Annual Investor Meetings of Liberty Media and Liberty TripAdvisor

Nov 10, 2016 AM EST
FWONA - Liberty Media Corp
Annual Investor Meetings of Liberty Media and Liberty TripAdvisor
Nov 10, 2016 / 02:00PM GMT 

Corporate Participants
   *  Courtnee Chun
      Liberty Media Corporation - VP, IR
   *  Greg Maffei
      Liberty Media Corporation - President and CEO
   *  Jim Meyer
      Sirius XM Holdings Inc. - CEO
   *  Terry McGuirk
      Atlanta Braves - Chairman and CEO
   *  Steve Kaufer
      Liberty Media Corporation - President and CEO, TripAdvisor
   *  John Malone
      Liberty Media Corporation - Chairman
   *  Chase Carey
      Formula One - Chairman
   *  Mark Carleton
      Liberty Media Corporation - CFO
   *  Mike George
      Liberty Interactive Corporation - President and CEO, QVC
   *  Darrell Cavens
      Liberty Interactive Corporation - President and CEO, zulily
   *  Chris Shean
      Liberty Expedia Holdings, Inc. - President and CEO
   *  Frank Poore
      Liberty Interactive Corporation - CEO, CommerceHub
   *  Tom Rutledge
      Liberty Broadband Corporation - President and CEO, Charter Communications
   *  Michael Rapino
      Live Nation Entertainment - President, CEO

Conference Call Participants
   *  Barton Crockett
      FBR Capital Markets & Co. - Analyst

Unidentified Participant   [1]
 This presentation 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 performance, new service and product launches, the proposed acquisition of Formula One and its anticipated benefits, the new Atlanta Braves Stadium and mixed-use facility 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. These forward-looking statements speak only as of the date of this presentation and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any such statements to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances under which any such statement is based.

 Please refer to our publicly filed documents including the most recent Forms 10-Q and 10-K for additional information.

 At today's meeting, we will discuss certain non-GAAP financial measures. Please refer to the Appendix at the end of this presentation for definitions and applicable GAAP reconciliations. The Appendix will be available on our website throughout this meeting.

 Courtnee Chun,  Liberty Media Corporation - VP, IR   [2]
 Good morning and welcome. I'm Courtnee Chun, SVP of Investor Relations for Liberty. Thank you for joining us today. So we will have a few sessions, one in the morning and one in the afternoon. Here is the agenda for today.

 Just a few housekeeping items before we get started: the Wi-Fi info is going to be up there in a second, so please take that down. Overflow -- so it looks like we are pretty full today. And if for some reason you don't get a seat at some session, go downstairs in the hall. We will be having slides and broadcasting down there as well. And the hall will close at 2 PM today but Live Nation has been nice enough to supply the lounge downstairs, so you can watch the presentations down there. Also this year we are giving away water bottles to commemorate the 25th anniversary of Liberty, so #SimplyLiberty. I'm sure they are going to be collectors' items. So, Amy Yong, no writing about the lack of a swag bag this year, please.

 The slides will be posted on the website but after we do the necessary SEC filings. So please give us a little bit of time; it's a long meeting to transcribe and get filed.

 In addition, there are a lot of appendices for these presentations. So please take a look at them.

 Greg Maffei,  Liberty Media Corporation - President and CEO   [3]
 Good morning. Thank you for joining us here today. We keep trying to raise the bar on these presentations. I'm not sure what's left, but we will try. Some of you may have known that we reached an agreement to purchase Formula One and we are rebranding [Sweeney]. You may recognize the trademark mustache. Chase was with us last night for dinner but unfortunately is unable to be here today.

 Milestones since we saw you last year, several. Starting up at the corporate level, we settled our litigation with Vivendi for pretax proceeds of $511 million, and we completed the tracking stock recapitalizations into the three tracking stocks below.

 At Liberty Sirius XM, they were busy. We've upped our ownership to about 66%. The Braves undertook a rights offering, raised about $400 million to complete the ballpark and mixed-use stadium. And they had significant progress on on-field performance in the second half of the year with a new manager; actually ended up with the second-best hitting, batting average in the National League, .277, for the second half of the season and a lot of other on-field performance metrics that look substantially better.

 And then over at Liberty Media Group, which announced its agreement to acquire Formula One, as we said, for just a little over $8 billion, we completed our investment of 19% in two phases. The backend closing, we hope to complete somewhere in the first quarter, hopefully in the first half of the first quarter. We raised $445 million of exchangeable debt, which helped fund the initial 19%. And we closed a $500 million margin loan.

 We will be changing the ticker of LMCA&K to ONE, but we will -- I can't even get a laugh. Come on. ONE, if you don't care for the accent on the engine noise.

 Our performance over the last year in Plus has been pretty good. This has been since we started the process of spinning off Starz, LBRD and LSXM, about a 14% compounded rate of return, which exceeds the market and most of the metrics of our peers.

 If you look a little longer, back to when we actually created LMCA with the division from Liberty Interactive, it has really been quite impressive, 26% compounded, well in excess of S&P and the NASDAQ.

 So I'm going to first talk about Liberty Sirius, a great performer but still annoyingly, to us, stubbornly there's a discount -- some of the reasons, perhaps the supply dynamics for Sirius, a $7 billion, roughly, equity, buying back $2 billion a year versus LSXM, roughly an $11 million public float, $13 billion NAV with no active buyback program.

 Speculation -- we may pay a premium of a new amount for those Sirius XM shares that we don't own. I would hope our history had suggested we are unlikely to do that. But maybe the market doesn't quite believe us. Tracking stock discounts, rumored Siri dividend which obviously has now occurred and a current market premium for dividend paying stocks, which hopefully that dissipates.

 We continue to look at ways to solve this problem. I don't think it will last forever, and at the right time and moment, I'm pretty sure we will solve it. So, stay tuned.

 So looking at the capital deployment at Sirius, it has been able to both grow its EBITDA at such a rate that, even with buybacks outpacing free cash flow, we have not had substantial increases in leverage, particularly over the last two years, where it has held reasonably constant at 3.3 to 3.4. The Sirius XM investment case continues to be primarily levered return of capital through share buyback. But we did institute, as I said, the $200 million annual dividend, about a 1% yield. And I expect that will grow over time and we will start out with a nice starter dividend with training wheels, and we might grow into it. We'll see.

 But as you can see here, the amount of free cash flow that the business has generated has allowed us to return substantial amounts of capital through share repurchase, primarily. I know that Jim Meyer is going to talk more about that.

 I'm going to talk a little bit more just for a second about the music business. If you look over the longer term, over the last 10-plus years, the music business has been in gradual decline, looking at the recorded music side.

 More recently new revenue sources have changed that to a degree. You've seen growth in streaming. And if you look off the chart at another business we have, Live Nation, which is going to present later, you have seen the enormous growth in touring.

 But that has only really stabilized what is a general decline in the physical goods. And in certain markets, physical is still very important, like Japan. But in a lot of markets physical is basically gone. And the growth of digital, which is now primarily downloads, which is now starting to be reduced by streaming, and the growth in performance rights.

 There are other models, as I said, and different ways to look at music that have changed dramatically over that 12 years. If you think about when we were kids, you might go find a record to listen to with your friends. And you would pick the favorite song and you would be listening to that song again and again. Or you might go to a jukebox and play your favorite song.

 That lean-in kind of experience today that kids have, primarily, and not less this audience is one where you go and search the song you want or maybe create the playlist you want. And that's allowed on YouTube or iTunes.

 At the other end of the spectrum, there is a laid-back experience where you are leaning back -- you might be in your car, you might be having this background where you have music that is curated and primarily made for you. In that range of experiences there's a whole bunch of companies which are pursuing those services in different ways.

 And they are not bright lines. Spotify had some lean-in, Spotify has some lean-back, etc. But we are very cognizant of the ways in which people listen to music, very dramatically. And there are ways to try and attack and profit from being in the right segments. And that's certainly what Sirius has done very well.

 If you look at this rise of streaming, which is what gets all the noise, we are less certain about that. Why?

 Well, there is lots of growth. There are also a lot of players, 57 estimated in the United States alone, and $2.9 billion of revenue. Now, I'd point out to you that $2.9 billion of revenue compares fairly unfavorably to the $5 billion plus that Sirius XM alone will have.

 And if you look globally, 400 players trying to capitalize on this business. Not a business that looks as attractive -- and while there is growth and it's estimated that the market will grow up to about $5 billion, it's still not clear with that many players and the structure of the way the business works, it's that attractive.

 And let me walk through, a minute, how we look at streaming economics. First, there are already two scale players on a global basis: Spotify and Apple. They've had good growth rates. They've done many things to juice their subscriber growth through promotions.

 My two oldest sons, 20 and 18 now, wait for the Christmas promotion when Spotify offers three months for $0.99. They always hit that and then they split the password. So the ARPU on that probably is not that attractive.

 Combine that competition with the fact that it's highly strategic for people like Apple, people like Amazon, who obviously have other ways to monetize, and we think there is going to continue to be enormous price pressure on what will happen to ARPU over time. And you can see there what the effect of monthly Spotify pricing is. It has continued to come down with that discounting. Bundling also hurts. And I think that's only going to continue.

 If you look over at the lower left, there are issues as well on the cost side. We live in a world at Spotify primarily where the CRB and Pandora does where the CRB sets the rates for what we can be charged for content. We obviously have a lot of content unrelated to music that is negotiated freely, whether it be Howard Stern or ESPN. But the music side is set by the CRB.

 That's not really the case with these streamers. And they are paying out huge amounts of their cost of goods sold comes in the form of this content which is unregulated. And it has had a high degree of variability in their P&L and creates what we think is unlikely to be an attractive situation for them continuing on a basis. And the [depth] now of people who have already tried to make it in this business continues to grow, and I don't think it's done.

 So let's look at another market. I talked about the lean-back. Another part of the market which continues to be big is the free market. So if you have an excess of lean-back and lean-in, and other access could be paid and free. And that free market is not going away.

 Sirius has done as well as anybody, and you will hear a lot more about it today, at going after people to get them to pay for premium content.

 But Jim Meyer can articulately state that, no matter how many times we pound you -- pay, pay, pay -- there is a certain percentage of the market who will never pay for premium content.

 And the goal is to try and service that as well. And that market is quite big. In the United States the terrestrial broadcast market is about $17 billion and it has held relatively constant. They have attractive reasons. Because of historical laws they are actually exempt from paying performance fees and their songwriter fees are regulated to a more modest level.

 We actually look at this part of the market as much more attractive, and entrants like Pandora, we think, are in some ways better positioned to go after it and compete because they have a technology advantage against traditional broadcasters, compared to being in that streaming market which is considerably smaller. There are a bunch of people who have strategy reasons why they want to be there and are competing for a relatively smaller pie.

 So we look at this in a way where it's interesting to us. And we continue to look at ways how we might be able to compete in this part of the market.

 Free is not going away. There will always be a free element, in our judgment.

 So I contrasted a minute ago how unattractive the streaming economics were and how there were many reasons why streaming is not a great business. We certainly watch it. We have a streaming element of our own, but a standalone streaming business looks very tough to us.

 And if you look at and contrast that with Sirius XM -- proven, profitable business model, portfolio of diverse content that helps build a moat, established distribution relationships with OEMs. We are in approximately 70% of cars now. We frankly don't want to be in anymore, because at the lower end cars we won't get traction and people actually taking up and converting to a full-time paying subscription. We have enormous ease-of-use advantages, a highly loyal customer base of 31 million US subscribers. We have an advantaged financial profile, given its efficient cost structure, better margins and a high free cash flow conversion.

 What's not to like? It's a Liberty business to the max.

 In addition, there's lots of optionality here, things that are being done to go forward. You're going to hear more about 360 L platform, which is how we really take advantage of the best of having broadcast through satellite and having a pull product through streaming, and you do the -- to bring together both linear distribution and interactive functionality. You will hear about that. And you will hear about some of the things that we have going forward on the connected vehicle and options and opportunities we have there.

 In contrast to the scale, the growth of streaming and the growth that has happened, there is very little that's actually being given to the artists. So Drake --

 I know you are all very familiar with Drake. Drake is the most popular artist on YouTube.

 And for 2.9 billion plays of his music, which is just a stunningly large number, he received $2.3 million. He's the largest. That was about 6% of his total Drake income in 2015.

 And you can see here on the upper left how little the revenue per play is and the monthly plays needed to earn the US minimum monthly wage. It's stunning how scaled this business is and how unattractive the economics are -- both, in our judgment, for the companies but also for the artists. And you can see some of those numbers down there about how touring made such an enormous amount of Taylor Swift's income in 2015 and who some of the leading tours are. You are going to hear a lot more about why the touring business continues to be attractive and the growth we are experiencing in Live Nation, from Michael Rapino, in a little bit.

 We will even bird the model, though. It used to be, when it was set up, and that's one of the reasons why there's the protection for terrestrial radio companies, that radio was a way to promote selling albums and records, and that's why they had free content because it was viewed that they were helping the artists. Now it has really been inverted.

 Streaming is a way to promote. YouTube is a way to promote tours. And that's where the artists are getting the bulk of their money.

 All of that led to another record year for Live Nation. And Live Nation, as I note at the top, benefits from bringing together supply, the artists; and demand, in the form of the ticketing. We fed enormous growth in the last year with strong tour activity, a record 70 million fans.

 As I noted, touring continues to be artists' main source of income. And touring frequency is growing because they see the appeal and the global nature of that, increasingly. As we've talked about before, you might have done US concerts and one or two outside the United States. Global tours are more and more a function of the economics that work for artists. And they more and more play to the strengths of Live Nation as being the premier global promoter and ticketer.

 All of that suggests growing strength for us and that the road ahead will allow us to gain more share of large event tickets globally. We currently promote in 40 countries and it's going to continue to grow with the leverage, the scale that Live Nation has to improve its e-commerce and sponsorship opportunities, and look to invest in new technologies, really, where we have the scale advantage to take advantage of that and go after things that could be done that are differentiated, make the consumer experience better in a way that's very difficult for other, smaller players.

 We've also talked, obviously, about our growth in the secondary market. I know Michael Rapino will talk more about that.

 Before I talk about Formula One, which is our newest property, I want to show you a quick video on Formula One (plays video).

 Hopefully, as exciting as that video is and as exciting as the sport of F1 is, we think the opportunity and the economics are equally exciting, almost. To remind you, as I said, we paid a little over $8 billion for the enterprise value of Formula One. You can see the other elements that are in the NAV over there of the Formula One group, our shares in Live Nation, about a 34.4% interest, our other public holdings, an interest in the Braves group and some other private assets in cash, to total NAV of about $5.5 billion.

 It has been a complicated year at Liberty Media Group. And you can see the effects of that over on the right-hand side. When we began trading in April, the market cap was about $1.5 billion. And through primarily the growth of Live Nation during the year, market cap rose to about $1.8 billion.

 When we issued the shares in the transaction that we are proposing or, rather, that we propose to issue, they had a market cap of about $3.3 billion. Those shares have grown by about $1.1 billion. About $741 million of that value goes to the new holders and about $404 million went to the existing holders. We issued at the price of $21 and change or we are issuing at the price of $21 and change to the holders of Formula One, the legacy holders. And obviously, the stock has traded up nicely since then, $28, $29, depending on the day.

 As I said, the market has liked it. We are up about 23% since the announcement in early September, and for the year, up about 47%. So pretty attractive returns.

 We structured a transaction. It was not easy, by any means, something we worked on for several years. And the Liberty team in total deserves a lot of credit, in my judgment, for trying to do something which met the needs of all the parties, both to give us operating control of an incredibly attractive asset and keep our LMCK issuance in terms of voting structure and an efficient tax position meeting the needs of the legacy F1 owners, primarily led by CDC, who have had a knockout homerun but still wanted to capitalize on that but also continue to ride on the growth of the asset and the potential for the asset, particularly under the leadership of Chase Carey.

 We expect Donald McKenzie of CDC will join the Board of Liberty Media when we close the transaction in the first quarter. We obviously also went to meet the needs of the teams. And I think, as what has been mentioned, we have expectations that they will become owners in Formula One, primarily through the placement of some of the shares of the CVC Group to them.

 And they are excited about some of the things that Liberty and Chase can do for the sport. And, above all, try to meet the needs of the fans, which is to bring in new opportunities -- and we'll talk about more of those in a second -- and an ownership structure which was ongoing and focused on the long term.

 Why do we like the business? Pretty rare; it's almost impossible to buy a global sports franchise of the scale of Formula One. You can't buy the Olympics. You can't buy SEFA. This is about as broad and wide as you can get with a huge competitive moat, in our judgment, unique scale.

 Massive reach -- five continents, 21 countries, 21 events in 2016, over 400 million fans and a very attractive demographic for sponsors and advertising, and a very attractive financial profile. Revenue from multiple sources including broadcast, sponsorship and venues, opportunities ahead that I'm going to talk about, multiyear contracted. We have an enormous percentage of revenue we can look forward and say we know it's coming, it's under contract, makes it very secure and allows us to support higher degrees of financial leverage, allows us to know and have certainty on the asset-light model that we have and a very tax-efficient structure.

 If you look at the reach and the consciousness of F1 in the minds of the media and fans around the world, it's stunning. You have royalty and NBA stars, Brad Pitt -- I don't see Angelina there. Most importantly, Kendall Jenner and her friends come. (laughter)

 There's wide demand for the sport across the globe. And if you look at the scale in terms of how big racing attendance is and compare it to many sorts of other big events, it's really quite stunning -- 140,000 people at Silverstone is just amazing. And we have really world-class sponsors from Heineken to UBS to Rolex to [Flight] to Air Emirates.

 A few fun facts -- in 2015, 1.5 billion people cumulatively watched F1. It's under two seconds -- if you come and watch, it's really stunning. There are so many parts that are stunning about the technology, so many parts that are stunning about how this is executed.

 One of the most impressive is if you watch how quickly they can tire change, in two seconds or less. The precision that goes into this, the amount of effort, is quite stunning. But there are a whole bunch of other fun facts there and many of them we hope to capitalize on more. One of them is about building personalities. And Max Verstappen, who won the Spanish Grand Prix, is 18 and is a great example of the kind of media personality, as well as, obviously, a Lewis Hamilton that we hope to build on and capitalize on.

 I talked -- I mentioned, rather, we have a very attractive financial structure, adjusted EBITDA margins of 26%, unlevered free cash flow margins are basically exactly the same. We have a conversion of about 98%. The largest cost item we have is team payments, and those are variable based on the growth in the sport and give us a lot of confidence in how the structure will work going forward. Team payments represented about 66% of adjusted EBITDA in 2015.

 We do expect some modest margin expansion in the near term, but that will to some degree be offset by continued investment, because we think there are opportunities in sponsorship, marketing, digital that we want to capitalize on and invest in, to try and build for longer growth.

 We have very little foreign-currency risk. The vast majority of our contracts are denominated in US dollars.

 Recent growth trends that have driven this business include the growth in the number of races. In general, the growth in the demand for live sports that is taking our broadcast rights higher, and there are escalators in those rights, broadcast fields as well. And we haven't had much growth in advertising and sponsorship, but we view that as an enormous opportunity.

 Where do we look to go, going forward? Race promotion. I think there is some opportunity to increase the number of races and make sure we're in the right markets. Over the long term I think we can -- obviously, the focus has been Western Europe, and places like Monza and Monaco will always remain the heart and soul of F1, but there are other places where there's enormous demand, potentially Latin America, Asia and the United States.

 I think there's an entertainment experience that can be built upon, and obviously the Liberty family is experienced with businesses like Live Nation and Ticketmaster, who know how to run those experiences, we think can help. And if you look at some of the best, from the best to the worst, some of the best experiences are places like Singapore, where Live Nation has an enormous role. And we can make that experience better for all of the kind of races. So there's opportunity there.

 Broadcasting -- there has been some movement from free to pay. I think the trend potentially continues. In competition for sports rights is something that's ongoing and of which we are a beneficiary. The new Sky deal is an example of that movement from a free-to-air to a pay service that has dramatically improved our revenue stream.

 We think there are things we can do to improve our position within even the services where we are today by building interest in the races and improving the product. And we have some ideas around that over time.

 Advertising and sponsorship -- we have three executives involved in advertising and sponsorship, only one of whom is dedicated to that. In contrast, Major League Baseball has about 80 people involved in sponsorship. And you see the commensurate number where we have a teens number of sponsors for F1 and we have something like 75 sponsors for MLB. Opportunity there, we think, is enormous.

 Digital -- F1 really has no presence in digital, and few sports cry out more for digitals in lots of ways. First, we have an enormous amount of data and we have an enormous amount of video which we can capitalize on, and we don't. We have an enormous fan base, some of whom are incredibly dedicated and worldwide, and the potential for a digital experience of over-the-top, incremental information is enormous. Things like virtual reality and augmented reality -- few sports call out for it more and few sports have done less to capitalize on it. So lots of things we think we can do.

 And expanding the franchise -- Chase Carey and I walked around the Monaco race back in May when we had not yet bought it but we were looking, and we tried hard to buy some F1 merchandise. We came back with all the money in our pockets -- literally nowhere to buy it.

 I think opportunities -- obviously, that says about not only just the opportunity to monetize on the merchandise but how to get the brand out better and do more. I think there's a lot of things we can do around that.

 There are secondary races, GP2 and GP3, which we can build upon. And we think there are other things just around the sport itself that can be done far better.

 So we are very excited for F1. We hope you are as well. We love the initial market response. Obviously, the real question will be over the long term how we are able to build the business. And I think we are putting together a great team who can do that.

 So with that I like to introduce our new CFO, new to this group, Mark Carleton.

 Mark Carleton,  Liberty Media Corporation - CFO   [4]
 Thank you, guys. Good morning. I want to take a minute to talk about the Atlanta Braves. We'll hear a little more about this later today from Terry McGuirk and the team.

 But we think the Braves are really in a strong position to grow long-term value. We think the team, the ballpark and the mixed use are all really well positioned to help drive what we're doing.

 And that really starts out with our management team. We have got an experienced, long-tenured management team that we certainly view as one of the best in the business. As you look at great leadership teams in baseball, you think about teams like the Cardinals and like the Giants and you think about teams like the Braves. And it is a really good team that's leading it.

 They have had, historically, a really good balance, rational and thoughtful in terms of building and investing in the team talent. To win in baseball, you got to have a balance of young kids, kids you develop as well as experienced players in free agents that you sign. And that balance is key to success. You saw it in the World Series this year with the combination. And our management team there is really top-notch at that and gets it. And certainly our minor-league system that suffered for a couple years, you will hear from Terry McGuirk, is really back in the top tier again.

 We expect pretty good near-term and long-term growth and revenue and free cash flow from the new ballpark. History tells us that there's a 15% to 25% increase in revenues as you move into a new ballpark. And obviously, as you will see more from Terry later, this ballpark is quite extraordinary.

