Cobalt International Energy, Inc.
Notes to Consolidated Financial Statements (Continued)
F-23
10. Long-term Debt (Continued)
The carrying amounts of the liability components of the Notes were as follows:
December 31, 2015
December 31, 2014
Principal
Amount
Unamortized
discount(1)
Carrying
Amount
Principal
Amount
Unamortized
discount
Carrying
Amount
($ in thousands)
Carrying amount of liability component
2.625% Notes.............................................................. $1,380,000 $ (242,966) $1,137,034 $1,380,000 $ (295,509) $1,084,491
3.125% Notes.............................................................. 1,300,000 (422,255) 877,745 1,300,000 (455,963) 844,037
Total ............................................................................ $2,680,000 $ (665,221) $2,014,779 $2,680,000 $ (751,472) $1,928,528
(1) Unamortized discount will be amortized over the remaining life of the Notes which is 4 years for the 2.625% Notes and
8.5 years for the 3.125% Notes.
The carrying amounts of the equity components of the Notes were as follows:
December 31,
2015
December 31,
2014
($ in thousands)
Debt discount relating to value of conversion option ................ $ 866,340 $
866,340
Debt issue costs..........................................................................
(20,185)
(20,185)
Total........................................................................................... $ 846,155 $
846,155
Fair Value
The fair value of the Notes, excluding the conversion feature, was calculated based on the fair value of similar
non-convertible debt instruments since an observable quoted price of the Notes or a similar asset or liability is not readily available.
As of December 31, 2015 and December 31, 2014, the fair values of the Notes were as follows:
December 31,
2015
December 31,
2014
($ in thousands)
2.625% Notes............................................................................. $ 791,209 $ 1,361,000
3.125% Notes.............................................................................
577,291 1,047,000
Total........................................................................................... $ 1,368,500 $ 2,408,000
As of December 31, 2015, the Company had $7.8 million accrued for interest on the Notes and commitment fees associated with
the Facility Agreement.
Interest expense associated with the 2.625% convertible senior notes due 2019 and the 3.125% convertible senior notes due
2024 was as follows:
For Year Ended December 31,
2015
2014
2013
($ in thousands)
Interest expense associated with accrued interest ..................... $ 78,549 $ 61,729 $
36,229
Interest expense associated with accretion of debt discount.....
86,251
68,348
44,789
Interest expense associated with amortization of debt issue
costs .......................................................................................
4,395
3,149
2,058
Less: Capitalized interest..........................................................
(105,819)
(58,458)
(17,700)
$ 63,376 $ 74,768 $
65,376
