CORRECTING and REPLACING Liberty Interactive Corporation Reports Fourth Quarter and Year End 2016 Financial Results

ENGLEWOOD, Colo.--(BUSINESS WIRE)-- In the news release, "Liberty Interactive Corporation Reports Fourth Quarter and Year End 2016 Financial Results,” issued February 28, 2017 by Liberty Interactive Corporation, we are advised that the cash and liquid investments attributed to the QVC Group and Liberty Ventures Group as of December 31, 2016 as presented in the Cash and Debt table in the Notes to the press release was inaccurate. This has been revised in the corrected release, which follows:

LIBERTY INTERACTIVE CORPORATION REPORTS FOURTH QUARTER AND YEAR END 2016 FINANCIAL RESULTS

Liberty Interactive Corporation (“Liberty Interactive”) (Nasdaq: QVCA, QVCB, LVNTA, LVNTB) today reported fourth quarter and year end 2016 results. Highlights include⁽¹⁾:

Attributed to QVC Group

• Consolidated QVC revenue down 1% to $8.7 billion in 2016
• QVC International revenue in local currency increased in all markets in the fourth quarter
  • QVC International revenue grew 3% on a constant currency⁽²⁾ basis
• QVC consolidated mobile penetration was 58% of QVC.com orders in 2016, a 795 basis point increase
  • QVC US mobile penetration was 57% of QVC.com orders, an 820 basis point increase
• zulily revenue grew 14% to $1.5 billion⁽³⁾ and operating loss was $152 million in 2016, driven by approximately $223 million of amortization of intangible assets primarily related to purchase accounting from the acquisition
  • zulily adjusted OIBDA⁽⁴⁾ grew 58% to $112 million⁽³⁾
• From November 1, 2016 through January 31, 2017, repurchased 12.5 million QVCA shares at an average price per share of $20.37 and a total cost of $255 million

“Internationally, QVC continues to perform well, while domestically we are focusing on strengthening a few merchandise categories that have been weak,” said Greg Maffei, Liberty Interactive President and CEO. “zulily finished the year strong and we took advantage of the stock pullback to repurchase $255 million of QVCA shares.”

Unless otherwise noted, the following discussion compares financial information for the thee months and year ended December 31, 2016 to the same period in 2015.

QVC GROUP – For the quarter, QVC Group's revenue decreased 3% to $3.1 billion, operating income was roughly flat at $384 million, adjusted OIBDA⁽⁴⁾ decreased 2% to $610 million, net income decreased 16% to $188 million and adjusted net income⁽⁵⁾ decreased 15% to $266 million. For the full year, QVC Group's revenue increased 11% to $10.2 billion, operating income decreased 14% to $1.0 billion, adjusted OIBDA increased 3% to $1.9 billion, net income decreased 26% to $473 million and adjusted net income decreased 8% to $812 million. Approximately $39 million of corporate level selling, general and administrative expense (“SG&A”) (including stock-based compensation expense) was allocated to QVC Group for the full year 2016. QVC Group’s reported GAAP results include the zulily acquisition beginning in the fourth quarter of 2015 (see the “zulily” section below for a further discussion of the impact of the acquisition).

QVC

“Our international segment generated strong results in the quarter with broad-based sales gains and margin expansion,” said QVC president and CEO Mike George. “The sales trend in our US business persisted from the third quarter primarily due to continued headwinds in select categories. We have strong action plans in place and are confident in our ability to return the US business to growth.”

“In 2016, we continued to significantly advance our digital platforms. eCommerce and mobile penetration grew approximately 260 and 800 basis points, respectively. As we begin 2017, we are serving a large, engaged customer base, and we are creating competitive advantages as we further extend our reach across digital and next generation commerce platforms. We will leverage these strengths to build on our highly differentiated shopping experience.”

Beginning in the first quarter of 2016, QVC began allocating certain corporate costs for management reporting purposes differently. Historically, QVC allocated these costs to the market from which the services were provided. As more of QVC's costs support initiatives in multiple markets, QVC is allocating costs to the markets that will benefit from the expenditures. These management cost allocations are related to certain functions, such as merchandising, commerce platforms, information technology, human resources, legal, finance, brand and communications, corporate development and administration. The cost allocations (from QVC US to QVC International) totaled approximately $7 million in the fourth quarter and $31 million for the full year 2016. As a result of the allocations, the US segment's operating income and adjusted OIBDA margins were each positively impacted approximately 35 basis points in the quarter and 50 basis points for the full year. The international segment's operating income and adjusted OIBDA margins were each negatively impacted approximately 100 and 120 basis points in the fourth quarter and full year, respectively. There was no impact to consolidated operating income and adjusted OIBDA margins. With the completion of the ONE Q implementation, QVC's financial disclosure is consistent with the way it evaluates its business performance and manages its operations.

