Good day everyone, and welcome to the Liberty Interactive Corporation Third Quarter Earnings Conference Call. Today’s call is being recorded. At this time for opening remarks and introductions, I would like to turn the call over to Courtnee Ulrich, VP of Investor Relations. Please go ahead.

Good afternoon. Before we begin we’d 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 business strategies, the proposed creation of the QVC group, and Liberty Digital Commerce Group tracking stocks, the proposed spin-off of interest in TripAdvisor, 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 limitation, possible changes in market acceptance of new products or services, our ability to satisfy the conditions to both the proposed recapitalization and post spin-off, 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 statement contained herein to reflect any change in Liberty Interactive’s expectations with regards 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 note and Schedules 1 through 3 three can be found at the end of this presentation. And with that I’d like to turn the call over to Greg Maffei, Liberty’s President and CEO.

Thank you, Courtnee, and good afternoon to all of you. Today speaking on the call besides myself we’ll have Liberty’s CFO, Chris Shean; QVC’s CEO, Mike George; and QVC U.S. CEO, Claire Watts. So we had a busy October. We repurchased over $300 million of LINTA’s stock. We announced our plan at our Investor Day to create Liberty Digital Commerce Tracking Stock and rename the remainder of the group QVC Group. We have been pleased with the market reaction to those announcements. Let me go on to the operating highlights. At QVC we had strong U.S. and UK results and continued growth in Italy. Results were negatively impacted by currency moves, particularly in Japan, and dotcom penetration in the U.S. for the third quarter rose to 41% and in a very positive manner 32% of those orders were on mobile. We also launched our toGather social site at the end of September, and have seen good quarterly results. Turning to Liberty Digital Commerce, we experienced good revenue growth, 14%, at those businesses to be attributed to Liberty Digital Commerce which now excludes BuySeasons. Bodybuilding.com was up 27%. CommerceHub was still small, grew 38%. We had mid single digit growth at Provide and BackCountry during off quarters for both of them. Their businesses are stronger either leading into their winter season for BackCountry or into the Mother’s day and Valentines for Provide. Q3 as I noted, is a seasonal low point profitability also for these businesses, as would scale during their respective holiday seasons and we continue to see declines as we invested heavily in those businesses. Despite that though, we saw improving trends throughout the quarter at BodyBuilding, and again great growth in profitability as well as revenue at CommerceHub and at Provide, operational changes and a resetting of our merchandise offering at RedEnvelope impacted the quarter in advance of the more important holiday season. Let me turn to Liberty Ventures, where we announced the plan to spin-off Liberty TripAdvisor Holdings and effectively our control stake in TripAdvisor into that separate company, and we also invested $300 million in what we believe is an attractive solar project called Abengoa. Let me turn it over to Chris Shean to discuss the financials.

Liberty Interactive Group’s revenue increased 2% in the third quarter while adjusted OIBDA was flat. QVC’s net revenue on a consolidated basis, they increased 2% while adjusted OIBDA increased 3% for the quarter. Liberty Interactive’s eCommerce businesses grew 7% for the quarter while adjusted OIBDA decreased to a loss of $5 million. Revenue for the eCommerce businesses, as Greg pointed out is seasonal due to the holiday seasons, which drive a significant portion of the revenue. The third quarter is generally lower than the other quarters due to fewer holidays. We saw improvement in revenue at all of the subs other than BuySeasons. These increases were driven by marketing efforts to drive additional traffic, investment in site improvements, increased shipping charges and broader inventory offerings. Additionally the increased revenue was partially driven by selling product at discounts to continue to manage our inventory levels to what we consider to be more appropriate balances, which impacted margins in some of the companies. The decrease in adjusted OIBDA was a result of these lower product margins, increased credit card charge back at one of the subsidiaries and a deleveraging of fixed cost at BuySeasons and RedEnvelope. Now let’s take quick look at the liquidity picture. At the end of the quarter Liberty Interactive Group had attributed cash of $455 million and a $4.8 billion principal amount of attributed debt. QVC’s total debt-to-adjusted OIBDA ratio, as is defined in their credit agreement was approximately 2.1 times as compared to a maximum allowable leverage ratio of 3.5 times. Now for detailed comments on QVC, I’ll hand the call over to Mike George.

