Crucial 2014 Annual Report Download - page 68

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66
The 2025 Notes contain covenants that, among other things, limit, in certain circumstances, our ability and/or the ability of
our domestic restricted subsidiaries (which are generally subsidiaries in the U.S. in which we own at least 80% of the voting
stock) to (1) create or incur certain liens and enter into sale and lease-back transactions, (2) create, assume, incur or guarantee
certain additional secured indebtedness and unsecured indebtedness of certain of our domestic restricted subsidiaries, and (3)
consolidate with or merge with or into, or convey, transfer or lease all or substantially all of our assets, to another entity. These
covenants are subject to a number of limitations, exceptions and qualifications.
Cash Redemption at Our Option: Prior to August 1, 2019, we may redeem the 2025 Notes, in whole or in part, at a price
equal to the principal amount of the 2025 Notes to be redeemed plus a make-whole premium as described in the indenture
governing the 2025 Notes, together with accrued and unpaid interest. On or after August 1, 2019, we may redeem the 2025
Notes, in whole or in part, at prices above the principal amount that decline over time, as specified in the indenture, together
with accrued and unpaid interest. Additionally, prior to August 1, 2017, we may use the net cash proceeds of one or more
equity offerings to redeem up to 35% of the aggregate principal amount of the 2025 Notes at a price equal to 105.5% of the
principal amount together with accrued and unpaid interest.
2013 Debt Restructure
During 2013, we repurchased $464 million of aggregate principal amount of our 2014 Notes for $477 million in cash in
privately negotiated transactions. The liability and equity components of the 2014 Notes had previously been stated separately
within debt and additional capital in our consolidated balance sheet. As a result, the repurchase resulted in the derecognition of
$431 million in debt for the principal amount (net of $33 million of debt discount) and $15 million in additional capital for the
equity component. We recognized a loss of $31 million (based on Level 2 fair value measurements) in 2013, which was
included in other non-operating expense.
MMJ Creditor Installment Payments
Under the MMJ Companies' plans of reorganization, which set forth the treatment of the MMJ Companies' pre-petition
creditors and their claims, the MMJ Companies were required to pay 200 billion yen, less certain expenses of the
reorganization proceedings and other items, to their secured and unsecured creditors in seven annual installment payments (the
"MMJ Creditor Installment Payments"). The MMJ Creditor Installment Payments do not provide for interest and were
recorded at fair value in the MMJ Acquisition. The fair-value discount is accreted to interest expense over the term of the
installment payments.
Under the MMJ Companies' corporate reorganization proceedings, the secured creditors of MMJ will recover 100% of
their amount of their fixed claims in 6 annual installment payments through December 2018 and the unsecured creditors will
recover at least 17.4% of the amount of their fixed claims in 7 annual installment payments through December 2019. In
October 2013, we paid the first installment payment of 51 billion yen to the reorganization creditors of the MMJ Companies.
The secured creditors of MAI were paid in full with a portion of the first installment payment made in October 2013, while the
unsecured creditors of MAI will recover at least 19% of the amount of their claims in 7 installment payments through
December 2019. The remaining portion of the unsecured claims of the creditors of the MMJ Companies not recovered
pursuant to the Reorganization Proceedings will be discharged, without payment, through December 2019.
The following table presents the remaining amounts of MMJ Creditor Installment Payments (stated in Japanese yen and
U.S. dollars) and the amount of unamortized discount as of August 28, 2014:
MMJ Creditor Installment
Payments
2015 ¥ 20,330 $ 196
2016 20,197 194
2017 20,063 193
2018 19,928 192
2019 28,674 276
2020 33,024 318
142,216 1,369
Less unamortized discount (24,700)(238)
MMJ Creditor Installment Payments ¥ 117,516 $ 1,131