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Equity

12 Months Ended

Dec. 31, 2017

Successor Equity

Common Stock. As discussed in Note 1, on the Emergence Date, the previously issued Predecessor Company common stock was canceled and an aggregate of approximately 18.9 million shares of Common Stock, par value $0.001 per share, was issued to the holders of allowed claims, as defined in the Plan. Approximately 0.4 million shares of Common Stock were reserved for future distributions under the Plan and approximately 0.1 million of the reserved shares were issued during the year ended December 31, 2017. Additionally, from the Emergence Date through February 9, 2017, voluntary conversions of Convertible Notes resulted in the issuance of approximately 1.0 million shares of Common Stock. The remaining balance of Convertible Notes converted to 14.1 million shares of Common Stock upon refinancing of the First Lien Exit Facility. See Note 12 for further discussion of the Convertible Notes.

Shareholder Rights Plan. On November 26, 2017, the Company’s Board adopted a short-term shareholder rights plan, which was further amended on January 22, 2018, (the “Rights Plan”). The Rights Plan will be triggered only if a person or group of persons exceeds beneficial ownership of 15% or more of the Company’s common stock. The Company intends to recommend the ratification of the Rights Plan for approval by its shareholders at the Company’s 2018 annual meeting of shareholders. If ratified by the shareholders, the Rights Plan will expire on November 26, 2018. If the Rights Plan is not ratified, then it will terminate and cease to be effective.

Warrants. As discussed in Note 1, on the Emergence Date, the Company issued approximately 4.9 million Series A Warrants, 4.5 million of which were issued immediately upon emergence, and 2.1 million Series B Warrants, 1.9 million of which

were issued immediately upon emergence. Warrants not issued immediately upon emergence were held in reserve for the future settlement of general unsecured claims under the Plan. The Warrants were initially exercisable for one share of Common Stock per Warrant at initial exercise prices of $41.34 and $42.03 per share, respectively, subject to adjustments pursuant to the terms of the Warrants, to certain holders of general unsecured claims as defined in the Plan. Approximately 0.1 million Series A Warrants and an insignificant amount of Series B Warrants were issued under the Plan during the year ended December 31, 2017. The Warrants are exercisable from the Emergence Date until October 4, 2022. The Warrants contain customary anti-dilution adjustments in the event of any stock split, reverse stock split, reclassification, stock dividend or other distributions.

Shares Withheld for Taxes. The following table shows the number of shares withheld for taxes and the associated value of those shares (in thousands). These shares were accounted for as treasury stock when withheld, and then immediately retired.



	Successor
	Year Ended December 31, 2017		Period from October 2, 2016 through December 31, 2016
Number of shares withheld for taxes	349		5
Value of shares withheld for taxes	$	6,730	$	110

Predecessor Equity

Preferred Stock. As discussed in Note 1, on the Emergence Date the Company’s authorized 7.0% and 8.5% convertible perpetual preferred stock was canceled and released under the Plan without receiving any recovery on account thereof.

Each outstanding share of convertible perpetual preferred stock was 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 was entitled to an annual dividend payable semi-annually in cash, common stock or a combination thereof, at the Company’s election. The Company could cause all outstanding shares of the convertible perpetual preferred stock to convert automatically into common stock at the prevailing conversion rate dependent on certain factors, including the Company’s stock trading above specified prices for a set period. The convertible perpetual preferred stock was not redeemable by the Company at any time. For the year ended December 31, 2015, approximately 0.2 million shares were converted into approximately 3.0 million shares of the Predecessor Company’s common stock. The following table summarizes information about each series of the Predecessor Company’s convertible perpetual preferred stock outstanding at December 31, 2015:



	Convertible Perpetual Preferred Stock
	8.5%		7.0%
Liquidation preference per share	$	100.00	$	100.00
Annual dividend per share	$	8.50	$	7.00
Conversion rate per share to common stock	12.4805		12.8791

Preferred Stock Dividends. Prior to the Chapter 11 petition filings, dividends on the Company’s 8.5% and 7.0% convertible perpetual preferred stock could be paid in cash or with shares of the Company’s common stock at the Company’s election.

In the first quarter of 2016, prior to the February semi-annual dividend payment date, the Company announced the suspension of the semi-annual dividend on its 8.5% convertible perpetual preferred stock. The Company suspended payment of the cumulative dividend on its 7.0% convertible perpetual preferred stock during the third quarter of 2015. The Company ceased accruing dividends on its 8.5% and 7.0% convertible perpetual preferred stock as of May 16, 2016, in conjunction with the Chapter 11 petition filings.

