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Equity
 6 Months Ended
Jun. 30, 2013
Equity [Abstract]  
Equity
Equity

Preferred Stock

The following table presents information regarding the Company’s preferred stock (in thousands):
 
June 30, 2013
 
December 31, 2012
Shares authorized
50,000

 
50,000

Shares outstanding at end of period
 
 
 
8.5% Convertible perpetual preferred stock
2,650

 
2,650

6.0% Convertible perpetual preferred stock
2,000

 
2,000

7.0% Convertible perpetual preferred stock
3,000

 
3,000



The Company is authorized to issue 50.0 million shares of preferred stock, $0.001 par value, of which approximately 7.7 million shares were designated as convertible perpetual preferred stock at June 30, 2013 and December 31, 2012. All of the outstanding shares of the Company’s convertible perpetual preferred stock were issued in private transactions but are now freely tradable, to the extent not owned by affiliates.

Each outstanding share of convertible perpetual preferred stock is convertible at the holder’s option at any time into shares of the Company’s common stock at the specified conversion rate, subject to customary adjustments in certain circumstances. Each holder is entitled to an annual dividend payable semi-annually in cash, common stock or a combination thereof, at the Company’s election. The convertible perpetual preferred stock is not redeemable by the Company at any time. After the specified conversion date, the Company may cause all outstanding shares of the convertible perpetual preferred stock to convert automatically into common stock at the then-prevailing conversion rate if certain conditions are met. The following table summarizes information about each series of the Company’s convertible perpetual preferred stock:
 
 
Convertible Perpetual Preferred Stock
 
 
8.5%
 
6.0%
 
7.0%
Liquidation preference per share
 
$
100.00

 
$
100.00

 
$
100.00

Annual dividend per share
 
$
8.50

 
$
6.00

 
$
7.00

Conversion rate per share to common stock
 
12.4805

 
9.2115

 
12.8791

Conversion date to common stock at Company’s option
 
February 20, 2014

 
December 21, 2014

 
November 20, 2015



Preferred stock dividends. All dividend payments to date on the Company’s 8.5%, 6.0% and 7.0% convertible perpetual preferred stock have been paid in cash. Paid and unpaid dividends included in the calculation of (loss applicable) income available to the Company’s common stockholders and the Company’s basic (loss) earnings per share calculation for the three and six-month periods ended June 30, 2013 and 2012 as presented in the accompanying unaudited condensed consolidated statements of operations, are included in the tables below (in thousands):
 
Three Months Ended June 30,
 
2013
 
2012
 
Dividends Paid
 
Dividends Unpaid
 
Total
 
Dividends Paid
 
Dividends Unpaid
 
Total
8.5% Convertible perpetual preferred stock
$
—

 
$
5,631

 
$
5,631

 
$
—

 
$
5,631

 
$
5,631

6.0% Convertible perpetual preferred stock
—

 
3,000

 
3,000

 
—

 
3,000

 
3,000

7.0% Convertible perpetual preferred stock
2,625

 
2,625

 
5,250

 
2,625

 
2,625

 
5,250

  Total
$
2,625

 
$
11,256

 
$
13,881

 
$
2,625

 
$
11,256

 
$
13,881

 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30,
 
2013
 
2012
 
Dividends Paid
 
Dividends Unpaid
 
Total
 
Dividends Paid
 
Dividends Unpaid
 
Total
8.5% Convertible perpetual preferred stock
$
2,816

 
$
8,447

 
$
11,263

 
$
2,816

 
$
8,447

 
$
11,263

6.0% Convertible perpetual preferred stock
500

 
5,500

 
6,000

 
500

 
5,500

 
6,000

7.0% Convertible perpetual preferred stock
7,875

 
2,625

 
10,500

 
7,875

 
2,625

 
10,500

  Total
$
11,191

 
$
16,572

 
$
27,763

 
$
11,191

 
$
16,572

 
$
27,763



Common Stock

The following table presents information regarding the Company’s common stock (in thousands):
 
