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Exhibit 99.1


Unaudited Attributed Financial Information for Tracking Stock Groups

        On May 9, 2006, we completed a restructuring and recapitalization pursuant to which we issued two new tracking stocks, one ("Liberty Interactive Stock") intended to reflect the separate performance of our businesses engaged in video and on-line commerce, including our subsidiaries, QVC, Inc., Provide Commerce, Inc., BuySeasons, Inc., Backcountry.com, Inc. and Bodybuilding.com. LLC and our interests in IAC/InterActiveCorp and Expedia, Inc., the second ("Liberty Capital Stock") intended to reflect the separate performance of all of our assets and businesses not attributed to the Interactive Group. Each share of our existing Series A and Series B common stock was exchanged for .25 of a share of the same series of Liberty Interactive Stock and .05 of a share of the same series of Liberty Capital Stock.

        The following tables present our assets, liabilities, revenue, expenses and cash flows as of and for the years ended December 31, 2007, 2006 and 2005. The tables further present our assets, liabilities, revenue, expenses and cash flows that are attributed to the Interactive Group and the Capital Group, respectively. The financial information should be read in conjunction with our audited financial statements for the years ended December 31, 2007, 2006 and 2005 included in this Annual Report on Form 10-K. The attributed financial information presented in the tables has been prepared assuming the restructuring had been completed as of January 1, 2005.

        Notwithstanding the following attribution of assets, liabilities, revenue, expenses and cash flows to the Interactive Group and the Capital Group, the restructuring does not affect the ownership or the respective legal title to our assets or responsibility for our liabilities. We and our subsidiaries each continue to be responsible for our respective liabilities. Holders of Liberty Interactive Stock and Liberty Capital Stock are holders of our common stock and continue to be subject to risks associated with an investment in our company and all of our businesses, assets and liabilities. The issuance of Liberty Interactive Stock and Liberty Capital Stock does not affect the rights of our creditors.

1

SUMMARY ATTRIBUTED FINANCIAL DATA

Interactive Group

 
   December 31,
 
   2007
   2006
   2005
 
   amounts in millions
Summary Balance Sheet Data:              
Current assets   $ 2,921   2,984   2,729
Cost investments   $ 2,044   2,572   2,084
Equity investments   $ 1,311   1,358   1,229
Total assets   $ 19,326   19,820   18,351
Long-term debt, including current portion   $ 7,177   6,383   5,327
Deferred income tax liabilities, noncurrent   $ 2,670   3,115   3,104
Attributed net assts   $ 7,530   8,561   8,231
 
 
   Years ended December 31,
  
 
   2007
   2006
   2005
  
 
   amounts in millions

  
Summary Operations Data:                
Revenue   $ 7,802   7,326   6,501  
Cost of goods sold     (4,921 ) (4,565 ) (4,112 )
Operating expenses     (638 ) (596 ) (570 )
Selling, general and administrative expenses(1)     (594 ) (544 ) (454 )
Depreciation and amortization     (536 ) (491 ) (449 )
   
 
 
 
    Operating income     1,113   1,130   916  

Interest expense
 
 
(465
)
(417
)
(374
)
Other income, net     128   130   29  
Income tax expense     (306 ) (210 ) (225 )
Minority interests in earnings of subsidiaries     (29 ) (35 ) (48 )
   
 
 
 
  Earnings before cumulative effect of accounting change     441   598   298  
Cumulative effect of accounting change, net of taxes     —   (87 ) —  
   
 
 
 
    Net earnings   $ 441   511   298  
   
 
 
 
(1)
Includes stock-based compensation of $35 million, $59 million and $52 million for the years ended December 31, 2007, 2006 and 2005, respectively.

2

SUMMARY ATTRIBUTED FINANCIAL DATA

Capital Group

 
   December 31,
 
   2007
   2006
   2005
 
   amounts in millions
Summary Balance Sheet Data:              
Current assets   $ 3,552   3,776   2,984
Cost investments   $ 15,525   19,050   16,405
Equity investments   $ 506   484   679
Total assets   $ 26,487   27,849   23,750
Long-term debt, including current portion   $ 4,538   2,640   2,422
Deferred income tax liabilities, noncurrent   $ 5,788   6,669   5,592
Attributed net assets   $ 12,056   13,072   10,889
 
 
   Years ended December 31,
  
 
   2007
   2006
   2005
  
 
   amounts in millions

  
Summary Operations Data:                
Revenue   $ 1,621   1,287   1,145  
Operating expenses     (1,205 ) (930 ) (827 )
Selling, general and administrative expenses(1)     (429 ) (262 ) (194 )
Depreciation and amortization     (139 ) (91 ) (96 )
Impairment of long-lived assets     (223 ) (113 ) —  
   
 
 
