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Stockholders' Equity | 9 Months Ended
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Sep. 30, 2020
Equity [Abstract] |
Stockholders' Equity | 10. Stockholders’ Equity Stockholder Rights Agreement — On April 22, 2020, our Board of Directors adopted a stockholder rights agreement and declared a dividend of one right (a “Right”) for each outstanding share of our common stock to stockholders of record at the close of business on May 8, 2020. Each Right entitles its holder, subject to the terms of the Rights Agreement (as defined below), to purchase from us one one-thousandth of a share of our Series A Junior Participating Preferred Stock, par value $0.01 per share, at an exercise price of $17.00 per Right, subject to adjustment. The description and terms of the Rights are set forth in a stockholder rights agreement, dated as of April 22, 2020 (the “Rights Agreement”), between us and Continental Stock Transfer & Trust Company, as rights agent (the “Rights Agent”). Initially, these Rights are not exercisable and trade with our shares of common stock. Under the Rights Agreement, the Rights generally become exercisable only if a person or group of persons acting together (each, an “acquiring person”) acquires beneficial ownership of 10% (12% for passive investors) or more of the outstanding shares of our common stock. In that situation, each holder of a Right (other than the acquiring person, whose Rights will become void) will become entitled to purchase additional shares of our common stock at a 50% discount. In addition, if we are acquired in a merger or other business combination after an unapproved party acquires more than 10% (12% for passive investors) of our outstanding shares of common stock, each holder of a Right would then be entitled to purchase shares of the acquiring company’s stock at a 50% discount. Our Board of Directors, at its option, may exchange each Right (other than Rights owned by the acquiring person that have become void) in whole or in part, at an exchange ratio of one share of our common stock per outstanding Right, subject to adjustment. Except as provided in the Rights Agreement, our Board of Directors is entitled to redeem the Rights at $0.001 per Right. Persons or groups that beneficially own 10% (12% for passive investors) or more of our outstanding common stock prior to our announcement of our adoption of the Rights Agreement will generally not cause the Rights to be exercisable until such time as those persons or groups become the beneficial owner of any additional shares of our common stock, subject to certain exceptions. On July 22, 2020, we and the Rights Agent entered into an amendment to the Rights Agreement. The amendment revises the definition of “acquiring person” in the Rights Agreement to exclude Excluded Persons. The amendment defines “Excluded Persons” as BlackRock, Inc. (collectively with the investment funds and accounts for which it acts or may act as manager and/or investment advisor, “BlackRock”) and The Vanguard Group, Inc. (together with the investment funds and accounts for which it acts or may act as manager and/or investment advisor, “Vanguard”). Our Board of Directors may determine, in its sole discretion, that BlackRock or Vanguard is no longer an “Excluded Person” if any of the representations, warranties, conditions or provisions in letter agreements between us and BlackRock or Vanguard, respectively, are breached or cease to be true, correct and complete in all material respects. Under each letter agreement, BlackRock and Vanguard represent, respectively, among other things, that:
| • | Such investor will not acquire 20% or more of our then-outstanding common stock;
| • | No single fund of such investor holds or will hold an economic interest (taking into account the ownership rules of Section 382 of the Internal Revenue Code) of 4.9% or more of our common stock, other than as disclosed to us; and
| • | Such investor will only acquire beneficial ownership of our common stock in the ordinary course of business and not with the purpose or effect of changing or influencing control of us.
