What changed in this filing

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Item 1. Financial Statements

2022-08-04 compared with 2022-05-04 · 101 added, 81 removed, 372 unchanged (33% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except per share data) March 31,

(in millions, except per share data) June 30,

2022 December 31,

25 unchanged sentences

5.0 million shares authorized;

no shares issued and outstanding at March 31, 2022 and December 31, 2021

no shares issued and outstanding

Common stock, $ 0.001 par value;

220.0 million shares authorized;

issued and outstanding shares were 95.5 million at March 31, 2022 and 94.9 million at December 31, 2021

issued and outstanding shares 95.6 million at June 30, 2022 and 94.9 million at December 31, 2021

Additional paid-in capital 1,999.8 2,011.4

5 unchanged sentences

NEUROCRINE BIOSCIENCES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

AND COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE (LOSS) INCOME

Three Months Ended

June 30, Six Months Ended

(in millions, except per share data) 2022 2021 2022 2021

5 unchanged sentences

Research and development 135.9 74.8 238.1 148.0

Acquired in-process research and development — 5.0 — 5.0

Selling, general and administrative 182.8 143.2 383.5 272.2

1 unchanged sentence

Operating income 54.7 62.8 57.8 94.3

Other income (expense):

Other (expense) income:

Interest expense ( 2.2 ) ( 6.2 ) ( 4.8 ) ( 12.6 )

Unrealized gain on equity securities 19.9 0.7

Unrealized (loss) gain on equity securities ( 7.4 ) — 12.5 0.7

Loss on extinguishment of convertible senior notes ( 70.0 ) — ( 70.0 ) —

Investment income and other, net 1.6 0.9 2.6 2.3

Total other income (expense), net 18.3 ( 4.3 )

Income before provision for (benefit from) income taxes 21.4 27.2

Provision for (benefit from) income taxes 7.5 ( 4.9 )

Net income 13.9 32.1

Total other expense, net ( 78.0 ) ( 5.3 ) ( 59.7 ) ( 9.6 )

(Loss) income before (benefit from) provision for income taxes ( 23.3 ) 57.5 ( 1.9 ) 84.7

(Benefit from) provision for income taxes ( 6.4 ) 15.2 1.1 10.3

Net (loss) income ( 16.9 ) 42.3 ( 3.0 ) 74.4

Unrealized loss on debt securities available-for-sale, net of tax ( 2.9 ) ( 0.3 ) ( 10.5 ) ( 1.1 )

Comprehensive income $ 6.3 $ 31.3

Earnings per share:

Comprehensive (loss) income $ ( 19.8 ) $ 42.0 $ ( 13.5 ) $ 73.3

(Loss) earnings per share:

Basic $ ( 0.18 ) $ 0.45 $ ( 0.03 ) $ 0.79

9 unchanged sentences

(in millions) Shares $ Total

Balances at December 31, 2021

Balances at March 31, 2022

95.5 $ 0.1 $ 1,947.7 $ ( 9.3 ) $ ( 547.4 ) $ 1,391.1

Net loss — — — — ( 16.9 ) ( 16.9 )

Unrealized loss on debt securities available-for-sale, net of tax — — — ( 2.9 ) — ( 2.9 )

Stock-based compensation expense — — 49.5 — — 49.5

Issuances of common stock under stock plans 0.1 — 2.6 — — 2.6

Balances at June 30, 2022

95.6 $ 0.1 $ 1,999.8 $ ( 12.2 ) $ ( 564.3 ) $ 1,423.4

Balances at March 31, 2021

94.5 $ 0.1 $ 1,897.8 $ 1.0 $ ( 693.3 ) $ 1,205.6

Net income — — — — 42.3 42.3

Unrealized loss on debt securities available-for-sale, net of tax — — — ( 0.3 ) — ( 0.3 )

Stock-based compensation expense — — 28.6 — — 28.6

Issuances of common stock under stock plans 0.1 — 3.0 — — 3.0

Balances at June 30, 2021

94.6 $ 0.1 $ 1,929.4 $ 0.7 $ ( 651.0 ) $ 1,279.2

Balance at December 31, 2021

94.9 $ 0.1 $ 2,011.4 $ ( 1.7 ) $ ( 635.8 ) $ 1,374.0

Net loss — — — — ( 3.0 ) ( 3.0 )

Unrealized loss on debt securities available-for-sale, net of tax — — — ( 10.5 ) — ( 10.5 )

