The following table summarizes the Company’s debt (in thousands):



	September 30, 2014			December 31, 2013
Revolving credit facility, due 2017	$	—		$	—
Senior term loan, due 2017	382,500			398,438
7.75% senior subordinated notes, due 2020	400,000			400,000
3.75% convertible senior subordinated notes, due 2025	79,979			132,408
4.00% junior subordinated convertible debentures, due 2033	307,122			307,153
3.25% convertible senior debentures, due 2035	427,500			427,500
3.75% convertible senior subordinated notes, due 2042	390,000			390,000
3.50% convertible senior subordinated notes, due 2044	424,250			424,250
Capitalized lease and other debt obligations	14,906			20,685
Subtotal	2,426,257			2,500,434
Add interest rate swap agreements	18,041			18,671
(Subtract) unamortized debt discount	(537,115		)	(573,082		)
(Subtract) current portion of debt	(495,713		)	(527,204		)
Total long-term debt, net	$	1,411,470		$	1,418,819

Refinancing Activity

In the second quarter of 2014, through privately negotiated transactions, Omnicare repurchased approximately $52 million in aggregate principal amount of its outstanding 3.75% Convertible Senior Subordinated Notes due 2025 (the “2025 Notes”) for approximately $134 million in cash. The Company recognized a loss on the repurchases of approximately $8 million in the second quarter of 2014, which is reflected in “Other charges” on the Consolidated Statement of Comprehensive Income (Loss).

In the third quarter of 2013, Omnicare entered into separate, privately negotiated exchange agreements under which the Company retired approximately $180 million in aggregate principal amount of outstanding 2025 Notes in exchange for the issuance of $424 million in aggregate principal amount of new 3.50% Convertible Senior Subordinated Notes due 2044 (the "2044 Notes"). Additionally, the Company entered into separate, privately negotiated purchase agreements to repurchase approximately $5 million in aggregate principal amount of its outstanding 2025 Notes and $150 million in aggregate principal amount of its 2020 Notes. Operating income for the three and nine months ended September 30, 2013 includes a non-cash loss of approximately $51 million in connection with the 2013 refinancing activities which is reflected in “Other Charges” on the Consolidated Statement of Comprehensive Income (Loss).

3.75% Convertible Senior Subordinated Notes, due 2025

As of September 30, 2014, approximately $80 million aggregate principal amount of the 2025 Notes remained outstanding. Holders may convert their 2025 Notes, prior to December 15, 2023, on any date during any calendar quarter (and only during such calendar quarter) if the closing sale price of the Company’s common stock was more than 130% of the then current conversion price for at least 20 trading days in the period of the 30 consecutive trading days ending on, and including, the last trading day of the previous quarter, or at any time on or after December 15, 2023 or under certain other specified circumstances. Upon conversion, the Company will pay cash and shares of its common stock, if any, based on a daily conversion value calculated on a proportionate basis for each day of the applicable 25 trading-day cash settlement averaging period. The conversion price is $26.84 and the conversion threshold is $34.89 as of September 30, 2014. As of September 30, 2014 and December 31, 2013, the aforementioned conversion threshold had been attained. As a result, the 2025 Notes were convertible by the holders to cash and shares of the Company’s common stock and have been classified as current debt, net of discount, on the Consolidated Balance Sheet as of September 30, 2014 and December 31, 2013. Because the terms of the 2025 Notes require the principal to be settled in cash, the Company reclassified from equity the portion of the 2025 Notes attributable to the conversion feature that had not yet been accreted to its face value.

