Crucial 2013 Annual Report Download - page 74

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73
Capital Lease Obligations
We have various capital lease obligations due in periodic installments with a weighted-average remaining term of 4.0 years
and weighted-average effective interest rates of 4.1% as of 2013 and 4.9% as of 2012. In 2013, we received $126 million in
proceeds from equipment sale-leaseback transactions and as a result recorded capital lease obligations aggregating $126 million
at a weighted-average effective interest rate of 4.3%, payable in periodic installments through July 2017. On July 31, 2013, in
connection with our acquisition of the Elpida Companies and purchase of the Rexchip shares from Powerchip, we recorded
$377 million of capital lease obligations at a weighted-average effective interest rate of 3.2%, payable in periodic installments
with a weighted-average remaining term of 5.5 years. In 2012, we received $609 million in proceeds from equipment sale-
leaseback transactions and as a result recorded capital lease obligations aggregating $609 million at a weighted-average
effective interest rate of 4.2%, payable in periodic installments through August, 2016.
Convertible Notes With Debt and Equity Components
The accounting standards for convertible debt instruments that may be fully or partially settled in cash upon conversion
require the debt and equity components to be separately accounted for in a manner that reflects our nonconvertible borrowing
rate when interest expense is recognized in subsequent periods. The amount recorded as debt is based on the fair value of the
debt component as a standalone instrument, determined using an average interest rate for similar nonconvertible debt issued by
entities with credit ratings comparable to ours at the time of issuance. The difference between the debt recorded at inception
and its principal amount is to be accreted to principal through interest expense through the estimated life of the note.
Conversion prices per share and the conversion value in excess of principal for our convertible notes were as follows:
Initial Conversion Conversion
Price Per
Share
Threshold(2)
Conversion Value
in Excess of Principal(3)
Outstanding
Principal Price Per
Share Number of
Shares(1) 2013 2012
2014 Notes $ 485 14.23 34.1 18.50 $ — $ —
2027 Notes 175 10.90 16.1 14.17 43 —
2031A Notes 345 9.50 36.3 12.35 148 —
2031B Notes 345 9.50 36.3 12.35 148 —
2032C Notes 550 9.63 57.1 12.52 225 —
2032D Notes 450 9.98 45.1 12.97 162 —
2033E Notes 300 10.93 27.4 14.21 72 —
2033F Notes 300 10.93 27.4 14.21 72 —
(1)Shares issuable, upon conversion, for the principal amount of the notes.
(2)Holders may convert their notes during any calendar quarter if the closing price of our common stock for at least 20
trading days in a 30 trading day period ending on the last trading day of the immediately preceding calendar quarter is
130% of the initial conversion price per share.
(3)Based on our closing share price of $13.57 and $6.18 as of August 29, 2013 and August 30, 2012, respectively.