Crucial 2014 Annual Report Download - page 66

64
Principal
Amount Carrying Value of Debt Equity
Amounts reduced in connection with the Exchanged Notes:
2027 Notes $ 80 $ 68 $ 51
2031A Notes 155 125 148
2031B Notes 205 152 212
440 345 411
Amounts added in connection with the issued notes:
2043G Notes 1,025 627 173
Net increase (decrease) as a result of the Exchange Transactions $ 585 $ 282 $ (238)
Conversions and Settlements: During 2014, we initiated a series of actions resulting in a number of debt conversions and
settlements. Those actions included the following:
Termination of Conversion Rights of our 2027 Notes – On November 7, 2013, we announced the termination of the
conversion rights for our remaining 2027 Notes, effective on December 13, 2013. Prior to such effective date, substantially all
of the holders of our 2027 Notes exercised their option to convert their notes and, in each case, we elected to settle the
conversion amount entirely in cash.
Redemption of our 2031A Notes – On November 7, 2013, we called for the redemption of our remaining 2031A Notes
effective on December 7, 2013. Prior to such effective date, substantially all of the holders of our 2031A Notes exercised their
option to convert their notes and, in each case, we elected to settle the conversion amount entirely in cash.
Redemption of our 2014 Notes – On January 31, 2014, we called for the redemption of our remaining 2014 Notes
effective on March 3, 2014. Prior to such effective date, substantially all of the holders of our 2014 Notes exercised their
option to convert their notes and, in each case, we elected to settle the conversion amount entirely in cash.
Redemption of our 2031B Notes – On July 23, 2014, we called for the redemption of our remaining 2031B Notes with
a principal amount of $114 million effective on August 22, 2014. Prior to such effective date, substantially all of the holders of
our 2031B Notes exercised their option to convert their notes and, in each case, we elected to settle the conversion amount
entirely in cash. All conversions of the 2031B Notes were settled in the first quarter of 2015.
As a result of our elections to settle the conversion amounts in cash, each of the settlement obligations became derivative
debt liabilities subject to mark-to-market accounting treatment. Under the terms of the indentures for the above notes, cash
settlement amounts for these derivative debt liabilities were determined based on the shares underlying the converted notes
multiplied by the volume-weighted-average price of our common stock over a period of 20 consecutive trading days, beginning
three days after the holder's election to convert their notes. Therefore, we reclassified the fair values of the equity components
of each of the converted notes from additional capital to derivative debt liabilities within current debt in our consolidated
balance sheet. In connection with the above, we used an aggregate of $1.45 billion in cash in 2014 and $389 million in 2015 to
settle conversion activities. A summary of the conversion activities for these notes is as follows: