CONVERTIBLE SUBORDINATED NOTES

On March 19, 2014, we issued $143.75 million aggregate principal amount of 2.75% convertible subordinated notes due March 15, 2021 (the “Notes”). The Notes bear interest at 2.75%. Interest on the Notes began to accrue on March 19, 2014 and is payable semi-annually in arrears on March 15 and September 15 of each year.

The carrying values of the liability and equity components of the Notes at December 31, 2014 and September 30, 2015 are reflected in our Consolidated Balance Sheets as follows (in thousands):



	December 31, 2014			September 30, 2015
Long-term liabilities:
Principal amount	$	143,750		$	143,750
Unamortized discount of liability component	(29,208		)	(26,654		)
Carrying value of the liability component	$	114,542		$	117,096

Equity component carrying value	$	17,973		$	17,973

The fair value of the Notes, which are Level 2 measurements, was approximately $158.8 million at September 30, 2015.

Interest expense on the Notes included contractual coupon interest expense of approximately $1.0 million for both the three months ended September 30, 2014 and 2015 and $2.1 million and $3.0 million for the nine months ended September 30, 2014 and 2015, respectively. Amortization of debt issuance costs was approximately $0.1 million for both the three months ended September 30, 2014 and 2015 and $0.3 million and $0.4 million for the nine months ended September 30, 2014 and 2015, respectively. Accretion of the discount on the convertible subordinated notes was $0.8 million and $0.9 million for the three months ended September 30, 2014 and 2015, respectively, and $1.6 million and $2.6 million for the nine months ended September 30, 2014 and 2015, respectively. The unamortized discount is being amortized over the remaining term of the Notes. The effective interest rate on the liability component for the three and nine months ended September 30, 2014 and 2015 was 6.75%.