QVC's consolidated revenue decreased 5% in the fourth quarter to $2.7 billion and decreased 1% to $8.7 billion in 2016. eCommerce revenue increased slightly to $1.3 billion and grew to 50% of consolidated revenue in the quarter, up from 47% a year ago. Mobile orders were 60% of total eCommerce orders in the quarter, compared to 52% a year ago. For the full year, consolidated eCommerce revenue increased 5% to $4.0 billion and grew to 47% from 44% of consolidated revenue. Mobile orders were 58% of eCommerce orders in 2016, compared to 50% in 2015. Operating income decreased 11% to $404 million in the quarter and declined 6% to $1.2 billion in 2016. Adjusted OIBDA decreased 6% to $569 million in the quarter and declined 3% to $1.8 billion in 2016. Operating income margin and adjusted OIBDA margin decreased 105 and 30 basis points, respectively, in the quarter and decreased 72 and 47 basis points, respectively, in the full year.

US Dollar denominated results were slightly impacted by unfavorable exchange rate fluctuations in the fourth quarter. The Dollar strengthened against the British Pound and Euro 18% and 2%, respectively, and weakened 11% versus the Japanese Yen in the quarter. On a constant currency basis⁽²⁾ in the fourth quarter, consolidated revenue, operating income and adjusted OIBDA decreased 4%, 10% and 5%, respectively, compared to a 5%, 11% and 6% respective decrease in US Dollars. For the full year, US Dollar denominated results were not impacted materially by exchange rate fluctuations. The Dollar strengthened versus the British Pound 12%, weakened against the Japanese Yen 11% and was essentially flat versus the Euro. Consolidated revenue, operating income and adjusted OIBDA decreased 1%, 6% and 3%, respectively, on both a reported and constant currency basis.

QVC's US revenue decreased 7% to $1.9 billion in the fourth quarter and 2% to $6.1 billion in 2016. In the quarter, average selling price per unit ("ASP") decreased 8% to $56.78, units sold increased 1%, and returns as a percentage of gross product revenue improved 32 basis points. The US experienced year-over-year declines in all categories except apparel. For the year, ASP decreased 6% to $57.00, units sold increased 2%, and returns as a percentage of gross product revenue improved 104 basis points. The US experienced declines in jewelry, electronics and beauty, which were partially offset by gains in apparel, home and accessories. eCommerce revenue decreased 1% to $1.1 billion and grew 326 basis points to 56% of total US revenue in the quarter. For the year, eCommerce revenue increased 4% to $3.2 billion and grew 328 basis points to 52% of total US revenue. In the quarter, operating income decreased 15% to $303 million, operating income margin declined 143 basis points, adjusted OIBDA decreased 9% to $438 million and adjusted OIBDA margin declined 43 basis points, including the aforementioned cost allocations. Excluding the cost allocations, adjusted OIBDA decreased 10% to $431 million and adjusted OIBDA margin declined approximately 80 basis points, primarily due to higher freight and warehouse expenses and lack of sales leverage. For the year, operating income decreased 6% to $915 million, operating income margin declined 58 basis points, adjusted OIBDA decreased 2% to $1.4 billion and adjusted OIBDA margin was flat, including the aforementioned cost allocations. Excluding the cost allocations, adjusted OIBDA decreased 4% to $1.4 billion million and adjusted OIBDA margin decreased approximately 50 basis points, primarily due to lower product margins and higher bad debt, freight and warehouse expenses, which were partially offset by lower personnel expenses and favorable inventory obsolescence.

