(5) Borrowings and Credit Arrangements

The Company had total debt with a carrying value of $5.04 billion at December 29, 2012 and September 29, 2012. The Company’s borrowings consisted of the following:


	December 29, 2012		September 29, 2012
Current debt obligations, net of debt discount:
Convertible Notes	$	734,476	$	—
Term Loan A		49,603		49,582
Term Loan B		14,858		14,853

Total current debt obligations		798,937		64,435

Long-term debt obligations, net of debt discount:
Term Loan A		930,066		942,065
Term Loan B		1,467,191		1,470,454
Senior Notes		1,000,000		1,000,000
Convertible Notes		839,828		1,558,660

Total long-term debt obligations		4,237,085		4,971,179

Total debt obligations	$	5,036,022	$	5,035,614

Credit Agreement

Borrowings outstanding under the credit and guaranty agreement (the “Credit Agreement”) for the three months ended December 29, 2012 had a weighted average interest rate of 4.0%. The interest rates on the outstanding Term Loan A and Term Loan B borrowings at December 29, 2012 ranged from 3.21% to 4.5%. Interest expense under the Credit Agreement totaled $30.0 million for the three months ended December 29, 2012, which includes non-cash interest expense of $3.7 million related to the amortization of the deferred financing costs and accretion of the debt discount.

The Credit Agreement contains affirmative and negative covenants customarily applicable to senior secured credit facilities, including covenants restricting the ability of the Company and the guarantors, subject to negotiated exceptions, to: incur additional indebtedness and additional liens on their assets; engage in mergers or acquisitions or dispose of assets; enter into sale-leaseback transactions; pay dividends or make other distributions; voluntarily prepay other indebtedness; enter into transactions with affiliated persons; make investments; and change the nature of their businesses. The credit facilities also contain total net leverage ratio and interest coverage ratio financial covenants measured as of the last day of each fiscal quarter, which are effective in our first quarter of fiscal 2013. The Company was in compliance with the Credit Agreement’s covenants as of December 29, 2012.

The Company has evaluated the Credit Agreement for derivatives pursuant to ASC 815, Derivatives and Hedging, and identified embedded derivatives that require bifurcation as the features are not clearly and closely related to the host instrument. The embedded derivatives are a default provision, which could require additional interest payments, and provision requiring contingent payments to compensate the lenders for changes in tax deductions. The Company has determined that the fair value of these embedded derivatives was nominal as of December 29, 2012.

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 in the three months ended December 29, 2012, which includes non-cash interest expense of $0.4 million related to the amortization of the deferred financing costs related to the Senior Notes.

On August 1, 2012, in connection with the issuance of the Senior Notes, the Company and the Guarantors entered into an exchange and registration rights agreement with the initial purchasers of the Senior Notes. Pursuant to the terms of the registration rights agreement, the Company and the Guarantors agreed to (i) file a registration statement covering an offer to exchange the Senior Notes for a new issue of identical exchange notes registered under the Securities Act on or before 180 days from August 1, 2012, (ii) use commercially reasonable efforts to cause such registration statement to become effective, and (iii) use commercially reasonable efforts to complete the exchange prior to 270 days after August 1, 2012. The Company filed a Registration Statement on Form S-4 with the Securities and Exchange Commission on January 28, 2013. The Registration Statement has not yet been declared effective. Under certain circumstances, the Company and the Guarantors may be required to provide a shelf registration statement to cover resales of the Senior Notes.

Convertible Notes

In the first quarter of fiscal 2013, the Company has reclassified its 2007 Notes to short-term in accordance with U.S. generally accepted accounting principles as they are due on demand within one year of the balance sheet date. The holders of these notes can put them to the Company on December 13, 2013.

The Convertible Notes and related equity components (recorded in additional paid-in-capital, net of deferred taxes) consisted of the following:


	December 29, 2012			September 29, 2012
2007 Notes principal amount	$	775,000		$	775,000
Unamortized discount		(40,524	)		(50,591	)

Net carrying amount	$	734,476		$	724,409


Equity component, net of taxes	$	233,353		$	233,353


2010 Notes principal amount	$	450,000		$	450,000
Unamortized discount		(70,199	)		(74,062	)

Net carrying amount	$	379,801		$	375,938


Equity component, net of taxes	$	60,054		$	60,054


2012 Notes principal amount	$	500,000		$	500,000
Unamortized discount		(39,973	)		(41,687	)

Net carrying amount	$	460,027		$	458,313


Equity component, net of taxes	$	49,195		$	49,195

Interest expense under the Convertible Notes is as follows:


	Three months ended
	December 29, 2012		December 24, 2011
Amortization of debt discount	$	15,644	$	18,953
Amortization of deferred financing costs		908		1,007

Non-cash interest expense		16,552		19,960

2.00% accrued interest		8,610		8,578

	$	25,162	$	28,538