jvid��Ƶ

(10)����Debt

Debt is summarized as follows:

1.375% Cash Convertible Senior Notes due 2023

On October��17, 2013 Liberty issued $1 billion aggregate principal amount of 1.375% Cash Convertible Senior Notes due 2023 (“Convertible Notes”). The Convertible Notes will mature on October��15, 2023 unless earlier repurchased by us or converted. Interest on the Convertible Notes is payable semi-annually in arrears on April��15 and October��15 of each year at a rate of 1.375% per annum. All conversion of the Convertible Notes will be settled solely in cash, and not through the delivery of any securities. Prior to the Recapitalization, the conversion rate for the Convertible Notes was 21.0859 shares of Series��A jvid��Ƶ common stock per $1,000 principal amount of Convertible Notes and an adjusted conversion price of $47.43 per share of Series��A jvid��Ƶ common stock.

As a result of the Recapitalization, as discussed in note��2, the Convertible Notes are convertible into cash based on the Securities Basket. The supplemental indenture entered into on April��15, 2016 in connection with the Recapitalization amends the conversion, adjustment and other provisions of the indenture to give effect to the Recapitalization and provides that the conversion consideration due upon conversion of any Convertible Note shall be determined as if references in the indenture to one share of Series��A jvid��Ƶ common stock were instead a reference to the Securities Basket, initially consisting of 0.10 of a share of Series��A Liberty Braves common stock, 1.0 share of Series��A Liberty SiriusXM common stock and 0.25 of a share of Series��A Liberty Formula One common stock. The Series��A Liberty Braves common stock component of the Securities Basket was adjusted to 0.1087 pursuant to anti-dilution adjustments arising out of the distribution of subscription rights to purchase shares of Series��C Liberty Braves common stock made to all holders of Liberty Braves common stock.

Holders of the Convertible Notes may convert their notes at their option at any time prior to the close of business on the second business day immediately preceding the maturity date of the notes under certain circumstances. Liberty has elected to account for this instrument using the fair value option. Accordingly, changes in the fair value of this instrument are recognized as unrealized gains (losses) in the statements of operations. As of December��31, 2017, the Convertible Notes are classified as a long term liability in the consolidated balance sheets, as the conversion conditions have not been met as of such date.

Additionally, contemporaneously with the issuance of the Convertible Notes, Liberty entered into the Bond Hedge Transaction. The Bond Hedge Transaction is expected to offset potential cash payments Liberty would be required to make in excess of the principal amount of the Convertible Notes, upon conversion of the notes in the event that the volume-weighted average price per share of the Series��A jvid��Ƶ common stock, as measured under the cash convertible note hedge transactions on each trading day of the relevant cash settlement averaging period or other relevant valuation period, was greater than the strike price of Series��A jvid��Ƶ common stock, which corresponded to the conversion price of the Convertible Notes. In connection with the Recapitalization and the entry into the supplemental indenture on April��15, 2016, Liberty entered into amendments to the Bond Hedge Transaction with each of the counterparties to reflect the adjustments resulting from the Recapitalization. As of the effective date of the Recapitalization, the Bond Hedge Transaction covered, in the aggregate, 5,271,475 shares of Series��A Liberty Formula One common stock, 21,085,900 shares of Series��A Liberty SiriusXM common stock and 2,108,590 shares of Series��A Liberty Braves common stock, subject to anti-dilution adjustments pertaining to the Convertible Notes, which was equal to the aggregate number of shares comprising the Securities Basket underlying the Convertible Notes at that time. The aggregate number of shares of Series��A Liberty Braves common stock relating to the Bond Hedge Transaction was increased to 2,292,037, pursuant to anti-dilution adjustments arising out of the rights distribution (note��2). ��As of December��31, 2017, the basket price of the securities underlying the Bond Hedge Transaction was $50.24 per share. The bond hedge expires on October��15, 2023 and is included in other assets as of December��31, 2017 and 2016 in the accompanying consolidated balance sheets, with changes in the fair value recorded as��unrealized gains (losses) on financial instruments, in the accompanying��consolidated statements of operations.

