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Cash Convertible Senior Notes and Related Transactions | 9 Months Ended
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Sep. 30, 2011
Cash Convertible Senior Notes and Related Transactions [Abstract] |
Cash Convertible Senior Notes and Related Transaction | Cash Convertible Senior Notes and Related Transactions Indenture. On March 29, 2010, the Company issued cash convertible senior notes (the “Notes”) in the aggregate principal amount of $175.0 pursuant to an indenture by and between the Company and Wells Fargo Bank, National Association, as trustee (the “Indenture”). Net proceeds from this transaction were approximately $169.1, after deducting the initial purchasers’ discounts and transaction fees and expenses. The Notes bear a stated interest rate of 4.5% per annum. The Company accounts for the cash conversion feature of the Notes (the “Bifurcated Conversion Feature”) as a separate derivative instrument. The fair value of the Bifurcated Conversion Feature on the issuance date of $38.1 was recorded as the original issue discount for purposes of accounting for the debt component of the Notes and will be amortized based on the effective interest method over the term of the Notes. The initial purchasers' discounts and transaction fees and expenses totaling $5.9 were capitalized as deferred financing costs and will also be amortized over the term of the Notes. The effective interest rate of the Notes is approximately 11% per annum, taking into account the accretion of the discounted carrying value of the Notes to their face value as well as the amortization of deferred financing costs. Interest is payable at the stated interest rate semi-annually in arrears on April 1 and October 1 of each year. The Notes will mature on April 1, 2015, subject to earlier repurchase or conversion. The Notes are subject to repurchase by the Company at the option of the holders following a fundamental change, as defined in the Indenture, at a price equal to 100% of the principal amount of the Notes plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. Fundamental changes include, but are not limited to, (i) certain ownership changes, (ii) certain recapitalizations, mergers and dispositions, (iii) shareholders’ approval of any plan or proposal for the liquidation or dissolution of the Company, and (iv) the failure of the Company’s common stock to be listed on certain stock exchanges. Holders may convert their Notes before January 1, 2015, only in certain circumstances determined by (i) the market price of the Company’s common stock, (ii) the trading price of the Notes, or (iii) the occurrence of specified corporate events. Holders may convert their Notes at any time on or after January 1, 2015 until the close of business on the second scheduled trading date immediately preceding the maturity date of the Notes. The Notes have an initial conversion rate of 20.6949 shares of the Company’s common stock per (in whole dollars) $1,000 principal amount of the Notes (equivalent to an initial conversion price of approximately $48.32 per share), subject to adjustment, based on the occurrence of certain events, including, but not limited to, (i) the payment of certain cash dividends on the Company’s common stock, (ii) the issuance of certain rights, options or warrants, (iii) the effectuation of share splits or combinations, (iv) certain distributions of property, and (v) certain issuer tender or exchange offers as described in the Indenture. The Notes are not convertible into the Company’s common stock or any other securities under any circumstances, but instead will be settled in cash. The following tables provide additional information regarding the Notes:
| September 30, 2011 |  | December 31, 2010
Principal amount | $ | 175.0 |  |  | $ | 175.0 |
Less: unamortized issuance discount | (28.7 | ) |  | (33.6 | )
Carrying amount, net of discount | $ | 146.3 |  |  | $ | 141.4 |
| Quarter Ended |  | Nine Months Ended
| September 30, |  | September 30,
| 2011 |  | 2010 |  | 2011 |  | 2010
Contractual coupon interest | $ | 2.0 |  |  | $ | 1.9 |  |  | $ | 5.9 |  |  | $ | 3.9 |
Amortization of discount and deferred financing costs | 2.0 |  |  | 1.8 |  |  | 5.8 |  |  | 3.6 |
Total interest expense 1 | $ | 4.0 |  |  | $ | 3.7 |  |  | $ | 11.7 |  |  | $ | 7.5 |
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1 | A portion of the interest relating to the Notes is capitalized as Construction in progress.
See “Other” in Note 12 for information relating to the estimated fair value of the Notes. Convertible Note Hedge Transactions. In March 2010, the Company paid approximately $31.4 to purchase Call Options. The Call Options have an initial exercise price equal to the conversion price of the Notes ($48.32 per share of the Company's common stock), are subject to anti-dilution adjustments substantially similar to the anti-dilution adjustments for the Notes, are settled in cash, and will expire upon the maturity of the Notes. Accordingly, if the market price per share of the Company's common stock at the time of cash conversion of any Notes is above the strike price of the Call Options, the Company is entitled to receive from the counterparties to the Call Options an aggregate amount equaling the amount of cash that the Company would be required to deliver to the holders of the converted Notes, less the principal amount thereof. In March 2010, the Company also sold net-share-settled warrants (the “Warrants”) relating to approximately 3.6 million shares of the Company's common stock for approximately $14.3 in cash. The Warrants have an initial strike price of $61.36 per share, are subject to certain anti-dilution adjustments, and expire on July 1, 2015. Under the terms of the Warrants, if the market price per share of the Company's common stock exceeds the strike price of the Warrants, the Company will be obligated to issue shares of the Company's common stock to the counterparties to the Warrants having a value equal to such excess, as measured under the terms of the Warrants. The Warrants may not be exercised prior to the expiration date. The Warrants meet the definition of derivatives but are not subject to fair value accounting because they are indexed to the Company's common stock and meet the requirement to be classified as equity instruments. The Call Options and Warrant transactions are separate transactions and are not part of the terms of the Notes and do not affect the rights of holders under the Notes.

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