 So we are looking forward to that. Some of that will flow through to the bottom line and some of it will prudently go into our own-the-field talent.

 Another plus of having a brand-new stadium is CapEx is very low. We expect less than $4 million a year in CapEx going forward. And then we certainly expect a future value bump with our RSM contract renewal in 2027. We are far from the elite, far from the top in terms of revenue from the television contracts.

 People like you guys oftentimes like to look at these Forbes valuations for teams. So I thought we would take a minute and look at it.

 These stats -- we've pulled out the Clippers because it is such an outlier in terms of relative value of the other teams. But interestingly, as you look at the Forbes values of these teams and the actual premium to Forbes when these teams were actually sold, it's pretty significant. The sales multiple is around 4.5 times when, if you look at where our, where the Braves' stock (inaudible) trade now, it's around 2.3 times. We will see more about that later. And that premium to Forbes is about 43%. So in terms of the team and the ballpark, we are really in a good position.

 Let's talk a little bit about mixed-use. This has proven to be a very exciting product for us. We've seen a number of great mixed-use opportunities around the country. LA Live certainly was one of the first ones, what's happening in Sacramento at the Golden One Center, 1060 Addison in Chicago. We point out the numbers in LoDo, where Coors Field was built in 1995 -- and those of you that went down there, lower downtown was homeless shelters and very, very rough area. And it has been completely transformed with housing, restaurants and bars and almost $200 million of economic impact a year.

 So mixed-use in general, we think, is really good. But we've taken that in another level here. The mixed-use here in Atlanta is being done simultaneously with the Stadium. It's integrated, it's coordinated, it's connected with the Stadium. So we will flow together and work together like we haven't seen before.

 And secondly, we have got experienced partners in each component of development. We are driving this development but we've got the Omni guys, strong hotel partners. We've got Comcast as partners on the business. We've got Live Nation as full partners on our entertainment venue. So we like that combination. Our partners have real money at risk in these ventures, as do we. And we think that puts us in a really, really good position to leverage and capitalize on this.

 And our new location in Atlanta and being in Atlanta is very positive -- great, great demographics, great flow. We are really excited about it. And fortunately, unlike some of these other projects, this project has been on time and on budget all the way along. It has been really good.

 Now -- which brings us a little bit to the Braves group net asset value, which we thought was something that was worthwhile to point out.

 This is a bit of an illustrative example as you look at the value. We started out with the team itself, and that's a 4.5 multiple of revenue including around a 20% increase in revenue in the first year in the new park. It doesn't include any what I would say more current valuations for the ML band interest that the team owns there, a pro rata share of or any of the new television contracts or the likes that certainly may come in. But there's certainly an argument that you can look at that number.

 On the ballpark, given the money we've got from public sources and debt, there's really no investment in that ballpark from the Braves. We've included it in here at zero. You could certainly argue that that Stadium is worth more than that and will pay more dividends than that over time.

 On the mixed-use development, between debt and between some of our third-party partners we will have about $200 million in there. For purposes of this analysis, we just left that in at cost. I can tell you we have detailed business plans on every component of the project. Each retail, the building, the hotel, the entertainment venue, all the residences, etc., and we are certainly looking at double-digit IRRs and returns on our invested capital in those projects.

 But we put that in there at cost. We have a little attributed cash and some other debt, which brings us back to a not unreasonable asset value for this business of about $1.5 billion, which today is around -- the market cap of [that is] around $700 million less than that on an apples to apples basis.

 So Terry will talk a lot more about the details of the Braves but we wanted to give you some highlights about that. And the team, the ballpark in the mixed-use are really, really in a good position. Thanks.

 Jim Meyer,  Sirius XM Holdings Inc. - CEO   [5]
 So if you take a quick glance at Sirius SM, we stand today at 31 million paying subscribers. That's about 1.7 million higher than when I stood on this stage a year ago. Obviously, what we are all about is we bring 150 channels of curated content. Commercial-free music is something that's very important to our subscribers. We are in slightly more than 75% of all the new cars built in the US market every year. And we have a 30% installation rate in used cars sold in the US and growing, and this is really, really, really important for -- I'll show you in a moment how our trial funnels work and where a lot of our growth will come from.

 Obviously, what are we all about? We are all about unrivaled content. And one of the questions we ask ourselves every day is, what is our value proposition and how do we continue to maintain and, more importantly, improve that value proposition to our subscribers.

 When I stood on the stage last year, many of you may remember we had not -- we had Howard Stern up for renewal. I'm happy to tell you we now have Howard renewed. Howard is going to be with us a long, long time. And we couldn't be happier.

 For those of you that are Howard listeners, his show has never been better. And we are really excited about the opportunities that Howard brings us going forward.

 Stood here a year ago, we didn't have a new deal with the NFL yet. We now have that deal secured long-term. I think it's important to note that at the core of our content our big-ticket items are now secured at a cost that will stay relatively flat over the next 3 to 5 years, which makes, I think, following our programming for investors pretty easy to do.

 That said, we are always on the lookout for any new content we can find. Believe me, money is not the reason why we don't add content. We are constantly looking for content we can add that improves that value proposition to our subscribers.

 Strong execution -- this is a core value for me and a core value for my leadership team. We work really hard about not being distracted by the shiny lights and we try to stay very, very focused on what is our business. And I think our track record shows that we have been very, very successful.

 When you look at where we are through three quarters this year compared to where we were last year, you see growth at every line item, solid subscriber growth. I'll talk more about that in the moment. Double-digit revenue growth, double-digit EBITDA growth, significant improvement in our operating margins and growth in our cash flow.

 I will note there are a few one-time items that were in both our 2015 cash flow and our 2016 cash flow that are holding down that true number. And you will see, by the end of the year, really strong growth in cash flow as well.

 So first and foremost, a growing subscriber base. I get asked a lot, well, are you concerned about new car sales? I want to be very clear with you: the higher, the better. But a SAAR that's in the range of 16.8 million, quite candidly, is just fine with me. I was here when the SAAR was 10 million. That's a tough day.

 And so right now we see the new car business is very healthy, and we see it continuing to allow us to grow.

 If you look back over time, it's pretty amazing. Since 2013 we have grown from slightly over 25 million to now more than 31 million paying customers. Why? Simply because they value the proposition that we -- the product that we bring them. They are willing to pay for it. And we make it extremely easy to use in an environment where it's meaningful to them. We expect to add about 1.7 million subs this year, and we are tracking very well for that through the first three quarters.

 Record adjusted EBITDA and margin -- this is a great chart. If you look at a cross at how our margin has grown, we had our strongest EBITDA margin ever in the third quarter this year. I've said publicly many times to investors that we believe this is a 40%-plus EBITDA margin business. There's nothing I've seen that says that's not where we will grow to and end up.

 But it's not just growing EBITDA margin. Look at the impressive growth that we have in EBITDA, where our EBITDA this year will be approximately $1.85 billion and growing really, really nicely, double digits.

 We like the way our business model sets up. And we are very pleased with how we have operated our business to be able to leverage our scalable model to deliver these results.

 Obviously, another really important aspect of our business is how much of our EBITDA is converted to cash flow. And this year we expect our cash flow to be approaching $1.5 billion. You can see how that has grown steadily every year. And we're in a good spot right now, which is really unique, which is we are not a taxpayer today. And we're in between satellite capital investment funding cycles. We obviously have begun to grow back into replenishing our satellite fleet, and 2016 shows the beginning of those investments.

 But we are comfortable in the profiles we showed you for EBITDA growth and we are comfortable for where that leads for free cash flow growth.

 This is a really important chart. And that is how we get subscribers, and what really works for us and what drives our acquisition are two simple funnels: new cars and used cars. And I make a profound statement to my team every once in a while, which is this -- it can't be a used car until it has been a new car. Okay?

 And so what that really means is, as long as we have a stronger position as we have in the new car business, the used-car funnels will follow right behind. It's simply math.

 And as you see here, when we started our business and when I stood on the stage in 2013, we talked a lot about the new car business. Now what we talk a lot about is the car business. And we look at every car being sold.

 By the way, the new car business this year will be, pick your number, 17.2 million, 17.4 million. Some are a little higher. I think they are being, probably, a little optimistic. The used-car business, though, is 40 million.

 And so really, when you talk about how many cars are sold this year, sold in this country every year, it's between 57 million and 60 million. It's a huge number. Okay? And we are now really concentrating on what percent of that 57 million to 60 million are we getting, as opposed to what percent of those new cars are we getting.

 Note in 2016 how fast our trials have grown, but also know note how many of those trials are coming from second- and third-owner vehicles and that also now our trials are approaching very quickly 20 million a year, which is really, really a great acquisition funnel.

 Well, what drives it? I can tell you, at the heart of it it's our strong OEM relationships. We work very hard and we work with every single car manufacturer in the United States. We have a relationship with every single one of them to deploy our technology.

 Today, and I'll go to the second bullet first, in the last four months we have extended our contractual arrangements with Chrysler, Ford and Toyota out in some cases until the middle of next decade. And so I get asked a lot, well, how worried are you about new technology coming to the vehicle and what do you think and those kind of things.

 I can tell you this is a strong testimony to what our OEM partners think. They would not be renewing these kinds of agreements with these kinds of commitments if they did not believe in the value proposition of satellite radio and in the technology of satellite radio. 70% of the US auto market share now is tied up in long-term contracts beyond 2020. And you will just see that number continue to improve over the next 12 to 18 months.

 On top of that, we are now deeply involved with the connected vehicle business. We have announced relationships this year with Chrysler, exclusive relationships with Chrysler, Ford -- I mean Chrysler, Toyota and Honda. We also are Nissan's exclusive provider. We get about 55% of the industry on our platform. And this is going to be a very exciting growth potential for us going forward. As you see here and you note in Greg's charts, at the bottom today 76 out of every 100 new cars built include our factory-installed satellite radio.

 So when you take that and you look out, and I will tell you somewhere in here there will be a recession. I'll also tell you our auto partners will probably be the last ones to see it coming. But they are an optimistic group, and we love them.

 But if you take out the many, many analysts that follow the auto industry and you lay out their projection for the auto industry over the next 10 years and you lay into that that penetration number, and that penetration number, remember, has credibility because it's secured with those long-term contracts I mentioned, look where our embedded base goes.

 And so, by 2025, it grows to 185 million cars. That is a tremendous opportunity for multiple bites at the apple to try to drive through our subscription business to a variety of people who, quite frankly, today have still never been exposed to it.

 So here I also get to say, gee, aren't you really worried about conductivity coming to the vehicle? And, gee, aren't you really worried what that will mean for Spotify or for Pandora or this or that?

 Well, number one, I want to tell you the vehicle has had conductivity for a long time. Okay? If you think back a long -- I can remember a lot of times I've been nervous in this business. The first time ever was you remember there was an old product called the iPod that some of you might remember. Okay? And a young product manager brought it in and said, look, you can plug it into your dashboard and work it right from the steering wheel. And you can have all your own music at your fingertips.

 Today there's not a car in the world made that doesn't have that jack. And yet very few people use it. Very few people use it.

 But real connectivity is coming to the vehicle, there is no question. I stood up here a year ago and told you we know where north is. I want to reiterate that again.

 As we exit this decade, the vast majority of new cars built will contain a powerful embedded modem. And it will contain that modem not for entertainment reasons, it will contain it for all the other things the auto companies want to do with it, whether it's to help them manage their warranty costs, allow them to collect data about their owners, allow them to more systematically connect with them, and then everything you can think of around that from usage-based insurance to -- you can go forever.

 The one thing we know, though, is that it also improves our business. And by that, I mean two-way connectivity coming to the vehicle fixes all of the things that, frankly, we don't have in our private satellite network today. And by that, I mean a back channel, full two-way connectivity. It allows us unlimited capacity. It allows us to do personalized services. And so we have -- not only are we not afraid of this and not only -- we see it as a mammoth opportunity for us.

 And so we have built a product called 360 L. You can see it demonstrated downstairs. And basically what 360 L is -- it's a seamless integration of two-way connectivity, whether it's brought by your phone or brought by that embedded modem and our private satellite network, to give you the best of both of those worlds.

 And you know what makes it work so good? As a user you have no idea where the signal is coming from, nor do you care. All you care about is getting the content that you want, when you want it, how you want it.

 And it does profound things for us on the back end of our business. Imagine the customer being able to do it with one touch, to renew their agreement with us.

 We are really, really excited about 360 L. It's like everything else in the automotive business; I want to be realistic with you here. And that is we have commitments now from several OEMs to deploy this. But they go at their own speed. Okay?

 And one of the things you learn when you are a partner of the OEM -- I can tell you with one of our OEMs we just finished the 2021 model year, with what we're doing with them. So these deployments take a long time to roll out. But make no mistake where they are going. And 360 L will give our business a tremendous, tremendous advantage, in my opinion, as we go through and move towards the end of this decade.

 So, with that said, we also are expanding our streaming offering across the board. If you look at our Company three years ago and you look at it today, we have several hundred engineers now working on streaming products. Okay? In our earnings call a couple weeks ago I announced how many new platforms we're going to be available on, in the next three or four months.

 And the reason is simple: customers love our content. They want to consume it in multiple places. And quite candidly, for the home or for the gym or for while you are running outside, streaming is a much better way to deliver the product than satellite.

 And frankly, I don't care. I only care that they listen and I only care that they pay. And so with those two criteria, we want to deliver that service to them however they want it. And you will continue to see our app continue to improve in functionality dramatically, continue to improve in simple user interface to use, and you will also see it continue to go across multiple platforms.

 When we combined our companies and when the government started satellite radio, they gave XM one set of spectrum and they gave Sirius an exact same amount of spectrum right next to each other. And when we merged the companies, we combined everything else but we couldn't combine the spectrum, the reason being we had half the cars on one, half the cars on the other. And if we went to one carmaker and said, we are going to phase out this one, they would have said, well, then, come back in five years when you are done and we will put that in.

 So we didn't want to do that. So we have been very busy over the last eight years, slowly but surely moving the automakers' platforms from one spectrum to the other as they deploy new cars. And what I'm happy to report is we are at a position today that by the end of this decade they will all be building new cars that have one technology in it. And by the middle of the next decade, 2025, we will be able to repurpose that spectrum for whatever we want.

 On top of that, we have designed and we are in the middle of finishing the early product work for a chipset that seamlessly works at both sets of spectrum. By the way, it looks at both sets of spectrum and it doesn't care what you want to do with that new spectrum, doesn't care whether you want to do video, doesn't care whether you want to do expanded data delivery. It's structured to give you the maximum amount of flexibility.

 We will begin deploying that in cars late this decade -- 2019, 2020 -- which will put us in a position by 2025 to do real exciting things with a big chunk of spectrum. And I think this is something, as investors, you ought to be very conscious of, of an asset that we are now going to be able to make really, really good value of.

 Best-in-class capital return -- Greg referenced this earlier. We have already bought back $7.5 [million] of shares. Our Board just approved our authorization to go up to $10 [million]. We wouldn't have asked our Board to expand our authorization if we didn't intend on using it, trust me. We intend on using it.

 We are really comfortable buying our stock back at the levels that it's priced at today, and we see real value going forward. And we also instituted a dividend to get started, hopefully, here to bring in a new class of investors. You can also see, I just want to note, this says since 2013 our stock is up 37%. I checked this morning; it's actually up 41%, which is something we're proud of.

 So when I went to business school, I had an old professor that used to lecture and I used to try not to pay attention. But his favorite expression was business models matter.

 Well, it turned out he was right. Okay? Business models matter. And ours is a strong, unbeatable business model. And by that I mean we have unbeatable content coupled with ease-of-use. We have leverageable fixed cost, high variable margins. It couldn't be a Liberty chart if I didn't say low taxes until 2019.

 The enabled vehicle fleet is going to grow from where it is today at about 90 million to 185 million over the next 7 to 8 years. 360 L -- if you get a chance to go see it, please go look at it -- in my mind, it future proofs the technology risk that potentially could come to our business from streaming and it allows us to move forward. Thank you very much.

 Michael Rapino,  Live Nation Entertainment - President, CEO   [6]
 Live Nation -- most of you know our business. But for those that don't, our core business is producing concerts. We have built this business model over the last 11 years. Our flywheel that we call is the concert, the two hours of magic. Today we will do over 26,000 of those shows in 40 countries. The benefit of that model is it produces scale. And the scale is the 70 million customers that go to that show.

 Over the last 11 years, we have been building and adding businesses off that scale. As I sat here 10 years ago and we launched a company we did a few thousand shows and we had one box, and it was called On-site Beer. And over the years we've upgraded those boxes and added those boxes to our scale.

 So on-site revenue is a big piece of our business, ticketing fees and ticketing revenue and advertising online and off-site. I'm going to show you now how that flywheel has advanced and how we are going to grow it.

 As we've said, we launched 11 years ago publicly. We are very proud that over this time, through an incredible great management team and focus, we have been able to grow this business continually. When we started this business people would always say, how are you going to grow the business? How are you going to grow the business? It's a low-margin concert business.

 My strategy always believed that 11 years ago was that live would become the center of the wheel, artists would have to tour. And from that live business you could create new businesses, higher margin. And over that last 11 years, we've grown both topline and bottomline continually. And we continue to think that this will grow.

 In 2016, as we are heading into the end of the year after our earnings last week, again, we're looking at another record year. On operating metrics, we are going to deliver on all four core businesses. We are going to grow the main operating metrics that will drive our overall financials, and we expect 2016 to end again in a record financial both topline, AOI and free cash flow.

 And when you step back and look at our business, in retrospect to some of the other businesses, over the last six years we have grown this business from over 47 million fans to 70 million fans. This year and next year we hope to pass MLB and consider it to be one of the largest leagues in the world in terms of consolidated scale.

 And we think the business will continue to grow and why we will have more than 70 million fans going forward -- as we look at the industry in general, Greg alluded to it, Live has been on fire not just the last while, Live has been on fire for the last 20 years. The last 20 years the business has been about getting that artist on stage. But now, globally, the business has been growing if you look both at the US and North America and emerging markets.

 This business has been growing year-over-year and we expect this business to continue to grow.

 Why will Live grow? Because at the core it's a product that Millennials value very high. You all hear about experience economy, but going to a live show, those two hours, those 2 1/2 shows a year you go to -- those are magic moments. All our data would suggest that the Millennials today love going to concerts, they love experiences, going to festivals. And that is going to continue.

 When you ask them, what is the greatest experiences you want to spend your money on, concerts rank right up there just below vacations on that Kodak moment of life that I have to experience.

 And all of that has been translating to growing ticket sales. We are taking more of the share of the music spend. We have been increasing the number of shows you go to. When we ask our Millennials, do you want to go to more shows in the future, the answer is yes. So we believe that the continual growth of live from a demand perspective will happen.

 When you look on the supply side, the artists need to tour. This is the way they pay their bills. This is the way they connect to their fans.

 And as Greg alluded to, whether they are getting the exact economics from YouTube or not, the artist is making more money today than he's ever made in his life because live has become so attractive. Sponsorship has become attractive, all the ways -- merchandise. You look at the Puma deal for a Rihanna, the Adidas deal for a Kanye -- those all happened because his brand has exploded.

 One of the great ways to build your brand other than social is to go on the road live and let it be experienced. So this business -- again, we know it's going to grow because the artist -- is how they connect and how they pay their bills.

 So we think we are very fortunate. We are in the part of the music business that we don't have to debate how will it monetize, will it monetize or will it grow. We know that for years from now consumers around the world will want to gather and cherish that rockstar of the day. So we think we've got incredible tailwinds behind us. Now it's about can we execute against that tailwind and that rising tide. And we think we have a great opportunity with the foundation assets.

 So first, we are going to continue to make sure we don't take our eye off this global business of scale, live concerts. Our flywheel has grown but we still have a huge opportunity on a global basis.

 I like reminding people this is the one asset, the one business that you are probably going to ever look to invest in that has no global barriers. We can be in any market overnight. We have no regulations. We don't have to build factories. But Rhianna is a global product. So the more times we can buy a promoter, buy a festival, buy revenue streams in foreign countries, we can monetize our Rhianna concert.

 So we are in 40 countries. We are the largest promoter in the world, by far. But on a global basis we have a lot of opportunity to still grow our market share, and we will still look for those bolt-on acquisitions to build our moat.

 From that moat is how you start building our businesses. The more customers that walk in our door, the more opportunities we have to monetize them.

 One of the great ways that we are going to look to monetize them is getting more efficient on the pricing. Everyone hears about Stub Hub and all this secondary market dollars out there, and it's true. We looked at our business last year, in 2016. We think the artists left at least $1 billion on the table. If you look at our tours that sold out and were wildly successful this year, and you track the secondary market, we still are ineffectively priced overall. So if we had priced at 2 market we would've captured $1 billion more for that artist, obviously 10% for ourselves.

 So if you look at the last year, just on the P1s and arenas, we have started to make some great progress, starting to price the product closer to what the market will pay. We've increased pricing by 14% and we're going to continue to be very, very strong advocates with the artist on how we better price the market, because all of that secondary ultimately should be in the artist and concert hands. The number one way you reduce the scalper issue, but it's also content is going to reclaim those dollars over time. We just got to get better at providing better pricing, better platinum, better VIP, better ways that they can scale that product.

 So you are going to see continual year after year, us chipping away at that $1 billion balance sheet.

 The second is, like any business, vacancy rates or whatever you want to call it is just unsold inventory. About 25% of our tickets are unsold, so we have 23 million tickets worth zero at midnight. So we've got great opportunity every year.

 One of the things that I'm always strong on with my management team is that, because our inventory has no cost, it's easy not to pay attention to it. But the number one way we can grow this Company, if we do nothing else, is just sell 250 tickets more to every concert we do on 26,000 shows, and we would add $60 million of AOI year on year.

 So the number-one way to grow our business is just to get more people in the door -- one, because whether we get them in the door at full price or a discount rate, once they walk in the door we sold them a beer, we pay parking and we drive our advertising business.

 Number one reason that fans don't come to shows is not awareness, although a lot of people like to talk about that. It's actually price. Awareness isn't the big issue. Thanks to the Internet, most people know now, 70% of fans know that Rihanna is coming because they follow her on Facebook, they see it on Instagram, their friends are sharing it. So social media has helped us immensely with awareness.

 But our biggest problem is pricing. Why? Because we don't have a perfect model. We are not putting an artist always on a Friday night on a perfect day in a perfect venue at the perfect price.

 So we've got to work harder. Once we go on sale, our number-one job is then to start looking at dynamic, flexible pricing, just like most hotels and airlines do. And right up until the minute before that show, can we continually dynamic price that product to fill a vacancy?