Concurrently with the Convertible Notes and Bond Hedge Transaction, Liberty also entered into separate privately negotiated warrant transactions under which Liberty sold warrants relating to the same number of shares of common stock as underlie the Bond Hedge Transaction, subject to anti-dilution adjustments (“Warrant Transactions”). The first expiration date of the warrants is January��16, 2024 and expire over a period covering 81 days thereafter. Liberty may elect to settle its delivery obligation under the warrant transactions with cash. In connection with the Recapitalization, Liberty entered into amendments to the Warrant Transactions with each of the option counterparties to reflect the adjustments to the Warrant Transactions resulting from the Recapitalization (“Amended Warrant Transactions”). As of the effective date of the Recapitalization, the Amended Warrant Transactions covered, in the aggregate, 5,271,475 shares of Series��A Liberty Formula One common stock, 21,085,900 shares of Series��A Liberty SiriusXM common stock and 2,108,590 shares of Series��A Liberty Braves common stock, subject to anti-dilution adjustments. The aggregate number of shares of Series��A Liberty Braves common stock relating to the Amended Warrant Transactions was increased to 2,292,037 pursuant to anti-dilution adjustments arising out of the rights distribution. The strike price of the warrants was adjusted, as a result of the Recapitalization and the rights offering, to $61.16 per share. As of December��31, 2017, the basket price of the securities underlying the Amended Warrant Transactions was $50.24 per share. The Amended Warrant Transactions may have a dilutive effect with respect to the shares comprising the Securities Basket underlying the warrants to the extent that the settlement price exceeds the strike price of the warrants, and the warrants are settled in shares comprising such Securities Basket.

1% Cash Convertible Notes due 2023

In connection with the Second Closing on January��23, 2017, Liberty issued $450��million convertible cash notes at an interest rate of 1% per annum, which are convertible, under certain circumstances, into cash based on the trading prices of the underlying shares of Series��C Liberty Formula One common stock and mature on January��30, 2023 (the ‘‘1% Convertible Notes’’). The initial conversion rate for the notes will be 27.1091��shares of Series��C Liberty Formula One common stock per $1,000 principal amount of notes, equivalent to an initial conversion price of approximately $36.89��per share of Series��C Liberty Formula One common stock. The conversion of the 1% Convertible Notes will be settled solely in cash, and not through the delivery of any securities. As discussed in note��5, Liberty used a portion of the net proceeds of the 1% Convertible Notes to fund an increase to the cash consideration payable to the selling shareholders of Formula��1 by approximately $400��million.

2.25% Exchangeable Senior Debentures due 2046

On August��17, 2016, Liberty closed a private offering of approximately $445��million aggregate principal amount of its 2.25% exchangeable senior debentures due 2046 (the “2.25% Exchangeable Senior Debentures due 2046”). Upon an exchange of debentures, Liberty, at its option, may deliver Time Warner common stock, cash or a combination of Time Warner common stock and cash. The number of shares of Time Warner common stock attributable to a debenture represents an initial exchange price of approximately $104.55 per share. A total of approximately 4.25��million shares of Time Warner common stock are attributable to the debentures. Interest is payable quarterly on March��31,��June��30, September��30 and December��31 of each year, commencing December��31, 2016. The debentures may be redeemed by Liberty, in whole or in part, on or after October��5, 2021. Holders of the debentures also have the right to require Liberty to purchase their debentures on October��5, 2021. The redemption and purchase price will generally equal 100% of the adjusted principal amount of the debentures plus accrued and unpaid interest.

The debentures, as well as the associated cash proceeds, were attributed to the Formula One Group. Liberty used the net proceeds of the offering for the acquisition of an investment in Formula��1 during September 2016, as further described in note��5. Liberty has elected to account for the debentures using the fair value option. Accordingly, changes in the fair value of these instruments are recognized as unrealized gains (losses) in the accompanying consolidated statements of operations.

On October��22, 2016, AT&T Inc. (“AT&T”) and Time Warner announced that they entered into a definitive agreement under which AT&T will acquire Time Warner in a stock-and-cash transaction. The transaction is subject to approval by Time Warner shareholders and review by the U.S. Department of Justice, as well as potential review by the FCC. If the acquisition is consummated, in accordance with the terms of the indenture governing the 2.25% Exchangeable Senior Debentures due 2046, the cash portion of the acquisition consideration would be paid as an extraordinary additional distribution to holders of debentures and the stock portion of the acquisition consideration would become reference shares attributable to the debentures. Additionally, if the acquisition is consummated, any amount of excess regular quarterly cash dividends paid on the AT&T reference shares would be distributed by the Company to holders of the debentures as an additional distribution.

Margin Loans

$750 Million Margin Loan due 2018

On April��30, 2013, Liberty Siri MarginCo, LLC, a wholly-owned subsidiary of Liberty, entered into a margin loan agreement. Shares of common stock of certain of the Company’s equity affiliates and cost investments were pledged as collateral pursuant to this agreement. During October 2014, Liberty refinanced this margin loan arrangement for a similar financial instrument with a term loan of $250��million and a $750��million undrawn line of credit. The term loan and any drawn portion of the revolver bore interest at a rate of LIBOR plus an applicable spread between 1.75% and 2.50% (based on value of collateral) with the undrawn portion carrying a fee of 0.75%. Interest on the term loan was payable on the first business day of each calendar quarter, and interest was payable on the revolving line of credit on the last day of the interest period applicable to the borrowing of which such loan is a part.