 
    Operating income (loss)     (375 ) (109 ) 28  

Interest expense
 
 
(176
)
(263
)
(252
)
Realized and unrealized gains (losses) on derivative instruments, net     1,275   (299 ) 274  
Gain (losses) on dispositions, net     634   607   (401 )
Other than temporary declines in fair value of investments     (33 ) (4 ) (449 )
Other income, net     220   213   111  
Income tax benefit (expense)     (15 ) (42 ) 351  
Minority interests in losses (earnings) of subsidiaries     (6 ) 8   (3 )
   
 
 
 
  Earnings (loss) from continuing operations     1,524   111   (341 )
Earnings (loss) from discontinued operations, net of taxes     149   220   10  
Cumulative effect of accounting change, net of taxes     —   (2 ) —  
   
 
 
 
    Net earnings (loss)   $ 1,673   329   (331 )
   
 
 
 
(1)
Includes stock-based compensation of $58 million, $8 million and zero for the years ended December 31, 2007, 2006 and 2005, respectively.

3

BALANCE SHEET INFORMATION
December 31, 2007
(unaudited)

 
   Attributed (note 1)
    
    
 
   Interactive
Group
   Capital
Group
   Eliminations
   Consolidated
Liberty
 
   amounts in millions
Assets                  
Current assets:                  
  Cash and cash equivalents   $ 557   2,578   —   3,135
  Trade and other receivables, net     1,179   338   —   1,517
  Inventory, net     975   —   —   975
  Program rights     —   515   —   515
  Current deferred tax assets     149   —   (149 ) —
  Other current assets     61   121   (15 ) 167
   
 
 
 
    Total current assets     2,921   3,552   (164 ) 6,309
   
 
 
 
Investments in available-for-sale securities and other cost investments     2,044   15,525   —   17,569
Investments in affiliates, accounted for using the equity method     1,311   506   —   1,817
Investment in special purpose entity     —   750   —   750
Property and equipment, net     1,074   277   —   1,351
Goodwill     5,928   1,927   —   7,855
Trademarks     2,489   26   —   2,515
Other non-amortizable intangibles     —   173   —   173
Intangible assets subject to amortization, net     3,502   361   —   3,863
Other assets, at cost, net of accumulated amortization     57   3,390   —   3,447
   
 
 
 
    Total assets   $ 19,326   26,487   (164 ) 45,649
   
 
 
 
Liabilities and Equity                  
Current liabilities:                  
  Accounts payable   $ 571   34   —   605
  Accrued interest     100   48   —   148
  Other accrued liabilities     644   292   —   936
  Intergroup payable/receivable     95   (95 ) —   —
  Current portion of debt (note 2)     13   178   —   191
  Accrued stock compensation     20   187   —   207
  Current deferred tax liabilities     —   242   (149 ) 93
  Other current liabilities     62   1,247   (15 ) 1,294
   
 
 
 
    Total current liabilities     1,505   2,133   (164 ) 3,474
   
 
 
 
Long-term debt (note 2)     7,164   4,360   —   11,524
Deferred income tax liabilities (note 5)     2,670   5,788   —   8,458
Other liabilities     350   1,391   —   1,741
   
 
 
 
    Total liabilities     11,689   13,672   (164 ) 25,197
Minority interests in equity of subsidiaries     107   759   —   866
Equity/Attributed net assets     7,530   12,056   —   19,586
   
 
 
 
    Total liabilities and equity   $ 19,326   26,487   (164 ) 45,649
   
 
 
 

4

BALANCE SHEET INFORMATION
December 31, 2006
(unaudited)

 
   Attributed (note 1)
    
    
 
   Interactive
Group
   Capital
Group
   Eliminations
   Consolidated
Liberty
 
   amounts in millions
Assets                  
Current assets:                  
  Cash and cash equivalents   $ 946   2,161   —   3,107
  Trade and other receivables, net     977   299   —   1,276
  Inventory, net     831   —   —   831
  Program rights     —   531   —   531
  Current deferred tax assets     159   —   (31 ) 128
  Other current assets     71   273   —   344
  Assets of discontinued operations     —   512   —   512
   
 
 
 
    Total current assets     2,984   3,776   (31 ) 6,729
   
 
 
 
Investments in available-for-sale securities and other cost investments     2,572   19,050   —   21,622
Investments in affiliates, accounted for using the equity method     1,358   484   —   1,842
Property and equipment, net     912   234   —   1,146
Goodwill     5,755   1,833   —   7,588
Trademarks     2,450   21   —   2,471
Intangible assets subject to amortization, net     3,756   154   —   3,910
Other assets, at cost, net of accumulated amortization     33   2,297   —   2,330
   
 
 
 
    Total assets   $ 19,820   27,849   (31 ) 47,638
   
 
 
 
Liabilities and Equity                  
Current liabilities:                  
  Accounts payable   $ 475   33   —   508
  Accrued interest     136   78   —   214
  Other accrued liabilities     637   238   —   875
  Intergroup payable/receivable     81   (81 ) —   —
  Current portion of debt (note 2)     11   103   —   114
  Accrued stock compensation     26   134   —   160
  Current deferred tax liabilities     —   31   (31 ) —
  Other current liabilities     91   1,506   —   1,597
  Liabilities of discontinued operations     —   101   —   101
   
