v2.4.1.9

Debt | 3 Months Ended
--- | ---
Dec. 04, 2014
Debt Disclosure [Abstract] |
Debt | Debt
|  |  |  |  |  | December 4, 2014 |  | August 28, 2014
Instrument(1) |  | Stated Rate |  | Effective Rate |  | Current |  | Long-Term |  | Total |  | Current |  | Long-Term |  | Total
MMJ creditor installment payments |  | N/A |  |  | 6.25 | % |  | $ | 169 |  |  | $ | 828 |  |  | $ | 997 |  |  | $ | 192 |  |  | $ | 939 |  |  | $ | 1,131 |
Capital lease obligations(2) |  | N/A |  |  | N/A |  |  | 315 |  |  | 472 |  |  | 787 |  |  | 323 |  |  | 588 |  |  | 911 |
2019 senior notes |  | 1.258 | % |  | 1.97 | % |  | 92 |  |  | 324 |  |  | 416 |  |  | 92 |  |  | 324 |  |  | 416 |
2022 senior notes |  | 5.875 | % |  | 6.14 | % |  | — |  |  | 600 |  |  | 600 |  |  | — |  |  | 600 |  |  | 600 |
2025 senior notes |  | 5.500 | % |  | 5.56 | % |  | — |  |  | 1,150 |  |  | 1,150 |  |  | — |  |  | 1,150 |  |  | 1,150 |
2031B convertible senior notes |  | 1.875 | % |  | 6.98 | % |  | — |  |  | — |  |  | — |  |  | 362 |  |  | — |  |  | 362 |
2032C convertible senior notes(3) |  | 2.375 | % |  | 5.95 | % |  | — |  |  | 312 |  |  | 312 |  |  | — |  |  | 314 |  |  | 314 |
2032D convertible senior notes(3) |  | 3.125 | % |  | 6.33 | % |  | — |  |  | 264 |  |  | 264 |  |  | — |  |  | 288 |  |  | 288 |
2033E convertible senior notes(3)(4) |  | 1.625 | % |  | 4.50 | % |  | 273 |  |  | — |  |  | 273 |  |  | 278 |  |  | — |  |  | 278 |
2033F convertible senior notes(3)(4) |  | 2.125 | % |  | 4.93 | % |  | 267 |  |  | — |  |  | 267 |  |  | 265 |  |  | — |  |  | 265 |
2043G convertible senior notes |  | 3.000 | % |  | 6.76 | % |  | — |  |  | 639 |  |  | 639 |  |  | — |  |  | 636 |  |  | 636 |
Other notes payable |  | 2.157 | % |  | 2.45 | % |  | 52 |  |  | 19 |  |  | 71 |  |  | 126 |  |  | 116 |  |  | 242 |
|  |  |  |  |  | $ | 1,168 |  |  | $ | 4,608 |  |  | $ | 5,776 |  |  | $ | 1,638 |  |  | $ | 4,955 |  |  | $ | 6,593 |
(1) | We have either the obligation or the option to pay cash for the aggregate amount due upon conversion for all of our convertible notes. Since it is our current intent to settle in cash the principal amount of all of our convertible notes upon conversion, the dilutive effect of such notes on earnings per share is computed under the treasury stock method.
(2) | Weighted-average imputed rate of 4.3% and 4.3% as of December 4, 2014 and August 28, 2014, respectively.
(3) | Since the closing price of our common stock for at least 20 trading days in the 30 trading day period ending on September 30, 2014 exceeded 130% of the conversion price per share, holders have the right to convert their notes at any time during the calendar quarter ended December 31, 2014. The closing price of our common stock also exceeded the thresholds for the calendar quarter ended December 31, 2014; therefore, these notes are convertible by the holders through March 31, 2015.
(4) | As a result of these notes being convertible at the option of the holder through December 31, 2014, and because the terms of these notes would require us to pay cash for the principal amount of any converted notes, amounts are classified as current.
2015 Debt Restructure In the first quarter of 2015, we continued to restructure our debt, including conversions and settlements, repurchases and early repayment of an other note payable. The following table presents the effect of each of the actions:
|  | Decrease in Principal |  | Decrease in Carrying Value |  | Decrease in Cash |  | Decrease in Equity |  | (Loss) Gain(1)
Conversions and settlements: |  |  |  |  |  |  |  |  |  |
2031B Notes |  | $ | (114 | ) |  | $ | (362 | ) |  | $ | (389 | ) |  | $ | — |  |  | $ | (24 | )
2033E Notes |  | (6 | ) |  | (6 | ) |  | (18 | ) |  | (14 | ) |  | 2 |
|  | (120 | ) |  | (368 | ) |  | (407 | ) |  | (14 | ) |  | (22 | )
Repurchases: |  |  |  |  |  |  |  |  |  |
2032C Notes |  | (5 | ) |  | (4 | ) |  | (18 | ) |  | (13 | ) |  | (1 | )
2032D Notes |  | (31 | ) |  | (26 | ) |  | (107 | ) |  | (79 | ) |  | (2 | )
|  | (36 | ) |  | (30 | ) |  | (125 | ) |  | (92 | ) |  | (3 | )
Early repayment of note |  | (121 | ) |  | (120 | ) |  | (122 | ) |  | — |  |  | (5 | )
|  | $ | (277 | ) |  | $ | (518 | ) |  | $ | (654 | ) |  | $ | (106 | ) |  | $ | (30 | )
(1) | Included in other non-operating expense.
