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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>8. CONVERTIBLE NOTES</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><i>2016 Notes</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     On January 14, 2011, we entered into an underwriting agreement with the Underwriter relating
to the offer and sale of $540 million aggregate principal amount of our 2016 Notes. Under the terms
of the underwriting agreement, we granted the Underwriter an option, exercisable within 30 days of
the date of the agreement, to purchase up to an additional $80 million aggregate principal amount
of 2016 Notes to cover overallotments. We issued $540 million in aggregate principal amount of the
2016 Notes upon the closing of the offering on January 20, 2011. Net proceeds to us, after payment
of underwriting fees and estimated expenses, were approximately $528.8 million. On January 31,
2011, the Underwriter exercised the overallotment option in full, and we closed on the sale of the
additional $80 million in principal amount of the 2016 Notes on February 3, 2011. Net proceeds to
us from the exercise of the overallotment option, after deducting underwriting fees and other
offering expenses, were approximately $78.3 million.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     On January 20, 2011, we entered into the First Supplemental Indenture (the “Supplemental
Indenture”), dated as of January 20, 2011, with The Bank of New York Mellon Trust Company, N.A., as
trustee (the “Trustee”), to our existing Base Indenture (the “Base Indenture” and, together with
the Supplemental Indenture, the “2016 Indenture”), dated as of March 16, 2007, with the Trustee.
The 2016 Indenture sets forth the rights and provisions governing the 2016 Notes. Interest is
payable on the 2016 Notes semi-annually in arrears on January 15 and July 15 of each year,
beginning on July 15, 2011. Record dates for payment of interest on the 2016 Notes are each January
1 and July 1.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The 2016 Notes are convertible at the option of the holder, and we may choose to satisfy
the conversion in cash, shares of our common stock, or a combination of cash and shares of our
common stock, based on a conversion rate initially equal to 19.5160 shares of our common stock per
$1,000 principal amount of the 2016 Notes, which is equivalent to an initial conversion price of
approximately $51.24 per share. The conversion rate will be increased under certain circumstances
described in the 2016 Indenture; however, the number of shares of common stock issued upon
conversion of a 2016 Note will not exceed 27.3224 per $1,000 principal amount of 2016 Notes,
subject to adjustment in accordance with the 2016 Indenture.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The offering of the 2016 Notes was made pursuant to our effective shelf registration statement
on Form S-3 (Registration No. 333-163573), as amended by a post-effective amendment, including the
related prospectus dated January 13, 2011 and the prospectus supplement dated January 14, 2011,
each as filed with the Securities and Exchange Commission.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The 2016 Notes are accounted for in accordance with ASC 470-20. Under ASC 470-20, issuers of
certain convertible debt instruments that have a net settlement feature and may be settled in cash
upon conversion, including partial cash settlement, are required to separately account for the
liability (debt) and equity (conversion option) components of the instrument. The carrying amount
of the liability component of the 2016 Notes, as of the issuance date, was calculated by estimating
the fair value of a similar liability issued at an 8.1% effective interest rate, which was
determined by considering the rate of return investors would require in the Company’s debt
structure. The amount of the equity component was calculated by deducting the fair value of the
liability component from the principal amount of the 2016 Notes and resulted in a corresponding
increase to debt discount. The debt discount is being amortized as interest expense through the
earlier of the maturity date of the 2016 Notes or the date of conversion.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The application of ASC 470-20 resulted in the initial recognition of $132.9 million as the
debt discount with a corresponding increase to additional paid-in capital, the equity component,
for the 2016 Notes. At March 31, 2011, the net carrying amount of the liability component, which is
recorded as a current liability in the consolidated balance sheet, and the remaining unamortized
debt discount were as follows (in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>March 31,</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>2011</b></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Carrying amount of the equity component
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">132,876</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Carrying amount of the liability component
</div></td>
<td> </td>
<td> </td>
<td align="right">491,424</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Unamortized discount of the liability component
</div></td>
<td> </td>
<td> </td>
<td align="right">128,576</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Amortization of the debt discount and debt issuance costs for the three months ended March 31,
2011 resulted in non-cash interest expense of $4.7 million. In addition, interest expense for the
three months ended March 31, 2011 was $3.4 million based on the
2.875% stated coupon rate. The fair
value of the 2016 Notes at March 31, 2011, based on the average trading prices of similar
instruments at March 31, 2011, was approximately $655.7 million.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     We have identified other embedded derivatives associated with the 2016 Notes and are
accounting for these embedded derivatives accordingly. These embedded derivatives meet certain
criteria and are therefore not required to be accounted for separately from the 2016 Notes.
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><i>2014 Notes</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In 2007, an aggregate of $85.3 million of the 2014 Notes were sold in a private placement to
qualified institutional buyers. Proceeds from the offering, after deducting placement fees and our
estimated expenses, were approximately $82.3 million. The 2014 Notes were issued at face principal
amount and pay interest semi-annually in arrears on June 15 and December 15 of each year. Record
dates for payment of interest on the 2014 Notes are each June 1st and December 1st. In certain
circumstances, additional amounts may become due on the 2014 Notes as additional interest. We can
elect that the sole remedy for an event of default for our failure to comply with the “reporting
obligations” provisions of the indenture under which the 2014 Notes were issued (the “Indenture”),
for the first 180 days after the occurrence of such event of default would be for the holders of
the 2014 Notes to receive additional interest on the 2014 Notes at an annual rate equal to 1% of
the outstanding principal amount of the 2014 Notes. We recorded interest expense, including the
amortization of debt issuance costs, related to the 2014 Notes of $0.4 million and $0.7 million
during the three months ended March 31, 2011 and 2010, respectively.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The 2014 Notes are convertible into our common stock, initially at the conversion price of
$10.28 per share, equal to a conversion rate of approximately 97.2644 shares per $1,000 principal
amount of the 2014 Notes, subject to adjustment. There may be an increase in the conversion rate of
the 2014 Notes under certain circumstances described in the Indenture; however, the number of
shares of common stock issued will not exceed 114.2857 per $1,000 principal amount of the 2014
Notes. A holder that converts 2014 Notes in connection with a “fundamental change,” as defined in
the Indenture, may in some circumstances be entitled to an increased conversion rate (i.e., a lower
per share conversion price) as a make whole premium. If a fundamental change occurs, holders of the
2014 Notes may require us to repurchase all or a portion of their 2014 Notes for cash at a
repurchase price equal to 100% of the principal amount of the 2014 Notes to be repurchased, plus
any accrued and unpaid interest and other amounts due thereon. The Indenture contains customary
covenants.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     In April 2009, $11.5 million in principal amount of the 2014 Notes were converted by holders
of the 2014 Notes, resulting in the issuance of approximately 1.1 million shares of common stock.
In May 2009, we exchanged approximately 2.1 million shares of our common stock for $21.2 million
principal face amount of the 2014 Notes. In December 2010, we exchanged approximately 2.5 million
shares of common stock for $24.9 million principal face amount of the 2014 Notes, which included a
premium of approximately 129,000 shares of common stock.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     We have identified embedded derivatives associated with the 2014 Notes. These embedded
derivatives meet certain criteria and are therefore not required to be accounted for separately
from the 2014 Notes.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     As of March 31, 2011 and December 31, 2010, the aggregate principal amount of the 2014 Notes
outstanding was $27.7 million. The fair value of the 2014 Notes at March 31, 2011 and December 31,
2010, based on the average trading prices of similar instruments near each respective quarter-end,
was approximately $101.2 million and $98.0 million, respectively.
</div>
</div>
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