Stockholders' Equity

Stockholders’ equity decreased $128 million during the six months ended June 30, 2017 compared with stockholders’ equity at December 31, 2016. The decrease was due primarily to the net loss of $153 million, partially offset by $24 million related to employee stock transactions in the six months ended June 30, 2017, which are described further below.

1.125% Warrants

In connection with the Call Spread Overlay transaction described in Note 8, “Derivatives,” in 2013, we issued 13,490,236 warrants with a strike price of $53.8475 per share. Under certain circumstances, beginning in April 2020, when the price of our common stock exceeds the strike price of the 1.125% Warrants, we will be obligated to issue shares of our common stock subject to a share delivery cap. The 1.125% Warrants could separately have a dilutive effect to the extent that the market value per share of our common stock exceeds the applicable strike price of the 1.125% Warrants. Refer to Note 3, “Net (Loss) Income per Share,” for dilution information for the periods presented. We will not receive any additional proceeds if the 1.125% Warrants are exercised.

Stock Incentive Plans

In connection with our equity incentive plans and employee stock purchase plan, approximately 692,000 shares of common stock vested or were purchased, net of shares used to settle employees’ income tax obligations, during the six months ended June 30, 2017.

Restricted stock awards (RSAs), performance stock awards (PSAs) and performance stock units (PSUs) activity for the six months ended June 30, 2017 is summarized below:



	Restricted Stock Awards		Performance Stock Awards		Performance Stock Units		Total		Weighted Average Grant Date Fair Value
Unvested balance, December 31, 2016	577,244		345,656		—		922,900		$	58.15
Granted	377,076		—		231,100		608,176		56.98
Vested	(380,812	)	(260,894	)	(139,272	)	(780,978	)	57.63
Forfeited	(58,643	)	—		—		(58,643	)	54.48
Unvested balance, June 30, 2017	514,865		84,762		91,828		691,455		57.57

The total fair value of RSAs granted during the six months ended June 30, 2017 and 2016 was $19 million and $17 million, respectively. The total fair value of RSAs which vested during the six months ended June 30, 2017 and 2016 was $20 million and $21 million, respectively.

No PSAs were granted during the six months ended June 30, 2017. The total fair value of PSAs granted during the six months ended June 30, 2016 was $15 million. The total fair value of PSAs which vested during the six months ended June 30, 2017 was $15 million. No PSAs vested during the six months ended June 30, 2016.

The total fair value of PSUs granted during the six months ended June 30, 2017 was $16 million. The total fair value of PSUs which vested during the six months ended June 30, 2017 was $9 million. There were no PSUs granted or vested in 2016.

During the six months ended June 30, 2017, the vesting of 133,957 RSAs, 153,574 PSAs and 139,272 PSUs was accelerated in connection with the termination of our former Chief Executive Officer (CEO) and former Chief Financial Officer (CFO) in May 2017. Share-based compensation expense of $35 million was recorded during the six months ended June 30, 2017, of which $23 million was recorded to “Restructuring and separation costs” in the accompanying consolidated statements of operations. See Note 11, “Restructuring and Separation Costs” for further discussion. Share-based compensation expense of $16 million was recorded to “General and administrative expenses” in the six months ended June 30, 2016.

As of June 30, 2017, there was $32 million of total unrecognized compensation expense related to unvested RSAs, including those with market and performance conditions, and unvested PSUs, which we expect to recognize over a remaining weighted-average period of 2.5 years and 2.1 years, respectively. This unrecognized compensation cost assumes an estimated forfeiture rate of 3.3% for non-executive employees as of June 30, 2017.