Debt



As of	May 30, 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		$	858	$	—	$	858	$	—	$	1,009	$	1,009
Capital lease obligations	N/A		4.20	%	233		415		648		310		536		846
MMJ Creditor Payments	N/A		9.76	%	187		—		187		309		183		492
2022 Term Loan B	4.24	%	4.65	%	5		716		721		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	%	—		126		126		—		132		132
2033F Notes	2.13	%	4.93	%	63		—		63		235		—		235
2043G Notes	3.00	%	6.76	%	—		—		—		—		682		682
					$	1,346	$	3,563	$	4,909	$	859	$	3,777	$	4,636


⁽¹⁾	IMFT Member Debt was classified as current as of May 30, 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 and, as a result, we reclassified $336 million from equity to a derivative debt liability. Holders converted substantially all of the 2043G Notes and, on March 13, 2019, we paid $1.43 billion to settle the conversions. We incurred losses of $316 million and $84 million in the third and second quarters of 2019, respectively, in connection with these transactions.

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 May 30, 2019, the trading price of our common stock was higher than the conversion prices of our 2032D Notes and our 2033F Notes and, as a result, the aggregate conversion value of $641 million exceeded the aggregate principal amount of $198 million by $443 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 May 30, 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 nine months of 2019:



Nine months ended May 30, 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	(43		)	(173		)	(184		)	(23		)	12
2043G Notes	(1,019		)	(691		)	(1,426		)	(326		)	(400		)
Issuances
2024 Notes	600			597			597			—			—
2026 Notes	500			497			497			—			—
2029 Notes	700			695			695			—			—
	$	728		$	916		$	144		$	(377	)	$	(386	)