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.

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.

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…

Thanks Greg. Liberty Interactive’s revenue increased 7% in the fourth quarter and 8% for the year while adjusted OIBDA increased 10% for the quarter and 4% for the year. QVC increased total revenue by 5% for the quarter and 6% for the year while adjusted OIBDA increased 9% for the quarter and 4% for the full-year 2011. Liberty Interactive’s other eCommerce businesses grew revenue 18% for the quarter and 20% for the year while adjusted OIBDA increased 4% in the fourth quarter and 19% overall in 2011. Now let’s take a quick look at the liquidity. At the end of the quarter, we had cash of $900 million and $6.6 billion principal amount in debt. QVC’s total debt to adjusted OIBDA ratio as defined in their credit facility was approximately 1.4 times as compared to a maximum allowable leverage of 3.5 times. From November 1 through January 31 of 2012, we repurchased six million shares of LINTA common stock at an average price of $16 with total cash consideration of $257 million. Now with that I will hand it over to Mike George for more in-depth comments on QVC.

Thank you, Chris. We were delighted with our results in Q4. Despite a difficult consumer spending environment we posted strong gains and adjusted OIBDA of 9% worldwide, sustained our track record of double-digit eCommerce growth, continued to grow our revenue from new customers at a faster rate than overall sales and significantly expanded our mobile business. The U.S. had a strong quarter with revenue up 4% and adjusted OIBDA up 10%. We were really pleased with the balanced product mix we saw in the quarter with solid growth in cook, kitchen and household, consumer electronics, beauty, jewelry, accessories and apparel. Shipping and handling revenue which you may recall was a challenge earlier in the year increased 8% as we made changes in our fee schedule to better align fees with our crew cost by product type. Our eCommerce penetration as Greg mentioned increased four points to 40% of revenue with December reaching a record 44% of revenue. So we think we’re on track to meet our stated goal of 50% eCommerce mix in the U.S. by 2014. Looking at these U.S. results, we believe our ability to meet or exceed at the same-store growth rates of traditional retailers, improve on our already strong OIBDA margins and avoid the heavy use of markdowns, pre-shipping and handling and other promotions that are now common place reflects the strength of our differentiated product mix and compelling content of high integrity pricing approach that offers great values everyday and outstanding customer service. Turning to Europe, the retail environment is clearly more challenging with low consumer confidence and decline in GDP growth along with foreign exchange rates have moved against us in Q4. However the impact for us is relatively contained since our European business represents only about 15% of our 2011 adjusted OIBDA. The…

Thank you, Mike. So QVC and our eCommerce companies had a strong finish in 2011 and we look forward to continued momentum into 2012. Our priorities remain mostly the same with the addition of completing the recapitalization of Liberty Interactive into the two tracking stock. At QVC, we’re focusing on differentiated product offering with compelling marketing and programming and expanding the business with new customers and new markets. We’re looking to continue to grow our eCommerce companies and capitalize on the continued success and we’ll focus on rationalizing the non-core investments particularly those at the newly established or to be established Liberty Ventures. We appreciate your continued interest in Liberty. Stay tuned. Thank you for listening and now I’d like to open it up to questions.

(Operator Instructions). And our first question is from Morgan Stanley, David Gober. David Gober – Morgan Stanley: Good morning, thanks for taking the questions. One for Greg and then a follow-up for Mike. For Greg, on the new ventures tracking stock obviously there is going to be a decent amount of capital there especially with the rates offering planned for after the separation. How do you think about uses of capital there, in terms of, you noted that there would be some investment in new investments. Will those be focused on any particular industry or is it a broader pool of capital to explore?

I don’t think we have going to contain ourselves with a particular focus. Obviously, most of Liberty’s experience is in TMT, so I think that’s probably where we’ll concentrate but that’s not just positive. What we are really saying is, is that Ventures has a much more wide open charter and Liberty Interactive has a very focused Charter and investors likely want to see the focus of those operating companies and the bat at Liberty Ventures is a little more broad. It’s about our ability to be smart in working through the tax issues, it’s about our ability to be smart and working through some of the non-consolidated investments in which we have instant control positions or potential control positions but not the ability to capitalize on them today, and our ability to reinvest smartly in things like the green deals that we cut and other areas. And it is a lot more uncertain about what that future is, but it’s a bet on our ability to be smart. David Gober – Morgan Stanley: Okay, that’s helpful. And for Mike, looking at the gross margins, particularly on the domestic business, clearly some strong improvement in the fourth quarter. Just curious what’s going on there? Is that all because of the shipping and handling adjustments made in the quarter or other product mix changes?