Cumulative-effect adjustment due to adoption of ASU 2020-06 — — ( 106.8 ) — 74.5 ( 32.3 )

1 unchanged sentence

Issuances of common stock under stock plans 0.7 — 8.7 — — 8.7

Balances at March 31, 2022

Balances at June 30, 2022

95.6 $ 0.1 $ 1,999.8 $ ( 12.2 ) $ ( 564.3 ) $ 1,423.4

Balances at December 31, 2020

Balance at December 31, 2020

93.5 $ 0.1 $ 1,849.7 $ 1.8 $ ( 725.4 ) $ 1,126.2

3 unchanged sentences

Issuances of common stock under stock plans 1.1 — 18.2 — — 18.2

Balances at March 31, 2021

Balance at June 30, 2021

94.6 $ 0.1 $ 1,929.4 $ 0.7 $ ( 651.0 ) $ 1,279.2

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

(in millions) 2022 2021

Cash flows from operating activities:

Net income $ 13.9 $ 32.1

Reconciliation of net income to net cash (used in) provided by operating activities:

Net (loss) income $ ( 3.0 ) $ 74.4

Adjustments to reconcile net (loss) income to net cash from operating activities:

Stock-based compensation expense 86.5 61.5

Loss on extinguishment of convertible senior notes 70.0 —

Depreciation 7.2 5.1

9 unchanged sentences

Other assets and liabilities, net ( 2.2 ) 5.5

Net cash (used in) provided by operating activities ( 40.5 ) 87.3

Cash flows from operating activities 97.6 190.5

Cash flows from investing activities:

3 unchanged sentences

Purchases of property and equipment ( 16.4 ) ( 8.8 )

Net cash (used in) provided by investing activities ( 31.6 ) 63.1

Cash flows from investing activities ( 0.2 ) ( 27.7 )

Cash flows from financing activities:

Issuances of common stock under benefit plans 8.7 18.2

Partial repurchase of convertible senior notes — ( 0.1 )

Net cash provided by financing activities 6.1 15.1

Repurchase of convertible senior notes ( 279.0 ) ( 0.1 )

Cash flows from financing activities ( 270.3 ) 18.1

Change in cash, cash equivalents and restricted cash ( 172.9 ) 180.9

1 unchanged sentence

Cash, cash equivalents and restricted cash at end of period $ 171.1 $ 371.2

Supplemental Disclosure:

Supplemental disclosures:

Non-cash capital expenditures $ 0.9 $ 2.2

Right-of-use assets acquired through operating leases $ — $ 21.6

Cash paid for interest $ 4.6 $ 4.3

Cash paid for income taxes $ 3.1 $ 1.6

See accompanying notes to the condensed consolidated financial statements.

2 unchanged sentences

Organization and Significant Accounting Policies

Description of Business .

Neurocrine Biosciences, Inc., or Neurocrine Biosciences, the Company, we, our or us, was incorporated in California in 1992 and reincorporated in Delaware in 1996.

Neurocrine Continental, Inc.

is a Delaware corporation and a wholly owned subsidiary of Neurocrine Biosciences.

We also have two wholly-owned Irish subsidiaries, Neurocrine Therapeutics, Ltd.

and Neurocrine Europe, Ltd., both of which were formed in December 2014 and are inactive.

Basis of Presentation .

24 unchanged sentences

We accounted for the transaction as an asset acquisition as the set of acquired assets did not constitute a business.

In the second quarter of 2022, the FDA accepted our submission of an investigational new drug application, or IND, for NBI-1117568 for the treatment of schizophrenia, for which we anticipate initiating a Phase II study during the second half of 2022.

Based upon this progress, a milestone of $ 30.0 million was expensed as R&D in the second quarter of 2022, which we expect to pay to Heptares in the third quarter of 2022.

Under the terms of the agreement, Heptares may be entitled to receive potential future payments of up to $ 2.6 billion upon the achievement of certain event-based milestones and would be entitled to receive royalties on the future net sales of any collaboration product.

19 unchanged sentences

We may terminate the agreement in its entirety or in one or more (but not all) of the United States, Japan, the European Union and the United Kingdom, or, collectively, the major markets, upon six months’ written notice to Takeda (i) with respect to all licensed products prior to the first commercial sale of the first licensed product for which first commercial sale occurs, or (ii) with respect to all licensed products in one or more given target classes, as defined in the agreement, prior to the first commercial sale of the first licensed product in such target class for which first commercial sale occurs.

