10. Financing Arrangements

Long-term Debt

The following table summarizes the carrying value of our long-term debt (in millions):


	April 26, 2013						April 27, 2012
	Amount			Effective Interest Rate			Amount			Effective Interest Rate
2.00% Senior Notes Due 2017	$	750.0			2.25	%	$	0.0			N/A
3.25% Senior Notes Due 2022		250.0			3.43	%		0.0			N/A
1.75% Convertible Notes Due 2013		1,264.9			6.31	%		1,264.9			6.31	%

Total		2,264.9						1,264.9
Less: Unamortized discount		(12.5	)					(62.6	)

Total		2,252.4						1,202.3
Less: Current portion		(1,257.8	)					(1,202.3	)

Total long-term debt	$	994.6					$	0.0

N/A — Not Applicable

2.00% Senior Notes due 2017 and 3.25% Senior Notes due 2022

In December 2012, we issued $750.0 million principal amount of 2.00% Senior Notes due on December 15, 2017 and $250.0 million principal amount of 3.25% Senior Notes due on December 15, 2022. The proceeds received were net of debt discounts of $5.8 million and issuance costs of $6.9 million, both of which are amortized as additional interest expense over the respective terms of the Senior Notes using the effective interest method. The Senior Notes are unsecured, unsubordinated obligations, which pay interest semi-annually on June 15 and December 15 and rank equally in right of payment with our other existing and future senior unsecured indebtedness, including the Convertible Notes. Interest expense associated with the Senior Notes was $9.4 million for the year ended April 26, 2013. The proceeds from the Senior Notes are available for general corporate purposes, including repayment of certain indebtedness, capital expenditures, possible stock repurchases, working capital and potential acquisitions and strategic transactions.

We may redeem the Senior Notes in whole or in part, at any time at our option at specified redemption prices. In addition, upon the occurrence of certain change of control triggering events, we may be required to repurchase the Senior Notes at 101% of their aggregate principal amount, plus accrued and unpaid interest to the date of repurchase. The Senior Notes also include covenants that limit our ability to incur debt secured by liens on assets or on shares of stock or indebtedness of our subsidiaries; to engage in sale and lease-back transactions; and to consolidate, merge or sell all or substantially all of our assets. As of April 26, 2013, we were in compliance with all covenants associated with the Senior Notes.

1.75% Convertible Senior Notes due 2013

On June 10, 2008, we issued $1,265.0 million aggregate principal amount of the Convertible Notes, with a maturity date of June 1, 2013 as described below. The Convertible Notes are unsecured, unsubordinated obligations of the Company, which pay interest in cash semi-annually at a rate of 1.75% per annum. Prior to maturity, the Convertible Notes may be converted based on an initial conversion rate of 31.40 shares of common stock per $1,000 principal amount of Convertible Notes (which represents an initial effective conversion price of the Convertible Notes of $31.85 per share). The Convertible Notes are not redeemable by us prior to the maturity date.

Prior to March 1, 2013, the holders of the Convertible Notes may have converted their Convertible Notes until the close of business on the scheduled trading day immediately preceding the maturity date if during any calendar quarter (and only during such calendar quarter) the last reported sale price of our common stock for 20 or more trading days in a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter exceeds 130% of the applicable conversion price in effect for the Convertible Notes on the last trading day of such immediately preceding calendar quarter; or upon other conditions set forth in the indenture for the Convertible Notes. On or after March 1, 2013, until the scheduled trading day immediately preceding the maturity date, holders of the Convertible Notes may be converted the Convertible Notes regardless of the foregoing conditions.

Our common stock price exceeded the conversion threshold for the Convertible Notes for at least 20 trading days during the 30 consecutive trading days ended March 31, 2012. Accordingly, as of April 27, 2012, the Convertible Notes were convertible at the option of the holders and, therefore, the carrying value of the Convertible Notes was classified as current portion of long-term debt. Since the Convertible Notes were convertible at the option of the holders and the principal amount was payable in cash, the difference between the principal amount and the carrying value of the Convertible Notes was reflected as equity on our consolidated balance sheet as of April 27, 2012.

Upon conversion, a holder will receive cash in an amount equal to the lesser of the conversion value and the principal amount of the Convertible Notes, and shares of our common stock for any conversion value in excess of the principal amount of the Convertible Notes, if any. As of April 26, 2013, shares issued related to the Convertible Notes were minimal. Based on the closing price of our common stock of $34.87 on April 26, 2013, the if-converted value of our Convertible Notes exceeds their principal amount by approximately $120.1 million. See Note 18 regarding the settlement of our Convertible Notes in June 2013.

We separately account for the liability and equity components of the Convertible Notes. The initial debt component of the Convertible Notes was valued at $1,017.0 million based on the contractual cash flows discounted at an appropriate comparable market non-convertible debt borrowing rate at the date of issuance of 6.31%, with the equity component representing the residual amount of the proceeds of $248.0 million which was recorded as a debt discount. Issuance costs were allocated pro-rata based on the relative initial carrying amounts of the debt and equity components. As a result, $5.2 million of the issuance costs was allocated to the equity component of the Convertible Notes, and $21.4 million of the issuance costs remained classified as other non-current assets. The debt discount and the issuance costs allocated to the debt component are amortized as additional interest expense over the term of the Convertible Notes using the effective interest method. As of April 26, 2013 and April 27, 2012, the aggregate of the mezzanine and permanent equity component of the Convertible Notes was $244.9 million.