4.00% Junior Subordinated Convertible Debentures, due 2033

As of September 30, 2014, approximately $307 million aggregate principal amount of the Company’s 4.00% Junior Subordinated Convertible Debentures, due 2033 (the “2033 Debentures”) was outstanding. The 2033 Debentures underlie the 4.00% Trust Preferred Income Equity Redeemable Securities (“Trust PIERS”) of Omnicare Capital Trust I and Omnicare Capital Trust II (the “Series A Trust PIERS” and “Series B Trust PIERS”, respectively). Each Trust PIERS represents an undivided beneficial interest in the assets of the applicable trust, which assets consist solely of a corresponding amount of 2033 Debentures. The Series A Trust PIERS and the Series B Trust PIERS have identical terms, except that the Series B Trust PIERS have a net share settlement feature. Holders may convert their Trust PIERS if the closing sale price of the Company’s common stock was more than 130% of the then current conversion price for at least 20 trading days in the 30 consecutive trading day period ending on, and including, the last trading day of the previous quarter. The conversion price is $40.82 and the conversion threshold is $53.07 as of September 30, 2014. As of September 30, 2014 and December 31, 2013, the aforementioned conversion threshold had been attained. As a result, the Trust PIERS (and the underlying 2033 Debentures) were convertible by the holders and have been classified as current debt, net of discount, on the Consolidated Balance Sheet as of September 30, 2014 and December 31, 2013. Because the majority of the 2033 Debentures require the principal to be settled in cash, the Company reclassified from equity the portion attributable to the conversion feature that had not yet been accreted to its face value.

The Trust PIERS (and underlying 2033 Debentures) have attained the threshold requiring payment of contingent interest in addition to regular cash interest.The contingent interest is accrued at the respective rate applied to the average trading price of the Trust PIERS for the five trading days ending on the respective date as outlined in the table below:

Accrual Period

Contingent Interest Rate

Trading price period end date

Cash interest paid per $50 stated liquidation amount of Trust PIERS

Payment Date

Start Date

End Date

December 15, 2013

March 14, 2014

0.125%

December 12, 2013

0.09

March 17, 2014

March 15, 2014

June 14, 2014

0.125%

March 13, 2014

0.09

June 16, 2014

June 15, 2014

September 15, 2014

0.125%

June 12, 2014

0.09

September 15, 2014

December 14, 2014

0.125%

September 12, 2014

0.10

December 15, 2014

3.75% Convertible Senior Subordinated Notes, due 2042

As of September 30, 2014, $390 million aggregate principal amount of 3.75% Convertible Senior Subordinated Notes due 2042 (the “2042 Notes”) was outstanding. Holders may convert their 2042 Notes, prior to April 1, 2040, on any date during any calendar quarter (and only during such calendar quarter) if the closing sale price of the Company’s common stock was more than 130% of the then current conversion price for at least 20 trading days in the 30 consecutive trading day period ending on, and including, the last trading day of the previous quarter, or at any time on or after April 1, 2040 or under certain other specified circumstances. Upon conversion, the Company will pay cash and shares of its common stock, if any, based on a daily conversion value calculated on a proportionate basis for each day of the applicable 25 trading-day cash settlement averaging period. The conversion price is $41.05 and the conversion threshold is $53.37 as of September 30, 2014. As of September 30, 2014 and December 31, 2013, the aforementioned conversion threshold had been attained. As a result, the 2042 Notes were convertible by the holders to cash and shares of the Company’s common stock and have been classified as current debt, net of discount, on the Consolidated Balance Sheet as of September 30, 2014 and December 31, 2013. Because the terms of the 2042 Notes require the principal to be settled in cash, the Company reclassified from equity the portion attributable to the conversion feature that had not yet been accreted to its face value.

As outlined above, several series of the Company’s outstanding notes and debentures (collectively, the “Convertible Notes”) are convertible into cash and/or shares of Omnicare common stock under specified circumstances, including if the closing price of the Company’s common stock is more than 130% of the conversion price for such Convertible Notes during the applicable measurement period. In general, upon conversion, the Company will pay cash for the principal amount of the Convertible Notes and shares of common stock for the remainder, if any, based on a daily conversion value during the applicable cash settlement averaging period; provided that the Company will pay cash in lieu of any fractional shares. Payment occurs at the end of the applicable settlement period, which is generally 30 days after the Company receives a holder’s notice of conversion. As of September 30, 2014, approximately $777 million in aggregate principal amount of Convertible Notes were convertible, including the 2025 Notes, the 2042 Notes and the 2033 Debentures.

