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Debt, Interest Income, Expense, and Other Finance Costs
 6 Months Ended
Jun. 30, 2023
Debt Disclosure [Abstract]  
Debt, Interest Income, Expense, and Other Finance Costs
6. Debt, Interest Income, Expense, and Other Finance Costs
Issuance of Convertible Debt
On June 26, 2023, we issued $350.0 million aggregate principal amount of 3.250% Convertible Senior Notes due 2028 (the "Convertible Notes"), which reflects the exercise in full of an option to purchase up to an additional $50.0 million in principal amount of the Convertible Notes.
The Convertible Notes mature on July 1, 2028, unless earlier converted, redeemed or repurchased. We may not redeem the Convertible Notes prior to July 6, 2026. Thereafter and until the 61st scheduled trading day immediately preceding the maturity date, we may redeem for cash, if the last reported sale price of our common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide the related Notice of Redemption. Prior to March 1, 2028, the Convertible Notes will be convertible at the option of the holders only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2023 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period in which, for each trading day of that period, the Trading Price (as defined in the Indenture), as determined following a request by a holder of Convertible Notes in accordance with the procedures described in the Indenture, per $1,000 principal amount of Convertible Notes for such trading day was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; (3) if we call such Convertible Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the Convertible Notes called (or deemed called) for redemption; or (4) upon the occurrence of specified corporate events described in the Indenture. Thereafter and until the second scheduled trading day immediately preceding the maturity date of the Convertible Notes, holders may convert regardless of the foregoing conditions.
The Convertible Notes are senior, unsecured obligations that bear interest at a rate of 3.250% per year, payable semiannually in arrears on January 1 and July 1 of each year, beginning on January 1, 2024. The initial conversion rate was 35.1710 shares of common stock per $1,000 principal amount of Convertible Notes, which is equivalent to an initial conversion price of approximately $28.43 per share. The conversion rate will be subject to adjustment upon the occurrence of certain events but will not be adjusted for accrued and unpaid interest.
Upon conversion, the Convertible Notes will be settled in cash up to the aggregate principal amount of the Convertible Notes to be converted, and in cash, shares of common stock or any combination thereof, at our option, in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount.
In connection with the pricing of the Convertible Notes, we entered into convertible note hedge transactions and warrant transactions. The cost of the convertible note hedge transactions was approximately $70.5 million. The convertible note hedge transactions cover, subject to customary anti-dilution adjustments, the number of shares of common stock that initially underlie the Convertible Notes, and have an initial strike price equal to the initial conversion price of the Convertible Notes. Separately, we received $40.0 million of proceeds from the sale of warrants to acquire, subject to anti-dilution adjustments, the same amount of shares at an initial strike price of $40.14 per share. The net cost of $30.5 million was recorded as a reduction to additional paid-in capital in the Condensed Consolidated Statement of Shareholders’ Equity.
The total interest expense recognized for the three and six months ended June 30, 2023 was nominal as a result of the June 26, 2023 closing date.
Credit Agreement
The Fourth Amended and Restated Credit Agreement matures in April 2027 and provides for a term loan as well as a revolving credit facility of up to $1.5 billion (the "Credit Facility").
Long-Term Debt
Our outstanding debt consists of the following (in millions):
June 30, 2023December 31, 2022
Credit Facility$— $339.0 
Term loan479.3 488.4 
Notes (1)
337.5 — 
Finance leases17.8 15.4 
Other (2)
43.3 2.9 
Total debt877.8 845.7 
Less: Current maturities of long-term debt and finance leases (2)
61.6 15.8 
Long-term debt$816.2 $829.9 
(1)The conversion feature discussed above did not require separate accounting. As a result a liability was recognized for the aggregate principal net of issuance costs. As of June 30, 2023 the net carrying amount of the Convertible Notes includes the aggregate principal amount of $350.0 million, net of unamortized debt issuance costs of $12.5 million. As the transaction closed on June 26, 2023, the carrying value of the Convertible Notes as of June 30, 2023 is a close approximation of its fair value.
(2)Includes secured borrowings of $40.3 million (EUR 37.0 million) as of June 30, 2023 for the transfer of tax receivables.
Interest Expense
The following table provides additional information about our Interest income (expense), and other financing costs, net (in millions):
For the Three Months Ended June 30,For the Six Months Ended June 30,
2023202220232022
Interest income$2.4 $1.3 $4.0 $3.8 
Interest expense and other financing costs(34.9)(27.8)(70.7)(44.6)
Interest expense and other financing costs, net$(32.5)$(26.5)$(66.8)$(40.9)