NOTE 6: LONG-TERM DEBT

The following tables present our long-term debt instruments outstanding, contractual maturities and interest expense:



	March 31, 2018									March 31, 2017							September 30, 2017
	Gross Amount			Debt Discount and Issuance Costs			Carrying Amount			Gross Amount		Debt Discount and Issuance Costs			Carrying Amount		Gross Amount		Debt Discount and Issuance Costs			Carrying Amount

	(in thousands)
2019 Convertible Notes	$	195,000		$	(12,704	)	$	182,296		$	230,000	$	(26,536	)	$	203,464	$	195,000	$	(17,654	)	$	177,346
2019 Convertible Notes Embedded Derivative	16,042			—			16,042			15,138		—			15,138		6,591		—			6,591
2024 Convertible Notes	143,750			(40,463		)	103,287			—		—			—		143,750		(42,880		)	100,870
Term Loan Facility	—			—			—			50,000		(1,878		)	48,122		—		—			—
Total	$	354,792		$	(53,167	)	$	301,625		$	295,138	$	(28,414	)	$	266,724	$	345,341	$	(60,534	)	$	284,807
Less current portion	(143,750		)	40,463			(103,287		)	—		—			—		—		—			—
Total long-term debt	$	211,042		$	(12,704	)	$	198,338		$	295,138	$	(28,414	)	$	266,724	$	345,341	$	(60,534	)	$	284,807



	Schedule of Contractual Maturities
	Total		Less Than 1 Year		1 - 3 Years		3 - 5 Years		More Than 5 Years

	(in thousands)
2019 Convertible Notes*	$	195,000	$	—	$	195,000	$	—	$	—
2024 Convertible Notes*	143,750		143,750		—		—		—
	$	338,750	$	143,750	$	195,000	$	—	$	—

Excludes the potential impact of the embedded derivative. During the second quarter of fiscal 2018, the market price of our Class A Non-Voting Common Stock met the threshold to trigger note holders’ right to convert their 2024 Convertible Notes during the third quarter of fiscal 2018. Therefore, we have classified the 2024 Convertible Notes as current on our condensed consolidated balance sheet as of March 31, 2018.



	Three Months Ended March 31,				Six Months Ended March 31,
	2018		2017		2018		2017

	(in millions)
2019 Convertible Notes:
Contractual interest expense	$	1.1	$	1.3	$	2.1	$	2.5
Amortization of debt discount and deferred financing costs	2.4		2.7		5.0		5.5
Total interest expense	$	3.5	$	4.0	$	7.1	$	8.0

2024 Convertible Notes:
Contractual interest expense	$	1.0	$	—	$	2.0	$	—
Amortization of debt discount and deferred financing costs	1.3		—		2.5		—
Total interest expense	$	2.3	$	—	$	4.5	$	—

2.875% Convertible Senior Notes Due 2024

In July 2017, we issued $143.75 million aggregate principal amount of 2.875% Convertible Senior Notes Due 2024 (the “2024 Convertible Notes”). All of the 2024 Convertible Notes were issued pursuant to an indenture dated July 5, 2017 (the "2017 Indenture") by and between us and Wells Fargo Bank, National Association, as the trustee. The 2024 Convertible Notes were issued in a private offering under Rule 144A under the Securities Act of 1933. The 2024 Convertible Notes pay interest semi-annually in arrears at a rate of 2.875% per annum on January 1 and July 1 of each year, commencing January 1, 2018, and mature on July 1, 2024 (the "2024 Maturity Date"), unless converted, redeemed or repurchased in accordance with their terms prior to such date. The carrying amount of the 2024 Convertible Notes as a separate equity-classified instrument (the “2024 Convertible Notes Embedded Derivative”) included under “Additional paid-in capital” in our condensed consolidated balance sheets of March 31, 2018 was $25.3 million. The effective interest rate for the three and six months ended March 31, 2018 was approximately 7%. As of March 31, 2018, the remaining unamortized debt discount and issuance costs will be amortized through the 2024 Maturity Date assuming no early conversion.

The 2024 Convertible Notes are convertible into cash or shares of Class A Non-Voting Common Stock ("Class A Common Stock"), or any combination thereof, at our option subject to satisfaction of certain conditions and during the periods described in the 2017 Indenture, based on an initial conversion rate of 100 shares of Class A Common Stock per $1,000 principal amount of 2024 Convertible Notes (equivalent to an initial conversion price of $10.00 per share of our Class A Common Stock). We account for the Class A Common Stock issuable upon conversion under the treasury stock method. To the extent our average share price is over $10.00 per share for any fiscal quarter, we are required to recognize incremental dilution of our earnings per share.

