Debt

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Debt

NOTE 6: DEBT

The Company’s outstanding debt consisted of the following as of the dates presented:

March 31, 2024	Outstanding Principal Amount		Unamortized Debt Issuance Costs			Carrying Value
(in millions)
Long-Term Debt:
7% 2025 Senior Notes due 2025	$	500	$	(3	)	$	497
0.25% Convertible 2026 Senior Notes due 2026		345		(2	)		343
Total Long-Term Debt	$	845	$	(5	)	$	840
December 31, 2023	Outstanding Principal Amount		Unamortized Debt Issuance Costs			Carrying Value
(in millions)
Long-Term Debt:
7% 2025 Senior Notes due 2025	$	500	$	(3	)	$	497
0.25% Convertible 2026 Senior Notes due 2026		345		(3	)		342
Total Long-Term Debt	$	845	$	(6	)	$	839

Credit Facility

We are party to a credit agreement with a group of lenders initially entered into in June 2015 and, most recently, amended and restated in June 2023, which, among other things, provides for a $500 million secured revolving credit facility (the “Credit Facility”). The Credit Facility has a maturity date of June 29, 2028 (unless, on any date that is 91 days prior to the final scheduled maturity date

in respect of any indebtedness outstanding under certain “specified debt,” the aggregate outstanding principal amount of such specified debt is $200 million or more, then the maturity date will be such business day).

As of March 31, 2024 and December 31, 2023, we had no outstanding borrowings under the Credit Facility. The Credit Facility also includes $15 million of borrowing capacity available for letters of credit and $40 million for swing-line borrowings on same-day notice. As of March 31, 2024 and December 31, 2023, we had issued $3 million and $4 million, respectively, of undrawn standby letters of credit under the Credit Facility. For the three months ended March 31, 2024 and 2023, total interest expense and commitment fees on our Credit Facility was not material. The Credit Agreement, among other things, requires us to maintain a maximum total net leverage ratio of 4.5 to 1.0 and contains certain customary affirmative and negative covenants and events of default, including a change of control.

2025 Senior Notes

As of March 31, 2024 and December 31, 2023, unpaid interest on the 2025 Senior Notes of $7 million and $16 million, respectively, was included in accrued expenses and other current liabilities on our unaudited condensed consolidated balance sheets, and $9 million was recorded as interest expense on our unaudited condensed consolidated statements of operations for each of the three months ended March 31, 2024 and 2023.

2026 Senior Notes

During the three months ended March 31, 2024 and 2023, our effective interest rate, including debt issuance costs, was 0.38% and 0.45%, respectively, and total interest expense incurred from the 2026 Senior Notes was not material in any period. As of March 31, 2024 and December 31, 2023, unpaid interest on the 2026 Senior Notes was also not material.

Capped Call Transactions

In connection with the issuance of the 2026 Senior Notes, the Company entered into privately negotiated capped call transactions (the “Capped Calls”) with certain of the initial purchasers of the 2026 Senior Notes and/or their respective affiliates and/or other financial institutions at a cost of approximately $35 million.

The Capped Calls are considered indexed to our own stock and are considered equity classified under GAAP, and are included as a reduction to additional paid-in-capital within stockholders’ equity on the unaudited condensed consolidated balance sheets as of both March 31, 2024 and December 31, 2023. The Capped Calls are not accounted for as derivatives and their fair value is not remeasured each reporting period.

Refer to “Note 8: Debt” in the notes to consolidated financial statements in Item 8 of our 2023 Annual Report, for additional information pertaining to redemption, conversion, and repurchase features or terms regarding the Credit Facility, 2025 Senior Notes, 2026 Senior Notes or Capped Calls.