Thank you Chris. We were very pleased with our results in the quarter, with consolidated revenue up 4% and adjusted OIBDA up over 5% on a constant currency basis. We had particularly strong performance in our U.S. and UK businesses, continued growth in Italy, and some stabilization in Germany, partially offset by softening results in Japan. In addition our China joint venture which is not consolidated grew revenue over 50% and reduced its adjusted OIBDA loss by over 40%. We remain focused on delivering to our current and potential customers a compelling and highly differentiated experience, bringing together the worlds of entertainment, shopping and social, and making this experience available in relevant ways across all the screens and devices that our customers engage with, and Q3 was an especially active quarter in building out both our TV and our digital platforms. We launched Q Plus, our second channel in the U.S. and QVC Style and QVC Extra, our third and our fourth channels in the UK along with an interactive application on the UK’s free view TV platform where viewers can navigate to three of our specialty broadcast from the same channel location. We added another 20 million high definition homes in the U.S., bringing our total to 70 million, and we expanded our reach in the U.S. to an incremental 7 million homes through over-the-air carriage. Along with the 6 million homes we added in China in Q3, our broadcasts now reach 290 million homes worldwide. On the digital side we launched our next generation iPad app in the U.S. in July and we’ll be rolling that out at other markets shortly. And Japan launched a new mobile optimized website last month that we believe will drive further mobile adoption. We continue to innovate in the social space, most…

Thank you Mike. QVC U.S. continues to remain focused on reimagining the world of shopping, entertainment and social as one by offering our customers a unique curation of product and programming through our integration of broadcast, website, e-marketing, mobile and our social platform. We’re delighted with our performance this quarter as we achieved increased sales and margins in every category with the exception of jewelry and electronics. Return rates have continued to decrease over the prior year. We’re pleased with the results of our efforts to engage new customers. Our accounts have increased 7% with sales to new customers increasing 9% compared to the prior year. We continue to provide our customers with an ever changing collection of interesting time. Our home division generated strong results, particularly in cook, dining, home décor and home improvements. The kitchen electrics and foods business drove growth in this category with standout brands like Vitamix, Masterbuilt, KitchenAid and Keurig. We’re also encouraged by the early response to our pre-season holiday assortment of décor and toys. We saw great momentum in our accessories business. Footwear and handbags generated strong results driven by standout brands Clark, Bare Traps, Dooney & Bourke and Orani and we're seeing positive results in our beauty business with renowned brands such Clarisonic and Josie Maran. QVC Plus is providing our viewers with another place for us to share with our customers why we're passionate about our products. Since we launched in August, we're seeing a positive response to our second broadcast channel which is now available to more than 27 million subscribers. We’re enhancing our shopping experience by integrating our platforms. We created a new experience for one of our programs called You're Home With Jill, where we aired four pre-produced shows and the program host Jill Bauer chatted with customers…

Thanks, Claire. Let’s take a quick at the liquidity picture as liberty ventures group. At the end of the quarter, the group had attributed cash and liquid investments of $1.5 billion and $2.5 billion in principal amount of attributed debt, which includes $596 billion of TripAdvisor's cash balances and liquid investments and $376 million of their debt facilities. The value of the public equity method securities and other public holdings attributed to the group was $1.7 billion and $947 million respectively at the end of the quarter. And now, I will turn it back over to Greg.

Well, thank you to Mike, Claire, and Chris. As I think you heard we’re pleased with results for the quarter and look forward to a strong finish to 2013. We appreciate your continued interest in Liberty Interactive and with that I will like to open it up for questions, Operator?

Thank you. The question-and-answer session will be conducted electronically. (Operator Instructions) And we will first take a question from Trisha Dill with Wells Fargo Securities.

I just have a few if I may. First, can you just isolate what you think were the biggest drivers of the improvement in QVC U.S. and the UK and whether or not you think those current trends are sustainable?