QVC's international revenue was flat at $711 million in the fourth quarter and increased 3% to $2.6 billion in 2016. The quarterly revenue performance included the net impact of unfavorable exchange rate fluctuations. On a constant currency basis, international revenue increased 3% in the quarter, reflecting gains in all markets. Units sold and ASP in constant currency each increased 1% in the quarter. QVC International experienced growth in all categories except apparel and jewelry. For the full year, international revenue on a constant currency basis increased 3%. Units sold increased 3% and ASP in constant currency was flat. QVC International experienced gains in all categories except apparel and jewelry for the full year. International eCommerce revenue increased 6% to $247 million and grew 197 basis points to 35% of total international revenue in the quarter. For 2016, International eCommerce revenue increased 8% to $854 million and grew 147 basis points to 33% of total international revenue. In the fourth quarter, operating income increased 1% to $101 million and adjusted OIBDA increased 2% to $131 million. On a constant currency basis, operating income increased 6% and adjusted OIBDA increased 5%, including the cost allocations from ONE Q. Excluding the cost allocations, adjusted OIBDA increased 11% and adjusted OIBDA margin grew approximately 140 basis points on a constant currency basis, primarily due to lower personnel, marketing and freight expenses, which were partially offset by lower product margins and higher commissions. QVC France generated an operating loss of $8 million in the fourth quarter of 2016 versus $9 million in the fourth quarter of 2015, and an adjusted OIBDA loss of $6 million in the fourth quarter of 2016 versus $8 million in the fourth quarter of 2015. For the full year, operating income decreased 5% to $288 million and adjusted OIBDA decreased 5% to $405 million. On a constant currency basis, operating income decreased 4% and adjusted OIBDA decreased 5%, including the cost allocations from ONE Q. Excluding the cost allocations, adjusted OIBDA increased 3% and adjusted OIBDA margin was essentially flat on a constant currency basis, reflecting lower personnel costs, which were offset by lower product margins. QVC France generated an operating loss of $33 million in 2016 compared to $27 million in 2015, and an adjusted OIBDA loss of $29 million in 2016 compared to $24 million in 2015.

CNR Home Shopping Co., Ltd. ("CNRS"), QVC's joint venture in China, reported revenue increased 4% and 2% in local currency in the fourth quarter and full year, respectively. CNRS' operating loss and adjusted OIBDA loss in local currency decreased 4% and 8%, respectively, in the quarter primarily due to lower fixed costs, commissions and freight expenses, which were partially offset by lower product margins and higher warehouse costs. For the year, CNRS' operating loss and adjusted OIBDA deficit in local currency increased 5% and 1%, respectively, primarily due to lower product margins and higher commissions, which were partially offset by lower fixed costs and freight expenses. This joint venture is being accounted for as an equity method investment, and as a result, QVC reported a $2 and $6 million reduction in net income for the fourth quarter and full year, respectively.

QVC's total debt, net of original issue discount, was $5.3 billion at December 31, 2016, a decrease of $0.1 billion from December 31, 2015

zulily

“Our fourth quarter performance was solid, even with softness in demand for the couple of weeks following the election,” said zulily President and CEO Darrell Cavens. “We continue to enhance our customer experience and innovate in existing and emerging engagement channels through our investments in marketing and technology opportunities and will continue to focus on these areas in 2017.”

Liberty Interactive acquired zulily on October 1, 2015. Although zulily’s results are only included in Liberty Interactive’s results since October 1, 2015, we believe a discussion of zulily’s standalone results promotes a better understanding of the overall results of its business. Upon acquisition, zulily reclassified certain costs between financial statement line items to conform to Liberty Interactive's reporting structure for ease of comparability for all reporting periods. zulily also changed its year end to December 31 on a prospective basis upon acquisition. This resulted in 92 days in the fourth quarter of 2016 compared to 95 days the prior year and 366 days for the full year 2016 compared to 368 in 2015. In addition, as part of purchase accounting, zulily reduced deferred revenue that was recognized as of October 1, 2015 (acquisition date) by $17 million. This had the effect of a one-time, non-cash reduction in reported revenue and adjusted OIBDA during the fourth quarter of 2015. zulily’s stand-alone operating results for the three months and years ended December 31, 2015 and December 31, 2016 were as follows:

zulily revenue increased 10% from $426 million in the fourth quarter of 2015 to $467 million in the fourth quarter of 2016. As described above, the fourth quarter of 2015 was impacted by a $17 million purchase accounting reduction in deferred revenue. Adjusted for this, zulily’s revenue increased 5% in the fourth quarter of 2016 and 14% for the full year. The increases in revenue for both the fourth quarter and full year were primarily attributed to an increase in total orders, driven primarily by an increase in the number of orders placed per active customer. Mobile orders were 66% of total orders placed in the fourth quarter, compared to 59% the prior year.