During October 2015, Liberty refinanced this margin loan arrangement for a similar financial instrument with a term loan of $250��million and a $1 billion undrawn line of credit. As of December��31, 2015, shares of SIRIUS��XM and Live Nation were pledged as collateral pursuant to this agreement. The new term loan and any drawn portion of the revolver carried an interest rate of LIBOR plus an applicable spread between 1.75% and 2.25% (based on the value of collateral) with the undrawn portion carrying a fee of 0.75%. Other terms of the agreement were substantially similar to the previous arrangement.

During October 2016, Liberty amended this margin loan arrangement to provide for a similar financial instrument with a term loan of $250��million and a $500��million undrawn line of credit, which is scheduled to mature during October 2018. The new term loan and any drawn portion of the revolver carries an interest rate of LIBOR plus 1.75% with the undrawn portion carrying a fee of 0.75%. Other terms of the agreement were substantially similar to the previous arrangement, except shares of Live Nation common stock were no longer pledged as collateral under the new arrangement.����Borrowings outstanding under this margin loan bore interest at a rate of 3.24% per annum at December��31, 2017. As of December��31, 2017, the Company had fully drawn against the revolving line of credit and 1,138.4��million shares of SIRIUS��XM common stock held by Liberty with a value of $6,102��million were pledged as collateral. As of December��31, 2017, the $750��million margin loan due 2018 is classified as current in the accompanying consolidated balance sheet. The margin loan contains various affirmative and negative covenants that restrict the activities of the borrower. The loan agreement does not include any financial covenants.

Live Nation Margin Loan

On November��8, 2016, LMC LYV, LLC, a wholly-owned subsidiary of Liberty, entered into a margin loan agreement with an available borrowing capacity of $500��million with various financial institutions.��This margin loan had a two year term, bore interest at a rate of LIBOR plus 2.25% and contained an undrawn commitment fee of 0.75% per annum. On December��12, 2017, the margin loan agreement was amended, extending the maturity date to December��12, 2019, and decreasing the interest rate to LIBOR plus 1.90% and the undrawn commitment fee to 0.60% per annum. Borrowings outstanding under this margin loan bore interest at a rate of 3.23% per annum as of December��31, 2017. Interest on the term loan is payable on the first business day of each calendar quarter.��This loan was undrawn as of December��31, 2016. On January��20, 2017, LMC LYV, LLC drew $350��million under the margin loan, and the proceeds were used for the Second Closing, as discussed in notes��2 and 5. As of December��31, 2017, availability under the Live Nation Margin Loan was $150��million. 53.7��million��shares of the Company’s Live Nation common stock with a value of $2,288��million and other investments with a value of $57��million were pledged as collateral to the loan as of December��31, 2017. The margin loan contains various affirmative and negative covenants that restrict the activities of the borrower. The loan agreement does not include any financial covenants.

SIRIUS��XM Senior Notes and Senior Secured Revolving Credit Facility

SIRIUS��XM 5.75% Senior Notes Due 2021

During August 2013, SIRIUS��XM issued $600��million of 5.75% Senior Notes due 2021 (“5.75% Notes”). Interest on the notes is payable semi-annually in arrears on February��1 and August��1 of each year at a rate of 5.75% per annum. Substantially all of SIRIUS��XM’s domestic wholly-owned subsidiaries guarantee SIRIUS��XM’s obligations under the notes. The 5.75% Notes were issued for $594��million. On August��4, 2017, SIRIUS��XM redeemed all of its 5.75% Notes for a total amount of $618��million. This redemption resulted in a loss on extinguishment of debt of approximately $21��million.

SIRIUS��XM 5.25% Senior Secured Notes due 2022

In August 2012, SIRIUS��XM issued $400��million aggregate principal amount of 5.25% Senior Secured Notes due 2022 (the “5.25% Notes”). Interest is payable semi-annually in arrears on February��15 and August��15 of each year at a rate of 5.25% per annum. On September��1, 2017, SIRIUS��XM redeemed all of its 5.25% Notes for a total amount of $411��million. This redemption resulted in a loss on extinguishment of debt of approximately $14��million.

