Crucial 2014 Annual Report Download - page 71

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Interest expense for our convertible notes consisting of contractual interest and amortization of discount and issuance costs
aggregated $132 million, $156 million and $124 million for 2014, 2013 and 2012. Interest expense by note was as follows:
Contractual Interest Amortization of Discount and Issuance Costs
For the year ended 2014 2013 2012 2014 2013 2012
2014 Notes $ 2 $ 13 $ 18 $ 14 $ 37 $ 47
2027 Notes 1 3 3 2 7 6
2031A Notes 1 5 5 3 12 11
2031B Notes 3 6 6 5 10 10
2032C Notes 11 13 5 12 14 5
2032D Notes 13 14 5 8 9 3
2033E Notes 5 3 — 7 4 —
2033F Notes 6 3 — 6 3 —
2043G Notes 24 — — 9 — —
$ 66 $ 60 $ 42 $ 66 $ 96 $ 82
2019 Notes
On December 20, 2013, we issued $462 million in principal amount of the 2019 Notes. The 2019 Notes mature on January
15, 2019 and are collateralized by certain equipment, which had a carrying value of $190 million as of August 28, 2014. The
principal amount of the 2019 Notes is payable in 10 semi-annual installments in January and July of each year, commencing in
July 2014. The Export-Import Bank of the United States (the "Ex-Im Bank") guaranteed payment of all regularly scheduled
installment payments of principal of, and interest on, the 2019 Notes. We paid $23 million to Ex-Im Bank for its guarantee
upon issuance of the 2019 Notes.
The 2019 Notes contains covenants which are customary for financings of this type, including negative covenants that
limit or restrict our ability to create liens or dispose of the equipment securing the 2019 Notes. Events of default also include,
among others, the occurrence of any event or circumstance that, in the reasonable judgment of Ex-Im Bank, is likely materially
and adversely to affect our ability to perform any payment obligation, or any of our other material obligations under the
indenture, the 2019 Notes or under any other related transaction documents to which Ex-Im Bank is a party.
Cash Redemption at Our Option: At any time prior to the maturity date of the 2019 Notes, we may redeem the 2019
Notes, in whole or in part, at a price equal to the principal amount of the 2019 Notes to be redeemed plus a make-whole
premium as described in the indenture, together with accrued and unpaid interest.
2031B Notes
On July 26, 2011, we issued $345 million of 2031B Notes due August 2031. During 2014, we exchanged $205 million of
aggregate principal amount in the Exchange Transaction, repurchased $26 million of aggregate principal amount for cash and
called for the redemption of the remaining $114 million of aggregate principal amount effective on August 22, 2014. Prior to
such effective date, substantially all of the holders of the 2031B Notes had converted their notes, which were settled in cash
with payments of $389 million in the first quarter of 2015.
2032C and 2032D Notes
On April 18, 2012, we issued $550 million of the 2032C Notes and $450 million of the 2032D Notes, each due May 2032.
The initial conversion rate for the 2032C Notes is 103.8907 shares of common stock per $1,000 principal amount, equivalent to
an initial conversion price of approximately $9.63 per share of common stock. The initial conversion rate for the 2032D Notes
is 100.1803 shares of common stock per $1,000 principal amount, equivalent to an initial conversion price of approximately
$9.98 per share of common stock. Interest is payable in May and November of each year. During 2014, we repurchased in
privately-negotiated transactions $188 million and $106 million of aggregate principal amounts of the 2032C and 2032D Notes,
respectively, for cash.