The Rights Agreement will expire on April 21, 2021, but our Board of Directors may consider earlier termination of the Rights Agreement if warranted. Cash Dividends — We paid cash dividends during the nine months ended September 30, 2020 and 2019 as follows:
2020: | Per Share |  |  | Total |
|  |  |  |  | (in thousands) |
Paid on March 19, 2020 | $ | 0.04 |  |  | $ | 7,629 |
Paid on June 18, 2020 |  | 0.02 |  |  | $ | 3,735 |
Paid on September 17, 2020 |  | 0.02 |  |  | $ | 3,746 |
Total cash dividends | $ | 0.08 |  |  | $ | 15,110 |
2019: | Per Share |  |  | Total |
|  |  |  |  | (in thousands) |
Paid on March 21, 2019 | $ | 0.04 |  |  | $ | 8,499 |
Paid on June 20, 2019 |  | 0.04 |  |  | $ | 8,344 |
Paid on September 19, 2019 |  | 0.04 |  |  | $ | 7,847 |
Total cash dividends | $ | 0.12 |  |  | $ | 24,690 |
On October 21, 2020, our Board of Directors approved a cash dividend on our common stock in the amount of $0.02 per share to be paid on December 17, 2020 to holders of record as of December 3, 2020. The amount and timing of all future dividend payments, if any, are subject to the discretion of the Board of Directors and will depend upon business conditions, results of operations, financial condition, terms of our debt agreements and other factors. Share Repurchases and Acquisitions — On September 6, 2013, our Board of Directors approved a stock buyback program that authorized purchases of up to $200 million of our common stock in open market or privately negotiated transactions. On July 25, 2018, our Board of Directors approved an increase of the authorization under the stock buyback program to allow for $250 million of future share repurchases. On February 6, 2019, our Board of Directors approved another increase of the authorization under the stock buyback program to allow for $250 million of future share repurchases. On July 24, 2019, our Board of Directors approved another increase of the authorization under the stock buyback program to allow for $250 million of future share repurchases. All purchases executed to date have been through open market transactions. Purchases under the program are made at management’s discretion, at prevailing prices, subject to market conditions and other factors. Purchases may be made at any time without prior notice. There is no expiration date associated with the buyback program. As of September 30, 2020, we had remaining authorization to purchase approximately $130 million of our outstanding common stock under the stock buyback program. Shares of stock purchased under the buyback program are held as treasury shares. We acquired shares of stock from employees during 2020 that are accounted for as treasury stock. These shares were acquired to satisfy the employees’ tax withholding obligations upon the settlement of performance unit awards and the vesting of restricted stock and restricted stock units. These shares were acquired at fair market value. These acquisitions were made pursuant to the terms of the Patterson-UTI Energy, Inc. Amended and Restated 2014 Long-Term Incentive Plan (the “2014 Plan”), as amended, and not pursuant to the stock buyback program. Treasury stock acquisitions during the nine months ended September 30, 2020 were as follows (dollars in thousands):
| Shares |  |  | Cost |
Treasury shares at beginning of period |  | 77,336,387 |  |  | $ | 1,345,134 |
Purchases pursuant to stock buyback program |  | 5,826,266 |  |  |  | 20,000 |
Acquisitions pursuant to long-term incentive plan |  | 222,550 |  |  |  | 1,129 |
Treasury shares at end of period |  | 83,385,203 |  |  | $ | 1,366,263 |
The reconciliation of changes in stockholders’ equity for the periods ended September 30, 2020 and 2019, are presented as follows (in thousands):
| For the nine months ended September 30, 2020 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Accumulated |  |  |  |  |  |  |  |  |
| Common Stock |  |  | Additional |  |  |  |  |  |  | Other |  |  |  |  |  |  |  |  |
| Number of |  |  |  |  |  |  | Paid-in |  |  | Retained |  |  | Comprehensive |  |  | Treasury |  |  |  |  |
| Shares |  |  | Amount |  |  | Capital |  |  | Earnings |  |  | Income (Loss) |  |  | Stock |  |  | Total |
Balance, December 31, 2019 |  | 269,372 |  |  | $ | 2,694 |  |  | $ | 2,875,680 |  |  | $ | 1,294,902 |  |  | $ | 5,478 |  |  | $ | (1,345,134 | ) |  | $ | 2,833,620 |
Net loss |  | — |  |  |  | — |  |  |  | — |  |  |  | (434,722 | ) |  |  | — |  |  |  | — |  |  |  | (434,722 | )
Foreign currency translation adjustment |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1,386 | ) |  |  | — |  |  |  | (1,386 | )
Vesting of restricted stock units |  | 151 |  |  |  | 1 |  |  |  | (1 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Stock-based compensation |  | — |  |  |  | — |  |  |  | 9,160 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 9,160 |
Payment of cash dividends |  | — |  |  |  | — |  |  |  | — |  |  |  | (7,629 | ) |  |  | — |  |  |  | — |  |  |  | (7,629 | )
Dividend equivalents |  | — |  |  |  | — |  |  |  | — |  |  |  | (125 | ) |  |  | — |  |  |  | — |  |  |  | (125 | )
Purchase of treasury stock |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (20,025 | ) |  |  | (20,025 | )
Balance, March 31, 2020 |  | 269,523 |  |  | $ | 2,695 |  |  | $ | 2,884,839 |  |  | $ | 852,426 |  |  | $ | 4,092 |  |  | $ | (1,365,159 | ) |  | $ | 2,378,893 |
Net loss |  | — |  |  |  | — |  |  |  | — |  |  |  | (150,332 | ) |  |  | — |  |  |  | — |  |  |  | (150,332 | )
Foreign currency translation adjustment |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 695 |  |  |  | — |  |  |  | 695 |
Vesting of restricted stock units |  | 1,046 |  |  |  | 11 |  |  |  | (11 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Stock-based compensation |  | — |  |  |  | — |  |  |  | 4,335 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4,335 |
Payment of cash dividends |  | — |  |  |  | — |  |  |  | — |  |  |  | (3,735 | ) |  |  | — |  |  |  | — |  |  |  | (3,735 | )
Dividend equivalents |  | — |  |  |  | — |  |  |  | — |  |  |  | (73 | ) |  |  | — |  |  |  | — |  |  |  | (73 | )
Purchase of treasury stock |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (910 | ) |  |  | (910 | )
Balance, June 30, 2020 |  | 270,569 |  |  | $ | 2,706 |  |  | $ | 2,889,163 |  |  | $ | 698,286 |  |  | $ | 4,787 |  |  | $ | (1,366,069 | ) |  | $ | 2,228,873 |
Net loss |  | — |  |  |  | — |  |  |  | — |  |  |  | (112,111 | ) |  |  | — |  |  |  | — |  |  |  | (112,111 | )
Foreign currency translation adjustment |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 218 |  |  |  | — |  |  |  | 218 |
Vesting of restricted stock units |  | 292 |  |  |  | 2 |  |  |  | (2 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Stock-based compensation |  | — |  |  |  | — |  |  |  | 6,592 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 6,592 |
Payment of cash dividends |  | — |  |  |  | — |  |  |  | — |  |  |  | (3,746 | ) |  |  | — |  |  |  | — |  |  |  | (3,746 | )
Dividend equivalents |  | — |  |  |  | — |  |  |  | — |  |  |  | (69 | ) |  |  | — |  |  |  | — |  |  |  | (69 | )
Purchase of treasury stock |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (194 | ) |  |  | (194 | )
Balance, September 30, 2020 |  | 270,861 |  |  | $ | 2,708 |  |  | $ | 2,895,753 |  |  | $ | 582,360 |  |  | $ | 5,005 |  |  | $ | (1,366,263 | ) |  | $ | 2,119,563 |
| For the nine months ended September 30, 2019 |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Accumulated |  |  |  |  |  |  |  |  |
| Common Stock |  |  |  |  | Additional |  |  |  |  |  |  | Other |  |  |  |  |  |  |  |  |
| Number of |  |  |  |  |  |  |  |  | Paid-in |  |  | Retained |  |  | Comprehensive |  |  | Treasury |  |  |  |  |
| Shares |  |  | Amount |  |  |  |  | Capital |  |  | Earnings |  |  | Income (Loss) |  |  | Stock |  |  | Total |
