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DEBT | 9 Months Ended
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Sep. 30, 2018
DEBT [Abstract] |
DEBT |
11. | DEBT
Existing Credit Agreement On October 9, 2014, the Company entered into a Credit Agreement (the “Existing Credit Agreement”) with various financial institutions, and Bank of America, N.A. as administrative agent. The Existing Credit Agreement provided for a $127.5 million term loan facility, a 6.6 billion Japanese yen term loan facility and a $187.5 million revolving credit facility, each with a term of five years. On October 10, 2014, the Company drew the full amount of the term loan facilities. On April 18, 2018, the Company repaid the full balance that was outstanding under the Existing Credit Agreement. As of September 30, 2018 and December 31, 2017, the Company had an outstanding balance of zero and $47.5 million, respectively, on the revolving credit facility. The Existing Credit Agreement required that the Company maintain a consolidated leverage ratio not exceeding 2.25 to 1.00 and a consolidated interest coverage ratio of no less than 3.00 to 1.00. New Credit Agreement On April 18, 2018, the Company entered into a Credit Agreement (the “New Credit Agreement”) with several financial institutions as lenders and Bank of America, N.A., as administrative agent. The New Credit Agreement provides for a $400 million term loan facility and a $350 million revolving credit facility, each with a term of five years. Concurrently with the closing of the New Credit Agreement, the Company drew the full amount of the term loan facility and $78.5 million of the revolving facility, each of which initially bear interest at the London Interbank Offered Rate (“LIBOR”), plus 2.25%. The interest rate applicable to the facilities is subject to adjustment based on the Company’s consolidated leverage ratio. The term loan facility will amortize in quarterly installments in amounts resulting in an annual amortization of 5.0% during the first and second years, 7.5% during the third and fourth years and 10.0% during the fifth year after the closing date of the New Credit Agreement, with the remainder payable at final maturity. The New Credit Agreement requires the Company to maintain a consolidated leverage ratio not exceeding 2.25 to 1.00 and a consolidated interest coverage ratio of no less than 3.00 to 1.00. Convertible Note On June 16, 2016, the Company issued $210.0 million of convertible senior notes (the “Convertible Notes”) in a private offering to a Chinese investor (the “Holder”). The Convertible Notes were senior unsecured obligations which ranked equal in right of payment to all senior unsecured indebtedness of the Company and ranked senior in right of payment to any indebtedness that was contractually subordinated to the Convertible Notes. Interest on the Convertible Notes was payable semiannually in arrears on June 15 and December 15 of each year at a rate of 4.75% per annum. The Convertible Notes had a stated maturity date of June 15, 2020, unless repurchased or converted prior to maturity. Prior to the stated maturity date, the Company could, at its option, redeem all or part of the Convertible Notes at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, provided that its common stock share price was equal to or exceeded 180% of the applicable conversion price for 20 or more trading days (including the final three trading days) in the 30 consecutive trading days prior to the Company’s exercise of such redemption right. The Holder of the Convertible Notes could, at its option, cause the Company to repurchase all of such Holder’s Convertible Notes or any portion thereof that was equal to $1,000 in principal amount or multiples of $1,000 upon a change in control or a termination of trading of the Company’s common stock, as those terms were defined in the indenture governing the Convertible Notes. In addition, the Holder of the Convertible Notes had the right, at such Holder’s option, to convert all or any portion thereof that is equal to $1,000 in principal amount or multiples of $1,000 at any time beginning six calendar months following June 16, 2016, at the then-applicable conversion rate. Upon conversion by the Holder, the Convertible Notes would be settled in cash with respect to principal and any accrued and unpaid interest to such date and in the Company’s common shares with respect to any additional amounts, based on the applicable conversion rate at such time. The Convertible Notes had an initial conversion rate of 21.5054 common shares per $1,000 principal amount of the Convertible Notes (which is equal to an initial conversion price of approximately $46.50 per common share). Throughout the term of the Convertible Notes, the conversion rate could be adjusted upon the occurrence of certain specified events. Of the $210.0 million in proceeds received from the issuance of the Convertible Notes, $199.1 million was originally allocated to long-term debt (the “Liability Component”) and $10.9 million was allocated to additional paid-in capital (the “Equity Component”) within the Company’s consolidated balance sheet. The Liability Component was calculated by measuring the fair value of a similar debt instrument that does not have an associated conversion feature. The amount allocated to the Equity Component, representing the conversion option, was calculated by deducting the fair value of the Liability