DEBT

12 Months Ended

Dec. 31, 2024

Convertible Notes

As of December 31, 2024, the Company had outstanding fixed-rate convertible notes for an undiscounted aggregate principal amount of $600.0 million. The following table summarizes information regarding the Company’s convertible notes:


	December 31,
	2024		2023
0.599% senior subordinated convertible notes due in August 2024 (the 2024 Notes)	$	—	$	495,000
Unamortized discount net of deferred offering costs	—		(1,123)
2024 Notes, net (1)	—		493,877

1.250% senior subordinated convertible notes due in May 2027 (the 2027 Notes)	600,000		600,000
Unamortized discount net of deferred offering costs	(4,862)		(6,905)
2027 Notes, net	595,138		593,095
Total convertible debt, net	$	595,138	$	1,086,972

Fair value of fixed-rate convertible debt (2):
2024 Notes	$	—	$	488,288
2027 Notes	558,894		619,260
Total fair value of fixed-rate convertible debt	$	558,894	$	1,107,548

(1)The Company’s convertible notes due in 2024 matured on August 1, 2024. Substantially all holders of the 2024 Notes were repaid with cash, totaling approximately $495.0 million. No gain or loss was incurred upon the extinguishment.

(2)The fair value of the Company’s fixed-rate convertible debt is based on open market trades and is classified as Level 1 in the fair value hierarchy. See Note 1 to these Consolidated Financial Statements for additional discussion of fair value measurements.

Interest expense on the Company’s fixed-rate convertible debt consisted of the following:


	Years Ended December 31,
	2024		2023		2022
Coupon interest expense	$	9,564	$	10,465	$	10,465
Accretion of discount on convertible notes	2,775		3,359		3,349
Amortization of debt issuance costs	391		594		593
Total interest expense on convertible debt	$	12,730	$	14,418	$	14,407

2027 Notes

In May 2020, the Company issued $600.0 million in aggregate principal amount of senior subordinated unsecured convertible notes with a maturity date of May 15, 2027. The 2027 Notes were issued to the public at par value and bear interest at the rate of 1.25% per annum. Interest is payable semi-annually in cash in arrears on May 15 and November 15 of each year, beginning November 15, 2020. The 2027 Notes are convertible, at the option of the holder into shares of the Company’s common stock. The initial conversion rate for the 2027 Notes is 7.2743 shares per $1,000 principal amount of the 2027 Notes, which represents a conversion price of $137.47 per share, subject to adjustment under certain conditions. Following certain corporate transactions, the Company will, in certain circumstances, increase the conversion rate for a holder that elects to convert its 2027 Notes in connection with such corporate transactions by a number of additional shares of the Company’s common stock. A holder may convert fewer than all of such holder’s 2027 Notes so long as the amount of the 2027 Notes converted is an integral multiple of $1,000 principal amount. Net proceeds from the offering were $585.8 million. In connection with the issuance of the 2027 Notes,

the Company recorded a discount on the 2027 Notes of $13.5 million, which will be accreted and recorded as additional interest expense over the life of the 2027 Notes.

The 2027 Notes are senior subordinated, unsecured obligations, and rank (i) subordinated in right of payment to the prior payment in full of all of the Company’s existing and future senior debt, (ii) equal in right of payment with the Company’s existing and future senior subordinated debt, (iii) senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the notes, (vi) effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness, and (v) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company’s subsidiaries. Upon the occurrence of a “fundamental change,” as defined in the indenture governing the 2027 Notes, the holders may require the Company to repurchase all or a portion of such holder’s 2027 Notes for cash at 100% of the principal amount of the 2027 Notes being purchased, plus any accrued and unpaid interest.

The offer and sale of the 2027 Notes and the shares of the Company’s common stock issuable upon conversion of the 2027 Notes have not been registered under the Securities Act or any state securities laws and the 2027 Notes were offered only to qualified institutional buyers as defined in Rule 144A under the Securities Act.

See Note 1 7 to these Consolidated Financial Statements for further discussion of the effect of conversion of the Company's convertible debt on earnings per common share.

Revolving Credit Facility

In August 2024, the Company entered into an unsecured revolving credit facility providing for $600.0 million in revolving loan commitments. The credit facility was intended to finance ongoing working capital needs and for other general corporate purposes. The credit facility contains financial covenants including a maximum total net leverage ratio and a minimum interest coverage ratio. The credit facility matures in August 2029. As of December 31, 2024, there were no amounts outstanding under the credit facility and the Company was in compliance with all covenants.