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Convertible Debt | 6 Months Ended
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Jun. 30, 2024
Convertible Debt [Abstract] |
Convertible Debt | 12. Convertible Debt 1.75 Percent Convertible Senior Notes In 2023, we completed a $575.0 million offering of convertible senior notes and used $488.2 million of the net proceeds from the issuance of the 1.75% Notes to repurchase $504.4 million in principal of our 0.125% Notes. We expect to use the remaining net proceeds to settle the 0.125% Notes that remain outstanding and for general corporate and working capital purposes. At June 30, 2024, we had the following 1.75% Notes outstanding (in millions except interest rate and price per share data):
|  | 1.75% Notes |
Outstanding principal balance |  | $ | 575.0 |
Unamortized debt issuance costs |  | $ | 11.4 |
Maturity date |  | June 2028 |
Interest rate |  |  | 1.75 | %
Effective interest rate |  |  | 2.3 | %
Conversion price per share |  | $ | 53.73 |
Total shares of common stock subject to conversion |  |  | 10.7 |
0 Percent Convertible Senior Notes and Call Spread At June 30, 2024, we had the following 0% Notes outstanding (in millions except interest rate and price per share data):
|  | 0% Notes |
Outstanding principal balance |  | $ | 632.5 |
Unamortized debt issuance costs |  | $ | 5.5 |
Maturity date |  | April 2026 |
Interest rate |  |  | 0 | %
Effective interest rate |  |  | 0.5 | %
Conversion price per share |  | $ | 57.84 |
Effective conversion price per share with call spread |  | $ | 76.39 |
Total shares of common stock subject to conversion |  |  | 10.9 |
In conjunction with the 2021 offering, we entered into a call spread transaction, which was comprised of purchasing note hedges and selling warrants, to minimize the impact of potential economic dilution upon conversion of our 0% Notes by increasing the effective conversion price on our 0% Notes. We increased our effective conversion price to $76.39 with the same number of underlying shares as our 0% Notes. The call spread cost us $46.9 million, of which $136.7 million was for the note hedge purchase, offset by $89.8 million we received for selling the warrants. Similar to our 0% Notes, our note hedges are subject to adjustment. Additionally, our note hedges are exercisable upon conversion of the 0% Notes. The note hedges will expire upon maturity of the 0% Notes, or April 2026. The note hedges and warrants are separate transactions and are not part of the terms of our 0% Notes. The holders of the 0% Notes do not have any rights with respect to the note hedges and warrants. We recorded the amount we paid for the note hedges and the amount we received for the warrants in additional paid-in capital in our condensed consolidated balance sheets. Refer to Part IV, Item 15, Note 1, Organization and Significant Accounting Policies, of our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 for our Call Spread accounting policy. We reassess our ability to continue to classify the note hedges and warrants in shareholders’ equity at each reporting period. 0.125 Percent Convertible Senior Notes and Call Spread As discussed above, in 2023, we repurchased $504.4 million of our 0.125% Notes. At June 30, 2024, we had the following 0.125% Notes outstanding with interest payable semi-annually (in millions except interest rate and price per share data):
|  | 0.125% Notes |
Outstanding principal balance |  | $ | 44.5 |
Unamortized debt issuance costs |  | $ | 0.1 |
Maturity date |  | December 2024 |
Interest rate |  |  | 0.125 | %
Effective interest rate |  |  | 0.5 | %
Conversion price per share |  | $ | 83.28 |
Effective conversion price per share with call spread |  | $ | 123.38 |
Total shares of common stock subject to conversion, excluding shares related to 0.125% Notes that we have repurchased and are currently holding in treasury |  |  | 0.5 |
In conjunction with the issuance of our 0.125% Notes in 2019, we entered into a call spread transaction, which was comprised of purchasing note hedges and selling warrants, to minimize the impact of potential economic dilution upon conversion of our 0.125% Notes by increasing the effective conversion price on our 0.125% Notes. We increased our effective conversion price to $123.38 with the same number of underlying shares as our 0.125% Notes. The call spread cost us $52.6 million, of which $108.7 million was for the note hedge purchase, offset by $56.1 million we received for selling the warrants. Similar to our 0.125% Notes, our note hedges are subject to adjustment. Additionally, our note hedges are exercisable upon conversion of the 0.125% Notes. The note hedges will expire upon maturity of the 0.125% Notes, or December 2024. The note hedges and warrants are separate transactions and are not part of the terms of our 0.125% Notes. The holders of the 0.125% Notes do not have any rights with respect to the note hedges and warrants. As of June 30, 2024, the note hedges and warrants remain outstanding. We recorded the amount we paid for the note hedges and the amount we received for the warrants in additional paid-in capital in our condensed consolidated balance sheets. We reassess our ability to continue to classify the note hedges and warrants in shareholders’ equity at each reporting period. Other Terms of Convertible Senior Notes The 1.75%, 0% and 0.125% Notes are convertible under certain conditions, at the option of the note holders. We can settle conversions of the notes, at our election, in cash, shares of our common stock or a combination of both. We may not redeem the notes prior to maturity, and we do not have to provide a sinking fund for them. Holders of the notes may require us to purchase some or all of their notes upon the occurrence of certain fundamental changes, as set forth in the indentures governing the notes, at a purchase price equal to 100 percent of the principal amount of the notes to be purchased, plus any accrued and unpaid interest.

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