Stamps.com 2015 Annual Report Download - page 52

TABLE OF CONTENTS
costsbepresentedasadirectdeductionfromthecarryingamountoftherelateddebt.Thestandardiseffectiveforinterimandannual
periodsbeginningafterDecember15,2015,withearlyadoptionpermitted,andrequiresaretrospectivemethodofadoption.We
adoptedtheprovisionsofthenewstandardforthebalancesheetdisclosuresofdebtissuancecostsasofDecember31,2015.
InNovember2015,theFASBissuedguidancethatrequiresdeferredtaxassetsandliabilitiestobepresentedasnoncurrentina
classifiedstatementoffinancialposition.TheguidanceiseffectivebeginningJanuary1,2017,withearlyadoptionpermitted.The
guidancecanbeappliedprospectivelyorretrospectively.TheCompanyelectedtoearlyadopttherequirementsandapplythem
retrospectivelyasofDecember31,2015.Theadoptionresultedinthereclassificationof$2.1millionofcurrentdeferredtaxassets,net
tononcurrentdeferredtaxassets,netintheConsolidatedBalanceSheetsasofDecember31,2014.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
OnNovember18,2015,weenteredintoaCreditAgreementwithagroupofbanks,whichprovidesforatermloanof$82.5
millionandarevolvingcreditfacilitywithamaximumborrowingof$82.5million.OurCreditAgreementmaturesonNovember18,
2020.InconnectionwithenteringintotheCreditAgreement,weincurredapproximately$1.8millionindebtissuancecostswhich
wererecordedasdebtdiscountandarebeingaccretedasinterestexpenseoverthelifeoftheCreditAgreement.Interestexpense
associatedwiththedebitissuancecostsfortheyearendedDecember31,2015wasapproximately$31,000.
BorrowingsunderthetermloanarepayableinquarterlyinstallmentswhichbeganonDecember31,2015.Wepayinterestonour
CreditAgreementequaltotheLondonInterbankOfferedRateplusanapplicablemargin,between1.25%to2.00%,baseduponcertain
financialmeasures.AsofDecember31,2015,ourapplicablemarginwas1.5%andinterestrateonouroutstandingloanwas
approximately1.86%.WearesubjecttocertaincustomaryquarterlyfinancialcovenantsunderourCreditAgreement.Further,the
CreditAgreementincludesnegativecovenants,subjecttoexceptions,restrictingorlimitingourabilityandtheabilityofour
subsidiariesto,amongotherthings,incuradditionalindebtedness,grantliens,repurchasestock,paydividendsandengageincertain
investment,acquisitionanddispositiontransactions.AsofDecember31,2015,wewereincompliancewiththecovenantsoftheCredit
Agreement.
Ourexposuretomarketrateriskforchangesininterestratesrelatesprimarilytoourinvestmentportfolio.Wehavenotused
derivativefinancialinstrumentsinourinvestmentportfolio.Noneoftheinstrumentsinourinvestmentportfolioareheldfortrading
purposes.Ourcashequivalentsandinvestmentsconsistofmoneymarket,U.S.governmentobligations,asset-backedsecuritiesand
publiccorporatedebtsecuritieswithweightedaveragematuritiesof215daysatDecember31,2015.Ourcashequivalentsand
investmentsapproximated$75.2millionatDecember31,2015andhadaweightedaverageinterestrateof0.3%.Interestrate
fluctuationsimpactthecarryingvalueoftheportfolio.Thefairvalueofourportfolioofmarketablesecuritieswouldnotbe
significantlyaffectedbyeithera10%increaseordecreaseintheratesofinterestdueprimarilytotheshort-termnatureoftheportfolio.
Wedonotbelievethatthefuturemarketrisksrelatedtotheabovesecuritieswillhaveamaterialadverseimpactonourfinancial
position,resultsofoperationsorliquidity.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Ourconsolidatedfinancialstatements,schedulesandsupplementarydata,aslistedunderItem15,appearinaseparatesectionof
thisReportbeginningonpageF-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
None.
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