 
 
 
    Total current liabilities     1,457   2,143   (31 ) 3,569
   
 
 
 
Long-term debt (note 2)     6,372   2,537   —   8,909
Deferred income tax liabilities (note 5)     3,057   6,604   —   9,661
Other liabilities     277   3,299   —   3,576
   
 
 
 
    Total liabilities     11,163   14,583   (31 ) 25,715
Minority interests in equity of subsidiaries     96   194   —   290
Equity/Attributed net assets     8,561   13,072   —   21,633
   
 
 
 
    Total liabilities and equity   $ 19,820   27,849   (31 ) 47,638
   
 
 
 

5

STATEMENT OF OPERATIONS AND COMPREHENSIVE EARNINGS INFORMATION
Year ended December 31, 2007
(unaudited)

 
   Attributed (note 1)
    
  
 
   Interactive
Group
   Capital
Group
   Consolidated
Liberty
  
 
   amounts in millions

  
Revenue:                
  Net retail sales   $ 7,802   —   7,802  
  Communications and programming services     —   1,621   1,621  
   
 
 
 
      7,802   1,621   9,423  
   
 
 
 
Operating costs and expenses:                
  Cost of sales     4,921   —   4,921  
  Operating     638   1,205   1,843  
  Selling, general and administrative (including stock-based compensation of $35 million and $58 million for Interactive Group and Capital Group, respectively) (notes 3 and 4)     594   429   1,023  
  Depreciation and amortization     536   139   675  
  Impairment of long-lived assets     —   223   223  
   
 
 
 
      6,689   1,996   8,685  
   
 
 
 
    Operating income (loss)     1,113   (375 ) 738  

Other income (expense):
 
 
 
 
 
 
 
 
  Interest expense     (465 ) (176 ) (641 )
  Dividend and interest income     44   277   321  
  Share of earnings (losses) of affiliates, net     77   (55 ) 22  
  Realized and unrealized gains (losses) on financial instruments, net     (6 ) 1,275   1,269  
  Gains on dispositions of assets, net     12   634   646  
  Other than temporary declines in fair value of investments     —   (33 ) (33 )
  Other, net     1   (2 ) (1 )
   
 
 
 
      (337 ) 1,920   1,583  
   
 
 
 
    Earnings from continuing operations before income taxes and minority interests     776   1,545   2,321  
Income tax expense (note 5)     (306 ) (15 ) (321 )
Minority interests in earnings of subsidiaries     (29 ) (6 ) (35 )
   
 
 
 
    Earnings from continuing operations     441   1,524   1,965  
Earnings from discontinued operations, net of taxes     —   149   149  
   
 
 
 
    Net earnings   $ 441   1,673   2,114  
   
 
 
 
Other comprehensive earnings (loss), net of taxes:                
  Foreign currency translation adjustments     99   8   107  
  Unrealized holding losses arising during the period     (440 ) (1,171 ) (1,611 )
  Recognition of previously unrealized gains on available-for-sale securities, net     —   (375 ) (375 )
   
 
 
 
  Other comprehensive loss     (341 ) (1,538 ) (1,879 )
   
 
 
 
Comprehensive earnings   $ 100   135   235  
   
 
 
 

6

STATEMENT OF OPERATIONS AND COMPREHENSIVE EARNINGS INFORMATION
Year ended December 31, 2006
(unaudited)

 
   Attributed (note 1)
    
  
 
   Interactive
Group
   Capital
Group
   Consolidated
Liberty
  
 
   amounts in millions

  
Revenue:                
  Net retail sales   $ 7,326   —   7,326  
  Communications and programming services     —   1,287   1,287  
   
 
 
 
      7,326   1,287   8,613  
   
 
 
 
Operating costs and expenses:                
  Cost of sales     4,565   —   4,565  
  Operating     596   930   1,526  
  Selling, general and administrative (including stock-based compensation of $59 million and $8 million for Interactive Group and Capital Group, respectively) (notes 3 and 4)     544   262   806  
  Depreciation and amortization     491   91   582  
  Impairment of long-lived assets     —   113   113  
   
 
 
 
      6,196   1,396   7,592  
   
 
 
 
    Operating income (loss)     1,130   (109 ) 1,021  

Other income (expense):
 
 
 
 
 
 
 
 
  Interest expense     (417 ) (263 ) (680 )
  Dividend and interest income     40   174   214  
  Share of earnings of affiliates, net     47   44   91  
  Realized and unrealized gains (losses) on financial instruments, net     20   (299 ) (279 )
  Gains on dispositions of assets, net     —   607   607  
  Other than temporary declines in fair value of investments     —   (4 ) (4 )
  Other, net     23   (5 ) 18  
   
 
 
 
      (287 ) 254   (33 )
   
