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Debt | 9 Months Ended
--- | ---
Jun. 30, 2018
Debt Disclosure [Abstract] |
DEBT | NOTE 6: DEBT The following tables present our debt instruments outstanding, contractual maturities and interest expense:
| June 30, 2018 |  | June 30, 2017 |  | September 30, 2017
| Gross Amount |  | Debt Discount and Issuance Costs |  | Carrying Amount |  | Gross Amount |  | Debt Discount and Issuance Costs |  | Carrying Amount |  | Gross Amount |  | Debt Discount and Issuance Costs |  | Carrying Amount
| (in thousands)
2019 Convertible Notes | $ | 195,000 |  |  | $ | (10,177 | ) |  | $ | 184,823 |  |  | $ | 230,000 |  |  | $ | (23,721 | ) |  | $ | 206,279 |  |  | $ | 195,000 |  |  | $ | (17,654 | ) |  | $ | 177,346 |
2019 Convertible Notes Embedded Derivative | 7,491 |  |  | — |  |  | 7,491 |  |  | 5,900 |  |  | — |  |  | 5,900 |  |  | 6,591 |  |  | — |  |  | 6,591 |
2024 Convertible Notes | 143,750 |  |  | (39,188 | ) |  | 104,562 |  |  | — |  |  | — |  |  | — |  |  | 143,750 |  |  | (42,880 | ) |  | 100,870 |
2025 Convertible Notes | 172,500 |  |  | (54,165 | ) |  | 118,335 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Other debt* | 3,482 |  |  | — |  |  | 3,482 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Term loan facility | — |  |  | — |  |  | — |  |  | 50,000 |  |  | (1,765 | ) |  | 48,235 |  |  | — |  |  | — |  |  | — |
Total | $ | 522,223 |  |  | $ | (103,530 | ) |  | $ | 418,693 |  |  | $ | 285,900 |  |  | $ | (25,486 | ) |  | $ | 260,414 |  |  | $ | 345,341 |  |  | $ | (60,534 | ) |  | $ | 284,807 |
Less current portion | (205,973 | ) |  | 10,177 |  |  | (195,796 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total long-term debt | $ | 316,250 |  |  | $ | (93,353 | ) |  | $ | 222,897 |  |  | $ | 285,900 |  |  | $ | (25,486 | ) |  | $ | 260,414 |  |  | $ | 345,341 |  |  | $ | (60,534 | ) |  | $ | 284,807 |
* | Purchase money financing; debt classified as current as collateral was destroyed. Insurance proceeds are expected to cover the entire loss.
| Schedule of Contractual Maturities
| Total |  | Less Than 1 Year |  | 1 - 3 Years |  | 3 - 5 Years |  | More Than 5 Years
| (in thousands)
2019 Convertible Notes* | $ | 195,000 |  |  | $ | 195,000 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
2024 Convertible Notes* | 143,750 |  |  | — |  |  | — |  |  | — |  |  | 143,750 |
2025 Convertible Notes* | 172,500 |  |  | — |  |  | — |  |  | — |  |  | 172,500 |
Other debt | 3,482 |  |  | 3,482 |  |  | — |  |  | — |  |  | — |
| $ | 514,732 |  |  | $ | 198,482 |  |  | $ | — |  |  | $ | — |  |  | $ | 316,250 |
* | Excludes the potential impact of embedded derivatives.
| Three Months Ended June 30, |  | Nine Months Ended June 30,
| 2018 |  | 2017 |  | 2018 |  | 2017
| (in millions)
2019 Convertible Notes: |  |  |  |  |  |  |
Contractual interest expense | $ | 1.1 |  |  | $ | 1.3 |  |  | $ | 3.2 |  |  | $ | 3.8 |
Amortization of debt discount and deferred financing costs | 2.5 |  |  | 2.8 |  |  | 7.5 |  |  | 8.3 |
Total interest expense | $ | 3.6 |  |  | $ | 4.1 |  |  | $ | 10.7 |  |  | $ | 12.1 |
2024 Convertible Notes: |  |  |  |  |  |  |
Contractual interest expense | $ | 1.1 |  |  | $ | — |  |  | $ | 3.1 |  |  | $ | — |
Amortization of debt discount and deferred financing costs | 1.3 |  |  | — |  |  | 3.8 |  |  | — |
Total interest expense | $ | 2.4 |  |  | $ | — |  |  | $ | 6.9 |  |  | $ | — |
2025 Convertible Notes: |  |  |  |  |  |  |
Contractual interest expense | $ | 0.5 |  |  | $ | — |  |  | $ | 0.5 |  |  | $ | — |
Amortization of debt discount and deferred financing costs | 0.8 |  |  | — |  |  | 0.8 |  |  | — |
Total interest expense | $ | 1.3 |  |  | $ | — |  |  | $ | 1.3 |  |  | $ | — |
2.375% Convertible Senior Notes Due 2025 In May 2018, we issued $172.5 million aggregate principal amount of 2.375% Convertible Senior Notes Due 2025 (the “2025 Convertible Notes”). The 2025 Convertible Notes were issued pursuant to an indenture dated May 14, 2018 (the "2018 Indenture") by and between us and Wells Fargo Bank, National Association, as the trustee. The 2025 Convertible Notes were issued in a private offering under Rule 144A under the Securities Act of 1933. The 2025 Convertible Notes pay interest semi-annually in arrears at a rate of 2.375% per annum on May 1 and November 1 of each year, commencing November 1, 2018, and mature on May 1, 2025 (the "2025 Maturity Date"), unless converted, redeemed or repurchased in accordance with their terms prior to such date. We measured the fair value of the liability component of the 2025 Convertible Notes under a discounted cash flow approach considering our synthetic credit rating, as determined with external consultation, including inputs that are not observable in the market. The fair value of the liability component was estimated by calculating the present value of the cash flows using a discount rate of 8% for a similarly structured liability with no conversion feature, maturing in seven years. Our estimate resulted in an initial carrying value of the liability component of the 2025 Convertible Notes of $121.3 million with an associated original issue discount of $51.2 million, exclusive of deferred financing costs. The carrying amount of the 2025 Convertible Notes as a separate equity-classified instrument (the “2025 Convertible Notes Embedded Derivative”) as initially calculated and is