There were probably three or four things that drove the improvement in gross margins. I would start with initial product margins were very good so they were generally up across the board. So just the kind of mix of items we sold in the quarter had a positive impact on our initial product margins. We saw a lot of favorability in our warehouse productivity. I think the team did a really nice job of flexing our variable labor and we saw some improvements in warehouse productivity, which rolls up into gross margins. Our obsolescence, we saw an improvement in our obsolescence rate. That’s principally due to the fact that we were able to have a year-over-year reduction in Indian inventory. So inventories are very clean. And then final factor was shipping and handling, which also has a leverage impact on gross margins. So it was a combination of factors. David Gober – Morgan Stanley: Okay, thank you very much.

Let’s move on to Barton Crockett, Lazard Capital Markets. Barton Crockett – Lazard Capital Markets: Okay great, thank you for taking the question. First on the tracker separation here, can you give us a little bit more color on any sense of how much capital you had looked to be raising at Ventures and when you would look to do that. And is that purely the capital for capacity for investments or are there some other kind of liquidity constraints there? That’s my first question.

Well I think the only capital that we are anticipating raising is under the subscription rights which are going to be issued to each of the holders of Liberty Interactive at the time. So our anticipation is, we will have a reverse split just because of the relative low value on a per share basis likely at Liberty Ventures and that after that split we will issue a new subscription right. For every three shares you will get a subscription right which will entitle you to buy more Liberty Ventures at a 20% discount over the first 20 trading days. So that’s the only capital that we are anticipating. That amount of capital will be somewhat dependent on whether the op warrants get exercised or the subscription rights get exercised which I suspect will largely happen. And what is the trading price over those first 20 days because the math will dictate that. If it trades at a higher price we are going to raise more capital versus trades at a lower price. But if you think about that it’s going to be a few $100 million, just looking at the math and what it’s likely to be. You can run through some different numbers, if you had very high or very low numbers for the trading price of Ventures. We're just guessing. It's going to be in the hundreds of millions of dollars range, not more. And that's the only capital we are anticipating raising today. Barton Crockett – Lazard Capital Markets: Okay. And again this is more, nice to have for investments as opposed to need to have for liquidity.

The one thing I would note is that we are here to present to investors a clean Liberty Interactive. If you think about the nature of the tracking stocks and the fact that we are still under one indenture and both sides are liable for each others debt, one of the things that's important is to ensure a well capitalized Liberty Ventures to give the market confidence that it, Liberty Ventures, can handle the debt which has been attributed to it never would be calling upon Liberty Interactive to ever handle that debt. Even if that debt is many, many years down the road, you want to present it fully capitalized and strongly capitalized Liberty Ventures so that it is not a drag on Liberty Interactive. So that's the only other reason besides putting capital in for opportunities is to ensure strength that the balance sheet is not a drag. Barton Crockett – Lazard Capital Markets: Okay. And then one last question here. Your share repurchase volume at about 2% of your market cap I think over the last kind of period through January is, as you noted below the kind of 50% aspiration rate you noted in your Investor Day over three years. Should we read that as an indication of your real appetite for share repurchase that it is somewhat below the aspiration that you've put up there, or were you constrained in the quarter by all of the changes you are doing corporately, so we shouldn't really read too much into the pace?

Well, I'd say probably, one, as you noted that was aspirational. Two, we usually put in place a whole bunch of bans about where the stock trades and how much we buy at levels. And the stock moved up in some cases faster than we might have anticipated. And three, we were influenced by the thought that we were doing the trackers and that rather than be buying stock in a mix, some of it you're effectively buying back Expedia and you’re effectively buying back TRIP and you’re buying back the eCommerce companies. Here, we wanted to be able to say, okay, we now have clarity on whether we're buying back which and how we think they're priced. Barton Crockett – Lazard Capital Markets: Okay that’s great thank you.