During the second quarter of fiscal 2018, the market price of our Class A Common Stock met the threshold based on at least 20 of the final 30 trading days of the quarter for the 2024 Convertible Notes to become convertible at the option of the holders during the third quarter of fiscal 2018 (April 1, 2018 to June 30, 2018). If presented for conversion, we may choose to settle the obligation through the payment of cash, the delivery of Class A Common Stock or a combination of cash and shares, although it continues to be our intention to settle the principal portion of the notes in cash and the remainder in Class A Common Stock. Accordingly, we have classified the 2024 Convertible Notes as current on our condensed consolidated balance sheet as of March 31, 2018. The stock trading price condition is measured on a quarter-by-quarter basis. If the notes are not convertible in any subsequent quarter, they will be classified as a non-current liability. The if-converted value of the 2024 Convertible Notes exceeded the principal amount by $46.7 million as of March 31, 2018.

2.125% Cash Convertible Senior Notes Due 2019

In June 2014, we issued $200 million aggregate principal amount of 2.125% Cash Convertible Senior Notes Due 2019 (the "2019 Convertible Notes"), with an additional $30 million principal amount of 2019 Convertible Notes issued in July 2014. In July 2017, we used $34.4 million of net proceeds from the 2024 Convertible Notes offering to repurchase and retire $35.0 million aggregate principal amount of 2019 Convertible Notes. All of the 2019 Convertible Notes were issued pursuant to an indenture dated June 23, 2014 (the "2014 Indenture") by and between us and Wells Fargo Bank, National Association, as the trustee. The 2019 Convertible Notes were issued in a private offering and resold under Rule 144A under the Securities Act of 1933. The 2019 Convertible Notes pay interest semi-annually in arrears at a rate of 2.125% per annum on June 15 and December 15 of each year and mature on June 15, 2019 (the "2019 Maturity Date"), unless converted, redeemed or repurchased in accordance with their terms prior to such date. The effective interest rate for the three and six months ended March 31, 2018 and 2017 was approximately 7%. As of March 31, 2018, the remaining unamortized debt discount and issuance costs will be amortized through the 2019 Maturity Date assuming no early conversion.

The 2019 Convertible Notes are convertible into cash, subject to satisfaction of certain conditions and during the periods described in the 2014 Indenture, based on an initial conversion rate of 62.2471 shares of Class A Common Stock per $1,000 principal amount of 2019 Convertible Notes (equivalent to an initial conversion price of approximately $16.065 per share of our Class A Common Stock). As of March 31, 2018, the if-converted value of the 2019 Convertible Notes did not exceed the principal amount.

2019 Convertible Notes Hedges

In connection with the issuance of the 2019 Convertible Notes, we purchased cash-settled call options (the “2019 Convertible Notes Hedges”) in privately negotiated transactions with certain of the initial purchasers or their affiliates (in this capacity, the “Option Counterparties”). The 2019 Convertible Notes Hedges provide us with the option to acquire, on a net settlement basis, approximately 12.1 million shares of our Class A Common Stock at a strike price of $16.065, which is equal to the number of shares of our Class A Common Stock that notionally underlie the 2019 Convertible Notes and corresponds to the conversion price of the 2019 Convertible Notes. If we exercise the 2019 Convertible Notes Hedges, the aggregate amount of cash we will receive from the Option Counterparties will cover the aggregate amount of cash that we would be required to pay to the holders of the converted 2019 Convertible Notes, less the principal amount thereof.

2019 Convertible Notes Warrants

In connection with the issuance of the 2019 Convertible Notes, we also sold net-share-settled warrants (the “2019 Convertible Notes Warrants”) in privately negotiated transactions with the Option Counterparties. The 2019 Convertible Notes Warrants allow for the purchase of up to approximately 12.1 million shares of our Class A Common Stock at a strike price of $20.83 per share. We account for the Class A Common Stock issuable upon exercise under the treasury stock method. As a result of the 2019 Convertible Notes Warrants and related transactions, we are required to recognize incremental dilution of our earnings per share to the extent our average share price is over $20.83 for any fiscal quarter. The 2019 Convertible Notes Warrants expire on various dates from September 2019 through February 2020 and must be settled in net shares of our Class A Common Stock.