We may terminate the agreement in its entirety or in one or more (but not all) of the major markets upon 12 months’ written notice to Takeda (i) with respect to all licensed products following the first commercial sale of the first licensed product for which first commercial sale occurs, or (ii) with respect to all licensed products in one or more given target classes following the first

commercial sale of the first licensed product in such target class for which first commercial sale occurs.

We may terminate the agreement in its entirety or in one or more (but not all) of the major markets upon 12 months’ written notice to

Takeda (i) with respect to all licensed products following the first commercial sale of the first licensed product for which first commercial sale occurs, or (ii) with respect to all licensed products in one or more given target classes following the first commercial sale of the first licensed product in such target class for which first commercial sale occurs.

Takeda may terminate the agreement, subject to specified conditions, (i) if we challenge the validity or enforceability of certain Takeda intellectual property rights or (ii) on a target class-by-target class basis, in the event that we do not conduct any material development or commercialization activities with respect to any licensed product within such target class for a specified continuous period.

25 unchanged sentences

Upon the expiration of the royalty term for a particular licensed product and country, the license obtained by us with respect to such product and country will become fully paid, royalty free, perpetual and irrevocable.

We may terminate the agreement upon 90 days’ written notice to Xenon, provided that such unilateral termination will not be effective for certain products until we have used commercially

reasonable efforts to complete certain specified clinical studies.

We may terminate the agreement upon 90 days’ written notice to Xenon,

provided that such unilateral termination will not be effective for certain products until we have used commercially reasonable efforts to complete certain specified clinical studies.

Either party may terminate the agreement in the event of a material breach in whole or in part, subject to specified conditions.

28 unchanged sentences

MTPC is responsible for all development, manufacturing and commercialization costs of valbenazine in such markets.

In March 2022, MTPC received Japanese Ministry of Health, Labour and Welfare approval for DYSVAL ® (valbenazine) for the treatment of tardive dyskinesia in Japan.

Under the terms of our license agreement with MTPC, we are entitled to receive a milestone payment of $ 20.0 million upon MTPC's first commercial sale of DYSVAL in Japan, which is expected to occur

in the second quarter of 2022.

In addition, we may also be entitled to receive potential future payments of up to $ 35.0 million upon the achievement of certain sales-based milestones and will be entitled to receive royalties at tiered percentage rates on future MTPC net sales of valbenazine for the longer of 10 years or the life of the related patent rights.

In June 2022, MTPC launched DYSVAL ® (valbenazine) in Japan for the treatment of tardive dyskinesia.

In connection with MTPC's first commercial sale of DYSVAL in Japan, we received a milestone payment of $ 20.0 million in the second quarter of 2022.

ASC 606 provides a royalty exception for a sales-based or usage-based royalty promised in exchange for a license of intellectual property.

Under the royalty exception, the milestone would be recognized as revenue only when the later of (1) the subsequent sale or usage occurs or (2) the performance obligation to which some or all of the sales-based or usage-based royalty has been allocated has been satisfied (or partially satisfied).

As the milestone related to a license of intellectual property and was contingent upon MTPC’s first commercial sale of DYSVAL in Japan, the milestone was recognized as revenue in the second quarter of 2022.

In addition, we will receive royalties at tiered percentage rates on MTPC net sales of DYSVAL.

DYSVAL royalty revenue was not significant for the three and six months ended June 30, 2022.

Under the terms of our license agreement with MTPC, we may be entitled to receive potential future payments of up to $ 30.0 million upon the achievement of certain sales-based milestones and are entitled to receive royalties at tiered percentage rates on future MTPC net sales of valbenazine for the longer of 10 years or the life of the related patent rights.

MTPC may terminate the agreement upon 180 days’ written notice to us.

3 unchanged sentences

AbbVie is responsible for all development and commercialization costs of elagolix.

AbbVie launched ORILISSA ® (elagolix tablets) in the United States and Canada in August and November 2018, respectively.

In June 2020, AbbVie launched ORIAHNN ® (elagolix, estradiol and norethindrone acetate capsules and elagolix capsules) in the United States.

We receive royalties at tiered percentage rates on AbbVie net sales of elagolix.

We recognized elagolix royalty revenue of $ 4.2 million and $ 4.5 million, respectively, for the three months ended March 31, 2022 and 2021.

Under the terms of our license agreement with AbbVie, we may be entitled to receive potential future payments of up to $ 366.0 million upon the achievement of certain event-based milestones and will continue to receive royalties at tiered percentage rates on future AbbVie net sales of elagolix for the longer of 10 years or the life of the related patent rights.