SIRIUS��XM Senior Notes Due 2020 and 2023

In May 2013, SIRIUS��XM issued $500��million of Senior Notes due 2020 which bear interest at an annual rate of 4.25% and $500��million of Senior Notes due 2023 which bear interest at an annual rate of 4.625%. SIRIUS��XM received net proceeds of $989��million��from the sale of the notes after deducting commissions, fees and expenses. Interest on the notes is payable semi-annually in arrears on May��15 and November��15 of each year. Substantially all of SIRIUS��XM’s domestic wholly-owned subsidiaries guarantee SIRIUS��XM’s obligations under the notes. On July��27, 2017, SIRIUS��XM redeemed all of its 4.25% Notes for a total amount of $510��million. This redemption resulted in a loss on extinguishment of debt of approximately $8��million.

SIRIUS��XM Senior Notes Due 2022 and 2027

In July 2017, SIRIUS��XM issued $1.0 billion aggregate principal amount of 3.875% Senior Notes due 2022 (the “3.875% Notes”) and $1.5 billion aggregate principal amount of 5.00% Senior Notes due 2027 (the “5.00% Notes”). For both series of notes, interest is payable semi-annually in arrears on February��1 and August��1, commencing on February��1, 2018. The 3.875% Notes will mature on August��1, 2022 and the 5.00% Notes will mature on August��1, 2027.

SIRIUS��XM 6% Senior Notes due 2024

In May 2014, SIRIUS��XM issued $1.5 billion aggregate principal amount of 6% Senior Notes due 2024 (the “6% Notes”). ��Interest is payable semi-annually in arrears on January��15 and July��15 of each year at a rate of 6% per annum. The 6% Notes will mature on July��15, 2024.

SIRIUS��XM 5.375% Senior Notes due 2025

In March 2015, SIRIUS��XM issued $1.0 billion principal amount of new senior notes due 2025 which bear interest at an annual rate 5.375% (“SIRIUS��XM 5.375% Senior Notes due 2025”) with an original issuance discount of $11��million. The SIRIUS��XM 5.375% Senior Notes due 2025 are recorded net of the remaining unamortized discount.

SIRIUS��XM 5.375% Senior Notes due 2026

In May 2016, SIRIUS��XM issued $1.0 billion principal amount of new senior notes due July 2026 which bear interest at an annual rate 5.375% (“SIRIUS��XM 5.375% Senior Notes due 2026”) with an original issuance discount of $11��million. The SIRIUS��XM 5.375% Senior Notes due 2026 are recorded net of the remaining unamortized discount.

SIRIUS��XM Senior Secured Revolving Credit Facility

SIRIUS��XM entered into a Senior Secured Revolving Credit Facility (the “Credit Facility”) with a syndicate of financial institutions with a total borrowing capacity of $1,750��million which matures in June 2020. The Credit Facility is guaranteed by certain of SIRIUS��XM’s material domestic subsidiaries and is secured by a lien on substantially all of SIRIUS��XM’s assets and the assets of its material domestic subsidiaries. The proceeds of loans under the Credit Facility are used for working capital and other general corporate purposes, including financing acquisitions, share repurchases and dividends. Interest on borrowings is payable on a monthly basis and accrues at a rate based on LIBOR plus an applicable rate. Borrowings outstanding under the Credit Facility as of December��31, 2017 bore interest at a rate of 3.30% per annum. SIRIUS��XM is required to pay a variable fee on the average daily unused portion of the Credit Facility which was 0.25% as of December��31, 2017 and is payable on a quarterly basis. The Credit Facility contains customary covenants, including a maintenance covenant. As of December��31, 2017, availability under the Credit Facility was $1,450��million.

Braves Holdings Notes and Loans

Braves Holdings’ debt is summarized as follows:

In 2014, Braves Holdings, through a wholly-owned subsidiary, purchased 82 acres of land for the purpose of constructing a Major League Baseball facility and development of a mixed-use complex adjacent to the ballpark. The total cost of the ballpark was approximately $722��million, ��of which approximately $392��million was funded by a combination of Cobb County, the Cumberland Improvement District and Cobb-Marietta Coliseum and Exhibit Hall Authority (the “Authority”) and approximately $330��million was funded by Braves Holdings. Funding for ballpark initiatives by Braves Holdings��came from cash on hand and various debt instruments, as detailed above.

In addition, Braves Holdings through affiliated entities and outside development partners are in the process of developing the land around the ballpark for a mixed-use complex that features retail, residential, office, hotel and entertainment opportunities. The estimated cost for the mixed-use development, known as The Battery Atlanta, is $558��million, of which Braves Holdings affiliated entities are expected to fund approximately $470��million through a mix of approximately $200��million in equity and $270��million in new debt. As of December��31, 2017, approximately $419��million has been spent on the mixed-use development. Braves Holdings funded approximately $388��million of this amount through a mix of $188��million in equity and approximately $200��million in debt.

