Please replace the corrected release dated July 23, 2013 with the following corrected version due to further revisions throughout.
The corrected release reads:
LIBERTY INTERACTIVE ANNOUNCES EXTRAORDINARY CASH DISTRIBUTION AND REFERENCE SHARE ADJUSTMENT ON ITS SENIOR EXCHANGEABLE DEBENTURES RELATING TO SPRINT COMMON STOCK
Liberty Interactive LLC (“Liberty”), a subsidiary of Liberty Interactive Corporation (Nasdaq: LINTA, LINTB, LVNTA, LVNTB), announced today that it will make an extraordinary cash distribution to holders of record on July 24, 2013, of its 4.0% Senior Exchangeable Debentures due 2029 and 3.75% Senior Exchangeable Debentures due 2030 (the “Debentures”). The cash distribution to be made per $1,000 principal amount of each Debenture is indicated in the table below (the “Extraordinary Distribution”). The distribution date for the Extraordinary Distribution is August 7, 2013.
The Extraordinary Distribution is being made by Liberty as a result of the closing of the merger transaction (the “Merger Transaction”) between Sprint Nextel Corporation (“Sprint Nextel”) and SoftBank Corp. Stockholders of Sprint Nextel were given the election (the “Merger Consideration Election”), for each share of Sprint Nextel Series 1 common stock held by them, to receive either (i) one share of common stock, par value $0.01 share (“Sprint Common Stock”), of a new corporation named “Sprint Corporation” (“Sprint”) or (ii) cash in the amount of $7.65, subject to proration and reallocation pursuant to the terms of the Merger Transaction. Sprint has publicly announced that, in connection with the Merger Consideration Election, Sprint has issued an aggregate of 850,899,628 shares of Sprint Common Stock and paid an aggregate of $16,639,999,897 in exchange for the 3,026,063,027 shares of Sprint Nextel Series 1 common stock that were eligible to participate in the Merger Consideration Election.
Under the Indenture relating to the Debentures, the Merger Consideration Election constituted a “reference share offer” which requires a “reference share offer adjustment” to the number of reference shares underlying each Debenture. Hence, in addition to the Extraordinary Distribution, Liberty has made a “reference share proportionate reduction” to the number of reference shares underlying the Debentures. The following table illustrates the payments and reference share adjustments being made by Liberty.
Extraordinary Distribution and Reference Share Proportionate Reduction
|4.0% Debentures||3.75% Debentures|
Pre-merger Exchange Ratio
Sprint Nextel: 11.4743
Sprint Nextel: 8.3882
Post-merger Exchange Ratio
Sprint : 3.2265
|Cash Distribution per bond||$63.0960||$46.1258|
|Total Cash Distribution||$29,578,250||$21,217,832|
In accordance with the Indenture, the principal amount of the Debentures is to be reduced by the amount of each extraordinary cash distribution that we pay on the Debentures. In addition, the adjusted principal amount is to be further reduced on each successive semi-annual interest payment date to the extent necessary to cause the semi-annual interest payment on that date to represent the payment by Liberty, in arrears, of an annualized yield equal to the stated cash coupon rate on the adjusted principal amount of the Debentures. In no event will the reductions to the principal amount of the Debentures affect the amount of the semi-annual interest payments received by holders of the Debentures, which will continue to be a rate of interest equal to the stated cash coupon rate per annum of the original principal amount of the Debentures. The following table illustrates the adjustment made to the principal amount of the Debentures attributable to the Extraordinary Distribution.
For federal income tax purposes the debentures are treated as "contingent payment debt instruments" and the holders are required to recognize interest income based on the "comparable yield" as originally determined for the debentures. As of the time of their issuance, a "projected payment schedule" was prepared for the debentures which would produce the comparable yield. The extraordinary cash distribution does not change the original comparable yield or the original projected payment schedule, and accordingly does not change the amount of interest income holders are required to recognize as taxable income, except to the extent described in the next sentence. Liberty intends to treat the extraordinary cash distribution on each bond as a positive adjustment pursuant to Treasury Regulation Section 1.1275-4(b)(6), and therefore as additional interest on such bond. Each holder should consult their tax advisor to determine the proper tax treatment of such distribution.
About Liberty Interactive LLC
Liberty Interactive LLC is a wholly owned subsidiary of Liberty Interactive Corporation and owns interests in a broad range of electronic retailing, media, communications, and entertainment businesses.
Liberty Interactive Corporation
Courtnee Ulrich, 720-875-5420
|Liberty Announces Semi-Annual Payment on 3.5% Senior Exchangeable Debentures Due 2031 - Results in Further Reduction of Adjusted Principal Amount (2014/1/15)|
|Liberty Announces Semi-Annual Payment on 3.75% Senior Exchangeable Debentures Due 2030 - Results in Further Reduction of Adjusted Principal Amount (2014/2/18)|
|Cominar announces offering of $250 million of floating rate Series 5 senior unsecured debentures due October 9, 2015 ()|
|Morguard Announces Completion of $135 Million Offering of 4.099% Series A Senior Unsecured Debentures ()|
|/ CORRECTION - QR Energy Announces Monthly Cash Distribution (2014/1/3)|
|CORRECTING and REPLACING Rubicon Technology Announces Earnings Conference Call for August 7 and Investor Conference Appearances August 14-15 (2013/8/6)|
|First Capital Realty announces C$50 million re-opening of 4.43% Series O senior unsecured debentures ()|
|North American Energy Partners Announces Completion of Partial Redemption of Its 9.125% Series 1 Senior Unsecured Debentures Due 2017 (2013/8/27)|
|North American Energy Partners Announces Receipt of Requisite Consents Regarding Its 9.125% Series 1 Senior Unsecured Debentures Due 2017 ()|
|Correct and Replace: RAI board declares quarterly cash dividend ()|
|Start Premium Trial||Register For Free|
|P||F||Fund Financial Data (13,000+ funds)|
|P||F||Stock Financial Data (7,000+ stocks)|
|P||F||Stock and Fund Screeners (basic)|
|P||F||Investing Articles and Market Commentary|
|P||F||Articles Archive (>30 days)|
|P||F||Discuss (dozens of stock, fund, bond, and general bulletin boards)|
|P||F||Portfolio Manager (basic)|
|P||F||Morningstar Investment Classroom|
|P||F||Access Your Portfolio Anytime, Anywhere via Your Mobile Device|
|P||Morningstar Fund Analyst Reports (full research on 1,700 funds, ETFs, and CEFs)|
|P||Morningstar Stock Analyst Reports (full research on more than 1,100 stocks)|
|P||Portfolio Manager (advanced with 10 X-Ray analyses, including recommendations)|
|P||Portfolio Monitor (monthly and on-demand personalized portfolio statements)|
|P||Morningstar Proprietary Stock Information (stock star ratings, buy/sell prices, economic moat ratings, and more)|
|P||Morningstar 5-Star Stock and Fund Favorites & Red Flags eNewsletters|
|P||Premium Stock and Fund Screeners (advanced with nearly infinite ways to find the best securities for you)|
|P||Discounts on Morningstar newsletters, books, seminars, and more|
Access these features and more when you sign up for Free Membership.
Join Morningstar today. It's Free.
Access these features and more when you sign up for Premium Membership.
Start your free 14-day trial today online
Your subscription may be tax deductible. Please contact your tax advisor.