June 30, 2013
 
December 31, 2012
Shares authorized
800,000

 
800,000

Shares outstanding
489,616

 
490,359

Shares held in treasury
1,313

 
1,219


    
Stockholder Rights Plan

On November 19, 2012, the Board adopted a stockholder rights plan pursuant to which the Board authorized and declared to stockholders of record on November 29, 2012 a dividend of one preferred share purchase right (the “Rights”) for each outstanding share of common stock. Effective April 29, 2013, at the direction of the Board, the Company amended the stockholder rights plan to accelerate the expiration date of the Rights to April 29, 2013. As a result, the Rights have expired and are no longer outstanding, and the stockholder rights plan has been terminated.

Treasury Stock

The Company makes required statutory tax payments on behalf of employees when their restricted stock awards vest and then withholds a number of vested shares of common stock having a value on the date of vesting equal to the tax obligation. As a result of such transactions, the Company withheld approximately 5.1 million shares having a total value of $27.2 million and approximately 0.8 million shares having a total value of $6.7 million during the six-month periods ended June 30, 2013 and 2012, respectively. These shares were accounted for as treasury stock when withheld and then immediately retired.

Shares of Company common stock held as assets in a trust for the Company’s non-qualified deferred compensation plan are accounted for as treasury shares. These shares are not included as outstanding shares of common stock in this report. For corporate purposes, including for the purpose of voting at Company stockholder meetings, these shares are considered outstanding and have voting rights, which are exercised by the Company.

Stockholder Receivable

On November 9, 2012, Tom L. Ward, the Company’s Chairman and CEO at that time, and the Company entered into a settlement agreement with a stockholder plaintiff relating to a third-party claim under Section 16(b) of the Exchange Act. The claim was filed in December 2010 and related to certain transactions involving Company common stock by Mr. Ward in 2008 and 2009. The settlement agreement found no liability or other wrongdoing under Section 16(b) regarding the transactions in question. Under the settlement agreement, Mr. Ward agreed to pay to the Company $5.0 million in four installments over four years commencing October 2013 and to waive his rights under his indemnification agreement with the Company with respect to this Section 16(b) action. The Company agreed to pay the fees of the plaintiff’s lawyers and paid Mr. Ward’s legal expenses as required under his indemnification agreement.

Based on the nature of the settlement as well as Mr. Ward’s position as an officer of the Company at that time, a $5.0 million receivable was recorded as a component of additional paid-in capital and is included in the accompanying unaudited condensed consolidating balance sheets.

Equity Compensation

The Company awards restricted common stock under its long-term incentive compensation plan that vests over specified periods of time, subject to certain conditions, and are valued based upon the market value of common stock on the date of grant. Awards issued prior to 2006 had vesting periods of one, four or seven years. Awards issued during and after 2006 generally have four-year vesting periods. Shares of restricted common stock are subject to restriction on transfer. Unvested restricted stock awards are included in the Company’s outstanding shares of common stock.

Equity compensation provided to employees directly involved in oil and natural gas exploration and development activities is capitalized to the Company’s oil and natural gas properties. Equity compensation not capitalized is reflected in general and administrative expenses, production expenses, midstream and marketing expenses and cost of sales expenses in the consolidated statements of operations. For the three and six-month periods ended June 30, 2013, the Company recognized equity compensation expense of $51.7 million and $70.7 million, net of $1.3 million and $2.9 million capitalized, respectively, related to restricted common stock. The three and six-month periods ended June 30, 2013 include approximately $40.9 million and $48.5 million, respectively, of equity compensation expense recognized in connection with the separation from the Company of certain of its former executives. For the three and six-month periods ended June 30, 2012, the Company recognized equity compensation expense of $11.1 million and $21.6 million, net of $2.1 million and $4.0 million capitalized, respectively, related to restricted common stock.

Noncontrolling Interest

Noncontrolling interest represents third-party ownership interests in the Company’s subsidiaries and consolidated VIEs (see Note 3), and is included as a component of equity in the accompanying unaudited condensed consolidated balance sheets and unaudited condensed consolidated statement of changes in equity.