Preferred stock dividend payments and accruals for the Company’s 8.5% and 7.0% convertible perpetual preferred stock are as follows (in thousands):



	Predecessor
	Period from January 1, 2016 through October 1, 2016		Year Ended December 31, 2015
8.5% Convertible perpetual preferred stock
Dividends paid in cash	$	—	$	11,262
Dividends satisfied in shares of common stock(1)	$	—	$	11,262
Accrued dividends at period end	$	—	$	8,447
Dividends in arrears	$	11,262	$	—
7.0% Convertible perpetual preferred stock
Dividends paid in cash	$	—	$	—
Dividends satisfied in shares of common stock(2)	$	—	$	10,500
Accrued dividends at period end	$	—	$	13,125
Dividends in arrears	$	21,000	$	10,500

____________________

(1)

For the year ended December 31, 2015, the Company paid a semi-annual dividend by issuing approximately 18.6 million shares of common stock. For purposes of the dividend payment, the value of each share issued was calculated as 95% of the average volume-weighted share price for the 15 trading day period ending July 29, 2015. Based upon the common stock’s closing price on August 17, 2015, the common stock issued had a market value of approximately $9.5 million, ($3.58 per outstanding share at the time the dividend was paid) that resulted in a difference between the fixed rate semi-annual dividend and the value of shares issued of approximately $1.8 million, which was recorded as a reduction to preferred stock dividends in the accompanying consolidated statement of operations.

(2)

For the year ended December 31, 2015, the Company paid a semi-annual dividend by issuing approximately 5.7 million shares of common stock. For purposes of the dividend payment, the value of each share issued was calculated as 95% of the average volume-weighted share price for the 15 trading day period ending April 28, 2015. Based upon the common stock’s closing price on May 15, 2015, the common stock issued had a market value of approximately $6.7 million, ($2.23 per outstanding share at the time the dividend was paid) that resulted in a difference between the fixed rate semi-annual dividend and the value of shares issued of approximately $3.8 million, which was recorded as a reduction to preferred stock dividends in the accompanying consolidated statement of operations.

Paid and unpaid dividends included in the calculation of income available (loss applicable) to the Company’s common stockholders and the Company’s basic earnings (loss) per share calculation for the Predecessor 2016 Period and year ended December 31, 2015, are presented in the accompanying consolidated statements of operations.

See Note 20 for discussion of the Company’s earnings (loss) per share calculation.

Common Stock. As discussed in Note 1, on the Emergence Date the Company’s authorized common stock was canceled and released under the Plan without receiving any recovery on account thereof.

In June 2015, the Company's stockholders approved an amendment to the Company's Certificate of Incorporation, to increase the number of shares of capital stock the Company is authorized to issue from 850.0 million (800.0 million shares of common stock and 50.0 million shares of preferred stock), par value $0.001 to 1.85 billion (1.80 billion shares of common stock and 50.0 million shares of preferred stock), par value $0.001.

Prior to the Emergence Date, shares of Predecessor Company common stock held as assets in a trust for the Company’s non-qualified deferred compensation plan were accounted for as treasury shares. The Company had 2.1 million shares of such common stock held in treasury at December 31, 2015. These shares were not included as outstanding shares of common stock for accounting purposes, and were canceled on the Emergence Date. No further matching contributions will be made to the non-qualified deferred compensation plan by the Successor Company.

Redemption of Senior Unsecured Notes. During the year ended December 31, 2015, the Predecessor Company issued approximately 28.0 million shares of common stock in exchange for $50.0 million in Senior Unsecured Notes.

Conversions of Convertible Senior Unsecured Notes. During the Predecessor 2016 Period and year ended December 31, 2015, the Company issued approximately 84.4 million and 92.8 million shares, respectively, of common stock upon the exercise of conversion options by holders of approximately $232.1 million and $255.3 million in par value, respectively, of the Convertible Senior Unsecured Notes. The Company recorded the issuance of common shares at fair value on the various dates the exchanges occurred.

See Note 17 for discussion of the Company’s share-based compensation.



	Predecessor
	Period from January 1, 2016 through October 1, 2016		Year Ended December 31, 2015		Year Ended December 31, 2014
Number of shares withheld for taxes	1,122		1,872		1,034
Value of shares withheld for taxes	$	44	$	2,428	$	6,373