Cash flows from financing activities: | |||||||||
| Borrowings of debt | 2,043 | — | 2,043 | ||||||
| Repayments of debt | (1,123 | ) | (115 | ) | (1,238 | ) | |||
| Reattribution of cash between groups | (1,346 | ) | 1,346 | — | |||||
| Intergroup receipts (payments), net | 122 | (122 | ) | — | |||||
| Repurchases of Liberty common stock | (690 | ) | — | (690 | ) | ||||
| Other financing activities, net | (30 | ) | — | (30 | ) | ||||
| Net cash provided (used) by financing activities | (1,024 | ) | 1,109 | 85 | |||||
| Effect of foreign currency rates on cash | (8 | ) | — | (8 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | (289 | ) | 1,235 | 946 | |||||
| Cash and cash equivalents at beginning of period | 847 | — | 847 | ||||||
| Cash and cash equivalents at end period | $ | 558 | 1,235 | 1,793 | |||||
10
Notes to Attributed Financial Information
(unaudited)
| (1) | The Interactive Group is comprised of our consolidated subsidiaries QVC, Inc., Provide Commerce, Inc., Backcountry.com, Inc., Bodybuilding.com, LLC and Celebrate Interactive Holdings LLC, CommerceHub and our interest in HSN, Inc. Accordingly, the accompanying attributed financial information for the Interactive Group includes the foregoing investments, as well as the assets, liabilities, revenue, expenses and cash flows of those consolidated subsidiaries. We have also attributed certain of our debt obligations (and related interest expense) to the Interactive Group based upon a number of factors, including the cash flow available to the Interactive Group and its ability to pay debt service and our assessment of the optimal capitalization for the Interactive Group. The specific debt obligations attributed to each of the Interactive Group and the Ventures Group are described in note 4 below. In addition, we have allocated certain corporate general and administrative expenses among the Interactive Group and the Ventures Group as described in note 5 below. |
The Interactive Group focuses on video and on-line commerce businesses. Accordingly, we expect that businesses that we may acquire in the future that we believe are complementary to this strategy will also be attributed to the Interactive Group.
The Ventures Group consists of all of our businesses not included in the Interactive Group including our consolidated subsidiary TripAdvisor, Inc. and our interests in equity method investments of Expedia, Inc., Interval Leisure Group, Inc. and Tree.com, Inc. and available-for-sale securities Time Warner Inc. and Time Warner Cable Inc. Accordingly, the accompanying attributed financial information for the Ventures Group includes these investments. In addition, we have attributed to the Ventures Group all of our senior exchangeable debentures (and related interest expense). See note 4 below for the debt obligations attributed to the Ventures Group.
Any businesses that we may acquire in the future that we do not attribute to the Interactive Group will be attributed to the Ventures Group.
| (2) | Investments in available-for-sale securities, including non-strategic securities, and other cost investments are summarized as follows: |
| September 30, 2013 | December 31, 2012 | |||||
| amounts in millions | ||||||
| Interactive Group | ||||||
| Other | $ | 4 | 4 | |||
| Total Interactive Group | 4 | 4 | ||||
| Ventures Group | ||||||
| Time Warner Inc. | 289 | 1,042 | ||||
| Time Warner Cable Inc. | 610 | 531 | ||||
| AOL, Inc. | — | 59 | ||||
| TripAdvisor AFS securities | 164 | 99 | ||||
| Other | 276 | 84 | ||||
| Total Ventures Group | 1,339 | 1,815 | ||||
| Consolidated Liberty | $ | 1,343 | 1,819 | |||
11
| (3) | The following table presents information regarding certain equity method investments: |
| Share of earnings (losses) | |||||||||||||||||||||
| September 30, 2013 | Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||
Percentage ownership | Carrying value | Market value | |||||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
| dollar amounts in millions | |||||||||||||||||||||
| Interactive Group | |||||||||||||||||||||
| HSN, Inc. | 38 | % | $ | 283 | 1,073 | 15 | 10 | 46 | 34 | ||||||||||||
| Other | various | 52 | NA | (2 | ) | (4 | ) | (13 | ) | (8 | ) | ||||||||||
| Total Interactive Group | 335 | 13 | 6 | 33 | 26 | ||||||||||||||||
| Ventures Group | |||||||||||||||||||||
| Expedia, Inc. | 17 | % | 465 | 1,196 | 27 | 41 | 17 | 65 | |||||||||||||
| TripAdvisor, Inc. | NA | NA | NA | NA | 10 | NA | 33 | ||||||||||||||
