(4) Borrowings and Credit Arrangements

The Company’s borrowings consisted of the following:


	March 29, 2014		September 28, 2013
Current debt obligations, net of debt discount:
Term Loan A	$	74,628	$	49,713
Term Loan B		14,869		113,966
Convertible Notes		—		400,133

Total current debt obligations		89,497		563,812

Long-term debt obligations, net of debt discount:
Term Loan A		845,782		894,834
Term Loan B		1,127,581		1,159,272
Senior Notes		1,000,000		1,000,000
Convertible Notes		1,210,595		1,187,992

Total long-term debt obligations		4,183,958		4,242,098

Total debt obligations	$	4,273,455	$	4,805,910

Credit Agreement

On October 31, 2013, the Company voluntarily pre-paid $100.0 million of its Term Loan B facility, which was reflected in current debt obligations as of September 28, 2013. Pursuant to ASC 470, Debt (ASC 470), the Company recorded a debt extinguishment loss of $2.9 million in the first quarter of fiscal 2014 to write-off the pro-rata amount of unamortized debt discount and deferred issuance costs related to this voluntary prepayment.

On February 26, 2014, the Company, the Guarantors, Goldman Sachs, and the Lenders entered into Refinancing Amendment No. 3 to the credit and guaranty agreement among the parties (as amended, the “Credit Agreement”). The Refinancing Amendment No. 3 refinanced the Company’s existing senior secured tranche B term loan facility (the “Existing Term Loan B”) with a new senior secured tranche B term loan facility (the “New Term Loan B”) with an issue price of 99.875% of the principal amount of the Existing Term Loan B (subject also to the prepayment referenced below). This amendment resulted in a 50 basis point reduction in the interest rate on the New Term Loan B as of the Refinancing Amendment No. 3 closing date. Amounts outstanding under the New Term Loan B will bear interest, at the Company’s option: (A) at the Base Rate, with a floor of 1.75%, plus 1.50% per annum, or (B) at the Adjusted Eurodollar Rate (i.e., the Libor rate), with a floor of 0.75% plus 2.50% per annum. In addition, the Company voluntarily prepaid $25.0 million of the New Term Loan B.

Pursuant to ASC 470, the accounting for this refinancing is required to be evaluated on a creditor-by-creditor basis to determine whether each transaction should be accounted for as a modification or extinguishment. Certain creditors under the Credit Agreement did not participate in this refinancing transaction and ceased being creditors of the Company, and certain creditors reduced their positions. As a result, the Company recorded a debt extinguishment loss of $4.4 million in the second quarter of fiscal 2014 to write-off the pro-rata amount of unamortized debt discount and deferred issuance costs related to these creditors. For the remainder of the creditors, this transaction has been accounted for as a modification because the present value of the cash flows on a creditor-by-creditor basis between the two debt instruments was less than 10%. Pursuant to ASC 470, subtopic 50-40, third-party costs of $1.0 million related to this transaction were expensed.

Borrowings outstanding under the Credit Agreement for the three and six months ended March 29, 2014 had weighted-average interest rates of 2.96% and 3.01%, respectively. The interest rates on the outstanding Term Loan A and Term Loan B borrowings at March 29, 2014 were 2.15% and 3.25%, respectively. Interest expense under the Credit Agreement totaled $19.2 million and $39.6 million for the three and six months ended March 29, 2014, respectively, which includes non-cash interest expense of $3.2 million and $6.5 million, respectively, related to the amortization of the deferred financing costs and accretion of the debt discount. Interest expense totaled $28.5 million and $58.6 million for the three and six months ended March 30, 2013, respectively, which includes non-cash interest expense of $4.1 million and $7.8 million related to the amortization of the deferred financing costs and accretion of the debt discount.

In the second quarter of fiscal 2013, the Company executed Refinancing Amendment No.1 to the Credit Agreement which reduced the interest rate on the Term Loan A facility. Consistent with the accounting treatment noted above for Refinancing Amendment No. 3, in connection with this transaction, the Company recorded a debt extinguishment loss of $3.2 million and expensed $2.4 million of third-party costs to interest expense.

Senior Notes

The Company’s 6.25% senior notes due 2020 (the “Senior Notes”) mature on August 1, 2020 and bear interest at the rate of 6.25% per year, payable semi-annually on February 1 and August 1 of each year, commencing on February 1, 2013. The Company recorded interest expense of $16.0 million and $32.0 million in both the three and six month periods ended March 29, 2014 and March 30, 2013, respectively, which includes non-cash interest expense of $0.4 million and $0.8 million in both the three and six month periods ended March 29, 2014 and March 30, 2013, respectively, related to the amortization of the deferred financing costs.

Convertible Notes

On November 14, 2013, the Company announced that it had issued a notice of redemption to the holders of its 2.00% Convertible Senior Notes due 2037 (“2007 Notes”) to redeem any 2007 Notes outstanding on December 18, 2013 at a redemption price payable in cash equal to 100% of the principal amount of the 2007 Notes plus accrued and unpaid interest to, but not including, December 18, 2013. Holders of the 2007 Notes also had the option of putting the 2007 Notes to the Company as of December 13, 2013. The 2007 Notes were redeemed at their par value aggregating $405.0 million. Under ASC 470, the derecognition of the 2007 Notes did not result in a gain or loss as the fair value of the liability component of the 2007 Notes was determined to be equal to the consideration paid to redeem the 2007 Notes, and as a result, no value was allocated to the reacquisition of the conversion option.

Interest expense under the Convertible Notes is as follows:


	Three Months Ended				Six Months Ended
	March 29, 2014		March 30, 2013		March 29, 2014		March 30, 2013
Amortization of debt discount	$	8,341	$	13,621	$	19,887	$	29,265
Amortization of deferred financing costs		413		790		1,063		1,698
Principal accretion		3,810		1,789		7,584		1,789

Non-cash interest expense		12,564		16,200		28,534		32,752
2.00% accrued interest		4,751		8,616		12,870		17,226

	$	17,315	$	24,816	$	41,404	$	49,978