Convertible Note Hedges and Warrants

Concurrent with the issuance of the Convertible Notes, we purchased Convertible Note hedges and sold warrants. The separate Convertible Note hedge and warrant transactions are structured to reduce the potential future economic dilution associated with the conversion of the Convertible Notes.

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Convertible Note Hedges: As of April 26, 2013 and April 27, 2012, we had arrangements with counterparties to buy up to approximately 31.8 million shares of our common stock, subject to anti-dilution adjustments, at a price of $31.85 per share, subject to adjustment. The Convertible Note hedge transactions expire at the earlier of (1) the last day on which any Convertible Notes remain outstanding or (2) the scheduled trading day immediately preceding the maturity date of the Convertible Notes. Upon exercise of the Convertible Note hedges, we have the option to receive cash or shares of our common stock equal to the difference between the then market price and the strike price of the Convertible Note hedges. See Note 18 regarding the exercise of our Convertible Note hedges in June 2013.

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Warrants: As of April 26, 2013 and April 27, 2012, we had outstanding warrants for others to acquire, subject to anti-dilution adjustments, 39.7 million shares of our common stock at an exercise price of $41.28 per share, subject to adjustment, on a series of days commencing on September 3, 2013. Upon exercise of the warrants, we have the option to deliver cash or shares of our common stock equal to the difference between the then market price and the strike price of the warrants.

As of April 26, 2013, we were subject to potential dilution on the approximately 20% unhedged portion of our Convertible Notes upon conversion, if on the date of conversion, the per-share market price of our common stock exceeded the conversion price of $31.85. As of April 26, 2013, we received a minimal number of shares related to the Convertible Note hedge transactions.

Interest Expense on Convertible Notes

The following table presents the amount of interest expense recognized related to the Convertible Notes (in millions):


	Year Ended
	April 26, 2013			April 27, 2012			April 29, 2011
Contractual coupon interest expense	$	22.0		$	22.0		$	22.1
Amortization of debt discount		55.5			52.0			48.9
Amortization of debt issuance costs		4.8			4.5			4.2
Less capitalized interest		(1.1	)		(5.0	)		0.0

Total interest expense related to Convertible Notes	$	81.2		$	73.5		$	75.2

The following table reflects the remaining debt discount related to the Convertible Notes (in millions):


	April 26, 2013		April 27, 2012
Unamortized discount	$	7.1	$	62.6

Debt Maturities

As of April 26, 2013, our aggregate future principal debt maturities are as follows (in millions):


Fiscal Year	Amount
2014	$	1,264.9
2015		0.0
2016		0.0
2017		0.0
2018		750.0
Thereafter		250.0

Total	$	2,264.9

Credit Facility

In December 2012, we entered into a credit agreement with a syndicated group of lenders that provides for an unsecured $250.0 million five-year revolving credit facility that is comprised of revolving loans, Eurocurrency loans and/or swingline loans. The credit facility includes a $100.0 million foreign currency sub-facility, a $50.0 million letter of credit sub-facility and a $10.0 million swingline sub-facility available on same-day notice. Available borrowings under the credit facility are reduced by the amount of any outstanding borrowings on the sub-facilities. We may also, subject to certain requirements, request an increase in the facility up to an additional $100.0 million and request two additional one-year extensions, subject to certain conditions. The proceeds from the facility may be used by us for general corporate purposes.

Borrowings under the facility, except for swingline loans, accrue interest in arrears at an alternate base rate as defined in the credit agreement or, at our option, an adjusted London Interbank Offered Rate (LIBOR) plus in each case, a spread (based on our public debt ratings and the type of loan) ranging from 0.2% to 1.2%. Swingline borrowings accrue interest at an alternate base rate. In addition, we are required to pay fees to maintain the credit facility, whether or not we have outstanding borrowings. The facility terminates on December 21, 2017 if no extensions have been requested and contains financial covenants requiring us to maintain a maximum leverage ratio of not more than 3.0:1.0 and a minimum interest coverage ratio of not less than 3.5:1.0. The facility contains customary affirmative and negative covenants, including covenants that limit our ability to incur debt secured by liens on assets or indebtedness of our subsidiaries and to consolidate, merge or sell all or substantially all of our assets. As of April 26, 2013, no borrowings were outstanding under the facility and we were in compliance with all covenants associated with the facility.

Other Long-Term Financing Arrangements

The following presents the amounts due under other long-term financing arrangements (in millions):


	April 26, 2013		April 27, 2012
Current portion of other long-term financing arrangements	$	5.2	$	9.1
Non-current portion of other long-term financing arrangements		5.6		3.5

Total	$	10.8	$	12.6