| Other | various | 425 | NA | (11 | ) | (14 | ) | (25 | ) | (35 | ) | ||||||||||
| Total Ventures Group | 890 | 16 | 37 | (8 | ) | 63 | |||||||||||||||
| Consolidated Liberty | $ | 1,225 | 29 | 43 | 25 | 89 | |||||||||||||||
| (4) | Debt attributed to the Interactive Group and the Ventures Group is comprised of the following: |
| September 30, 2013 | ||||||||
Outstanding principal | Carrying value | |||||||
| amounts in millions | ||||||||
| Interactive Group | ||||||||
| 8.5% Senior Debentures due 2029 | $ | 287 | 285 | |||||
| 8.25% Senior Debentures due 2030 | 505 | 501 | ||||||
| 1% Exchangeable Senior Debentures due 2043 | 400 | 413 | ||||||
| QVC 7.5% Senior Secured Notes due 2019 | 769 | 760 | ||||||
| QVC 7.375% Senior Secured Notes due 2020 | 500 | 500 | ||||||
| QVC 5.125% Senior Secured Notes due 2022 | 500 | 500 | ||||||
| QVC 4.375% Senior Secured Notes due 2023 | 750 | 750 | ||||||
| QVC 5.95% Senior Secured Notes due 2043 | 300 | 300 | ||||||
| QVC Bank Credit Facilities | 673 | 673 | ||||||
| Other subsidiary debt | 153 | 153 | ||||||
| Total Interactive Group debt | 4,837 | 4,835 | ||||||
| Ventures Group | ||||||||
| 4% Exchangeable Senior Debentures due 2029 | 439 | 277 | ||||||
| 3.75% Exchangeable Senior Debentures due 2030 | 439 | 276 | ||||||
| 3.5% Exchangeable Senior Debentures due 2031 | 363 | 308 | ||||||
| 0.75% Exchangeable Senior Debentures due 2043 | 850 | 962 | ||||||
| TripAdvisor Debt Facilities | 376 | 376 | ||||||
| Total Ventures Group debt | 2,467 | 2,199 | ||||||
| Total consolidated Liberty debt | $ | 7,304 | 7,034 | |||||
| Less current maturities | (1,366 | ) | ||||||
| Total long-term debt | $ | 5,668 | ||||||
| (5) | Cash compensation expense for our corporate employees will be allocated between the Interactive Group and the Ventures Group based on the estimated percentage of time spent providing services for each group. On a semi-annual basis estimated time spent will be determined through an interview process and a review of personnel duties unless transactions significantly change the composition of companies and investments in either respective group which would require a more timely reevaluation of estimated time spent. Other general and administrative expenses will be charged directly to the groups whenever possible and are otherwise allocated based on estimated usage or some other reasonably |
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determined methodology. Amounts allocated from the Interactive Group to the Ventures Group were determined to be $5 million and $3 million for the three months ended September 30, 2013 and 2012, respectively, and $15 million and $5 million for the nine months ended September 30, 2013 and 2012, respectively. We note that stock compensation related to each tracking stock group is determined based on actual options outstanding for each respective tracking stock group.
While we believe that this allocation method is reasonable and fair to each group, we may elect to change the allocation methodology or percentages used to allocate general and administrative expenses in the future.
| (6) | The Liberty Interactive common stock and the Liberty Ventures common stock have voting and conversion rights under our restated charter. Following is a summary of those rights. Holders of Series A common stock of each group is entitled to one vote per share, and holders of Series B common stock of each group are entitled to ten votes per share. Holders of Series C common stock of each group, if issued, are entitled to 1/100th of a vote per share in certain limited cases and will otherwise not be entitled to vote. In general, holders of Series A and Series B common stock will vote as a single class. In certain limited circumstances, the board may elect to seek the approval of the holders of only Series A and Series B Liberty Interactive common stock or the approval of the holders of only Series A and Series B Liberty Ventures common stock. |
At the option of the holder, each share of Series B common stock will be convertible into one share of Series A common stock of the same group. At the discretion of our board, the common stock related to one group may be converted into common stock of the same series that is related to the other group.
| (7) | The intergroup payable (receivable) is primarily attributable to an allocation of intergroup income taxes payable from the Interactive Group to the Ventures Group. |
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