Balance, December 31, 2018 |  | 267,316 |  |  | $ | 2,673 |  |  |  |  | $ | 2,827,154 |  |  | $ | 1,753,557 |  |  | $ | 2,487 |  |  | $ | (1,080,448 | ) |  | $ | 3,505,423 |
Net loss |  | — |  |  |  | — |  |  |  |  |  | — |  |  |  | (28,614 | ) |  |  | — |  |  |  | — |  |  |  | (28,614 | )
Foreign currency translation adjustment |  | — |  |  |  | — |  |  |  |  |  | — |  |  |  | — |  |  |  | 944 |  |  |  | — |  |  |  | 944 |
Vesting of restricted stock units |  | 38 |  |  |  | — |  |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Forfeitures of restricted stock |  | (1 | ) |  |  | — |  |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Stock-based compensation |  | — |  |  |  | — |  |  |  |  |  | 9,338 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 9,338 |
Payment of cash dividends |  | — |  |  |  | — |  |  |  |  |  | — |  |  |  | (8,499 | ) |  |  | — |  |  |  | — |  |  |  | (8,499 | )
Dividend equivalents |  | — |  |  |  | — |  |  |  |  |  | — |  |  |  | (110 | ) |  |  | — |  |  |  | — |  |  |  | (110 | )
Purchase of treasury stock |  | — |  |  |  | — |  |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (75,113 | ) |  |  | (75,113 | )
Balance, March 31, 2019 |  | 267,353 |  |  | $ | 2,673 |  |  |  |  | $ | 2,836,492 |  |  | $ | 1,716,334 |  |  | $ | 3,431 |  |  | $ | (1,155,561 | ) |  | $ | 3,403,369 |
Net loss |  | — |  |  |  | — |  |  |  |  |  | — |  |  |  | (49,447 | ) |  |  | — |  |  |  | — |  |  |  | (49,447 | )
Foreign currency translation adjustment |  | — |  |  |  | — |  |  |  |  |  | — |  |  |  | — |  |  |  | 848 |  |  |  | — |  |  |  | 848 |
Exercise of stock options |  | 700 |  |  |  | 7 |  |  |  |  |  | 9,212 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 9,219 |
Vesting of restricted stock units |  | 739 |  |  |  | 8 |  |  |  |  |  | (8 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Forfeitures of restricted stock |  | (1 | ) |  |  | — |  |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Stock-based compensation |  | — |  |  |  | — |  |  |  |  |  | 11,050 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 11,050 |
Payment of cash dividends |  | — |  |  |  | — |  |  |  |  |  | — |  |  |  | (8,344 | ) |  |  | — |  |  |  | — |  |  |  | (8,344 | )
Dividend equivalents |  | — |  |  |  | — |  |  |  |  |  | — |  |  |  | (126 | ) |  |  | — |  |  |  | — |  |  |  | (126 | )
Purchase of treasury stock |  | — |  |  |  | — |  |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (88,258 | ) |  |  | (88,258 | )
Balance, June 30, 2019 |  | 268,791 |  |  | $ | 2,688 |  |  |  |  | $ | 2,856,746 |  |  | $ | 1,658,417 |  |  | $ | 4,279 |  |  | $ | (1,243,819 | ) |  | $ | 3,278,311 |
Net loss |  | — |  |  |  | — |  |  |  |  |  | — |  |  |  | (261,719 | ) |  |  | — |  |  |  | — |  |  |  | (261,719 | )
Foreign currency translation adjustment |  | — |  |  |  | — |  |  |  |  |  | — |  |  |  | — |  |  |  | 854 |  |  |  | — |  |  |  | 854 |
Vesting of restricted stock units |  | 433 |  |  |  | 4 |  |  |  |  |  | (4 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Stock-based compensation |  | — |  |  |  | — |  |  |  |  |  | 9,670 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 9,670 |
Payment of cash dividends |  | — |  |  |  | — |  |  |  |  |  | — |  |  |  | (7,847 | ) |  |  | — |  |  |  | — |  |  |  | (7,847 | )
Dividend equivalents |  | — |  |  |  | — |  |  |  |  |  | — |  |  |  | (160 | ) |  |  | — |  |  |  | — |  |  |  | (160 | )
Purchase of treasury stock |  | — |  |  |  | — |  |  |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (76,123 | ) |  |  | (76,123 | )
Balance, September 30, 2019 |  | 269,224 |  |  | $ | 2,692 |  |  |  |  | $ | 2,866,412 |  |  | $ | 1,388,691 |  |  | $ | 5,133 |  |  | $ | (1,319,942 | ) |  | $ | 2,942,986 |

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(e)(1)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -URI http://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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