Operating loss improved to $(14) million in the fourth quarter of 2016 compared to $(53) million in the same period last year. zulily’s fourth quarter 2016 operating loss includes approximately $45 million of amortization of intangible assets, primarily recognized as a result of purchase accounting, compared to approximately $63 million recognized in the fourth quarter of 2015. zulily’s operating loss was $(152) million for the full year 2016 as compared to $(78) million in the prior year. The increase in operating loss was primarily driven by higher amortization of intangible assets recognized as a result of purchase accounting (approximately $223 million for full year 2016 compared to $65 million in 2015). zulily's full year 2015 operating loss also includes $30 million in costs associated with the closing of Liberty Interactive’s acquisition.

Adjusted OIBDA increased 90% from $21 million in the fourth quarter of 2015 to $40 million in the fourth quarter of 2016. Adjusting for the aforementioned $17 million purchase accounting reduction in deferred revenue in the fourth quarter of 2015, adjusted OIBDA grew 5% in the fourth quarter of 2016 and 58% for full year 2016. zulily's full year 2015 adjusted OIBDA excludes the aforementioned $30 million in transaction costs related to Liberty Interactive’s purchase of zulily (recognized in the third quarter of 2015).

Share Repurchases

From November 1, 2016 through January 31, 2017, Liberty Interactive repurchased approximately 12.5 million Series A QVC Group shares (Nasdaq: QVCA) at an average cost per share of $20.37 for total cash consideration of $255 million. On October 26, 2016, the Board of Directors authorized the repurchase of an additional $300 million of either the QVC Group or the Liberty Ventures Group. The remaining repurchase authorization for Liberty Interactive as of February 1, 2017 is approximately $1,026 million, of which $376 million can be applied to repurchases of either QVC Group or Liberty Ventures Group stock and $650 million can only be applied to Liberty Ventures Group stock.

QVC Group has attributed to it Liberty Interactive’s subsidiaries, QVC, Inc. and zulily, llc, and Liberty Interactive’s interest in HSN.

LIBERTY VENTURES GROUP – On November 4, 2016, Liberty Interactive completed the split-off of Expedia Holdings (the “Split-off”), which is comprised of, among other things, Liberty Interactive’s former interest in Expedia, Inc. (approximately 16% equity interest and approximately 52% voting interest as of December 31, 2016), its former subsidiary Vitalize, LLC (“Vitalize,” formerly referred to as Bodybuilding.com), $350 million of debt and $50 million of cash. The Split-off was accomplished through the redemption of 40% of the shares of each series of Liberty Ventures common stock outstanding at 5:00 p.m. New York City time, on November 4, 2016 for 100% of the outstanding shares of Expedia Holdings. Accordingly, (i) 0.4 of each outstanding share of Series A Liberty Ventures common stock (“LVNTA”) was redeemed for 0.4 of a share of Series A Expedia Holdings common stock (“LEXEA”) and (ii) 0.4 of each outstanding share of Series B Liberty Ventures common stock (“LVNTB”) was redeemed for 0.4 of a share of Series B Expedia Holdings common stock (“LEXEB”), in each case, with cash paid in lieu of fractional shares. In connection with the Split-off, Expedia Holdings distributed $299 million, net of certain debt related costs, to Liberty Interactive, which is attributed to the Liberty Ventures Group.

Following the Split-off, the consolidated financial statements of Liberty Interactive have been prepared such that our former investment in Expedia is presented as a discontinued operation and Vitalize is not presented as a discontinued operation. Approximately $54 million of corporate level SG&A expense (including stock-based compensation expense) was allocated to Liberty Ventures Group for the full year 2016. SG&A incurred by Liberty Ventures Group was elevated in 2016 due to the Split-Off and the spin-off of CommerceHub, Inc.

Share Repurchases

There were no repurchases of Liberty Ventures Group common stock (Nasdaq: LVNTA) from November 1, 2016 through January 31, 2017. On October 26, 2016, the Board of Directors authorized the repurchase of an additional $300 million of either the QVC Group or the Liberty Ventures Group. The remaining repurchase authorization for Liberty Interactive as of February 1, 2017 is approximately $1,026 million, of which $376 million can be applied to repurchases of either QVC Group or Liberty Ventures Group stock and $650 million can only be applied to Liberty Ventures Group stock.