currently included under “Additional paid-in capital” in our condensed consolidated balance sheets of June 30, 2018 was $49.6 million ($39.1 million, net of tax). The 2025 Convertible Notes Embedded Derivative is expected to remain recorded in equity in our condensed consolidated balance sheets as long as it continues to meet the criteria as an equity-classified instrument in subsequent reporting periods. We incurred transaction costs of $5.5 million related to the issuance of the 2025 Convertible Notes, which we recorded as deferred financing costs and are included under “Long-term debt, net” and “Additional paid-in capital” in our condensed consolidated balance sheets. The effective interest rate for the three and nine months ended June 30, 2018 was approximately 9%. As of June 30, 2018, the remaining unamortized debt discount and issuance costs will be amortized through the 2025 Maturity Date assuming no early conversion. The 2025 Convertible Notes are convertible into cash or shares of Class A Non-Voting Common Stock ("Class A Common Stock"), or any combination thereof, at our option subject to satisfaction of certain conditions and during the periods described in the 2018 Indenture, based on an initial conversion rate of 62.8931 shares of Class A Common Stock per $1,000 principal amount of 2025 Convertible Notes (equivalent to an initial conversion price of $15.90 per share of our Class A Common Stock). We account for the Class A Common Stock issuable upon conversion under the treasury stock method. To the extent our average share price is over $15.90 per share for any fiscal quarter, we are required to recognize incremental dilution of our earnings per share. Prior to November 1, 2024, the 2025 Convertible Notes will be convertible only under the following circumstances: (1) during any fiscal quarter commencing after the fiscal quarter ended on June 30, 2018 (and only during such fiscal quarter), if the last reported sale price of our Class A Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal 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 five consecutive trading day period (the “measurement period”) in which the trading price, as defined in the 2018 Indenture, per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our Class A Common Stock and the conversion rate on such trading day; (3) if we call any or all of the 2025 Convertible Notes for redemption, at any time prior to the close of business on the business day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events, as defined in the 2018 Indenture. On or after November 1, 2024 until the close of business on the business day immediately preceding the 2025 Maturity Date, holders of 2025 Convertible Notes may, at their option, convert their 2025 Convertible Notes at any time, regardless of the foregoing circumstances. We may not redeem the 2025 Convertible Notes prior to May 1, 2022. At our option, we may redeem for cash all or any portion of the 2025 Convertible Notes on or after May 1, 2022, if the last reported sale price of the Class A Common Stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which we provide notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption. The redemption price will be equal to 100% of the principal amount of the 2025 Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. If, among other triggers described in the 2018 Indenture, the market price of our Class A Common Stock meets the threshold based on at least 20 of the final 30 trading days of the quarter for the 2025 Convertible Notes to become convertible at the option of the holders during the subsequent quarter, we may be required to classify the 2025 Convertible Notes as current on our condensed consolidated balance sheets for each quarter in which such triggers are met. The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of June 30, 2018. As of June 30, 2018, the if-converted value of the 2025 Convertible Notes did not exceed the principal amount. 2.875% Convertible Senior Notes Due 2024 In July 2017, we issued $143.75 million aggregate principal amount of 2.875% Convertible Senior Notes Due 2024 (the “2024 Convertible Notes”). All of the 2024 Convertible Notes were issued pursuant to an indenture dated July 5, 2017 (the "2017 Indenture") by and between us and Wells Fargo Bank, National Association, as the trustee. The 2024 Convertible Notes were issued in a private offering under Rule 144A under the Securities Act of 1933. The 2024 Convertible Notes pay interest semi-annually in arrears at a rate of 2.875% per annum on January 1 and July 1 of each year, commencing January 1, 2018, and mature on July 1, 2024 (the "2024 Maturity Date"), unless converted, redeemed or repurchased in accordance with their terms prior to such date. The carrying amount of the 2024 Convertible Notes as a separate equity-classified instrument (the “2024 Convertible Notes Embedded Derivative”) included under “Additional paid-in capital” in our condensed consolidated balance sheets of June 30, 2018 was $25.3 million. The effective interest rate for the three and nine months ended June 30, 2018 was approximately 9%. As of June 30, 2018, the remaining unamortized debt discount and issuance costs will be amortized through the 2024 Maturity Date assuming no early conversion. The 2024 Convertible Notes are convertible into cash or shares of Class A Common