I think one other point I would make Barton, is we did increase the authorization buyback at Liberty Interactive, which I think had dwindled down to about $300 million up to a new $1 billion level. So we clearly are making a statement about our willingness to buy and we did ramp over where we had been. So hopefully those are positive signs. Barton Crockett – Lazard Capital Markets: That’s good helpful. Thank you.

Thank you.

Moving on next to Stifel Nicolaus, Ben Mogil Ben Mogil – Stifel Nicolaus: Hi, thank you for taking the question. Mike, probably more for you, I know it's only sort of a six, seven weeks into the quarter, but can you talk a little bit about the trends that you're seeing on sort of across the board geographically, as well as for shipping and what's working and what sort of surprises by the way.

Well, in terms of current quarters results we never comment on our own performance in the quarter, I can make a couple of comments about that, but we’re seeing in the market overall, which all of you are seeing that. Clearly, the U.S. market feels a little bit better and January retail sales were probably okay for the industry. They weren't stellar, but there’s a little bit of sense of our consumer confidence with move up in employment rates and the stock market. So that said, we were also making that comment year ago at this time, so when never knows in the U.S. economy, but seems to be on a little bit of a better trend. I think the European economies going to be touch and go. And we think we can outrun that and grow through market share gain, but certainly looking at the situation in Europe, I’d say that remains the place of kind of greater uncertainty relative to the U.S. and perhaps relative to Japan. And our goal will just be obviously to continue to provide a differentiated offering and outgrow the market, even if the market is challenging. I mentioned when we put in place our new shipping and handling fee schedule, that once we implemented it, we did not see any change in the trajectory of our business. So we do believe, because our offerings are so distinct, that if we offer a fair price for shipping and handling. We can continue to do that and not be subject to the kind of pressures that most retailers are facing on that front. So, while we don't minimize that issue, it’s not as partially to [determine] for us as it is for many other players. Ben Mogil – Stifel Nicolaus: And we’re saying, and were some of the trends that you saw on eCommerce and mobile and digital that were obviously heightened in December because of the share volume. Do you see, and you seen those trends sort of continue into the quarter so far?

Yeah, we continue to be very happy with the performance of our eCommerce business. As you said, you can’t draw a straight line from Q4, partly providing reasons, but probably because of the mix of product categories that you sell in Q4 is more eCommerce-friendly. You got a higher mix of electronics and other items that tend to naturally have a high eCommerce mix. So I wouldn't look at it on a sequential basis, but in terms of year-over-year trends, we continue to feel good about the ramp in the mobile and eCommerce more broadly. Ben Mogil – Stifel Nicolaus: That’s great. Thanks for the color Mike, I appreciate it.

Yep.

Tom Forte, Telsey Advisory Group. Please go ahead. Thomas Forte – Telsey Advisory Group LLC: Great. Thanks very much. So the first question I had was do you feel like with these adjustments on shipping and handling pricing. And depending on where the consumers today. She is still buying the best of your good better best assortment, there we’re going to see a change as far as average selling prices unit sold, are we going to see a better balance there or are we going to still see improvements in average selling prices in pressure on units sold?

I think Tom, it's always hard to predict, so I think we kind of look forward on something like that because you never know what the consumer is going to gravitate towards. Having said that, I do think we're likely to continue to see average selling prices increase. We just see really good strength in the kind of better and best end of our assortments. It's the area where we can be most differentiated from the competition. It's a product that's unique. We can offer our biggest values. We can tell the story of the high-end blender better than anyone else can tell us. We think our business is just naturally gravitating towards higher price points and more differentiated product offerings. And that's not good or bad. In fact if shipping and handling is priced properly, which we now think it is then pure economics would say on balance you would probably prefer to have a rising ASP because that improves your productivity, since many of our costs are driven by units not by dollars. So we don't really look at it, again as a good or a bad. We just have to make sure the elements of the P&L are appropriately aligned, which I can say now are. So we are saying, probably continued growth in ASP, while not quite at the same rate we saw last year, but the consumer testifies it. Thomas Forte – Telsey Advisory Group LLC: And my second question is, where do you stand today on the timing of QVCs potential expansion into China and France?