 We've had great success in our arenas. If you look over the last few years where we focus, we are getting better and better at having less empty seats in an arena. Number one way we are doing that is better pricing, whether it's a Groupon pricing that can attract people, a value offer, using our database direct to talk to that customer that maybe is thinking about going to the show but now we can get them off the couch. So the number one way we are going to keep looking is use our data, drive a value offer between on sale and show time and affect that price sensitivity issue, and that's the way we are going to continually drive down this business and add to our bottom line.

 Last year, I think we talked about this. Another big way we've got to continually drive our business is just keep selling more to those 70 million customers.

 Again, this math is simple. We have 70 million customers walk into our door. We have done a great job moving up the ladder, but we have still got room to move in best-in-class. We think there's about an $8 opportunity, if you compare what we are doing today at $22 versus the best-in-class arena or NFL stadium.

 We've added a new skill set internally. We put a new division in charge last year, some ex-Universal Disney employees. They had a great summer this year of testing better products, higher end products, speed of service, some technology delivered to your seat, grab and gos at our festivals and amphitheaters.

 So we have got a long runway there of great products. And we think this will be a continual year-over-year growth on our way to claim that $100 million.

 The highest margin part of our businesses advertising and sponsorship. Funny, Greg mentioned the Formula One having three staff. I can see the opportunity there. We have over 400 staff and 900 sponsors. So I'm sure Formula One has got a huge runway ahead of it there.

 We like our space. Again, more and more companies are trying to figure out how to touch their customers live, more shift in the advertising -- on-site, promotion, actual, being able to find those customers. So if you look at the model overall, sponsorship for music has been growing at 5% a year. We have been growing at 12%, so we have been beating the market with those 900 brands.

 But we still think, again, it's about a $3.6 billion business on brands that want to spend on music. We are still underdeveloped at 11% versus the size of our platform. So we think, and why we continually tell the market we will continually grow this business at double-digit rates, is we have a lot of unsold assets and we have a lot of brands that want to upsell as we developed a more global and better product list.

 And this is why we keep growing our business. When we get in front of a CMO at a big brand, we don't -- there isn't a platform out there that can match us in terms of if they've decided to spend on music and they are looking to touch fans.

 We have 70 million fans that we can segment. We have a whole bunch of ways we can deliver a 19- to 24-year-old fan exactly to a brand.

 If you look at our database, which is really our secret sauce, nobody has a database of this size on the planet of live event customers. So now I can really get deep and connect a brand with a certain demo were certain genre.

 And then for the brand that says, I want to talk to your customers on-site, I want to deliver a program. But I'd like to get some amplification outside of your venues, we spent a lot of time over the last few years developing content, publishing that content. In this year alone we will have over 3 billion views of that festival that Red Bull sponsors, but then we stream it online and touch more customers.

 So when we present our brand proposition for on-site, we know where Judy is going to be on a Thursday. We know how to talk to her live. And we can also talk to many customers outside of our business through social media and amplification.

 That double combination is very attractive to sponsors, and we continually see our 900 sponsors upgrading from a local to a national.

 Ticketmaster has been a great success story. We are very proud of what we've accomplished since we've taken this over. If you look at the pure numbers on what we have grown from tickets, this is a business that's 40 years old and in 2016 will have some of its record-selling months, which I don't think there has been too many turnarounds of that nature.

 If you look, since we've taken over we have almost added 100 million new tickets, $10 billion in [TCV].

 How have we done it? Same model. This is a global, not a local business. So we got to continually expand geographically as we have 226 countries. And we've got to put more products on the table. Ticketmaster was basically a single product talking to a single market.

 We've added a portfolio approach, added more products, added more countries. And at that stage, if you look at it, we still have huge opportunity on a global basis. Ticketmaster is very, very large in America. But on the global basis it's a huge market share potential, and we will continue to look at ways to grow that business on a global basis, following this roadmap.

 We've talked every year and are very proud, again, of one of the products we launched was TM Plus ongoing after the secondary, letting fans by that ticket while they are at TM, a primary or secondary. We have been growing that business year-over-year. Ticketmaster was late to get into this business in the US. In the rest of the world we are actually first or second. So in Europe, UK, Australia we were ahead of the business. So those businesses -- we are not playing catch-up. America, we were. We still have a long way to go on market share, and we think year over year we will be standing up here, telling you how we've captured more of that secondary market by using our scale of our Ticketmaster platform.

 And one product we are very, very proud to launch -- one of the principles of Ticketmaster that we really wanted to unlock is Ticketmaster was a closed distribution system when we took over. We basically bought inventory. You could only get it at our site, and that was our business model. Well, in today's world we have to make sure we take that buy button to other places. So we have been looking and building a platform that we can open up on both avenues.

 This avenue, where this year we now actually take our buy button and distribute it, so you will see it at Facebook if you haven't already, you will see it at Bands in Town, you'll see it at other places where the buy button, where the fan is already at, at the Rhianna page or the Lauren Hill page -- they can buy a concert ticket right there. It's our ticket, it's our data, it's our shopping cart. But it buys us extended reach, and we are looking to expand that dramatically this year.

 These are some of the partners that we either already have launched with or are delivering our API within. So this buys us incredible open-platform distribution. The other area we are working on an open platform is having Ticketmaster and other brands -- our secondary and other brands be able to add inventory to our platform. So as we continue to build our platform and turn it into a more open platform, then we get more content on our platform and we get to deliver more eyeballs and more ticket sales to our core business.

 So overall, we believe that we have delivered incredible shareholder value over the last 11 years. If you invested in us 11 years ago, you beat the S&P. So we're proud of that for a rock 'n roll company, turned good.

 We continue to think this business is the exciting part of the music business. Every day people are excited about the idea that we have these 77 million fans. We think the business is strong from a global industry perspective. We think we've showed we know how to execute this flywheel and continue to extract more dollars. And we think over the next few years we're going to add more levers to that flywheel as we look at how do we take 77 million golden tickets and those fans and add new businesses to our core live. Thank you.

 Terry McGuirk,  Atlanta Braves - Chairman and CEO   [7]
 Good morning. It's great to be here at and be able to tell you a little bit about what's going on at the Atlanta Braves.

 In the last few years, the Braves have had two main initiatives. Initiative number one has been to regrow, refresh our minor league system and the talent therein.

 Mark Carleton talked a little bit about that -- so important to our major league team. And in 2014 we looked at our minor league system, and we were not happy. We had a bottom 10 minor league system; and we said, this is not sustainable. This is not something that is going to work long term for us.

 So we have made that a major force of initiative. And it goes hand-in-hand with initiative number two, which is the building, the obvious one, the building of the Battery and the SunTrust Park. SunTrust Park -- new 41,000-seat intimate, populist design stadium. It's fabulous. It's a wonder of the world, if you haven't been there to see it, opening up soon.

 And then the Battery -- the Battery is something that we've designed specifically just to fit a lifestyle mixed use project around this ballpark. The Battery includes Omni Hotel, 275 rooms, a nine-story office building for Comcast, a smaller office building next door to that, the Roxy Theatre, which will be a music theater with 4,.000 capacity run by our friends at Live Nation. We have 531 apartments. We have 250,000 feet of soft good retail, 20 restaurants.

 You get the idea. This is a really big project.

 Talking about it, it always doesn't do justice to it. So I was planning on -- we put a drone up over it in the last week just to pick something off so you could see and get a feel of exactly what this project looks like and feels like, because it's something special. So if we could run that video? (Video playing)

 And let me tell you that it is -- it's inspiring for us to walk through every day. And you can see how these two things work together. As we refresh and make the minor league talent better, it graduates into the major league club, we get wave after wave of that. Something really great happens when you have new assets to leverage on.

 And I didn't really say that when we had that [poor] rating on our minor league system -- we have now graduated, as we go into 2017, with a wholly new operation. We have a number-one minor league system in all of baseball. In two years, we have turned that around from a bottom to the top.

 And it's all about excellence, and we are doing, I think, an amazing job in our player personnel side. It took the Mets and Kansas City and Houston and Chicago Cubs five years to do what we've just done in two years. So I really feel like we've got a lot to be proud of.

 We still got to go back a slide here, gentlemen. Yes, there we go.

 Let's start at the beginning. We started in 1871. We are one of the oldest franchises in any sport, the longest continually operating baseball franchise. In modern times we have been called the gold standard by commissioners in baseball. We've made the playoffs 18 out of the last 26 years. And as you notice up here, we won the division 14 straight years, from 1991 to 2005.

 That's a record that will probably never be broken in sports, ever. Oh, and also, by the way, we won the division in 2013 and were in first place halfway through 2014. And that's that jumping off point where we decided to redo the minor league system, when we went 26 and 40 in the second half of 2014.

 A quick status report on what's going on at the Braves -- SunTrust Park is on time and on budget for the opening next year. We named Brian Snitker the new manager. He was the interim last year. We had a terrific second half, 37 and 35. And we won 20 of our last 30 games and 12 out of the last 14.

 So we are so jacked up for the beginning of 2017. We wish the season didn't end. And this was all against playoff teams at the end of the year.

 Defensively, Ender Inciarte just won the Gold Glove Award on Tuesday night. He is now the preeminent centerfielder in the National League. Together with Matt Kemp, Dansby Swanson down at the bottom, that we added this year, and Freddie Freeman, who should have been an MVP candidate, our position players are really starting to turn into something pretty special.

 The Braves have already been about pitching. We have a lot of pitching coming and wave after wave. And one writer said about our minor league system, the Braves have an embarrassment of riches in pitching in their minor league system. And that's really true.

 Player acquisition strategy -- this is what we have been doing over the last couple of years in order to add these players to our minor league system: free-agent signings, trades of major league talent for prospects, draft picks and international signings. All of these different ways -- we have used them all and we have brought in a plethora of talent. As evidenced, I think the real empirical evidence is our AAA, AA and low A teams all made their championship series. And our Rome A Braves won the league championship. There's so much talent at all these different levels, and it's showing because they are all winning and they are all getting up to the next levels quickly.

 SunTrust Park highlights -- as I said, we are on track and we're on budget for opening next year. And that's amazing -- on budget because we set those budgets back in 2013, and we haven't wavered. So we are very proud of the on-budget factor. We are actually moving into our offices in the new stadium, in about one month. So it's moving along quickly. We are right in the heart of Braves country, where ticket purchasing is at its greatest, right in the suburbs of North Atlanta. And our fans are taking up the uptake right away. We project 50% of the tickets sold and actually even 76% of the premium tickets are already sold.

 So, baseball is all about enhanced revenue streams, topline revenue, which we have talked about. That's what we are going to be able to provide in the new stadium. We are going to have more seating, premium seating, more premium clubs, more parking to sell. The 25-year naming rights deal with SunTrust Bank is the most lucrative on a per cap basis ever done in baseball, even more than Citi Field.

 We have enhanced sponsorship opportunities and advertising opportunities in the assets of the new operation, and we have a new concessionaire, Delaware North. And we will have all kinds of food and beverage opportunities there also.

 Corporate sales are going incredibly well. This is just an array of some corporations that have aligned with us, starting with SunTrust, the 25-year player. These are -- they average over 10 years in length, these contracts. And amazingly, we already have 85% of our year one sponsorship revenue in the books.

 So this page has a lot of numbers about the Battery. I think some of the key -- the key takeaway there is we have 12 acres of land left in the Battery that we haven't developed. That gives us another bite at the apple when we come around again in phase 2.

 So there's a lot of -- we're just so excited about the positive aspects of all the development in the Battery. And as Mark Carleton said, we have an unbelievable array of experienced industry partners. They are driving us to profitability and to the right place in all of these businesses because they've got skin in the game, too.

 We've got more skin, but we really like where we are in all these businesses.

 And then, finally, I'll leave you with a snapshot of -- this is a status of the different submarkets that we are entering into and a little bit how we have derisked properties of patient in the submarkets. For those of you who have the Appendix, the Appendix has an awful lot of added information on this. But that suffices on a topline look.

 Our goal is to win the World Series. That's what we set out to do every year. We've never felt like we were more on the glide slope to get there. The Atlanta Braves are looking forward to 2017. And thank you very much.

Unidentified Participant   [8]
 This presentation 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 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. These forward-looking statements speak only as of the date of this presentation and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any such statements to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

 Please refer to our publicly filed documents, including the most recent Forms 10-Q and 10-K, for additional information.

 At today's meeting we will discuss certain non-GAAP financial measures. Please refer to the Appendix at the end of this presentation for definitions and applicable GAAP reconciliations. The Appendix will be available on our website throughout this meeting.

 (video playing)

 Greg Maffei,  Liberty Media Corporation - President and CEO   [9]
 You had to walk away pretty impressed with the execution of all the Liberty Media companies and portfolios, from the Braves to Live Nation to Sirius XM. And obviously we expect more with Formula One going forward. John was nice enough to give me the Chairman title on this Company, and it was generous of him. We'll move forward and try and do him well.

 The Ollies are the awards that TripAdvisor gives to its community, which is obviously a massive asset of TripAdvisor. And some of the commitments that people make, the dedication that they have as users and engaged users of the TripAdvisor community is stunning.

 The leading overall review contributor did almost 1,400 reviews. That's almost four reviews a day. That's pretty impressive. But this reviewer, who reviewed 194 hotels in one year -- four reviews per week -- is even more massive. This person clearly gets more vacation than most of us.

 And perhaps most impressive of all, the food reviewer who won did 851 food reviews in one year. That's every breakfast, every lunch, and one-third of all the dinners you could eat in a year. This person is well-loved by the culinary industry.

 But that just speaks to the power and depth of the TripAdvisor community. And there are many ways to measure that power. It is truly a funnel of unparalleled traffic. If you look globally, 350 million, but if you look just inside the United States, 69 million unique monthly visitors. And that compares quite favorably with Expedia, AirBnB and the Priceline group with its many entrants.

 In the digital era, the ability to aggregate users and demand has proved to be massively beneficial to create a platform on which you can monetize. Our travel bandwidth is unmatched. Our opportunity to improve monetization and capture value from that aggregated demand is huge, to use a common phrase today, and probably as yet not complete. The tech author Geoffrey Moore has talked about crossing the chasm when you have a disruptive transformation that goes on in technology and how you market and attack markets differently when that occurs.

 That lifecycle that people go through and the cohorts, how they get involved, customer cohorts, in moving to broad acceptance has been documented in many cases. And we have lots of chasms we are crossing here at TripAdvisor, but clearly disruptive innovation of InstantBook is forcing changes in customer behavior, and really on two levels. We have adoption and changing; we move from innovators to early adopters among the hotels who have down entered into the InstantBook process. And we have the same thing happening among our end-user community and customers.

 Now, we're doing this for lots of reasons, and you will hear a lot more from Steve Kaufer about it. But obviously, it's not only to create a better experience for the consumers where we can bring together all the data and information about their travel needs and then execute on it inside one place, but it's also to create a better business model for ourselves where we have a much more diversified revenue stream, an opportunity to be a transaction agent, and add incremental services across the TripAdvisor family.

 And you can see the movement from tech enthusiasts, highly dedicated people, to a broader audience and visionaries and then the pragmatic mainstream, where you cross that chasm. And I think our view of where we are at TripAdvisor is we are really just beginning that. And I've talked about this in the past, but we are beginning to see the elements that are making that happen.

 We are now up to 20% InstantBook desktop conversion in the US. We've clearly moved beyond the early adopters on the hotel side and among consumers and moving towards the more general consumption. Importantly and impressively, and with approval, we are seeing repeat rates, people who have used InstantBook, continue to increase and use InstantBook again and again.

 The opportunity for us, and you will hear more about this, is to build the flywheel. You heard a little bit about flywheels at Live Nation. You're going to hear more about flywheels from Steve Kaufer. When I was at Microsoft, he was talking about a virtuous cycle. And clearly we have an opportunity for a virtuous cycle at Trip.

 And that virtuous cycle really is this massive user base. To the degree we can monetize them better, to the degree we can convert them better, we create two sets of opportunities: not only more money that gets brought to the bottom line for TripAdvisor, but suddenly our ability to serve that audience and serve a greater set of customers within our audience, gets better and better, creates more opportunity to market to them, creates a flywheel of faster growth. So not only do we get better monetization for ourselves and our bottom line, we get more marketing investment we can make attractively in a way that lets us convert higher and higher those customers and get that wheel going faster.

 Steve will talk about that more. You can see on the slides some things that we are doing to go after that. I think we are all disappointed with some of the things, the take rates, but we're optimistic about where we go with this at Trip. And ultimately it's the right decision.

 (video playing)

 Steve Kaufer,  Liberty Media Corporation - President and CEO, TripAdvisor   [10]
 Well, thank you all very much. Greg, that was an inspiring video. Oh, my goodness; completely unexpected but delightful. Here we go.

 In case I say something about anything going forward, here's our Safe Harbor.

 Onward to the story, how we help travelers plan, and book, and have the absolute best trip. What was it that Live Nation said just a little bit ago? Where do Millennials love to spend their experience dollars? Concerts was the number-two category. Amen. Who remembers what the number-one category was? Vacations.

 Thank you. That is the business we are in. And it is a huge, huge business, $1.3 trillion being spent and more and more of these dollars flowing online in all the different categories of travel, whether it's a hotel, in air, in activity, and experience, restaurants when you are in market. All of this contribute to the sheer number of dollars spent when you are taking this trip.

 TripAdvisor's influence, in turn, continues to grow all around the globe. Almost anywhere you go, I bet you will see that TripAdvisor, the certificate of excellence in the hotel, maybe even the waiter at the restaurant asking you to please write a review when you head back home.

 We are investing. We are looking at building this incredible content asset. When you look -- when Greg talked about some of those outstanding reviewers, our absolute best friends, let's remember how much we pay them for their contributions to the site: nothing! They love this!

 Of course, they are sharing their wisdom, their opinions with their friends. And these are not one or two words -- loved it, hated it -- like perhaps some other sites have. These are thoughtful opinions that really do help guide the next traveler.

 But that's the primary reason we have so many people coming back to the site and living what that next trip can be because they get to read it all as if they have been there.

 This is one of the most interesting stats I can look at, 280 contributions per minute. In the course of me taking a vacation for a week, I come home and we've collected almost 3 million more reviews. Those reviews make the site better and better for the next person who is planning a trip because the info is fresher, it's covering more items, it's giving you what to order at that restaurant. It's really helping you build a better trip and help you unleash the power of that next trip.

 These community members, a phenomenally large number -- oh, my goodness, up to 390 million this past summer. That's an incredible growth rate when you think of the size and the scale that we operate on already. And so, let's look at scale across the board -- 390 million unique visitors, 435 million -- that's million -- reviews and opinions, 80 million photos. You can really get a sense of what it's like there -- 280 reviews, 48 markets, all of these different languages -- because we are telling a story that people are hungry for.

 They'd love to know what's going on, in their next vacation, before they get there so they can maximize the time. And that's what the flywheel talks about.

 I love TripAdvisor. So many people, hopefully some of you, would have said that over time. I trust the information I find there, so I can now do more with TripAdvisor. I can look at the hotels and the reviews and what I'm going to do when I get to my destination and how I'm going to have the great time. My experience matches my original expectation, so I'm happy with it. My loyalty builds. I come back and I started all over again.

 When looking at influence, we did a few studies to look at from a sales perspective. How can we help destination organizations, how can we help hotel chains around the globe understand the kind of power that the reviews on TripAdvisor talk about? An astounding half of the people were looking at TripAdvisor saying, we use this as a source to help influence travel.

 Now, we've built a phenomenally successful model over the years, letting that influence help drive the conversion, helping drive traffic to our client website. But we decided to change it a little bit.

 We've been building an end-to-end travel marketplace. We started, and we built such an incredible brand around the topic of reviews, knowing what you're going to expect when you get there. But now we are extending it.

 Let's try this. Quick, audience, raise your hand if you have used TripAdvisor on one of your past trips, just as a user. Most hands go up. Raise your hand if you have booked your hotel on TripAdvisor. A couple of hands go up. Loved it, thank you very much, guys, I really appreciate it. Please tell all your friends.

 Looking at the rest of the people who raise their hands, they use TripAdvisor, they like TripAdvisor, but for whatever reason didn't actually book the hotel on TripAdvisor -- that is the size of the market opportunity. And that was about 90% of this room, as a highly unique sample size.

 Take a look at the reason why people haven't booked on TripAdvisor. They didn't know they could. We have such a strong brand that in the review space it's actually an obstacle to creating the brain waves that say, yes and I can finish my booking here. We've done it with a handful of you and we've done it with many of those people out in the real world as well.

 So it's working because the product actually works. You are able to book, and more and more people are coming back to book again, our best signal that it wasn't an accident but we like this booking opportunity.

 So if you paint the picture and say, we clearly -- we believe, modesty aside, believe we have the best place to research the trip.

 Now we have to finish building out that best place to actually book the trip. Mechanically, we've got most of the pieces now. We don't always have the best price. That takes time. And as much as you folks and others may love TripAdvisor, you are not going to be booking with us if my price for a hotel is $20 higher than somebody else's.

 But if you look at the model that we've built, the model says, the internal model says, when we get, presuming we can, all of the different suppliers of hotel rooms into the store -- we have Priceline, we have Acora, we have Marriott, we have a number of the major chains, a number of the other discount OTAs. But as soon as we can get everyone in, we will, almost by definition, have the best price, not necessarily better than others, but there just won't be a reason to go shop around somewhere else.

 So you will have found the content. You will have looked at the price. The TripAdvisor is at least as good as anywhere else. If you are ready to buy, you buy right then. If not, you leave, you come back to TripAdvisor because that's where you left off, to buy.

 If for some reason we didn't have the best price, you know we found the best price for you somewhere else. And that's why our meta-business still remains robust and will be robust forever, as far as we can tell. So the best content for the decision-making, the best prices you are going to be able to find on the web. You will be able to complete the booking on all devices and use your store credit card across the different devices.

 And of course, when you go on the trip, what's the best app to take when you are traveling, the app that's going to give you the recommendations you are looking for, for what is going to make your trip extra special? The TripAdvisor app, because we got all of the attractions and tours known to mankind listed and rated on TripAdvisor.

 We have restaurants, 4-plus million restaurants around the globe on TripAdvisor ready for you to consume.

 The [temper] rollout is basically complete except we are still adding more suppliers to get better prices, but we have over 500,000 properties that are instantly bookable. We continue to get more partner coverage. We are, of course, always optimizing the room flow.

 We still have a ways to catch up, but the product works very, very well now. And our biggest challenge and the thing that is taking us longer than we expected is this change in consumer awareness, from the great place to research and the place I'm ready to book. With all the ingredients in place, we know we deserve a lot more than what we're getting currently.

 Building the habit is the other way we talk about it. So, with the repeat bookings, just as you become loyal to any app, well, if that's the TripAdvisor app, you are going to book again and again. I looked up the other day; we had somebody that booked 12 rooms, one by one by one bookings, over the course of a two-week period.

 Clearly planning a great trip somewhere, but once we got that first one, well, why wouldn't he or she happily continue to book the rest of the trip? That's the habit that we are looking for.