Component from the par value of the Convertible Notes. The Company determined that the conversion option did not require separate accounting treatment as a derivative instrument because it was both indexed to the Company’s own stock and would be classified in stockholders’ equity if freestanding. The Equity Component would not be remeasured as long as it continued to meet the conditions for equity classification. The excess of the principal amount of the Liability Component over its carrying amount (the “Debt Discount”) was amortized to interest expense over the term of the Convertible Notes. As a result, the Liability Component was accreted up to the Convertible Notes’ $210.0 million face value, resulting in additional non-cash interest expense being recognized within the Company’s consolidated statement of income. The effective interest rate on the Convertible Notes was approximately 7.1% per annum. The Company incurred approximately $6.6 million of issuance costs related to the issuance of the Convertible Notes. Of the $6.6 million in issuance costs incurred, $6.3 million and $0.3 million were recorded to deferred financing cost and additional paid-in capital, respectively, in proportion to the allocation of the proceeds of the Convertible Notes. The $6.3 million recorded to deferred financing cost on the Company’s consolidated balance sheet as a reduction of long-term debt was amortized over the contractual term of the Convertible Notes using the effective interest method. During the first quarter of 2018 the issuance costs were expensed due to the conversion of the Notes. During the three- and nine-months ended September 30, 2018, the Company recognized zero and $3.5 million, respectively in interest expense related to the Convertible Notes, which included zero and $3.0 million, respectively of contractual interest and zero and 0.5 million, respectively in amortization of debt issuance costs and in amortization of the Debt Discount prior to the conversion of the Notes. During the first quarter of 2018, the Holder elected to convert the Convertible Notes pursuant to their terms in the indenture. The Company satisfied the equity portion of its conversion obligation on February 28, 2018 by issuing 1,535,652 shares of the Company’s Class A Common Stock to the Holder and, on April 18, 2018, satisfied and discharged its obligations under the Convertible Notes and the indenture governing the Convertible Notes by paying the Holder $213.4 million which included $3.4 million of accrued interest from December 15, 2017 through April 17, 2018. The early conversion of the notes resulted in a $7.2 million charge to other income (expense) during the first quarter of 2018 for a loss on extinguishment of debt. The following table summarizes the Company’s debt facilities as of September 30, 2018 and December 31, 2017:
Facility or Arrangement |  | Original Principal Amount |  | Balance as of September 30, 2018(1)(2) |  | Balance as of December 31, 2017(2) |  | Interest Rate |  | Repayment terms
October 2014 Credit Agreement term loan facility: |  |  |  |  |  |  |  |  |  |
U.S. dollar denominated: |  | $127.5 million |  | — |  | $94.8 million |  | Variable 30 day: 4.627% |  | Principal amount was paid in full during April 2018.
Japanese yen denominated: |  | 6.6 billion yen |  | — |  | 4.9 billion yen ($43.5 million as of December 31, 2017) |  | Variable 30 day: 2.7595% |  | Principal amount was paid in full during April 2018.
October 2014 Credit Agreement revolving credit facility: |  |  |  | — |  | $47.5 million |  | Variable 30 day: 4.594% |  | Principal amount was paid in full during April 2018 and credit line was closed.
April 2018 Credit Agreement term loan facility: |  |  |  |  |  |  |  |  |  |
U.S. dollar denominated: |  | $400.0 million |  | $390.0 million |  | — |  | Variable 30 day: 4.49% |  | 35% of the principal amount is payable in increasing quarterly installments over a five-year period that began on June 30, 2018, with the remainder payable at the end of the five-year term.
April 2018 Credit Agreement revolving credit facility: |  |  |  | $62.5 million |  | — |  | Variable 30 day: 4.49% |  | Revolving line of credit expires April 18, 2023.
Japan subsidiary loan: |  | 2.1 billion yen |  | — |  | 0.7 billion yen ($5.9 million as of December 31, 2017) |  | 0.66% |  | Principal amount was paid in full during July 2018.
Convertible note: |  | $210.0 million |  | — |  | $210.0 million |  | 4.75% |  | Principal amount was paid in full during April 2018.
(1) | As of September 30, 2018, the current portion of the Company’s debt (i.e. becoming due in the next 12 months) included $20.0 million of the balance of its U.S. dollar denominated debt under the New Credit Agreement facility. The Company has classified the $62.5 million borrowed under the revolving line of credit as short-term debt because it is the Company’s intention to use the line of credit to borrow and pay back funds over short periods of time.
(2) | The carrying value of the debt reflects the amounts stated in the above table less debt issuance costs of $4.2 million as of September 30, 2018 related to the credit agreement; and a debt discount of $9.1 million and debt issuance costs of $4.0 million (consisting of $11.1 million related to the Convertible Note and $2.0 million related to the credit agreement) as of December 31, 2017, which is not reflected in this table.

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