TiVo 2015 Annual Report Download - page 56

Download and view the complete annual report

Please find page 56 of the 2015 TiVo annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 141

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141

Table of Contents
Term Loan Facility B
.
The
$689.5 million
of borrowings under our
Term Loan Facility B
is subject to a variable interest rate. If interest rates
increase, our debt service obligations would increase even though the amount borrowed remained the same. We have entered into a number of interest rate
swaps to hedge this interest rate risk. Under these interest rate swaps, we have generally agreed to pay interest at a fixed rate and receive interest at a
floating rate from the counterparties. The terms of our
Term Loan Facility B
and interest rate swaps are more fully described in Note 9 to the Consolidated
Financial Statements included in Part IV of this Annual Report on Form 10
-
K
, which is incorporated herein by reference.
2020 Convertible Notes. In March 2015, we issued
$345.0 million
in principal of 2020 Convertible Notes that have a fixed interest rate of
0.500%
.
As the 2020 Convertible Notes have a fixed interest rate, there is no economic interest rate exposure. However, the fair value of the 2020 Convertible Notes
is exposed to fluctuations in interest rates and securities prices. Generally, the fair value of the 2020 Convertible Notes will decrease as interest rates
increase and the fair value of the 2020 Convertible Notes will increase as the price of our common stock increases.
In connection with the offering of the 2020 Convertible Notes, we purchased call options and sold warrants with respect to our common stock. The
options are expected to offset the potential dilution with respect to the issuance of shares of our common stock resulting from any conversion of the
2020
Convertible Notes. The warrants will have a dilutive effect with respect to our common stock to the extent that the market price of our common stock
exceeds the strike price of the warrants. However, we have the right to settle the warrants in cash or shares. The strike price of the warrants is
$40.1450
per
share. The number of shares of our common stock underlying the warrants is
11.9 million
shares, subject to anti
-
dilution adjustments.
For further discussion regarding the 2020 Convertible Notes and the related call options and warrants, see Note 9 to the Consolidated Financial
Statements included in Part IV of this Annual Report on Form 10
-
K
, which is incorporated herein by reference.
Foreign Currency Exchange Rates. Due to our operations outside the U.S., we are subject to the risks of fluctuations in foreign currency
exchange rates. As a substantial majority of our non
-
U.S. revenue and expense transactions are denominated in U.S. dollars, fluctuations in foreign
currency exchange rates could cause our products and services to become relatively more expensive to customers in a particular country, leading to a
reduction in sales or profitability in that country. Many of our subsidiaries operate in their local currency, which mitigates a portion of the exposure related
to the respective currency collected.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is included in Part IV of this Annual Report on Form 10
-
K
, which is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
54