Qurate Retail, Inc. - FORM 10-Q - EX-99.1 - EXHIBIT - August 5, 2014

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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, BuySeasons, Inc., Evite, 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 June 30, 2014, revenue and expenses for the three and six months ended June 30, 2014 and 2013 and cash flows for the six months ended June 30, 2014 and 2013. The tables further present our assets, liabilities, revenue, expenses and cash flows that are attributed to the Interactive Group and the Ventures Group, respectively. The financial information in this Exhibit should be read in conjunction with our unaudited condensed consolidated financial statements for the six months ended June 30, 2014 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
 
June 30, 2014
 
December 31, 2013
 
amounts in millions
Summary balance sheet data:
 
 
 
Cash and cash equivalents
$
692

 
598

Trade and other receivables, net
$
785

 
1,150

Inventory
$
1,181

 
1,135

Investments in affiliates, accounted for using the equity method
$
363

 
343

Total assets
$
14,346

 
14,862

Long-term debt
$
5,195

 
5,044

Deferred income tax liabilities
$
1,100

 
1,208

Net assets attributable to the Interactive Group shareholders
$
6,164

 
6,378


 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2014
 
2013
 
2014
 
2013
 
amounts in millions
Summary operations data:
 
 
 
 
 
 
 
Revenue
$
2,495

 
2,400

 
4,942

 
4,834

Cost of sales
(1,568
)
 
(1,521
)
 
(3,134
)
 
(3,074
)
Operating expenses
(219
)
 
(207
)
 
(436
)
 
(415
)
Selling, general and administrative expenses (1)
(280
)
 
(246
)
 
(537
)
 
(506
)
Impairment of intangible assets
(7
)
 
—

 
(7
)
 
—

Depreciation and amortization
(166
)
 
(158
)
 
(329
)
 
(311
)
Operating income (loss)
255

 
268

 
499

 
528

Interest expense
(79
)
 
(70
)
 
(156
)
 
(154
)
Share of earnings (losses) of affiliates, net
7

 
4

 
28

 
20

Realized and unrealized gains (losses) on financial instruments, net
6

 
4

 
7

 
17

Other income (expense), net
(1
)
 
(15
)
 
—

 
(55
)
Income tax benefit (expense)
(74
)
 
(69
)
 
(144
)
 
(127
)
Net earnings (loss)
114

 
122

 
234

 
229

Less net earnings (loss) attributable to noncontrolling interests
9

 
13

 
19

 
25

Net earnings (loss) attributable to Liberty Interactive Corporation shareholders
$
105

 
109

 
215

 
204

______________________________________________
(1)
Includes stock-based compensation of $24 million and $29 million for the three months ended June 30, 2014 and 2013, respectively, and $48 million and $53 million for the six months ended June 30, 2014 and 2013, respectively.

2

SUMMARY ATTRIBUTED FINANCIAL DATA (Continued)
Ventures Group
 
June 30, 2014
 
December 31, 2013
 
amounts in millions
Summary balance sheet data:
 
 
 
Cash and cash equivalents
$
1,141

 
658

Investments in available-for-sale securities and other cost investments
$
1,271

 
1,497

Investments in affiliates, accounted for using the equity method
$
873

 
894

Total assets
$
10,535

 
9,984

Long-term debt, including current portion
$
2,434

 
2,301

Deferred income tax liabilities, including current portion
$
2,752

 
2,731

Net assets attributable to the Ventures Group shareholders
$
504

 
558

Noncontrolling interests in equity of subsidiaries
$
4,466

 
4,375

 
 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2014
 
2013
 
2014
 
2013
 
amounts in millions
Summary operations data:
 
 
 
 
 
 
 
Revenue
$
323

 
247

 
604

 
477

Operating expenses (1)
(51
)
 
(36
)
 
(99
)
 
(72
)
Selling, general and administrative expenses (1)
(167
)
 
(116
)
 
(299
)
 
(222
)
Depreciation and amortization
(71
)
 
(79
)
 
(140
)
 
(156
)
Operating income (loss)
34

 
16

 
66

 
27

Interest expense
(21
)
 
(20
)
 
(43
)
 
(47
)
Share of earnings (losses) of affiliates, net
(3
)
 
3

 
(26
)
 
(24
)
Realized and unrealized gains (losses) on financial instruments, net
(47
)
 
5

 
(73
)
 
(81
)
Other, net
4

 
(2
)
 
11

 
—

Income tax benefit (expense)
25

 
26

 
47

 
99

Net earnings (loss)
(8
)
 
28

 
(18
)
 
(26
)
Less net earnings (loss) attributable to noncontrolling interests
20

 
17

 
38

 
31

Net earnings (loss) attributable to Liberty Interactive Corporation shareholders
$
(28
)
 
11

 
(56
)
 
(57
)
______________________________________________
(1)
Included in the Ventures Group statements of operations are the following amounts of stock-based compensation:
 
Three months ended
June 30,
 
Six months ended
June 30,
 
2014
 
2013
 
2014
 
2013
 
amounts in millions
Operating expenses
$
7

 
5

 
14

 
13

Selling, general and administrative expenses
12

 
10

 
23

 
20

 
$
19

 
15

 
37

 
33




3

BALANCE SHEET INFORMATION
June 30, 2014
(unaudited)
 
Attributed (note 1)
 
 
 
 
 
Interactive
Group
 
Ventures Group
 
Inter-group
eliminations
 
Consolidated
Liberty
 
amounts in millions
Assets
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
692

 
1,141

 
—

 
1,833

Trade and other receivables, net
785

 
188

 
—

 
973

Inventory, net
1,181

 
—

 
—

 
1,181

Short term marketable securities
11

 
646

 
—

 
657

Other current assets
252

 
20

 
(159
)
 
113

Total current assets
2,921

 
1,995

 
(159
)
 
4,757

Investments in available-for-sale securities and other cost investments (note 2)
4

 
1,271

 
—

 
1,275

Investments in affiliates, accounted for using the equity method (note 3)
363

 
873

 
—

 
1,236

Property and equipment, net
1,183

 
93

 
—

 
1,276

Intangible assets not subject to amortization, net
8,389

 
5,399

 
—

 
13,788

Intangible assets subject to amortization, net
1,396

 
871

 
—

 
2,267

Other assets, at cost, net of accumulated amortization
90

 
33

 
—

 
123

Total assets
$
14,346

 
10,535

 
(159
)
 
24,722

Liabilities and Equity
 
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
 
Intergroup payable (receivable) (note 7)
$
53

 
(53
)
 
—

 
—

Accounts payable
571

 
135

 
—

 
706

Accrued liabilities
681

 
123

 
—

 
804

Current portion of debt (note 4)
39

 
1,009

 
—

 
1,048

Deferred tax liabilities
—

 
1,137

 
(159
)
 
978

Other current liabilities
199

 
63

 
—

 
262

Total current liabilities
1,543

 
2,414

 
(159
)
 
3,798

Long-term debt (note 4)
5,195

 
1,425

 
—

 
6,620

Deferred income tax liabilities
1,100

 
1,615

 
—

 
2,715

Other liabilities
222

 
111

 
—

 
333

Total liabilities
8,060

 
5,565

 
(159
)
 
13,466

Equity/Attributed net assets (liabilities)
6,164

 
504

 
—

 
6,668

Noncontrolling interests in equity of subsidiaries
122

 
4,466

 
—

 
4,588

Total liabilities and equity
$
14,346

 
10,535

 
(159
)
 
24,722


4

STATEMENT OF OPERATIONS INFORMATION
Three months ended June 30, 2014
(unaudited)
 
Attributed (note 1)
 
 
 
Interactive Group
 
Ventures Group
 
Consolidated Liberty
 
amounts in millions
Revenue:
 
 
 
 
 
Net retail sales
$
2,495

 
—

 
2,495

Other revenue
—

 
323

 
323

Total revenue
2,495

 
323

 
2,818

Operating costs and expenses:
 
 
 
 
 