In August 2018, AbbVie launched ORILISSA ® (elagolix tablets) in the United States for the treatment of moderate to severe pain associated with endometriosis.

In June 2020, AbbVie launched ORIAHNN ® (elagolix, estradiol and norethindrone acetate capsules and elagolix capsules) in the United States for the treatment of heavy menstrual bleeding related to uterine fibroids in premenopausal women.

We receive royalties at tiered percentage rates on AbbVie net sales of elagolix and recognized elagolix royalty revenue of $ 5.2 million and $ 9.4 million, respectively, for the three and six months ended June 30, 2022 and $ 5.9 million and $ 10.4 million, respectively, for the three and six months ended June 30, 2021.

Under the terms of our license agreement with AbbVie, we may be entitled to receive potential future payments of up to $ 366.0 million upon the achievement of certain event-based milestones and are entitled to receive royalties at tiered percentage rates on future AbbVie net sales of elagolix for the longer of 10 years or the life of the related patent rights.

AbbVie may terminate the agreement upon 180 days’ written notice to us.

5 unchanged sentences

Maturity Amortized

Unrealized Gain

Unrealized Loss Fair

Cost Unrealized

Gain Unrealized

Value Amortized

Cost Unrealized Gain Unrealized Loss Fair

Cost Unrealized

Gain Unrealized

Commercial paper 0 to 1 years $ 78.2 $ — $ ( 0.4 ) $ 77.8 $ 204.8 $ — $ — $ 204.8

5 unchanged sentences

$ 415.5 $ — $ ( 10.3 ) $ 405.2 $ 563.2 $ — $ ( 2.5 ) $ 560.7

As of March 31, 2022, our security portfolio consisted of 174 debt securities available-for-sale, including 168 such securities that were in an unrealized loss position but of high credit quality.

As of June 30, 2022, our security portfolio consisted of 166 debt securities available-for-sale, including 164 such securities that were in an unrealized loss position but of high credit quality.

Unrealized losses on these investments were primarily due to changes in interest rates.

We do not intend to sell these investments and it is not more likely than not that we will be required to sell these investments before recovery of their amortized cost basis.

No allowance for credit losses was recognized as of March 31, 2022 or December 31, 2021.

The following table presents debt securities available-for-sale that were in an unrealized loss position as of March 31, 2022, aggregated by major security type and length of time in a continuous loss position.

No allowance for credit losses was recognized as of June 30, 2022 or December 31, 2021.

The following table presents debt securities available-for-sale that were in an unrealized loss position as of June 30, 2022, aggregated by major security type and length of time in a continuous loss position.

Less Than 12 Months 12 Months or Longer Total

14 unchanged sentences

Securities of government-sponsored entities $ 230.5 $ ( 1.0 ) $ — $ — $ 230.5 $ ( 1.0 )

Accrued interest receivables on debt securities available-for-sale totaled $ 3.0 million and $ 2.2 million, respectively, as of March 31, 2022 and December 31, 2021.

Accrued interest receivables on debt securities available-for-sale totaled $ 2.7 million and $ 2.2 million, respectively, as of June 30, 2022 and December 31, 2021.

We do not measure an allowance for credit losses for accrued interest receivables.

1 unchanged sentence

Uncollectible accrued interest receivables associated with an impaired debt security are reversed against interest income upon identification of the impairment.

No accrued interest receivables were written off during the three months ended March 31, 2022 or 2021.

No accrued interest receivables were written off during the six months ended June 30, 2022 or 2021.

Fair Value Measurements

We record cash equivalents, debt securities available-for-sale and equity security investments at fair value based on a fair value hierarchy that distinguishes between assumptions based on market data (observable inputs) and our own assumptions (unobservable inputs).

The fair value hierarchy consists of the following three levels:

2 unchanged sentences

Level 3 – Unobservable inputs that reflect our own assumptions about the assumptions that market participants would use in pricing the asset or liability when there is little, if any, market activity for the asset or liability at the measurement date.

Investments in debt securities available-for-sale are classified as Level 2 and carried at fair value.

We estimate the fair value of debt securities available-for-sale by utilizing third-party pricing services.

These pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value.

Such inputs include market pricing based on real-time trade data for similar instruments, issuer credit spreads, benchmark yields, broker/dealer quotes and other observable inputs.

