DEBT

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

DEBT

DEBT

The following table summarizes the Company’s outstanding debt (in millions):

		December 31, 2021				September 30, 2022
	Maturity	Amount (in millions)		Effective Interest Rate		Amount (in millions)		Effective Interest Rate
2026 Notes	2026	$	1,250	7.0	%	$	1,250	7.6	%
Total long term debt		1,250				1,250
Less unamortized discount and debt issuance costs		(24)				(21)
Notes payable, less unamortized discount and debt issuance costs		1,226				1,229
Less: Current portion		—				—
Total note payable, less current portion		$	1,226			$	1,229

Term Facility

In April 2018, the Company entered into a variable rate Term Facility Agreement (“Term Facility”). In February 2021, the Company paid all outstanding amounts related to the Term Facility. Interest on the Term Facility was paid based on the London Interbank Offered Rate (“LIBOR”) plus 4.3%. The Company’s obligations under the Term Facility were backed by guarantees, including from an affiliate of a stockholder of the Company.

In connection with the Term Facility, the Company issued common stock warrants to the affiliate of the stockholder on the date thereof. The common stock warrants were classified as a debt issuance cost, recorded as an increase to Additional paid-in capital, and subsequently amortized over the periods the Term Facility was outstanding.

2021 Convertible Notes

In July 2021, the Company issued $2,500 million aggregate principal amount of unsecured senior convertible promissory notes due July 2026 in a private offering (“2021 Convertible Notes”) and made an irrevocable election to account for the 2021 Convertible Notes under the Fair Value Option in accordance with ASC Topic 825, Financial Instruments. As a result, the 2021 Convertible Notes were initially recognized as a liability measured at issue-date estimated fair value and subsequently re-measured to estimated fair value as of September 30, 2021. The 2021 Convertible Notes accrued interest quarterly at a rate of (i) zero percent (0%) from the date of issuance to, and including, June 30, 2022 and (ii) five percent (5%) after June 30, 2022. The Company made no cash interest payments on the 2021 Convertible Notes during the three and nine months ended September 30, 2021.

Upon the Company’s IPO, the 2021 Convertible Notes converted into 38 million shares of Class A common stock at a conversion price equal to $66.30 per share. During the three and nine months ended September 30, 2021, the loss on the 2021 Convertible Notes was recognized in “Loss on convertible notes, net” in the Consolidated Statements of Operations and was calculated as follows (in millions):

	September 30, 2021
	Fair value (carrying amount)		Unpaid principal balance		Loss on convertible notes, net
2021 Convertible Notes	$	2,958	$	2,500	$	458

ABL Facility

In May 2021, the Company, through various of its subsidiaries, entered into an ABL Facility with a syndicate of banks that may be used for general corporate purposes. Availability under the ABL Facility is based on the lesser of the borrowing base and the committed $750 million cap and is reduced by borrowings and the issuance of letters of credit which bear a fronting fee of 0.125% plus interest per annum.

As of September 30, 2022, the Company had no borrowings under the ABL Facility and $395 million of letters of credit outstanding, resulting in availability under the ABL Facility of $353 million after giving effect to the borrowing base and the outstanding letters of credit. As of September 30, 2022, the Company was in compliance with all covenants required by the ABL Facility.

2026 Notes

In October 2021, the Company issued $1,250 million aggregate principal amount of senior secured floating rate notes due October 2026 (the “2026 Notes”) to certain new and existing investors of the Company. As of September 30, 2022, the Company was in compliance with all covenants required by the 2026 Notes, and the contractual interest rate was 7.2%.

The 2026 Notes are classified within Level 2 of the fair value hierarchy because they are valued using quoted prices in markets that are not active. As of December 31, 2021 and September 30, 2022, the fair value of the 2026 Notes was $1,250 million and $1,186 million, respectively.