Cost of sales
1,568

 
—

 
1,568

Operating, including stock-based compensation (note 5)
219

 
51

 
270

Selling, general and administrative, including stock-based compensation (note 5)
280

 
167

 
447

Impairment of intangible assets
7

 
—

 
7

Depreciation and amortization
166

 
71

 
237

 
2,240

 
289

 
2,529

Operating income (loss)
255

 
34

 
289

Other income (expense):
 
 
 
 
 
Interest expense
(79
)
 
(21
)
 
(100
)
Share of earnings (losses) of affiliates, net (note 3)
7

 
(3
)
 
4

Realized and unrealized gains (losses) on financial instruments, net
6

 
(47
)
 
(41
)
Other, net
(1
)
 
4

 
3

 
(67
)
 
(67
)
 
(134
)
Earnings (loss) before income taxes
188

 
(33
)
 
155

Income tax benefit (expense)
(74
)
 
25

 
(49
)
Net earnings (loss)
114

 
(8
)
 
106

Less net earnings (loss) attributable to noncontrolling interests
9

 
20

 
29

Net earnings (loss) attributable to Liberty Interactive Corporation shareholders
$
105

 
(28
)
 
77


5

STATEMENT OF OPERATIONS INFORMATION
Three months ended June 30, 2013
(unaudited)

 
Attributed (note 1)
 
 
 
Interactive Group
 
Ventures Group
 
Consolidated Liberty
 
amounts in millions
Revenue:
 
 
 
 
 
Net retail sales
$
2,400

 
—

 
2,400

Other revenue
—

 
247

 
247

Total revenue
2,400

 
247

 
2,647

Operating costs and expenses:
 
 
 
 
 
Cost of sales
1,521

 
—

 
1,521

Operating
207

 
36

 
243

Selling, general and administrative, including stock-based compensation (note 5)
246

 
116

 
362

Depreciation and amortization
158

 
79

 
237

 
2,132

 
231

 
2,363

Operating income (loss)
268

 
16

 
284

Other income (expense):
 

 
 

 
 
Interest expense
(70
)
 
(20
)
 
(90
)
Share of earnings (losses) of affiliates, net (note 3)
4

 
3

 
7

Realized and unrealized gains (losses) on financial instruments, net
4

 
5

 
9

Other, net
(15
)
 
(2
)
 
(17
)
 
(77
)
 
(14
)
 
(91
)
Earnings (loss) from continuing operations before income taxes
191

 
2

 
193

Income tax benefit (expense)
(69
)
 
26

 
(43
)
Net earnings (loss)
122

 
28

 
150

Less net earnings (loss) attributable to noncontrolling interests
13

 
17

 
30

Net earnings (loss) attributable to Liberty Interactive Corporation shareholders
$
109

 
11

 
120


6

STATEMENT OF OPERATIONS INFORMATION
Six months ended June 30, 2014
(unaudited)

 
Attributed (note 1)
 
 
 
Interactive Group
 
Ventures Group
 
Consolidated Liberty
 
amounts in millions
Revenue:
 
 
 
 
 
Net retail sales
$
4,942

 
—

 
4,942

Other revenue
—

 
604

 
604

Total revenue
4,942

 
604

 
5,546

Operating costs and expenses:
 
 
 
 
 
Cost of sales
3,134

 
—

 
3,134

Operating, including stock-based compensation (note 5)
436

 
99

 
535

Selling, general and administrative, including stock-based compensation (note 5)
537

 
299

 
836

Impairment of intangible assets
7

 
—

 
7

Depreciation and amortization
329

 
140

 
469

 
4,443

 
538

 
4,981

Operating income (loss)
499

 
66

 
565

Other income (expense):
 
 
 
 
 
Interest expense
(156
)
 
(43
)
 
(199
)
Share of earnings (losses) of affiliates, net (note 3)
28

 
(26
)
 
2

Realized and unrealized gains (losses) on financial instruments, net
7

 
(73
)
 
(66
)
Other, net
—

 
11

 
11

 
(121
)
 
(131
)
 
