Convertible Notes, Net

6 Months Ended

Jun. 30, 2021

Text Block [Abstract]

Convertible Notes, Net

9. CONVERTIBLE NOTES, NET

As of June 30, 2021, the following convertible senior notes, or Convertible Notes, were outstanding ($ in thousands):

Convertible Notes Issuance	Face Value		Interest Rate			All-in Cost(1)			Conversion Rate(2)		Maturity
May 2017	$	402,500		4.38	%		4.85	%		28.0324		May 5, 2022
March 2018	$	220,000		4.75	%		5.33	%		27.6052		March 15, 2023

(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 shares of class A common stock per $1,000 principal amount of Convertible Notes, which is equivalent to a conversion price of $35.67 and $36.23 per share of class A common stock, respectively, for the May 2017 and March 2018 convertible notes. The cumulative dividend threshold as defined in the respective May 2017 and March 2018 convertible notes supplemental indentures have not been exceeded as of June 30, 2021.

The 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 January 31, 2022 and December 14, 2022 for the May 2017 and March 2018 convertible notes, respectively, at the applicable conversion rate in effect on the conversion date. Thereafter, the Convertible Notes are convertible at the option of the holder at any time until the second scheduled trading day immediately preceding the maturity date. We may not redeem the Convertible Notes prior to maturity. The last reported sale price of our class A common stock of $31.89 on June 30, 2021 was less than the per share conversion price of the May 2017 and March 2018 convertible notes. We have the intent and ability to settle each series of the Convertible Notes in cash and, as a result, the potential conversion of the Convertible Notes did not have any impact on our diluted earnings per share.

Upon our issuance of the May 2017 convertible notes, we recorded a $979,000 discount based on the implied value of the conversion option and an assumed effective interest rate of 4.57%, as well as $8.4 million of issue discount and issuance costs. Including the amortization of the discount and issuance costs, our total cost of the May 2017 convertible notes issuance is 4.91% per annum.

Upon our issuance of the March 2018 convertible notes, we recorded a $1.5 million discount based on the implied value of the conversion option and an assumed effective interest rate of 5.25%, as well as $5.2 million of issue discount and issuance costs. Including the amortization of the discount and issuance costs, our total cost of the March 2018 convertible notes issuance is 5.49% per annum.

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

	June 30, 2021			December 31, 2020
Face value	$	622,500		$	622,500
Unamortized discount		(4,113	)		(5,715	)
Deferred financing costs		(276	)		(396	)
Net book value	$	618,111		$	616,389

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

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Cash coupon	$	7,015	$	7,015	$	14,030	$	14,030
Discount and issuance cost amortization		869		828		1,722		1,639
Total interest expense	$	7,884	$	7,843	$	15,752	$	15,669

Accrued interest payable for the Convertible Notes was $6.0 million as of both June 30, 2021 and December 31, 2020. Refer to Note 2 for additional discussion of our accounting policies for the Convertible Notes.