We validate valuations obtained from third-party pricing services by understanding the models used, obtaining market values from other pricing sources and analyzing data in certain instances.

Investments in equity securities of certain companies that are subject to holding period restrictions longer than one year are classified as Level 3 and carried at fair value using an option pricing valuation model.

The most significant assumptions within the option pricing valuation model are the stock price volatility, which is based on the historical volatility of similar companies and the discount for lack of marketability related to the term of the restrictions.

We deem transfers between levels of the fair value hierarchy to have occurred at the end of the reporting period during which the event or change in circumstances that caused the transfer occurred.

The following table presents a summary of investments, which were measured at fair value on a recurring basis.

16 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in millions) 2022 2021 2022 2021

2 unchanged sentences

Transfers out of Level 3 (2)

— — ( 31.8 ) —

Balance at end of period $ — $ 38.9 $ — $ 38.9

_________________________

(1) Unrealized gains and losses on restricted equity security investments are included in other income (expense), net.

(2) Our equity security investment in Voyager was transferred from Level 3 to Level 1 as the associated holding period restriction expired.

(1) Unrealized gains and losses on restricted equity security investments were measured at fair value on a recurring basis using significant unobservable inputs (Level 3) and are included in other income (expense), net.

(2) In the first quarter of 2022, our equity security investment in Voyager was transferred from Level 3 to Level 1 as the associated holding period restriction expired.

Inventories consisted of the following:

(in millions) March 31,

(in millions) June 30,

2022 December 31,

5 unchanged sentences

The following table presents a reconciliation of cash, cash equivalents and restricted cash to amounts shown in the condensed consolidated statements of cash flows.

(in millions) March 31,

2022 March 31,

(in millions) June 30,

2022 June 30,

Cash and cash equivalents $ 163.3 $ 368.0

6 unchanged sentences

Upon completion of construction, we expect to utilize the campus facility as our new corporate headquarters.

This lease has not commenced for accounting purposes.

Under the terms of the lease, on a building-by-building basis, base rent will be subject to a 10-month rent abatement period following the respective lease commencement date, which dates will be determined in the future based upon achievement of substantial completion of construction with respect to each such building in the condition suitable for the installation of our furniture, fixtures, and equipment, and on which date we will record a lease liability, corresponding right-of-use asset, and begin lease expense recognition with respect to each such building.

2 unchanged sentences

The following table presents supplemental operating lease information for operating leases that have commenced.

Three Months Ended

Six Months Ended

(in millions, except weighted average data) 2022 2021

1 unchanged sentence

Cash paid for amounts included in the measurement of operating lease liabilities $ 8.2 $ 5.5

2022 March 31,

2022 June 30,

Weighted average remaining lease term

1 unchanged sentence

Weighted average discount rate 5.3 % 5.3 %

The following table presents approximate non-cancelable future minimum lease payments under operating leases as of March 31, 2022.

The following table presents approximate non-cancelable future minimum lease payments under operating leases as of June 30, 2022.

(in millions) Amount (1)

16 unchanged sentences

Transaction costs attributable to the liability component were being amortized over the seven-year term of the 2024 Notes using the effective interest rate method, while transaction costs attributable to the equity component were recorded as a reduction to additional paid-in capital on the issuance date.

In November 2020, we entered into separate, privately negotiated transactions with certain holders of the 2024 Notes to repurchase $ 136.2 million aggregate principal amount of the 2024 Notes for an aggregate repurchase price of $ 186.9 million in cash.

In the fourth quarter of 2020, we entered into separate, privately negotiated transactions with certain holders of the 2024 Notes to repurchase $ 136.2 million aggregate principal amount of the 2024 Notes for an aggregate repurchase price of $ 186.9 million in cash.

We accounted for the partial repurchase of the 2024 Notes as a debt extinguishment.

1 unchanged sentence

The fair value of the liability component was calculated at settlement using a discounted cash flow analysis with a discount rate of 3.37 %, which was the market rate for similar notes that have no conversion rights.

The difference of $ 56.3 million between the fair value of the aggregate consideration remitted to certain holders of the 2024 Notes and the fair value of the liability component was attributed to the reacquisition of the equity component and recorded

as a reduction to additional paid-in capital.

component and recorded as a reduction to additional paid-in capital.

The carrying amount of the liability of $ 112.4 million at settlement was recognized as a reduction to the 2024 Notes and resulted in an $ 18.4 million loss on extinguishment, which we recognized in the fourth quarter of 2020.

