Financing Activities

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

FINANCING ACTIVITIES

FINANCING ACTIVITIES

On May 1, 2020, the Company completed the public offering of $2.3 billion aggregate principal amount of Convertible Senior Notes (the "Convertible Notes"). The Convertible Notes bear interest at a rate of 1.25% and will mature on May 1, 2025. Interest on the notes is payable semi-annually in arrears.

Holders may convert their Convertible Notes at their option at any time prior to the close of business on the business day immediately preceding February 1, 2025, in the event certain conditions are met, as stated in the offering documents. The Convertible Notes did not meet the criteria to be converted as of the date of the financial statements, and thus are classified as Long-term debt in the accompanying unaudited Condensed Consolidated Balance Sheet as of June 30, 2023. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock, or a combination of cash and shares of common stock, at the Company’s election. The Company intends to settle conversions by paying cash up to the principal amount of the Convertible Notes, with any excess conversion value settled in cash or shares of common stock. The initial conversion rate was 25.9909 shares of common stock per $1,000 principal amount of Convertible Notes (equivalent to an initial conversion price of approximately $38.48 per share of common stock). However, based on the Company's cash dividends declared in May 2023, the bond conversion rate changed to 26.4038 on June 20, 2023. The net carrying amount and principal amount of the Convertible Notes was $1.6 billion as of June 30, 2023 and December 31, 2022.

The Company recognized interest expense associated with the Convertible Notes as follows:

	Three months ended June 30,				Six months ended June 30,
(in millions)	2023		2022		2023		2022
Non-cash amortization of debt issuance costs	$	3	$	3	$	5	$	7
Contractual coupon interest	5		6		10		12
Total interest expense	$	8	$	9	$	15	$	19

The unamortized debt issuance costs are being recognized as non-cash interest expense based on the 5-year term of the notes, through May 1, 2025, less amounts that were or will be required to be accelerated immediately upon conversion or repurchases. The Company had no changes to contingencies during the six months ended June 30, 2023. The effective interest rate associated with the Convertible Notes was approximately 1.9 percent for the three and six months ended June 30, 2023.

The following tables present the impact of the partial extinguishment of the Company's Convertible Notes and early prepayment of debt (excluding payments on finance leases) for the three and six months ended June 30, 2022. No such instances of partial extinguishment or early prepayment of debt occurred for the three and six months ended June 30, 2023.

	Three months ended June 30, 2022
(in millions)	Cash paid for debt and interest		Principal repayment		Loss on extinguishment		Non-cash amortization of debt discount and (issuance) costs
1.25% Convertible Notes due 2025	$	178	$	138	$	42	$	(2)
5.125% Notes due 2027	27		26		1		—
4.75% Notes due 2023	3		3		—		—
5.25% Notes due 2025	1		1		—		—
Total	$	209	$	168	$	43	$	(2)

	Six months ended June 30, 2022
(in millions)	Cash paid for debt and interest		Principal repayment		Loss on extinguishment		Non-cash amortization of debt discount and (issuance) costs
1.25% Convertible Notes due 2025	$	409	$	302	$	112	$	(5)
5.125% Notes due 2027	61		56		4		1
4.75% Notes due 2023	3		3		—		—
5.25% Notes due 2025	1		1		—		—
Total	$	474	$	362	$	116	$	(4)

The Company has access to $1.0 billion under its amended and restated revolving credit facility (the "Amended A&R Credit Agreement"), which expires in August 2025. For the six months ended June 30, 2023 and 2022, there were no amounts outstanding under the Amended A&R Credit Agreement.