We continue to work hard on both markets. No new news to talk about today, but as we have discussed, we are interested in both markets, have been in active dialogue in both markets and are continuing to look at other markets as well. And I would certainly hope over the course of the next several months we'd have some definitive news on that front. But everything is a process and can't give any certainty in that timing. But I think it's likely over the next several months that we'll have some news on that front. Thomas Forte – Telsey Advisory Group LLC: Great, thank you very much.

Thanks.

Okay, now let's go to Wunderlich Securities, Matthew Harrigan. Matthew Harrigan – Wunderlich Securities: Thank you. First of all, as you morph yourself yet again, are there any restrictions on your repurchase activity moving toward this early summer in the close. And then for Mike, when you look at 3.1 million in new customers, would you have been down slightly if it wasn’t for the activity in Italy? Can you talk about your customer retention, your spending trends on your established customers? I think you said the new customer sales were up about 14%. And I guess as A recasts itself and I guess becomes even hipper if that's possible in terms of the customers, are you seeing even more evolution in the product categories you are trying to emphasize balancing the bar bell of the new customers and the established homes are little bit more I guess (inaudible) in terms of the what they are like?

So I'll take the first one. We don't anticipate that our actions regarding the trackers are going to limit our repurchase activity. Matthew Harrigan – Wunderlich Securities: Okay.

Mike, do you want to talk about the [hipness] trend for QVC?

I would love to. So just on the first part of your question Matthew, on the math of it, we would not have been down in either new customer count or new customer revenue if we normalize for Italy. I can't do that math immediately for you, but just looking high level at the numbers, the Italy numbers just aren't big enough to have materially changed what I laid out for you. I do think we continue to feel good about our revenue growth from customers across most markets. Not every market is up and it tends to ebb and flow a bit, but as a broad statement, normalizing for Italy, we are seeing solid results there and have been now for two or three years. And I just think, as we’ve talked in the past, all the initiatives we are pursuing we see as giving us gains, both with existing customers and new customers. So part of it is this platform expansion being available in more places. eCommerce new customers are younger than TV new customers, mobile customers are younger than eCommerce new customers. We have a disproportionate share of new customers coming in through various forms of eCommerce. That’s part of it, both in businesses like beauty has driven in a younger customer and a lot of the things we do to create buzz and publicity, including our Oscars event tonight. I think all of that's a broader range of customers. So we continue to feel good about how our brand is being positioned and feel like we continue to sort of broaden the relevance of the brand across all age groups. One of the things I've shared in the past is that the average age of our new customer is slightly younger than the average age of adult female population. I don’t know if that trend will accelerate, but we think we will see it continue. Matthew Harrigan – Wunderlich Securities: So you feel your retention rate is built on 85%, 86% and you're basically flat to slightly up on the established customer?

Yes. For the full year, we were up, I think we were up a few points with established customer spending up obviously more with new names. But we’ve seen established customer spend kind of grow low single-digit sort of the 3% to 4% range which fills us, like a reasonably healthy level. So in the U.S. as an example year-to-date for full year 2011, existing customers were up about 3.5% in spend, new customers up about 13%. But we like that balance for a total of about 4.5%. We think that’s a pretty healthy balance. Matthew Harrigan – Wunderlich Securities: And I'm sorry to badger you, but the retention rate is still you’re inferring 85, 86 more or less.

Yes. The retention rate doesn’t seem to budge so it is spot on, hasn’t changed at all. Matthew Harrigan – Wunderlich Securities: Great quarter. Congratulations.

Thank you, Matt.

And ladies and gentlemen, our final question of the day will come from Citi’s Jason Bazinet. Jason Bazinet – Citigroup: Just had a couple of questions on the Liberty Ventures, can you remind us in sort of $20, $30 or whenever those exchangables come due what the amount is that you’ll owe to IRS, at sort of that point in time and how easy will it be to sort of get corresponding tax assets via theses green energy investments or other actions you take? Is it sort of easy to do, is it a stretch? And then one final one, I think in the release you said you are going to put a $1.25 million of cash on top of whatever capital you raise as it release the subscription rate. Where is that cash coming from given the cash that sits on balance sheet? Are you trying down more on your bank line? Thanks.