 
 
 
    Earnings from continuing operations before income taxes and minority interests     843   145   988  
Income tax expense (note 5)     (210 ) (42 ) (252 )
Minority interests in losses (earnings) of subsidiaries     (35 ) 8   (27 )
   
 
 
 
    Earnings from continuing operations     598   111   709  
Earnings from discontinued operations, net of taxes     —   220   220  
Cumulative effect of accounting change, net of taxes     (87 ) (2 ) (89 )
   
 
 
 
    Net earnings   $ 511   329   840  
   
 
 
 
Other comprehensive earnings (loss), net of taxes:                
  Foreign currency translation adjustments     109   2   111  
  Unrealized holding gains arising during the period     351   2,254   2,605  
  Recognition of previously unrealized gains on available-for-sale securities, net     —   (185 ) (185 )
   
 
 
 
  Other comprehensive earnings     460   2,071   2,531  
   
 
 
 
Comprehensive earnings   $ 971   2,400   3,371  
   
 
 
 

7

STATEMENT OF OPERATIONS AND COMPREHENSIVE EARNINGS INFORMATION
Year ended December 31, 2005
(unaudited)

 
   Attributed (note 1)
    
  
 
   Interactive Group
   Capital Group
   Consolidated Liberty
  
 
   amounts in millions

  
Revenue:                
  Net retail sales   $ 6,501   —   6,501  
  Communications and programming services     —   1,145   1,145  
   
 
 
 
      6,501   1,145   7,646  
   
 
 
 
Operating costs and expenses:                
  Cost of sales     4,112   —   4,112  
  Operating     570   827   1,397  
  Selling, general and administrative (including stock-based compensation of $52 million and $0 for Interactive Group and Capital Group, respectively) (notes 3 and 4)     454   194   648  
  Depreciation and amortization     449   96   545  
   
 
 
 
      5,585   1,117   6,702  
   
 
 
 
    Operating income     916   28   944  
Other income (expense):                
 
Interest expense
 
 
(374
)
(252
)
(626
)
  Dividend and interest income     35   108   143  
  Share of earnings of affiliates, net     9   4   13  
  Realized and unrealized gains (losses) on financial instruments, net     (17 ) 274   257  
  Gains (losses) on dispositions of assets, net     40   (401 ) (361 )
  Other than temporary declines in fair value of investments     —   (449 ) (449 )
  Other, net     (38 ) (1 ) (39 )
   
 
 
 
      (345 ) (717 ) (1,062 )
   
 
 
 
    Earnings (loss) from continuing operations before income taxes and minority interests     571   (689 ) (118 )
Income tax benefit (expense) (note 5)     (225 ) 351   126  
Minority interests in earnings of subsidiaries     (48 ) (3 ) (51 )
   
 
 
 
    Earnings (loss) from continuing operations     298   (341 ) (43 )
Earnings from discontinued operations, net of taxes     —   10   10  
   
 
 
 
    Net earnings (loss)   $ 298   (331 ) (33 )
   
 
 
 
Other comprehensive earnings (loss), net of taxes:                
  Foreign currency translation adjustments     (5 ) —   (5 )
  Recognition of previously unrealized foreign currency translation losses     —   312   312  
  Unrealized holding losses arising during the period     (160 ) (961 ) (1,121 )
  Recognition of previously unrealized losses (gains) on available-for-sale securities, net     (13 ) 230   217  
  Reclass unrealized gain on available-for-sale security to equity method investment     (197 ) —   (197 )
  Other comprehensive loss from discontinued operations     —   (7 ) (7 )
   
 
 
 
  Other comprehensive loss     (375 ) (426 ) (801 )
   
 
 
 
Comprehensive loss   $ (77 ) (757 ) (834 )
   
 
 
 

8

STATEMENT OF CASH FLOWS INFORMATION
Year ended December 31, 2007
(unaudited)

 
   Attributed (note 1)
    
  
 
   Interactive
Group
   Capital
Group
   Consolidated
Liberty
  
 
   amounts in millions

  
Cash flows from operating activities:                
  Net earnings   $ 441   1,673   2,114  
  Adjustments to reconcile net earnings to net cash provided by operating activities:                
    Earnings from discontinued operations     —   (149 ) (149 )
    Depreciation and amortization     536   139   675  
    Impairment of long-lived assets     —   223   223  
    Stock-based compensation     35   58   93  
    Cash payments for stock-based compensation     (37 ) (3 ) (40 )
    Noncash interest expense     4   5   9  
    Share of earnings of affiliates, net     (77 ) 55   (22 )
    Realized and unrealized losses (gains) on financial instruments, net     6   (1,275 ) (1,269 )
    Gains on disposition of assets, net     (12 ) (634 ) (646 )
    Other than temporary declines in fair value of investments     —   33   33  
    Minority interests in earnings (losses) of subsidiaries     29   6   35  
    Deferred income tax benefit     (128 ) 248   120  
    Other noncash charges (credits), net     (1 ) 142   141  
    Intergroup tax allocation     278   (278 ) —  
    Intergroup tax payments     (321 ) 321   —  
    Other intergroup cash transfers, net     54   (54 ) —  
    Changes in operating assets and liabilities, net of the effects of acquisitions:                
      Current assets     (290 ) (146 ) (436 )
      Payables and other current liabilities     87   190   277  
   
