Borrowing Arrangements

3 Months Ended

Dec. 30, 2011

BORROWING ARRANGEMENTS

LONG-TERM DEBT

On March 2, 2007, the Company issued $200.0 million aggregate principal amount of convertible subordinated notes ("2007 Convertible Notes"). The offering contained two tranches. The first tranche consisted of $100.0 million of 1.25% convertible subordinated notes due March 2010 (the "1.25% Notes") which have been retired. The second tranche consisted of $100.0 million aggregate principal amount of 1.50% convertible subordinated notes due March 2012 (the "1.50% Notes"). During the three months ended December 30, 2011, the Company redeemed and retired $9.4 million of aggregate principal amount of the 1.50% Notes, paying a cash premium of $5.6 million which was accounted for as a reacquisition of equity instruments in accordance with ASC 470-20 - Debt, Debt with Conversions and Other Options ("ASC 470-20"). As of December 30, 2011, the remaining aggregate principal amount of the 1.50% Notes was $17.3 million, which the Company redeemed and retired subsequent to the Balance Sheet date for total cash paid of $32.8 million (including premium).

On October 3, 2009, the Company adopted ASC 470-20 which requires the issuer of convertible debt instruments with cash settlement features to separately account for the liability and equity components of the convertible debt instrument and requires retrospective application to all periods presented in the financial statements to which it is applicable. ASC 470-20 applies to the Company's 2007 Convertible Notes. Using a non-convertible borrowing rate of 6.86%, the Company estimated the fair value of the liability component of the $100.0 million aggregate principal amount of the 1.50% Notes to be $77.3 million as of October 3, 2009. As of the issuance date, the difference between the fair value of the liability component of the 1.50% Notes and the corresponding aggregate principal amount of such notes, which is equal to the fair value of the equity component of the 1.50% Notes, $22.7 million, was retrospectively recorded as a debt discount and as an increase to additional paid-in capital, net of tax. The remaining unamortized discount of the liability component of the 1.50% Notes was written off in January 2012 to correspond with the retirement of the remaining outstanding aggregate principal amount of the 1.50% Notes.

The following tables provide additional information about the Company's 2007 Convertible Notes (in thousands):



	As of
	December 30, 2011			September 30, 2011
Equity component of the convertible notes outstanding	$	3,926		$	6,061
Principal amount of the convertible notes	17,277			26,677
Unamortized discount of the liability component	154			588
Net carrying amount of the liability component	17,123			26,089

	Three-months Ended
	December 30, 2011			December 31, 2010
Effective interest rate on the liability component	6.86		%	6.86		%
Cash interest expense recognized (contractual interest)	$	97		$	100
Effective interest expense recognized	$	351		$	328

The number of shares underlying the remaining 1.50% Notes was approximately 1.8 million at December 30, 2011.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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