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(2)听听听Tracking Stocks

A tracking stock is a type of common stock that the issuing company intends to reflect or "track" the economic performance of a particular business or "group," rather than the economic performance of the company as a whole. Liberty has two tracking stocks鈥擰VC Group common stock and Liberty Ventures common stock, which are intended to track and reflect the economic performance of the Liberty QVC Group and the Ventures Group, respectively (as defined below). 听

While the QVC Group and the Ventures Group have separate collections of businesses, assets and liabilities attributed to them, no group is a separate legal entity and therefore cannot own assets, issue securities or enter into legally binding agreements. Holders of tracking stock have no direct claim to the group's stock or assets and are not represented by separate boards of directors. Instead, holders of tracking stock are stockholders of the parent corporation, with a single board of directors and subject to all of the risks and liabilities of the parent corporation.

The term 鈥淨VC Group鈥� does not represent a separate legal entity, rather it represents those businesses, assets and liabilities that have been attributed to that group. As of March 31, 2017, the QVC Group is primarily comprised of our merchandise-focused televised-shopping programs, Internet and mobile application businesses and has attributed to it our wholly-owned subsidiaries, QVC and zulily, llc (鈥渮ulily鈥�), our approximate 38% interest in HSN, Inc. (鈥淗SN鈥�), cash and certain liabilities that reside with QVC and zulily, certain liabilities related to our corporate indebtedness (see note 10) and certain deferred tax liabilities. As of March听31, 2017, the QVC Group has cash and cash equivalents of approximately $379 million, which includes subsidiary cash.

The term 鈥淰entures Group鈥� does not represent a separate legal entity, rather it represents those businesses, assets and liabilities that have been attributed to that group. As of March听31, 2017, the Ventures Group is comprised primarily of our interests in Evite, Inc. (鈥淓vite鈥�), FTD Companies, Inc. (鈥淔TD鈥�), LendingTree, Inc. (鈥淟endingTree鈥�), Liberty Broadband, investments in Charter, ILG, Inc. (鈥淚LG鈥�), and Time Warner Inc. (鈥淭ime Warner鈥�), 听and cash and cash equivalents of approximately $442 million. The Ventures Group also has attributed to it certain liabilities related to our Exchangeable Debentures (see note 10) and certain deferred tax liabilities. The Ventures Group is primarily focused on the maximization of the value of these investments and investing in new business opportunities.听

On April听4, 2017, Liberty entered into an Agreement and Plan of Reorganization (the 鈥淩eorganization Agreement鈥� and the transactions contemplated thereby, the 鈥淭ransactions鈥�) with General Communication,听Inc. (鈥淕CI鈥�), an Alaska corporation, and Liberty Interactive LLC, a Delaware limited liability company and a direct wholly-owned subsidiary of Liberty (鈥淟I LLC鈥�), whereby Liberty will acquire GCI through a reorganization in which certain Ventures Group assets and liabilities will be contributed to GCI in exchange for a controlling interest in GCI.听听Liberty and LI LLC will contribute to GCI Liberty (as defined below) its entire equity interest in Liberty Broadband, Charter and LendingTree, together with the Evite operating business and certain other assets and liabilities (including, subject to certain conditions, Liberty鈥檚 equity interest in FTD), in exchange for (a)听the issuance to LI LLC of (i)听a number of shares of reclassified GCI Class听A Common Stock and a number of shares of reclassified GCI Class听B Common Stock equal to the number of outstanding shares of Series听A Liberty Ventures common stock and Series听B Liberty Ventures common stock outstanding on the closing date of the Contribution, respectively, (ii)听certain exchangeable debentures and (iii)听cash and (b)听the assumption of certain liabilities by GCI Liberty (the 鈥淐ontribution鈥�).

Liberty will then effect a tax-free separation of its controlling interest in the combined company (to be named GCI Liberty,听Inc. (鈥淕CI Liberty鈥�)) to the holders of Liberty Ventures common stock in full redemption of all outstanding shares of such stock, leaving QVC Group common stock as the only outstanding common stock of Liberty.听 Holders of GCI Class听A Common Stock and GCI Class听B Common Stock each will receive (i) 0.63 of a share of reclassified GCI Class A Common Stock and (ii) 0.20 of a share of new GCI Series A preferred stock in exchange for each share of their existing GCI stock.听听听The exchange ratios were determined based on total consideration of $32.50 per share for existing GCI common stock, comprised of $27.50 per share in reclassified GCI Class听A Common Stock and $5.00 per share in newly issued GCI Preferred Stock, and a Liberty Ventures reference price of $43.65 (with no premium paid for shares of GCI Class听B Common Stock). The Series A preferred shares will accrue dividends at an initial rate of 5% per annum (which would increase to 7% in connection with a future reincorporation of GCI Liberty in Delaware) and will be redeemable upon the 21st anniversary of the closing.

At the closing of the Transactions, Liberty will reattribute certain assets and liabilities from the Ventures Group to the QVC Group (the 鈥淩eattribution鈥�).听 The reattributed assets and liabilities, if effected as of the date hereof, would include cash, Liberty鈥檚 interest in ILG, certain green energy investments, LI LLC鈥檚 exchangeable debentures (other than its outstanding 1.75% Exchangeable Debentures due 2046 that are exchanged for mirror debentures of GCI in an exchange offer to be conducted prior to the closing of the Transactions), and certain tax benefits.听 Liberty will complete the Reattribution using similar valuation methodologies to those used in connection with its previous reattributions, including taking into account the advice of its financial advisor. The Transactions are expected to be consummated during the first quarter of 2018, subject to the satisfaction of customary closing conditions, including receipt of regulatory approval and the requisite stockholder approvals.听

See Exhibit听99.1 to this Quarterly Report on Form听10-Q for unaudited attributed financial information for Liberty's tracking stock groups.