 We get to deepen the customer relationship because we know where they are going, exactly. And it's a tourist destination. Probably know that they would like to do something there, and so we can start personalizing our coverage, our emails and our push messages, with the things that someone might want to do when they are there.

 And for that hotel, the non-hotel business, obviously the more bookings you have, the more credit cards, the easier it is to offload together.

 Speaking of our non-hotel business, that attraction business -- I've referred to it as a $1 billion opportunity because there isn't an OTA-like entity other than TripAdvisor that has pulled together of tens of thousands of different things to do in destination, and made them bookable online.

 Whether you go to (inaudible), whether you buy it on Trip or any of our affiliates, we are the place that has taken the time and effort to connect all of those small attractions so that you can get the convenience of booking on your phone, on your app, hopefully, the TripAdvisor app.

 Restaurants -- want to eat anywhere in the world? Over 100 million restaurant reviews -- oh, my goodness, more than anyone else that we are aware of, globally. And vacation rentals, because a hotel isn't always the right thing for you, we have 850,000-something different properties available around the globe.

 So what makes it the best value? What makes TripAdvisor the best value proposition for the traveler? It's our North Star remains making sure that traveler is accounted for, making sure that traveler is getting everything that they are looking for out of this trip. Well, compared to a straight search engine, you really don't have all of the content. You have links to other content. You don't have comparison capabilities and you don't have bookings on all these things.

 Meta-search providers that have sprung up -- hey, great price comparison. But that's about all they do for you. And they do a very good job at that, but it's not the full suite of offerings.

 OTAs -- Priceline and Expedia are really strong companies. They have been at this OTA business for a long time and they have great pricing. But, by the way, they don't always have the best pricing. That's why every traveler I've ever met always shops around on different sites, which in turn has led to the rise of the meta-search category like TripAdvisor, Trivago or Kayak. Knowing they could get the best price on TripAdvisor and then you can book it helps us smooth out that flow.

 And then alternative accommodations -- AirBnB, very powerful player. HomeAway, now part of our Expedia, another competitor in the space. But we are holding our own, in part because of the size of the traffic funnel that we already have.

 So when I hear commentary from the outside -- oh, what about? Let's go through some of those what abouts. What about that shift to mobile? Actually, over time, that plays in our favor, we believe, because that TripAdvisor app is the one that's in your pocket when you are in market. You may also have somebody else's app, but nobody else's app were certainly a regular OTA app is not going to help you the way TripAdvisor, the way you currently use TripAdvisor when you are in market. Super well-positioned. We have a lot that we offer people when they are in market.

 Shopper growth deceleration -- well, this was a known consequence of us launching InstantBook, making less revenue per session, which drives down our ability to acquire more paid traffic. Now that we lap InstantBook, now that we get our revenue gains back, we can now afford to spend appropriately in these channels, and we gain some of our traffic, some of our hotel shopper growth.

 [That's how we book] direct companions. I've got a bunch of questions about this.

 We don't see it impacting our business terribly much. In general, we are perceived as much friendlier to the hotel than the typical OTA. Hotels love to have their inventory distributed through multiple channels in addition to their own, and we are one of the more friendly ones for them.

 And then increased competition -- well, guess what, the travel space has been incredibly competitive for all the years I've been in it, which is coming up on 17 now. So when we look at this space, we say, why is it so competitive. It's because it is so huge and it continues to grow so fast. And there's still so much to be done.

 Yes, you can book a hotel online easily now. But think about all the things that you are going to do in destination. Think about all the memories. Thick about all the opportunities that you have when traveling to be able to do more and more.

 So when you look at the economic engine, the flywheel comes back and says, look, TripAdvisor offers more products and services. You are able to do those bookings on our site, regaining credit cards. We are seeing that people are using those credit cards over and over again. So stickiness on the side drives increased revenue per session. Guess what? That enables us to buy more traffic because we are making more, for every visitor that comes in, through the multitude of products plus the fact that we get our own domain-direct repeat traffic on that. With that, we get to monetize better.

 So if you look at the financials, we've had some decent growth over the past several years. But now you look at 2016, and this is what happens when you call out that we are having an investment year.

 When I explain internally to the Company and externally, I paint the picture that I did at the beginning of this presentation. Is that vision, is the goal of being able to provide an experience for travelers where they can find the great content that we have with the brand that they unquestionably trust more than anyone else and then giving them the best possible price on a property because we've sourced it from all the other folks doing the hard work to actually get the best price. So no need to shop around. We have the best price for you, and now you can book it with your thumb print, with your store credit card, with your Apple Pay.

 It's already on that one site and it's on the app, which is where so many of these transactions are billing. That's the vision.

 Now, to get there, we had to roll out IB, InstantBook. We had to actually take a hit, which you see here, in our revenue, in order to get the cycle of adoption going. We think it was the right thing to do when we take a long-term perspective. And it's always a long-term perspective when you are looking at TripAdvisor.

 With that hit to the top line, since the business just generates straight profit on the bottom, as soon as you take a piece off that top, it pretty much falls to the bottom.

 What we saw in Q3 and what we saw finishing up September and October is that we had left our InstantBook rollout in the US. We saw our rev per shopper and our revenue growth return to what we had expected. We are obviously hoping for the same in other markets as we left those other markets.

 But the big question for us will remain, is there -- or how long will it take to change the consumer perception of TripAdvisor not just as a research site but as the site you can also book because when we are able to accomplish that, to a greater or lesser degree, our economic engine starts to look just like those other OTAs, the conversion on our site becomes incredibly strong, which in turn drives our ability to grow through all the means that we know how, on the top line, which grows even faster than our current growth rate in terms of unique users, in terms of content. And the flywheel keeps going.

 How big can the flywheel be? Why don't we close with it is a $1.3 trillion market, an amazing opportunity. And we appreciate your support. Thank you.

Questions and Answers
 Greg Maffei,  Liberty Media Corporation - President and CEO   [1]
 Here we go. Anybody have any questions? Right here, first hand I saw.

Unidentified Audience Member   [2]
 Thanks. I'll ask one for each of you. Greg, you talked a lot about the music industry, highlighted the opportunity in terrestrial. Sirius has a lot of new technology coming out with 360 L. Maybe you could just talk a little bit more about how you think they might go after that opportunity or how Liberty may. A little more detail would be interesting because that's not an obvious move for you guys.

 And I'll just ask my question to John on cable -- you've talked a lot about the industry needing to collaborate more over the past few years, maybe getting ahead of where NetFlix ultimately has arrived. Now that Comcast is integrating NetFlix, maybe Charter will as well.

 Do you think that makes sense? Is that the right strategy for the industry, or do you think they have -- sort of you can't beat them, join them? Or is that a mistake from your perspective? Thank you.

 Greg Maffei,  Liberty Media Corporation - President and CEO   [3]
 So on free, I think there are a bunch of ways we could attack it I don't think it's necessarily as much tied to 360 L. I think it's largely around looking -- you saw the statistics that Jim put forward. We are going to have a 185 million installed base. Let's imagine we are at 35 million, 40 million -- pick your most optimistic number to describe it.

 There's still going to be 150-million-odd cars which have a Sirius XM connection and capabilities. Our ability to light up free channels, our ability to do things around that and monetize that in other ways.

 I think Jim has articulated it well. There are a certain number of people who will never pay. We want to find a way to serve them as well. That could be one way. There are other ways. We certainly look at all the terrestrial=rated companies, other companies like that, and thought about how we would participate and what we could do. I don't know. Jim Meyer?

 Jim Meyer,  Sirius XM Holdings Inc. - CEO   [4]
 I certainly agree with everything you said, Greg. We've looked at -- Greg and I both looked a lot at terrestrial assets. We just really don't see anything there that plays.

 But I think Greg raises a really interesting point. As that 360 L interface rolls out over the next 10 years, you can imagine that gives us a very easy link to 185 million cars, not just the 35 million subscribers. And I think that's where we are trying to see what opportunity might exist for us, with a different product, and certainly one that wouldn't cannibalize what we've built.

 Greg Maffei,  Liberty Media Corporation - President and CEO   [5]
 John, cable?

 John Malone,  Liberty Media Corporation - Chairman   [6]
 Yes. On collaboration, I would say take it from the technological side, the industries are cooperating very well. Tony Werner is the CTO over at Comcast. Balan Nair is the CTO at Liberty Global. Balan is on the Board at Charter. Tony used to be the CTO at LGI.

 We cooperate very closely on the technologies that are being deployed now. And of course, X1, which is a Comcast development, is being deployed now by Cox cable and up in Canada by Shaw. So there's a lot of commonality.

 The core technical software, hardware development that's at the middle of the new digital devices is a common investment of Comcast and Liberty Global. So there's a lot of technological collaboration.

 I'd say when it comes to working together, I think the juice of your -- or the core of your question on bundling is really about unbundling. And the question is, how will that unbundling evolve? And clearly, Liberty Global has made and announced a deal with Netflix to bring Netflix service inside the walled garden, if you want to call it that, onto the search platforms. And it involves revenue splits and marketing and potentially combined billing.

 I think the evidence is pretty good that that structure would dramatically reduce NetFlix churn, which is an important element for them, and enhanced marketing. I think that's just the beginning of what will happen, in my opinion, is a ton of a la carte and many services that will be offered to the consumer as an adjunct to the broadband connection, as opposed to the large bundle. And some of those would be offered in the random-access form or in streaming form or in conjunction with even wireless offerings.

 So I think the evolution -- you will see the distributors participating in video revenue streams, on the one side, as margins and/or penetration of the big bundle slowly declines. I think it will all balance out, based on value added.

 In terms of other collaboration, obviously the opportunity for the US cable industry to get together and offer a commonly branded B2B offering, to do advertising services together, perhaps to get behind and support some unique content investment -- I think those are all wide open. Opportunities are substantial for that.

 Greg Maffei,  Liberty Media Corporation - President and CEO   [7]
 Out on the front here, Barton?

 Barton Crockett,  FBR Capital Markets & Co. - Analyst   [8]
 I wanted to ask a question -- this is Barton Crockett from FBR. I wanted to ask a question about the Liberty Media tracking stock structure. It seems pretty clear now that you have three businesses that will be in each three of the trackers and [lingerless] businesses, it would seem to be a natural step that at some point these would be threefold separate asset-back stocks. But I think we are all struggling with how long it could take to get there, what the steps could be to get us there.

 And I was wondering if you could comment on that. Does that kind of view that that's the natural future makes sense right now? And is this going to be a four- or five-year process as you wait to season some of these companies has actively traded businesses that you've got in there?

 Mark Carleton,  Liberty Media Corporation - CFO   [9]
 Well, if the government would leave the rules static, I could probably answer that question. (laughter) So to some degree -- as you noticed, we just on Friday spun off Expedia Holdings. That was a long process to work through because the rules kept evolving, the tax rules.

 I think that in the three entities that are inside LMC, it would be difficult today to do a tax-efficient split-off. But that's something we're working on. And the time frame to get that accomplished is, to some degree, determined by market opportunity.

 We have to change some of our ownership levels in some of the enterprises. But it's all achievable. It's a question of, is it going to be a year out, two years out, three years out? Clearly, the tracking stock is a transitional device. And the goal is to avoid corporate-level taxes on gains.

 Greg Maffei,  Liberty Media Corporation - President and CEO   [10]
 I'm a little more optimistic that the tracking stock structure will last because I need a job at Liberty Media. And if we spun everything away I don't know what I would do. I think, if you look in particular, we have used hard spends when we either thought there was undervaluation or there was a reason why the market would be better served by having an independent asset-backed company.

 Candidly, I think we are taking Formula One -- we are a pretty long way away from that, having not yet closed the second step and clipping the back end. And we think there's a lot to be done under Chase and that management team, but we like to think we can be a positive factor. I think that's true of a lot of cases where we've been involved. It's only at the point where we think our contribution is reduced. It's not so much about only structural issues but when it is that the market is better served by an independent, our contributions are reduced and it sets up either another combination -- witness DirectTV getting merged with AT&T and the like that that becomes more necessary, responsive to the market, etc.

 (inaudible - microphone inaccessible)

Unidentified Audience Member   [11]
 So a couple of questions -- the first on collaboration again. And when you look at wireless as an opportunity, is there a role for the industry to get together and offer a wireless service the way it has been attempted in the past by the cable industry in the 1990s and then the mid-2000s?

 Secondly, on the content side, Formula One is the content asset. But in general you have a lot of other content assets in your portfolio. How do you guys think about those assets going forward, whether it's Landscape, Starz or Discovery or any of the other assets in the portfolio?

 Mark Carleton,  Liberty Media Corporation - CFO   [12]
 Well, on the wireless subject, clearly, as we sit right now the three major US cable companies all have an MD&O arrangement with Verizon that is perpetual. It's pretty attractive as MD&O. And, other things equal, probably all three companies will. I think that's the current most likely development. Obviously, the larger the scale of the footprint, the greater the synergies. And so, the idea of the cable operators collaborating and developing a commonly branded -- or acquiring an existing wireless network provider is a possibility.

 So certainly collaboration in that area would be very profitable when compared to non-collaboration. The greater the coverage, the more efficient the brand, the greater the negotiating leverage with whoever the network operator is.

 So, certainly, we are hoping that the industry will collaborate as they approach what I regard as a necessary component in conductivity, which is a quad play, as they call it, or the addition of a cellular alternative companion transport. And clearly, what is evolving now with AT&T is going to push the industry, in my opinion, to move in that direction more quickly.

 Steve Kaufer,  Liberty Media Corporation - President and CEO, TripAdvisor   [13]
 So I will take a cut at the content side. I think there are two trends that are making content -- there are some other trends that may reduce, but there are two big trends which are making content theoretically more value. An increased number of distributors, many over-the-top; bidding for content, by definition, pushes it up.

 Similarly, the ability to take content more and more globally and use it across multiple markets increases the value of the content. There are some other trends we can talk about that you may worry about. Is scripted programming going from 200 originals, 4 or 5 years ago, to 420 or something this year? That's got to go the other way.

 But if you take an asset like Formula One or take an asset like the Braves or take an asset like Live Nation, all of which are in the content business, we think those all have unique aspects. They spot may not be quite as global, but there is certainly some international element. But the first, the Live and Formula One, take the benefit of having that global scale, that ability to reuse, that ability to add multiple ways to distribute. And baseball probably has done the last part as well as anybody through BAM and finding not only to get the broadcast revenues, not only to get the revenues but to get over-the-top revenues, all those are positive forces.

 And so we have not been lucky enough to own Facebook or Google or in a massive digital platform. I talked about one in TripAdvisor. It's about as big a digital platform as you can find out there. But we don't own one that has a distribution content license in the same way. We can, however, own and have found a way to own several really excellent content assets which benefit from those trends, digital trends. And that's why, one of the reasons I think we were very interested in.

 John, do you want to add?

 John Malone,  Liberty Media Corporation - Chairman   [14]
 Yes. No; I think the thing that's unique about Formula One -- we have launched -- the business is built on sports rights. And if you have to renew them, pretty much the owner of the sports rights sex out the profitability every time there's a renewal. Alternative to that is to do long-term escalating agreements like ESPN has done. And that, of course -- that represents the business risk if in fact the business doesn't develop the way you project.

 So the very unique thing about Formula One, the reason I really love this deal dashes a great deal but it's a great structure. It's a great task arrangement.

 But on top of that, you actually own it. You don't have to renew the rights periodically. And so if you do succeed in developing with your partners and the teams of your partners a great business, you are not at risk to see most of the economics get wiped out when you turn around to renew the contract. And that's really unique.

 You can build a business on -- Ted Turner, when we were there, built the TNT network on two years of eight games on Sunday night at the NFL. It was great.

 But after two years he couldn't renew the contract. He couldn't afford the escalation and cost. Fortunately, we were able to replace the programming with something else, which some of the industry called bait and switch. But it worked. (laughter)

 So sports is a little bit of cocaine because it's very powerful. But in the right markets, the right sports can really move shares. They can really create a business. But the risk with it is who really ends up owning the money. Infrequently, it's not even the team owners, it's the players.

 Greg Maffei,  Liberty Media Corporation - President and CEO   [15]
 John suggested we have moved from being a cocaine user to a cocaine dealer. All right, next question. Chase, in there.

 Chase Carey,  Formula One - Chairman   [16]
 Got our own poppy fields.

Unidentified Audience Member   [17]
 Just one question for Dr. Malone -- in light of the election results, I think the market doesn't really know whether it's going to be more pro-business because it's Republican or less pro-business because it's populist. And I was just wondering if you could share your thoughts really not so much just on the M&A but also FCC, Treasury Department, any sort of insights in terms of how you see this developing would be helpful.

 John Malone,  Liberty Media Corporation - Chairman   [18]
 Well, I think you are going to see more fiscal stimulus, both in the combination of tax reform, which -- the lowering of corporate rates, the encouragement of the repatriation of capital. And that will create, in my opinion, a higher interest rate environment and probably some inflation.

 If you are a capital-intensive business, most of your costs are fixed. And so inflation is -- a little inflation or reasonable inflation has always been beneficial to equity returns in our industry. Most of our levered businesses are long-term fixed. And so a little bit of inflation is good for the equity and may be not so good for the debt holders. So as a broad thesis, I think that's what you will see.

 I think the deregulatory aspects of a Republican administration will be favorable. I think the likelihood that you will see government intervening to support one particular industry's goals relative to another is probably less risky today than it would have been two days ago.

 Greg Maffei,  Liberty Media Corporation - President and CEO   [19]
 But John and I were sitting over here looking at those screens. Facebook is down 4.5% today. That seems unintelligible to me because big capital, likely beneficiaries of repatriation, likely to be beneficiaries of reduced tax rate. Google may lose the advantage of having a direct pipeline to the White House, but they are going to bring back an awful lot of capital at low rates. We may be beneficiaries that they don't have a direct pipeline to the White House anymore. Eric Schmidt may have to move out of the Lincoln Bedroom.

 But they do have massive taxable capital rates, which I think they're going to be beneficiaries of. And it seems a little like the market has overreacted on taking down these tech stocks.

Unidentified Audience Member   [20]
 Some of this problem goes away if [Wheeler falls custom] and offers his resignation. But I thought on super mobility, even some of the Republican commissioners seemed pretty stressed over 5G and small cells and almost a free rider benefit to cable because you're in such a great position to service that need.

 And I think some of the commissioners were saying it's so inefficient to build, duplicate and to policies and it just sounded like there was a real potential morass for government intervention. Could you comment on that?

 And then also on any fallout from Lyft and Uber, for Sirius XM over time? Although I know Jim has said they've had negotiations, but I'd be curious to see if that is a risk or a benefit, longer-term.

 John Malone,  Liberty Media Corporation - Chairman   [21]
 Well, I'd say the cable in-place architecture would be far and away the quickest and most cost-effective way of implementing 5G, if 5G in fact turns out to have a place in the future, which I kind of think it does.

 But you need a dense grid for backhaul and you need pretty much a local presence in every neighborhood, pretty close in, if you are going to use the short-distance frequencies where there's tons of bandwidth but they don't penetrate very well, they don't go very far.

 So, cable has a unique asset positioning there. My concern had always been that government would intervene to force transport for third parties in some kind of Title II regulatory regime. I think this election probably reduces that risk substantially. It doesn't eliminate the opportunity, it just means that the opportunity becomes discretionary as opposed to imposed.

 And so, it's entirely possible that the cable network owners could work out something with the wireless guys to implement -- accelerate the implementation together, perhaps, in a more orderly way or, in the case of Charter here, Charter may choose to deploy an architecture like that on their own.

 Greg Maffei,  Liberty Media Corporation - President and CEO   [22]
 Broadband is a better business than the wireless business. If the regulators don't require the two to be forced that way, I'd rather sit with our position. Our position would be at Charter, being able to go into wireless and wireless in a position to try and go into broadband.

 On the Lyft/Uber threat to Sirius XM, I think that's relatively de minimis. And if you look at who the users are and what the users are for Uber and who the pattern of our buyers is, I'm not sure they are that correlated for the (inaudible).

 So one last quick question, if we could, and then we are going to have to free you up. Yes, here. Do you want to just state it and I'll repeat it? No, they've got your mic there. Go ahead.

Unidentified Audience Member   [23]
 Thank you. I just wanted to get your perspective, Greg, on how owning a scaled, ad-supported streaming company could be helpful to Live Nation in addition to Sirius. And as you look at your chessboard in the long term, whether it makes sense to combine Sirius and Live Nation.

 Greg Maffei,  Liberty Media Corporation - President and CEO   [24]
 I think that having a scaled platform like Sirius is very beneficial. I've talked about it and a lot of these other businesses, having another scaled platform on top that had -- and, in general, free platform scale fast.

 Bill Gates, my old boss, used to say free sells really fast. I don't know why that works that way.

 So if you had a big digital platform, it would be something we could get not only ad bases on, but there are ways in which I think people like Live Nation could benefit from that, understanding the perspective on who is utilizing and who is buying what. So there are ways we think that could work that are interesting. There are ways that Live Nation and Sirius continue to cooperate, and I think you will see more of that in the future. And there are clearly not only promotion benefits and the like, but I'm not sure a combination has to happen that way. We will see how life evolves.

 John Malone,  Liberty Media Corporation - Chairman   [25]
 As a broad generalization, as you get into more and more relationships with the and customers that are of a subscription type nature and it's more and more nichey, those are not normally economically viable propositions unless it's what I call check the box. In other words, the consumer is already in a relationship of billing, marketing, a presence relationship with a supplier, and the consumer is offered to add this feature or that feature or the other feature.

 Those are much more economically viable than trying to develop a small niche business standalone that has to be marketed, it has to be billed and collected. Ask Glenn Beck how that worked out for him or ask Bob Johnson, who has tried this in these niches, or John Hendrix. Everybody who tries these narrow-niche direct relationship with the end consumer discovers that churn, marketing costs and billing costs just make those kinds of ventures tough.

 This is why Amazon, with their Prime offering, with a massive presence and a billing presence and an ability to just ask the consumer, would you like to add this, would you like to add that -- very powerful in terms of being able to provide that service. If you could take somebody like a cell phone company with 120 million active billing customers, the ability to add a feature on a check the box basis, or you take the cable company with 22 million customers, or how about a Sirius XM with 31 million billing relationships and customer accounts -- those are very attractive ways to introduce incremental services that are of a consumer pays nature.

 So I think that would be my take on where this thing is likely to evolve.

 Greg Maffei,  Liberty Media Corporation - President and CEO   [26]
 So if someone has a big digital platform they could give us, we are very excited about that. But short of that, we are going to try and work with the one we have.

 Thank you very much for a great morning. Please go get a lunch. Please go experience the Liberty experience downstairs. And we will see you in a little bit.