 
 
 
        Net cash provided by operating activities     604   554   1,158  
   
 
 
 
Cash flows from investing activities:                
  Cash proceeds from dispositions     12   483   495  
  Net proceeds from settlement of derivatives     —   75   75  
  Cash received in exchange transactions     —   1,154   1,154  
  Cash paid for acquisitions, net of cash acquired     (236 ) (112 ) (348 )
  Investment in special purpose entity     —   (750 ) (750 )
  Capital expenditures     (289 ) (27 ) (316 )
  Net sales of short term investments     —   34   34  
  Net increase in restricted stock     —   (882 ) (882 )
  Other investing activities, net     (74 ) (121 ) (195 )
   
 
 
 
        Net cash used by investing activities     (587 ) (146 ) (733 )
   
 
 
 
Cash flows from financing activities:                
  Borrowings of debt     1,112   757   1,869  
  Repayments of debt     (332 ) (166 ) (498 )
  Repurchases of Liberty common stock     (1,224 ) (1,305 ) (2,529 )
  Contribution from minority owner     —   751   751  
  Other financing activities, net     28   (27 ) 1  
   
 
 
 
        Net cash provided (used) by financing activities     (416 ) 10   (406 )
   
 
 
 
Effect of foreign currency rates on cash     10   (2 ) 8  
   
 
 
 
Net cash provided by discontinued operations:                
  Cash provided by operating activities     —   8   8  
  Cash used by investing activities     —   (9 ) (9 )
  Cash provided by financing activities     —   —   —  
  Change in available cash held by discontinued operations     —   2   2  
   
 
 
 
        Net cash provided by discontinued operations     —   1   1  
   
 
 
 
        Net increase (decrease) in cash and cash equivalents     (389 ) 417   28  
        Cash and cash equivalents at beginning of year     946   2,161   3,107  
   
 
 
 
        Cash and cash equivalents at end of year   $ 557   2,578   3,135  
   
 
 
 

9

STATEMENT OF CASH FLOWS INFORMATION
Year ended December 31, 2006
(unaudited)

 
   Attributed (note 1)
    
  
 
   Interactive
Group
   Capital
Group
   Consolidated
Liberty
  
 
   amounts in millions

  
Cash flows from operating activities:                
  Net earnings   $ 511   329   840  
  Adjustments to reconcile net earnings to net cash provided by operating activities:                
    Earnings from discontinued operations     —   (220 ) (220 )
    Cumulative effect of accounting change     87   2   89  
    Depreciation and amortization     491   91   582  
    Impairment of long-lived assets     —   113   113  
    Stock-based compensation     59   8   67  
    Cash payments for stock-based compensation     (111 ) (4 ) (115 )
    Noncash interest expense     4   104   108  
    Share of earnings of affiliates, net     (47 ) (44 ) (91 )
    Realized and unrealized losses (gains) on financial instruments, net     (20 ) 299   279  
    Gains on disposition of assets, net     —   (607 ) (607 )
    Other than temporary declines in fair value of investments     —   4   4  
    Minority interests in earnings (losses) of subsidiaries     35   (8 ) 27  
    Deferred income tax benefit     (262 ) (203 ) (465 )
    Other noncash charges (credits), net     (13 ) 57   44  
    Changes in operating assets and liabilities, net of the effects of acquisitions:                
      Current assets     (219 ) (83 ) (302 )
      Payables and other current liabilities     38   622   660  
   
 
 
 
        Net cash provided by operating activities     553   460   1,013  
   
 
 
 
Cash flows from investing activities:                
  Cash proceeds from dispositions     —   1,322   1,322  
  Premium proceeds (payments) from origination of derivatives     (5 ) 64   59  
  Net proceeds from settlement of derivatives     —   101   101  
  Cash paid for acquisitions, net of cash acquired     (767 ) (440 ) (1,207 )
  Capital expenditures     (259 ) (19 ) (278 )
  Net sales of short term investments     23   264   287  
  Other investing activities, net     (8 ) (161 ) (169 )
   
 
 
 
        Net cash provided (used) by investing activities     (1,016 ) 1,131   115  
   
 
 
 
Cash flows from financing activities:                
  Borrowings of debt     3,227   2   3,229  
  Repayments of debt     (2,188 ) (3 ) (2,191 )
  Intergroup cash transfers, net     293   (293 ) —  
  Repurchases of Liberty common stock     (954 ) —   (954 )
  Other financing activities, net     68   (88 ) (20 )
   
 
 
 
        Net cash provided (used) by financing activities     446   (382 ) 64  
   
 
 