Yeah, so starting with the future liability is about $5.4 billion. Jason Bazinet – Citigroup: Okay

Now at 29, 30, 31, now what’s going to leaving about that for sit in today is our current liability is about something like $1.3 billion. So there is a lot of benefit to be generated between now and 2029. So to sit there and think about the $5.4 billion without looking to fact that it only sits today at $1.3 billion, $1.3 billion which is a undiscounted $1.3 billion, right. Jason Bazinet – Citigroup: Correct.

1.3 it’s, we cut it off now, we’ve never got another credit, it will $1.3 billion due over that time 29, 30, 31. We’re now talking about in those cases it’s going to be $5.4 billion. So there is another 4 plus billion to be generated a benefit. Jason Bazinet – Citigroup: Understood.

So that’s theoretically money that we will lot invest lively between now and then. Jason Bazinet – Citigroup: Okay.

Some of that will go into these green investments. We have found some and as a mass exercise that you might find in enjoyable, Jason, as I know you're a numerical type fellow, take a discount rate and say what you have to invest some of the cash you’re going to get at to [see] that $5.4 billion. It’s a fairly low number given how much benefit is coming. And we’d like to think we will be able to beat that fairly low number on the rates of return. On the green deals that we’ve done today, I believe we will beat that number substantially. I mean by margins that are fairly large. Whether we we’ll also be able to find other kinds of attractive investments, we are hopeful. There are – given that very low hurdle rate against, which we have to target to be given how much benefits going to be generate versus how much liability we have today, it’s not (inaudible) I think we’ll be able to exceed that and create equity value and I think our Chairman once add a thought.

Yeah. The only thought I would make is if you would liquidate ventures today and pay all the taxes, it would have a very little equity value. So the entirety of the value is essentially going forward based upon the ability to generate returns going forward based upon the tax incentive, if you want to call our tax advantage liabilities that we have, and the low interest rate on them and their duration. But you’re kind of looking at a 19 or 20 year liability at a low interest rate, tax advantage and a cumulative borrowing from the IRS at zero interest rate for 20 years. That creates the equity value if there is any going forward and creates the challenge. You clearly are starting right with sufficient capital that you could liquidate the whole thing and have a positive residual…

A small… Jason Bazinet – Citigroup: Positive residual. So clearly the objective is not to do that, but rather to take advantage of the balance between assets and liabilities and the ability to reinvest deferred tax liabilities favorably. So because of big exercise and the present value of future assets and liabilities and the skill set of being able to more the assets and create new assets that have favorable present values of – an adjusted for the liquidation value.

Thanks. So if I was to look at another way, when we look at the balance sheet of Liberty ventures, it will show as John noted very little, positive, net equity value. If you would hard liquidate today. But that will ignore that our ability to defer many of the taxes, we already talked about the once related to these exchange will not coming [to] ‘29, ‘30, ‘31 and it will ignore the fact that some of that gains, capital gains that we can chose once take or not and it will ignore the fact that an asset, which will never really be on the balance sheet, but which will have growth over time is the future detections in excess of cash paid and in effect as John noted that interest-free loan from the government. So that will be the exercise for us to kind of talk to the marketplace and educate and that will be the marketplace for us to invest license. Jason Bazinet – Citigroup: Makes perfect sense and the $1.25 billion of cash.

Yeah. The $1.25 billion of cash is going to come from some cash that is excess Liberty interactive some cash that is excess of QVC, some cash that will be generated by QVC and eCommerce companies, but primarily by QVC between now and the time that we complete the Liberty Ventures transaction. And the balance will be drawn on the Liberty interactive for the QVC credit line, which we had something like 400 drawn today of $2 billion so there's plenty of room available to draw. And I think in the release we said we’re anticipating something like $1.3 billion incremental draw on that, but we’ll see it will move some (inaudible). Jason Bazinet – Citigroup: Okay, very helpful. Thank you.

Ladies and gentlemen, once again that concludes our question-and-answer session. I’ll turn the conference back to Liberty Media Corporation for any closing remarks.

Well, I want to thank you. We are trying to keep it interesting and hopefully value creating for all of our investors. And I appreciate your interest in the company, and look forward to speaking you to next quarter if not sooner.

And again we conclude our conference call for today. Thank you all for your participation.