Debt Obligations

9 Months Ended

Sep. 30, 2014

Debt Obligations

On July 25, 2011, the Company issued $60,000 aggregate principal amount of 3.75% Convertible Senior Notes due 2016 (the “Notes”) at par. The Notes were issued pursuant to an indenture, dated as of July 25, 2011, between the Company and Bank of New York Mellon Trust Company, N.A., as Trustee, which includes a form of Note. The Notes provide for the payment of interest semi-annually in arrears on January 15 and July 15 of each year, beginning January 15, 2012, at an annual rate of 3.75% and will mature on July 15, 2016, unless earlier converted or repurchased. The Notes may be converted, under certain circumstances, based on an initial conversion rate of 77.241 shares of Company common stock per $1 principal amount of Notes, which represents an initial conversion price of approximately $12.95 per share. Concurrently with the issuance of the Notes, the Company purchased a convertible note hedge and sold a warrant. Each of the convertible note hedge and warrant transactions were entered into with an affiliate of the initial purchaser of the Notes. The convertible note hedge is intended to reduce the potential future dilution to the Company’s common stock associated with the conversion of the Notes. However, the warrant transaction will have a dilutive effect on the Company’s earnings per share to the extent that the price of the Company’s common stock exceeds the strike price of the warrant. The strike price of the warrant is $17.00 per share subject to adjustment in accordance with the terms of the agreement. The net proceeds to the Company from the sale of the Notes, including the convertible note hedge and warrant were $50,249.

The following table reflects the net carrying value of the Notes:



	September 30, 2014		December 31, 2013
Convertible senior notes	$	60,000	$	60,000
Less: Unamortized interest discount	6,003		8,249
Net carrying value of convertible senior notes	$	53,997	$	51,751

The following table presents the amount of interest cost recognized relating to the Notes during the three and nine months ended September 30, 2014 and September 30, 2013.



	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Contractual interest coupon	$	563	$	562	$	1,688	$	1,686
Amortization of interest discount	772		700		2,246		2,037
Amortization of debt issuance costs	94		79		268		224
Total interest cost recognized	$	1,429	$	1,341	$	4,202	$	3,947

The remaining bond discount of the Notes of $6,003, as of September 30, 2014, will be amortized over the remaining life of the Notes.

- 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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