Supplemental Financial Statement Information

Supplemental Cash Flow Information



	Six Months Ended June 30,
(in thousands)	2018		2017
Net cash paid for income taxes	$	8,799	$	7,115
Cash paid for interest expense	1,560		2,011
Property, equipment, and intellectual property received, but not paid	1,472		843

Inventories

Inventories are summarized as follows (in thousands):



	June 30, 2018		December 31, 2017
Raw materials	$	50,416	$	57,061
Work-in-process	12,831		9,792
Finished goods	54,868		58,960
Total	$	118,115	$	125,813

Deferred Contract Acquisition Costs

Certain of our sales incentive programs that meet the definition of an incremental cost of obtaining a customer contract are required to be capitalized under ASC 340-40. We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year.

Sales commissions for renewal of a contract may not be commensurate with the commissions paid for the acquisition of the initial contract because commissions are generally not paid on the renewal of the specifically anticipated contract. Sales commissions for initial contracts are deferred and then amortized generally on a straight-line basis over a period of benefit that we have determined to be three to four years. We determined the period of benefit by taking into consideration our customer contracts, our technology, and other factors.

Upon adoption of ASC 340-40 on January 1, 2018, we capitalized $8.1 million in contract acquisition costs related to contracts that were not completed. For contracts that have durations of less than one year, we follow the practical expedient and expense these costs when incurred.

During the three and six months ended June 30, 2018, we amortized $1.0 and $2.1 million of deferred contract acquisition costs, respectively, and we recognized no impairment losses in relation to costs capitalized. During the three and six months ended June 30, 2018, an additional $1.1 and $2.1 million of contract acquisition costs were capitalized, respectively. Deferred contract acquisition costs are included within other noncurrent assets in our Condensed Consolidated Balance Sheets.

Deferred Cost of Revenue

Deferred cost of revenue related to unrecognized revenue on shipments to customers was $0.4 and $3.5 million as of June 30, 2018 and December 31, 2017, respectively, and is included in other current assets in our Condensed Consolidated Balance Sheets.

Product Warranty Reserves

Product warranty reserves are included in accrued and other liabilities on our Condensed Consolidated Balance Sheets. The changes in product warranty reserves are as follows (in thousands):



	June 30,
	2018			2017
Beginning balance	$	16,335		$	10,319
Liability assumed upon acquiring FFPS	—			9,368
Provisions, net of releases	4,265			4,790
Settlements	(6,795		)	(6,254		)
Ending balance	$	13,805		$	18,223

Equipment Subject to Operating Leases, Net

Equipment subject to operating leases was as follows (in thousands):



	June 30, 2018			December 31, 2017
Equipment subject to operating leases	$	8,025		$	5,432
Accumulated depreciation	(2,788		)	(1,927		)
Equipment subject to operating leases, net	$	5,237		$	3,505

Scheduled minimum future rental revenue on operating leases as of June 30, 2018 was as follows (in thousands):



Remainder of 2018	$	1,120
2019	2,244
2020	2,826
2021	384
2022	432
	$	7,006

Accumulated Other Comprehensive Income (Loss) (“AOCI”)

AOCI classified within stockholders’ equity in our Condensed Consolidated Balance Sheets was as follows (in thousands):



	June 30, 2018			December 31, 2017
Net unrealized investment losses	$	(1,122	)	$	(697	)
Currency translation gains (losses)	(4,080		)	8,794
Net unrealized gains on cash flow hedges	—			41
Total	$	(5,202	)	$	8,138

Amounts reclassified out of AOCI, net of tax, were immaterial for all periods presented, and consisted of unrealized gains and losses from investments in debt securities that are reported within interest income and other income (expense), net, in our Condensed Consolidated Statements of Operations.