Notes Payable

Notes payable consist of the following:



As of	April 30, 2015		January 31, 2015
4.00% Debentures due 2031	$	232,004	$	230,400
Other	3,600		—
Notes Payable	$	235,604	$	230,400

Our 4.00% Convertible Subordinated Debentures (4.00% Debentures) are due in 2031, but we may be required to repay them earlier under the conversion and redemption provisions described below.

4.00% Debentures due 2031

In April 2011, we issued $253,000 of 4.00% Debentures in a private placement pursuant to the SEC Rule 144A under the Securities Act of 1933. Interest on the 4.00% Debentures is payable semi-annually in April and October.

Each one thousand dollars in principal amount of the 4.00% Debentures is currently convertible, under certain circumstances, into 49.2485 shares of our common stock (equivalent to a conversion price of $20.31 per share) for a total of 12,460 shares. The initial conversion rate for the 4.00% Debentures was 48.6902 shares of our common stock for each one thousand dollars in principal amount (equivalent to a conversion price of $20.54 per share). The conversion rate was adjusted because we have declared and paid quarterly cash dividends since the first quarter of fiscal year 2014.

As of April 30, 2015, the 4.00% Debentures are convertible, under certain circumstances, into shares of our common stock at the conversion rate noted above. The circumstances for conversion include:


•	The market price of our common stock exceeding 120.0% of the conversion price, or $24.37 per share as of April 30, 2015, for at least 20 of the last 30 trading days in the previous fiscal quarter;


•	A call for redemption of the 4.00% Debentures;


•	Specified distributions to holders of our common stock;


•	If a fundamental change, such as a change of control, occurs;


•	During the two months prior to, but not on, the maturity date; or


•	The market price of the 4.00% Debentures declining to less than 98% of the value of the common stock into which the 4.00% Debentures are convertible.

Upon conversion of any 4.00% Debentures, a holder will receive:


(i)	Cash for the lesser of the principal amount of the 4.00% Debentures that are converted or the value of the converted shares; and


(ii)	Cash or shares of common stock, at our election, for the excess, if any, of the value of the converted shares over the principal amount.

As of April 30, 2015, the if-converted value of the 4.00% Debentures to the note holders exceeded the principal amount by $47,910.

As of April 30, 2015, none of the conditions allowing the holders of the 4.00% Debentures to convert the 4.00% Debentures into shares of our common stock had been met. However, during the three months ended April 30, 2015, the market price of our common stock exceeded 120% of the conversion price, or $24.37 per share, for 15 of the last 30 consecutive trading days of the period.

If a holder elects to convert their 4.00% Debentures in connection with a fundamental change in the company that occurs prior to April 5, 2016, the holder will also be entitled to receive a make whole premium upon conversion in some circumstances.

We may redeem some or all of the 4.00% Debentures for cash on or after April 5, 2016 at the following redemption prices expressed as a percentage of principal, plus any accrued and unpaid interest:



Period	Redemption Price
Beginning on April 5, 2016 and ending on March 31, 2017	101.143	%
Beginning on April 1, 2017 and ending on March 31, 2018	100.571	%
On April 1, 2018 and thereafter	100.000	%

The holders, at their option, may redeem the 4.00% Debentures for cash on April 1, 2018, April 1, 2021, and April 1, 2026, and in the event of a fundamental change in the company. In each case, our repurchase price will be 100% of the principal amount of the 4.00% Debentures plus any accrued and unpaid interest.

The 4.00% Debentures contain a conversion feature that the debt may be settled in cash upon conversion, therefore we separately account for the implied liability and equity components of the 4.00% Debentures. The principal amount, unamortized debt discount, net carrying amount of the liability component, and carrying amount of the equity component of the 4.00% Debentures are as follows:



As of	April 30, 2015			January 31, 2015
Principal amount	$	253,000		$	253,000
Unamortized debt discount	(20,996		)	(22,600		)
Net carrying amount of the liability component	$	232,004		$	230,400
Equity component	$	43,930		$	43,930

The unamortized debt discount amortizes to interest expense using the effective interest method through March 2018.

We recognized the following amounts in interest expense in the condensed consolidated statement of operations related to the 4.00% Debentures:



	Three months ended April 30,
	2015		2014
Interest expense at the contractual interest rate	$	2,530	$	2,530
Amortization of debt discount	$	1,604	$	1,494

The effective interest rate on the 4.00% Debentures was 7.25% for the three months ended April 30, 2015 and 2014.

Other Notes Payable

In February 2015, we issued a subordinated note payable as part of a business combination. The note bears interest at a rate of 4.0% and is due in full on February 25, 2019.