(252
)
Earnings (loss) before income taxes
378

 
(65
)
 
313

Income tax benefit (expense)
(144
)
 
47

 
(97
)
Net earnings (loss)
234

 
(18
)
 
216

Less net earnings (loss) attributable to noncontrolling interests
19

 
38

 
57

Net earnings (loss) attributable to Liberty Interactive Corporation shareholders
$
215

 
(56
)
 
159



7

STATEMENT OF OPERATIONS INFORMATION
Six months ended June 30, 2013
(unaudited)
 
Attributed (note 1)
 
 
 
Interactive Group
 
Ventures Group
 
Consolidated Liberty
 
amounts in millions
Revenue:
 
 
 
 
 
Net retail sales
$
4,834

 
—

 
4,834

Other revenue
—

 
477

 
477

Total revenue
4,834

 
477

 
5,311

Operating costs and expenses:
 
 
 
 
 
Cost of sales
3,074

 
—

 
3,074

Operating
415

 
72

 
487

Selling, general and administrative, including stock-based compensation (note 5)
506

 
222

 
728

Depreciation and amortization
311

 
156

 
467

 
4,306

 
450

 
4,756

Operating income (loss)
528

 
27

 
555

Other income (expense):
 

 
 

 
 
Interest expense
(154
)
 
(47
)
 
(201
)
Share of earnings (losses) of affiliates, net (note 3)
20

 
(24
)
 
(4
)
Realized and unrealized gains (losses) on financial instruments, net
17

 
(81
)
 
(64
)
Other, net
(55
)
 
—

 
(55
)
 
(172
)
 
(152
)
 
(324
)
Earnings (loss) before income taxes
356

 
(125
)
 
231

Income tax benefit (expense)
(127
)
 
99

 
(28
)
Net earnings (loss)
229

 
(26
)
 
203

Less net earnings (loss) attributable to noncontrolling interests
25

 
31

 
56

Net earnings (loss) attributable to Liberty Interactive Corporation shareholders
$
204

 
(57
)
 
147



8

STATEMENT OF CASH FLOWS INFORMATION
Six months ended June 30, 2014
(unaudited)
 
Attributed (note 1)
 
 
 
Interactive
Group
 
Ventures Group
 
Consolidated
Liberty
 
amounts in millions
Cash flows from operating activities:
 
 
 
 
 
Net earnings (loss)
$
234

 
(18
)
 
216

Adjustments to reconcile net earnings to net cash provided by operating activities:
 
 
 
 
 
Depreciation and amortization
329

 
140

 
469

Stock-based compensation
48

 
37

 
85

Cash payments for stock based compensation
(5
)
 
(1
)
 
(6
)
Excess tax benefit from stock-based compensation
(9
)
 
(15
)
 
(24
)
Share of losses (earnings) of affiliates, net
(28
)
 
26

 
(2
)
Cash receipts from return on equity investments
10

 
10

 
20

Realized and unrealized gains (losses) on financial instruments, net
(7
)
 
73

 
66

       Impairment of intangible assets
7

 
—

 
7

Deferred income tax (benefit) expense
(101
)
 
(1
)
 
(102
)
Other, net
5

 
2

 
7

Intergroup tax allocation
105

 
(105
)
 
—

Intergroup tax payment
(276
)
 
276

 
—

Changes in operating assets and liabilities
 
 
 
 
 
Current and other assets
308

 
(65
)
 
243

Payables and other current liabilities
(50
)
 
158

 
108

Net cash provided (used) by operating activities
570

 
517

 
1,087

Cash flows from investing activities:
 
 
 
 
 
Cash proceeds from dispositions
—

 
25

 
25

Investments in and loans to cost and equity investees
(2
)
 
(29
)
 
(31
)
Capital expended for property and equipment
(87
)
 
(42
)
 
(129
)
Purchases of short-term and other marketable securities
(38
)
 
(438
)
 
(476
)
Sales of short term and other marketable securities
27

 
614

 
641

Acquisitions, net of cash acquired
—

 
(152
)
 
(152
)
Other investing activities, net
(10
)
 
