Long-Term Debt

6 Months Ended

Jun. 30, 2012

Long-Term Debt

Long-Term Debt

6. Long-Term Debt

The estimated fair value of debt was estimated based on the quoted price of the instrument as of June 30, 2012 and December 31, 2011. The carrying values and estimated fair values for the notes were as follows:

	June 30, 2012				December 31, 2011
	Carrying		Estimated Fair Value		Carrying		Estimated Fair Value
(in thousands)	Value		(Level 2)		Value		(Level 2)
Convertible subordinated notes	$	172,500	$	183,549	$	172,500	$	189,588

Convertible Subordinated Notes

In January 2008, the Company closed an underwritten public offering of $172.5 million aggregate principal amount of unsecured convertible subordinated notes which will mature on January 15, 2015. The financing raised proceeds, net of issuance costs, of $166.7 million. The notes bear interest at the rate of 3.0% per year, that is payable semi-annually in arrears in cash on January 15 and July 15 of each year, beginning on July 15, 2008.

The notes are convertible, at the option of the holder, into shares of the Company’s common stock at an initial conversion rate of 38.6548 shares per $1,000 principal amount of the notes, subject to adjustment in certain circumstances, which represents an initial conversion price of approximately $25.87 per share. The debt issuance costs, which are included in other long-term assets, are being amortized on a straight-line basis over the life of the notes. Unamortized debt issuance costs totaled $2.1 million as of June 30, 2012. Amortization expense was $0.2 million for both the three months ended June 30, 2012 and 2011 and $0.4 million for both the six months ended June 30, 2012 and 2011.

Holders of the notes will be able to require the Company to repurchase some or all of their notes upon the occurrence of a fundamental change (as defined) at 100% of the principal amount of the notes being repurchased plus accrued and unpaid interest. The Company may not redeem the notes prior to January 15, 2012. On or after January 15, 2012 and prior to the maturity date, the Company, upon notice of redemption, may redeem for cash all or part of the notes if the last reported sale price of its common stock has been greater than or equal to 130% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period prior to the date on which it provides notice of redemption. The redemption price will equal 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest up to but excluding the redemption date. As of June 30, 2012, the Company did not provide notice of redemption or redeem any of the notes.