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Debt | 6 Months Ended
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Feb. 28, 2019
Debt Disclosure [Abstract] |
Debt | Debt
As of |  | February 28, 2019 |  | August 30, 2018
|  |  |  |  |  | Net Carrying Amount |  | Net Carrying Amount
Instrument |  | Stated Rate |  | Effective Rate |  | Current |  | Long-Term |  | Total |  | Current |  | Long-Term |  | Total
IMFT Member Debt(1) |  | N/A |  |  | N/A |  |  | $ | 1,009 |  |  | $ | — |  |  | $ | 1,009 |  |  | $ | — |  |  | $ | 1,009 |  |  | $ | 1,009 |
Capital lease obligations |  | N/A |  |  | 4.12 | % |  | 261 |  |  | 455 |  |  | 716 |  |  | 310 |  |  | 536 |  |  | 846 |
MMJ Creditor Payments |  | N/A |  |  | 9.76 | % |  | 181 |  |  | — |  |  | 181 |  |  | 309 |  |  | 183 |  |  | 492 |
2022 Term Loan B |  | 4.25 | % |  | 4.66 | % |  | 5 |  |  | 718 |  |  | 723 |  |  | 5 |  |  | 720 |  |  | 725 |
2024 Notes |  | 4.64 | % |  | 4.76 | % |  | — |  |  | 597 |  |  | 597 |  |  | — |  |  | — |  |  | — |
2025 Notes |  | 5.50 | % |  | 5.56 | % |  | — |  |  | 516 |  |  | 516 |  |  | — |  |  | 515 |  |  | 515 |
2026 Notes |  | 4.98 | % |  | 5.07 | % |  | — |  |  | 497 |  |  | 497 |  |  | — |  |  | — |  |  | — |
2029 Notes |  | 5.33 | % |  | 5.40 | % |  | — |  |  | 696 |  |  | 696 |  |  | — |  |  | — |  |  | — |
2032D Notes |  | 3.13 | % |  | 6.33 | % |  | — |  |  | 125 |  |  | 125 |  |  | — |  |  | 132 |  |  | 132 |
2033F Notes |  | 2.13 | % |  | 4.93 | % |  | 68 |  |  | — |  |  | 68 |  |  | 235 |  |  | — |  |  | 235 |
2043G Notes |  | 3.00 | % |  | 6.76 | % |  | 1,110 |  |  | — |  |  | 1,110 |  |  | — |  |  | 682 |  |  | 682 |
|  |  |  |  |  | $ | 2,634 |  |  | $ | 3,604 |  |  | $ | 6,238 |  |  | $ | 859 |  |  | $ | 3,777 |  |  | $ | 4,636 |
(1) | IMFT Member Debt was classified as current as of February 28, 2019 as a result of exercising our option to acquire Intel's interest in IMFT.
Senior Unsecured Notes On February 6, 2019, we issued our 2024 Notes, 2026 Notes, and 2029 Notes in a public offering. Issuance costs for these notes were $11 million. We may redeem some or all of these notes at our option prior to their maturity at a redemption price equal to accrued interest plus the present value of the remaining scheduled payments and we may redeem some or all of these notes at par between one and three months prior to maturity. Each of the 2024 Notes, 2026 Notes, and 2029 Notes contain covenants that, among other things, limit, in certain circumstances, our ability and/or the ability of our restricted subsidiaries (which are generally domestic subsidiaries in which we own at least 80% of the voting stock) to (1) create or incur certain liens, (2) enter into certain sale and lease-back transactions; 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 and exceptions. Additionally, if a change in control triggering event occurs, as defined in the indenture governing such notes, we will be required to offer to purchase such notes at 101% of the outstanding aggregate principal amount plus accrued interest up to the purchase date. Convertible Senior Notes On February 8, 2019, we notified holders of our 2043G Notes that we would redeem all of the outstanding 2043G Notes on March 13, 2019. Holders could elect to convert these notes prior to March 12, 2019 at a conversion rate of 34.2936 shares of our common stock per $1,000 of principal amount. In connection with our notice, we made an irrevocable election to settle any conversions in cash. As a result, we reclassified $336 million from equity to a derivative debt liability. As of February 28, 2019, current debt included an aggregate of $1.11 billion for the settlement obligation (including principal and amounts in excess of principal) of all of our 2043G Notes. Holders converted substantially all of the 2043G Notes and on March 13, 2019, we paid $1.43 billion to settle the conversions and recognized a loss of $316 million in the third quarter of 2019. Holders of our convertible notes may convert their notes during any calendar quarter if 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 of February 28, 2019, the trading price of our common stock was higher than the initial conversion prices of our 2032D Notes and our 2033F Notes and, as a result, the aggregate conversion value of $807 million exceeded the aggregate principal amount of $203 million by $604 million. Available Revolving Credit Facility On November 27, 2018, we increased the amount available to draw under our existing revolving credit facility expiring in July 2023 from $2.0 billion to $2.5 billion. As of February 28, 2019, there were no outstanding amounts drawn under this facility. Debt Activity When we receive a notice of conversion for any of our convertible notes and elect to settle in cash any portion of the conversion obligation in excess of the principal amount, the cash settlement obligations become derivative debt liabilities subject to mark-to-market accounting treatment based on the volume-weighted-average price of our common stock over a period of 20 consecutive trading days. Accordingly, at the date of our election to settle a conversion in cash, we reclassify the fair value of the equity component of the converted notes from additional capital to derivative debt liability within current debt in our consolidated balance sheet. The following table presents the effects of conversions, settlements, and issuance of debt in the first six months of 2019:
Six months ended February 28, 2019 |  | Increase (Decrease) in Principal |  | Increase (Decrease) in Carrying Value |  | Increase (Decrease) in Cash |  | Decrease in Equity |  | Gain (Loss)
Settled conversions |  |  |  |  |  |  |  |  |  |
2032D Notes |  | $ | (10 | ) |  | $ | (9 | ) |  | $ | (35 | ) |  | $ | (28 | ) |  | $ | 2 |
2033F Notes |  | (38 | ) |  | (169 | ) |  | (164 | ) |  | (8 | ) |  | 13 |
Conversions not settled |  |  |  |  |  |  |  |  |  |
2043G Notes |  | — |  |  | 420 |  |  | — |  |  | (336 | ) |  | (84 | )
Issuances |  |  |  |  |  |  |  |  |  |
2024 Notes |  | 600 |  |  | 597 |  |  | 597 |  |  | — |  |  | — |
2026 Notes |  | 500 |  |  | 497 |  |  | 497 |  |  | — |  |  | — |
2029 Notes |  | 700 |  |  | 695 |  |  | 695 |  |  | — |  |  | — |
|  | $ | 1,752 |  |  | $ | 2,031 |  |  | $ | 1,590 |  |  | $ | (372 | ) |  | $ | (69 | )

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- Definition The entire disclosure for debt and capital lease obligations can be reported. Information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. Also includes descriptions and amounts of capital leasing arrangements that consist of direct financing, sales type and leveraged leases. Disclosure may include the effect on the balance sheet and the income statement resulting from a change in lease classification for leases that at inception would have been classified differently had guidance been in effect at the inception of the original lease. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 840 -URI http://asc.fasb.org/topic&trid=2208923 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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