LONG-TERM DEBT AND OTHER BORROWINGS (Tables)

3 Months Ended

Sep. 25, 2016

As of September 25, 2016 and June 26, 2016, the Company's outstanding debt consisted of the following:



	September 25, 2016						June 26, 2016
	Amount (in thousands)				Effective Interest Rate		Amount (in thousands)				Effective Interest Rate
Fixed-rate 1.25% Convertible Notes Due May 15, 2018 ("2018 Notes")	$	449,947		⁽¹⁾	5.27	%	$	449,954		⁽³⁾	5.27	%
Fixed-rate 2.75% Senior Notes Due March 15, 2020 ("2020 Notes")	500,000				2.88	%	500,000				2.88	%
Fixed-rate 2.80% Senior Notes Due June 15, 2021 ("2021 Notes")	800,000				2.95	%	800,000				2.95	%
Fixed-rate 3.45% Senior Notes Due June 15, 2023 ("2023 Notes")	600,000				3.60	%	600,000				3.60	%
Fixed-rate 3.80% Senior Notes Due March 15, 2025 ("2025 Notes")	500,000				3.87	%	500,000				3.87	%
Fixed-rate 3.90% Senior Notes Due June 15, 2026 ("2026 Notes")	1,000,000				4.01	%	1,000,000				4.01	%
Fixed-rate 2.625% Convertible Notes Due May 15, 2041 ("2041 Notes")	699,883			⁽¹⁾	4.28	%	699,895			⁽³⁾	4.28	%
Total debt outstanding, at par	4,549,830						4,549,849
Unamortized discount	(226,811		)				(232,727		)
Fair value adjustment - interest rate contracts	7,592						8,552
Unamortized bond issuance costs	(6,781		)				(7,213		)	⁽⁴⁾
Total debt outstanding, at carrying value	$	4,323,830					$	4,318,461
Reported as:
Current portion of long-term debt	$	945,836		⁽²⁾			$	940,537		⁽²⁾
Long-term debt	3,377,994						3,377,924
Total debt outstanding, at carrying value	$	4,323,830					$	4,318,461

____________________________

⁽¹⁾ As of September 25, 2016, these notes were convertible at the option of the bondholder, as a result of the condition described in (2) below. Upon closure of the conversion period, Notes not converted will be reclassified back into noncurrent liabilities and the temporary equity will be reclassified into permanent equity.

⁽²⁾ As of the report date the market value of the Company's Common Stock was greater than 130% of the convertible notes conversion price for 20 or more of the 30 consecutive trading days preceding the quarter-end. As a result, the convertible notes were classified in current liabilities and a portion of the equity component, representing the unamortized discount, was classified in temporary equity on the Company's Consolidated Balance Sheets.

⁽³⁾ As of June 26, 2016, these notes were convertible at the option of the bond holder, as a result of the condition described in (2) above.

⁽⁴⁾The Company adopted ASU 2015-3, regarding the simplification of the presentation of bond issuance costs, which requires that bond issuance costs related to a recognized liability be presented on the balance sheet as a direct reduction from the carrying amount of that debt liability, consistent with debt discounts. The Company applied the accounting standard update on a retrospective basis by reclassifying the presentation of bond issuance costs totaling $1.76 million which was originally included in prepaid assets and other current assets against current portion of convertible notes and capital leases, and $5.45 million which was originally included in other assets against senior notes, convertible notes, and capital leases, less current portion on the Condensed Consolidated Balance Sheets for June 26, 2016. There is no impact to the Company's Condensed Consolidated Statements of Operation, Stockholders' Equity, or Cash Flows for the fiscal year ended June 26, 2016.

Components of Convertible Notes

Selected additional information regarding the Convertible Notes outstanding as of September 25, 2016 and June 26, 2016, the Convertible Notes consisted of the following:



	September 25, 2016				June 26, 2016
	2018 Notes		2041 Notes		2018 Notes		2041 Notes
	(in thousands, except years, percentages, conversion rate, and conversion price)
Carrying amount of permanent equity component, net of tax	$	77,064	$153,384		$	72,992	$	152,397
Carrying amount of temporary equity component, net of tax	$	27,818	$	174,649	$	31,894	$	175,658
Remaining amortization period (years)	1.6		24.6		1.9		24.9
Fair Value of Notes (Level 2)	$	701,242	$	1,906,194
Conversion rate (shares of common stock per $1,000 principal amount of notes)	16.3893		29.4126
Conversion price (per share of common stock)	$	61.02	$	34.00
If-converted value in excess of par value	$	226,868	$	1,189,443
Estimated share dilution using average quarterly stock price $90.25 per share	2,389		12,830

Warrants and Convertible Note Hedge Arrangements

The following table presents the details of the warrants and convertible note hedge arrangements as of September 25, 2016:



	2016 Notes		2018 Notes
	(shares in thousands)
Warrants:
Underlying shares	3,098		7,375
Estimated share dilution using average quarterly stock price $90.25 per share	694		1,354
Exercise price	$	69.07	$	73.68
Expiration date range	August 15 - October 21, 2016		August 15 - October 23, 2018
Convertible Note Hedge:
Number of shares available from counterparties	—		7,374
Exercise price	$	—	$	61.02

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block]

Selected additional information regarding the Senior Notes outstanding as of September 25, 2016 is as follows:



	Remaining Amortization period	Fair Value of Notes (Level 2)
	(years)	(in thousands)
2020 Notes	3.4	$	501,375
2021 Notes	4.7	$	821,224
2023 Notes	*	$	615,000
2025 Notes	8.4	$	514,100
2026 Notes	*	$	1,046,340

* As a result of the October 5, 2016 termination of the Agreement and Plan of Merger and Reorganization with KLA-Tencor (see Note 15 for additional information), the 2023 Notes and the 2026 Notes were redeemed on October 13, 2016 under the Special Mandatory Redemption terms of the indenture governing these Notes.

Schedule of Recognized Interest Cost Relating to Both Contractual Interest Coupon and Amortization of Discount on Liability Component of Notes

The following table presents the amount of interest cost recognized relating to both the contractual interest coupon and amortization of the debt discount, issuance costs, and effective portion of interest rate contracts with respect to the Convertible Notes, the Senior Notes, the term loan agreement and the revolving credit facility during the three months ended September 25, 2016 and September 27, 2015.



	Three Months Ended
	September 25, 2016			September 27, 2015
	(in thousands)
Contractual interest coupon	$	34,712		$	14,451
Amortization of interest discount	5,914			9,122
Amortization of issuance costs	918			652
Effect of interest rate contracts, net	(1,058		)	94
Total interest cost recognized	$	40,486		$	24,319