 Courtnee Chun,  Liberty Media Corporation - VP, IR   [27]
 Hi, good afternoon, thank you for joining us. I'm Courtnee Chun, SVP of Investor Relations for Liberty. So this afternoon we are going to be covering QVC, Zulily, Liberty Ventures, Liberty Broadband and Charter. So a great day of presentations.

 Just a couple things to go over first -- the Wi-Fi info, in case you need it. Overflow -- there is room downstairs in case you can't find a seat, go to the Live Nation lounge. The hall downstairs will close at 2:00, just so you know. Then hopefully you all got your commemorative water bottles for our 25th anniversary. So you make sure you get those. I'm sure they will be a collector's item.

 And then slides -- slides will be posted on our website but after we do necessary SEC filings. So please be patient. They should be up sometime next week.

 And then for those of you who are already here, you know what's coming up. But I assure you it's new and even better content in the afternoon. But I still need to read the FLS. This production includes (technical difficulty).

 Greg Maffei,  Liberty Media Corporation - President and CEO   [28]
 Good afternoon and welcome to Liberty's investor day, for those who didn't attend this morning.

 (technical difficulty)

 And that has proven to be a wonderful addition to the Q family, entirely consistent with the Q shopping philosophy and growing and giving -- confirming the value of the deal that we struck, with growth rates of 16% in EBITDA and 105% in -- excuse me, 16% in revenue and 105% in OIBDA.

 As I said, Zulily's operating performance confirms the thesis that we had when we bought it. It has shown impressive revenue growth since the announcement, driven by improvements in marketing. We've gone out and warehoused vendor inventory that has improved dramatically the customer experience, reducing shipping times. We've changed the UI in ways to aggregate vendors in thematic events. All of those have built on the strength that Sue Lily originally had and allowed us to get benefits of increasing scale and obviously the beginnings of cost synergies with QVC, our only additive.

 We expect more runway expansion ahead. And over the past four quarters, similarly has increased the QVC growth rate on revenue and OIBDA 2% and 2.9%, respectively. Impressive stuff. But when you add what talent we gained in the process with Mark, Darrell, Lori and Bob, I think you'll see that is growing and you will see Bob is now going to be involved in not only looking at the back-office operations for Zulily but also those for QVC.

 And I think ways you will see us do more together, including the things we are doing now -- cross-promoting platforms, using some of the QVC vendors over at Zulily; and using some of the channels that Zulily has as a clearance platform for QVC merchandise only confirm that not only was this a great financial deal, but we think it's a great strategic deal.

 I mentioned that QVC US has had its challenges. I think we are working through those. But to affirm, this is still a great business. We have not seen, really, declines in viewership, and retention or in the demographics of our customers. They have all remained stable. We have seen some challenges in a few key product areas. We've seen increased promotional competition in certain markets and we have seen certain macro factors like the election, like the Olympics, which clearly did not help on shopping in the most recent time frame.

 The market has been very fixated on a couple of things. How much Easy Pay, what is Amazon doing, are customers cord cutting. We are not saying those are without effect on the recent declines. But to our mind, it's not as if that also only occurred in the last quarter. Those are headwinds and issues that QVC has been dealing with successfully for many years. And I don't think it's changed dramatically the performance of this business, in one quarter. I do think some of the factors that are listed in the second group there are more relevant and ones that we are attacking.

 So what are we doing? The QVC team is working hard to get us back to the trajectory of results that we had. Looking at new product trends, something that doesn't get solved in a week, we are finding that the pricing and sharpening the pencil, adding new distribution, most recently adding Beauty IQ, a great, interesting web service that I encourage you to check out, expanding our digital offerings, moving towards cost reductions -- and you saw recently we had a good-sized RIF to try and bring costs in line with the [side set] of the business today, and moving forward with a bunch of initiatives which add costs and efficiency, including our global business center in Poland and our West Coast distribution center, which improves shipping time to the West Coast with greater efficiency.

 Above all, we are not taking actions which are short-term. We want to keep the value of this really impressive franchise and not take it apart by doing things which threaten the long-term health. We are not using excessive clearance inventory. We are not ramping up easy pay. And we are not being overly promotional or chasing low-margin customers. We are trying to build the business for the long term and keep it that way.

 As we've said, this business has had a long history of excellent results. Before this period, we had 28 consecutive quarters of revenue growth for the second quarter. And I think we appreciate and hope you do the stable revenue growth that has occurred, the high margins and the quite reasonable capital requirements this business has had over the last several years, which has made it an enormous cash flow distributor to us.

 This was the first down quarter in seven years, really back to the Great Recession. And I don't think any of that changes our assessment of the power of the business.

 The QVC distribution model has enormous advantages, and we consider them sustainable, from its programming and inventory flexibility to the ability to demonstrate and entertain on air, and use that as a mode and means to connect with customers, from the infrastructure that it would be difficult for any other competitor to replicate, the TV distribution, the vendor relationships and the like, all very valuable, the scale we have and, above all, the fact that we have been building the brand with embedded value of vendor advertising to the benefit of our vendors and ourselves over the last 25-plus years.

 Now, you are all -- or many of you have been concerned with our buyback philosophy and our views. And I thought I would reiterate some of them, and hopefully they are consistent. This is a levered return of capital story. It's not unique to QVC and it's not unique. But it's certainly indicative of what Liberty has believed in, for many years.

 It's highly cash-generative. We have a mandate for focused M&A if we find things like Zulily, but we are not going to diversify out of that niche that we think we are very good at. And we are about tax-efficient return of capital.

 We've continued the buyback at roughly the free cash flow rate over the last several years, in the $800 million range. Things that we think about when we look at the buyback include what's the return we are likely to get on that. Probably that's the first and foremost. But we are constrained to some degree by what leverage we will maintain at the Q level. And we have told the rating agencies [like] we're targeting the 3.5 at the QVC level over the long-term -- we will see if we will get there -- 2.8, 2.5 at Q and 3.5 overall.

 And buybacks, as I said, have been used as a steady return of capital. That's not going to change. Our share price decline recently makes it only more interesting, but it doesn't change our view about the attractiveness of the long-term strategy here.

 So with that, I'm going to turn it over to our CFO, Mark Carleton.

 Mark Carleton,  Liberty Media Corporation - CFO   [29]
 Good afternoon. Keeping up with Greg's comments on QVC, I think our views on the buyback and on the return of capital process are really strongly influenced by our views on value. And I think the view right now is that the market is overly discounting the value of QVC, certainly in the US. What we've put together here for you is a simple, illustrative sum of the parts to parse out the individual pieces and see where we end up.

 If you start at the group overall at around $14.7 billion of economic value, pieces of that -- Zulily that -- we put a placeholder in there at about $2.3 billion, which is about 20% up over what we paid for it a couple years ago. Zu has performed brilliantly, beautifully.

 We piece out there the international businesses that are certainly well on track at about nine times there. We back out the stake of the HSN shares at market, and we are left with an implied market value in QVC US of about $7.8 billion. And to us, a 5.5 multiple, which is what that implies if you use the consensus OIBDA estimate for 2016, is a very low price.

 And certainly, as you look at it, akin to department stores, we are certainly well at the low end in terms of EBITDA margins. And below that, we're certainly well at the high end for cash flow margins. So the business has been a little tough for a couple of months, but we think there's real value here and continues to be significant cash flow growth. And we think Mike and the team at QVC, as you will hear about later, really have got a good hold on what they're doing and where they are going. And that's why continuing this buyback at where we have been certainly wasn't an easy decision from our standpoint.

 Let's talk a little bit about amortization and the impact on EPS. We've got more people that have been following us from an EPS standpoint and a P/E ratio standpoint than perhaps before. We've got a couple classes of intangibles here at the QVC Group. The yellow box is the original QVC purchase accounting back from 2003, when we bought out the rest of Comcast. And the green is the Zulily buyout in 2015.

 So you can see that these intangible assets and therefore the amortization associated with them are declining very rapidly. And obviously that amortization impacts net income.

 So, if you are really going to adjust for this purchase accounting amortization, then you've got to add that back to the net income. If you start with our QVC GAAP net income over the last 12 months, add back to that the QVC purchase accounting amortization net of the deferred tax benefit, add back to that the Zulily purchase accounting amortization net of the deferred tax benefit, that gives you that based adjusted net income. If you divide that by the 467 million shares outstanding, you end up with an EPS number of around $1.82.

 And with the share price a few days earlier at $18.26, that's about a 10 times P/E ratio, for those of you that do that math.

 Let's talk a little bit about liquidity that we have at QVC -- pretty significant. $680 million of revolver capacity. Now, again, that includes the $345 million that we borrowed to finance out the HSNI exchangeables just a couple of weeks ago, $348 million in cash and liquid investments and, then again, the HNI stake, just that market. So significant, $1.759 billion in liquidity -- pretty good shape.

 From a debt standpoint, as Greg talked about, the use of that revolver took our borrowings up at the QVC Inc. level to about 2.8 times. We have the senior notes and debentures above up at the Liberty Interactive level. We are still on the same capital approach and the same commitment to 2.5 times. It was the prudent use of capital for these exchangeables to take those out, using that line of credit. But we are reiterating our target and continuing to work towards that 2.5 level.

 And then lastly, from a debt maturity standpoint, we have really well-positioned and diversified set of debt assets here. Our weighted average cost of date is low. We've got no meaningful maturities other than the revolver in 2021 that we think we will be able to manage well. So all in, we think we are in pretty good shape there. Thank you.

 Mike George,  Liberty Interactive Corporation - President and CEO, QVC   [30]
 Good afternoon, everyone. It's great to be with all of you. We always appreciate this opportunity to update you on the QVC story, especially this year, since this recent sales of pomp has certainly created a lot of questions and concerns which I'm going to do my best to answer today.

 So I'm going to start by giving you a quick overview of the QVC shopping experience. Then I'm going to spend most of my time going deep on the drivers of the slowdown in the US and, more importantly, what we are doing about it. And then we will close with a few thoughts on Zulily.

 So as you know, QVC is a very unique shopping experience. At its core it's about two things -- the joy of discovery, a discovery in something new, something unexpected, something at an extraordinary value. And it's about the power of relationships. It's about the power that comes from these highly engaged communities of shoppers connecting with each other, connecting with their host, guests, even customer service representative. So it's pretty distinctive.

 This discovery spans a broad range of categories. But, while it's a diverse set of categories, it's very narrow in that our hundreds of buyers focus on curating a really unique assortment of key brands and key items, many of which can't be found elsewhere.

 The global success -- we reach into 360 million homes around the world. That's a 24 by 7 access to customers around the world that most marketers would love to have. We are a digital leader. We have emerged as one of the largest e-commerce and mobile commerce retailers in the world.

 And the customer base is enormously powerful. Every year this experience attracts about 4 million new customers to the brand. And we have a level of purchase frequency and lifetime loyalty with those customers that most retailers would love to have. And in a world where it is extraordinarily hard to create and sustain competitive differentiation and retail, we think we have a somewhat unique, somewhat insulated position.

 It's about our focus on relationships over day-to-day transactions, it's about the kind of unique blend of shopping, media, social that only we can bring together. And it's about the power of scale and privileged assets that makes this model very hard to replicate.

 And all of that has driven really extraordinary financial results, consistent growth in revenue, consistent expansion of OIBDA margins that are already industry-leading and consistent growth in free cash flow. Obviously, the challenge of the last few months has caused a lot of folks to question whether that thesis is still true and whether something more fundamental has changed in the business.

 We are quite confident that that is not the case, and we will find a way to power through these current business pressures that we are facing to get back to this story.

 So let's jump right into what we are seeing right now in our US business. We do have a 30-year track record of growth outside the Great Recession, so this dip in Q3 surprised us, it surprised all of you, it led to lots of interesting theories outside the building as to what was driving it.

 We heard about a mysterious Amazon effect that all of a sudden hit us the second week in June. We heard theories about credit usage, all of which we knew not to be factually correct.

 The truth is not -- as is usually the case, is not so neat. The truth is that we faced a number of pressures in a few different categories of our business that have come together and, as I said on the earnings call, formed this perfect storm of pressures that we need to work through. We think those category pressures coupled with this generally difficult macro environment -- that combination created the pressures we see today. It's fashionable to blame everything on the election cycle, but the reality is we are a TV-based retailer. We are trying to inspire customers to make highly discretionary purposes. And this feels like it has been a difficult environment to do that in.

 I think that's a second-order effect, but it has been a part of the overall environment that we have faced. We are confident that these issues are not structural and that we can address them.

 So let me talk a little bit more about these category trends I've been referencing. And this slide takes a look at -- isolates the time period from June, when the sales first went negative, through the end of Q3.

 And here I am sharing demand sales data. That makes it look a little worse than net revenue. Demand sales is a proxy for net revenue, but it doesn't have things like the benefit of improving return rates baked in. But it gives you a sense of the business.

 If you look at the top row, the good news is got a lot of businesses that are great, from floor care to bedding, mattresses, garden, and outdoor living, holiday decor. Those businesses collectively are about a quarter of our sales and are up 11% and remind us the great products, great offers and favorable industry trends still work, still drive great results.

 The bottom row -- about a third of our business is, on the other hand, absolutely terrible, down 24%. Five categories, jewelry business that has been tough for a while, and we've made the hard call to stop new receipts in jewelry and just work on clearing our inventories and position ourselves for growth in the future. Electronics, which has been more up and down, then more down in the last couple of years. And where we found it comping the bumps that we got last year from Windows 10 was a challenge. And it is one area where our pullback in credit usage did have an impact on sales. Kitchen Cook, one of the great businesses that QVC, huge market share gain or over many years -- we just saw this dramatic slowdown in the kind of premium kitchen electrics category that we didn't quite anticipate and we're trying to work through.

 Had a very unique issue with one vendor in hair care. We will get past that fairly quickly. And a handbag market that is bad in general and that weakness has caught up with us.

 You look in the middle and you see a large part of the business that's basically flat, certainly not where we want it to be but also not terrible. This is most of our fashion businesses and our beauty business.

 The key in this middle row is that far right column. These businesses were growing at extraordinary rights and slowed down dramatically on a sequential basis. So flat year over year but down meaningfully from the first part of the year.

 And I think our learning there is that we came into 2016 leaning into these fashion businesses because they were working really well. And then we got to having to comp those businesses, and we were not able, in a tough market, to comp big gains from a year ago. Some of the new brands that we bet heavily on didn't work. We think they will work as we understand the customers' reactions to those brands and we finetune them, but they didn't work as strongly out of the gate. And so that combination of pressures has led to what, for us, is obviously a very disappointing result.

 In addition to the sales pressure, we had margin pressure. That's also unusual because we are used to about a [15]-basis-point improvement in our OIBDA margins every year. Q3, we dropped 100 basis points. 90 of those 100 basis points was jewelry clearance activity. So again, we did decide to get aggressive on clearance of jewelry and, to a lesser extent, in handbags.

 We had some other pressures on the P&L from the ASP, the average selling price, in sales deleverage. We think those issues are more short term than not. And we still have a little more work to do to clear inventories. And we do need to get the sales line moving in a positive direction. But we are very confident that, as we get sales moving, we will get through these margin factors as well and get back to the kind of OIBDA expansion we are accustomed to.

 So I've talked about what drove the slowdown, this kind of confluence of category challenges and some macro pressures. I think it's also worth talking about what we do not believe drove the slowdown. We have not seen any change in consumer sentiment about QVC or even in her core purchase behaviors. We haven't seen any change in competitive trends. We haven't seen any change in cord cutting.

 We'll talk about a couple of those. So for her view of QVC we get a 67% net promoter score. That's a very high NPS score, well above most companies and industries. And that score has been absolutely stable through the downturn. When we ask our customers to evaluate QVC on a number of shopping attributes, not surprisingly, she rates us much higher than everyone else. More importantly, at the far right, she also says that our performance on those attributes has actually improved year-over-year. So the sentiment is positive.

 The top of the final engagement metrics are positive. Her viewership of QVC is up year over year, other than a two-week dip during the Olympics, up year over year. Our web visits are up meaningfully year over year. She is still with us, she is positive, she is engaged with us.

 And even when you dissect the sales shortfall you can see a lot of healthy attributes in the underlying customer base. So, top row is our existing customers. They pulled back their spend in this June through September time period by 7% on the demand basis, big pullback. But look at how she did it: no change in the count of existing customers, virtually no change in the number of units she purchased over this time period versus a year ago, no change in retention, high at 92%.

 All of the change, all of the change is in selling price. So those third of the businesses that I said were so weak that she may have noticed on that power slide that they carry an ASP that's about 50% higher than our average ASP.

 So we didn't just have some weak categories. We had our highest price point categories be the ones to soften up. And that created a tough pressure on the sales line. But she is engaging as frequently as she did a year ago.

 New and reactivated as a somewhat similar story. The number of items she is buying is about the same as a year ago, her retention is the same as a year ago. The ASP has declined, is declining, as it is with existing. But you also see a reduction in customer account among new and reactivated customers.

 That's a little bit comping a record high on that metric a year ago, so tough comp. That's a little bit anniversarying expansion in carriage, and that's a lot about the fact that, again, these businesses have slowed down. In addition to being high ASP businesses, they are also businesses with an unusually high mix of new customers. Electronics, kitchen and cook, hair care -- those are the kinds of businesses that bring in a lot of our new customers. So we've got to get those businesses working better, which we are confident we can do and turn around that number.

 Let's talk about the Amazon effect. Powerful competitor, they are an important part of the environment, for sure. As long as we have tracked customers' propensity to cross purchase at Amazon, we have seen that number go up over time. It goes up at a fairly modest rate, a fairly predictable rate. Absolutely no change in that trend line in the last four or five months.

 Nothing in the quantitative data we track on our customer or in the qualitative feedback she gives us tells us that somehow, in the June through September time period, she fundamentally change her behavior as it related to Amazon, especially not in categories like apparel, which she reports is one of the categories she is the least likely to cross shop at Amazon. She is much more likely to cross shop areas like Home and Garden, which is the strongest business in the Company right now.

 So that's a diagnosis of where we are. A few different pressures we've got to work on. So let's talk about how we go fix those issues.

 Five priorities to get the business back to sustainable, healthy growth: we've got to have more balanced growth across categories. We've got to execute the fundamentals flawlessly. We've got to bring in more new customers. We want to keep expanding distribution and engaging what I would term more fundamental innovation of the model for long-term benefit. And we're going to keep driving down our operating costs.

 So most importantly, get back to growth across more categories. There's a lot to that. It's about doing all the basics on super-speed. So a lot of increased focus -- we've got to bring in more new brands faster, penetrate more subcategories faster, putting more leadership focus on that, putting more organizational resources against that, leveraging the global network of brands better -- bringing in brands from Italy, a number of countries, leveraging our friends at zulily and trying to find opportunities with the zulily vendor base.

 In just the month of October, we launched 24 new brands, 24 new brands on QVC. Many more to come.

 We're trying to be more creative about our relationships with potential partners who can drive content and traffic to us. Trying to penetrate new white spaces, fund arrangements with companies like Ultra -- ULTA, Scott brothers, Blue Apron, to do that.

 Bringing in more diversity in every single program. Trying to have on more items per hour, more diversity of the programming. All these things to kind of create more places for growth.

 All of that cuts across categories, but each category has a very detailed and very robust plan for growth. I will breeze through these at lightning speed.

 Apparel and accessories has been a great business for us that's, again, probably grown a bit above market, but not as fast as we'd like to see it. We don't want to and don't need to get back to double-digit growth here, but we want to get it moving faster. And we're going to work on these new lifestyle brands, get them performing better.

 We're tapping a number of assortment gaps -- areas like distressed denim -- great new offerings. We're trying to extend the credibility across a broader range of footwear categories. A lot of new introductions there. A lot of work on sort of megatrend towards comfort clothing and footwear. Broadening our handbag assortment, deepening our penetration in luggage. A lot going on here.

 In beauty, we have to get past this erosion we've seen in our number-one beauty brand, WEN. We start to comp that decline around December. We expect more pressure next year, but we expect that pressure to be substantially moderated from the degree of pressure we saw this year, adding in a number of fabulous new hair care brands.

 And across the whole beauty complex, we're adding 40 new brands in the first half of next year that go into a number of very relevant trends for our customer, focused on the spa segment and many others, as you can see here.

 In Beauty iQ, our new beauty network, we are talking about introducing another potentially up to 35 kind of indie brands on that network in the first quarter of 2017. So a lot going on to get beauty to consistent growth.

 Jewelry: we probably have more work to do here to get this business stabilized, can continue to be conservative here as we clean up inventories. But we have challenged our team with: how do we get back to growth in jewelry? We haven't seen that in a while. We think we are owed it.

 And we're working hard on a number of underpenetrated categories, from watches, to trend items, to fashion jewelry, special occasion, where we think we can do better.

 Home, -- lots of home is working great; I'm not focusing on that right now. But a lot of home is working great, really reaffirming the strength of the model. But we want to get our kitchen cook business to, in the short-term, moderate the decline, get back to growth over time. Some of that is just kind of having to comp some of these mega items that aren't working as well anymore.

 But we're really leaning into new trends. I've talked a lot about things like copper cookware and air fryers, where -- these are businesses that didn't exist a year ago and now are quite meaningful. We are working harder to earn a premium tier of business in the cookware space with brands like All-Clad, working on storage.

 I mentioned Blue Apron. It's one of the hot brands that's in the subscription food space. That's a really compelling arena. We think there's a lot more we can do in those kinds of white spaces.

 Electronics: not sure electronics is going to be a consistent growth engine for us. That's not our strategy, but we do want to be able to jump on trends and out of trends as they emerge.

 I think our success with the sort of burgeoning virtual assistant market, exemplified by the Amazon Echo products, where we can tell an amazing story, introduce consumers to new technology, and have it available at a cheaper price than on Amazon is a powerful testament to the model.

 We've got to get past the sort of big PC and tablet business we built up over many years -- manage those declines down, but penetrate some new categories like all-in-one and touch PCs that I think will moderate the pressure we've seen in that category.

 So that's job one: get to more balanced growth across categories. Job two is -- well, we hope we do well every day, but it's a heightened focus right now, which is execute the fundamentals flawlessly; update the fundamentals for today's consumer; deliver perfect experiences, starting with the kind of browse-and-view phase of the customer journey.

 We are doing a lot to engage customers on-air in new ways: shorter sells, more diverse presentations, new presentation techniques. We are doing a lot to engage the customer online in new ways, which I'll talk about in a second. Even basic stuff, like how we communicate sizing and specs of garments. We are having deep discussions with our customers about how do we do that in a higher quality way.

 A lot going on in the purchase phase, really focused on first-time resolution of any issues, since we have such an outstanding customer service reputation. On the far right, get the customer the product faster. We have launched our West Coast DC. Get more items in the box to lower the cost of shipping. Do returns faster. A lot we can do to continue to enhance the experience -- and all of it, all of it, doing it with a more personalized approach, leveraging new data sets and technologies we have to kind of tailor this experience to each customer's interests.