1 unchanged sentence

Under this transition method, the cumulative effect of the accounting change increased the carrying amount of the 2024 Notes by $ 42.2 million, reduced deferred tax liabilities by $ 9.9 million, reduced additional paid-in capital by $ 106.8 million, and reduced the accumulated deficit by $ 74.5 million.

The following table presents a summary of the 2024 Notes as of March 31, 2022.

In the second quarter of 2022, we entered into separate, privately negotiated transactions with certain holders of the 2024 Notes to repurchase $ 210.8 million aggregate principal amount of the 2024 Notes for an aggregate repurchase price of $ 279.0 million in cash.

We accounted for the partial repurchase of the 2024 Notes as a debt extinguishment, which resulted in the recognition of a $ 70.0 million loss on extinguishment in the second quarter of 2022.

The following table presents a summary of the 2024 Notes as of June 30, 2022.

Amount Unamortized Debt Net Carrying

2 unchanged sentences

_________________________

(1) While the 2024 Notes were classified as a long-term liability as of March 31, 2022, the future convertibility and associated balance sheet classification will be monitored at each quarterly reporting date and determined based on the market prices of our common stock during the prescribed measurement period.

(1) While the 2024 Notes were classified as a long-term liability as of June 30, 2022, the future convertibility and associated balance sheet classification will be monitored at each quarterly reporting date and determined based on the market prices of our common stock during the prescribed measurement period.

In the event that we have the election to redeem the 2024 Notes or the holders of the 2024 Notes have the election to convert the 2024 Notes at any time during the prescribed measurement period, the 2024 Notes would be classified as a current obligation.

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in millions) 2022 2021 2022 2021

4 unchanged sentences

The initial conversion rate for the 2024 Notes, which is subject to adjustment in some events (as provided for in the 2017 Indenture), is 13.1711 shares of common stock per $ 1,000 principal amount and equivalent to an initial conversion price of approximately $ 75.92 per share, reflecting a conversion premium of approximately 42.5 % above the closing price of $ 53.28 per share of our common stock on April 26, 2017.

We may redeem for cash all or part of the 2024 Notes if the last reported sale price (as defined in the 2017 Indenture) of our common stock has been at least 130 % of the conversion price then in effect (equal to $ 98.70 as of March 31, 2022) for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading-day period ending on, and including, the trading day immediately before the date which we provide notice of redemption.

We may redeem for cash all or part of the 2024 Notes if the last reported sale price (as defined in the 2017 Indenture) of our common stock has been at least 130 % of the conversion price then in effect (equal to $ 98.70 as of June 30, 2022) for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading-day period ending on, and including, the trading day immediately before the date which we provide notice of redemption.

Holders of the 2024 Notes may convert the 2024 Notes at any time prior to the close of business on the business day immediately preceding May 15, 2024, only under the following circumstances:

(i) during any calendar quarter (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than 130 % of the conversion price (equal to $ 98.70 as of March 31, 2022) on each applicable trading day;

(ii) during the five business-day period immediately after any five consecutive trading-day period (the measurement period) in which the trading price (as defined in the 2017 Indenture) per $ 1,000 principal amount of the 2024 Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of our common stock and the conversion rate on each such trading day;

7 unchanged sentences

The 2017 Indenture contains customary events of default with respect to the 2024 Notes, including that upon certain events of default, 100 % of the principal and accrued and unpaid interest on the 2024 Notes will automatically become due and payable.

Earnings per Share

Earnings per share was calculated as follows:

(Loss) Earnings per Share

(Loss) earnings per share was calculated as follows:

Three Months Ended

June 30, Six Months Ended

(in millions, except per share data) 2022 2021 2022 2021

Net income - basic and diluted $ 13.9 $ 32.1

Net (loss) income - basic and diluted $ ( 16.9 ) $ 42.3 $ ( 3.0 ) $ 74.4

Weighted-average shares outstanding:

5 unchanged sentences

Diluted 95.6 97.7 95.4 98.0

Earnings per share, basic $ 0.15 $ 0.34

Earnings per share, diluted $ 0.14 $ 0.33

(Loss) earnings per share, basic $ ( 0.18 ) $ 0.45 $ ( 0.03 ) $ 0.79

(Loss) earnings per share, diluted $ ( 0.18 ) $ 0.43 $ ( 0.03 ) $ 0.76

Shares excluded from diluted per share amounts because their effect would have been anti-dilutive 12.5 4.7 12.2 3.7

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements