Convertible Senior Notes, Net

6 Months Ended

Jun. 30, 2021

In two separate offerings during 2017, we issued an aggregate principal amount of $345.0 million of 4.75% Convertible Senior Notes due 2022 (the "2022 Notes"), for which we received $337.5 million, after deducting the underwriting discount and offering expenses. At June 30, 2021, the 2022 Notes had a carrying value of $341.7 million and an unamortized discount of $3.3 million.

During the fourth quarter of 2018, we issued $230.0 million of 5.375% Convertible Senior Notes due 2023 (the "2023 Notes" and, together with the 2022 Notes, the "Convertible Notes"), for which we received $223.7 million after deducting the underwriting discount and offering expenses. At June 30, 2021, the 2023 Notes had a carrying value of $226.1 million and an unamortized discount of $3.9 million.

The following table summarizes the terms of the Convertible Notes as of June 30, 2021 ($ in thousands):


	Principal Amount		Coupon Rate		Effective Rate (1)		Conversion Rate (2)	Maturity Date	Remaining Period of Amortization
2022 Notes	$	345,000	4.75	%	5.60	%	50.2260	8/23/2022	1.15
2023 Notes	230,000		5.38	%	6.16	%	48.7187	10/15/2023	2.29
Total	$	575,000

The following table summarizes the terms of the Convertible Notes as of December 31, 2020 ($ in thousands):


	Principal Amount		Coupon Rate		Effective Rate (1)		Conversion Rate (2)	Maturity Date	Remaining Period of Amortization
2022 Notes	$	345,000	4.75	%	5.60	%	50.2260	8/23/2022	1.65
2023 Notes	230,000		5.38	%	6.16	%	48.7187	10/15/2023	2.79
Total	$	575,000

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(1)Effective rate includes the effect of the adjustment for the conversion option (See footnote (2) below), the value of which reduced the initial liability and was recorded in additional paid-in-capital.

(2)We have the option to settle any conversions in cash, shares of common stock or a combination thereof. The conversion rate represents the number of shares of common stock issuable per one thousand principal amount of the Convertible Notes converted, and includes adjustments relating to cash dividend payments made by us to stockholders that have been deferred and carried-forward in accordance with, and are not yet required to be made pursuant to, the terms of the applicable supplemental indenture.

We may not redeem the Convertible Notes prior to maturity except in limited circumstances. The closing price of our common stock on June 30, 2021 of $15.95 was less than the per share conversion price of the Convertible Notes.

In accordance with ASC 470, "Debt," the liability and equity components of convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) are to be separately accounted for in a manner that reflects the issuer’s nonconvertible debt borrowing rate. GAAP requires that the initial proceeds from the sale of the Convertible Notes be allocated between a liability component and an equity component in a manner that reflects interest expense at the interest rate of similar nonconvertible debt that could have been issued by us at such time. We measured the fair value of the debt components of the Convertible Notes as of their issuance date based on effective interest rates. As a result, we attributed

approximately $15.4 million of the proceeds to the equity component of the Convertible Notes ($11.0 million to the 2022 Notes and $4.4 million to the 2023 Notes), which represents the excess proceeds received over the fair value of the liability component of the Convertible Notes at the date of issuance. The equity component of the Convertible Notes has been reflected within additional paid-in capital in our condensed consolidated balance sheet as of June 30, 2021. The resulting debt discount is being amortized over the period during which the Convertible Notes are expected to be outstanding (the maturity date) as additional non-cash interest expense. The additional non-cash interest expense attributable to each of the Convertible Notes will increase in subsequent reporting periods through the maturity date as the Convertible Notes accrete to their par value over the same period.The aggregate contractual interest expense was approximately $7.2 million and $14.4 million for the three and six months ended June 30, 2021 and June 30, 2020. With respect to the amortization of the discount on the liability component of the Convertible Notes as well as the amortization of deferred financing costs, we reported additional non-cash interest expense of approximately $1.6 million and $3.1 million for the three and six months ended June 30, 2021, as compared to $1.5 million and $3.0 million for the three and six months ended June 30, 2020, respectively.