 
Effect of foreign currency rates on cash     18   —   18  
   
 
 
 
Net cash provided by discontinued operations:                
  Cash provided by operating activities     —   62   62  
  Cash used by investing activities     —   (67 ) (67 )
  Cash provided by financing activities     —   6   6  
  Change in available cash held by discontinued operations     —   —   —  
   
 
 
 
        Net cash provided by discontinued operations     —   1   1  
   
 
 
 
        Net increase in cash and cash equivalents     1   1,210   1,211  
        Cash and cash equivalents at beginning of year     945   951   1,896  
   
 
 
 
        Cash and cash equivalents at end of year   $ 946   2,161   3,107  
   
 
 
 

10

STATEMENT OF CASH FLOWS INFORMATION
Year ended December 31, 2005
(unaudited)

 
   Attributed (note 1)
    
  
 
   Interactive
Group
   Capital
Group
   Consolidated
Liberty
  
 
   amounts in millions

  
Cash flows from operating activities:                
  Net earnings (loss)   $ 298   (331 ) (33 )
  Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:                
    Earnings from discontinued operations     —   (10 ) (10 )
    Depreciation and amortization     449   96   545  
    Stock-based compensation     52   —   52  
    Cash payments for stock-based compensation     —   (103 ) (103 )
    Noncash interest expense     3   98   101  
    Share of earnings of affiliates, net     (9 ) (4 ) (13 )
    Realized and unrealized losses (gains) on financial instruments, net     17   (274 ) (257 )
    Losses (gains) on disposition of assets, net     (40 ) 401   361  
    Other than temporary declines in fair value of investments     —   449   449  
    Minority interests in earnings of subsidiaries     48   3   51  
    Deferred income tax benefit     (188 ) (201 ) (389 )
    Other noncash charges, net     38   3   41  
    Changes in operating assets and liabilities, net of the effects of acquisitions:                
      Current assets     (162 ) (13 ) (175 )
      Payables and other current liabilities     248   198   446  
   
 
 
 
        Net cash provided by operating activities     754   312   1,066  
   
 
 
 
Cash flows from investing activities:                
  Cash proceeds from dispositions     1   48   49  
  Premium proceeds from origination of derivatives     —   473   473  
  Net proceeds from settlement of derivatives     —   461   461  
  Capital expenditures     (153 ) (15 ) (168 )
  Net purchases of short term investments     —   (85 ) (85 )
  Cash paid for acquisitions, net of cash acquired     (85 ) (11 ) (96 )
  Other investing activities, net     (19 ) (12 ) (31 )
   
 
 
 
        Net cash provided (used) by investing activities     (256 ) 859   603  
   
 
 
 
Cash flows from financing activities:                
  Borrowings of debt     800   61   861  
  Repayments of debt     (1,734 ) (67 ) (1,801 )
  Intergroup cash transfers, net     548   (548 ) —  
  Other financing activities, net     23   66   89  
   
 
 
 
        Net cash used by financing activities     (363 ) (488 ) (851 )
   
 
 
 
Effect of foreign currency rates on cash     (45 ) —   (45 )
   
 
 
 
Net cash provided to discontinued operations:                
  Cash provided by operating activities     —   75   75  
  Cash used by investing activities     —   (110 ) (110 )
  Cash provided by financing activities     —   11   11  
  Change in available cash held by discontinued operations     —   (177 ) (177 )
   
 
 
 
        Net cash provided to discontinued operations     —   (201 ) (201 )
   
 
 
 
        Net increase in cash and cash equivalents     90   482   572  
        Cash and cash equivalents at beginning of year     855   469   1,324  
   
 
 
 
        Cash and cash equivalents at end of year   $ 945   951   1,896  
   
 
 
 

11


Notes to Attributed Financial Information

(unaudited)

(1)
The assets attributed to our Interactive Group as of December 31, 2007 include our 100% interests in QVC, Inc., Provide Commerce, Inc., BuySeasons, Inc., Backcountry.com, Inc. and Bodybuilding.com, LLC, and our ownership interests in IAC/InterActiveCorp, Expedia and GSI Commerce, Inc. Accordingly, the accompanying attributed financial information for the Interactive Group includes our investments in IAC/InterActiveCorp, Expedia and GSI, as well as the assets, liabilities, revenue, expenses and cash flows of QVC, Provide, BuySeasons, Backcountry and Bodybuilding. 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 Capital Group are described in note 2 below. In addition, we have allocated certain corporate general and administrative expenses between the Interactive Group and the Capital Group as described in note 3 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 Capital Group consists of all of our businesses not included in the Interactive Group, including our consolidated subsidiaries Starz Entertainment, LLC, Starz Media, LLC, Atlanta National League Baseball Club, Inc., FUN Technologies, Inc., TruePosition, Inc., Leisure Arts, Inc., and Liberty TS, Inc., and our cost and equity investments in GSN, LLC, WildBlue Communications, Inc. and others. Accordingly, the accompanying attributed financial information for the Capital Group includes these investments and the assets, liabilities, revenue, expenses and cash flows of these consolidated subsidiaries. In addition, we have attributed to the Capital Group all of our notes and debentures (and related interest expense) that have not been attributed to the Interactive Group. See note 2 below for the debt obligations attributed to the Capital Group.


