Priceline 2014 Annual Report Download - page 108

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with the equity component of convertible debt of $1.6 million after tax were recorded in additional paid-in capital related to the 2021 Notes at
December 31, 2014.
For the years ended December 31, 2014 , 2013 and 2012 , the Company recognized interest expense of $75.3 million , $78.2 million
and $59.4 million , respectively, related to convertible notes, comprised of $17.1 million , $17.7 million and $15.2 million , respectively, for the
contractual coupon interest, $54.4 million , $55.7 million and $39.8 million , respectively, related to the amortization of debt discount and $3.8
million , $4.8 million and $4.4 million , respectively, related to the amortization of debt issuance costs. For the years ended December 31, 2014
and 2013 , included in the amortization of debt discount mentioned above was $2.6 million and $1.5 million , respectively, of original issuance
discount amortization related to the 2020 Notes. In addition, the Company incurred interest expense for the write off of unamortized debt
issuance costs related to debt conversions of $0.5 million and $2.4 million for the years ended December 31, 2014 and 2013 , respectively. The
remaining period for amortization of debt discount and debt issuance costs is the period until the stated maturity date for the respective debt. The
weighted-average effective interest rates for the years ended December 31, 2014 , 2013 , and 2012 are 3.5% , 4.5% and 4.8% , respectively.
In addition, if the Company's convertible debt is redeemed or converted prior to maturity, a gain or loss on extinguishment is
recognized. The gain or loss is the difference between the fair value of the debt component immediately prior to extinguishment and its carrying
value. To estimate the fair value of the debt at the conversion date, the Company estimated its straight debt borrowing rate, considering its credit
rating and straight debt of comparable corporate issuers. For the year ended December 31, 2014 and 2013 , the Company recognized non-cash
losses of $6.3 million ( $3.8 million after tax) and $26.7 million ( $16.2 million after tax), respectively, in "Foreign currency transactions and
other" in the Consolidated Statements of Operations in connection with the conversion of the 2015 Notes.
Euro Denominated Debt
In September 2014, the Company issued Senior Notes due September 23, 2024, with an interest rate of 2.375% (the "2024 Notes") for
an aggregate principal amount of 1.0 billion Euros. The 2024 Notes were issued with an initial discount of 9.4 million Euros. In addition, the
Company paid $6.5 million in debt issuance costs during the year ended December 31, 2014 . Interest on the 2024 Notes is payable annually on
September 23, beginning September 23, 2015. Subject to certain limited exceptions, all payments of interest and principal, including payments
made upon any redemption of the 2024 Notes, will be made in Euros.
in a Euro functional currency subsidiary. The foreign currency transaction gains or losses on these liabilities are measured based on changes in
spot rates and are recorded in accumulated other comprehensive income (loss). The Euro denominated net assets of the subsidiary are translated
into U.S. Dollars at each balance sheet date, with effects of foreign currency changes also reported in accumulated other comprehensive income
(loss). Since the notional amount of the recorded Euro denominated debt and related interest are not greater than the notional amount of the
Company's net investment, the Company does not expect to incur any ineffectiveness on this hedge.
For the year ended December 31, 2014 , the Company recognized interest expense of $8.6 million related to the 2024 Notes. The
remaining period for amortization of debt discount and debt issuance costs is the stated maturity date for this debt. The effective interest rate for
the year ended December 31, 2014 was 2.5% .
In the second quarter of 2013, the Company's Board of Directors authorized a program to purchase $1.0 billion of the Company's
common stock, in addition to amounts previously authorized. In the second quarter of 2013, the Company repurchased 431,910 shares for an
aggregate cost of $345.5 million in privately negotiated, off-market transactions and in the third and fourth quarters of 2014, the Company
repurchased 114,645 shares of its common stock in privately negotiated, off-market transactions and 438,897 shares of its common stock in the
open market for aggregate costs of $147.3 million and $500.0 million , respectively, related to this authorization. The Company has $7.2 million
remaining to repurchase common stock related to this authorization.
In connection with the issuance of the 2018 Notes, the Company repurchased 263,913 shares in the first quarter of 2012 for an
aggregate cost of $166.2 million .
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