Crucial 2015 Annual Report Download - page 65

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63
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 7 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
December 2014, we paid the second installment payment of 21 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 September 3, 2015:
2016 ¥ 19,813 $ 165
2017 19,840 165
2018 19,762 164
2019 28,687 238
2020 33,642 280
121,744 1,012
Less unamortized discount (17,981)(150)
¥ 103,763 $ 862
Pursuant to the terms of the Sponsor Agreement, we entered into a series of agreements with the MMJ Companies,
including supply agreements, research and development services agreements, and general services agreements, which are
intended to generate operating cash flows to meet the requirements of the MMJ Companies' businesses, including the funding
of the MMJ Creditor Installment Payments.
Capital Lease Obligations
In 2015, we recorded capital lease obligations aggregating $324 million, including $291 million related to equipment sale-
leaseback transactions, at a weighted-average effective interest rate of 3.2%, payable in periodic installments through May
2019. In 2014, we recorded capital lease obligations aggregating $121 million at a weighted-average effective interest rate of
4.6%, payable in periodic installments through December 2023.
1.258% Notes
On December 20, 2013, we issued $462 million in principal amount of the 1.258% Notes. The 1.258% Notes mature on
January 15, 2019 and are collateralized by certain equipment, which had a carrying value of $95 million as of September 3,
2015. The principal amount of the 1.258% Notes is payable in 10 semiannual 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 and interest on the 1.258% Notes. We paid $23 million to Ex-Im Bank
for its guarantee upon issuance of the 1.258% Notes.
The 1.258% Notes contain 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 1.258% 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 1.258% Notes, or under any other related transaction documents to which Ex-Im Bank is a party.