Long-Term Debt

The carrying value of our long-term debt at June 30, 2014 and December 31, 2013 was as follows:



(In thousands)		June 30, 2014		December 31, 2013
5.375%	Senior Notes due 2015	$	—	$	54,481
9.000%	Senior Notes due 2017	192,096		191,611
3.000%	Convertible Senior Notes due 2017 (1)	364,296		353,798
2.250%	Convertible Senior Notes due 2019 (2)	336,005		330,182
5.500%	Senior Notes due 2019	300,000		—
	Total long-term debt	$	1,192,397	$	930,072

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(1)	The principal amount of these notes is $450 million.


(2)	The principal amount of these notes is $400 million.

Senior Notes due 2015

On June 16, 2014, in accordance with the optional redemption provisions of the notes, we redeemed all of the remaining outstanding principal amount of our Senior Notes due 2015 at a price established in accordance with the indenture governing the senior notes. We paid $57.2 million to holders of the notes at redemption and recorded a loss of $2.8 million.

Senior Notes due 2019

In May 2014, in anticipation of the Clayton acquisition, we issued $300 million principal amount of Senior Notes due 2019 and received net proceeds of approximately $294.4 million. The notes bear interest at a rate of 5.500% per annum, payable semi-annually on June 1 and December 1 of each year, commencing on December 1, 2014. These notes mature on June 1, 2019 and include covenants customary for securities of their nature. Additionally, the indentures governing these notes include covenants restricting us from encumbering the capital stock of a designated subsidiary (as defined in the indenture) or disposing of any capital stock of any designated subsidiary unless either all of the stock is disposed of or we retain more than 80% of the stock. We have the option to redeem the notes, in whole or in part, at any time or from time to time prior to maturity at a redemption price equal to the greater of: (i) 100% of the aggregate principal amount of the notes to be redeemed and (ii) the make-whole amount, which is the present value of the notes discounted at the applicable treasury rate plus 50 basis points, plus, in each case, accrued interest thereon to the redemption date.

Convertible Senior Notes due 2017 and 2019

During the three-month period ended June 30, 2014, our closing stock price exceeded the threshold required for the holders of our Convertible Senior Notes due 2019 to be able to exercise their conversion rights during the three-month period ending September 30, 2014, but it did not exceed the applicable threshold under the Convertible Senior Notes due 2017. In any period when holders of the Convertible Senior Notes due 2017 are eligible to exercise their conversion option, the equity component related to these instruments will be reclassified from permanent equity to mezzanine (temporary) equity, specifically in those instances when the issuer is required to settle the aggregate principal amount of the notes in cash. Therefore, if in any future period the holders of our Convertible Senior Notes due 2017 are able to exercise their conversion rights, then the difference between (1) the amount of cash deliverable upon conversion (i.e., par value of debt) and (2) the carrying value of the debt component will be reclassified from permanent equity to mezzanine equity, and will continue to be reported as mezzanine equity for any period in which the debt remains currently convertible.

Issuance and transaction costs incurred at the time of the issuance of the convertible notes are allocated to the liability and equity components in proportion to the allocation of proceeds and accounted for as debt issuance costs and equity issuance costs, respectively. The convertible notes are reflected on our condensed consolidated balance sheets as follows:



	Convertible Senior Notes due 2017						Convertible Senior Notes due 2019
(In thousands)	June 30, 2014			December 31, 2013			June 30, 2014				December 31, 2013
Liability component:
Principal	$	450,000		$	450,000		$	400,000			$	400,000
Less: debt discount, net (1)	(85,704		)	(96,202		)	(63,995		)		(69,818		)
Net carrying amount	$	364,296		$	353,798		$	336,005			$	330,182

Equity component (net of tax impact) (2)	$	65,679		$	65,679		$	77,026		(3)	$	77,026		(3)

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(1)	Included within long-term debt and is being amortized over the life of the convertible notes.


(2)	Amount included within additional paid-in capital, net of the capped call transactions (Convertible Senior Notes due 2017) and related issuance costs (Convertible Senior Notes due 2017 and 2019).


(3)	There was no net tax impact recorded in equity related to the Convertible Senior Notes due 2019, as a result of our full valuation allowance.

The following tables set forth total interest expense recognized related to the convertible notes for the periods indicated:



	Convertible Senior Notes due 2017
	Three Months Ended June 30,						Six Months Ended June 30,
($ in thousands)	2014			2013			2014			2013
Contractual interest expense	$	2,351		$	3,375		$	6,750		$	6,750
Amortization of debt issuance costs	304			287			604			570
Amortization of debt discount	5,312			4,826			10,498			9,538
Total interest expense	$	7,967		$	8,488		$	17,852		$	16,858

Effective interest rate of the liability component	9.75		%	9.75		%	9.75		%	9.75		%



	Convertible Senior Notes due 2019
	Three Months Ended June 30,						Six Months Ended June 30,
($ in thousands)	2014			2013			2014			2013
Contractual interest expense	$	2,250		$	2,250		$	4,500		$	2,925
Amortization of debt issuance costs	319			308			635			400
Amortization of debt discount	2,934			2,758			5,823			3,577
Total interest expense	$	5,503		$	5,316		$	10,958		$	6,902

Effective interest rate of the liability component	6.25		%	6.25		%	6.25		%	6.25		%