Priceline 2014 Annual Report Download - page 107

June 15, 2020, upon the occurrence of specific events, including but not limited to a change in control, or if the closing sales price of the
Company's common stock for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the
immediately preceding calendar quarter is more than 150%
of the applicable conversion price in effect for the notes on the last trading day of the
immediately preceding quarter. In the event that all or substantially all of the Company's common stock is acquired on or prior to the maturity of
the 2020 Notes in a transaction in which the consideration paid to holders of the Company's common stock consists of all or substantially all
cash, the Company would be required to make additional payments in the form of additional shares of common stock to the holders of the 2020
Notes in an aggregate value ranging from
$0 to approximately $397 million
depending upon the date of the transaction and the then current stock
price of the Company. As of March 15, 2020, holders will have the right to convert all or any portion of the 2020 Notes. The 2020 Notes may
not be redeemed by the Company prior to maturity. The holders may require the Company to repurchase the 2020 Notes for cash in certain
circumstances. Interest on the 2020 Notes is payable on June 15 and December 15 of each year.
In March 2012, the Company issued in a private placement $1.0 billion aggregate principal amount of Convertible Senior Notes due
March 15, 2018, with an interest rate of 1.0% (the "2018 Notes"). The Company paid $20.9 million in debt issuance costs during the year ended
December 31, 2012, related to this offering. The 2018 Notes are convertible, subject to certain conditions, into the Company's common stock at a
conversion price of approximately $944.61 per share. The 2018 Notes are convertible, at the option of the holder, prior to March 15, 2018, upon
the occurrence of specific events, including but not limited to a change in control, or if the closing sales price of the Company's common stock
for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar
quarter is more than 150% of the applicable conversion price in effect for the notes on the last trading day of the immediately preceding quarter.
In the event that all or substantially all of the Company's common stock is acquired on or prior to the maturity of the 2018 Notes in a transaction
in which the consideration paid to holders of the Company's common stock consists of all or substantially all cash, the Company would be
required to make additional payments in the form of additional shares of common stock to the holders of the 2018 Notes in aggregate value
ranging from $0 to approximately $344 million depending upon the date of the transaction and the then current stock price of the Company. As
of December 15, 2017, holders will have the right to convert all or any portion of the 2018 Notes. The 2018 Notes may not be redeemed by the
Company prior to maturity. The holders may require the Company to repurchase the 2018 Notes for cash in certain circumstances. Interest on
the 2018 Notes is payable on March 15 and September 15 of each year.
In March 2010, the Company issued in a private placement $575.0 million aggregate principal amount of Convertible Senior Notes due
March 15, 2015, with an interest rate of 1.25% (the "2015 Notes"). The Company paid $13.3 million in debt issuance costs associated with the
2015 Notes for the year ended December 31, 2010. The 2015 Notes are convertible, subject to certain conditions, into the Company's common
stock at a conversion price of approximately $303.06 per share. The 2015 Notes are convertible, at the option of the holder, prior to March 15,
2015, upon the occurrence of specified events, including, but not limited to a change in control, or if the closing sales price of the Company's
common stock for at least 20 trading days in the period of the 30 consecutive trading days ending on the last trading day of the immediately
preceding calendar quarter is more than 150%
of the applicable conversion price in effect for the notes on the last trading day of the immediately
preceding quarter. The 2015 Notes are currently convertible and will remain convertible until the trading day prior to the maturity date of March
15, 2015, regardless of the Company's stock price. The 2015 Notes may not be redeemed by the Company prior to maturity. The holders may
require the Company to repurchase the 2015 Notes for cash in certain circumstances. Interest on the 2015 Notes is payable on March 15 and
September 15 of each year.
Accounting guidance requires that cash-settled convertible debt, such as the Company's Convertible Senior Notes, be separated into
debt and equity components at issuance and each be assigned a value. The value assigned to the debt component is the estimated fair value, as of
the issuance date, of a similar bond without the conversion feature. The difference between the bond cash proceeds and this estimated fair value,
representing the value assigned to the equity component, is recorded as a debt discount. Debt discount is amortized using the effective interest
method over the period from the origination date through the stated maturity date. The Company estimated the straight debt borrowing rates at
debt origination to be 5.89% for the 2015 Notes, 3.50% for the 2018 Notes, 3.13% for the 2020 Notes and 3.18% for the 2021 Notes. The yield
to maturity was estimated at an at-market coupon priced at par.
Debt discount after tax of $69.1 million ( $115.2 million before tax) net of financing costs associated with the equity component of
convertible debt of $1.6 million after tax were recorded in additional paid-
in capital related to the 2015 Notes in March 2010. Debt discount after
tax of $80.9 million ( $135.2 million before tax) net of financing costs associated with the equity component of convertible debt of $2.8 million
after tax were recorded in additional paid-in capital related to the 2018 Notes in March 2012. Debt discount after tax of $92.4 million ( $154.3
million before tax) and financing costs associated with the equity component of convertible debt of $0.1 million after tax were recorded in
additional paid-in capital related to the 2020 Notes at June 30, 2013. Debt discount after tax of $82.5 million ( $142.9 million before tax) net of
financing costs associated
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