TiVo 2015 Annual Report Download - page 50

Table of Contents
Convertible Notes at a repurchase price equal to
100% of the principal of the repurchased 2020 Convertible Notes, plus accrued and unpaid interest. The
initial conversion rate is also subject to customary anti - dilution adjustments.
The 2020 Convertible Notes are not redeemable prior to maturity by us and no sinking fund is provided. The 2020 Convertible Notes are unsecured
and do not contain financial covenants or restrictions on the payment of dividends, the incurrence of indebtedness or the repurchase of other securities by
us. The 2015 Indenture includes customary terms and covenants, including certain events of default after which the 2020 Convertible Notes may be due and
payable immediately.
Senior Secured Credit Facility
On July 2, 2014, we, as parent guarantor, and two of our wholly - owned subsidiaries, Rovi Solutions Corporation and Rovi Guides, Inc., as
borrowers, and certain of our other subsidiaries, as subsidiary guarantors, entered into a Credit Agreement (the “Credit Agreement”
). The Credit Agreement
provided for a (i) five - year $125.0 million term loan A facility (the “Term Loan Facility A” ), ( ii) seven - year $700.0 million term loan B facility (the “Term Loan
Facility B ” and together with Term Loan Facility A, the “Term Loan Facility” ) and (iii) five - year $175.0 million revolving credit facility (including a letter of
credit sub - facility) (the "Revolving Facility” and together with the Term Loan Facility, the “Senior Secured Credit Facility” ).
As a result of voluntary principal prepayments in 2015, Term Loan Facility A was extinguished. As of
December 31, 2015 , no amounts related to
Term Loan Facility A remain outstanding.
Term Loan Facility B amortizes in equal quarterly installments in an aggregate annual amount equal to 1% of the original principal amount thereof,
with any remaining balance payable on the final maturity date of Term Loan Facility B . Loans under Term Loan Facility B bear interest, at our option, at a
rate equal to either LIBOR, plus an applicable margin equal to 3.00% per annum (subject to a 0.75% LIBOR floor) or the prime lending rate, plus an applicable
margin equal to 2.00% per annum.
In September 2015, the Revolving Facility was terminated at our election.
The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to us and
our subsidiaries, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness,
dividends and other distributions. Term Loan Facility A and the Revolving Facility contained financial covenants that required that we maintained a
minimum consolidated interest coverage ratio and a maximum total leverage ratio.
Term Loan Facility B does not contain a minimum consolidated interest
coverage ratio or a maximum total leverage ratio covenant. We may be required to make an additional payment on the Term Loan Facility each
February. This payment is calculated as a percentage of the prior year's Excess Cash Flow as defined in the Credit Agreement. No payment was required in
February 2015.
2040 Convertible Notes
We issued
$460.0 million in aggregate principal of 2.625% Convertible Senior Notes due in 2040 at par pursuant to an Indenture dated March 17,
2010 (the "2010 Indenture"). On February 20, 2015, holders of
$287.4 million of outstanding principal exercised their right to require us to repurchase their
2040 Convertible Notes for cash. On June 30, 2015, we redeemed the remaining
$3.6 million of outstanding principal. As of December 31, 2015 , no amounts
related to the 2040 Convertible Notes remain outstanding.
Critical Accounting Policies and Estimates
The preparation of our Consolidated Financial Statements in accordance with accounting principles generally accepted in the U.S. requires
management to make estimates, assumptions and judgments that affect the amounts reported in the financial statements and accompanying notes. Our
estimates, assumptions and judgments are based on historical experience and various other assumptions believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about the carrying amount of assets and liabilities that are not readily apparent
from other sources. Making estimates, assumptions and judgments about future events is inherently unpredictable and is subject to significant
uncertainties, some of which are beyond our control. Management believes the estimates, assumptions and judgments employed and resulting balances
reported in the Consolidated Financial Statements are reasonable; however, actual results could differ materially.
A summary of our significant accounting policies, including a discussion about associated risks and uncertainties, is contained in Note 1 to the
Consolidated Financial Statements included in Part IV of this Annual Report on Form 10
- K , which is
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