Crucial 2011 Annual Report Download - page 62

Exchange Transaction : In the Exchange Transaction, $ 175 million in aggregate principal amount of our 2014 Notes was extinguished. The
extinguishment resulted in the derecognition of $ 144 million in debt for the principal of the 2014 Notes (net of $ 31 million of debt discount) and
$ 13 million of additional capital. We recognized a loss of $ 15 million on the exchange based on the estimated $ 157 million
fair value of the debt
component of the 2014 Notes exchanged and their $ 142 million carrying value (net of unamortized issuance costs).
Partial Repurchase of the 2014 Notes: Because the liability and equity components of the 2014 Notes were stated separately, the repurchase
of $ 176 million aggregate principal amount resulted in the derecognition of $ 144 million in debt (net of $ 32 million of debt discount) and $ 13
million of additional capital. We recognized a loss of $ 17 million (including transaction fees) on the repurchase based on the estimated $ 158
million fair value of the debt components of the 2014 Notes repurchased. The fair value of the debt component of the 2014 Notes was estimated
using an interest rate for nonconvertible debt, with terms similar to the debt component of the 2014 Notes on a standalone basis, issued by entities
with credit ratings comparable to ours at the exchange date (Level 2).
Partial Repurchase of the 2013 Notes : We recognized a loss of $ 79 million
(including transaction fees) in the repurchase of the 2013 Notes.
2014 Notes
In May 2007, we issued $ 1.3 billion of the 2014 Notes, of which $ 351 million was extinguished on November 3, 2010 in connection with
the Exchange Transaction and Partial Repurchase of the 2014 Notes. 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.
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 .
Upon conversion, we will have the right to deliver shares of our common stock, cash or a combination of cash and shares of common stock.
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 100% of 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 100% of the principal amount, plus accrued and
unpaid interest, if any.
Capital Lease Obligations
We have various capital lease obligations due in periodic installments through February 2023 at weighted-average effective interest rates of
6.1% as of 2011 and 7.2% as of 2010.
In 2011, we received $ 268 million in proceeds from sales-leaseback transactions and as a result recorded capital lease obligations
aggregating $ 246 million at a weighted-average effective interest rate of 5.4% , payable in periodic installments through May 2016 .
In 2010, we recorded $ 121 million in capital lease obligations with a weighted-average effective interest rate of 9.5% , payable in periodic
installments through December 2020 .
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