The aggregate principle amount of Convertible Notes convertible at any given time is subject to change depending on factors such as the price of the Company’s common stock during the applicable measurement period. The Company cannot predict the aggregate principal amount of Convertible Notes that will be convertible at any given time or how many, if any, holders of such Convertible Notes will present their Convertible Notes for conversion or the impact of any such conversions on the Company’s results of operations, financial condition, liquidity or cash flows.

Revolving Credit Facility and Term Loan

As of September 30, 2014, there was $383 million outstanding under the Company’s term loan. The interest rate on the term loan was 1.91% at September 30, 2014. As of September 30, 2014, the Company had no outstanding borrowings under its revolving credit facility, except for approximately $14 million of standby letters of credit, substantially all of which are subject to automatic annual renewals.

Interest Rate Swap Agreements

The weighted average floating interest rate on the Interest Rate Swap Agreements in the third quarter of 2014 was 4.19% compared to the 7.75% stated interest rate on the corresponding 2020 Notes, which had a remaining principal balance of $400 million at September 30, 2014.

Deferred Debt Issuance Costs

The Company amortized to expense approximately $1 million of deferred debt issuance costs during each of the three month periods ended September 30, 2014 and 2013 and $3 million during each of the nine month periods ended September 30, 2014 and 2013, respectively. Interest expense for the nine months ended September 30, 2014 includes the write-off of approximately $1 million in deferred debt issuance costs related to the Company’s second quarter 2014 repurchase transaction. Interest expense for the three and nine months ended September 30, 2013 includes the write-off of approximately $5 million in deferred debt issuance costs related to the Company’s third quarter 2013 refinancing transactions activities.

Information relating to the Company’s convertible securities at September 30, 2014 is in the following table:



Convertible Debt	Carrying Value of Equity Component (in thousands)		Remaining Amortization Period	Effective Interest Rate
3.75% convertible senior subordinated notes, due 2025	$	6,913	11.25	8.25	%
4.00% junior subordinated convertible debentures, due 2033	$	118,348	18.75	8.01	%
3.25% convertible senior debentures, due 2035	$	245,433	1.25	7.63	%
3.75% convertible senior subordinated notes, due 2042	$	167,941	27.50	7.30	%
3.50% convertible senior subordinated notes, due 2044	$	208,200	29.40	7.70	%

The fair value of the Company’s fixed-rate debt facilities, excluding the Interest Rate Swap Agreements, is based on quoted market prices (Level II) and is summarized as follows (in thousands):



Fair Value of Financial Instruments
	September 30, 2014				December 31, 2013
Financial Instrument	Book Value		Market Value		Book Value		Market Value
7.75% senior subordinated notes, due 2020	$	400,000	$	421,000	$	400,000	$	435,800
3.75% convertible senior subordinated notes, due 2025
Carrying value	53,801		—		87,310		—
Unamortized debt discount	26,178		—		45,098		—
Principal amount	79,979		180,800		132,408		306,500
4.00% junior subordinated convertible debentures, due 2033
Carrying value	188,124		—		186,136		—
Unamortized debt discount	118,998		—		121,017		—
Principal amount	307,122		468,300		307,153		455,900
3.25% convertible senior debentures, due 2035
Carrying value	405,419		—		393,126		—
Unamortized debt discount	22,081		—		34,374		—
Principal amount	427,500		450,000		427,500		457,400
3.75% convertible senior subordinated notes, due 2042
Carrying value	226,389		—		225,014		—
Unamortized debt discount	163,611		—		164,986		—
Principal amount	390,000		608,000		390,000		592,800
3.50% convertible senior subordinated notes, due 2044
Carrying value	218,003		—		216,643		—
Unamortized debt discount	206,247		—		207,607		—
Principal amount	424,250		469,600		424,250		428,500