Claire, do you want to hit on U.S.

From the U.S., I would say the consistency performance across all of our merchandise categories, as we said was the exception of jewelry, we saw really strong performance across the board and that’s encouraging. Also our distribution was getting Q plus out there and OTA has helped put our signal in more places and we continue to see improvements on our website as we are refining our new platform and getting SEO back in into line. So it’s really product mix, the mix of programming and our distribution effort that have made the difference in the U.S.

I would say on the UK, I would love to you tell that’s a 7% growth sustainable, but I do think we got a bump from anniversary and a very difficult August, last year given the distraction of the London Olympics. That said, I think we have done a number of things to improve the business and I also think there is general strengthening in UK economy. So I would expect that we can perform better than probably what we have been doing over the last 18 months, but not quite at the 7% level. That does have a little bit of the Olympic impacts in it.

And then just wondering if you could comment on the inventory growth relative to sales growth during the quarter. It accelerated a bit versus the typical seasonal trend in 3Q. Obviously this just a snapshot of one day, but just wondering how you’re feeling about inventory levels thus far in the current quarter.

Yes, Trisha, so, on the U.S. I can tell you that, it’s a little bit of change in the timing of our receipts for the fourth quarter because of some of the way that our calendar is built. I feel very good about the position that we’re in and the year where we need to be.

Okay great and then just one quick on the Liberty Digital. How much of the adjusted EBITDA decline was related to buy season? I think you gave the revenue growth ex-that business, but just wondering how much it drove down EBITDA as well.

2 million.

Next, we’ll move on to Barton Crockett with FBR Capital Markets.

I wanted to ask a question about the Liberty Ventures Tracking Stock. The Abengoa investment, the 30% IRR that you talked to is very attractive. Could you give us a little bit more detail though about what that constitutes? Is that 30% return on the net, $100 million investment, you get $200 million back over the next 18 months to 2 years? And is that like $30 million of cash a year or do there something large than that, 30% on the $300 million? It just seems like very large return. Some color there would be helpful?

It is and of course as you know, the danger with calculating IRR is in this case particularly with much of it being tax oriented, a significant amount of capital comes back in the early days. Now, that’s not exactly a problem but it does not suggest if you look at multiples of capital invested. It’s not going to be anything like looking at the $300 million average balance invested and we’re therefore not going to get a return on a $300 million number. Maybe Albert, you want to add any color on this? Albert Rosenthaler?

Sure. No, I think that that’s accurate and that going forward I think it will be more in the $10 million to $15 million range per year going forward. But this is a very long investment. It has long tale to it. So we like the economics on it fits well with our balance sheet. It’s a good long return.

And we’ll move on to Matthew Harrigan with Wunderlich Securities.

Firstly, I think 85,000 reported at BodyBuilding had, I think $320 million in revenues last year. I know it’s pretty consistent 20%, 30% our growth rate. That clearly masks a lot volatility and some of the other underlying businesses. I think if you look at the value on that, on some of the specialty retail in eCommerce comps, it would be a good chunk of what the spinoff could be at perceptively coming out. But is there an argument for breaking this up. It’s a bit of dogs breakfast in terms of the some of the businesses are performing really well. I know there commonalities in the system side and all that but it just feels like there are something that kind of cancel each other out. And then secondly, I know in oversea markets the agreements are little bit different on Keurig [ph], on the fixed percentage or fixed payment without having the benefit on the e-commerce savings you get. Is that something that the MSOs are probably going to have to ask for in U.S. as more and more of your business get lagged on more than 48 hours on their stateside?

Mike George, I’ll let you handle the second question in a moment but I’ll try and take cut at the first one. I think you’re right to note that we have some very high growth businesses in the liberty digital portfolio and then we have some which are in more challenged categories. I think in almost every case we have a plan that we have confidence in that we’re investing behind that can accelerate that growth and the ones that are looking at more challenged categories. We’ll see how that goes. That having been said, I do think that one of the benefits of the trackers is creating greater focus around this and greater opportunity for us to do something in terms of partnerships or the like that will be more meaningful in the context of the Liberty Digital tracker size and would have frankly been somewhat lost around LINTA. So, we’re certainly aware of that. We’re also aware that Liberty has been known to shift its portfolio over time and in some of these we have pretty good basis and others we don’t. So we’ll see how it all plays up.