15

 
5

Net cash provided (used) by investing activities
(110
)
 
(7
)
 
(117
)
Cash flows from financing activities:
 
 
 
 
 
Borrowings of debt
1,895

 
5

 
1,900

Repayments of debt
(1,739
)
 
(25
)
 
(1,764
)
Intergroup receipts (payments), net
2

 
(2
)
 
—

Repurchases of Liberty common stock
(478
)
 
—

 
(478
)
Minimum withholding taxes on net settlements of stock-based compensation
(14
)
 
(23
)
 
(37
)
Excess tax benefit from stock-based compensation
9

 
15

 
24

Other financing activities, net
(36
)
 
—

 
(36
)
Net cash provided (used) by financing activities
(361
)
 
(30
)
 
(391
)
Effect of foreign currency rates on cash
(5
)
 
3

 
(2
)
Net increase (decrease) in cash and cash equivalents
94

 
483

 
577

Cash and cash equivalents at beginning of period
598

 
658

 
1,256

Cash and cash equivalents at end period
$
692

 
1,141

 
1,833


9

STATEMENT OF CASH FLOWS INFORMATION
Six months ended June 30, 2013
(unaudited)
 
Attributed (note 1)
 
 
 
Interactive
Group
 
Ventures Group
 
Consolidated
Liberty
 
amounts in millions
Cash flows from operating activities:
 
 
 
 
 
Net earnings (loss)
$
229

 
(26
)
 
203

Adjustments to reconcile net earnings to net cash provided by operating activities:
 
 
 
 
 
Depreciation and amortization
311

 
156

 
467

Stock-based compensation
53

 
33

 
86

Cash payments for stock based compensation
(4
)
 
(1
)
 
(5
)
Excess tax benefits on stock-based compensation
(7
)
 
(5
)
 
(12
)
Share of losses (earnings) of affiliates, net
(20
)
 
24

 
4

Cash receipts from return on equity investments
7

 
8

 
15

Realized and unrealized gains (losses) on financial instruments, net
(17
)
 
81

 
64

(Gains) losses on transactions, net
1

 
1

 
2

Deferred income tax (benefit) expense
(86
)
 
(181
)
 
(267
)
Other, net
6

 
8

 
14

Intergroup tax allocation
(33
)
 
33

 
—

Intergroup tax receipts (payments)
94

 
(94
)
 
—

Changes in operating assets and liabilities
 
 
 
 
 
Current and other assets
324

 
(74
)
 
250

Payables and other current liabilities
(476
)
 
102

 
(374
)
Net cash provided (used) by operating activities
382

 
65

 
447

Cash flows from investing activities:
 
 
 
 
 
Cash proceeds from dispositions
—

 
1,136

 
1,136

Investments in and loans to cost and equity investees
—

 
(51
)
 
(51
)
Capital expended for property and equipment
(111
)
 
(25
)
 
(136
)
Purchases of short-term and other marketable securities
—

 
(1,116
)
 
(1,116
)
Sales of short term and other marketable securities
2

 
442

 
444

Acquisitions, net of cash acquired
—

 
(32
)
 
(32
)
Other investing activities, net
(7
)
 
(3
)
 
(10
)
Net cash provided (used) by investing activities
(116
)
 
351

 
235

Cash flows from financing activities:
 
 
 
 
 
Borrowings of debt
2,246

 
848

 
3,094

Repayments of debt
(2,055
)
 
(2,342
)
 
(4,397
)
Shares repurchased by subsidiary
—

 
(42
)
 
(42
)
Shares issued by subsidiary
—

 
19

 
19

Intergroup receipts (payments), net
2

 
(2
)
 
—

Repurchases of Liberty common stock
(499
)
 
—

 
(499
)
Excess tax benefit from stock-based compensation
7

 
5

 
12

Minimum withholding taxes on net settlements of share-based compensation
(7
)
 
(6
)
 
(13
)
Other financing activities, net
(39
)
 
—

 
(39
)
Net cash provided (used) by financing activities
(345
)
 
(1,520
)
 