Formula��1 Notes and Loans

Bank Loans

Formula��1 had a first lien term loan denominated in Euros totaling $42��million, which was repaid on June��30, 2017. On August��3, 2017, Formula��1 increased the amount outstanding under a first lien term loan denominated in U.S. Dollars (the “Senior Loan Facility”) from $3.1 billion to $3.3 billion and extended its maturity to February��2024. In addition, on August��3, 2017, the revolving credit facility under the Senior Loan Facility was increased from $75��million to $500��million. As part of a refinancing of the Senior Loan Facility in March 2017, $628��million of the Senior Loan Facility was considered repaid and then borrowed due to a change in the mix of counterparties in the Senior Loan Facility. As part of the refinancing in March 2017, the interest rate on the Senior Loan Facility was reduced from LIBOR plus 3.75% per annum to LIBOR plus 3.25% per annum, with a LIBOR floor on the U.S. Dollar denominated debt of 1%. In September 2017, the interest rate on the Senior Loan Facility was reduced to LIBOR plus 3.0% per annum. The interest rate on the Senior Loan Facility was approximately 4.57% as of December��31, 2017. The Senior Loan Facility is secured by share pledges, bank accounts and floating charges over Formula��1’s primary operating companies with certain cross guarantees. Additionally, as of December��31, 2017, Formula��1 has interest rate swaps on $2.5 billion of the $3.3 billion Senior Loan Facility in order to manage its interest rate risk.

On January��31, 2018, Formula��1 refinanced the Senior Loan Facility. As part of the refinancing, Formula��1 repaid $400��million of the Senior Loan Facility, reducing the amount outstanding to $2.9 billion. The repayment was funded through borrowings of $250��million under the revolving credit facility and $150��million of cash on hand. The interest rate on the Senior Loan Facility was reduced to LIBOR plus 2.5% per annum.

Formula��1 also had a second lien facility, which had $1 billion outstanding at the time of the acquisition of Formula��1 by Liberty. In May 2017, Liberty issued 12.9��million shares of Series��C Liberty Formula One common stock and used the net proceeds of approximately $388��million to repay a portion of the second lien facility. Formula��1 fully repaid the second lien facility during the year ended December��31, 2017.

Delta Topco Limited Exchangeable Redeemable Loan Notes

As discussed in note��5, in connection with the Second Closing on January��23, 2017, Delta Topco issued the Exchangeable Notes upon the conversion of certain outstanding Delta Topco loan notes.��The Exchangeable Notes bore interest at 2% per annum and were exchangeable into cash or newly issued shares of Series��C Liberty Formula One common stock. Interest was payable by either, at the discretion of Delta Topco, (i)��issuing payment-in-kind notes or (ii)��cash. In September 2017, $323��million aggregate principal amount of Exchangeable Notes were exchanged for 14.5��million shares of Series��C Liberty Formula One common stock. In November 2017, the remaining $27��million aggregate principal amount of Exchangeable Notes were exchanged for 1.2��million shares of��Series��C Liberty Formula One common stock.

The Exchangeable Notes were attributed to the Formula One Group. The debt host component of the Exchangeable Notes was recorded as debt, at fair value (level��2), with the related discount amortized using the effective interest rate method, while the embedded conversion option was recorded in additional paid-in capital. Upon settlement, the Company recorded a true-up to additional paid-in capital for the amount and type (shares of Series��C Liberty Formula One common stock) of settlement.

Debt Covenants

The SIRIUS��XM Credit Facility contains certain financial covenants related to SIRIUS��XM’s leverage ratio. Braves Holdings’ term loan contains certain financial covenants related to Braves Holdings’ debt service coverage ratio and capital expenditures. Additionally, SIRIUS��XM’s Credit Facility, the Braves Holdings term loan, Formula��1 debt and other borrowings contain certain non-financial covenants. As of December��31, 2017, the Company, SIRIUS��XM, Formula��1 and Braves Holdings were in compliance with all debt covenants.

Fair Value of Debt

The fair value, based on quoted market prices of the same instruments but not considered to be active markets (Level��2), of SIRIUS��XM’s publicly traded debt securities is as follows (amounts in millions):

Due to the variable rate nature of the Credit Facility, margin loans and other debt, the Company believes that the carrying amount approximates fair value at December��31, 2017.

Five Year Maturities

The annual principal maturities of outstanding debt obligations for each of the next five years is as follows (amounts in millions):

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