So, Matthew on the carriage agreements, you’re right that that there is a variety of carriage agreements internationally but probably on average somewhat higher, probably the majority of those carriage agreements are fixed at some level, the fixed fee arrangements which gives you nice leverage when revenue is really strong and some pressure revenue is softer. So it a different kind of arrangement and they don’t get a same benefit that U.S. gets therefore from the shift to e-commerce. In terms of what if the U.S. moved to more of kind of an arrangement; we feel very comfortable with the arrangements in the U.S. and feel it’s a very kind of fair and balanced structure that rewards the carriage provider for driving sales on the broadcast because anything we sell that’s aired that day on any platform, they will get a commission on and we negotiated some major contracts in the last couple of years that have not exchanged that arrangement. So we don’t anticipate any change in that fundamental structure in the U.S. going forward.

I know I’m being bad in asking another question but if you’ll forgive me. If you look at Liberty, a lot of the D&A is just orchestrated toward your big swings, like your SiriusXM or U.S. cable, and when you look at the new international markets, the capital light model you talked about, less of investment than Italy; it seems almost counterintuitive that you wouldn’t be more aggressive than your one market every 18 months or so? Is that something that you could possibly change or are you still just really, really looking at staggering things out like you said just a couple of weeks ago?

We are gated by two factors in coming up with that kind of timeline. One is just reality of really finding and structuring deals that we think we’re highly attractive and these take an awful long time and so significantly accelerating that pace would imply that we’re able to kind of get these deals done on a much faster time table and that can happen but it’s very opportunistic and very episodic. So, it’s little hard to predict the specific timing. The other thing we’re gated by is just making sure that we can execute with excellence and we do send a team of experienced QVC leaders in to these markets, along with hiring a lot of folks locally that want to make sure we’ll have the right people, the right systems, the right tools to execute it at our level. So, those are gating factors. Now I would tell you that we have worked hard to prepare ourselves, that if were so fortunate to get a couple of major deals of the finish line at the same time, we wouldn’t shy away from doing two deals practically simultaneously. So, there is certainly some give and take on that broad timeline I gave you but over some long period of time, I think that’s realistic assessment of the funnel and deals as well as our capacity to execute well.

And next, Tom Forte with Telsey Advisory Group.

So first question I have was I think this was your strongest performance in the U.S. for unit growth since the third quarter of last year. So, what should beat that? And then the second is where do we stand on jewelry in U.S.? I know in fitted gold prices have put crimp in the results for a while, but what would it take to improve the results for jewelry in the U.S.? Thanks.

So, unit growth is a really function about mix, little bit of growth in some of our lower ASP categories and also just a 5% top line. So that’s bus driving the unit. Jewelry for us is still work-in-progress. And a matter of fact, just learning today that gold has really come down quite a bit to your gold statement. So, for jewelry we have a team working on it. It’s not an overnight fix for us because it has been a pretty difficult business to reposition, knowing how much of our business was in gold in the past but we have a very strong designer business, we have a healthy costume business, we're beginning to see a little bit of a resurgence in some of the basics in the jewelry business. So we’ll keep working at it. But it is a work in progress,

And we'll move on to Jason Bassinets with Citi.

Have a question on Liberty Ventures for Mr. Maffei. As we think about future investments that you might make at Ventures and the size of those, how should investors think about it? Do we think about it as sort of the annual cash that will come in from QVC for use of your shield or is it Vat plus whatever cash you have on the balance sheet?

Well I think Jason; it tends more to the latter. We have quite a lot of available cash, not only I think the $1.5 billion today but once we complete the trip, Liberty trip spin, there'll be some incremental money coming across half the cycle through but effective to another $250 million. So there's quite a lot of available cash, I think we'd be disappointed if we were only able to invest the amount of the shield.