While we believe the allocation methodology described above is reasonable and fair to each group, we may elect to change the allocation methodology in the future. In the event we elect to transfer assets or businesses from one group to the other, such transfer would be made on a fair value basis and would be accounted for as a short-term loan unless our board of directors determines to account for it as a long-term loan or through an inter-group interest.

12

Notes to Attributed Financial Information

(unaudited)

(2)
Debt attributed to the Interactive Group and the Capital Group is comprised of the following:

 
   December 31, 2007
 
   Outstanding
principal
   Carrying
value
 
   amounts in millions
Interactive Group          
  7.875% Senior Notes due 2009   $ 670   668
  7.75% Senior Notes due 2009     233   234
  5.7% Senior Notes due 2013     803   801
  8.5% Senior Debentures due 2029     500   495
  8.25% Senior Debentures due 2030     902   895
  QVC bank credit facilities     4,023   4,023
  Other subsidiary debt     61   61
   
 
    Total Interactive Group debt     7,192   7,177
   
 
Capital Group          
  0.75% Senior Exchangeable Debentures due 2023     1,750   1,820
  4% Senior Exchangeable Debentures due 2029     869   556
  3.75% Senior Exchangeable Debentures due 2030     810   463
  3.5% Senior Exchangeable Debentures due 2031     501   432
  3.25% Senior Exchangeable Debentures due 2031     551   419
  Liberty bank facility     750   750
  Subsidiary debt     98   98
   
 
    Total Capital Group debt     5,329   4,538
   
 
Total debt   $ 12,521   11,715
   
 
(3)
Cash compensation expense for our corporate employees has been allocated between the Interactive Group and the Capital Group based on the estimated percentage of time spent providing services for each group. Stock-based compensation expense for our corporate employees has been allocated between the Interactive Group and the Capital Group based on the compensation derived from the equity awards for the respective tracking stock. Other general and administrative expenses are charged directly to the groups whenever possible and are otherwise allocated based on estimated usage or some other reasonably determined methodology. Amounts allocated from the Capital Group to the Interactive Group for the years ended December 31, 2007, 2006 and 2005 were $17 million, $13 million and $5 million, respectively. 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.

(4)
Prior to January 1, 2006, we accounted for compensation expense related to stock options and stock appreciation rights pursuant to the recognition and measurement provisions of Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB Opinion No. 25"). Compensation was recognized based upon the percentage of the options that were vested and the difference between the market price of the underlying common stock and the exercise price of the options at the balance sheet date. The following tables illustrate the effect on earnings (loss) from continuing operations for the year ended December 31, 2005 if we had applied the fair value recognition provisions of Statement of Financial Accounting Standards No. 123, "Accounting

13

Notes to Attributed Financial Information

(unaudited)

Interactive Group

Earnings from continuing operations   $ 298  
  Add stock-based compensation as determined under the intrinsic value method, net of taxes     1  
  Deduct stock-based compensation as determined under the fair value method, net of taxes     (24 )
   
 
Pro forma earnings from continuing operations   $ 275  
   
 

Capital Group

Loss from continuing operations   $ (341 )
  Add stock-based compensation as determined under the intrinsic value method, net of taxes     1  
  Deduct stock-based compensation as determined under the fair value method, net of taxes     (18 )
   
 
Pro forma loss from continuing operations   $ (358 )
   
 
(5)
We have accounted for income taxes for the Interactive Group and the Capital Group in the accompanying attributed financial information in a manner similar to a stand-alone company basis. To the extent this methodology differs from our tax sharing policy, differences have been reflected in the attributed net assets of the groups.


The Interactive Group's income tax benefit (expense) consists of:

 
   Years ended December 31,
  
 
   2007
   2006
   2005
  
 
   amounts in millions

  
Current:                
  Federal   $ (280 ) (305 ) (259 )
  State and local     (64 ) (57 ) (69 )
  Foreign     (90 ) (110 ) (85 )
   
 
 
 
      (434 ) (472 ) (413 )
   
 
 
 
Deferred:                
  Federal     94   197   150  
  State and local     33   62   40  
  Foreign     1   3   (2 )
   
 
 
 
      128   262   188  
   
 
 
 
Income tax expense   $ (306 ) (210 ) (225 )
   
 
 
 

14

Notes to Attributed Financial Information

(unaudited)


The Interactive Group's income tax benefit (expense) differs from the amounts computed by applying the U.S. federal income tax rate of 35% as a result of the following:

