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Debt
9 Months Ended
Sep. 30, 2018
Debt  
Debt

6. Debt

 

Our debt consists of:

 

 

 

 

 

 

 

 

 

 

September 30,

 

December 31,

(In thousands)

    

2018

    

2017

Term B Loan

 

$

13,750

 

$

243,750

2023 Notes

 

 

240,984

 

 

240,984

2025 Notes

 

 

192,500

 

 

192,500

Total debt

 

 

447,234

 

 

677,234

Unamortized debt discount and issuance costs

 

 

(66,232)

 

 

(77,872)

Current portion of Term B Loan

 

 

 —

 

 

(25,000)

Net long-term debt

 

$

381,002

 

$

574,362

 

Prepayments of Senior Secured Term Loans

 

On February 28 and August 1, 2018, we prepaid the principal balance of the Term B Loan by $120.0 million and $110.0 million, respectively. With the prepayments, we incurred a loss on the extinguishment of debt of $3.1 million and $2.6 million, respectively, representing unamortized debt issuance costs. The loss on the extinguishment of debt is  presented as part of other expense, net in our consolidated statements of operations. As of September 30, 2018, the outstanding principal balance of the Term B Loan was $13.8 million.

 

Convertible Senior Notes Due 2025

 

In accordance with accounting guidance for debt with conversion and other options, we separately account for the liability and equity components of the 2025 Notes by allocating the proceeds between the liability component and the embedded conversion option (“equity component”) due to our ability to settle the conversion obligation of the 2025 Notes in cash, common stock or a combination of cash and common stock, at our option. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature using the income approach. The allocation was performed in a manner that reflected our non-convertible debt borrowing rate for similar debt. The equity component of the 2025 Notes was recognized as a debt discount and represents the difference between the proceeds from the issuance of the 2025 Notes and the fair value of the liability of the 2025 Notes on the date of issuance. The excess of the principal amount of the liability component over its carrying amount (“debt discount”) is amortized to interest expense using the effective interest method. The equity component is not re-measured as long as it continues to meet the conditions for equity classification.

 

Our outstanding 2025 Notes balances as of September 30, 2018, consisted of the following:

 

 

 

 

 

(In thousands)

    

 

 

Liability component

 

 

 

Principal

 

$

192,500

Debt discount and issuance costs, net

 

 

(63,460)

Net carrying amount

 

$

129,040

Equity component, net

 

$

65,361

 

In connection with the issuance of the 2025 Notes, we incurred approximately $5.4 million of debt issuance costs, which primarily consisted of placement, legal and other professional fees, and allocated these costs to the liability and equity components based on the allocation of the proceeds. Of the total $5.4 million of debt issuance costs, $1.9 million were allocated to the equity component and recorded as a reduction to additional paid-in capital and $3.5 million were allocated to the liability component and recorded as a reduction to the carrying amount of the liability component on the consolidated balance sheet. The portion allocated to the liability component is amortized to interest expense over the expected life of the 2025 Notes using the effective interest method.

 

The following table sets forth total interest expense recognized related to the 2025 Notes for the three and nine months ended September 30, 2018 and 2017:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

(In thousands)

    

2018

 

2017

 

2018

 

2017

Contractual interest expense

    

$

1,203

    

$

722

    

$

3,596

    

$

722

Amortization of debt issuance costs

 

 

127

 

 

69

 

 

375

 

 

69

Amortization of debt discount

 

 

1,532

 

 

834

 

 

4,507

 

 

834

Total interest and amortization expense

 

$

2,862

 

$

1,625

 

$

8,478

 

$

1,625

 

Debt Maturities

 

The aggregate scheduled maturities of our long-term debt (consisting of our Term B Loan, 2023 Notes and 2025 Notes) as of September 30, 2018, are as follows:

 

 

 

 

 

(In thousands)

    

 

 

Years ending December 31:

 

 

 

2018 to 2021

 

$

 —

2022

 

 

13,750

Thereafter

 

 

433,484

Total

 

$

447,234