BALANCE SHEET COMPONENTS

The following tables provide details of selected balance sheet components (in thousands):



	September 30, 2016			December 31, 2015
Accounts receivable, net:
Accounts receivable	$	103,511		$	73,855
Less: allowances for doubtful accounts, returns and discounts	(4,433		)	(4,340		)
Total	$	99,078		$	69,515



	September 30, 2016		December 31, 2015
Prepaid expenses and other current assets:
Prepaid inventories to contract manufacturer⁽¹⁾	$	4,736	$	8,500
Prepaid maintenance, royalty, rent and property taxes	7,003		5,974
Other Prepayments	4,730		2,762
Deferred cost of revenue	10,470		4,601
French R&D tax credits receivable⁽²⁾	6,279		—
Restricted cash⁽³⁾	1,341		1,093
Other	3,960		2,073
Total	$	38,519	$	25,003

(1) From time to time, the Company makes advance payment to a supplier for future inventory in order to secure more favorable pricing. As of September 30, 2016, the Company had $8.5 million of prepaid inventory and accounts payable of approximately $3.8 million with one of its suppliers. Based on the agreement with this supplier, the Company has the right to set off the amount owed with the amount owed by the supplier, and in October 2016, according to the terms of the supplier agreement, the Company notified the supplier of its intent to net the balances in the fourth quarter of 2016. Based on the guidance in ASC 210-20, as of September 30, 2016, the Company took a net position on the balance sheet and elected to net $3.8 million of prepaid inventories with accounts payable.

(2) The Company’s acquired TVN subsidiary in France (the “TVN French Subsidiary”) participates in the French Crédit d’Impôt Recherche (“CIR”) program (the “R&D tax credits”) which allows companies to monetize eligible research expenses. The French R&D tax credits can be used to offset against income tax payable to the French government in each of the four years after being incurred, or if not utilized, are recoverable in cash. The amount of French R&D tax credits recoverable are subject to audit by the French government and during the second quarter of 2016, the French government approved the 2012 claim and refunded $5.8 million to the TVN French Subsidiary. The remaining R&D tax credit receivables at September 30, 2016 were approximately $25.1 million and are expected to be recoverable from 2017 through 2020 with $6.3 million reported under “Prepaid and other Current Assets” and $18.8 million reported under “Other Long-term Assets” on the Company’s Condensed Consolidated Balance Sheets. Pursuant to the TVN Purchase Agreement, the Company is indemnified by the selling shareholders with respect to the validity and recoverability of the outstanding TVN French Subsidiary R&D tax credit receivables.

(3) The restricted cash balances are primarily held as cash collateral security for certain bank guarantees. These restricted funds are invested in bank deposits and cannot be withdrawn from the Company’s accounts without the prior written consent of the applicable secured party. Additionally, as of September 30, 2016, the Company recorded approximately $1.1 million of restricted cash for the bank guarantee associated with the TVN French Subsidiary’s office building lease. This amount is reported under “Other Long-term Assets” on the Company’s Condensed Consolidated Balance Sheets.



	September 30, 2016		December 31, 2015
Inventories:
Raw materials	$	9,417	$	5,421
Work-in-process	1,328		1,950
Finished goods	13,397		19,827
Service-related spares	11,686		11,621
Total	$	35,828	$	38,819



	September 30, 2016			December 31, 2015
Property and equipment, net:
Furniture and fixtures	$	9,110		$	7,808
Machinery and equipment	99,172			93,010
Capitalized software	34,703			29,391
Leasehold improvements	14,005			10,000
Property and equipment, gross	156,990			140,209
Less: accumulated depreciation and amortization	(121,845		)	(113,197		)
Total	$	35,145		$	27,012



	September 30, 2016		December 31, 2015
Accrued Liabilities:
Accrued employee compensation and related expenses	$	18,420	$	12,083
Accrued sales and use tax and property taxes	1,861		1,743
Accrued warranty	5,079		3,913
Accrued royalty payments	2,597		873
Contingent inventory reserves	2,485		1,315
Customer deposits	5,020		953
Others	14,907		10,474
Total	$	50,369	$	31,354

The TVN acquisition was subject to post-closing adjustments capped at (i) the difference between €76 million (approximately $83.3 million as converted from euros into U.S. dollars using an agreed upon average exchange rate) and $75 million, with respect to an adjustment based on TVN’s 2015 revenue, and (ii) up to $5 million with respect to an adjustment based on TVN’s 2015 backlog that ships during the first half of 2016. The Company paid $3.5 million upon the finalization of the revenue and working capital adjustments in the second quarter of 2016 and $2.5 million upon the finalization of the backlog adjustment in the third quarter of 2016. As of September 30, 2016, there were no amounts of TVN contingent consideration which remained outstanding.