 Part of a great experience is great value. And one of the things I always say is I think because we have high OIBDA margins, people look at our business and think we have poor values. You don't have a business like ours, with the success we've had and the customer loyalty we've had, with anything other than compelling values.

 We're going to stick to our beliefs -- our beliefs that our price should be, all-in, better than anyone else's price; our belief that our first price should, generally speaking, be our best price. But we are -- as Greg touched on, we are looking at everything. We're making sure every item is priced properly. We're reimagining some promotional strategies to make sure we stay relevant in the time periods when department stores are in promotion mode. We're using Easy Pay in a strategic way.

 So a lot we're doing here. We think any changes we make in this area will stay true to the fundamental philosophies of the business. And we'll find a way to fund those changes, to the extent they require funding, through expense offsets elsewhere.

 And this is just sort of a recent example of compelling values. These are the kinds of products we've offered in the last two or three weeks. Extraordinary values on innovative new items at absolutely best price in the marketplace.

 Let's talk about credit. Credit is an important part of the value story. It's got a lot of attention recently. We do offer credit through our Easy Pay program. We think it's a wonderful, low-cost reason to buy on QVC. It does not cost us much when you look at the P&L impact of it.

 We did see our write-off rates start to creep up in Q4. That surprised us, because they've been going down for three or four years. They're still sub-2% of credit receivables are written off, so a very low number. But we wanted to understand that, and we did what we typically do is we took a cautious approach.

 We on the margin pulled back a little bit, not dramatically, in our credit usage in Q3 as we monitor those trends. They do appear by and large to have stabilized.

 We think it may have had a modest impact on Q3 sales, again, particularly in areas like electronics. But we would put it kind of lower on the list of drivers -- not nearly the kind of negative impact that has been speculated upon.

 And since we have seen the bad debt rates moderate, we are starting to use it carefully, but kind of getting back to the more normal usage level. So I think it's neutral to the story. I don't think it's a big sales accelerator going forward, but I also don't think it's a sales detractor.

 Third priority is to accelerate growth of new customers. This is a cool-built chart. So -- I went too far. Go back one. Thank you.

 We see lots of opportunities to bring new customers into this franchise. We have done it on a pretty good record going back a number of years. That yellow bubble is what we call high value prospects, persuadable prospects: people that earn a income level that's relevant for QVC; people that tell us they would have an interest in buying on QVC; people in the right demographic range.

 The grey bubble is what we call the addressables. They're basically people that are already on our platforms; they are just not yet buying from us. The intersection of addressable and high-value persuadables is the sweet spot, because we are talking to those folks every day.

 As we get our beauty and home businesses on track we will bring more of those customers in. Those are the products they most care about. We're speaking to her in a more relevant way through new personalization techniques. New programs like Beauty iQ and Private Access will appeal to her.

 And the folks that aren't yet on the platforms -- we're going after them as well. A new focus on how we market the QVC brand and speak to the value of for those who don't want to experience us on TV. The role of Facebook Live and other social networks, new purchase incentives we have put in place, the partnership with zulily. Lots of ways to speak to that customer. So we see lots of opportunity to get new customer growth in a healthy way.

 The fourth priority is how do we continue to expand the reach of this shopping experience? It starts with our digital platforms. We've been going through a major re-architecture, which I have talked about, of our digital platforms.

 We just launched a couple of big new phases of that in the last couple of months to create a much better experience. The one I'd point out is we architected the live video experience across not just, but across our apps, across Facebook, across YouTube, really leaning into innovation in that intersection of video and digital experience.

 And everything we do in this space has a mobile-first mindset and a mindset that says you want to have a powerful and seamless experience across every form and type of device the customer interacts with. And we think we do that in a way that's pretty unique. Leaning hard into this.

 Roku -- just launched on November 1 a major expansion of our Roku app. I encourage you to check it out. You don't need to have a paid TV service to get. This nothing wrong with a paid TV service, but you don't need one to get QVC. You can get all three channels on Roku. You can get a best of programming from the last week. You can get all this cool kind of snackable video content on Roku in one app.

 A really great experience. And we're going to get amazing data that we don't normally get through the television set -- amazing data about every customer interaction with this platform. This to me is the future -- whether it's through a paid TV service or not, this is the future of live and on-demand, over-the-top, interactive experience on QVC. We're just starting to learn. It's going to be really powerful for us.

 Facebook Live -- I keep talking about Facebook Live. An amazing transformation just happened in the last year where we cannot only simulcast our live shows -- we were one of the first, arguably the first, broadcaster to ever simulcast on Facebook Live. But in addition, a lot of great other live content that we don't put on the main channel. Going home with the Scott Brothers is a very hot property, and experiencing them in their setting at home. A lot we are doing here across all markets.

 So there's just a couple of examples of our commitment to be wherever the customer is -- over the air or over-the-top, social, live, on-demand. We're going to be where the customer is with the relevant, engaging experience.

 Private Access: another kind of innovation in our reach. It's a mini experience within the experience. It's basically trying to tap into this kind of deep-discount off-price market, learning from our teammates at zulily -- and in fact leveraging some zulily brands and a lot of zulily knowledge, and creating an incremental purchase occasion for both new and existing customers.

 And most excited about Beauty iQ, which we launched last week. It's our third network in the US after QVC and QVC Plus, but it is so much more than a network. First of all, it is the only network exclusively devoted to beauty. The only one, not shopping, but of any kind.

 But it's a lot more than that. Internally we have called it QVC 2.0. It is an attempt to reimagine what QVC could look like if we were to reengineer from the ground up for a new audience.

 We went from green light to launch in 60 days. So there's a lot were going to do to improve it. But in that 60 days, I think we're on to something really powerful. It's sort of a YouTube bloggers meets commerce kind of experience. Its own brand, its own sets, its own hosts; in many cases its own products, its own graphics, its own look and feel. Very different from what we typically do.

 And I threw in at the last minute some stats from the first show that aired last week without any real promotional activity. Imagine that you've never watched QVC. Imagine that you don't own a TV set.

 But you have a mobile phone, and you like Facebook. And so you see our live show on Facebook Live -- that's what this screen grab is, simulcast on Facebook Live. You are seeing beauty tips, beauty tutorials from the leading people in beauty in the country.

 You're engaged in a deep social interaction with your friends and potential friends. And by the way, you can buy something, too. It is the most contemporary, most relevant video-based lifestyle experience you can imagine. And the highest demographic watching this premier show on Beauty iQ was the 24- to 35-year-old aged segment. This is the future of QVC. There's so much more we can do here.

 And we're going to work on cost. And you know, we have a decent track record of expanding our OIBDA margins over time. We have a series of initiatives I won't take you through right now. We just keep working on opportunities in every area of the P&L.

 I would say the most important one is fulfillment. You know, we're not going to get to success by stripping out customer service experience, by stripping out talented team members who are adding value to our business every day. We've done some hard things in that category, but we're going to be careful. We have a whole lot of folks in our Company that make a big difference every day and we value enormously.

 But here are things we can do: we can take $1 billion of fulfillment spend, $1 billion of fulfillment spend, and we can find a way to do that better and more efficiently and save money every year on fulfillment costs -- and improve the customer experience at the same time, and improve delivery speed at the same time. And that's what we aim to do.

 So I hope you can see we are working hard on our opportunities. We're pretty energized about the future despite this bump.

 I get a lot of questions about pace and timing of the turnaround. And we've said we're not going to speculate on that; we're just going to kind of do our job and get to a better outcome. If we had to pin it, we would say unfortunately we don't think it's months, but we definitely don't think it's years. We think it's a matter of quarters to kind of get this business back on a healthy trend.

 And as I mentioned on the earnings call, we are encouraged by the trend in Q4. Not nearly enough for us, but it's a start. The sales declines have moderated to the low to mid-single digits, and customer growth is back on a positive growth track.

 We are moderating the clearance activity so the margin impact won't be quite so substantial as Q3. So -- got a plan, working the plan a step at a time. Feeling good about the direction.

 And I'll just quickly close on zulily. We bought the company a little over a year ago. We said to you, we have an investment thesis that is founded on three thoughts. It's a fabulous business and a fabulous management team with some QVC-like characteristics that this underappreciated by the market. Check. That team has more than demonstrated that that's true in the last year.

 We said, point two, that these are complementary companies. We can leverage our assets, our customer base, our talents. And we'll both be better off for it. Check. We've proven that out.

 And then we said the combination of those two things will lead to great financial returns. Quite confident that that will pay off.

 We are learning from each other. zulily is adopting some QVC practices, their own interpretation of those practices -- things like deal of the day, which is our TSV. We are copying what they do with our Private Access site.

 A lot of our compelling proprietary brands are having new lives on zulily and adding to purchase occasions for the zulily customer. We have introduced 115 new brands to zulily from the QVC portfolio just year to date.

 And we're working on cost synergies. And we're kind of right at that point where we'll start to see some more benefit of that over the next 12 months or so. So we just couldn't be more thrilled with how it's going.

 That's my story. I appreciate all of you and your support for QVC. Thank you.

 (video playing)

 Darrell Cavens,  Liberty Interactive Corporation - President and CEO, zulily   [31]
 Hello, everybody, very excited to be here. As Mike mentioned, about 13 months since we closed the deal to become part of the QVC Group and part of Liberty.

 And it has certainly been a great year, and I very much look forward to what our opportunities are going forward. So I'm going to walk you through a little bit of that.

 So if you step back and look at zulily and why it's a different kind of retailer. I just want to take a minute and go over that, because I think we are pretty unique, and we often get compared to people that are, I'd say, operating very differently than we are.

 We start each day with an entirely new site. Right? So if you think about a retail store that you walked into each morning that was entirely different, it really is something special and unique. And we're launching over 9,000 styles each morning.

 Just to put that in perspective, you walk into your typical Costco store, you've got about 4,500 styles of product in that store. We launch roughly double that number every single day, fresh and new. So it is a pretty unique business.

 When you look at kind of how we're delivering that -- how do we take those 9,000 and make them for you, and make them for me, and make them for you, personalized? We deal with a lot of technology to take the data of how you are using the site, how you're interacting.

 If you happen to have a two-year-old kid, if you happen to have no kids, if you happen to have a 14-year-old, you're probably looking for something different. And so we use a lot of technology to make that personalization there.

 And then it's really, at the end of the day, all about incredible value. As Mike mentioned, value in retail is what customers are looking for. We fundamentally believe we provide the great product, great pricing. She'll come back again, and again, and again.

 Our average unit price, about $19. Our average order, about $56. It's very much an impulse purchase. She's showing up each day looking for something new and finding it.

 And what that's led to is a business that we think is pretty special. We started the business -- it launched just about 6.5 years ago, almost 7 years ago now, and it's grown very rapidly.

 If you look at the last year, you see that we've been able to continue to increase our profitability. And a lot of that has come through margin expansion from our supply chain and our technology investments over the last two years. And I continue to believe that there's more room for margin expansion here as we look forward. And we're learning a lot from working and partnering with the QVC folks.

 If you look at where we are focused, where I'm spending my time -- very much focused on customer growth. How do we take the brand that we've got and expose it to more people. I think with -- in partnership with QVC, we see some opportunities there making sure our vendor experience is awesome.

 What I want to hear from our vendors every day -- and we hear this again and again: you are the easiest partner to work with. We are able to move quickly. If we talk to them on a Wednesday, we run them on a Monday; we get a check in their hand a couple of weeks later. It's a very quick process and just really, really important we keep those over 17,000 vendors we work with happy and excited.

 Using technology -- I'll talk about that. And then incredible supply chain benefits. As Greg mentioned, our head of operations has just gone over now, heading over QVC logistics and transportation organization as well as zulily's. And we think by doing that, there's great opportunity to bring together some synergies and improve the customer experience.

 So our focus very much is leaning on QVC. How can we take those lessons that we've learned over the last year and move them forward?

 So if you look at where we sell and what we sell, it's a very, very, very diverse set of products. If you look at the unique products -- we very much lead with apparel, particularly women's apparel being our largest category. But you see from men's to shoes.

 And you see some categories that we've launched over the last couple of months here: personalized -- so that is if you want a picture of your son or daughter on a blanket, on a mug, we are able to take that now and -- through working with a third party -- to really expand our offering there.

 Second is working closely with the QVC folks in health and beauty. It's a category we've not been in really much before and we think there's a lot of opportunity. We are seeing great, great traction in some of the health and beauty brands we're bringing. And then just continue to see very, very strong growth in our home business.

 Working on marketing: so you just saw our newest TV ad. We launched about 30 days ago a new TV campaign. Hopefully some of you are seeing it out there live out in the wild. But we are continuing to test into that, and you'll see us continue to stay aggressive there.

 Things like Facebook Live, as Mike mentioned -- great opportunity for us to tell unique stories. Customers are very much engaging with that. And then leaning into programs like Instagram. We create so much fresh product. If you look at the photography room, we've got over 50 photo studios within our operations where we are creating new, fresh product.

 So products Pinterest are phenomenal for us. And we think there's a great opportunity to lean into new customer acquisition there.

 And then Mike showed a little bit of this, but learning from QVC. The idea of the TSV, Today's Special Value. How do we bring these one-day deals? We have typically lived in a three-day world for our products and events that we launch. And so we are seeing a great, great traction and excitement from customers with that daily deal. How do we use that?

 Similarly, early access for our app. How do we expose product to get people to download the app and engage with it? And then, lastly, learning from things like our version of Easy Pay called Smart-pay, where we are able to take that financing idea and bring it to the customers. We're seeing incredible pick-up there with that.

 I would say we're going at it cautiously. We're taking a lot of lessons that QVC has learned and going cautiously. But I'm very optimistic about what I'm seeing in terms of the potential and opportunity there.

 We've talked about this on a bunch of calls, but we also now have a pretty sizable business hosting inventory from our vendors and our suppliers. I think if you've done any research on the business, you know that generally our business is a negative working capital business, where we don't take inventory in before we sell it. A great financial business, but it does create some challenges on the customer side, where our shipping times are longer than traditional retailers.

 What we're seeing with our zulily partner services business now is we've got over 2.5 million units in our facilities that are not owned by us, that in most cases vendors are paying us actually to store there -- that we have access, where we can ship those out same day, next day. So it's really starting to broaden the offering and the customer experience that we can offer. And just great growth from the vendor community, and a lot more wanting to be part of this program.

 How do we make this happen? We have a sizable technology organization that is building this and making it just a very kind of, I'd say, unique technology solution in retail. With those 9,000 new styles a day launching, with the customer volumes we have, we put in a tremendous amount of technology around personalization, and then the supply chain.

 And the supply chain gains are a big part of what you've seen on the margin growth. And we continue to think there's opportunity there on the tech side.

 I will lastly kind of touch on international. If you look at our business today, relatively small percentage of the business is international. Roughly 5%, 6% of the business international. We think there's a long-term opportunity here. And again, working with the QVC team, looking at their international businesses. We're going to lean into that and expand the brand globally.

 On the supply chain side, if you look at our distribution network, we have three distribution centers in the US. One in Reno, Nevada; Columbus, Ohio, and one in Bethlehem, Pennsylvania. But one of the newest things we've launched over the last six months is a distribution center in China.

 We are now actually shipping products from China direct to consumers here in the US. And what we are able to do with that is find this incredible sourcing over there of unique and distinct products that are generally not available here in the US. And we can do that at incredible margins.

 So again, still a relatively small business working with a third-party there. But were seeing a lot of potential to do direct ship to consumer from China. And we think as we look over the next year, two years, there are some very large opportunities -- and potentially working with QVC see how we can bring that capability across the whole Company Group.

 And lastly, just leaving you with an overview. I very much feel that we are in the early days of this business. We are only seven years old.

 We've reached pretty considerable scale. And as we look forward, I think the financials are strong; I think our growth opportunity is there. And we've got a very strong management team. I've been very excited that over the last year since the deal, we've pretty much kept our entire management team together. They are excited and engaged. We are leaning into it, working close to the QVC team. And I think there's a lot more ahead. And so thank you very much.

 Greg Maffei,  Liberty Media Corporation - President and CEO   [32]
 So I'm going to turn our attention now to Liberty Ventures just kind of our successor to LCAPA -- or crappa, if you've been around long enough. (laughter)

 And we are pursuing the same strategy of breaking down like fractions. And since we were here last year, we have been busy across lots of the companies, but few more busy than we have been adventurous.

 First we purchased $2.4 billion of LBRDK in conjunction with the closing of the Charter/Time Warner transaction, fourth-largest transaction in US history that's actually closed. Invested at $56.23, which looks pretty good. The implied NAV accretion per LVNTA share of our LBRDK purchases is $4.29 per share. So we've had nice growth there.

 In conjunction, again with the Charter/Time Warner merger, we retired the 0.75% exchangeable debenture and issued some new 1.75% exchangeable debentures, which -- effectively we have a call spread up to 3.41 our -- the underlying 2.2 million Charter shares. So recognizing at Ventures we own directly some LBRDK shares and some Charter shares, both in Ventures.

 We also completed the spinoff of CommerceHub. CHUBB is out on its own. You're going to hear from Frank in a minute. That's trading at $14.76 as of last week. That's about $7.38 per the old LVNTA share, based on the distribution ratios and accounting for the Liberty Expedia reduction, which happened -- redemption, rather, which happened last Friday.

 And lastly, as John noted earlier, we completed the spinoff of Liberty Expedia, with a redemption ratio of 0.4 LEXEAs for every 0.4 LVNTAs. In conjunction with that, we had $300 million moved from Liberty Expedia back over to Liberty Interactive and attributed to Liberty Ventures. And that cut our undiluted share count down to 85.4 million shares. So was a busy year.

 When we were here a year ago, we looked like the column on the left. And as we said, we significantly slimmed down, and focused, and clarified, and concentrated on really our Charter and Liberty Broadband investments.

 That performance across the last year has been quite good. And this obviously excludes Liberty Expedia, since the date through which we took this it would not be meaningful to look at any gains on Liberty Expedia, which only really began trading on Monday. But if you look at the prior components, it's done quite well.

 Now, as I made it pretty clear, Ventures is heavily weighted towards Charter. With the shares we converted from the holdings we had in Time Warner Cable that are now Charter, with the LBRDK shares we have had, we are up $500 million plus to date already. And if you were able to collapse and look through with the NAV of our Charter shares, ignoring the discount which currently is at LBRDK, we'd be up another $300 million. So it's been quite successful.

 We are really levered to Charter. In fact, given that there is debt on Ventures which exceeds the value of the other assets, the Interval, and the FTD and the like. It's more of levered than Charter. Each $1.00 in Charter will result in a larger than $1.00 increase in Liberty Ventures.

 LBRDK is also more levered than Charter, and we'll talk about that in a minute. But Ventures is even more levered to the Charter upside than Charter is itself. I guess you could say we are believers.

 So looking at what's going on and how we drive value in the net asset value of Liberty Ventures, obviously performance at Charter is the dominant thing. But there are some other things we will work on and continue to work on: opportunistically clean up the stakes we have an ILG and Tree and FTD. There is minimal tax leakage and always given we're up in some and down in others, but there's a little bit.

 We are continuing to generate cash, which is being paid by QVC to Ventures for the tax shield that Ventures has created through the exchangeables -- rather than pay the US government, taking advantage of those tax shields QVC pays to Ventures. The investments we make there are likely to be episodic.

 You heard our philosophy on what is attractive, larger purchases where there's less competition. Some angled, perhaps it has hair on it. That's why we get through and try and figure out complexity.

 But I would expect that that will be -- when we see an opportunity, we may even create more leverage on Ventures. We'd like to make a bigger splash. We just think there's a lot less competition.

 If you look at some of the deals we've done well over the last few years, it's been, for example, where it was end-of-life of a private equity fund, Apollo, closing out on Charter. Before it was Formula One, where CVC was closing out. We try and pick off those kind of advantages, find something differentiated. But they tend to be big.

 We will have potentially some green investments in the future, but I don't think they'll be as big. And the net after-tax cash flows of how that works are not enormous in the context -- $30 million to $50 million a year through 2021 and declining thereafter. They're not enormous in the context of the Liberty Ventures consolation. The emphasis is on Charter and maybe one or two big bets we make. That's our focus.

 So with that, [I think I'll] retire.

Operator   [33]
 This presentation 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 performance, new service and product launches, expected benefits from the split off from Liberty Interactive, and other matters that are not historical facts. These forward-looking statements involve many risks and uncertainties that could cause the actual results to differ materially from those expressed or implied by such statements.

 These forward-looking statements speak only as of the date of this presentation, and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any such statements to reflect any change in our expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based.

 Please refer to our publicly filed documents, including the most recent Form 10-Q and our registration statement on Form S-4, filed in connection with the split-off, for additional information.

 At today's meeting we will discuss certain non-GAAP financial measures. Please refer to the appendix at the end of this presentation for definitions and applicable GAAP reconciliations. The appendix will be available on our website throughout this meeting.

 Chris Shean,  Liberty Expedia Holdings, Inc. - President and CEO   [34]
 So I have a brief presentation here on Liberty Expedia Holdings. So why did we do this? Well, for the typical reasons that we've done spinoff transactions in the past: to improve on the trading values of the -- versus the sum of the parts of the consolidated companies. And it gives us flexibility to pursue potential future transactions.

 Okay, so what's in it? In addition to our 23 million shares in Expedia, which, if you look at the chart on the side there, has had a great run -- we have our business and $300 million of debt. As Greg mentioned, a 0.4 to 0.4 exchange ratio, resulting in 56.9 million Liberty Expedia shares, with a commensurate reduction in Liberty Ventures shares.

 And one of the key arrangements as part of this transaction is a proxy swap agreement between John and Barry Diller for up to 18 months, where Liberty Expedia Holdings now has its votes on Expedia, and John has given his votes on the B shares of Liberty Expedia Holdings to Barry, which allows Liberty Expedia to consolidate Expedia during that term.

 So -- what is the current state of play? This company still generates a significant amount of traffic. It has a very large and active user community, a broad SKU count, and shipped over 4.6 million orders in the last 12 months.

 However, as you can see on the chart on the right, facing some revenue headwinds. Why is that? Well, one of the things that we started to notice is the sports nutrition market is not growing as fast as it once was. I would say the broader nutritional category continues to grow.

 Sports nutrition, specifically the protein powders and things that you would take in connection with specific workouts, not as much. We are noticing trends with all the natural grocers that are out that people are maybe getting their protein from natural sources through their diet. These types of things have impacted the category.

 The bodybuilding category itself, which still is the core customer here, is pretty static, whereas other fitness pursuits continue to grow, like CrossFit, or like spin class, or these types of things.

 We're noticing competitive threats in the marketplace. Amazon has now got us in the crosshairs of entering into this market and selling these products, as well as retailers are selling protein. One other thing that we've noticed is as our traffic has become more and more mobile, our conversion rate has dropped. Conversion on mobile is about a third of what it is on the desktop, which has caused its own challenges for us.

