Long-term Debt

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Long-term Debt

Long-term Debt 

The Company’s total indebtedness as of June 30, 2023 and December 31, 2022 consisted of the following:

Debt Instrument (defined below, as applicable)	June 30, 2023		December 31, 2022
	(Dollars in millions)
3.250% Convertible Senior Notes due March 2028 (2028 Convertible Notes)	$	320.0	$	320.0
Finance lease obligations	23.5		23.6
Less: Debt issuance costs	(9.0)		(9.8)
	334.5		333.8
Less: Current portion of long-term debt	13.0		13.2
Long-term debt	$	321.5	$	320.6

During 2022, the Company utilized various methods allowable or required under its then-existing debt agreements to retire all of its senior secured long-term debt, leaving only its unsecured 3.250% Convertible Senior Notes due 2028 (the 2028 Convertible Notes), which are further described below, and various finance lease obligations outstanding at December 31, 2022.

2028 Convertible Notes

On March 1, 2022, through a private offering, the Company issued the 2028 Convertible Notes in the aggregate principal amount of $320.0 million. The 2028 Convertible Notes are senior unsecured obligations of the Company and are governed under an indenture.

The Company used the proceeds of the offering of the 2028 Convertible Notes and available cash to redeem $62.6 million of senior secured notes maturing in 2024 and $257.4 million of senior secured notes maturing in 2025, and to pay related premiums, fees and expenses relating to the offering and redemptions. The Company capitalized $11.2 million of debt issuance costs related to the offering and recognized a loss on early debt extinguishment of $23.0 million during the three months ended March 31, 2022.

The 2028 Convertible Notes will mature on March 1, 2028, unless earlier converted, redeemed or repurchased in accordance with their terms. The 2028 Convertible Notes bore interest from March 1, 2022 at a rate of 3.250% per year, payable semi-annually in arrears on March 1 and September 1 of each year, beginning on September 1, 2022.

The 2028 Convertible Notes’ indenture requires conversion rate adjustments upon the payment of dividends to holders of the Company’s common stock once such cumulative dividends impact the conversion rate by at least 1%. Under the applicable conversion rate formula, the $0.075 per share dividend declared on April 27, 2023 and paid on May 31, 2023 yielded a revised conversion rate of 50.5451 shares per $1,000 principal amount of 2028 Convertible Notes, which did not meet the 1% threshold to impact the existing conversion rate of 50.3816. The conversion rate may be impacted prospectively, based upon cumulative dividends paid.

During the first and second quarters of 2023, the Company’s reported common stock prices did not prompt the conversion feature of the 2028 Convertible Notes. As a result, the 2028 Convertible Notes were not convertible at the option of the holders during the second quarter of 2023, and will not be similarly convertible during the third quarter of 2023.

As of June 30, 2023, the if-converted value of the 2028 Convertible Notes exceeded the principal amount by $29.2 million.

Interest Charges

The following table presents the components of the Company’s interest expense related to its indebtedness and financial assurance instruments such as surety bonds and letters of credit. Additionally, the table sets forth the amount of cash paid for interest and the amount of non-cash interest expense primarily related to the amortization of debt issuance costs.

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(Dollars in millions)
Indebtedness	$	5.3	$	24.0	$	11.7	$	49.9
Financial assurance instruments	8.0		13.6		20.0		27.1
Interest expense	$	13.3	$	37.6	$	31.7	$	77.0
Cash paid for interest	$	22.9	$	40.6	$	41.9	$	77.8
Non-cash interest expense	$	1.7	$	5.2	$	3.3	$	9.0

Covenant Compliance

The Company was compliant with all relevant covenants under its debt and other finance agreements at June 30, 2023. The April 2023 termination of the Company’s credit agreement and related letter of credit facility, as described in Note 11. “Financial Instruments and Other Guarantees,” eliminated the related compliance requirements as of March 31, 2023 and prospectively.