Convertible Notes, Net

12 Months Ended

Dec. 31, 2022

CONVERTIBLE NOTES, NET During the year ended December 31, 2022, we issued $300.0 million aggregate principal amount of 5.50% convertible senior notes due 2027, or the March 2022 convertible notes. In connection with this offering, we repurchased $64.7 million aggregate principal amount of our May 2017 convertible senior notes at a price of 100.25% per $1,000 principal amount. We repaid the remaining $337.9 million aggregate principal amount of our May 2017 convertible senior notes at maturity on May 5, 2022.

As of December 31, 2022, the following convertible senior notes, or Convertible Notes, were outstanding ($ in thousands):


Convertible Notes Issuance	Face Value		Interest Rate	All-in Cost(1)	Conversion Price(2)	Maturity
March 2018	$	220,000	4.75%	5.33%	$36.23	March 15, 2023
March 2022	$	300,000	5.50%	5.94%	$36.27	March 15, 2027

(1)Includes issuance costs that are amortized through interest expense over the life of the Convertible Notes using the effective interest method.

(2)Represents the price of class A common stock per share based on a conversion rate of 27.6052 and 27.5702, respectively, for the March 2018 and March 2022 convertible notes. The conversion rate represents the number of shares of class A common stock issuable per $1,000 principal amount of Convertible Notes. The cumulative dividend threshold as defined in the respective March 2018 and March 2022 convertible notes supplemental indentures have not been exceeded as of December 31, 2022.

Other than as provided by the optional redemption provisions with respect to our March 2022 convertible notes, we may not redeem the Convertible Notes prior to maturity. The March 2022 convertible notes are convertible at the holders’ option into shares of our class A common stock, only under specific circumstances, prior to the close of business on December 14, 2026 at the applicable conversion rate in effect on the conversion date. Thereafter, the March 2022 convertible notes are convertible at the option of the holder at any time until the second scheduled trading day immediately preceding the maturity date. The March 2018 convertible notes are currently convertible at the option of the holder at any time until the second scheduled trading day immediately preceding the maturity date. We have elected to settle the March 2018 convertible notes in cash for any conversions that occur during the final conversion period. The last reported sale price of our class A common stock of $21.17 on December 30, 2022, the last trading day in the year ended December 31, 2022, was less than the per share conversion price of the March 2018 and March 2022 convertible notes.

We adopted ASU 2020-06 on January 1, 2022, using the modified retrospective method of transition, which resulted in an aggregate decrease to our additional paid-in capital of $2.4 million, an aggregate decrease to our accumulated deficit of $2.0 million, and an aggregate increase to our convertible notes, net, balance of $477,000, as of January 1, 2022. Subsequent to adoption of ASU 2020-06, convertible debt proceeds, unless issued with a substantial premium or an embedded conversion feature, will no longer be allocated between debt and equity components. This reduces the issue discount and results in less non-cash interest expense in our consolidated financial statements. Additionally, ASU 2020-06 results in the reporting of diluted earnings per share for shares issuable under our convertible notes in our consolidated financial statements, if the effect is dilutive, regardless of our settlement intent. Refer to Note 2 and Note 13 for additional discussion of ASU 2020-06 and our earnings per share calculation, respectively.

The following table details the net book value of our Convertible Notes on our consolidated balance sheets ($ in thousands):


	December 31, 2022		December 31, 2021
Face value	$	520,000	$	622,500
Deferred financing costs and unamortized discount	(5,743)		(2,624)
Net book value	$	514,257	$	619,876

The following table details our interest expense related to the Convertible Notes ($ in thousands):


	Year Ended December 31,
		2022		2021		2020
Cash coupon		$	28,859	$	28,059	$	28,059
Discount and issuance cost amortization		2,853		3,486		3,319
Total interest expense		$	31,712	$	31,545	$	31,378

Accrued interest payable for the Convertible Notes was $7.9 million and $6.0 million as of December 31, 2022 and December 31, 2021, respectively. Refer to Note 2 for additional discussion of our accounting policies for the Convertible Notes.