 So what are we doing? Well, the management team has decided -- or is undertaking to transform itself, using this opportunity to leverage the scale of the existing model to move into adjacent categories. They're going to create a portfolio of different brands to try to achieve this.

 The initiatives include launching an array of private label products that touch on the different areas. And they're going to possibly be distributing this product not only on the site, but also through other retailers -- possibly Amazon.

 We're developing products and content specifically for the female marketplace. And we are also trying to pursue monetization of some of our great content that we have that we have not exploited as well as we could have.

 And lastly, we hope to continue to optimize the existing core business and maximizes efficiency going forward. So I would encourage you to stay tend to see how the management team executes on this aggressive new strategy. And hopefully we'll have positive news in the future. Thank you.

Operator   [35]
 This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include information concerning CommerceHub's possible or assumed future results of operations, including descriptions of business strategy, market conditions and potential, customer growth, sales channel expansion, future financial performance, and other matters that are not historical facts. These statements often include words such as may, well, should, believe, expect, anticipate, intend, plan, estimate, or similar expressions.

 You should not place undue reliance on any forward-looking statements. Forward-looking statements inherently involve many risks and uncertainties that could cause actual results to differ materially from those projected in these statements, all of which are difficult to predict and many of which are beyond the CommerceHub's control. Although CommerceHub believes that the forward-looking statements contained in this presentation are based upon reasonable assumptions, you should be aware that many factors, including those described under the heading risk factors in CommerceHub's registration statement on Form S-1, file number 333- 210508, could affect CommerceHub's actual results and could cause actual results to differ materially from those in the forward-looking statements.

 Where in any forward-looking statement we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis. But there can be no assurance that the expectations or belief will result or be achieved or accomplished. These forward-looking statements speak only as of the date of this presentation, and CommerceHub expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained in this presentation, any change in the Company's expectations with regard thereto or any other change in events, conditions, or circumstances on which any such statement is based. All subsequent written and oral forward-looking statements attributable to CommerceHub or persons acting on CommerceHub's behalf are expressly qualified in their entirety by the cautionary statements contained in this presentation.

 Frank Poore,  Liberty Interactive Corporation - CEO, CommerceHub   [36]
 Well, thank you. I appreciate the opportunity to be here. Before I get into this, I just wanted to talk about, generally, retail sales. So in retail traditionally in the old days, retailers would buy products from brands and manufacturers and bring them into their own warehouses and ship them. In today's era, supply chain is changing.

 You think about the old days -- Wal-Mart had the supply chain excellence, and it allowed them to be as dominant as they were. Now Amazon has gone out and built a bunch of warehouses, created Prime, and now once again in retail supply chain is dominating.

 We really see going forward the opportunity to distribute commerce. And I think the supply chain of the future is going to be one that is distributed.

 What you see today is -- CommerceHub, we work with retailers. And we connect them directly to suppliers who can ship products directly to the consumer without actually having to stock those items. So we connect to distributors; we connect them to brands.

 More and more we're starting to connect other things. So we've tied in carriers, shipping carriers -- DHL, UPS, FedEx. We've integrated 3PLs, third-party logistics companies. These retailers are now selling on marketplaces outside of their own sites.

 They're also connecting through Google. For some of our retailers, as much as 50% of their revenue actually comes from Google and other generated traffic, which is pretty amazing.

 They're also connecting social channels. They need to be where customers are. And as a retailer it starts to get very complex to connect to all these different points, and to be able to collect information -- data -- from all these disparate sources. So you can imagine information that you need from the carrier, the tracking information, is in one system from the carrier.

 The distributors have a system. The retailers have a system. We provide the ability to normalize that data, take it in from different sources, and put it together.

 Now what's happening is brands are starting to light up. And brands are also -- in addition to selling into retailers, they are selling on marketplaces directly. They are also connecting to search, so they can drive their own traffic and do what retailers have done and connect to social. And they too want to be able to connect to 3PLs and carriers.

 So you get this complexity that's evolving when you're doing this distributed commerce model.

 What CommerceHub does is -- we simplify all of that by providing a hub. And in that hub, we take the disparity that exists between different systems, different business processes; we bring that all into one central hub, normalize the data, apply business logic and processes to make it possible for any party to connect one time to the system and be able to connect and communicate with all of the different trading partners they have.

 So I just wanted to talk about some of the customers we've got, blue-chip retailers we continue to add. We just announced Dick's Sporting Goods two days ago. But we've connected, as I say, to brands, retailers, and distribution partners, as well as search and social.

 So if you're retailer today and you're trying to grow, you really only have two things you can do. You can sell more to your existing customers, and you can go out and get new customers. And so if you take a traditional retailer, they may stock in their warehouses 30,000 products. We've put here up to 100,000.

 Maybe a Super Wal-Mart has 100,000 products, or maybe they carry that many in a warehouse. But that's what they have available. But you have to think -- you're competing with Amazon, who has 400 million SKUs or something close to that.

 What we do is we enable all of this distribution network and all of these suppliers that we have to be able to connect in a cloud-based way, where now that retailer can offer virtual inventory -- inventory that's actually sitting in the suppliers warehouses that can be made available. And now we can enable millions of SKUs without any inventory risk. We provide all the tools, technologies, and capabilities to be able to achieve the same levels of customer service, the same fulfillment performance, and the same brand identity as if they actually bought those goods, brought them into their own warehouses, and shipped them themselves.

 So we have two real target audiences that we sell to. We sell to retailers and we sell to suppliers, and suppliers are brands and distributors.

 For retailers, it's a simple proposition. Mr. Retailer, I can help you radically expand your product offering without taking any inventory risk, so that you have the selection to offer the customers that come in.

 Every retailer out there can clearly look at their search box and determine what's being asked for that they don't have. If you don't have -- if you're looking for shoes and they don't have a particular size or color, you leave and go somewhere else. If you can connect to the actual brand and expand that line, it's pretty significant. We see significant growth in terms of revenue when they add products. Amazon realized this a long time ago. Wal-Mart is coming on significantly with their marketplace.

 The other thing is retailers have to be able to put their products in other channels. I said Google drives a significant amount of business. Many of these retailers are also selling on eBay and other channels. So we enable them to do that.

 And as we -- you know, we just heard that mobile conversion is tough. So if you think about it, you go on Google; you click on something; the product comes up. And you go to buy it, and you've got to enter in all of your credit card information -- your name, your address. So you leave.

 It's a big problem for Google. And so Google has been talking about buy buttons and these sorts of things so that they can actually capture the sale, so that both parties make out -- they don't lose the sale. We think we're well positioned for buy buttons and these other types of technologies.

 And then the other thing is shipping faster. You know, Amazon Prime -- you pay for it, and you're in this thing, and you get products very quickly. Our retailers, some of them, they'll be doing drop shipping, or even in their own warehouses. And it will say, please allow 7 to 10 days delivery. You know, I tell them, you might as well put a link to Amazon right there, because at least you can get to the affiliate fee. (laughter)

 So we're working with retailers to be able to not only ship faster -- we've got algorithms where we know uniquely, more than the retailers do, we know exactly where inventory is by quantity and by location. So we can actually make determinations about how our products are shipped. So we know who the customer is; we know where the product is; we know the promised delivery date. We can look at the carriers and figure out the right transit times and everything and choose the right cost carrier to get it there on that particular time.

 The other thing we're doing is we've partnered with third-party logistics companies that are pre-integrated to CommerceHub. We're working with a big retailer now where we've taken some of their products, put them out on the West Coast as opposed to just their East Coast facility. And not only do they get one- and two-day shipping, but they're doing it at ground rates, and they're not having to go across multiple zones. So there is real opportunity for us to help our retailers achieve not only expanded selection for their customers but also faster delivery.

 And more recently, we've launched something called CommerceHub for brands. Historically, CommerceHub has gone out and we've sold to retailers. And we sell to the large retailers, and then those retailers act as our sales agent to bring in suppliers to do business with us.

 And so we've amassed 9,700 customers in terms of the supplier side on our network. And those suppliers -- you know, we've amassed these brands. So for the first time, we're really going back and selling something to these brands.

 And what we are doing is we are going in and we're saying, Mr. Brand, I have an opportunity for you to reach many channels -- not just selling on your own website or selling into a retailer. So a lot of these big brands will sell into the retailer.

 I was actually meeting with a brand yesterday, and the president told me that they had $0.5 billion worth of inventory sitting in their warehouse waiting to be sold. And so you think about the ability to unlock that inventory and make it available where customers are.

 So if you're a shoe company, and you've got all of these shoes in your warehouse, you want to have those products up on all of the major retailers; you want to have them on all the major marketplaces; and you want to have them on the search and social channels that matter. I tell these brands that in the old days you would fight for shelf space. Well, today, the shelves are digital, and they are Pinterest, and they're Facebook, and they're Google. And that's where customers are. So their products need to be in front of them.

 So we can help these retailers -- or these brands, rather, have one central catalog, that they can manage their catalog out to every endpoint that they are working with and be able to order-integrate and be able to do fulfillment and logistics. And, again, we use that same third-party logistics network. A lot of these brands aren't in a position to do single pick, pack, and ship distribution.

 They've got forklifts running around, and they can't pick one piece for Mary Smith in Toledo. So were helping them, and we think this is huge opportunity here. And we've got positive traction. We signed an iconic major footwear brand recently we just announced. And we had signed Mattel just recently as well.

 So the growth drivers for CommerceHub -- we've got the wind of e-commerce at our backs. So we've got inherent growth just in terms of e-commerce. We're getting increased adoption from our customers.

 So as these retailers -- in the olden days we would bring folks on, and for the most part they were trying to do operational things. They were shipping mattresses, or things they didn't want to have to bring in and double ship and double handle.

 And now it's becoming much more of a strategy. It's how do we expand to have a selection? And how do we do this with efficiency? And so we're starting to see virtual inventory become a much, much bigger part of the businesses of these retailers.

 And then we are going out and signing new brand and retail customers to continue to build a network both here and internationally. We've just announced Dick's Sporting Goods as well.

 So just a -- the growth of e-commerce, $692 billion in just a handful of years; it's continuing to grow. The pink line here shows the percentage of online retail as a percentage of the total retail. So it's becoming much more significant over time. So we've got a lot of opportunity just within the e-commerce world to continue growing.

 In addition to that, we made this chart. So we've got different types of customers. Like I said, we've got customers who have come on, and some of them it's less than 10% of their overall GMV actually is powered by virtual inventory. We've got some customers who -- it's up to as much as 50%. And so these are major retailers. So we're talking very significant amounts of revenue that are being generated from products that they actually don't carry.

 And so our effort is going to be around trying to get these less-than-highly penetrated retailers to continue to adopt this model. We have got account management teams that are in working with these organizations. And there's a receptivity now, because all of these guys are trying to grow, and there's just no way to compete if you don't have the selection.

 So we see real opportunity to continue to penetrate. And most of our customers are not in that 30% to 50%. So there's a lot of opportunity to get them there. And we think that that's probably a pretty good penetration rate to shoot for over time.

 So we've got significant opportunity still available to us both here in the US -- we've got a lot of big customers, but there are still big customers out there -- and there are customers internationally. And so our addressable market is still very, very sizable. And I still feel like we're in the early innings of this opportunity.

 Just to quickly go over some highlights -- I'm not going to read through each of these, but the summary here is that we have consistent revenue growth year-over-year, which turns to significant profitability, because we have a relatively low in the market cost for sales and marketing.

 As I said, we sell to the retailers, and the retailers do our selling. So we don't have that direct cost. But all of this translates into significant profitability which we convert to cash flow.

 So that's my presentation. I appreciate you having me here today.

Operator   [37]
 This presentation 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 performance, our investment in Charter Communications, new service and product launches, Charter Communications' integration of Time Warner Cable and Bright House, 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.

 These forward-looking statements speak only as of the date of this presentation, and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any such statements to reflect any change in our expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based. Please refer to our publicly filed documents, including the most recent Forms 10-Q and 10-K, for additional information.

 At today's meeting we will discuss certain non-GAAP financial measures. Please refer to the appendix at the end of this presentation for definitions and applicable GAAP reconciliations. The appendix will be available on our website throughout this meeting.

 Greg Maffei,  Liberty Media Corporation - President and CEO   [38]
 This is one of the easier ones; it almost tells itself. What's happened in the last year since we were here talking about Liberty Broadband?

 Well, the Charter/Time Warner Cable/Bright House transactions closed in May. We raised $4.4 billion of new equity into Liberty Broadband. Initially we struck that at $56.23 share, which is kind of a forward those guys when they committed -- included, obviously, our own Liberty Ventures, but also some third-party investors. And that was a premium to the then-market price, but was at the NAV of their underlying Charter.

 We, Liberty Broadband, turned around and invested $5 billion in new Charter shares at an average price of $195.08. Compares pretty favorably to $273 this morning. Thank you, President-elect Trump. It's up about 40% -- not the 27%, because we've had a little gain in the last couple of weeks since we put the chart together, or the slide.

 We enhanced the balance sheet and liquidity profile at Liberty Broadband, entering into some new margin loans with an aggregate capacity of $700 million, of which we've only drawn [$6 million]. And we're really quite low leverage here. Even though I mentioned earlier there is greater upside in leverage in this for every gain in Charter compared to Charter itself, if you look, it's about a $12.7 billion market cap against about $600 million of margin loans. So by any measurement, fairly conservatively capitalized.

 We initially, as you may recall, had bought $2.6 billion of Charter, which maybe we now call legacy Charter in the presentation that Tom's going to give in a moment. At $105.62 a share it was -- that's accounting for the kind of reverse split we did in conjunction with the Time Warner transactions -- and those were initially bought by Liberty Media. We spun them off about two years ago into Liberty Broadband, and since that time -- it says here 134%, but again, as of today, it's more like 158% in 3.5 years. So pretty good return.

 We bought the incremental stock, 5 billion, in May. And we're up nicely on that as well.

 We believe there's a lot of upside here. We're in the early days of the Time Warner Cable/Bright House integration. And I think most of the metrics remain on or ahead of schedule. And again, you're going to hear a lot more about that from Tom. I'm going to focus on really how Liberty Broadband is impacted.

 The deal that was done was the fourth largest that's been completed in US history and the sixth largest among global transactions, because it was done in conjunction with the $10.4 billion deal at Bright House. We, as I mentioned, went out and raised money from third parties as well as Liberty Ventures, $500 million from four hedge funds or hedge-fund-like entities.

 And that return has been pretty good to them. And that's actually sort of important to our longer-term philosophy and strategy. I've been 11 years at Liberty as of yesterday, and for 9.5 or 10 of those, we kept saying we have too much liquidity, and we don't know what to do with our cash. That problem has been solved. Now we need to find more cash. That's always the case, never -- always too much or too little.

 And one of the things we have been doing and thinking about is ways to find partners on deals. I think I mentioned our philosophy is bigger deals have less competition, more interesting. That may involve consortium-type arrangements -- in this was a precursor, frankly, with what we're looking at conjunction with that one, maybe more of the same, and some other deals that we're looking at may be more of the same.

 So this was important not only for the value it created in allowing us to be -- have the presence and influence we have at Charter on a continuing basis, but also in setting a trend of finding third-party investors who have done well and want to play with us going forward.

 Posts the closing of both transactions, Liberty Broadband owns 54.1 million Charter shares. That's about 17.4% of the equity if you account for the Advance/Newhouse convertible adds when converted. We have about 25.01% of the voting power, given that we have a proxy on the Liberty Interactive shares or the Liberty Ventures shares and the shares of Advance/Newhouse, such that we get our way up to 25.01% of the voting.

 We have the right to designate three Board members. And we also have some preemptive rights and the like on the equity. Advanced/Newhouse, our partner in many things in life in the Malone world, owns about 13%.

 Why we remain excited about Charter: we think the strength of the video product is still underappreciated. Legacy Charter has been able to grow video share in its market. Time Warner Cable had not pursued video as aggressively. And the opportunity to upgrade their plan to all-digital and pursue the strategy of simplified pricing, greater emphasis on triple play and a minimum -- high-speed minimums that are more appealing to customers I think has got lots of opportunity ahead.

 We're still underpenetrated on our own customer relationships versus the 49 million homes passed. We think the competitive advantage of the cable plan of offering greater broadband speeds at continually higher levels with relatively less capital in their DOCSIS is attractive and gives a roadmap all the way up to 10 gig the customers and we will find attractive.

 As I mentioned, we really in the early days of integrating Time Warner Cable and Bright House, rolling out standardized pricing, in-sourcing customer service provisions to provide more expensive but better and more efficient customer service relationship that ultimately will save on costs.

 There is an optionality around the quad play. I think John would say it's more than optionality. He thinks it's virtually a requirement. I'd probably be more in the Tom camp, or more on the optionality side.

 We've got a lot of great things that can happen, and most of them around wireless are positive. Charter has already rapidly delevered. Probably at the 4.0 level already.

 And there's a lot of room for flexibility of capital. As you know, it already repurchased stock in the third quarter, and we expect there will be much more going forward. And we have, as I mentioned, some valuable governance and preemptive rights at Charter, which make our position only that much more attractive.

 If you just took the last slide here about our net asset value, it's pretty straightforward. We have a small company, Skyhook which served as the ATB. We value that at a relatively modest level, but even on the basis of that at that modest level, if you look at the Charter shares we have, the cash we have on hand, the margin loan we have, netted our NAV -- the NAV per share is $72 compared to the $64 at the time the slide was struck. Both have been pushed up. There's about a 10% discount.

 That provides some opportunities. First, I wouldn't be surprised to see, given the liquidity we have and the potential liquidity, given the large amount of unencumbered Charter shares, to see us utilize that to shrink the shares at Liberty Broadband. You are buying Charter at a big discount, 10%.

 For all of those who are not in the Liberty family but are third-party investors, if you're interested in Charter, you're going to hear Tom's presentation. I hope you'll walk away compelled, as we were, and remain. And then you'll also think about Liberty Broadband, which has almost $13 billion of liquidity and trades at a 10% discount.

 So thank you very much. I don't want to steal your thunder, Tom. There we go.

 (video playing)

 Tom Rutledge,  Liberty Broadband Corporation - President and CEO, Charter Communications   [39]
 Okay, so that music bookends this deal. As you remember a couple of years ago, Greg played Time is on Our Side. So: Time Has Come.

 And it's exciting to have great assets and to put them together, and to take what we've been doing a Charter and apply that across a much bigger footprint. I'm not going to sing that to you.

 So we have a big national business. We have 50 million passings, including enterprise passings; 26 million customer relationships; 17 million video customers; 22 million Internet customers; and 11 million voice customers.

 And this slide really shows you how we fit sort of in the country in terms of our video share. Third biggest video company, second-biggest wireline broadband company, $40 billion revenue business, with $14 billion, $15 billion of EBITDA currently and growing rapidly.

 A large superior value company with tremendous upside. 25 million, 26 million customer relationships, but 50 million-plus passings. The opportunity in this company is to grow subscriber relationships in the passings that we don't serve.

 So our strategy for the new acquisitions and for legacy Charter is take our continued, proven track record of investing in our products, investing in our network, and driving market share through the acquisition of customers, and the creation of revenue growth, and the creation of EBITDA growth through the efficiencies that a higher penetrated business gets you.

 We don't need scale, although we are getting scale out of this business. Charter was a subscale cable company, quite successful. There are disadvantages to not having the kind of scale that we have put together in this company.

 For instance, in legacy Charter 50% of our marketing dollars had to be direct. We couldn't use mass media, because we didn't have the share of the DMAs that our marketplace was divided into in a sufficiently penetrated way to use mass media. So in the new business that's over 95% of the footprint. So we get a much more efficient marketing footprint because we can use mass media, not just -- well, even nationally, but also at the regional level, where we couldn't do that in legacy Charter.

 And our model, though, in legacy Charter did not really require that kind of efficiency. We were able to create customers by using our network, freeing up the spectrum in the network, and using that to create all-digital products, taking away analog signals and creating -- using that same amount of spectrum to create all-digital data products, which had higher capacity. And we used all of that in the right packaging and bundling strategy so that we could actually drive share and maintain customer relationships when we acquired the share.

 So when you do that, we actually unlock a tremendous amount of savings. It's not the savings that come from synergy that are created -- the synergies that are created through a deal, and there are a lot of synergies that are created through a deal. We have three corporations; we've been able to put those together. We've already identified about $700 million in annualized run-rate realized synergies, just by the end of this year, that come from just the taking out of costs associated with a conventional merger.

 But the real synergy in the business or the real cost opportunity in the business is running the business efficiently. And the way you get that efficiency is actually through great service.

 So if you invest in your products and you have a better video product than your competitors, it's all digital. It's two-way interactive on every outlet. So that requires a set-top box in every outlet. It requires turning off the analog signals.

 And if you use the spectrum that you free up by turning off the analog signals to have faster minimum data speeds, our slowest data speeds are 10 to 15 times faster than the average AT&T data speed, for instance. And as a result of that we have a stickier product, a better product, a more satisfied customer base. And by having a more satisfied customer base, we have longer customer lives, which means for the same dollars of revenue, we have lower costs.

 Why are the costs lower? Well, there are less transactions if you're connecting less and disconnecting less. If you're disconnecting less, you need less sales, less cost of sales per dollar of revenue. Or those sales go into growth, which is really the more virtuous cycle that we are actually in. But you take costs out of the business by having a more satisfied customer base.

 The other way you get a more satisfied customer base is by having a better service operation. And so we've in-sourced a lot of work. We've taken calls that were going offshore, brought them onshore. As a result of that we've got higher labor costs. As a result of the higher labor cost per transaction, we actually end up with less transactions.

 And the reason we end up with less transactions is because we do the work right the first time. The craftsmanship of our service organization is so significantly improved that there are less service calls and less activity, and less repeat activity, which also results in more customer satisfaction, which results in longer customer life, which results in lower transactions.

 And on top of all that, there's the synergy of the new digital marketplace that we are in -- the ability to serve our customers digitally, meaning through an online portal; and schedule work; and have equipment dropshipped to them to already-hot digital drops, so that the customer can self-serve, which is also more satisfactory. So we've created a virtuous set of investments in customer service that create customer satisfaction, which reduce costs, increase customer life, and actually increase customer counts, which increase revenue. So we've got a very virtuous growth strategy that comes from the operating synergies that we developed.

 We've taken this new Company, which is 90,000-some employees and is going to be 110,000 employees when we do all the in-sourcing we want to do, and divided it up into 11 regions. But we run the Company as a singular entity.

 We have 11 physical locations. We have almost 700,000 miles of physical infrastructure throughout the country. And we have a distributed workforce that manages the transactions and the maintenance of the physical infrastructure.

 Our call centers, though, are being unified into centralized individual service entities -- meaning all sales will be handled in one location, all the service will be handled in one location. And as a result of that, you get efficiencies in the way you deal with customers, and you get uniformity across the whole physical infrastructure.

