XML 33 R20.htm IDEA: XBRL DOCUMENT
v3.6.0.2

Convertible Senior Notes | 12 Months Ended
--- | ---
Dec. 31, 2016
Convertible Senior Notes | Note 12—Convertible Senior Notes Convertible senior notes consist of the following (in thousands):
|  | December 31, 2015 |  |  | December 31, 2016 |
|  |  |  |  | Debt |  |  |  |  |  |  |  |  | Debt |  |  |  |
|  | Principal |  |  | Issuance |  |  | Net |  |  | Principal |  |  | Issuance |  |  | Net |
|  | Amount |  |  | Costs |  |  | Amount |  |  | Amount |  |  | Costs |  |  | Amount |
4.25% convertible senior notes (due 2018) |  | $ | 100,000 |  |  | $ | 2,181 |  |  | $ | 97,819 |  |  | $ | 93,865 |  |  | $ | 1,098 |  |  | $ | 92,767 |
4.875% convertible senior notes (due 2020) |  |  | 115,000 |  |  |  | 3,653 |  |  |  | 111,347 |  |  |  | 113,000 |  |  |  | 2,760 |  |  |  | 110,240 |
Total convertible senior notes, net of debt issuance costs |  | $ | 215,000 |  |  | $ | 5,834 |  |  | $ | 209,166 |  |  | $ | 206,865 |  |  | $ | 3,858 |  |  | $ | 203,007 |
In November 2009, the Company sold an aggregate of $100.0 million principal amount of the 2014 Notes. The 2014 Notes, which were senior unsecured obligations of the Company, paid cash interest semi-annually at a rate of 4.50% per annum and matured on November 1, 2014. In July 2013, the Company repurchased an aggregate of $61.0 million principal amount of these notes at par plus accrued interest with a portion of the net proceeds from the issuance of $100.0 million principal amount of 4.25% convertible senior notes due 2018 resulting in a gain on extinguishment of $0.1 million. The remainder of these notes was redeemed at par at maturity on November 1, 2014. ASC 470-20, “Debt with Conversion and Other Options,” requires the issuer of certain convertible debt instruments that may be settled in cash (or other assets) upon conversion to separately account for the liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer's non-convertible debt borrowing rate. In accordance with ASC 470-20, the Company allocated $13.7 million of the $100.0 million principal amount of the 2014 Notes to the equity component, which represents a discount to the debt that was being amortized to interest expense through November 1, 2014. Interest expense associated with the amortization of the discount was $0.9 million, nil and nil for December 31, 2014, 2015 and 2016. The Company repurchased $61.0 million of the 2014 Notes during the year ended December 31, 2013 as discussed below, with $2.8 million of the price allocated to the repurchase of the related equity component. In addition, approximately $2.2 million of the unamortized debt discount and $0.6 million of debt issuance costs were written off in connection with the repurchase of the 2014 Notes. The remaining aggregate $39.0 million of principal amount of the 2014 Notes were redeemed at par at maturity on November 1, 2014. In July 2013, the Company sold an aggregate of $100.0 million principal amount of 4.25% Convertible Senior Notes due 2018 (the “2018 Notes”). The 2018 Notes are senior unsecured obligations of the Company paying interest semi-annually in arrears on August 1 and February 1 of each year at a rate of 4.25% per annum and will mature on August 1, 2018. The initial and still current conversion rate for the 2018 Notes is 114.3674 shares of the Company’s common stock per $1,000 principal amount of notes, equivalent to an initial conversion price of approximately $8.74 per share of common stock, subject to adjustment in certain events. Upon conversion, the 2018 Notes will be settled in shares of the Company’s common stock. Holders of the 2018 Notes may require that the Company repurchase for cash all or some of their notes upon the occurrence of a fundamental change (as defined in the 2018 Notes). In 2016, the Company repurchased and retired an aggregate of approximately $6.1 million principal amount of the 2018 Notes. In addition, approximately $0.1 million of the unamortized debt issuance costs were written off and a nominal gain was recognized in conjunction with the retirement of the 2018 Notes. In June 2014, the Company sold an aggregate of $115.0 million principal amount of 4.875% Convertible Senior Notes due 2020 (the “2020 Notes”). The 2020 Notes are senior unsecured obligations of the Company paying interest semi-annually in arrears on June 1 and December 1 of each year at a rate of 4.875% per annum and will mature on June 1, 2020. The initial and still current conversion rate for the 2020 Notes is 103.7613 shares of the Company’s common stock per $1,000 principal amount of notes, equivalent to an initial conversion price of approximately $9.64 per share of common stock, subject to adjustment in certain events. Upon conversion, the 2020 Notes will be settled in shares of the Company’s common stock. Holders of the 2020 Notes may require that the Company repurchase for cash all or some of their notes upon the occurrence of a fundamental change (as defined in the 2020 Notes). In January 2016, the Company repurchased and retired an aggregate of $2.0 million principal amount of the 2020 Notes. In addition, approximately $0.1 million of the unamortized debt issuance costs were written off and a $0.1 million gain was recognized in conjunction with the retirement of the 2020 Notes. On January 1, 2016, the Company adopted ASU 2015-03, “Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs,” which requires that debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the debt liability, similar to the presentation of debt premiums and discounts. ASU 2015-03 applies retrospectively and does not change the recognition and measurement requirements for debt issuance costs. As a result, the Company reclassified $5.8 million of debt issuance costs previously included in other long term assets to convertible senior notes, net on its consolidated financial statements as of December 31, 2015. Key components of the 4.50% convertible senior notes due 2014 consist of the following (in thousands):
|  | Years Ended December 31, |
|  | 2014 |  |  | 2015 |  |  |  | 2016 |
Contractual interest expense on the coupon |  | $ | 1,463 |  |  | $ | ― |  |  | $ | ― |
Amortization of debt discount and debt issuance costs recognized as interest expense |  |  | 1,140 |  |  |  | ― |  |  |  | ― |
|  | $ | 2,603 |  |  | $ | ― |  |  | $ | ― |
Key components of the 4.25% convertible senior notes due 2018 consist of the following (in thousands):
|  | Years Ended December 31, |
|  | 2014 |  |  | 2015 |  |  | 2016 |
Contractual interest expense |  | $ | 4,250 |  |  | $ | 4,250 |  |  | $ | 4,191 |
Amortization of debt issuance costs recognized as interest expense |  |  | 835 |  |  |  | 836 |  |  |  | 1,172 |
|  | $ | 5,085 |  |  | $ | 5,086 |  |  | $ | 5,363 |
Key components of the 4.875% convertible senior notes due 2020 consist of the following (in thousands):
|  | Years Ended December 31, |
|  | 2014 |  |  | 2015 |  |  | 2016 |
Contractual interest expense |  | $ | 3,135 |  |  | $ | 5,606 |  |  | $ | 5,508 |
Amortization of debt issuance costs recognized as interest expense |  |  | 473 |  |  |  | 811 |  |  |  | 804 |
|  | $ | 3,608 |  |  | $ | 6,417 |  |  | $ | 6,312 |

X
- Definition Convertible Senior Debentures Disclosure. + References No definition available. + Details
Name: | jakk_ConvertibleSeniorDebenturesDisclosureTextBlock
Namespace Prefix: | jakk_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration