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Convertible Senior Notes (Tables)

6 Months Ended

Jun. 30, 2017

Convertible Notes Payable [Abstract]



	Convertible Date	Initial Conversion Price per Share		Initial Conversion Rate per $1,000 Par Value	Initial Number of Shares
2022 Notes	February 1, 2022	$	134.75	7.42 shares	5,806,936
2018 Notes	July 1, 2018	$	73.88	13.54 shares	7,783,023

The Notes consisted of the following (in thousands):



	June 30, 2017			December 31, 2016
Liability component:
Principal:
2022 Notes	$	782,500		$	—
2018 Notes	575,000			575,000
Less: debt issuance cost and debt discount, net of amortization
2022 Notes	(167,754		)	$	—
2018 Notes	(49,683		)	(67,188		)
Net carrying amount	$	1,140,063		$	507,812



	2022 Notes		2018 Notes
Equity component recorded at issuance:
Note	162,039		155,319
Issuance cost	(2,148	)	(3,257	)
Net amount recorded in equity	159,891		152,062

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments

The estimated fair values of the Notes at June 30, 2017 and December 31, 2016 based on the closing trading price per $100 of the Notes were as follows (in thousands):



	June 30, 2017		December 31, 2016
2022 Notes	$	796,976	N/A
2018 Notes	$	833,808	$	681,375

Schedule of Interest Expense

The following table sets forth total interest expense recognized related to the Notes (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Amortization of debt issuance cost
2022 Notes	$	122	$	—	$	122	$	—
2018 Notes	474		442		940		877
Amortization of debt discount
2022 Notes	2,388		—		2,388		—
2018 Notes	8,353		7,806		16,565		15,480
Total	$	11,337	$	8,248	$	20,015	$	16,357
Effective interest rate of the liability component
2022 Notes	4.75%
2018 Notes	6.50%

Schedule of Note Hedges



	Purchase		Shares
	(in thousands)
2022 Note Hedge	$	128,017	5,806,936
2018 Note Hedge	$	135,815	7,783,023

Schedule of Warrants

Warrants



	Proceeds		Shares	Strike Price
	(in thousands)
2022 Warrants	$	54,071	5,806,936	$	203.40
2018 Warrants	$	84,525	7,783,023	$	107.46

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

+ References + Details