QVC Group, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Investments In Available-For-Sale Securities And Other Cost Investments

Investments In Available-For-Sale Securities And Other Cost Investments

12 Months Ended

Dec. 31, 2011

Investments In Available-For-Sale Securities And Other Cost Investments

Investments in available-for-sale securities and other cost investments [Text Block]

Investments in Available-for-Sale Securities and Other Cost Investments

All marketable equity and debt securities held by the Company are classified as available-for-sale ("AFS") and are carried at fair value generally based on quoted market prices. GAAP permits entities to choose to measure many financial instruments, such as AFS securities, and certain other items at fair value and to recognize the changes in fair value of such instruments in the entity's statement of operations (the "fair value option"). The Company previously had entered into economic hedges for certain of its non-strategic AFS securities (although such instruments are not accounted for as fair value hedges by the Company). Changes in the fair value of those economic hedges were reflected in the Company's statement of operations as unrealized gains (losses). In order to better match the changes in fair value of the subject AFS securities and the changes in fair value of the corresponding economic hedges in the Company's financial statements, the Company has elected the fair value option for those of its AFS securities which it considers to be non-strategic ("Non-strategic Securities"). Accordingly, changes in the fair value of Non-strategic Securities, as determined by quoted market prices, are reported in realized and unrealized gains (losses) on financial instruments in the accompanying condensed consolidated statements of operations. The total value of the Non-strategic Securities aggregated $1,435 million as of December 31, 2011.

Investments in AFS securities, including Non-strategic Securities, and other cost investments are summarized as follows:



	December 31, 2011		December 31, 2010
	amounts in millions
Time Warner Inc.(1)(2)	$	340	1,101
Time Warner Cable Inc.(1)(2)	150		567
Sprint Nextel Corporation ("Sprint")(1)	44		301
Motorola Solutions(1)	—		471
Viacom, Inc.	345		301
Live Nation(3)	24		389
Century Link, Inc.(1)	67		248
Barnes & Noble, Inc. (4)	253		—
Priceline(1)	—		208
Other AFS equity securities(1)(2)	46		176
SIRIUS XM debt securities	384		384
Other AFS debt securities	206		404
	$	1,859	4,550

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(1)	Includes shares previously pledged as collateral for share borrowing arrangements. These arrangements were settled in the fourth quarter of 2011 through the release of these shares, held as collateral, to the counterparty. See note 9 for additional discussion.


(2)	As discussed in note 2, prior to the Split-Off, certain of these securities were reattributed from the Capital Group to the Interactive Group in the first quarter of 2011.


(3)	In June 2011, Liberty acquired an additional 5.5 million shares of Live Nation for $58 million. The additional ownership requires the Company to account for the investment as an equity method affiliate. For additional discussion see note 7. Liberty continues to hold debt securities in Live Nation which are included in available-for-sale securities.

(4)

In August 2011, Liberty acquired 204,000 shares of preferred stock of Barnes & Noble, Inc., which is convertible into an approximate 17% common equity interest, for $204 million. The preferred stock pays dividends at a rate of 7.75% per annum. Liberty has elected to account for its investment in Barnes & Noble at fair value. Accordingly, changes in fair value of Barnes & Noble, Inc. preferred stock are reported in realized and unrealized gains (losses) on financial instruments in the accompanying condensed consolidated statements of operations.

Unrealized Holding Gains and Losses

Unrealized holding gains and losses related to investments in AFS securities are summarized below.



	December 31, 2011			December 31, 2010
	Equity securities		Debt securities	Equity securities	Debt securities
	amounts in millions
Gross unrealized holding gains	$	1	57	32	66
Gross unrealized holding losses (1)	$	—	—	—	—

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(1)	Liberty does not currently have any gross unrealized losses that have been in such position for greater than a year.