Convertible Notes, Other Debts And Capital Leases (Tables)

3 Months Ended

Apr. 01, 2016

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments

The following table presents the components of the Notes as of April 1, 2016 (in thousands, except for years and percentages):



	April 1, 2016			December 31, 2015
Liability:
Principal amount	$	128,250		$	128,250
Less: Debt discount, net of amortization	(25,673		)	(26,732		)
Less: Debt issuance costs, net of amortization	(3,095		)	(3,223		)
Carrying amount	$	99,482		$	98,295
Remaining amortization period (years)	4.7			4.9
Effective interest rate on liability component	9.94		%	9.94		%

Equity:
Value of conversion option	$	26,925		$	26,925
Less: Equity issuance costs	(863		)	(863		)
Carrying amount	$	26,062		$	26,062

Convertible Debt Interest

The following table presents interest expense recognized for the Notes (in thousands):



	Three months ended
	April 1, 2016		April 3, 2015
Contractual interest expense	$	1,283	$	—
Amortization of debt discount	1,059		—
Amortization of debt issuance costs	128		—
Total interest expense recognized	$	2,470	$	—

Schedule of Other Debt and Capital Leases

In connection with the TVN acquisition, the Company assumed a variety of debt and credit facilities in France to satisfy the financing requirements of TVN operations. These arrangements are summarized in the table below (in thousands):



	April 1, 2016
Financing from French government agencies related to various government incentive programs ⁽¹⁾	$	18,980
Term loans ⁽²⁾	1,721
Secured borrowings ⁽³⁾	1,837
Obligations under capital leases	2,769
Total debt obligations	25,307
Less: current portion	(8,843		)
Long-term portion	$	16,464

Other than the 4.00% Notes, the Company did not have any other indebtedness as of December 31, 2015.

(1) As of April 1, 2016, the Company’s TVN French Subsidiary had an aggregate of $19.0 million of loans due to various financing programs of French government agencies, $15.3 million of which is related to loans backed by French R&D tax credit receivables. As of April 1, 2016, the TVN French Subsidiary had an aggregate of $27.6 million of R&D tax credit receivables from the French government from June 2016 through June 2018. (See Note 8, “Balance Sheet Components-Prepaid expenses and other current assets” for more information). This R&D tax loan has a fixed rate of 0.6%, plus EURIBOR 1 month + 1.3% and matures between 2016 through 2018. The remaining loans of $3.7 million at April 1, 2016 primarily relates to financial support from French government agencies for R&D innovation projects at minimal interest rates and these loans mature between 2020 through 2023.

(2) One of the term loans with a certain financial institution contains annual covenants that require the TVN French Subsidiary to maintain a minimum working capital balance and various other financial covenants and restrictions that limit the French Subsidiary’s ability to incur additional indebtedness. The annual covenant is based on French statutory year-end results and the French subsidiary was in compliance for 2015.

(3) The TVN French Subsidiary obtained advances under a credit line with BPI France against a pool of eligible receivables with recourse. The maximum advance under this credit line for receivables is €2 million, less applicable fees, and €200,000 of cash is pledged for this program. This credit line will expire in July 2016 unless renewed pursuant to the terms of the credit agreement and the Company plans to renew the credit line for an additional year prior to its expiration. The TVN French Subsidiary also entered into an accounts receivable financing agreement with GE Capital Cofacredit, (“GE”) on September 27, 2013, which is subject to automatic renewal unless cancelled. GE advances up to 90% of qualified customer invoices and holds the remaining 10% as a guarantee fund up with a minimum of €80,000. In addition, another 10% of outstanding receivables is set aside in a holdback receivable and released upon payments received from the customers. These arrangements are treated as secured borrowings in accordance with FASB ASC 860, Transfers and Servicing.

Schedule of Maturities of Long-term Debt

The table below shows the future minimum repayments of debts and capital lease obligations as of April 1, 2016 (in thousands):



Years ending December 31,	Capital lease obligations		Debt obligations
2016 (remaining nine months)	$	903	$	7,562
2017	1,234		5,735
2018	538		5,895
2019	68		1,023
2020	26		678
Thereafter	—		1,645
Total	$	2,769	$	22,538