The businesses and assets attributed to the Liberty Ventures Group are all of Liberty Interactive's businesses and assets other than those attributed to the QVC Group, including its interests in Liberty Broadband Corporation and FTD, Liberty Interactive’s subsidiary Evite, and minority interests in Interval Leisure Group, Lending Tree and Charter Communications.

FOOTNOTES

1. Liberty Interactive's President and CEO, Greg Maffei, will discuss these highlights and other matters in Liberty Interactive's earnings conference call which will begin at 12:00 p.m. (E.S.T.) on February 28, 2017. For information regarding how to access the call, please see “Important Notice” later in this document.
2. For a definition of constant currency financial metrics and applicable reconciliations, see the accompanying schedules.
3. Adds back the impact of a one-time, non-cash purchase accounting reduction to deferred revenue of $17 million in the fourth quarter 2015.
4. For a definition of adjusted OIBDA and applicable reconciliations and a definition of adjusted OIBDA margin, see the accompanying schedules.
5. For a definition of adjusted net income and applicable reconciliations, see the accompanying schedules.

NOTES

The following financial information with respect to Liberty Interactive's equity affiliates and available for sale securities is intended to supplement Liberty Interactive's consolidated statements of operations which are included in its Form 10-K for the year ended December 31, 2016.

Cash and Debt

The following presentation is provided to separately identify cash and liquid investments and debt information.

Total cash and liquid investments attributed to the QVC Group increased by approximately $56 million during the fourth quarter primarily due to cash from operations and borrowings under the QVC bank credit facility, partially offset by share repurchases, net debt repayments and capital expenditures. Total debt attributed to the QVC Group decreased by $78 million. On October 5, 2016, Liberty Interactive LLC (“LI LLC”) paid $345 million to holders of substantially all of its 1% Exchangeable Senior Debentures due 2043 (the “1% Exchangeables”) that chose to exercise a purchase option requiring LI LLC to repurchase the 1% Exchangeables for a price equal to the adjusted principal amount per debenture plus accrued and unpaid interest. LI LLC funded this payment with cash on the balance sheet and borrowings under the QVC bank credit facility.

Total cash and liquid investments attributed to the Liberty Ventures Group increased $332 million, primarily due to the $299 million distribution (net of certain debt related costs) from Expedia Holdings in connection with the Split-off. Total debt attributed to Liberty Ventures Group decreased by $28 million primarily due to the Split-off and associated subsidiary debt at Vitalize.

Important Notice: Liberty Interactive (Nasdaq: QVCA, QVCB, LVNTA, LVNTB) President and CEO, Greg Maffei will discuss Liberty Interactive's earnings release in a conference call which will begin at 12:00 p.m. (E.S.T.) on February 28, 2017. The call can be accessed by dialing (844) 307-2219 or (678) 509-7635 at least 10 minutes prior to the start time. The call will also be broadcast live across the Internet and archived on our website. To access the webcast go to http://www.libertyinteractive.com/events. Links to this press release will also be available on Liberty Interactive's website.

This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about business strategies, market potential, future financial prospects and performance, new service and product offerings, the benefits of QVC’s changed cost allocation structure, the monetization of our non-core assets, the continuation of our stock repurchase program, the estimated liabilities under exchangeable debentures 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 limitation, possible changes in market acceptance of new products or services, competitive issues, regulatory matters affecting our businesses, continued access to capital on terms acceptable to Liberty Interactive, changes in law and government regulations that may impact the derivative instruments that hedge certain of our financial risks, the availability of investment opportunities, and market conditions conducive to stock repurchases. These forward-looking statements speak only as of the date of this presentation, and Liberty Interactive expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement 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. Please refer to the publicly filed documents of Liberty Interactive, including the most recent Form 10-K, for additional information about Liberty Interactive and about the risks and uncertainties related to Liberty Interactive's business which may affect the statements made in this press release.

NON-GAAP FINANCIAL MEASURES

This press release includes a presentation of adjusted OIBDA, which is a non-GAAP financial measure, for Liberty Interactive, QVC (and certain of its subsidiaries), and zulily together with a reconciliation to that entity or such businesses’ operating income, as determined under GAAP. Liberty Interactive defines adjusted OIBDA as revenue less cost of sales, operating expenses, and selling, general and administrative expenses, excluding all stock based compensation, and excludes from that definition depreciation and amortization and restructuring and impairment charges that are included in the measurement of operating income pursuant to GAAP. Further, this press release includes adjusted OIBDA margin which is also a non-GAAP financial measure. Liberty Interactive defines adjusted OIBDA margin as adjusted OIBDA divided by revenue.

Liberty Interactive believes adjusted OIBDA is an important indicator of the operational strength and performance of its businesses, including each business' ability to service debt and fund capital expenditures. In addition, this measure allows management to view operating results and perform analytical comparisons and benchmarking between businesses and identify strategies to improve performance. Because adjusted OIBDA is used as a measure of operating performance, Liberty Interactive views operating income as the most directly comparable GAAP measure. Adjusted OIBDA is not meant to replace or supersede operating income or any other GAAP measure, but rather to supplement such GAAP measures in order to present investors with the same information that Liberty Interactive's management considers in assessing the results of operations and performance of its assets. Please see the attached schedules for applicable reconciliations.

In addition, this presentation includes references to adjusted net income, which is a non-GAAP financial measure, for QVC Group. Liberty Interactive defines adjusted net income as net income, excluding the impact of purchase accounting amortization (net of deferred tax benefit).

Liberty Interactive believes adjusted net income is an important indicator of financial performance, in particular for QVC Group, due to the impact of purchase accounting amortization. Because adjusted net income is used as a measure of overall financial performance, Liberty Interactive views net income as the most directly comparable GAAP measure. Adjusted net income is not meant to replace or supersede net income or any other GAAP measure, but rather to supplement such GAAP measures in order to present investors with a supplemental metric of financial performance. Please see the attached schedules for a reconciliation of adjusted net income to net income (loss) calculated in accordance with GAAP for QVC Group (Schedule 4).

This presentation also references certain financial metrics on a constant currency basis, which is a non-GAAP measure, for QVC Group. Constant currency financial metrics, as presented herein, are calculated by translating the current-year and prior-year reported amounts into comparable amounts using a single foreign exchange rate for each currency.

Liberty Interactive believes constant currency financial metrics are an important indicator of financial performance, in particular for QVC Group, due to the translational impact of foreign currency exchange rate fluctuations relating to its subsidiaries in the UK, Germany, Italy, Japan and France, as well as its JV in China. We use constant currency financial metrics to provide a framework to assess how our businesses performed excluding the effects of such fluctuations. Please see the attached schedules for a reconciliation of the impact of foreign currency fluctuations on revenue, operating income and adjusted OIBDA (Schedule 5).

SCHEDULE 1

The following table provides a reconciliation of QVC Group's adjusted OIBDA to its operating income calculated in accordance with GAAP for the three months ended December 31, 2015, March 31, 2016, June 30, 2016, September 30, 2016 and December 31, 2016, respectively, and years ended December 31, 2015 and 2016.

SCHEDULE 2

The following table provides a reconciliation of adjusted OIBDA for QVC (and certain of its subsidiaries) and zulily to that entity or such businesses' operating income (loss) calculated in accordance with GAAP for the three months ended December 31, 2015, March 31, 2016, June 30, 2016, September 30, 2016 and December 31, 2016, respectively, and years ended December 31, 2015 and 2016.

SCHEDULE 3

The following table provides a reconciliation of adjusted OIBDA for QVC Group and the Liberty Ventures Group to the Liberty Interactive Corporation operating income (loss) calculated in accordance with GAAP for the three months ended December 31, 2015, March 31, 2016, June 30, 2016, September 30, 2016 and December 31, 2016, respectively, and years ended December 31, 2015 and 2016.

SCHEDULE 4

The following table provides a reconciliation of QVC Group's adjusted net income to its net income calculated in accordance with GAAP for the three months ended December 31, 2015, March 31, 2016, June 30, 2016, September 30, 2016 and December 31, 2016, respectively, and years ended December 31, 2015 and 2016.

SCHEDULE 5

The following table provides a comparison of the year over year percentage change in QVC Inc.'s constant currency revenue, operating income, adjusted OIBDA and ASP to the comparable figures calculated in accordance with GAAP for the three months and year ended December 31, 2016.

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Liberty Interactive Corporation
Courtnee Chun, 720-875-5420

Source: Liberty Interactive Corporation

Released February 28, 2017