(1,865
)
Effect of foreign currency rates on cash
(29
)
 
—

 
(29
)
Net increase (decrease) in cash and cash equivalents
(108
)
 
(1,104
)
 
(1,212
)
Cash and cash equivalents at beginning of period
699

 
1,961

 
2,660

Cash and cash equivalents at end period
$
591

 
857

 
1,448



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, BuySeasons, Evite and 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:
 
June 30, 2014
 
December 31, 2013
 
amounts in millions
Interactive Group
 
 
 
Other
$
4

 
4

Total Interactive Group
4

 
4

Ventures Group
 
 
 
Time Warner Inc.
308

 
306

Time Warner Cable Inc.
805

 
741

TripAdvisor AFS securities
83

 
188

Other
75

 
262

Total Ventures Group
1,271

 
1,497

Consolidated Liberty
$
1,275

 
1,501
















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(3)
The following table presents information regarding certain equity method investments:
 
 
 
 
 
 
 
Share of earnings (losses)
 
June 30, 2014
 
Three months ended
June 30,
 
Six months ended
June 30,
 
Percentage
ownership
 
Carrying
value
 
Market
value
 
 
2014
 
2013
 
2014
 
2013
 
dollar amounts in millions
Interactive Group
 
 
 
 
 
 
 
 
 
 
 
 
 
HSN, Inc.
38
%
 
$
313

 
1,186

 
9

 
11

 
31

 
31

Other
various

 
50

 
NA

 
(2
)
 
(7
)
 
(3
)
 
(11
)
Total Interactive Group
 
 
363

 
 
 
7

 
4

 
28

 
20

Ventures Group
 
 
 
 
 
 
 
 
 
 
 
 
 
Expedia, Inc.
18
%
 
476

 
1,818

 
10

 
10

 
4

 
(10
)
Other
various

 
397

 
NA

 
(13
)
 
(7
)
 
(30
)
 
(14
)
Total Ventures Group
 
 
873

 
 
 
(3
)
 
3

 
(26
)
 
(24
)
Consolidated Liberty
 
 
$
1,236

 
 
 
4

 
7

 
2

 
(4
)
(4)
Debt attributed to the Interactive Group and the Ventures Group is comprised of the following:
 
 
June 30, 2014
 
 
Outstanding
principal
 
Carrying
value
 
 
amounts in millions
Interactive Group
 
 
 
 
8.5% Senior Debentures due 2029
$
287

 
285

 
8.25% Senior Debentures due 2030
504

 
501

 
1% Exchangeable Senior Debentures due 2043
400

 
416

 
QVC 7.5% Senior Secured Notes due 2019
769

 
761

 
QVC 3.125% Senior Secured Notes due 2019
400

 
399

 
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 4.850% Senior Secured Notes due 2024
600

 
600

 
QVC 5.95% Senior Secured Notes due 2043
300

 
300

 
QVC Bank Credit Facilities
65

 
65

 
Other subsidiary debt
157

 
157

        Total Interactive Group debt
5,232

 
5,234

Ventures Group
 
 
 
 
4% Exchangeable Senior Debentures due 2029
439

 
307

 
3.75% Exchangeable Senior Debentures due 2030
438

 
294

 
3.5% Exchangeable Senior Debentures due 2031
359

 
335

 
0.75% Exchangeable Senior Debentures due 2043
850

 
1,145

 
TripAdvisor Debt Facilities
353

 
353

        Total Ventures Group debt
2,439

 
2,434

 
Total consolidated Liberty debt
$
7,671

 
7,668

 
Less current maturities
 
 
(1,048
)
 
Total long-term debt
 
 
$
6,620


(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

12

directly to the groups whenever possible and are otherwise allocated based on estimated usage or some other reasonably determined methodology. Amounts allocated from the Interactive Group to the Ventures Group were determined to be$4 million and $7 million for the three months ended June 30, 2014 and 2013, respectively, and $6 million and $10 million for the six months ended June 30, 2014 and 2013, 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 are 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.


13

Qurate Retail, Inc. Reports