Convertible Senior Notes

Convertible senior notes consist of the following (in thousands):



	December 31, 2017						December 31, 2018
	Principal/ Fair Value Amount		Debt Issuance Costs		Net Amount		Principal/ Fair Value Amount		Debt Issuance Costs		Net Amount
4.25% convertible senior notes (due 2018)	$	21,178	$	103	$	21,075	$	—	$	—	$	—
4.875% convertible senior notes (due 2020)	113,000		1,972		111,028		113,000		1,182		111,818
3.25% convertible senior notes (due 2020) *	22,469		—		22,469		27,974		—		27,974
Total convertible senior notes, net of debt issuance costs	$	156,647	$	2,075	$	154,572	$	140,974	$	1,182	$	139,792

* The amount presented for the 3.25% 2020 convertible senior notes within the table represents the fair value. The principal amount of these notes totals $21.5 million and $29.5 million as of December 31, 2017 and December 31, 2018, respectively.

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, which were senior unsecured obligations of the Company, paid interest semi-annually in arrears on August 1 and February 1 of each year at a rate of 4.25% per annum and matured on August 1, 2018. The initial conversion rate for the 2018 Notes was 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. 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. During the first quarter of 2017, the Company exchanged and retired $39.1 million principal amount of the 2018 Notes at par for $24.1 million in cash and approximately 2.9 million shares of its common stock. During the second quarter of 2017, the Company exchanged and retired $12.0 million principal amount of the 2018 Notes at par for $11.6 million in cash and 112,400 shares of its common stock, and 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 exchange and retirement of the 2018 Notes.

In August 2017, the Company agreed with Oasis Management and Oasis Investments II Master Fund Ltd., (collectively, “Oasis”) the holder of approximately $21.5 million face amount of its 4.25% convertible senior notes due in 2018, to extend the maturity date of these notes to November 1, 2020. In addition, the interest rate was reduced to 3.25% per annum and the conversion rate was increased to 328.0302 shares of the Company’s common stock per $1,000 principal amount of notes, among other things. After execution of a definitive agreement for the modification and final approval by the other members of the Company’s Board of Directors and Oasis’ Investment Committee the transaction closed on November 7, 2017. In connection with this transaction, the Company recognized a loss on extinguishment of the debt of approximately $0.6 million. On July 26, 2018, the Company closed a transaction with Oasis to exchange $8.0 million face amount of the 4.25% convertible senior notes due in August 2018 with convertible senior notes similar to those issued to Oasis in November 2017. The new notes mature on November 1, 2020, accrue interest at an annual rate of 3.25% and are convertible into shares of the Company’s common stock at an initial rate of 322.2688 shares per $1,000 principal amount of the new notes. In connection with this transaction, the Company recognized a loss on extinguishment of the debt of approximately $0.5 million. The conversion price for the 3.25% convertible senior notes will be reset on November 1, 2018 and November 1, 2019 (each, a “reset date”) to a price equal to 105% above the 5-day Volume Weighted Average Price ("VWAP") preceding the reset date; provided, however, among other reset restrictions, that if the conversion price resulting from such reset is lower than 90 percent of the average VWAP during the 90 calendar days preceding the reset date, then the reset price shall be the 30-day VWAP preceding the reset date. The conversion price of the 3.25% 2020 Notes reset on November 1, 2018 to $2.54 per share and the conversion rate was increased to 393.7008 shares of the Company's common stock per $1,000 principal amount of notes.

The remaining $13.2 million of 2018 Notes were redeemed at par at maturity on August 1, 2018.

The Company has elected to measure and present the debt held by Oasis at fair value using Level 3 inputs and as a result, recognized a loss of $0.3 million for the year ended December 31, 2017, and a gain of $2.9 million for the year ended December 31, 2018 related to changes in the fair value of the 3.25% 2020 Notes. At December 31, 2017 and 2018, the 3.25% 2020 Notes had a fair value of approximately $22.5 million and $28.0 million, respectively. The Company evaluated its credit risk as of December 31, 2018, and determined that there was no change from December 31, 2017.

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.

The fair value of the 4.875% convertible senior notes payable due 2020 as of December 31, 2017 and 2018 was $89.7 million and $93.2 million, respectively, based upon the most recent quoted market prices. The fair values of the convertible senior notes are considered to be Level 3 measurements on the fair value hierarchy.

Key components of the 4.25% convertible senior notes due 2018 consist of the following (in thousands):



	Year ended December 31,
	2016		2017		2018
Contractual interest expense	$	4,191	$	2,184	$	373
Amortization of debt issuance costs recognized as interest expense	1,172		844		103
	$	5,363	$	3,028	$	476

Key components of the 3.25% convertible senior notes due 2020 consist of the following (in thousands):



	Year ended December 31,
	2016		2017		2018
Contractual interest expense	$	—	$	103	$	815
Amortization of debt issuance costs recognized as interest expense	—		—		—
	$	—	$	103	$	815

Key components of the 4.875% convertible senior notes due 2020 consist of the following (in thousands):



	Year ended December 31,
	2016		2017		2018
Contractual interest expense	$	5,508	$	5,509	$	5,509
Amortization of debt issuance costs recognized as interest expense	804		789		789
	$	6,312	$	6,298	$	6,298