 So any person that works in Charter in any part of the United States, by the time we get this integration done, will be able to go to any place else in the country and work -- meaning they'll have all the same metrics, the same data, the same user interfaces as employees and as customers throughout the footprint. So we'll have a uniform product.

 And as a result of that we get efficiencies, and we also get quality across the entire business that we run. So we run it as a single entity with a distributed field workforce.

 The integration is going well. It is three big companies coming together, and they are significant. Legacy Charter was 25,000 people. And by the way, I hired -- in the 4.5 years I've been at Charter, I've hired 8,000 people of that 25,000 net as a result of this in-sourcing strategy.

 So legacy Charter has already accomplished the goal of creating a quality driven workforce that's creating the opportunity to take all this excess activity out of the business, and growing very nicely as a result of that. We're doing that across a much bigger footprint now. The 25,000 employee company now has 91,000 employees in the legacy Time Warner and Bright House footprint. So the integration is a significant effort, and it's a big effort. And it's complex -- logistically complex.

 We're launching spectrum branding, which is our price packaging strategy, across the footprint. We've already launched in Los Angeles and in Texas. Next week we launch in New York and Florida.

 By March of next year, we'll have our branding completely rolled out throughout the country. There's 40,000 trucks that we have to paint. I've seen our Spectrum trucks showing up on the streets of New York City.

 Next week, we'll be fully branded as Spectrum here. It's exciting. We'll be able to have a uniform marketing sales approach, price approach at least incrementally as we go forward across the country.

 Small business, which has also been modified in the new company as a high volume, uniform-price package product, will be rebranded also in the spring of next year. We're going to go all-digital in legacy Time Warner and legacy Bright House.

 They are not completed like Charter is completed. That's capital intensive. We're going to have to buy set-top boxes for many outlets and turn off the analog signal. That's a huge capital project with lots of moving parts and lots of operational difficulties. But you come out the other end of it with this capability of having a vastly superior product set and a vastly superior infrastructure, because it's been freed up from its analog spectrum.

 The overhead from the three systems is being collapsed quite rapidly. That's where a lot of the synergies are coming. We've already integrated all the business systems, and the accounting systems, the HR systems. So all of the software that runs the corporate enterprise is one as of now.

 The practices, though, of taking care of customers is really complex. We have multiple billing systems, 10 of them. 10 instances. We think we can get to three sets of customer relationship systems by next year. And then over the next several years, we'll integrate that all into a single instance in terms of being able to provide the vision I said earlier, of having our people be able to go to any part of this company and have the exact same systems that they're dealing with, so that we can get a really high quality service prospect across our footprint.

 New York City, if you live here, is a service challenge. It was for Time Warner. We are working on it, but give me a few weeks.

 And we're in-sourcing the field operations, as I said, like we did at Charter. That takes time. We've got to build buildings to put people in. If you have a call center in the Philippines and you want one here, you've got to build it, you've got to staff it.

 And for a moment in time you actually have two costs. You have the cost of your offshore costs and the costs of training and holding up a new instance of the service structure while you're doing it. There's some inefficiency in that, but the outcome of that down the road is this virtuous cycle of high satisfied customers with less transactions and more cash flow per customer. So we're doing that. We are making that investment.

 And we're launching our user interface, which is state-of-the-art, across our footprint incrementally as we roll out our all-digital product going forward.

 Our pricing and packaging: the Spectrum brand that we have and the packaging that goes with it is really a simple straight, you know, $29, $29, $29 product for video, data, and voice. We put a lot of value in those products.

 And when we step those products up as they come off the promotional period, they stick because they are highly valuable products. They are not low-value, low-cost products packaged to look attractive. They're high-value products, attractively priced, and they stick.

 So our national promotion and pricing package was also designed to simplify our business so that our people can deal with reasonable amounts of information in terms of the selling process, and so that our fulfillment of those sales can work in a simplified way and our consistency of service and fulfillment is of a higher quality -- which all translates to our business in an effective relationship with customers that ultimately translates into more growth and lower costs.

 So our packaging and pricing is really valuable. The video product has got two-way interactive capability on every outlet with every HD channel there is -- essentially a VOD library that can't be replicated. Tens and tens of thousands of titles, essentially everything there is.

 And data speeds that are 10 to 15 times faster than most of our competitors are offering in the market for similar pricing. And a voice product that's still selling in well, fully featured. Maybe some of the polling that went wrong the other day was related to the fact that people have let go of the voice product in many cases, and the wrong people were talked to. But if they asked us, we could've told them. (laughter)

 People at the bottom end of this country is having a very difficult time from an income level -- the bottom 40%. Our biggest single problem in the business is price. And our biggest single driver in price is content cost, but most people want all the content. And we continue to do very well with our bundled packaging.

 And our sell-in of the expanded basic to the basic service is 97%. So when we market our business, we put a lot of programming in the marketplace. And there's a lot of satisfaction driven from it, but it is expensive. And that is the pressure of the business.

 Another interesting fact, I guess, that sort of indicates that that's true is that if you look at what people think of as cord cutters -- people that just buy broadband -- look at what our sales ratio in those markets are. It's the single highest response universe that we get when we market. So if I send out a mail piece or put a direct response television ad on TV, the highest response rate comes from broadband-only homes, which just tells you that universe of customers is not connected to cable because of price.

 Our simplified pricing and packaging, though, drives lots of packaging into the home. Our video business is growing rapidly. Our all-digital product unburdens the network.

 And, really, I guess the other key concept that our strategy should incorporate is -- if you looked at the cable business, and looked at the assets we have, and looked at replacement costs new, the single biggest valuable asset we have is our network, and the hardest thing to replicate.

 And when you fill that up with analog channels and don't use that network as a competitive tool, you're really taking your most valuable asset and sort of throwing it away. And that's what some of the cable industry was doing. And that value is essentially what we are unlocking strategically through this packaging and pricing strategy.

 This is really the result of legacy Charter over the last four years. It's what we expect to happen on the new assets without any kind of synergy and without any kind of scale advantages -- all of which we're getting in the new business.

 So you can see we been growing customer relationships steadily. We've begun to grow our video business after we went all-digital, improved the service proposition. Our Internet additions continue to grow massively and rapidly. And the adjusted EBITDA growth comes right up with the increase in customer relationships.

 And if you look at the kinds of earnings that we are producing at legacy Charter in our last earnings call, that number is now a double-digit EBITDA growth number. And we expect that kind of growth to continue in the legacy Charter -- although we now have a conglomerate that has all of the old assets in it that have to be upgraded.

 So that's the Charter story. That's how we create the value. And when I come back next year, I'll pretty much say the same thing. (laughter) Thank you.

 (technical difficulty) will find it uneconomic to do those on an a la carte basis, and they will only find success if it's part of a larger service offering where the check-the-box opportunity is there. Somebody like Amazon, for instance, which has begun the process of allowing a la carte additions to their Prime service offering on a check-the-box basis where the supplier of the service is splitting the revenue with Amazon but including the billing and the marketing with Amazon. And I think that's a trend that will accelerate, and I think it's probably likely that the cable distributors, the traditional distributors, will begin the practice of offering a -- especially subscription type services away from the big bundle.

 Right now, traditionally, if you wanted to buy HBO, you had to buy at least a pretty big package of other video services, and then you got to buy HBO, for instance. I believe that that will change over time, and that operators will continue to offer it that way but they will also offer, if you buy our broadband service, you can also buy HBO that way. And HBO will find it's in their interest to do that with a marketing split arrangement, billing arrangement potentially.

 So, I think what you will see is a restructuring of these video service offerings in which it will turn out that there would be multiple bundles. And the reason that doesn't happen en masse right now is because a number of the program supply contracts, a number of the important ones on the linear channels, preclude their services being offered except as part of a big bundle.

 Greg Maffei,  Liberty Media Corporation - President and CEO   [40]
 Tom, do you want to add anything, or --

 Tom Rutledge,  Liberty Broadband Corporation - President and CEO, Charter Communications   [41]
 Just that there's a lot in what John just said. We hooked up 1.3 million cords last year, another way of thinking about it. So when people think of cord cutting, our businesses, our video business and the fact that we have a very fast, high-speed data business, actually makes over-the-top more practical and useful to consumers. And so one of the things that's driving our data business is the fact that these over-the-top services exist.

 So we look at the whole universe as just full of opportunity to be a retailer, a wholesaler, and to be a broadband provider and to be a service provider in the home, and to build user interfaces for customers and relationships with customers that are pretty attractive. So the kind of world that John described, which I think in many ways is already happening, but not happening so fast that the existing world is about to fall apart. There's an awful lot of equity in the existing distribution system, and a lot of self-interest that is not going to cause everybody who is in it to suddenly want to go out and be an a la carte retailer.

 John Malone,  Liberty Media Corporation - Chairman   [42]
 I think the big driving thing that you have to keep in mind is what Tom mentioned, which, for 40% of households who have seen their income stagnant to declining in real terms, price is a very big issue. And historically, they got to the big bundle because most people could afford it. Now, especially the AT&T DirecTV people that I am historically quite familiar with ran into a problem where affordability was a big issue in a business that was all video that had an ARPU of $100 plus and where a big percentage of the people requesting service couldn't qualify credit-wise to justify DirecTV putting the capital investment in to hook them up because they would churn up because of inability to pay. And so there's that dynamic going on at the same time. It's not just that people have said I don't care about this big video package. There is an affordability issue. And what you are finding is some people are deciding, if I've got to give up something, I'm not going to give up my high-speed connectivity; that's kind of critical to my lifestyle now. I'll cut back on my video package as much as I can, and maybe I'll have to give it up at some point and switch for some direct to the consumer service. But there is still a lot of demand for that big package. It's really more a question of affordability.

 Tom Rutledge,  Liberty Broadband Corporation - President and CEO, Charter Communications   [43]
 But also, as we I think just goes on the (inaudible) aggregating audiences is worth a lot, whether it was true in the linear world or true in the digital world. And the reality is Charter is going to be aggregating a bunch of audiences and offering them a range over time of alternatives that are likely to include different skinny bundles that they can check the box on, because the churn is going to be too high to be a direct to consumer guy and not be, as John said, inside the bill of someone like Charter, which becomes an essential important service. I'm not sure, at the end of the day, there's less margin in that for Charter. I think it's going to be a lot less margin if you are a guy who's trying to pull -- you are cable network who is trying to pull 12 channels which don't all have that demand. You start snipping off the 11th, the 10th, the night, etc.

 Other questions? Let's go over here. Are you going to ask if we're going to get the Charter deal done? I just wanted to check.

 Greg Maffei,  Liberty Media Corporation - President and CEO   [44]
 But I would like to go back to two years ago where John made a great comment. John was asked about -- I didn't ask the question, I forget who in the audience did. John was asked about Netflix getting a free ride. It was actually something that he addressed with Dave this morning as well on CNBC. You basically, John, were very clear that it's unsustainable I think was your exact words, that it can't last with, that Internet video gets a free ride on Charter's pipes. And to get that Time Warner deal that you did get done, you gave up on that, not just to Netflix but to the industry of getting paid for people using your pipes in terms of heavy bandwidth.

 With what just happened on Tuesday, and Trump has made comments before that Obama was a government overreach into the Internet. While I have no idea what he ultimately does, do you think there's a potential for us to revert back to what you originally said two years ago, that that is the way forward and that you do get paid for heavy bandwidth, users of users, whatever you want to call it on the corporate side rather than purely on the consumer side?

 John Malone,  Liberty Media Corporation - Chairman   [45]
 I don't know if Tom is ready to go back to the new FCC and try and renegotiate. That might be a pretty heavy burden. It certainly would be the right thing to happen. But I can see this happening also in a different way, which is there will be a number of service providers who will want to be carried on the Internet, who want to be delivered, promoted, marketed, who want our search engines to be able to find their programming, who want to be part of our billing system. And so there's another way to get there, which is basically competition, because, if Netflix faced serious competition from HBO, from Hulu, from Amazon perhaps, from half a dozen other more nichey services, from some sports services and so on, then the leverage of the carrier would be enhanced and we would see perhaps more flexibility in terms of volume versus charges. But it's terribly unfair that Reed can decide to deploy 4K and swamp our capacity. And we have no way essentially of making the customers who are enjoying that service pay for the volume of their consumption, because really peak volume drives our CapEx. Now, Tom made that deal for two reasons. One was they had a gun to his head, and number two was he had a lot of excess capacity. For a couple of years, he was going to have adequate capacity under his current capital plans because he has converted all of his analog-to-digital, so he has lots of firepower right now to be able to accommodate that requirement. And so as the price of getting the deal done, and because he had that capacity, he had to agree to it.

 My guess is if this Internet of Things continues to evolve and capacity requirements continue to expand, we may be addressing that with the government before the end of the time frame. And I think there was even a provision for reopening that, Tom, wasn't there?

 Tom Rutledge,  Liberty Broadband Corporation - President and CEO, Charter Communications   [46]
 Yes, it's four years and five months.

 John Malone,  Liberty Media Corporation - Chairman   [47]
 We don't really think about that much. So, I think that those issues could be readdressed appropriately by a different FCC.

Unidentified Company Representative   [48]
 Let's try one over here, James.

Unidentified Audience Member   [49]
 Clearly, you acquired a great deal of scale in cable with the Time Warner Cable deal and actually tripled the size of Charter. Is there further benefit to further scale in cable, or are you getting sort of a flat part of the curve where adding more footprint doesn't really add that much bang for the buck?

 John Malone,  Liberty Media Corporation - Chairman   [50]
 I think you have to look at it on what you acquire. If Tom acquires an adjacent small cable operator, the synergies are proportionately huge relative to the scale of the incremental investment. So, in other words, if he can use his existing scale and the efficiencies he's got to add incrementally, the economics is compelling. So big bubbles get bigger. Really big bubbles kind of absorb all of the little bubbles, and that's physics. So, yes, there's an enormous incremental synergy should Tom be able to find and acquire an incremental footprint.

 Greg Maffei,  Liberty Media Corporation - President and CEO   [51]
 But there's financial synergy on that, right, which would be almost any cable system that Charter added at a reasonable price, I'm sure Charter could make more efficient and get benefit from. (multiple speakers) getting some strategic synergy and scale, I think there's not enough footprint left in the world to change --

 John Malone,  Liberty Media Corporation - Chairman   [52]
 No, they are traditional operating horizontal synergies and they are very compelling. Okay? It adds a lot of incremental value just because everything else -- it's like fixed marginal costs. The marginal costs are very low in our business incrementally. The fixed costs are very high. So, if you can add another 0.5% that's adjacent to you, the economics is still quite compelling.

 Greg Maffei,  Liberty Media Corporation - President and CEO   [53]
 But the second -- getting some big strategic, look, Charter put itself in another league by moving to the scale it did in terms of the cable world. But they have 49 million homes passed, 24 million relationships. Facebook is $1.7 billion, is that right? With 1 billion daily users, DA use. As far as any opportunity to think about it truly being monopolistic or in some way having influence at the scale of the technology companies, it's another world, and we are playing a different game. And that's why there's one game here and there's another game up here that's a very different game.

 John Malone,  Liberty Media Corporation - Chairman   [54]
 In other words, a 1% increase by Tom through acquisition isn't going to allow Tom to go back to his vendors and say look how much bigger I am, I now can buy for everything cheaper. But he certainly can buy cheaper than that 1% is buying in everything from equipment to software. So it's that kind of traditional horizontal.

 But in terms of leapfrogging to the next -- to global scale from domestic scale, obviously you're not going to be able to do that in the US cable world.

 Greg Maffei,  Liberty Media Corporation - President and CEO   [55]
 There's one over here. (multiple speakers) give everybody a chance.

Unidentified Audience Member   [56]
 My understanding is that legacy cable billing practice is mostly tied to an address. Is it possible to migrate that to more individually sort of a person-focused system? If so, could Charter serve perhaps video customers outside of their passing footprint and, more mundanely, could you find additional services to bundle maybe something that's a little smaller?

 John Malone,  Liberty Media Corporation - Chairman   [57]
 There are efforts to treat the household as a collection of individual customers. I don't believe we are there at Charter yet, but I think that's definitely on the drawing board. Tom, do you have --

 Tom Rutledge,  Liberty Broadband Corporation - President and CEO, Charter Communications   [58]
 It is, and if you think about certain wireless situations, like where you have even public Wi-Fi for instance, if you are in a Jiffy Lube waiting room and you're a Charter customer and I have a Charter business customer in that same business, I give you free access to the Wi-Fi. If you are not, we have a process to bill you as a non-customer relationship. So it's a non-geographic-based billing proposition. It's not a significant driver of anything we are doing today, but given the way we are putting our billing systems together, that kind of -- we need to get the integration done, but that kind of functionality exists. Why we would want to do it is hard to say from a business model perspective unless you are selling outside your footprint. We do have that right, by the way, in some cases, with some programming vendors that we have, and I expect that those -- to the extent that others are granted those rights, we will get granted those rights. Whether we want to sell non-facilities-based content as a company isn't clear yet, but we certainly have the capability. If we had a niche product or if we had any product that we thought we could get margin outside of our physical footprint, we would sell it.

 Greg Maffei,  Liberty Media Corporation - President and CEO   [59]
 Try one over here. Dennis?

Unidentified Audience Member   [60]
 Greg, you said on the earnings call the other day that it would be ideal if you could merge Liberty Ventures and Liberty Broadband, but there were complications. I wonder if you could talk about what they are, how you solve them, when you solve them? And is that a priority for Liberty Ventures over using that vehicle to buy other big things?

 Greg Maffei,  Liberty Media Corporation - President and CEO   [61]
 I think the reason we say that is insufficient number of ATBs issues that we've had around how to separate out currently the exchange symbols that are attributed to ventures are actually an indenture that's shared with the QVC side of the house or there would be some publications about unwinding that. Not impossible, but complications. As I said, we don't have an ATB over on the ventures side. We need to pretty scale ATB, so that inhibits us. The appeal of it would be at some point to get all of our Charter and Charter-related LB (inaudible) shares over in the same bucket. But I would describe that as interesting, a priority, but not necessarily the highest priority we have.

 John Malone,  Liberty Media Corporation - Chairman   [62]
 There are ways to get there, but they are complicated. What else is new?

 Greg Maffei,  Liberty Media Corporation - President and CEO   [63]
 We thrive on that. Barton?

 Barton Crockett,  FBR Capital Markets & Co. - Analyst   [64]
 It's Barton from FBR. I was curious about, John, one of your comments I think on CNBC that you said it was I think good for content to come together with pipes in the context of the AT&T Time Warner merger. And I was curious if you could explain why that is? If you believe the argument that there is greater innovation that could come, or if this is predicated on some view that Net Neutrality is maybe less of an issue going forward. And if it is, the case that content and pipes belong together, what does that say about Charter? Shouldn't Charter be looking at that?

 John Malone,  Liberty Media Corporation - Chairman   [65]
 Well, I think Charter should, at the back of its mind, be thinking about what kind of content, content investment, content involvement would enhance their business but also would enhance the value of the content. Basically, Liberty was built on the back of TCI by recognizing the importance of distribution to people trying to develop content businesses. So, it didn't enhance TCI, but it created a lot of economic value for an investment position in content.

 So, to a substantial degree, I think the AT&T Time Warner deal will create a more robust value in the Time Warner content. It certainly puts a floor under it. If AT&T is distributing it and paying a transfer price that is substantial and promoting the content, most of the other distributors will find it impossible not to carry the programming, and not to pay whatever the affiliate fee structure is, which would be at or above the AT&T transfer price. Otherwise, they can't claim it's not fair.

 So, from that point of view, that kind of transaction, I think, shores up the value of the acquired asset and probably enhances it.

 I think, when you start talking about streaming HBO, for instance, and not charging a data charge to your wireless customers who want to use wireless to stream it, you create a new revenue stream for HBO, which other cellular operators will probably need to offer as well. So, you do enhance I think the value of HBO. To me, that transaction was 80% diversification and 20% value creation in a business that was kind of maturing and that was facing a lot of competition from attackers. And so it sort of buttresses the wireless business, it sort of supports the software business, and there are very few large assets out there in the content space that could be bought, that would make the difference, and that have enough free cash flow characteristics that they could be acquired without destroying the dividend paying potential. So, I mean it was kind of like very few things fit, and that fit.

 Now, other program suppliers are going to look at it and say, well, the government is certainly not going to allow AT&T, with its being the dominant distributor now, right, to discriminate against other content providers relative to the ones that they are buying. And in that sense, it's likely that it creates less friction for independent programmers than more friction. That was the context that I think I was referring to.

 Greg Maffei,  Liberty Media Corporation - President and CEO   [66]
 Maybe one last one at the back.

Unidentified Audience Member   [67]
 I have a question for Mr. Malone. Given Liberty Media's fondness for Feeder Kayak and the power of individual freedom, what is the position of Liberty Interactive with respect to QVC's practice of copying the designs of its individual vendors and putting them on their in-house proprietary products, and then marginalizing those vendors? And I say this in context of a license agreement with QVC for the manufacture of my product, SkinnyJeans2.

 John Malone,  Liberty Media Corporation - Chairman   [68]
 Thank you for the question. Maybe we should take that off-line because it's clear you have a dispute, which is your prerogative, but probably not really a shareholder-based question. So maybe one last one that's a shareholder one. Thank you.

Unidentified Audience Member   [69]
 (inaudible) QVC is offset with 67, and cable and satellite is still dangling down there at 7 even though Comcast, you, Cox, DirecTV seems to have a very strong brand name. Where is the disconnect there? I mean everything -- a lot of the nerve share, are there like hidden Trumpers, hidden people who really like their service that's not showing up in the MPS scores or what?

 John Malone,  Liberty Media Corporation - Chairman   [70]
 Tom may have a view on this. I've been in the business a long while. Cable service is very complicated. You pay a fair amount of money for it. You love the content supplier and you hate the guy that charges you for it. I mean that's kind of the bottom line. And you know, you've never seen a public outcry because ESPN is charging more to the cable operator and they're passing it through. The cable operator takes the beating; the distributor takes the beating. That said, there are differences amongst operators. And you're absolutely right. Cox pay a lot more attention to customer service. They were a stable company. They do a good job. There are others historically that had troubles in that area. And I think what Tom is talking about is pretty revolutionary in terms of trying to give excellent customer service with an economic motive of reducing churn and reducing transactional costs. Tom, do you want to --

 Tom Rutledge,  Liberty Broadband Corporation - President and CEO, Charter Communications   [71]
 No, I agree. It's hard to be loved when you send someone a bill every month. Our ambition is just not to be hated.

 Greg Maffei,  Liberty Media Corporation - President and CEO   [72]
 I want to close by thanking all of the Liberty team and all of our portfolio companies who worked so hard to put today together. I hope you enjoyed it. Thank you all for coming. We hope to see you next year if not before.

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