And how, if you can just give a sort of,

Having been said, we barely investment the amount the shield to date. So I’ll acknowledge we’ve been failing.

Okay. But if we were sitting inside your planning room there, is there like a list on the wall of 36 investments and you're just picking one or two that seem extraordinarily attractive and there's lots that are out there?

No, I think we are we kind of had two main thrusts. We have got a couple of people who are focused on and looking at some of these green tax oriented investments and you been hearing us chip away at those, none of which, though Abengoa one is large in initial capital because of the quick return of enormous amounts. None of it is enormous amounts of capital being held, constantly invested. And then we have a broader corporate development team, which is looking probably more at things that are more traditional for Liberty, lots of as I said distribution kinds of assets and content assets and I think, if you know, they are probably 10 names in house we’re discussing at any one time with varying degrees of interest and varying degrees of development.

And we’ll move on to Victor Anthony with Topeka Capital markets.

Question on the commerce group. As I look to try to value the assets post the spend, maybe you could help us out with a 1-2-3 revenue growth trajectory for these businesses as a whole, as well as the margin expansion, and also out of the five major businesses, which ones are you most excited about along the lines of revenue growth and margin expansion, and has anything changed from a capital structure perspective since the Analyst Day?

I'll take the easy one first. I don’t think we’ve anticipated any change being announced that we were going to see the $250 million credit facility of which roughly an average balance of about $60 million will be drawn and I still think we believe that. As far as, which businesses we love, that's like about all your children, you're reluctant to say which one you like, even if it's one moment or the other, they're making you less or more happy. That having been said, just as the approximate, the fastest growth assets in there have been CommerceHub and BodyBuilding over the last several years and I don't think that's going to change. I think there are plans, good investment plans that provide RedEnvelope. There are good investment plans around that country but unfortunately some of that Country's results are going to be impacted by weather, less snow early, but it'll be cold early in San Francisco, New York, LA, that'll make us very happy. And then by costumes we're probably in the toughest somewhat of a turnaround mode and I think the management there has got a good plan but it’s probably the toughest space. As far as the overall growth rate, I think we’ve been looking at numbers which have been averaging sort of mid-teens plus and I don’t think that's an unrealistic set of assumptions. Could get better but that's probably a conservative set.

And our final question today will come from Carla Casillo with JPMorgan.

You had mentioned that returns had ticked up a bit internationally. I'm wondering if it’s dramatically different in one geography versus another and if it is just mix related or there could be any changes you're making to design?

Yes, it’s certainly concentrated in two markets, Japan and Germany. So that's really where we're seeing the return rate pressure. I would say it’s largely mix related. There are some specific anomalies. For example in Japan we had built a large business on made to order jewelry. We’ve decided to reduce that and the mix because it's not a great business for attracting new customers but it has the benefit of not allowing returns. So when you shift that to a returnable business you see a sort of one time pop in return rates. So we have I would say, it’s largely driven by growth in the fashion businesses in Germany and Japan by this change in jewelry and I would say we’ve had some quality issues that we need to pay more attention to, that's a minority of the issue, but I think there's been some things that we could have done a better job of, either in terms of quality control or how we present and describe the item on air. The teams are working aggressively on all those fronts. While the return rates are still up in Jewelry the rate of increase is moderated and we'll start to see these numbers normalize next year. We’ve had a few quarters now where we've seen this bump, mainly mix driven.

Okay, great and then just one credit question. Given our markets are generally strong in credit markets and all the transactions you have contemplated, do you expect to come to the market anytime on the credit side?

This is Greg, I think we’re not going to tip our hand but as we’ve expressed long term, our desire and belief that these are attractive markets and we will be opportunistic in seeking situations to extend our maturities at attractive rates. So with that operator, I think we’re done, thank you very much everybody for your continued interest in Liberty and we look forward to speaking with you next quarter, if not sooner.

And that will conclude today's call. We thank you for your participation.