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

Quarterly report pursuant to Section 13 or 15(d)

Long-Term Debt

Long-Term Debt

6 Months Ended

Jun. 30, 2014

Long-term Debt, Unclassified [Abstract]

Debt is summarized as follows:



		Outstanding principal at June 30, 2014		Carrying value
		Outstanding principal at June 30, 2014		June 30, 2014			December 31, 2013
		amounts in millions
Interactive Group
Corporate level notes and debentures
	8.5% Senior Debentures due 2029	$	287	285			285
	8.25% Senior Debentures due 2030	504		501			501
	1% Exchangeable Senior Debentures due 2043	400		416			423
Subsidiary level notes and facilities
	QVC 7.5% Senior Secured Notes due 2019	769		761			761
	QVC 3.125% Senior Secured Notes due 2019	400		399			—
	QVC 7.375% Senior Secured Notes due 2020	500		500			500
	QVC 5.125% Senior Secured Notes due 2022	500		500			500
	QVC 4.375% Senior Secured Notes due 2023	750		750			750
	QVC 4.850% Senior Secured Notes due 2024	600		600			—
	QVC 5.95% Senior Secured Notes due 2043	300		300			300
	QVC Bank Credit Facilities	65		65			922
	Other subsidiary debt	157		157			141
Total Interactive Group		$	5,232	5,234			5,083
Ventures Group
Corporate level debentures
	4% Exchangeable Senior Debentures due 2029	$	439	307			284
	3.75% Exchangeable Senior Debentures due 2030	438		294			270
	3.5% Exchangeable Senior Debentures due 2031	359		335			316
	0.75% Exchangeable Senior Debentures due 2043	850		1,145			1,062
Subsidiary level facilities
	TripAdvisor Debt Facilities	353		353			369
Total Ventures Group debt		$	2,439	2,434			2,301
	Total consolidated Liberty debt	$	7,671	7,668			7,384
	Less current classification			(1,048		)	(978	)
	Total long-term debt			$	6,620		6,406

QVC Senior Secured Notes

On March 18, 2014, QVC, a consolidated subsidiary of Liberty, issued $400 million principal amount of new 3.125% senior secured notes due 2019 at an issue price of 99.828% and $600 million principal amount of new 4.85% senior secured notes due 2024 at an issue price of 99.927% (collectively, the “Notes”). The Notes are secured by a first-priority lien on the capital stock of QVC, which is the same collateral that secures QVC's existing secured indebtedness. The net proceeds from the offering were used to repay indebtedness under QVC’s senior secured credit facility and for working capital and other general corporate purposes. QVC was in compliance with all of its debt covenants related to its outstanding senior secured notes at June 30, 2014.

QVC Bank Credit Facilities

The interest rate on borrowings outstanding under the QVC Bank Credit Facilities was 1.9% at June 30, 2014. Availability under the QVC Amended and Restated Credit Agreement at June 30, 2014 was $1.9 billion. QVC was in compliance with all debt covenants related to the Amended and Restated Credit Agreement at June 30, 2014.

Exchangeable Senior Debentures

Liberty has elected to account for the exchangeable senior debentures using the fair value option. Accordingly, changes in the fair value of these instruments are recognized as unrealized gains (losses) in the statements of operations. Liberty will review the terms of the debentures on a quarterly basis to determine whether a triggering event has occurred to require current classification of the exchangeables upon a call event. As of June 30, 2014 the balance of the 4% Exchangeable Senior Debentures due 2029, the 3.75% Exchangeable Senior Debentures due 2030 and the 3.5% Exchangeable Senior Debentures due 2031 have been classified as current.

Other Subsidiary Debt

Other subsidiary debt at June 30, 2014 is comprised of capitalized satellite transponder lease obligations and bank debt of certain subsidiaries.

Fair Value of Debt

Liberty estimates the fair value of its debt based on the quoted market prices for the same or similar issues or on the current rate offered to Liberty for debt of the same remaining maturities (Level 2). The fair value of Liberty's publicly traded debt securities that are not reported at fair value in the accompanying condensed consolidated balance sheet at June 30, 2014 are as follows (amounts in millions):



Senior debentures	$	883
QVC senior secured notes	$	4,006

Due to the variable rate nature, Liberty believes that the carrying amount of its other debt, not discussed above, approximated fair value at June 30, 2014

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References + Details