Crucial 2013 Annual Report Download - page 76

Download and view the complete annual report

Please find page 76 of the 2013 Crucial annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 130

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130

75
Interest expense for our convertible notes was as follows:
For the year ended 2013 2012 2011
Contractual interest expense:
2014 Notes, stated rate of 1.875% $ 13 $ 18 $ 19
2027 Notes, stated rate of 1.875% 3 3 3
2031A Notes, stated rate of 1.5% 5 5 1
2031B Notes, stated rate of 1.875% 6 6 1
2032C Notes, stated rate of 2.375% 13 5 —
2032D Notes, stated rate of 3.125% 14 5 —
2033E Notes, stated rate of 1.625% 3 — —
2033F Notes, stated rate of 2.125% 3 — —
60 42 24
Amortization of discount and issuance costs:
2014 Notes, effective rate of 7.9% 37 47 46
2027 Notes, effective rate of 6.9% 7 6 5
2031A Notes, effective rate of 6.5% 12 11 1
2031B Notes, effective rate of 7.0% 10 10 1
2032C Notes, effective rate of 6.0% 14 5 —
2032D Notes, effective rate of 6.3% 9 3 —
2033E Notes, effective rate of 4.5% 4 — —
2033F Notes, effective rate of 4.9% 3 — —
96 82 53
$ 156 $ 124 $ 77
2014 Notes
In May 2007, we issued $1.3 billion of aggregate principal amount of the 2014 Notes due June 2014, of which $464
million was repurchased on February 12, 2013 and $351 million was extinguished in 2011 in connection with debt restructures
(see "Debt Restructure" below). The initial conversion rate of the 2014 Notes is 70.2679 shares of common stock per $1,000
principal amount, or approximately $14.23 per share. Interest is payable in June and December of each year.
Conversion Rights: Holders may convert their 2014 Notes under the following circumstances: (1) during any calendar
quarter if the closing price of our common stock for at least 20 trading days in the 30 consecutive trading days ending on the
last trading day of the immediately preceding calendar quarter is more than 130% of the conversion price of the 2014 Notes
(approximately $18.50 per share); (2) if the 2014 Notes have been called for redemption; (3) if specified distributions or
corporate events occur, as set forth in the indenture for the 2014 Notes; (4) if the trading price of the 2014 Notes is less than
98% of the product of the closing price of our common stock and the conversion rate of the 2014 Notes during the periods
specified in the indenture; or (5) at any time on or after March 1, 2014.
We have the option to pay cash, issue shares of common stock or any combination thereof for the aggregate amount due
upon conversion. It is our intent to settle the principal amount of the 2014 Notes in cash upon conversion. As a result, upon
conversion of the 2014 Notes, only the amounts payable in excess of the principal amounts of the 2014 Notes are considered in
diluted earnings per share under the treasury stock method.
Cash Redemption at Our Option: We may redeem for cash the 2014 Notes if the last reported sale price of our common
stock has been at least 130% of the conversion price (approximately $18.50 per share) for at least 20 trading days during any 30
consecutive trading-day period. The redemption price is the principal amount to be redeemed, plus accrued and unpaid interest.
Cash Repurchase at the Option of the Holder: Upon a change in control or a termination of trading, as defined in the
indenture, holders may require us to repurchase for cash all or a portion of their 2014 Notes at a repurchase price equal to the
principal amount, plus accrued and unpaid interest, if any.