Conversions and Settlements: During the first quarter of 2015, we had the following debt conversions and settlements: 2031B Notes – On July 23, 2014, we called for the redemption of our remaining 2031B Notes 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 amount due upon conversion entirely in cash. 2033E Notes – On September 30, 2014, a holder converted a portion of our 2033E Notes and we elected to settle the amount due upon conversion entirely in cash. As a result of our elections to settle the amounts due upon conversion 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, at the dates of our election to settle the conversion in cash, 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. Repurchases: During the first quarter of 2015, we repurchased a portion of our 2032C Notes and 2032D Notes in privately-negotiated transactions. The liability and equity components of the repurchased notes had previously been stated separately within debt and additional capital in our consolidated balance sheet. As a result, our accounting for the repurchased notes affected debt and equity. Early Repayment: On October 17, 2014, we repaid a note payable prior to its scheduled maturity. 2014 Debt Restructure Throughout 2014, we reduced the dilutive effects of our convertible notes by exchanging portions of these notes with less-dilutive convertible notes, or by converting or repurchasing portions of these notes using cash generated from operations and proceeds from issuing non-convertible debt with near investment-grade covenants. In the first quarter of 2014, we incurred losses related to these activities as follows:
• | $49 million (which included $38 million in non-operating expense and $11 million of interest expense from the payment of a "make-whole") from the exchange of an aggregate principal amount of $440 million of 2027 Notes, 2031A Notes and 2031B Notes into 2043G Notes; and
• | $43 million (which included $37 million in non-operating expense and $6 million of interest expense from the payment of a "make-whole") from the conversion of $95 million of principal amount of 2027 Notes and $112 million of aggregate principal amount of 2031A Notes.
Convertible Notes With Debt and Equity Components As of December 4, 2014, the trading price of our common stock was higher than the conversion prices of all of our outstanding convertible notes. As a result, the conversion values were in excess of principal amounts for such notes. The following table summarizes certain features of our convertible notes outstanding as of December 4, 2014:
|  | Holder Put Date(1) |  | Outstanding Principal |  | Underlying Shares |  | Conversion Price Per Share |  | Conversion Price Per Share Threshold(2) |  | Conversion Value in Excess of Principal(3)
2032C Notes |  | May 2019 |  | $ | 357 |  |  | 37 |  |  | $ | 9.63 |  |  | $ | 12.52 |  |  | $ | 982 |
2032D Notes |  | May 2021 |  | 313 |  |  | 31 |  |  | 9.98 |  |  | 12.97 |  |  | 816 |
2033E Notes |  | February 2018 |  | 294 |  |  | 27 |  |  | 10.93 |  |  | 14.21 |  |  | 674 |
2033F Notes |  | February 2020 |  | 300 |  |  | 27 |  |  | 10.93 |  |  | 14.21 |  |  | 690 |
2043G Notes(4) |  | November 2028 |  | 1,025 |  |  | 35 |  |  | 29.16 |  |  | 37.91 |  |  | 243 |
|  |  |  | $ | 2,289 |  |  | 157 |  |  |  |  |  |  | $ | 3,405 |
(1) | The terms of our convertible notes give holders the right to require us to repurchase all or a portion of their notes at a date or dates earlier than the contractual maturities of the notes or upon the occurrence of certain events or circumstances.
(2) | Holders have the right to convert all or a portion of their notes at a date or dates earlier than the contractual maturity if, during any calendar quarter, the closing price of our common stock for at least 20 trading days in the 30 consecutive trading days ending on the last trading day of the preceding calendar quarter is more than 130% of the conversion price. As a result, as of December 4, 2014, holders of our 2032 Notes and 2033 Notes had the right to convert their notes.
(3) | Based on our closing share price of $36.07 as of December 4, 2014.
(4) | The original principal amount of $820 million accretes up to $917 million in November 2028 and $1.03 billion at maturity in 2043.
We amortize any initial debt discount or imputed interest over the period from issuance of the notes through the earliest date that holders can require us to repurchase all or a portion of their notes (see "Holder Put Date" in the table above). As a result, the period of amortization can be significantly shorter than the contractual maturity. Revolving Credit Facilities On December 2, 2014, we terminated our unused $153 million senior secured three-year revolving credit facility and entered into a senior secured five-year revolving credit facility, collateralized by a security interest in trade receivables and inventory. The credit facility has an aggregate revolving commitment which is subject to certain adjustments, including an availability block that effectively limits the maximum amount we could draw to $540 million. Additionally, the maximum amount we could draw may decrease further if the value, as defined of our trade receivables and inventory collateralizing the credit facility decrease below a specified threshold. The revolving credit facility contains customary covenants and conditions, including as a funding condition the absence of any event or circumstance that has a material adverse effect on our business or financial condition. Generally, interest is payable on any outstanding principal balance at a variable rate not to exceed LIBOR plus an applicable margin ranging between 1.25% to 1.75%, based on the monthly average undrawn availability under the credit facility. As of December 4, 2014, the amount available to us was $500 million and we had not drawn any amounts under this facility. Contractual Maturities As of December 4, 2014, maturities of notes payable (including the MMJ creditor installment payments) and future minimum lease payments under capital lease obligations were as follows:
|  | Notes Payable |  | Capital Lease Obligations
Remainder of 2015 |  | $ | 304 |  |  | $ | 247 |
2016 |  | 290 |  |  | 295 |
2017 |  | 260 |  |  | 98 |
2018 |  | 552 |  |  | 56 |
2019 |  | 642 |  |  | 52 |
2020 and thereafter |  | 3,556 |  |  | 110 |
Unamortized discounts and interest, respectively |  | (615 | ) |  | (71 | )
|  | $ | 4,989 |  |  | $ | 787 |

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- Definition The entire disclosure for long-term debt. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 22 -Article 5 + Details
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