 
   Years ended December 31,
  
 
   2007
   2006
   2005
  
 
   amounts in millions

  
Computed expected tax expense   $ (262 ) (283 ) (183 )
Change in estimated foreign and state tax rates     (6 ) 132   28  
State and local income taxes, net of federal income taxes     (19 ) (23 ) (25 )
Foreign taxes, net of foreign tax credits     (10 ) (20 ) (29 )
Change in valuation allowance affecting tax expense     5   (14 ) 2  
Minority interest     (10 ) (12 ) (12 )
Disqualifying disposition of incentive stock options not deductible for book purposes     —   14   —  
Other, net     (4 ) (4 ) (6 )
   
 
 
 
  Income tax expense   $ (306 ) (210 ) (225 )
   
 
 
 

The tax effects of temporary differences that give rise to significant portions of the Interactive Group's deferred tax assets and deferred tax liabilities are presented below:

 
   December 31,
  
 
   2007
   2006
  
 
   amounts in millions

  
Deferred tax assets:            
  Net operating and capital loss carryforwards   $ 43   35  
  Accrued stock compensation     11   23  
  Other accrued liabilities     148   161  
  Deferred revenue     11   —  
  Other future deductible amounts     100   90  
   
 
 
    Deferred tax assets     313   309  
  Valuation allowance     (12 ) (19 )
   
 
 
    Net deferred tax assets     301   290  
   
 
 
Deferred tax liabilities:            
  Investments     594   884  
  Intangible assets     2,083   2,225  
  Other     145   79  
   
 
 
    Deferred tax liabilities     2,822   3,188  
   
 
 
Net deferred tax liabilities   $ 2,521   2,898  
   
 
 

15

Notes to Attributed Financial Information

(unaudited)


The Capital Group's income tax benefit (expense) consists of:

 
   Years ended December 31,
  
 
   2007
   2006
   2005
  
 
   amounts in millions

  
Current:                
  Federal   $ 253   (208 ) 159  
  State and local     (17 ) (35 ) (6 )
  Foreign     (3 ) (2 ) (3 )
   
 
 
 
      233   (245 ) 150  
   
 
 
 
Deferred:                
  Federal     (246 ) 165   69  
  State and local     (2 ) 37   132  
  Foreign     —   1   —  
   
 
 
 
      (248 ) 203   201  
   
 
 
 
Income tax benefit (expense)   $ (15 ) (42 ) 351  
   
 
 
 

The Capital Group's income tax benefit (expense) differs from the amounts computed by applying the U.S. federal income tax rate of 35% as a result of the following:

 
   Years ended December 31,
  
 
   2007
   2006
   2005
  
 
   amounts in millions

  
Computed expected tax benefit (expense)   $ (538 ) (53 ) 242  
Nontaxable exchange of investments for subsidiaries and cash     541   —   —  
State and local income taxes, net of federal income taxes     (16 ) (11 ) 32  
Foreign taxes     9   —   (2 )
Change in valuation allowance affecting tax expense     (14 ) 90   (42 )
Change in estimated foreign and state tax rates     2   (2 ) 119  
Impairment of goodwill not deductible for tax purposes     (11 ) (39 ) —  
Disposition of nondeductible goodwill in sales transaction     —   (43 ) —  
Dividends received deduction     12   12   12  
Other, net     —   4   (10 )
   
 
 
 
Income tax benefit (expense)   $ (15 ) (42 ) 351  
   
 
 
 

16

Notes to Attributed Financial Information

(unaudited)


The tax effects of temporary differences that give rise to significant portions of the Capital Group's deferred tax assets and deferred tax liabilities are presented below:

 
   December 31,
  
 
   2007
   2006
  
 
   amounts in millions

  
Deferred tax assets:            
  Net operating and capital loss carryforwards   $ 272   435  
  Accrued stock compensation     79   56  
  Other accrued liabilities     58   53  
  Deferred revenue     305   231  
  Other future deductible amounts     53   27  
   
 
 
    Deferred tax assets     767   802  
  Valuation allowance     (51 ) (28 )
   
 
 
    Net deferred tax assets     716   774  
   
 
 
Deferred tax liabilities:            
  Investments     5,378   6,001  
  Intangible assets     201   137  
  Discount on exchangeable debentures     1,167   981  
  Other     —   290  
   
 
 
    Deferred tax liabilities     6,746   7,409  
   
 
 
Net deferred tax liabilities   $ 6,030   6,635  
   
 
 
(6)
The Liberty Interactive Stock and the Liberty Capital Stock have voting and conversion rights under our amended 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, will be 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 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 Stock or the approval of the holders of only Series A and Series B Liberty Capital 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, Liberty Interactive Stock may be converted into Liberty Capital Stock at any time. In addition, following certain group dispositions and subject to certain limitations, Liberty Capital Stock may be converted into Liberty Interactive Stock, and Liberty Interactive Stock may be converted into Liberty Capital Stock.

17



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Unaudited Attributed Financial Information for Tracking Stock Groups
Notes to Attributed Financial Information (unaudited)