Qurate Retail, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Investments In Affiliates Accounted For Using The Equity Method

Investments In Affiliates Accounted For Using The Equity Method

6 Months Ended

Jun. 30, 2011

Investments In Affiliates Accounted For Using The Equity Method

Investments In Affiliates Accounted For Using The Equity Method

(7) Investments in Affiliates Accounted for Using the Equity Method

Liberty has various investments accounted for using the equity method. The following table includes Liberty's carrying amount and percentage ownership of the more significant investments in affiliates at June 30, 2011 and the carrying amount at December 31, 2010:


				December 31,
	June 30, 2011			2010
	Percentage	Market	Carrying	Carrying
	ownership	Value	amount	amount
	dollar amounts in millions
Interactive Group
Expedia	25%	$ 2,007	$ 753	710
Other	various	N/A	265	239
Capital Group
SIRIUS XM	40%	$ 5,665	--	5
Live Nation (a)	21%	$ 449	371	--
Other	various	N/A	89	86
			$ 1,478	1,040

The following table presents Liberty's share of earnings (losses) of affiliates:


	Three months ended		Six months ended
	June 30,		June 30,
	2011	2010	2011	2010
	amounts in millions
Interactive Group
Expedia	$ 35	28	48	42
Other	2	8	9	17
Capital Group
SIRIUS XM	(1)	8	(8)	--
Live Nation (a)	(22)	--	(45)	--
Other	1	(5)	3	(11)
	$ 15	39	7	48

(a)During June 2011, Liberty acquired an additional 5.5 million shares of Live Nation which increased our ownership percentage above 20% of the outstanding voting shares. Due to the presumption that an entity with an ownership percentage greater than 20% has significant influence and no other factors would rebut that presumption, the Company is accounting for the investment as an equity method affiliate. The Company has elected to record its share of earnings (loss) for Live Nation on a three-month lag due to timeliness considerations. Increases in ownership which result in a change to the equity method of accounting generally require retroactive recognition of an investment's share of earnings (loss) in prior periods. Due to the relative insignificance of our share of losses for Live Nation in previous periods, both quantitatively and qualitatively, the Company has recorded such amounts in the current year. Approximately $12 million of the losses recorded for the six months ended June 30, 2011 relate to the prior year.

Expedia

Summarized unaudited financial information for Expedia is as follows:


Expedia Consolidated Balance Sheets
	June 30,		December 31,
	2011		2010
	amounts in millions

Current assets	$ 2,954	1,702
Property and equipment, net	318	277
Goodwill	3,679	3,642
Intangible assets	793	798
Other assets	301	232
Total assets	$ 8,045	6,651

Current liabilities	$ 2,998	1,889
Deferred income taxes	266	248
Long-term debt	1,645	1,645
Other liabilities	122	132
Noncontrolling interest	134	64
Equity	2,880	2,673
Total liabilities and equity	$ 8,045	6,651


Expedia Consolidated Statements of Operations
	Six months ended
	June 30,
	2011	2010
	amounts in millions

Revenue	$ 1,846	1,552
Cost of revenue	(376)	(327)
Gross profit	1,470	1,225
Selling, general and administrative expenses	(1,116)	(902)
Amortization	(15)	(17)
Restructuring charges and other	(4)	--
Operating income	335	306

Interest expense	(62)	(41)
Other income (expense), net	(3)	3
Income tax expense	(77)	(92)
Net earnings	193	176
Net earnings attributable to noncontrolling interests	(1)	(2)
Net earnings attributable to Expedia, Inc.	$ 192	174

Sirius XM Radio Inc.

Based on Liberty's voting rights and its conclusion that the SIRIUS XM Preferred Stock is in-substance common stock, Liberty accounts for its investment in the SIRIUS XM Preferred Stock using the equity method of accounting. Liberty has elected to record its share of earnings (loss) for SIRIUS XM on a three-month lag due to timeliness considerations. As of March 31, 2011 and 2010 SIRIUS XM had total assets of $7,229 million and $7,740 million, respectively, and total liabilities of $6,930 million and $7,588 million, respectively. SIRIUS XM's net income attributable to common shareholders was $78 million and $42 million for the three months ended March 31, 2011 and 2010.

As of June 30, 2011, the SIRIUS XM Preferred Stock had a market value of $5,665 million based on the value of the common stock into which it is convertible.

- Definition

The entire disclosure for equity investment, or group of investments, for which combined disclosure is appropriate, including: (a) the name of each investee and percentage of ownership of common stock, (b) accounting policies for investments in common stock, (c) difference between the amount at which the investment is carried and the amount of underlying equity in net assets and the accounting treatment of the difference, (d) the total fair value of each identified investment for which a market value is available, (e) summarized information as to assets, liabilities, and results of operations of the investees (for investments in unconsolidated subsidiaries, common stock of joint ventures, or other investments using the equity method), and (f) material effects of possible conversions, exercises, or contingent issuances of the investee. Other disclosures include (a) the names of any investee in which the investor owns 20 percent or more of the voting stock and investment is not accounted for using the equity method, and the reasons why not, and (b) the names of any investee in which the investor owns less than 20 percent of the voting stock and the investment is accounted for using the equity method, and the reasons why it is.

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