Stock, or any combination thereof, at our option subject to satisfaction of certain conditions and during the periods described in the 2017 Indenture, based on an initial conversion rate of 100 shares of Class A Common Stock per $1,000 principal amount of 2024 Convertible Notes (equivalent to an initial conversion price of $10.00 per share of our Class A Common Stock). We account for the Class A Common Stock issuable upon conversion under the treasury stock method. To the extent our average share price is over $10.00 per share for any fiscal quarter, we are required to recognize incremental dilution of our earnings per share. If, among other triggers described in the 2017 Indenture, the market price of our Class A Common Stock meets the threshold based on at least 20 of the final 30 trading days of a quarter for the 2024 Convertible Notes to become convertible at the option of the holders during the subsequent quarter, we may be required to classify the 2024 Convertible Notes as current on our condensed consolidated balance sheets for each quarter in which such triggers are met. The stock trading price condition and other triggers are measured on a quarter-by-quarter basis and were not met as of June 30, 2018, and therefore, the 2024 Convertible notes are not classified as current as of June 30, 2018. Though not currently convertible, we estimate that the if-converted value of the 2024 Convertible Notes exceeded the principal amount by $39.6 million as of June 30, 2018. 2.125% Cash Convertible Senior Notes Due 2019 In June 2014, we issued $200 million aggregate principal amount of 2.125% Cash Convertible Senior Notes Due 2019 (the "2019 Convertible Notes"), with an additional $30 million principal amount of 2019 Convertible Notes issued in July 2014. In July 2017, we used $34.4 million of net proceeds from the 2024 Convertible Notes offering to repurchase and retire $35.0 million aggregate principal amount of 2019 Convertible Notes. The 2019 Convertible Notes were issued pursuant to an indenture dated June 23, 2014 (the "2014 Indenture") by and between us and Wells Fargo Bank, National Association, as the trustee. The 2019 Convertible Notes were issued in a private offering and resold under Rule 144A under the Securities Act of 1933. The 2019 Convertible Notes pay interest semi-annually in arrears at a rate of 2.125% per annum on June 15 and December 15 of each year and mature on June 15, 2019 (the "2019 Maturity Date"), unless converted, redeemed or repurchased in accordance with their terms prior to such date. The effective interest rate for the three and nine months ended June 30, 2018 and 2017 was approximately 8%. As of June 30, 2018, the remaining unamortized debt discount and issuance costs will be amortized through the 2019 Maturity Date assuming no early conversion. The 2019 Convertible Notes are convertible into cash, subject to satisfaction of certain conditions and during the periods described in the 2014 Indenture, based on an initial conversion rate of 62.2471 shares of Class A Common Stock per $1,000 principal amount of 2019 Convertible Notes (equivalent to an initial conversion price of approximately $16.065 per share of our Class A Common Stock). As of June 30, 2018, the if-converted value of the 2019 Convertible Notes did not exceed the principal amount. 2019 Convertible Notes Hedges In connection with the issuance of the 2019 Convertible Notes, we purchased cash-settled call options (the “2019 Convertible Notes Hedges”) in privately negotiated transactions with certain of the initial purchasers or their affiliates (in this capacity, the “Option Counterparties”). The 2019 Convertible Notes Hedges provide us with the option to acquire, on a net settlement basis, approximately 12.1 million shares of our Class A Common Stock at a strike price of $16.065, which is equal to the number of shares of our Class A Common Stock that notionally underlie the 2019 Convertible Notes and corresponds to the conversion price of the 2019 Convertible Notes. If we exercise the 2019 Convertible Notes Hedges, the aggregate amount of cash we will receive from the Option Counterparties will cover the aggregate amount of cash that we would be required to pay to the holders of the converted 2019 Convertible Notes, less the principal amount thereof. 2019 Convertible Notes Warrants In connection with the issuance of the 2019 Convertible Notes, we also sold net-share-settled warrants (the “2019 Convertible Notes Warrants”) in privately negotiated transactions with the Option Counterparties. Subsequent to repurchase and retirement of $35.0 million aggregate principal amount of 2019 Convertible Notes in July 2017, the 2019 Convertible Notes Warrants allow for the purchase of up to approximately 9.4 million shares of our Class A Common Stock at a strike price of $20.83 per share. We account for the Class A Common Stock issuable upon exercise under the treasury stock method. As a result of the 2019 Convertible Notes Warrants and related transactions, we are required to recognize incremental dilution of our earnings per share to the extent our average share price is over $20.83 for any fiscal quarter. The 2019 Convertible Notes Warrants expire on various dates from September 2019 through February 2020 and must be settled in net shares of our Class A Common Stock.

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