Crucial 2011 Annual Report Download - page 63

2031A and 2031B Notes
On July 26, 2011 , we issued $ 345 million of the 2031A Notes and $ 345 million of 2031B Notes, each due August 1, 2031 . Issuance costs
for the 2031 Notes totaled $ 18 million . The initial conversion rate for the 2031 Notes is 105.2632 shares of common stock per $1,000 principal
amount, equivalent to an initial conversion price of approximately $ 9.50 per share of common stock. Interest is payable in February and August
of each year.
Upon the issuance of the 2031 Notes, we recorded $ 487 million of debt, $ 198 million of additional capital and $ 13 million of deferred debt
issuance costs (included in other noncurrent assets). The amount recorded as debt is based on the fair value of the debt component as a standalone
instrument, and was determined using an average interest rate for similar nonconvertible debt issued by entities with credit ratings comparable to
ours at the time of issuance (Level 2). The difference between the debt recorded at inception and the principal amount ($ 91 million for the 2031A
Notes and $
112 million for the 2031B Notes) is being accreted to principal through interest expense through August 2018 for the 2013A Notes
and August 2020 for the 2031B Notes, the expected life of the notes.
Conversion Rights : Holders may convert their 2031 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 preceding calendar
quarter is more than 130% of the conversion price of the 2031 Notes (approximately $ 12.35 per share); (2) if the 2031 Notes are called for
redemption; (3) if specified distributions or corporate events occur, as set forth in the indenture for the 2031 Notes; (4) if the trading price of the
2031 Notes is less than 98% of the product of the closing price of our common stock and the conversion rate of the 2031 Notes during the periods
specified in the indenture; or (5) at any time after May 1, 2031 .
Upon conversion, we will pay cash up to the aggregate principal amount and cash, shares of common stock or a combination of cash and
shares of common stock, at our option, for any remaining conversion obligations. As a result of the settlement terms upon conversion of the 2031
Notes, the 2031 Notes are considered in diluted earnings per share under the treasury stock method.
Cash Redemption at Our Option : We may redeem for cash the 2031A Notes on or after August 5, 2013 and the 2031B Notes on or after
August 5, 2014 if the last reported sale price of our common stock has been at least 130% of the conversion price (approximately $ 12.35 per
share) for at least 20 trading days during any 30 consecutive trading day period. The redemption price will equal the principal amount plus
accrued and unpaid interest. If we redeem the 2031A Notes prior to August 5, 2015 , or the 2031B Notes prior to August 5, 2016 , we will also
make a "make-whole premium" payment in cash equal to the present value of all remaining scheduled payments of interest on the 2031 Notes,
using a discount rate equal to 150 basis points.
Cash Repurchase at the Option of the Holder : We may be required by the holders of the 2031 Notes to repurchase for cash all or a portion
of the 2031A Notes on August 1, 2018 and all or a portion of the 2031B Notes on August 1, 2020 . The repurchase price is equal to the principal
amount, plus accrued and unpaid interest. Upon a change in control or a termination of trading, as defined in the indenture, we may be required by
the holders of the 2031 Notes to repurchase for cash all or a portion of their 2031 Notes at a repurchase price equal to the principal amount plus
accrued and unpaid interest.
2013 Notes
In April 2009, we issued $230 million of the 2013 Notes and in connection with Partial Repurchase of 2013 Notes, repurchased $ 91 million
of aggregate principal balance on November 3, 2010. The initial conversion rate is 196.7052 shares of common stock per $1,000 principal amount
or approximately $ 5.08 per share, and is subject to adjustment upon the occurrence of certain events specified in the indenture.
Conversion Rights : The 2013 Notes may by converted by their holders at any time prior to October 15, 2013 .
Cash Redemption at Our Option : We may redeem for cash the 2013 Notes on or after April 20, 2012 if the closing price of our common
stock has been at least 135% of the conversion price (approximately $ 6.86 per share) for at least 20 trading days during a 30 consecutive trading-
day period. The redemption price will equal the principal amount and accrued and unpaid interest plus a make-
whole premium equal to the present
value of the remaining interest payments from the redemption date to the date of maturity.
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