Convertible Notes, Other Debts And Capital Leases (Tables)

3 Months Ended

Mar. 31, 2017

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments

The following table presents the components of the Notes as of March 31, 2017 and December 31, 2016 (in thousands, except for years and percentages):



	March 31, 2017			December 31, 2016
Liability:
Principal amount	$	128,250		$	128,250
Less: Debt discount, net of amortization	(21,128		)	(22,302		)
Less: Debt issuance costs, net of amortization	(2,547		)	(2,689		)
Carrying amount	$	104,575		$	103,259
Remaining amortization period (years)	3.7			3.9
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
	March 31, 2017		April 1, 2016
Contractual interest expense	$	1,283	$	1,283
Amortization of debt discount	1,174		1,059
Amortization of debt issuance costs	142		128
Total interest expense recognized	$	2,599	$	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):



	March 31, 2017			December 31, 2016
Financing from French government agencies related to various government incentive programs ⁽¹⁾	$	17,586		$	17,930
Term loans ⁽²⁾	1,353			1,400
Secured borrowings ⁽³⁾	—			—
Obligations under capital leases	1,630			1,860
Total debt obligations	20,569			21,190
Less: current portion	(6,802		)	(7,275		)
Long-term portion	$	13,767		$	13,915

(1) As of March 31, 2017, the Company’s TVN French Subsidiary had an aggregate of $17.6 million of loans due to various financing programs of French government agencies, $14.9 million of which is related to loans backed by R&D tax credit receivables. As of March 31, 2017, the TVN French Subsidiary had an aggregate of $27.5 million of R&D tax credit receivables from the French government from 2017 through 2020. (See Note 8, “Balance Sheet Components-Prepaid expenses and other current assets,” for more information). These tax loans have a fixed rate of 0.6%, plus EURIBOR 1 month + 1.3% and mature between 2017 through 2019. The remaining loans of $2.7 million at March 31, 2017 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 TVN French Subsidiary failed the 2016 covenant test primarily due to the Company’s plan to integrate TVN’s operations into other subsidiaries for tax planning and logistics purposes. In early 2017, the Company informed the financial institution of the 2016 covenant test results and was told by the financial institution to continue with the original payment schedule. The Company reported the entire loan balance with this financial institution under “Other debts and capital lease obligations, current” in the Condensed Consolidated Balance Sheets. The loan balance was approximately $0.4 million at both March 31, 2017 and December 31, 2016.

(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 (approximately $2.1 million as converted using the exchange rate at March 31, 2017), less applicable fees, and €200,000 (approximately $0.2 million as converted using the exchange rate at March 31, 2017) of cash is pledged for this program. This credit line was renewed in July 2016 for an additional year with no material change to the terms of the credit agreement. There was no balance outstanding to BPI France as of March 31, 2017.

Schedule of Maturities of Long-term Debt

The table below shows the future minimum repayments of debts and capital lease obligations as of March 31, 2017 (in thousands):



Years ending December 31,	Capital lease obligations		Other Debt obligations
2017 (remaining nine months)	$	726	$	5,704
2018	814		5,504
2019	65		6,356
2020	25		563
2021	—		459
Thereafter	—		353
Total	$	1,630	$	18,939